Energy Exchange

Clean Energy And The 2013 Budget Proposal

By Marita Mirzatuny / Published: February 15, 2012

Source: EcoWatch

In his State of the Union Address last month, President Obama made energy issues a focal point. Taking a clear stance, he said that it was time to “end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising.” With this statement, President Obama is addressing the reality that government support for new energy sources is the lowest it has been in any point in U.S. history, according to a report by DBL investors. “During the early years of what would become the U.S. oil and gas industries, federal subsidies for producers averaged half a percent of the federal budget. By contrast, the current support for renewables is barely a fifth that size, just one tenth of one percent of federal spending.”

Going further in addressing climate change the President said, “I know that there are those who disagree with the overwhelming scientific evidence on climate change. But here’s the thing. Even if you doubt the evidence, providing incentives for energy efficiency and clean energy are the right thing to do for our future, because the nation that leads the clean-energy economy will be the nation that leads the global economy, and America must be that nation.”

On Monday he unveiled his budget proposal for FY 2013. So, how does it hold up to the goals of his speech with regards to a clean energy future?

The Good News:

– The world’s largest energy consumer, the Department of Defense (DOD), would receive approximately $1 billion for energy conservation efforts. This would further the DOD’s increasing commitment to renewable energy which now makes up 8.5 percent of its energy production and procurement.

– With a 3.2 percent increase from the year before, the budget proposes $27.2 billion for the Department of Energy. Of that:

Research and development for energy efficiency, advanced vehicles and biofuels would get $2.3 billion
Renewable energy sources will get a $522 million increase and an additional $174 million for a revamped industrial technology-advanced manufacturing program.
$12 million would be directed towards multi-year research investments in safer natural gas infrastructure in order to reduce risks associated with hydraulic fracturing in shale formations.
Furthermore, pipeline safety would receive a 70 percent, $64 million, increase.
This 3.2 percent increase comes just as a report vindicates the DOE loan program, confirming that the “overall loan portfolio as a whole is expected to perform well and holds less than the amount of risk envisioned by Congress when they designed and funded the program.” Energy Secretary Steven Chu states that, “we have always known that there were inherent risks in backing innovative technologies at full commercial scale, and it is very likely that there will be other companies in the portfolio that won’t succeed. But the vast majority of companies are expected to pay the loans back in full, on time and with about $8 billion in interest — while supporting a total of 60,000 American jobs and helping us compete for a rapidly growing global industry.”

The Bad News:

– Seeming to cave to current attacks, the fiscal 2013 budget proposes stifling cuts to the Environmental Protection Agency (EPA):

Reducing current agency funding levels by $105 million, the EPA is slated to receive $8.3 billion. This would make for the first time since 1994 that the agency’s budget was cut for three consecutive years.

– Counterproductive cuts to USDA’s Natural Resources Conservation Service:

Proposed cuts for Farm Bill conservation programs would be about $600 million.
Already Congress has cut conservation funding by $2.8 billion over the last five years, representing 81 percent of the nearly $3.5 billion in Farm Bill spending cuts over that time period(FY 2008-2012).

Despite some disappointment, overall we at EDF are pleased that the President chose to not only speak to the importance of a clean energy future but that his budget reflects this as well.

Elgie Holstein, our senior director for strategic planning here at EDF and a former associate director of the Office of Management and Budget for Natural Resources, Energy and Science, sums it up well, “despite some flaws, the president’s budget is a big net plus for the environment, and we urge Congress to embrace the positive aspects of it.” That latter part will be the true challenge.

Vice president of EDF’s Energy Program, Jim Marston continues: “The fact is: clean energy and responsible environmental policy make good economic policy as well because they create jobs, while cutting energy and medical bills for American families. Look at it this way: environmental conservation is cheaper than environmental cleanup, just like preventive medicine is cheaper than emergency room treatment. We applaud the President’s support of job-creating, clean energy programs.”

The President understands that getting our energy future on the right path is an essential foundation that our country needs to be competitive, provide jobs and protect our health and environment.

