Energy Efficiency Markets Blog
Energy Efficiency Markets Blog, by Elisa Wood
By Elisa Wood
May 23, 2012
Who among us has not eagerly described the smart meter to a non-energy person only to be greeted by a blank stare, or worse the retort: “Why would I want to track my electricity costs all day?”
You try to explain the profound applications: smart appliances that talk to the power grid, consumer clubs that sell energy savings, your car serving as a power plant. But the conversation then becomes one about fascinating toys, not a world change.
A new paper by Joseph Stanislaw, independent senior energy advisor at Deloitte, eloquently gets to the real meaning of smart grid. Moving beyond the gadget talk, he describes the bigger picture, how new energy efficiency and smart technologies will democratize energy.
Energy efficiency could have “a greater impact on the global energy picture than any other development,” according to the paper, titled Energy’s next frontiers: How technology is radically reshaping supply, demand and the energy of geopolitics.
“The breakthroughs have been stunning, and often elegant in their simplicity. Among the least appreciated technologies are those that empower companies and individuals to understand and manage—and thus significantly reduce—their energy consumption. Last year, venture capitalists invested $275 million—up 75% from 2010—in start-ups that make software and other technologies to manage energy use,” the paper says.
Stanislaw explains how smart technologies are bringing about ‘the Power of One’ in the energy game. No longer passive receivers, consumers and businesses become active choosers; hence they influence the kind of generation plants we build – or if we build them at all – simply by the way they use electricity. Our market signals, not central planning, shape the infrastructure we build.
The Power of One idea often gets lost in political discourse about energy. Debate tends to focus on wind power tax incentives, solar trade wars, the pros and cons of hydraulic fracturing and access to public lands to drill oil.
By Elisa Wood
May 17, 2012
Why do some states avoid creating policies that encourage consumers and businesses to save energy? What’s the psychology of the laggards?
A new report by the American Council for an Energy Efficiency Economy sheds some insight as it examines the states that consistently fall behind in the organization’s annual energy efficiency ranking.
The bottom states are: Alabama, Kansas, Mississippi, Missouri, North Dakota, Oklahoma, South Carolina, South Dakota, West Virginia, and Wyoming. The good news is that even these laggards are beginning to adopt policies to save energy, according to the report, “Opportunity Knocks: Examining Low-Ranking States in the State Energy Efficiency Scorecard.”
But they still have a lot of catching up to do. And why did they fall behind in the first place?
The report authors, who interviewed 55 stakeholders, found one reason is a general lack of awareness about energy efficiency’s benefits. Another is an aversion to government mandates. But one of the most fascinating barriers is a misperception about energy costs.
Industry folklore says that consumers in states with low electric rates have no motivation to save energy. This folklore discourages policymakers from putting time and money into energy efficiency programs. In truth, these states have good economic reasons to encourage consumers to insulate, install better lighting, and undertake other energy savings measures. It turns out that even though electric rates are low in these states, consumers are paying high monthly bills.
By Elisa Wood
May 10, 2012
It’s easy to get the impression that technology game-changers happen in a near flash. And the stories of Facebook, Google, Microsoft and Apple leave us thinking that genius pops right out of the dorm room.
But in the energy industry it’s not that easy. The innovation we see today often stems from years of late nights, deep discussion and hard negotiation.
Take, for example, the Massachusetts story. The American Council for an Energy Efficient Economy named it number one for energy efficiency in October. You may wonder, how did that happen? Why not California – isn’t it the greenest of states?
But for Steve Cowell, chairman and CEO of Conservation Services Group, it was no surprise to see Massachusetts rise to the top. Cowell has been on the inside of the state’s energy efficiency scene for decades, going back to when he worked for former Governor Michael Dukakis in the late 1970s. He was there when the groundwork was laid to bring Massachusetts where it is today.
Cowell cites a pivotal event in the mid-1980s A group of influential activists, thinkers and utility leaders converged in the state, ready to bring efficiency to the forefront. Their names weren’t necessarily recognizable then, but today several are national leaders in the energy arena: Jon Wellinghoff, Steve Nadel, Rick Sergel, Peter Flynn, Doug Foy, Armond Cohen, Alan Nogee, Ralph Cavanaugh, Mary Beth Gentleman, Clare Moorhead, Timothy Stout, Bob King, Joseph M. Chaisson, Rachel Greenberg, Brad Steele.
And then there was John Rowe, CEO of Exelon, now arguably one of the power industry’s most influential figures. Back then, he headed a smaller utility called New England Electric System (later absorbed by National Grid.) Rowe directed a legendary challenge to the group that would frame the region’s direction. “I’m the rat, show me cheese.” In other words, give utilities a financial incentive to pursue energy efficiency, and they will do it.
By Kat Friedrich
Guest Blogger, Energy Efficiency Markets
May 2, 2012
A vast gap exists between the detailed information financial institutions need to support energy efficiency financing and the limited data they currently have. Several examples suggest these loan programs can succeed, but there are no large datasets supporting investment in energy efficiency.
Providing energy efficiency loans could give financial institutions new market opportunities. Unfortunately, their underwriters don’t have enough loan performance information to finance large volumes of energy efficiency projects yet. This lack of information inhibits the scaling up of energy efficiency retrofits in the residential and commercial sectors.
