Industrial Energy Efficiency – Stay Out of the Ditch
To win people over and get them to join your cause, it is best to not clobber them over the head as the beginning of this article for the top five measures for industrial energy efficiency does. The first paragraph reads like a senator’s stump speech with selective facts that deliver a distorted message. To wit, “the United States ranks first in energy wastefulness among developed nations”. Presumably, China is not a developed nation. Moreover, is waste measured in energy consumption, waste, or either of those per unit of economic output?
The next statement is that industry is responsible for 30% of greenhouse gas emissions, [paraphrasing] therefore, industry is bad. Bad. Bad. Bad. More efficient buildings would reduce our dependence on foreign oil, it says. That one is good for a laugh because less than 1% of electricity produced comes from petrol, which is overwhelmingly used for transportation and also as a feedstock for some industries.
Moving on. I agree there is massive savings potential with supporting “utilities” within an industrial plant. These include compressed air, fans, pumps, blowers, cooling and chilled water systems, steam, and refrigeration. He is correct again that staff is stretched membrane thin.
I disagree that aging equipment is a bane to industrial energy efficiency. Poor system design and control sequences waste an order of magnitude more energy than the incremental disadvantage old equipment has over newer, more modern equipment. For example, air compressors produce about 22 standard cubic feet of compressed air per 100 brake horsepower at full load. (Is this a dumb metric? Yes. But I didn’t develop it.) This hasn’t changed greatly for decades. Similarly, industrial boilers operate at 80-85% efficiency. No change for decades. Fans and pumps operate at around 70% efficiency.
Technology has improved to greatly improve part load efficiencies. The key to industrial energy efficiency and everything else is efficiency at typical operating conditions, which is not full capacity. Components like variable frequency drives have assisted this greatly. However, they are often controlled far less effectively than one would like to see.
I am in complete agreement that the three needs of many plant managers include a prioritized list of cost effective measures (knowledge), a business case for it (risk aversion), and source of dough (capital). A vast majority of energy efficiency portfolios throughout the country lack effective delivery of developed measures for customer decision making AND provide assistance between the prioritized list development and implementation. This is where many projects go in the ditch.
Portfolios will need to move in the direction of knowledge and information based programs in order to hit aggressive energy saving targets, and this is already in gear for a number of utilities – and I’m lovin it, not to be confused with McDonald’s, although I would throw in a pitch for the cheap and crappy McDonald’s hamburger, which I like very much. Michaels rolled out such a program several years ago. Twelve month savings data are just beginning to pile in showing 15-40% savings and even greater in some cases. In some jurisdictions, the whole shebang is also known as “strategic energy management” (SEM) programs.
Strategic energy management programs can be great because they are comprehensive, facility wide, and not just changing out light bulbs and installing a new, but not systemically integrated, boiler or variable frequency driver here and there. It includes benchmarking, investigation, measurement development, planning, implementation assistance (also known as the “magic middle” or the ditch as noted above), and constant monitoring of performance metrics.
Now for the “top five” industrial energy efficiency measures from the above article.
- Reduce peak demand. The article states peak demand is “impossible to determine by looking at the utility bill.” Wha? Does he mean in real time? I don’t get it. Anyway, many times comprehensive energy efficiency implementation will bring down peak demand proportionally with energy savings. Note, I said comprehensive – which means rolling a bunch of measures together. The article also states demand charges often equal 30% of the dollars billed. Actually, it’s closer to 50% and sometimes even higher. Some electrical tariffs practically give energy away but charge like crazy for demand.
- Reduce weekend energy use. This is slightly more sophisticated than changing light bulbs. Turn stuff off at night and on the weekends. I got it already.
- Set stuff back at night. See number 2.
- Avoid startup spikes. Myth alert! Myth alert. “Startup spikes result when voltage jumps because multiple mechanical systems are turned on simultaneously.” Talk about going in the ditch! Inrush current when slamming things on causes voltage to droop. The myth is that inrush currents and power spikes increase demand charges. Not true. Demand is measured over 15 minute intervals – either sliding or discrete intervals depending on the utility. Therefore, a split second spike in power draw will have very little impact on demand or demand charges. It’s like throwing a little ice cube in a vat of hot oil. It may cause problems and I wouldn’t advise it if you know what’s good for you, but it isn’t going to noticeably affect the oil temperature.
- Save with compressed air. It is certainly true that compressed air systems can waste gobs of energy, but compressed air has been targeted by programs for a long time. However, there is still a lot that can be done, particularly with compressor sequencing for multiple-compressor plants – as discussed above for actual operational efficiency, not full load only. He does hit this one on the head near the end of the article.
I’ll have to generate my own top five at some point.
Holy Cow, Fumble!!!!
