Energy Exchange: Energy efficiency

By Ellen Bell

I’ve always been proud to be from Illinois. As a Midwestern girl who went out East for college, I spoke often about the wonders of my hometown of Chicago: from our miles of gorgeous public lakefront, to our proud history as the home of the first skyscraper. We have a scrappy side, too. As a city that rebuilt itself from scratch after the Great Chicago Fire of 1871, we’ve always worn the title, ‘Second City’ as a badge of honor (and a chip on our shoulder, when it’s used as anything but a compliment).

That’s why when the U.S. Green Building Council (USGBC) released its annual Top 10 States for LEED, it came as no surprise to me that Illinois topped the list for the third year in a row. The ranking evaluates states based on sustainable building design, construction, and transformation, demonstrating Illinois’ progressive leadership when it comes to energy management in buildings.

Illinois has taken the lead, but property managers who haven’t jumped on the energy efficiency bandwagon yet should join now – there’s plenty of room. It’s never too late to pursue efficiency opportunities that benefit your organization’s bottom line.

LEED is a fantastic framework, but it’s not the only option

A second piece of information in USGBC’s announcement left me unsurprised: the top 10 states once again utilized LEED for Building Operation and Maintenance, the most out of LEED’s three rating systems. Although all three provide a framework for practical and measurable green building solutions, Operation and Maintenance focuses on existing buildings, while the other two measure construction and design (both for building and interior).

People often only think about pursuing LEED certification for new construction projects, which is an important opportunity to maximize a building’s operating efficiency from the beginning. But, as demonstrated by the report, upgrading equipment to maximize efficiency in existing properties is a lucrative avenue worth pursuing. In fact, focusing on optimizing systems in the already-built environment is quickly becoming a $20 billion business that represents both economic and environmental opportunities.

Illinois Leads on LEED, but Greater Energy Management Opportunity Awaits
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And you don’t need to go after anything as complex as LEED certification to follow Illinois’ pioneering example – or get a share of that $20 billion. A building’s energy data, available either through utilities or onsite tracking software, is often an untapped operational resource. Determining a property’s standard energy use and analyzing that data can provide quick insights that lead to low-cost, or even no cost, operational fixes.

Significant value lies in energy management

The everyday responsibilities of managing a building can leave little time for energy management. But if you reframe it as financial acumen, it’s worth finding the time.

According to Chicago’s Building Energy Benchmarking Report, hundreds of millions of dollars of energy reduction savings are possible. That is, if reporting buildings improve their operating procedures to achieve (or surpass) the national average, as determined by the Department of Energy’s Energy Star energy efficiency program.

Furthermore, utilities across the country offer incentive programs to help improve a property’s energy operations, covering everything from lighting and HVAC upgrades, to energy audits. These programs help property managers get a handle on useful energy data, and often promise quick returns for recommended efficiency projects.

But as American architect and urban designer Daniel Burnham said, “Make no littleplans” – and I would be remiss if I didn’t point out that thinking big should always be an option, too. There’s a reason over five billion square feet of commercial, neighborhood, and residential properties are LEED-certified in the United States: There is value, not to mention financing opportunities, to be found in a whole-building energy and sustainability management strategy.

For example, the Empire State Building’s retrofit project focused on eight key areas that influenced energy consumption, demonstrating how energy efficiency investments can deliver benefits, like lower operating costs, increased building valuation, and lower energy usage. Taking the time to make the business case for this kind of layered, strategic, fact-based planning – which allows savings to grow and systems to function optimally – is never time wasted.

The leadership shown by Illinois’ industry professionals, business leaders, and community advocates has cemented LEED’s status as a transformative force in building efficiency. As our position at the top of the list demonstrates, existing efforts are carrying on the legacy of innovation and leadership, honoring the Midwestern pioneers who came before us. Pursuing new efficiency opportunities will maintain Illinois’ place at the forefront of innovative building energy management – and allow us to look forward to a healthier, more sustainable future.

By Ronny Sandoval

The GridWise Alliance, a leading business forum for the development of a smart, clean, modern electric grid, just released its 3rd Annual Grid Modernization Index – a ranking of states’ progress towards a more sustainable energy system. The Index goes beyond tracking investments that modernize the electric system; it explores the policies these investments can support, such as increasing efficiency and reducing emissions. The report also delves into the valuable services customers can expect from smart technology investments in the grid.

Grid modernization isn’t simply about replacing aging infrastructure – it’s about managing energy in new ways, namely through sensors and digital communication. Greater visibility and control as a result of these investments can create a dynamic electric system that is more efficient, better manages costs, improves customer service, and protects our limited resources.

In addition to possibly giving your home state something to brag about, the results of this Index offer plenty of useful information on how states have modernized the grid and charted their own course toward making smarter energy choices.

States are leading the charge

California, Illinois, and Texas rank first, second, and third in the new Index. They continue to lead the pack, as in previous years.

Feeling Gridlocked? New Report Grades State Power Systems and Inspires Modernization
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California has long been recognized as a pioneer in driving efficient and clean investments in the electric system, but ambitious time-of-use rate designs – which reward people who shift some of their electricity use to times of the day when renewable energy is plentiful and electricity is cheaper – have contributed to California’s continued leadership. New requirements that demand response – a voluntary conservation tool that relies on people and technology, not power plants to manage peak energy demand – be considered as a potential tool in meeting future system needs also contributed to California’s top ranking this year. Environmental Defense Fund (EDF) has advocated for these and other sustainable policies in the state for some time.

In Illinois, where EDF is also very active, utilities have agreed to report on environmental performance metrics, conducted studies showing voltage optimization is a great investment, and invested billions of dollars in smart meters that underpin smarter energy choices. Leading utility ComEd also recently embraced the Open Data Access Framework, an industry-recognized model framework that EDF helped create and made possible by Illinois’ investment in smart meters. Open Data Access is designed to help utilities unlock smart grid benefits by granting people easy access to energy data.

Texas, another one of EDF’s priority states, rounds out the top three leaders in this year’s Grid Modernization Index. The state’s policies in encouraging retail competition have facilitated the creation of products and services with a unique customer focus. Texas’s exploration into making the best use of distributed energy resources (like rooftop solar and energy storage) and providing value to the system further demonstrates its leadership in modernizing the electric grid. And, with three new grants from the Department of Energy’s SunShot Initiative, Texas may be well on its way to reclaim the number one spot in grid modernization.

Key takeaways

Aside from details about what is happening in leading states, the Index also offers some interesting key takeaways. We recommend you review them all, but three stand out:

1. There is a significant gap between the front runners and laggards. However, the findings are not just about shining a light on the leaders. If your state is behind in modernizing its grid, it can consider the approach of other states and focus on realizing the benefits that matter most first.
2. Demand response is a key ingredient for highly ranked states. This is not surprising, considering demand response is a proven clean energy tool for managing peak demand, lowering electricity bills, and reducing harmful pollution.
3. A modern grid can facilitate a number of your state’s energy, economic, and environmental priorities. However, collaboration among all stakeholders is essential to ensure the transition to a more modern energy system is sustainable.

What’s next for your state?

EDF is a member of the GridWise Alliance and is very proud of our involvement in bringing an environmental perspective to the project team and contributing as a strategic advisor on this report. The Index shows that the policies EDF promotes have impact – especially in some of the higher-ranking states. We envision that utilities and regulators will continue to be guided by the smart, clean energy strategies captured in this document. Regardless of ranking, all states can use the Index to make more informed decisions in creating a modern and more sustainable energy system.

By Jim Marston

Back in September when the New York Times declared 2015 “the year humans got serious about climate change,” we knew they were on to something. But as we near the end of 2015, it’s hard to believe we’ve accomplished as much as we have in just 12 months.

This momentum culminated in representatives of 195 nations agreeing in Paris to act together on world knowledge of climate change. This historic agreement will aim to reduce global greenhouse gas emissions, report transparently, and review and strengthen standards every five years. EDF President Fred Krupp stated, “It sends a powerful, immediate signal to global markets that the clean energy future is open for business.”

Though history proves “hindsight is 20/20,” historians just might look back at 2015 as the year everything changed for clean energy. Here’s a look at some of the top trends that fueled climate action by governments, investors, corporations, individuals, cities, utilities, market analysts, real estate professionals, and cleantech leaders in 2015. [Click through the following slideshow to see the trends.]

• 1. Governments make way for clean energy
  In addition to the global climate accord in Paris, the Environmental Protection Agency finalized the Clean Power Plan in August, setting the first-ever national limits on carbon pollution from power plants. While some states are challenging these rules in court, EDF reported that even a state like Texas – known for its oil-rich energy resources – could achieve nearly 90 percent of its 2030 Clean Power Plan goals under business-as-usual.
  
  State action on renewables found political room to grow when California passed SB 350, raising the state’s renewable energy mix to 50 percent and doubling the efficiency of existing buildings. And in North Carolina, tax credits and a modest renewable energy portfolio standard created more clean energy opportunities.
  
  Photo source: Yann Caradec CC BY 2.0
• 2. Investors double down on clean energy
  Citibank predicted in 2015 that it would be cheaper to invest in energy efficiency and renewable energy than to follow a business-as-usual route to meeting our world’s growing energy needs. By transitioning to a clean energy economy we will, in fact, save an estimated $1.8 trillion by 2040.
  
