Energy Exchange

How Policy Can Drive Progress In The Energy Efficiency Market

By Kate Zerrenner / Published: June 20, 2013

Energy efficiency is one of the fastest and most affordable ways to reduce harmful pollution. Why, then, aren’t we financing more energy efficiency upgrades?

Well, simply put, there are quite a few barriers that must be addressed and broken down before energy efficiency skyrockets. Yes, there are already many buildings that have set the bar high for others to follow, but some investor and lender hesitancies still exist that we need to overcome.

Furthermore, the efficiency market cannot create itself. And it is currently stifled, despite investors’ eagerness to take part.

The problem, as the investment community sees it, is that there is no secondary market for energy efficiency loans. In other words, the pool of loans is currently not large enough to make these investments worthwhile for institutional investors. Furthermore, there is a lack of uniform standards for energy efficiency loans, limited data on loan and project performance and an insufficient pipeline of projects. There are also challenges to bringing efficiency to scale, namely:

the split incentive—disconnect between the building owner and the residents, who actually pay the utility bill;
utility disincentives—utilities generally make money by selling more energy, not by reducing wasted energy; and
limited information available to consumers on their energy use.

Investor Confidence Project Releases Enhanced Energy Efficiency Protocols

By EDF Blogs / Published: June 14, 2013

This blog post was written by guest blogger Matt Golden, Senior Energy Finance Consultant.

Source: City-Data.com

The EDF Investor Confidence Project (ICP) is a multi-year initiative to help spur growth in the commercial energy efficiency retrofit market by reducing transaction costs and engineering overhead, and increasing the reliability and consistency of savings. EDF has worked with a cross-functional team of industry experts to assemble existing technical standards and best practices into a straightforward Energy Performance Protocol (EPP) that defines a standard investment quality energy efficiency project to enable deal-flow and investment.

In November of 2012, we released the initial version of the Energy Performance Protocol for Large Commercial (EPP-LC). We received encouraging reviews from industry allies and many industry leaders have committed to join our growing ICP Ally program, a broad based network of organizations that helps us develop, test, and implement the ICP Protocols.

New Release: Large Commercial – Version 1.1

Building on our initial success and market feedback, ICP is now releasing a new and updated version 1.1 of the EPP-LC, which incorporates a wide array of important improvements that will streamline the project development process and improve results.

Our ICP team is incredibly grateful to all individuals that contributed their time and energy to this process resulting in a more streamlined protocol, especially our committed team of experts who dedicated untold hours and contributed a wide array of industry, research, and public sector experience.

Environmental Accomplishments And Missed Opportunities From The 83rd Texas Legislative Session

By EDF Blogs / Published: May 31, 2013

This blog post is co-authored by Marita Mirzatuny and Kate Zerrenner.

In addition to passing tax cuts and making pecan pie the official state pie of Texas, the 83^rd Legislature heard numerous energy-related bills. As a solution to our Texas Energy Crunch efforts, EDF supported 13 bills that would have provided relief to Texas’ resource adequacy problems; in other words, the issues Texas faces as a result of increasing energy demand, scorching temperatures and a record drought. Among those bills (which we review on page 13 of our ‘State of the Texas Energy Crunch’ report) are a few, highlighted below, that made some – albeit not enough – progress.

Energy Legislation

A big success this session was the passage of Senate Bill (SB) 385 by Chairman John Carona. SB 385, or the Property Assessed Clean Energy (PACE) bill, clears some of the hurdles that prohibit commercial and industrial properties from taking advantage of new financing for energy improvements. PACE allows property owners to pay for water and energy efficiency upgrades or renewable energy improvements with loans, which are then repaid through an annual charge on their property tax bill. For more on this legislation, please see our recent blog post covering PACE in Texas.

