ACEEE Blog

How does your country rank for energy efficiency?
August 20, 2015 - 1:25 am

By Chetana Kallakuri, Research Analyst, Federal Policy


Evaluating how countries use energy provides valuable information necessary to identify energy waste, improve energy systems, and promote smarter economic growth. An efficient economy is one that minimizes its energy needs while providing better access to goods and services.

For the past 35 years at ACEEE, we’ve informed policymakers and the public to advance energy efficiency in the United States through in -depth technical and policy analysis.

We leverage this expertise to understand how other countries manage their energy. Today ACEEE released the 2015 International Scorecard Self-Scoring Tool. Anybody can use this Excel-based tool to analyze the status of energy efficiency in their country or province, and compare themselves with the largest economies of the world.

The tool is based on the 2014 ACEEE International Energy Efficiency Scorecard, which is our second comparative study of energy efficiency policies and performance across the 16 top economies of the world. Countries examined include the United States, China, Japan, Germany, France, United Kingdom, Brazil, Italy, Russia, Canada, and Australia, along with the European Union as a whole. New entrants in the 2014 race were India, Spain, Mexico, and South Korea. In the analysis, we evaluate each of these economies using 31 metrics in four sectors: national efforts, industry, buildings, and transportation. The new self-scoring tool reflects these advancements in our analysis. The tool also has a more user-friendly interface than the first version.

The self-scoring tool is accompanied by a detailed user guide and a case study on South Africa. For the case study, we collected data using centralized sources available in the self-scoring tool and collaborated with South Africa country experts. South Africa scored a total of 36/100, indicating that there is much scope for improvement of energy efficiency in all sectors. More details are available in the case study.

The biggest challenge we face in comparing energy efficiency across economies is the lack of quality data. Partly, this difficulty arises from the lack of measurement of energy use in countries. For example, the metric “vehicle miles traveled per capita” in the self-scoring tool is an indicator of fuel used for motorized personal transport. The higher this number, the more the energy consumed for personal transport per capita in the country, and hence the lower the score for this metric. Tracking such data helps not only to understand travel trends of citizens, but also to identify strategies to reduce fuel consumption and formulate policies to provide efficient modes of transport, such as trains, buses, bicycle pathways, etc., that meet the mobility needs of the citizens.

Energy efficiency indicators become all the more significant in countries looking to develop or restore their infrastructure. Directed by this information, good energy policies can strengthen energy security and transform energy guzzlers into lean and mean economies.

We welcome your feedback on the 2015 International Scorecard Self-Scoring Tool. Please direct all comments and questions to ckallakuri@aceee.org. You can also help us improve our analysis by sharing the most recent data available for your country.


Energy Efficiency in the Clean Power Plan: Take One
August 12, 2015 - 11:42 pm

By Cassandra Kubes, Research Analyst, Environmental Policy


On August 3rd, EPA released the final Clean Power Plan (CPP), a rule that sets performance rates and individual state targets for carbon dioxide emissions from existing power plants. Now that the emissions targets are set, energy efficiency plays a prominent role as a proven strategy that states can use to reduce energy, cut emissions, and boost the economy. As we have said, it’s not important that energy efficiency is no longer a CPP building block. The fact is that it’s prominently featured as a key compliance option for states in EPA’s materials (see Energy Efficiency TSD and Key Topics and Issues Fact Sheet), as a component of the rule’s Regulatory Impact Analysis, and even in the president’s speech announcing the rule.

Now that we’ve had time for a first read-through of the final rule, we’ve found some significant changes from the proposed version.

Setting targets

EPA revised several aspects of the CO2 target-setting calculation. While the resulting changes in target stringency vary by state from the proposed to the final rule, on average the new 2030 targets are slightly stronger. The final rule provides emissions targets in the form of a state average emissions rate (pounds of CO2/MWh of electricity generated), and translates the targets into a mass-based goal for each state (tons of CO 2 per year from affected electric generating units [EGUs], i.e., coal and natural gas power plants). In addition, the rule now accounts for uniform CO2 performance rates for two specific EGUs. States can choose to comply using any of one of these emissions targets. Energy efficiency and nuclear energy were both removed from the building blocks that are used to set CO2 targets, while the application and data used for the remaining building blocks (heat rate improvements, fuel switching to natural gas combined cycle, and increasing renewable energy) were altered considerably from the proposed rule.

Timeline and pathways for compliance

The timeline for compliance with the rule has been pushed back to 2022, with the final compliance deadline remaining 2030 and thereafter. In addition, states are required to meet a series of interim compliance goals in 2024, 2027, and 2029. Under the final rule, energy efficiency improvements can count if they are installed after January 1, 2013 and will still be saving energy in 2022. These savings can continue to receive credit for each year over the 2022–2030 period in which they save energy.

In the final rule, EPA identifies a variety of energy efficiency measures, programs, and policies that can count toward compliance. These include utility and nonutility energy efficiency programs, building energy codes, combined heat and power, energy savings performance contracting, state appliance and equipment standards, behavioral and industrial programs, and energy efficiency in water and wastewater facilities, among others.