Yale and Environmental Defense Fund socialites[1] have published an article for Nature (you can purchase the article with a federally backed low-interest loan or borrowing against the negative equity in your home) indicating that rebound effect is over-hyped. Rebound, snapback, backfire, fumble, boot, bogey, crash, and other terms are used to describe consumers’ change in behavior to use efficient energy consuming products more because they are cheaper to operate.
Sometimes one needs to use perverse reasoning beyond social norms (no not that) to shoot down illogic. First, consider that behavior change is the golden pinnacle of any energy efficiency portfolio. It is dancing, screaming, itching, squealing, fevered feeling, hot, hot, hot… right now across the country. The American Council for an Energy Efficient Economy (ACEEE) can barely keep up with the growth of its BECC (Behavior, Energy and Climate Change) conference. A webinar featuring highlights of the conference was recently overwhelmed and they are offering a second showing. Get it?
Why is the fumble theory bogus? Because 98%[2] of the populous never thinks about energy efficiency, consumption, or cost. And therefore, behavior change is extremely difficult. Perhaps this 98% figure can be backed by evaluation studies of OPower, which puts residential customers’ energy consumption compared to their neighbors’ in their face – to shame or motivate them to do something. OPower savings for the demographic with the highest levels of savings due to merely informing customers how their energy use compares with others and with their own historic use, is about 2%. Bingo.
Therefore, it is very difficult to move the needle by informing bluntly and regularly in your face, how can people claim the needle will go the other way if consumers buy hybrid cars or LED lights? It just isn’t going to happen, especially with electric or hybrid cars.
Really. First off, if an electric car owner decides to take the scenic route to work, he will be walking half the way and his car will be impounded by the state patrol. Secondly, why would anyone want to drive these things more than they have to anyway? They have automatic transmissions. They scream nerd and they are the unsightly modern day version of the Ford Pinto or AMC Pacer. Thirdly, the folks who buy these cars are true believers. They haven’t used a plastic bag since before the artist formerly known as Prince was… Prince. They don’t spray their dandelions with 2-4D, they harvest dandelions and toss them with their salad. In fact, they don’t even keep a lawn. They have an enormous indigenous flower and native weed, er plant spread but they may steal the neighbors’ dandelions before the neighbors are afforded the joy of dousing their lawn with chemicals.
Or, consider the smarty pants author, who burns wood exclusively to heat the home in winter. The wood comes from dead/dying trees on the lot, a chainsaw, and muscles. No girly hydraulic wood splitter here. Although the fuel is free, time is finite and scarce and it takes time to cut, chop, and haul wood. It isn’t to be wasted. In fact, not only is the fuel “free” and renewable, less of it is burned relative to conventional sources as the thermostat is set to essentially keep the pipes from freezing using the gas-fired furnace. All the while, natural gas prices, adjusted for inflation, are probably as low as they’ve ever been.
The point is, folks who buy stuff to reduce energy cost are likely more prone to behave favorably rather than wastefully. The key phrase in that sentence is “to reduce energy cost”. Consumers who upgrade to day-bright, efficient high bay fluorescent fixtures to replace their crappy yellow high pressure sodium or buzzing metal halide or dim and fading blue mercury vapor or constantly burning out incandescent lights; just to avoid these unpleasant attributes and have a brighter space with better color, indeed may save less. But in this case, probably not because the junk the new fixtures replaced, with exception of incandescent, never gets switched off due to delayed warm-up time to come to full brightness.
Consumers may purchase efficient equipment and waste energy like crazy for any number of reasons, including poor system design, not understanding how systems work, poor control sequences, and all of the above and then some. I simply do not believe people think, “I have an efficient boiler so I’m going to keep it 80F 24/7 inside”. Or, “I have insulated walls so I’ll just leave the windows open”.
HOWEVER, since many Americans spend every cent of their earnings just before payday – right down to “Can I afford the king size or do I just have to settle on the regular Snickers bar?” – saving energy and money will result in more buying and more energy to produce the stuff or services provided. Spending less on energy will allow these people to purchase more junk to fill their garages with, such that they have to park their gas guzzler outdoors. But wait a minute. These people aren’t going to buy anything efficient anyway. There you are.
As an added bonus this week, the image nearby is presented. What is it? A natural gas flame on a cook stove? An “infrared” photo of the sun? A lost but now found Van Gogh? The bottom side of synthetic car-wash sponge? You guessed it! – it is the H5N1 avian influenza virus. This will bring you joy the next time you are incapacitated with a 104F fever, aches, and can’t swallow anything – just knowing your body is filled with billions of these beautiful organisms.
[1] Article doesn’t say if they are professors, students or janitors.
[2] A guess.
