Energy Exchange

New York Public Service Commission Signals Big Changes to Prioritize Clean Energy

Elizabeth Stein Photo2In the last week of December, the New York Public Service Commission issued an Order that signals big changes coming soon to New York’s electric utility landscape.  The Commission made it clear that it wants clean energy resources, including on-site, distributed power generation (such as solar PV), energy efficiency and energy load management strategies, to play a central role in how the energy system brings value to customers.  In contrast to the peripheral role clean energy resources have played in the past, the Commission is now ready to make them a priority, signaling a willingness to transform the regulatory landscape.

The Order was one of a trilogy arising from three intertwined proceedings, all of which were considered by the Commission on December 19, 2013.  One of those three – perhaps the most concrete and immediate – was a proceeding concerning the initial capitalization of New York’s Green Bank, a new entity that aims to advance clean energy funding in New York State.  That proceeding addresses a proposal to leverage ratepayer funds and private investment to systematically address market barriers to private financing of distributed generation, energy efficiency and demand management projects, with an ultimate goal of building a clean energy marketplace that can stand on its own.  The other related proceedings concerned two New York State programs that draw on the same funding sources that are now being made available for the initial capitalization of the Green Bank: New York’s Renewable Portfolio Standard (RPS) and the Energy Efficiency Portfolio Standard (EEPS).

This Order concerns various proposals to improve and streamline the EEPS programs.  Some of these changes are effective immediately, such as the elimination of duplicative reporting requirements.  Other, more substantive program modifications – such as the changes to the structure of EEPS and other clean energy programs, as well as the responsibilities of various entities (including the Commission’s Staff, the New York State Energy Research and Development Authority (NYSERDA) and the utilities themselves) – are to be addressed through a new “E2 working group,” which is to be formed by February 1, 2014.  This new working group is tasked with “sharing and developing concepts for an optimized E2 portfolio that supports a scale-up of energy efficiency and overall system efficiency,” for a program launch by the end of 2015. Read More »

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New Sustainable FERC Website Charts Progress to Clean, Low-Carbon Energy

Elizabeth Stein Photo2The Sustainable FERC Project, a coalition of environmental and clean energy organizations, launched its new website today:  The site will inform the public and policymakers about the coalition’s efforts to increase the amount of clean, low-carbon energy powering the nation’s electric grid, which focus on the Federal Energy Regulatory Commission (FERC) and the regional entities regulated by FERC.

FERC is a federal agency whose activities include regulation of transmission and wholesale sales of electricity in interstate commerce.  Working on behalf of its coalition partners, the Sustainable FERC Project develops and advocates for federal policies and regional implementation and practices that will give rise to a cleaner, more efficient energy system. The coalition’s top priorities include removing the barriers to getting clean energy on the transmission grid, maximizing the use of energy efficiency in planning and facilitating a transition to a cleaner energy future.

Source - Windpower Engineering Development

Source – Windpower Engineering Development

EDF’s work as a member of the Sustainable FERC Project coalition complements our own Smart Power Initiative, which is working, primarily through state-level advocacy, to change the trajectory of the U.S. electricity system to help avoid dangerous climate change through smart power policies and clean energy investments.  The Smart Power Initiative focuses on ensuring that the right state policies are in place to allow for better integration of clean energy resources into the power grid.

Optimizing the environmental performance of the U.S. electric grid – which is sometimes called the “largest machine on the planet” – requires environmentally-sound policies and practices at all levels to drive system planning and operation.  The new website ( will feature issue analysis, coalition comments filed with FERC and regional grid organizations and links to blogs written by representatives from the coalition.  It should become a go-to site for those wanting to deepen their understanding of environmentally-important smart grid developments in the federally-regulated portions of the U.S. electric system.

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Audrey Zibelman’s Appointment Strengthens New York’s Clean Energy Commitment

One of the ways you can tell that in idea is gaining real momentum is by looking at the people being tapped to lead it.  Last week, New Yorkers got a good idea how serious their leaders are about clean energy when the State Senate confirmed Governor Andrew Cuomo’s appointment of Audrey Zibelman, an internationally-recognized expert in energy policy, markets and smart grid innovation, to the New York Public Service Commission (PSC).  The PSC regulates the state’s public energy utilities, and once Ms. Zibelman assumes office, Governor Cuomo will designate her as chair of the PSC.

Ms. Zibelman was president and chief executive officer of Viridity Energy Inc., a pioneering smart power company she founded after more than 25 years of electric utility industry leadership experience in both the public and private sectors. Previously, Ms. Zibelman was the executive vice president and chief operating officer of PJM, the Regional Transmission Organization that operates the world’s largest wholesale electricity market and serves 14 states throughout the eastern United States.

Ms. Zibelman’s is not a symbolic appointment.  It is a welcome sign of New York State’s commitment to building a smarter, modernized energy system that enables wider use of renewable energy and energy efficiency and offers greater resiliency to extreme weather events like Superstorm Sandy. Change takes both leadership and expertise, and EDF believes that Ms. Zibelman will provide both. Read More »

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President’s Vision Encompasses A Next-Generation Energy System

Tuesday’s State of the Union (SOTU) speech included much that was music to environmentalists’ ears.  The headline, of course, is the commitment to take serious action to address the most significant challenge our generation faces – climate change.  And, with it, the extreme weather and public health burdens that are already making life harder for vulnerable regions and people nationwide, and that stand to become so much worse as the root cause remains unaddressed. 

But some of the most exciting aspects of the SOTU message are the nuts and bolts that underlie the top-line goal.  Specifically, the President’s speech recognizes that Americans have an opportunity to achieve many of the carbon reductions we need through actions that create new business opportunities, increase national security and drive economic growth.  In fact, we already are.  As the President noted, the past four years have seen the beginnings of a revolution in American energy production and use – technological innovations have put us on track to energy independence and renewable resources constitute a growing share of electric generation capacity. 

