Energy Exchange

America’s Military Renewables Plan Fast-Tracked And Mission Critical

By EDF Blogs / Published: August 23, 2012

By: Jillian Jordan, EDF Energy Marketing & Communications Intern

This months’ announcement from the White House calling for green energy bids and its plan to fast-track wind and solar projects delivered a clear message that renewable energy is something the American military – and its government – whole-heartily believes in. The federal government’s Renewable Energy Partnership Plan (Plan), headed by the Department of Defense (DoD) and the Department of the Interior (DOI), is pushing new project development on and near numerous military installations to the tune of $7 billion dollars.

Even more compelling is the fact that clean energy is now considered part of America’s national security plan by key political figures and the DoD. The White House’s Heather Zichal, Deputy Assistant for Energy and Climate Change, has commended this strategic move towards clean energy and endorsed the Plan as “operationally necessary, financially prudent and mission critical.”

So mission critical, in fact, that the Army has planned the incorporation of renewables as a high-priority tactic for saving lives. Military convoys have long been known to be one of the most dangerous operations, costing more lives than many other career fields in the armed forces. When supplies like gasoline run out, transportation troops are assigned the duty of delivering them through hostile territory. For every 24 fuel resupply missions, one American life is lost – which constitutes one out of every eight deaths in Iraq. Using clean energy actually saves lives for today’s military. The less fossil fuel used and the less dependent we are on oil, the less convoy trips are needed for refueling and to run diesel generators that power military tents, therefore minimizing the risk for American troops.

The alternative energy infrastructure projects under the Plan will create jobs favoring local economies, produce about 7,200 megawatts of energy and utilize millions of acres of public lands and offshore areas that are best suited for wind and solar projects, all while meeting the goals of the federal Energy Policy Act of 2005. Under the Act, the military has voluntary plans for 25% of its energy produced by clean sources by 2025.

“Developing renewable energy is the right thing to do for national security, as well as for the environment and our economy,” Secretary of Defense Leon E. Panetta said. “Renewable energy projects built on these lands will provide reliable, local sources of power for military installations; allow for a continued energy supply if the commercial power grid gets disrupted; and will help lower utility costs.”

In addition to becoming independent from the national grid, utility costs have been upwards of $4 billion annually and the task force assigned to the Plan is determined to lower the DoD’s energy bill and curtail energy usage. But, above all, the goal is to maintain the military’s ability to remain powered during mission-critical times. Conditions of the Plan offer an added safety net in the event of a massive blackout or, for a worst-case-scenario attack on America’s power grid.

Preliminary site evaluation began with DOI’s Smart from the Start initiative under Secretary of the Interior Ken Salazar. Pilot projects are currently underway in Arizona, California, Nevada and Wyoming, with more fast-tracked proposals to be announced in the next few weeks. The Renewable Energy Partnership Plan signed between the two agencies would allow the military to purchase power produced from homegrown, renewable energy sources, which could lead to a reduction in clean energy costs and an overall boost to the alternative energy sector.

Of the DOI’s 28 million acres, 16 million of which were designated for defense, 13 million that are rich in resources and ideal for wind, solar and geothermal power generation. “Our nation’s military lands hold great renewable energy potential, and this partnership will help ensure that we’re tapping into these resources with a smart and focused approach to power our military, reduce energy costs, and grow our nation’s energy independence,” Salazar said.

Posted in Renewable Energy, Washington, DC / Read 5 Responses

Demand Response Means Big Money for Big Users

By / Published: August 22, 2012

After a full week of triple digit temperatures in central Texas, the forecast this weekend for highs in the mid-90’s seems like a blessing both for our thermostat and for the unending topic of this blog series: our electric grid. Officials from the Public Utility Commission (PUC) and the Electric Reliability Council of Texas (ERCOT) have been worried about the strain on our electric grid all summer long, but they aren’t just worried about this summer. The energy crunch is an issue that we know will be with us until we deal with it; we can’t rely on dancing cats to ease the crunch. We need real solutions to avoid real problems in the future.

It doesn’t have to be that way though, and it doesn’t need to cost as much as some worry it will, but that’s assuming that the PUC and ERCOT are able to move quickly and decisively to encourage demand response. In our blog post last week we focused on the benefits of demand response for residential customers and small businesses, and that’s probably where the greatest overall potential lies. But the quickest return – and the most financially savvy electric customers – might lie in the commercial and industrial markets today. Fortunately two great examples in other parts of the country show how we could be doing more for those markets in demand response as well.

