Energy Exchange

New Report: Commercial Building Energy Efficiency = Jobs

By EDF Blogs / Published: June 13, 2011

Source: Architecture 2030

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

The President’s Better Buildings Initiative proposes to make American businesses more energy efficient through a series of new initiatives including newly designed tax incentives for building efficiency, better financing opportunities for commercial retrofits, a “Race to Green” for state and municipal governments that streamline regulations and attract private investment for retrofit projects, a “Better Buildings Challenge” to CEOs and University Presidents, and, finally, new training for commercial building technology workers. An analysis released today, conducted by the Political Economy Research Institute (PERI) of the University of Massachusetts at Amherst, showed that more than 114,000 new jobs, many of which would come from the hard-hit construction industry, would be created through the Better Buildings Initiative.

Insights into which firms will benefit, and where those jobs may be located, can be found in Duke University’s value chain analyses of three energy efficiency strategies for buildings: high efficiency windows and glass, smart grid, and LED lighting. If HOME STAR legislation is also passed, the firms involved in residential re-insulation and electric heat pump hot water heaters will also benefit.

Job creation is no mystery for the business world: it begins and ends with new customers. Every policy initiative that pushes more customers to U.S. firms identified in these value chain studies is critical. Hopefully, the Better Building Initiative is followed by a commitment to broader policy that puts us on a path to a low carbon economy. Broad policy creates customers for the many firms involved in the value chains for hundreds of climate solutions – whether renewables, energy efficiency, transportation, agricultural, industrial or other innovations. And, at the end of the day, customers = jobs.

Posted in Energy Efficiency, Jobs, Washington, DC / Read 1 Response

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

By EDF Blogs / Published: May 23, 2011

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

By EDF Blogs / Published: May 23, 2011

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

Smart Grid: Big Market, Big Return

By EDF Blogs / Published: May 11, 2011

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

The exciting innovations in the area of an energy internet – also known as the “smart grid” – illustrate just one of the ground-breaking ways that the U.S. can reduce our energy consumption and carbon emissions while also creating new business opportunities that help expand jobs.

Big Market, Big Return

Using data from a Pacific Northwest National Lab study that quantified several categories of smart grid benefits, Duke University estimates that a built-out smart grid could reduce an estimated 18% of emissions from the U.S. electric sector. Looking across the full spectrum of possible benefits, EDF sees even greater potential. By mobilizing system-wide efficiencies and large-scale deployment of renewable and distributed resources, a well-designed smart grid could reduce electric sector carbon emissions 30% by 2030.

This new market is predicted to be just as large as the aforementioned emission estimates. According to one market research firm, the global market value of products to enable the smart grid has grown from an estimated $26 billion in 2005 to more than $69 billion in 2009, a compounded annual growth rate of 22%. Total market value is expected to exceed $186 billion by 2015 (SBI Energy, 2010).

Who Will Benefit?

Duke University’s report, “U.S. Smart Grid: Finding New Ways to Cut Carbon and Create Jobs,” identifies 334 U.S. company locations in 39 states that are already developing or manufacturing products for a smart grid. All regions of the country will benefit.

For example, Chicago-based S&C Electric Company, founded in 1911, acquired new customers in the smart grid market. The company holds thousands of patents in switchgear, interrupters, and other transmission-voltage devices. In the past four years, its business has expanded approximately 50%, according to the company, with new products such as a truck-sized device that connects wind farms to the grid. Today, most of S&C’s products are made in the United States and Canada, with only a small portion made elsewhere. In all, the U.S. workforce totals about 1,700 employees, including more than 1,000 machinist, manufacturing, assembly and support positions, 200 engineers and technicians, a global sales force, and finance and accounting offices.

Global Expansion

Export markets are promising as well. According to Duke, “Italy’s 30 million installed smart meters all use Echelon (a U.S. company based in California) technology. Echelon has recently won large contracts in China, Russia, and Denmark.”

As former Google CEO Eric Schmidt noted, “Many companies can skirt downturns entirely by coming up with innovations that change the game in their industries – or create new ones.” That’s exactly what companies identified by Duke, from well-known IBM and other partners in our Pecan Street Project to companies such as Cooper Power Systems, are doing as they expand their offerings to meet the demands of the smart grid value chain.

Just last Friday, Eric Spiegel, President and CEO of Siemens Corporation, announced that their “orders and sales are increasing and [they] have added more than 1,000 new jobs to our U.S. workforce in just the last two quarters to keep up with the demand.” All three of the company’s sectors – Industry, Energy, and Healthcare – contributed to these results, but job growth was concentrated in the Industrial Automation, Building Efficiency, Smart Grid, and IT areas. Encouraging news all around.

Posted in Grid Modernization / Comments are closed

New York City’s Split Incentive “Trifecta”

By EDF Blogs / Published: April 5, 2011

By: Elizabeth Stein, EDF Attorney

Today, New York City is pioneering a new solution to the long-studied problem of the “split incentive” that prevents commercial landlords and office tenants from saving money and cutting pollution with energy efficiency. This is not just an academic exercise – the solution will be rolled out in the heart of Manhattan, at the Gold LEED-certified 7 World Trade Center site, and modeled in the government’s own leases across the city. This can be a game-changer for energy efficiency nationally.

