By EDF Blogs

By: Ellen Bell, Senior Specialist, Building Energy Initiative

This commentary originally appeared on the EDF Climate Corps Blog.

Following the lead of mayors and governors across the country, last month the President announced energy as a priority for the year. By focusing on energy management, organizations are contributing to the transformation of energy use in the country, saving billions in energy costs and cutting greenhouse gas emissions.

Mayor Rahm Emanuel’s Retrofit Chicago initiative, aimed at reducing participating buildings energy use in the city by 20 percent within the next five years, is a compelling example of this. For this reason, EDF Climate Corps, an innovative summer fellowship program that places specially trained graduate students in organizations to save energy and related costs, is working to recruit organizations in Chicago this month.

To ramp up energy savings in the area, EDF Climate Corps has already signed on AT&T, McDonald’s Corporation, Shorenstein Properties and Jones Lang LaSalle. Each summer, EDF Climate Corps fellows evaluate organizations for energy savings opportunities with many of them uncovering stakeholder engagement as a key savings opportunity.

After 400 EDF Climate Corps engagements, the program has found that there are three key constituencies to tap into for energy management:

Executive Leadership – EDF’s Virtuous Cycle of Strategic Energy Management framework notes that executive leadership teams have significant influence when it comes to an organization’s energy performance. Ambitious goal setting is one way executive leaders can advance green initiatives. For example, Cummins, Inc., a global power leader that designs, manufactures, distributes and services engines and related technologies, set intensity goals for energy and greenhouse gas emissions. To help reach their 2015 goals, Cummins brought in two EDF Climate Corps fellows in 2012 to develop strategic energy efficiency initiatives for its new and existing facilities. By auditing the company’s forty U.S. facilities, the EDF Climate Corps fellow developed recommendations that could potentially help Cummins reach its 2015 goals, save more than $5 million in annual net-operating costs and eliminate 51,000 metric tons of carbon dioxide emissions.

Source: Malachi Leopold

Employees– When it comes to energy efficiency, employee engagement is an organization’s greatest resource. By empowering employees at all levels with knowledge and responsibility surrounding the organization’s energy use, positive behavior changes can produce sustainable work environments and communities. McDonald’s Corporation, for example, worked with EDF Climate Corps in 2011 to uncover strategies to engage about 700,000 employees at the company’s 14,000 U.S. restaurants. As a result, the fellow produced and distributed an employee education video that has the potential to reduce the average U.S. McDonald’s restaurant energy consumption by up to 10 percent.

Local communities and utilities – Thanks to the leadership of politicians and grassroots organizations, more cities and communities are offering incentives and solutions to decrease energy use and greenhouse gas emissions. For example, Property Assessed Clean Energy (PACE) financing programs and legislation like California’s Global Warming Solutions Act (also called AB 32) are compelling organizations to evaluate the energy performance of their facilities. In Sacramento last summer, an EDF Climate Corps fellow joined Mayor Kevin Johnson to launch the nation’s largest PACE project and worked with the nonprofit Greenwise Joint Venture to identify three strategies to advance the program. Building certifications and even utility companies all offer organizations a way to improve energy performance. In fact, the EDF Climate Corps program has found that demand response management and other energy market opportunities are surfacing from utilities nationwide.

Working with these three distinct groups can drive energy management practices forward at almost any organization. If a majority of buildings in Chicago actively engaged these groups around energy management – the city has the opportunity to exceed Mayor Emanuel’s energy reduction goals.

As the nation works to meet the President’s “Better Building Challenge,” now is the time for leaders to prioritize energy management, and EDF Climate Corps is a hands-on, cost-effective way for companies to reach their goals.

Learn more about the energy assets available through EDF Climate Corps before the 2014 application deadline of February 21, 2014.

What is the next step your organization will take to improve energy performance?

By Marita Mirzatuny

This Commentary Originally Appeared on Our Texas Clean Air Matters Blog.

San Antonio’s Southwest Research Institute (SwRI) brings Texas the latest example of an intelligent, demand-side resource that can play an active role in the power grid and offset the use of fossil-fuel power plants. Late last month, SwRI announced that its innovative vehicle-to-grid system got the green light from the Electric Reliability Council of Texas (ERCOT), the grid operator, to participate in the state’s electricity market. This system is able to control the charging and discharging for a fleet of electric delivery trucks, meaning that when the supply of electricity struggles to meet demand, the intelligent vehicle charging system can simply stop charging (thus lowering demand). This technology will significantly increase grid reliability, thanks to its quick response time, and effectively deter the need for firing up another dirty power plant.

In order to avoid a blackout, the supply of electricity to the power grid must equal the electric demand from customers. Conventionally, this balance is maintained by power plants that remain on stand-by, ready to respond at a moment’s notice. Every hour of the day, ERCOT precisely controls these power plants to keep the grid balanced. In the process, a power plant has to rapidly increase or decrease its power output, which decreases its efficiency and increases its carbon and pollution footprint, much like an a car revving its engine.

Source: SAE

To modernize our electric system, experts have proposed using demand-side resources – defined here as energy efficiency, demand response, renewable energy, energy storage, and even electric vehicles – to balance the electric grid in place of power plants. Smart power technologies enable ERCOT to reduce demand for energy through programs like demand response, where a customer is compensated for temporarily conserving energy use. For the first time, a customer reducing their need for electricity can provide the same service as a power plant generating more electricity. These customer-powered “negawatts” (the amount of energy not used) are advantageous because they offset power plant emissions, rather than increase them.

SwRI’s intelligent delivery truck charging system provides negawatts to ERCOT by temporarily suspending vehicle charging. During the day, electric delivery trucks carry goods to their intended destination, and then return to “refuel” with electricity in the evening, when Texas’ wind farms are most productive. SwRI’s charging management system ensures that all of the trucks are recharged before they have to make their next trip. At the same time, it counts up how many trucks are charging, and sends that information to ERCOT. If ERCOT senses a sudden shortfall in power supply, the management system interrupts charging for some of the trucks to quickly rebalance the grid.

By EDF Blogs

By: Matt Golden, Senior Energy Finance Consultant 

As interest in and adoption of EDF’s Investor Confidence Project (ICP) protocols has continued to grow in the United States, so too has interest internationally. The Investor Confidence Project was invited to showcase our efforts at ESCO Europe, the continent’s largest conference for energy service providers. This year, the conference was held in Barcelona, Spain and drew an array of participants from across Europe and the public and private sectors, including representatives from finance companies, governments, and non-profits with interests in the energy industry.

I was privileged to serve as both a panelist in a roundtable discussion on barriers to ESCO financing, and a speaker on “Improving Access to Finance,” a well-attended session with representatives from the European Investment Bank, European Bank for Reconstruction and Development, and European Energy Efficiency Fund.

EDF was invited to attend this conference based on a series of conversations over the last year with European stakeholders facing the same barriers to investing in energy efficiency as their American counterparts. With policymakers in Europe similarly counting on a vast expansion of the market in building retrofits and an expected influx of private and public capital, there is a focus on standardization and policies that can enable capital and investors to enter the market with fewer transaction costs.

Over the course of the three-day ESCO Europe event, the ICP team met with more than thirty stakeholders. The feedback on ICP was extremely positive, with stakeholders sharing the view that the ICP protocols meet European goals of spurring more energy efficiency projects and reducing carbon emissions while being adaptable to the European market. After becoming familiar with the Investor Confidence Project and its objectives, European stakeholders agreed that working together to create a version of the ICP protocols in Europe would help standardize the market on a global level.

As a result, the Investor Confidence Project is now in conversation with a range of public and private stakeholders from across the European Union and U.K. about ways to link and collaborate on our efforts. In particular, we have been working with Steven Fawkes from the U.K., an author on ESCO financing who also has a long history in the energy efficiency field and private sector experience in the ESCO industry.

