Energy Efficiency – Policy and Implementation

There are several government programs already in place that have the effect of promoting energy efficiency. One such program would be the plethora of state-based Renewable Portfolio Standards (RPS), which typically include a carve-out for a certain percentage of the goal to be met through energy efficiency measures. This means that rather than investing in renewable energy technologies to meet 100% of the RPS goal, utilities may also reduce the total amount of energy consumed in their service area as part of the effort to reduce total greenhouse gas emissions. Many utility companies promote that option by offering rebates or incentives to businesses and homeowners for upgrading their appliances or lighting to more efficient models. The US government also mandated that manufacturers and importers may no longer produce or supply 40 or 60 watt incandescent lightbulbs as of January 1, 2014, however there are numerous loopholes to that law such as slightly modifying the wattage of the bulb (http://www.theverge.com/2014/1/1/5263826/the-incandescent-light-bulb-isnt-dead). The idea here was to force individuals and businesses to switch from highly inefficient incandescent bulbs to more efficient halogen, CFL, or LED lightbulbs.

I think that if the Federal Government was really serious about promoting energy efficiency, they would institute a nation-wide “buy back program” where the government would provide a rebate incentive to individuals and businesses to trade in their older and more inefficient technologies for more efficient, but also more expensive ones. There could also be tax credit incentives offered to homeowners who upgrade their insulation and windows, improving the envelope of their homes and substantially reducing the energy required for heating and cooling. Tax credits such as these have been offered in the past but expired for any improvements not implemented before January 1, 2012 (http://www.irs.gov/uac/Tax-Credits-Available-for-Certain-Energy-Efficient-Home-Improvements).

As a business opportunity, a company could assist individuals and businesses in claiming these buy-back incentives while also providing the equipment and installation of the new upgrades. A large company can leverage their purchasing power to obtain better prices on this equipment than a typical homeowner could find on their own. The company could also manage the paperwork and rebate process for the customer to make it an easy “one stop shop”. Then the company would take possession of the old equipment and could recover scrap value or revenue from parts, enhancing their bottom line. A truly comprehensive business offering would also include the installation of insulation and window upgrades and the related tax credit forms. A homeowner could receive one quote for all of their energy efficiency needs and receive professional assistance with obtaining the appropriate tax credits and rebates.

Lesson 3: Energy Efficiency – Cole

If the goal is to use efficiency improvements to put the United States on a track to potentially use less power than today, there needs to be a cooperation between businesses, the government, and individuals. Governments can promote energy efficiency through a variety of programs and policies. Raising minimum efficiency standards for appliances, offering tax incentives on energy efficiency renovations, and raising energy taxes are some polices that the government can impose. The United States government already requires some appliances like refrigerators and dishwashers to meet certain efficiency standards. However fails to address other major household appliances in terms of energy efficiency. The government should raise the efficiency standards higher for the appliances already included in this policy and expand standards to other major household appliances to put the United States on a better track. Offering more tax incentives for replacing old windows, furnaces, insulation, door, etcetera, and other energy efficiency renovations, would be a another policy. This gives individuals and businesses “incentives” to increase the efficiency of their houses, buildings, or factories while using electricity. Another way of doing this and generating revenue would be to increase energy taxes. That will sure get individuals and business to cooperate and increase their energy efficiency.

I believe that energy consultation and servicing firms already have the potential to move with these types policies. To meet efficiency standards and save money by investing in renovations, individuals and businesses will have to consult with firms that are very knowledgeable in doing research and providing plans to meet with their energy efficiency needs.

Lesson 3 – Energy Efficiency: Developing Reliable CCS Rob Fulton

President Obama’s Climate Action Plan of 2013 has set a goal to reduce carbon pollution by at least 3 billion metric tons cumulatively by 2030. This is to be done through efficiency standards. The EPA has been tasked with establishing carbon pollution standards for power plants – new and existing. (White House, 2013) Tougher policies requiring emission reductions (for example RPS standards) will force the power industry to take mitigation measures. Cutting emissions of fossil fuel power plants and investing in renewable energy power/infrastructure are two important aspects of the plan. In order to cut emissions of producing power in America, advances in abatement technologies will be needed. A few possible abatement actions include: expansion of nuclear energy, retro-fitting existing fossil fuel plants (increasing efficiencies), and developing reliable carbon capture and sequestration (CCS) technology. Utilizing future climate change impact information for design and construction of nuclear plants and implementing safe operating protocols (perhaps modeled by the U.S. Navy Nuclear Program), can aid in convincing society that nuclear energy is a prudent choice for producing cleaner energy. Converting coal plants to natural gas will also make the power industry more efficient. However, coming up with a proven system for CCS has the potential for revolutionizing the power industry.