States can now comply using a variety of expanded pathways. The final rule allows for rate- or mass-based compliance at the EGU or statewide level. In addition, states can choose a pathway to trade individually or with other states. Within a rate-based compliance pathway, states can trade energy efficiency savings or bank them indefinitely using Emission Rate Credits (ERCs). EPA also released a draft EM&V guidance document for states complying with demand-side efficiency using a rate-based pathway. The key item is this guidance is that states must determine energy savings relative to a “common practice baseline.” While energy efficiency strategies used for mass-based compliance do not require EM&V to be documented within a state plan, the associated energy savings will help states meet their allowance goals.

EPA has also proposed an early-credit option for states called the Clean Energy Incentive Program (CEIP). The CEIP awards early credit for low-income energy efficiency programs and certain renewable energy projects implemented in 2020 and 2021. The program offers a two-to-one match for state energy efficiency savings in order to jump-start these efforts in low-income communities.

Planning for the future

Energy efficiency will be a key component in low-cost plans as states contemplate their compliance options. State compliance plans are due September 6, 2016, but states can request a two-year extension. The final rule also requires states to incorporate the needs of low-income and underserved communities within their compliance plans, and fully engage these communities along with other stakeholders during the planning process. EPA is also requesting comments on several items that have not been finalized. These include the CEIP for early action credit and the draft federal plan for states that fail to submit a compliance plan by the September 2018 deadline, both available here. The EPA is also seeking comments on the Draft EM&V Guidance for Demand-side Energy Efficiency. The deadline for all three comment periods is 90 days after the final rule is published in the Federal Register, which likely means sometime in December. In the coming months, EPA will also be engaging stakeholders regarding the definition of low-income communities and the types of energy efficiency programs allowed under the CEIP.

Along with other organizations, ACEEE will be providing assistance to states as they develop compliance plans. We will also submit comments to the EPA regarding the outstanding energy efficiency items. Stay tuned for more information about these efforts and additional resources on energy efficiency in the CPP in future blog posts. For more resources on incorporating energy efficiency as a compliance strategy, visit ACEEE’s webpage and our joint NASEO-ACEEE State 111(d) Resource Hub.


New York’s REV: Recent filings show that energy efficiency efforts vary widely
August 10, 2015 - 8:30 pm

By Steven Nadel , Executive Director


New York State has been a leader in utility of the future efforts and embarked on a major initiative to change how it regulates energy utilities, called Reforming the Energy Vision (REV). In a blog post earlier this year, I described a major decision in the REV proceeding before the state’s Public Service Commission (PSC), and also raised some questions about the role of energy efficiency as REV moves forward.

Energy efficiency programs under REV

Under REV, the role of utilities in implementing energy efficiency efforts increases as programs operated by the New York State Energy Research and Development Authority (NYSERDA) transition largely to an upstream focus on market transformation and improving the functioning of markets for clean energy. The PSC decision early this year set 2016 energy saving goals for utilities at the same level as their 2015 goals, but stated that “longer-term goals should exceed existing targets.” In our opinion, higher targets are needed, because in recent years (e.g., 2014) NYSERDA programs have saved more energy than the utility programs. With NYSERDA changing its focus, the expanded utility programs should, at a minimum, include the savings that NYSERDA programs previously achieved. The PSC asked the utilities to prepare three-year energy efficiency plans, and for NYSERDA to describe its plans in more detail. These plans were all filed in July and this blog post summarizes ACEEE’s initial review of these plans.

Energy efficiency plans range from strong to weak

Overall, the utilities' various plans are a mixed bag. On the positive side, National Grid, the state’s second largest investor-owned utility, proposed a plan that will achieve electric efficiency savings of about 0.9% of their distribution sales in their first year and ramp up to 1.2% of sales in the third year (these calculations are ACEEE’s as described below). National Grid’s New York savings are substantially greater than the other New York utilities, but still fall short of the greater-than-2.0%-per-year savings that National Grid is achieving in Massachusetts and Rhode Island.

NYSERDA also proposed an extensive series of programs including both new “market development initiatives” and continuance of some existing programs through a transition period covering 2016, and in some cases (e.g., for multifamily buildings), through 2017. Some notable new initiatives address the energy efficiency of tenant spaces in commercial buildings, strategic energy management in industrial facilities, zero net energy and deep retrofits in both the residential and commercial sectors, and efforts to help prospective residential tenants and home buyers to assess the energy efficiency of a home or apartment before they sign a lease or contract. Also noteworthy, relative to earlier proposals, NYSERDA provides fewer funds to the New York Green Bank in the short term and instead shifts some of those funds to the latter years of the plan. The Green Bank already has hundreds of millions of dollars set aside and will not need additional capital for a while.

The plans of the state’s other large utilities, Consolidated Edison (Con Ed) and New York State Electric & Gas (NYSEG), are not as promising. Con Ed’s plan calls for energy efficiency savings of about 0.4% of distribution sales in all three years, while NYSEG’s plan also targets savings of about 0.4% of distribution sales. Both the Con Ed and NYSEG plans include only a limited number of programs with a focus on commercial and industrial rebates, small commercial direct installation, and multifamily programs. In between, with savings of 0.5-0.8% of distribution sales, are the state’s other investor-owned utilities. These percentage savings calculations are shown in the table below for all of New York’s investor-owned utilities.

