Monthly Archives: August 2012

EDF Energy Innovation Series Feature #10: Social Networking From Honest Buildings

By Jim Marston / Published: August 22, 2012

Throughout 2012, EDF’s Energy Innovation Series will highlight more than 20 innovations across a broad range of energy categories, including smart grid and renewable energy technologies, energy efficiency financing, and progressive utilities, to name a few. This series will demonstrate that cost-effective, clean energy solutions are available now and imperative to lowering our dependence on fossil fuels.

Find more information on this featured innovation here.

Is your office building on LinkedIn? Can you find user reviews of your high-rise on Yelp? Probably not, but the chances are good that you’ll be able to do both on HonestBuildings.com.

Since launching in beta on March 20, 2012, the fast growing real estate network has already aggregated detailed information on over 700,000 buildings across the U.S. From architects to brokers, thousands of real estate, construction and service companies have joined the platform, posting their portfolio of work and connecting with building owners and managers to find new business opportunities.

Honest Building’s co-founder and CEO Riggs Kubiak says that the real estate market is primed for the convergence of data and community, which will lead to more transparency for all stakeholders and accelerate the adoption of high performance buildings.

“Greater transparency about building performance increases the demand for energy efficiency as tenants can make better, informed decisions about where they lease,” said Kubiak. “This accelerates the adoption of all sorts of best practices by building owners and managers in order to command the best leasing rates. From energy efficiency to leasing to design to management, buildings will have to get better, faster. This also gives the best building service providers and vendors the opportunity to scale faster, as the services and technologies with the best track record can leverage a network effect to capture more and more business.”

And when it comes to important energy innovations, tackling the building sector is vitally important. Cars and trucks carry a lot of the blame for climate change. But in the U.S., the building sector is responsible for nearly half of CO2 emissions, compared to a third for the transportation sector. Three-quarters of the electricity produced in the U.S. is used just to operate buildings, and that percentage is even higher globally.

There’s a massive amount of factual, verifiable data about how homes and buildings operate. This data includes square footage, energy costs, walkability – all things that people care about now more than ever. But all this information is very hard for consumers to find and for building professionals to promote. And there is no venue for people — designers, buyers or sellers — to interact.

“The purpose of Honest Buildings is to merge the hard facts with human interaction,” Riggs said. “You can see the data on a building and weigh it against what the community is saying about it.”

In San Francisco, the Honest Buildings platform is using energy benchmarking compliance data to bring together building owners, service providers and local government to create new business opportunities and more efficient buildings. Working with the city’s department of the environment, they’ve created a custom map of all the buildings that have and have not complied with the city’s energy benchmarking ordinance, and helped building owners connect with energy efficiency companies and consultants that can help these building go above and beyond compliance.

“The introduction of real-time energy data for buildings will provide an incredible insight into how they perform,” Riggs said. “Our expectation is that developers and property managers will want to highlight their best performers and create an element of competition that will increase efficiency and sustainability. And the better the technology, the faster that will happen.”

But according to Riggs, data alone isn’t enough. “As with all great services, there has to be a human element,” he said. “People need to be able to weigh in with their voice, and the social network aspect of our service will be just as important as detailed, trustworthy data. Information may help us make better buildings, but people make the decisions.”

Posted in Energy Efficiency, Energy Innovation / Read 3 Responses

The Housing Market And Green Labels: Location! Location! Efficiency!

By / Published: August 21, 2012

From produce to t-shirts, we know certain people are willing to pay more for organic, and that these people often seek out restaurants, vendors and brands that have earned certifications for their commitments to sustainable practices. Labels help consumers, who increasingly face a multitude of product and service offerings, make informed decisions. But what about a sustainably-labeled house? Will people pay more for a certifiably more efficient, or “green,” home?