Chairman Carona’s demand response bill, SB 1351, passed and was referred to State Affairs in the House. Demand response (DR) initiatives allow customers to voluntarily reduce peak electricity use and receive a payment for doing so in response to a signal from their utilities. Additionally, Chairman Rafael Anchía introduced the companion bill, House Bill (HB) 2194. HB 2194 allows for customer, or demand-side resources (DSR), from “residential, commercial, and industrial customers to participate in all energy markets” and specifies that DSR “must be designed and implemented in a manner to increase market efficiency, competition, and customer benefits.” This bill clears the way for demand response, renewable energy, and energy efficiency to become important players in the market.

SB 1280, by Senator Kirk Watson, passed out of the Business and Commerce Committee with a seven to two vote. This bill, regarding Texas’ reserve margin for the electric grid, requires that power regions (such as the Electric Reliability Council of Texas, or ERCOT) estimate the available generation at any given time, the expected peak demand (demand at the hottest part of the day when the most energy is being used) and the amount of reserve energy needed to ensure a reliable electricity supply. SB 1280 also directs the use of voluntary load participation programs (think demand response) with at least 20 percent of peak energy demand coming from each of the residential, commercial and industrial sectors.

Senator José Rodríguez’s net metering bill, SB 1239, successfully passed out of the Business and Commerce committee. Texas is one of only seven states where customers are not guaranteed fair compensation for the electricity they provide to the grid. SB 1239 clarifies that all retail electric providers, municipal utilities and cooperatives must buy back extra electricity from residential customers along with churches and schools at a reasonable, market-based value. For example, Los Angeles implemented the largest solar buyback program in the nation earlier this year, paying customers 17 cents a kilowatt hour for excess energy produced.

In the House, HB 303 by Representative Eddie Rodriguez called for a new renewable energy goal – to supply 35 percent of energy demand with clean energy by 2020, with at least two percent coming from solar. This marks an important precedent for the clean energy standards introduced in state legislatures around the country. Additionally, Representative Rafael Anchía authored HB 2196, a bill that addresses payments to customers for renewable energy and other demand-side contributions to the electric grid.

While it’s great that some of the bills gained some traction, only SB 385 made its way to the Governor’s desk. With a hotter than average summer approaching, possibly worse than 2011, electric reliability is not a guarantee and these bills would have provided solutions to help address our energy issues. Already Texas is receiving national attention for our impeding energy shortages.

Source: www.lavacacountytaxpayers.org

Water Legislation

At the last minute, the House and Senate, after much back door negotiating and out front wrangling, approved a plan to fund the State Water Plan. HB 4, by Chairman Allan Ritter, set up two funding accounts to pay for water projects. These accounts must be approved by voters, because the bills would amend Texas’ Constitution to allow the plan to be initially funded with a portion of the Rainy Day Fund. Read More »

Also posted in Demand Response, Renewable Energy, Texas / Comments are closed

Texas Picks Up The Clean Energy PACE

By Kate Zerrenner / Published: May 23, 2013

Chairman John Carona’s Property Assessed Clean Energy (PACE) bill, Senate Bill 385 (SB 385), which was sponsored by Chairman Jim Keffer in the House, is headed to the Texas Governor’s desk! Building upon successful legislation passed in 2009 to authorize “PACE districts” in Texas, SB 385 clears some of the hurdles that prevent commercial and industrial properties from taking advantage of new financing for water and energy conservation efforts.

PACE is an innovative, market-based approach that helps alleviate the steep, upfront costs property that owners generally incur for water and energy improvements by using loans that are seamlessly repaid through an additional charge on their property tax bills. The loan is then attached to the property, rather than the owner, and can be transferred if the property is sold. PACE loans can be issued by city or county financing districts or financial institutions, such as banks. Property owners who participate will start saving money on their utility bills each month as a result of water conservation, energy efficiency and/or renewable energy improvements, while repaying the loan annually when they file their taxes. In other words, they will see net gains despite increased property taxes. The program is entirely voluntary.

