Granny was thrown out of her wheelchair and off a cliff in one of the most controversial ads of the 2012 US presidential election. Whether you love or hate the clip, which went after Republicans on Medicare, it shows the emotional tenor we bring to the debate over health care costs.

Energy costs affect Granny at least as much – and everyone else too. Yet we rarely devote such time and passion to the issue, except when gasoline prices spike. Even then, the talk is temporary. We become acclimated to the higher costs. Note how little grumbling you hear now that $3-$4 per gallon gasoline is the new normal.

Why do we make a big deal about the economics of health care and not the economics of energy? Because we are not doing the math. That’s what a new report by United Technologies Corp. reveals.

Few realize, for example, that we spend about the same amount each year powering our homes, stores and offices – $432 billion – as businesses spend on health insurance.

“It is on par, which is remarkable because it speaks to where we can go,” said John Mandyck, chief sustainability officer for UTC Climate, Controls and Security, in an interview.

Where UTC sees us going is toward saving money through greater energy efficiency, which opens the way toward deploying the extra capital for other personal or investment purposes.

“Unlocking American Efficiency: The Economic and Commercial Power of Investing in Energy Efficient Buildings,” looks specifically at the economics of making US buildings 30 percent more efficient by 2030. Here are a few eye-catching points the report makes about what that could mean for our finances.

• A 30% investment in building efficiency brings a 28.6 percent internal rate of return over 10 years. That’s about four times better than average corporate bond yield or average equity performance and more than double the returns of high performing venture capital firms.
• Households could save about $466 per year – twice as much as they spend on average for fresh vegetables and nearly as much as they spend on prescription and non-prescription drugs.
• After recouping the cost of upgrading government buildings, the US would save about $8 billion per year on energy costs.  How meaningful is this? Over a decade, this is as much savings as we could achieve by raising the Medicare retirement age to 67, increasing taxes one percent for top earners, or taxing foreign earnings by US corporations. It’s also about as much as we would save by eliminating the Environmental Protection Agency.

Here is another way to look at energy savings. Think about lowering energy costs as a way to raise household income, says the report. We hear a lot about the decline in middle class salaries. Had energy costs remained level since 2000, they would have made up for the average drop in household income.

Thinking about energy costs this way converts the issue from being “a problem to an opportunity,” Mandyck said. It offers a chance to consider how we can “redeploy that cash flow in other ways.”

It makes sense for the US to pursue this line of thought with greater vigor. As a share of gross domestic product, energy costs rose from 6.2 percent to 9.2 percent over the last decade, says the report. And we can expect to see energy costs rise another 17% over the next two decades, according to the International Energy Agency.

Ultimately, the UTC’s energy efficiency story is about us keeping more of our own money and using it in other productive ways. Granny’s wheel chair doesn’t need to be powered by a heartless force beyond her control that sends her over a cliff. Embed more energy efficiency into the economy and Granny can afford her own motorized, self-propelled wheelchair and go wherever she wants.

Elisa Wood is a long-time energy writer whose work has been picked up CNN, the New York Times, Reuters, the Wall Street Journal Online and Washington Post.  See her articles at RealEnergyWriters.com

The US faces a bit of a math problem when it comes to making its buildings more energy efficient. If every energy auditor worked around the clock, it would take 22 years to analyze all buildings.

And of course the audit is only step one.

“At that point we wouldn’t have saved a single kilowatt-hour of energy,” said Mike Kaplan, vice president of marketing for Retroficiency, a building analytics company and the source of the 22-year statistic.

Is there a way to speed the process – and allow auditors to eat and sleep too?  Retroficiency is a part of a breed of startups that see big data and analytics as the solution.

The first trick is figuring out which buildings to tackle. Utilities and energy service companies need guidance identifying the best prospects among the nation’s five million buildings. Thirty percent of US buildings account for 70 percent of the potential energy savings, Kaplan said.

To identify the 30 percent, Retroficiency offers a ‘virtual energy assessment,’ a platform that quickly scans buildings to “create energy models on the fly,” he said. The software program evaluates thousands of commercial buildings per day, spending minutes on each building. It requires only a building’s interval consumption data and address. The process is entirely remote; no one needs to set foot on the property.

With the best prospects identified, the next step is convincing building owners to undertake a retrofit. Here Retroficiency follows the lead of contemporary product marketers – it personalizes the pitch, much the way OPower does for the homeowner. So rather than getting a generic flyer about utility incentives, the building owner gets a message, something like:  ‘We’ve looked at your building. Here’s what we found. And we know how you can cut your bill by 15 percent – oh and your utility offers incentives.’

