Last week I took a survey by AESP as they are gathering a pulse on where hacks like me think the trends are heading. This coincided with last week’s rant regarding the end of lighting, and I essentially gave AESP a special edition rant in the survey, for free! Unfortunately, I didn’t save my responses so I will just redo them.
In my responses, I used parallels between energy efficiency and diet and health. They are amazingly comparable. Much of energy efficiency is akin to diet soda and low-fat ice cream. The masses assume that, like doing a lighting retrofit, consuming diet soda and this, that, and the other low calorie crap will make oneself better off than they otherwise would be. The following is my view on diet soda, and I am not a conspiracy nut: consuming diet soda makes people ravenously hungry. Although I can count on one hand the times I drink a diet soda in between meals in a year, about an hour after doing so, I need a triple bypass Whopper and a pound of fries with a birthday cake and a bucket of ice cream to tamp down the ensuing hunger pang. Consumers would be better off drinking corn syrup and skipping the feast to follow.
Energy efficiency, like diet and health, must include the right consumer choices, a permanent lifestyle (behavior) adjustment, knowledge, and measuring the bottom line to be successful over the long term.
I already mentioned that lighting and other widget retrofits are the fat free, sugar free Twinkie of energy efficiency. All else equal, they will make you better off than you would otherwise be. However, all else is usually not equal. People start to consume more of this crap and more other crap. Moreover, the bottom line is the energy bills and the bathroom scale, not how many kWh saved on this or calories saved on that.
Successful, lasting energy efficiency requires making changes that move in the right direction, and not sloughing off in other areas. It requires constant monitoring of the bits and pieces of energy consuming devices and most importantly, monitoring the bottom line energy consumption.
The biggest barriers I see for the permanent EE lifestyle are lack of expertise and lack of time on the consumer side. I am talking about commercial and industrial customers here. I don’t know whether it is the three or four dollar gasoline, utility-delivered-energy price volatility, competition, public image, or other things, but interest in energy efficiency at the customer level is several fold greater than it was 10 or 12 years ago. On the flip side, staff levels are down across the board for public and private facility management. Many customers, when provided with sound information, the right follow-on services, financial impact data, and services like verification of energy BILL savings, will buy on.
This article from the Shelton Group was published on the same day I received the AESP survey, and it further beats my drum. Everyone thinks they are saving energy, while at the same time they say their energy bills are going up. This is clearly the diet soda effect. The article discusses ongoing nudges, reminders, warnings and such about rising energy bills related to certain activities. That’s all good, but as I said months ago, the consumer has to give a damn or they will tune out this noise. This is why in the AESP survey I said, “Residential programs are going to take a pounding in coming years because of a combination of codes and standards for appliances and lack of damn giving by this customer segment.”
I forecast that, in a way, the energy efficiency industry is going to parallel trends in the US economy over the past decades. The industry will become more service and information based and less so on hardware and equipment. Like manufacturing, hardware and equipment will always be a vital component to energy efficiency, but the big money and impacts will come from systemic top to bottom attention to energy efficiency detail.
 AKA “pop” according to portions of the Midwest populous.
 Follow on services can be as simple as more specifically defining the scope of a contractor and reviewing “shop drawings” to more detailed specifications.
Believe it or not, I did not have a rant topic in mind going into Saturday morning – my rant writing time. But the fog burned off quickly as a topic came into view – one that arose during the prior week. Incidentally, I once heard a “meteorologist” instructor say he always scolded his students for saying fog “burns” off. Instead, they should say the fog lifted. What? Fog is suspended water droplets, not vapor. Water vapor in air, or as steam, is invisible. When fog “burns off,” it changes from visible water droplets to invisible vapor, so while “burn off” isn’t exactly correct, it’s better than “lifted”.
As I understand it, certain regulatory agencies are getting bored with lighting. Hallelujah! Lighting is kind of like the Star Wars movie that nerds watched 26 times. At some point, it reaches saturation; it is no longer interesting, and it becomes boring. And even as a seven year old, I would be asking how can that garbage can on tiny wheels propel itself in sugary sand?
What comes after lighting? There are a number of packaged control products for mass markets including convenience stores and rooftop units. I’m actually excited about these widgets because they require sound HVAC design knowledge so certain things like the following do not occur: coils freeze into a block of ice, warm air stratifies into wide temperature variation from floor to ceiling, cold air dumps onto occupants making for cold spots in the occupied space, occupants die of asphyxiation (a slight exaggeration), and god forbid the beer isn’t cold.
After lighting, there is also of course, my favorite: the elimination of stupid and/or incomprehensible HVAC system design and the riddance of most energy hemorrhaging from systems and processes. This is virtually limitless in large buildings.
Moving onto the main topic of this rant: new construction. First, let me interject this hot tamale. Some program metrics for new construction success include post-construction energy consumption that matches energy model predictions. No. No. No. No. No. Say it with me. NO! Who cares if the answer is correct? This is the WROOONG metric. How much energy does the building use compared to similarly functioning ones? That is the metric. Customers shouldn’t give a rats if the answer is correct. They don’t get paid for that, and their energy bills aren’t lower as a result. This is an issue I came across TWICE last week in two different states! Regulators and program administrators – are you listening?
Now, understanding that the goal is low energy consumption, NOT right answers, although right answers are typically illusive, there are generally two categories in which to achieve low energy consumption. The first one is to select designs that are inherently simple and extremely difficult to screw up, and NOT extremely difficult to run with low energy cost. The second category includes innovative design, and I mean innovative design. There is nothing so common as “innovative design”.
What am I talking about? Innovative design? I can define this two ways, one for energy geeks and one for common people (not the song – BTW, the William Shatner adaptation is hilarious – good listening for a bad day). The energy geeks dividing line between standard fare and innovation is the common building simulation engine, DOE-2. If DOE-2 can handle the simulation in its entirety, there is no innovation; only incremental upgrades for a multitude of building and equipment characteristics.
The common person definition can be demonstrated with cars. The common automobile with four wheels, engine in the front, and sundry features such as a moon roof and rear camera dummy crash avoider is not innovative. Make em small. Put in tiny engines. Lower the drag coefficient (make them aerodynamic) and so on. Unfortunately, at this point there are few examples of innovative cars, but let’s just use the hybrid and the plug-in hybrid as examples of breaking the mould. The key breakthroughs include energy recovery from braking and an engine that operates in its sweet spot efficiency-wise whenever it needs to run. From an energy perspective, it smashes the model.