Also posted in Climate, Natural Gas, Renewable Energy, Washington, DC / Read 2 Responses

California Finds Common Interests In Financing Energy Efficiency Upgrades

By Brad Copithorne / Published: February 14, 2012

This commentary was originally posted on the EDF California Dream 2.0 Blog.

OBR Moves Forward

Last week, the California Public Utilities Commission (“CPUC”) held a well-attended three-day workshop to discuss a potential On-Bill Repayment (“OBR”) program and other statewide financing solutions for energy efficiency upgrades.

We thought it would be helpful to highlight some of the key takeaways:

The Funding Gap is Large – Jeanne Clinton of the CPUC used charts to show that the annual need for energy efficiency upgrades in California exceeds $10 billion but that current ratepayer spending was about $1 billion. In this economic environment, it is unlikely that ratepayers or taxpayers will make up the difference. EDF believes that addressing this gap will require active engagement from a wide variety of investors ranging from large banks to local institutions. Additionally, demand generation must come from a variety of sources ranging from the largest contractors and Energy Service Companies (ESCOs), home improvement retailers and appliance retailers down to the smallest contractors. Fortunately, the workshops drew participants from all of these groups. Wells Fargo, Deutsche Bank, Citi, Trane and SolarCity were among the attendees, each of which committed multiple person-days to the proceedings.

Setting a Goal – Cisco Devries of Renewable Funding identified the auto loan market might provide some attractive benchmarks for energy efficiency lending offerings.. Auto loans are offered by a number of financial institutions, are usually originated seamlessly in the dealer’s office and are currently available at a rate of 3.7% for five-year loans. Cisco said that much of the low cost is driven by standardization and the ability of banks to finance large pools of loans in the capital markets. EDF, however, hopes that an OBR program would offer better consumer protections than the auto loan market.

Publically Funded Credit Enhancements are a Good First Step – Christine Solich of the California Treasurer’s office and Angie Hacker of Santa Barbara each discussed how they have been able to entice local credit unions to participate in energy efficiency lending programs through loan loss reserves ranging from 5-15%. Alfred Griffin of Citi explained that banks would either need a much larger reserve (possibly more than 30%) or 10+ years of loan performance data in order to satisfy the needs of rating agencies and institutional investors. On the other hand, Alfred said that the California OBR proposal would likely provide sufficient data because it uses utility bill payment records that go back for decades..This opportunity, however, would not be available for an OBR program that did not use all of a utility’s standard collection procedures for delinquent payments.

OBR can Work – The utilities raised numerous legal concerns while consumer advocates questioned whether residential customers would be adequately protected. Proponents of the OBR program heard these concerns and can only support it if it doesn’t expose utilities to significant increased liability or provide adequate consumer protection. Fortunately, Jeff Pitkin of New York discussed how his state has managed to overcome these obstacles to establish an OBR program. From the perspective of the utilities and residential customers, the New York OBR program is virtually identical to the California proposal and we are hopeful that we can incorporate many of their best practices to address these problems. (The California OBR proposal differs from New York in that it is initially open to a broad range of lenders and investors and has a much broader range of projects, financing structures and building types.)

I had the opportunity to spend time with representatives from most of the key constituencies and believe that there is genuine interest in working together to provide a low-cost financing solution for Californians.

EDF is excited that large statewide contractors such as Trane and SolarCity were willing to take time out of their busy schedules to attend. These firms will need flexible, statewide solutions from leading financial institutions to finance their customers’ projects. We believe that an OBR program that fully benefits from utility bill collection policies will be able to meet their needs, increase investment in energy efficiency and create jobs for Californians.

Also posted in California, On-bill repayment / Tagged OBR | Comments are closed

California’s On-Bill Repayment Program Takes Two Steps Forward

By Brad Copithorne / Published: February 7, 2012

This commentary was originally posted on the EDF California Dream 2.0 Blog.

Last month, the California Public Utilities Commission released for comment EDF’s proposal to create the first statewide on-bill repayment (OBR) program that pays for energy efficiency and renewable energy upgrades for residential and commercial properties using third-party financing. The proposal is taking two important steps forward this week.