Best Practice Hamburger Helper
The phrase that always has me reaching for a complimentary bag that can be found in the seat pocket in front of you on an airplane is “Best Practice”. Are you following “best practice”? Are you familiar with “best practice”? Will you use “best practice”? No. No. And no.
Define best practice, anyway. What does it mean? It’s something someone with many letters in their title block, who was paid a princely fee to declare, “This is the way it ought to be done”. Let’s examine a few deep thoughts on this concept.
- “Best practice” infers this is the best car, shirt, beer, house, bicycle… for you. What if your friends or coworkers you frequently haul around in the back seat of the car are tall and best-practice man recommends a best-practice Nissan Altima? I can tell from experience riding in the back seats of rented Altimas that they have no headroom, and I am not a tall guy. Consider EE program evaluation: The typical portion of an EE program budget (total) available for program evaluation is 3%. The sample size for producing the industry standard confidence and precision targets is typically in the 70 project range, almost regardless of the size of the population. Do you think 3% is the right number to budget to evaluate PG&Es residential lighting program and 3% is the right number to budget for Rochester (Minnesota) Public Utilities residential lighting program? Best practice – in the garbage can.
- Somebody paid the best practice man to produce “best practice” and therefore, “best practice” is available to the public. If it isn’t available to the public, how can it be declared “best practice”? If we are asked in an RFP to do stuff via “best practice”, where is it? It’s available on the internet somewhere, like advice for curing hiccups. The fact is, if it is available to the public, “best practice” actually means “status quo” or “not worst practice” or “folklore”.
- “Best practice” is something you want to advertise? Who writes a proposal and enthusiastically scribes they will deploy industry “best practice” for the client? Firms that die. That’s who.
How about these best practices, which I Jeff Ihnen, P.E., MS ME, LEED AP, JBJBJee provide for free:
- Best practice is never use the term “best practice” when describing how you will handle a project for a client.
- Best practice is explaining how you understand the client’s plight, challenges, and interests and how you will take care of them for the client. I will not deploy the square-peg “best practice” to your round-hole problem.
- Best practice is completing stuff on time for the client.
- Best practice is producing accurate results that reflect reality; results that will not come back to bite a few months after best-practice man flew home and started deploying “best practice” for other clients.
- Best practice is telling clients what they need to know and not what they want to hear or what you want to tell them.
- Best practice is working for clients who want to know what they need to know.
- Best practice is producing clear demonstrable results, not merely trying with “best practice”. Trying is for young kids. Results are for adults.
- Best practice is bang for the buck, not paying for ridiculous precision on something that doesn’t matter.
- Best practice is doing what the client needs, not what the consultant wants.
LEED has resulted in common examples of failed “best practice”. LEED is taking a pounding with high profile news outlets and lawsuits but the best practice known as LEED is NOT the problem. The USGBC is NOT the problem. The problem is practitioners who have no business developing green buildings. They don’t understand energy consumption and efficiency. They don’t know how buildings work. They don’t understand building automation systems. They can’t follow instructions to do things differently. They design and build the building as usual and look at the paperwork at the end as a useless function. What does one expect?
Building a “green” building is exactly like cooking a delicious meal for guests. Cooking a delicious meal is easy 95% of the time[1] by following instructions in the cookbook – but you HAVE to follow instructions. The usual LEED building process goes like this: brown hamburger, cook macaroni, add Hamburger Helper, “where’s my plaque?”. No offense to Hamburger Helper, which was derived for “cooks” who can barely handle boiling an egg and for busy people with a pack of ravenous kids to feed, but in the end it’s Hamburger Helper. It’s what you get from people and firms with no skill. It’s “best practice”.
[1] The 5% that is difficult takes a lot of experience – things such as bread and pastries require skill and experience.
Refrigerator Sitcoms and Lethal Toaster Ovens
I’ve read enough energy-saving tip lists to fill a Webster’s dictionary[1]. In this rant, I dissect some common ones, some uncommon ones, and provide some myself.
Cook with small appliances – toaster oven, slow cooker, electric skillet: I would strongly advise against a toaster oven because (1) using it to make toast wastes energy – a “slice” toaster evenly toasts bread with coils in the closest proximity possible minimizing wasted heat, (2) my experience with toaster ovens for baking things like quick bread is that they burn. The temperature and coil proximity (ironically) is too close to what is cooking, and it blasts the dough with ultra-intense heat such that the surface is cooked while the middle is raw and (3) toaster ovens are disasters waiting to happen. It represents the only time I’ve ever used a fire extinguisher to put out a bona fide fire in my house. They also will be used as a shelf for buns or bread, and then you have a plastic bag melted to the top. Save energy; don’t burn down the house; don’t light plastic bags on fire – destroy the toaster oven. If you do choose to roll the dice with a toaster oven and the contents catch fire, get the fire extinguisher, pull the pin, and be ready to blast before opening the oven, which will feed the fuel with a lot of oxygen and the flames may shoot up to the ceiling – this is no joke.