Similarly, there are building features that smash the model in ways that aren’t exactly like splitting the atom. Some include radiant heating and cooling, displacement ventilation, smart but easy demand controlled ventilation, and multiple types of energy recovery. The key is application of the technology to appropriate building types with specific needs, keeping it simple and making it difficult to screw up operationally, and keeping occupants comfortable. The DOE-2 engine doesn’t handle this stuff.
Since physical and absolute barriers for efficient equipment – lights, heating, cooling, controls for standard systems are nigh, I would guess the next moves would include the riddance of theoretically efficient but practically unworkable systems from energy codes.
 To use the old cliché, broken clocks are right twice a day, and so there is a difference between correct answers and correct calculations in many cases, especially when entering an error band.
Before I get to this week’s rant, or I should say, this week’s primary rant, I need to share this with you. Just before the holidays in Strange Magic,I tore into hands-free energy audit software. All you need is an address and billing information and voila, there it is; an energy audit that tells you everything you need to know to cut your energy bills by a certain guesstimate.
This week I came across an apparent competitor to the one discussed in Strange Magic, so I viewed their online charting and graphics. They present analysis via bar chart for various end uses; lighting, cooling, heating, miscellaneous, and so on. They present current consumption and potential consumption for each of these, demonstrating a savings of course. It took about three seconds for my eyes to pick up the fact that the ratio of all the end uses looked very similar. Sure enough every single one of the seven end uses has a potential to save almost exactly 23%. That will never happen. It would be like every guy on a 12-player roster scoring exactly 10 points. That isn’t how it works. Ever.
Now dude, this is bordering on fraud if you ask me. What did I say in Strange Magic? The best you can do is guesstimate savings potential for the entire building with the information you can get from billing records and a street address. Do not be fooled by this crap!
You old gray hairs like me would remember the days when they had cartoons before the movie started. That was the cartoon, except for it is serious as a brain tumor. On with the main attraction.
Our beloved California is once again “leading” the nation in energy efficiency policy. This time the target is… drum rolllllll… the phone charger! More accurately, all chargers – so-called “vampire loads”. So this week’s rant features analysis and research conducted in my house.
I’ve seen a number of articles on this topic but this one from Energy Efficiency News seems like a good one.
This is California with 37 million people and so the numbers are incomprehensible until we start pealing back the onion. These charger devices are reported to consume 8 billion kWh, or 8,000 GWh. There are 12 million households in CA, averaging 11 chargers per household: 120 million chargers. Do the math and you get 17 kWh per charger saved annually. If they are saving energy 24/7/365; dividing 17 kWh per year by 8,760 hours/year results in 1.9 Watts saved every hour of every year for every charger in the state. The article states that this is 40% savings, so the average charger wastes almost 5 Watts all the time according to California. See nearby chart for clarification.
So is this reasonable? Here are my findings using a “Kill A Watt” 120 Volt power meter:
- My phone, Motorola Droid Pro smart phone: Consumes about 7 Watts while charging, and turned on. Once it’s fully charged, it cycles between 0 and 3 Watts, mostly on zero. When the screen is turned off, you have to wait a long time before it gets a micro shot of 3 Watts. So it uses almost nothing when plugged in, turned on, not in use and fully charged. When it tells me it’s fully charged, unplug it to save energy, it would take 16 years to save a (one) kWh. I’ll get right on that.
- iPod Touch: This thing is identical to the iPhone without the phone part. It guzzles a whopping 3-4 Watts while charging AND in use.
- Dell Mini Computer: Booted up with the lid closed and monitor off uses 7 Watts. With the monitor on, 11-12 Watts. In use while charging full blast: 30 Watts. Shut down with a full battery: 0 Watts.
- Dell 4200, 12 inch laptop (my real computer): Booted up, running a bunch of apps, monitor on and charging full blast: 40 Watts. All else equal with the battery fully charged: 16 Watts. Shut down on a full battery: 0 Watts.
- Rayovac battery charger with 4 AAA batteries: 3 Watts. I don’t know how these things work exactly but they seem to consume consistent power. The batteries are always warm – 3 Watts warm.
So first off, as one blogger pointed out, saving energy by eliminating “vampire” loads is crap. Vampire loads don’t amount to squat. I’ll tell you want does amount to 10% of squat: not shutting down equipment like computers, stereos, DVRs, and stuff like that. But these aren’t vampire loads. They are load loads for crying out loud.
The vampire loads with my electronic stuff, which has to be pretty typical of battery chargers, is virtually zero.
Back to the battery charging. The power factor on these battery chargers is poor, at only 0.5 or so. Could it be this is what the once-golden state is targeting? Not so much. Poor power factor simply requires more current on the wires from the generator to the device. More current means more line losses. Line losses from generator to point of use are roughly 10%. So if we take 10% of 15 Watts (the remaining 0.5), ooh, ooh, 1.5 Watts. Well I’ll be darned.
This is within the realm of possibility but probably not likely. All of these 11 devices per household would have to be in use 24/7, at least (?). The savings is probably closer to one third of that claimed, or perhaps a quarter. The devices most likely use substantially less than 15 Watts on average – see the phone Wattages above.
But who gets the savings from power factor correction? Not the consumer; at least directly. Residential customers in every precinct I know of pay nothing for crappy power factor. It all boils down to reducing losses by my guesstimate of 7 Watts per household, or a whopping 6 kWh per year per household. You’d “save” more by reusing your towels a couple times per wash, in a couple weeks.
But remember, consumers don’t save. It’s actually the utility that saves. In a regulated market, some of that would flow to the consumer in the form of lower rates because the utility recovers more revenue for given assets: generation, poles, wires and fuel. However, the amount is so tiny, it’s within the margin of error I’m sure most likely upgrading chargers is a waste of money for consumers.
Rambling on just a little more, The Washington Post report on this, calling it “vampire battery chargers,” says “Chargers waste electricity by continuing to draw electricity even when a battery is full and suck energy when laptops, cellphones, digital cameras and other devices aren’t plugged in.”
Chargers continue to draw power even when the battery is full? Well duh! The device is still running. As I found in my tests, shutting down the device with a full charge and the thing plugged in results in ZERO energy consumption. Maybe I should call Kill A Watt because their meters don’t work, apparently. Chargers still draw power when nothing is plugged in? None of mine do at least to the threshold of a tiny 1 Watt.