There is a great opportunity to expand the scope of ICP to develop a parallel set of protocols for the European marketplace. As a first step in the process, we will gather a broad steering committee with both geographic and stakeholder diversity to develop a plan for both funding and execution. Working to adapt our current protocols offers a major advantage for the Europeans, both in terms of time and effort, as we won’t be starting from scratch. There’s also the added benefit of creating a more consistent market across the U.S. and Europe, which will speed adoption in both markets.

One of our key takeaways from the ESCO conference is that while here in the U.S. we tend to look to Europe as more advanced, Europe is actually looking to the U.S. for solutions. In reality, we are all struggling with the same basic set of market barriers, and there appears to be substantial opportunity for collaboration on many fronts.

We look forward to ongoing collaboration with our European counterparts and believe that in an age of global markets, linking efforts to overcome similar barriers to scaling energy efficiency investment will help accelerate both markets.

By Kate Zerrenner

Energy and water, two of our most important global resources, are inextricably linked. And yet when it comes to planning, the regulatory agencies in charge of managing these precious resources are often separate and uncoordinated in their decision-making. With the World Bank’s recent unveiling of its Thirsty Energy initiative, it seems that the energy-water nexus is finally being taken seriously- and on a global scale.

This new initiative aims to address the interconnection between energy and water head-on by providing countries with “assessment tools and management frameworks” to help governments “coordinate decision-making” when planning for future energy and water infrastructure. Fortunately, this kind of guidance couldn’t come soon enough. Here’s a cool infographic from the Thirsty Energy website to illustrate where we are and where we’re headed:

To further complicate things, climate change is expected to make the management of water and energy resources exceptionally challenging “by causing more water variability and intensified weather events, such as severe floods and droughts,” says the website.

Another key point from this initiative is that while a global water crisis is looming, many countries are already facing challenges to their electricity supplies.

As I mentioned in a previous blog, several areas in the US that are not considered water-stressed have already  been experiencing rolling black-outs and brown-outs due to historic droughts.

More intense and longer droughts are also threatening areas such as India, China, and Brazil. In addition to being home to some of the world’s largest populations, these countries also represent an important hub of goods and services that the U.S. relies on. Furthermore, Americans have gotten used to having an abundance and diversity of food throughout the year from countries like India, China, and Brazil. As climate change continues to impact water and electric supplies in countries around the world, the agricultural sectors in many countries will be one of the hardest hit sectors, and that has direct implications for the American way of life.

The Thirsty Energy initiative of the World Bank aims to help countries begin the process of co-managing their electric and water planning. This is the basic first step that is needed. By corralling experts from its own water and energy programs within the World Bank, as well as those in the public and private sectors, the Thirsty Energy initiative will help countries work through their divisions, and prevent a constrained future.

The initiative is based on a working paper that the World Bank published in the summer of 2013. The report offered several recommendations to address the energy-water nexus, including improved modeling in both the water and energy sectors, more integrative planning, regulatory reform, and greater public and stakeholder involvement in developing solutions.

In its history, the World Bank has been responsible for some impressive financial and regulatory culture shifts. Hopefully, this initiative will be one of the efforts that brings about real change in the way countries around the world address the energy-water (and food) nexus. The World Bank is headquartered in Washington, D.C. and its President is an American. Hopefully the Bank’s effort to help countries around the world effectively address this nexus will spill over into its own neighborhood. It’s time for the U.S. and its states to take up this mantle.

By Kate Zerrenner

This commentary originally appeared on our Texas Clean Air Matters blog.

Right now, there are no limits on carbon pollution from power plants, even though these facilities were responsible for  roughly 40 percent of all U.S. carbon dioxide (CO2) emissions in 2012.

That’s why the Environmental Protection Agency (EPA) is crafting greenhouse gas (GHG) regulations for new fossil fuel-fired power plants by setting a limit on how much CO2 the plants can emit. Later this year, EPA will issue proposed CO2 “emission guidelines” for existing fossil fuel-fired power plants using various Clean Air Act tools to protect human health and to clean up our air.

To achieve significant and cost-effective emission reductions from existing power plants, EPA should look to leading states that are already implementing successful measures to reduce emissions. These measures include investing in renewable energy, harvesting energy efficiency, and utilizing more efficient and lower-emitting fossil fuel-fired units.

Energy efficiency, in particular, is a cost-effective way to cut emissions by reducing the sheer amount of electricity produced and used, which saves money for consumers in the process. However, it is vital that energy savings and emission reductions from customer-facing, demand-side energy efficiency – that is energy efficiency installed in homes and businesses – be accounted for in the process.

What is section 111(d) of the Clean Air Act?

The best near-term opportunity to curb climate change is to place national limits on carbon pollution from power plants, and section 111 of the Clean Air Act gives EPA the responsibility to put the right rules in place.

As called for in the President’s Climate Action Plan, EPA has issued a proposed rule under section 111(b) that would set the first federal limits on carbon pollution from new fossil fuel-fired power plants. But it is section 111(d) that will enable EPA to regulate the vast quantity of carbon pollution from existing power plants.

Section 111(d) calls for a dynamic federal-state partnership that is expected to set overarching performance benchmarks in the “emission guidelines”, while still allowing states to write their own plans on how to meet those goals. Specifically, state plans must meet or exceed the benchmark defined in the guideline. This process creates an opportunity for EPA to proactively engage with states to ensure GHG reductions are achieved in the most efficient and effective manner possible.

Does energy efficiency have a role in 111(d)?

Section 111(d) gives EPA flexibility in the design of its emission guidelines, and thus opens the door for demand-side energy efficiency. Energy efficiency provides numerous benefits to states: savings to consumers, job creation, and reductions in several power plant emissions, including carbon emissions, sulfur dioxide, and ozone-forming pollutants.

Many states favor including demand-side energy efficiency in state plans and the concerns for implementation, such as how to quantify emission reductions from energy efficiency and how to measure the energy savings, are solvable.

Energy efficiency should be an all-in measure.

In the face of a changing climate, where power plants are responsible for 34% of carbon pollution in Texas, strong standards need to be put in place.

Energy efficiency is already the most cost-effective way to reduce energy use and carbon pollution from power plants. It also creates other benefits to the power grid, like improving grid reliability and lowering costs for infrastructure maintenance. Plus, saving energy saves water, which is critical in a state like Texas under the pressure of a multi-year drought.

The good news is that about half of the states in the United States already have mandatory energy efficiency targets, so there is a wealth of knowledge and experience across the country. In fact, Texas was the first state to set an energy efficiency resource standard and, although its target has since lagged in terms of aggressiveness, it has the knowledge base to make energy efficiency thrive. Many Texas cities are leaders in energy efficiency as well, undertaking significant efforts to upgrade public buildings and more.

There is no doubt that the benefits of energy efficiency go beyond the power plant’s fence line. Figuring out how to include this valuable resource as a flexible compliance mechanism is an important step in ensuring the health and vitality of Texas and states across the U.S.

If you are in the Austin area and wish to learn more about energy efficiency, join me at the South-central Partnership for Energy Efficiency as a Resource’s (SPEER’s) 2nd Annual Summit, where I will be leading a workshop on how states can rely on energy efficiency to ensure meaningful and cost-effective carbon reductions. 

By Jon Goldstein

Business is booming right now for the American oil and gas industry, which has fueled economic growth in major oil and gas producing states, including Wyoming. But what will happen when the music stops? When the boom cools – as booms inevitably do ­­­– will states be left holding the bag?

Too often, that has been the pattern. A problem acutely illustrated by the issue of “orphan wells.” When oil and gas companies walk away from wells that are no longer producing oil or gas at economic levels, states (meaning, taxpayers) are typically the ones left responsible for addressing risks from these wells. Until old oil and gas wells are properly plugged and surface sites remediated, they pose contamination risks to groundwater supplies, as well as safety risks to landowners and wildlife.

