Progress on commercial building energy efficiency has been good, but more attention needed to decrease waste in several areas
July 01, 2016 - 9:26 am

By Steven Nadel , Executive Director

Data recently released as part of the Commercial Building Energy Consumption Survey (CBECS) highlights changes in commercial sector energy demand between 2003 and 2012. The Energy Information Administration conducts CBECS approximately every five years, and examines in depth a nationally representative sample of thousands of commercial buildings.  Overall, energy use per square foot of floor area is down by 12%. Great strides have been made in reducing energy use for lighting (see our previous blog post) and space heating. Regarding space heating, the reduction is due to both greater use of energy-saving technologies and practices, as well as higher growth in building floor area in the south, which accounted for 39% of commercial building floor area in 2012, up from 37% in 2003.

But it is also notable that some building energy end-uses have gone up over the past decade. As we have previously discussed, energy use for computers, office equipment, and “other” uses is up (see the figure below which highlights changes in energy use since 2003 by end-use). Use for cooking and refrigeration is also up, mirroring growth in the food service and food store sectors. We’re eating out more, and buying more prepared and refrigerated foods—data from the Bureau of Labor Statistics shows that food store employment is up 12.7% over the past decade, more than double the growth in all employment. And cooling and ventilation energy use are also up, although the growth in cooling is very modest given the fact that CBECS found that 45% of all commercial new construction since 2003 has been in the south where cooling needs are particularly high. 

Total commercial energy consumption for lighting and other end-uses, 2003 and 2012

Source: EIA 2012 CBECS results

What does this mean for energy efficiency? These findings show that efficiency efforts can work, as shown for lighting and space heating. And cooling energy use growth would have been much greater if not for gains in cooling equipment efficiency and other cooling efficiency measures. But these findings also indicate that we need to pay more attention to areas of growing energy uses including cooking, refrigeration, ventilation, office equipment, and other miscellaneous uses. While efficiency progress has been made in these areas (e.g., efficiency standards for commercial refrigeration equipment and ENERGY STAR® programs for both commercial refrigeration and cooking), greater effort is needed. We need to better understand how this energy is used (a just released DOE report on commercial appliances should help), continue to develop new technologies and practices to reduce this use, and develop program and policy approaches to speed up dissemination of these new technologies and practices.  Progress on lighting and space heating help show that with added attention, we should be able to tame even these growing energy uses.

Data Points is a blog series focusing on the graphs and other images that tell the energy efficiency story.


Pennsylvania’s large utility customers shouldn’t opt out of paying their fair share to reduce energy waste
June 28, 2016 - 12:17 pm

By Ethan Rogers , Program Director, Industry

Currently there is an attempt in Pennsylvania’s statehouse to allow large utility customers to shirk their responsibility to reduce their energy waste. Senate Bill 805 would allow large industrial and commercial companies to opt out of Act 129, the Pennsylvanian statewide initiative to create a more energy-efficient economy. Similar ideas have been floated in the state before, but now things are moving fast and this week may see a decision on whether large customers are relieved of their responsibility to pay their fair share for energy efficiency investments that benefit the entire state.

Huge benefits could be endangered

Energy efficiency programs are largely paid for by ratepayers in the form of a small fee on their bills or a small amount embedded in their rates. These fees are then aggregated to fund cost-effective energy efficiency programs and projects across all sectors. These programs lead to huge benefits, especially when everyone participates. To date, Pennsylvania’s energy efficiency programs have created about 57,000 jobs within the state, and saved customers at all sizes more than $750 million on their electricity bills. Energy efficiency has significantly lowered the costs of electricity in Pennsylvania, and it is in the interest of all customers, large and small, to ensure that these investments continue.

But reaping the full benefits of energy efficiency could be in doubt if Senate Bill 805 goes through. When large utility customers opt out of efficiency programs, it affects everyone. Large customers represent a singular opportunity for low-cost energy savings for ratepayer-funded energy efficiency programs. This opt-out legislation allows large customers to fully opt out of paying their energy efficiency fees with no corresponding obligation to make energy efficiency investments on their own. That means other customer classes will have to carry the full burden of meeting state efficiency targets, or if the targets are lowered, pay for the generation and transmission that will be needed to serve a less energy-efficient economy.