When the building owner has signed on, the next step begins, the ‘automated energy audit.’  This can be a combination of both remote and on-site work by auditors or engineers. Auditors input into Retroficiency’s software whatever they know about the building – type, size, information about its lighting, heating and cooling – or whatever they uncover in a walk-through of the premises.

“We have data based on tens of thousands of previous audits. We can very quickly generate an hourly energy model of the building, and then run that energy model to evaluate thousands of measures in minutes,” Kaplan said.

The building owner gets a report with recommended energy efficiency improvements. About two-thirds of recommended measures come from the automated process and one-third from the auditor’s customized analysis, he said.

Since Retroficiency launched in March 2011, it has evaluated more than 300 million square feet of building space and identified more than 1.5 billion kWh of savings. Its software is used predominantly in the US and Europe. Some of its clients include the Council of Smaller Enterprises in Ohio, Liberty Property Trust and CLEAResult. Retroficiency also is conducting about a half dozen pilots for utilities.

Retroficiency sees a big market ahead for remote building analytics. The US is tapping only about $20 to $30 billion of what appears to be a $100 to $400 billion market for energy efficiency, according to Kaplan. Greening our buildings is high on the federal agenda. States and cities also are putting in place goals and mandates to improve building efficiency. Several large cities, for example, now require that large buildings publicly report their energy performance.

“One component of the mandate in Boston and in other cities like New York and San Francisco requires some buildings to conduct energy assessments on their buildings. Retroficiency can enable building owners and their service providers to generate more comprehensive audits in 50-80 percent less time that traditional audits. This means that more money can be spent on energy efficiency measures rather than just evaluation,” Kaplan said.

Others are also moving into this space. Energy Efficiency Markets recently reported on FirstFuel, another Boston-area company specializing in remote building analytics. Who else? Please let us know in the comments section here. http://www.realenergywriters.com/

Elisa Wood is a long-time energy writer whose work has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post. See her articles here: http://www.realenergywriters.com/elisa-wood/

When New York City Mayor Michael Bloomberg leaves office in January, green building advocates lose a strong ally. But they are determined to make sure his shoes are filled to their liking.

To that end, a coalition of environmental and real estate interests are asking candidates to endorse their plan, “Green Building Roadmap for NYC’s Next Mayor,” which offers steps to further the city’s energy efficiency efforts.

Those unfamiliar with Bloomberg’s agenda may be surprised to hear the term ‘green’ ascribed to New York City.  After all, “soot” is the moniker Elizabeth Gilbert came up with in the movie, “Eat, Pray, Love,” when asked by a group of Italians for a word that embodies New York.

Truth be told, when the numbers are crunched, New York turns out to be one of the nation’s most energy efficient cities, largely because of its heavy use of mass transit and its density (about 1 million buildings in 300 square miles).

“People are surprised to see New York City as a leader on environmental issues,” said Russell Unger, executive director of the Urban Green Council, which led the roadmap effort. “We can hold our own against any city traditionally seen as a leader.”

What are the city’s bragging points?

Under Bloomberg, New York became one of a handful of US cities where privately owned buildings must publicly report their energy and water use. The effort is seen as a way to shame the energy wasters into action, boost value for the green buildings, and bring greater transparency to real estate transactions.

Bloomberg’s administration also has introduced a model commercial lease that gets at the notorious ‘split incentive’ problem for rental properties. Since renters are responsible for paying utility bills, building owners have little financial reason to invest in energy efficiency upgrades. The owner receives no financial return. The model lease solves this problem by offering a formula for owners and renters to share the bill savings.

New York is working on the soot problem too. It turns out it is not cars and trucks that create most of the city’s soot – as many believe.   About 86 percent of the soot comes from one percent of the city’s buildings, those that use dirty heating fuel. The city has mandated that building owners phase out use of the low-grade oil.

Urban Green’s new roadmap puts forward a range of ideas that build upon these programs. For example, the plan emphasizes bettering school facilities to make them healthier. It updates school construction specs, improves school building maintenance and waste management, and encourages use of better heating systems.

The plan also encourages construction of high performance buildings by streamlining permit applications. And it brings to smaller buildings some of the same energy analysis reporting required of the city’s largest buildings.

What happens if a mayoral candidate decides not to support the road map? Unger said that group won’t necessarily be making a big deal about any who don’t sign on. But it will make known those who do.

