By Tomas Carbonell

The U.S. Environmental Protection Agency (EPA) has embarked on a vital effort — accompanied by extensive outreach to states, power companies, environmental organizations, and other stakeholders, including you — to establish the nation’s first limits on carbon pollution from fossil fuel-fired power plants.

EPA was directed to take this critical step for public health and the environment in the President’s Climate Action Plan that was released last summer. Protective and well-designed Carbon Pollution Standards will provide important benefits for all Americans.

Fossil fuel-fired power plants emit 40 percent of the nation’s carbon pollution, as well as significant amounts of mercury, acid gases, and pollutants that contribute to smog and particulates.

That’s why it is critical to get these rules right, and to mobilize common sense solutions proven in red and blue states alike in reducing carbon pollution from the power sector.

Of all the available ways to reduce carbon pollution, one of the most cost-effective and time-tested approaches is to reduce demand for fossil fuel electricity through end-use energy efficiency (EE).

EE measures encompass countless improvements, large and small, in the ways we use electricity in our offices, factories, and homes. All of those improvements can add up to big savings, not only in our monthly energy bills but in the total amount of fossil generation needed to power our society.

Dozens of states and power companies are already investing heavily in EE, and have built up decades of experience in measuring and verifying the many benefits it can yield for consumers and for the environment.

Incredible Potential to Cut Emissions and Save Money by Reducing Wasted Electricity

States and power companies around the country have been implementing EE programs for decades, and have increased their efforts in recent years as experience with the benefits of EE has grown.

26 states in diverse regions of the country, from Arizona and Colorado in the Southwest to industrial Midwest states like Ohio and Illinois, now have “energy efficiency resource standards” or similar policies that require utilities to achieve a certain amount of energy savings each year.

State spending on EE programs increased by 28 percent between 2010 and 2012.

As EE policies and investments have grown, so have energy savings.

In 2011, state EE programs saved a total of 22.9 million megawatt-hours — roughly equivalent to the entire annual output of seven 500 megawatt coal-fired power plants.

These savings increased 22 percent since 2010 and, importantly, count only those savings achieved in the first year these EE measures are in place.

Because most EE measures continue to yield energy savings years or even decades after they are installed, the cumulative savings from these state EE programs are much larger.

A recent study by the American Council for an Energy Efficient Economy found that EE programs and policies are a key reason why residential and commercial electricity demand has remained stable since 2007.

As impressive as these developments are, they only scratch the surface of what could be achieved if we were to fully unlock the potential for EE to save energy and reduce emissions.

An exhaustive 2009 analysis by McKinsey & Company, for example, found that rigorous investment in cost-effective EE could reduce the country’s total energy consumption by 23 percent in 2020.

Energy savings on this scale would yield massive emission reductions — about 700 million metric tons of carbon dioxidein 2020 alone (more than 30 percent of power sector emissions today) – and at a cost per kilowatt-hour saved that is about 85 percent less than the average retail price of electricity.

The report also estimated that realizing these energy savings would create about 600,000 to 900,000 jobs through 2020.

Other national and regional studies have similarly found that EE represents a tremendous “win-win” opportunity for our climate, for families and consumers, and for the economy as a whole.

In 2012, for example, the Southwest Energy Efficiency Project (SWEEP) issued a report focusing on the potential benefits of scaling-up EE programs in six Southwestern states (Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming).

Based on the track record of “best practice” EE programs around the country, SWEEP found that these six states could reduce their electricity demand in 2020 by more than 20 percent while achieving net benefits of about $20 billion – amounting to $2,650 for every household in the region (largely in the form of lower energy bills).

Investments in EE at this scale would also create about 30,000 additional jobs in the region by 2020, and increase wages and salaries by more than $1 billion.

At the same time, these EE measures would reduce carbon pollution by more than 30 million metric tons in 2020, (a 16% reduction relative to expected emissions in 2020), while also reducing thousands of tons of pollutants that contribute to smog, acid rain, and harmful particulate pollution.

EE and the Carbon Pollution Standards

If you’ve read my colleague Megan Ceronsky’s earlier blog, you’ve already heard about section 111(d) of the Clean Air Act.

That section provides bedrock authority for EPA to issue Carbon Pollution Standards for existing power plants.  It also provides a broad, flexible framework for states and companies to deploy EE and other flexible approaches to reducing carbon pollution from the power sector.

Under section 111(d), EPA and the states will work together to reduce emissions from existing power plants.  EPA will issue “emission guidelines” that identify the “best system of emission reduction” for carbon pollution from existing power plants and the emission reductions achievable using that system.  The states then have the responsibility to develop plans that implement standards consistent with those guidelines.

Just a few weeks ago, Kate Konschnik, Policy Director of the Environmental Law Program at Harvard Law School, released a report that makes a strong legal case for considering EE as part of the “best system of emission reduction” that underpins EPA’s emission guidelines.

As Konschnik argues, the Clean Air Act grants EPA broad authority to consider flexible measures such as EE as a part of the best system of emission reduction for carbon pollution:

[B]ecause it is adequately demonstrated and cost-effective, imposes minimal environmental costs, and reduces overall energy requirements.

Moreover, as Konschnik points out, methods for quantifying and verifying EE-related energy savings and emission reductions are well-developed.

Over the last two decades, at least 35 states and two regional transmission organizations have adopted protocols for measuring and verifying energy savings from EE projects. These savings are now widely used as the basis for critical regulatory proceedings and market functions, including establishing utility rates, compensating EE in regional capacity markets, and carrying out long-term regional resource planning.

In addition, EPA has already allowed several states to credit emission reductions resulting from EE and renewable energy towards compliance with national air quality standards. EPA has also issued detailed guidance to the states on analytical approaches and tools that could be used for future programs.

Ensuring Smooth Implementation of EE in the Carbon Pollution Standards

Under traditional emissions trading programs such as the Regional Greenhouse Gas Initiative (RGGI) or California’s cap-and-trade system, the emission reduction benefits of EE are readily observed as emissions from power plants drop.

Under these programs, no separate system for tracking emission reductions from EE is necessary.  As a recent report by RGGI confirms, these programs are also funding significant investments in EE programs that have already helped 815,000 families.

However, some states may choose to directly incentivize EE through policies that credit individual projects and programs for their impacts on energy savings and emissions.

For this reason, EDF has worked with experts in the field to study how measurement and verification for such EE crediting systems could work in a way that is environmentally rigorous and administratively streamlined, and that builds on extensive state and regional experience with existing EE programs.

We recently submitted a report to EPA, developed by the Analysis Group, that lays out one possible framework for ensuring both desirable outcomes:

• Rigorous measurement and verification of EE projects, and
• Consistent methods for determining emission reductions that are attributable to EE projects

This framework recognizes the diverse approaches to measurement and verification of EE that are in use around the country. But in developing this framework, we were also struck by the significant progress that a number of organizations have made in developing best practices and consensus protocols for evaluating EE projects.

One example is the Department of Energy’s Uniform Methods Project (UMP), which has organized a multi-stakeholder process to develop rigorous yet streamlined measurement and verification protocols for different types of EE projects.

To date, UMP has released protocols addressing seven major EE project types and five “cross-cutting” evaluation issues. Eight more protocols are expected to be finalized in the coming months.

Other notable efforts to develop and encourage best practices in the field include:

• The International Performance Measurement and Verification Protocol, which lays out four broadly accepted approaches to measurement and verification of EE projects and has been adopted or recognized by various states and regional transmission organizations
• Regional technical initiatives such as the Northeast Energy Efficiency Partnership and Pacific Northwest Regional Technical Forum, which work to develop regional databases on the performance of EE programs
• The evaluation guides and studies produced by the State and Local Energy Efficiency Action Network, which brings together diverse stakeholders to promote timely, cost-effective, and accurate measurement and verification practices

EE: Ready for Prime Time

EE represents a historic opportunity to achieve extensive reductions in emissions of carbon pollution and other power sector pollutants that directly harm public health and the environment.