Lastly, the Times article says chargers waste up to 60% of what they consume. What happens with this 60%? Energy waste is almost always if not ALWAYS given off as heat. We’ve established that laptops consume about 15 Watts provided by a “charger” – an electronic doohickey (rectifier or something like that) that converts 120 Volts of alternating current into a few volts of direct current for computer consumption. This is the only place this ~50% waste can occur because my power cords aren’t melting. A 15 Watt CFL from my laboratory heats up to about 160 degrees. My charger: 85 degrees, while delivering 16 Watts.
It’s been a while since my heat transfer courses but I can promise the heat loss from the CFL is a complicated model because of the geometry. However, it is safe to say it has a lot more surface and better orientation to enhance heat transfer. That being the case, if both the CFL and the charger are wasting 15 Watts, the charger should be much hotter due to its small size (next to Bailey’s paw for scale) and lousy heat transfer characteristics. So I conclude there is very little real energy loss from these devices. To cover the phones, their charger physical size and profiles are much smaller and not warm at all.
I declare these vampire losses to be more of a flying rodent loss and somebody, preferably a team of engineers should spend a day or two, determining the real savings because it isn’t 2 Watts per charger as claimed.
And BTW, the power factor of that CFL 0.59. Uh oh.
A few weeks back I came across an energy blogger that referenced a software developer who would do an energy audit via address and energy bills. Period. Really?
As my roommate and I used to say, “C’mon dude,” as in give me a big fat (or favorite expletive here) break. We have done the address / energy consumption analysis many times but at MOST, we can do a decent job of benchmarking the facility against comparable ones but even this is difficult. We can measure the building footprint with satellite images. Easy. The challenge is multi-story facilities, and I mean facilities with two hundred thousand to a million square feet – large schools and medium size hospitals. To determine the square footage you need the number of floors and footprint. This is difficult with street views because there are pesky trees and the fish-eye lens meant to give viewers a feel for the area, not see how many stories there are in a hospital. Sometimes if the building is new and big, square footage will be available online, but this is rare.
So the first claim that all you need is an address will work for about 30-40% of facilities. Been there. Done it. And all you have with that is benchmarking, which is valuable but it can’t tell you the condensing boiler is running too hot to be at optimal efficiency – or even what type of lighting is in the place, without conversing with the owner.
The next step in the satellite and billing analysis is determining the types of heating and cooling systems the building has. This is even more difficult without a conversation with the customer. So what do we look for? Signs of system types – cooling towers, boiler stacks, with as much street view as one can get. Can’t find these things from satellite images or street views? It could be a ground source heat pump building or if it is in an urban setting it may be on district steam and or chilled water. Building energy use varies so widely between the pigs and the misers that a building on expensive district chilled water may use as much electricity as a building that makes its own chilled water – with electricity from the meter. One time we benchmarked a corporate HQ building in Minneapolis and it had electric RESISTANCE for heat and it still barely used as much electricity as some gas/electric buildings. In summary: you can typically learn very little without at least talking with the building owner or maintenance company.
The idea of bill-and-satellite-only audit is a farce. If you want one of those, step this way. I have a better deal for you. I have a relative in Libya with a million dollars she has to get rid of before the rebels snatch it. She just needs your bank account number, SSN and birth date – and a couple credit card numbers just in case. The money will be in your bank account tonight, that is, if your bank can hold that much.
Commercial buildings have fixed loads and seasonal loads, the latter of which are a strong function of weather but also sometimes due to seasonal use, such as schools where the occupancy drops to almost nothing or half in summers. Without doing a fairly detailed inventory and analysis of fixed loads, it is impossible to break these loads into useful, telling bins for a specific facility. These fixed loads (non-HVAC) combined probably total 60% of the building’s electric use. Without building specific inventory, one is stuck with using typical building end-use analysis (i.e., averages), and what good is that to a customer?
Numerous times this blog has blasted generic and specific federal government officials for their ignorance about energy efficiency and alternative energy. They seem to think the answer to perpetual zero emission electricity, and did I mention free energy, is sitting right there on the shelf like a can of chick peas but we chowderheads in the engineering world are too dense to see it. Similarly, although it is a much more obscure need, I’ll bet they would bite on a magic app for doing audits, hands free and blind. The iPhone or Android device will take care of it all.
Beware. Somebody will develop such a sham and it will be introduced like the second coming of Macintosh riding a white horse. And it will be crap.
It isn’t all fluff, however. But don’t tell me what you are selling is a five star hotel when really it’s a pup tent.
The amount of monthly energy bill increase that will trigger homeowners to do something. Homeowners with higher incomes and more advanced academic degrees will act with lower increases than average. Lower income households actually wait for even higher increases in their bills before doing something about it.
Death Sentence for 100W Light Bulb Suspended
In typical petty Washington gamesmanship, Republicans added an overturning of the incandescent ban for another few months, along with the two month payroll tax cut, which as a demand side gimmick does nothing to promote economic growth. Don’t spend it all in one place. Incandescent hoarders – you have a few more months to top off your basement full of light bulbs.
General Motors Meets Energy Reduction Challenge
GM, a subsidiary of the US treasury department, has cut energy intensity in 30 plants on a per-vehicle basis. Congratulations for turning out the lights in ¾ of these plants that are no longer used.
Recently, the American Council for an Energy Efficient Economy (ACEEE) released its annual state rankings for energy efficiency. We noticed Wisconsin slipped a few pegs to 16 while Iowa remains near the top at 11. The top states for EE programs include the usual suspects: California, Massachusetts, Vermont, and New York.
As we discussed the rankings in house, my comment was, you probably don’t want to be in the top 10 on this list because those states are on the business-unfriendly end of the spectrum. They have big EE spending congruent with heavy regulation.
So you guessed it; this rant analyzes economic performance, politics, and business friendliness along with the ACEEE rankings.
I did some digging to see what sort of correlations there were between state energy policy, political leanings, and economic growth. One can make all sorts of arguments; my favorite including “if it weren’t for xyz, it would be much worse.” But I never buy that bologna. Likewise, I don’t buy excuses for why savings aren’t being accrued as estimated, unless something radical has changed – like half the occupants left the building and turned out the lights. This is why we look at savings on energy bills and don’t bother with weather normalization or other excuses. Nobody can argue with meter reads from billing data.
