By Stephanie Kline

Source: The U.S. Army Flickr

Home energy bills are not something most people think about when it comes to military energy conservation. Most service members are unlikely to think about them either, especially those who live in military housing, which are communities on or near bases that are managed by private firms. For soldiers, sailors, airmen and Marines living in these communities, their Base Allowance for Housing (BAH) covers rent and utilities and is automatically taken out of their paychecks. While convenient and easy to manage, this system can have the negative, unintended consequence of removing responsibility for individual energy use – an issue of particular concern this time of year when temperatures are at their highest and air conditioners are working overtime.

For service members who do not live in privatized military housing, their BAH is not taken out of their paychecks, and they are responsible for paying rent and utilities. My husband and I lived off base at all of our duty stations and were responsible for paying our own bills. Although our BAH was specifically designated for these expenses, we conserved energy whenever possible to keep more money in our pockets. 

The services are tapping into that economic behavior with branch-specific (Navy, Army, Air Force)  energy conservation programs that follow a Defense Department mandate requiring individual service members to take responsibility for residential energy bills. The services have been working toward establishing such programs across all military housing. As the Defense Department responds to budget cuts and new warfare threats, energy efficiency is one of its main weapons to decrease costs and meet energy mandates.

The energy efficiency programs work like this: a baseline for average energy use is set for similar homes. A 10 percent buffer is added above and below the baseline. Residents who use less energy than the average receive a rebate on their utility bill. Those who use more energy pay an overage charge.

It's easy to understand how the incentive works, and most homes will fall within the normal range. The savings from energy efficiency will stay in the community to support the program and pay for home maintenance on the base.

The goal is not to penalize service members at home, but rather to help them think about ways to conserve energy outside of the base, ship, or aircraft, as well as assist the military in reducing costs.

Studies have shown that individuals responsible for their own utility bills tend, on average, to use up to 20 percent less energy. In fact, a pilot program in the Navy’s Southeast region lowered monthly energy use by an average of 16 percent per home, saved $20 on each home’s utility bill, and reduced monthly carbon dioxide emissions by 62 metric tons over the course of a few months.

These home energy programs save money, help mitigate climate change effects, and instill a lean energy mindset in service members and their families that will increase the demand for market-based energy efficiency solutions as they transition to civilian life.

My husband and I are out of the service now. We still keep a keen eye on our thermostat.

By Jorge Madrid

Map from the LASER Atlas showing temperature rise projections in Los Angeles

You may be wondering – as I was before we started a project with the UCLA Luskin Center for Innovation over a year ago – “what the heck does Big Data have to do with climate change?”

To start, here’s a piece from Climate Central that exemplifies the new power of big data.

“Big Data allows you to say simple, clear things…to tell people about their climate locally in ways they can understand.”

Through taking information created all around us and applying thoughtful analysis, we can comprehend and unleash it to solve our greatest challenges. For EDF, that means partnering with the country’s top universities and most innovative companies to address the biggest challenge of our time – climate change.

Today we launch the newest version of the Los Angeles Solar & Efficiency Report (LASER), a data-driven mapping tool that can help stakeholders and local leaders understand climate and pollution risks in their own communities. Empowered by this information, they can seek out and maximize available resources to deploy clean energy, reduce climate pollution, and create tens of thousands of much-needed jobs.

A call to action

Last March President Obama announced the launch of his Climate Data Initiative, which put a spotlight on the need and potential to use knowledge-driven insights to help communities effectively mitigate, prepare, and adapt to climate change. This was followed by the United Nation’s Big Data Climate Challenge in May.

By releasing these maps today, we humbly join an international movement of individuals, public entities, and private companies who are maximizing the potential of shared information to inform, educate, and usher in a new wave of innovation and opportunity.

Speaking of opportunity, although Los Angeles is famous for its nearly year-round sunshine, it is leaving about 98 percent of its rooftop solar potential untapped. Achieving just ten percent of that would drive the creation of 47,000 solar installation jobs and could reduce carbon pollution by nearly 2.5 million tons annually. This is the equivalent of taking more than half a million cars off the road every year.

New, low-carbon energy options are critical to reduce greenhouse gases and avoid the worst impacts of climate change. We’re already experiencing impacts of a changing climate, and Los Angeles County is projected to get REALLY HOT in the coming decades. Using groundbreaking climate projections by Dr. Alex Hall and the UCLA Department of Atmospheric Oceanic Sciences, the LASER maps show that, by mid-century, Los Angeles’ urban core and downtown will experience three times as many extreme heat days (above 95 degrees Fahrenheit) as today, and the valleys and areas of high elevation will experience four times as many.

All air is not equal in L.A.

Half of California’s most vulnerable population lives in L.A. County, based on analysis from Environmental Protection Agency data and the CalEnviroScreen. That means there are 3.7 million people living in communities in L.A. County – 38 percent of the county – already over-burdened by harmful pollution and other risk factors that make them especially impacted by climate change. A majority of these vulnerable areas are home to low-income families and communities of color. As one of these maps demonstrates, there are polluting fossil fuel power plants right in the middle of many of these communities.

The most polluted areas in L.A. can grow thousands of clean energy jobs

There’s an overwhelming bright spot on the LASER maps. It turns out that some of the communities most vulnerable to air pollution and extreme heat impacts – like East Los Angeles, South Los Angeles, and the San Fernando Valley – also have some of the highest job creation potential through rooftop solar installation and energy efficiency, both of which also reduce climate and air pollution.

Fortunately, California is already planning to prioritize clean energy and other low-carbon investments in the state’s most vulnerable communities via proceeds from its successful cap-and-trade program. Just last month, California Governor Brown allocated $225 million specifically to disadvantaged communities, above the mandated 25 percent of program proceeds.

Data can overcome barriers

This set of visual tools can help overcome language, technical, and literacy barriers and bring all affected parties to the table to tackle difficult policy challenges. LASER maps serve as a valuable and empowering educational tool for communities facing increased risks as a direct result of climate change. Through increased understanding and openness, these maps can help create and advance a vision for a cleaner, healthier future for the region.

Information is power. It’s not just for the data crunchers, the politicians, or even the climate nerds; it’s for everyone and can start a conversation that everyone can access.

This commentary originally appeared on our California Dream 2.0 blog.

By John Finnigan

Source: iStock

The U.S. electric grid has not been updated since World War II when telephones, dishwashers, and air conditioning were the cutting-edge technology innovations of the century. Today, this same grid is struggling to cope with the technological advances of the last decade, a reality that hit home for New Yorkers in the wake of Superstorm Sandy when millions of people lost power for days and even weeks.

But New York is taking steps to change this, first by initiating a proceeding in April to overhaul the state’s utility business model, and now by opening the proceeding to comments. EDF filed our comments (Track 1 and Track 2) in this case last Friday, July 18th, and commends the New York Public Service Commission for the opportunity to provide our input on this exceedingly important policy that will have national implications.

Humble beginnings

New York played a leading role in establishing today’s utility business model. Thomas Edison developed the first power plant on Pearl Street in Manhattan in 1882, serving 85 lighting customers.

The business model of Edison and his protégé, Samuel Insull, was simple – keep adding more customers and keep building larger power plants. This was a win-win model for Edison’s customers and for his utility companies. Customers won because the ever-larger power plants were more efficient, meaning Edison could sell electricity at a lower cost per unit every time he built a new plant.

As the price per kilowatt of electricity kept declining, customers used more electricity. To encourage growth in this new electricity infrastructure, New York, like all of the other states, protected the utilities’ investment by granting them an exclusive right to serve customers. In exchange for being permitted to operate as a monopoly, New York set the price the utility could charge for electricity. The prices were structured to reward the utility for successfully building a bigger and more robust system.

Needless to say, Edison’s business model proved wildly successful.

We now have access to electricity 24/7, at the flip of a switch. The U.S. electric power industry fuels the world’s largest economy. We rely on our heating and air conditioning, appliances, televisions, computers, phones – all powered by electricity – to provide our daily needs. The electrification of America was the greatest engineering feat of the 20th century, surpassing even the invention of the Internet and sending a man to the moon.

Out with the old, in with the new

This model has worked well for the past 130 years because it used the right incentives for what society needed. But today this business model is out of sync with what we need now.

Customer expectations have evolved beyond the relatively basic requirements of Edison’s time; they need and expect power quality and reliability to support the digital economy. We now know that when customers are armed with the knowledge that the cost to produce electricity varies by time of day and year, they are willing to change well-worn patterns to bring down their electricity bill. For example, price-conscious customers might run their dishwashers at night instead of during the day, yielding not just lower prices for themselves but the entire system at large.

Indeed, many customers want to take advantage of new technologies and falling prices to enjoy on-site electricity options, like rooftop solar panels and electric vehicles. More efficient industries, buildings, homes, and appliances now allow customers to accomplish much more with far less energy. Advances in telecommunications and information systems create new opportunities for energy services we could not have imagined just a few years ago.