In many cases, EE measures will actually save families and businesses money over time and help strengthen the economy.

Decades of state and utility experience in designing and implementing EE programs have demonstrated that the benefits of EE are real, and that the policies and tools needed to incentivize EE and measure its effects are available.

EPA should fully mobilize the potential of EE by exercising its authority to consider EE in the design of the Carbon Pollution Standards, and by providing guidance to the states to facilitate the inclusion of EE in state plans implementing those standards.

This commentary originally appeared on our Climate 411 blog.

By EDF Blogs

By: Matt Golden, Senior Energy Finance Consultant

 

Source: LA Better Buildings Challenge

Environmental Defense Fund’s Investor Confidence ProjectSM (ICP) is pleased to announce a partnership with the Los Angeles Better Buildings Challenge to help develop a more robust marketplace for energy efficiency retrofits in the city. Los Angeles has set a goal of achieving 20% energy savings across 30 million square feet of existing buildings by 2020 as part of the Better Buildings Challenge, a national leadership initiative sponsored by the U.S. Department of Energy. If achieved, it is estimated that this 20% reduction in energy costs will create over 7,000 high-quality local jobs, and avert annual carbon emissions equivalent to taking more than 18,000 cars off the road.

The LA Better Buildings Challenge will be promoting the ICP Protocols through its network of building owners and industry stakeholders to help bring even greater transparency and accountability to the energy efficiency market by introducing a system of standardization in the way commercial building retrofits are developed, funded, and managed. The ICP framework assembles best practices and existing technical standards into a set of protocols that define a clear roadmap for developing projects, determining savings estimates, and documenting and verifying results.

Source: LA Better Buildings Challenge

David Hodgins, Executive Director of the LA Better Buildings Challenge, describes how the partnership with ICP will help the project meet its goal. “The mission of the LA Better Buildings Challenge is to support our partners in achieving a minimum of 20% savings by 2020, and to get there we need to have a clear path. We are excited to partner with ICP, which offers our partners a best-practice approach to developing, underwriting, and measuring the impact of their resource efficiency projects,” he said.

With the goal of driving at least $25 million in total investment, the LA Better Buildings Challenge has developed a directory of capital providers to facilitate access to project funding options. Using the ICP protocols, EDF will work with the LA Better Buildings Challenge to increase deal flow and expand its pool of investors putting dollars to work in Los Angeles’ economy.

The ICP Protocols are designed to increase confidence in energy and financial savings among building owners, project developers, and investors, making it easier to overcome the many barriers that make it hard for projects to move from a good idea to construction. The ICP team is working with LA Better Buildings Challenge to connect local companies, building owners, and projects to local investors and our national network of Project Allies. This service will provide them with a range of relevant options, from energy service agreements and debt and equity financing, to insurance products and a diversity of software tools.

Adopting the ICP framework will save LA Better Building Challenge partners from the expensive and time-consuming process of creating and maintaining unique technical project requirements that would otherwise result in a patchwork of program requirements across California and the county, increasing transaction costs for project developers, building owners, and investors alike.

The LA Better Buildings Challenge has been extremely active in engaging the public and private sectors, as well as building owners in order to meet the target goal. Achieving a reduction of 20% in energy savings will significantly reduce operating costs for building owners (freeing up capital for more productive uses), enhance tenant comfort and productivity, and boost market competitiveness.

The LA Better Building Challenge is a great example of how the Investor Confidence Project can support the ongoing growth of an established energy efficiency program and enable deeper investments in energy efficiency. We look forward to working closely with the LA Better Buildings Challenge and a range of other program partners as we help establish a consistent national marketplace for energy efficiency investment.

By EDF Blogs

By: Victor A. Rojas, Senior Manager, Financial Policy

Source: 401(K) Flickr

The past two decades have seen a tremendous growth in our understanding of the climate change imperative and in the enormity of the challenge that confronts us. It has become clear that meeting climate change mitigation objectives will require the aggressive deployment of clean energy technologies, substantial amounts of capital, and creative methods of engaging that capital around these activities.

Transitioning to a low-carbon economy costs money (and lots of it). In fact, the International Energy Agency has estimated that $10.5 trillion will be required between 2010 and 2030 to fund this transition worldwide. Given the continuing challenges confronting global economies, the bulk of the capital needed to transition to this clean energy future will, by necessity, be private capital. As a result, creative financing solutions are essential to engaging and unleashing private, institutional capital, and accelerating the flow of those funds toward clean energy projects.

But the question of how to most effectively unlock the enormous amounts of capital necessary to pay for our transition to a low-carbon economy still remains.

Structure and rules are needed to engage private capital

In principle, there is no shortage of capital looking for suitable investment opportunities. The nearly $120 trillion in institutional funds currently under management is more than enough private capital to fund the transition to a low-carbon economy for the entire world. The challenge is how to construct these investment opportunities so that they quickly attract the volume of capital needed on a replicable basis. New asset classes New asset classes (themed, climate-related financial instruments, such as climate and green bonds) and creative financing mechanisms, such as property-assessed clean energy (PACE) financing, energy service agreements, and power purchase agreements, will allow issuers to borrow against future economic and environmental benefits. It will also allow for the critical investment necessary now to deliver those environmental benefits into the future.

Institutional capital and other private sources of finance have yet to show an understanding of the opportunities emerging in the clean energy sector. As a result, investors need a new tool and market infrastructure into which these funds can be comfortably deployed. There is also a critical lack of “standards.”  An agreed upon set of rules and criteria are essential to assure investors they are getting a fair return on their investment in clean energy. These rules should be designed to fully engage institutional capital, which will create a wider and more liquid market for these types of investments.

Creative financing solutions will fund the low carbon future

In my next few posts, I’ll talk about green bonds, climate bonds, and other finance mechanisms designed to engage and accelerate private, institutional capital flows into climate change initiatives. I will also talk about On-Bill Repayment and Property Assessed Clean Energy programs, EDF’s Investor Confidence Project, aggregation (the process whereby a number of a firm's smaller projects are combined and treated as an individual project), securitization (the process of pooling similar financial instruments, such as loans or bonds, into one security), and other efforts that are designed to engage private capital, create wider and more liquid secondary markets for climate debt, and help to finance critical clean energy initiatives. Stay tuned.

By Brad Copithorne

Yesterday, my colleague Scott Hofmeister described an insurance pool that California has introduced to help communities integrate Property Assessed Clean Energy (“PACE”), a unique program that allows homeowners to finance money-saving clean energy retrofits through their property tax bill. These programs are popular in Sonoma, Orange, San Diego, Riverside, San Bernardino, Kern, and Fresno Counties, and we expect them to spread rapidly throughout the state.

Home Energy Renovation Opportunity (HERO), a residential PACE program run by Renovate America that has partnered with the Western Riverside Council of Governments, has funded over $180 million of clean energy retrofit projects in a little more than two years of operation. These investments are expected to save homeowners more than 2 billion kilowatt-hours, reduce consumers’ utility bills by almost $500 million and avoid more than 1.4 million metric tons of CO2 emissions, or the equivalent of removing almost 300,000 passenger vehicles from the road for a full year. And notably, the HERO program is entirely funded by private investors.

If the whole state of California embraced PACE at the same rate as Riverside County, residential PACE could generate up to $3.5 billion of private investment. That could create more than a few high quality local jobs.

Last week, about $100 million of the HERO financings were securitized and sold to investors by Deutsche Bank. The terms of the transactions indicate the incredible power of the PACE structure and potential of these clean energy investments. Despite all of the financings coming from a single county, 20 year maturities for the underlying loans, and an overcollateralization of only 3%, the rating agency provided a AA rating, the second highest possible, for these financial assets. For comparison, geographically diversified pools of unsecured 10-12 year energy efficiency loans may require overcollateralization of 20+% to achieve BBB ratings.

The transaction was priced last week at a yield of 4.75%  (11 year SWAP rates + 180 bps) and some market experts expect that future transactions may capture even lower yields as investors become comfortable with PACE.