Opting out will decrease Pennsylvania’s expertise and knowledge base

An opt-out also means that large customers are ignoring an important opportunity. In general, investments in energy efficiency lower operating costs for manufacturers, which increases their productivity and improves competitiveness. When these investments are made through utility programs, businesses get the added value of access to technical expertise, project implementation support, and financial incentives that reduce initial costs. In effect, they invest in projects that they would not do on their own.

Supporters of such legislation may claim otherwise, but on multiple occasions we have debunked the reasons they give—myths if you will—for exempting large customers from contributing their share. Most recently in a series of fact sheets that describe the value of including industrial energy efficiency programs to a state’s efficiency and economic development efforts, and how to design effective energy efficiency programs for large customers. Over the years, our analysis has proven the cost effectiveness of energy efficiency in comparison to conventional resources.

Everyone should pay their fair share for benefits they enjoy

Pennsylvania currently ranks 17th in ACEEE’s 2015 State Energy Efficiency Scorecard, rising three positions from 2014, a notable achievement. The state should be looking to advance, not backslide on its progress to deliver benefits to all residents by reducing energy waste. It is important for everyone who benefits to participate in making the Pennsylvania economy more energy-efficient. Allowing large customers to opt out will transfer their responsibility to other consumers and may increase the cost of electricity and decrease the number of jobs that could be created in the Keystone State.

Celebrating 40 years of saving energy and training students in industrial efficiency
June 17, 2016 - 10:18 am

By Meegan Kelly, Senior Research Analyst, Industry Program

Industry has been important to the American economy since the earliest days of our country and the strength of the manufacturing sector is a priority for the US government and members of Congress. In a Senate briefing last week, staff on Capitol Hill attended a presentation celebrating the success of the Industrial Assessment Centers (IAC) program, a little-known and long-standing initiative funded by the US Department of Energy (DOE) that helps small manufacturers save energy while training the next generation of energy efficiency engineers.

As part of the IAC program’s 40th anniversary, hill staffers from more than 10 Congressional offices convened for a briefing organized by Senator Jeanne Shaheen (D-NH) to learn about the program’s achievements. Since the program was founded in 1976, teams of students at 24 of the top US engineering schools have conducted more than 17,000 free energy assessments, and helped small and medium-size manufacturers save more than $1 billion in energy costs and enough energy to power over 1.4 million homes. To emphasize these successes, Senator Shaheen and Senator Lamar Alexander (R-TN) submitted a formal recognition resolution commending the value the IAC program has brought to both manufacturers and engineering students.

Dr. Kathleen Hogan, Deputy Assistant Secretary for Energy Efficiency for DOE, spoke at the briefing and described the program’s critical role within the department and shared her perspective on how we can ensure that the momentum continues for the next 40 years. IAC Technical Field Manager Dr. Michael Muller from Rutgers University and Dr. Sudhakar Neti, assistant director of the IAC at Lehigh University, also spoke at the event and shared stories about what it is like to work with students in the field. Another speaker, Bert Hill, manager at Volvo Group North America, explained the benefits his company received after IAC energy assessments were completed at five of their plants over the last three years.

A study commissioned by the DOE last year evaluated the performance of the program over fifteen years (1997–2013) and confirmed the measurable impact it has had on both energy savings and job skills development. The efficiency recommendations implemented by companies yielded over 480 MBTUs annually for every federal dollar spent, all while developing a pipeline of talented engineers who are trained in energy efficiency with skills that are highly valued in the job market. Several IAC student alumni who graduated from the program and work today as energy efficiency engineers also attended the briefing.

The future of the IAC program is bright and DOE is currently reviewing applications from universities to select which ones will host centers for the next five years. Hosting an IAC can have a large impact on a university and the territory that the center serves, so universities compete to host a center and partner with utilities, government, and local manufacturing groups to make compelling proposals. DOE will invest approximately $35 million in those centers over that five-year period. 

Energy efficiency makes Clean Power Plan goals very achievable
June 10, 2016 - 10:00 am

By Sara Hayes, Sr. Manager and Researcher, Air and Climate Policy

The Environmental Protection Agency has finalized state-specific limits on greenhouse gas emissions from the power sector. States can get most, if not all, of the emission savings they need by reducing the amount of electricity they are currently wasting. In the graph below, the light orange bars show that the listed states can achieve more than half of EPA’s 2030 limits with a few modest energy efficiency measures: 1% annual savings target, updated building codes, and 100 MW of new combined heat and power. The red bar shows the money saved by businesses and households when they spend less on their utility bills. In every single case, implementing efficiency measures costs LESS than building new generation to meet demand. All of this data comes from the SUPR2 calculator for states. It’s really easy to use. Try it out!

