Monthly Archives: May 2011

The Bottom Line: Information Is Powerful & Can Be Used For Good

By: Matt Davis, EDF Research Fellow and Author of EDF Behavior and Energy Savings Study

I’m excited to announce the results of a new EDF study that analyzes the potential to reduce energy use and our environmental impact using one of the cheapest inputs in the world: information.  At EDF, we’ve always believed that the right set of consumer-facing energy efficiency tools and technology could allow families to take charge of their energy usage, cut down on their monthly bills, and shrink their carbon footprint – and now we have proof.

Source: Opower

We collaborated with an innovative start-up called Opower to look at the potential for simple graphs and data to drive energy savings.  We analyzed 22 million electricity bills, spread across 11 utilities, to see how households react to energy-savings tips and – most importantly, and originally – a graphic that shows them how their usage stacks up against their neighbors’.

Our findings, in a nutshell: information pays.  The 771,000 households who received Home Energy Reports (Reports) reduced their electricity usage by 1.8% on average.  While we can only speculate about what would happen in other settings, that number jumped out at us, and for good reason.  If every home in America reduced their electricity usage by that much, we would all see the following benefits:

  •  $3 billion in savings on energy bills;
  • 26,000 gigawatt-hours of reduced electricity-demand – enough to power the homes of 5.6 million Americans; and
  • 8.9 million metric tons of reduced carbon emissions, which is equivalent to the annual emissions from three 500 MW coal-fired power plants.

We also looked at how different types of households respond to the Reports and found some interesting results.  For instance, in most of the utilities we looked at, the “energy hogs” are the most likely to roll back their energy usage.  If you were to use that fact to target reports at “high-potential” households, you could boost the average reduction to 6.8% – more than three times the sample-wide average.

Energy efficiency is widely considered one of the greatest untapped energy resources.  This study confirms that simple behavioral changes generate consistent savings across a wide range of utilities and demographics.  The message is clear: customers empowered with information on energy usage are more likely to save energy and money, all while reducing their carbon footprint.

We hope that simple, innovative tools like this one will spread far and wide.

Posted in Energy Efficiency / Read 3 Responses

Put My Tax Dollars Into A Growth Market, Please

Guest Blog Post By: Jackie Roberts, EDF’s Director of Sustainable Technologies, National Climate Campaign

Two efforts to repeal tax breaks for oil and gas companies – Senate Bill S.940 and the Administration’s budget proposals to eliminate subsidies in FY 2010, FY 2011, and FY 2012 budgets – should receive bipartisan support for no other reason than re-directing those subsidies can be an engine of job creation.  University of Massachusetts at Amherst economic researchers developed employment estimates for various energy sources, including energy efficiency strategies.  Their data show that investments in energy efficiency creates 2.5 to four times more jobs than that for oil and gas development and renewables create 2.5 to three times more jobs than that for oil and gas development.

These jobs are dispersed throughout the U.S. as shown with our LessCarbonMoreJobs mapping, and bring particular benefits to the hard hit Midwest manufacturing regions.

Large government subsidies might, just might, be justified if “Big Oil” was using profits to invest record amounts in transitioning to clean energy.  But, that is far from the case.  A Center for American Progress analysis of Big Oil investments reveals that the big five oil companies invested just four percent of their total 2008 profits in renewable and alternative energy ventures.  There are no signs that this level of investment has increased at all in the past several years. 

Clean energy will be a major new market – by some estimates the market for renewables alone will range from $1.7 trillion per year to $2.3 trillion by 2020, depending on different government policy scenarios.  Having already slipped from first to third in terms of investments in this sector, the U.S. needs to play catch up.  Government dollars should be used to help the U.S. transition to clean energy and to do so in a way that we have significant market share in as many clean energy solutions as possible.  First mover advantages are critical with new markets and worth every penny we can devote to creating strong clean energy innovation and manufacturing here in the U.S.  Such investments will also translate into cheap, homegrown energy sources in the medium- to long-term – the supposed purpose of the oil and gas subsidies.  Put my tax dollars into a growth market, please.