HERO is setting the pace for clean energy financing. In the coming months, EDF will be working with HERO and other PACE programs to ensure continued success in California, with hopes to expand this proven opportunity to additional states. “We are fortunate to be working with EDF and local governments throughout California to enable thousands of homeowners to lower their utility bills and collectively save millions of dollars,” commented JP McNeill, CEO of Renovate America, “this is a great example of what happens when the public sector and the private sector work together to deliver a solution for homeowners in the U.S.”

This commentary originally appeared on our California Dream 2.0 blog. 

By EDF Blogs

By: Matt Golden, Senior Energy Finance Consultant

Each year the Climate Change Business Journal (CCBJ) awards businesses and non-profits for their outstanding work in the climate and environment industry. This year, we are thrilled to announce that EDF’s own Investor Confidence Project (ICP) was named a winner of CCBJ’s Business Achievement Award in the category of Finance. Winners of the 18 categories – ranging from solar and wind power to transportation and energy efficiency – were recognized this month at an Environmental Industry Summit in San Diego.

The Investor Confidence Project received recognition for its efforts to help create a market for investor-ready energy efficiency projects. From the CCBJ award website: “ICP is moving the energy efficiency industry closer to the Holy Grail of securitization, in which energy efficiency projects can be valued based on consistent parameters with little project-specific analysis and vetting-processes that ratchet up soft costs quickly.”

Investors need a way to manage risk, and they abhor uncertainty. The fact that historically every energy efficiency project is unique, makes the process of underwriting performance risk very challenging and expensive. ICP creates a standardized class of projects assembling existing technical standards into a set of Energy Performance Protocols that outline best practices, existing standards, and documentation that can enable financing or managing of energy performance risk.

As with all red carpet award winners, our list of “thank yous” is long – so instead check out our amazing list of supporting project allies. It was the contributions from our many industry and public sector stakeholders that ensure the ICP Protocols strike the right balance and can help remove long standing barriers to large-scale investment in energy efficiency. EDF is honored and thrilled to be a recipient of this prestigious award, but as the saying goes, “it takes a village” to accomplish true success.

By Kate Zerrenner

Source: UN Water

The theme of this year’s World Water Day on March 22nd is the “energy-water nexus,” and the timing couldn't be better. According to the United Nations (who first established World Water Day in 1993):

• 780 million people worldwide lack access to safe drinking water.
• 13 billion people worldwide lack access to electricity.
• 90 percent of the power generation in the world comes from water-intensive fossil fuels.
• As countries progress and develop, there is an increased risk of conflict between power generators, other water users, and environmental concerns.
• By 2035, global water withdrawals for energy are predicted to increase by 20 percent, and water consumption for energy is expected to increase by 85 percent.

For the past year, I’ve been trying to bring awareness to the connection between energy and water in Texas, but this issue is much bigger than a single state. Energy and water are both basic components of life and economic progress, and they are also inextricably linked. Energy is used to secure, deliver, treat, and distribute water, while water is used (and often degraded) to develop, process and deliver energy.

For 2014, the UN will highlight the inequality that results from the lack of coordination between the energy and water sectors.

The UN is interested in the energy-water nexus for the same reason that the World Bank is interested in it: the inequality of access to basic services, such as safe-drinking water and electricity, is unacceptable and indicative of extreme poverty across the globe. By coordinating policies and programs between the two sectors, energy and water can innovate together and improve people’s lives across the globe. Through this attention, it is hoped that these two sectors will enhance energy security and sustainable water use.

Source: Argonne National Library

As population grows, energy and water must work together

Of particular concern is that as the global population grows, so will the demand for energy and water. As economic progress depends on the growth of these two sectors, it is becoming increasingly important to address the nexus between the energy and water in a holistic way. Scarcity of both or either resource threatens to undermine successful economic development. So, how do we manage our resources to ensure that they are available and sustainable?

Despite the inherent connection between the two sectors, energy and water planners routinely make decisions that impact one another without adequately understanding the scientific or policy complexities of the other sector. This miscommunication often hides joint opportunities for conservation to the detriment of budgets, efficiency, the environment, and public health.

Real solutions to real problems

A holistic outlook that integrates behavior, technology, and conservation is what’s needed to help set the world on a sustainable path. Greater efficiencies through an integrated approach to our energy and water constraints mean that we are protecting our resources and help to establish financial stability in these sectors.

So, while the energy-water nexus seems daunting, there are solutions to help mitigate or solve these challenges:

• Joint planning: With cooperation, energy and water sectors can successfully reduce the reliance on thirsty fossil-fuel electricity and bolster the supply of water. Better understanding of each other’s sectors will enhance coordination and better investment in long-term solutions to preserve our resources.
• Public education: Education about the energy-water nexus (saving water saves energy and vice versa) is needed, and people need to know that their individual choices do play an important role in solving this issue—choices in which foods they buy, which cars they drive, and more.
• Low-water energy resources: Support the development of solar and wind energy, which consume little to no water and generate negligible carbon emissions.
• Preservation: Recognize that our planet’s diverse ecosystems are part of the equation. Thoughtful management of the trade-offs between the needs of the energy and water sectors, and the plants and animals we share this planet with, is critical if we are going to ensure that short-term gains for economic development do not undermine the ecosystem that’s so important for future resilience and sustainability.
• Fair value pricing: Appropriately price energy and water resources to both provide sufficient revenues for industry players and promote conservation and efficiency through price signals.

The importance of the energy-water nexus is coming to the forefront as more people across the globe live in places that face constrained access to both of these important resources. As climate change continues to complicate the energy-water equation —for example, higher temperatures lead to increased demand for air conditioning, which stresses the electric grid and requires additional water for cooling—these challenges will intensify. That’s why the UN’s choice to feature the energy-water nexus as the theme for this year’s World Water Day could not come at a better time. The call to action is now, and our policies and investments must reflect the importance of this global priority.

If you interested in learning more about World Water Day, you can download the newest report here, to be released on March 22nd.

This commentary originally appeared on our EDF Voices blog.

By Rory Christian

Source: The White House

Today, the White House is hosting an event highlighting its commitment to boosting resilience among communities most vulnerable to the effects of climate change. EDF commends the White House for taking steps to make climate change preparedness and resilience a national priority, especially since this has mostly been a regional issue dealt with in areas affected by severe weather events, such as New York, New Jersey, and Connecticut.

At the event, federal agencies, businesses, researchers, and academia, among others will discuss plans to use data-driven technologies and leverage freely available government data to develop products and services that will help the country better prepare for the effects of climate change. The event will showcase insights gathered from scientific data as well as cutting-edge technologies built by American innovators that are essential to better understanding and managing the risks posed by climate change.

Among those in attendance will be White House counselor John Podesta, who is advising the Obama administration on taking a more aggressive posture on environmental policies; Dr. Ellen Stofan, NASA Chief Scientist; and Rebecca Moore, founder of Google Earth Engine.

Hurricane Sandy underscores vulnerable energy infrastructure

Hurricane Sandy’s devastation of the country’s northeastern coast in late 2012 drove home the point that federal and state governments can no longer just mitigate climate change by reducing carbon pollution; they must actively engage in preparing for severe weather events that are becoming increasingly frequent as a result of climate change.

Sandy, which destroyed homes and businesses and knocked out electricity to millions for weeks, shined a much-needed spotlight on the vulnerability of our century-old energy infrastructure, placing the issue front and center for the region’s state and local leaders, electric utility companies, and regulators.

A diverse coalition of climate leaders is essential

Quick to respond to the damage caused by Sandy, the federal government pledged over $60 billion in federal funds to support recovery efforts. EDF is pleased that the Obama administration is reinforcing its commitment to mitigating the effects of climate change on a national level by convening today’s meeting. A diverse coalition of top private-sector technology companies, scientists, and other climate experts is essential if we are to harness the latest climate science and technologies to boost resilience in an era of increasingly frequent extreme weather events. This cross-section of dynamic leaders will help drive us toward the most creative, innovative energy solutions.

