East coast states again dominate awards for efficiency

By Elisa Wood

September 15, 2010

Again East Coast states have won disproportionate recognition in a national analysis of energy efficiency programs, this time from the well-respected American Council for an Energy-Efficient Economy.

ACEEE named five of the best state-led efficiency programs in a report issued Wednesday. Three of the five awards went to Northeast and Mid-Atlantic programs: Two in New York and one in Maryland.

This comes on the heels of a report by the Center for American Progress and Energy Resource Management Corp. that identified the ten best states for energy efficiency. Seven of the ten were East Coast states.

What’s the secret ingredient that brings so much success to the eastern states when it comes to efficiency? ACEEE gives credit to the region’s historic pursuit of energy efficiency and effective alliances between utilities and state governments.

ACEEE also points out that several new sources of funding are now available for efficiency endeavors. (Also see Energy Efficiency Incentives for Business 2010:Eastern States at www.realenergywriters.com, which details incentives totaling $8.6 billion for efficiency along the East Coast.)

The federal government has dramatically increased efficiency spending in recent years, as have several states throughout the nation. For the Northeast and Mid-Atlantic states, there is the added advantage of some specialty programs that contribute funds, such as the Regional Greenhouse Gas Initiative. RGGI, the nation’s only mandatory carbon dioxide cap and trade program, has generated $650 million in auction allowance sales since September 2008.

“The funding streams for individual states coming from RGGI proceeds have been large enough to launch new and innovative energy efficiency programs, such as the Green Homes/Green Jobs Program in New York,” the ACEEE report said.

In addition, Maine is using all of its RGGI proceeds for electric and fuel efficiency, and New Hampshire is using 90 percent of its RGGI share for energy efficiency. Other Northeast and Mid-Atlantic states have channeled millions from RGGI into efficiency programs, operating under the premise that efficiency offers the cheapest and cleanest way to meet new energy demand.

While the Northeast and Mid-Atlantic appear to head the pack when it comes to efficiency, programs in the report, other states also received kudos from ACEEE. Hawaii and Colorado were among those receiving top honors. Honorable mention went to programs in Alaska, Connecticut, Louisiana, Massachusetts, Minnesota, New York, South Carolina, Texas and Washington. Emerging programs were noted in California, Massachusetts and New Jersey.

“These state programs benefit customers in numerous ways, generating significant energy savings, training thousands of professionals, lowering energy costs, and reducing the negative environmental impacts of energy use. Many featured programs demonstrate collaboration between public and private stakeholders, serving as models for effectively coordinated and highly-leveraged programs that can last for years to come,” said Steve Nadel, ACEEE executive director.

ACEEE’s top five included efficiency programs that focus on new homes, combined heat and power, wastewater efficiency, economic development and agriculture. Full details are available at ACEEE’s website. http://www.aceee.org/research-report/e106.

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” www.realenergywriters.com

Efficiency’s Role in Carbon Cap-and-Trade

By Elisa Wood

August 28, 2008

We hear a lot about how efficiency will play an increasingly important role as the United States undertakes efforts to reduce carbon dioxide emissions. But how does that play out in a practical sense under cap-and-trade programs?

The Offset Quality Initiative provides insight in a new white paper on greenhouse gas offsets:

http://www.pewclimate.org/docUploads/OQI-Ensuring-Offset-Quality-white-paper.pdf

A cap-and-trade program, like the Regional Greenhouse Gas Initiative (RGGI), caps emissions at a certain level in a geographic location, and then lets players use various trading mechanisms to operate within the cap. See Lisa Cohn’s blog in August 21 issue of Energy Efficiency Markets: http://energyefficiencymarkets.wordpress.com/2008/08/21/eastern-states-ready-for-big-ee-boost/

One of those mechanisms is an offset, which acts as a counterbalance to reduce overall greenhouse gases. More specifically, an offset represents emissions reduced at one site to make up for emissions produced elsewhere.

Offsets can be bought and sold in the form of credits. A commercial building owner might install efficiency improvements that reduce the amount of carbon dioxide the building produces. The owner then translates the emissions reductions into offsets under standards set by the cap-and-trade program. A power plant might buy the offsets to ‘reduce’ its emissions. The plant does not actually cut back on what it emits, but instead piggybacks on the building’s reductions. Overall emissions fall, so the cap-and-trade program achieves its goal.

RGGI, the nation’s first cap-and-trade program set to take effect next year in ten states, allows certain efficiency measures to qualify as offsets.

The program accepts offsets from efficiency measures that reduce or avoid carbon dioxide emissions created by natural gas, oil or propane in commercial or residential buildings. The building owner might improve equipment and systems for heat and hot water, install energy management systems, improve the building envelope or engage in certain other activities. (See RGGI’s model rule, page 132-145, http://www.rggi.org/modelrule.htm.)

Of course, offsets are just one way efficiency markets benefit from today’s focus on reducing carbon dioxide emissions. Even where no cap-and-trade programs exist, policymakers see energy efficiency as a key way to address climate change. The fewer electrons we use, the less power plants run; the less they run, the lower our emissions are. Thus, many cities and states are increasingly focused on larger policies and incentives that encourage businesses and homeowners to undertake efficiency measures.

Programs like RGGI help spur such thinking. Expect growing talk nationally about energy efficiency and its importance in the coming weeks as RGGI makes the news with its first market auction September 25.

Visit energy writer Elisa Wood at www.realenergywriters.com and subscribe to her free EE Markets newsletter and podcast.