The President’s vision, as outlined in the SOTU, encompasses a next-generation energy system – one where the system that was revolutionary in Thomas Edison’s time is finally supplanted by a system that meets the needs of our time.  Technological change can bring full-scale transformation, and government can play a role by accelerating technological development.  A future where cars and trucks no longer depend on oil can finally be imagined – and government efforts can help bring that future into the present more quickly.

Carbon-free wind and solar energy represent a growing share of our resource mix, and  they can grow to serve a larger and larger share of load.   And energy waste in buildings can be cut substantially – but doing so requires innovations in energy retrofits, building operations and finance, which government can also help to foster.

Finally, President Obama referred to fostering a ‘self-healing power grid,’ which is extremely important. Modernizing our outdated, aging electric grid and how it is operated (as well as customer-side technology and practices) will help minimize problems that arise from extreme weather events and other disruptions, while also allowing for greater shares of electric demand to be served by resources whose output depends (literally) on something as fickle as the weather.

Posted in Energy Efficiency, Grid Modernization, On-bill repayment, Renewable Energy, Washington, DC / Tagged , | Comments are closed

Leveraging Data To Move Markets

Recently, I blogged here about the fact that significant improvements in the efficiency of existing buildings – a critical and potentially cost-effective part of our carbon reduction strategy – are not easy to achieve, and described how doubts about the likely success of energy upgrade projects are a barrier to “scaling up” efficiency in buildings.  I also touched on EDF’s efforts to change that.

Today I’m happy to report further on some of the progress being made toward a future in which energy efficiency (EE) project originators and funders will have greater reason to expect success in energy upgrades involving existing buildings.

Last week, EDF partnered with Bloomberg New Energy Finance to host ‘Leveraging Data to Move Markets,’ a half-day discussion among government, real estate, Wall Street, real estate entrepreneurs and NGOs, with participation from the Department of Energy (DOE) and the White House Center for Environmental Quality (CEQ).  The discussion focused on DOE and EDF efforts to address key data and standardization requirements to meet the needs of private capital markets to facilitate comprehensive energy efficiency projects.

It was clear based on the conversation throughout the day that investors and other market players are looking for accurate, reliable, and transparent forecasts of savings from EE projects and related loans in order to manage risk associated with investing.  The lack of standards for data and for the various practices that make up the lifecycle of an EE retrofit are not only affecting the ability to rely on the savings being delivered, but also impeding the origination of projects and creating significant transaction costs to all players. 

As Jonathan Powers described at the opening of the meeting, the White House’s CEQ is keenly interested in stimulating discussions among private market actors and parties in possession of data, with an eye toward how data sets can be leveraged to achieve purposes above and beyond the capabilities of the entity that collected it in the first place.  The DOE is actively engaged in creating data sets with the potential to change the landscape in which energy efficiency projections are made.

Ron Herbst of Deutsche Bank observed during the day’s opening panel that “Data informs where you should hunt for opportunity.”  He also noted that auditable energy performance data would be a substantial step forward, and emphasized the power of transparency to correct malfunctioning markets.  Jeff Pitkin, of the New York State Energy Research and Development Authority (NYSERDA, a New York State authority with a mandate to run energy efficiency programs), seconded the need for transparency. Mr. Pitkin noted that the ability to ground projections in something that is “seen as a credible process,” and transparency with respect to the distinct track records of different market actors, would be powerful levers for building better programs and making prospective projects more attractive to property owners.  Angela Ferrante of Energi, an insurance company seeking to underwrite performance risk in energy upgrade projects, similarly stressed that the variability among project proposals is itself a real barrier to efficient underwriting. Read More »

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Making It Real – Energy Efficiency Upgrade Project Performance In The Real World

While codes, standards, and an increasingly energy-savvy marketplace push new buildings toward higher energy standards, existing building stock presents a conundrum.  Upgrading a building to meet higher energy standards than those for which it was originally designed is a tricky business.

McKinsey and others have identified energy efficiency in buildings, particularly large buildings, as one of the most powerful, and potentially cost-effective, opportunities for greenhouse gas (GHG) reductions needed to avoid catastrophic climate change.  However, even energy conservation measures that are “expected” to “pay for themselves” fairly quickly are not implemented universally.   Why?

There are myriad barriers to scaling energy efficiency, but one that gets little attention is the question of how reasonable and achievable upfront energy saving projections actually are.  This is remarkable, because knowing the savings will actually happen is incredibly important for ensuring that energy cost savings streams actually flow to the parties who pay for them – thus making billions of dollars available to pay for them as well ensuring that load reductions resulting from energy efficiency projects can be relied upon by electric system planners and that the GHG reductions we are counting on actually happen.

In a complex world, of course, it would be unreasonable to expect outcomes to match predictions perfectly. And, if the variability consisted of most outcomes coming pretty close to matching predictions, with overperforming and underperforming projects distributed evenly along a familiar-looking bell curve, the unpredictability of individual projects could be managed to some extent by combining them into portfolios.  Unfortunately, this does not appear to be the case.  Although data about energy efficiency project performance is scarce, the little that is publicly available suggests that outcomes do not conform to a neat bell curve, and, worse, systematic underperformance may be the norm. 

I’ve explored some of the reasons for this variability and underperformance – and described EDF’s efforts to foster the conditions for a better track record – by convening parties engaged in various aspects of the upgrade process (our Investor Confidence Project)  in a Snapshot column published yesterday in the newsletter of the Sallan Foundation, The Torchlight.

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