I used growth in gross state product for the past 10 years as a metric for economic vibrancy. I used the average percentage of votes for Democratic candidates for president over the past four elections as a measure of state political leanings and simply ranked those from low to high. Finally, ChiefExecutive.net ranks states for business friendliness with a survey of about 550 CEOs. The CEO rankings include considerations of tax and regulation, workforce quality, and living environment.
The rankings for all categories are shown in the data at the bottom of this blog so you can peel it off and do whatever you want with it. FYI – I left out District of Columbia because that is a whacked out, in more than one way, “state”. Therefore, you will see some 51s in the scatter plots.
Plots are worth a thousand words so I plotted ACEEE ranking against political leanings and ACEEE ranking against economic vibrancy. There is a strong correlation between energy efficiency policy and the states politics. Liberal states dominate the high end of the ACEEE rankings as shown in the chart below. Bear in mind that low numbers are high rankings. For example, see the first dot in the lower left corner of the plot. That represents Massachusetts, which was ranked number one by ACEEE and the state has the most liberal record in presidential elections.
It is interesting to point out the outliers. The most conservative state is Utah and they have an ACEEE ranking of 17. Idaho, the third most conservative state is ranked in the middle at 26 by ACEEE. On the other end is Delaware, the 10th most liberal state with an ACEEE ranking of 31. Delaware, however is the size of my back yard and has almost no Interstate highway so anything is possible there.
To my surprise, there is a very weak correlation between energy efficiency and economic growth. It’s actually better than I thought because big states like California and Michigan have good EE rankings and horrible economies. Generally speaking however, higher EE rankings have less economic growth. This is what I was referring to regarding not making excuses. But..but…but… I don’t care. It is what it is and you can send your excuses to your senator where it can be ignored with the rest of the correspondence he/she gets.
See the first point on the left in the chart below? That’s Massachusetts, which had the third worst economic growth over the 2000-2010 period. Yeow! That crappy growth was a bit of a surprise to me. California was 34th in economic growth – actually considerably better than I would have guessed. Subtract Apple from the state’s GSP and it would probably be 45th place. Subtract the rest of Silicon Valley and it would be 50th I would bet.
Washington (the state) has the best combination of energy efficiency and economy. Missouri appears to be a convincing dead last in this combination.
Actually, when I said the second quintile is probably where you want to be from an EE perspective, I was correct, somewhat. The second quintile of states for high EE ranking have the second worst economies, but better than the first quintile, bogged down by rust belt states of Michigan, Wisconsin, Illinois, and New Jersey. Actually, the states with the worst EE rankings have the best economies, so I was right in that sense, unfortunately.
Finally, I roll it all together: energy efficiency, CEO business friendliness, economic growth, and political leanings. Once again, I remind you that large numbers are low rankings.
First a few comments on business friendliness. Texas is top ranked by CEOs as the best place to do business. California is dead last. In a post a few months ago, I pointed out the hilarious fact that Gavin Newsom, California’s Lieutenant Governor, with several legislators in tow visited Texas to see why Texas was sucking jobs out of California like a Hoover vacuum cleaner. What a dope. Maybe he should discover this thing called the internet.
When considering workforce quality and living environment have to be sky high for California, you know their tax and regulatory climate is hell on earth. Steve Jobs apparently alluded to this in his recent biography by Walter Isaacson, saying “it is almost impossible to do so [build a factory] these days in America, largely because of regulations and unnecessary costs.” For examples, Google “delta smelt” to see how “saving” this minnow ruined farmers in California, or check out this recent article to “save” a sucker (a fish that is) in Southern California. There are a plethora of states that would be happy to export some Asian carp to replace this bottom feeder if that’s what they want.
But on with the comprehensive results shown in the chart below – Based on trailing economic performance and current energy efficiency and CEO rankings representing future potential, it appears that the fourth quintile of states ranked by ACEEE is the optimal place to be. These states include Indiana, Texas, Virginia, Montana, Georgia, Kentucky, Alaska, Arkansas, Louisiana, and Nebraska. These states are ramping up EE programs. The average CEO rank for future business development of top EE states is almost 40. That is terrible! These states include Massachusetts, California, New York, Oregon, Rhode Island, Vermont, Washington, Connecticut, Minnesota, and Maryland.
But…but…but – I don’t care. As my basketball coach used to say, “If ifs and buts were candy and nuts what a wonderful world it would be.”
State by state data are provided below.
GSP Rank = ranking in growth of gross state product from 2000 to 2010, constant dollars.
CEO Rank = ChiefExecutive.net survey results of 550 chief executives for business friendly states considering taxes, regulation, workforce, and livability.
Democrat Rank = Ranking of states by percent of votes for the democratic candidates in general presidential elections for the trailing four cycles.
Obviously, many states have tied scores for ACEEE. However, I have no idea how they have four tied for 17th place, a 19th and a 21st. You can probably find out in the full report.
Hey, if you are a highly ranked energy efficiency individual, and if you still take showers, you might consider one of these LED shower-powered lights for your shower. Does two things: saves lighting energy and water flow. Good luck! I came across this on the Sylvania website where I was visiting to vociferously complain about the expensive headlights on my car that simultaneously burned out after a measly 8 months surrounding summer use (very little). This was the second pair (the other a different brand) of high output headlights that failed early. Avoid them, especially if changing the head lamp is like threading a needle in a soda can – sharp edges and all.
In 1984 was not like 1984, I talked about greeting change with gusto to win the future but with few specifics. This post will cover one such “innovative” way for all stakeholders to benefit from energy efficiency.
The typical utility-sponsored energy efficiency portfolio works like this:
- A small percentage of billed energy consumption, aka a rider is paid by customers to fund EE programs.
- Programs provide incentives for energy efficient equipment and in some cases services such as studies.
- Evaluators determine impacts attributable to programs and make recommendations for improvement.
- Regulators oversee it all to help ensure consumers aren’t being ripped off – a primary role of government.
- Consumer advocacy groups, some of which are in business solely to bash utilities and add no constructive value whatsoever, object to everything. Other advocacy groups can be great as they understand the utility business and that it is not a charity like The Salvation Army.
Many utilities have, at some point, added financing to their portfolios with dismal results and no wonder. Customers can typically get lower interest rates on the market or with banks and other lending institutions. Why waste time with the utility or program?
