WASHINGTON - Increasing demand and high prices are driving the United States to seriously commit to energy efficiency. The specter of climate change is another major influence. Those were the predominant themes of the 18th annual Energy Efficiency Forum, sponsored by Johnson Controls and the United States Energy Association.

Energy remains a hot topic and keynote speaker Samuel W. Bodman, U.S. Secretary of Energy, noted, “Energy policy is like the weather. Everyone has an opinion on it, but expects someone else to do something about it. And when it says ‘United States Secretary of Energy’ on your business card, like it does on mine, the person they expect to do something about it is me.”

But it’s not the government’s job alone, Bodman said. The government should provide funding for research and incentives to promote promising technologies. Government must provide the right policy to encourage investment. But the private sector should lead with support from the government.

“The transition to a more energy-efficient economy will largely happen as a result of changes in the private sector,” said Bodman. “The marketplace can move faster than government.” The government must support private initiatives, he said.

As an example of federal support, Bodman announced that the Department of Energy (DOE) would be making available $40 million in funding to support the Energy Efficient Housing Partnership Teams under the Building America Program. Teams selected by the DOE will conduct research and implement energy-saving construction practices in new residential homes. “This latest grant allows the department to support private activities already underway and facilitate interaction between the different parts of the home design and construction fields,” he said.

Bodman also met with John Engler, president of the National Association of Manufacturers (NAM), to sign a memorandum of understanding committing the DOE and NAM to work together to increase the energy efficiency of U.S. manufacturing plants.

“NAM and its over 11,000 members recognize that improving energy efficiency is good not only for America’s energy security, it’s good for the bottom line,” said Bodman.

“We need to find as many ways as possible to do more with less,” Bodman concluded.

PURSUE EFFICIENCY NOW

James E. Rogers, chairman, president, and CEO of Duke Energy, said that growth in demand for electricity is increasing by 2 percent per year. Energy efficiency, he said, can help reduce demand, bring electricity to more people who don’t have access, and reduce emissions.

Why pursue energy efficiency now? One reason, said Rogers, is climate change. We will have carbon regulation by 2009 or 2020, he declared. But we need it now. “Every day we delay the cost goes up.”

Energy efficiency is “the cheapest alternative to reduce our carbon footprint,” he said.

Another reason to pursue efficiency is energy security. “We’ll never have energy independence,” Rogers stated, “but that doesn’t mean we shouldn’t strive for energy security.”

As to why utilities should lead on energy efficiency, Rogers said, “I believe we have the ability to fundamentally transform the world through energy efficiency.” Utilities can provide price information and demand control technology. “We’re in a great position to provide universal access” to energy efficiency.

Saving energy is cheaper than new generation, he said. Because of this, Duke Energy is working to convince state regulators to approve a Save-a-Watt program. This would price energy saved based on the avoided cost of new generation. The price saved can be included in the rate base so it would benefit consumers. And the utility would be compensated for saving energy just as it’s compensated for building additional capacity.

ENERGY EFFICIENCY WORKS

Rep. James Sensenbrenner (R-Wis.) stated that energy efficiency “is an important message that rings true every time.” It is “something we can all generally agree on: energy efficiency works.”

As the country searches for ways to reduce greenhouse gas emissions, “we should be sure to pay close attention to the benefits that can be wrought from improved energy efficiency.”

Sensenbrenner remarked that the Environmental Protection Agency reported in its 2005 figures that energy efficiency programs, like Energy Star, helped remove the emissions equivalent of 23 million cars off the road and saved consumers about $12 billion. “So regardless of what you think of global warming, energy efficiency is a pro-consumer policy that should get vigorous support from both political parties and all citizens in this country.”

As someone who has studied the climate change issue for many years, the congressman provided some comments on the Kyoto Protocol. Speaking at the Energy Efficiency Forum nine years ago, Sensenbrenner said, “Any climate change solutions have to be realistic, affordable, globally inclusive, and produce tangible results.” His feeling on the Kyoto Protocol was that it’s “based on immature science, costs too much, leaves too many procedural questions unanswered, is grossly unfair because developing countries are not required to participate, and will do nothing to solve the speculative problem it is intended to solve.” He said he stands by those words today.

Climate change is “complicated and nuanced,” Sensenbrenner said. “However, the scientific evidence that humans are in some ways contributing to warming is getting stronger, as is the case for voluntary reductions in greenhouse gas emissions.”