It’s not just customer choice and technology, however, placing pressure on Edison’s outdated utility business model. It has also become increasingly evident that our reliance on fossil fuels burned in large centralized power plants has created an environmental burden for our children. We need a system that is less polluting. Climate change has increased the likelihood of extreme weather events, which could render large central plants useless in meeting our energy needs. Upgrading to a smarter grid will allow us to fully integrate distributed generation, like rooftop solar and combined heat and power, that can operate independent of the central grid.

The challenge

To meet the needs of today and tomorrow’s world, we must ask ourselves if the services are best delivered as they have been for the last 130 years. We must look to new opportunities that reward utilities for successfully furnishing a sustainable platform for our energy needs, not just for providing more power plants and equipment. The utilities will be our portal to energy services, but they do not necessarily have to be the provider of them.

To accomplish this, the New York Public Services Commission, in consultation with stakeholders, must identify the outcomes they want utilities to achieve – and tie the utilities’ revenues to their performance in meeting these outcomes. New York has a good start with performance-based ratemaking. It is time to build on that foundation to reward results, not utility spending.

This will be no easy task. The electric power industry has grown into a $300 billion/year industry using the old model. Over the last 130 years, regulators, utilities, investors, and customers have become entrenched in our ways. Any transition will require a shift in deeply-rooted practices and sufficient time to fully develop. Changing to a performance-based model will require detailed analysis to establish optimum outcomes and performance metrics.

The outcomes will still address traditional objectives of resource adequacy and reliability of service, while taking into account new elements such as clean energy, customer engagement, system efficiency, and openness to innovation. This will require fundamental changes in the reward system that go far beyond decoupling. New reward systems are needed to align the incentives for traditional utility companies, the clean tech industry, and customers. As always, regulators must be vigilant in monitoring the utilities’ performance, but it will mean developing new skills. Rather than judging prudency in retrospect, the Commission will be challenged to be more of a partner in envisioning the possibilities of the future utility.

EDF will bring to this proceeding its perspective and experience in solving environmental problems through innovative market-based solutions. Some strategies by which the Commission can achieve this objective in part include:

1. transitioning from traditional rate of return regulation to performance based regulation;
2. fully valuing all costs and benefits associated with distributed energy resources;
3. removing barriers to non-utility entities participating in energy service markets; and
4. requiring the utility to optimize the load it serves.

New York gave birth to the electric power industry 130 years ago, making it the perfect place to reinvent the utility business model for the 21st century. New York boldly proposes to take on this challenge.

By Marita Mirzatuny

Paramount Theater in Austin, TX. Source: Nicholas Henderson Flickr

They say everything is bigger in Texas and often that's true, especially when it comes to big hair and the bravado of politicians. This amounts to a lot of drama and theatrics. I mean, as someone who grew up in Dallas, I can tell you that the soap opera by the same name wasn't too far off the mark.

Being a mighty oil and gas (and wind!) state, this drama often translates into fights with the US Environmental Protection Agency (EPA) and other environmental regulators over pollution reduction. Texas is the number one emitter of carbon emissions and second biggest water-polluter in the nation. Texas doesn't really have solid ground to stand on.

Yet as of 2012, Texas Attorney General Greg Abbott (current GOP and Koch-brothers backed candidate for Governor) has sued the federal government over environmental regulations sixteen times. And of the 25 total lawsuits pending against the federal government, Texas has only prevailed five times. Exemplified yet again in June when the Supreme Court ruled seven to two that yes, in fact, EPA is allowed to regulate greenhouse gas emissions from most large industrial facilities, like power plants and factories, despite Texas’ arguments.

In Abbott’s own words, "what I really do for fun is I go into the office [and] I sue the Obama administration.” This fun hobby has cost taxpayers roughly $2.5 million – or a "bargain," according to Abbott.

So, of course, after the Obama administration announced that carbon emissions from existing power plants will be limited for the first time ever, the same cast of characters began revving up the futile fight with words like “job-killing,” conveniently ignoring the job growth in the state’s renewables sector. Abbott yet again vowed to waste even more money fighting EPA in court while Governor Perry went so far as to say that there’s a “war on American energy [designed] simply to appease what appears to be a tiny sliver of environmental extremists.” Well, “more than two-thirds of Americans support President Barack Obama’s new climate rule,” hardly a “tiny sliver of extremists.”

But it doesn't have to be this way. We can avoid all the sanctimony of failed lawsuits and go straight to growing Texas' clean energy economy by taking advantage of the flexibility built into EPA’s Clean Power Plan.

The Script

On the day following the carbon pollution rule announcement, it just so happened that the bi-partisan Texas Clean Energy Coalition (TCEC) held a luncheon to announce the findings of a new Brattle Group report commissioned by the host organization: Exploring Natural Gas & Renewables in ERCOT, Part III. This is the third in a series of analyses that TCEC has conducted to look at the full potential of Texas energy assets beyond fossil fuels.

While it does rely on natural gas, the report emphasizes renewable energy, like wind and solar power, and demand response (a program that rewards people for using less electricity, rather than turning on coal-fired power plants to meet electricity demand) as key players moving forward. This blueprint shows the way Texas can reduce emissions by over 38 percent by 2032. EPA’s Clean Power Plan requires a 39 percent reduction in Texas’ carbon emissions from 2012 levels by 2030. This path forward is well within Texas’ reach. The report also highlights that "the scenario with the most aggressive assumptions for efficiency, demand response, and combined heat and power was also found to deliver the lowest power prices in 2032."

So the day after Texas was tasked with reducing carbon emission by 39 percent, TCEC came out with a plan to get us there. That's what I call serendipity, and we should embrace it as a positive step forward in the state.

And Action?

The TCEC report isn't the only path either, as co-author Dr. Peter Fox-Penner noted. The analysis was modest in estimating the potential growth of demand-side resources, such as rooftop solar power, demand response, and energy efficiency, which Brattle estimates could "cut projected peak demand growth in half and provide substantial opportunities to… lower overall electricity costs." Fox-Penner added that "Texas is in a position to build a cleaner, more affordable, more water-lean and more reliable electricity sector.” The report concluded that no matter the pathway, "the more demand-side resources deployed, the more money Texas would save."

This comes as the World Bank estimates that fighting climate change will grow global GDP by up to $2.6 trillion a year and as Citigroup bullishly reports that renewables will displace coal and nuclear in the near future. Even Governor Perry, with his "Texas Miracle," bragging about stealing jobs away from California, is thinking of moving to the carbon-regulating state and driving a Tesla. The writing is on the wall. Yet Texas’ current leadership is fighting an old war that they don't even seem to really buy into anymore.

The University of Texas’ Dr. Michael Webber sums it up well:

What's the number one way you can reduce emissions in the power sector? By switching from coal to gas. And who sells the gas? We do. What's the other way you do it? With wind and solar. Well, who's got the wind and the sunshine? We do. Who's got the cheap, flat land for building wind farms and solar farms? We do.”

Denying climate change and rigging the system to benefit fossil fuels may have been a lucrative strategy in the past. But if Texas wants to succeed in the new world, it needs to take lessons from its most desirable cities, proactively harness our renewable resources (including the power of people), and improve the quality of our environment.

Rick Perry may be heading to Hollywood following his last act as Governor, but Texas still has a leading role to play in the clean energy economy. It's time we cut the theatrics and the pollution.

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

By Greg Andeck

Source: Advanced Telemetry

Office building employees in Charlotte, North Carolina are taking small, voluntary actions to save energy. These steps are making a noticeable difference on utility bills and Duke Energy, the country's largest utility, can prove it.

Duke's Smart Energy Now program is the first commercially-available program of its kind in the country to use behavior change to reduce energy use in office buildings. The program helped participating customers save about six percent in energy over three years, exceeding the five percent goal and representing enough savings to power nearly 2,600 homes for a year.

Through the use of gentle reminders and friendly games, the program encourages uptown office workers to turn off computers and lights and find other easy ways to save energy. An innovative electronic kiosk in the lobby of each participating building shows real-time energy use, and participants can check their progress.

Smart Energy Now is part of Envision Charlotte, an initiative led by companies in the city center to improve energy efficiency and sustainability. The program is helping Envision Charlotte meet its goal of reducing energy use by 20 percent over five years.

Because the approach has demonstrated considerable savings, Duke Energy wants to expand its behavior change program to three more North Carolina cities – Raleigh, Greensboro and Winston-Salem – and five more states where Duke does business. Programs for small towns and rural communities are also on the horizon in North Carolina. The company recently received approval to offer similar programs in South Carolina.

Envision Charlotte and Smart Energy Now are two great examples of innovative energy efficiency projects in commercial buildings. For a look at a savvy smart grid project in a residential area, check out Pecan Street in Austin. Both are creative initiatives to lower energy use in buildings, a tactic that we feel will prove increasingly useful to states as they formulate plans to meet the EPA’s proposed Clean Power Plan.

