Energy Exchange

Cost Savings Aren’t the Only Benefit to Energy Efficiency

Kate ZerrennerThis commentary originally appeared on our Texas Clean Air Matters blog.

I often refer to energy efficiency as being cost effective, and it is. It is always cheaper not to use energy or to get the same result while using less energy. But monetary cost savings are just one of the many benefits associated with implementing energy efficiency measures. Reduced pollution, improved health and reduced strain on our water supply are other notable benefits of energy efficiency, though they are not always taken into consideration when a utility proposes a new energy efficiency project.

At the state regulatory level, Public Utility Commissions or similar entities are required to do a cost-benefit analysis for each energy efficiency project or program that a utility proposes, in order to determine how cost effective it may be. This analysis is called an ‘energy efficiency cost test,’ and although the concept may seem straight forward, its application is based on a varying set of pre-defined criteria that are not always consistent. Furthermore, the subject of cost-effectiveness tests is sensitive in the utility sector, because it’s at the core of how energy efficiency programs are valued.

There are several different types of energy efficiency cost tests that differ slightly and are often customized to reflect a state’s values. Before diving into the options, it’s important to note that a cost-effectiveness test of some sort is a necessary measure as more and more states implement ratepayer-funded energy efficiency programs. Customers need to know that the programs they’re paying for are delivering the promised benefits, and regulators need to ensure that the costs paid by the customers are justified.  Read More »

Posted in Energy Efficiency, Texas / Tagged | Read 1 Response

California on Course to Give Power to the People

Transformer over orange skyIn a report issued by the Energy Division at the California Public Utilities Commission (CPUC), experts demonstrated their commitment to the transition toward greener electricity rates in the Golden State. This is good news for two reasons: It will give customers more control of their utility bills and it keeps the state on course to cut pollution.

Today, most Californians are frozen by energy bills that are hard to understand and even more difficult to keep under control.  Fortunately, recommendations from the CPUC released Monday will put the power in the hands of customers by transitioning to rates that vary with the time of energy use.

These “time-variant rates” (TVR) can cut pollution by giving customers tools to directly influence how much money is spent on the least-efficient, most-expensive, and most-polluting power plants.   Critically, it’s also a way to avoid ever-growing, system-wide peak demand that leads to the building of additional power plants, known as “peaker plants” as they are specifically designed to serve customers at times of peak demand. Read More »

Posted in California, Clean Energy, Electricity Pricing, State / Comments are closed

New Protocol Will Help Create Investor Confidence in Small-Scale Energy Efficiency Retrofits

##logoBy: Matt Golden, Senior Energy Finance Consultant

The Investor Confidence Project (ICP), which aims to bring transparency and accountability to the energy efficiency market by introducing a system of standardization, is pleased to announce the release of the Energy Performance Protocol for Targeted Commercial projects.  Unlike whole building retrofits, targeted commercial projects are typically projects that can upgrade a single measure, such as lighting or windows, or multiple measures that are very basic. The protocols standardize how projects are baselined, engineered, installed, operated and measured, and are aimed at boosting investor confidence in the resulting savings.

The Targeted Commercial Protocol complements the ICP’s two existing Energy Performance Protocols: 1) Large Commercial Protocol, which involves a whole building retrofit greater than $1 million and with annual energy savings of more than 20%, and 2) Standard Commercial Protocol, which is a whole building retrofit priced at below $1 million.

The Targeted Commercial Protocol further develops the ICP family of protocols and addresses the range of project types increasingly common in the growing energy efficiency retrofit marketplace. Reflecting market realities for smaller projects, this protocol was developed in collaboration with industry experts, including organizations that are part of the ICP Ally Network.  It strikes a balance between the need to minimize overhead for less complex projects, while maintaining the necessary rigor to attract investment for smaller projects.  Read More »

Posted in Energy Efficiency, Investor Confidence Project / Tagged | Comments are closed

Demand Response Helps Texas Avoid Rolling Blackouts in the Face of Polar Vortex

MaritaHeadshot

This commentary originally appeared on our Texas Clean Air Matters blog

As we begin a new year, the outlook for 2014 looks bright.  But as the Polar Vortex has descended upon the U.S. over the last few days, we have been reminded of the past, specifically the winter of 2011 when Texas’ electricity grid stuttered under the extreme cold.

Monday, as a record-breaking cold snap whisked over the U.S., the Electric Reliability Council of Texas (ERCOT), the state’s grid operator, warned of possible blackouts, just as they did in 2011.  We were lucky this time, but in February of 2011 we were not, and blackouts occurred throughout the state.

