Monthly Archives: October 2013

At a Key Moment for Energy, California Should Seize Demand Response

This commentary originally appeared on EDF’s California Dream 2.0 blog. 

Traditionally, if an area’s population grows — or it loses a power plant — it needs more energy. But California and some other states can approach it differently and reduce the use of fossil fuels.

Instead of asking, How can we add more energy?” the real question becomes “How can we reduce demand?”

Two words: Demand Response (DR).

DR is an incentive that has been proven to work on the East Coast and elsewhere, encouraging energy users who voluntarily participate to reduce their electricity usage temporarily when demand could outpace supply.

Recently, the California Energy Commission’s Integrated Energy Policy Report (IEPR) Draft recognized DR as a technology with a high potential to maximize energy efficiency. This report comes at an important time for the state, when greenhouse gas emissions from large facilities have increased in California after decreasing the previous years, in large part due to the closing of the San Onofre Nuclear Generating Station (SONGS) power plant.

In our recently submitted comments, EDF commended the Commission on thinking big on demand response, a cutting edge load management technology that can lower wholesale energy prices when they are highest, dramatically minimize system costs, and reduce air pollution and greenhouse gas emissions.

In their report the Commission also acknowledged that while DR is a great tool if used well, there still “has been little progress towards increasing the amount of DR used in the state.”  The Commission included several recommendations to bolster DR going forward, which EDF supports and will advocate for.

We also made suggestions for how the Commission could maximize the use of DR in California, including:

Time of Use (TOU) tariffs allow customers to pay prices for energy that depend on both when and how much they use. By giving customers the option to save money for reducing their energy use at peak times, older, less efficient peaker plants aren’t used as much and the overall system costs go down dramatically. If half of Southern California Edison’s ratepayers adopted its voluntary TOU program, this would replace the need for two thirds of the San Onofre generating capacity.

  • Set clear and ambitious goals for demand response in the state

The Commission should set ambitious benchmarks in regard to demand response capacity.

  • Foster consumer adoption of innovative demand response technology

Modern technology allows for automated thermostats, ‘set it and forget it’, and other options for easy to use systems that allow interested electricity customers to quickly and consistently respond and reduce energy use when demand is high and the grid is stressed. The Commission should plan to increase consumer uptake of these technologies.

  • Support new technologies and quick scaling up of pilot projects

Demand response opportunities exist on a broad scale in California.  Innovative ideas like charging electric cars when solar power is abundant to help maximize the benefits from renewables are still being developed. The Commission should encourage and support these new technologies, and look for successful pilots that are both cost-effective and fully scalable.

  • Establish effective enforcement mechanisms

By putting in place proper monitoring and enforcement mechanisms, the Commission will help ensure expected environmental benefits.

The Commission’s IEPR is a great step forward, and comes at a key moment for managing California’s energy system. We urge the Commission to continue its work with other stakeholders to increase this momentum, and to utilize its authority – such as appliance and buildings standards and electricity forecasting – to help implement the state’s vision for demand response.

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A New Day For Energy Efficiency In North Carolina

The North Carolina Utilities Commission issued an important ruling this week that reaffirms the importance of energy efficiency as the fastest and cheapest way to reduce pollution from fossil fuels, protect the health of our families and promote our economy.

The ruling approved a new “shared savings” program that allows Duke Energy to make favorable returns on energy efficiency investments, but only if the company saves their customers money in the process.  The shared savings model is the most common financial tool in the United States to encourage electric utilities to make energy efficiency investments.

The new program will motivate the utility to implement energy efficiency measures as broadly and cost-effectively as possible.  Duke’s investments, in turn, can help ensure a robust market for providers of energy efficiency goods and services.

The shared savings model also provides an additional financial incentive for Duke to achieve the voluntary energy savings it agreed to when the company merged with Progress Energy in 2012.  The merger agreement included a minimum 1% per year energy savings starting in 2014 and 7% cumulative energy savings over five years (from 2014-2018).  If the company achieves certain energy efficiency targets, it will receive a financial incentive.

Notably, the ruling requires Duke Energy to convene a stakeholder discussion on the feasibility of commercial and industrial on-bill repayment and combined heat and power programs, which will enable the commercial sector to achieve high levels of energy efficiency performance.

The commission’s decision replaces Duke’s avoided cost energy efficiency program, known as “Save-a-Watt.”  That program, which expires at the end of 2013, was successful in motivating Duke to make investments in energy efficiency.  In fact, the company exceeded its energy savings targets.  The downside: Save-a-Watt was overly complex for energy regulators and stakeholders.  In contrast, the new shared savings program is simple, transparent and will continue to expand Duke Energy’s energy efficiency investments.

EDF is pleased to see that the ruling incorporates all of the major elements of an agreement that we helped secure in August with Duke Energy, the Commission Public Staff, North Carolina Sustainable Energy Association and environmental colleagues.  We look forward to watching Duke Energy achieve its full energy efficiency potential.

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From the Pacific Coast Climate Plan, a Path Forward for the Low Carbon Fuel Standard

While several stories have been written on this week’s historic climate pact signed by California, Oregon, Washington and British Columbia, little has been mentioned about the path its created for low carbon fuels in Western North America. Such a clear statement on the direction for West Coast low carbon fuels development has never been made, so it certainly deserves a deeper dive.

In Part II of the pact: “Transition the West Coast to clean modes of transportation and reduce the large share of greenhouse gas emissions from this sector” the leaders agreed to “Adopt and maintain low-carbon fuel standards in each jurisdiction. Oregon and Washington will adopt low-carbon fuels standards, and California and British Columbia will maintain their existing standards.”