A recent study, “The Value of Green Labels in the California Housing Market,” suggests that the market places significant value on certified green homes in California. Such green-labeled homes fetched a 9% premium versus non-labeled homes, based on statewide sales data for 1.6 million homes from 2007 to 2012. This translates to a $34,800 price premium for a home labeled by at least one of three standards: ENERGY STAR, LEED for Homes or California’s own GreenPoint label, on the $400,000 sales price of a non-labeled home. The research was conducted by Matthew E. Kahn, an economics professor at UCLA, and Nils Kok of Maastricht University in the Netherlands, a visiting scholar at the University of California at Berkeley. Their analysis controls for variables known to affect real estate prices including location, size, vintage and the presence of amenities.

The study estimates that the typical single-family California household spends $200/month on utilities, and thus stands to benefit from $720 in annual savings from energy efficiency measures that would reduce energy use by 30%. The authors point out that the $34,800 price premium of a green-labeled home is 48x the annual estimated utility bill savings of $720, suggesting that consumers value efficient homes for more than the direct financial benefits they produce.

All else equal, it is well understood that a resource efficient home uses less energy than an inefficient one, and will therefore have lower operating costs. But Kahn and Kok point out that ‘the added value of a green-labeled home far exceeds both the estimated cost of adding energy efficiency features to a home and the utility-bill savings generated by those improvements.’

Since the non-financial benefits of a green-labeled home are a seemingly large part of their perceived value, effectively promoting energy efficiency requires a targeted marketing approach that taps into the consumer’s values – perhaps some combination of increased comfort, improved indoor air quality and the signal of ‘conspicuous conservation’ that lets your neighbors know your own particular “shade of green.” In fact, the study found that the value of a green-labeled home was positively correlated with the level of environmental ideology of a neighborhood, as measured by the percent of hybrid vehicle registrations.

We tend to focus on cash-flows when doing a cost-benefit analysis of energy efficiency financing programs, weighing the upfront installation costs versus the resulting monthly utility bill savings. This makes sense given that non-financial benefits, to date, have been hard to value. However, this study is an indication that these benefits are indeed monetized at sale – and a 9% price premium sends a strong message that it pays to invest in energy efficiency!

Posted in California, Energy Efficiency / Read 1 Response

Taking a stand to secure the benefits of greenhouse gas offsets in California

By Tim O'Connor / Published: August 16, 2012

Yesterday, EDF filed a legal brief to help defend a core component of California’s landmark cap-and-trade program. Similar briefs were also filed by other environmental, non-profit, and business groups. These briefs, filed to the San Francisco Superior Court – (Case number 519554), support the California Air Resources Board’s (CARB’s) decision to allow pollution reductions achieved by verified, voluntary projects — known as offsets – to count under the program. The suit, first filed in March, seeks to prevent California’s program from harnessing these projects.

Here’s our perspective:

Offsets present an important opportunity to support environmentally beneficial projects throughout California’s economy. Offsets help to incentivize projects that reduce pollution in sectors – such as agriculture – that are not covered by the state’s cap-and-trade program. Under current rules, a variety of projects – including projects to grow and maintain urban forests in the metropolitan LA area, to capture greenhouse gas pollution from animal waste lagoons in the Central Valley, and to manage forests in Northern California – may be eligible to receive tradable carbon permits. Those permits can then be sold to power plants and other companies that are required to reduce pollution under the state’s cap-and-trade program.

CARB has adopted a stringent, category-specific approach to ensure measurable pollution reductions. Not just any old offset project can qualify for carbon credits under the program. Only projects that are developed according to pre-approved protocols adopted by CARB and that meet stringent accounting, verification and longevity standards can earn credits. These stringent requirements ensure that only verified projects representing real emissions reductions in specific project areas can receive credits that can be sold into the cap-and-trade program.

Over the past two years, EDF, along with other groups, has been working to introduce new types of projects that can sell credits into the program, as long as they meet CARB’s stringent criteria. Three such types of projects include: projects to reduce pollution from agricultural operations in California’s rice farming industry; projects to upgrade equipment in oil fields; and projects that ensure efficient use of fertilizers throughout the agricultural sector. All of these projects can lead to significant greenhouse gas reductions across the state.