However, if we are really going to reduce emissions, “we need to do it through realistic policies that promote common-sense solutions.”

Any climate change policy, he said, “must produce real results, include major emitters like China and India, and accomplish these goals without sapping the economy of its strength.”

ENERGY LEGISLATION

Kateri Callahan, president of the Alliance to Save Energy, provided an overview on new energy legislation that is being worked on by Congress.

Drivers for this legislation, she said, include gasoline prices rising to record levels; energy security - petroleum imports are now at 60 percent; and the issue of climate change.

The Senate bill H.R. 6 sets significant goals, said Callahan. It moves toward cellulosic ethanol and creates a renewable fuels infrastructure. Regarding energy efficiency, it provides a federal light bulb standard. This standard could produce as much as all of the savings of appliance standards between 1987 and 2000, she commented. The bill also aims to reduce gasoline consumption by 20 percent by 2017, 35 percent by 2025, and 45 percent by 2030.

The legislation would require the Department of Housing and Urban Development (HUD) to upgrade energy efficiency for public and assisted housing. And it would require all federal buildings to reduce energy consumption by 30 percent by 2015.

The House bill includes very tough lighting standards, strong advanced building codes, a similar alternative fuel standard, but far, far weaker automobile efficiency standards.

Anticipated amendments include federal energy management requirements, tax incentives for new homes and buildings, and substitute lighting standards.

EFFICIENT ENERGY UTILIZATION

Omar Siddiqui, chief strategist of energy efficiency, Electric Power Research Institute, presented the organization’s vision for efficient energy utilization.

Siddiqui said there are five things driving energy efficiency:

1. Demand;

2. Energy prices;

3. Shortage of new capacity;

4. Vulnerability to imports; and

5. Awareness of climate change.

The market enablers, he said, are technology, policy, and incentives.

Technology includes smart and efficient end-use devices, such as high-efficiency HVAC. There is “still substantial room for improving electricity energy efficiency,” said Siddiqui.

California, for example, has implemented measures to level off per capita consumption. Using real-time pricing and demand response with automation, with the default as compliance, California’s pilot program shows real savings, he said.

In operation, real-time pricing is used to send a signal to smart end-use devices. This can be used to perform automatic dimming of lights, cycling of air conditioning systems, and adjustment of variable-speed drives.

“If you provide financial incentives to manufacturers, innovations will follow,” Siddiqui said.

DARING TO COMMIT

A panel discussion, “Energy Efficiency: Daring to Commit,” was moderated by Christine Ervin, president, Christine Ervin Co. Panelists included Randall Moorhead, vice president, government affairs, Philips Electronics North America; Richard Wells, vice president, energy, The Dow Chemical Co.; and Frank O’Brien-Bernini, vice president, research & development and sustainability officer, Owens Corning.

O’Brien-Bernini said that at Owens Corning, “Over the last 14 years, we’ve reduced the energy intensity of our operations by 40 percent.” Even with this significant progress, he said, his company continues to find in its operations efficiency projects with 18-to-24 month payback periods.

At Dow Chemical, Wells said, “It’s commit or fail for us.” The company wanted to reduce energy use by 20 percent by 2005, he noted; it was able to cut it by 22 percent. The company would like to save another 25 percent by 2015.

At Philips, said Moorhead, they have some new products that will “dramatically change the energy equation for lighting.” This new lighting will provide the exact same color of light, will be dimmable, and will use 33-38 percent less energy compared to conventional incandescent lights.

There are 4 billion incandescent light bulbs that use 95 percent of their energy to produce heat and 5 percent for light, he said. Changing these bulbs offers substantial energy-savings potential.

Codes and standards are a necessary component to promote change, stated Moorhead. “Incandescent lights will never be fully replaced unless there are standards for energy-efficiency lighting,” he said. But there is no single silver bullet, said O’Brien-Bernini. “Policy, codes and standards, incentives, all of the above are needed.”

Buildings are responsible for about 43 percent of greenhouse gas emissions, O’Brien-Bernini related. So buildings need to be a critical part of the solution on climate change. Energy efficiency came out very good on the cost return curve in mitigating greenhouse gas emissions.

“There are economic costs and there are economic benefits,” said Moorhead. Replacing inefficient lighting provides economic benefit as well as helping in reducing emissions.

Regarding climate change, Wells stated, “This is solvable. We are past the awareness phase. We must now move to the solutions phase.”

Publication date: 07/23/2007