“Making the Most of Your Energy” in NYC

Large commercial buildings typically face a number of hurdles when trying to upgrade their energy systems – particularly those with multiple tenants. In New York City, the Rockefeller Group Development Corporation saw these hurdles as an opportunity for a new approach to energy management. By selling their demand reductions to the grid, in the manner we’ve proposed for ERCOT, they managed to reduce energy usage by 60,000 kWh per month and reduced peak demand by 1.4 MW. McGraw Hill now receives a net income (after payments for the financed upgrade) of $500,000 annually.

Rules in ERCOT might allow for this kind of savings already in some small ancillary services markets, so long as their metering system complies with ERCOT protocols. Those ERCOT demand response markets are capped and already oversubscribed; leaving developers who want to build smart buildings or upgrade older ones are looking to other markets for their business.

Meanwhile, in the heartland….

We mean Warrick County, Indiana specifically. Alcoa, one of the world’s leading aluminum producers has worked with their grid operator Midwest ISO (MISO) to develop a completely new approach to industrial demand response that has blown the doors off of the possibilities for Texas’ industrial sector. The market for aluminum is ruthless, and Before Alcoa anything that gives Alcoa a leg up helps them preserve critical jobs and tax income in their communities around the country.

With this new market, Alcoa has managed to maintain international competitiveness for their Warrick County plant and is looking to expand demand response to their aluminum smelters in other parts of the country. In Texas, where Alcoa’s Rockdale smelters are were not able already struggling to maintain international competitiveness and have been idled as a result, , new markets like the pilot project announced by ERCOT on Monday could mean the difference for other industries between staying profitable and shutting down operations.

Whether it’s in the city or the country, a big user or a small mom and pop store, demand response markets offer a new benefit to customers if the market rules allow customers to compete with other resources. As we discussed earlier this week, the potential for these resources in Texas would help us meet 15 percent of our peak demand needs according to ERCOT’s Brattle Report. That potential stretches across all types of customers, and must be part of the solution to the energy crunch in Texas if we want to keep rates down and maintain reliability.

Posted in Demand Response, General, Texas / Comments are closed

EDF Energy Innovation Series Feature #10: Social Networking From Honest Buildings

By Jim Marston / Published: August 22, 2012

Throughout 2012, EDF’s Energy Innovation Series will highlight more than 20 innovations across a broad range of energy categories, including smart grid and renewable energy technologies, energy efficiency financing, and progressive utilities, to name a few. This series will demonstrate that cost-effective, clean energy solutions are available now and imperative to lowering our dependence on fossil fuels.

Find more information on this featured innovation here.

Is your office building on LinkedIn? Can you find user reviews of your high-rise on Yelp? Probably not, but the chances are good that you’ll be able to do both on HonestBuildings.com.

Since launching in beta on March 20, 2012, the fast growing real estate network has already aggregated detailed information on over 700,000 buildings across the U.S. From architects to brokers, thousands of real estate, construction and service companies have joined the platform, posting their portfolio of work and connecting with building owners and managers to find new business opportunities.

Honest Building’s co-founder and CEO Riggs Kubiak says that the real estate market is primed for the convergence of data and community, which will lead to more transparency for all stakeholders and accelerate the adoption of high performance buildings.

“Greater transparency about building performance increases the demand for energy efficiency as tenants can make better, informed decisions about where they lease,” said Kubiak. “This accelerates the adoption of all sorts of best practices by building owners and managers in order to command the best leasing rates. From energy efficiency to leasing to design to management, buildings will have to get better, faster. This also gives the best building service providers and vendors the opportunity to scale faster, as the services and technologies with the best track record can leverage a network effect to capture more and more business.”

And when it comes to important energy innovations, tackling the building sector is vitally important. Cars and trucks carry a lot of the blame for climate change. But in the U.S., the building sector is responsible for nearly half of CO2 emissions, compared to a third for the transportation sector. Three-quarters of the electricity produced in the U.S. is used just to operate buildings, and that percentage is even higher globally.

There’s a massive amount of factual, verifiable data about how homes and buildings operate. This data includes square footage, energy costs, walkability – all things that people care about now more than ever. But all this information is very hard for consumers to find and for building professionals to promote. And there is no venue for people — designers, buyers or sellers — to interact.

“The purpose of Honest Buildings is to merge the hard facts with human interaction,” Riggs said. “You can see the data on a building and weigh it against what the community is saying about it.”