  Today’s momentum, researchers noted, is driven in no small part by investors who are turning away from fossil fuel assets to instead focus on new and promising opportunities in clean energy. This trend came to a head in late November when Mission Innovation and the Breakthrough Energy Coalition launched simultaneously to dramatically accelerate public and private investment in clean energy innovation.
  
  Photo source: Michael Rivera CC BY 3.0
• 3. Corporations greenlight clean energy
  In corporate boardrooms, climate awareness and clean energy business opportunities merged. One example, 81 companies signed the White House’s American Business Act on Climate Pledge in October.
  
  This outpouring of corporate support shows that climate action has finally gone mainstream. And it’s no wonder. With Americans acknowledging the reality of climate change by increasing margins, and supporting action to cut fossil fuel pollution by a clear majority, the signal to business leaders is unequivocal. And because getting ahead of climate change can unlock new business models, energy savings, and lesser risk, the business case is a stool with many solid legs.
  
  Photo source: Joe Ravi CC BY 3.0
• 4. Renewables get even cheaper.
  2015 was a big year for renewable energy. Rooftop solar is becoming a middle-class commodity, with most installations landing in neighborhoods with a median household income of $40,000 to $90,000. American wind energy achieved a new milestone (70 GW nationwide in 2015!), and utility-scale solar is reaching “grid parity” (i.e., cost equivalency) with traditional generation in more areas across the country. Both resources received a major boost when Congress recently extended the federal tax incentives – which, according to Greentech Media Research, will help spur nearly 100 cumulative gigawatts of solar installations by 2020, resulting in $130 billion in total investment. Similar gains are also expected for wind.
  
  Photo source: McConnell Photography
• 5. Utility business models are changing
  While the price of renewable energy hit record lows in 2015, the proliferation of distributed energy resources – like rooftop solar, energy storage, and microgrids – hit a record high. More people are producing their own energy, and as a result, utilities are being forced to rethink how they recoup grid investments. Some utilities are choosing to adapt, while others are fighting change. Under the moniker Reforming the Energy Vision, New York is pioneering “utility 2.0” – or, a future in which electric vehicles, rooftop solar, and other types of homegrown energy are commonplace. In Ohio, however, utility bad boy FirstEnergy spent most of 2015 fighting the clean energy revolution via a $3 billon, ratepayer-funded bailout request.
  
  Photo source: Tim Connor
• 6. Electricity rate design becomes a hot-button issue
  One way utilities are dealing with the changing energy landscape is by rethinking how they charge customers for electricity and other grid services. Unfortunately, some utilities are intentionally trying to curb customers’ incentives to install solar mainly because this homegrown energy resource reduces shareholder profits and revenue for utilities. “Fixed charges” seemed to be the silver-bullet solution for these utilities in 2015.
  
  At least 35 investor-owned utilities in 18 states have requested fixed rate increases since 2014, with battles playing out in Kansas, Philadelphia, and many other regions. Time-of-use electricity pricing – which reflects the true cost of electricity throughout the day – is one alternative approach that California regulators approved this summer.
  
  Photo source: Brendan Wood CC BY 2.0
• 7. Clean energy becomes a moral issue
  In his 2015 encyclical, Laudato Si’ (“Praised Be to You”), Pope Francis called attention to the societal benefits of clean energy. In July, the Pope shrewdly convened the first meeting specifically for local government officials at the Vatican. Why? Because, like many, the Pope believes cities, unencumbered by state mechanisms, can get things done when it comes to clean energy.
  
  Photo source: Alfredo Borba CC BY 4.0
• 8. Real estate leaders embrace energy management
  Buildings use nearly 40 percent of all energy in the U.S. and account for a third of our greenhouse gases. A growing number of commercial real estate professionals began looking for opportunities in 2015 to upgrade what they’ve already got – and financing these upgrades is getting easier with EDF’s Investor Confidence Project (ICP). By standardizing how energy efficiency projects are developed and brought to market, similar to what was developed years ago for car loans and mortgages, ICP is clearing away barriers to energy efficiency financing. This year, New Jersey became the first state to pilot an ICP state incentive program.
  
  Photo source: Arthur Paxton – Rutgers University CC BY 3.0
• 9. Energy storage emerges as a megatrend
  This was the year breakthroughs in energy storage became inevitable. Tesla ushered in a new clean energy era when it unveiled its “Powerwall,” a home energy storage unit meant for backup during blackouts, with potential for future “solar plus storage” capabilities. Meanwhile, forward-thinking California utility, San Diego Gas and Electric began developing a “BYOB,” or Bring Your Own Battery, model in 2015 (with hopes of a pilot in 2016) that would allow the utility to “crowdsource” its customers’ batteries (like electric vehicles and Tesla’s Powerwall) to meet energy demand. And in Illinois, one of Chicago’s most iconic landmarks unveiled a battery storage unit that will help balance the electric grid and save money.
  
  Photo source: Tesla Motors – Tesla Energy CC By 4.0
• 10. Utilities get a grip on data
  Data may be the most promising and powerful tool to advance energy efficiency, but we’ve barely begun to scratch the surface of its potential. For example, in Pennsylvania, EDF and Mission:data — a national coalition of technology companies that advance the use of energy data — encouraged the Pennsylvania Public Utility Commission (PUC) to adopt the Open Access Data Framework. By clarifying the type of electricity usage data customers and authorized third-parties have access to and how the data should be provided, this framework could allow technologies, such as smart thermostats, and third parties to transform meter data into actionable steps that increase efficiency, save money, and cut pollution.
  
  Photo source: Space-Time Insight

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By Dick Munson

It started with U.S. Energy Secretary, Ernest Moniz. He was in Chicago to give a high-profile speech on the Iranian nuclear deal and had two free hours after the luncheon address. His staff called to ask if the secretary could come over to our office, which houses Environmental Defense Fund (EDF), an assortment of clean-energy start-ups, and the Energy Foundry, essentially a private-equity firm financing such entrepreneurs. Hard to say no to the head of the U.S. Department of Energy.

About a month later, we get a call from the Environmental Protection Agency (EPA). Gina McCarthy, head of the EPA, was going to be in Chicago for a press conference. She had some free time in the late morning and wondered if she, too, could drop by to talk. Who’s going to deny the EPA administrator?

After another month, we get another call. This time from the U.S. Small Business Administration, whose administrator, Maria Contreras-Sweet, was going to be in Chicago. She had heard from colleagues that our office was the “place to be,” and wanted her own informative tour. What could we say?

The U.S. is currently undergoing a major transition to a cleaner, smarter, more efficient electric grid, and Illinois is at the heart of this change – which is clearly attracting interest from prominent leaders. So what exactly did our high-profile guests want to learn about?

We talked with the energy secretary about how grid modernization can empower people with access to their own energy-use data, as well as how to calculate the greenhouse-gas reductions resulting from advanced energy meters (which Illinois utilities are currently trying to figure out, with our help).

We also walked Secretary Moniz around the office, and the MIT physicist regaled in conversations with creative developers of energy storage, which is starting to rival conventional energy resources. Chicago is becoming a center for battery research and demonstration, and EDF recently helped the iconic Merchandise Mart demonstrate how energy storage can benefit – and even generate revenue for – commercial office buildings.

EDF Chicago hosts high-profile energy visitors in 2015. #cleanenergynow
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Gina McCarthy was in town to announce an impressive Illinois initiative – the nation’s largest of its kind – to leverage customer rebates to get more than a million smart thermostats into Northern Illinoisans’ homes. While at our office, she was particularly interested in our work on demand response, a way to incentivize buildings to conserve energy when the electric grid is stressed. Specifically, she wanted to learn more about our partnership with the Combined Capacity Asset Performance Project (C-CAP), a collaboration with PJM (the regional grid operator) to demonstrate how demand response can continue to play a strong and vital role in PJM’s electricity market. She seemed to agree that demand response is a key tool for reducing carbon pollution, and the EDF-PJM initiative was an innovative means to achieve efficiency.

Of course, as the head of EPA, McCarthy also wanted to know about our efforts in Illinois to advance the Clean Power Plan's nationwide limits on carbon pollution from power plants. While some states are fighting the Clean Power Plan, Illinois has indicated it will develop an implementation plan and EDF is working with allies, like Citizens Utility Board and the Illinois Clean Jobs Coalition, to ensure the state complies.

Our third visitor, Maria Contreras-Sweet, heads up the Small Business Administration, a U.S. government agency that provides support to entrepreneurs and small businesses. She was particularly interested in how government financing and programs could encourage innovation and efficiency in emerging electricity markets. We told her about our efforts to help pass the Illinois Clean Jobs bill, which a recent report found would lead to 32,000 new jobs for Illinois – a direct result of expanding efficiency and renewable energy investments. The bill has support from a diverse set of groups and both sides of the aisle.

Maybe our high-profile visitors really didn’t have a lot to do in Chicago after they gave their planned speeches. Maybe they stopped by to enjoy a 12th-floor view of Millennium Park and Lake Michigan. Maybe they wanted to hang out with 30-something entrepreneurs (present author excluded). But we like to think our innovative energy developments are the big attraction for senior administration officials.

Our guests during 2015 came to learn, and we happily obliged by sharing information on the interesting work EDF is undertaking in the Midwest to transform the way energy is created, moved, and valued. While we navigated around their beefy security details, we expressed appreciation for their leadership, as well as their interest in the collaborative, clean-energy momentum building in Illinois.

