Energy Exchange: Energy efficiency

By EDF Blogs

By: Matt Golden, Senior Energy Finance Consultant

The Investor Confidence Project (ICP), an EDF initiative designed to unlock investment in energy efficiency, is making progress toward completing a credentialing system that would provide third-party validation of an energy efficiency project. The latest development is the Project Developer Credential, the second of three in the ICP credentialing system.

ICP is accelerating the development of a global energy efficiency market by standardizing how projects are developed and energy savings are calculated. The ICP system includes a set of protocols for developing energy efficiency projects as well as a credentialing system.

The Project Developer Credential is given to those developers who are able to properly deploy the ICP protocols when undertaking an energy efficiency retrofit. This latest development is an important step forward for investors of all types, especially building owners, who can now select developers from a growing list of credentialed providers.

Already, ICP has signed up 11 developers who’ve met the basic requirements and been trained in the ICP protocols: Johnson Controls, Trane, Pepco Energy Services, SCI Energy, Performance Systems Development, TRC, Association for Energy Affordability, Environmental Building Strategies, Swinerton Builders, H.T. Lyons, and L&S Energy Services, Inc.

Those firms who have received the Project Developer Credential enjoy enhanced credibility, additional brand awareness, and preferred status with an increasing number of programs and investors who are partnering with ICP to increase deal flow.

Under the ICP credentialing system, credentialed project developers originate projects and proposals, credentialed software providers offer standard documentation, and credentialed quality assurance providers conduct a third-party review. Projects conforming to this process then receive the Investor Ready Energy Efficiency™ (IREE) certification.

The process is akin to audited financials, in which certified IREE projects provide investors and building owners with a new level of confidence in project engineering, performance, and returns.

Last year, ICP released the Software Provider Credential, which is standardizing the process of developing and documenting energy efficiency projects. To receive the ICP Software Provider Credential, software providers must enable facilitated access to all of the required documentation as well as support the ICP workflow for creating IREE projects.

In the coming months, the Investor Confidence Project plans to release the last of its three credentials, the Quality Assurance Credential, which will add the very important step of allowing third parties to verify projects conform to the ICP protocols.

We believe the release of this latest credential for project developers will expand the demand for energy efficiency projects since building owners will know they are dealing with highly trained developers. This credential, combined with the rollout of the IREE certification later this year, will create a robust, active market in energy efficiency across the country.

By Dick Munson

Labor, business, and environmental leaders have formed a unique coalition that will urge Illinois lawmakers to pass new standards for energy efficiency and renewable energy, leading to tens of thousands of new, local jobs.

Members of the Illinois Clean Jobs Coalition, including Environmental Defense Fund, argue that the state should not settle for an old stagnant energy system – one that struggles to meet new Environmental Protection Agency clean energy standards, raises electricity prices for families and businesses, and fails to create new jobs. Instead, we should move decisively toward a cleaner, more reliable, and affordable energy future that increases employment right here in Illinois.

More than 100,000 individuals across the state already work in the clean energy industry, exceeding the number employed in the state’s real estate and accounting sectors combined. That figure is growing at an impressive rate of nine to 10 percent annually. Coalition members predict even sharper job growth if lawmakers embrace their recommendations for spurring a clean energy economy in Illinois, including:

• Revising the Renewable Portfolio Standard (RPS) to increase the share of power coming from renewable sources, like wind and solar, to 35 percent by 2030;
• Increasing energy efficiency standards to reduce electricity use in Illinois by 20 percent by 2025, creating tens of thousands of new jobs for people who design efficiency measures, weatherize buildings, and upgrade appliances and technologies in homes and businesses;
• Supporting market-based strategies to reduce carbon pollution. Members said that a new revenue stream could be used to invest in areas such as workforce development, low-income bill assistance, and research and development for new clean energy technology.

These principles and the work of the Clean Jobs Coalition are particularly relevant because of two recent developments. First, the U.S. Environmental Protection unveiled its proposed Clean Power Plan last year, which would set the nation’s first ever limits on carbon pollution from existing power plants. Meanwhile, Exelon is reportedly preparing to seek a bailout funded by Illinoisans for as much as $580 million to prevent threatened closures at some nuclear plants. Instead of watching other states capitalize on the Clean Power Plan and prosper, or stagnating the state’s economic growth by doubling down on aging power plants, this coalition aims to make Illinois the hub of America’s clean energy future.