The most efficient means for cooking with electricity is the microwave. I don’t have the data but I guarantee a much greater percentage of electrical energy is absorbed by the food than with any conventional cooking method – by far. Note, I did not say pale rubbery food is desirable.
Heating and cooling equipment – Yeah, yeah, replace the filter every now and then. Did you know that a dirty filter is a “better” filter? The more crap lodged in the filter, the smaller and smaller the particles it will catch. Hence, a “better” filter. To maximize heating and cooling efficiency, a filter romantically known as a cat catcher is best. This is one of those green things a person could tape to a clean windshield and have better visibility than some cars with dirty windshields that I’ve been in. I.e., it catches the big stuff that plugs coils and nothing else. A clean filter will result in MORE fan energy consumption, but will also extract more heat from the natural gas being burned or cooling provided by the condensing unit/AC [2]. Oh, and these are like single speed bikes, not race horses. Turning the thermostat to 90 to heat up faster, or 50 to cool down faster, doesn’t work like beating a race horse with a whip. It ain’t gonna run any faster. It will simply over heat or over cool the house.
Clothes – This is a big deal. We heat our house almost entirely with wood and a wood stove. The furnace thermostat is set at 52F in the winter and the temperature will drift down to 52F from 70F in something like 18 hours when it’s 10F outside. It only takes an hour or two to return to Bermuda conditions in the living space. Think of beautiful fall sweatshirt weather. Energy efficiency tip: don’t be a wimp. Dress for the season.
Here’s a problem – in the office we have energy inefficient attire requirements. We have to wear shoes, pants and shirts. When the AC goes down, it’s miserable. Not so at home. Peel stuff off till comfort is achieved. Energy efficiency tip: take advantage of freedom from the fashion Gestapo.
Here’s another thing about living in cold climates – observe the people who whine the most – they dress like they are in Tallahassee. Cold weather sucks for two reasons: (1) machines don’t like to work because things freeze, jell, and condense in very cold weather and (2) pretending it isn’t cold by dressing for the Gulf Coast.
Here is one from We Energies: Use cold water for disposal (e.g. in-sink-erator). This is good advice, but they should stop there. They go on to say cold water solidifies grease, allowing it to more easily pass through the disposal and pipes. OMG! Do not put fat of any sort down the drain.
Get a power meter for 120V outlets – One such brand is Kill-A-Watt and they cost maybe $20. I used this for the couple rants I wrote about vampire loads where I conducted my own in-house tests. Check what your own vampire loads and non-vampire loads (operating TV, computers, monitors, etc.) are and decide what conveniences you want to give up, if any.
Recognize the big users: If you want to save energy, you need to hunt the big fish and use them wisely. Running a clothes dryer too long on one load may equal all the vampire loads in your house running for a year. An electric dryer sucks 5,000 Watts baby. The electric stove is probably in the same ballpark. A refrigerator less than ~ 10 years old is probably in the 100-150 Watt range and they run half the time, which brings me to the next one.
Don’t be stupid: That’s right. Standing in front of the refrigerator and watching the contents like a sitcom wastes energy. I had a roommate who did that frequently. I don’t know if he was fantasizing about what sort of cardiac sandwich he could make or what. Leaving the door open while rummaging through the beer selection to pick the perfect style for the mood is perfectly acceptable. And keeping the fridge full of beer also helps reduce energy consumption, just a smidge. Why? Opening the door of an empty fridge allows all the cold air to spill out. A fridge full of beer has no air to spill.
I barely got started so I will need to do a series of these over time, but I won’t overwhelm the reader with too many of these in a row.
Did I tell you the fiscal cliff, aka, the fiscal ant hill would result in high drama? Here I am, a couple days before the New Year, and the President flew his 747 to Washington all the way from Hawaii, while congress people from all over the country pour in for the media carnival which will result in NO substantive budget resolutions whatsoever. They won’t come close to 10% deficit reduction once interaction effects (behavior change as discussed last week) are accounted for. I doubt we will fall off the ant hill and rather, there will be a meaningless delay scam so they can all go home for their New Years bashes and at the same time, establish another media spectacle in a month or two.
[1] Note to millennials – a Webster’s dictionary is a book with ink on paper with the definitions of thousands of words, all in convenient alphabetical order.
[2] Hard core energy geeks: yes, more air flow results in greater cooling capacity as the compressor works against less dP and thus moves more refrigerant.