Photo source: Tim Sackton (Flickr)

By Guest Author

By: Charlene Heydinger, Executive Director, Keeping PACE in Texas

As a bustling metropolis and the biggest city in Texas, Houston has a lot of buildings – and that equals a lot of opportunity to make these facilities more energy- and water-efficient.

Houston grabbed headlines last month when it became the first in Texas to adopt a citywide Property Assessed Clean Energy (PACE) program. PACE will help Houston building owners undertake much-needed water and energy efficiency improvements through private financing – all without having to worry about steep upfront costs. This move means substantial economic development potential, in addition to environmental benefits, for the nation's fourth largest city.

It’s also a sign this innovative clean energy finance tool is catching fire in Texas: Houston joins Austin’s Travis County, which embraced PACE in March, and a Dallas city ordinance is just on the horizon. Additionally, Cameron and Willacy Counties expect to bring PACE to the Rio Grande Valley in January.

2015 marks a record year for the PACE finance approach across Texas, and interest is growing in several other counties. Even better, all are following the stakeholder-designed PACE in a Box model toolkit – meaning PACE is uniform, user-friendly, and market-based throughout the state.

How does PACE work?

Imagine you own a 1980s apartment complex in Houston. Over the years, building maintenance was deferred in lieu of more immediate expenses, and the original equipment is increasingly harder to maintain. A retrofit with new, energy-efficient materials and technology would enhance the property and help your residents save money on electric bills, if only you could justify taking cash from your core business to update the facility. And who knows if you will even still own the complex by the time the project is paid off? You can’t risk overinvesting in the property since you aren’t sure how long you’ll own it.

Enter PACE, which enables commercial, industrial, and multifamily real estate property owners like you to improve your property’s water or energy efficiency through a voluntary contractual property assessment, which is secured by a senior lien on the property. In other words, the assessment is a local economic development tool that ties the financing obligation to the property itself. If you decide to sell your apartment complex, the remaining PACE repayment obligation transfers to the new owner, who also enjoys the benefits of the improvement. PACE ends the risk of overinvesting in the property and significantly lowers the risk for the lender, too.

Before you know it, your 1980s apartment complex will be significantly more energy-efficient – saving you money and benefiting the local economy and environment.

2015 was a record year for #PACE in Texas. #cleanenergynow
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PACE in Texas has momentum on its side

To get its program off the ground, Houston has deployed the Pace in a Box toolkit, which contains all of the design elements, documents, and implementation steps necessary for a local government to establish a PACE program quickly and economically. Our PACE in a Box toolkit helps each county and city initiate the program in a simple, uniform way. As PACE continues to expand across the state, this consistency will speed up adoption and allow everyone to work with the same documents and processes throughout the state. This state-wide uniformity can also serve as a model for the country.

It’s important to note that the energy and water efficiency improvements are wholly financed by private capital in Texas. This means PACE programs that follow the toolkit, in Houston and throughout the state, do not require taxpayer funding but enable vast amounts of private money to flow into facility upgrades. Nine lenders – including a Texas bank – are ready with hundreds of millions of dollars available for Texas PACE projects. PACE further empowers property owners by letting them select their lenders.

Finally, it should be noted that this exciting Houston development could not have been done without Laura Spanjian, Mayor Parker’s Director of Sustainability. Spanjian spearheaded the effort to ensure Houston could take a big leap on updating and improving the energy and water efficiency of its buildings. Her team included Houston’s Energy Efficiency in Buildings, Keeping PACE in Texas, the Texas PACE Authority, and key city staff. And now, based on her model, we even have "Starting a PACE Program Tasks and Timeline" guidelines for everything your community needs to start a PACE program in 14 weeks.

By unlocking private capital and overcoming upfront costs, PACE will play a critical role in advancing clean energy in Houston, Austin, Dallas, and throughout the state. If 2015 was this good to PACE in Texas, we can’t wait to see where 2016 takes us.

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

By Ellen Bell

Buildings use nearly 40 percent of all energy in the U.S. and account for a third of our greenhouse gases. Today, a growing number of commercial real estate leaders are looking for opportunities to upgrade what they’ve already got – rather than starting from scratch – to save money and lessen their environmental impact. These commercial real estate leaders know there is a great deal of potential in starting small, and in focusing on what best serves their bottom line.

Organizations that need a more tailored approach to making their real estate energy-efficient have a myriad of opportunities that are now being pioneered by property owners across the country. Leading companies are applying outside-the-box energy management solutions to buildings constructed before the green-building boom.

Here are two examples of companies that enlisted Environmental Defense Fund’s Climate Corps program to accelerate clean energy projects in their facilities and meet their corporate energy goals:

• 77 West Wacker, a JLL-managed property in Chicago, had already tackled its base-building operations and found ways to reduce 32 percent of its energy use through certification under LEED (short for Leadership in Energy and Environmental Design) and other measures before deciding there was more to do. The building is now advancing new approaches to both comprehensive energy management and tenant engagement with the goal of cutting an additional 26.5 percent of its energy use by 2018.

• Shorenstein Properties, based in San Francisco, has one of the industry’s most respected sustainability programs with 15 million square feet of its portfolio LEED-certified and an average ENERGY STAR score of 82 out of 100 points. For the last two years, Shorenstein has earned the Global Real Estate Sustainability Benchmark “Green Star,” the highest rating, by focusing its sustainability strategy on smart operation, investment in efficiency, and tenant engagement.

Management tools boost older buildings' #energyefficiency & bottom lines.
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Moreover, retrofitted buildings can earn LEED certification through a path designed specifically for existing buildings, and they are greatly expanding the market of energy-efficient buildings.

Over the next three years, new LEED-certified construction will contribute more than $303 billion to the United States’ economy, a recent study concluded. This year alone, the industry will generate 2.3 million jobs. By 2018, this new construction is expected to save more than $1 billion in energy usage and more than $100 million in water use.

The trend isn’t limited to the U.S. Leading global brands are also making energy-efficiency a priority.

This post originally appeared on our EDF Voices blog.

By Peter Sopher

From Apple to General Electric, it is common practice in the corporate world for established juggernauts to invest significant sums for research and development. Why? Maintaining one’s reign atop a sector requires dynamic, cutting edge innovation.

The same logic applies to state economies. And when it comes to energy, Texas – where oil and gas rein king – has arguably been America’s most dominant state for the past century. Over recent years, however, technologies and developments reshaping the sector have advanced at an unprecedented rate. As a result, it’s become clear that the energy sector of the future will rely far more on clean energy and smart technologies than on fossil fuels.

The good news: Texas has by far the most potential for solar and wind generation in the United States, which means the Lone Star state might be even more energy-rich in the 21st century than it has been in the past. In addition, the state’s energy sector is trending cleaner due to market forces.

And, in case you needed more proof, 2015 has been a dynamite year for clean energy momentum in Texas. Here are five reasons why:

• As prices have dropped, the growth rate for renewables has accelerated.

Texas’ grid operator, the Electric Reliability Council of Texas (ERCOT), keeps track of all electric generation in the state year to year, and evidence from 2015 suggests renewables have taken off. ERCOT’s installed wind capacity – or the amount of wind energy capable of being produced – is projected to increase nearly 25 percent from 2014 by year’s end. In addition, solar capacity has increased more than 30 percent this year. And the groundwork has been laid for an explosion in 2016: ERCOT solar installations are expected to quadruple, and wind installations are forecast to grow more than 35 percent.

Why is all this wind and solar growth occurring? Prices for both are plummeting. In particular, these competitive prices have manifested in unprecedented 2015 Texas solar power deals. Austin’s utility, Austin Energy, received offers earlier this year for solar energy at 4 cents/kilowatt hour (KWh), which led Greentech Media to declare it the “Cheapest Solar Ever.” Houston, Texas’ biggest city, also made plans for solar energy to generate 7 percent of its power by late 2016 at 4.8 cents/KWh, a price that city officials estimate could save the city more than $19 billion over the deal’s 20-year lifespan.

An encouraging sign for the future is that solar costs have historically fallen over 20 percent as global capacity has doubled, and global capacity is expected to double from the 2014 level by 2017. Austin Energy expects the price of solar to drop below 2 cents/KWh by 2020.

• Economics are driving corporate giants and cities (even conservative ones) toward ambitious clean energy action.

Stellar clean energy prices have contributed to big Texas news from companies and cities alike in 2015.

For example, Facebook announced earlier this year that it will power its large new data center in Fort Worth using wind energy. This announcement preceded an October 2015 announcement from Procter & Gamble and followed a 2014 statement from Mars who both will power 100 percent of their U.S.-based electricity needs using Texas wind.

And last month, the municipal electric utility that serves Denton, a North Texas city of 130,000 people, announced plans to get an impressive 70 percent of its energy from renewable sources by 2019. This ambitious renewables target echoes one set earlier this year by Georgetown, a fellow Texas city just north of Austin, which is on track to be 100 percent renewable by 2017. The city’s mayor, Dale Ross, minced no words in clarifying the reason behind the decision saying, “environmental zealots have not taken over our city council…Our move to wind and solar is chiefly a business decision based on cost and price stability.”

While in the past, Austin, San Antonio, and El Paso have set ambitious clean energy goals, what is especially encouraging about Denton and Georgetown is that they are politically conservative. For example, in the 2014 Senate race, Williamson County (which subsumes Georgetown) and Denton County voted 62 percent and 68 percent for the Republican candidate, respectively. Even in Texas’ conservative cities, politics are not proving to be a hindrance as renewables begin to outcompete fossil fuels.

