The Power of Energy Efficiency
Addressing what’s here and what’s next in energy efficiency
WASHINGTON — With the theme “Leveraging Innovation to Become an Energy Efficiency Superpower,” government and private sector officials discussed the technologies, policies, and business models the U.S. needs to pursue at the 2015 Energy Efficiency Forum, sponsored by Johnson Controls Inc. and the United States Energy Association.
FREE MARKET OPPORTUNITIES
“It really is amazing the kind of work we can do with energy efficiency,” said Sen. Cory Gardner, R-Colorado. “As Republicans, we shouldn’t be afraid of energy efficiency. We shouldn’t let the hair on the back of our necks stand up just because somebody said the word renewable.”
The U.S. has great free market opportunities with energy efficiency and renewable energy, acknowledged Gardner. Consumers can utilize such things as energy savings performance contracts (ESPCs) and new market tax credits.
Gardner noted he is working with Sen. Martin Heinrich, D-New Mexico, on the idea of microlabs, taking developments from the country’s national laboratories, such as the National Renewable Energy Laboratory in Colorado, to speed up technology transfer to the private sector.
He also encouraged the use of tax policy to promote renewable energy opportunities.
Gardner said that simplifying the tax code would allow Americans to keep more of their money to invest. “The tax code is longer than the Bible, but, unlike the Bible, there’s no good news in it.”
Discussing comprehensive energy legislation, Gardner stated, “I think we can come up with a bipartisan solution for our nation’s energy needs.”
THE INTERNET OF ENERGY
James L. Connaughton, executive vice president, C3 Energy, said the Internet of Things (IoT) is marrying information technology (IT) and physical technologies. The Gartner Group estimates that 25 billion things will be interconnected by 2020.
The Internet of energy is what we call the smart grid, said Connaughton. “The smart grid is going to be the largest and most complex machine ever conceived and will likely be one of the most significant scientific achievements of this century,” he asserted. Sensors are being added across the board — to grid equipment, homes and businesses in thermostats, HVAC equipment, lighting, and industrial equipment.
As of 2014, nearly 400 million smart meters were installed globally. These smart meters and sensors are generating massive amounts of data. “What’s missing is that the smart grid doesn’t have an operating system to make use of the information,” Connaughton said.
New technologies are now enabling energy providers to collect and aggregate all these data, which provide insight through analytics. They enable utilities to holistically look at the data and operate the grid at higher levels of performance.
“Algorithms can take prior experience to predict future experiences,” he said. Consumers can identify future loads and where they’ll need it. They can also identify malfunctions and achieve more rapid recovery from weather events.
To sum this up, said Connaughton, the Electric Power Research Institute has shown that such improvements in the grid “can reduce energy use by an average of 3 percent, and, in some cases, as much as 8 percent.”
McKinsey and Co. estimates that delivering these approaches across the entire U.S. grid could produce a net savings to businesses and consumers of $55 billion annually.
“This is the underpinning; this is the foundation that allows us to become an energy-efficiency superpower,” he said.
AN EFFICIENT ENERGY MARKET
Cheryl LaFleur, commissioner, Federal Energy Regulatory Commission (FERC), noted that FERC is an independent agency responsible for interstate and wholesale energy. The commission aims to optimize and balance reliability, security, and cost, and reduce the impact energy use has on the environment.
“Energy efficiency has the potential to contribute to all three goals,” she said.
Energy efficiency can help keep the lights on without the need for new power generation. Energy efficiency reduces heating, cooling, and other costs. And, energy efficiency helps reduce emissions.
Within the U.S., there are huge variations in energy efficiency, said LaFleur. She noted that state policies and federal policies can be used to bring the country up to a higher level.
State policies include building codes and portfolio standards. Rate regulation can also be used to allow utilities to recover their costs in implementing smart meters and other new technologies.
Federal policy tools include appliance standards and building standards. These “are usually the quickest way to make change,” LaFleur stated.
The federal government can also utilize tax incentives and environmental policy to spur greater energy efficiency.
“The country is investing a lot of money in energy right now,” said LaFleur. “This is the time to build in efficiency.”
REDUCING ENERGY USE
Kate E. Brandt, federal chief sustainability officer at the White House Council on Environmental Quality, said the federal government operates about 360,000 buildings. The Obama administration has set a goal to reduce greenhouse gas emissions by 40 percent by 2025. “This will not only have huge environmental benefits, but it will also lead to up to $18 billion in cost avoidance on our energy bills,” said Brandt.