Plugging and remediating wells can be expensive business, and when the bottom falls out on commodity prices it has been too easy for operators to declare bankruptcy and walk away – sticking taxpayers with the tab for plugging and remediation. It is imperative that states ensure they have the financial resources to address orphan wells and the ability to hold producers financially accountable when problems occur.

Wyoming is one state wrestling with this issue. The state currently estimates it has at least 1,200 orphan wells, the unfortunate residue of a boom and bust in coal bed methane development, and the state estimates the number could climb as high as 5,700.  At its current rate, it would take the state 317 years to plug and remediate all these sites.

As a first step to tackle this problem, Governor Matt Mead  recently proposed a plan  that sets aside $3 million to address the state’s backlog of orphan wells and includes strong measures such as:

• Developing an aggressive, prioritized four-year schedule to properly plug orphan wells
• Identifying and resolving data gaps at the Wyoming Oil and Gas Conservation Commission (WOGCC) and U.S. Bureau of Land Management (BLM) that make a full accounting of orphan wells difficult
• Reviewing bonding levels to ensure producers are putting up adequate financial resources for the state to address these wells in the case of default

Source: Jim Wilson

The Governor’s proposal is a good, aggressive first step toward addressing Wyoming’s orphan well problem; and with some key improvements advocated by EDF and the Wyoming Outdoor Council (WOC), this effort could become a model for other states with similar problems. Things like the state reviewing and identifying multiyear funding sources – such as an increase in the mill levy or conservation tax – to fund this needed work going forward and prohibiting future permits/leases for “bad operators” who have pulled up stakes on wells in the past.

Continuing this funding is especially important. Current estimates state Wyoming’s orphan well problem could cost as much as $32 million to solve, making the proposed $3 million a good down payment but in need of further financial support. To its credit, the Petroleum Association of Wyoming has come forward in support of raising the conservation tax and using those funds to help plug orphan wells.

Ultimately, it will take a comprehensive and well-managed program to get the state on track toward clearing the orphan well backlog and ensuring all operators are held accountable to prevent this problem from escalating further. EDF and WOC will remain engaged in this issue as its funding is considered in the state legislature and as potential regulatory hearings proceed at the WOGCC in the coming months.

American oil production rose by a record of almost a million barrels a day in 2013 according to new estimates from the International Energy Agency. Meanwhile, the WOGCC reports it received a record number of applications for permits to drill in 2013. Times are good for oil and gas, making now the perfect time to address these orphan well problems once and for all.

By John Finnigan

Ben Franklin famously said, “If you fail to plan, you’re planning to fail.”  This saying certainly holds true for smart grid deployment plans, which can cost utilities several hundred million dollars.  Given these high stakes, good planning is essential.

Many utilities have installed smart grids.  Currently, 25% of U.S. electricity customers have smart meters, a key component of the smart grid.  Some early deployments were rocky, but utilities have learned their lessons.  Utilities have incorporated these lessons learned in the planning process for more recent smart grid deployments.  A well-thought-out smart grid deployment plan should address the following topics:

• Strategic purpose: What are the objectives for deploying a smart grid?  What are the guiding principles which will govern the project?
• Road map: The plan should provide a step-by-step overview for each phase of the deployment plan, in chronological order.
• Technologies: Describe the technologies selected by the utility and explain how these technologies will function together as a unified system.
• Implementation: Explain how the utility will manage the project and coordinate the activities of the different departments involved in the deployment.
• Customer impacts: How will customers be affected by the smart grid deployment? What changes will they see in the electricity service they receive, including the meters, meter data, billing, collection, connection/disconnection of service, and customer service?
• New services: What new products and services, including new rate plans, will the utility provide after the smart meters are installed?
• Customer education: How will the utility educate customers about the smart grid plan? What channels with the utility use to communicate with customers and how often will these communications occur?
• Cybersecurity and data privacy: How will the utility keep the customers’ usage information secure? How can customers provide information to other providers of energy products and services? What types of information will be available to these third parties?

A utility preparing for a smart grid deployment should follow the standards developed by the Smart Grid Interoperability Panel (SGIP).  The SGIP is a public-private partnership formed in 2009 by the National Institute of Standards and Technology.  The SGIP’s mission is to develop industry standards to ensure that all the equipment and systems used in a smart grid deployment will work effectively together.

Performance metrics are essential to ensuring a successful smart grid deployment

A smart grid deployment plan might look good on paper, but how do we ensure that the plan is implemented properly?  One word: measurement.  Tom DeMarco, a management guru, said, “You can’t control what you can’t measure.”  The plan must contain metrics to define how success will be measured.

When a utility develops a smart grid plan, the utility must demonstrate that the benefits exceed the costs.  When the deployment plan is approved, the utility receives permission to begin incurring costs and recovering these costs from its customers.  The customers may be required to start paying for the smart grid equipment before the benefits from the smart grid deployment are fully realized.  Having clear, objective performance metrics will protect the utility’s customers by holding the utility accountable for delivering all the benefits promised.

Good examples of thoughtful, well-developed smart grid deployment plans are those filed by Commonwealth Edison (ComEd) and Ameren for their Illinois customers in October 2012.  These plans are noteworthy for their detailed performance metrics, which EDF had a hand in developing.  These smart grid deployments are now in progress and so far, so good.

The test will be found in the plans’ performance metrics, which will provide clear evidence of how well ComEd and Ameren deliver on their promises.  State utility commissioners reviewing upcoming smart grid projects in their jurisdictions should think about requiring these same types of detailed performance metrics for the smart grid deployment plans under consideration.

By Marita Mirzatuny

This commentary originally appeared on our Texas Clean Air Matters blog.

As we thaw out this week from our most recent arctic blast, Texas’ inexperience with ice and snow has been met with Internet memes and jokes. But dealing with extreme temperatures causes serious strain on our current energy system and exacerbates our “energy crunch,” signifying that the available supply of electricity barely meets the demand for that power.

However, as is typical of Texas, last week our weather was quite pleasant – in the 70s – and strains on the system due to weather events weren’t too much of a concern. Yet the Electric Reliability Council of Texas (ERCOT), the state agency charged with managing the flow of electricity for most of Texas, alerted an emergency situation despite mild temperatures. To avert disaster, ERCOT initiated demand response, “ask[ing] customers to raise thermostat settings to 78 degrees, typically a summer response intended to reduce demand from air conditioners.” A single malfunctioning power plant caused the problem. ERCOT declined to identify the plant involved.

Much of this uncertainty and drama can be alleviated with demand response (DR), a novel approach to managing the grid system. Using smart power technology like smart thermostats, utilities can moderately adjust its customers’ energy use in real-time for a brief amount of time to meet the energy needs of all Texans. When energy demand is high, electric utilities can ask customers to voluntarily conserve energy in exchange for cost-savings and even payments. During the polar vortex earlier this month, CPS Energy, San Antonio’s municipal utility, saved about 77 megawatts (MW) of power through demand response programs – enough to power 32,725 homes.  Texas isn’t the only place where demand response is taking hold.

DR plays a critical role in PJM, the grid operator that includes 13 states in the Midwest and Northeast. Customers were paid a total of $330 million in 2012, while bringing more competitive resources into the market lowered overall energy system costs. During the summer of 2012, PJM estimates this effect saved all customers around $650 million. Contrasting that with the fact that during our polar vortex a few weeks ago, Texas’ power prices actually jumped higher than any other state, even the ones buried under feet of snow, reaching the cap of $5000 per megawatt-hour compared with PJM’s $1800.

Texans deserve to have an electric grid that is secure and reliable – not one that faces rolling blackouts during the hottest and coldest days of the year or because one fossil fuel plant goes down. This is why Texas’ Public Utility Commission (PUC), the state agency that regulates electricity, is deliberating whether to reform the state’s current energy-only market structure, which pays power plants to provide electricity, to a capacity market, which pays power plants to exist in addition to providing electricity.  EDF sees a securer, cleaner path forward.