• Private utilities are increasingly opening their minds to clean energy.

Earlier this year, Luminant, the state’s biggest electricity generator with a coal-heavy fleet, announced plans to power more than 50,000 homes with West Texas solar by late 2016. This is the largest solar deal in the country for an investor-owned utility in a competitive market. Although Luminant has a long way to go, it has taken its first step in the right direction.

In addition, transmission and distribution utilities, like CenterPoint, are modernizing through an aggressive push for pervasive advanced meter installations and a cleaner energy portfolio that enables customer-owned distributed energy resources (or everyday folks adding rooftop solar to their homes, for example).

5 signs of Texas’ #cleanenergy momentum in 2015.
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• The state has experienced substantial energy efficiency progress.

According to the American Council for an Energy-Efficient Economy’s (ACEEE) annual state rankings, Texas was most improved – jumping from 34th most efficient state in 2014 to 26th in 2015. The state’s emphasis on adopting the newest building energy codes and ensuring compliance to them was the primary driving force behind this improvement.

In addition to building codes, the perennial energy efficiency leaders within the state, Austin Energy and CPS Energy in San Antonio, continue to be on track to achieve their ambitious energy efficiency targets. Austin Energy aims to reduce peak 2020 energy demand by 17 percent through energy efficiency. In addition, CPS Energy is midway to achieving a similarly ambitious efficiency goal for 2009-2020.

• The Clean Power Plan anchors a future policy landscape that is favorable for renewables.

August 2015 saw the finalization of the Clean Power Plan (CPP), Environmental Protection Agency’s plan to limit carbon pollution from our nation’s power plants for the first time ever. By emphasizing carbon-free energy sources and energy efficiency, this policy creates a landscape for clean energy growth in the United States like never before.

Fortunately, Texas is nearly 90 percent of the way toward compliance with the plan by 2030 under “business as usual.” And the even better news is the Clean Power Plan is a major boost for clean energy progress in the state because it will:

• Spur clean energy activity in order to achieve the remaining 12 percent gap in compliance.
• Add clarity for businesses about what to expect from the state’s energy sector over the coming years, meaning they can feel confident about developing long-term strategies.
• Provide certainty that politically-charged decisions will not hinder Texas’ current clean energy momentum.

Over the past decade, year-on-year clean energy progress has been exponential in Texas. Not only has this trend ramped up in 2015, all signs point to 2016 leaving this year in a North Texas dust storm.

And for every Coca-Cola, which has adapted to the times decade after decade to remain on top, there are 10 companies like America Online (AOL), whose market share fizzled as its competitors’ superior technologies turned its value proposition obsolete. With more years like 2015, Texas will set itself up to be the energy world’s Coca-Cola as it dominates the sector for another century.

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

By Ellen Bell

When you think about something that is 85 years old, you might think of history and tradition but not necessarily innovation. However, when the 85-year-old in question is a Chicago landmark committed to finding new ways to tackle energy management, cutting-edge solutions are par for the course.

The Merchandise Mart is a massive commercial space, spanning two city blocks along the Chicago River and offering some 4.2 million square feet of floor space. As expected, its energy consumption is also enormous, but the building has long been a leader in efficiency. And recently, the Mart took an even bigger step forward by unveiling an innovative battery storage unit that will help balance the electric grid – and earn money while doing it.

How the Mart came to be a clean energy leader

Built in 1930 for Marshall Field & Co., the Kennedy family owned the art deco structure for more than half a century, before selling it in 1998 to Vornado Realty Trust. Efficiency efforts began in the 1980s with the installation of an ice-storage cooling system that freezes tons of water overnight when cooling needs are minimal, allowing the building to shift power consumption to off-peak periods, save money, and reduce pollution.

Vornado later implemented a comprehensive sustainability program for the Mart that, among other things, reduces overall water consumption, optimizes energy efficiency, and encourages renewable and alternative energy sources. The efficiency efforts culminated in LEED certification from the U.S. Green Building Council in 2013. As a result, the Mart is one of the largest green buildings in the world.

Despite such progress, Vornado recognized more gains were possible. In 2014, it hired an EDF Climate Corps fellow to determine why after-hours energy use was so high in some sections of the building. The fellow walked the Mart’s lengthy corridors – an almost eight mile route – multiple times to manually read the meters and calculate individual energy use and power footprints. By also analyzing lease data and information about individual tenants’ lighting and appliance usage, he found that 34 percent of the building’s tenants accounted for 90 percent of its after-hour use.

The analysis revealed that adjusting lights and usage behavior meant the Mart could reduce 470 metric tons of carbon emissions and save 520,000 kilowatt hours of electricity annually – the equivalent of $60,000 in savings. Armed with this information, the fellow and the team at the Mart then began tenant outreach that included easy energy-conservation tips, individualized reports on energy use and peer energy performance, and information on available utility incentives to encourage tenant adoption of energy efficiency measures.

How one of Chicago’s most iconic landmarks is saving money through #EnergyStorage.
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How the Mart’s energy storage leads to lower electricity costs

Based on additional assessment done by the fellow, the EDF-Mart collaboration expanded to evaluate and implement battery storage. Energy storage enables buildings to help balance the electric grid – even better than power plants can. That’s because battery power can ramp up or down in two second intervals when needed, which is faster and easier than adjusting power plants. Therefore, the battery can respond to changing conditions on the electric grid by either releasing energy or charging as necessary, all without having to alter the Mart’s electricity use.

By installing a battery that helps maintain the grid’s balance, the Mart would be able to participate in the ancillary services electricity market and earn money. Ancillary services refers to specialty, “outside the box” services and functions that support the continuous flow of electricity on the grid, ensuring that supply can always meet demand. Just as a traditional power plant gets paid to provide reliable electricity, ancillary service providers can earn money through the market.

Over the past two years, EDF introduced and explained this concept to Vornado, and Johnson Controls (JCI) was identified as the ideal vendor partner. EDF helped work out the technical details, like determining the correct capacity and placement of the battery, while JCI incorporated its lithium-ion battery technology into the Mart’s controls and software. The result will now provide the commercial real estate industry with a real-life example of the technology at work.

In coordination with other clean energy resources like demand response, the battery will also demonstrate the potential to significantly cut down total electricity costs. Demand response is a cost-effective tool that rewards people and businesses for conserving energy when the grid needs it most. The Mart has relied on JCI’s demand response programs for years to generate energy savings which, coupled with the new revenue from energy storage, has the potential to reduce the amount a commercial building spends on electricity each year by more than a third.

With an eye toward the future, these innovative, money-saving clean energy efforts have not gone unnoticed. Forward-thinking companies like Motorola and ConAgra have joined younger, web-focused businesses like Yelp to make the Merchandise Mart their Chicago home – further proof that this celebrated landmark is getting better (and smarter!) with age.

By Jim Marston

Every time I open my hometown newspaper and see a negative op-ed on America’s first nationwide limits on power plant carbon pollution – the Clean Power Plan – I think, “Oh boy. Some new industry water-carrier opposing commonsense efforts to improve public health.”

Now, to be sure, Texas is not the only state where groups have been telling lies and fearmongering in the press about these new clean air standards. But at least here in Texas, there seems to be one group in particular that’s leading the pack of spreading misinformation: Texas Public Policy Foundation (TPPF). They’ve been regurgitating the same tired, anti-science, anti-health nonsense for years.

A conservative think tank based in Austin, Texas, TPPF claims it is trying to protect people’s wallets – which is true if by ‘people,’ you mean its members. Just take a look at its donor list, which includes out-of-state interests like the Koch Brothers and Big Tobacco, as well as major coal players like The American Coalition for Clean Coal and Texas coal-burning electric generators.

The truth is, they don’t want Texans to realize the pollution standards are good for our health, water supply, and economy. Here are a few other things they’d prefer you didn’t know about the Clean Power Plan:

Their “sky is falling” predictions on cost increases are bogus: Electricity prices will not skyrocket under the Clean Power Plan. As more wind and natural gas have come online in Texas, electricity prices have actually gone down. In fact, average annual real-time market prices for electricity decreased nearly 50 percent from 2005-2013, largely due to the significant decline of the cost of renewable energy and natural gas.

What this Texas think tank doesn’t want you to know about the Clean Power Plan
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Then you need to factor in that the cheapest energy of all is energy we don’t use in the first place. Texas has barely begun to take advantage of our most cost-effective clean energy resource: energy efficiency. The state’s energy efficiency levels are currently at 0.21 percent of our energy generation mix, meaning there is a huge potential to lower bills through helping families and businesses use less energy.

In our grid operator’s recent assessment of the Clean Power Plan, costs rise just one percent per year in its worst-case scenario. The difference is less than typical price increases from year to year, plus those projected 2030 prices are still lower than where we were in 2002 before the deregulation of the electricity market. Regardless, we can avoid those increases if Texas gets to work on a thoughtful plan that harnesses our abundant clean energy resources.

Furthermore, historically, opponents of environmental standards have predicted crazy cost increases time and again – and have consistently been wrong. This is exactly what happened with the Mercury and Air Toxics Standards, when industry made outrageous cost predictions that ended up being as much as eight times greater than the real cost.

The Clean Power Plan is good for all Texans’ health (including the members of TPPF): Carbon pollution is a clear and present danger and our communities are already suffering serious harm. This is especially true for those neighboring coal-fired power plants – which often also happen to be the home of some our most vulnerable citizens.