He points out, too, that the road map is backed by an unusual coalition of environmental and   commercial interests, groups that often don’t see eye-to-eye, but do agree on green buildings since they offer air, health and economic betterment.  Urban Green is joined, for example, by the Real Estate Board of New York and the New York Building Congress in pushing the roadmap.  It’s the kind of coming together of groups that political candidates like on their side.

The mayor’s race could prove instructive beyond New York City. Buildings offer enormous opportunity for energy savings. Urban voters are becoming increasingly aware of the value of living and working in energy efficient environments.  If Urban Green’s campaign gains attention in the New York race, we may see the political currency of green buildings rise in other cities as well.

Elisa Wood is a long-time energy writer whose work has been picked up by CNN, the New York Times, Reuters and the Wall Street Journal Online. See her articles here: http://www.realenergywriters.com/elisa-wood/

It says something that Ernest Moniz chose to deliver his first public talk as US energy secretary to an energy efficiency crowd.

His appearance last week at EE Global in Washington, D.C. was a surprise of sorts. And the timing was significant. Moniz had only been confirmed as energy secretary three hours before taking the podium at the Alliance to Save Energy’s annual conference.

Why did he make the stop?

Probably not because of the size of the crowd. About 550 people attended the two-day gathering. For the energy efficiency industry, these are impressive figures, but by energy conference standards in general, not so much. Ten thousand people attended the American Wind Energy Association’s most recent annual gathering and Solar Power International drew 15,000.

Nor was it likely because of the crowd’s influence.  The big money in energy lies elsewhere, with the utilities and the oil and gas industries, which have contributed the bulk of the $91 million spent lobbying Congress on energy issues so far this year, according to the Center for Responsive Politics.  Energy efficiency companies represented only a smattering.

Instead, Moniz’ presence signaled not what the energy efficiency industry is today, but where it’s going – quickly – and the Obama administration’s willingness to help it get there.

In fact, Moniz called the timing of the efficiency conference and his nomination “fortuitous” because of the aligned agendas. “Efficiency is going to be a big focus as we go forward,” he said.

Energy efficiency is poised to be the next big thing in clean energy, ready to take the steps two at a time, as the wind and solar industries have in recent years. (The US wind industry grew 500 percent from 2006-2012; solar has grown almost 300 percent based on megawatts installed)

Energy efficiency’s growth is being fueled by several factors, not the least of which is economic. The market is working in its favor.  Energy prices are up and efficiency offers a way to get them down.

The US Energy Information Administration projects that electricity prices will grow 2.6 percent in 2013, almost double the 1.4 percent increase in 2012. This follows a $720 million rise in energy costs from 2002 to 2011, almost as great as the US’ jump in healthcare costs during that time frame, according to a report released at the conference by United Technologies Corp.

“Energy prices have risen to the level where avoiding the cost becomes the investment opportunity. I think that opportunity will only grow,” said John Mandyck, chief sustainability officer for United Technologies Climate, Control & Security, in an interview.

In fact, UTC found in a report that a 30 percent increase in building efficiency would not only pay for itself, but also generate a net positive cash flow of $65 million per year. This beats the rate of return for corporate bonds, according to Mandyck.

That’s the good news.

The bad news is that as energy efficiency grows in stature, it is likely to attract some of the same enemies as the wind and solar industries. For a look at one of these confrontations – a 12-year confrontation – see this story about Cape Wind’s battle with oil billionaire Bill Koch.

The wolf has already shown up at the door in the Northeast, according to  Susan Coakley, executive director of the Northeast Energy Efficiency Partnerships. The Northeast, in particular Massachusetts, is one of the most active energy efficiency markets in the US.

For example, Americans for Prosperity has pushed for repeal of the Regional Greenhouse Gas Initiative in several Northeast states.  RGGI is a large source of funding for energy efficiency in the region.

“When you are number one in the country, and you are making that kind of progress, you sometimes have a bulls-eye on your back,” said Coakley, during a panel discussion at EE Global. “And indeed, we are beginning to have some well-funded pushback. This is not internally driven. This is externally driven. I’ll tell you right now, it is the fossil fuel industry that is setting up institutes to push back on our policies.”

But the energy efficiency industry comes to the fight with strong advantages. It can build on the lessons learned by the wind and solar sectors in fending off their opponents. And it clearly has some good friends in high places.