Fortunately, there’s a lot of clean energy support among Illinoisans that reinforces what the Clean Jobs Coalition is advocating for.

Many Illinois leaders have gone on record supporting changes in energy standards. Before taking office, Gov. Bruce Rauner said that he supports expanded energy efficiency, restructuring the Renewable Portfolio Standard, and “increasing investment in clean energy.” In December, 53 state legislators signed an official comment letter signaling their support for the Clean Power Plan.

Recent polling shows overwhelming support for clean energy to meet Illinois’ future energy needs. Three out of four voters (75 percent) support increased energy efficiency, 67 percent support more solar, and 59 percent support wind. By contrast, just one-fifth support more nuclear power (19 percent) or coal (21 percent).

EDF is proud to join forces with other environmental groups, such as Natural Resources Defense Council and Sierra Club; consumer advocacy groups, including Citizens Utility Board; labor unions, including the Chicago Building Trades; and businesses, including SoCore Energy and Schneider Electric, to spur a clean energy economy in Illinois – one that leaves a healthier environment for future generations and creates tens of thousands of new jobs across Illinois.

Photo source: iStock

By Victoria Mills

Business leaders have long agreed on the “why” of environmental management: seeing the value in increased profits, reduced waste, and a smaller carbon footprint. But the “how” has often been the stumbling block.

Two case studies released today from adidas Group and the Housing Authority of the City and County of Denver (DHA) help to answer that question, detailing energy management strategies that deliver tremendous value and are great examples for other organizations to follow.

The adidas Group tackled the dual challenge of improving efficiency in existing distribution centers as well as when specifying material handling equipment in new facilities. Recognizing that only reducing upfront costs during design won’t optimize efficiency over the long term, the adidas Group is now analyzing the lifecycle cost of conveyer belts and other equipment. See the full case study here.

Meanwhile, DHA tackled the challenge of expanding renewable energy resources despite limited capital funds. The solution: an innovative power purchase agreement that enabled the installation of a 2.5 megawatt solar project with minimal upfront costs and a stream of lease payments to benefit DHA. If the 3,300 housing authorities in the U.S. duplicated Denver’s success, their rooftops could produce enough solar energy to power more than 1 million homes. See the full case study here.

Today’s announcement comes on the heels of the recently released case studies of JLL andUrban Innovations, which have risen to the City of Chicago’s challenge to reduce commercial building energy consumption by 20 percent in the next five years. By focusing on education, automation, and data, JLL and Urban Innovations each took leaps forward in energy efficiency.

EDF is thrilled to share these case studies as scalable solutions that companies across a wide range of industry sectors can adopt. Together, they show the diversity of organizations that benefit from EDF Climate Corps, and whet our appetite for the projects on tap for the summer of 2015, including Verizon, Shorenstein Properties, and Hill+Knowlton Strategies.

This post originally appeared on our EDF Climate Corps blog.

By Kate Zerrenner

As the Texas legislative session begins ramping up, I am reminded of smart policies from sessions past that holistically benefit Texas, had bipartisan support, and brought unlikely allies together. As we head into the session, it’s important to remember that no matter which side of the aisle you are on, clean energy solutions make sense for Texas – economically and environmentally.

This week, Environmental Defense Fund and R Street Institute, with support from Google, hosted a breakfast roundtable at the Texas Capitol to highlight one of those bills. The panel highlighted the potential for Property-Assessed Clean Energy (PACE) and other commonsense, market-driven financing policies to be game-changers for accelerating the deployment and adoption of clean energy resources and water conservation practices across the state of Texas.

PACE, an innovative financing tool that allows people to repay loans for clean energy projects (like rooftop solar and energy efficiency upgrades) through their property tax bill, has the potential to unlock a considerable amount of private funding for clean energy projects in the state. This agreement simultaneously offers building owners cheaper financing options and lenders secure repayment terms. With benefits for all, it’s no wonder the PACE bill passed last legislative session with support from both sides of the aisle, environmental groups, and industry alike.