EDF’s California team is also launching their own climate data-driven resilience project today in support of the White House event: the newest version of the “Los Angeles Solar and Efficiency Report (LASER),” first released in November of last year. This innovative climate mapping tool is designed to help local leaders identify opportunities to invest in clean energy jobs and strengthen climate resiliency in vulnerable communities.

Ensuring the adoption of technologies and policies that move the U.S. power grid into the 21st century, making it more resilient, flexible, and smarter, can simultaneously accomplish today’s goals while preparing for future challenges.

By Scott Hofmeister

When it comes to protecting the environment and fighting climate change, California has always been a first mover.

Now the state is boldly acting to unleash a new market that saves energy, cuts pollution, and drastically increases clean energy investment for California’s residents.

Last week, California approved a $10 million reserve that will revive the Property Assessed Clean Energy (PACE) program for residential customers.

PACE allows customers to take advantage of energy saving upgrades to their home with no money down. Customers simply use a portion of their savings to pay off the investment over time through their property tax bill. Financing can be entirely provided by private lenders at no cost to taxpayers.

Since its first use at a San Francisco office building in 2012, PACE has been a resounding success in the commercial sector. In fact, the commercial markets have quickly taken to PACE and continue to set new deal-size records.

The residential market started out equally strong, but cooled off when the Federal Housing Finance Agency (FHFA) raised concerns that PACE financing could be potentially hurting home mortgage holders like Fannie Mae and Freddie Mac. The FHFA announcement effectively stalled residential PACE, as local communities and homeowners were concerned about potential impacts to the mortgage markets.

Still, a few California programs have decided to offer residential PACE and have barely been able to keep up with demand, proving that the program can thrive for homeowners.

Sonoma County’s residential program has financed upgrades for nearly 2,000 homes since it began in 2009. Since December 2011, the Western Riverside Council of Governments has offered a residential PACE program to homeowners called HERO Financing. In that time, $134 million has been invested in clean energy upgrades for homeowners in a region of Southern California with a population of 1.45 million people.

At that rate, almost $30 billion of clean energy retrofits could be financed if a similar residential PACE program were adopted nationwide.

California’s latest proposal, ushered in by Governor Brown, will harness the success of PACE and its untapped potential, while easing the concerns of the FHFA. The new reserve will pay mortgage holders (like Fannie and Freddie) for specific losses they incur due to a PACE financing, so they don’t have to worry about losing money because of PACE.  We are hopeful the FHFA will bless this approach so that more states can attract private, clean energy investments at no cost to taxpayers.

Ultimately, California is poised to see a massive increase in residential energy efficiency and investment through PACE, all while helping residents save money, use cleaner energy, and protect the environment, too.

This commentary originally appeared on our California Dream 2.0 blog.

By Rory Christian

Source: NASA Earth Observatory

Last month, I had the pleasure of moderating a panel called “Utilities 2.0: The Role of Distributed Generation and Demand Response in Evolving Utility Business Models.” The topic may sound esoteric, but to the more than sixty people in attendance, and at least fifty more watching online, the event, which was sponsored by clean energy networking group Agrion, offered insight into how these options will in a not-too-distant future revolutionize the way all of us consume electricity.

The energy industry is abuzz with talk of how distributed generation, which enables consumers to draw power from on-site sources, such as rooftop solar, and demand response, which rewards customers who use less electricity during times of peak demand, are transforming the electric utility industry. A once-in-a-generation paradigm shift is already in motion, and exactly how it will play out is anyone’s guess.

The Agrion panel wasn’t the only crowded event I’ve recently attended where the need for new utility business models was the topic of lively debate. Earlier this month, I joined representatives from utility companies and the New York Public Service Commission as well as other industry stakeholders at a NYU symposium on “The Utility Industry of the Future.” Both of these events came hot on the heels of the Commission’s Order last month requiring Con Edison to support more clean, distributed generation and sophisticated electricity pricing structures based on the time electricity is used.

Slow Growth in Electricity Demand

As options for clean, distributed energy resources and demand response decrease in price, they are becoming increasingly attractive to customers. Though there are many differing views regarding the scope and scale of the problem, one thing is clear: the way utilities do business must change. Utilities are monopolies, in that they have an exclusive right to a geographic area as well as a predetermined rate of return on the condition that electricity is provided on a reliable and affordable basis. This means utilities are incentivized to sell as much electricity as possible. This model has worked well with few changes for close to a century, but developments in technology and customer expectations require that the existing model be evaluated in a new light.

Technological advancements have occurred at a pace that regulatory changes have been unable to match. According to the U.S. Energy Information Administration, “[E]lectricity demand growth remains relatively slow, as increasing demand for electricity services is offset by efficiency gains from new appliance standards and investments in energy-efficient equipment.” Energy efficiency improvements have slowed the annual growth of electricity demand to less than one percent in the first decade of this century. Given this anemic level of growth, the potential for wide-scale adoption of clean, distributed energy resources and demand response could significantly alter the economics of utilities.

Banner Year for Solar

Solar, in particular, had a banner year in 2013. Not only have the cost of solar panels dropped by 75% since 2008, but the number of solar installations increased by 41% throughout 2012 (nearly fifteen times the amount installed in 2008). Last year, according to the Solar Energy Industries Association, solar was the “second-largest source of new electricity generating capacity in the U.S., exceeded only by natural gas.”

Many questions were raised during these recent conferences. What investments should regulators attempt to incentivize? What should be the role of the utility in managing distributed energy resources? Should utilities be compensated for investments that are no longer creating returns? While there are many questions, we have, as of yet, few answers. We can, however, be sure that the electrical grid will play a different role in the near future than it does today.

By Lauren Navarro

Last week, the California Public Utility Commission (CPUC) finalized an important decision for Southern California’s energy supply following the closure of the San Onofre Nuclear Generating Station (SONGS). The plan emphasizes increased reliance on clean energy in this part of the state – an important step towards a fully realized low-carbon future.

The decision authorized San Diego Gas and Electric and Southern California Edison to procure at least 550 megawatts (MW) of ‘preferred resources,’ which include renewable energy, demand response (a tool that’s used by utilities to reward people who use less electricity during times of “critical,” peak electricity demand), energy efficiency, at least 50 MW of energy storage, and up to 1,000 MW of these resources altogether.

That’s a major step forward, as utilities across the country traditionally rely on large fossil fuel plants to meet regional demand.

However, the CPUC also authorized the procurement of 1,000 MW of power from natural gas generation, demonstrating that Southern California still has a ways to go to reach its clean energy potential.

In the proposed decision last week, the CPUC recognized the need for a diverse and flexible portfolio of energy tools and resources. By emphasizing the potential of demand-side energy resources to meet Southern California’s reliability needs, the CPUC has essentially launched a new era in the state’s transition to a cleaner, more resilient energy future.

The CPUC should be commended for including ‘preferred resources’ (such as renewable power and energy efficiency) in its decision, and for recognizing the important role demand response resources can play to meet California’s energy needs following the loss of SONGS. Going forward, the CPUC and the utilities should go one step further by seeking to expand and maximize the role of demand response policies – which rely on people, not power plants, to meet electrical demand – including voluntary time-of-use (TOU) pricing in securing the state’s energy future.

Time of use rates, for example, put power in the hands of the customers to determine whether power plants are needed by pricing electricity based on the time of day it is used.  By linking awareness of the cost of energy with smart displays and thermostats, these rates can make a big difference in the need for power plants – and lower your bills, one power plant at a time.  As EDF described in our comments on the proposed decision, if 20 percent of Southern California Edison’s ratepayers adopted voluntary TOU, peak demand would fall by almost 630 megawatts (“MW”), about a third of SONGS capacity.

In fact, if half of Southern California Edison’s residential ratepayers adopted a voluntary TOU electricity pricing structure, this could replace two-thirds of the SONGS’ lost capacity, saving $357 million per year. By including increasing demand response resources, such as TOU, in the CPUC’s long-term plans, the state can avoid being locked into environmentally risky – and expensive – fossil fuels.