In San Francisco, the Honest Buildings platform is using energy benchmarking compliance data to bring together building owners, service providers and local government to create new business opportunities and more efficient buildings. Working with the city’s department of the environment, they’ve created a custom map of all the buildings that have and have not complied with the city’s energy benchmarking ordinance, and helped building owners connect with energy efficiency companies and consultants that can help these building go above and beyond compliance.

“The introduction of real-time energy data for buildings will provide an incredible insight into how they perform,” Riggs said. “Our expectation is that developers and property managers will want to highlight their best performers and create an element of competition that will increase efficiency and sustainability. And the better the technology, the faster that will happen.”

But according to Riggs, data alone isn’t enough. “As with all great services, there has to be a human element,” he said. “People need to be able to weigh in with their voice, and the social network aspect of our service will be just as important as detailed, trustworthy data. Information may help us make better buildings, but people make the decisions.”

Posted in Energy Efficiency, Energy Innovation / Read 3 Responses

The Housing Market And Green Labels: Location! Location! Efficiency!

By / Published: August 21, 2012

From produce to t-shirts, we know certain people are willing to pay more for organic, and that these people often seek out restaurants, vendors and brands that have earned certifications for their commitments to sustainable practices. Labels help consumers, who increasingly face a multitude of product and service offerings, make informed decisions. But what about a sustainably-labeled house? Will people pay more for a certifiably more efficient, or “green,” home?

A recent study, “The Value of Green Labels in the California Housing Market,” suggests that the market places significant value on certified green homes in California. Such green-labeled homes fetched a 9% premium versus non-labeled homes, based on statewide sales data for 1.6 million homes from 2007 to 2012. This translates to a $34,800 price premium for a home labeled by at least one of three standards: ENERGY STAR, LEED for Homes or California’s own GreenPoint label, on the $400,000 sales price of a non-labeled home. The research was conducted by Matthew E. Kahn, an economics professor at UCLA, and Nils Kok of Maastricht University in the Netherlands, a visiting scholar at the University of California at Berkeley. Their analysis controls for variables known to affect real estate prices including location, size, vintage and the presence of amenities.

The study estimates that the typical single-family California household spends $200/month on utilities, and thus stands to benefit from $720 in annual savings from energy efficiency measures that would reduce energy use by 30%. The authors point out that the $34,800 price premium of a green-labeled home is 48x the annual estimated utility bill savings of $720, suggesting that consumers value efficient homes for more than the direct financial benefits they produce.

All else equal, it is well understood that a resource efficient home uses less energy than an inefficient one, and will therefore have lower operating costs. But Kahn and Kok point out that ‘the added value of a green-labeled home far exceeds both the estimated cost of adding energy efficiency features to a home and the utility-bill savings generated by those improvements.’

Since the non-financial benefits of a green-labeled home are a seemingly large part of their perceived value, effectively promoting energy efficiency requires a targeted marketing approach that taps into the consumer’s values – perhaps some combination of increased comfort, improved indoor air quality and the signal of ‘conspicuous conservation’ that lets your neighbors know your own particular “shade of green.” In fact, the study found that the value of a green-labeled home was positively correlated with the level of environmental ideology of a neighborhood, as measured by the percent of hybrid vehicle registrations.

We tend to focus on cash-flows when doing a cost-benefit analysis of energy efficiency financing programs, weighing the upfront installation costs versus the resulting monthly utility bill savings. This makes sense given that non-financial benefits, to date, have been hard to value. However, this study is an indication that these benefits are indeed monetized at sale – and a 9% price premium sends a strong message that it pays to invest in energy efficiency!

Posted in California, Energy Efficiency / Read 1 Response

Taking a stand to secure the benefits of greenhouse gas offsets in California

By Tim O'Connor / Published: August 16, 2012

Yesterday, EDF filed a legal brief to help defend a core component of California’s landmark cap-and-trade program. Similar briefs were also filed by other environmental, non-profit, and business groups. These briefs, filed to the San Francisco Superior Court – (Case number 519554), support the California Air Resources Board’s (CARB’s) decision to allow pollution reductions achieved by verified, voluntary projects — known as offsets – to count under the program. The suit, first filed in March, seeks to prevent California’s program from harnessing these projects.