By Paul Stinson

Source: Paul Cross, https://flic.kr/p/7AU7PK

Like many relationships, the one between utilities and their customers can be complicated. Sure, they’ve been together for decades, but no longer are customers satisfied with a distant, disengaged power company selling them more and more megawatts.

As the utility business model evolves into one based on diverse energy services, utilities must find ways to prioritize and improve their customer relationships if they hope to thrive in the new energy economy.

What do customers really want?

It doesn’t take years of market research to discover that utility customers enjoy saving money. But just as important as a low price for power – if not more so – is a genuine feeling of power.  Just ask Dr. Philip Lewis of global energy think-tank VassaETT, who has researched the subject for years. His findings show that customers want to be in control of their energy behavior. They want market transparency and predictable rewards for their choices. The bottom line, says Lewis, is that customers want to feel like equals with their electricity suppliers, not captives.

A recent Accenture study maintains that the issue of customer choice is at the heart of the changing utility landscape. In an ever-evolving energy marketplace, consumers value personal connections and are interested in buying products and services that align with their lifestyles. Utilities, for their part, have long been able to ignore these qualitative concerns, but it’s increasingly clear that they must refocus their attention on serving this new breed of customer if they want to remain in the picture.

How can utilities deliver?

Open communication is the basis of any healthy relationship, and perhaps the easiest and best way for utilities to improve their connection with customers is to expand their use of social media. These days most utilities have Twitter and Facebook accounts, but few appear to be maximizing the potential of these and similar channels for customer interaction.

For example, utilities can use social media for sharing information on storms and power outages. ComEd and Duke Energy are but two companies that turned to social media in the wake of severe storms in recent years, posting real-time updates on repair and recovery efforts and earning widespread customer participation and media coverage in the process. Social media can also help utilities segment their markets and target specific groups of customers for energy efficiency or demand response products and promotions.

Additionally, social media enables dynamic customer-to-utility communication, an invaluable avenue for discovering and discussing customer needs. Though it’s clear that customers generally want more control of their energy behavior, utilities cannot simply employ a one-size-fits-all solution. The amount of customer control and the corresponding offerings of products and services will vary based on a myriad of geographic, cultural, and socio-economic factors. As they navigate these market uncertainties, utilities can use social media to gather information about customer trends – such as which neighborhoods are going solar fastest – gauge interest in new products and services, and create personalized marketing channels.

Hope on the Horizon

One hopeful development in the area of customer engagement is We Stand For Energy, a new national campaign sponsored by the Edison Electric Institute (an association of investor-owned utilities, or about 70 percent of all US power companies) that seeks to educate people about the value of a reliable, affordable, clean energy future.  The interactive website, which formally launched in late May but is still being rolled-out to independent utilities across the US, invites visitors to register using their name, email, and zip code. In exchange, they’re offered “regular updates” and a chance to “participate in the conversation with our community.” The website also features a blog and an interactive map of the United States that breaks down the fuel mix and number of electric company employees in each state, as well as links to their social media channels.

Although some have noted that this campaign may just be utilities’ attempt to preempt blowback if electricity rates increase due to all of these clean energy infrastructure upgrades, it remains to be seen whether this is the beginning of a more integrated strategy among investor-owned utilities to actively engage with their customers. Whatever the case may be, it’s exciting to see this utility group embracing the digital world as an opportunity to educate, learn from, and connect with the 21st century electricity customer.

Just as good interpersonal relationships rest on communication and trust, so too must the relationships between utilities and their customers. As utility business models continue to change, their customers are also changing from passive ratepayers to active, engaged energy users. It’s clear that they want their voice to be heard. The question is, are utilities willing to listen?

By Marita Mirzatuny

Workers install solar panels on a home in Austin's Mueller neighborhood, a project of Pecan Street Inc.

As I stroll through the Mueller neighborhood in Austin, TX, I see parks, fountains, two-door garage homes – absolutely nothing out of the ordinary – just your average suburban neighborhood. But I know better.

Under the surface of this community lives the most “connected” network of energy customers in the country. Mueller is the launching site for Pecan Street Inc.’s living smart-grid research project and, according to a recent issue of Time Magazine, America’s Smartest City.

The Time article features homeowners who generate and make money on their solar panels, while enjoying access to minute-by-minute energy use data. It shows their sense of stewardship and empowerment.

The story does a good job summarizing the mission of Pecan Street, of which Environmental Defense Fund is a founding member and environmental partner. But the author misses one important point when he writes: “The rest of America may never realize Mueller’s vision for the future.”

The truth is, we have cause for a lot more optimism than that. We believe that the Mueller model is scalable and EDF is working hard to make sure the rest of the country can also enjoy the benefits of a smarter, cleaner home.

A living laboratory

Together with the City of Austin, the University of Texas, Austin Energy, and other institutions, we set out in 2008 to reinvent a neighborhood to become a model for America’s clean energy future. One of the goals of the project is for the neighborhood to decrease carbon emissions by more than 60 percent compared to its Austin peers.

But the Mueller neighborhood, the locus of Pecan Street, is foremost a laboratory of ideas and technologies that includes more than 250 households, 200 of which have rooftop solar and over 50 electric vehicles.

In June of 2013, Pecan Street opened its three-story Pike Powers Laboratory and Center for Commercialization, where researchers test everything from electric vehicles to energy storage technologies. And Pecan Street is expanding.

The project already includes residents throughout Austin, Dallas, San Diego, and Boulder – and it's just the beginning. Despite different climates and needs, these cities show that the opportunity for scaling the Mueller model is huge if we allow flexibility and meet regional needs.

Communities with abundant sunshine can benefit from rooftop solar panels that face west, while others with less sun may invest in community energy storage. Those in windy parts of the country may find success by encouraging residents to shift their power needs to the night when the wind blows more.

Utilities have the power

Pecan Street is proving that energy independence, comfort, reliability, and sustainability all go hand-in-hand – if you have the right electric utility.

Austin Energy is undoubtedly one of the country’s more forward-thinking utilities, which is, in part, why Mueller residents are enjoying negative utility bills. They understand that the world is changing and are prepared and ready for the challenge.

Meanwhile, other utilities around the country are fighting hard to protect the status quo and creating roadblocks for homeowners looking to gain energy independence. To counter this movement, EDF is helping state regulators rethink the country’s century-old utility business model.

Instead of paying utilities to build more dirty power plants, utilities should incentivize energy efficiency upgrades and distributed generation, like rooftop solar panels. The cleanest and cheapest electricity, after all, is the energy we don’t use.

Scalable innovation

Energy efficiency and demand response – a program  that rewards people for using less electricity, rather than turning on coal-fired power plants to meet electricity demands – can take us a long way.

So can financing tools that eliminate steep upfront costs. EDF’s On-bill repayment has opened the door for homeowners of all incomes to harness clean energy – a requisite for growing the market. We estimate that over a 12-year timeframe on-bill repayment could help spur $87 billion in clean energy investments nationwide.

Such programs, along with knowledge from the Mueller neighborhood, can bring innovation far beyond Austin.

Pecan Street’s main goal above all else is to be a proving ground where appliances can be tested in a real-world situation before they go to market. It’s a place where we can see how the growth in electric vehicles affects the electric grid, and where we can find new revenue streams for utilities as the world changes around them.

The key to this new path is flexibility in the system and multiple, sustainable options that consider each region’s needs, all while reducing pollution and improving our quality of life.

The wisdom gained from “America’s Smartest City” will be applicable to our entire country.

This commentary originally appeared on our EDF Voices blog.

By Michael Panfil

Resiliency+ is a new blog series, which highlights the ways in which different clean energy resources and technologies can play an important part in increasing energy resiliency in New Jersey and around the country. Check back every two weeks, or sign up to receive Energy Exchange blog posts via email.

Source: http://aroundaworld.net/

The Federal Energy Regulatory Commission (FERC) describes demand response as “changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.”

There is quite a bit to unpack in that definition, but put simply, demand response is little more than a way of financially motivating customers to reduce their energy use when electricity is particularly scarce and expensive or when the wires are overburdened (check out EDF’s other blog posts and resources that go into more detail). The end result is a more efficient electric grid which is less overbuilt and less dependent on inefficient fossil-fuel plants that are often uneconomic to operate and highly polluting, but may be called upon when all else fails.

Demand response can be a great resiliency tool by working to reduce stress on our electricity grid during times of prolonged disaster or shifts in weather. For example, last winter the Northeast experienced a prolonged cold snap, during which people used more electricity than normal to stay warm and keep the lights on. Making matters worse, up to 20% of power plants were off-line, either due to scheduled maintenance or because of the cold weather. Conditions like these – in which energy demand is higher than anticipated and supply is less than expected – can lead to black-outs. Fortunately, demand response proved to be a vital piece of the solution. Customers reduced their electricity usage by 1,900 MW of electricity in parts of the Midwest and Northeast (covered by ‘PJM Interconnection’, a regional electricity transmission organization). Demand response helped this region avoid the worst case scenario: a blackout for all customers during a time when heat was desperately needed.

