Energy Exchange

Clean Energy: Getting Past Cute

By Andy Darrell / Published: May 13, 2011

Source: Wired Business Conference

Did Bill Gates just call the solar panels on my house cute? “If you’re interested in cuteness, the stuff in the home is the place to go” was the line most often quoted from his talk at the Wired Business Conference in New York City. Headlines declared that Bill Gates thinks clean energy is ‘cute’ and Gates seemed to suggest that people who were serious about energy should be looking to innovation in nuclear and other technologies.

That set off a firestorm of responses among clean energy advocates who point out, correctly, that the cost of renewables is coming down, the clean energy market is growing, and many countries are leaping ahead of the US in terms of public investment and incentives.

According to a UN report released May 9, renewable resources are plentiful and could provide as much as 77% of the worlds’ energy by 2050. According to the report, renewable energy investments globally could be in the trillions of dollars by 2030. The brake, according to the UN, is not technology. It’s governance and policy that stand in the way. To get beyond cute, we need advances in policy that create an energy market friendly not just to fossil fuels but to renewables too.

But what does it mean for policy to support clean energy? A couple of weeks ago, Deutsche Bank released a report that says: “there has been a very substantial growth in [clean energy] investment in China, and something of a shift away from Europe and the US as the centers of clean energy investing.” The implication is that America is being left behind.

But here’s the kicker. Deutsche Bank then says: “clean energy private investment is still dominated by the US.” To me, that’s America’s ticket to leadership in the trillion-dollar market of the future. Create the rules of the game that allow clean energy to compete and innovation has a shot at taking clean energy well past cute, all the way to super-model status.

Today’s rules of the game make it hard to plug renewables into the grid on parity with fossil fuel sources. Buildings can waste nearly half of their energy – yet utilities aren’t rewarded for “buying” efficiency. We can produce electric cars that cost less than three cents a mile to drive (compared to more than 13 cents for a gasoline-powered car), but where do we plug them in? How many households and businesses can easily figure out their energy run rate – and the most cost-effective steps to cut bills? Shouldn’t there be an iPhone app for that?

It’s time to take private investment in clean energy to scale. For that to happen, government has to rewrite the rules of the game so that:

Clean energy can plug into the grid, both for distributed sources (which work really well in some places, like cities) and for utility-scale renewables (which could work well in other places, like deserts). No need to disparage one or the other – let them compete fairly and openly for market share in different places.
Information is transparent and accurate. Make it easy for buyers to see the energy footprint of homes and CFOs to track energy usage floor by floor. Yes, there ought to be an iPhone app for that too – not just an opaque monthly bill. Map the pollution created by power plants. Disclose hydraulic fracturing fluid. Hidden information kills free markets.
Efficiency has a market. Let utilities “buy” efficiency just like they “buy” new power plants and innovators will find ways to aggregate efficiency across cities and real estate portfolios to meet that demand.
Cars can be electric – and be “batteries.” Electric vehicles can be batteries for intermittent renewables like solar and wind. They can also be the least expensive cars on the road today. If we could easily plug them in, who wouldn’t want that?
Subsidies give way to rules that create a level playing field. Governments currently dole out massive subsidies to the oil and gas industry. They subsidize renewables too, but comparatively less. Worldwide, some reports suggest that governments pay over $300 billion in subsidies for fossil fuels and a mere $55 billion for renewables. Frankly, waiting for more and more subsidies alone is a losing strategy, especially in times of fiscal constraint. What if we focused instead on getting the rules right, so that renewables could plug in and compete on more even footing? And what if we focused on getting information into the marketplace so that local and regional renewable opportunities were clear to end-users?

How important is it to get this right? By 2030, the global population will reach 10 billion people – that’s a billion more than originally expected. Most will live in explosively growing mega-cities, especially in fast-growing economies in China, South Asia, and Latin America.

Can we provide so many people an economic future without destroying the planet? Only if we take down the barriers to private sector innovation and rewrite the rules of the market to let clean energy in.

Here’s something else Gates said: “If we don’t have innovation in energy, we don’t have much at all.” If we don’t have innovation in policy, we won’t have enough innovation in energy.