There is a great need for a company to produce a reliable means of post-combustion capture of carbon dioxide from power plants. This form of CCS can be easily retro-fitted onto existing power plants, making it possible for operational coal-fired plants to continue producing power without the incredibly costly alternative of altering fuel supply, or worse – deactivating the plant. Great investments in R&D are necessary to improve post-combustion CCS which can lead to perfecting the scrubbing process enough for commercial use. Once the capturing process is upgraded, implementing a suitable sequestration process for the plant(s) can then be designed to fully execute the project.

Reference:

Congressional Research Service. The President’s Climate Action Plan. Jane A. Leggett. R43120. Washington D.C.:U.S. Government Printing Office, 2014.

Reichart Lesson 3 – Energy Efficiency

1. What types of policies on the part of government could promote energy efficiency?

The government has a prime role to promote a policy which would drive the economy towards energy efficiency and sustainability. Businesses which are functioning within their proper niche would have no reason to promote or create energy efficient products unless a large changed needed to be made. It is only through a combination of major policy changes, and consumer demand that businesses will make a transition towards more efficient products.

For example:

  • Residential buildings REQUIRE certain amounts of insulation throughout the home (policy change) AND homeowners like to be warm and save money on heating during the winter (demand). Therefore businesses such as CertainTeed are doing well selling insulation.
  • To the contrary, limited to my locality, there has not been a demand of strictly electric cars. Although there are tax breaks (policy change), finding a charging station would be a major inconvenience as the closest one is about 40 miles away (lack of demand).

Finally one of the coolest things that the government is doing is promoting low energy and sustainable building policies. Look at the Department of Energy’s Race to Zero. The program itself was designed to:

2. How would you develop a business that has the potential to move this idea forward?

I feel that consulting firms will have a giant market in the future. Energy prices will continue to rise and homeowners/ businesses will continue to use more energy in spite of having energy efficient items (see chart below). We are reaching a point that there will be a major demand seeking the knowledge of energy efficiency on both a small and large scale. Through a combination of energy auditing, life-cycle cost analyses, and up to date knowledge of sustainable tax incentives a consulting firm could do quite well.USA compared to China historical energy use

-Reichart

Rosling, Hans. Gapminder World. Vers. 0.0.7. Stockholm: Http://www.gapminder.org/, n.d. Computer software.

Pacific Northwest National Laboratory & Oak Ridge National Laboratory. “BUILDERS CHALLENGE GUIDE TO 40% Whole-House Energy Savings in the Cold and Very Cold Climates.” BUILDING TECHNOLOGIES PROGRAM (n.d.): n. pag. Feb. 2011. Web.

“Residential Buildings Integration.” Residential Buildings Integration. Energy.gov, n.d. Web. 14 Sept. 2014.

Mark Moore Efficiency Consulting L3

The government has a responsibility to promote policy which drives the economy towards energy efficiency. Corporations have no intention of investing in research and development to create more efficient products unless forced to do so. Business as usual will occur until policy changes this business mindset or enough people demand more energy efficient products. I believe the government needs to strongly promote two basic policy types. First, a policy which can provide a benchmark for energy efficiency measures for energy generation, transmission, and end-use. Second, a financial policy which includes tax incentives, rebates, grants, and subsidies to attract investment by corporations. These policies together would create an even playing field and incentivize corporations to invest in energy efficient technology.