Posted in Energy Efficiency, Renewable Energy, Washington, DC / Comments are closed

Decoding the Final Decision in the AB 32 Lawsuit

A Superior Court in San Francisco issued a final judgment today in a lawsuit filed in 2009 by environmental justice (EJ) groups concerning California’s groundbreaking 2006 law, the Global Warming Solutions Act (AB 32), which sets limits on global warming pollution in the state.

As expected, the ruling establishes a new timeline and preconditions for continued implementation and final approval of the AB 32 cap-and-trade regulation. The ruling confirms the California Air Resources Board’s (CARB) ability to use cap-and-trade and should not force a delay in the planned launch of the program on January 1, 2012, as long as the agency meets its California Environmental Quality Act (CEQA) requirements laid out by the court.

The judge found that CARB did not adequately complete its legally mandated review of alternatives to cap and trade and must do so, then gain approval by its board and the judge prior to proceeding with implementation. Even before today’s ruling was issued, CARB had assured the public that it was significantly bolstering its analysis. EDF is eager to be part of the public process to review and comment on the updated analysis and believes the new documents will further illustrate the proven, far-reaching benefits of using market forces to limit pollution.

It’s worth noting that the California Department of Public Health evaluated the potential impacts of a cap-and-trade program and found that the regulation was not likely to cause any adverse impacts to public health and welfare – especially if money raised from the program gets reinvested in California communities to help protect against the impacts of climate change, an essential element of the state’s plan.

In a press release issued shortly after the ruling was announced, CARB said that it will appeal the ruling, a legal procedure that will likely allow it to continue working on the regulatory design and finishing touches before the new analysis is final.

Posted in General / Comments are closed

Shining a Light on Energy Efficiency: EDF Climate Corps reflects on three years of results

As any energy manager knows, it’s one thing to find energy-saving projects that are worth doing, and quite another to get them implemented.  Over the last three years, EDF Climate Corps fellows have uncovered almost a billion kilowatt hours of potential energy savings, representing $439 million in net operating savings.  But our biggest question has always been, “Will the companies move forward with those energy-saving investments after the fellows leave?”  Thankfully, the answer is yes:  so far, companies report that they are implementing projects accounting for 86 percentof the savings identified by EDF Climate Corps fellows.

This year, as we looked back on three years of results, we noticed that many of the projects that got implemented first were lighting projects.  For example, Hospital Corporation of America will roll out a lighting retrofit program across the organization, and eBay recently upgraded the lighting in a 60,000-square foot building on its San Jose campus.  Other companies are employing devices to make sure the lights are on only when people need them:  AT&T will installoccupancy sensors in its 250 largest central offices, and Sungard is optimizing the lighting timers in its New York City office.

This is no surprise if you’ve ever looked at the ROI on lighting projects.  The upfront costs tend to be relatively low – zero in the case of delamping or switching timer settings – so payback time is short.  And lighting projects are pretty straightforward to identify.  You can often spot ways to cut lighting costs just by walking through a building, and use a $50 light logger to document when the lights are on and don’t need to be, as our fellow at AT&T did.

Beyond lighting, EDF Climate Corps companies are also implementing upgrades to HVAC systems, office equipment, and data centers.  Eaton is moving forward with an air circulation improvement in a North Carolina plant that could yield an annual electricity reduction of 2.5 million kWh.  eBay is currently installing power management software for all of its PCs.  And Cisco has raised temperatures in some of its research labs, which could save the company about $1.8 million and 18 million kWh of electricity annually.

But if we’ve learned anything about energy efficiency over the last three years, it’s that it has as much to do with changing behavior as changing lightbulbs.  And EDF Climate Corps fellows have contributed to several projects that integrate energy and environmental data into a range of business decisions.

For example, Compass Group North America created a web-based toolkit for its food service clients, illuminating choices they can make to cut their carbon emissions.  And Diversey has introduced several decision-support tools with the help of its EDF Climate Corps fellow, including one that factors energy and carbon emissions into capital expenditures, and another that tracks savings from avoided travel.  As the firm’s global travel is 10 percent of its carbon footprint, Diversey estimates $6 million in annual savings from reduced travel that can be invested in other energy projects.