The chair of New Jersey’s Board of Public Utilities wants to “look into cutting the subsidized rebates, saving the average residential customer more than $2 a month”. (don’t spend that all on one place) He wants to look at creating a revolving loan program over time, rather than collecting money from everyone on their energy bills and paying it out to some customers in the form of rebates or other services described above.
Of course, as described in the 1984 post, this was met with angst and resistance by a variety of stakeholders. A chump from the Sierra Club says residential customers won’t use the program for purchasing an efficient furnace, for example. And this is based on???? It would probably take care of some free riders for people like me who would buy the efficient thing anyway and why not take the $100 rebate from the program I have been paying into? I wouldn’t do the financing because I hate monthly payments and it’s more hassle than the 39 cents saved. Other people, it seems, will finance a new 16 oz claw hammer from The Home Depot if given a chance. They are probably the same people who write a check at the convenience store for a soda and two hot dogs.
The American Council for an Energy Efficient Economy declares finance programs are used by only 1% of consumers and that for one program, when given the choice between financing and incentives, 90% of respondents choose incentives. This is grapes and cantaloupes. The time-strapped reader like me would read 1% of respondents like financing and 90% like incentives. Nice try.
What’s the problem with financing programs and lousy participation? They suck. They generally offer nothing a person can’t get from the bank or selling bonds for large end users. They provide no other services, such as cost/benefit analysis for customers. How to make financing attractive: lose the rigidness, forget the no-benefit program that ran for five years with three participants, and break with the status quo that most utilities cling to at all cost.
Stakeholders need to change their mindset and actually consider EE as a resource – a replacement for power plants and infrastructure. From the customer perspective it is a replacement for paying for therms and kWh. Combine this with the usual demand side management funds and utilities could create a vibrant and active financing program. It could be marketed by something jazzy like TGTBT – to good to be true. Looks like a bridge doesn’t it? I can see it now.
Gimmicks aside, the first thing that would help a ton is adding the payments to the monthly bill. Energy efficiency is a resource delivered to customers so why not pay for it rather than paying for kWh and therms? I have heard from more than one utility that their software, SAP or similar, cannot handle on-bill financing. You have got to be kidding me. That’s like saying a smart phone can’t make phone calls. The answer to any question involving ability for computation on a computer is, yes it can.
On-bill financing makes it easier for customers to make projects happen. Depending on the corporate bean counter, this may allow for treating the project as a lease rather than a capital purchase that requires approval from God. Once the credit risk has been cleared, customers with more than one facility can implement projects in multiple facilities.
From a utility perspective, why not earn the same return on capital as is used for power plants and infrastructure? This is blasphemous to some regulators but especially consumer advocacy groups because this means utilities would make profit on EE projects. Egad. Well heeyaah!
Having watched utilities for years, I have to wonder whether some really want to reduce their customers’ energy consumption through EE programs. Many, for sure those running programs, do but it seems some are given instructions from the board room to just make it look good. Thoughtful executives and boards know what is good for their customers is good for the utility because prosperity results in expansion and … more consumption! And vibrant programs are good for public relations making it easier get what is wanted through rate cases, and they surely are good for the Eco Devo department for luring new big customers.
Returning from that digression, wouldn’t it be a good thing to grant the same profit on selling EE as utilities make selling energy? This should make the executives and the board much happier than collecting money from their customers and distributing it to others driving down consumption, presumably. Regulatory and consumer advocacy agencies need to get on board with profit driven EE programs. As long as the program is as cost effective for the customer, what’s wrong with making money on it?
Another pillar in TGTBT is a savings or cash flow guarantee. This typically triggers a stampede for the exits among utility folks. I have not seen a study on this but guarantees are definitely a critical piece of doing an EE project for some customers. Transparency is something desirable for these contracts as well. Customers see how much the project actually costs and what the finance charges and fees are. They could even competitively bid the project to help ensure good pricing. This all allows for a much more desirable proposition than the typical performance contract which essentially is a contract that says, “trust us, we are not ripping you off.”
Putting all these elements together isn’t absent challenges, including credit ratings of customers. Such a program may not work well for residential customers, particularly those who don’t own their residence. The administrative costs may be prohibitive. Default rates would be higher among residential customers because people move from residence to residence, and out of utility territory, much more easily than businesses, schools, factories, and institutional buildings can. Indeed, for C&I customers such programs have been very successful with negligible savings challenges and puny default rates.
Recapping, key elements include: granting normal return on capital for utilities, very low finance rates for customers, and guaranteed performance. On-bill financing makes things easier for customers but isn’t absolutely essential. The other three pieces are.
I read more hype regarding the Fukushima nuclear plants last week in The Wall Street Journal. It was a bit like the ACEEE statement above. Paraphrasing, “trace amounts of dangerous plutonium was found within a 30 mile radius of the plant.” I’m sure I have trace amounts of some fried cheese balls I ate in high school – plated out on an artery somewhere too. They also detect strontium, iodine, cesium, this, that and the other – some with half lives of 30 to 90 years. OMG! We’re all going to die.
I would say that 99% of the population has no idea what a half life even is. It is the point at which half a particular isotope has decayed to a lower energy state – I.e. half the gammas, alphas, neutrons have been puked out. So all else equal, the longer the half life, the less intense the radiation, but 99% probably think it will be lethal for that long.
How many people have died from the reactor accidents? I haven’t heard of any yet. Zero.
This week I am testing an additional medium for the The Energy Rant; the cartoon. Click here to try it out. Send email comments with your thoughts regarding this mechanism to me at email@example.com.
Major barriers to EE for large commercial and industrial end users include;
- Lack of time
- Lack of expertise
- Lack of capital
- Risk aversion
If you don’t think end users are short on availability, just ask them. Most end users don’t have time to commit to energy efficiency projects and most of the rest think they don’t have time. The ones who really don’t have time get seven paid holidays and two-three weeks vacation while the latter group gets eleven paid holidays and six weeks vacation, if you know what I mean.
Most commercial building owner/occupants think of lighting retrofit, adding roof insulation and replacing windows or maybe replacing a boiler they think is 60% efficient. Lighting may be ok but the rest of this stuff is almost always going to have a negligible impact on energy consumption. Efficiency to most industrial end users means, just keep it rolling – widgets per shift, less maintenance. Many times increasing widgets per shift and reducing maintenance is accompanied by energy efficiency, especially when EE is the primary reason to do project. However, there are bails of cash on fire in many places that are invisible to folks who focus solely on keeping things going. In other cases, we’ve seen industrial end users think they’re going to meet their 10% reduction goals by turning lights off. Pssst. Your lights only consume 4% of your energy bills.