For more information on energy efficiency and the Clean Power Plan, visit our Clean Power Plan topic page.

Data Points is a blog series focusing on the graphs and other images that tell the energy efficiency story.


Energy efficiency lowers costs in recent PJM capacity auction
June 01, 2016 - 10:00 am

By Brendon Baatz, Manager, Utilities Policy

Energy efficiency provides many benefits to the electric utility system. One of these benefits is reducing the market price for electric generation. PJM Interconnection, the operator of the largest electric grid in the United States serving approximately 61 million people, wrapped up its most recent generation capacity auction last week. This auction determines the price paid to power plants three years in the future. The clearing price in last week’s auction was far below expectations and nearly 40% below last year’s clearing price. This is in large part due to new natural gas power plants and energy efficiency.

Approximately 1,515 MW of energy efficiency cleared the auction, the largest amount ever. In terms of total clean energy alternative resources to clear the auction, energy efficiency had the highest amount of capacity, substantially more than solar (335 MW) and wind (969 MW). The complete results can be found here.

The results of this capacity auction are great news for two reasons. First, the result highlights how system planners are utilizing energy efficiency as resource able to provide sustained and predictable energy and reserves. The fact that energy efficiency cleared a substantial amount of megawatts under new requirements called “capacity performance” underscores the confidence of system planners in energy efficiency to reliably meet system load. 

Second, energy efficiency reduces costs for the entire PJM footprint. If efficiency had not participated in this auction, the clearing price would have been higher. While the economic value would have varied by resource zone (PJM is broken up into several geographical zones), many zones would have faced higher prices from other forms of generation. While the specific offer prices in the auction are confidential, Exelon (the largest utility company in the country) has publically stated two of its largest nuclear plants did not clear, meaning they are not economically competitive in the PJM marketplace. Given that energy efficiency savings are at the margin, these resources have provided substantial economic savings to millions of customers in the PJM footprint.

Capacity performance and why it’s important

The resources cleared as capacity performance included: approximately 139,000 MW or 89% of traditional generation (including solar and wind), 614 MW or 6% of demand response, and 1058 MW or 70% of energy efficiency.  Capacity performance is a new resource designation in the PJM footprint. It is a much more stringent requirement than in previous auctions. Essentially, it requires a resource to be “capable of sustained, predictable operation, and is expected to be available and capable of providing energy and reserves when needed throughout the entire delivery year.” The majority of efficiency resources met this requirement demonstrating efficiency can serve as a reliable system resource in the same way as nuclear, natural gas, or solar generation. 

Energy efficiency in prior PJM auctions

Energy efficiency has been participating as a resource in the PJM capacity market since 2009. The chart below shows the total amount of energy efficiency that cleared the last eight auctions. The delivery year is three years from the year of the auction. From delivery year 2012/2013 to 2019/2020, the level of energy efficiency resources clearing the auction has nearly tripled increasing from 568 MW to 1515 MW. These also only include efficiency that has not been reflected in the peak load forecast for the year in question, meaning there are additional savings not included.

Energy efficiency in future capacity markets

The level of energy efficiency to clear the PJM capacity market has increased nearly every year since 2009. This week’s auction emphasizes the critical role energy efficiency will play in the region as natural gas prices continue to reshape the national electric generation fleet. We expect the level of efficiency to clear this market to continue to grow in future auctions further suppressing the market prices for generating capacity in the region. This in turn will reduce system costs for customers for years to come.

New York REVs up as commission includes efficiency in earnings opportunities; efficiency targets to be decided later
May 26, 2016 - 9:36 am

By Steven Nadel , Executive Director

Last week the New York State Public Service Commission (PSC) released its final decision in Phase 2 of the Reforming the Energy Vision (REV) proceeding. REV is the New York initiative to reform the utility industry by building the rules that govern the utility system of the future. Phase 2 of the proceeding dealt mostly with financial issues, particularly how utilities can earn money. Several aspects of the decision affect energy efficiency, chiefly the inclusion of energy efficiency in an “earning adjustment mechanism” and a pledge to “develop targets for energy efficiency beyond [existing plans and targets].”