Demand-side resources – like DR, renewable energy, efficiency, and energy storage – give the consumer flexibility and leverage in their energy usage and generation, playing a key role to ensuring grid reliability, affordability, customer choice and environmental sustainability. According to the Brattle Group, Texans could achieve as much as 13,000 MW of demand response by 2019, with the majority (7,661 MW) coming from residential customers, a group that accounts for “more than 70 percent of peak load.” Enabling DR technologies gives Texans, already active participants in grid reliability, more choice and freedom over their electricity than ever before.

So far 2014 has given DR a chance to prove itself in the Texas energy market. It has. It is time to expand its availability by encouraging new business models and becoming engaged prosumers.

By EDF Blogs

By: Victor Rojas

(Credit: www.poonamsagar.com)

While 2014 is only just getting underway, it is already shaping up to be a banner year for clean energy finance. Capital investments are being made, funds developed, and securitization tools crafted — all with remarkable speed. And private capital markets are aggressively rallying around these efforts, which will only increase the momentum of our collective efforts to drive investments into essential energy efficiency and renewable energy projects.

Funding for homeowner energy efficiency loans could lead to securitization

Early this year, clean energy consumer finance company, Kilowatt Financial, closed a $100 million deal with  Citi to finance 10-12 year unsecured loans of up to $30,000 for homeowners making energy efficiency improvements to their HVAC (heating, ventilation, and air conditioning) systems, water heaters, windows, roofing, insulation, lighting, and appliances.

The transaction is designed to facilitate a securitization of loans (which promotes liquidity in the marketplace), help establish a secondary market, and spur energy efficiency investments. Kilowatt and Citi expect to create term asset-backed securities from the loans that will provide a sustainable source of capital for homeowners looking to make home energy upgrades.

Marshal Salant, managing director and global head at Citi Alternative Energy Finance, stated that “Citi is committed to financing clean energy and energy efficiency improvement projects like Kilowatt’s loan program, which will have an immediate impact on the homeowners and communities that we both serve. This transaction will allow Kilowatt to launch a much-anticipated market for the securitization of consumer energy efficiency loans in the U.S. asset-backed security market.”

In addition to this new, unsecured energy efficiency product, Kilowatt currently offers solar financing in the form of leases and power purchase agreements (PPAs) in Arizona, California, Colorado, Connecticut, Hawaii, Maryland, Massachusetts, New Jersey and New York. Direct loans are also available as retail installment contracts or direct loans for solar in over more than 40 states, including the states listed above.

Aggregation and monetization make for investor-ready energy efficiency projects 

Following on the heels of Kilowatt’s announcement, Joule Assets announced that the Joule Energy Reduction Assets (ERA) Fund is seeking to deploy at least $100 million globally over the next three years to help finance the installation of clean technology that generates energy savings, such as building controls, LED lighting, efficient HVAC systems, and programmable thermostats.

The Joule ERA Fund will aggregate small- and medium-sized projects ($50,000 – $500,000) that generate revenues from these types of efficiency upgrades. In addition to traditional financing revenue streams, Joule Assets will profit from energy savings in commercial buildings through renewable energy certificates, white certificates (documents certifying that a certain reduction of energy consumption has been attained), or reductions in electricity bills.

By aggregating these clean energy projects, the Fund hopes to make them attractive to private investors and institutions that would otherwise not be willing to shoulder the costs of underwriting individual transactions of this scale. The Fund will lend money to other parties of the transaction who sell the technologies directly to businesses. The loans made by the Fund will be backed-up by an allowance for bad loans (a loan-loss reserve) worth about one-tenth of the loan.

Joule expects the ERA Fund to “open up the energy efficiency markets,” drawing parallels to the recent SolarCity bond issuance that was backed by cash flows generated from rooftop solar installations.

Loan securitization remains critical for broad-scale deployment of clean energy

The size of these two efforts – $100 million each – is no accident. Markets broadly consider that number to be the smallest at which securitization is a viable option.

Asset-backed securitization and secondary market creation will be critical for broad-scale, private capital engagement. Securitization has the potential to exponentially expand clean energy investments to institutional investors such as mutual funds and pension funds, as well as large financial institutions looking for pooled assets. In effect, the private capital spigots will be opened with investments flowing into critical renewable energy and energy efficiency projects.

Each of these solutions represents portfolio-based approaches to achieve scale and reduce transaction costs to investors. EDF believes that both of these efforts signal an important step forward. However, there are other key barriers and transaction costs that are impeding demand and causing uncertainty for a range of investors. One such risk is the complexity of evaluating performance risk, particularly on energy efficiency transactions that can be extremely complex and unique. EDF is working to address this issue through our Investor Confidence Project efforts, which are designed to standardize projects into recognizable assets and aid in pooling of projects with manageable outcomes.

Asset-backed securitization will give both the renewable energy and energy efficiency industries broader access to more potential investors. It will also serve to lower the cost of capital, level energy costs, and enhance market liquidity. Citi’s investment and the efforts of Kilowatt Financial and Joule Assets, coupled with tools such as EDF’s Investor Confidence Project, can make it easier for clean energy investments to break into the secondary market.

By Kate Zerrenner

This commentary originally appeared on our Texas Clean Air Matters Blog.

The Texas Comptroller, Susan Combs, recently released the Texas Water Report: Going Deeper for the Solution, which proposes a sort of revolution to solve Texas’ water woes. As Combs notes, Texas is a global energy leader, but the state should be a global water leader too. And her initiative couldn’t come fast enough. Texas, already prone to cycles of drought, is facing new water pressures, including population growth and a changing economy, which only make it harder to preserve our diminishing water supply. To rouse the state’s water recovery plan, the report prioritizes water-saving technological innovations (while stressing the need for conservation) and lauds various Texas cities for water management practices. But the report misses some key elements that are essential to keeping our water flowing. In the same way that new energy technologies have brought us closer to a cleaner, more reliable electric grid, innovations in the water arena can seamlessly reduce our water use and set the state on a sustainable path.

The report says conservation is not enough, and it’s right. However, efficiency is the most significant first step and conservation achieved through technology is a welcome counter to the infrastructure-heavy plans typically heard at the Capitol and in the State Water Plan. (What good is a new reservoir, if there’s no water to put in it?) Some of the technologies evaluated in the report include aquifer storage and recovery, inter-basin transfers, low-water fracking technologies and desalinization – what some call “game changers.” These technologies could potentially relieve our future water woes, but these projects are expensive and don’t alleviate our immediate or even mid-term water stresses. 

The report also brings to light that some areas are actually running out of water, showing a sobering graphic of cities in the direst straits, and highlights some examples of what cities are doing to help stave off a water disaster. Naturally, San Antonio, which is at the forefront of water conservation and the energy-water nexus, exhibits some great examples, including adopting higher rates for top water users in the area. Austin also gets a mention for its water reuse programs and, surprisingly, so does California. I say ‘surprisingly’ because California isn’t often seen as an example for Texas to follow, especially considering that its governor declared a drought emergency last week. Maybe this is an indication of just how serious things have gotten.

The solutions in this report are praiseworthy and all recommend for the Texas Legislature to pony-up funds to pay for water efficiency and conservation. Some examples include giving grants to water authorities and major water users to make a meaningful difference in water efficiency and conservation, helping spur technological innovation through demonstration projects, and creating a competitive prize to incent innovative research for universities. I agree with all of these recommendations, but I think the report is missing a few key elements.

Climate change must be part of the conversation.

Source: WATR News

One topic the report does not talk about is Texas’ history of severe droughts and extreme weather, or how climate change is making those patterns more intense. If we are talking about future water supplies and trying to plan for the increasing demands of this limited resource, we need to talk about climate change. It is no longer an option to conduct long-range planning without using all the available data. It’s time to incorporate energy and water efficiency in preparing for our changing climate.

