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
Last week I attended the Association of Energy Services Professionals (AESP) national conference in Orlando at the Disney World Hilton. Thankfully, it wasn’t actually in the park – hey, I don’t know man. I would otherwise not go within 2-3 states of a crowded black hole for cash like that.
The conference expo hall “infrastructure”, including booth structure consisting of pipe framing and curtain dividers, chairs, tables, power and other things is outsourced to a company that travels from venue to venue like carnies. For a couple thousand dollars or whatever, the exhibit space is all you get. A $30 table rents for $275 for two days – that is correct. A $30 table for the price you could rent a car for an entire week! A $10 chair rented for $90 for two days. Power to run our 30 Watt LED display lights for a couple days: $95. Ninety five dollars for not even one kWh! I wonder if the carnies reimburse the hotel for energy used?
Once we unpacked our stuff and set it up in the exhibit hall, a few shards of paper were scattered on the gaudy carpet of the conference center in our booth space. Having remembered a vacuum cleaner going past a while before to clean up a neighboring booth, I asked the Hilton folks for a vacuum, if it wouldn’t be too much trouble – like if one is in the area anyway, I would like to use it for a minute. Soon after, a woman with one of those IDs on a lanyard like those of the stage crew at a concert use, stops by. “You asked for a vacuum?” “Yes. If there is one nearby and it isn’t much trouble it would be great to use it for a minute.” “There is a charge for using a vacuum cleaner.” “WHAT?” Good God. I said I would pick up the dozen shards with my fingers or just spit on it and grind it into the carpet.
When it comes to lodging, more is less. Internet access in “expensive” hotels costs money. No “free” coffee or breakfast. Everything costs extra, right down to the $7 liter of Evian next to the TV.
None of this was new to me, except the vacuum thing was a bit of a “you’ve got to be kidding me” moment.
When you stay at a Holiday Inn Express, do you think the biscuits, gravy, cinnamon rolls, coffee and juice are free out of the goodness of their hearts? HELL NO! I happen to like Holiday Inn Express over Hilton for normal business stays because they have the “free” breakfast ready instantly in the morning and I don’t have to wait for anything. Remember, Raisin Bran and Cool Milk and I’m Fine.
These exploits remind me of the energy efficiency and engineering business. People who think they are getting free services from their contractors are naïve fools. They either don’t get the “services” at all; or they get the services that completely favor the contractor (themselves), and one way or another you pay for everything they do. They may say, “It’s absolutely free. We don’t charge anything for our time.” BULL. If it isn’t charged directly, it’s built into their overhead cost which is built into their material and labor costs.
As I discussed the cost of $35 tables and $10 chairs above, you may have been thinking, “You idiot. Why don’t you just get your own and ship it or go out and buy your own locally.” Because there is a lot of cost and hassle built into that. Our time is worth a lot of money. I can chase around town to save $250 while it costs me $450 in my time to do so. What about little issues like arriving at midnight the night before the start of the conference? Take the day off so I can find cheap furniture? Not. Shipping isn’t cheap either. Shipping our display, which is compact, but a bit heavy, runs $200. And will the hotel just hold it for you? Sure, for a tidy fee of $82.50. The carnies have this all figured out. They know exactly how much it costs to buy, ship, or go buy your own stuff locally for the show. They price their crap just below that, so a $10 chair costs $90 to rent for a couple days.
The carnie business model is used, typically ruthlessly by “design builders”. There is design, bid, build which may take a little extra time, but every step is competitive (e.g., “bid”) keeping cost down and quality up. And there is design build, where you essentially agree to a floor plan, sign a blank check and put a blindfold on for a few months. I’m no expert on the dastardly design build business, but the sales pitch goes something like this: you don’t have to waste money on expensive architects and engineers and then hassle with contractors. You don’t have to wait for competitive bids. Just sign this check. We’ll fill in the numbers and take care of everything for you. It will be wonderful, fast, and easy. Translation: once you sign on the dotted line, the carnies will move in and provide you with the cheapest crap imaginable. You will be a captive, ignorant sucker and we will take what we can get and you will be boxed in with no one looking out for your interests. Everything is extra. A LOT extra.