By replacing a chunk of capacity from SONGS with renewable energy, energy storage, demand response, and other smart energy resources, the CPUC highlights an important priority for the state in the coming decades. This should be the beginning, not the end, of Southern California’s push to adopt preferred resources and diversify its energy mix in order to usher in a clean, sustainable, and healthy future.

This commentary originally appeared on our California Dream 2.0 blog.

By Dick Munson

In a victory for Illinois residents and the environment, Commonwealth Edison Company (ComEd) today formally proposed to the Illinois Commerce Commission an accelerated timetable for completing its deployment of four million smart meters. ComEd began installing smart meters last fall as part of the Energy Infrastructure and Modernization Act of 2011. With this proposal, the Illinois utility will complete its meter installation almost five years earlier than planned.

Modern, smart electricity meters are a key component of the smart grid. These devices help eliminate huge waste in the energy system, reduce overall and peak energy demand, and spur the adoption of clean, low-carbon energy resources, including wind and solar power. By enabling two-way, real-time communication, smart meters give every day energy users, small businesses, manufacturers, and farmers (and the electricity providers that serve them) the information they need to control their own energy use and reduce their electricity costs.

“Faster deployment of the smart grid makes economic sense for Illinois consumers,” said David Kolata, Citizen’s Utility Board’s (CUB) Executive Director. “Not only will it lower overall implementation costs through economies of scale, but it will also allow consumers to more quickly access smart grid benefits, including improved reliability, better energy efficiency, and new, money-saving power pricing programs.”

Critical work, however, lies ahead. For instance, EDF has negotiated with ComEd a set of 20 metrics that will be used to evaluate the consumer, economic, and environmental benefits associated with the smart grid. This will help ensure that the deployment of this new technology benefits more than the utility’s bottom line. As the saying goes, what gets measured gets done.

We also are working to set standards for providing customers with their energy-use data as close to real-time as possible so that they can become more active participants in their own energy consumption. Additionally, EDF and our Illinois partners are pushing to advance dynamic pricing adoption, through more sophisticated electricity pricing structures based on the time electricity is used. Such pricing alternatives could help Illinois customers reduce their energy use during periods when costs – and environmental impacts – are high.

“New technologies and business models are emerging every day to enable residents to conserve electricity, save money, and reduce pollution,” said Andrew Barbeau, president of The Accelerate Group, who is working with EDF in Illinois to advance effective smart grid implementation. “Achieving a critical mass of customers with meters sooner will enable Illinois to be a leader of the pack in implementing solutions for smart and connected homes and communities.”

The speed-up still needs to be approved by the Illinois Commerce Commission, but it is an important first step in what EDF sees as a path toward a smarter, cleaner, and healthier energy system for all Illinoisans. Stay tuned.

By Kate Zerrenner

A couple of weeks ago, I wrote about energy efficiency and the Clean Air Act section 111(d) provisions in anticipation of the SPEER Second Annual Summit, a gathering of top energy efficiency industry leaders from Texas and Oklahoma. At the Summit, I co-led a session on Environmental Protection Agency’s (EPA’s) push to regulate power plant emissions. Session attendees agreed that Texas would be an unlikely leader in developing innovative ways to comply with carbon pollution standards for existing power plants.

This is a missed opportunity on Texas’ part, as states will get the first crack at drafting plans to comply with new federal standards. This is an important opportunity because individual states are in the best position to craft frameworks that enable maximum flexibility and are appropriately tailored to local circumstances. So, this begs the question: is there an alternative, more constructive path that is most beneficial to Texas?

The Kentucky Way

Texas should take a serious look at Kentucky – another unlikely leader in climate policy. Last year, Kentucky sent a report to EPA’s Administrator, Gina McCarthy, laying out Kentucky’s proposed framework to guide its discussions with the Federal Government. State officials clearly had some concerns about the impending standards, but they also demonstrated commitment to meeting President Obama’s emissions reductions goals and improving the health of Kentuckians.

The state leaders advocated for an approach that allows for maximum flexibility to comply based on the state’s unique energy portfolio and economy. Among a suite of compliance options, the Kentucky report included two noteworthy techniques. First, the state asked EPA to develop a mass-emission reduction standard (reduction of total average carbon dioxide (CO2) emissions) as opposed to a rate-emission standard (reduction of CO2 emissions per unit of energy produced). This approach opens the door for more easily measured and verified energy savings. Secondly, Kentucky proposed participating in a regional or national market-based CO2 credit trading program (similar to the Regional Greenhouse Gas Initiative adopted by nine states), which would enhance electric reliability while also allowing for more flexibility in meeting clean air standards.

All told, Kentucky’s roadmap found that a significant reduction in emissions (nearly 30 million metric tons worth of CO2) could be achieved by 2020 at a very reasonable cost. Moreover, customer-facing energy efficiency would yield significant net savings for consumers – making it by far the most cost-effective means to reduce emissions for the state.

Proactive, Realistic Approach

This proactive and constructive stance is smart, and Texas should take note. Rather than spending millions of taxpayer dollars suing EPA to try to stall implementing life-saving standards, as Texas has done in the past, Kentucky’s state leaders have developed a realistic approach. The result is a proposal that aims to achieve significant, cost-effective reductions in carbon pollution – while simultaneously setting an example of robust, state-federal collaboration. This mutually beneficial plan will improve air quality, save lives, and spur a clean energy economy.

On that note, I have a few recommendations as other states begin creating their own plans:

• Water should be a part of the discussion. States’ energy choices should consider water usage in addition to air emissions. In many drought-stricken regions of the country, continued reliance on fossil fuel power generation may become unsustainable given that many existing power plants use substantial amounts of water for cooling. As temperatures increase and drought conditions continue to intensify, fossil fuel power plants will likely welter and eventually shutter under these conditions. States need a holistic outlook, one that harnesses water-free wind and solar PV, in order to advance a more sustainable energy future.

• EPA should consider regional solutions for compliance. Historically, EPA has evaluated state plans on an individual basis. However, there may be advantages to regional approaches for compliance with the Carbon Pollution Standards, as multiple states (or utilities located in multiple states) could establish regional emissions trading programs or other flexible approaches that lead to healthier air quality.

• States should see the Carbon Pollution Standards as an opportunity to improve human health. Strategies to reduce carbon pollution are also expected to reduce other harmful pollutants emitted by the power sector, including pollutants that contribute to ground-level ozone (“smog”), dangerous particulates, and mercury. EPA has already proven that the Clean Air Act protects human health and saves billions in health care costs; this standard will help bring a breath of fresher air to states around the county.

• Energy efficiency must be a part of the solution. Energy efficiency is one of a few compliance mechanisms that is an investment, not a cost. Energy efficiency saves money for consumers and enhances economic growth, while helping reduce a suite of harmful pollutants. A mass-emissions standard (as Kentucky proposed) makes monitoring and verification of emissions reductions more straightforward, because it gives appropriate credit to all energy efficiency efforts based on actual emissions reductions.

And for Texas, I have this to say: rather than spend taxpayers’ dollars suing EPA over clean air standards, state leaders should think about how best to protect the health of their citizens and the economy to ensure a robust, healthy future. Texas already leads the nation in terms of wind energy production and solar energy potential – both of which create affordable power to fuel the state’s bustling economy and reduce air pollution to safeguard Texans’ health. Investing in clean energy and technologies that reduce emissions and water use from fossil fuels means state leaders are investing in a cleaner environment for this and future generations.

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

By EDF Blogs

To see the full infographic, go to greentechmedia.com.

By: Benjamin Schneider

You may have heard about the recent 60 Minutes segment that inexplicably reported the cleantech sector was in steep decline. There are quite a few reports out there breaking down the many fallacies of that segment, with most correctly concluding the sector is not dead, it is in fact booming and evidence of that surging momentum is everywhere you look. Consider these five examples that show just how good things are for cleantech these days:

1.  The solar industry is booming.

The facts are unequivocal: the solar industry is alive and well. According to a new report and infographic released this week by Greentech Media Research and the Solar Energy Industry Association (SEIA), 2013 was a banner year.