Also posted in Climate, Grid Modernization, Renewable Energy / Read 1 Response

Dramatically Cleaner Air Within Reach For New York City

By Andy Darrell / Published: April 22, 2011

Source: Inhabitat

At a standing-room-only speech in Harlem yesterday, Mayor Bloomberg launched the update to New York City’s sustainability initiative PlaNYC. That plan has two bold goals: achieving the cleanest air of any big city in America and cutting greenhouse gas emissions 30% by 2030.

I’m thrilled that the Mayor announced a dramatic step forward for clean air. The Clean Heat Campaign will phase out New York City’s most polluting heating fuels – heating oil no. 6 and no. 4 – through a combination of clear deadlines and a campaign to encourage buildings to upgrade to cleaner fuels and efficiency.

The stakes for public health are high. About 10,000 buildings burn heating oil so dirty that it causes more soot pollution than all of the cars and trucks in New York City combined. The new regulation finalized yesterday will eliminate the dirtiest of the fuels, number 6 oil, by 2015 and the next-dirtiest grade by 2030.

We think the health and business case for upgrading to clean heat is so compelling that these deadlines can be beat. To get information into the market, EDF launched a web page that maps the buildings in the city burning dirty oil, provides a step-by-step guide to upgrading to clean fuels, identifies incentives, and tells success stories from individual buildings. We’re committed to do what we can to make the transition to clean fuels as quick and affordable as possible.

Though clean heat got a lot of well-deserved media attention, PlaNYC includes other big steps forward:

– Commitments to clean energy, including one to “develop a smarter and cleaner electric utility grid for New York
City” – an idea that we think holds real promise to help expand the market for solar, efficiency and other clean energy sources;

– A new energy efficiency finance non-profit, using federal stimulus dollars to make local loans; and

– For the first time, the plan addresses food, recycling, and solid waste.

Around the world, cities are struggling with soot, smog, and climate impacts from how we make and use energy. Just two years ago, the planet’s population switched from primarily rural to more than 50% urban – by 2030, nearly 5 billion people (60% of the world’s population) will be living in cities. How those cities make and use energy will define our planet’s ability to solve climate change – and will dramatically affect public health. Today, with this announcement, I see hope for the future.

Also posted in New York / Tagged Clean Heat NYC | 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.

Also posted in New York / Comments are closed

Thinking Long Term On America’s Energy Future

By Elgie Holstein / Published: April 1, 2011

On Wednesday, President Obama, speaking at Georgetown University, set out a multi-pronged approach to boosting America’s energy security. We agree that America “cannot keep going from shock to trance on the issue of energy security, rushing to propose action when gas prices rise, then hitting the snooze button when they fall again.” President Obama’s goals to leverage alternative fuels, increase efficiency, and invest in smart grid technology, advanced vehicles, high speed rail, and public transit are critical steps toward a truly clean energy economy.

The core objectives of our Energy Program are to help accelerate the deployment of large-scale, clean technologies into the nation’s energy system and remake the market for efficiency and innovation. Our goal is to reduce the environmental impact of energy production, delivery, and use. Why? Because investments in clean technology will bring about the clean energy revolution we need by greatly reducing our use of dirty fuels and improving air quality and, thus, the health of millions of Americans – especially children and the elderly.

We can improve our energy independence and end the economic hardships imposed on American families by spiking energy costs while preserving our air, land, and water for future generations.

As important as the energy, environmental, and public health outcomes are, this revolution also benefits our economy and creates jobs. American workers have tremendous opportunities related to energy efficient and clean technologies, which are creating well-paying jobs and helping companies compete in the global market.

One of EDF’s main areas of focus is on smart grid technology. President Obama’s Advanced Research Projects Agency-Energy (ARPA-E) funds projects that will help modernize our antiquated electricity system. A smarter grid can adjust demand, reducing the need to build costly, new power plants. It will enable extensive new wind and solar energy to integrate into an upgraded grid so that we can rely far more on clean, renewable, home-grown energy. The result: less environmental damage, more jobs, and a more efficient, reliable, and resilient electricity system. A smart grid will also facilitate the switch to electric vehicles, making it possible to “smart charge” them at night so they can be ready the next morning for commuters who will no longer be paying for gasoline.