California has a long way to go before meeting its ambitious climate change targets. Offsets present one important opportunity to realize that goal because of the incentive for new projects and ideas to be developed throughout the state. Our brief in the California Superior Court filed yesterday is but one part – albeit an important part – of the effort to ensure innovative project developers can participate in California’s long-term transition to a lower carbon economy.

Posted in General / Comments are closed

EDF Energy Innovation Series Feature #9: Green Button Initiative

By Jim Marston / Published: August 15, 2012

Find more information on this featured innovation here.

Since their introduction, smart meters and “connected” appliances have offered the potential for customers to better access and control their energy data. Tens of millions of smart meters later, there’s a massive amount of data being gathered, but few ways for customers to understand it.

A desire to make sense of this treasure trove of energy data (and a challenge by the White House to come together as an industry) was the driver behind Green Button, a voluntary effort by utility companies to bring some order and predictability to– and increase the consumer value of – the gigabytes of energy information now available.

“Armed with their own data, homeowners and building owners will have more opportunities and choices to use a growing array of online services that can help them manage energy use and save on their bills, while helping the Nation achieve the important goals of conserving energy and reducing pollution,” said Nick Sinai, a senior advisor in the White House Office of Science and Technology.

The momentum sparked by the White House call to action has been remarkable.

Nearly two dozen energy providers and more than 30 energy and technology companies are already on-board.

The early and broad cooperation has resulted in more than 31 million homes and business that can already – or will soon be able to – view their consumption usage online. Developing standards for energy data is one of the most important first steps to making it a powerful tool for customers and entrepreneurs. Standards allow for the development of tools, apps and services that can apply to any customer, regardless of who provides their power.

While the White House challenge was focused on transparency and usability for customers, the effort has also sparked a lot of excitement with another group: entrepreneurs.

Imagine a smart phone app that, with a customer’s permission, monitors a home’s energy usage and patterns, analyzes the data against the home’s size, local weather patterns and other customers, and provides home improvement suggestions to reduce energy costs. Or even more simple, imagine an app that allows customers to securely control individual appliances in their home from anywhere on the planet.

Some companies are already using the initial data sets at “code-a-thons”where software application developers compete to produce prototype apps during caffeine-induced all nighters. In a similar spirit, last month EDF teamed up with the White House, Google and HonestBuildings to pull together a “data jam” at Google’s Manhattan headquarters. Todd Park, U.S. Chief Technology Officer and Assistant to the President, kicked of a brainstorm among tech entrepreneurs, energy experts, finance whizzes, web designers and government agencies, to answer this question: if government makes its energy data open and computer-friendly, what could entrepreneurs invent to “improve energy outcomes for families and businesses?” The jam session generated at least ten great ideas, ranging from consumer energy apps to ways to save money on your commute.

Just a few years ago, the new availability of Global Positioning System (GPS) data fueled the creation of countless GPS-based products aimed at filling that new niche market of navigation products. Today, GPS is an integral part of the explosion of mobile apps.

“Opening up access to GPS information led to an explosion of innovation and economic value, with GPS data fueling an estimated $90 billion of commercial products and services. I’m confident that energy data will similarly fuel a new wave of innovation and entrepreneurial opportunities,” said Sinai.

Posted in Energy Innovation, General / Read 3 Responses

13:15

By Marita Mirzatuny / Published: August 13, 2012

Source: “ERCOT Investment Incentives and Resource Adequacy.” Brattle Group. June 1, 2012.

In January, we discussed the benefits of demand response (DR) and how Texas is not taking full advantage of it. Not only is DR a low cost, zero water source for providing capacity through conservation, but it can also actually directly benefit consumers financially. Furthermore, since residential and small customers account for “more than 70 percent of peak load” it is paramount that we tap into this resource.