A study evaluating a carbon reduction strategy similar to the Clean Power Plan shows it would save approximately 2300 lives, as well as prevent 790 hospitalizations and 140 heart attacks, in Texas alone between 2020 and 2030. Those are real Texan lives saved – lives that TPPF conveniently leaves out of the equation.

“Business as usual” gets Texas nearly 90% of the way to meeting its 2030 Clean Power Plan goals: The existing market – not an environmental agenda – is already transitioning our state to a clean energy economy. If those trends continue as they are expected to, we will only need a handful of thoughtful investments to get us over the finish line.

That’s because Texas’ electric grid operator has created the most competitive market in the country, meaning the most economical resources get put on the grid first. Increasingly, some of the most affordable options also happen to be clean, like energy efficiency, natural gas, and solar and wind energy. Plus, independent sources like Bloomberg New Energy Finance show coal – which TPPF is trying to prop up – will continue to increase in price as the cost of wind and solar continues to fall.

The majority of Texans are in favor of limiting carbon pollution: 61 percent of Texans support setting strict limits on coal-fired power plants. Good to know Governor Abbott and Attorney General Paxton are going ahead with a lawsuit without giving two cents about what the majority of Texans actually want.

The military recognizes how critical clean energy is: A new report from retired military leaders says, “Renewable, distributed energy is not just a ‘policy objective’ for the U.S. military, it is an operational imperative.” The Clean Power Plan will help usher in an era of a smarter, cleaner, more efficient grid that will improve national security and make the U.S. more energy-independent.

The Clean Power Plan is firmly anchored in law and fact: Despite our state leaders’ use of valuable resources to fight the plan, established law is not on their side. Three Supreme Court cases have confirmed the applicability of the Clean Air Act to regulate carbon dioxide emissions – i.e. the Clean Power Plan is on solid legal ground.

Texas has a bounty of clean energy resources at hand to tackle carbon pollution. For example, we have more solar, wind, and energy efficiency potential than any other state – but you wouldn’t know it from the TPPF. Let’s not sacrifice progress and healthier Texans for the sake of a few polluters’ pocketbooks.

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

By EDF Blogs

By: Jeff Milum, Director of Market Development, Investor Confidence Project 

40 percent of all energy in the U.S. is used by buildings, which also accounts for one-third of our country’s greenhouse gases emissions. This represents a huge opportunity, both for climate action and financial gain.

There’s just one problem: Project developers often have trouble finding financing for projects, even though investors who are looking to finance building efficiency upgrades are in need of more quality projects. This conundrum is increasingly apparent as more mainstream investors are entering the energy efficiency sector searching for investments with consistent, long-term yields, as well as “green” attributes.

That’s why Environmental Defense Fund’s Investor Confidence Project (ICP) is proud to announce the launch of the ICP Investor Network. By connecting investors who are seeking quality projects with trained and vetted project developers who are originating certified ICP-certified energy efficiency projects, ICP is working to help close this gap.

EDF’s Investor Confidence Project creates certified Investor Ready Energy Efficiency™ projects that make investing in what are often complex efficiency project easy for building owners, and finance firms alike. Investor Ready Energy Efficiency™ projects have been reviewed by an independent engineer to have followed ICP Protocols for quality project development and have provided consistent documentation for each step in the process. By certifying projects against an industry standard, ICP reduces transaction costs and increases confidence in savings in order to help engage private capital and scale up energy efficiency investments globally.

Members of the new ICP Investor Network see the value that ICP provides to their investments in energy efficiency projects and to the evolution of the industry as a whole. In joining the network, they are committing to recommending the use of the ICP Protocols and Credentialing System as best practices when developing energy efficiency projects. Additionally, the majority of Investor Network members are validating the value ICP provides by offering incentives such as accelerated underwriting, reduced transaction fees, and preferable terms for Investor Ready Energy Efficiency™ projects.

New Investor Network aims to 'close the gap' on #energyefficiency financing
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Members of the Investor Network make up around $1B in financing for energy efficiency projects collectively and are comprised of a wide range of financial services firms including lenders, equity providers, project insurance providers, and energy services. Charter members include:

• Bluepath Finance
• CleanFund Commercial PACE Capital
• Energi
• Hartford Steam Boiler
• HUB International
• Joule Assets
• M-core Credit Corporation
• Metrus Energy
• Noesis
• Petros PACE Finance
• ReNewAll LLC
• Renew Financial
• Spark Fund

A number of these providers have chosen to offer additional incentives for ICP-certified  projects, such as expedited underwriting and preferable terms, in recognition that standardized projects are more reliable, easier to underwrite, and better investments.

The Investor Network complements ICP’s Protocols and Credentialing System and is a critical link in ICP’s plan to increase the industry’s project deal flow through a managed ecosystem of energy efficiency providers. While driving more deal flow is ICP’s near term goal, the Investor Network is expected to play a pivotal role in a more long-term strategy to create a standardized asset-class of energy efficiency projects to enable market transformation.

By removing the uncertainty surrounding investment in energy efficiency, ICP benefits not only investors but also building owners and society at large by reducing carbon emissions. EDF is excited about the potential of ICP to transform the energy efficiency market and looks forward to seeing the realization of its numerous benefits.

Interested investors can find more details on ICP’s website here. To get in touch with any of the Investor Confidence Project’s Investor Network members about funding for energy efficiency projects, contact info@eeperformance.org.

Photo source: Wikimedia Commons/Josh Goodman

By Mary Barber

The large-scale adoption of energy efficiency in buildings is a key to achieving a cleaner environment, lower utility bills, and more comfort for customers. But increasing private capital investment in the energy efficiency market has been a big challenge.

Environmental Defense Fund’s Investor Confidence Project (ICP) addresses one specific barrier to more energy efficiency investment: the lack of trust investors and building owners have in projected energy and cost savings. ICP offers protocols that define industry best practices for energy efficiency project development and a credentialing system that provides third-party validation.

By standardizing the process by which energy efficiency projects are developed and measured – and creating a new Investor Ready Energy Efficiency™ asset class as an end result – investors can more easily finance energy efficiency projects and have more confidence in the energy and financial savings expected from these projects.

While many states have made great strides promoting the policies and incentives to spur private investment in energy efficiency projects, my home state of New Jersey is getting serious about it.

The New Jersey Board of Public Utilities today approved the Investor Confidence Project (ICP) pilot with the New Jersey Clean Energy Program’s (NJCEP) Pay-for-Performance (P4P) energy efficiency program. This pilot, the first ICP state incentive program of its kind in the country, is designed to assess the benefits of adopting ICP protocols for NJCEP’s commercial projects as they seek to increase private investment for energy efficiency within the state.

New Jersey accelerates #energyefficiency adoption with this new pilot project.
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The P4P pilot introduces ICP as an alternative way for buildings to meet the pay-for-performance requirements. One of the goals of the pilot is to assemble data over three years of participation that will provide project developers and the Clean Energy Program with new information regarding project performance over an extended period of time. This information is crucial to ensuring the predicted energy and environmental benefits are actually achieved and maintained.

Hats off to the New Jersey Office of Clean Energy, TRC (the P4P market manager), and the many Pay-for-Performance partners who over the last eighteen months worked hard to develop a P4P/ICP framework. It will inform and build upon progress in other areas of the country like Texas, Connecticut, San Francisco, and New York that are all at different stages of adopting ICP.

We look forward to continuing our collaboration with the Board of Public Utilities and the Office of Clean Energy on energy efficiency and other cost-effective, clean energy solutions that are good for people, businesses and the environment.

 Photo source: Jamaalcobbs/English Wikipedia

By John Hall

When the Environmental Protection Agency (EPA) finalized America’s Clean Power Plan in early August, it marked the first time our country has put a limit on emissions from the nation’s largest source of carbon pollution: power plants. The standards represent a huge step forward for cleaner air and all of the benefits that come along with it.

Texas leaders immediately denounced the final plan, boldly proclaiming it would have catastrophic consequences, and vowed to fight the Clean Power Plan.

But if state decision makers stop to look at the facts, they will see that the Clean Power Plan is well within our reach. In fact, Texas can get to 88 percent of the way toward compliance simply through current trends alone, as shown in our new report out today, Well Within Reach: How Texas Can Comply with and Benefit from the Clean Power Plan. And, not only is compliance achievable, the plan actually provides Texas the opportunity to use it to grow the state’s economy.

Texas’ clean energy transition gets the state most of the way there

We’ve written before about how the market is already moving Texas toward a clean energy economy. Lower prices and technological progress have led to renewable energy and natural gas increasingly powering Texas, while the use of imported coal is on the decline. Plus, the deregulated structure of the state’s electricity market opened it up to competition in the Electric Reliability Council of Texas (ERCOT), the grid operator for 90 percent of the state. Combine that with the construction of the massive highway of transmission lines built to carry West Texas wind to cities throughout the state,  the Competitive Renewable Energy Zone, and the state’s abundant clean energy assets – all of these elements have worked together to create an excellent economic context for cleaner fuel sources in  Texas.

It’s Time to Change the Conversation about the #CleanPowerPlan in Texas.
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But we wanted to show exactly what this clean energy momentum meant for the Clean Power Plan. Using an industry-vetted tool from MJ Bradley and Associates, we embarked on an analysis to determine just how far along Texas would be toward compliance, even if our state decision makers did nothing but let the market play out.