Energy use should be integrated with water conservation.

Texas is an energy-intensive state (with modest energy efficiency goals), which means the state is automatically water-intensive. After all, energy uses water and water uses energy – the two are inextricably linked. That’s why one of the best ways to bolster our water supply and cut harmful carbon emissions is for water and electricity regulators to plan together. With cooperation and a holistic outlook, state regulators can successfully reduce our reliance on thirsty fossil-fuel electricity while also cutting the state’s overall water consumption.

Behavior, technology, and conservation are all part of the solution.

Just as the report states that conservation can’t solve all of Texas’ water problems, technology can’t either. We must be more efficient and thoughtful in our water use and not rely entirely on technology to dig us out of this hole. There needs to be a mental shift, too. A holistic outlook that integrates behavior, technology, and conservation is what’s needed to set the state on a sustainable path. Elevating Texans’ water IQ through public education and installing smart water meters (to see water-usage data) on homes and businesses are simple measures the state can enact to begin bridging the water- information gap.

For those living in water-stressed areas (and that’s not just Texas and the arid West), it’s important to understand that we all have a role to play when it comes to making Texas a global water leader. But ultimately, if Legislators and key decision-makers don’t take this bull by the horns, Texans will face a very dry future.

By Tomas Carbonell

This commentary originally appeared on our Texas Clean Air Matters blog.

This post was co-authored by Tomás Carbonell, EDF Attorney, and Brian Korpics, EDF Legal Fellow.

Source: Texas Tribune
Haze over Dallas Area

Last week, EDF took one more step toward protecting Texans from harmful levels of ozone pollution that have afflicted the state for far too long.

Ozone pollution, better known as “smog,” is one of the most severe and persistent public health problems affecting Texans.  Smog causes a range of health issues — including aggravation of asthma and other respiratory illnesses, decreased lung function, increased hospital and emergency room visits for respiratory conditions — and it is associated with premature mortality in urban areas.

According to the American Lung Association (ALA), Dallas-Fort Worth is the eighth most affected area in the country for smog.  ALA estimates the city is home to millions of people who are sensitive to ozone-related health problems — including 1.6 million people suffering cardiovascular disease; nearly 1.9 million children; nearly 650,000 elderly residents; and over 520,000 people with asthma.

EDF and its dedicated staff in Texas have long worked to protect Texans from unhealthy levels of smog by reducing the pollution that leads to harmful ozone levels.  Most recently, we have been litigating in the United States Court of Appeals for the District of Columbia Circuit to secure important Clean Air Act protections in all areas that are contributing to the serious ozone problems in Dallas-Fort Worth. 

This litigation started in May 2012, when EPA determined which areas of the country met its 2008 ozone air quality standards and which did not.  As part of this process, the Clean Air Act requires EPA to determine which areas of the country “contribute” to air quality problems “nearby” — and to ensure those areas do their fair share in helping to restore healthy air.   Applying a rigorous analytical framework that has guided EPA’s decisions across Republican and Democratic administrations alike, EPA determined that Wise County, Texas contributes to unhealthy ozone levels in Dallas-Fort Worth and should be included in the same “nonattainment area” as the rest of the city.  EPA’s designation rested on extensive analyses of numerous factors, including nearby ozone monitors showing serious violations of air quality standards (including one monitor located just half a mile from the county line); high emissions of ozone-forming pollutants from Wise County, largely due to expanding oil and gas production; atmospheric modeling linking Wise County to areas of Dallas-Fort Worth suffering high ozone levels; and trends in population growth and vehicle traffic.

Instead of working constructively to reduce Wise County’s pollution and to restore healthy air for the children and families in Dallas-Fort Worth, the state of Texas and Wise County took EPA to court to oppose the designation.  Joining them were several representatives of the oil and gas industry, including the Texas Pipeline Association, the Gas Processors Association, Devon Energy and Targa Resources.  EDF, following its track record of protecting air quality in Texas and in Wise County, intervened in the litigation to support EPA’s well-founded determination.

On January 15, EDF filed a brief in the D.C. Circuit vigorously defending EPA’s decision against the various attacks leveled by the state, county and industry petitioners.  Our brief describes the compelling body of evidence supporting the Wise County designation, and explains how EPA’s analysis was fully consistent with the Clean Air Act.

We hope that state and industry officials move forward and carry out the array of cost-effective, proven solutions that can reduce emissions of ozone-forming pollutants from industrial sources, including oil and gas facilities.  These solutions are vital to making meaningful progress in restoring healthy air for children and families in the Dallas-Fort Worth area.  It is time to stop investing taxpayer dollars in litigation and to start working together to protect our children from harmful air pollution.

By EDF Blogs

By: Abbey Brown

Recently, New Yorkers bid farewell to our Mayor of twelve years, Mike Bloomberg. Under Bloomberg’s prevue, EDF helped catalyze the NYC Clean Heat program – which led to the cleanest air the City has seen in the last fifty years. Through NYC Clean Heat’s efforts over the past few years to phase out the use of highly-polluting No. 6 heating oil in more than 3,000 buildings across NYC, sulfur pollution fell by more than two-thirds while soot pollution dropped by a quarter.

NYC Clean Heat has made great strides in helping buildings become cleaner and more efficient, but there is still much work to be done. EDF is wasting no time in capitalizing on the effective public-private partnership we helped assemble of community and union leaders, policymakers and leaders in the utility, real estate and finance sectors to bring more environmental and public health gains to the City. Our next target:  All that energy wasted by old and inefficient buildings.

Nearly 40% of U.S. energy is consumed by residential and commercial buildings, which are responsible for more than a third of our country’s greenhouse gases.  The building sector presents one of the greatest untapped opportunities for major gains in energy savings and pollution reductions over the next several years. 

Getty Images

While former Mayor Bloomberg proved a strong ally in meeting our environmental goals, we look forward to the next era of leadership under Mayor Bill de Blasio, who is committed to improving air quality. We are already looking ahead to ensure that the connections and resources we built through NYC Clean Heat do not die out. The program’s model of deploying extensive data and technical expertise as well as facilitating access to financing would be particularly effective in building-wide energy efficiency efforts.

And don’t worry: NYC Clean Heat, too, will continue through mid-2014.

By Brad Copithorne

Last year, the trade association for the utility industry, the Edison Electric Institute (EEI), published a whitepaper on the disruptive challenges facing the utility industry.  In summary, EEI’s thesis was that the existing utility business model (centralized, fossil-fuel based generation) is under threat from on-site, distributed generation as more customers switch to cleaner, and often cheaper, solar power.  The white paper poses an important question: How can utilities acquire the revenue needed to keep the electric grid humming and provide reliable power to all customers if a growing number of people are producing their own electricity?

In business, one of the most difficult problems that companies face is how to adapt a successful business model to technological or social changes that threaten that business model.  Wang, Unisys, DEC and Amdahl were all big computer companies in the 1970’s that clung to an obsolete business model in the face of distributed computing.  IBM and HP, on the other hand, adapted their business models and generally thrived.

Over the past year, we have seen several utilities tackling this challenge head-on by investing in distributed, renewable energy projects.  In September, I wrote about how NextEra and NRG were voluntarily developing solar investments and how Direct Energy and Viridian were investing in solar installations developed by SolarCity.

Clean Power Finance (CPF), a company whose core strategy is to connect developers of residential solar installations with investors that want to profit from distributed solar projects, is working to scale investments in distributed generation.  A couple months ago, I had the pleasure of meeting with CPF’s Senior Vice President of Corporate Development, Micah Myers, who, at the time, was optimistic that utilities would view his platform as a turn-key method to invest in these projects.