The 13 Percent Reserve Margin

Fast forward to this summer, where a few factors have encouraged the situation as Texas’ energy crunch comes to light. In May, the 13.75 percent reserve margin became the center of discussion about how to proceed. Set in 2010 by the Electric Reliability Council of Texas (ERCOT) board, the 13.75 percent target planning reserve margin is to ensure enough power is available for contingencies such as extreme weather and unplanned power plant outages. However, a newly revised Capacity, Demand and Reserves (CDR) report shows that in 2014 we may be only at 9.8 percent and by 2015 this could drop to 6.9 percent, numbers that are very far away from the original goal. A failure to meet this reserve creates instability, not only for the ERCOT market as a whole, but that uncertainty ripples through the state for all businesses and households.

In June, the peak energy forecast for this summer was surpassed. ERCOT had predicted a 66,195 megawatt (MW) peak demand for the whole summer, but we surpassed that with 66,583 MW in June, well before the string of 100+ degree days we have seen recently.

The 15 Percent Potential From Demand Response

In June the Brattle Report came out reiterating FERC’s studies, which demonstrated that the potential for achievable participation in DR is 15 percent of capacity in Texas. This means that “dynamic pricing and load control technologies are deployed on an opt-out basis, with roughly 75 percent of customers participating.”

So if Texas met this DR goal of 15 percent it would be enough to cover our reserve margin of 13.75 percent and then some. Without new power plants. Without any new generation capacity at all. While in actuality we would rely on other demand side resources as well – such as distributed generation and storage – it is very important to point out the link between the 13/15 ratio, and how much potential demand response provides us.

Even better is that unlike other mechanisms that do not benefit consumers financially such as the price cap increase, DR and other demand side resources can provide large gains for consumers. Not only do they encourage reductions in energy consumption and thus energy bills, but because there is an added value in providing that “negawatt” capacity back into the system, customers are compensated. As we noted in an earlier blog, in the PJM market, $20 million of the payments went to residential customers!”

While there are still only a few of these initiatives around the country, the momentum is alive. Last year, FERC Rule 745 was established that “requires wholesale energy market operators to pay DR participants the market price for energy when those resources are able to balance supply and demand as an alternative to additional generation, and when DR dispatch is cost-effective.” This lays the foundation for how consumers will be compensated. FERC Chairman Jon Wellinghoff put it well, “[this] final rule is about bringing benefits to consumers. The approach to compensating demand response resources as we require here will help to provide more resource options for efficient and reliable system operation, encourage new entry and innovation in energy markets, and spur the deployment of new technologies. All of this contributes to just and reasonable rates.”

On June 26, ERCOT moved in the right direction by approving a DR pilot project that “will allow eligible participants a half hour to respond to ERCOT requests to reduce their electric use. The program is open to electric users — either as individual customers or as part of an aggregated group of consumers — who can reduce demand on the ERCOT grid by at least 100 kilowatts, which is the amount 20 homes use during peak demand.”

This follows a rule change adopted by the PUC in May that “authorizes ERCOT to conduct pilot projects to ‘evaluate resources, technologies, services, and processes that demonstrate the potential to advance the operational and market functions of the ERCOT system.’ This is the first pilot project approved under the new rule.” EDF commented on these rule changes and we are pleased to see ERCOT moving forward with these pilots. While many more deployments need to begin, we are headed down the right path and finally waking up the innovations needed in the energy market.

Posted in Demand Response, Texas / Read 1 Response

Natural Gas – A Briefing Paper For Candidates

By Eric Pooley / Published: August 10, 2012

To download a copy of this briefing paper, please click here.

Hydraulic fracturing and horizontal drilling, processes used to extract natural gas from underground shale formations, have unlocked vast new domestic reserves — an unexpected abundance that has overturned many of America’s assumptions about energy. Every major-party candidate for public office in 2012, Republican or Democrat, must understand this new energy reality. And though each candidate’s position on natural gas development is likely to begin with a recognition of shale gas’s economic and energy security benefits, mastery of the issue requires a deeper level of understanding. Shale gas also brings with it a set of serious risks to public health and the environment — including impacts to water, air, land, local communities and the earth’s climate. At the local level in areas where shale gas production is intense, legitimate concerns over health and environmental impacts are shared by Republican, Democratic, and independent voters alike. No candidate’s position on natural gas can be considered complete unless it addresses these impacts.

