What does the US/China agreement mean for efficiency?

By Elisa Wood

November 19, 2009

The energy efficiency market has a gawky quality. It is not exactly one market but a conglomeration of various industries as diverse as appliance manufacturers, energy auditors, smart meter software designers and cogeneration developers. They are unified only in their ability to save energy.

All arms and legs as it may appear, the efficiency market seems ready to shoot to a new level of maturity. If that wasn’t apparent before, it became so this week with an announcement out of Obama’s visit to Beijing that the US and China will collaborate to curb their combined $1.5 trillion annual energy appetite.

How will this change the efficiency industry?

Given that the two nations consume 40% of the world’s energy, the collaboration could bring new economies of scale to efficiency. The agreement calls for:

• Greening buildings with better building codes and labels, advanced energy rating systems, and more emphasis on training building inspectors.

• Reducing energy waste in industry through benchmarking, on-site energy audits and tools and training programs to support these activities.

• Improving energy efficient consumer products by harmonizing test procedures and performance metrics. The two countries will exchange best practices for labeling systems and promote awareness of the benefits of energy efficient products.

• Working together to demonstrate energy efficient technologies and design practices, building on the research and development of the new U.S.-China Clean Energy Research Center.

• Engaging the private sector in promoting energy efficiency and expanding bilateral trade and investment.

With this new scale, energy services companies (ESCos) may follow a growth pattern similar to that of US solar firms. Just a few years ago, solar installation companies tended to of the two-guys-and-a-truck variety. The operations were small and local, just as many ESCos are now. Then companies like SunEdison came along and began acquiring the smaller ventures. Soon solar had a national footprint, and not long after, an international footprint as European and Chinese companies began buying American firms.

Solar seemed to mature into an international market overnight. Efficiency may now have the same opportunity.

See details on the US/Chinese collaboration here: http://www.energy.gov/news2009/documents2009/US-China_Fact_Sheet_Efficiency_Action_Plan.pdf

Visit Elisa Wood at http://www.realenergywriters.com/ and pick up her free Energy Efficiency Markets podcast and newsletter.

No place like home for energy savings

By Elisa Wood

November 12, 2009

Apparently there is no place like home, even when it comes to fulfilling lofty wishes like fixing our energy supply.

A recent White House task force on the middle class finds that our homes generate more than 20% of the nation’s carbon dioxide emissions. If we make our houses more efficient, we can significantly cut emissions and reduce energy use by 40%, a move that could lower our bills by $21 billion annually.

But who has the extra cash in this economy for better windows and an updated heating system?

The report recommends leveraging some of the $80 billion in energy and environment stimulus funds to set up financing mechanisms that let homeowners pay over time and avoid the upfront hit.

Already, to that end, several states have created low-interest revolving loan funds. Nebraska has set aside $11 million. Florida is offering $10 million, particularly for solar hot water installations. And yes, Dorothy, you can go home again. Kansas has gotten into the act with $34 million in efficiency loans.

In addition, the task force encourages federally funded pilot programs using ‘Property Assessed Clean Energy’ financing. Now available in a handful of cities, these programs finance clean energy efforts on property tax bills. Ideally, the efficiency retrofits will reduce energy bills at least as much as property payments rise, so that the homeowner faces no net increase in expenses. Particularly interesting, the loan stays with the property – not the owner. So if the homeowner decides to sell, the new owner, who reaps the benefits of the efficient home, also pays any remaining costs of the retrofit.

Similarly, the report calls for making energy efficiency mortgages more available. The US Dept. of Housing and Urban Development needs to work with Fannie Mae and Freddie Mac to establish uniform procedures for such mortgage products, the report says. In addition, the home appraisal industry must develop methods to evaluate a home’s energy efficiency.

And finally, the report says the housing industry deserves the same opportunity given to the appliance industry with Energy Star labels. Americans saved $19 billion on their utility bills last year with Energy Star appliances, according to the report. A similar label for homes would help buyers in their shopping and provide a benchmark for auditors, retrofitters, lenders and realtors.

To realize these recommendations, the report calls for creation of an interagency ‘Energy Retrofit Working Group,’ chaired by the Department of Energy, HUD, the Department of Agriculture, the Department of Labor, and the Environmental Protection Agency.