Taxman, Yeah, I’m the Tax man
Taxman, Yeah, I’m the Taxman
Thank you American Council for an Energy Efficient Economy for clearing the decks to talk about tax policy and energy efficiency – enabling me with its Three Tax Reforms to Encourage Modernization of the Manufacturing Sector.
Allow me to divulge some truths about our confiscation, er I mean, federal tax policies. In five words: small business gets the shaft. Small businesses earn their profits in the US and they are pass-through entities, the profits from which are taxed at the 
owners’ personal tax rates far above typical effective corporate tax rates. The IRS extracts a pound of flesh for every three pounds produced. Corporations; not so much. (see the chart nearby). I can tell you why/how but that’s a story for beer time somewhere.
A case study in monetary and tax policy perversion of capital: Interest rates are nearly zero as the Ben Bernanke prints money to finance the deficit and debt[1]. Taxes (the “cliff”) are set to rise in a few days so what are corporations doing? Dumping cash to shareholders. Costco for one is borrowing $3.5 billion to pay a one time $3 billion special dividend to shareholders. The debt will be repaid by future earnings. And former CEO, Jim Sinegal wants the rest of us and in particular small business to pay higher taxes. Hypocrite.
In fact, as of last week reported special one-time corporate dividends totaled roughly $23 billion and note, Apple with $90 billion in cash is not included in this list.
Conclusion: taxes matter.
The first proposal by ACEEE is to lower the tax on repatriated money. ACEEE claims the cost to the treasury would be low. I disagree. The cost to the treasury will be negative. In other words, the treasury will increase its haul because the current 35% of $0 is $0. Ten percent of hundreds of billions of dollars is billions and billions of dollars – not even counting the ensuing corporate, income, property and all kinds of taxes business expansion in the US will deliver. I have no doubt the majority of lawmakers in Washington are clueless about these things. A confiscatory tax rate that can / will be / is avoided produces no revenue to the treasury. The result is a pre-cliff surge in tax revenue in 2012 on LOW taxes followed by a dearth next year. I’ll provide the data when it becomes available.
- Bottom line: I strongly agree with ACEEE that repatriated dollars should be taxed at a far lower rate, if taxed at all.
The second proposal is to use accelerated depreciation to get a near term tax benefit from energy efficiency projects. ACEEE claims this will not cost the treasury anything because it simply shifts the tax burden to out years. I too like this policy but I would want it across the board. Defining an energy efficiency project would be a mess. Trust me. We have seen many absurd claims in self-directed (customer directed) / opt-out (of EE programs) projects. Companies, let alone the IRS, do not know what energy efficiency is. For example, spending money to consolidate manufacturing to one facility, or from two shifts seven days a week to three shifts five days a week is NOT energy efficiency. But customers think it is.
- Bottom line: I agree with ACEEE but let’s use accelerated depreciation across the board for all types of investment.
The third proposal is a tax credit of 35% of the investment in EE to be repaid over 10 years. I understand the benefit but linking it to reality is a bit more complicated than the first two. If the project lowered energy consumption by the cost of implementation over 10 years (e.g., 10 year payback), this gives the customer a tax incentive in year one to be repaid over the 10 years. So it seems like financing the tax payments.
- Bottom line: This wouldn’t be attractive to me and like the second one, it is too burdensome and easily gamed.
Number four is Jeff Ihnen’s idea: lower the corporate tax rate across the board and nix all the perverting tax loopholes and credits. Let’s move from the highest corporate tax rate in the world to one of the lowest, say 10%. Eliminate the tax on repatriated capital. The treasury is getting nothing from it now and allowing those dollars to flow back will allow companies to expand here in the US, creating corporate income tax, jobs and associated personal income tax. A summary of enormous benefits:
- Jobs – Washington’s clueless fixation.
- Higher tax revenue.
- MORE energy efficiency[2].
- Insourcing jobs.
- Capital will flood into the most productive country in the world – ours.
- Greenhouse gas reduction – think of that! China is building coal plants willy nilly. The US is shutting them down ON TOP of being more energy efficient and more productive.
Everyone except perhaps our foreign competitors and Washington wins here. However, there remains one mammoth obstacle: ignorance and/or lust for power in Washington. Lowering and flattening the tax code while getting rid of deductions and credits takes away power, manipulation, and ability to divide the electorate to win or buy the next election.
[1] Home owners may think this is good but there is no free lunch and I can explain that another day.
[2] Energy efficiency builds the bottom line and taking less in taxes makes it more attractive.
Diet Soda and the Triple Bypass
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[1] 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[2], 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.
[1] AKA “pop” according to portions of the Midwest populous.
[2] Follow on services can be as simple as more specifically defining the scope of a contractor and reviewing “shop drawings” to more detailed specifications.
The End of Lighting
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?[1] 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.
[1] 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.