Not enough money. I’ve investigated commercial real estate from both an owner’s and leaser’s perspective. The owner makes the tenant pay the utility bills in many/most cases, so there is little incentive for the owner to do anything. The tenant’s perspective is “I have a three-year lease, this isn’t my building, and I don’t even know if I’ll be here after three years.” For industrial end-users, capital is very precious and can take force majeure to get.
Then there is a real risk that savings won’t transpire as indicated. Lighting is about the only measure customer’s can count on with high probability. This is unfortunate because it doesn’t need to be that way. It’s just that there are a lot of schlocks who make assumptions like an old boiler is 60% efficient. As my boss says, if a boiler is really 60% efficient, turn and run as fast as you can because it may be about to blow. We’ve seen schlock estimates indicating over one therm per square foot savings by adding insulation. You might achieve these savings if one of the walls on your facility was missing prior to implementation.
Now we arrive at the subject of this week’s rant: efficiency bid programs. We see a lot of efficiency bid programs, some of which are delivered by clients of ours. They are typically an alternative to conventional custom efficiency incentive programs provided side by side. They work like this: develop a project with cost and savings estimates and submit a proposal to the utility for an incentive. The incentive is always greater than the standard custom efficiency incentive or why bother with the development and bid? The program is purportedly competitive – i.e., a “free market” for incentives to maximize bang for the program buck. If it’s competitive, somebody must lose. This isn’t tee ball.
I cannot see how these programs don’t get slaughtered in a net to gross analysis. Net savings are actual savings attributable to the program. Gross savings are actual savings, period. What’s the difference? Net includes the effects of the program. Did the program influence the customer’s decision to move forward with an EE project?
Let’s get back to the barriers now. Time. It takes just as much time for a customer and a contractor and/or consultant to develop the project for bid as it does to develop the project for a standard incentive. And it takes more time to shepherd the thing trough the bid process. Efficiency bid takes MORE time. Which leads me to…
Risk. As mentioned, there is risk the project won’t generate savings because the energy analyst is a schlock. But for efficiency bid, there is risk, presumably, that there won’t even be an incentive after thousands of dollars are spent developing the project. Remember, if this program is competitive, somebody loses. Who is going to spend gobs of time not knowing whether they will get an incentive? If the standard custom efficiency incentive is the consolation prize and it’s enough for a “go”, then why would the program waste money on a premium efficiency-bid incentive?
True story, last week we considered pursuing one of these bids for an industrial customer for which we had done a study. We decided against it because (1) we only had a month to get it submitted and in that month you need to get the customer on board and a month is a nanosecond for a capital intensive corporation to allocate (2) extremely scarce capital, and therefore, (3) it was too big a risk for even us, the consultant, to get the whole thing pulled together in a month, at the mercy of the corporate bean counters. There is far too little upside for our risk of getting something we have almost no control over to happen.
Somebody has to lose if this is competitive. Most likely only the biggest customers are going to pursue these projects. A major customer spends a bunch of time to put a bid together and then is told, sorry, you lose. Now the utility is faced with a colossal PR disaster with a major customer that will raise Cain all the way to PSC’s office. OR, the customer takes the standard custom incentive as a consolation prize, in which case the whole bid thing was a ruse to get extra program money – a free rider.
These efficiency bid programs probably look great on the surface but if one really understands market barriers and how large end-users allocate and budget capital, it seems like a big free rider program to me. They take more time, not less. They add risk rather than decrease risk. They potentially provide more capital assistance, but at what I see is a disproportional addition of risk.
- Ameren Missouri says they will pare back EE programs because they are costing shareholders return on investment. Wow – although I consider it unfortunate, it’s understandable and refreshing to some degree to get straight talk from a utility that actually believes this. I think a good portion of utilities really think this way but lead on as though they are saving the universe. Do what it takes to look good to the regulators but with minimal real impact. Come to think of it, these utilities may be like The Firm. Once a partner in the EE programs and made aware of the scam, you’re stuck unless you want your car to accidently explode when you leave for home. BTW, programs can be developed for utilities to make money on EE. Just call 608.785.1900.
- Don’t look now, the Chevy Volt has even less than the advertised 40 mile battery range – like about 40% less during cold weather as batteries don’t work well in cold weather. Not only that, as mentioned in “A Frivolous Novelty” it takes about 5 kW to heat the cabin of the vehicle. I “mistakenly” thought this was a big deal. Not really. At about 0.5 mile/kWh, the battery juice is consumed in less than a half hour. That’s 50 kWh for 25 miles of driving but only 2.5 kWh for heating. Who is going to pay $40,000 to be limited to 25 miles between charging? Raise your hand. Not all at once, it may make the planet wobble.
- In one last bit of refreshing honesty, this guy provides a good assessment of plusses and minuses of the ban on the standard incandescent lamp: Good assessment – far above average for that matter.
written by Jeffrey L. Ihnen, P.E., LEED AP
A senior sales director for MXEnergy, “the fastest growing natural gas and electricity retail provider” states, “As we observe the unrest in Egypt and other parts of the world, we recognize the volatility of the natural gas market.” What? He like many others “on both sides of the aisle” use the Middle East and our real dependence on foreign to twang the audience’s emotional strings.
The goings on in Egypt will have nearly zero affect on natural gas prices here in the mainland, U.S. Why? Because nearly all of our natural gas is produced here and we import from hostile regimes like Canada. LOL! The guy is using Middle East unrest and the threat of rising oil prices to translate to high gas and electricity prices here at home. I think renewable energy at maybe 1-2% of our electricity supply may produce more electricity than oil does. C’mon. Don’t feed me this bull dung.
Then there is Al Gore’s movie the inconvenient truth, lower case on purpose. The movie is one giant tug at the heart strings with flooding, starvation, cuddly polar bears dying. In reaction to the movie, the president at Veriform, a steel fabricator, was so moved by the film he reduced his energy bills by 58% by investing $46,000 to save $90,000 annually. Something tells me there is a little bit of number manufacturing and/or trickery going on here. This leads the reader to believe that $90,000 is the 58% but it’s a little hard to fathom a steel fabricator with a $160,000 annual energy bill. And what was the guy doing before? Heating his facilities with electricity with all the doors and windows open? He saved this with lighting, heating controls (e.g., thermostats?), and insulation?