You get screwed for what you don’t pay for.
Design build is polluting the country with cheap and crappy buildings – energy hogs that are going to be crumbling in 30 years. Austin Powers, as you may recall, fears only two things. Nuclear war and… carnies – circus folk, nomads, smell like cabbage, small hands.
The ladies at AESP know how to put on a smooth, high-quality conference, and they deliver. It’s a fast growing organization for a reason. Kudos to a fine organization and event.
A couple weeks ago in Goodfellas Take California I explained, or attempted to explain at least, how mandating CFLs was bad policy. As it turns out, the impacts are far below than anticipated. In the 2006-2008 program years, PG&E (Pacific Gas and Electric) aimed, er I mean shot for, er I mean strived for incentivizing the purchase of 53 million compact fluorescent lamps (CFLs). At nearly a $2 subsidy per lamp, the program did not meet participation targets, er I mean goals. Not only that, evaluators concluded savings due to the program were 73% lower than anticipated. Whoa! That is God-awful. We just finished a bunch of residential verification work all over California for comprehensive programs as well. Per my involvement with that project, I don’t think the utilities will be singing a joyful song once they see those results either.
BTW, per the article, lighting is responsible for 8% of greenhouse gases. California may have 2% of the world’s lighting (a SWAG) and residential lighting may be about 15% of the total. Switching this lighting to CFLs would reduce GHG emissions by maybe 0.008% at the very most. It’s probably closer to half that. I feel cold already just thinking about it.
In a recent Milwaukee Journal Sentinel piece, Joel Rogers, head of the Center on Wisconsin Strategy and a leader in the national Emerald Cities initiative, states, “The first major barrier [to energy savings] is that most people don’t know much about what they can save.” Hmmm. Sounds an awful lot like my rant, Horse and Buggy EE Programs, where I said the powers in WI, in their infinite wisdom declared the feasibility study, the answer to Mr. Rogers’ “first major barrier” problem is actually not a problem. The solution to Mr. Rogers’ “first major barrier” was declared a waste of money. Mr. Rogers, please see your “Energy Advisor” with Focus on Energy, but wear a helmet. The brick wall is hard, and stout.
written by Jeffrey L. Ihnen, P.E., LEED AP
Many posts ago, I wrote “The More You Spend, The More You Save” explaining how poor system control wastes energy but results in even greater energy savings for efficient equipment. For example, consider an air handling system that wastes heating energy provided by an efficient boiler. The boiler saves x% versus a conventional model, so x% multiplied by greater use (wasted energy) results in “more” savings.
Recently I picked up on buzz that argues greater efficiency results in greater energy consumption. At one point I recall reading in the Wall Street Journal an editorial that argued more efficient vehicles just result in people driving more. They live further from work. They go on joy rides. They visit the in-laws more. I scoffed at this argument, at least at current gasoline costs and anything near them. If I buy a hybrid that gets 50 mpg versus a “sports car” like an Infiniti G35 coupe that goes half as far on a gallon of gasoline, I will drive more. No. Way.
I will drive more (barely) if (1) I have a car that is fun to drive and (2) I am in an area where it is fun to drive. While I haven’t driven a hybrid, I don’t think it would meet my criteria for #1. As for #2, western Wisconsin is a driver’s and biker’s paradise because (1) it is scenic (2) there are lots of smooth, paved, and curvy roads on which to drive and (3) there is minimal traffic. Quite frankly, I’m much more concerned about striking a deer, coon or coyote than another vehicle. I used to live in the DC metro area. Forget it. You might as well drive a tin can because you are going nowhere fast. I grew up in Southwest Minnesota. Forget it. You can drive for miles without moving the steering wheel. But even so, living here in driver’s paradise, I have limited time so I never, ever think, “ooh boy, a 45 minute drive is only going to cost me $2.79 in gasoline – let’s drive!”
