Pink on Green: How to ignite the second electrical revolution

By Elisa Wood

April 4, 2012

The electric industry is good at building things. That’s how it solves problems. Is there a threat of blackouts? Develop a new natural gas-fired plant. Worried about climate change? Build wind and solar power. Does electricity cost too much? Install a transmission line to import cheaper power.

But build-to-solve represents only half of the equation in the new world of smart grid. The other half, the part that stumps the industry, is solve-without-building.

Rather than adding more energy, smart grid tries to wring maximum efficiency out of the system by changing the way we consume electricity. But it turns out, trying to direct human energy behavior makes cat herding look easy. To get people to pay attention to their energy use, utilities and private companies are experimenting with alluring gadgets and social motivators. So far, success has been minimal. Thomas Edison’s light bulb has been such a smashing success for the last 100 years, none of us want to turn it off.

So what will it take?

The Edison Foundation recently looked outside the industry for some answers, inviting Dan Pink, best-selling author of “DRIVE: The Surprising Truth About What Motivates Us” to speak at last month’s Power the People 2.0 conference in Washington D.C.

Consumer motivation has become a common conference topic. But Pink’s talk was different. He stepped back and took a broader view and asked: How do we motivate the people who are trying motivate the consumer? Pink calls this “the science of how people do extraordinary things.”

The power industry’s creative thinkers need to bust out of their intellectual silos to ignite the “second electrical revolution,” according to Pink. But smart grid represents a particularly difficult problem for them because the industry is trying to invent gadgets consumers are not demanding. The electric grid needs the gadgets and needs consumers to use them. But consumers would rather think about their next iTunes download or where to buy the tastiest strawberry. How do you get consumers to want a smart plug or home energy display just as much? Some in the industry say smart grid is doomed because it not born of household demand but of the power industry’s need.

Pink has another view. He asked members of the audience to raise their hands if they own an iPad. Half did. Then he asked how many of them knew they needed one two years ago. Only one hand went up.

Therein lines Apple’s genius; its ability to give the world something it didn’t know it was missing. Can the power industry do the same with smart grid? It must first recognize that this is a skill more likely to be found in artists than engineers. “I think the cognitive skills of artists today are the most important cognitive skills in the economy,” Pink said. “We need scientist that think like artists and artists that think like scientists.”

The electric industry also needs to reconsider the way it motivates creative employees. “It turns out a lot our intuitions about motivation are not quite right,” according to Pink. In fact, it’s downright “Newtonian” to assume that “when you reward behavior you get more of it, and when you punish behavior you get less of it.”

So forget the big bonus for the genius idea. While people need to be paid reasonably to perform well, big bonuses only motivate them to achieve short-term goals, like making a sales quota. “Igniting the second electrical revolution is not simple, is not short-term, but is complex and long term,” he said.

So what gets creative thinkers moving? Free time, as Pink tells it. He cited studies and examples of artists doing their best work without a commission and inventors achieving Nobel Prize-winning work off the clock. The business community is beginning to catch on to this idea, and some are offering a regular day when their inventors and problem solvers are encouraged to stop their required tasks and just work on anything that intrigues them. Many of these free hours have produced astonishing findings, some that the companies have been unable to achieve any other way.

“Complex industries, likes yours, complex ecosystems demand this kind of complex, silo-busting thinking. You’re going to get it, not through an elaborate system of incentives, but by hiring talented people and getting out of their way,” he said.

Perhaps, if Pink is right, and the electric industry listens, he’ll be able ask audiences in a few years how many own some amazing energy-saving device that no one has yet conceived, and many hands will fly into the air. Perhaps then the light bulb, as we know it, will finally be replaced.

Elisa Wood is a long-time energy writer whose work can be found at www.RealEnergyWriters.com

Business Intelligence for utilities: Five planning strategies

By Chris Lewis

Guest Blogger, Energy Efficiency Markets

March 28, 2012

Business Intelligence is not a new concept to utilities, as the analysis of data is as entrenched in every utility as the concept of providing safe, reliable and affordable power. However, the unique challenge facing utilities today is that there is exponentially more data, from more advanced sources, and dispersed to many more functional areas of the organization.

Utilities are operating in a new smart grid environment where they must start examining Business Intelligence and Analytics as a core competency. Careful planning and strategies need to be put in place to ensure data quality, manage and support system integrations, and ultimately determine the level of engagement of the customer.

Cognera conducted research in this area and surveyed investor-owned utilities, co-operatives, and municipally owned and operated utilities, and found some interesting facts:

• Almost 70% of respondents with advanced metering infrastructure installations planned to use the data for purposes other than billing and specifically for a Business Intelligence application.