  Energy Efficiency Savings as a Percent
  of 2013 Distribution Sales
Utility 2016 2017 2018
       
Con Edison 0.4% 0.4% 0.4%
National Grid (NY) 0.9% 1.1% 1.2%
NYSEG 0.4% 0.4% 0.4%
Central Hudson Electric & Gas 0.8% 0.8% 0.8%
Rochester Gas & Electric 0.5% 0.5% 0.5%
Orange & Rockland 0.6% 0.6% 0.6%

 

Source: ACEEE calculations of percentage savings targets using planned savings in individual utility plans and calculating these as a percent of 2013 electricity sales by utility as reported by the US Energy Information Administration (http://www.eia.gov/electricity/data/eia861/). Our electricity sales numbers include both bundled sales (utility procures power) and delivery sales (customer procures power and utility delivers it), but for each utility we deduct a pro rata share of sales by the New York Power Authority (NYPA) since NYPA offers its own energy efficiency programs to its customers and therefore NYPA customers are not served by the other utility programs.

PSC needs to set more explicit targets

Based on ACEEE’s review, only National Grid is following the PSC’s desire to increase their energy saving targets over time. We recommend that the other utilities also follow this guidance and plan a steady expansion of their energy efficiency programs.

Most importantly, if the PSC wants the other utilities to increase their energy efficiency savings, they will need to be more explicit in setting new targets and not just letting the utilities base their energy savings targets on past achievements. In addition, our review of the utility plans indicates that transition plans are needed for some important NYSERDA programs that will be ending as NYSERDA shifts focus. Again, the PSC should specifically request such transition plans from the utilities, such as new construction programs, and multifamily and single-family retrofits. National Grid is proposing a new construction program, but such programs are not mentioned by Con Ed or NYSEG. New construction programs are particularly important because it is generally much less expensive to build efficiency into new construction than it is to build an inefficient building and have to retrofit it later. All three utility plans mention multifamily programs, but none provide any detail on how comprehensive these will be. National Grid appears to be planning a single-family program, Con Ed is unclear, and NYSEG does not appear to have such a program in their plans.

In addition, the next phase of the REV proceeding will be very important. In this phase, the PSC plans to move toward performance-based ratemaking, where utilities will be measured and rewarded based on several performance metrics. In late July, the PSC staff released a white paper on these issues. We will comment on this new white paper in a future blog post, but for now just note that it includes performance incentives for meeting energy efficiency targets, seemingly using the modest targets contained in the utility plans.

New York has been a leader on energy efficiency for decades, finishing as high as third in ACEEE state energy efficiency scorecards over the past nine years. National Grid and NYSERDA appear to be continuing this leadership tradition. Both the PSC and the other utilities will need to step up their energy efficiency efforts in order for New York as a whole to continue being an energy efficiency leader.


Using less energy to keep drinks cold
August 05, 2015 - 8:23 pm

By Joanna Mauer, Technical Advocacy Manager, Appliance Standards Awareness Project (ASAP)


Late yesterday, the Department of Energy (DOE) proposed strong new standards that would reduce the energy consumed by beverage vending machines to keep drinks cold. The proposed standards would cut energy use by 25-65% relative to the least-efficient machines available now, and save money for schools, hospitals, hotels, and other businesses and institutions where beverage vending machines are used.

Beverage vending machines meeting the new standards, sold over 30 years, would reduce national electricity consumption by 23 billion kilowatt-hours, an amount equal to the annual energy consumption of 2.1 million US households, netting savings of $0.4–1.1 billion for vending machine property owners.

DOE set the first national efficiency standards for beverage vending machines in 2009, which took effect in 2012. The current standards apply to common beverage vending machines where the complete machine is refrigerated. The new proposed rule would update the current standards and also establish new standards for “combination” beverage vending machines, where the machine includes both a refrigerated section to cool and hold beverages, as well as a non-refrigerated section to hold snack items, for example.

A key innovative element of the new proposed standards is crediting energy-saving control strategies.

The two main types of energy-saving controls used in beverage vending machines are lighting controls and refrigeration system controls. Lighting controls automatically dim or turn off the lights illuminating the beverages and any signage during periods when a building is closed or there is low customer traffic. Refrigeration system controls allow the temperature of the beverages in the machine to rise a few degrees during periods of extended inactivity before the machine automatically returns to normal vending temperatures.

Improved components, such as more-efficient compressors and fan motors and better heat exchangers, would also help meet the new standards.

DOE is scheduled to publish a final rule by February 2016, and the new standards would take effect three years later.