That’s one argument that doesn’t hold water in my opinion. On the other hand, some people do run efficient stuff like lighting for longer hours because it’s efficient.
The other argument made in these articles is that the money freed up by spending less on energy results in redirection of that extra money toward other goods and services – and those goods and services result in more energy consumption to extract, process, manufacture, transport and operate. I do buy into the merits of this argument whether the end-user is a homeowner, service provider, or manufacturer. I never really bought into the notion that energy efficiency programs result in lower revenues for utilities. Maybe they understand this and hence the rah-rah from utilities for energy efficiency programs. I don’t blame them. By far the main driver of EE is saving money and increasing profits. See “This is Not Tee-Ball“.
Just think how this turns the energy efficiency business and policies on their heads. In “Paying to Lose,” I discussed how utilities have to make their savings goals or they may get hammered by regulators. This, in turn, improves the bottom lines of their customers allowing them to expand. What a racket. Rather than utilities spending money for their customers to use less of their product, they are actually using their CUSTOMERS’ money to sell MORE of their product. And how about “Decoupling Stupid,” that allows utilities to recover revenue “lost” to energy efficiency? They spend their customers’ money to increase sales and meanwhile essentially get reimbursed for the “savings”. Cool!
We have also discussed the underperformance of LEED facilities. In “LEED and the NOT Happenin’ Savings,” I described how LEED buildings weren’t meeting energy performance targets because of lousy commissioning. Well hail to the lousy commissioning agents! They are actually reducing global energy demand and greenhouse gas emissions. Now that end user won’t be able to afford a new vehicle manufactured in Ontario with steel from soot belching plants in China shipped across the Pacific, through the Panama Canal to the Gulf of Mexico and transported by rail to Toronto or someplace – and tires from tariff protected Ohio that are shipped to Canada and back to the California border once installed on the automobile. They also won’t be driving their phantom car. (California won’t allow the car cross state lines because of the embedded energy, so Los Angeleans have to drive to Reno to pick up their car – I just made that up but it is probably true or at least accurate or emblematic, but certainly driving a new car across state lines into the golden state causes cancer and birth defects like everything else in CA does)
And I consider Michaels Energy. Our facility uses practically no energy but in recent years our air travel has gone from virtually zero to hundreds of thousands of passenger miles per year. And from the destination airport, we drive all over the place. Soon for example, we will have about five people zigzagging all over California verifying energy efficiency measures that probably save less than the gasoline burned to prove it. Somebody has to do it!
So go ahead and turn that thermostat up, open the window for some fresh air and click on that 70 inch plasma TV, have a beer and save the planet, Homer.
written by Jeffrey L. Ihnen, P.E., LEED AP
A couple weeks ago, the National Academy of Sciences released a study that summarized the findings of the general public’s perceptions of energy consumption and potential savings from various end-uses in their daily lives. You can check out the curves in the linked article above and take my word for it or risk brain damage reading the thing. To me there are several significant findings, none of which surprise me. These are in no particular order and are only a subset of the findings.
- Finding #1 – When asked open ended questions about ways to save energy, people overwhelmingly selected curtailment measures over efficiency. Shut stuff off. Unplug it. Drive less. Relax and take it easy (love that one but don’t watch a 56 inch plasma while lying on the couch). Conserve energy – so the answer to “What is the single most effective thing you can do to conserve energy?” is conserve energy. I think I would have yelled at them like the Geico drill sergeant.