Another key point that the President made was on responsible development practices for natural gas. Natural gas can play a significant role in achieving our clean energy future – but it needs to be developed safely and in an environmentally sound manner. Protecting citizens’ health and the environment will require that we “get it right from the start.” That means putting rules in place to guarantee that our water and land are protected from contamination and ensuring that leakage of harmful air pollution is minimized.

The President’s call for increased transparency in the use of hydraulic fracturing chemicals is a necessity. The natural gas industry is engaged in a public perception war that it is not winning. Participating in the development of transparency within the industry is the first step necessary in attempting to rebuild public trust. A balance between creating a sustainable market for business and ensuring the health and safety of the public should not be a source of division, but instead our common ground.

While Congress is negotiating the federal budget, members would do well to recognize the essential need to make long-term investments in a 21st century clean energy economy that will reduce America’s dependence on foreign oil and put Americans back to work.

EDF commends the President for his willingness to look to the future. If we can do that, we will all benefit from a stronger economy, energy security, and a cleaner environment that protects our public health and maintains our quality of life.

Also posted in Climate, Grid Modernization, Natural Gas, Renewable Energy, Washington, DC / Read 1 Response

Energy Efficiency Standards Save Texas Schools Money

By Kate Zerrenner / Published: March 22, 2011

Alder Creek Middle School in Truckee California: A Demonstration project for Collaborative for High Performance Schools

On March 16 the Texas House Energy Resources Committee heard testimony on HB 775 from Rep. Rafael Anchia. HB 775 would further enable school districts to reduce energy and water consumption, which saves money and improves the air quality of Texas schools. As public schools are facing grim budget decisions saving money on energy means more teachers in classrooms and a better education for Texas children.

Investing in energy efficiency measures saves school districts and taxpayers money in the long run because energy efficiency lowers electricity bills. Stated differently, failing to improve efficiency means school districts are wasting energy and needlessly straining tight budgets. Also, energy efficiency is one of the few measures that will reduce air pollution at the same time that it saves money. Many energy efficiency measures will require some upfront costs. However, school districts have several options for offsetting or avoiding those costs all together, including Texas LoanSTAR, performance contracts, and utility incentive programs. (You can read further explanations of these options/programs in my full testimony to the committee)

Specific School District Examples

According to the U.S. Department of Energy, an energy-efficient school district with 4,000 students could save as much as $160,000 a year in energy costs, with savings reaching $1.6 million over ten years. Texas schools that have initiated energy conservation programs have already begun to realize savings with some relatively easy investments. The table below shows Texas school districts that have received funds from the LoanSTAR program for energy efficient measures and the estimated costs and savings.

School District	Energy Conservation Measures (ECM)	Total Estimated ECM costs	Annual Energy Cost Savings	Payback (years)
Arlington	Replace lighting, correct power factor, upgrade mechanical system	$4,655,086	$649, 880	7.2
Holliday	Replace lighting and HVAC systems	$188,169	$20,120	9.4
Red Oak	Replace lighting, install occupancy sensors and EMS, institute payment and performance bonds	$2,214,305	$311,887	7.1

Also posted in Texas / Read 1 Response

Who or What is to Blame for Last Week’s Rolling Blackouts in Texas?

By / Published: February 7, 2011

Last week’s rolling blackouts have left a lot of people wondering what (or who) exactly is to blame. While it’s clear that incredibly cold weather played a significant role, details have only now begun to trickle out about the root causes of the rolling blackouts – and what helped save Texas from a system wide blackout that would have taken hours, if not days, from which to recover. That didn’t stop a lot of people from throwing out bizarre conspiracy theories, unfounded assertions, or claims about the need to build more fossil fuel plants in Texas, all before the facts were even known.

Just the Facts, Please

We’ll get to that soon enough, but first let’s hear from someone who really knows what happened – Trip Doggett, head of the Electric Reliability Council of Texas (ERCOT), which manages the state’s electric grid and ordered utilities to begin rolling blackouts to avert a more serious crisis. In a Texas Tribune interview last week Doggett said: “Our problem was more around the 50 generating units who had issues with their lack of winterization or insufficient winterization efforts that caused the major problem.” 50 generating units. About 7,000 MW of fossil fuel plants, or more than 10% of the supply on the grid, went down last week because of ‘insufficient weatherization.’ Read More »

Also posted in Grid Modernization, Texas / Read 1 Response