• The most preferred single source for Business Intelligence software was within the actual provider of the AMI system themselves (50%), followed by a desire to see meter data management systems (25%) and customer information systems (15%) provide the Business Intelligence function.

• 70% of respondents said that they are currently unsure or would be using a combination of systems to provide the analytics and reporting required.

Desert Year: Why Is It So Hard to Care?

by Skip Laitner

Guest blogger, Energy Efficiency Markets

Reposted from Real Climate Economics

March 21, 2012

Why is it so hard to care about snakes? Or the desert? The climate? And especially the environment more generally?

This time the snake was real. Right there on the side of the road. Some evenings ago, however, in the waning hours of twilight, it turned out to be just a short length of black rubber hose that was also laying along the path I was taking. But this particular snake was just as dead. I’m no expert but it was non-venomous, perhaps a narrowhead garter snake.

It looked as though it wanted to live, but it also looked as though the wound had slowly bled it to death. The snake seemed as if it had been just barely clipped or pinched by the wheel of a passing car. The injury itself didn’t really appear to be all that serious. I was thinking that had it been given immediate care, it would likely be alive today. Unfortunately, the cars seem to be more forthcoming than any immediate animal care.

I confess that while not especially fond of them, I am intrigued by snakes. And of this particular critter? Somehow I think of this as “my snake” and I wondered why I cared about it, or why I was saddened by its demise? That single snake was neither socially nor economically important.

Nature is content to love snakes in her own way – as a species. Yet she seems wholly unconcerned with any particular snake. As Joseph Wood Krutch suggested many years back, Mother Nature seems to hold the view that it’s the “greatest good of the greatest number.” In fact, it seems to be a principle so absolute that she is not “tempered with regret over those who happen not to be included within the greatest number.” And yet, I cared.

There are perhaps 3000 separate species of snakes, and maybe hundreds of millions of individual snakes. These may be a sufficient number so that, like Mother Nature, I don’t need to think about them all that much. And I certainly don’t need to fret over their individual livelihood. And yet I cared about this snake. Probably because I was right there with it. In some way, then, I was connected to it.

Why is it so hard to care about snakes? Or the desert? The climate? And especially the environment more generally? Part of it, I suspect, is our isolation. We spend 6 percent of our time in our cars and 89 percent of our time in our buildings. That insulates and isolates. But the research of psychologist Susan Mineka (at Northwestern University’s Feinberg School of Medicine) suggests thatour instinctive fear of snakes may be learned. Her studies of rhesus monkeys provide empirical evidence that we may be genetically programmed with the fear of snakes. But here’s the kicker. . . . The genetic program needs to be turned on, or socially-triggered, by some vicarious experience. That may be good news for snakes. And that may be good news for us; and the climate as well. What is learned can be unlearned. What if we encourage and allow that unlearning or relearning to happen? Perhaps then we may find unexpected value in snakes. And the environment.

Snakes are important models for adaptation, evolutionary ecology, and high-performance muscle physiology. And they also provide a sense of wonder. Somehow the desert wouldn’t quite be the desert if we didn’t wonder whether there might be a snake resting under a rock, that very same rock that you might also decide would be a good resting place. Still, I recall the advice of WC Fields who once said, always carry a flagon of whiskey in case of snakebite; and furthermore, always carry a small snake.

John A. “Skip” Laitner is Director of Economic and Social Analysis for the American Council for an Energy-Efficient Economy (ACEEE), based in Washington, DC. Tucson is his family’s hometown, and he likely will be there through August of 2012. He hopes to provide a new posting roughly every week over the year. While these columns do not reflect the official opinion or views of ACEEE, its board or its staff, he can be reached at jslaitner@aceee.org.

All sustainability is local

By Elisa Wood

March 15, 2012

“All politics is local.” This quote from the late US Congressman Tip O’Neill continues to frame political strategies today. It turns out his premise also applies to environmentalism. All sustainability is local, as a Massachusetts software company reveals in a new application that takes on the complicated task of quantifying the green efforts of corporations.

Massachusetts-based Energy Points has devised a sustainability algorithm that considers location, right down to the zip code, in sorting the many variables that reveal how well a company performs environmentally. What’s most sustainable in one location might not be so important elsewhere. For example, installing LED lighting could be wise move for a Massachusetts operation, but a company in the Mojave Desert might be better off with a new water management system, says Energy Points founder Ory Zik.