Which energy efficiency policies saved the most last year?
July 29, 2015 - 12:32 am

By Steven Nadel , Executive Director


We are periodically asked how much different policies have saved and which policies have had the largest impact. In our recent report on energy efficiency progress over the past 35 years, we reviewed many current energy savings estimates and projections. Here I wanted to summarize which policies appear to be saving the most energy today, looking at estimated energy savings in calendar year 2014. Our estimates are summarized in the table below.

Approximate 2014 Energy Savings from Major Energy Efficiency Policies (quads)

Corporate avg fuel economy standards

7.3

Appliance & equipment efficiency stds

5.3

Energy Star

3.8x

Utility sector energy efficiency programs 

1.8

Building codes

1.1

Federal R&D

1.0

Energy Service Companies

0.5

Federal tax incentives

0.3

 

Notes: "Quads" is quadrillian (10 to the 15th power) Btu. The US uses about 100 quads per year.
Assume 10,000 Btu per kWh (source energy).
x ENERGY STAR savings are from 2013

Vehicle standards

Vehicle fuel economy standards generated the largest energy savings in 2014, saving an estimated 7.3 quadrillion Btu of energy (called a “quad”; by way of scale, the US uses about 100 quads of energy annually). These figures, from the Department of Transportation (DOT), represent progress since standards first took effect in 1978 under legislation passed under President Ford. Furthermore, DOT expects these savings to grow substantially in coming years as a result of new fuel economy standards that have been set in recent years.

Appliance and equipment standards

The second largest savings, 5.4 quads, come from minimum efficiency standards on appliances and other types of energy-using equipment. These estimates come from a 2012 report with updates by Joanna Mauer of the Appliance Standards Awareness Project. Congress has enacted standards on more than 50 products, beginning with legislation signed by President Reagan, and the Department of Energy (DOE) periodically revises these standards.

ENERGY STAR®

Third on the list is the ENERGY STAR program, including ENERGY STAR homes, buildings and equipment. EPA estimates that this program saved about 380 trillion kilowatt-hours (kWh) of electricity in 2013 (2014 data not yet available), which works out to 3.8 quads.

Utility sector energy efficiency programs

Fourth is energy efficiency programs funded by utility customers, and operated either by the utilities themselves or by other entities designated by states and utilities. These programs help utility customers save energy, reducing energy bills, and also help the utility and all ratepayers because saving a kWh is generally less expensive than generating a kWh. In 2013, these programs saved about 160 billion kWh (1.6 quads), and based on the increase in savings from in 2013, we estimate 2014 savings at about 1.8 quads. The data come from DOE’s Energy Information Administration as analyzed in our 35-year look-back.

Building codes

Building energy codes appear to be next on the list, saving an estimated 1.1 quads in 2014. This estimate is explained in a note at the end of this blog. Several model building energy codes were developed in the 1980s and are regularly updated, typically every three years. Most states adopt one of these model codes as a statewide code, and where a state does not have a code, major municipalities may adopt a code.

Federal R&D

Federal government energy efficiency research and development (R&D) appears to result in a similar level of savings as building codes but this estimate is very uncertain. Our figure is based on 2014 estimated savings from a 2001 study, which in turn is based on work by the National Academy of Sciences and the President’s Council of Advisors on Science and Technology. DOE has a substantial energy efficiency R&D effort that has contributed to such energy-saving products as LED lighting, electronic ballasts for fluorescent lamps, windows with special heat-reflective coatings, and advanced building analytic software. DOE has conducted more recent evaluations on individual R&D projects, but no one has compiled these recent evaluations into an estimate of the overall savings and other benefits from DOE’s R&D program.

Energy Service Companies

Energy service companies are private companies that generally identify, finance and install energy-saving measures and then manage their maintenance for the terms of their contract. Most of their contracts in the US are with municipalities, universities, schools and hospitals— institutions that are often capital short but are willing to enter into long-term contracts. A Lawrence Berkeley Laboratory study estimates they saved 0.34 quads of electricity in 2012, but we round up to about 0.5 quads to include savings in other fuels as well as savings from 2013 and 2014 projects.

Federal tax incentives

Rounding out our look at energy policies, federal energy efficiency tax incentives saved about 0.3 quads (2014 estimate from a 2011 study). Congress passed these credits in 2005 to encourage improvements in homes, appliances and commercial buildings. Many of them have since been extended.

Caveats

In reviewing these figures, several words of caution need to be kept in mind. First, these estimates come from a variety of sources and employ different methodologies. They should be considered approximate and not exact. Some of these estimates, such as for building codes and R&D, are highly approximate as discussed above. Second, there is likely some overlap between these savings estimates, and thus these figures should not be summed without adjusting for overlaps. In particular, there is likely overlap between ENERGY STAR, tax incentives, utility-sector programs, and energy savings performance contracts.

Policies and Markets

In our paper looking back on the past 35 years, we estimated that in 2014, energy efficiency measures implemented over the previous 35 years reduced US energy use by about 58 quads. Savings from the eight policies discussed here probably total a little under 20 quads (they total 21 quads but we round down due to overlap between policies). The remaining savings of about 40 quads are likely due to a combination of market forces as well as some policies not cataloged here, with the market forces probably dominant.