Is the White House doing more than tapping its shoes together to bring the initiative home? Monitor these two sites for progress:http://www.whitehouse.gov/strongmiddleclass/blog

http://www.whitehouse.gov/strongmiddleclass

Visit Elisa Wood at http://www.realenergywriters.com/ and pick up her free Energy Efficiency Markets podcast and newsletter.

Energy research and the cobbler’s children

By Elisa Wood

November 5, 2009

Scientific research has brought us products that offer greater energy efficiency. But is research, itself, energy efficient?

Evan Mills, staff scientist with the Lawrence Berkeley National Laboratory, raises this question and points out what may be a largely untapped market for energy efficiency companies: research labs. (See Environmental Science & Technology, http://eetd.lbl.gov/emills/pubs/pdf/sustainable-scientists.pdf.)

US researchers “unwittingly” spend about $10 billion annually on energy, he says in the article, and could cut the bill by half through sustainable practices.

It’s important to take a look at research efficiency because labs are often energy intensive. Researchers may work in hyper clean environments with sophisticated air ventilation, or they may need data centers with vast air-conditioning. Thus, a lab’s utility bills can be “staggering,” he says. Consider CERN, the European Organization for Nuclear Research, whose 230-MW capacity needs costs $80 million per year; or the US Department of Energy’s data centers, which pay $100 million per year for energy.

Money saved through efficiency could be channeled into more research. Yet only 1 to 3% of research labs operate in “green” facilities. LBNL has created a model energy efficient lab setting at its Molecular Foundry, a nanotechnology lab in Berkeley, California. With LEED gold certification, the facility has achieved energy savings 28% beyond California’s already aggressive building standard. http://www.kawneer.com/kawneer/north_america/en/news/releases/LBNL_Release_FINAL.pdf

Typically, laboratory’s can find energy savings by using premium-efficiency fume hoods and laboratory equipment, avoiding over-ventilation, limiting pressure drop in the ventilation system, engaging in energy recovery, minimizing simultaneous heating and cooling, and properly sizing space conditioning equipment to match energy needs, according to Mills.

He recommends that we reduce energy costs by including efficiency requirements in research solicitations. Labs could then calculate the cost of efficient equipment or building improvements into a proposal’s capital expenditures.

“Doing the right thing isn’t the only reason to strive for improved sustainability,” Mills says in the article. “The scientific enterprise depends on availability of ample energy and can be fettered by its cost. In the 1980s, LBNL’s particle accelerators were responsible for the vast majority of site-wide energy use. Indeed, the Bevatron’s [a particle accelerator] energy budget only allowed for ten months of experiments each year. At the time, raising the energy efficiency of the process (e.g., through improved magnets and power supplies) trimmed consumption and costs sufficiently to enable a full year of experiments to be conducted.”

Today, it appears energy research has succumbed to the syndrome of the cobbler’s children who have no shoes. Science discovers efficiencies, but doesn’t necessarily put them to use for its own purposes. Given our growing mastery of common efficiency practices in homes and businesses, research labs represent a new frontier for the energy efficiency industry.

Visit Elisa Wood at http://www.realenergywriters.com/ and pick up her free Energy Efficiency Markets podcast and newsletter.

What’s geothermal again?

October 29, 2009

By Elisa Wood

Some green energy sources seem to have charisma; others struggle for public attention with little success.

Solar energy is an “it” technology, as evidenced once again by the tremendous participation in the annual Solar Power International conference in Anaheim, California this week (Oct. 27-29). Twice as many companies (945) are displaying their wares in the Expo Hall this year, despite the still lagging economy. And overall attendance is expected to break last year’s record, itself a record breaker.

Even on Main Street, ask pretty much anyone and they know solar, probably like it, and see it as an economy builder.

Ask the same people about geothermal heat pumps and there is a good chance they won’t know what you’re talking about. Or they may give an answer that confuses the appliances with geothermal geyser power plants. For whatever reason, the concept of extracting heat from the ground has yet to capture the public or political imagination as much as extracting it from the sun.

Yet, geothermal heat pumps could have a significant impact on our energy supply. They can be installed pretty much anywhere there is a building. And if we used them to maximum potential in the United States, we could avoid building 91-105 gigawatts of generation, nearly half of the new power we will need in 2030, according to the US Department of Energy.

Homeowners who consider then discard the idea often cite the high upfront installation costs. Yet the same argument could easily be made about solar photovoltaic panels. So why is geothermal an also ran technology?