One thing that makes PACE unique is that it also funds water conservation projects. What many people don’t realize is that power plants require water to produce electricity and electricity is needed to clean, treat, and transport water, a relationship known as the energy-water nexus. In reality, we get some of the best water savings through energy efficiency projects. So by taking into account energy and water savings, PACE can help policymakers, utilities, advocates, and building owners begin to really comprehend the water dependency of energy resources.

Knowledge is power

If you are looking to take advantage of Texas’ unique, voluntary PACE program, you can find more information here: www.KeepingPACEinTexas.org  

We already have the power to understand and estimate water savings from energy efficiency and clean energy projects, like a rooftop solar PV installation. In Texas, however, we have not comprehensively measured what those water savings are. Some of that could be the electric utilities’ reluctance to venture down the water-savings path for fear that, in addition to an energy efficiency or renewable energy goal, they would be required to meet a water-savings goal. But I’m not advocating for an additional goal, rather a useful measurement tool for formulating better energy policy.

PACE not only enables utilities and building owners to choose energy resources that don’t require water to operate, but also provides the right data to better inform policymakers. At the end of the day, utilities can harness more water-smart, cost-effective clean energy resources and decision makers will better understand the energy-water nexus.

Revitalizing Texas business and industry

There are some projects that are first and foremost water conservation projects, such as greywater systems, high-efficiency toilets, and waterless urinals. Commercial properties, in particular, have a lot to gain from reducing water use in their buildings, but these projects can have high upfront costs. PACE aims to help property owners minimize those steep costs while adding value to their properties through efficiency and conservation measures. It can also be a great economic development tool for Texas.

As an example, a five-star hotel in Austin looked at a suite of water and energy efficiency upgrades which amounted to $1.8 million. Taking into account the local jobs for contractors, lighting specialists, mechanics, water efficiency companies, and more, as well as the revenue and growth for those companies, the total economic impact for the state economy from this hotel revamp totaled roughly $9 million. With numbers like these, PACE is a no-brainer. Plus, the water efficiency technologies will result in energy savings that can be measured for better understanding about the energy-water nexus.

As fellow panelist Steve Minick, Vice President for the Texas Association of Business, said, “This is a win-win-win. PACE addresses reducing energy and water usage in a commonsense, free market, voluntary way. It doesn’t involve mandates, doesn’t involve the government telling you have to do this, because it’s in your own best interest. This is gravy!”

It’s a power drill, not a silver bullet

PACE, however, is not a silver bullet that can solve all the energy efficiency and water conservation problems for business and industry, but it is a critical tool in the toolbox. Further, just as when you go to buy a car, there are several options for how to pay for it: upfront, lease, or loan. Businesses and industries want the same kind of choices in the marketplace, much like they want different tools for different projects. PACE can be the power drill that really makes a difference for Texas industries’ energy and water efficiency needs. It’s just a matter of making that choice.

Photo source: flickr/thegaventas

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

By Ellen Bell

One degree Fahrenheit.

Yes, that was Friday’s temperature in Chicago.

But instead of thinking about jetting off to a sandy beach in the Caribbean, my thoughts instead turn to a more practical matter. As I look across the Chicago skyline, I wonder how many of these buildings have old, inefficient heating systems.

The good news is that right here in Chicago, some building owners are finding better, more efficient ways to heat — and in balmier times, cool — their properties.

Over the past year, EDF, the City of Chicago, and some of the city’s leading building owners have teamed up to make real progress in cutting energy use and costs. 

The results of this partnership have helped Chicago move closer to the goal of the city’s Retrofit Chicago initiative: reduce commercial energy use in participating buildings by 20 percent in five years. The Mayor’s office has set the bar for energy savings, and EDF Climate Corps is providing boots on the ground to get it done. And Chicago’s leading building owners and operators are showing creativity and innovation in taking their energy management to the next level.

Let me tell you a little more about the buildings that are driving energy efficiency in Chicago:

77 West Wacker, an all-electric JLL property, is a shining model of energy management in Class A buildings. In ten years, 77 West Wacker has gone from working toward LEED certification to being one of Chicago’s most energy-efficient buildings.