Our 35 year review concluded that many factors have driven energy efficiency gains, including market forces, policy impacts, and the interplay between the two. This blog post reinforces that conclusion, showing the large impact of policies, and the probably even larger impact of market forces. But without the direct impact of policies, and the indirect impact of policies on market forces, our energy savings would have been smaller, and our energy use and energy bills substantially higher. Going forward, we need to pay attention to both policies and market forces, and the productive synergies between them.

A Note on Savings from Building Energy Codes

Savings from building codes are approximate and are estimated from two sources. The two estimates are very similar, providing some assurance they are reasonable.

First, in 2004, we estimated savings in 2000 from codes adopted in the 1980s and 1990s, and also projected savings in 2020 from codes. We used these figures to estimate savings in 2014 by taking the estimate of 2000 savings from that report (0.537 quads), plus taking a portion of 2020 estimated savings based on construction through 2013, resulting in an estimate of 1.14 quads saved in 2014. The 2004 report estimated 0.935 additional quads in 2020, and we took 9/15 of these estimates, since the original estimate included 15 years of construction, nine of which took place by the end of 2014. The 2004 estimate for 2020 included projections of future code stringency and adoption and compliance rates. In retrospect, we were too conservative on stringency and a little too aggressive on adoption and compliance, but a back-of-the-envelope estimate indicates that these effects roughly offset each other.

Second, in 2014, Olga Livingston from Pacific Northwest National Laboratory, along with co-authors, estimated the impact of the DOE Building Energy Codes Program. For 2014 they estimated savings of 0.57 quads. However, their estimate did not include four states (California, Florida, Oregon, and Washington, since DOE had little impact on these states); their estimate excluded an estimate (details not available) on what states would have done without DOE support; and their estimate did not include codes developed prior to 1992. We made rough estimates to adjust for these three factors. For the four states, we added to the savings based on the population in 2014 of these four states relative to the other states, adding 25%. For state actions not due to DOE, we added 30%, which is just a guess. For savings from pre-1992 codes, we took half of Nadel’s estimate for 2000, as this estimate included pre-1992 codes. After all three adjustments, the estimated savings from codes in 2014 totals 1.19 quads.

Both of these estimates are highly approximate, so rather than round up to 1.2 quads we round down to 1.1 quads. Better estimates of energy savings from codes would be useful. Tentatively, PNNL tells us that they are planning to do such an analysis in 2016.


Three cheers for Maryland!
July 27, 2015 - 10:05 pm

By Brendon Baatz, Sr. Research Analyst, Utilities, State, and Local Policy Program


Last week the Maryland Public Service Commission released its long-awaited order on several key energy efficiency issues. The decisions in the order placed Maryland in the forefront of national energy efficiency leadership. Several key decisions highlight how important energy efficiency is to the future of the state of Maryland, and the value the Public Service Commission places on using energy efficiency to save customers money, reduce environmental pollution, and reduce utility costs. ACEEE worked closely with a large coalition of energy efficiency advocates to propose recommendations for several of the key issues in the order.

Here are highlights from three key decisions in the order:

2% Annual Savings Goal

The order established a new annual energy savings goal of 2% of baseline retail weather-normalized gross electric sales for each utility, for the five largest electric utilities in the state. Each utility will have until 2020 to reach the 2% annual goal, with a requirement to update 2017 efficiency plans to ramp up 0.2% annually to reach the goal. The new energy savings goal departs significantly from the previous goal, which required utilities to achieve per capita energy savings of 15% by 2015. The 2% goal puts Maryland in line with other leading states, such as Massachusetts, Rhode Island, Arizona, and Vermont, in terms of energy savings targets.

Cost Effectiveness Standards

The order also established new standards for testing programs for cost effectiveness. The cost effectiveness rules are critical because these tests produce one of the metrics that determine which programs a utility will offer. Previously, Maryland primarily relied on the total resource cost test to screen programs. Now, the societal cost test will also be used to evaluate programs. This test considers costs and benefits of a program from a societal perspective and is not as limited as the total resource cost test, which only includes a narrow list of benefits. In short, the societal cost test is a better indicator of the value of energy efficiency programs because it considers a broader perspective. The societal cost test will also rely on a different discount rate than the total resource cost test. A discount rate is used to calculate the benefits of a program in the future and is an extremely important part of the program screening process. If the discount rate is too high, the benefits in later years will appear to be less than they really are. The societal test will use a lower discount rate meant to represent the value of future benefits from a societal prospective. A lower discount rate is also better in this case because it reflects the reduced level of risk a utility takes on when making investments in energy efficiency.

Multiple Benefits

The order also directed utilities to include the multiple, non-energy benefits of energy efficiency when evaluating programs, such as increased comfort, reduced utility carrying cost for arrearages, and air pollution benefits (for more information on this topic, see our recent reports on the multiple benefits of energy efficiency programs in the multi-family and business sectors). The non-energy benefits approved by the Commission include multiple benefits beyond the societal prospective, including participant and utility-specific non-energy benefits. While the number of states including multiple benefits has increased in recent years, still only a handful of states consider these valuable benefits in program screening. The inclusion of multiple benefits is important because it allows consideration of all relevant benefits when implementing energy efficiency programs. Excluding benefits can have adverse impacts on resource selection and lead to higher costs for customers when higher-cost resources are used instead of lower-cost efficiency.