One problem, according to the DOE, is that the heat pump industry needs to collect and disseminate more solid data on heat pumps. Work underway by the Chewonki Foundation, an educational institute in Maine, moves in this direction. With a grant from the Maine Public Utilities Commission, Chewonki is monitoring and measuring the performance of a newly installed heat pump system at its 11,000 square-foot meeting hall. The state is looking for an alternative to heating buildings with oil, a relatively common fuel in Maine. Geothermal heat pumps may prove to be that alternative. http://www.onsetcomp.com/resources/white_papers

This is not to imply that the geothermal heat pump industry is not growing. To the contrary, US shipments of geothermal heat pumps grew 40 percent last year, according to a report released this month by the Energy Information Administration.http://www.eia.doe.gov/cneaf/solar.renewables/page/ghpsurvey/geothermalrpt.pdf. The industry is very much a domestic jobs builder. Most of the systems shipped in the US last year where manufactured here — 416,019 tons – with the remaining 86 tons from China. Sixteen percent of US product was exported.

Still, the geothermal heat pump industry is a small one, representing $319 million last year. Compare this to a domestic solar PV cell and module market of $1.72 billion in 2007 (2008 figures are not yet available from EIA).

Of course, it was just a few years ago that solar conferences were drawing hundreds, not tens of thousands of people, as Solar Power International does now. So who knows? Perhaps it’s not far-fetched to imagine the term” geothermal” rolling off the tongue of the average consumer, as easily as “solar” does today.

Visit Elisa Wood at http://www.realenergywriters.com/ and pick up her free Energy Efficiency Markets podcast and newsletter.

It’s the environment, stupid

By Elisa Wood

October 22, 2009

If Harry Truman were running for president today, he’d probably ‘Give ‘em Green,’ rather than ‘Give ‘em Hell.’ Bill Clinton’s campaign slogan would be, ‘It’s the environment, stupid.’ And Herbert Hoover might be promising a solar panel on every roof, rather than a chicken in every pot – and the pot would sit on a smart-metered stove, powered by a plug-in hybrid, eligible for renewable energy certificates.

Today, green credentials count. Hardly a day goes by without a mayor, governor or legislator claiming some sort of first, best or highest green energy goal.

That’s why the state energy efficiency scorecard, released this week by the American Council for an Energy Efficient Economy, is significant. It carries political currency.

Bragging rights go to California, Massachusetts, Connecticut, Oregon and New York,* the top five states (in that order) doing good by energy efficiency. Some red faces, however, might be found in Nebraska, Alabama, Mississippi, North Dakota, and Wyoming, the group that ACEEE says “most needs to improve.”

States are expected to continue their pursuit of energy efficiency into the next decade. The ACEEE reports that utility ratepayer-funds for efficiency will likely grow from $3.1 billion in 2008 to $5.4-$12 billion in 2020.

What’s most interesting is that so much money and effort is being put into energy efficiency now – during the Great Recession – when states face deficits. This defies conventional behavior: Historically, Americans worry about the environment only when the economy is sound. It appears that green energy advocates have successfully imprinted in the American psyche a link between renewable energy and efficiency and economic prosperity.

“This growing and deepening commitment to energy efficiency is so strong that the current recession has not put a dent in the vast majority of state programs,” says Steven Nadel, ACEEE executive director. “And that is for good reason: Energy efficiency is the only resource that can actually reduce energy consumption while growing the economy — making efficiency the ‘first fuel’ states can use to balance their energy portfolios.”

So we find ourselves in a kinder, greener nation, one with no electric meter left behind, where we walk softly and carry a big wind tower…

*At about the same time the ACEEE released the report, New York announced plans to shift Regional Greenhouse Gas Initiative money, slated for clean energy programs, toward reducing its deficit. This may have reduced New York’s ranking in the eyes of the environmental community.

Visit Elisa Wood at http://www.realenergywriters.com/ and pick up her free Energy Efficiency Markets podcast and newsletter.

Efficiency left out of cap and trade

By Elisa Wood

October 15, 2009

Waxman/Markey’s climate change bill is about 1,400 pages. Its length and complexity, alone, provides fuel for its opponents. Would it stand a better chance of enactment if it encompassed less?

For example, would it have been wiser if Congress pursued cap and trade one year and a renewable energy standard another? I’ve asked this question a lot during interviews the past few weeks, and received a range of responses. But what I found most enlightening, at least from an energy efficiency perspective, was a webinar offered by Bill Prindle, vice president at ICF International. http://www.icfi.com/markets/energy/webinar/webinar-archive.asp.