Energy efficiency is the fastest, most cost-effective way to reduce greenhouse gas (GHG) emissions in the United States. Americans waste an extraordinary amount of energy in inefficient buildings – and that means we’re wasting money too. In New York City, buildings account for a staggering 80% of the city’s carbon emissions and $15 billion in energy costs. Applying today’s technology, many buildings could cut energy use by between 20 and 40% through investments that have the potential to pay for themselves. Investments in energy efficiency will reduce greenhouse gas emissions, lower energy costs, and create jobs when we need them most.

Today’s commercial leases, however, stand in the way of unleashing that savings stream – hence the split incentive conundrum. Why would a landlord upgrade a building’s energy systems if the cost savings accrue only to the tenant? Something as simple as the way a lease is drafted can block access to the cheapest and fastest way to solve air and climate pollution.

To solve this problem, Mayor Bloomberg’s administration teamed up with EDF, NRDC, NYSERDA, real estate consultants HR&A and Cycle-7, and senior real estate attorney, Marc Rauch, among others, to reinvent the commercial lease in a way that lines up the incentives so that landlords and tenants will want to upgrade their buildings and cut waste. The new lease language is simple, straightforward, and can be used by any commercial building, anywhere.

The basic idea is to realign the business deal on energy costs, so that both landlords and tenants are motivated to stop wasting energy. Under the new lease announced today, part of the cost savings from energy efficiencies are made available to pay for upgrades to cleaner technology. Tenants save money and buildings end up with newer lighting and heating and air conditioning systems that cost less to operate. The new lease also solves a tough measurement and verification challenge by applying an easy-to-understand discount to the upfront cost-savings projections obtained by a landlord’s engineer, in order to protect against variances between cost savings projections and realities over time.

By changing the business deal between landlord and tenant, the lease structure announced today creates a way to save money, cut pollution, and modernize building systems. It’s the ultimate win-win for New York City’s commercial landlords, tenants – and for any of us who breathe the air in a city with lots of power plants. I think of this as a split incentive “trifecta:” it’s being adopted by the private sector in a true market transaction at the World Trade Center site, the City itself is committing to use the approach in leases where it is a tenant, and the Real Estate Board of New York (REBNY), New York City’s leading real estate trade association, is speaking favorably about the solution.

This is a great example of what can happen when government, advocates, and the private sector roll up their sleeves together to solve a problem. This forward-thinking business deal serves as a model for every commercial building in the country. Help us spread the word, and let’s see if we can use this to open up the marketplace for energy efficiency globally.

For more information, please see the City’s Energy Aligned Lease fact sheet and model language.

Posted in Energy Efficiency, New York / Comments are closed

What People Need And Want From Their 21st Century Electricity Grid

By EDF Blogs / Published: February 17, 2011

By: Derek Walker, Director, California Climate Initiative & Deputy Director, States Climate Program

For most people, the “smart grid” is just another nerdy-sounding concept, a little like the Internet was 15 years ago. Back in 1995, only a crystal ball would have given a hint of the rapid explosion of the information age and the changes it would bring about in our daily lives. The “smart grid” is in its infancy, but the benefits it offers are starting to become clear: reduced air pollution, more reliability, and greater control for the people and businesses that use energy. Not to mention some very cool gadgets that can do everything from remotely starting your washing machine to telling you, in real time, how much money you are spending to power your iPad.

Last month, the 2011 State of the Consumer Report was released by the Smart Grid Consumer Collaborative (SGCC), an organization (EDF is an affiliate member) whose mission is to listen to, educate, and collaborate with consumers to ensure the most efficient and effective transition to the “smart grid” of the future. After all, billions of dollars will be spent in the next 20 years to upgrade our electricity infrastructure, and we need to get the most bang for every buck. That means the best technology, the most cost-savings, and the greatest degree of consumer empowerment possible.

The SGCC report combines the insights from over 80 studies and white papers to give a thorough snapshot of what consumers want, need, and expect from new energy technologies and the modernized “smart grid.” The result is a template for innovators, policy makers, and consumers themselves about how best to get and stay engaged in the exciting changes that are coming…and in many cases, are already here.

The results of the studies clearly show that people are intrigued, but that there are many different kinds of people that have different needs and require varying levels of engagement. It also shows that those fascinated with new gadgets and those with the greatest interest in doing their part to create a healthy environment and reduce pollution are the most likely ‘first adopters.’ The report concludes that to generate more widespread enthusiasm for the “smart grid,” it is important to emphasize how the increasing costs of energy can be cut through a “smart grid” and how simple and user-friendly new clean energy technologies can be.

Ultimately, people want and embrace what they can see, feel and touch. That means that tangible benefits such as energy and cost savings, more reliability, and the ability to pick and choose technologies and pricing schemes are vital. The report touches on a basic truth about human behavior: the gap between intention and action. Consumer education, engagement, and empowerment are critical keys to successfully unlocking the myriad benefits of the “smart grid.”

Posted in Grid Modernization / Comments are closed