Putting the facts about energy use and greenhouse gas emissions into decision-makers’ hands is a powerful way to spotlight the business and environmental benefits of energy efficiency, and move energy-saving projects forward.  Another bright idea brought to you by EDF Climate Corps.

Sign up to receive emails about EDF Climate Corps, including regular blog posts by our fellows. You can also visit ourFacebook page to get regular updates about this project.

Posted in EDF Climate Corps / Comments are closed

Malfunctioning Smart Meters Demonstrate Their Intelligence

The digital “smart meter” replacement of antiquated analog meters in California has caused quite a stir.  These devices have been making headlines since installations began en masse in 2006 because of concerns about health risks related to the wireless technology they use to transmit data and coincidental bill increases.  While an independent contractor hired by the California Public Utilities Commission found that the initial bill increases were due to summertime rate hikes and unusually high summer temperatures, PG&E’s smart meters are in the news again for billing errors. 

This time there are faulty meters generating billing errors when hot weather makes them run faster than normal.  While some skeptics may feel that the meter malfunctions validate their concerns, in fact, it demonstrates a key smart meter benefit: for the first time ever, meters have the ability to alert utilities that they aren’t working properly. 

When Bad News is Good News

In this particular instance, PG&E remotely compared the meters’ clocks with real time. It identified roughly 1,600 out of 2 million meters made by Landis & Gyr that were malfunctioning.  Its other 2 million meters made by General Electric don’t appear to have the problem. 

This is transformative: PG&E can now monitor millions of meters in real time to comprehensively identify and ameliorate problems. 

This isn’t possible with old analog meters, which is one of the many reasons why they’re being replaced. Before smart meters, electricity users who suspected erroneous billing had little evidence to make their claims.  Now the utility can proactively identify and address problems. 

To Put Things in Perspective

While it is inconvenient when any technical device, including a smart meter, is malfunctioning, the rate of problems with analog meters is much higher.  Consider this comparison:

  • Roughly 1,600 out of 2 million meters were found to have internal clocks that run a bit fast in rare hot conditions.  That’s a meter failure rate of 0.08%, or less than one 10th of a percent.  This failure rate is believed to be within industry norms.
  • According to PG&E, analog meters have a failure rate in the range of 3%, which means they fail at rates about 40 times greater than suggested by these faulty smart meters.

PG&E estimates that the overcharge for failed smart meters is less than $40/year, about $3.33 per month.  Again, it is the intelligent meters that enabled PG&E to quantify and correct the problem.  All of the customers with faulty meters will be repaid in full and receive replacement meters.  They will also get $25 for being inconvenienced and receive a free home energy audit.   

Advantages of Smart Meters

Once smart meters have been fully deployed, utilities will be able to remotely and in real-time monitor all meters in their service territory, isolating malfunctions with precision and speed.  What does that mean for consumers?  More reliable service and quick resolution when problems arise. 

You might wonder why EDF, an environmental advocacy group, is commenting on this.  Smart meters are key to delivering the environmental and public health benefits of the smart grid

EDF will soon be releasing a smart grid evaluation framework targeted at the plans that PG&E, San Diego Gas & Electric, and Southern California Edison owe the state by July 1, 2011.

We will then be publicly evaluating those plans for their ability to deliver benefits including: increased effectiveness and reduced costs of energy efficiency and other electricity conservation programs; integration of electric vehicles and intermittent renewable electricity generation resources, such as rooftop solar panels.

Stay tuned.

Posted in Grid Modernization / Read 3 Responses

Clean Energy: Getting Past Cute

Source: Wired Business Conference

Did Bill Gates just call the solar panels on my house cute?  “If you’re interested in cuteness, the stuff in the home is the place to go” was the line most often quoted from his talk at the Wired Business Conference in New York City.  Headlines declared that Bill Gates thinks clean energy is ‘cute’ and Gates seemed to suggest that people who were serious about energy should be looking to innovation in nuclear and other technologies. 