One time we had a coworker of my wife’s over for a cookout and he was describing a program on Discovery Channel, if I remember correctly, that chronicles a polar bear that starves to death. So I mentally roll my eyes and think, I’ve got to see this program. The next day or next week I tuned in watching the polar bear swimming around in open water, jumping in, climbing out, jumping in, swimming, and at the end he’s on an island with nothing but gigantic walruses, the things with 18 inch tusks. These things are too huge for a polar bear to take down. They have skin an inch thick and about three feet of blubber.
The bear is after the cub, calf, pup, piglet, baby, squab or something like that – the little ones. But the five ton adults are pig piling the little guy like a loose ball at the line of scrimmage in an N.F.L. game. The bear is jumping on the backs of these school-bus size blubber bags – like a guy trying to tackle a Clydesdale. He of course gets nowhere and walks away with a dejected look with sad music and depressing voice over. Who knows if the bear actually died or they just made up the whole story fabricated from lost footage of Mutual of Omaha’s Wild Kingdom, with Marlin Perkins.
The conclusion: global warming was destroying the habitat of the bear’s favorite food, seals, and therefore, the gasoline you are releasing into the air when driving your car, killed the bear in the film. My conclusion: assuming the bear really starved, what a dumb bear that doesn’t know how to hunt. What about the seals that were spared? Somewhere a bunch of seals that would otherwise be dead are basking in the sun.
Back to Al Gore’s film. When I first saw the film’s promotional poster (you can get an eleven by seventeen keepsake for fifteen dollars) I immediately thought this is fitting and wonderfully ironic. If you know anything about the weather at all – anything, you know low pressure systems, hurricanes, snow storms, rainstorms, and tornadoes spin counterclockwise in the northern hemisphere. Yet the hurricane cartoon on the movie poster spins clockwise. Chances this was intentional to represent a storm in the southern hemisphere: 0%. All credibility: gone. If this had one bit of “scientific” “peer review” (aka like-minded conspiring), why couldn’t anybody see this? Al Gore won an Oscar and a Nobel Peace Prize, while the U.K. has all but banned the film for being full of bull dung.
We don’t need these convenient lies. Get it? To sell energy efficiency. Exaggerating, embellishing, and just plain manufacturing facts catch up with you. This, like climate gate, does our industry no good. Just the facts ma’am.
Lisa Jackson, EPA administrator, is convinced ever increasing regulation is going to be an economic boom. Did you know every dollar the EPA levies in regulation returns $40 to the economy? Wow! What is the ticker symbol? I’ll margin my account to the max.
Saying these regs will be a net job generator is ludicrous – like the breaking windows to put people to work parable. That’s exactly what this is. Just look at this report, and specifically page 7. Where is the higher cost of energy factored into the equation? Somebody has to pay for all this stuff. Higher energy prices are like higher taxes. The more that is spent on energy, the less there is left to buy goods and services – that are provided by workers, formerly located in the United States. This doesn’t even pass the laugh test.
written by Jeffrey L. Ihnen, P.E., LEED AP
“Thrown under the bus.” Now there is a term that has to be going out of style pretty soon. The phrase is used practically daily by everyone, especially in the news-talk business. Where did that come from? Why is it so popular and useable? Has it ever happened? It seems it would be very difficult to do. You would have to take the guy down like roping a calf and somehow stuff them under the cargo hold while the bus is going down the road I guess?? Your timing, strength and technique would have to be impeccable. It may deserve to be elevated to an Olympic sport. Seems like it would be like trying to stuff a cat into an ice cream bucket.
Some precursors to “thrown under the bus”: Thrown down the stairs (that’s already been coined but I think it was much underrated); Taken to the woodshed (already coined, gaining traction in politics); Burned at the stake! Wow, now there’s an old one that probably died at the hands of political correctness; Tarred and feathered; Fed to the lions; Thrown to the wolves.
Some suggested new ones: Thrown from the train? Rammed through the wood chipper? Shoved into the hammer mill? Sentenced to Oprah? Boiled in milk? Shredded with the Sunday paper? Canned with tuna? Bagged with the grass clippings? Thrown in the lake of fire? Fed to the Stay Puft Marshmallow Man? Pitted and stuffed with pimento?
“Low hanging fruit” is another favorite of mine – not. What does low hanging fruit mean? Well, everybody has their definition of what they think it is but they are not all the same. Low hanging fruit to me includes all energy efficiency measures that fit in a four year lumped package. Low hanging fruit to a firm that does performance contracting may represent a package of measures that has a combined five to seven year payback.
In some, circles low hanging fruit means all the energy savings you (consultant) can generate with your magic wand, while rubbing a rabbits foot and humming the cheesy Steve Miller hit, ♫♪Abracadabra ♪♫. Like politicians who think alternative energy is a low cost, abundant source of energy that we just aren’t trying hard enough to develop, these customers seem to think they can cut their energy bills by 10-15% by spending virtually nothing on consultants, hardware, software, programming or contractors.
You can save a lot of energy, and if/when real time pricing becomes available, a lot of money in your home with behavioral changes. Turn the thermostat up in hot weather; wash clothes on the weekends or after 9 at night, lock your electric water heater and maybe your dehumidifier out during peak hours, and even turn the lights off when you leave the room!
Which of these sorts of measures are going to be available to commercial and industrial facility managers? – shut the lights out when you leave and maybe they can eek the temperature up a couple degrees in hot weather before people start to howl. How much will this save? Somewhere between 0.01% and 1.00%. There it is, your abracadabra free audit.
We are working with customers that have savings goals of 10-15% for huge manufacturing facilities and they plan to start with the “turn out the lights” solution. This is a potential huge waste of calendar time while they watch their bills roll in over subsequent months. They won’t see savings because it’s down in the grass and well within the “noise” of typical energy consumption gyrations from month to month and year to year.
Getting to the goal can be done with cost effective measures but cost effective and free are two different things. Ten to 15% savings isn’t going to happen without spending money on expertise, time, and in many cases some equipment or controls. There is no magic/free solution and the sooner this is accepted, the sooner customers can get on with achieving their energy goals.
Tidbits provides comment and follow up on recent news and posts to this blog.
I said at least twice that the disaster in the gulf would be underestimated. Two thousand barrels a day turned into 5,000 and now I think the most recent estimate is 50,000 barrels a day. Touché.