The first step: Senator Kevin de Leon (D-LA) and Senator Lou Correa (D-Orange County) today introduced enabling legislation for the program. Based on preliminary conversations, we are optimistic that this proposal will receive support from members of both political parties. This bill is designed to deal with questions regarding the agency’s authority to develop an OBR program. It also provides a mechanism for property owners to disclose OBR projects to prospective renters or buyers. This disclosure will enable a building occupant to see how the money saved by the efficiency project will be used to pay back the OBR investment tied to their property.

The second step: the CPUC is hosting workshops in San Francisco on February 8-10 to discuss the OBR proposal and other aspects of energy efficiency finance. More than 200 stakeholders and other members of the public are expected to participate in the workshops, including several contractors, lenders, Energy Services Agreement (ESA) companies and building owners that see an attractive economic opportunity in the program.

EDF looks forward to working with all interested parties, to construct a successful program that can begin financing projects early next year.

Also posted in California, On-bill repayment / Comments are closed

Creating Energy Champions

By Kristen Coracini / Published: February 2, 2012

This commentary was originally posted on Duke Energy’s Shedding A Light Blog.

In late January, I had the great pleasure of joining a group of Charlotte, N.C. city employees at an “Energy Champions” training hosted by Duke Energy and Charlotte Center City Partners. The city workers were bursting with enthusiasm, inventing creative ideas on the spot about how to motivate people to reduce energy use in the workplace. Many involved “friendly” competitions, around things like turning off monitors and lights: I for one would not want to be the recipient of the “Dim Bulb Award.”

Participants were excited to help Charlotte shine as a leader in innovation and to be part of Envision Charlotte, an initiative to make their city the most sustainable urban core in the country. Environmental Defense Fund (EDF) is pleased to be part of this innovative public-private partnership, along with Duke Energy, Charlotte Center City Partners, Bank of America and others.

One goal of Envision Charlotte is to reduce energy use in more than 60 large commercial and government buildings in Uptown Charlotte by 20 percent within a five-year timeframe. Why target buildings? Because buildings account for more than 30 percent of total energy use, and 65 percent of electricity consumption. Reducing energy use in buildings, especially the large buildings participating in Envision Charlotte (more than 10,000 square feet each), can have a huge impact and presents an enormous opportunity to cut costs and greenhouse gas emissions.

One of the ways Envision Charlotte will accomplish this goal is through Duke’s Smart Energy Now program. Duke and its partners Cisco Systems and Verizon Wireless have already installed smart meters and information kiosks in participating buildings. These displays show in real-time how much energy is being used in the city’s center every day, and provide tips on how to reduce that use. Information is also available through a secure portal, accessible to building owners and managers, which shows how much energy each individual building is using. This information will help employees, building owners and facilities managers make smart decisions about how they use energy every day of the week.

As a smart grid expert, I’m particularly interested to see what role smart technologies will play in making these buildings more efficient, and in shifting demand away from times of peak electricity use, when energy is most expensive and most polluting, and (ideally) to times when renewable energy is available on the grid.

Duke and its partners will host more Energy Champions trainings over the next few months, targeted specifically to different segments of building users: executives, workers and facilities managers. There is already palpable excitement in the city with the Democratic National Convention coming in the fall, which will place Charlotte in national, and even international, spotlights. Only these spotlights will be energy efficient. And please turn them off when you’re done.

Also posted in Grid Modernization, North Carolina / Comments are closed

Getting ‘Smart’ About Your Energy Use Just Got Easier

By Jamie Fine / Published: January 20, 2012

This commentary was originally posted on the EDF California Dream 2.0 Blog.

Source: Green Button

On Wednesday, I attended a presentation of the Green Button at EMC², hosted by Silicon Valley Leadership Group, OSIsoft and SolarCity, and moderated by Aneesh Chopra, U.S. Chief Tech Officer and Advisor to the President.