The Wall Street Journal also recently reported that investors are more enthusiastically embracing solar stocks again, siting “an industry shakeout of the past few years and falling costs of producing and installing solar-power systems” as the reason for a “recent big gains in the stocks.”

The handful of solar companies that didn’t make it tend to grab more headlines. But on the whole, the solar industry has grown by leaps and bounds in terms of job creation, generating capacity, and investor confidence.

2. Federal grants are leading to incredibly successful startups.

Not only is Tesla Motors one of the most successful cleantech startups in the world, they are one of the most successful startups of any sector. They recently announced plans to invest $2 billion in a large-scale factory to produce cheaper batteries, and stock shares soared after news of the company’s robust production outlook. They must be doing something right to afford such robust growth, and none of this would have been possible without the Department of Energy loan program that helped get them off the ground.

And though Tesla is rightly held up as an example of the United States’ commitment to the advancement of clean technologies (to say nothing of their cars), they’re hardly alone. You can find examples of startups receiving federal loans to help jumpstart tremendously successful companies all over America.

3. States are paving the way for more cleantech success, too.

Take a look at New York, where Governor Cuomo recently announced an initiative to provide an additional $30 million to stimulate more large-scale solar and biogas projects in the New York City area. Meanwhile, in Arizona, state regulators are working on smart energy measures that would both lay a foundation for a strong rooftop solar industry while still allowing utilities to charge fair rates to solar rooftop customers.

Stories like these are indicative of the national trend – states increasingly recognize the value in supporting the robust cleantech sector because advancements in clean energy are good for people, business and the environment. And you can expect to see more such examples of state-sponsored, market-based solutions that benefit the public and private sectors alike as word about successful models like these spread.

4. More people are embracing cleantech. 

Of course, even favorable market conditions wouldn’t amount to much without strong demand for cleantech. Fortunately, new data suggests that after years of fluctuations, customers are increasingly interested. Solar energy, wind energy, and hybrid and electric cars all saw a rebound in interest compared to prior-year levels.

Google’s recent $3.2 billion purchase of Nest Labs, the company responsible for transforming “unloved” home products, such as thermostats and smoke detectors, into beautiful, smart appliances, is another indicator that more people are embracing cleantech. By purchasing Nest, Google was simply reacting to a market signal from customers whose interest (and investments) in smart, innovative home energy management systems have shown a significant increase over the past few years.

5. Cleantech costs are falling. 

Lower costs play a huge factor in the cleantech industry’s success, according to the Department of Energy:

• The cost of solar panels has dropped 75 percent since 2008.
• The cost of LED lights fell 85 percent in that same time frame.
• Electric vehicle batteries cost 50 percent less today than they did four years ago.

There’s no question there is still much work to be done. The United States is at a crossroads, and there are still many policy, regulatory, and market barriers that EDF is working diligently to help remove so that an even broader-scale adoption of cleantech may be achieved.  A continued investment in cleantech will pave the way for a sustainable, clean energy future that grows our economy, helps families save money, and cuts pollution that causes climate change.

So let’s give credit where it’s due – the cleantech sector has taken off, whether the news reports it or not.

This commentary originally appeared on our EDF Voices blog.

By Brad Copithorne

Two weeks ago, State Senator Kevin de León introduced a bill to establish the first “Green Bank” in California, a bold proposal that would unleash low-cost financing opportunities for clean energy projects throughout the Golden State.

I recently had the opportunity to testify at a hearing on the bill to discuss the best practices for green banks across the country and how the program would work in California.

First, a bit more on Green Banks:

At its core, the program is a clean energy finance bank set up by the state, designed to enable increased investment in clean energy projects and companies by working closely with the private sector to remove financial or structural barriers.   The goal is simple: increase the amount of clean energy at a low-cost and encourage private investment by reducing the overall risk of clean energy projects.

While the concept is new to California, Green Banks have already taken root in other states. Connecticut established the first program in 2012, New York’s version launched a few weeks ago, and Hawaii is expected to come online this summer.

All three Green Banks plan to use limited amounts of public capital to induce substantial private investment.  In many cases, the public capital is expected to be quickly recycled as the investments are securitized or otherwise sold to private investors.

Each of the programs has hired a team with broad experience in both the public and private sectors.  The banks each maintain strong public oversight but also have the ability to contract quickly and efficiently with private investors.

As Dan Adler, Managing Director of CalCEF and President of CalCEF Ventures testified, a Green bank should use the market discipline of requiring private investment alongside any public dollars in order to insure market discipline.”

At the hearing, Bryan Garcia, President and CEO of Connecticut’s green bank, described two transactions they used to increase investment in solar for homeowners and energy efficiency for businesses.  The first was a solar investment fund that used a small amount of public capital to attract funding from local banks and other investors.  In exchange, the private investors agreed to work closely with local installers to fund projects for Connecticut homeowners that might not otherwise qualify for funding.

The second transaction was a set of loans to commercial properties for energy efficiency retrofits.  The loans were secured with property tax assessments in a structure known as Property Assessed Clean Energy, or PACE, and are in the process of being sold to a private investor which will allow the bank to quickly recycle their capital.

Twelve stakeholders in all – from the public and private sectors – testified how a California Green Bank could meaningfully increase private clean energy investment in the state.  We look forward to working with Senators de León and Jim Beall to develop a successful Green Bank for California – and one that will be the envy of other states.

This commentary originally appeared on our California Dream 2.0 blog.

By Brad Copithorne

Source: The Green Leaf

EDF has been advocating for states to establish On-Bill Repayment (OBR) programs that allow property owners and tenants to finance clean energy retrofits directly through their utility bills with no upfront cost. California and Connecticut are working to establish OBR programs, but Hawaii is expected to beat them to the punch. Hawaii’s program is critical as electric rates are about double the average of mainland states and most electricity has historically been generated with dirty, expensive oil.

Given the potential of OBR to lower electricity bills, reduce that state’s carbon footprint, and expand job growth in the clean energy sector, EDF has been working closely with Hawaii and multiple private sector investors for the past year to develop their OBR program. Once formally launched later this spring, Hawaii’s program will be one of only two in the nation, preceded by New York who enacted their program in 2011.

OBR in a nutshell

Here’s how OBR works: Banks and other private investors team up with contractors and project developers to create competitive options for installing energy efficiency or renewable generation projects. Linking the repayment to the customer’s utility bill is expected to lower financing costs, increase availability of credit for projects that might not otherwise qualify, and allow owners to finance long payback projects without fear of needing to refinance if they sell the property.

EDF estimates that a national OBR program could generate $87.4 billion of investment in energy efficiency projects over the next 12 years, which would increase employment job-years by 615,000 (a job-year is a full-time job that lasts for one year). Since the program can be structured with financing entirely from private lenders and investors, OBR can be implemented at no cost to ratepayers or taxpayers.

One of Hawaii’s primary objectives will be to provide renters and lower income residents access to financing for clean energy retrofits to help them cope with expensive utility bills.

Hawaii’s OBR program is ramping up

The state’s OBR program is expected to have a soft launch near the end of March and will initially be focused on solar hot water for residential and small business customers. With abundant sunshine and no natural gas, solar hot water is a project that usually provides significant financial savings and environmental benefits in Hawaii. The program is expected to roll out other measures in the following months and eventually expand to include large commercial properties.

EDF has been in conversations with a wide range of project developers and investors and is optimistic that Hawaii’s OBR program can have a strong launch. Furthermore, we are hopeful that EDF can help the state export this exciting program back to mainland.

By EDF Blogs

By: Susan Leeds, CEO of the New York City Energy Efficiency Corporation (NYCEEC)

Source: AtisSun

As New York City gets repeatedly hammered by snow, ice and the evil “wintry mix,” one could almost forget the world is warming at an ever faster clip. But the experts in the room earlier this month at the roundtable discussion on ‘Economics of Energy Retrofits’ at Urban Green Council (New York’s chapter of the U.S. Green Building Council) know the debate is over. Climate change is real and the window for action is closing. That’s why it’s more important than ever to work toward removing barriers to clean energy financing now.