Recently, Integrys, a supplier of competitive energy solutions in the Midwest and Midatlantic states, affirmed Micah’s earlier prediction by announcing that they would invest in solar projects through CPF’s platform.  According to Greentech Media, Edison International, Duke and NextEra have all also made direct equity investments in CPF.  These types of partnerships led by CPF are a model for how utilities can modernize their energy infrastructure and transition their outmoded business models into the twenty-first century.

In Hawaii, another potentially innovative utility business model is unfolding.  With abundant sunshine and the highest utility rates in the country, Hawaii has long been a leader in solar installations.  Unfortunately, Hawaiian Electric Company (HECO), the local utility, has substantially slowed their pace of solar installations by citing safety and reliability concerns associated with large amounts of distributed generation.

Last year, the Hawaii legislature passed a bill that could both solve this problem and provide a new business model for HECO.  Under the terms of the bill, HECO could earn premium rates of return by investing in technologies that expand the capacity of the power grid to safely accept increased solar generation.  Examples of these clean technologies include energy storage, advanced grid architectures and automated demand response, which is an energy management tool that rewards participants for conserving energy during peak, or ‘rush hour’, times on the electric grid.  While few investments have occurred to-date, we applaud Hawaii for helping their utility invest in the future rather than the past.

EDF looks forward to working with all interested utilities as their transfer from the fossil fuel-based business models of the past to clean energy strategies of the future.

By Matt Watson

This commentary originally appeared on our EDF Voices blog.

The Center for Sustainable Shale Development (CSSD) put out the Open For Business sign today – a key milestone in this innovative effort to up the game on environmental protection in shale gas development.  The question now is, will energy companies step up?

We hope so.

CSSD is an unprecedented collaboration – bringing together environmental groups, philanthropic organizations and energy companies to develop performance standards for reducing environmental impacts from shale gas production, and setting up a system so gas producers can have their operations audited and certified against those standards.

CSSD isn’t a substitute for effective regulation.  Strong rules and robust oversight is a nonnegotiable bottom line.  But we like the idea of upping the ante.  Why not have a program that recognizes companies for going beyond the regulatory minimums and doing more to protect communities and the environment?  These companies are tough competitors – so let’s make environmental performance part of what they compete on.

I like to use the U.S. Green Building Council’s LEED™ program as an analogy for what CSSD could be.  Through its certifications, the LEED™ program has had an enormous influence in making sustainably built homes and offices a growing part of the market.  At the same time, developers who build to LEED™ standards find they get higher rents, more attractive financing and better insurance rates.

What if we could do the same thing here? What if we could introduce a whole new set of economic incentives for improving environmental performance in shale gas production? It’s worth a shot.

OpenClipart.org

Now, the key pieces of the program are in place. The group has developed 15 initial performance standards that represent leading practices for protecting air, water and climate (new standards will be added over time, and each of the standards will be reviewed every year to make sure they continue to set a high bar for performance). A top-notch auditing firm has been hired. And a detailed set of protocols is in place to make sure the company audits are rigorous, consistent and transparent.

So, CSSD is open for business, and any operator in the Appalachian region can apply for certification. At the outset, four companies have said they will put their operations under the microscope and seek certification – Chevron, CONSOL Energy, EQT and Shell. That’s a great start. But it’s only a start.

The real proof will be in what comes next. Will these first four companies get the kind of recognition they’re after?  Will mineral owners and communities start asking operators if they’re CSSD certified before they open their doors to development?  Will other companies see the advantage to committing themselves to meet a higher bar and come through the door to get certified?

We hope so.

That’s why we’ve invested the time to build a rigorous certification process in collaboration with energy companies, regulators, CSSD auditors, environmental groups and other stakeholders. We recognize that this project is no panacea for solving all the challenges associated with shale energy production. But the potential is there for raising the bar on performance – and if we can do that, it will have been worth the effort.

By Elizabeth B. Stein

In the last week of December, the New York Public Service Commission issued an Order that signals big changes coming soon to New York’s electric utility landscape.  The Commission made it clear that it wants clean energy resources, including on-site, distributed power generation (such as solar PV), energy efficiency and energy load management strategies, to play a central role in how the energy system brings value to customers.  In contrast to the peripheral role clean energy resources have played in the past, the Commission is now ready to make them a priority, signaling a willingness to transform the regulatory landscape.

The Order was one of a trilogy arising from three intertwined proceedings, all of which were considered by the Commission on December 19, 2013.  One of those three – perhaps the most concrete and immediate – was a proceeding concerning the initial capitalization of New York’s Green Bank, a new entity that aims to advance clean energy funding in New York State.  That proceeding addresses a proposal to leverage ratepayer funds and private investment to systematically address market barriers to private financing of distributed generation, energy efficiency and demand management projects, with an ultimate goal of building a clean energy marketplace that can stand on its own.  The other related proceedings concerned two New York State programs that draw on the same funding sources that are now being made available for the initial capitalization of the Green Bank: New York’s Renewable Portfolio Standard (RPS) and the Energy Efficiency Portfolio Standard (EEPS).

This Order concerns various proposals to improve and streamline the EEPS programs.  Some of these changes are effective immediately, such as the elimination of duplicative reporting requirements.  Other, more substantive program modifications – such as the changes to the structure of EEPS and other clean energy programs, as well as the responsibilities of various entities (including the Commission’s Staff, the New York State Energy Research and Development Authority (NYSERDA) and the utilities themselves) – are to be addressed through a new “E2 working group,” which is to be formed by February 1, 2014.  This new working group is tasked with “sharing and developing concepts for an optimized E2 portfolio that supports a scale-up of energy efficiency and overall system efficiency,” for a program launch by the end of 2015.

In addition to these changes, however, the EEPS Order goes much further.  It goes so far as to direct a re-examination of the entire regulatory framework within which New York’s utility companies do business.  Noting that the “balkanization of various demand-side resources…has slowed or prevented the widespread adoption of some resources and technologies into the regulated and competitive electrical power and services industry, resulting in many lost opportunities,” the Commission articulates a vision with customer value at the center and demand-side resources playing a central role in serving them.  The Commission further states that technologies and markets have evolved since the existing clean energy programs were established, and that disruptions from major storms, like Superstorm Sandy, have coincided with increasing dependence on reliable electricity.  Even the most well-designed clean energy programs will not succeed as long as an outdated regulatory framework prevents their success.  Therefore, the Commission concluded that “the time has arrived for a…comprehensive consideration of how our regulatory paradigm and the retail and wholesale market designs either effectuate or impede progress of our policy objectives underlying these programs.”  With a deadline of spring 2014, the Commission has directed its Staff to develop a scope for a proceeding that would pave the way for transforming that paradigm in time for the 2016 round of energy efficiency investments.

For utility companies, regulatory structure and business model go hand-in-hand.  The EEPS Order opens the door to reconsider regulatory fundamentals in New York.  It seeks to better harmonize utilities’ entire business model with public policy and open up new sources of value for customers at a time when the utility industry stands at a precipice nationwide.  For example, the Edison Electric Institute (EEI), an electric industry association, observed in January 2013 that the threat of disruptive forces, such as new technologies for home energy management systems (HEMS), along with declining sales and end-use efficiency, are presenting unprecedented challenges for the utility industry.  EEI further noted that “the utility industry and its stakeholders must be prepared to address these challenges in a way that will benefit customers, long-term economic growth and investors.”

How exactly tomorrow’s regulatory structure – and tomorrow’s utilities – will work is in not yet known.  Coupled with the financing innovations that the Green Bank can unleash, the process that the EEPS Order has set in motion will give New York, its customers and its utilities an opportunity to lead the charge in responding proactively to this challenging moment in a way that sets the stage for a cleaner, more resilient and affordable energy future.

By EDF Blogs

By: Matt Golden, Senior Energy Finance Consultant

The Investor Confidence Project (ICP) and Commercial Property Assessed Clean Energy (PACE) programs offer many opportunities for collaboration in the buildings and energy efficiency sector.  We will be exploring this potential for partnership in the upcoming webinar, Commercial PACE: Raising Confidence in Energy Savings to Ramp-Up Investment and Demand, held on January, 30th 2014, at 2pm ET/ 11am PT.