State of the Future

This landmark order will have positive effects on the state of Maryland for years to come. The EmPower Maryland energy efficiency programs have been highly successful to date, and the Commission’s guidance in this order will only bolster the success of the programs. The order also directed working groups to propose specific energy savings goals for natural gas utilities and limited-income electric programs. The goals will drive greater performance in both of these areas, providing reduced costs and substantial benefits to all utility customers in Maryland.


Congress takes three steps forward with energy efficiency bills but finish line unclear
July 23, 2015 - 8:43 pm

By Steven Nadel , Executive Director


This week has been an active one for energy efficiency on Capitol Hill. Yesterday Senate Energy and Natural Resources Committee chair Senator Lisa Murkowski (R-AK) and ranking member Senator Maria Cantwell (D-WA) released a draft energy bill, with one out of the four titles focusing on energy efficiency. Also yesterday, the Energy and Power Subcommittee of the House Energy and Commerce Committee approved an energy bill, including several energy efficiency provisions. And the day before, the Senate Finance Committee approved extensions of a variety of tax incentives, including three that address energy efficiency. These actions are only early steps in the process of enacting legislation, but progress on three bills in one week is certainly notable.

Senate and House release bipartisan energy bills

In terms of specifics, the Senate energy bill incorporates many of the provisions in the bipartisan Energy Savings and Industrial Competiveness Act introduced by Senators Portman (R-OH) and Shaheen (D-NH). Particularly notable is a provision to assist states and voluntary code organizations to improve building energy codes. Other provisions added to the committee bill include sections to encourage smart buildings and smart manufacturing that ACEEE helped to develop, a pilot grant program for non-profit organizations including religious institutions, improvements to programs that use energy service companies to finance energy efficiency improvements in federal facilities, and reauthorization and updating of the federal Weatherization Assistance Program and State Energy Program. On the other hand, we are troubled that the bill does not include a provision from the Portman-Shaheen bill, the SAVE Act, which would encourage recognition of energy savings when efficient homes are financed with mortgages.

The energy efficiency portion of the House bill has many fewer energy efficiency provisions than the Senate bill. It includes provisions on energy-saving information technologies, energy-efficient data centers, coordination of energy retrofitting assistance for schools, and reauthorization of the Industrial Assessment Center program that are also in the Senate bill. In addition, the House bill includes a provision that is not in the Senate bill to add information to appliance Energy Guide labels for products that have smart grid capabilities. Also notable is the fact that the House bill only includes provisions that are bipartisan—we were concerned that some provisions might be included that would hinder efficiency improvements in building codes and equipment efficiency standards.

Despite all the activity this week, the path to law for the energy bill is uncertain. The Senate Energy Committee will consider amendments to its bill next week, and the full House Energy and Commerce Committee will likely consider amendments in September. The House committee leadership has indicated that a variety of partisan issues will be considered then. In both the House and Senate there is a risk that partisan amendments to the bills on efficiency or other issues will endanger their support, or that the bills will simply get lost amidst other issues. But the committees have defied political considerations to keep a bipartisan process so far.

Bill to extend tax incentives includes energy efficiency

The Senate Finance Committee bill extends a variety of energy efficiency tax incentives until the end of 2016. Most of the efficiency tax incentives expired at the end of 2014, and are described here. Included are new home, commercial building, and residential upgrade incentives. The bill, if enacted into law, will cover efficiency investments made in 2015 and 2016. For the most part the bill just changes the expiration dates, but it does include a number of other changes. On home upgrades, it updates and improves the qualification levels for residential window, water heater, boiler, cool roof, and wood stove incentives, and expands the credit to cover labor costs. The bill also modifies the baseline for calculating commercial building incentives; and permits tribal governments and non-profit organizations to transfer eligibility for the incentive to the person designing the property, since the incentive is not useful to organizations that do not pay taxes. Details on what the committee did can be found on pages 6-7 here.

For the tax incentives bill, the House has indicated it is in no hurry and will not work on a bill until fall. It is unclear whether a tax incentive bill will ultimately be voted on by the full Senate and House, or whether tax incentive provisions will be added to some other major piece of legislation such as an appropriations continuing resolution or omnibus year-end package. It is also possible the House will do something different than the Senate; last year, the House passed a simple extension without any changes, but the committee chairman has also talked about seeking more substantial tax changes such as a “down payment on tax reform” this fall.

Outlook: cloudy but possible sunshine

While it’s too early to know what the final results could be, this week’s promising actions begin to fill in the possible contours of energy efficiency legislation for this year. But we are early in the process and there are many twists and turns in the legislative path ahead. ACEEE, and many of our allies, will be working hard to get the best possible legislation for energy efficiency across the finish line.