Bait and Switch
The day after last week’s election, the headlines included discussions about the “fiscal cliff” coming on January 1, 2013, when the “Bush” tax cuts expire and substantial automatic spending cuts kick in. I guarantee this will not come and go without high drama. First thing after the election comes the ceremonial token olive branches, and five minutes later both sides return to sharpening their heals and digging in.
I would say energy efficiency has it’s own version of the fiscal cliff coming, and that is the end of the gravy train – lighting retrofits – the so-called low hanging fruit, a term I adore as much as the end of the day. Actually, it will be more of a descent into Death Valley as mandates phase out old-fashioned T12 and incandescent light bulbs. So what is the solution to the Death Valley Spiral? Vampire loads! This I read recently on a blog post or email. Going after vampire loads would be like making car radios use less power to improve gas mileage. Vampire loads don’t amount to squat, and I mentioned this in a blog a long time ago, but I just reran my own home tests.
First, what is a vampire load – energy consumed when a device is turned off. Leaving things on – like stereo and home entertainment equipment is not a vampire load. Here is my vampire load study:
The cable box DVR takes about 15 minutes to boot up, and it seems to not really have a power off mode, but if one likes to wait 15 minutes three times a day to save $20 in a year, go for it. Granted, this could certainly come with better not-in-use power characteristics. Nevertheless, this IS NOT a phantom/vampire load anyway. The VCR/DVD player burns a stunning 1 Watt, most likely to burn the digital clock on the display.
What is one frontier you never read or hear about? Stupid use of expensive fuel, and the most expensive fuel is electricity. If the country wants to take giant steps toward reducing energy consumption, why not promote fuel switching from dumb uses of electricity to natural gas wherever possible.
Last March or so, I bought a retractable clothesline for $12.95 at Menards. Simple payback: about 7.5 weeks (5kW, half hour per load, load per day, 10 cents/kWh). With the deck and clothesline on the north side of the house and winter coming, the “efficiency” of the clothesline is not so grand, so I’m staring at my 5 kW electric dryer.
Why do I have an electric dryer? Because in the La Crosse area, the standard apartment lease comes with “hookups” for washer and dryer but no washer and dryer. So, the hookups of course include electric-only energy sources for clothes dryers. Our choice, therefore, when moving here was electric dryer or the thrill of the Laundromat.
These hookups without appliances are as commonsensical as the Wisconsin bubbler.[1] Tenants have to buy and lug washers and dryers from place to place? Why not refrigerators and stoves too?
The mom and pop stores around here, where I prefer to shop because service to me is king, do not even carry gas dryers. Electric water heaters are another travesty. Using electricity to dry clothes and heat water is the same as buying a Husqvarna 5kW generator that burns gasoline to make toast in the morning.
In a triple or quadruple irony, it reminds me of the Nissan Leaf commercial. Speaking of double ironies, you have to sit through an ad to watch the Leaf ad on YouTube. Electricity is actually a smart fuel for cars, just as wind is for power generation, but there are about 46 physical limitations and barriers for making it a decent full blown alternative to liquid or gaseous fueled transportation.
Some barriers to smart fuel switching include old school energy program thought. Without an exhaustive investigation, I am not aware of any programs that provide incentives to switch from expensive, and from a resource perspective, more wasteful electricity to less expensive natural gas.
The fuel switching is a matter of cross-subsidization where, for example, an electric customer gets a rebate from the electric utility for switching to natural gas. The electric rate payers are benefiting the gas customers. If you stop and think about this a little bit, it is entirely foolish. When the electric utility throws money at a customer for installing more efficient lighting, it benefits the light bulb manufacturers – in CHINA! What is the difference to the electric rate payers OR the electric utility? Electric rate payer money via EE programs is used to reduce demand and sales of electricity while benefiting others customers and other retail sellers of stuff. What difference does it make whether the stuff is light bulbs, insulation, windows, automatic controls, or natural gas?
And consider this, nearly all the new electrical generating capacity is produced by natural gas. We pay to build natural gas plants, poles and wires to produce electricity at perhaps 70% efficiency (roughly for combined cycle plants) to power water heaters, clothes dryers, stoves and other stuff. Therefore, we use more natural gas, not less. As a result, we require more infrastructure for both natural gas and electricity delivery.
Not promoting fuel switching costs consumers at every turn. What is the problem here? Figure it out. Let’s go.
[1] Not knowing what a bubbler is is about as shameful as not knowing the name of a character on an HBO drama series, or the third string center for the Packers – from the 1988 squad.
f(x) where x = Energy Cost
It has been a while since I’ve picked on an economist for his or her seemingly foolish statements and theories (other than the Ben Bernanke but I’ll get back to him later).