The three different levels of government, federal, state, and local all need to be considered when developing policy. Is a comprehensive one size fits all policy wise? I believe that the state and local levels should be allowed to tweak policy to conform with their distinct areas. As stated in the National Renewable Energy Laboratory report, ‘There is a consonance among policy goals at all three levels, with each jurisdiction focusing its operations on its own unique geographical scope. Understanding how the policies interact and can contribute to a comprehensive efficiency policy is critical to developing a plan to reduce energy consumption (Cochran, Doris, & Vorum, 2009, p. 10). Policy at the federal level should be broad with ordered guidelines providing authority over policy matters. The state and local levels need to be customized to fit into state and local laws and regulations. Each level of government can mold the most effective policy within its jurisdiction. I believe policy along these lines would be most effective in promoting energy efficiency.

 

The market for consulting firms, I believe, will grow in the near future as the need for knowledge on energy efficiency rises. The McKinsey report describes the value of such consulting to achieve maximum savings through energy efficiency, ‘energy managers can directly play a decisive role in capturing 1730 trillion BTUs of end-use energy consumption, but only 2% of facilities used on-site energy managers’ (McKinsey & Co., 2009, p. 83). Clearly there is a market for consulting services to large and small businesses alike. Some advantages of energy efficiency measures include, energy auditing and lifecycle cost analysis, which  could save companies vast amounts of money, while reducing carbon emissions in the process. I would like to start a consulting firm and be part of the solution to promote energy efficiency.

Cochran, J., Doris, E., & Vorum, M. (December 2009). Energy Efficiency Policy in the United  

    States: Overview of Trends at Different Levels of Government. Retrieved Sept. 11, 2014,

from http://www.nrel.gov/docs/fy10osti/46532.pdf.

 

McKinsey & Co. (2009). Unlocking Energy Efficiency in the US Economy. Retrieved Sept. 11,

2014, from ww.mckinsey.com/client_service/electric_power_and_natural_gas/latest_thinking/unlocking_energy_efficiency_in_the_us_economy.

03- What Have We Learned? – Jackson

On May 9th, 2014 the White House announced new Executive Actions addressing energy efficiency. Many state and local governments have also announced intentions to promote energy efficiency as a way to cut carbon pollution, protect the environment, save money, and preserve resources. The President’s plan gives $2 billion in federal energy efficiency upgrades to Federal buildings, in addition to the $2 billion already allotted in 2011. The release also announced new DOE energy efficiency standards for electric motors and walk-in coolers and freezers. The Federal government also regulates energy efficiency standards for appliances, vehicles, and buildings. The city of Chicago’s sustainability initiative calls for strengthening commercial building codes and retrofitting residential apartment buildings. 

Boston Consulting Group shared an example of how an energy efficiency business can create opportunity by providing companies with “end-to-end” services. Beginning with an energy audit, the efficiency business then can provide a company with necessary services such as upgraded lighting, new HVAC units, energy recovery ventilators, occupancy sensors in offices and restrooms, and smart thermostats. All of these upgrades will dramatically reduce the company’s energy consumption, saving a lot of money. The initial investment is covered by the energy efficiency business and paid back over a certain period, say 10 years, with interest. Thereby, the efficiency business gains a solid return on investment, while the company gains the immediate energy savings without having to front the huge initial investment. The energy savings in effect more than pay for the total cost of the project. I think this type of plan could work very well for large companies, that have a willingness and scale to afford large projects. 

Sources:

http://www.whitehouse.gov/the-press-office/2014/05/09/fact-sheet-president-obama-announces-commitments-and-executive-actions-a

http://www.cityofchicago.org/city/en/progs/env/retrofit_chicago.html

https://www.bcgperspectives.com/content/articles/energy_environment_energy_efficiency_opportunity_winning_strategies_high_growth_market/?chapter=3#chapter3