The administration is looking to reduce Btu per square foot in federal buildings 2.5 percent per year from a 2015 baseline. “In 10 years, we’ll be 25 percent more energy efficient than we are today,” she said.
Energy savings performance contracts [ESPCs] are a key tool to achieve more efficient buildings. “We have 370 projects that have been identified and about 200 on contract.”
One example is an Internal Revenue Service (IRS) building where the General Services Administration (GSA) is implementing a 60 percent deep-energy retrofit. The agency expects to attain $2.8 million in savings in the endeavor’s first year.
For electric and thermal energy consumption, the federal government has a 25 percent clean energy goal by 2025. This encompasses renewable energies, such as solar and wind, and alternative energies, like combined heat and power (CHP) and fuel cells.
STEPPING IT UP
Kathleen Hogan, deputy assistant secretary for energy efficiency, U.S. Department of Energy (DOE), posed the question: How do we step up our energy-efficiency efforts?
Answering her question, she acknowledged a need for efficient technologies, good information on our buildings, a trained workforce, good policy, good methods, and leadership.
The DOE’s appliance standards program applies to more than 60 products and is now saving consumers more than $50 billion a year. “We anticipate that savings will grow by an additional $20 billion annually by 2030 as we keep these standards apace with innovation,” said Hogan.
The DOE’s Building America program, in cooperation with builders and building scientists, has developed more than 100 innovations, she said. “We’ve funded improvements in water heating, heating and cooling, building envelopes … and we continue to push in these areas.”
Hogan said, “Federal leadership by example is critical.” The president has challenged the federal agencies to complete $4 billion in performance contracts by 2016.
The Better Buildings initiative is working with leaders in the commercial, residential, and industrial sectors to demonstrate energy-efficiency solutions that work. The DOE has 250 partners in this program and is reporting an annual average savings of more than 2 percent per year.
“We’ve made a lot of progress, but we have a ways to go to meet today’s challenges,” Hogan concluded.
Three Lightning Round Innovation Talks examined what’s next in energy efficiency.
Erik Birkerts, executive vice president, Clean Energy Trust, said his organization works to help bring new clean energy technologies to the marketplace. The initiative is supported by more than 70 corporations and the DOE.
He noted that clean energy technology not only requires an innovative technology that meets a need, it requires long-term funding and, of course, customers. His firm serves as “a clean tech bridge” to supply the needed funding and commercialization opportunities.
Frank Peeters, a member of OptiMN, the University of Minnesota team that beat out 32 other university teams to win the DOE’s 2015 Race to Zero Student Design Competition, described his team’s winning home design. He said the OptiMN home was designed to optimize the space with constructability in mind. It utilizes natural and LED lighting to minimize energy use and has a large roof for solar panels. The whole house is wrapped in a high-efficiency thermal layer. A condensing water heater provides for water heating and space conditioning. An energy recovery ventilator (ERV) provides for proper IAQ and energy savings.
Ben Bixby, general manager of energy products, Nest Labs Inc., said a programmable thermostat can save 20 percent on heating and cooling energy use, but only if the user programs it. “We made a thermostat that programs itself and then pays for itself,” he said.
Bixby added, “We launched our ‘Works with Nest’ program a little under a year ago.” One in eight Nest homes now communicates with at least one other non-Nest product, he said, and there are more than 8,000 developers working to connect their products.
A SUSTAINABLE ARMY
Katherine Hammack, assistant secretary of the U.S. Army for installations, energy, and environment, noted the Army is the largest facility energy user of the federal government.
The Army recently introduced an energy and sustainability strategy. “The object is to enhance Army capabilities, readiness, and performance through an effective design of systems and integration of resource considerations,” Hammack said. “So, our strategy is to reduce future resource risk and increase mission assurance.”
Like other federal agencies, the Army is utilizing energy savings performance contracts to upgrade its facilities. The attraction is the budget line item OPM or “other people’s money.” ESPCs save energy and pay for it through the guaranteed savings.
Net-zero energy is another strategy. Hammack explained that net-zero starts with energy reduction, then energy efficiency, then cogeneration or combined heat and power, and, finally, renewable energy.
Water efficiency is also important. “It takes energy to process water,” she noted. “Improving the resiliency of our installations is really critical.”
Publication date: 8/17/2015