As a result, we evaluated a forecast scenario based on the following factors:

• Business-as-usual trends in electricity generation based on projections from the state’s primary     grid operator, ERCOT;
• The wind power capacity ERCOT projects will be on the grid in 2017, as well as industry projections to 2029;
• The current energy efficiency results ERCOT’s municipal utilities, Austin Energy and San Antonio’s CPS Energy, are achieving; and
• The significant impacts that increased production and falling prices of natural gas have in reducing demand for coal.

The results surprised even us: Texas can achieve nearly 90 percent compliance with the Clean Power Plan solely based on these existing market trends.

Three ways Texas can go from 88 to 100 percent compliance

1. Develop a state plan within the existing ERCOT market structure: This is the first thing Texas needs to do in order to get the rest of the way there. If Texas decides not to create its own compliance strategy, like it chose to do in 2010 with greenhouse gas emissions permitting, EPA will create one for us. Ceding this critical responsibility to EPA would be an enormous lost opportunity for Texas.
2. Maximize clean energy resources: Decision makers should capitalize on energy efficiency – our most cost-effective energy resource – and renewable energy, as well as advance programs that enable financing of clean energy projects. Specifically, the Property Assessed Clean Energy (PACE) program, an innovative financing mechanism that ties private loans for clean energy projects to property tax bills, was enacted during the 2013 Texas legislative session with support from both sides of the aisle. PACE has the potential to unlock a significant amount of private funding and should be fully implemented.
3. Incorporate an option for mid-course review: In developing the Texas CPP compliance plan, leaders should build in an option to review it after a few years, allowing the state to take advantage of new technologies and opportunities that arise. The cleantech sector is experiencing rapid development, as evidenced by Austin’s burgeoning cleantech economy. Texas should have a nimble plan that would allow for incorporating up-and-coming technologies, like energy storage.

Beyond compliance: An enormous economic opportunity

The biggest economic development opportunity for Texas lies in going beyond compliance with the Clean Power Plan. Texas is fortunate to have an abundance of clean energy resources like wind, solar, and energy efficiency potential. State decision makers can leverage these advantages to export excess renewable power to help other states comply. Alternately, Texas could go above and beyond its target and sell carbon allowances or emission-rate credits to states with a more difficult time complying. By ramping up the production of homegrown energy sources, Texas can transform the Clean Power Plan from an environmental standard to a robust economic development strategy, bringing more jobs and increased revenues while saving huge quantities of water.

The Clean Power Plan is well within Texas’ grasp. Let’s stop fighting these commonsense standards, and start talking about how we can create a plan that best suits our resources and policies. Our economy will thank us.

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

By EDF Blogs

By: Karin Rives

A number to remember: $44 trillion. It’s what Citibank estimates that climate change will cost the global economy by 2060 unless we take decisive steps to rein in greenhouse gas emissions.

To put the number in perspective, that is roughly the combined gross domestic products of the United States, China and the European Union.

But the banking giant’s recent forecast also offers a financially attractive way forward.

The Citi researchers estimated what our energy-hungry world will spend on conventional power infrastructure and procurement over the next several decades. They then compared that with what it would cost to instead develop low-carbon energy sources to meet rising demand from especially developing nations.

Their conclusion: By transitioning to a clean energy economy we will, in fact, save an estimated $1.8 trillion by 2040.

This number, of course, only tells part of the story. Investments in clean energy will bring an array of other benefits, not the least of which are new markets, industry growth and more jobs – all of which will fuel the economy and boost GDPs.

So why is the Citibank report important? Because it gives us numbers that can help us move the needle forward at a very critical time.

Clean vs. dirty energy: The numbers

A business-as-usual scenario where macroeconomics are driving demand for energy and fuel needs are driven by short-term planning would result in an energy bill for the world of $192 trillion over the next 25 years, Citibank estimates. That’s in addition to a mounting financial impact from climate change as greenhouse gas emissions continue to rise.

A very strong ‘Why would you not?’ argument begins to develop.

By comparison, investments in energy efficiency and renewable energy sources will cost the world an estimated $190.2 trillion. This scenario assumes that 34 percent of the world’s energy will come from renewables in 2040, up from less than 20 percent in 2014.

.@Citibank: How investments in #CleanEnergy can save trillions
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“The incremental costs of following a low-carbon path are in context limited and seem affordable,” the authors write. “The return on that investment is acceptable; moreover the likely avoided liabilities are enormous…A very strong ‘Why would you not?’ argument begins to develop.”

Citibank’s energy team is hopeful the world will move in the right direction, starting with the international climate talks held in Paris in December.

Today’s momentum, they noted, is driven in no small part by investors who are turning away from fossil fuel assets to instead focus on new and promising opportunities in clean energy.

This post originally appeared on our EDF Voices blog.

By Dick Munson

One million is a big number, but that’s the goal for getting smart thermostats into Northern Illinois homes. In partnership with environmental and consumer groups, Chicago-based electric and gas companies this week agreed to offer rebates that will cut an intelligent monitor’s cost in half, helping empower people to reduce both their energy bills and pollution.

This smart-thermostat initiative is the nation’s largest and makes devices eligible for up to $120 in rebates (on average, a smart thermostat will run you about $250). The partnership between the utilities and advocacy groups expects the financing will lead to the installation of one million smart thermostats across Northern Illinois over the next five years.

A diverse group announced the program this week: Commonwealth Edison (ComEd), Nicor Gas, Peoples Gas, North Shore Gas, Environmental Law & Policy Center, Illinois consumer advocacy group Citizens Utility Board, Illinois Commerce Commission, and smart thermostat manufacturers, ecobee and Nest.

Smart thermostats lead to smarter energy use

Smart thermostats are WiFi-enabled devices that allow residents to easily control the heating and air conditioning settings in a home through their smartphones, tablets, and computers. On the simplest level they enable people to easily switch off their air conditioning or heating when the house is not occupied, but the technology is considered smart because, over time, it will do this for you by learning your behavior patterns.

For instance, some devices automatically learn when the house is likely to be occupied or empty, allowing the thermostat to pre-heat or pre-cool the house in order to provide a comfortable temperature when a resident arrives. Zoned systems also can control the temperature in individual rooms, providing energy savings when only a home office, and not the bedrooms, needs to be heated on a winter’s day, for example. Residents remain comfortable when they’re home, but save money on heating and cooling while away at work, on vacation, or even in a different room.

1 million & beyond: Rebates to accelerate smart thermostat adoption in Illinois
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The devices also empower people to customize their energy use, creating substantial opportunities for cost-effective energy savings. Rather than leaving homes at a constant temperature, the Nest Learning Thermostat, for example, has been shown to save people about 10 to 12 percent on their heating bills and about 15 percent on their cooling bills on average.

Smart thermostats tend to have several unique characteristics. They:

• Allow remote access to the unit and control of the heating and cooling (HVAC) system from a web portal or smartphone application.
• Offer the option to program a custom schedule to reduce energy use when residents are away from home.
• Report on performance of the HVAC system.
• Alert people when a problem arises with their HVAC system or when it is time for equipment maintenance.
• Display the current weather and five-day forecast.

Furthermore, smart thermostats enable energy efficiency, which means less demand on the grid and less power plant pollution. They also help unlock the potential of demand response, a cost-effective energy savings tool that rewards people for conserving the electricity when the grid is stressed. If you have a smart thermostat and agree to participate in a demand response event, your thermostat will automatically be minimally adjusted to ease the burden on the grid.

With this new initiative to bring one million intelligent devices to homes, Northern Illinoisans will be able to tap into energy and cost savings, all while breathing cleaner air from less carbon emissions.

 Photo source: Flickr/Green Energy Futures 

By Jamie Fine

Electricity regulators, clean energy innovators, and rappers have all lamented poor communication. And some have pushed for cleaner, cheaper, more reliable solutions for meeting our energy needs. This is particularly so with the much anticipated emergence of a new kind of non-event based, price-responsive demand response (DR), or flexible DR.

Whereas traditional DR signals customers to voluntarily and temporarily reduce their energy use at times when the electric grid is stressed, this type of DR does that and more. The big difference? It signals customers, their appliances, and their electric vehicles to increase their energy use when electricity is clean, plentiful, and cheap.

For example, electric vehicles can be programmed to charge at mid-day when the sun is bright and solar energy is at its peak, and provide electricity back to the grid when the sun sets. Better yet, many of our cars, homes, and appliances can be programmed to monitor grid conditions in real time, via the Internet, and respond accordingly by charging or defecting. Also known as a “set-it-and-forget-it” feature, this function enables the seamless integration of flexible DR while also supporting the full potential of energy efficiency measures and distributed energy resources (DERs), like rooftop solar and energy storage.

The seamless and stealth nature of this type of DR, which can be largely automated by tools and service providers, is something neither the customer nor the utility have to think about. It’s like a secret agent, operating behind walls and wires to find the greatest energy (and cost) saving-potential. Regulators need to unleash this “secret agent DR” by rewarding it fairly and efficiently in the energy marketplace, giving it a “license to thrill” in households and businesses across California.

Flexible demand response delivers serious benefits

The good news is, this innovative form of DR aligns with times of the day when electricity is cheap and demand is high. That is, solar and wind will be plentiful at times when customers generally desire to use energy. This element of flexible DR brings some serious benefits to California’s electric grid, environment, and people, including its ability to:

• Decarbonize California’s electric grid. By helping to shift demand to times of day when clean energy is plentiful, California can rely more on low-carbon resources and less on dirty ones. This is increasingly important as California adds more electric vehicles to its roads, and thus more demand to the electric grid.