We tend to use the terms ‘sustainable’ and ‘green’ loosely, and they have become more advertising slogans than clear descriptions. Energy Points says it overcomes this problem by measuring sustainability “on math not myth.”

More specifically, the company takes its cue from Weight Watchers by reducing a complex set of calculations into a simple point system. Energy Points converts a company’s sustainability profile into what it calls an energy per gallon metric, a mirror of the per gallon of gasoline measure that is easily understood by most Americans.

But there is nothing simple about the software platform’s data base, which took three years to build. In addition to location, the algorithm considers such variables as a company’s management of fuel, transportation, waste, water and electricity, where resources are used, when they are used, and how they are created, distributed and treated.

Companies can use the platform to determine their best course of action and to gauge how they compare to others.

“The market place is rewarding companies that are more sustainable. Energy Points will allow companies to quantify and then communicate sustainability in way that the market place can understand,” said Zik, who also founded solar thermal company HelioFocus.

Energy Points recently announced that it has secured a $3 million initial round of financing led by Plan B Ventures. The company is using the financing to accelerate the adoption of its platform. About 15 companies are already on board to pilot the product.

Given today’s corporate interest in sustainability, and the need for honesty in green measurement, Energy Points may be on to something. Now if someone would create a scientific metric to verify political claims, local or otherwise….

Elisa Wood is a long-time energy writer whose work can be found at www.RealEnergyWriters.com

Trillion dollar answer to Bachmann’s light bulb question

By Elisa Wood

March 8, 2012

US Congresswoman Michele Bachmann often asks why government should tell us which kind of light bulb to choose. Turns out it’s a question with a trillion dollar answer.

We will save $1.1 trillion through 2035 because of existing energy efficiency mandates for light bulbs and appliances, according to a report issued this week by the American Council for an Energy-Efficient Economy and the Appliance Standards Awareness Project.

“The Efficiency Boom: Cashing In on the Savings from Appliance Standards” says the standards will cut our energy use 200 quads, the equivalent of the US using no energy for two years. The standards already have reduced our energy use 3.5 percent.

This means lighting and appliance standards have saved more energy than almost any other efficiency program, says the report.

Bringing the numbers close to home, the average household will save about $30,000 over 45 years, or enough to cover two years of typical mortgage payments, under existing and new standards. This assumes the household changes major appliances every 15 years.

It’s important to note that Bachmann’s assertion – that the government is choosing light bulbs – is an oversimplification. The standards do not mandate any particular kind of lights, but call for manufacturers to achieve a certain level of energy efficiency. True, an old technology may not make the cut. Oddly, though, no one seems worried about losing access to inefficient air conditioners, computers or other appliances. Anti-standards folks, like Bachmann, seem attached only to inefficient light bulbs. (This bewilders me.)

US appliance standards go back to 1974 when then-Governor Ronald Reagan signed a bill to bring greater efficiency to major appliances in that state. Other states followed, but the federal government didn’t get on board until 1987. Again it was Reagan, this time as President, who signed the first bill. Additional standards became law under President George Bush and President George W. Bush. Since then, the Department of Energy has further updated standards. About 55 products are covered; not only lighting, but also refrigerators, air conditioners, motors and other appliances.

“Standards have been a bipartisan energy policy success story stretching across four decades and five presidencies,” said Andrew deLaski, executive director of ASAP, a coalition of consumer, environmental and efficiency groups.

Will cyber-sensitives reveal the future of energy efficiency?

By Elisa Wood

February 29, 2012

The US economy is three times larger than China’s, yet when it comes to developing a clean energy industry, China keeps besting us. The US came in second – again – to China this quarter in Ernst & Young’s much-watched renewable energy ranking released February 28.

But there is one clean energy segment where the US leads: demand response.

Demand response comes into play when there is high demand for power straining the electric grid, usually hot summer days. Utilities or grid operators give factories and other businesses a payment in return for decreasing their energy use during these peak periods. As a result, demand response not only averts blackouts, but also saves us money, since it is far cheaper to conserve energy when the grid is strained than it is to generate more power.

An American-grown industry, demand response is now gaining international attention. EnerNOC, a Boston company that provides demand response services, finds itself increasingly explaining the concept abroad, according to Gregg Dixon, senior vice president of marketing and sales. The company now serves about 12,000 businesses, colleges, hospitals and other large energy users, not only in the US, but also in Canada, the United Kingdom, Australia and New Zealand.

Other demand response companies, Comverge, Johnson Controls, Silver Spring Networks, Wipro and Honeywell, also report international expansion, according to Pike Research, which expects the $1.3 billion global market for demand response to see a compound annual growth rate of 37% by 2016.

