Momentum builds for energy efficiency...but is the wolf at the door?

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/

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Tags: Moniz, Obama, efficiency, energy

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Comment by Danny S. Parker on June 6, 2013 at 3:03pm

Elisa,

On the question of partnering with an efficiency team at the time of solar install for an EE audit and intervention, I think this is very often recommended by PV installers ("We will be providing you with 70% of your annual electricity consumption and you can get the rest by efficiency improvements...), but there is no formal, set in place method with many. Often it's just lip service with the client left to figure out what to do: the prime reason that efficiency is not more of a motive force in the market place. Let's face it, efficiency is more complex.

That said, Solar City does have its own energy efficiency service that it links to solar installations-- one reason this outfit is doing well. 

http://www.solarcity.com/energy-efficiency/audit.aspx

It makes no sense to install a $20,000 4-kW PV system to serve a household with an old refrigerator using more than 3 kWh per day, with incandescent lighting and an electric resistance water heater.

So, it is important to take the low hanging efficiency fruit before installing solar. And I have to agree with Curt; let's eliminate ducts outside the conditioned space in new construction. For existing construction, let emphasize mini-splits for cooling and sealed ducts buried in insulation for heating.

Comment by Jim Gunshinan on June 6, 2013 at 2:13pm

There are programs that tie efficiency increases to solar installations, such as the one run by the Maryland state energy office that my sister participated in. She is not net-zero but enjoys energy savings and after some snafus with the utility, is getting credit for the energy she sends back to the utility. But the big benefit for her is the increased comfort of her home. It's an old farm house that has been renovated a few times, and was pretty leaky before the retrofit.

I'm pretty sure though that the programs that tie in efficiency and solar PV are not supported by anyone other than some state and local governments, regulated utilities, and nonprofits. I'm sure the concept will have an uphill battle in the private market, but it's a great idea, and proven to work.

Comment by Elisa Wood on June 6, 2013 at 12:41pm

Thanks Danny and Curt. Interesting. A question to you. How common is it for solar installers to propose an audit or partner with an EE contractor before installing panels. I heard a few years ago it was pretty rare. Any uptick? 

Comment by Curt Kinder on June 6, 2013 at 11:48am

Danny is right, both in regard to recommended steps and about pushback.

Unfortunately the nuts and bolts items lack the 'style' appeal of big PV arrays or towering turbines.

Then there are the inevitable screwups - The nicest SEER 15 heat pump made is systematically brought to its knees by leaky, restrictive, unbalanced, poorly insulated ductwork. A super-spiffy heat pump water heater crammed into a closet suffers efficiency loss and may lead to mold.

I'm looking forward to heat pump clothes dryers, but the average American asked to choose between waiting a bit longer for dry clothes vs continuing to consume hundreds of extra kWh annually will go for the energy hog, every time.

While on the subject of eliminating things, let's eliminate ductwork in unconditioned spaces.

Comment by Danny S. Parker on June 5, 2013 at 3:58pm

Elisa,  I agree completely. The reason there has not been significant push-back on efficiency thus far is that it is more difficult to manage and obtain big results swiftly, as with the case for net-metered home solar.

It is possible to remodel a home with advanced systems and cut its energy use in half, but that is complex and expensive-- unlike bolting on 5 kW of photovoltaics with a grid-tied inverter.

That said, there are some very fruitful areas for reducing energy use in the residential sector at lower cost than solar electricity. Many of these have to do with appliances and equipment.  A few of these:

- Ending electric-resistance water heating and electric resistance space heating

- Upping the minimum SEER rating for air conditioners to 15 Btu/W.

- Fostering heat pump clothes dryers (most energy using appliance now in the average U.S. household)

- Requiring the HD-DVRs power down to less than 5 Watts when not in use

- Limiting appliance standby power to no more than 1 Watt

Of course, there would be very significant push back for each of these items, precisely because they would be effective. Still, that's the work.

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