By collecting and analyzing building data, 77 West Wacker was able to find energy-saving opportunities through customizations to its Building Automation System (BAS). So when last year’s polar vortex hit Chicago and energy prices spiked for a 12-hour period, 77 West Wacker was able to preheat the building and reduce energy consumption by over 1,000 kWh per hour during the cold spell.

325 West Huron is located in one of Chicago’s hottest neighborhoods. A Class B building owned by Urban Innovations, this property has a steam boiler that’s over 100 years old. But thanks to Jason Szczur, Urban Innovations’ chief engineer, the boiler is now an environmental asset. By installing new igniters, tubes, heating elements, and insulation, Jason was able to improve the energy efficiency of the building.

Both 77 West Wacker and Urban Innovations joined Retrofit Chicago in 2014, with help from the energy-saving strategies developed by their EDF Climate Corps fellows.

Shorenstein Properties’ River North Point is 1.2 million square feet of office and creative space originally built in the 1970s. Now, it is LEED Gold certified and modeling sustainability through consistent improvements since 2009. In 2014, EDF Climate Corps worked with River North Point to take advantage of ComEd’s Retro-Commissioning program and expand tenant engagement in energy efficiency.

Chicago’s Merchandise Mart, one of the largest commercial buildings in the world, continues to find energy savings for their property and their tenants. Through good old-fashioned data collection, EDF Climate Corps was able to identify 520,000 kWh of electricity that could be saved annually by reducing after-hours use.

There’s still work to be done. But take inspiration from the progress that EDF Climate Corps, the City of Chicago, and leading businesses have made in reducing energy use in Chicago. We’re just getting warmed up!

This post originally appeared on our EDF Climate Corps blog.

By Kate Zerrenner

The Electric Reliability Council of Texas (ERCOT), which manages 90 percent of Texas’ electric grid, has been busy. In the last two months of 2014, the agency released two very lengthy reports examining the future of a lower-polluting power grid in light of upcoming EPA clean air protections, in particular the Clean Power Plan. As the media described it, the reports did not provide the rosiest of outlooks for costs to Texans or electric reliability. But I think they are looking at the reports the wrong way.

The electric grid is changing. Innovative technologies – many of which are created right here in Texas – are lowering electricity bills and increasing energy independence. They are disrupting the way we produce and use electricity and they are changing the way ERCOT looks at grid reliability – albeit not in these two reports.

As cleantech entrepreneurs, you are at the helm of deciding Texas’ (and, let’s face it, America’s) energy future. And there are quite a few market opportunities outlined in the reports, if you look closely. Here are a few hidden in the report, plus other trends to keep an eye on:

New from @KateZerrenner: What Do the @ERCOT_ISO Reports Really Say? ow.ly/Hc2IY @CleanTX
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• Pollution control technologies are a must. Very soon power companies in Texas will install scrubbers and other devices to reduce multiple – not just one – pollutants, thereby making compliance with EPA’s subsequent regulations easier and more cost-effective.
• Coal is out. Power companies in Texas will start complying with EPA’s clean air protections beginning this month. By 2029, the state will only need to cut 200 megawatts of coal-fired power to comply with the proposed Clean Power Plan, which would set the first-ever national limits on carbon pollution from existing power plants.
• Opportunities for customer-focused clean energy have never been riper. Energy resources, like energy efficiency and demand response (which pays people to conserve energy when the electric grid is stressed), are gaining ground every day in Texas, and so is the demand for them. They have proven to be vital resources on the power grid that help reduce electricity costs for Texas homes and businesses.
• Solar is the future of Texas. One of the biggest takeaways from the report is that ERCOT did not take into account distributed solar resources in its forecasts. However, it does note that solar will play a huge role in Texas’ energy future – much of which will occur on our own rooftops.
• Storage is essential. Like rooftop solar, energy storage was left out of ERCOT’s equations, but there is ample opportunity to integrate more wind and solar energy on the power grid and smooth out reliability concerns with this innovative technology.