Elisa Wood is a long-time energy writer whose work has been picked up by CNN, the New York Times, Reuters and the Wall Street Journal Online. See her articles here: http://www.realenergywriters.com/elisa-wood/

The Texas House and Senate passed Senate Bill 385 in May. If Governor Rick Perry approves the bill, the state will break new ground by developing plans for commercial and industrial property assessed clean energy (PACE) programs. This bill will redesign Texas’s approach to PACE, focusing on the commercial and industrial sectors rather than on residential programs. The legislation covers both energy efficiency and water efficiency.

To facilitate local decision making, cities and local areas will partner with businesses and nonprofits to set up their own PACE programs. These programs will allow businesses to borrow money from private lenders and repay it yearly via an assessment on their property taxes.

The bill has a solid foundation of support from a wide range of stakeholders including industry leaders and senior legislators. Charlene Heydinger, executive director of the nonprofit Keeping PACE in Texas, has built an effective coalition which includes large businesses and banks.

“PACE is the only solution out there that is totally market-driven, totally voluntary and local, and there are no mandates,” Heydinger said. “Our business community loves PACE because it is a real option for a solution without the drawbacks that have given people pause.”

Momentum of PACE Programs

PACE has been gaining traction nationwide since the first pilot PACE program in 2008, said David Gabrielson, executive director of PACENow. “It’s an idea that caught on very quickly and resonated all over the country.” However, some of the first generation of PACE bills were not designed for easy implementation. States are currently developing updated approaches to PACE.

In 2009, Texas passed a PACE bill which focused on residential energy-related programs. But because the bill was difficult to implement and the Federal Housing Finance Agency opposes residential PACE, PACE stalled in Texas. This year, Republican Senator John Carona introduced a new bill to improve Texas’s prospects for creating successful PACE programs. “I think Texas, in taking up this effort to get their legislation amended, is really on the cutting edge of states around the country,” Gabrielson said.

“We’ll put industrial PACE on the national map,” Heydinger said. Texas is a massive hub of industrial activity. Heydinger said Texas uses 19 percent of the energy used by industry in the United States. According to the United States Bureau of Economic Analysis, Texas was responsible for 8.73 percent of the national gross domestic product in 2011.

Collaboration with Banks

Heydinger collaborated with financial stakeholders to make sure banks’ concerns were addressed. Their collaboration led to a new version of the bill which focuses on commercial and industrial sectors rather than the residential sector.

“Two words, when spoken together, strike fear… and trepidation into the hearts of bankers, and that’s ‘priority lien,’” said Steve Scurlock, executive vice president of Independent Bankers Association of Texas (IBAT). “That is always a red flag. It was very important to us to make sure that the consent piece was very strong – that this would not happen without the consent and opportunity to do what the first lien holder would want to do.”

After the bill was revised, IBAT testified in favor of the House version of the bill. “We felt like it provided appropriate protections not just for our lenders, but for… consumers and building owners as well,” Scurlock said. “One of the things I like about the PACE bill this time is that there’s public/private cooperation. The primary funding for the projects is provided through the lending institutions and I think that’s a good thing.”

Control by Local Communities

“We have a very lean state government structure,” Heydinger said. Therefore, the legislation provides solutions which are inexpensive and simple for local and municipal governments to implement. The bill provides a flexible framework to allow local governments to partner with nonprofit organizations and businesses to set up PACE programs.

The bill does not specify extensive details as to how the individual programs will work, but it does outline guidelines for setting them up. The projects will be paid for through property assessments. They will be funded upfront by either governments or third parties. The financing may cover a variety of expenses including the cost of verifying savings. Project savings verification is required for every PACE activity in Texas.

Local governments will be able to designate regions for the purpose of creating PACE programs. Heydinger said that in agricultural areas, counties may combine their resources to create joint PACE programs.

There are powerful incentives for local districts and cities to set up PACE and water efficiency programs. In addition to being job creation engines, these programs can reduce water shortages and brownouts, both of which are of concern to industry. Texas is currently experiencing a multi-year drought. Brownouts can lead to increased costs for chemical production factories, Heydinger said.

Messaging for Business Leaders and Legislators

“I speak business when I talk about PACE,” Heydinger said. “Our effort now in the next month is about the jobs, the economic impact, the ability to upgrade our existing infrastructure. The benefits of our work that are environmental are wonderful, but they don’t get traction here. We have approached PACE as an economic development bill.”

Since the state legislature only meets for six months every other year, it was also crucial for Heydinger to use communication strategies that would appeal to legislators as persuasively as possible. When the Texas legislature puts a bill on the back burner, action can be postponed for years.