The small size of the market for energy efficiency loans inhibits market growth, said John Joshi, Managing Director and Business Strategist at Capital Fusion Partners. Investors seek liquidity; they want to be able to move their assets within a market. As the energy efficiency loan market grows, this lack of liquidity will no longer be an issue. Right now, “it’s a Catch-22,” Joshi said.
“We need strong political and regulatory support to make the market more viable,” Joshi said. “If it’s left to capital markets’ intervention, it will be a much slower process.” He said government financial support for renewable energy programs is key to opening this market.
“Investors want to compare apples to apples within transactions,” Joshi said. “They also want analytics so they can do scenario modeling.” Investors also ask third parties to participate in the analysis, so data needs to be accessible to a range of stakeholders.
When approving loans, underwriters need reliable data on the expected energy savings from energy improvements so they can factor this into their credit risk analysis. To consider an energy efficiency loan a safe investment, investors and rating agencies need reliable data on expected energy savings from efficiency installations in similar buildings in similar locations. They also need statistics on loan repayment. Much of this information is currently missing.
By Elisa Wood
April 25, 2012
Exhilaration swept through the energy efficiency industry as city after city, state after state and nation after nation set aggressive energy saving goals over the last several years. But with target dates nearing in certain jurisdictions, a more sober attitude now permeates. Some governments are asking: Are we reaching too high?
A global report issued this week by PwC, which looks into the minds of power industry executives, suggests the worry may be justified. Called ‘The shape of power to come,’ the annual report emerged from interviews with senior executives at 72 power companies in 43 countries. It found that a good number (45%) of executives are dubious that we will reach energy efficiency targets by 2030.
Meanwhile, PwC also says North America and Europe may be heading for a blackout watch. Remember those? Such warnings sprang up during the pre-recession era of heady economic growth. With economic recovery, the risk of power shortages again rises, as worldwide energy demand expands from 17,200 TWh in 2009 to over 31,700 TWh in 2035.
Energy efficiency is widely seen as the cheapest way to meet at least some of the new demand. But the report cites two significant problems that hinder efficiency efforts. The first is fossil fuel subsidies; the second is human nature.
Energy Efficiency Markets Podcast- Top 10 LED Reflector Bulbs-Efficient & Appealing Part 2Lisa Cohn of RealEnergyWriters.com continues her interview with Adam Cooper, research manager for the Institute for Energy Efficiency, which recently identified the top ten LED reflector bulbs--the bulbs that are the most energy efficient and appealing to consumers. […]
- Top 10 LED Reflector Bulbs-Efficient & Appealing Part 1Lisa Cohn of RealEnergyWriters.com interviews Adam Cooper, research manager for the Institute for Energy Efficiency, which recently identified the top ten LED reflector bulbs--the bulbs that are the most energy efficient and appealing to consumers. […]
- The Many Net Zero Home Benefits Part 2Lisa Cohn of RealEnergyWriters.com interviews Mike Murphy, executive vice president, Nexus EnergyHomes, which won builder of the year from the National Assoc. of Home Builders (NAHB). He describes the benefits of net zero homes and the challenges of getting more built. […]
- The Many Net Zero Home Benefits Part 1Lisa Cohn of RealEnergyWriters.com interviews Mike Murphy, executive vice president, Nexus EnergyHomes, which won builder of the year from the National Assoc. of Home Builders (NAHB). He describes the benefits of net zero homes and the challenges of getting more built. […]
- California's Focus on Lighting As a SystemLisa Cohn of RealEnergyWriters.com interviews Zach Gentry, vice president of marketing and product management for Enlighted Inc., an energy efficiency and building information company creating networked control systems. He explains how the California Public Utilities Commission is restructuring incentives by focusing on lighting as a system. […]
- Motivating Customers With Competition and Rewards Part 2Lisa Cohn of RealEnergyWriters.com continues her interview with Andy Frank, VP of business development for Efficiency 2.0, which helps utilities meet their EE goals using creative techniques such as competitions and rewards. The programs yield up to 6% savings. […]
- Motivating Customers With Competition and Rewards Part 1Lisa Cohn of RealEnergyWriters.com interviews Andy Frank, VP of business development for Efficiency 2.0, which helps utilities meet their EE goals using creative techniques such as competitions and rewards. The programs yield up to 6% savings. […]
- Trends in Data Center Energy EfficiencyLisa Cohn of RealEnergyWriters.com interviews Bill Kosik, Principal Data Center Energy Technologist with HP Technology Services, about what’s most effective in data center EE. […]
- The Battery That's Bringing Clean Energy to PJM's Grid Part 2Lisa Cohn of RealEnergyWriters.com continues her interview with Tom Granville, CEO of Axion Power, about how the company's battery is bringing clean energy to PJM's grid, stabilizing the grid, and supporting PJM's demand-response programs. The efforts have been helped by a new FERC rule. […]
- The Battery That's Bringing Clean Energy to PJM's Grid Part 1Lisa Cohn of RealEnergyWriters.com interviews Tom Granville, CEO of Axion Power, about how the company's battery is bringing clean energy to PJM's grid, stabilizing the grid, and supporting PJM's demand-response programs. The efforts have been helped by a new FERC rule. […]
- Top 10 LED Reflector Bulbs-Efficient & Appealing Part 2