Smart utilities in Texas have already installed pollution control technologies, retired inefficient, water-intensive coal plants, and integrated more clean energy resources. And they are creating jobs to support these projects. This is the Golden Age for entrepreneurs in the electricity sector. Looking ahead in the new year, I, for one, am excited to see the rapid transformation to a healthier, lower-carbon electricity system and to discover the next big technology that comes out of Texas.

This commentary originally appeared on the CleanTX Blog.

By Cheryl Roberto

The New Year is a time for reflection, beginning with a look back on the previous 12 months and all that they brought. A quick scan of the U.S. climate and energy news in 2014 will tell you it was a very big year.

The Environmental Protection Agency (EPA) proposed the first-ever limits on carbon pollution from power plants, the U.S. and China struck a historic climate deal, and Tesla broke ground in Nevada on the largest advanced automotive-battery factory in the world – a  move that’s expected to slash the cost of lithium ion batteries by a third. At the same time that these important national and international advancements were grabbing headlines, Environmental Defense Fund (EDF) and our partners were working together to incrementally transform the U.S. electricity system by rewriting outdated regulations, spurring energy services markets, and modernizing our century-old electric grid.

The U.S. is on the verge of a revolution in the way we make, move, and use energy. And, having spent years working on governmental and regulatory matters related to our power system and lessening its impact on the environment, I can honestly say there has never been a more exciting time to be in this field. Here are a few of the moments that were near and dear to our hearts over the past year, developments I see as a sure signal 2015 will be another epic year for clean energy.

Modernizing utility business models

Our country’s electricity system has relied on the same business model since the days of Thomas Edison over 100 years ago. While the notion of “gain more customers, sell more electricity” once made sense for electric utilities, it no longer serves our technologically savvy society that increasingly aims to slash both electricity bills and harmful pollution.

That’s why we’re advocating for new business models and regulatory approaches that base utility earnings on performance — including environmental performance — rather than investments in new infrastructure. Utility interests should also be rewarded for enabling clean energy services, instead of simply delivering electricity. This goes hand-in-hand with a broader shift that we’re already beginning to see in the U.S. and around the world, a shift away from centralized fossil fuel-powered energy to a system that wastes less energy through efficiency, integrates more renewables like wind and solar, and customizes offerings to involve and empower people to take control over their own energy use.

Last spring, the state of New York courageously opened the Reforming the Energy Vision (REV) proceeding to overhaul and modernize the state’s utility business model. REV is a bold step and an exciting opportunity for achieving transformational change in the electricity system. As the proceeding continues and New York adopts smarter policies and grid modernization efforts, the state can serve as an example to others looking to upgrade.

Making the grid more resilient and less wasteful

In addition to revamping utility business models, we are working to ensure our existing grid and electricity infrastructure is performing at the highest level. Fortunately, the same clean energy investments that deliver a more efficient grid can also deliver greater resilience, reliability, and a more nimble distribution system – a key ingredient for incorporating renewable energy.

In 2014, the state of Illinois went a long way toward enhancing grid performance. One of the state’s largest utilities, Commonwealth Edison (ComEd), proposed to accelerate its smart grid deployment plan by three years, giving customers faster access to time-based electricity rate plans and resulting in lower energy costs and cleaner air. On the energy storage front, Northern Illinois will soon be home to North America’s largest battery project.

New Jersey also joined Illinois as a state making smart grid strides. New Jersey received over $400 million in federal funding to develop the NJ TransitGrid into a first-of-its-kind microgrid capable of keeping the power running when the electric grid goes down. Other exciting news came on October 23rd when the New Jersey Office of Clean Energy released a first-of-its-kind solicitation for a $3 million dollar Renewable Energy Storage Program.

Finally, on a national level, clean energy advocates were very pleased when the Federal Energy Regulatory Commission (FERC) upheld Order 1000, confirming what many think is common sense: Because the power grid crosses state and utility boundaries, a coordinated approach to electricity transmission planning (that is, moving electricity from power plant to power plug) is more efficient and cost effective than multiple entities planning in isolation.

Empowering customers to choose clean energy

While the environmental benefits of updating our electricity system and cutting carbon emissions are clear, there are also economic advantages. EDF is working to ensure customers are rewarded for choosing clean energy options.