Heydinger said she has been impressed with the legislature’s commitment to addressing long-term infrastructure issues this year. “Good government invests in the future,” she said. This year, Texas’s legislature has focused on developing long-range plans for roads, construction, water conservation and energy efficiency. This bill is part of a larger emphasis on planning for Texas’s growth. Many people are moving to Texas from other states and nations.

“One of the things I… like about Texas is that they are very focused on results,” said Brad Copithorne, an energy and financial policy specialist at Environmental Defense Fund. “If something will create jobs and will stimulate the economy, that’s something they can agree on and make happen. We’re very pleased that this will lead to cleaner air and a healthier environment for everybody. If we can do this by allowing business to create jobs, that seems to me to be a win for everyone.”

To view the history of the bill, visit http://www.capitol.state.tx.us/BillLookup/History.aspx?LegSess=83R&Bill=SB385.

This story was originally published by the Clean Energy Finance Center (CEFC). You can subscribe to future stories from the Clean Energy Finance Source by visiting the CEFC’s news page.

We fret about turning off the lights to save pennies on energy. Meanwhile, electricity worth billions of dollars gets lost or stolen on the world’s power grids every year.

In industry jargon, the problem is known as ‘line loss.’ A certain amount of electricity generated by a power plant never makes it to the consumer – or at least the paying consumer. Instead it is lost or diverted somewhere over the wires. Some of it dissipates in transit for technical reasons. In other cases, it’s pilfered by marijuana growers, households, or in some countries even manufacturers.

Awesense, a Canadian company that has built its business model around solving this problem, pegs the cost of worldwide electricity loss at $202 billion annually.

Losses vary dramatically by country, with percentages running in the double digits in Brazil, China and India. In the US, about seven percent of the power generated goes missing. How much of that is theft? No hard figures exist, but a rule of thumb for sophisticated grids puts US power theft at two to three percent. That may not sound like a lot, but the US is one of the world’s biggest power producers.  So even a small percentage of electricity lost means a large amount of fossil fuel wasted.

So, in a time when we strive for greater energy efficiency, why don’t we hear more about this problem? 

It’s a matter of accountability and who pays, according to Mischa Steiner-Jovic, CEO of Awesense.  Regulators typically do not require utilities to absorb the costs. Instead, electricity ratepayers subsidize the thievery.

“The utility commission has not sufficiently motivated the utility to reduce its losses. Because the utilities are able to pass their losses on to the rest of the customers, they are not financially motivated to solve power theft,” said Steiner-Jovic in a recent interview.

That’s not to say, nothing is being done. Some progressive utilities in North America are taking initiative, in part for safety reasons. Utility workers can inadvertently come in contact with wires exposed by setups jury-rigged to divert power.

But North America is still far behind Brazil, where the federal government has put in place a policy to reduce electricity losses. “Energy is such an important factor for the growth of their economy. They can’t afford to lose 20-30 percent of their energy,” said Steiner-Jovic. Brazil’s electricity theft problem has helped spur the installation of smart meters, which can go long way in helping utilities identify loss.

Not all utilities can afford smart meters. And anyway, thieves sometimes maneuver around them. Awesense has developed a system to identify electricity loss for utilities with or without smart meters.  The company acts as a kind of energy auditor for the grid, using a combination of software and monitoring equipment to identify where loss is occurring and why – whether the problem is malfunctioning equipment or theft. It then helps the utility put in place a strategy to resolve the problem. Like many energy service companies, Awesense operates under a ‘no upfront cost’ model – it is paid out of the energy savings achieved by the utility.

So far, developing countries have shown the greatest concern about line loss. But Steiner-Jovic predicts that North America, too, will take more notice as the consumer becomes increasingly energy aware.

“It just can’t go on that we turn a blind eye to inefficiency on the grid,” he said. “Energy is too valuable a commodity.”

Elisa Wood is a long-time energy writer whose work has been picked up by CNN, the New York Times, Reuters and the Wall Street Journal. See her articles here: http://www.realenergywriters.com/elisa-wood/

You know that experience, when you buy a new car, and suddenly you see the model everywhere? Since Superstorm Sandy I’ve had the equivalent experience with the term ‘microgrid.’

Policymakers and thought leaders in the US Northeast started talking microgrid in earnest shortly after the October 2012 storm leveled swaths of their region. Lately, the term seems to arise in almost every interview I do about transmission and reliability – whether about the US, Japan, Sweden, India or other areas of the world.