- Finding #2 – People can reduce energy consumption by 30% “without waiting for new technologies, making major economic sacrifices, or losing a sense of well-being.” Well I don’t know about the “making economic sacrifices” part of this. Viewing average residential end uses of electricity, the easy stuff is lighting and… lighting. I don’t see anything else on there that doesn’t require sacrifice, more work, or spending a lot of money. Lighting accounts for 15% of consumption. Assuming this is all incandescent, replace it all with compact fluorescent for about 2/3 savings, or 10%. We’re one third the way there. Space cooling could be reduced a couple percentage points tops without sacrifice, well, make that 0% without sacrifice. You would have to set your temperature up all the time. Setting the thermostat up is going to save practically nothing because heat transfer due to temperature differences outside versus inside are relatively small. Clothes dryers? You would have to line dry. That is a sacrifice if you ask me. The rest you are either going to be able to do very little or a bunch of nickels and dimes will add up to a few percentage points.The only way to get to 30% is to select efficient equipment when replacement is needed anyway. Throwing away a working furnace and air conditioner with efficient models won’t pay for itself. Spending extra for an efficient model when you need a new one anyway will.
- Finding #3 – Turning off the lights when leaving the room is considered by the general public to produce attractive savings. The paper says there is actually very little savings from this. Hide the kids and maybe the spouse too! I’m not buying this one. The study is 25 years old coincidently.
- Finding #4 – People relate to curtailment, using things less more than using efficient stuff by a margin of 5:1. The top three items are turn off the lights, conserve energy (and call the sergeant), and drive less. If you’ve ever thought of it, efficient vehicles are more efficient, all else equal. The Mini Cooper get’s great mileage, comes with leather seats, manual transmission, and is one of the best resellers on the market.
- Finding #5 – People do not understand which things in their home are energy hogs. They are fairly accurate with light bulbs, stereos, and computers and they actually think laptops use as much as a desktop. My laptop uses about 25W. You can barely read the paper by a 25W compact fluorescent light. What cracks me up is they think the central air conditioner and electric clothes dryer uses only about two or three time more energy than the laptop! You see that huge hulking plug for the dryer? The reality is the dryer uses about 100x more energy.
- Finding #6 – Tuning up your car twice a year saves 100 times as much energy compared to driving 60 mph rather than 70 mph for 60 miles. First, this is misleading. My car wouldn’t even use two gallons in that distance for either speed. Second, who tunes up a car? That’s from the 1970s and earlier when engine control was mechanical. Everything is digitally controlled nowadays. It works or it doesn’t. I haven’t “tuned up” my car in the seven years I’ve owned it and it gets 34 mpg now like it did when it was new. Change air filters and keep the tires a few psi below the maximum shown on the sidewall.
- Finding #7 – People think a truck uses as much energy to move freight as a train does when in reality trucks use about 20 times as much per ton-mile. This magnitude surprises me. What’s the difference? Rolling resistance. Trains have almost none while trucks have a lot. The rest is mainly drag and I’m sure stop and go traffic is a killer for trucks as well. Airplanes use roughly 200 times more than rail. Is buying carbon credits getting expensive to buy off your guilt for taking an airplane? – Become a hobo. And isn’t the checked-bag charge for flying stupid? Shouldn’t people be charged or not based on their weight plus that of all their crap?
- Finding #8 – A virgin glass bottle doesn’t require a whole lot more energy than a recycled one but the public thinks it does. My guess is recycling plastics doesn’t save a lot of energy either. I would also guess recycling paper saves more, somewhere between aluminum and glass or plastic. Not generating garbage for the landfill is as important as the energy savings to me.
One conclusion out of all this is we need to do a better job of informing end users that saving energy doesn’t mean freezing in the dark or taking a shower once a month. I would say these concepts apply at least ten times more for commercial and industrial energy efficiency. There is all kinds of waste in these facilities that do zero to provide better anything.
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
Automobiles have really changed over the past 30 years, and in some ways for the worse. Back in the 1970s before hardly anyone purchased imports, imports were small and domestic vehicles were hulking behemoths. Then it was the second, or was it the third or fourth – doesn’t matter – energy crisis hit in the late 1970s and domestic cars shrunk in a big way. The Ford Mustang went from a muscle car to feeble runt. A 1982 Mustang was the first car I owned. It was also by far the crappiest car I ever owned.