In essence, Green Button is literally a green button on utility customer interface websites that customers can click to instantly download their historical energy use data in a simple, standardized electronic format. Customers can then upload the data into software applications, or give it to consultants that provide services such as identifying how to save money by using less energy.

All of the big California utilities – SCE, SDG&E and PG&E – have embraced the concept and will offer the Green Button to their millions of customers. There is a hope that utilities across the country will also adopt it.

One presenter observed that Americans, on average, waste 20% of the energy that they purchase. This creates a huge opportunity to save money on energy and help to protect the environment by avoiding demand for energy generated by dirty sources, including coal-fired power plants.

Yesterday’s event revealed what can be accomplished when software innovators, government leaders and utilities focus on a common goal. Chopra is widely recognized as an IT innovator in government and he challenged the utility industry to develop access to consumer data in September 2011. Now Green Button is a fully operational, widely embraced standard that will provide a buffet of energy use data for hungry software application developers.

Testimonials were provided by up-and-coming CEOs in the energy sector, including oPower, Tendril, Lucid Design Group and Simple Energy. Each company demonstrated how Green Button will drive innovations in energy use software applications. For example, Tendril announced that its platform, Tendril Connect, will “connect utilities and energy service providers, consumers and app developers to achieve smarter energy usage.”

One question I was left with was, “just how green is the Green Button?” Currently, only the color pallet is green; no pollution information (such as greenhouse gas emissions) is associated with the energy use data.

While Dr. David Wollman, Deputy Director of Smart Grid & Cyber-Physical Systems, and Manager, Smart Grid Standards and Research at the National Institute of Standards and Technology (NIST), indicated that the Green Button standards do have accommodations for emissions information, there will need to be positive pressure to fully develop that piece of the button.

And that’s where EDF and you can come in. We need to encourage efforts to rigorously link emissions information with energy use, in both time and place.

As part of EDF’s smart grid work, we are working with utilities, regulatory agencies and third parties in California and across the country to ensure that innovators have access to an emerging and competitive utility market. Access to standardized energy use data is an essential piece. Why? So they can provide consumers with new tools that help them better understand and manage their energy use, which can save money, cut pollution and help protect the planet.

Also posted in California, Grid Modernization / Read 3 Responses

EDF Honored As An Innovative Leader Actively Making A Difference In The Clean Energy Sector

By Miriam Horn / Published: January 17, 2012

EDF got thrilling news today from Abu Dhabi (home to Masdar, one of the world’s first smart grid pilots): Zayed Future Energy Prize announced that Environmental Defense Fund received its $500,000 second runner-up award in the Small-to-Medium Size Enterprises (SME) and Non-Governmental Organizations (NGO) category for our impact, long-term vision, leadership and innovation in renewable energy and sustainability. Carbon Disclosure Project received the $1.5 million prize in the NGO/SME category and Orb Energy received the $1 million first runner-up award.

Source: Zayed Future Energy Prize

Power generation is the source of 40% of U.S. greenhouse gas emissions. Over the next two decades, the U.S. will invest two trillion dollars to replace our aging, inefficient electricity infrastructure — but there is no guarantee that this investment will move ahead in ways that maximize environmental benefit and secure the clean, low-carbon energy system we need to avoid a climate catastrophe. Indeed, a recent International Energy Agency report warns that “without a bold change of policy direction [in the next five years], the world will lock itself into an insecure, inefficient and high-carbon energy system.”

Decisions being made now on energy and infrastructure investments will make — or break — the path to climate stability, meaning we have a once-in-a-generation opportunity right now to revolutionize how we generate, distribute and use electricity.

This award will help us ensure that the smart grid will also be a green grid, one that increases efficiencies across the entire system, is open to innovation and new market entrants and intelligent enough to enable far greater penetration of clean energy and electric vehicles in the U.S., and ultimately throughout the world. It will also accelerate our work in energy efficiency to create a vibrant market for energy savings by tearing down barriers to private capital investment and showing companies how they can improve their bottom line by reducing energy waste.

Also posted in Grid Modernization / Comments are closed