We need your data!
July 16, 2015 - 8:50 pm

By Ethan Rogers , Senior Manager, Industry


ACEEE is participating in a collaborative effort to develop new energy performance labels for pumps, fans, and compressors that will become the basis of a new type of energy efficiency program with prescribed savings values. Our Industry Program has joined with the Hydraulic Institute (HI), Air Movement and Control Association International (AMCA), Compressed Air and Gas Institute (CAGI), Fluid Sealing Association (FSA), National Electrical Manufacturers Association (NEMA) and a dozen utilities and energy efficiency programs to get this initiative underway, which ultimately will provide incentives to commercial and industrial energy consumers to purchase more efficient pumps, fans, and compressors.

The Extended Motor Product Label Initiative (EMPLI), which has been described in detail in a prior post, has reached the point where product category-specific application and operational data is needed by the working groups to determine the average potential savings. We are starting with collecting water pumping system operating hours and loads. This information will be used in program proposals to state public service commissions to document that labeled products save energy.

To collect, anonymize, and aggregate the data, the collaborative is working with the Hydraulic Institute and NEMA Business Information Services (NEMA Biz). A data collection sheet is available on the HI website for download, and NEMA Biz has been contracted to confidentially collect and analyze the data. Organizations interested in participating need only download the data collection form from HI’s webpage for this effort, fill it out, and submit it electronically to NEMA Biz at harrisons@nema.org. All individual company data will remain secure and will not be shared with anyone. The data being requested by the EMPLI pump working group is general in nature: hours of operation, percentage loading, product performance, and markets served. NEMA Biz will anonymize and aggregate the data and then provide it to the EMPLI pump working group in the form necessary for state public utility commissions to be able to use for program justification and evaluation.

Organizations that participate will also receive a copy of the aggregated data. This information will provide insights into the marketplace and enable participants to position their products for new utility-sector funding opportunities. The better the data, the more complete the report will be for all involved.

Collection of operational data is necessary for the success of the EMPL Initiative. The goal of this collaborative effort is the development of new voluntary product performance labels that can be used as purchasing specifications by companies and public institutions, and that can become the basis for an entirely new type of prescriptive rebate energy efficiency program that attributes or “deems” an average energy savings to a qualifying product.To all the companies that serve the commercial and industrial sectors, we join HI in requesting your participation in this survey. And to all who participate in this data collection effort, a big “Thank You!” from all of us participating in EMPLI. This is an important effort for the industrial energy efficiency community; so let others know and please forward this notice!


The E2e weatherization study: generating more heat than light
July 02, 2015 - 2:00 am

By Steven Nadel , Executive Director


A recent academic working paper on the low-income weatherization assistance program in Michigan, by researchers associated with the E2e project, has created much controversy. My colleague Marty Kushler recently published a blog post criticizing the paper and its accompanying policy brief; many others have done the same (see links at the bottom to read more). As the critiques have noted, there are two primary concerns with this paper:

1. The paper looks at one program in one state and inappropriately seeks to apply the results to all residential energy efficiency programs.

2. The evaluation focuses only on energy savings and ignores the fact that low-income weatherization is not only designed to save energy, but also has other objectives, such as improving occupant safety, health and comfort, addressing structural problems in homes, and reducing utility bill arrearages.

In this blog post, I’d like to take a broader look at some important issues this paper raises, building on these two points and also raising a couple of additional issues.

Methodology

First, parts of this study use an experimental research design called a randomized controlled trial, where researchers define a pool of eligible customers and randomly assign some of the eligible customers to a treatment group and some to a control group. In this way the treatment and control groups are identical. This is a powerful research approach but also has an Achilles heel: you cannot generalize the findings to households and programs that are different from those that you studied, because different types of households and different programs can have characteristics that would change the findings. In this case, they looked at weatherization of low-income households in a few counties in Michigan, and the results cannot be generalized to other states, to other programs, or to other income groups.

To illustrate the point, a study by Oak Ridge National Laboratory is looking at 30,000 homes that participated in the low-income weatherization program across the country (and not just one state). Preliminary results from this study find that, relative to a control group, benefits are on average about 1.7 times the cost––a very different result from the E2e study. While there are some differences between E2e’s approach and the quasi-experimental approach used by Oak Ridge, the big difference is in geographic coverage.

Missed benefits

Second, many energy efficiency programs and investments serve multiple purposes. To compare all costs against only some benefits is to bias the analysis. In this case the paper in one place seeks to assign all the costs to energy savings and in another place puts all the costs on carbon reduction; nowhere do they look at other important benefits of the program. To fairly evaluate such programs and investments, either all of the benefits need to be quantified and compared to the full costs, or if only energy benefits are quantified, then only the incremental costs of the energy efficiency improvements should be counted. Given that the weatherization program being studied is deliberately intended to achieve multiple benefits beyond simple energy savings, a more comprehensive assessment of benefits should have been done.