Ed Dolan, university / government wonk, states in an interview that there is no lock-step relationship between economic growth and energy cost. Rather, the world’s best performing economies have substantially increased their energy efficiency in terms of energy consumption per gross domestic product (GDP). He states while the OECD countries (Organisation for Economic Co-operation and Development) – about 35 mostly free countries – increased efficiency by an average of 55%, the United States did “a little better” at 81%. A little better? That is enormous.
Ok. There is a lot to chew on here. First, of course the economy does not move in lock-step with energy prices. If it did, our GDP growth would have been 200% cumulative over the past few years since the hydraulic fracturing boom for natural gas began. Instead, we’ve been growing at the glacial pace of less than 2%. Like carbon dioxide and global warming, “experts” argue whether ambient CO2 levels are a function of global temperatures or if global temperatures are a function of CO2 – what follows what in other words. No comment, because I don’t know and I’m burned out on that topic. But I would say energy prices and economic growth are barely related except in extreme long term cases, perhaps more than a year. The economy can impact energy prices or energy prices can clearly affect economic growth, despite Mr. Dolan’s assertions. Consider what the fracking boom has resulted in:
- Royal Dutch Shell is building a $10 billion plant in Louisiana to convert natural gas to diesel fuel.
- Pennsylvania recently won a three-state contest to land a multi-billion-dollar chemical plant, again from Shell. This plant will make ethylene, a feedstock for plastics.
- Several years ago, ammonia plants were being dismantled and shipped overseas for re-assembly and production. This is reversing, and ammonia production is booming in the US again. Ammonia is a key ingredient for nitrogen-based fertilizers as well as a refrigerant.
- Chevron Phillips will be building several chemical plants in Texas and Louisiana.
- Nucor is building a $750 million steel plant on the Mississippi in Louisiana. The feedstock for this is iron ore. I wonder where they may get ore?
- Even textiles, yes, textiles, are moving back to the US. Brazil’s Santana is building a denim plant in Texas.
Then there is the incredible job machine to drill for the natural gas and manufacture the stuff to support it. Despite the political class fighting to claim credit for the low unemployment in Ohio, it is the hydraulic fracturing boom that is soaking up the unemployed and drawing business from around the country/world. Economists at Citigroup estimate 3.6 million additional jobs from the fracking boom by 2020. This is moving the needle and not just helping out a few obscure businesses.
Back to Mr. Dolan’s commentary – he seems to imply that energy costs don’t matter but energy efficiency does. What is the difference in using a million decatherms at $5 (low cost) or a half million decatherms at $10 (efficient) in his context. This is the case we have compared to Europe where natural gas prices are triple or more than we have here in the states. Since the efficiency difference is a little higher compared to some countries and a little lower compared to others, cheap natural gas gives the US enormous advantage in a broad swath of the economy.
Natural gas is not like petroleum, the price of which is set in the global marketplace. At this point, natural gas is primarily a land-locked commodity transported by pipelines and not cost effectively by ship, although this will be coming. Therefore, low natural gas prices are a boon to the countries that have it. Natural gas prices are thus just as effective as efficiency at lowering production costs and improving profit. Obviously, I’d advocate for efficiency as a risk mitigation strategy in this case.
I agree with many things Mr. Dolan states. One is that traditional mineral rich parts of the world are less free and less industrious; in my opinion because they have wealth to spread around, and that wealth is controlled by thugs like Hugo Chavez and Vlady Putin. I agree with his concerns about environment-be-damned, “low-competence” Russia. With massive conventional sources, they can waste it and be competitive, and take that energy to the world market with very little margin for environmental disaster – see Chernobyl.
The interviewer then asks about the Ben Bernanke’s money printing, romantically known as quantitative easing, which sounds like a laxative. Mr. Dolan says it isn’t the magic bullet. This is correct. It isn’t a bullet at all. It’s a stool softener.
Just like energy prices, interest rates can lead or follow the economy. Unlike Mr. Dolan, the Bernanke seems to think interest rates are virtually the only parameters of economic fuel. It’s like having a pig of a building and all the Bernanke knows is lighting. He retrofits the lighting with T8 lamps (tubes). Still a pig. He replaces them with 28W lamps. Still a pig. He removes lamps. Still a pig. He limits fixtures to one lamp per fixture. Still a pig. He cuts the wires in the panel and gets electrocuted. Still a pig. And there remains a plethora of unintended consequences due to sheer ignorance, like people can’t see and have to walk across the street to use the restroom. Possibly, the pig is running its chiller all year because the outdoor air dampers were wired shut and half the heating valves are shot requiring the discharge temperatures to run at 48F all year. Possibly something else is wrong. Do ya think? Forcing one parameter to obscene levels cannot make up for Everest size problems and barriers elsewhere.