• Provide a new form of flexible resource. The successful growth of wind and solar energy means grid reliability management is expanding from a focus on periods of “peak,” or high demand, to flexible demand. Flexibility refers to the need to better align electricity usage with renewable energy, while avoiding increases in energy demand when those resources are not available. This new iteration of DR constitutes an innovative form of flexible resource that is still new to grid planners, but has great promise for complementing other clean energy solutions, like utility-scale renewable resources. A recent study by the Rocky Mountain Institute (RMI) finds that, “residential use of a smart thermostat and a water heater timer for flexiwatt consumption is calculated to save U.S. utilities 8 percent of their heat-oriented generation, worth about $13.3 billion per year.”

• Empower people to be more comfortable. One example of a new kind of technology which is able to perform this kind of DR is the Nest thermostat. A recent study of Nest users across 41 states found people save about 10-12 percent in heating and about 15 percent in cooling with most participants, “feeling more comfortable after the Nest Learning Thermostat was installed.” This shows this is also a strategy that will empower energy users to be more comfortable.

Putting this exciting approach to work

In addition to recognizing its many benefits, we need to figure out how best to implement this flexible DR.

One way is for the managers of the electric grid to start planning for it. They can do this by including it in their forecasts of energy demand. This includes representing flexible DR in the California Energy Commission’s (CEC) Integrated Energy Policy Report, an annual report of trends and issues related to energy that the CEC presents to the governor and the California State Legislature. Based on this report, the legislature should enact policy to realize its potential. As the saying goes, “If we don’t plan on where we’re going, we’re likely to end up someplace else.”

When combined with other things like new electricity pricing mechanisms in California, this people-powered solution will become routine and commonplace. It will help the state get the best possible value from solar and wind while avoiding additional stress on the electric grid during times of peak demand or other grid constraints. As California aims to achieve ambitious renewable energy targets, this will be yet another powerful tool to build the state’s clean energy future.

To learn more about non-event based, price-responsive demand response (DR), or flexible DR, Jamie Fine will be describing this great opportunity in more detail during a presentation at the DR World Forum in Costa Mesa, October 6-7. 

By Abbey Brown

Building on the momentum of Climate Week NYC and the Pope’s visit to New York last week, Mayor Bill de Blasio announced today the launch of an ambitious new program called the NYC Retrofit Accelerator.

Tasked with upgrading 20,000 (or 15 percent) of New York City’s private buildings – 40 percent of which will be low-income housing – the Retrofit Accelerator will provide resources for buildings owners and managers to improve their energy and water efficiency. Addressing energy use in buildings is key to meeting the city’s ambitious carbon reduction goals, as buildings account for roughly 75 percent of the city’s carbon emissions. It is estimated that the Retrofit Accelerator will result in cutting approximately 940,000 metric tons of carbon dioxide equivalent annually by 2025. The city has said this is the equivalent of taking 200,000 cars off the road.

If this program sounds familiar, that’s because de Blasio revealed Retrofit Accelerator at Climate Week NYC last year as part of the broader One City Built to Last plan. Today’s announcement marks the formal launch of this program, an exciting expansion of the successful NYC Clean Heat model, which resulted in New York’s cleanest air since the early 1960s.

NYC Clean Heat as a model

Since it was started in 2012, NYC Clean Heat has become a major air quality improvement tool for the city and its residents – all by simply working with building owners to replace dirty heating oils with cleaner fuels. A key component of this program’s success was the diverse coalition of financial, real estate, and non-profit communities that EDF and the city convened to provide insight for the program’s implementation.

Indeed, Mayor de Blasio is using NYC Clean Heat as a blueprint for the Retrofit Accelerator, expanding it from one issue – heating oil – to many. With the Retrofit Accelerator, buildings will receive help for everything from lighting to full-building retrofits, while still receiving help with heating oil conversions if necessary.

Mayor De Blasio launches ambitious Retrofit Accelerator #EnergyEfficiency program
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By connecting building managers with technical experts to help with retrofits, as well as financing opportunities to fund the energy efficiency upgrades, the Retrofit Accelerator stands to be just as effective as NYC Clean Heat.

We are increasingly excited about this model’s potential beyond the five boroughs. As the Retrofit Accelerator takes off, we anticipate further success, and will look to replicate the program model across the U.S., and potentially the world.

By EDF Blogs

By: Matt Golden, Senior Energy Finance Consultant

As California races towards a clean energy future, not only do we need new aggressive goals for all sectors, but we also need to rethink how we manage distributed energy resources, like rooftop solar and customer side energy storage. This is particularly true for one such resource, energy efficiency.

Two weeks ago, the California legislature passed a number of clean energy related bills including SB 350 (De León), a bill that sets the state on a path to achieve Governor Brown's ambitious clean energy goals. The governor’s “50/50/50” plan aims to increase electricity from renewable sources to 50 percent, reduce petroleum use by 50 percent, and double building efficiency by 2030.

Most media reports have focused on the bill’s ambition to increase the renewable portfolio standard and energy efficiency goals, and some observers have expressed justified concern about items left on the cutting room floor (the petroleum use reduction target). But there has been little discussion of the bill’s most important provisions – those that address how energy efficiency will be measured and delivered going forward.

Not only does the bill essentially double California's energy efficiency goals, it does so by making a number of crucial changes in how we approach energy efficiency in the state. These changes, if implemented, represent the beginnings of a major paradigm shift for this clean energy resource.

Changes to how California defines and measures energy efficiency

First, SB 350 fundamentally changes the way energy efficiency is measured in California. Traditionally, regulators rely on a series of after-the-fact studies, including regulation which considers energy code and attempts to account for a number of subjective impacts. SB 350 on the other hand, is clear that “energy efficiency savings and demand reduction reported…shall be measured taking into consideration the overall reduction in normalized metered electricity and natural gas consumption.” This removes much of the subjectivity from measuring energy efficiency by taking a more holistic look at electricity and gas-use reductions.

This is a huge shift from current practices. It promises to standardize how energy efficiency is measured based on meter data and evaluate its performance based on straight reductions in energy demand. More importantly, it has the potential to finally put in place a standardized and replicable system for measuring energy efficiency as a source of electricity available to the grid. In doing so, markets can treat energy efficiency as a reliable energy commodity.

The bill also directs the California Public Utilities Commission (CPUC) “achieve greater energy efficiency in existing residential and nonresidential structures that fall significantly below the current standards in Title 24 of the California Code of Regulations.” In essence, this definition places importance on what results show at the meter, not how a given customer gets there. Further, it defines those results as the difference between the buildings’ baseline use before energy efficiency interventions, and consumption during the performance period of the retrofits or upgrades.

California’s Latest Legislation is a Paradigm Shift for Energy Efficiency
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Building on this data driven approach to measuring energy savings, SB 350 puts in place “pay for performance programs” and goes on to direct that, “Incentive payments shall be based on measured results.” These programs will compensate customers who develop and implement energy efficiency plans based on measured results of those plans. This approach is not new. National Resource Defense Council (NRDC) and The Utility Reform Network (TURN) proposed a similar program to the CPUC in the form of their pay-for-metered performance pilot. Pacific Gas & Electric (PG&E) supported the pilot because of its potential to promote comprehensive upgrades while minimizing implementation costs.

SB 350 is not the only bill shaking up energy efficiency

Though it is getting somewhat less attention, the legislature also passed AB 802 (Williams). In addition to its primary goals of implementing statewide benchmarking across the energy industry and providing access to energy data, this bill also moves the state towards meter-based energy efficiency. It does so by directing the CPUC to incorporate meter-based performance into its goals and budgets. In addition, it instructs the California Energy Commission (CEC) to count efficiency starting from a building baseline rather than energy code (which breaks down a major barrier to energy efficiency).

Taken as a whole, these changes – supported by a surprising group of stakeholders including environmental groups, local governments, industry, utilities, and ratepayer advocates – fundamentally shift California’s approach to energy efficiency. As they come into effect, we will move from a programmatic, regulated approach, to markets which treat energy efficiency as a reliable energy resource. Further, we will rely on private capital and innovation to create the business models necessary to achieve Governor Brown’s goals.

When the Governor signs these landmark bills into law, the state will take a major step forward, creating new opportunity for energy efficiency in California and a model for the rest of the nation to follow.

This post originally appeared on our California Dream 2.0 blog.

Photo source: Wiki Commons

By EDF Blogs

By: Amy Chiang, student at the University of Michigan, the 2015 EDF Climate Corps fellow at General Motors

 

I was already level with the roof on a ladder when my General Motors supervisor pointed out the irony of my situation. As an Environmental Defense Fund Climate Corps fellow, I was destroying the homes of the young maple tree seedlings trying to grow in the rain gutter of a Detroit home. I’m all for trees, but not when they take up residence in a rain gutter.

But how did I find myself on a roof in Detroit? Partly because my answer to the “are you scared of heights” question was “no,” but also because I was embedded for a summer in GM’s foundry division as part of my EDF Climate Corps fellowship.

With a background working in clean, renewable energy resources, I did not expect my next project would be on sustainability at an aluminum foundry – where raw metal inputs are melted down and cast into the desired part. However, it turns out that foundries actually consume the most energy in the vehicle manufacturing process – second only to paint – with 50 percent of the energy consumed in the furnaces used to melt and hold the metal. To assist in future energy reduction, this summer I developed a matrix to help GM compare their furnaces and aluminum foundries to realize energy savings.