This was the first giant step for domestic auto makers toward import fuel efficiency and of course it was disastrous. Millions of buyers experienced the same thing I did and did the same thing I did; started buying imports and never went back.
Getting on with the topic at hand – just look at how automakers of all stripes and origins have morphed into the same styles. Let’s look at how the Ford Taurus (formerly the LTD), Honda Accord, Volvo, and BMW 535 have changed from 1978 through today.
Back in the day, you could look at a silhouette of a car – or better yet, I could draw it on paper and you could tell what brand it was, and I draw as well as I play violin (I don’t think I’ve ever had my hands on one). In 2010, all you have to do is change the front grille and unless you study cars like an anal-retentive buyer with every issue of Consumer Reports and Buyers Guides for the past five years, you would never be able to tell what brand they are. They only have a tiny vestige of auto heritage left in about one square foot of the front of the vehicle.
Here’s an entrepreneurial thought: the “import” makers should sell optional “domestic” front ends and leave their stores open around the clock. This way the few remaining people who wouldn’t be caught dead in an import could sneak in the back door with a big hooded rapper sweatshirt on at 3:00 AM Monday morning and drive out with a car they really want and nobody would ever know it’s an import. Their parents would let them in the house.
This paragraph is a bit of a guess because I’m not THAT old to know for sure. Over the same period of 30 years, energy efficiency programs have “evolved”, more like devolved, in the same way. Back then there were few efficient technologies (products) and energy efficiency required brain power. A portfolio of programs probably got the most savings from custom measures like upgrading systems and controls, replacing controls, adding heat recovery, changing incandescent lighting to fluorescent and boring building envelope improvements. Compact fluorescent and T8 lighting, if they existed back then, probably cost as much as the modern laptop Check out that baby!
In 2010, program portfolios are like modern cars. Just take the utility logo off one and slap on the next logo and voila, ready to launch. They typically consist of prescriptive incentives for residential lighting, heating and cooling, appliances, appliance recycling, and maybe ENERGY STAR® new construction; and commercial and industrial prescriptive incentives for like categories plus maybe commercial new construction and retrocommissioning. Prescriptive measures, those that receive incentive for achieving some equipment efficiency threshold, probably account for 80-90% of savings – more for newer programs, maybe less for mature programs.
Program implementation has become a marketing campaign for technologies; efficient versions of everything available in the marketplace. There is nothing wrong with this, but codes and standards can drive these. Take the home furnace. Is there any need for an 80% efficient non-condensing furnace anymore? Any contractors who install 80% efficient furnaces should be fined, speaking facetiously. It’s just stupid. Compact fluorescent lighting is pretty much in the same category. This gravy train of easy savings is about to end as incandescent lighting is phased out. Moreover, I would say the market has already transformed to CFLs and possibly not even for energy efficiency. Many consumers choose them because they don’t burn out. Less maintenance and pain in the kiester to keep up with failing light bulbs. In commercial and agricultural facilities, these maintenance savings swamp energy savings. People are expensive. Good light bulbs are not.
Some states are sharply increasing goals and what are program administrators doing in response? More of the same. Some are just increasing incentives, even doubling them in some cases. This is like trying to significantly cut federal spending and taking entitlements and defense off the table. There isn’t much left to work with. Cost premium of efficient stuff is only one barrier to energy efficiency. At some point, you could literally give away efficient stuff and still not meet goals.
Program administrators and utilities need to put everything on the table and go back to the early days of custom efficiency, and comprehensive energy retrofit, retrocommissioning and demand response for commercial and industrial facilities. Industrial programs are woeful all over the country, including in California. Measures like “pump off controllers” for oil wells and numerous oil refining measures are complete free riders – measures that would happen regardless of any efficiency programs.