In addition to improving resiliency, demand response provides a number of environmental benefits.  First, demand response can help to reduce ‘peak’ consumption of electricity, a time when electricity is usually both the most costly and the most polluting. Demand response reduces or eliminates the need for peak resources, like coal-burning power plants, by reducing demand. Second, demand response can help encourage renewable resources like solar and wind power by helping to address intermittency issues. For example, when the wind stops blowing or the sun stops shining, demand response, particularly when automated, can reduce the need for electric capacity until it comes back online.

New Jersey falls within the geographic bounds of the aforementioned regional transmission organization, PJM Interconnection (PJM coordinates electricity usage throughout much of the Midwest and Northeast), which is a leader in demand response. A FERC survey found that New Jersey’s reported demand response capability as of 2012 was 910 MW.  However, more demand response is possible in the state through automated demand response programs provided by third parties and utilities.

Superstorm Sandy was a wake-up call to New Jersey after a third of businesses and homes in the state lost power for days and in some cases, weeks. State officials are recognizing the crucial importance of grid resiliency during both singular extreme weather events, like Superstorm Sandy, and prolonged weather events, like cold snaps and heat waves. By increasing demand response across the state, New Jersey can begin to address the negative impacts of these weather events, and in turn, create a more resilient electrical grid.

By EDF Blogs

By: Max Wycisk, Communications Intern

The second annual New York Energy Week, held last week, brought together more than 4,000 industry leaders and innovators – double the number last year – to discuss the dynamic changes the state’s energy sector has seen in the last twelve months, including the state’s historic move to re-examine its utility business model. In a series of panel discussions held throughout New York City, state, national, and international energy leaders reviewed key topics such as energy storage, building efficiency, and the rapidly evolving utility industry itself. While the topic of discussion varied, a number of consistent themes emerged, giving attendees a clear vision of the steps industry is taking toward adopting a modern, decentralized, clean energy future.

Communication drives innovation

One of the main themes of the conference, which was organized by research firm Enerknol, was the shift in how the energy industry will interact with consumers as well as the way in which it interacts with itself. Speakers frequently described the current energy industry as ‘fragmented’ or ‘acting within silos’ and questions arose at nearly every panel about how to stimulate conversation between different energy sectors that will lead to collaboration, investment, and innovation.

Peter Molengraaf, CEO of the Dutch power company Alliander, articulated this idea during the week’s closing ceremonies when he urged the energy industry to open up and begin sharing information, software, and solutions that will stimulate creativity and benefit both business and customers. The critical need for communication was also expressed during the NYC 2.0 roundtable on sustainable buildings, which was moderated by Rory Christian, EDF’s New York Director, Clean Energy. Panelist Posie Constable, director of Clean Heat Finance at the New York Clean Energy Finance Corporation (NYCEEC) spoke about leveraging partnerships to achieve goals, referencing NYCEEC’s success in refinancing mortgages to support energy efficiency retrofits through partnerships with corporations like Fannie Mae. She noted such relationships are among the largest opportunities currently available to the energy industry.

Technology is accelerating the transition to clean energy

Many participants at New York Energy Week spoke about the potential of technology to significantly accelerate our transition to a clean energy economy by making utilities smarter and enhancing energy efficiency. The applications for technology in the energy industry are limitless and range from using electric vehicles and large batteries to create a resilient electric grid, to enabling two-way data communication programs like demand response, which incentivizes people (via a credit or rebate on their monthly electricity bill) to conserve energy during periods of peak or high energy demand. Technological advances also support the production of renewable energy on a massive scale, with solar panels and wind turbines coming to represent an ever larger percentage of global energy generation as the technology behind them continues to improve.

Conference participants view the energy industry as being at a critical juncture for change and highlighted that actions over the next five years will define our energy future for the following 50. New York Energy Week was a promising start to imagining what this future might look like. We must continue to challenge norms and seek innovative solutions at every turn. EDF looks forward to continuing this dialogue and to realizing all the possibilities that abound when leaders of the energy community work together.

By Lauren Navarro

This blog post was co-authored by Kate Zerrenner, an EDF project manager and expert on energy efficiency and climate change.

On June 2, the U.S. Environmental Protection Agency made a historic announcement that will change how we make, move and use electricity for generations to come.

For the first time in history, the government proposed limits on the amount of carbon pollution American fossil-fueled power plants are allowed to spew into the atmosphere.

There are two clear winners to comply with the plan while maintaining commitment to electric reliability and affordability: energy efficiency and demand response.

We’re already seeing pushback from some of our nation’s big polluter states, such as West Virginia and Texas. But the truth is that while the proposed limits on carbon are strong, they’re also flexible.

In fact, the EPA has laid out a whole menu of options in its Clean Power Plan – from power plant upgrades, to switching from coal to natural gas, and adopting more renewable energy resources. States can choose from these and other strategies as they develop their own plans to meet the new standards.

That said, there are two clear winners on the EPA’s menu that offer low-cost options for states that seek to comply with the plan while maintaining their commitment to electric reliability and affordability: energy efficiency and demand response.

Energy efficiency our lowest-hanging fruit

Simply saving energy is the most cost-effective way to reduce demand and carbon pollution from power plants. The cheapest, cleanest and most reliable electricity, after all, is the electricity we don’t use.

The benefits of energy efficiency are vast. It helps people and businesses save money, it boosts job creation (as many as 274,000, one source estimates), and it reduces harmful power plant pollution.

From a utility perspective, energy efficiency improves the reliability of our electric grid and lowers costs for infrastructure maintenance.

Plus, in states such as Texas and California, which face extreme drought, energy efficiency can save scarce water sources. Remember that coal-fired power plants are thirsty and less water is consumed when these plants are used less (or not at all).

Half of the states already have mandatory energy-efficiency targets, so we have the knowledge and experience across the country to advance this undeniably beneficial resource.

Same as taking all cars off road

McKinsey & Co. estimates that by 2020, the United States could reduce its annual energy consumption by 23 percent by adopting energy-efficiency measures. This could save us more than $1 trillion dollars and cut greenhouse gas emissions by more than a gigaton—the equivalent of taking the entire U.S. fleet of passenger vehicles and light trucks off the road.

That’s why Environmental Defense Fund is working with policymakers, investors, and utilities throughout the country to understand the full benefits of energy efficiency, and to explore paths for implementation, for when they’re crafting state plans under EPA’s new Clean Power Plan.

Demand response: everyone wins

Demand response is another way to introduce greater efficiency into the nation's electricity system and help reduce carbon emissions. It’s an invaluable tool that can help conserve electricity when supplies run thin, and bring more clean energy onto the grid.

On a hot summer day, for example, when electricity demand is high, utilities can ask permission of select customers to lower their thermostats a couple of degrees. In exchange, these customers receive credit on their next electricity bill.

It also helps utility companies better manage stress on the electric grid and it can help them integrate wind, solar, and other renewables to replace aging coal-fired power plants.

Demand response relies on people, not power plants, to meet energy demand and reduce carbon pollution from our electricity sector.

Proven strategies

In Southern California, for example, they’re about to replace a large chunk of electric capacity – at least 550 megawatts – from the recently closed San Onofre Nuclear Generation Station with renewable energy, energy storage – and demand response. This will help minimize a need for gas-fired plants and other polluting facilities that might replace the nuclear plant.

Best of all, demand response is more affordable than building new power plants. In fact, if just 50 percent of Southern California Edison’s customers participated in time-of-use rates – a type of demand response program – energy demand would plummet so much that 66 percent of San Onofre’s former generating capacity would no longer be needed.

As a bonus, customers across the territory would also collectively see cost savings of $357 million, a 15-percent decrease.

As a result of smart decisions such as the one involving the San Onofre plant, California’s utility sector’s greenhouse gas emissions have and will continue to decline. This proves that demand response can and should be a core tenet in the nation’s push to diversify its energy mix and cut pollution in order to usher in a clean, sustainable and healthy future.

As EPA Administrator Gina McCarthy noted last week, these clean energy solutions are not new ideas. They’re based on proven technologies and approaches that "are already part of the ongoing story of energy progress in America."

"We're not doing cutting-edge work here, folks," she said. "We are just opening the door to cutting-edge.”

This commentary originally appeared on EDF Voices.

By Rachel Neil

Library of Congress, Prints and Photographs Collections.

As innovative energy products and services come to market, so do new mechanisms to fund them. And existing funding options become more popular. This has resulted in a boom of finance jargon, especially regarding energy efficiency and renewable generation. Though many of the finance terms used in clean energy finance are similar to those used in traditional finance, it’s easy to get lost. We hope this glossary will help those in clean energy navigate the new and growing world of clean energy finance.

Asset Class: A grouping of similar types of investments that behave similarly in the marketplace and are subject to the same laws and regulations. Broad examples of asset classes include:

1. Equities (also known as stocks) – assets that represent ownership of part of a company.
2. Bonds – assets that guarantee a fixed payment stream.