In 2001, shale gas accounted for just 2% of America’s natural gas supply. Today, it accounts for more than 30% — while more than 90% of all new oil and gas wells being drilled in the U.S. make use of hydraulic fracturing. As unconventional natural gas production spreads into populous regions that are not accustomed to intensive industrial activity, its impacts have made it the object of intense local opposition, as manifested in the July 28th “Stop the Frack Attack” rally in Washington D.C and others like it in state capitals around the country. The environmental and public health concerns of local communities must be addressed if natural gas companies are to maintain their social license to operate.

Economic Benefits

While a majority of Americans remain unfamiliar with hydraulic fracturing, or “fracking,” according to a recent University of Texas poll, many will certainly applaud the economic benefits of low-cost natural gas. The natural gas revolution is driving:

Job creation across the value chain, with rising demand for technical and professional services, for steel, pipelines and storage facilities, and for all the ancillary goods and services that arise in support of a rapidly growing industry.
An unexpected expansion in the American chemical industry, with Dow and DuPont now building new plants close to shale formations. “If you had told me 10 years ago I’d be standing up on this podium making this announcement [about Dow’s $4 billion investment in four new Texas chemical plants], I would not have believed you,” Dow CEO Andrew Liveris said in April. “The cost of energy, the cost of feedstocks … was pricing the United States out of the market,” he said. But the shale “miracle” changed that.
A revival in U.S steelmaking and other manufacturing industries. Nucor, which uses natural gas to make steel, is building a $750-million facility in Louisiana, just eight years after shutting down a similar plant in the same state.
A new sense of the potential for U.S. energy independence and energy security.

Environmental Benefits

Increased development of shale gas could yield substantial environmental and public health benefits while helping the U.S. energy infrastructure become cleaner and less carbon-intensive. This highly desirable outcome will only be achieved, however, if the resource is developed responsibly. The potential exists because natural gas:

Produces only about half the carbon dioxide of coal when burned.
Produces about a third as much of the smog-forming nitrogen oxides that come from burning coal.
Produces almost none of the mercury and sulfur dioxides that come from burning coal or oil.

For this reason, fueling power plants with natural gas instead of coal can dramatically cut conventional air pollution, can help reduce greenhouse gas emissions from the power sector and could help turn the tide against mountaintop removal mining and other environmentally disastrous industry practices. And because natural gas-fired power plants can cycle up quickly, they can be a nimble enabler of intermittent renewable energy sources in combination with demand response and emerging large-scale energy storage technologies.

Critically, if U.S. industry and regulators are successful in measuring and reducing methane pollution, which undermines natural gas’ role as a lower carbon alternative to coal and oil, the shale gas revolution can also bring a reduction in short-term radiative forcing — the driver of global climate change — over the next several decades. Leak reduction will determine how much of a role natural gas can play in a clean, low carbon future.

In short, natural gas could be a win-win benefiting both the economy and the environment — if we do it the right way. The right way means putting tough rules and mandatory environmental safeguards in place that protect communities and reduce methane pollution. There is no question that domestic unconventional gas supplies are leading to coal-fired power plants being retired. The public recognizes this benefit, but the jury is still out on whether shale resources can be produced responsibly. It’s no simple task to strike a balance between public safety and the development of this crucial energy resource, but it is essential that we do so. Americans deserve assurance that the economic, environmental and energy security benefits of shale gas development will be realized without sacrificing their health, safety, or the protection of the environment.

Clearly there are environmentally sensitive areas that should be off limits to natural gas development. And just as clearly there are some areas where intensive development will occur. Environmental Defense Fund is working with partners from academia, civil society, and industry to identify and minimize the impacts from the full range of gas development activities. Horizontal drilling and hydraulic fracturing attract significant press attention, but the issues of gas production are much broader than that.