ERCOT’s warning meant that the grid’s power reserves “dropped below a comfortable threshold,” and the “system was just one step away from rolling blackouts” as the need for energy outpaced supply.  As these blackout threats loomed, two power plants succumbed to the cold and went down.  The loss in capacity amounted to about 3700 megawatts (MW), with 1800 MW lost due to the cold.  According to Dan Woodfin, ERCOT’s Director of System Operations, “if we had lost another unit it would have put us into an Energy Emergency Alert Three” – the stage that prompts rolling blackouts.  This is unnecessary and unacceptable. Read More »

Posted in Demand Response, Renewable Energy, Texas / Tagged , , , , | Read 2 Responses

EDF and Allies Defend EPA Emission Standards for Oil and Gas Pollution

Source: Angela Keck Law Offices LLC

Source: Angela Keck Law Offices LLC

By: Tomás Carbonell, EDF Attorney, and Brian Korpics, EDF Legal Fellow

A new year may be upon us, but – unfortunately – some members of the oil and gas industry would prefer we roll back the clock on common sense, long-overdue emission standards for oil and gas equipment.

Oil and natural gas production continues to expand rapidly in the United States – and with it the potential for emissions of climate-destabilizing pollutants (especially methane), smog-forming compounds and carcinogenic substances, such as benzene.  We urgently need rigorous national standards that comprehensively address the full suite of pollutants from oil and gas facilities, protect public health and the environment and conserve needless waste of our nation’s natural resources.

In August 2012, the U.S. Environmental Protection Agency (EPA) took a promising first step by issuing emission standards for new natural gas wells and other oil and gas equipment, including the thousands of large storage tanks built near gas wells, pipelines and processing facilities each and every year.  These “New Source Performance Standards” (NSPS) were based on proven and highly-effective emission control technologies that leading companies have been using for years.  Many of these control technologies also directly benefit a company’s bottom line by reducing avoidable waste of natural gas from vents and leaks – saving money while protecting our climate and air.  Read More »

Posted in Climate, Natural Gas, Washington, DC / Read 1 Response

California’s Innovation Story: Real People, Real Solutions

EDF’s Innovator Series profiles companies and people across California with bold solutions to reduce carbon pollution and help the state meet the goals of AB 32. Each addition to the series will profile a different solution, focused on the development of new technologies and ideas.

Time and again, the people of California have affirmed that pursuing policies to cut climate pollution is critically important for the health of current and future generations. At the same time, history has shown it to be much harder to implement environmental policies if there is a perception that economic health will suffer. The ultimate goal is well-designed public policy that delivers environmental, health and economic benefits together.

In 2006, the state legislature took the environmental and economic paradigm to heart when it passed California’s global warming law, AB 32, creating a fundamental promise that cutting pollution and growing the Golden State’s prosperity will go hand in hand. Today, California business and community leaders are proving that promise to be a reality – and new stories are regularly emerging to show it. Our new AB 32 Innovator Series will work to capture these stories, bringing the companies – and people behind them – into light.

One of the reasons AB 32 has succeeded has been its ability to use market-based programs to cut pollution, allowing for both environmental and economic progress. Economic, government and academic experts have long suggested that well-designed market-based programs are the best tools for achieving pollution reductions because they inspire businesses to identify and apply new and innovative solutions. These solutions are often cheaper and faster at cutting pollution than prior methods, resulting in reduced compliance costs and rapid pollution declines.

For example, in a 2012 paper published in the Proceedings of the National Academy of Science, it said this about a market mechanism used in AB 32 (cap and trade):

“Facilitating innovation in “clean” technologies may be the key to achieving climate change stabilization without dampening economic productivity…CTPs [cap and trade programs] have several attributes that support clean technology innovation.”

For a concrete example of the possibility that innovation provides, think back to the acid rain problem of the 1990’s. Sulfur pollution was spewing from major coal-fired power plants across the U.S., degrading forests, lakes and architectural landmarks at a threatening rate.

When the U.S. Environmental Protection Agency (EPA) adopted a cap-and-trade regulation to help solve the problem, most experts thought installing expensive scrubbers and equipment upgrades across the U.S. was the solution. As a result, power companies across the U.S. predicted runaway costs and facility closures. However, when faced with the opportunity of a market-based solution and its inherent signal to innovate, a simple low-cost solution was developed by these same companies: find lower-sulfur coal and bring it to the power plants by train, rather than using high-sulfur coal located closer by.

Through this simple innovation, compliance costs were 80–90% cheaper than initially estimated.

Unfortunately, most economic models and regulatory implementation scenarios are ill-equipped at predicting innovation because it tends to happen in ways people don’t expect. If it was easy to predict how and when ground-breaking ideas occur, they would have already been applied. As the acid rain example shows, innovation can, and does, take many forms. Accordingly, by documenting the development and implementation of innovative solutions as they emerge, the true potential of policies like AB 32 can be realized. This is the essence of our new California Innovators Series.

In California, AB 32 is helping to develop groundbreaking solutions, proving that the state’s climate policy mission of protecting the economy and the planet can be realized. EDF’s Innovator Series will recognize several of these bold solutions throughout the year in an effort to distinguish the companies positively impacting California’s landscape and inspiring future innovators to come.

Please note, EDF has a standing corporate donation policy and we accept no funding from companies or organizations featured in this series. Furthermore, the EDF California Innovators Series is in no way an official endorsement of the people or organizations featured, or their business models and practices.

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