The heart of the decision is establishing two new earning opportunities for utilities – platform service revenues and earning adjustment mechanisms.

Platform service revenues

According to the decision, “[p]latform service revenues [PSRs] are new forms of utility revenues associated with operation and facilitation of distribution-level markets. In early stages, utilities will earn from displacing traditional [distribution] infrastructure projects with non-wires alternatives. As markets mature, opportunities to earn with PSRs will increase.” Among the non-wires alternatives utilities can use are energy efficiency, demand response, distributed generation and storage.

Earning adjustment mechanisms

The new earning adjustment mechanism is a type of performance-based ratemaking—a system where utility earnings are adjusted up or down based on performance on specifically-defined metrics. The REV2 decision specifies four categories of earning adjustment mechanisms: system efficiency (achieving peak reduction and load factor improvement targets), energy efficiency (discussed below), customer engagement and information access (providing tools and opt-in rates and use of these tools and rates), interconnection (ease with which third-parties can connect to the grid). Additionally, the commission decided that affordability issues are important and will receive attention in other dockets. In addition to the energy efficiency metric, energy efficiency can contribute to the system efficiency metric and to addressing affordability issues.

For the energy efficiency category, the PSC specifies that one of the metrics should be based on electric usage intensity (e.g., electric use per customer), but that additional metrics can be developed, including ones based on program-specific savings, cost-savings, and innovative efficiency measures that address the PSC’s strategic goals. The next step in this process is for the Clean Energy Advisory Council (CEAC, a group of state officials, senior utility executives, and perhaps others) to develop recommendations on energy efficiency targets and earnings mechanisms for meeting and exceeding those targets. In another proceeding, the PSC has asked the CEAC to develop recommendations by the end of the year.

Looking beyond earnings

The decision also addresses greenhouse gas reductions, competitive market-based earnings and data access. The greenhouse gas section notes a separate Clean Energy Standard proceeding (addressing renewable and nuclear energy) but also says that “[u]tilities will… be encouraged to propose programs to accelerate the conversion of transportation and building end uses to efficient electric alternatives.” This provision could include efforts to promote electric vehicles or cold climate heat pumps. On competitive market-based earnings, the decision allows utility subsidiaries to compete in markets provided they meet five criteria specified in the decision (at page 49) and implement standards to avoid affiliate abuse. This provision might, for example, affect utility subsidiaries that develop combined heat and power systems at customer facilities. The data access section requires utilities to make certain basic data available for free but utilities may charge a fee for more refined data or analysis.

In addition, the decision also addresses rate-setting, encouraging residential opt-in time-of-use rates and specifying that future rate cases will examine ways to make demand charges for commercial and industrial customers more time-sensitive. The decision also asks PSC staff to work with stakeholders and report to the commission on possible residential opt-out variable rate scenarios including time-of-use rates, demand charges and peak-coincident demand charges. “Opt-in” means customers must make a proactive decision to enroll, which typically means low participation rates. “Opt-out” means customers are automatically enrolled, but can make a proactive decision to opt-out. Participation rates are generally much higher with opt-out.

Many decisions to be made later

Overall, the PSC decision contains some promising opportunities for energy efficiency, although how extensive the opportunities are will be determined over the balance of this year by the Clean Energy Advisory Council and subsequent PSC decisions addressing such issues as setting energy efficiency targets and earnings incentive mechanism details. ACEEE hopes that CEAC will recommend strong energy efficiency targets and earnings mechanisms, which is the combination ACEEE finds deliver the largest savings.

The full PSC decision can be found here. It includes a summary beginning on page 23.

To check progress toward 2025 fuel economy targets, we took a look at the Ford F-150
May 24, 2016 - 10:00 am

By Siddiq Khan, Senior Researcher

Recent press accounts of automobile fuel economy trends express concern that light trucks won’t be able to keep up with rising fuel economy (CAFE) standards. While most new model passenger cars are years ahead of their CAFE targets, only 40% new model pickups and SUVs are 2016 CAFE compliant. But sales of pickups and SUVs have surged in 2015, and this surge is likely to continue in 2016. Meanwhile, fuel economy and greenhouse gas standards for cars and light trucks for model years 2022 through 2025 are under review. Will lagging pickups really pose an obstacle to meeting the 2025 fuel economy goals?