Here’s our perspective:

Offsets present an important opportunity to support environmentally beneficial projects throughout California’s economy. Offsets help to incentivize projects that reduce pollution in sectors – such as agriculture – that are not covered by the state’s cap-and-trade program. Under current rules, a variety of projects – including projects to grow and maintain urban forests in the metropolitan LA area, to capture greenhouse gas pollution from animal waste lagoons in the Central Valley, and to manage forests in Northern California – may be eligible to receive tradable carbon permits. Those permits can then be sold to power plants and other companies that are required to reduce pollution under the state’s cap-and-trade program.

CARB has adopted a stringent, category-specific approach to ensure measurable pollution reductions. Not just any old offset project can qualify for carbon credits under the program. Only projects that are developed according to pre-approved protocols adopted by CARB and that meet stringent accounting, verification and longevity standards can earn credits. These stringent requirements ensure that only verified projects representing real emissions reductions in specific project areas can receive credits that can be sold into the cap-and-trade program.

Over the past two years, EDF, along with other groups, has been working to introduce new types of projects that can sell credits into the program, as long as they meet CARB’s stringent criteria. Three such types of projects include: projects to reduce pollution from agricultural operations in California’s rice farming industry; projects to upgrade equipment in oil fields; and projects that ensure efficient use of fertilizers throughout the agricultural sector. All of these projects can lead to significant greenhouse gas reductions across the state.

California has a long way to go before meeting its ambitious climate change targets. Offsets present one important opportunity to realize that goal because of the incentive for new projects and ideas to be developed throughout the state. Our brief in the California Superior Court filed yesterday is but one part – albeit an important part – of the effort to ensure innovative project developers can participate in California’s long-term transition to a lower carbon economy.

Posted in General / Comments are closed

EDF Energy Innovation Series Feature #9: Green Button Initiative

By Jim Marston / Published: August 15, 2012

Find more information on this featured innovation here.

Since their introduction, smart meters and “connected” appliances have offered the potential for customers to better access and control their energy data. Tens of millions of smart meters later, there’s a massive amount of data being gathered, but few ways for customers to understand it.

A desire to make sense of this treasure trove of energy data (and a challenge by the White House to come together as an industry) was the driver behind Green Button, a voluntary effort by utility companies to bring some order and predictability to– and increase the consumer value of – the gigabytes of energy information now available.

“Armed with their own data, homeowners and building owners will have more opportunities and choices to use a growing array of online services that can help them manage energy use and save on their bills, while helping the Nation achieve the important goals of conserving energy and reducing pollution,” said Nick Sinai, a senior advisor in the White House Office of Science and Technology.

The momentum sparked by the White House call to action has been remarkable.

Nearly two dozen energy providers and more than 30 energy and technology companies are already on-board.

The early and broad cooperation has resulted in more than 31 million homes and business that can already – or will soon be able to – view their consumption usage online. Developing standards for energy data is one of the most important first steps to making it a powerful tool for customers and entrepreneurs. Standards allow for the development of tools, apps and services that can apply to any customer, regardless of who provides their power.

While the White House challenge was focused on transparency and usability for customers, the effort has also sparked a lot of excitement with another group: entrepreneurs.

Imagine a smart phone app that, with a customer’s permission, monitors a home’s energy usage and patterns, analyzes the data against the home’s size, local weather patterns and other customers, and provides home improvement suggestions to reduce energy costs. Or even more simple, imagine an app that allows customers to securely control individual appliances in their home from anywhere on the planet.

Some companies are already using the initial data sets at “code-a-thons”where software application developers compete to produce prototype apps during caffeine-induced all nighters. In a similar spirit, last month EDF teamed up with the White House, Google and HonestBuildings to pull together a “data jam” at Google’s Manhattan headquarters. Todd Park, U.S. Chief Technology Officer and Assistant to the President, kicked of a brainstorm among tech entrepreneurs, energy experts, finance whizzes, web designers and government agencies, to answer this question: if government makes its energy data open and computer-friendly, what could entrepreneurs invent to “improve energy outcomes for families and businesses?” The jam session generated at least ten great ideas, ranging from consumer energy apps to ways to save money on your commute.

Just a few years ago, the new availability of Global Positioning System (GPS) data fueled the creation of countless GPS-based products aimed at filling that new niche market of navigation products. Today, GPS is an integral part of the explosion of mobile apps.

“Opening up access to GPS information led to an explosion of innovation and economic value, with GPS data fueling an estimated $90 billion of commercial products and services. I’m confident that energy data will similarly fuel a new wave of innovation and entrepreneurial opportunities,” said Sinai.

Posted in Energy Innovation, General / Read 3 Responses