These small, electricity islands have been around for a long time, but mostly confined to colleges and military bases. Are we about to see more widespread development?

Microgrids are smaller versions of the larger grid, but the power plants are closer to the customer. Hence, they have fewer miles of wire that is vulnerable to falling trees. They are typically connected to the larger grid. But when the grid goes down, the microgrid can disengage and keep operating. So microgrids are used as a way to maintain electric reliability in carved-out areas.

I recently asked three respected smart grid experts for their views on a potential microgrid boom, and they gave me three different slants.

“Truthfully, I think microgrid is a very good concept – it has certain applications – but not in general,” said GE’s John McDonald, director of technical strategy and policy development for GE Energy Management’s Digital Energy.

He sees microgrid as successful in rural areas on military bases and at universities. “But you wouldn’t want to have, in the Continental US, the grid be composed of thousands of little microgrids. It would be very difficult to manage that,” McDonald said.

Bradley Williams, vice president for industry strategy at Oracle Utilities, has a different view. Information technology can solve problems that inhibit more widespread use of microgrid, he says.

“The military bases and campuses are piloting this, but that is just the beginning,” Williams said.

He envisions communities driving future microgrid development, particularly those with building codes that require solar, wind or other forms of self-generation.

“I do think it is coming: it will not be driven by the utilities,” he said, adding that utilities will get on board once they know microgrids pose no danger to line workers – an information management issue that Oracle is working on.

Meanwhile, Michael Gordon, CEO of Joule Assets, describes the coming microgrid as a bundling of distributed generation and virtual power plants, which can serve utility resource needs.

Microgrid will help alleviate a kind of inefficiency beginning to emerge on the grid as more and more consumers and businesses buy their own generators following each big storm, he said.

“People are installing things that are not cost-effective because they don’t want a one week outage,” said Gordon, whose New York company helps create energy reduction assets.

What’s coming are microgrids made up of consumer-producers who will sell into the various electricity markets, Gordon said. The consumer will finance and build the asset and then sell energy, efficiency or demand reduction. The utility may act as buyer.

It is not only Superstorm Sandy that is spurring talk of microgrid. Discussion heightened about the concept, as well, after the 2011 earthquake and tsunami in Japan.  The Sendai microgrid at Tohoku Fukushi University continued to provide power while the rest of the grid failed, points out a PWC report, “The Future of Microgrids: Their Promise and Challenges.”

Microgrid also is gaining steam because of the Obama administration’s push for more combined heat and power, which is often included within a microgrid. Obama wants the US to build 40 GW of CHP by 2020.

Here are a couple of microgrid developments to watch in the US.

The Connecticut Department of Energy and Environmental Protection in February announced that it is evaluating 27 microgrid projects for possible funding. The projects were among 36 that sought $15 million in available state grants. Some of the projects are sizable – as large as 10 MW. Governor Dannel Malloy has recommended an additional $30 million for the program over the next two years.

In nearby New York, Governor Andrew Cuomo has created an energy highway blueprint to modernize the state’s electric system, which has resulted in several proposals, some of them microgrid.

Many other examples exist of the growing use of microgrids. Readers, please feel free to use the comment section here to let us know about them.

Elisa Wood is a long-time energy writer whose work has been picked up by CNN, the New York Times, Reuters and the Wall Street Journal. See her articles here: http://www.realenergywriters.com/elisa-wood/

A pretty big wad of money – $40 billion – is hiding somewhere inside the lights, AC, thermostats, furnaces and fans of our offices, stores, hospitals and schools.

That’s the amount of money the federal government estimates we can save annually by reducing energy use in commercial buildings 20 percent by 2020.  To achieve the goal, the Obama administration in 2011 initiated the Better Buildings Challenge, a way to encourage investment, share information and create demonstration projects that save energy.

It’s no small effort. Finding energy savings in buildings can be a Where’s Waldo-style mission.  Hidden from view are faulty valves and switches, lighting controls that don’t jive with human activity, and malfunctioning appliances that suck up energy.

But the federal program – along with other state, city and corporate efforts – are leading to intriguing technologies and demonstration projects.

Seattle’s Bullitt Center

In Seattle, a building that describes itself as the world’s greenest, opened April 22. The 50,000 square-foot Bullitt Center is designed to be 83 percent more efficient than is typical. But it isn’t stopping there. Its owners want to achieve complete energy and water self-sufficiency over a year.

The Bullitt Center is engaging in a certification process called the Living Building Challenge, one of the toughest badges of honor for a building to achieve.  The standard goes beyond just saving energy and water, and requires that the building helps restore the natural environment.