Since Ford’s F-Series has been the best-selling vehicle in America for 34 years, let’s take a look at the F-150 pickup (F-150 comes under light-duty CAFE, but not F-250 and F-350; they are heavy-duty vehicles). The F-150 has four engine options that, together with choice of two- or four-wheel drive,  affect fuel economy. Ford has garnered much attention in recent years for its downsized, turbocharged “Ecoboost” engines in the F-150 (among other nameplates) and a 700-lb. mass reduction across all F-150 models. Thanks to these and other changes, many F-150s meet or exceed their 2016 fuel economy targets. But others, like those with the 5.0L naturally aspirated engine, do not. Using a Ford projection of sales shares of the various engines and assuming that two-thirds of F-150s will have four-wheel drive, we estimate that the average fuel economy of all F-150s sold this year will be 24.2 miles per gallon (mpg), falling a bit short of their 2016 average fuel economy target of 24.7 mpg. Additional credits for air conditioning efficiency and other “off-cycle”technologies should allow Ford to close that ½-mpg gap and hit the F-150 target for 2016 without difficulty.

Looking forward to 2025, multiple technologies assessed by federal agencies in setting CAFE standards remain available to further increase fuel economy. All models can take advantage of advanced valve train technologies, greater transmission efficiency and shift optimization, aerodynamic drag reduction, low rolling resistance tires and further mass reduction, among others. Models with Ecoboost engines can adopt cooled exhaust gas recirculation. Start-stop technology, which saves fuel by shutting off the engine when the vehicle is at rest, is already standard with the 2016 2.7L Ecoboost engine, but will be new to the 3.5L Ecoboost starting in 2017.

Note: Fuel consumption reduction estimates for individual technologies are from NHTSA Final Regulatory Impact Analysis, August 2012

With the addition of the technologies shown in the above figure, all F-150 models except the 5.0L 4WD reach or exceed their average 2025 fuel economy target of 32.1 mpg (an estimate based on today’s size distribution of F-150s sold). Assuming the same shares for the four engines assumed for 2016 and two-thirds four-wheel drive, the entire F-150 line reaches its average target of 32.1 mpg in 2025 as shown in the figure below.

But in fact, Ford could substantially exceed the 2025 fuel economy target for the F-150.  We estimate that, if all models moved to turbocharged, downsized engines, for example, the F-150 could reach 34.1 mpg on average, 2.0 mpg over the 2025 target. Even if naturally aspirated engines remain in the line-up, they are likely to benefit substantially from advances such as high compression ratio and cooled exhaust gas recirculation (EGR).

So it looks like the F-150 could go well beyond its 2025 target using well-known technologies, with no vehicle electrification (beyond start-stop), and without even taking advantage of the multiple flexibilities in the program that make it easier for manufacturers to meet the standards. If the F-150 is any indication, the real question for the agencies’ review of the 2022-2025 CAFE standards is: can we do better than previously thought? 

Explaining the unique energy burden of low-income households
May 20, 2016 - 10:00 am

By Ariel Drehobl, Research Analyst, Local Policy

In a recent report released by ACEEE and Energy Efficiency for All, Lifting the High Energy Burden in America’s Largest Cities, we measured energy burdens in 48 of the largest cities in the United States. Energy burden means the percentage of household income that goes toward energy costs, and we looked specifically at utility energy bills (transportation energy costs are also a significant household expense, but it was outside the scope of the analysis). We found that low-income, African American, Latino, and renters pay up to three times more than the average household on home energy costs. Higher energy burdens have real implications on the health and wellbeing of families and individuals. For example, the median income for low-income households in Memphis is around $19,000, and we found that they can spend upwards of $2,500 to $4,700 a year on their utilities. Families like these households, who have to devote higher proportions of their income to utility bills, may have to make trade-offs between heating and cooling their homes and affording other important necessities, such as food, medicine, and childcare.  

Lower incomes, less efficient housing, and limited access to energy efficiency programs can explain the higher energy burdens faced by these groups. We found that even though these families paid less overall on energy bills, they paid more per square foot, which indicates the relative inefficiency of their homes.

When analyzing energy burden, it’s important to look beyond averages and medians in order to better understand the burden faced by those worst-off economically. In this study, we also looked at the energy burden “quartiles” for each group (quartiles represent the middle value of the lowest half and upper half of the dataset).