This one-hour, Environmental Defense Fund (EDF) / PACEnow webinar is designed to help Commercial PACE administrators, investors, project developers and building owners understand how standardization can facilitate multiple stakeholder alignment, ensure underwriting needs are met and enable energy efficiency investment while lowering transaction costs.  It will include a brief presentation on EDF’s Investor Confidence Project, followed by panel discussion focusing on how Commercial PACE programs are using ICP to address the owner and investor projected savings-confidence challenge, which has been an impediment to energy retrofit financing nationwide.  Moreover, the panel will share how ICP is enabling energy efficiency financing to become a mainstream financial asset class with the high degree of standardization, predictability and scale that investors demand.

The panel will further discuss ICP and its relationship to a variety of efforts, including:

• The Connecticut Commercial PACE program and how standardized technical underwriting is leading to significant demand and investor engagement.
• How Texas “Pace-in-a-Box” is developing a standard PACE model to harmonize Commercial PACE programs ramping up across the state.
• Clean Fund, one of the leading Commercial PACE investors, and how standardization leads to increased opportunities for business and investor confidence.

Experts from the Commercial PACE and energy efficiency sector will be leading the panel, including:

• Matt Golden, ICP Lead and Senior Energy Finance Consultant with EDF
• David Gabrielson, Executive Director of PACEnow
• Brian McCarter, CEO of Sustainable Real Estate Solutions
• Charlene Heydinger, Executive Director of Keeping PACE in Texas
• John Kinney, CEO of Clean Fund.

This webinar is free and open to the public but you must register ahead of time.  For inquiries regarding this webinar or EDF’s Investor Confidence Project, please contact us.

By Marita Mirzatuny

On Monday, Google announced it is spending $3.2 billion to buy Nest Labs, the trailblazing company funded through its Google Ventures program and responsible for transforming “unloved” home products into beautiful, smart appliances. That’s a lot of money for a business with only two products: a thermostat and a smoke detector. Nest Labs is not exactly reinventing the wheel, right? Well, actually they are.

Welcome to the Smart Home

Google’s move is a starting shot in the race to become the go-to smart home provider, putting in place stepping stones to realizing a future in which our homes will become one ecosystem – integrated and functioning as a whole. Customers are looking for smart appliances that can notify you when they are wasting energy or not performing properly. Plus, these innovative technologies provide customers with more opportunities to engage with and benefit from other cost- and energy-saving solutions, like demand response, rooftop solar power and electric vehicles. This puts customers in the driver seat, giving them insight and control over their daily lives in ways never before imagined (even if just to use automated, “set-it-and-forget-it” functionality).

The Nest learning thermostat ‘learns’ residents’ behaviors and habits and sets temperatures at the optimal comfort and energy-saving level accordingly. Nest also enables residents to control their electricity remotely and provides the interface needed to participate in demand response, an energy management program that rewards participants for conserving energy during peak, or ‘rush hour’, times on the electric grid.

Many utilities are already taking advantage of Nest’s ability to better manage the flow of energy into and out of homes. We wrote about one such program when Austin Energy partnered with Nest to launch its residential demand response pilot in 2013. Austin Energy’s new program provides participants with an $85 rebate per thermostat in exchange for the ability to raise the Nest thermostat’s temperature a few degrees when electricity supplies run thin and energy prices spike.

Meanwhile, Nest’s other product, Protect, is completely revamping the way we interact with the annoying, chirping smoke detector of yore. Whether you accidentally burnt the popcorn or a true emergency happens while you’re away, Protect will know the difference.

But, while these gadgets are cool and helpful, what motivated Google to spend twice the amount they paid for YouTube to acquire Nest Labs?

Crossing the Energy Divide

In August, I wrote about smart homes and how we are on the cusp of new technologies for home energy management systems (HEMS) with devices like Nest and others, which promise to revolutionize our lives. The problem thus far has been that technological advances in the electric sphere tend to benefit the utilities more than the consumer. For example, by the end of 2015, approximately “45% of all U.S. households will be served by smart meters but as few as 10% of those meters will be enabled for two-way communications” via HEMS. This two-way communication is what gives customers leverage over their power usage and creation, as well as what helps save them money.

Google’s vision is to close this gap with Nest.

Source: TechCrunch

It is not just one thermostat here and a smoke detector there; it is the fully-integrated automation of your home with Nest acting as the sleek hub for all the activity therein. The possibilities are endless when considering third-party app developers are providing answers to problems we didn’t even realize we had yet! Recall the days before the iPhone and social media. Energy management and home automation sit at that same precipice, ready to take us into the future, especially as “serious innovation in core gadget lines like smartphones and televisions is coming to an end,” according to Wired Magazine.

In Texas, if residential consumers were benefiting from demand response at its full potential, enabled by technologies like Nest, we would not have an “Energy Crunch” problem. We would be able to load-shift when the electric grid is strained, avoiding the need to fire up polluting coal plants.

According to GigaOm, “technologies that manage home energy consumption just hit the big time.” And after shutting down its home energy software experiment, PowerMeter, just a few years ago, Google is now at the forefront of home energy hardware and software development. “If Google is able to give Nest the resources it needs to get its thermostat and software out there at a much greater scale,” says Giga Om, “that means lower energy consumption ahead for homes that adopt it. And that’s a good thing overall for the world and for lowering carbon emissions.”

Competition is Driving Expansion

While Nest provides that same “sexy-cool” design that Apple is known for (it was, after all, co-founded by former Apple executive Tony Fadell, who helped create the iPod and iPhone), it isn’t the only player. AT&T is getting into the game with its new Digital Life services that enable home automation and integration of energy, home security, water leak detection and more. Comcast’s competing service is Xfinity Home, teaming up with EcoFactor, a cloud-based energy management platform.

It’s interesting that the, previously disparate, telecom and energy utilities are now competing with each other (and Google) in this brave new world of complete smart home services. As Wired explains, “Nest has made no secret that it doesn’t plan to stop at the thermostat and the smoke detector. It wants to take all the mundane but important technologies you use every day in your home and make them smarter and more pleasing — what Fadell calls the ‘conscious home.’”

EDF is working diligently to bring the understanding and availability of these technologies to the marketplace. With Google’s announcement, innovative energy solutions are going mainstream, which means a better life for all of us and a cleaner environment in which to enjoy it.

By EDF Blogs

By: Marilynn Marsh-Robinson, Project Manager

This commentary originally appeared on our EDF Voices Blog

Those of us from rural areas know the special beauty of natural landscapes – and we know the challenges of living in sparsely-populated regions. Rural areas have higher rates of poverty and economic disparity, lower per capita income and disproportionate elderly and veteran  populations when compared to more urban areas.

Rural homes and commercial buildings tend to be older and less energy-efficient, and more than half of all manufactured homes are located in rural communities. Many homes lack adequate insulation, weather stripping around windows and other basic improvements that reduce energy use and add dollars to household budgets.

Additionally, rural communities account for over 70% of our country’s land mass, about 12% of total electric utility customers, and are crucial to advancing national energy and economic goals. These often overlooked and underserved rural areas are ready for innovative public and private partnerships that promote the transition to a clean, low-carbon economy and wise energy choices. 

USDA commits $250 million to rural energy efficiency 

Rural electric cooperatives recently got some good news when USDA announced that $250 million is available in its Energy Efficiency and Conservation Loan Program to help residential and business customers make energy efficiency improvements that will lower their electric bills. Cooperatives can also use loan funds to improve their own energy systems, such as transmission and generation facilities.

"Ultimately, reducing energy use helps pump capital back into rural communities,” Agriculture Secretary Tom Vilsack noted. “This program is designed to meet the unique needs of consumers and businesses to encourage energy efficiency retrofitting projects across rural America."