Specific Areas of Concern

EDF sees five areas in which strong rulemaking is necessary:

Mandating greater transparency in industry operations. Having good data is a prerequisite to understanding and mitigating risks, and it’s the first step toward winning back a badly damaged public trust. Regulators should require, and companies should embrace, disclosure policies that mandate reporting of not only the chemicals used in hydraulic fracturing, but also chemicals used in drilling and operating wells – as Ohio Governor John Kasich has advocated. Transparency should also be brought to other aspects of industry operations, such as detailed reporting of air emissions, chemical characterization of waste streams and tracking and reporting of water use and waste disposition. Company compliance histories should also be catalogued and reported, so companies with good records can get the credit they deserve and bad actors can be identified and pushed to improve performance.
Modernizing rules for well construction and operation. Poor well construction and operation can lead to groundwater contamination and to blowouts that can endanger lives and foul the surface environment. In response, EDF is working with regulators and key stakeholders to strengthen rules for proper construction and operation of hydraulically fractured wells. While stronger regulatory oversight of well construction is needed, no one should try to suggest that hydraulic fracturing itself is risk free. Both aspects of well development need strong oversight.
Strengthening regulations for waste and water management. Poor handling, storage and disposal of production fluids and other wastes is a major issue; chemical spillage is the leading cause of groundwater contamination from gas development activities. In response, EDF is pressing for measures to reduce spills, improve the use and handling of chemicals, and assure proper disposal (or recycling) of produced water. As mentioned above, a key missing ingredient here is better data on the chemical composition of waste streams. To be confident that handling, treatment and disposal practices are sufficient, authorities must know what substances are being handled. Finally, headline-grabbing reports of earthquakes connected to shale gas development have been linked to the waste disposal method known as deep well injection, not to hydraulic fracturing itself. This issue points to the need for improved seismic analysis prior to permitting of deep injection wells.
Improving regulations to protect local and regional air quality. Air emissions resulting from the production, storage, processing, and transportation of natural gas can threaten public health. Leaks and routine venting during the extraction, processing and transportation of natural gas result in emissions of greenhouse gases and, depending on the local composition of unprocessed gas, other pollutants that contribute to locally- and regionally-elevated air pollution. In 2009, an SMU study estimated that the combined amounts of volatile organic compounds (VOC) and nitrogen oxide (NOx) emissions from oil and natural gas production in the Barnett Shale of North Texas were comparable to amounts of those emissions from the roughly 4 million cars and trucks in the adjoining Dallas Fort-Worth metro area. Fortunately, widely available and cost-effective remedies exist: repairing worn equipment, using “green” well completion techniques and eliminating venting are just a few. In the past five years, for example, Southwestern Energy says it has cut the cost of capturing stray emissions from $20,000 a well to close to zero. The company is capturing an average of 16 million cubic feet of gas that would otherwise have been released or flared. Southwestern also uses special pop-off valves to make sure natural gas is not released into the air from well casings. If pressure causes a valve to open, the gas is captured in a closed loop that returns it to the system, saving the resource. These systems cost just $600 to $1200 a piece.
Developing innovative strategies to reduce community impacts. The cumulative impact of infrastructure development, traffic, noise, lights, and the like can overwhelm communities and intrude on sensitive ecosystems and habitats; none of this is easily addressed through conventional regulatory approaches. Instead, EDF recommends that states and local governments bring together stakeholders for scientifically based, bottom-up planning processes designed to address unique local needs. Likewise, the right of local communities to regulate the location of gas development through local zoning ordinances must be preserved. Gas operations shouldn’t receive special carve-outs from traditional local powers that other industrial activities must comply with.

President Obama has voiced his commitment to domestic energy production through safe and responsible natural gas development, declaring that “America will develop this resource without putting the health and safety of our citizens at risk.” EDF would like to see Governor Romney and other candidates across the land call for the same careful balance. Far from being an example of regulation that chokes economic growth, strong oversight of natural gas development is necessary to ensure the sector’s continued growth, by avoiding the public backlash that could slow or even derail natural gas development. Read More »

Posted in Methane, Natural Gas, Washington, DC / Tagged Energy Policy, fracking, Natural Gas Policy | Read 11 Responses