The figure below illustrates the energy burden quartiles experienced by low-income households, indicated by the orange, green, and blue points. The dotted green line indicates the median energy burden for all households in our study, not just low-income households. Three-fourths of low-income households experienced an energy burden greater than the orange point (the lowest burden quartile), one-half of households experienced a burden greater than the green point (the median), and one-fourth of households experienced a burden higher than the blue point (the highest burden quartile). Take New Orleans for example: a quarter of low-income households in New Orleans experienced an energy burden greater than 19%. This is not unique. In 17 cities, a quarter of low-income households experienced an energy burden greater than 14%. This represents a significantly higher energy burden compared to the median energy burden across all cities in our sample, which was 3.5%, suggesting these low-income households devote a significantly higher portion of their income to utility bills.

What next? States, cities, and utilities can take action to address high energy burdens in their communities. Utility-funded energy efficiency programs are an underutilized strategy that can complement bill assistance and weatherization programs. To address high energy burdens, we suggest improving and expanding low-income utility programs by following the best practices laid out in our report, Building Better Energy Efficiency Programs for Low-Income Households. The same applies for the programs that serve multifamily buildings where building owners and managers experience unique barriers to upgrading housing stock with traditional efficiency measures and the majority of low-income residents are renters. We outline best practices for the delivery of multifamily energy efficiency programs in our report, Apartment Hunters: Programs Searching for Energy Savings in Multifamily Buildings. Utilities should also collect, track, and report demographic data on program participation in order to ensure that efficiency programs are meeting goals.

Cities and states can also work to ensure that cost-effectiveness testing of energy efficiency programs include multiple benefits and also that strong low-income savings goals are in place for both investor- and municipally-owned utilities. The Clean Power Plan also offers an opportunity for increased investment in low-income energy efficiency programs through the Clean Energy Incentive Program. Local stakeholders have many policy and program options to help those most in need in their communities to reduce their utility energy costs and alleviate energy burdens.

For more information on the topics covered in this post, see our low-income energy efficiency programs and multifamily homes topic pages.

Data Points is a blog series focusing on the graphs and other images that tell the energy efficiency story.

Oakland is living up to California’s high bar on energy efficiency, and then some
May 19, 2016 - 10:00 am

By Tyler Bailey, Research Analyst, Local Policy

Local governments of all sizes can invest days, months, and years into advancing energy efficiency programs and policies. Yet many go unrecognized for their efforts. Because the City Energy Efficiency Scorecard only covers 51 large cities, ACEEE created the Local Energy Efficiency Self-Scoring Tool so that any community can evaluate itself. Once a community has completed the tool, we can recognize their policy efforts in the State and Local Policy Database.

Oakland, California was the first city not covered by our Scorecard to complete the tool, and scored extremely well. Here are some of their highlights followed by a Q&A with a local government staff person.

Highlights from Oakland

A score of nearly 70 out of 100 would have earned Oakland a spot in the top ten of our 2015 City Scorecard were the city included. Oakland scored well in several policy areas, but its exemplary score can be attributed in part to its performance in a couple policy areas, namely transportation policies and actions to support efficiency efforts among energy and water utilities. In transportation, Oakland tied Arlington County, Virginia for the highest score of all cities we’ve assessed. Some of Oakland’s transportation-related achievements include: widespread availability of the AC transit and BART rail service and high regional spending on transit, a Green Fleet resolution to encourage efficient driving behavior, and active government participation in Oakland’s Clean Cities Coalition partnership. Oakland’s high score in energy and water utilities was due to several factors, including strong utility spending on electric and natural gas efficiency programs and Oakland’s support for these programs through the Local Government Sustainable Energy Coalition’s Energy Policy Committee.

A Conversation with Oakland

To share Oakland’s story, I corresponded with Daniel Hamilton, the Energy Program Director for the City of Oakland over email. The following exchange has been edited for clarity.  

Tyler Bailey: What have been the most effective energy efficiency programs Oakland has implemented that have saved the most energy?

Daniel Hamilton: Oakland participates in a range of regional programs to increase energy efficiency in buildings, the most effective of which is the single family and multifamily home retrofit programs of the Bay Area Regional Energy Network (BayREN). BayREN is a joint effort of the cities and counties of the San Francisco Bay Area, and has had great success in addressing the hard-to-reach market of existing residential buildings. Meeting our long-term efficiency goals requires greater penetration into the existing building stock, and working collaboratively with other local governments, rather than independently, has allowed us to manage programs like this at a scale that is much more effective.