As a native of rural North Carolina, I welcome and applaud this much-needed assistance from USDA. It opens a whole new realm of possibilities for the hard-working families living in rural communities who are often challenged with gaining access to affordable loans to pay for efficiency improvements.

The role of private financing

In addition to federal programs like the USDA’s, private financing has a role to play. One example is in Eastern North Carolina, where EDF partnered with a local cooperative (Roanoke Electric Cooperative) and a credit union (Generations Community Credit Union) to design a programthat makes low-interest loans to homeowners in a seven-county region.

Roanoke Electric Cooperative serves 15,000 customers, and Generations Community Credit Union focuses on assisting underserved rural communities. Their new program will help homeowners with unusually-high electric bills finance basic, yet critical, efficiency measures.

Here’s how it works: Qualified homeowners can borrow up to $4,000 for improvements, with interest rates as low as 3.5 percent. Customers conveniently pay back the loans through their utility bills. It’s called on-bill finance, and the Roanoke/Generations program is the first in North Carolina to use private capital for energy efficiency retrofits.

Imagine the benefits as innovative financing programs like these spread to rural areas across the country. Access to affordable loans will spur economic development, help cooperatives invest in a cleaner, more reliable, resilient electric system and allow families to live in homes that are easier and cheaper to heat and cool. And that’s good news no matter where you call home.

By Kate Zerrenner

This commentary originally appeared on our EDF Voices blog.

It’s no secret that electricity generation requires substantial amounts of water, and different energy sources require varying amounts of water. Nor is it a surprise that Texas and other areas in the West and Southwest are in the midst of a persistent drought. Given these realities, it is surprising that water scarcity is largely absent from the debate over which energy sources are going to be the most reliable in our energy future.

Recent media coverage has been quick to pin the challenge of reliability as one that only applies to renewables. The logic goes something like this: if the sun doesn’t shine or the wind doesn’t blow, we won’t have electricity, making these energy sources unreliable. But if we don’t have reliable access to abundant water resources to produce, move and manage energy that comes from water-intensive energy resources like fossil fuels, this argument against the intermittency of renewables becomes moot.

Moving forward into an uncertain energy future, the water intensity of a particular electricity source should be taken into consideration as a matter of course. 

We know that solar PV and wind are virtually water-free fuel sources, and yet we continue to adopt policies that create roadblocks to their integration in favor of highly-water intensive coal and natural gas. Bringing more renewable energy onto the grid is not technologically impossible, but there are significant political and policy barriers in the way. We need to rethink how we plan for energy needs and put water in the equation from the beginning.

Water is scarce, but so too is data

While a utility generally includes water use in its permitting process to build a new power plant, actual water usage data is not consistent or current. Additionally, when analyzing water availability for power, planners should look at the situation across sectors. If they’re not considering, for example, the water needs of the agricultural sector, electric planners could have inaccurate estimates of what will be available in the future, especially in light of a changing climate. The electric sector should also be doing regular assessments of water use and needs as conditions change—heat waves, multi-year droughts, damaged infrastructure from storms and other weather events could impact water quality and quantity.

Adding Water to the Energy Equation

Lately there has been a lot of talk about the necessity of maintaining our current fuel mix, which is heavily dependent on fossil fuels and very water-intensive. According to the Energy Information Agency in its latest assessment, in 2012 coal accounted for 37% of U.S. electric generation, followed by natural gas (30%), nuclear (19%) and renewables (12%). Unfortunately, their predictions for the fuel mix in 2040 are not much more encouraging.

What is troubling here is that by 2040, we’re still looking at the vast majority of our electricity coming from highly water-intensive fuel sources. Where is this water supposed to come from when we are already inadequately managing our use?

Consider nuclear power: A recent NPR story on nuclear power in California highlighted the split among environmentalists over nuclear power on waste versus carbon emissions. But nowhere did the story mention the issue that will make the rest moot: if there is not enough water for highly-water intensive nuclear power to run, the low-carbon energy or the contentious waste issues are non-existent.

Water scarcity isn’t just for the West

Water scarcity has become a national issue. In the past few years, we’ve seen power implications of water shortages in areas not normally associated with water stress. During the 2008 Southeastern drought as well as the 2012 drought that pummeled the Midwest, we saw shutdowns and near shut downs of nuclear power plants from in states like Alabama, to  North Carolina and Illinois.  And let’s not forget the ongoing fight of the Tri-State Water Wars between Alabama, Georgia and Florida over distribution of increasingly scarce water for many uses, including power.

Furthermore, in its annual Winter Outlook, the National Oceanic and Atmospheric Administration (NOAA) predicts a drier and warmer winter for the Southeast (and of course continuing dry conditions in much of the West, including portions of Texas that will likely see a “redevelopment” of drought this winter).

Water Scarcity Makes Renewable Energy a Viable Option, Despite Intermittency

The intermittency of renewable energy is a red herring which can be addressed through better research, development and deployment of available technologies such as energy storage, and better policies to help integrate them into the grid. But the fact that the water usage of most renewable energy is negligible means that it is the ideal power source for our water-stressed energy future.

The discussion needs to shift. We should be talking about water intensity at the front end of our power planning because if we don’t plan with water in mind, we are planning for a dark future.

By Rory Christian

Since Superstorm Sandy stranded thousands without power across the state of New York in 2012, it has become clear that infrastructure upgrades are a necessity for the state. The current, outdated energy system is not up to the challenges of the present day and a changing climate. A year after Sandy, New York has a plan. Last week during his State of the State Address, Governor Cuomo announced the allocation of $40 million to the new Community Grids NYPrize Competition, a program which promises to help New York achieve a more sustainable, resilient energy future.

The competition, aimed at jump-starting at least ten “independent, community-based electric distributions systems” across the state by the end of 2014, is a highlight of a larger $17 billion plan to prepare for future storms like Sandy. Upon full implementation, the NYPrize Competition Community Grids are expected to support approximately 40,000 New York residents.

A “community microgrid” is a new type of energy system that leverages decentralized, local, clean power sources such as solar and wind that are able to operate independently of the centralized electric system. Microgrids are small-scale distribution systems that link multiple distributed energy resources (DERs) into a network that can generate, store and control its own power. Microgrids can operate in tandem with the main power grid during normal conditions, but can disconnect and function as an independent “island” of stable power if the main grid fails. The use of microgrids greatly reduces the number of outages and allows more people to keep their lights on during (and in the wake of) extreme weather events. 

But microgrids offer much more than just backup power in the event of an outage. They are meant to be used year-round as a primary energy source and offer many financial and environmental benefits. Renewable energy, like rooftop solar, along with dynamic energy storage systems and other energy-saving technologies such as demand response, works in tandem with microgrids to help reduce the overall consumption of energy. Microgrids also have the potential to help utilities better regulate and manage the flow of electricity to all customers (whether they are part of the microgrid community or not).

In addition to these benefits, Governor Cuomo has outlined four key objectives of the NYPrize Competition:

• Modernize New York’s power grid with advanced distributed technologies;
• Protect vulnerable residents and communities from power outages due to future storms and disasters;
• Improve electricity reliability during central grid power outages to maintain business continuity; and
• Demonstrate how community scale energy networks play an important role in New York’s transition to a cleaner and more resilient energy system.

Above all, this competition is about modernizing New York’s antiquated electric grid, a key step in preparing for an uncertain climate future and keeping the lights and heat on during the next extreme weather event. Building a smarter grid and encouraging clean, onsite renewable energy means fewer outages and faster recovery. A smarter grid would also have the intelligence needed to pinpoint outages, isolate damage and reroute power. EDF applauds Governor Cuomo’s efforts to deliver cleaner air, better health, more reliable electricity and greater customer control over electric power and costs for all New Yorkers.