Administrators also need to think outside the box with “incentives” as well. There are many ways to do this but I’ll have to save that for another day because I’m out of time. But for now, let’s just say to take it to the next level, administrators are going to need custom measures, which requires engineering expertise. It looks good for us!
written by Jeffrey L. Ihnen, P.E., LEED AP
Thousands, make that millions of people, including some smart people and congress people, when talking solutions for our energy efficiency low-carbon future are continuously babbling about “technology” that will save us all. Bill Gates says we need Miracles. Whadahyou talking about man? The White House announces $130 million for a new building energy efficiency effort – “a multi-agency initiative to spur regional economic growth while making buildings more energy efficient.” It will be “an Energy Innovation Hub focused on developing new technologies to improve the design of energy-efficient building systems”. Get ready for cold fusion to reemerge.
Let me tell you somethin’, we don’t need to throw bazillions of dollars into developing these new magic elixirs – not now anyway. We need the public and organizations to take action with the “miracles” that are already on the shelf at your local home improvement center or mechanical and electrical contractors’ warehouse. You saw last week’s rant on people at Boulder lead to the energy efficiency trough but refusing to drink. This is the problem. Why develop a bunch of other junk that people won’t buy?
I’ve been in the energy efficiency market for 14 years and there has really been very little progress in energy efficient products or technologies for commercial buildings during this period. Why? In large part because there are physical and scientific barriers. Boilers and furnaces were available in the 90% plus efficiency then as they are now. Electric motors run in the mid 90% efficiency range. There is this theoretical barrier of 100% efficiency that Mr. Gates may think is just a nuisance. Maybe it’s just that nobody has thought about it hard enough. Chillers, lighting, variable frequency drives, compact fluorescent lighting, energy recovery – there have been no major breakthroughs with this stuff in 14 years. Prices for some things have come down a lot and quality has improved. The thing is, these technologies have become very cost effective as prices have dropped and energy costs risen. Just use them already!
Other innovative system designs such as displacement ventilation and chilled beam cooling systems have been refined but I don’t think they were born in the past 14 years. But even an “efficient” system can waste energy like congress can. See previous posts “Dermal Beauty, Ugly to the Bone”, “The More You Spend, The More You Save”, and “LEED and the Not Happenin’ Energy Savings”.
Rather than developing miracles that many think are just sitting there waiting to be discovered, let’s use cost-effective technologies we have right now. Compact fluorescent bulbs use 70% less electricity than incandescent, but they still only take up 30% of unit sales with the rest being incandescent in the screw-in category. And this is in CA where programs have been running forever. Beyond that, you would be amazed at how many variable frequency drives are spinning away at or near 60 Hz (that’s full speed) because of some bonehead control setpoint; heating and cooling systems fighting one another like a car traveling down the road with the brakes applied; many pieces of large “efficient” equipment like huge air compressors online blowing off compressed air (wasting it) or otherwise running at full capacity when only a tiny fraction is needed; it’s dogs and cats living together – mass hysteria!
McKinsey determined that the U.S. can cost effectively reduce energy consumption by 23% compared to BAU (business as usual – I like that one). To become zero carbon, the first thing that needs to happen is minimize consumption through energy efficiency with existing technologies, system design, and controls optimization. Once this happens, money that used to fly out the window to pay energy bills piles up so fast that renewable sources can be purchased, even though it may not be cost effective. I’ve been through the exercise using a college campus as an example. The perverse thing is that the more money an entity is wasting on energy, the easier it is to become carbon neutral. How can this be? There is a huge cash flow going to pay energy bills. Much of that can first be cost effectively captured through energy savings. Since more waste is eliminated, more cash piles up and renewable sources can be purchased sooner as the last leg to carbon neutral. Of course you don’t want to be wasting energy in the first place, but if you are….