TB: Based on your successes and experience with overcoming hurdles, what advice do you have for other localities working to improve energy efficiency?

DH: Cities have an unprecedented level of resources available to them now to support advanced energy efficiency policies and programs. Nonprofits like the New Buildings Institute and the Institute for Market Transformation, in addition to federal agencies like the Department of Energy, have developed comprehensive guides to assist cities in drafting ordinances, designing programs, and improving compliance and implementation. The ACEEE Scorecard criteria also provide a great framework for understanding the range of actions that a city can take to improve its energy performance and reduce its associated GHG emissions.

TB: Where do you see the greatest (untapped) potential for energy efficiency in Oakland and how are you working to tap that potential?

DH: There are two areas of greatest potential for Oakland to lower our energy consumption—energy conservation ordinances and community choice aggregation (CCA). The city adopted the Energy and Climate Action Plan which calls for the consideration of both residential and commercial energy conservation ordinances, and the city is pursuing multiple strategies for developing such ordinances in 2016. In addition, the city is participating in a countywide effort to form a community choice energy program, creating more renewable energy demand and a new provider of energy efficiency services. Developing these efforts into programs to be considered by the city council are key priorities in our efforts to substantially lower energy consumption and increase renewable energy generation in Oakland.

Why utilities are investing in this technology as a way to boost resiliency and reduce consumer costs
May 18, 2016 - 10:00 am

By Anna Chittum, Visiting Fellow, Industry

What if there was a technology your utility could deploy today that was cheaper and cleaner than most existing power generation, that boosted system resiliency and reliability, and was twice as efficient? Would you want them to use it?

Customers of Duke Energy in North Carolina may soon enjoy these benefits. Duke Energy is just the latest example of utilities around the country that are investing in customer-sited combined heat and power (CHP) plants to bring cleaner, cheaper, and more quickly deployable energy resources to their customers. Duke has proposed to develop, own, and operate a 21 Megawatt (MW) CHP plant located at Duke University.

CHP is different from traditional power generation because the large amount of heat generated during the electric generation process is used, instead of wasted. Whereas traditional power plants dump their excess heat into the air or a nearby river or lake, CHP captures that heat and uses it for a productive purpose. In this case, the heat generated at the Duke plant will serve the university’s need for space heating, water heating, and steam for uses such as cleaning and sterilization at Duke University Hospital. The increased efficiency means the university will reduce its energy-related CO2 emissions by about 25%. And by siting CHP near the point of consumption, the utility reduces losses along transmission and distribution lines, which average over 7% but can climb as high as 20% during times of peak system use.

While the university itself stands to benefit from this arrangement, the project was given the go-ahead by the utility in large part due to the benefits to all users of Duke Energy’s system. The 21 MW of new capacity is more cost-effective than other supply alternatives the utility considered, and can come online faster than most other types of power generation. The power generated by the new plant will serve both the university, as well as the surrounding Durham community.

Duke Energy is not alone in tapping CHP for its near-term energy needs. Other utilities have realized that siting distributed CHP power plants at customer locations can bring benefits to the whole system. In Texas, Austin Energy owns a 4.3 MW CHP system located near Seton’s Dell Children’s Medical Center, providing low-cost and highly reliable power and thermal energy to the hospital and nearby buildings. In Florida, Florida Public Utilities (FPU) is developing a 20 MW CHP system located at a Rayonier Advanced Materials cellulose plant. Rayonier will use the steam in its production process, and the power will serve FPU’s nearby customers on Amelia Island. The plant is expected to save FPU customers $28 million over the 20-year contract period. State regulators were very enthusiastic about the project, and are hoping to see others like it.

In addition to the efficiency and emissions reduction benefits, utilities and customers are increasingly recognizing the reliability benefits of CHP and viewing it as critical infrastructure for staying online in even the worst weather events. Given so many benefits, it is natural to wonder why we don’t see more CHP owned by utilities as supply-side assets. One reason is that utilities do not usually consider CHP in their long-term resource planning efforts. That situation is changing as more and more states identify CHP as an important option to be considered alongside traditional generation. Indeed, Duke Energy has indicated that the CHP plant at Duke University is just one of possibly four additional customer-sited CHP developments it plans in the near future. Stay tuned as ACEEE continues to explore the emerging role of CHP as a distributed utility resource.