Bonds are often further categorized based on structure or source of the payments. Examples of these subclasses include municipal, corporate and mortgage bonds.

Credit Enhancement:  A feature that increases the creditworthiness of an individual or corporate borrower. They are intended to reduce the risk that the investors will not be repaid. One simple type of credit enhancement is a loan loss reserve, which accepts the losses for a portion of the defaults in an asset pool. Other types of credit enhancements include payment mechanisms such as On-Bill Repayment and PACE (see explanations below).

Energy Services Agreement (ESA): In an ESA, energy efficiency is treated as a service rather than a product. In this type of agreement, a project developer evaluates a building and executes energy efficiency upgrades. The customer pays for this energy service over time at an agreed upon rate. One way to structure the contract is to have the customer pay per unit of energy saved, which means they only pay for the actual savings and do not bear the risk of an underperforming project.

Green Bank: Green banks are generally defined as public or quasi-public financial institutions that use public funds to attract private investment to clean energy projects. Green bank activities can include offering financing guarantees, creating new financial products, and helping alleviate market barriers and inefficiencies. Green banks in Connecticut, New York and Hawaii have hired staff with extensive experience in both the private and public sectors. Each of these banks has the authority and capability to work closely with private sector entities to design effective clean energy financing solutions.

Green Bonds: A type of bond that is issued to pay for climate/environmental projects. These are often issued by large institutions, such as World Bank, Bank of America, and Toyota, that invest in both environmental and non-environmental projects. However the proceeds from the green bonds are invested exclusively in green projects.

MACRS: The Modified Accelerated Cost Recovery System (MACRS) is the primary tax depreciation system used by the IRS. Depreciation is an income tax deduction that taxpayers can use to recover the cost of certain types of property over time.  MACRS specifies different cost recovery periods for different types of properties, usually based on the expected useful life of that property. However, MACRS allows for a relatively short five-year cost recovery period for solar photovoltaic assets despite the fact that solar systems often have a useful life of 25 years or more. This accelerated recovery period increases the attractiveness of solar investment.

On-Bill Finance (OBF): OBF allows utility customers to borrow money from their utility at little to no interest to pay for certain energy efficiency measures. The loan is repaid over time through the utility bill.

On-Bill Repayment (OBR): OBR is a program that helps utility customers secure private financing for energy efficiency and renewable generation by allowing them to repay the private financing institution through their utility bill. Placing the repayment on the utility bill provides lenders and other investors with greater assurance that they will be repaid, therefore enhancing the credit of participating customers. This results in a greater number of customers being eligible for financing as well as better overall financing terms for qualifying customers.

Open Source OBR: An OBR program that allows multiple lenders and other investors to compete for customers and allows a wide variety of financing products, such as loans, leases, Power Purchase Agreements and Energy Services Agreements, to be eligible through the program.

Property Assessed Clean Energy (PACE): PACE allows building/home owners to repay loans for energy efficiency and/or renewable generation through their property tax bill. Placing the loan repayment on the property tax bill reduces the risk of default because property taxes are almost always successfully collected. This reduced risk of default provides a credit enhancement for participating building/home owners, and therefore allows more building/home owners to get access to financing at attractive rates.

PACE 2.0: PACE 2.0 is a new version of PACE that is emerging in Connecticut, California and some other states. Like the original PACE, PACE 2.0 allows for clean energy investments to be repaid through the property tax bill. But PACE 2.0 goes a step further by allowing payments for solar leases and for solar power purchase agreements to also be repaid through the property tax bill.

Renewable Electricity Production Tax Credit (PTC): The Renewable Electricity Production Tax Credit (PTC) is a per-kilowatt-hour tax credit for electricity generated from qualified renewable resources including, but not limited to, wind, geothermal, and closed-loop biomass. It incentivizes renewable energy in a market dominated by fossil fuels. This tax credit is generally only available for the first ten years of production. The PTC is not typically used for solar generation.

Secondary Market: The market(s) where securities and other assets can be purchased from somebody other than the initial issuer of the asset. For example, when a bank sells the mortgages that it originated as mortgage-backed securities, they are selling into a secondary market. Secondary markets are particularly important to clean energy finance because the payment obligations that are created through clean energy finance mechanisms like PACE and OBR (see definitions above) can be turned into an asset and sold on secondary markets. The ability to sell these assets on the secondary market is very attractive to investors and helps drive down the cost of capital for clean energy projects.

Securitization: The process of combining financial assets into a pool and then selling portions of that combined pool on the secondary market to institutional investors, such as pension funds. The resulting asset (i.e. mortgage-backed securities) generally requires a credit rating from a rating agency assessing the risk associated with it. By allowing the original investor in a project to sell the resulting asset on the secondary market, securitization increases initial lenders’ willingness to provide low-cost capital. This is particularly true if the resulting securities receive a high credit rating because the asset will be worth more on the secondary market.

Solar Investment Tax Credit (ITC): The Solar Investment Tax Credit (ITC) is a 30 percent tax credit for the cost of solar systems installed on residential and commercial properties.

Solar Lease: A contractual agreement under which an individual or business allows solar panels owned by a third party to be installed on their property, and leases those panels for a fixed period of time. Lease periods typically fall within 10 to 20 years. Third-party ownership structures, such as solar leases and Solar Power Purchase Agreements, allow investors to take full advantage of the tax benefits of solar (see Tax Equity Investment).

Solar Power Purchase Agreement (PPA): A contractual agreement under which an individual or business allows solar panels owned by a third party to be installed on their property, and agrees to purchase the power produced from the solar installation at an agreed upon rate over a fixed period of time. Third party ownership structures, such as Solar Leases and Power Purchase Agreements, allow investors and consumers to take full advantage of the tax benefits of solar (see Tax Equity Investment).

Tax Equity Investment (Third Party Ownership): Investment in solar development by a third party private investor who utilize federal tax benefits to offset taxes they would otherwise owe. In such an arrangement, a third party investor owns the solar panels and collects the tax benefits while leasing out the panels, or selling the power through a Solar Power Purchase Agreement. The two primary tax benefits for solar investment are the Solar Investment Tax Credit (ITC) and the MACRS. In practice, tax equity investments are generally attractive for profitable financial companies and for a few wealthy individuals with extensive real estate holdings.

Yield Co: A yield co is a publicly traded company that is created for the purpose of owning assets that produce cash flow. Some yield cos specifically focus on renewable energy assets. The income from these assets is then generally distributed to the shareholders as dividends. While yield cos are structured as a normal taxpaying corporations, yield cos that own renewable resources can use the tax benefits associated with clean energy investment to avoid paying taxes.

By John Finnigan

By Jukka Isokoski via Wikimedia Commons

The recent Energy Strong settlement between New Jersey regulators and Public Service Electric & Gas (PSE&G), the state’s largest utility, should help reinforce vulnerable energy infrastructure ahead of future severe storms. Last month, the Board of Public Utilities (BPU) agreed that customers could fund $1.2 billion in PSE&G improvements to New Jersey’s electric grid to make it more resilient and efficient. As a participant in the case, EDF was encouraged that PSE&G agreed to necessary changes to its grid to protect against more extreme weather events.

PSE&G, which had originally asked for $2.6 billion in storm-related hardening funds, submitted its Energy Strong proposal to regulators in the wake of Superstorm Sandy, which knocked out electricity for a third of homes and businesses in the state for weeks.

The BPU denied EDF and other environmental organizations full intervener status, preventing us from mounting a full case that would have included expert witnesses on proven climate science and the increased likelihood of future superstorms, the pressing need to take aggressive action to make our existing electric and gas distribution grids more resilient, and the need to transition to a smarter, more decentralized energy system.  Although our status in the case was limited by the BPU’s decision, we managed to argue for and win some positives for the environment:

• PSE&G agreed to reduce methane emissions by replacing old natural gas mains in areas that have a history of leaks and will collaborate with EDF on a pilot to identify and replace the leakiest pipelines first. New Jersey leads the nation in the amount of old and potentially leaky cast iron pipes – over 5,000 miles in all – and roughly 80% of this is in PSE&G’s service territory.  PSE&G owns more than 4,000 miles of old cast iron pipe, the largest amount of any utility in the country. Natural gas is primarily methane, which is a powerful greenhouse gas, many times more potent than carbon dioxide over the short term. Finding and fixing leaks not only makes PSE&G’s natural gas system safer and more resilient, it helps reduce the pollution that is leading to events like Superstorm Sandy.
• PSE&G will invest $100 million in grid modernization, which will produce energy efficiency savings and avoid emissions from gas-fired power plants typically employed to serve this peak demand. PSE&G can save consumers additional money by bidding these energy savings into the region’s wholesale energy market, which pays PSE&G for using energy more efficiently. PSE&G would use these payments to reduce the cost of energy grid modernization improvements. EDF continues to urge PSE&G to bid energy savings into the wholesale energy market and rebate these revenues back to ratepayers.
• Due to the increasing likelihood of extreme weather events caused by climate change, PSE&G agreed to a higher level of flood protection for its substations than it originally proposed (though not as high as we believe it should be) and a performance metric in which no future outages will occur at these substations due to flooding.