Of course the Bullitt Center has solar panels, occupancy sensors and data displays that show energy use and emissions – all that you would expect of a contemporary green building. But it also has other interesting design elements. The building’s mechanical workings are in plain view so everyone inside can better see what’s going on.  Ninety percent of the lighting is natural. Tenants must adhere to electricity budgets as a term of the lease, and they share in any net metering profits the building accrues.  The structure is heavy timber, not the usual steel or concrete of most office buildings. Water will come only from rain treated onsite.

The design nudges occupants toward energy conservation in various ways. For example, the stairway offers spectacular views meant to discourage use of the elevator.  “There is no such thing as a net-zero building, only net-zero occupants,” said Luke McKneally, solar engineering project manager, who was quoted in a Bullitt Center blog by Brad Khan.

Boston’ FirstFuel

The US would achieve the 20 percent federal goal quickly if its cities had blocks and blocks of Bullitt Center-type structures. But, alas, most of our buildings are well, already built. So how do we bring efficiency to the remaining 5 million or so commercial buildings?

FirstFuel Software, located outside of Boston in the town of Lexington, has been circulating some impressive findings in recent months indicating that ‘zero-touch audits’ offer a path to big savings in existing buildings. The company applies advanced analytics to see where a building is wasting energy.

What’s unique here is that FirstFuel never sets foot on the building’s premises. Instead, the company uses interval meter data supplied by the local utility and some other basic information about the building.

Working with the Department of Defense, PG&E and other large utilities and federal agencies, FirstFuel says it has found that buildings can achieve a large amount of savings through operational improvements at little or no cost to building owners.

FirstFuel uncovered $12 million in operational savings when it applied its Remote Building Analytics to various kinds of buildings totaling 60-million square feet. Extrapolating from its work thus far, FirstFuel estimates that US buildings could save $17 billion in energy costs through operational improvements.

Some of the most common inefficiencies are the most difficult to uncover, according to FirstFuel. For example, the company found – to the surprise of building managers – that heating and cooling systems were often working at odds. Both would operate at the same time, as the building transitioned from one system to the other to maintain a certain temperature. This set the AC in overdrive to compensate for the hot air from the heating system.

“We position ourselves as the folks that can find operational savings that other methods can’t,” said Erik Mazmanian, FirstFuel Software’s marketing and strategy manager, in a recent interview.

The company sees its platform as a way to achieve scale in energy savings. Rather than marketing to building managers, FirstFuel is focusing on utilities. In many states, utilities must achieve a specified level of energy efficiency each year under state rules. The FirstFuel platform allows them to study swaths of buildings within their service territory and determine where they can achieve the greatest bang for their buck.

FirstFuel analytics do not replace the conventional energy audit – the hands-on work of engineers and auditors working on a building retrofit, Mazmanian said. Instead, it acts as a kind of building “score keeper,” using analytics to pinpoint operational inefficiencies and then track results when they are corrected.

Both projects – the Bullitt Center and FirstFuel’s analytics – are examples of just two of many initiatives under way to bring greater efficiency to our buildings. To help the effort, the US Department of Energy is beta testing a building performance database with actual statistics on tens of thousands of commercial and residential buildings. In addition, more than 110 organizations, representing two billion square feet, have pledged to help reach the 20 percent savings goals. Some recent additions include Sprint, Macy’s and Johnson Controls and the city of Houston.

So the $40 billion pot of negawatts at the end of the electric rainbow may not be easy to reach – but the building sector has set off on the quest.

Elisa Wood is a long-time energy writer, whose blogs have been picked up by CNN, the New York Times, Reuters and the Wall Street Journal. Her work can be found at http://www.realenergywriters.com/elisa-wood/

New York officials are scrutinizing the cost of energy efficiency – especially when it’s needed fast – as they prepare for the possible shutdown of a nuclear plant.

Energy efficiency insiders will want to keep an eye on this public service commission proceeding for two reasons. First, it offers a potential 100 MW in business opportunity. Second, wide disagreement exists about what the resource will cost.

The 100 MW of energy efficiency would help make up for the potential loss of Indian Point. The nuclear plant’s federal licenses expire over the next couple of years, and it’s not clear whether or not it will win relicensing.  State officials say they must prepare now. New York City relies on Indian Point’s power.

Consolidated Edison wants to provide 100 MW of permanent peak reduction as part of larger mix of generation and transmission to replace the plant.