I also said the robotic government bureaucracy would act like idiots. Recently, the EPA was threatening to keep the A Whale gigantic skimmer with a capacity of 500,000 barrels of treatment per day from performing because its discharge of cleaned seawater may not meet the EPAs standards. I hope the EPA isn’t around if I should get in an accident and my arteries are spewing blood all over the road. They may not allow a good Samaritan doctor from plugging the leak. The area and the doctor’s instruments may not meet hygiene standards. What morons.
Thirteen countries offered up ships to help contain the “spilled” oil. Thanks, but no thanks guys. We don’t need your help. The 80 year old (or so) Jones Act in a sop to the unions, prohibits foreign vessels from docking in US ports in consecutive stops. It’s refreshing to know unions take precedent over beaches, birds, turtles, and fishing and tourism industries. The only thing worse than bureaucracy is a crony one.
written by Jeffrey L. Ihnen, P.E., LEED AP
In many states, energy efficiency programs are meeting annual savings goals and their incentive cash is depleted in a fraction of the year. States where energy efficiency programs are a new offering are especially quick to meet goals. These states include Ohio, Michigan and Illinois. These states rely heavily on lighting, which accounts for somewhere in the range of 90% of the total savings. Even mature states like Wisconsin and California still get well over half their savings from lighting and other prescriptive measures (rebates). Wisconsin surpassed goals and ran out of incentives last program year.
There are many ways to solve the “excess savings problem” from reducing or eliminating incentives on some things or eliminating program offerings. In Wisconsin, they are sort of cutting incentives across the board and getting rid of comprehensive energy retrofit in existing commercial and industrial (C&I) facilities, where everyone knows the greatest potential exists. Comprehensive energy retrofit in WI is dead because they killed feasibility studies.
Wisconsin must know something Minnesota, Iowa, Illinois, Michigan, New York, California, Johnson Controls, Honeywell, Siemens, and dozens of energy service companies (ESCOs) around the country are oblivious to. These states’ programs rely substantially on comprehensive energy retrofit and it’s actually the holy grail of energy efficiency. But not in Wisconsin.
Wisconsin instead relies on the discount model. See Incentive or Discount, January 12, 2010. The powers that are believe this is the most cost effective (only) way to deliver savings and that feasibility studies once paid for by the program just rot on the customer’s shelf. But there are numerous ways to avoid this. You just have to develop an integrated program that holds customers accountable for implementing measures.
When Wisconsin (Focus on Energy, Focus for short) took over the energy efficiency programs from the investor-owned utilities about 10 years ago, one of the goals was market transformation. Market transformation simply means making energy efficient products and services the normal way of doing business such that ratepayer-funded programs are no longer needed, or their need is greatly reduced. Market transformation has long since been cast aside.
Instead, Focus has been transformed into something that seems to be directly at odds with its market transformation charter. Service providers in the market, ones with expertise and no bias (don’t sell stuff) are locked out by an apparatus that cannot work for them. Eliminating feasibility studies was the equivalent of adding a mote full of alligators around the fiefdom with razor wire atop the castle wall to keep the serfs out.
The idea that feasibility studies are a waste of money is just plainly incorrect. Nearly all of our feasibility studies are acted on. Last year we kicked off a retrocommissioning program with three pilot studies – no commitment from the owners whatsoever. We just wanted to demonstrate potential. Two of three have already been implemented. One has almost a year’s savings accumulated with 25-30% electric and gas savings, on their bills. The third project is close to implementation, which will probably be completed by year’s end.
In another study, we projected 30% savings for a high school. Actual results were 40% savings, indicated by energy bills. One college campus: 20% gas and electric savings projected, 20% savings realized. Another campus 15% and 22% electric and gas savings projected, respectively. Actual savings from bills: 25% and 20%. A medical clinic with about 25% savings projected: actual savings in the first 3 months of post-implementation operation total a full half year of projected savings. Every one of these projects needed measure identification, cost and savings estimates, and return on investment analysis. We started with a blank slate.
We have a study underway for a huge food processor and are projecting 3.5 million kWh savings, from only a portion of their air handling systems (68 units). We are looking forward to moving on to the ammonia refrigeration and compressed air systems. This customer has been very progressive with energy projects over the past 7-8 years and is willing to get everything that meets their financial criteria. In fact, when we delivered the proposal they agreed to move forward with the study on the air handlers but said, “but I don’t think you’ll find anything”.
The bottom line is, a comprehensive program that includes front-end screening, study, Implementation design, implementation, functional performance testing of measures, and customer training will be acted on by customers. Of the 10 or so projects, including dozens of campus buildings, where we have used this process, savings have been 20% or more in every case, up to 40%, and actual savings from pre and post implementation bill comparisons have always come in above study projections. Projects include everything from retrocommissioning to major equipment/system retrofits to new controls systems.
Ironically, we completed a “no risk” study with Focus last year including controls, refrigeration and HVAC. The customer went forward with all recommended measures. Again, all we started with was a customer that wanted to cost-effectively save energy, a blank sheet of paper. No “pre-packaged” projects. I.e., no free rider.
From a program perspective, this is very cost effective because savings are huge and concentrated and studies do not get stranded. The problem with some (as in, not all) program administrators whether they be third parties or utilities is they are steadfastly wedded to the status quo with a divorce rate Vatican City would cheer. The typical disjointed process with reams of paperwork and delays at the outset, no assistance between study and implementation, no hook or commitment from customers to do anything with the study, and no functional testing at the conclusion of implementation is doomed to fail.
The solutions to the “waste of money” issue are simple and they work very well, but some administrators and in some cases regulators need to open their minds and ditch their horse and buggy program paradigms.
And by the way, the attribution rate, which is the savings that occur as a result of an integrated program including feasibility studies, is near 100%. See the food processor guy’s quote above. He didn’t think we would find anything. Tell me. Would these 3.5 million kWh savings have occurred in the absence of a thorough investigation? How does a customer who buys an efficient boiler have any idea what the incremental cost and energy savings of his new equipment are? Does that constitute decision making based on energy efficiency? Perhaps some programs could improve their attribution rates on C&I programs if they would actually lead customers to implement energy efficiency measures rather than chasing contractors, like lawyers chasing ambulances, to capture savings that are going to happen in the marketplace anyway.
written by Jeffrey L. Ihnen, P.E., LEED AP← Older posts