EDF will monitor the implementation of this settlement and will continue to look for every opportunity to reduce methane emissions, increase electric and natural gas grid resiliency, and promote policies that accelerate deployment of renewables, energy efficiency, and other market-based approaches.

By Cheryl Roberto

For those of us (and all of you) who’ve been urging the government to implement meaningful climate policy, the release yesterday of a plan to cut carbon emissions from power plants has been a long time coming. But it finally came.

The U.S. Environmental Protection Agency’s proposed carbon pollution rule for existing fossil-fueled power plants – also known as the Clean Power Plan – are a huge win for our climate.

We also think it could go down in history as the tipping point in our nation’s transition to a clean energy economy. Here’s why:

Old, dirty power plants will be retired

The nation’s fleet of coal-fired power plants is the single largest source of carbon pollution in the U.S. and one of the largest in the world. Placing carbon regulations on this source of electricity for the first time in history will transform our energy system.

Utilities have acknowledged that it doesn’t make economic sense to pour money into retrofitting and retaining older, less-reliable coal-fired power plants when they need to focus investments on newer and more reliable plants.

This means that many of the most highly-polluting coal-fired power plants that provide electricity to our homes and businesses today will be retired. It presents a unique opportunity for clean energy solutions to fill the gap in generating capacity.

Increasing our use of homegrown, renewable power sources and investing in proven tools such as energy efficiency, smart grids, and demand response (which compensates electricity customers for conserving energy) will help fill this gap while reducing our reliance on fossil fuels that pollute the environment and contribute to climate change.

States will lead the way

EPA’s approach provides clear guidance for what limits and metrics must be met, but leaves states the flexibility to design solutions to meet those requirements as they see fit. This will encourage all states (even those which do not embrace the climate challenge) to look at clean energy technology as an attractive option when they seek to comply with the law.

Federal limits on carbon pollution from existing power plants are exactly the clarity states need to lead us to clean, reliable and affordable energy for all Americans – now and in the future.

Entrepreneurs, investors ready to jump in

What’s more, the new EPA plan – once it's final – will give entrepreneurs, corporations, and venture capitalists the market signal they need to go full steam ahead with low-carbon innovations. It may be one of the largest market opportunities in history to drive the development and implementation of clean energy on a national level.

At Environmental Defense Fund, we’re right in the middle of many of these promising solutions, working with state legislators and regulators to clear outdated rules that mire us in the past and discourage innovators.

Paving the way for a cleaner, healthier future

We’re working with financial institutions to develop new funding opportunities for clean energy investments that will help raise the estimated $10.5 trillion needed over the next two decades to transition our world to a clean energy economy.

We’re working with energy research pioneer Pecan Street Inc. in Austin, TX to test customer energy management solutions such as rooftop solar, home energy storage, learning thermostats, and time-of-use energy pricing (which incentivizes people to use electricity during periods of low, or “off-peak”, energy demand).

And we’re pushing to make energy efficiency a cornerstone of America’s energy policy.

It may not be as sexy as fuel cells and solar panels, but building a more efficient energy system — from power plants to transmission lines to homes and buildings — is the most affordable and cleanest path forward.

The United States is expected to spend about $2 trillion over the next two decades to replace our outdated electric infrastructure. These new regulations are a step in the right direction toward ensuring that these investments are spent on our future and not entrenching us in our past.

EPA's proposed rule means good jobs, economic development, and a healthier planet.

And as a pioneer at the forefront of this movement, EDF is determined to make sure we stay on track.

This commentary originally appeared on our EDF Voices blog.

By Derek Walker

EPA’s Clean Power Plan, proposed today, is a roadmap for cutting dangerous pollution from power plants, and as with any map, there are many roads to follow. For this journey, states are in the driver’s seat and can steer themselves in the direction most beneficial to their people and to the state’s economy, as long as they show EPA they are staying on the map and ultimately reaching the final destination.

As usual, California got off to a head start, explored the territory, blazed a lot of new trails, and left a number of clues on how states can transition to a lower carbon future, and California’s successes are one proven, potential model for other states to follow. The state’s legacy of clean energy and energy efficiency progress is a big reason the White House and EPA could roll out the most significant national climate change action in U.S. history.

Way back in the mid-1970s, when Governor Jerry Brown did his first tour of duty, California pioneered what remains one of the most effective tools for cutting pollution and saving money: energy efficiency. The state’s efficiency standards, largely aimed at buildings and appliances, have saved Californians $74 billion and avoided the construction of more than 30 power plants. All those energy savings have translated into California residential electricity bills that are 25% lower than the national average.  What’s more, California produces twice as much economic output per kilowatt hour of electricity usage as the national average.

While energy efficiency has done yeoman’s work pulling costs down, reducing the need for dirty energy, and supercharging the state’s clean energy economy, California has also brought bold approaches to cleaning up its power supply. The California Renewable Portfolio Standard (RPS) requires 33% of all electricity sold in California to come from renewable sources by 2020, the most aggressive of the 29 states with RPS measures on the books.

In 2006, California enacted Senate Bill 1368, a groundbreaking law that set the nation’s first greenhouse gas emissions standard for power plants, a forerunner of EPA’s Clean Power Plan announced today. The same year, the Global Warming Solutions Act (AB 32) instituted a statewide limit on greenhouse gas emissions, requiring California to return to 1990 levels by 2020. Power plants are capped under AB 32’s successful cap-and-trade program, another precedent that set the table for EPA’s Clean Power Plan, which establishes a national limit on power plant pollution for the first time. This robust suite of policies resulted in California cutting carbon pollution from in-state and imported electricity by 16% between 2005 and 2010-2012.

Given this track record, it’s no surprise that Californians strongly support pollution limits on power plants. According to the Public Policy Institute of California (PPIC) 2013 survey, 76% of Californians support “stricter emissions limits on power plants,” and 65% of survey respondents say that California should act immediately to cut emissions and not wait for the economy to improve, a record-high level of support. The survey also shows that Californians believe the economy will improve because of strong environmental regulations, and that you don’t have to have one or the other. Data corroborating this view continues to pile up: the state now has its lowest unemployment rate since 2008 even with increasingly stringent environmental policies.

California is proof positive that states can fashion creative policies that improve their environmental and economic bottom line, and that’s exactly what will be needed to make EPA’s Clean Power Plan a durable and resounding success. California’s roadmap includes a variety of alternative routes, giving other states a chance to adopt or adapt them to meet the needs of their own unique journeys toward a healthier future.

This commentary originally appeared on our California Dream 2.0 blog. 

By Brad Copithorne

Last week, Connecticut’s Clean Energy Finance and Investment Authority (“CEFIA”), the state’s Green Bank, announced the sale of $24 million in loans for clean energy retrofits of commercial properties. The loans were originated through the state’s Property Assessed Clean Energy (PACE) program, which allows property owners to access 100 percent up-front financing for energy efficiency and renewable energy improvements on their buildings.  Repayment is attached to a lien on the property tax bill, making PACE loans very attractive assets for investors.

According to Jessica Bailey, Director of PACE for CEFIA, “Connecticut’s PACE program is able to provide financing for commercial property owners to implement money saving clean energy projects. Without PACE, most of these property owners might not have access to attractive financing and these projects would not be completed.”

Clean Fund originates and aggregates PACE loans. Selling these assets to Clean Fund allows CEFIA or another municipal agency to replenish their capital and make more loans available to property owners. CEFIA has once again demonstrated the power of the Green Bank model to take a small amount of public capital and leverage it with private capital (a four to one ratio in this case) to reduce energy use in Connecticut’s commercial sector, create jobs, and increase investment in the state.

According to the CEFIA press release, this clean energy investment portfolio “represents a lifetime energy savings equivalent of $40 million. With an additional 75 projects in the pipeline, financing of up to $75 million is anticipated by the end of 2014.”

John Kinney, CEO of Clean Fund told us, “We look forward to working with CEFIA and other state and local jurisdictions to exponentially expand the number of clean energy projects.”

CEFIA’s PACE program also uses EDF’s Investor Confidence Project to provide property owners with standardized estimates of savings from energy efficiency projects.  According to Jessica Bailey, “ICP has helped many building owners make the commitment to invest in energy efficiency retrofits as it increases their comfort with energy-savings estimates.”

We congratulate CEFIA and Clean Fund on this important transaction and look forward to their continued leadership in clean energy finance.

By Ronny Sandoval

What would you say if I told you that about three-quarters of what you spend on electricity every month is wasted? Considering that Americans spend about $350 billion on electricity annually, I hope you’ll find this as shocking as I do.

From generation to delivery to consumption, inefficiencies at every step of electricity’s journey add up to a lot of waste. Fortunately, these same conditions present us with opportunities to substantially reduce inefficiencies and their associated economic, social, and environmental impacts.