At issue is the price tag.

Con Edison estimated it will cost as much as $300 million to achieve 100 MW of peak energy reduction. The New York State Energy & Research Development Authority pegs the cost at $155.5 million. And Consumer Power Advocates, an alliance of hospitals, colleges and other large non-profit energy users, estimates $200/kW, compared with Con Edison’s $3,000/kW.

In an April 19 order, the public service commission called the costs “sobering.” The commission wants to find ways to bring the price down. Competitive solicitations can do this, but they are time consuming, the commission said. And the schedule is tight – by energy planning standards.  Licenses for Indian Point’s two units expire in September 2013 and December 2015.

The commission ordered Con Edison to file a plan within 45 days that provides more granular cost estimates and offers ways to lower the price tag.

Why were Con Edison’s initial costs so high? It has to do with the need for speed. The utility believes it must offer high incentives and rebates to get customers to sign on quickly enough to meet the 2016 reduction goal.

The strategy, which targets mostly large energy users, calls for several approaches to peak reduction, such as fuel switching, renewable distributed generation, lighting, and building management and control systems combined with efficient air conditioning.

The programs may go forward even if nuclear plant doesn’t close, according to Garry Brown, chairman of the public service commission. 

“One of the things we will be looking at is the value of some of these upgrades  —energy efficiency — even if Indian Point stays open. At least some of the projects would probably fall into the category of something that may be valuable under any circumstance,” Brown said at the commission’s April meeting.

Stay tuned. The commission wants to have the program goals and budgets in place before the end of the summer.

Elisa Wood is a long-time energy writer, whose blogs have been picked up by CNN, the New York Times, Reuters and the Wall Street Journal. Her work can be found at http://www.realenergywriters.com/elisa-wood/

The cell phone is quickly becoming a handy tool for tracking home energy use and even switching appliances on and off from afar. It also turns out to be a good way for consumers to view the inner workings of the electric grid – as ISO New England is showing.

ISO-NE in September became the first grid operator to create a free app that gives anyone with a smart phone an easy-to-understand look inside a wholesale electric market.

Nerdy. Yes? But also practical for those truly interested in saving energy.

ISO to Go provides a user friendly tutorial to the arcane world of whole electricity. Users get a quick, real-time glimpse into the frequently changing power conditions and prices in 150 towns and cities in the six-state New England region. A geo feature identifies the city closest to the cell phone user.

Timing is everything when it comes to energy efficiency. A kilowatt saved when the grid is under strain is more valuable than one saved when it is not. But the consumer has no way of knowing the state of the grid.

That’s where this app comes in. Using easy-to-comprehend visuals and text, the app shows the demand and wholesale prices of power in real time. Homeowners can use the information to see the best time to wash clothes or engage in other energy-intensive activity.

Why is timing so important? The New England grid includes about 350 power plants, some new, clean and inexpensive; others older, costly and polluting. If the grid is under strain, most of the plants – good and bad – must operate. When it’s not under strain, the ISO can avoid use of the less efficient resources.

These periods of peak demand are costly. If we avoid using electricity at this time, we reduce wholesale electricity prices. The overall cost of the system decreases, so everyone benefits.

“This mobile application makes it easy for anyone, wherever they are, to check on grid conditions, follow wholesale electricity prices, see what fuels are being used to generate electricity, and learn more about the  region’s power system,” said Gordon van Welie, the ISO’s president and CEO. “As smart phones and other smart devices increase in use, we’re very pleased to offer this new way for people to access information about the grid.”

Using the cell phone to track and control energy use is a relatively new idea, but it is catching on. So far, seven percent of U.S. adults use mobile devices to monitor their electricity usage, according to an April 2013 Internet survey by Zpryme Research and Consulting. That equates to about 16.8 million Americans. It’s more of a male than female phenomenon. And not surprisingly, the younger crowd (25-34) is most apt to use a mobile device to monitor energy use, Zpryme said.

ISO to Go is one of several ways the energy industry is attempting to cultivate a more savvy energy consumer. (See Parts I and II of this series.) It’s slow going. Energy doesn’t tend to capture consumer attention. But that may change as we increasingly pair energy efficiency with these devices that enchant us. Who knows? Maybe that person you see tapping on a cell phone is not on Facebook, but is busy saving us all a little money.

Elisa Wood is a long-time energy writer, whose blogs have been picked up by CNN, the New York Times, Reuters and the Wall Street Journal. Her work can be found at http://www.realenergywriters.com/elisa-wood/