For example, smart meters (which provide detailed electricity use data throughout the day) have many uses: from helping utilities avoid unnecessary service calls to helping customers reduce electricity use during periods of high energy demand. Yet, not all households have easy access to the energy data provided by smart meters to control their energy use and reduce electricity bills. That’s why EDF and Citizens Utility Board (CUB) joined forces to develop the Open Data Access Framework. This platform ensures customers own their own electricity data while also providing important insight into their electricity consumption (how much they are using and when). It could also help unleash the potential of new services and gadgets – like the NEST learning thermostat – that help people better understand and manage their energy use.

Demand response also places people in the driver’s seat. This energy conservation tool – which pays people and businesses to save or shift energy use when the power grid is stressed and  cleaner, renewable resources are available – received a huge vote of confidence when EDF-sponsored  Senate Bill 1414 unanimously passed the California House and Senate and was then signed into law by Governor Brown in September.

Unleashing the power of private capital

Updating our grid and increasing the adoption of new, clean energy technologies will require private capital. In 2014, we saw great strides toward the introduction and acceleration of financial tools that reduce the risk of clean energy investments and help avoid high upfront costs of energy improvements.

Initiatives like EDF’s Investor Confidence Project (ICP) are accelerating the development of a global energy efficiency market by standardizing how energy efficiency projects are developed and energy savings are calculated. In 2014, ICP protocols were embraced by state, national, and global leaders alike. ICP’s energy efficiency protocols were adopted in Texas as part of a do-it-yourself toolkit for using PACE (Property-Assessed Clean Energy) – called PACE-In-a-Box – that enables local governments to use their property assessment as a way to finance clean energy projects for industrial, agriculture, water, and commercial buildings. EDF also launched ICP in Europe last year and we’re in ongoing discussions with key state officials across the country – from California to New Jersey and New York – who are exploring the integration of ICP into their energy efficiency programs. 2014 was a big year for ICP, and now, with a robust third-party credentialing system for energy efficiency projects, we expect to see even bigger wins in 2015.

Growth in the use of private capital for clean energy was seen in multiple developments along the east coast. In New York City, the mayor announced the retrofit accelerator program, a promising expansion of the successful EDF-NYC Clean Heat model that will help thousands of buildings in the city invest in energy efficiency. In North Carolina, a rural electric cooperative received funds from a new United States Department of Agriculture on-bill finance program to allow customers to pay for energy improvements through a monthly service charge on their utility bills – which is offset by savings from energy efficiency. Finally, EDF co-hosted a successful, first-of-its-kind Resilience Finance Symposium in New Jersey to discuss the progress the state has made toward improving its energy infrastructure in the two years since Superstorm Sandy.

Partnering with clean energy champions

Of course, the clean energy future won’t be achieved by a single group or effort. To that end, EDF is aligning and leveraging actions of others in this space, and finding new partners to act.

One valuable partnership gained in 2014 was Operation Free, a clean energy coalition of 5,000 veterans and national security experts, seeking to fight climate threats by tapping into the unique qualifications of veterans. Former service members are encouraged to draw upon their experience to educate and mobilize their communities around climate security, including drafting energy legislation and on-the-ground advocacy for clean energy policies. These policies not only help support military readiness, but can also help the Defense Department meet its tough sustainability goals, such as reducing greenhouse gas emissions from certain sources by 34 percent by 2020.

Each new year welcomes great opportunity, hope, and optimism for what lies ahead. The Clean Energy team at EDF looks forward to embarking on a bold, new adventure in 2015 pushing for unconventional strategies that get more clean technology into the electricity market at scale and also prove that innovative, market-based, clean energy solutions can work for businesses, people, and the environment.

By Vic A. Rojas

The Investor Confidence Project (ICP), an EDF initiative designed to unlock investment in energy efficiency, experienced significant momentum in 2014. By gaining support in key states across the country as well as expanding to Europe, ICP laid the groundwork for even more successes in 2015.

Through ICP, EDF is accelerating the development of a global energy efficiency market by standardizing how energy efficiency projects are developed and energy savings are calculated.

In virtually all established markets, from car loans to home mortgages, standardization in how projects are structured and documented has helped to accelerate underwriting and create a vibrant secondary market, reducing long-term liability and spurring investment. The potential energy efficiency market is estimated at $1 trillion, but in order to realize a fraction of this market, the energy efficiency industry will need to leverage standardization to scale to this level.