Generation: Energy is wasted at the source

Today, the majority of the electricity produced in the United States originates from fossil fuels, including coal and natural gas. According to the United States Environmental Protection Agency, these plants are only about 33 percent efficient, and “two-thirds of the energy in the fuel is lost — vented as heat — at most power plants in the United States.”

There are limits to what can be done to address this problem as this loss is largely due to the thermal process of large power plants, since heat is a by-product of this sort of generation and it has to be released somehow.

Some plants, however, achieve higher efficiencies by capturing wasted heat energy and putting it to meaningful work, raising the total efficiency to somewhere within the 60-80 percent (or greater) range.

One example of this kind of technology is combined heat and power, which burns a fossil-fuel like natural gas to make electricity, but reroutes the heat generated as a by-product (often vented out of the chimney stack) back to the customer’s premise and used to heat hot water or a space.

Today, this technology is mostly limited to large buildings or complexes, but it has proven to be very successful in places such as New York City, where these types of structures are prevalent.

Delivery: Energy is lost en route to homes and businesses

Adding to our energy loss, another seven percent of the electricity that’s ultimately generated is later lost in the delivery path to homes and businesses.

Available and emerging technologies show us it doesn’t have to be this way. “Voltage optimization’” technologies and strategies, for example, can lower the amount of energy lost in the delivery process while also reducing the associated environmental impacts.

Consumption: Old appliances, bad habits = a little more waste

Try to think of all the old and inefficient appliances and equipment that use more electricity than is necessary. For example, incandescent (traditional) light bulbs can use four times as much electricity as energy-efficient compact fluorescent bulbs. Most of the energy these traditional bulbs use generates heat, not light.

Similarly, inefficient refrigerators can use 15 percent more electricity (or much more depending on the age) than efficient alternatives.

Now, also think of all the things that are simply left on or running that don’t have to be (lights, computers, TVs, phone chargers, etc.) and you really start to get a picture of the amount of inefficiency based on our ingrained habits of consumption.

Smart solutions

But don’t be discouraged! Abundant and cost-effective energy efficiency opportunities mean we can reduce this waste – and ultimately pollution. By simply improving the way we use energy at home and at work we can realize big energy savings across the whole electricity supply chain.

When an unused appliance is powered off, the electric system doesn’t just save on the energy the appliance would have used, it also avoids all the extra energy (and greenhouse gas emissions) the system would have generated to compensate for its inefficiencies.

Fortunately, more and more solutions (such as “smart’ thermostats” and “smart” power strips) are providing consumers with the tools to automate and maximize energy savings at home.

Commercial buildings can also benefit from these intelligent energy control devices by implementing operating schedules, occupancy sensors, and other forms of building automation to ensure that lighting or heating and cooling systems aren’t running when not needed.

Collectively, we can improve this part of the supply chain through an increasing variety of actions – such as using more efficient appliances, energy conservation, and the automation of energy use.

A rare opportunity

I think it’s safe to say that most Americans would like to see more bang for their electricity buck, but the argument for efficiency is not just a financial one. Energy efficiency has the added benefit of protecting our finite natural resources and reducing harmful, greenhouse gas emissions that affect our health.

Much of the inefficiencies in the electric system are a product of decisions made along the supply chain and the policies and incentives that drive them.

The U.S. is expected to spend about $2 trillion over the next two decades to replace our aging, inefficient and polluting energy infrastructure. This presents a once-in-a-generation opportunity to revolutionize how we make, move, manage, and use electricity.

It's an opportunity we cannot afford to waste, the way we've been wasting so much electricity.

This commentary originally appeared on our EDF Voices blog.

By Michael Panfil

Resiliency+ is a new blog series, which highlights the ways in which different clean energy resources and technologies can play an important part in increasing energy resiliency in New Jersey and around the country. Check back every two weeks, or sign up to receive Energy Exchange blog posts via email.

Source: Postdlf

Unlike large, centralized power plants, distributed generation and microgrids create electricity on or near the premises where it can be primarily used. Solar panels on rooftops, for example, are a form of distributed generation: they create electricity that can be used in the same location where the renewable energy is generated. Microgrids are similar – systems that serve a specific energy consumer, such as university campuses, with on-site energy generation that can operate both independently from (i.e. ‘islanded’) and connected to the larger energy grid.

A National Renewable Energy Laboratory (NREL) study found that distributed generation and microgrids, “are integral to energy resiliency.” With the right enabling technology, distributed generation and microgrids have the potential to ‘island’, meaning that they can function separately from the main electricity grid. In other words, in the aftermath of a storm or during a blackout, distributed generation and microgrids are able to keep power running. The importance of this technology cannot be understated. Without it, electricity that has the potential to work during a system-wide blackout – like solar power or energy storage – will be rendered powerless. Distributed generation and microgrids provide the pathway for these clean energy resources to function during and after a natural disaster.

Distributed generation and microgrids have a number of other important benefits as well. Operationally, these technologies allow electricity to be used more efficiently. That’s because the energy produced by these systems does not have to be transported hundreds of miles over inefficient power lines to its end users (a process which accounts for nearly seven percent of our electricity system’s energy loss). Environmentally, distributed generation and microgrids can help to reduce the negative impacts of transmission and distribution on our land and water by decreasing the infrastructure needed to transfer energy from centralized power plants to homes and businesses.

Distributed generation and microgrids provide another important benefit by decentralizing power where clean energy solutions (like solar power, wind power, and energy storage) can be sited. These resources are logical choices to power distributed generation and microgrids. By unlocking this value proposition, distributed generation and microgrids can thus incentivize the deployment of clean energy resources.

Distributed generation and microgrids have the potential to significantly improve New Jersey’s electricity grid and help the state in reducing the negative impacts of a future disaster. The state has proposed steps to achieve these benefits, which it outlined in an Action Plan that details how New Jersey will spend federal Sandy relief funds.

This Action Plan lays the groundwork for an Energy Resilience Bank, which would help fund greater use and deployment of distributed generation and microgrids. The Action Plan notes the success of distributed generation, saying it proved “extremely resilient following Superstorm Sandy” and gives the example of Bergen County Utilities Authority, which was able to keep its sewage treatment facilities operational thanks to the technology. The NREL study found a number of facilities in New Jersey primed for distributed generation and microgrids, including more than 200 schools, wastewater treatment facilities, communications centers, and hospitals.

The state’s Action Plan left no question as to the role of distributed generation and microgrids in boosting energy resiliency, stating that distributed generation “is less reliant on liquid fuel supply and availability, has longer continuous run times, and has less environmental impacts.” These benefits are crucial for energy resiliency in limiting the damage caused by future disastrous weather events in New Jersey and nationwide.

By Guest Author

By: John Gruss, Vice President and General Manager of Enerliance

According to the recently released National Climate Assessment, 2012 was the hottest year on record for the continental United States, and experts predict that temperatures are only going to rise. Couple this with an energy grid that is already under severe strain, and there can be no denying we’ve got a serious problem on our hands.

Every year an overstressed electric grid faces increasing challenges to cool and operate homes and buildings. As we approach summer, with heat waves that are growing longer in duration, this crisis could result in energy shortages and blackouts that are not merely a matter of disrupted comfort and lost productivity but are a serious threat to national security and human health.

To combat this potentially catastrophic situation, there are a number of strategies in place and in the works. One such strategy is automated demand response, which rewards people for reducing their energy use during times of “peak” or high demand on the electric grid. On a hot day, for example, a utility company can send a signal to its customers enrolled in the automatic demand response program, asking for permission to reduce their air conditioning by a couple of degrees. The customer always has the option to decline, but when they do participate in this demand response “event,” they see a credit on their next electricity bill, which saves them money in the long run.

There has been a great deal of talk about automated demand response of late, because, simply put, there have been a lot more extreme weather events (mostly due to climate change), forcing utilities to think of new and innovative ways to deal with peak electricity demand. The great thing about automated demand response is that, if participation is adequate, it can help offset the need to build and maintain new power plants by balancing demand and maintaining grid stability.

Residential automated demand response has received most of the attention of late, which is a big and necessary step in the right direction. But if we want to achieve significant gains in a short amount of time, we also need to be looking at commercial automated demand response for the heating, ventilation and air conditioning systems operating in large buildings and on campuses.

Consider this: A 1.8-million-square-foot building in Southern California can supply its utility with 1.4 MW of “negawatts” (megawatts saved through the reduced use of heating or cooling systems) just by implementing automated demand response. Quick division indicates that it would take roughly 600 2,000 square foot homes to produce an equal result if each home delivered an average of 2,300 watts of curtailment per event. Numbers like these clearly illustrate just how impactful commercial automated demand response can be in reducing our nation’s energy demand and achieving the scale of change we need to curb climate change on an accelerated timeline.

But there are two major hurdles to overcome if we want to see commercial building owners and operators participate in automated demand response programs: comfort and return on investment. Building owners simply will not join a demand response program if it means their buildings will become uncomfortable during demand response events. That’s because discomfort results in a loss of productivity, which results in a loss of tenants, revenue, and so on. Plus, the front-end costs of adding specialized intelligence to a building’s heating and cooling system are significant, and without a compelling financial reward for demand response participation, the investment is not practical, even if the environmental motivation is there.