That set off a firestorm of responses among clean energy advocates who point out, correctly, that the cost of renewables is coming down, the clean energy market is growing, and many countries are leaping ahead of the US in terms of public investment and incentives. 

According to a UN report released May 9, renewable resources are plentiful and could provide as much as 77% of the worlds’ energy by 2050.  According to the report, renewable energy investments globally could be in the trillions of dollars by 2030.  The brake, according to the UN, is not technology.  It’s governance and policy that stand in the way.  To get beyond cute, we need advances in policy that create an energy market friendly not just to fossil fuels but to renewables too.

But what does it mean for policy to support clean energy?  A couple of weeks ago, Deutsche Bank released a report that says: “there has been a very substantial growth in [clean energy] investment in China, and something of a shift away from Europe and the US as the centers of clean energy investing.”  The implication is that America is being left behind.

But here’s the kicker.  Deutsche Bank then says: “clean energy private investment is still dominated by the US.”  To me, that’s America’s ticket to leadership in the trillion-dollar market of the future.  Create the rules of the game that allow clean energy to compete and innovation has a shot at taking clean energy well past cute, all the way to super-model status. 

Today’s rules of the game make it hard to plug renewables into the grid on parity with fossil fuel sources.  Buildings can waste nearly half of their energy – yet utilities aren’t rewarded for “buying” efficiency.  We can produce electric cars that cost less than three cents a mile to drive (compared to more than 13 cents for a gasoline-powered car), but where do we plug them in?  How many households and businesses can easily figure out their energy run rate – and the most cost-effective steps to cut bills?  Shouldn’t there be an iPhone app for that?

It’s time to take private investment in clean energy to scale.  For that to happen, government has to rewrite the rules of the game so that:

  • Clean energy can plug into the grid, both for distributed sources (which work really well in some places, like cities) and for utility-scale renewables (which could work well in other places, like deserts).  No need to disparage one or the other – let them compete fairly and openly for market share in different places.
  • Information is transparent and accurate.  Make it easy for buyers to see the energy footprint of homes and CFOs to track energy usage floor by floor.  Yes, there ought to be an iPhone app for that too – not just an opaque monthly bill.  Map the pollution created by power plants.  Disclose hydraulic fracturing fluid.  Hidden information kills free markets.
  • Efficiency has a market.  Let utilities “buy” efficiency just like they “buy” new power plants and innovators will find ways to aggregate efficiency across cities and real estate portfolios to meet that demand.
  • Cars can be electric – and be “batteries.”  Electric vehicles can be batteries for intermittent renewables like solar and wind.  They can also be the least expensive cars on the road today.  If we could easily plug them in, who wouldn’t want that?
  • Subsidies give way to rules that create a level playing field.  Governments currently dole out massive subsidies to the oil and gas industry.  They subsidize renewables too, but comparatively less.  Worldwide, some reports suggest that governments pay over $300 billion in subsidies for fossil fuels and a mere $55 billion for renewables.  Frankly, waiting for more and more subsidies alone is a losing strategy, especially in times of fiscal constraint.  What if we focused instead on getting the rules right, so that renewables could plug in and compete on more even footing?  And what if we focused on getting information into the marketplace so that local and regional renewable opportunities were clear to end-users? 

How important is it to get this right?  By 2030, the global population will reach 10 billion people – that’s a billion more than originally expected.  Most will live in explosively growing mega-cities, especially in fast-growing economies in China, South Asia, and Latin America. 

Can we provide so many people an economic future without destroying the planet?  Only if we take down the barriers to private sector innovation and rewrite the rules of the market to let clean energy in. 

Here’s something else Gates said: “If we don’t have innovation in energy, we don’t have much at all.”  If we don’t have innovation in policy, we won’t have enough innovation in energy.

Posted in Climate, Energy Efficiency, Grid Modernization, Renewable Energy / Read 1 Response