Why isn’t this happening? There are enough barriers and discussion to fill a rack of encyclopedias but I’ve had enough for this week.
written by Jeffrey L. Ihnen, P.E., LEED AP
There is a running joke in our business that electrical engineers don’t know anything about energy efficiency. It is only a joke. One of the sharpest energy guys I have interviewed was a physics major who started on the ground floor of an energy efficiency consulting firm filling orders of equipment they also happened to sell. In 10 years he worked his way up to really understanding how buildings and their complex systems work and he became a manager of a team of energy engineers teaching his group how buildings work and how to model them.
This article made laugh out loud. MBAs developing energy management plans and reducing businesses’ carbon footprint. Maybe I need an MBA to consult with my doctor prior to my next gallbladder surgery. I can see it now. Replace lighting in a half million square foot manufacturing plant (nothing wrong with that) and install 100 kW of photovoltaic and dedicate a focus group to reduce energy consumption. Meanwhile there are what we call piles of cash ablaze scattered about the plant in the form of process, system, and controls waste, on both the supply and demand ends of energy consuming systems.
Beyond shutting things off and installing equipment that is more efficient than option A, energy efficiency is domain of the physical sciences. The root of energy efficiency expertise is calculus, followed by physics, and core courses in thermodynamics, heat transfer, and fluid dynamics. If job candidates have anything less than Bs in any of these courses we discard them as candidates.
Arm an engineering graduate with an MBA and you may have a powerful weapon to put out these fires. An MBA could make a rousing case to embrace energy efficiency as a profit enhancer, risk reducer, and marketing tool – much better than I can. But there are already enough engineers in our business who don’t know what they are doing. We evaluate their work all the time. We don’t need political scientist MBAs cluttering up our market. I might as well look up a culinary chef to do a wheel alignment on my car. Jacque Pepin, are you available?
written by Jeffrey L. Ihnen, P.E., LEED AP
Recently, we received our umpteenth “request for proposal” (RFP) to provide the engineering required to capture the elusive $1.80 tax deduction on new or remodeled buildings. We spend a lot of time, money and effort to drive business through our doors but I’m not sure I want to see another one of these.
Like the rest of the universally incomprehensible tax code, the engineering piece of this is relatively complex. If we did this all the time, it wouldn’t be a problem. But it seems we get the next RFP just as the rules are overwritten in my long-term memory banks. What do we compare to? Does this apply to both retrofit and new construction? Does retrofit compare to new construction baselines or actual pre-project conditions? How do these partial incentives for HVAC, envelope, and lighting work? How do the two lighting approaches work? What suffices for demonstration of percent savings? Half day – gone.
To do the engineering right, which is the only way we do things, it takes a lot of energy modeling time and expense (with the exception of the isolated lighting calculation). Also, consider:
- It is impossible to save anywhere near 16.7% with envelope measures , relative to energy code, so you’re left with 50% total building savings. As a side note for COMMERCIAL buildings, in many if not most situations, it is not cost effective to save energy by adding insulation, and you can save some but not much with enhanced glazing.
- We need to save 50% of the total building consumption with HVAC and lighting, but on average per benchmark data, HVAC and lighting only account for 67% of building operating energy cost. See where I’m going with this? Your combined HVAC and lighting savings need to be 75% more efficient than baseline! There’s a reason LEED has about 50% set as the threshold to capture all possible energy points! You have to use a genius designer, perhaps have deep pockets, plus all the stars have to align for a “lucky” baseline system to have a shot at 50% savings.
- Only the lighting power density approach for a $0.60 per square foot deduction is worth pursuing.
- The threshold for the rest needs to be reduced, to perhaps 30% savings, which is still impressive and also certainly not something one can achieve without trying.
End users can get partial deductions for (1) envelope, (2) HVAC, and (3) lighting, by saving 16.7% of the total for any of the three. This 16.7% is one third of 50%..
 We are actually shooting for all 10 LEED 2.2 points on one project, but “only” 42% savings are needed for that.
written by Jeffrey L. Ihnen, P.E., LEED APNewer posts →