Energy Exchange

Duke Energy Agrees To New Model For Energy Efficiency

By Greg Andeck / Published: August 28, 2013

Environmental Defense Fund and the North Carolina Sustainable Energy Association recently joined the North Carolina Utilities Commission Public Staff and environmental colleagues in reaching an agreement with Duke Energy on its new incentive mechanism for energy efficiency investments.

The NC Utilities Commission is expected to issue a ruling on the agreement by the end of November 2013. If approved, the agreement will motivate Duke to implement energy efficiency measures as broadly and cost-effectively as possible. Duke’s efforts, in turn, can help ensure a robust market for providers of energy efficiency goods and services.

The agreement would replace Duke’s avoided cost energy efficiency program, “Save-a-Watt,” with a business model known as “shared savings.” Save-a-Watt, which expires at the end of 2013, was successful in motivating Duke to make investments in energy efficiency. In fact, the company exceeded its energy savings targets, but the program was overly complex for energy regulators and stakeholders.

In contrast, the shared savings approach will split the anticipated dollar savings between Duke and its customers and set a single, flat rate of return. By sharing the savings, the model properly balances the interests of the utility and customers, and it will motivate Duke to make energy efficiency investments that save customers money. The shared savings model is the most commonly used energy efficiency utility incentive mechanism in the United States.

Also posted in Energy Efficiency, North Carolina, On-bill repayment / Tagged Clean Air, Energy Efficiency, OBR, On Bill Repayment, Shared Savings, Utility Business Models | Read 2 Responses

Agricultural Offsets are to 2013 as Energy Efficiency was to 1973

By Robert Parkhurst / Published: August 28, 2013

In 1973 Chase Manhattan Bank saw “virtually no scope for conservation” of electricity. In 2011 the total market for energy efficiency in buildings was worth $68 billion and is expected to grow more than 50% by 2017.

The same thing is being said about greenhouse gas (GHG) protocols for agriculture today as energy efficiency 40 years ago. When the California Air Resources Board (CARB) stated that they plan to consider a protocol for rice farmers in California and the Midsouth, some stated that the reductions from the protocol would be “very small” and not “widely used.” These criticisms miss a key point.

The rice protocol is the jumping off point for a wide-range of agricultural offsets. The rice protocol will demonstrate the benefits from the use of biogeochemical models, such as the DeNitrification DeComposition (DNDC) model, pioneered by the University of New Hampshire over the past two decades. It will show how agricultural producers can aggregate their reductions with fellow farmers to create an offset project. It will revolutionize ways to verify large amounts of data through risk-based sampling. In short, this is the start of something significant.

Once the rice protocol is approved, CARB can turn its attention to other crops such as corn, wheat, or leafy greens. They can look at grazing practices on land across the United States. These practices, just like energy efficiency, add up fast. It is entirely possible to achieve annual GHG reductions of one hundred million metric tons of CO₂e reductions, equivalent to taking more than 20 million cars off the road, over the next ten years.

Because agriculture is the largest uncapped sector under California’s cap-and-trade program, it has a unique potential to help California meet its 2020 target. To play a role in the program, the rice protocol needs to be adopted this spring and additional offset protocols from agriculture need to be considered in the upcoming years.

Also posted in California / Comments are closed

How Smarter, More Flexible Energy Can Help Communities Weather Future Storms

By Andy Darrell / Published: August 27, 2013

Last week, the Hurricane Sandy Rebuilding Task Force released a Rebuilding Strategy, which aims to rebuild communities affected by Hurricane Sandy in ways that are “better able to withstand future storms and other risks posed by climate change.” From an energy perspective, the main goal of these recommendations is to make the electrical grid smarter and more flexible. This effort would minimize power outages and fuel shortages in the event of similar emergency situations in the future.

The Task Force is led by President Obama and chaired by Housing and Urban Development (HUD) Secretary Shaun Donovan. The recommendations put forth in the report were developed with Governor Cuomo, Governor Christie, and a number of federal agencies and officials from across New York and New Jersey, representing an unusual opportunity to make changes that will help communities weather future crises.

This key idea – smarter, flexible energy – is central to resilience, safety and quick recovery in a storm, as well as reducing the harmful pollution linked to climate change in the first place. This has been a key theme of EDF’s efforts to help the Northeast region respond to Sandy.

When the power grid went down on most of New York City following Hurricane Sandy, a number of buildings were able to keep their lights on thanks to existing microgrids and on-site, renewable energy sources. The Task Force report lays out a path forward for taking these isolated success stories to scale and making these clean technologies available to everyone.