So demand response is clearly a success story, at least when it comes to reducing use of energy by companies and large institutions. The next frontier for demand response is the homeowner. And unfortunately, that might be a tougher market to crack. The average person shows little interest in taking the time to cut back on energy use during peak periods.

“The concept from an economist’s point of view makes sense. But unless it is managed for us in a very simple way, I just don’t see people using it. And I’m a zealot on this stuff,” Dixon said.

A recent report by the American Council for an Energy-Efficient Economy underscores the problem. It turns out homeowners aren’t saving a lot of energy, even when new energy gadgets give them real-time feedback on the costs.

These home gadgets, which include display monitors, smart meters, and web interfaces, are meant to encourage people to cut back during peak periods, when energy prices are high. But ACEEE found homeowners achieved only a 3.8% overall savings in nine pilot programs it studied. Four of the pilots showed peak period savings of up to 11.3%. The programs were conducted in the US, UK and Ireland.

There is, however, one intriguing exception, a group that does respond. ACEEE isn’t quite sure who they are, but calls them cyber-sensitives. They do not fit into any one demographic box; they are not a certain age or income. But they represent a swath of the population that achieves energy savings of up to 25% when given devices that offer them real-time feedback on their energy use.

Some in the energy industry believe household demand response will never be accepted beyond the cyber-sensitives. Others see this group as a starting point for further study that may reveal what encourage us to save energy, whether it is costs, comforts, green altruism or even an emotional or intuitive response to technology, says ACEEE.

It’s hard not to draw a parallel between these energy information gadgets and the early days of personal computers. At first the computer was viewed as a device that would largely be used in business, much as demand response is today. Then came Steve Jobs and we all know the rest of the story. If demand response companies can capture the attention of households, as they have businesses, maybe the US will find its got its new Apple.

Elisa Wood is a long-time energy writer whose work can be found at RealEnergyWriters.com

Energy Efficiency: A way for colleges to save and make money?

By Elisa Wood

February 23, 2012

The Obama administration – and every parent with a child in college – is concerned about the ever-escalating cost of higher education. And for good reason. Tuition, room and board rose 37 percent for undergraduates at public colleges and 25 percent at private colleges (adjusted for inflation) from 2000 to 2010, according to the National Center for Education Statistics.

Colleges are enormous energy users. National Grid says that in the Northeast, a US higher education hub, a typical 50,000-square foot college building uses more than $200,000 of energy annually. So one way for colleges to reduce costs is through greater energy efficiency, especially if it is financed adeptly.

The Green Revolving Fund offers an interesting model. Basically, the college sets aside money in a fund to make energy efficiency improvements, and then uses the money saved on energy bills to replenish the fund and make more improvements to further drive down energy bills.

About 50 colleges have established GRFs, and they are achieving a median annual return on investment of 30 percent, according to Mark Orlowski, executive director of Sustainable Endowments Institute, who presented a recent webinar on the funds through the Yale Center for Business and the Environment.

A GRF removes energy efficiency from competition for college resources. Energy improvements cease to be a burden on the operating budgets, and conversation about efficiency transforms into one about investment and re-investment. Colleges find seed money for GRFs from a variety of sources, including reserve funds, alumni donations, endowments and utilities.

The Sustainable Endowments Institute and several partners have launched a challenge to raise college GRF funds to a cumulative $1 billion, up from the current $65 million. Existing funds vary in size from $5,000 at the College of Wooster in Ohio to $25.45 million at Standard University. The average fund is $1.4 million, according to SEI. The funds can be found in 25 states, and at colleges as big as University of Illinois at Urbana-Champaign with 42,000 students and as small as Kalamazoo College with an enrollment of 1,381. Students, themselves, started the programs at 17 of the schools.

A recent blog by Joe Indvik posted by the Association for Advancement of Sustainability in Higher Education offers several good reasons for colleges to pursue GRFs over other ways to invest in efficiency. For example, he points to the “sizzle” factor. “A GRF is a unified, purposeful investment vehicle that is easy to market and generates a more positive public image than traditional investments. It demonstrates concrete commitment to sustainability in a way that one-time investments cannot,” he says.

This is not a new concept. Harvard has had a GRF for more than a decade. But the idea has taken off in recent years, with about three quarters of GRFs formed since 2008. Energy efficiency companies would be wise to track their creation, since they clearly open the door to new business opportunities. More details can be found at www.greenbillion.org and http://www.endowmentinstitute.org/.

Elisa Wood is a long-time energy writer. See more of her work at RealEnergyWriters.com.