Here’s what I took away: Energy efficiency helps the carbon reduction cause. But the carbon reduction cause doesn’t do much for efficiency.

Most versions of cap and trade programs now on the table do not recognize the value of demand-side resources in reducing emissions. Credit goes to emissions reductions at the power plant level, not at the retail customer level. So while my new, efficient heat pump will cut my energy use and therefore carbon emissions, this action is not acknowledged anywhere in a cap and trade system. Cap and trade offers no financial reward to the consumer or business that invests in energy efficiency measures.

In a perfect world, lawmakers would rethink cap and trade to encompass demand-side efficiency. But it appears that political and technical obstructions make that difficult. This is bad news – and downright odd – given that energy efficiency is widely acknowledged to be the cheapest way to cut carbon dioxide emissions.

So what’s to be done?

Prindle describes the need to enact polices that complement cap and trade. This is where a national renewable energy standard comes into play. Within Waxman/Markey, the standard requires not only a certain percentage of renewables in a state’s energy mix, but also certain amount of efficiency – a so-called energy efficiency portfolio standard. With a standard in place, efficiency increases, energy use declines, and fewer greenhouse gases are emitted – without any cap and trade influence. As is often the case, the states have already jumped out in front of federal policy: 19 now have such energy efficiency portfolio standards.

A bill with just a cap and trade scheme, one without a portfolio standard, eliminates a powerful way to reduce carbon emissions. So perhaps the 1,400 pages of Waxman/Market are justified. The verdict, of course, is out on whether or not Congress will pass an energy bill this year. Much has been made of the complexity and length of health care reform legislation. Expect the same when, and if, the energy bill comes under public scrutiny. We’ll see what pages make it beyond the cutting room floor.

Visit Elisa Wood at http://www.realenergywriters.com/ and pick up her free Energy Efficiency Markets podcast and newsletter.

Energy head tilters for this week

By Elisa Wood

October 8, 2009

I’ve been writing about energy for 20 years. And during those years, I’ve heard many out-of-the box concepts and witnessed some surprising trends. But it seems that lately head-tilting news comes along more and more frequently, a sign I think of how quickly innovation is occurring in the electric power industry.

Below are three ideas that caught my attention this week as I covered the industry. Perhaps you have your own head-tilters to add. Please do!

By the way, two decades ago solar and wind power were pretty much oddball ideas. Consider that before judging any comments.

• A 14-year-old boy in an impoverished African village, who has never heard of the Internet, built a working windmill out of scrap material

Too poor to attend school anymore William Kamkwamba went to a US-sponsored library to try to keep up on his learning. There the Malawian boy found diagrams for building windmills and painstakingly followed the directions to bring electricity and water to his famine-stricken village. He scavenged for junk and found old bike parts, pipes and fans to make it work. His fellow villagers thought he was crazy until he succeeded. His story is chronicled in his book, “The Boy Who Harnessed the Wind.” http://williamkamkwamba.typepad.com/

There is some irony here that an attempt has been underway for 10 years to build offshore wind power on wealthy Cape Cod, with no luck. Maybe the region needs to hire Kamkwamba as a consultant.

• Baby you can drive my combined heat and power car

We’ve all heard that combined heat and power is a highly efficient approach to heating, cooling and electrifying schools, stores, office buildings, factories, hospitals, and multi-famly housing complexes. But cars? Thomas Blakeslee, president of the Clearlight Foundation, posits that we could achieve far greater fuel efficiency if, rather than feeding ethanol directly into cars, we used it to fuel combined heat and power plants that would in turn electrify cars. The efficiency would be so great, we could drive these electric cars 22 times farther on CHP electricity than if we used the same acre of corn to make ethanol. http://www.clrlight.org/CHPethanol.htm

• Energy efficiency: The invisible hand that Adam Smith never saw

Energy efficiency is often discussed in terms of how much money it can save a household or business on utility bills. But how about what it can save an economy? Environment Northeast issued an interesting report in September that investigates what efficiency can do for state gross product. The macroeconomic report found that every $1 million invested by a state in energy efficiency increases gross state product by $7 million. http://environmentnortheast.org/

Visit Elisa Wood at http://www.realenergywriters.com/ and pick up her free Energy Efficiency Markets podcast and newsletter.