In 2009, Governor Perry signed House Bill 1937 (HB 1937) by Mike Villarreal, which established PACE districts in Texas for the first time. Although cities and counties across the state began the process of setting up PACE districts, the entire process was derailed when the Federal Housing Finance Agency (FHFA) created an obstacle for residential PACE programs. FHFA expressed concerns about the senior lien—that is, if a homeowner with a PACE loan defaults, the repayment of the PACE obligation would take priority over settling the mortgage. There were also some structural concerns which would have “required the Texas legislature to amend or replace the existing statute.” This new bill, SB 385, addresses the structural problems and applies to commercial and industrial (rather than residential) property owners, thus removing the senior lien concern from the equation. Read More »

Also posted in On-bill repayment, Texas / Tagged PACE, Property Assessed Clean Energy | Comments are closed

Heat Without Fire: Geothermal For A Cleaner, Sustainable Future In New York City

By EDF Blogs / Published: May 21, 2013

By: Mark Franks, EDF Energy Research Intern

Source: Achrnews.com

Hurricane Sandy proved that New York City’s energy system is not up to the challenges of the present day. And, as we have highlighted before, the city faces some major challenges to reducing dangerous air pollution caused by heavy heating fuels. One promising solution seeking to significantly reduce NYC’s carbon footprint, improve air quality, and increase grid resiliency during storms is geothermal heat pumps.

The U.S. Environmental Protection Agency (EPA) has called ground source heat pumps the “most energy-efficient, environmentally clean, and cost-effective space conditioning systems available.” Geothermal heat pumps or exchangers, also known as geo-exchange, require no fossil-fuel burning on-site, use 70 percent of their energy from Earth’s renewable sources and are, on average, nearly 50 percent more efficient than gas furnaces.

Last month, I had the honor of watching NYC Mayor Bloomberg sign a bill tasking the New York City Office of Long-Term Planning & Sustainability to study geothermal energy resources and the feasibility of city-wide adoption of geothermal heating and cooling. As Mayor Bloomberg’s sustainability leadership – in an official capacity at least – comes to an end, his plans to ensure that the city’s mission to find sustainable, cost-effective solutions to combat air pollution are well underway. Though the geothermal heating and cooling bill is very important, it is only one aspect of the Mayor’s larger PlaNYC effort.

During his speech, Mayor Bloomberg remarked, “So what is geothermal anyway? I am having it installed in the new place I just bought and I know it works and how much it costs but nothing else.” His words sum up the greatest challenge for geo-exchange yet – lack of awareness. Geo-exchange technology needs our help to move it out of its prolonged infancy and into the mainstream. Read More »

Also posted in New York / Tagged Mayor Bloomberg, PlaNYC | Read 4 Responses

Ohio Consumers And Businesses Come Together To Support Energy Efficiency

By John Finnigan / Published: May 9, 2013

Most states have long-term renewable energy and energy efficiency targets. Ohio’s energy efficiency resource standard saves over 700,000 kilowatt-hours of energy annually, more than the energy generated by a new fossil fuel power plant. Ohio’s energy efficiency law is under attack, even though Ohio’s targets are right in the middle compared to other states’ targets.

Source: Clean Energy Ohio

Ironically, the consumers who pay for energy efficiency are not leading this attack. Rather, the attack comes from certain electric utilities and the advocacy groups they support: the American Legislative Exchange Council and the Heartland Institute. The utilities claim to be protecting consumers from the costs of the energy efficiency programs, but they really want to protect their own electricity sales.

One argument raised against energy efficiency programs is that they cost too much. Energy programs, however, must pass a cost/benefit test. The programs will be offered only if the value of energy savings exceeds the program costs. In many cases, the energy savings are two or three times greater than the program costs.

Another argument is that all consumers pay for the programs, but only those who use the programs benefit. A few large Ohio industrial companies have raised this argument. But these companies develop their own energy efficiency programs, so they don’t pay for utility-sponsored energy efficiency programs. Read More »

Posted in Energy Efficiency / Tagged Ohio | Read 2 Responses