As the De Blasio administration strives to build a more affordable New York City it’s important to note that clean energy building upgrades are central to this mission. By reducing energy use, building owners and their tenants can realize millions of dollars in annual savings while slashing dangerous carbon pollution for cleaner air and water.

Upfront Cost of Retrofits Presents Obstacle

The market barriers to implementing commonsense energy efficiency upgrades that pay for themselves in just a few years are plain. No one wants to dish out a dollar today for a dollar tomorrow. Upfront costs are a roadblock, no matter how short the payback period. Even when building owners decide to do the right thing, conventional lenders are not focusing on energy efficiency as a valuable service to their clients. This leaves building owners without easy access to clean energy financing.

Sometimes the barriers are even more basic. Despite years of wonk talk about energy efficiency as “low-hanging fruit,” building owners, contractors, and project developers are still in the dark about options, benefits, and appropriate partners to help put talk into action.

State and City Green Banks Clear the Way for Clean Energy Financing

New York City and state have been lucky enough to have prescient authorities who are aware of the large role of financing in addressing climate change. The city-run New York City Energy Efficiency Corporation (NYCEEC) and the recently-launched New York state green bank are working to become solution centers for clean energy financing in New York City and state respectively. These institutions are able to leverage expertise and financial muscle to transform inefficient buildings into clean, high-performing investments. By offering custom-built financing at attractive terms, building owners will have no more excuses to leave money on the table.

One project that has taken advantage of the city’s new energy finance offerings is Franklin Plaza, a Mitchell-Lama housing co-op in East Harlem. Franklin Plaza recently closed on the first tranche of its $3.8 million loan through the NYC Housing Development Corporation’s (HDC) Program for Energy Retrofit Loans, a program enabled by HDC’s partnership with NYCEEC. The loan for this project will help reduce Franklin Plaza’s energy use by 15%, cut carbon emissions by 30%, and result in energy savings that are equivalent to averting a 10% rent increase. “The development and preservation of affordable housing is the core of our mission at HDC and the salvation of Franklin Plaza epitomizes this work,” said Marc Jahr, former President of HDC.

NYCEEC recently announced $50 million in financing available through a range of products and partnerships, including equipment loans, mortgage lending, credit enhancements and energy services agreements. This new deployment of private capital is a shot in the arm for clean energy financing and supports:

• Energy efficiency improvements, such as smart lighting, heat pumps, energy management systems, boilers, chillers and more.
• Fuel conversions, under the City’s Clean Heat Initiative, from #6 or #4 heating oil to ultra-low sulfur diesel or natural gas
• Combined heat and power systems.
• Clean distributed generation, including solar and other renewable energy sources.

Clean energy building upgrades have an important role to play in the new Mayor’s promise to increase affordable housing in NYC, and innovative financing program’s like those offered through the city and state’s green banks are exactly what New York needs to ensure a greener, cleaner, and more affordable living experience.

Susan Leeds, CEO of NYCEEC

Visit www.NYCEEC.com to learn more about how we are remaking New York City buildings for a cleaner, greener, and more affordable tomorrow.

 

By EDF Blogs

By: Elizabeth B. Stein, Attorney and Adam Peltz, Attorney

Source: Iwan Baan

The New York State Public Service Commission (Commission) took a historic step late last week, unanimously approving an Order that requires Con Edison to implement state-of-the-art measures to plan for and protect its electric, gas, and steam systems from the effects of climate change. This announcement regarding the future of New York State’s largest utility comes as a welcome coda to local storm recovery and resiliency efforts that have been in the works for some time now.

On October 29, 2012, Superstorm Sandy clobbered the coastline of New York City. Homes were swept away or badly damaged as corrosive salt water flooded basements, while millions lost power. In one of the enduring images of the storm, an exploding transformer at East 14th Street caused the “city that never sleeps” to go dark below 40th Street and stay that way for the better part of a week.

The ferocity of the storm’s attack startled many of us, but for those with knowledge of the region’s infrastructure, the devastation came as less of a surprise. In 2005, Hurricane Katrina had been an enormous wake-up call to vulnerable coastal cities, and the next year New York City unveiled new emergency plans to prepare the City for the event of a Category 3 hurricane, as described in the landmark 2007 PlaNYC 2030 report. This report also called for a forward-looking plan to deal with climate change that would include updated flood maps and upgraded building codes to prepare for extreme weather events. The City’s efforts bore fruit when Sandy actually hit and a post-mortem analysis showed the situation could have been far worse.

Con Edison, the utility that provides electricity to New York City and Westchester County and natural gas to portions of that footprint, had also been planning for better storm readiness for many years before Superstorm Sandy. Having learned key lessons from Hurricane Katrina, Con Edison had been moving in the direction of waterproof equipment for years. The utility had also discovered an alarming trend of increasing storm-related service disruptions in its own service territory; as of January 2013, when the rate case was initiated, four of the five worst storms to interrupt service to Con Edison’s customers had occurred in the preceding two and a half years.

Thus, when Con Edison brought a major rate case less than three months after Sandy, it came prepared with a rigorous storm-hardening plan, parts of which had been years in the making. But it was clear that the utility needed to do more than “harden” the existing system, and that it needed to account not just for storms but for other facets of climate change as well. In the rate case, EDF, the Columbia Law School Center for Climate Change Law (Columbia), Natural Resources Defense Council (NRDC), and the Pace Energy and Climate Center (Pace), among others, joined together in urging Con Edison to modernize its system and operations in ways that transcend traditional storm-hardening.

EDF and other parties argued for the electric grid to become less centralized and more flexible. We also called upon Con Edison to change how it charges customers for electric service by introducing more sophisticated electricity pricing structures based on the time electricity is used. This greater flexibility would furnish a greater range of options for dealing with system stresses, not only in storms but in other situations such as heat waves. The rate case was informed by Columbia’s focus on the most up-to-date climate science and what that means for grid design. EDF and other parties also sounded a cautionary note on natural gas, calling for methane leakage reduction.

While the rate case was underway, and on the recommendation of Department of Public Service (DPS) Staff, Con Edison convened a Storm Hardening and Resiliency Collaborative. This Collaborative gave rate case parties an additional forum to examine the utility’s storm hardening plans while addressing other facets of resiliency as well. In addition to detailed examination of Con Edison’s proposed storm hardening measures, the Collaborative emerged as a forum where alternative resiliency strategies, methane leakage reduction, and cost-benefit methodologies for storm-hardening and resiliency measures could be more fully developed.

Over the course of the rate case, Con Edison rose to these challenges. The settlement that the Commission endorsed on February 20 includes progress toward many of the initiatives supported by EDF and other environmental organizations. Importantly, the settlement agreement also called for the continuation of the groundbreaking Collaborative, paving the way for Con Edison to emerge as a standard-bearer for utility planning in the face of climate change.

In our next blog post, we will discuss some highlights of the 300+ page final Order posted by the Commission last Friday, February 21st, and how those aspects of the Order advance clean energy and resiliency in New York.

By Jamie Fine

Buildings account for 40% of our nation’s electricity use. In 2012, power plants spewed about 2 gigatons of global warming pollution into our air, which was about one-third of total U.S. emissions. That’s why EDF and the U.S. Green Building Council (USGBC) teamed up to launch the Demand Response Partnership Program (DRPP) aimed at  enrolling LEED-certified commercial buildings in host utility demand response (DR) programs. Since the program’s inception over 2 years ago, the preliminary results of this collaboration are now available. Our 2013 DRPP Year End Report details how the program is educating building energy managers to drive adoption of demand response programs for commercial buildings.

DR is used to reduce energy use by rewarding utility customers who use less electricity during times of “critical,” peak electricity demand. The DRPP asks LEED buildings that are already quite efficient to operate in low power mode when the grid is stressed. The DRP Program used the USGBC’s newly posted LEED ‘Pilot Credit 8: Demand Response’ as an implementation guideline and leveraged its relationships with the building community to foster adoption and participation in existing utility and solution provider demand response offerings.