Also posted in Climate, Grid Modernization, Investor Confidence Project, New York, On-bill repayment / Tagged climate change, energy, Grid Resiliency, Smart Grid, sustainability | Read 1 Response

AB 32’s Scoping Plan is a Tale of Two Energy Futures

By Tim O'Connor / Published: August 14, 2013

This commentary originally appeared on EDF’s California Dream 2.0 blog.

For a window into two vastly different visions of our state’s future, take a look at the comments filed last week as part of the AB 32 Scoping Plan update process. The 2008 Scoping Plan lays out the approach that California will take to achieve its goal of reducing emissions to 1990 levels by 2020, and this is the first 5 year update.

EDF’s comments reflect what most Californians have already asked for – a laser focus on expanding emission reductions and providing ample clean energy opportunities for businesses throughout the state.

This includes:

Increasing emission reductions from vehicles, goods movement and the agriculture sector;
Developing diversified low-carbon fuels that yield cost reductions;
Integrating clean energy and energy efficiency through programs like “time-of-use” pricing and On-Bill Repayment;
And, extending the cap-and-trade program and low carbon fuel standard beyond 2020;

All of the opportunities outlined by EDF aim to fulfill the Scoping Plan’s mission: achieving the maximum technologically feasible reductions in greenhouse gas pollution in a cost-effective way.

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

Energy And Water Are Running Out In Texas, But It’s Not Too Late

By Kate Zerrenner / Published: August 8, 2013

As we’ve highlighted in previous posts, water and energy regulators often make decisions in silos, despite the inherent connection between these two sectors. Texas is no exception.

Two very important and intertwined events are happening in Texas right now.

First, the state is in the midst of an energy crunch brought on by a dysfunctional electricity market, drought, population growth and extreme summer temperatures. An energy crunch signifies that the available supply of power barely exceeds the projected need (or demand) for electricity. Texas’ insufficient power supply makes the whole electricity system vulnerable to extreme weather events. An especially hot day (with thousands of air conditioning units running at full blast) could push the state over the edge and force the Electric Reliability Council of Texas (ERCOT), the institution charged with ensuring grid reliability, to issue rolling blackouts.

Second, Texas is still in the midst of a severe, multi-year drought, forcing state agencies to impose strict water restrictions throughout the state. The drought has already had a devastating impact on surface water and many communities are facing critical water shortages.

Although Texas has always had to deal with extreme weather events, we can anticipate even more intense weather as climate change advances. The new climate ‘normal’ makes extreme heat waves, like the historic 2011 Texas summer, 20 times more likely to occur. These extreme weather events heighten the urgency of the energy-water nexus. Read More »

Also posted in Climate, Demand Response, Energy Efficiency, Energy-Water Nexus, Renewable Energy, Texas, Utility Business Models / Tagged Demand Response, energy, Energy Efficiency, Energy-Water Nexus, Texas Energy Crunch, Water | Read 4 Responses

What Does It Mean For Energy Efficiency To Be A Resource In Texas?

By Kate Zerrenner / Published: August 7, 2013

We’ve discussed the potentially grave impacts of the Texas Energy Crunch in a number of our previous blog posts. Time and time again, we repeat that the cheapest, cleanest and most reliable energy resource is the energy we save through energy efficiency. But our energy efficiency programs in Texas are still modest compared to other states. Beyond politics, there is another key issue limiting our state’s energy savings: Texas does not treat energy efficiency as a ‘resource.’

Traditionally, energy efficiency is left ‘invisible’ to utilities and grid planners—so they lose count of its many benefits. Treating energy efficiency as a resource, instead, puts it on a level playing field with other energy resources, such as power plants. This allows utilities to realize the unique benefits energy efficiency has over other energy sources.

Energy efficiency can reduce harmful greenhouse gases, save people money and create jobs – and it is extremely competitive with other energy resources. When the energy saved through efficiency is weighed against new energy resources, efficiency upgrades to buildings and homes generally weigh in at just one-third of the cost of building a new fossil-fuel power plant. On top of that, energy efficiency upgrades can eliminate the need to install or replace other expensive electric grid equipment. This cost-savings is one of the many benefits generally overlooked by utilities and electric grid planners.

Part of what prevents electric grid planners from counting efficiency as a resource in Texas is the way that the energy market is structured. When Texas deregulated its energy market in 1999, the aim was to increase options for customers and lower prices. Efficiency programs were not included in the new market structure. Instead, they were left for transmission and distribution utilities (TDUs), the “wires” companies that deliver electricity from power plants to customers, to manage. With efficiency left out of the restructured energy market, the Public Utility Commission of Texas (PUC) and other state leaders tend to view efficiency programs as subsidies that exist outside of the market. Read More »

Also posted in Demand Response, Energy Efficiency, Grid Modernization, Texas, Utility Business Models / Tagged Capabilities Market, Capacity Market, Energy Efficiency, ERCOT, Texas Energy Crunch | Read 3 Responses