Marielle Martin – Lesson 3

The government has the ability to impose policy to incentives and disincentives certain behaviors. When it is a public goods issue, as this one is, imposing these policies is justifiable. A carbon tax is a large scale measure, being heavily analyzed at the present. Dale Jorgenson, and economist who studies the relationships between energy, policy, and environment, spoke in an interview about the tax. He (2014) noted that “a tax of $30 per metric ton of carbon dioxide is equivalent to a tax of 24.4 cents per gallon of gasoline”, which would “raise about $150 billion in revenue for the United States” (Shaw). The article also estimates the world’s yearly costs of climate change impacts to be around $1.6 trillion dollars (Shaw, 2014). With that in mind, the tax is actually hugely discounted to what we actually ‘owe’ the planet. In addition to the carbon tax, policies providing tax credits, grants, or home and business certifications based on energy use thresholds, high efficiency, or low emission/renewable energy source use could be applied. The metrics for these policies may be difficult to accurately measure though, as people have the ability to use a variety of energy options – only some of which require metering/grid connection that is monitored. As a last resort option, government policy could take a glance back in time to the 1970s. Oil economics and foreign power plays resulted in gasoline rationing in the United States. It’s a drastic measure, but there may be a day when such drastic measures are once again necessary. This type of government policy would surely ruffle some feathers over the issues of ‘freedom’ and ‘market economy’. It would span a much more diverse range of energy options to place restrictions on and have social implications on issues like income, standard of living, and access to alternatives.

To develop a business that works through government policy for energy efficiency, I would want to first identify where policy may be viable. I would be inclined to work on designing, building, or installing a measurement technology that could be used in policy aimed to incentivize household efforts for efficiency and minimizing consumption. As I mentioned above, measuring the metrics for which incentives would be rewarded can be difficult, so the prospect of policy only matters if the tools to provide the policy exist. In the hands of private business, innovative solutions for measuring a household’s energy use – even down to the type of energy – may be possible. In the UK, government is promoting smart meter installation in all homes and businesses by 2020 to increase energy conservation (Morris, 2014). The technology developed by Smart Metering Systems monitors gas and electricity consumption, sends the information to energy companies, and provides users with real consumption measurements (Morris, 2014). Smart Metering Systems’ profits have risen by 24% since government promotion began – proving that certain policy has the opportunity to create positive change (Morris, 2014). In addition to the initial energy conservation that users proactively achieve from smart meter installation, policy implementation to reward conservation efforts (by tax credit, grant, etc.) based on energy consumption ‘brackets’ would further increase energy conservation. For example, lower levels of energy consumption would correspond to higher levels of tax credit off of energy spending. The “kilowatt not used is the best of all” would definitely apply for a business working with government policy to conserve energy.

Shaw, Jonathan. (2014, September-October). Time to Tax Carbon. Harvard Magazine. Retrieved from http://harvardmag.com/pdf/2014/09-pdfs/0914-52.pdf

Morris, Jessica. (2014, September 2). Smart Metering Systems Rise on U.K. Energy Savings Plan. Businessweek. Retrieved from http://www.businessweek.com/news/2014-09-02/smart-metering-systems-rises-on-u-dot-k-dot-energy-savings-plan

 

Residential Home Improvement & SMART Grid – MSWALE

I agree with the statement that a lot of the technology we have available today can help reduce waste and improve our energy efficiency significantly. Unfortunately, I do not think technology is the reason for our slow transition to more energy-efficient ways of production, distribution, and end use. I believe it has to do more with the cost of implementing such systems.

As a residential example, homes of all ages could use newer materials and hardware to improve their homes insulation which in return makes their home more energy-efficient and saves them on energy costs. They can increase the r-value in the homes by adding or improving the type of insulation of the walls, roof, doors and windows. Buy new energy-efficient appliances including a tankless water heater or even doing a geothermal heat pump, but in the end it comes down to cost. Some homes being developed are to achieve zero-emissions or all the material in the home are to be eco-friendly, so there are many opportunities available it’s just a matter of how much a homeowner is willing to spend in the upfront costs.

Another opportunity that has been a slow transition is the smart-grid. Some areas already have it up and running, while other cities and states are expected to have it completed by 2018. I have learned a lot about this system over the last year and it’s amazing in what it will achieve but it will cost a lot of money. Below are some links to give more information on the smart-grid.

http://www.reuters.com/article/2011/05/24/us-utilities-smartgrid-epri-idUSTRE74N7O420110524

http://www.usnews.com/news/energy/slideshows/10-cities-adopting-smart-grid-technology/11

http://energy.gov/oe/services/technology-development/smart-grid