For a project that sounds data-driven and office-bound, I ended up spending as many days in the office as I did outside of it. To bolster my field experience, I got the opportunity to visit all the GM-owned U.S. aluminum foundries several times to gather energy usage data and engage with the plant team about their processes.

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I even got to participate in an energy “treasure hunt,” an 18-hour process (starting at thevery early time of 5 a.m.) that captures the foundry’s operational systems – including start up and shut down procedures – to see where energy can be reduced. This not only gave me an opportunity to do additional in-depth analysis for potential energy savings, but I also got to learn more about all the different people involved in running a foundry and who could help provide the data I needed.
With my first energy treasure hunt under my belt, I flew down to Mexico with three other members of GM’s global facilities team to partake in another hunt, this time at a vehicle assembly plant. Since this plant was much newer, it was harder to find potential energy savings –an exciting step in the right direction and a sign that GM is committed to reducing energy use across its operations. Newer plants are more likely to have energy efficiency solutions already in place such as efficient lighting and HVAC systems, making their energy footprint far lower than they would be at older plants.

As a whole, this fellowship was a great opportunity to get a sense not only of GM’s foundry operations, but their internal culture. Even though I was only there for 11 weeks, I feel that I got to experience what working at GM is like.  I was amazed by all the different opportunities available – from international business trips to a community service event to clean up a house in Detroit.

Ultimately, I worked with both internal and external sources to develop a simplified model quantifying millions of dollars of potential savings in energy and aluminum reduction – a solid financial benefit for the company. Prior to this internship, I was completely invested in renewable energy as the solution to energy problems, but working at GM has shown me the enormous potential energy savings that can come from being innovative in energy efficiency projects as well as the benefits of participating in the larger culture.

And who knows, by saying yes to aluminum foundries and cleaning out rain gutters, I may have just found a new calling.

This post originally appeared on General Motors Green.

By EDF Blogs

By: Lauren Navarro and Tim O’Connor

Every day thousands of Americans suffer from dirty air – costing the young and old their health, livelihood, and in many cases, their lives. As California is home to the top five most polluted cities in the country, we need action.

Thankfully, after many long hours of debate and negotiations at the state capitol, the California Legislature passed SB 350 (De León) last Friday. The California State Assembly passed the bill, with a 52-26 vote with bipartisan support before passing it on to the senate where it was approved in a concurrence vote. This bill increases California’s renewable energy mix to 50 percent and doubles the energy efficiency of existing buildings. Both of these provisions will serve to combat dirty air and fight climate change, while ushering in a new era for the state’s electricity system – one defined by a cleaner, more resilient, and dynamic electric grid.

Win some, lose some

As many have reported, SB 350 had an additional provision to cut the use of petroleum in California by 50 percent over the next 15 years, an approach that would have reduced the state’s reliance on imported fuels. However, that provision was removed from the bill before being passed out of the legislature. Even without this portion, SB 350 is still a strong demonstration of the state’s dedication to fighting climate change.

Raising the renewable portfolio standard (RPS) is a major yet doable step for California. The state has steadily progressed towards this goal since the legislature passed the first RPS of 20 percent in 2002 and increased it to 33 percent in 2005. With SB 350 pushing it to 50 percent, the proverbial glass is now more than half full with opportunity.

SB 350 will diversify California’s clean energy resources

The increase in the state’s renewable energy production builds on past standards, while also adding exciting new dimensions. Namely, it looks at how to combine renewables with other technologies to build a clean electric grid that will benefit all Californians for years to come.

For example, the existing RPS has been incredibly successful at getting a wealth of solar energy up and running in California. This valuable clean energy resource is available in the middle of the day, when the sun shines its brightest. In fact, California has made solar so abundant that it sometimes outshines demand during the middle of the day, while other resources are required to meet electricity needs in the late afternoon and early morning. This opens up an opportunity for renewables like solar to work with other clean energy technologies to balance supply and demand, building a clean electricity system on a large scale.

California makes #CleanEnergy history with passage of SB 350 | edf.org/ffj
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To take advantage of this opportunity, SB 350 requires utilities to put together portfolios – using zero-carbon resources as much as they reasonably can through integrated resource planning. In other words, it requires utilities to plan how they will build a truly clean grid. This approach supports a greater role for the use of clean, people-powered resources, including:

• Demand response— This energy conservation tool rewards people and businesses for reducing stress on the electric when it’s needed most. By combining energy automation technology, like two-way programmable thermostats and market signals to reduce or increase energy use at key times, Californians can begin to shift their energy use to times of day when clean energy is plentiful. For example, on the hottest day of the year in the middle of the afternoon when everyone’s pumping their AC, utilities can send homeowners a signal to shift non-essential appliance use (like running the dishwasher) to times of day when use electricity is cleaner, like at night when wind energy is abundant.
• Electric vehicles—Like mobile batteries, electric vehicles can be used to store renewable energy. Cars charging at an owners’ work place can gulp down solar energy to expend it on the drive home, lowering costs for drivers.
• Energy storage— Similar to electric vehicles, energy storage works essentially the same way as traditional batteries. People charge them when power is clean and plentiful, and use them during “peak” hours, when demand and stress on the central electric grid is at its highest.

SB 350 will bring California into a cleaner future

SB 350 also places a greater focus on clean energy in disadvantaged communities and communities of color, often the most affected by pollution from the energy sector. With the combined focus on renewables, integration, and energy efficiency, SB 350 can help Californians manage their energy use and their utility bills, while supporting California’s clean tech sector.

Reducing air pollution and mitigating climate change is an important goal – one that SB 350 can help achieve. California is, for the first time, figuring out how all the building blocks of a clean energy system fit together – renewables, customer-side resources, and other low-carbon resources – and it will set an example for the rest of the nation. SB 350 is the product of extensive, thoughtful negotiations between government, business, and environmental experts across the state. With the support of progressive utilities, like Sempra Energy and other clean energy companies dedicated to delivering clean energy resources to the people of California, these efforts have resulted in the strongest targets in the U.S. SB 350 is now poised to deliver California into a cleaner 21stcentury.

This post originally appeared on our California Dream 2.0 blog.

By EDF Blogs

By: Victoria Mills and Cheryl Roberto

To many, it may seem that pursuing environmental sustainability would fall relatively low on a municipal housing authority’s goals.  After all, providing moderate and low-income families with clean, stable homes in the face of uncertain federal subsidies and increasing taxpayer scrutiny is challenge enough.

The Housing Authority of the City and County of Denver (DHA), therefore, deserves praise for its innovative solar power program that not only provides renewable energy, but creates revenue for the housing authority, creates green jobs in the region, and saves taxpayers’ money – all the while reflecting the spirit of the federal Department of Energy’s Better Buildings Challenge, which looks to reduce energy consumption by 20 percent by the year 2020. DHA serves as a model for municipalities across the country.

Andrea Davis of the DHA’s Real Estate Department and Chris Jedd, portfolio energy manager, showed the creativity and sheer will to make a lofty renewable energy goal affordable, manageable and successful, while providing their communities with empowerment, economic opportunity, and a vibrant living environment.

Taking financing and deployment to scale

After careful vetting through its RFP process, the DHA partnered with several solar energy companies to ensure that taxpayers funded virtually no up-front costs.  In 2012, the authority teamed with Denver-based Oak Leaf Energy Partners to scope, develop and seek financing for the project which included the installation of 666 solar electric systems on 387 DHA resident housing rooftops, with the production potential for 2.5 megawatts of electricity.  Namaste Solar of Boulder, CO installed more than 10,000 solar panels over the course of 11 months.  And, Belgium-based Enfinity provided $10 million in financing and operation of the systems,  agreeing to not only sell the electricity it generates from the solar electric systems to DHA at a discount, but to pay DHA for leasing the authority’s roof space.

Throughout the project, DHA wrote its own rules. Without vast internal experience and expertise in running its own solar power business – and without the upfront capital — the authority looked outside for the right combination of partners that could help the authority realize the goal of an anticipated 3.4 million kilowatt hours of electricity per year, which is an annual reduction of around 3,400 tons of carbon dioxide in the region.

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Preserving capital, keeping costs predictable

For DHA, there are a number of resulting benefits. This project enabled the housing authority to expand its portfolio of renewable energy sources without dedicating funding. And, with the additional revenue streams from its roof leases, DHA has capital that can be used for other much-needed improvements.

In addition the DHA’s solar energy costs are now also long-term and predictable, which is something the federal department of Housing and Urban Development (HUD) encourages.  And, with accompanying resident communications programs, DHA has provided its residents with information about the project and an additional reason for them to take pride in their homes.

Through its EDF Climate Corps program, Environmental Defense Fund has proudly worked with DHA on its sustainability programs, and we’ve seen first-hand how DHA’s proactive engagement on the frontlines of its Solar PPA changed the way it viewed its energy consumption and carbon footprint.

There are 3,300 housing authorities in the United States. If all followed DHA’s lead, the rooftops of public housing authorities could produce 11 billion kilowatt hours of electricity annually, powering more than one million homes, and reducing carbon dioxide emissions by 11 million tons. And saving municipal taxpayers millions of dollars annually in energy costs.

It’s time for those other 3,299 other municipalities to follow DHA’s lead.

This post originally appeared on EDF+Business.