Tea Party On, Dudes
Jeff Erickson of Navigant Consulting presented an interesting paper at last week’s American Council for an Energy Efficient Economy (ACEEE) Summer Study for Buildings. The title was, “Occupy Wall Street and the Tea Party Battle over Energy Efficiency.” I thought it was just clever (aka bait and switch) advertising, but the presentation featured, almost exclusively, how the free market, small government tea party and the profit-bad, regulation-good occupiers might view energy efficiency.
The tea party would favor consumer choice for incandescent light bulbs and gas guzzlers over government regulation of these common, and other uncommon for that matter, consumer goods. They would also advocate free markets for energy supply. The problem with this notion, however, is that the utilities were developed on a regulated monopoly business model, I would guess for economies of scale reasons. Also, natural gas and electricity are more like public benefits, as are roads, water, and sewage systems.
Free enterprise exists where barriers to entering a market are reasonably affordable, where access to consumers is vast, and/or where the product or service is pretty much optional. In my case as an electricity consumer, for example, the street transformer, the wires feeding it, and the wires going to my house from the transformer up to and including the meter, are owned by Xcel Energy. I can only guess where the electrical supply actually comes from, but it is safe to say Wal-Mart is not an option for buying electricity at this point.
Consumer choice for electricity, for me, realistically includes: (1) Xcel Energy, (2) a natural-gas-fired generator, (3) photovoltaic / batteries, or (4) other options that are even less cost effective. At the current bargain basement cost of about 70 cents per therm of natural gas delivered to my house, I could generate electricity for roughly 12 cents per kWh. This, of course, does not include the $4,000 (or whatever) cost for the electrical generator churning out electricity with a stunning 20% efficiency.
Switching gears for a moment, I’ve overheard discussions of how the deregulations of the telecom and airline industries have been failures – how? Apparently because many carriers filed for bankruptcy. These are failures of adaptation, not failures of market changes. Nearly all, if not all the legacy airlines have filed for bankruptcy and others like Eastern and PanAm were essentially liquidated. These legacy carriers were saddled with unsustainable contracts with unions. The “solutions” included crippling strikes and/or eventual bankruptcy to put these doomed-to-fail contracts through the shredder and start over.
I was just explaining to my friend how Delta Airlines had retrofitted their planes to have skinnier chair cushions to shoe-horn another row or two of seats into their cattle-class cabins. His response: “Dude, but you can still fly practically anywhere for $400.” True. In twenty years of business travel, plane tickets haven’t budged much at all, EVEN with much higher fuel costs. I bet that non-fuel cost per passenger mile has actually declined over the same period because new low-cost carriers like Southwest, Frontier, and Jet Blue have joined the market. I call this a huge victory for consumers. Telecom, the costs for which I know much less about, has been a similar smashing success. Long distance is so cheap at any time of the day, it isn’t worth tracking – better than the buck a minute for “collect calls” from the 1970s. Half the readers probably don’t know what a collect call is. Again, a few bankruptcies of cement-shoed companies later, consumers have benefited hugely.
Deregulating utilities, electricity in particular, has never been successful to my knowledge because it meets none of the criteria above. Consider water and sewer, which, like electricity, are necessary for modern life. It is less expensive (and hassle) to hook up to a central municipal system that uses vast economy of scale to provide these critical services at a virtually negligible “startup” cost, and very low operating cost. It also provides environmental benefits of lower risk by poking fewer holes into the water table and better containment of nutrient-rich sewage. I’ve seen lakes go from green algae bombs to nice clear water in just a few years with the installation of municipal sewage systems for homes that lined the lake shore.
Regulated monopolies that exist with large centralized providers of “the necessities of life” will continue to be the best option for consumers – for as far as the eye can see. Policies to minimize cost with reasonable environmental regulation are necessary, while consumer choice is preferred.
This is why, in my opinion, our industry needs to lay off mandates for “unequal” alternatives. Unequal alternatives include standard and halogen incandescent light bulbs, CFLs and LEDs. Each has one or more substantial differences in cost and output, including color rendering and full startup time. Conversely, standards for some consumer appliances have demonstrated in numerous cases to be huge successes. One example is the lowly refrigerator. Energy consumption for refrigerators has fallen by almost three quarters since the early 1970s while inflation adjusted cost has barely budged at all. More importantly, cold is cold. The beer, ice cream, and lettuce don’t know the difference.
Other success, of course, includes cost effective lead-by-carrot programs that incentivize cost effective, efficient alternatives – and no, I am not repeating myself. The programs AND the products and/or services shall be cost effective for consumers. Energy efficiency shall be the lower cost resource alternative to more power plants, fuel, poles and wires. This is something the tea partiers should get behind with some well-presented market information.
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