The report looked at three areas to measure the program’s success in 2013: Recruitment and outreach to potential participants, research and analysis of data from participants, and education about the DRP Program. A few key highlights are outlined in the Year End Report:

The preliminary results of the Demand Response Partnership Program (DRPP), a unique partnership launched by EDF and the U.S. Green Building Council (USGBC) in 2011, are now out in a new report. Photo Source: Harvard University

• Completed outreach to 572 LEED ‐registered and ‐certified buildings, representing 275 million square feet. Of these, 133 buildings (representing 51 million square feet) are enrolled, evaluating enrollment, or have been determined to be DR ready.
• Entered data analysis and reporting phase with a research pool of 30 buildings agreeing to provide energy usage data and nearly 200 buildings participating in the Building Systems Assessment Survey.
• Energy use data for 14 buildings, representing a total of 125 demand response events, were analyzed and this analysis will serve as a basis for future case studies.

The USGBC & EDF partnered with select utilities, solution providers, and program sponsors to achieve these milestones.

LEED Buildings Movement Leads the Way

According to the DRPP landing page on the USGBC website, “DRPP is part of a larger movement by LEED to get builders and architects to start thinking more holistically about their buildings and considering the interconnection between building systems. Demand response is another step in this tradition and focuses on thinking beyond the walls of the project to consider the interconnection between energy use decisions (how much and when it is used) and the impacts on energy generation and distribution capacity.”

Project registrations for the DRPP LEED credit have continued to pick up and now total over 300 across the country.

More Results to Come

This year, DRPP will continue with data analysis and reporting, focusing on feedback surveys from commercial building participants and partners. EDF is examining the environmental impacts of demand response events by testing the premise that DR is both environmentally beneficial and key to increasing renewable generation.

The results of this analysis will be released in a final report in summer 2014. In the meantime, EDF will continue working with its DRPP partners to maximize the untapped potential of demand response to reduce carbon emissions, lower energy bills, and improve grid resiliency.

By Mary Barber

New Jersey has proposed using federal Sandy relief funds to set up an Energy Resilience Bank that would fund projects to make the state’s energy infrastructure more resilient in the face of extreme weather events. The Bank is an innovative proposal that will help New Jersey prepare for the future in the wake of Superstorm Sandy, which destroyed thousands of homes and businesses, causing human loss and suffering that continues for many today.

Climate change increases the likelihood that New Jersey will continue to be buffeted by storms such as Sandy, which exposed and underscored the need to upgrade to a more resilient, low-carbon energy infrastructure when a third of the state lost power for nearly a week. The Energy Resilience Bank, which will be capitalized at $210 million, would help expedite this process, allowing the state to keep the lights on and residents safer during the next storm.

The creation of an Energy Resilience Bank was proposed as part of an Action Plan Amendment, released last week by Governor Christie’s office, detailing how federal Sandy relief funds would be spent in the state. In October, the U.S. Department of Housing and Urban Development (HUD) announced a second allocation of Community Development Block Grant (CDBG) Disaster Recovery funds, awarding New Jersey an additional $1.46 billion for Sandy-related rebuilding needs. The first tranche of $1.8 billion was approved by HUD in April last year. In addition to targeting unmet housing and economic revitalization needs, the second allocation will also cover unmet infrastructure needs in the areas of energy, communications, waste and wastewater systems and transportation projects.

Source: Greenpeace – Tim Aubry

Meeting New Jersey’s resilience objectives will require accelerated and aggressive deployment of energy efficiency and on-site, distributed power generation technologies (such as solar PV) throughout the state. Distributed generation initiatives on such a scale will require substantial amounts of capital. With federal, state, and local governments strapped for cash, it’s clear that the bulk of the capital required to invest in distributed generation will have to come from the private sector.

The proposed Energy Resilience Bank, which is similar to the “Green Bank” construct supported by EDF in other jurisdictions, would help spur this private financing. At this point we believe that the State would be well advised to consider this construct as it would leverage public funds and authority to lower the cost and increase the amount of private financing for distributed generation technology. A ‘green bank’ model would also drive innovation, fuel local and regional economic growth, and aid in job creation.

New Jersey can facilitate the creation of robust energy finance mechanisms that have the potential to transform the state’s energy markets. In this way, New Jersey can help to unlock private capital market activity to boost energy resilience as well as larger environmental and market objectives.

By Marita Mirzatuny

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

EDF's Marita Mirzatuny with Secretary Moniz at Pecan Street's Pike Powers Labratory

Last Thursday, I had the privilege of presenting a short summary of EDF’s Smart Power Initiative to Dr. Ernest Moniz, the U.S. Secretary of Energy. As a group of over 30 people piled into the Pike Powers Laboratory (including the lab’s namesake), the Secretary made his way in, beelined for some coffee, and sat down to hear all about Austin’s innovative and collaborative energy “ecosystem.”

Present was the Mayor of Austin, Lee Leffingwell, various cleantech entrepreneurs sponsored by the Austin Technology Incubator (ATI), representatives from the State Energy Conservation Office (SECO), and the Governor’s office, among others.

Everyone had the opportunity to speak to the Secretary in a roundtable format about the work their particular company or group is doing to solve energy problems, and as EDF’s representative, I reported on our Smart Power work in Texas.

As I told Secretary Moniz, we are aiming to reduce harmful pollution from fossil fuels by prioritizing customer-facing, demand-side resources, like demand response (DR), energy efficiency, and renewables. Texas is the number one emitter of carbon in the nation (emitting twice as much as any other state) and at the same time we are reeling from the effects of climate change firsthand with a persistent drought and increasing temperatures. But we also have the greatest opportunity for solar power in the nation (though currently ranked behind New Jersey) and our demand response potential is the highest as well. Texas is the leading wind producer in the U.S., however, proving that innovation can happen when collaboration occurs. This is why Pecan Street’s residential energy data is necessary in making the case for new pathways to a cleaner future, sparking innovation and strengthening Texas’ economy.

Secretary Moniz expressed his enthusiasm for the Pecan Street, stating “Fantastic, I think it’s got to be the greatest, by far the most aggressive, project that I know of, at least in terms of the data collection. What came out was a view of a really dedicated, collaborative community in a vibrant investment ecosystem pushing clean energy. Austin is clearly a leader in this domain." Overall, Moniz found the project "very impressive."

After our conversation and a tour of the Lab, Secretary Moniz made his way to the University of Texas where he spoke to a packed auditorium. Qualifying a few questions from the audience with a smile, the Secretary reiterated the President’s “all-of-the-above” energy strategy, making it clear that the goal of the Administration is to move to a low-carbon future:

Very simple, we continue to reduce our oil dependence as we lower our oil imports…through alternative fuels, electric vehicles, and corporate average fuel economy (CAFE) standards. Across the board, that is what 'all-of-the-above' means. We are committed to low carbon, but we are also committed to all of the tools — research, development, and deployment — the option of all of those tools in a low-carbon marketplace. There’s no ambiguity about the need and commitment in this administration to lower greenhouse gas emissions, he said.

Secretary Moniz also noted how steeply the cost for renewable energy technologies has decreased over the past few years, which is critical if the U.S. intends to lead the global clean energy economy. "We should not take our eye off the ball in terms of what have been incredible cost reductions in these technologies. We want to be ahead of the train, not catching up to the caboose at the end,” he remarked.

As a nuclear physicist and Director of the Laboratory for Energy and the Environment at the Massachusetts Institute of Technology, Secretary Moniz understands what is happening in the new energy revolution, ensuring that we have a leader in the Obama Administration who gets it. While some see his “all-of-the-above” strategy as discouraging, from where I sat, it is refreshing and encouraging to have such a brilliant academic at the helm of America’s energy vision and not someone coming from the ranks of corporate interests. I have confidence he will be a valuable partner in helping EDF accomplish our Smart Power Initiative goals, which seek to transition our nation to a cleaner, more resilient and dynamic energy future.