The relevance of this statement cannot be understated.

According to the US Energy Information Agency, the 3 western states burn a combined 23.7 billion gallons of gas and diesel every year, emitting just over 200 million metric tons of carbon dioxide. British Columbia, for its part, releases about 15.5 million tons from burning gas and diesel in cars and trucks every year.

Furthermore, based on recent projections of alternative fuel industry growth from the California energy commission, the US Energy Information Agency, and consulting firms like Navigant, stringent Low Carbon Fuel Standards (LCFS) are achievable.

For example, according to recent cutting-edge research on electric vehicle (EV) sales, California and Washington will likely lead the nation in EV sales by the year 2022 with about 813,000 and 105,000 EV’s sold respectively. Additionally, the state of Oregon is expected to account for over 5% of all EV sales in 2022. With policies like the LCFS, these vehicles can capitalize on the huge amount of zero carbon power (hydroelectric, wind, etc.) produced throughout the pacific northwest on a yearly basis – yielding even greater economic investments while also significantly reducing pollution that causes climate change and public health impacts.

In addition to the EV example, a set of LCFS standards across the western region can build upon the large amount of low carbon biofuels that are being produced. By way of example, according to the US EIA, at least 14 different biodiesel production facilities with a production capacity of 183 million gallons of fuel are already located in California, Oregon and Washington, with more to come. Furthermore, as documented by the California Energy Commissions, at least a 3-fold increase in alternative fuels production is expected by 2020, enabling the achievement of goals for “petroleum displacement, in‐stage biofuel production, and LCFS compliance.”

These alternative fuel facilities and companies mean local jobs, economic growth and reduced imports – a much different picture than the current trend of buying massive amounts of foreign crude oil and sending billions of dollars abroad.

For years, members of the oil and traditional ethanol industries have fought to undermine the LCFS in the media, the courts and at the ballot box. These groups have spared no expense to build implementation road blocks and cast doubt over the standard, hiring consulting firms that deliver highly criticized sky-is-falling cost estimates, sponsoring industry groups aimed at casting doubt over implementation readiness, and suing California in state and federal court. With this most recent announcement, those efforts were again proven futile.

Though time will tell how Oregon and Washington will implement the LCFS portion of the recent climate pact, for now, a green light means it’s go time for low carbon fuels across the region.

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Energy And Water Utilities’ Unique Perspectives Uncover Joint Cost-Saving Solutions

In the past, I’ve written a lot about the inherent connection between energy and water use and the need for co-management of energy-water planning. Most of the energy we use requires copious amounts of water to produce, and most of the water we use requires a considerable amount of energy to treat and transport. Despite this inherent connection, it’s actually uncommon to see energy and water utilities collaborating to identify best practices to save energy and water and even lower costs. Think of it this way: If energy and water utilities worked together, their unique perspectives could uncover joint cost-saving solutions, customers would save more money and utilities could share data to better understand their holistic energy-water footprint.

Identifying why there is a lack of collaboration and how to overcome these barriers was the motivation behind the American Council for an Energy-Efficient Economy’s (ACEEE’s) recent report.  The report goes beyond citing discrepancies, though, and provides solutions for energy and water utilities to create better, more resource-efficient programs for themselves and their customers.

The report highlights a number of ways U.S. energy and water utilities have collaborated to identify mutually-beneficial energy and water savings. It lists successful energy and water utility programs from a variety of different sectors, including residential, commercial, industrial, agricultural and municipal. Read More »

Posted in California, Energy Efficiency, Energy-Water Nexus, Texas / Tagged , | Comments are closed

One Year After Superstorm Sandy, Slow But Steady Progress Toward A Common Goal

Source: Iwan Baan

By: Rory Christian, Director of New York Smart Power, and Mary Barber, Director of Smart Power Initiatives

It was only a year ago that the most devastating storm the Northeast has ever seen slammed into the region. Hurricane Sandy pummeled the states of New York and New Jersey, destroying homes and businesses and knocking out electricity for millions of families for days, weeks and – in some cases – months.

The unprecedented situation shined a much-needed spotlight on the vulnerability of our century-old energy infrastructure, placing the issue front and center for the region’s state and local leaders, electric utility companies and regulators, particularly as climate change increases the frequency of extreme weather events.  Utilities in the region have since begun to fortify flood-prone substations among other reinforcements to the power grid, but improvements that are ‘status quo’ are only part of the solution to future challenges.

Ensuring the adoption of technologies and policies that move the U.S. power grid into the 21st century, making it more resilient, flexible and smarter, can simultaneously accomplish today’s goals while preparing for future challenges – some of which may not yet be apparent.  EDF is working closely with stakeholders to find innovative and pragmatic solutions to help modernize our aging energy infrastructure, an improvement that is crucial to resiliency, safety and storm recovery. Read More »

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Historic Agreement Demonstrates Broad Commitment To Build Clean Energy Economy

 This commentary originally appeared on EDF’s California Dream 2.0 blog.

With the stroke of a pen, North American efforts to combat climate change and promote clean energy reached a new level today.

I was lucky enough to witness the historic event, as Governor Jerry Brown joined the leaders of Oregon, Washington State and the Canadian province of British Columbia, to sign an agreement that formally aligns climate and clean energy policies in the four jurisdictions.

This signing by these “Fab Four” of the Pacific Coast Collaborative makes sense given all they have in common: they’re geographically connected, share infrastructure, and their combined regional economy accounts for a $2.8 trillion GDP, making it the world’s fifth largest economy.

Read More »

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