This is where heating and cooling systems optimization technology for large commercial buildings, like Enerliance’s LOBOS (Load Based Optimization System), comes into play. With an energy efficiency optimization system that is also automated demand response compatible, the return on investment is realized within the first couple of years. That’s because even outside of automated demand response events, the system runs at maximum efficiency levels resulting in lower energy bills every day.

In California, a LOBOS-installed college campus is projected to achieve energy-efficiency-driven electricity savings of more than $600,000 in the first year alone. The everyday energy savings created by the optimization system justify the investment, and also provide the infrastructure to support advanced automated demand response functionality with minimal additional cost. With advanced automated demand response control, it is possible to precisely manage participation in demand response events with minimal to zero impact on tenant comfort. That’s because LOBOS will constantly recalibrate its usage relative to the event requirements and allocate available cooling resources to the areas of greatest need within the building, rather than arbitrarily plunging the usage down to a fixed level and holding it at a steadily low but uncomfortable level.

Today, buildings equipped with LOBOS automated demand response optimization offset almost 30 megawatts of energy from the Southern California electric grid alone. Enerliance’s internal projections indicate that if the system were deployed in compatible buildings nationwide, it could offer more than 25 gigawatts of automated demand response power reduction. That’s equivalent to the electricity generated by 21 nuclear power plants.

Commercial building owners interested in determining the cost savings associated with integrating an energy efficiency and automated demand response optimization system with their heating and cooling system are invited to use the calculator found on the Enerliance website. A zip code and the building’s square footage is all you need to explore the numbers.

Reports such as the National Climate Assessment foretell a pretty bleak future if grid strain is not addressed. Demand response is one way we can begin tackling this complex challenge. It’s good for people, businesses, and the environment, and will unlock a future that relies on intelligent, resilient, and clean energy solutions.

By EDF Blogs

By: Liz Delaney, Senior Manager, EDF Climate Corps Operations

Reinhard Krause / Reuters

China is, in many ways, the epicenter of the world’s efforts to curb climate change. The rapidly growing nation’s need for energy is soaring – demand is expected to double by 2020 – and China has surpassed the United States to become the biggest emitter of greenhouse gases.

So it makes total sense for the Environmental Defense Fund to expand its unique fellowship program, Climate Corps, to China this summer to help leading global brands there find energy efficiency and sustainability solutions that help them thrive. EDF is partnering with Apple, Wal-Mart, McDonald’s, Cummins and Legrand in China, initially placing six graduate students to work with the companies.

Such efforts will also help China and its 1.3 billion people begin to address an air pollution problem that has grounded flights, caused health emergencies, and threatened food supplies in recent months.

Reducing emissions and energy use

Widening the Climate Corps program to China, where EDF has already been working for the past two decades, is a natural and necessary progression for us.

Turns out, several of the large corporations we’re already working with through Climate Corps were also eager to improve efficiency in China – as were 40 of the Chinese-born graduate students who applied to our program this year.

It fits well with EDF’s overall strategy for China, which focuses on the urgent need to cap carbon emissions. Our goal is to shift the country away from its dependency on coal to cleaner energy alternatives and to slow the growth of energy demand — all while leveraging top government priorities to improve air quality and reduce poverty.

EDF Vice President Dan Dudek heads a team of 28 staffers in our Beijing, Shanghai, New York, San Francisco, and Washington offices and serves as a senior advisor on the China Council for International Cooperation on Environment and Development, the highest international advisory body on the environment in the country.

Our recent successes in China include working with the government to lay the foundation for a national carbon market that gives industry economic incentives for cutting emissions. EDF supported the development of the first program in Shenzhen and now conducts training programs for the seven regional pilots under way.

The Shenzhen program alone is expected to reduce carbon emissions per unit of Gross Domestic Product by as much as 21 percent by 2015. According to the World Bank, the seven pilots already cover 250 million people and one-third of the Chinese economy.

Energy savings = good business

With EDF Climate Corps, meanwhile, we have a successful program that can be replicated across industries, geographies and cultures at a time when a growing number of nations focus on energy efficiency as a way to cut costs and pollution.

Buildings account for 27 percent of total energy demand and about 60 percent of carbon emissions in China’s urban areas.

The country’s current five-year plan (2011-15) mandates new green buildings that will help save 9 million tons of coal and avoid 18 million tons of carbon emissions compared to standard buildings. China faces huge challenges as it seeks to improve building energy performance. About one-third of the 40 billion-square meters of existing building space must be retrofitted for energy efficiency.

Since Climate Corps launched in the United States in 2008, our fellows have uncovered opportunities that could avoid 1.3 million metric tons of carbon emissions and cut 2 billion kilowatt hours of electricity every year in the private and public sectors. Climate Corps fellows are building the business case for energy efficiency.

With this summer’s pilot program starting in China, we will lay the groundwork to drive similar success in that nation.

This commentary originally appeared on our EDF Voices blog.

By Jim Marston

http://www.theburdenfilm.com/

When most of us think about military operations, we think of tanks rolling across a desert, large aircraft carriers on the ocean, or long lines of Humvees in convoys. These vehicles, and their missions, take a lot of energy and are part of the large category of “operational energy use.” In fact, 75% of all military energy use is operational.

This operational energy use has created a massive dependence on fossil fuels, resulting in some unintended consequences, which:

• Cause ships, planes and vehicles, like tanks, to cease operations during refueling. This takes time and keeps the vehicle from completing its mission. Fuel convoys are also prime targets for ambushes and improvised explosive devices (IEDs).

• Bind the military to a volatile commodity with changing prices and an unstable future.

• Exacerbate climate change, an issue that U.S. Defense Secretary Chuck Hagel recently called a “threat multiplier.” According to Secretary Hagel, climate change will influence resource competition and “aggravate stressors abroad such as poverty, environmental degradation, political instability, and social tensions.” These stressors will increase the frequency, scope, and duration of future conflicts and, by extension, U.S. military interventions around the globe. 

All of these consequences pose a huge national security threat to our military overseas, a reality that’s exposed in the new film, "The Burden: Free America of Fossil Fuel Dependence." Sponsored by the Truman National Security Project, and still in the funding phase of its development (visit the film’s Kickstarter page to learn more or donate before Saturday, May 24th, when it must receive full-funding), this short film discusses the U.S. military’s reliance on traditional liquid fossil fuels and how this dependence places the United States and its military in a vulnerable position. The film aims to dismantle political rhetoric against the military’s transition to clean energy by showcasing combat veterans discussing the threat that our dependence on fossil fuels posed during their service. In short, it concludes that investing in and implementing more clean energy is a key strategy and a necessity for the armed services.

Neither domestic nor foreign oil production will cover our future defense needs; over the past decade, global oil investment has increased by 300% while the supply has only increased by 12%. Because oil is the current fuel of choice for many nations, fossil fuel shortages and price changes will cause conflicts.

The military’s dependence upon fossil fuels has to be replaced by sustainable, clean technologies that can be brought to scale.

On-site, distributed generation, such as rooftop solar and microgrids, present especially promising options for transitioning our armed forces away from fossil fuels. Microgrids are particularly well-suited for military operations because they have the unique ability to operate independently from a central electric grid and typically incorporate energy storage. They can vary in size – providing power to an entire military base or an individual camp – and enable the generation of power on-site or near where it will be used. Combining renewable energy resources with a microgrid would help prevent armed forces in combat from having to leave the base for re-fueling supply runs, which often result in death or injury to soldiers. In fact, for every 24 fuel resupply missions, one American life is lost – which constitutes one out of every eight soldiers’ deaths in Iraq. These statistics reiterate the importance of our military transitioning away from fossil fuels. Doing so will save the lives of soldiers overseas performing important missions.

Energy efficiency is another option worth noting. According to the Pew Charitable Trust, 20 percent of the Defense Department's energy consumption occurs on domestic bases, where the annual energy bill tops $4 billion. The Navy recently conducted its inaugural Fleet Energy Training Event to highlight new conservation developments and train sailors in applying best energy practices. One of the goals is to shift sailors' attitudes from "saving energy if you can" to "saving energy unless you can't." The military would be well-served to instill a similar mindset in each service member. Not only will this make a significant dent in reducing massive energy bills at domestic bases, but it will also help reduce energy use while on missions overseas and prevent the need for frequent fuel resupply trips.

The inevitable challenges of climate change present a unique opportunity for the military to lead from the front in the nation’s transition to a more sustainable, clean energy future. Doing so will improve the military’s operational efficiency, safety while fighting overseas, and resiliency during gas price hikes or shortages. And considering that the Defense Department is the single largest energy consumer in the United States, despite accounting for less than one percent of total domestic use, the military’s transition to clean, efficient, renewable energy sources will also no doubt make a significant dent in the nation’s greenhouse gas emissions.