Market-only agenda

Third, it appears that one of the aims of this study was to discuss the most efficient approaches to reducing greenhouse gas emissions (this is the title of item #1 in their policy brief). In the brief they recommend market-based approaches like cap-and-trade programs and carbon taxes. While ACEEE supports such market-based approaches, we recognize the need to use multiple approaches to substantially reduce greenhouse gas emissions, including energy efficiency programs. The country will also need to use multiple approaches in order to meet broader energy and social goals. A carbon tax is unlikely to do much to address the needs of low-income households, just as greenhouse gas reduction is not the main purpose of low-income weatherization. Rather than tear down one approach at the expense of another, it would be useful to assemble a set of complementary approaches, using evaluation to make each approach as good as it can be. Biasing research, even toward a noble end, can undercut efforts to build support and find “win-win” synergies.

Missing review

Fourth, this paper is labeled a “working paper.” It has not yet been peer reviewed. Rather than release an un-reviewed study to the press to great fanfare, it would have been much more appropriate to share the results with energy efficiency evaluation and low-income weatherization experts (and not just economists) to get feedback on the draft report, learn about any problems with the draft study, and revise the study to address the problems. The issues that are being raised on many blogs regarding the E2e paper would have been much better raised in a peer-review process, rather than in the press and other public forums. This is not the first time we have had to criticize unbalanced research or inappropriate spin coming out of E2e (for other examples see here and here). The authors are all university professors; we presume this is not the way they are teaching their students to publish research.

Michigan, Wisconsin, and the media

What does this mean going forward? While we strongly support research to determine how well energy efficiency programs are functioning in practice, we hope that the E2e project does a better job in the future to seek external review before they release their findings. They should also fairly balance both the energy and non-energy benefits and costs of the programs they examine.

They can start in Wisconsin. One of the authors of the Michigan study told the Associated Press that he is finding similar results in a study of middle-income homes in Wisconsin. We strongly suggest that this new study receive expert review before it is released, and that it consider non-energy costs and benefits. Expert-reviewed research by ACEEE and others has found that non-energy benefits are also prevalent in middle-income homes. It also bears noting that middle-class weatherization, like low-income weatherization, is relatively expensive. It would be doubly irresponsible to generalize the new results to other energy efficiency programs, after picking two of the most expensive examples. For a little perspective, Lawrence Berkley Laboratory found in a recent report that whole-home weatherization programs cost utilities an average of 9.4 cents per kWh saved, while the average residential program costs only 3.3 cents per kWh saved.

We hope that the press is much more careful when it examines future E2e papers. While there is some excellent research coming out of this project, there are also a distressing number of questionable papers. Good research is immensely valuable, but poor or mischaracterized research can be far more harmful in the short term, given the media’s penchant for counterintuitive stories. The result is to hinder the ability to make rational policy decisions.

Click on the links below to read more discussions on the study.


Continuing the conversation on efficiency and the water-energy nexus
July 01, 2015 - 2:06 am

By David Ribeiro, Senior Analyst


How much energy does it take to fill a glass with drinking water? If you take into account the energy to transport the water from its source through the treatment and distribution process and into your faucet, there’s a lot of embedded energy that goes into that glass of water. And that’s not even getting into any energy used in the wastewater treatment process.

It’s a simple question, but a challenging one to answer. It’s valuable, though, for water utilities to better understand the embedded energy in their systems so they can reduce costs, improve energy efficiency, and quantify the avoided energy and pollution savings that accrue from water efficiency programs. And it’s all the more important with the exceptional drought spreading across the West.

ACEEE researched this topic in a white paper released last year, Watts in a Drop of Water: Savings at the Water-Energy Nexus, which gathered data from existing literature on energy savings associated with water savings. Today we’re releasing a new paper, A Survey of Energy Use in Water Companies, representing the next step in our research. The paper presents data we collected, in collaboration with the National Association of Water Companies (NAWC) , on the energy required to treat and distribute water. The data was collected through a survey to some of NAWC’s member companies.

The response was not as high as we hoped, but we received real-world data from a selection of water utilities on how they use energy by activity, such as source/conveyance, treatment, and distribution. We also quantified how energy intensive these water companies’ processes are by examining the amount of energy required to process a million gallons of water. The results are similar to our past research, showing the mean energy intensity of our sampled water systems to be 2,300 kWh/million gallon.

The energy consumption of water can vary dramatically in the water service sector (source, conveyance, and treatment) due to a variety of factors, including the size of the water system, pumping requirements between geographic locations, and raw water characteristics. But variations also suggest room for improvement in how efficiently these systems/companies use energy to process, treat, pump, and distribute water. Most companies we surveyed have begun efforts to improve their energy efficiency through measures like energy audits of their facilities, capital investments in energy efficiency measures, and operational improvements. However, while several companies have leak-detection programs to reduce drinking water losses through pipe systems, fewer companies have embraced water conservation programs. In the survey, we asked about various potential conservation efforts including water audits for customers, direct installs of water saving technology, and water conservation incentives. Because energy is embedded in water through the water system, water conservation programs save energy and shouldn’t be overlooked.

We still need more data on the energy intensities of systems to build out this analysis. But one thing is clear: while a few respondents to our survey are ahead of the curve, there are more opportunities for greater energy efficiency, water conservation, and joint-program partnership between energy and water utilities.