The ICP system offers a series of protocols that define industry best practices for energy efficiency project development and a credentialing system that provides third-party validation. This leads to increased confidence among building owners and investors in the reliability of projected savings.

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.

Key support from states

Earlier this year, Texas adopted ICP’s energy efficiency protocols as part of a do-it-yourself toolkit for using PACE (Property-Assessed Clean Energy) – called PACE-In-a-Box – that will officially be rolled out statewide in 2015. PACE will enable the state’s local governments to use their property assessment as a way to finance clean energy and energy efficiency projects for industrial, agriculture, water, and commercial buildings.

To help local authorities understand the complex PACE adoption process, Keeping PACE in Texas, a non-profit devoted to bringing PACE programs to Texas, developed the PACE-In-a-Box toolkit. This toolkit establishes the ICP protocols as its recommended standard for developing projects, estimating energy and financial savings, and documenting and verifying results.

EDF is also in ongoing discussions with key state and local officials across the country – from California to New Jersey and New York – who are exploring the integration of ICP into their energy efficiency programs.

Investor Confidence Project Europe rollout

The energy efficiency initiative also gained traction overseas in the fall of 2014 with the rollout of the Investor Confidence Project Europe (ICP Europe), a move that could help Europe meet its goal of reducing carbon emissions by 90 percent from buildings by 2050.

Estimates project that large-scale European energy efficiency efforts could reduce carbon emissions by 932 million metric tons, equivalent to taking nearly 200 million cars off the road and creating more than a million jobs in the building industry by 2050.

ICP Europe has already gained support from a powerful pan-European coalition of private-sector banks, development banks, investors, property owners, energy efficiency companies, and government agencies. ICP Europe’s steering group includes: ING Bank, Green Investment Bank, eu.ESCO, Plus Ultra Asset Management, ARUP, EuroACE, RdA Climate Solutions, Siemens, E.ON, Building Performance Institute of Europe, and Climate Strategy.

ICP releases key credentials

The ICP system includes not just a set of protocols for developing energy efficiency projects, but also a credentialing system that provides third-party validation. This past year, the Investor Confidence Project made great strides in assembling this credentialing system by releasing two key components: the Software Provider Credential and the Project Developer Credential.

The Software Provider Credential will help standardize the documentation of energy efficiency projects by credentialing software firms who have developed ICP-compliant software applications supporting the workflow for creating Investor Ready Energy Efficiency™ projects. Six firms have already received the Software Provider Credential: Performance Systems Development, Noesis Energy, Sustainable Real Estate Solutions, Encentiv Energy, HELiOS Building Efficiency, and the National Electrical Contractors Association’s ECAP Platform.

The Investor Confidence Project also recently launched a credential for project developers who are able to properly deploy the ICP protocols when undertaking an energy efficiency retrofit.

This latest development is an important step forward for investors of all types, especially building owners, who can now select developers from a growing list of credentialed providers. Four entities have already received the new Project Developer Credential: Association for Energy Affordability, Environmental Building Strategies, Swinterton Builders, and H.T. Lyons, Inc.

The Investor Confidence Project plans to release the last of its three credentials, the Quality Assurance Credential, in the coming year. Projects that conform to the requirements of the ICP protocols, originate from a credentialed project developer, and are verified by a credential quality assurance provider are referred to as Investor Ready Energy Efficiency™ projects.

In addition to the credentials, the Investor Confidence Project also issued a ‘soup-to-nuts’ guide for executing each step in the ICP protocols, called the Project Development Specification.

We are proud of our growing support from energy efficiency industry leaders here in the U.S. and abroad, and now, with a robust third-party credentialing system, we expect to see even bigger wins in 2015.

By Rory Christian

In the future, when we look back on 2014, I believe it will be remembered as the tipping point for climate action. In the Northeast, we’ll remember the devastating early-season snowstorm that caused over a dozen deaths. In the Southwest, many will remember the third-straight year of a drought that seems without end. And, nationally, many will remember 2014 as one of the hottest years in recorded history – the hottest since 2010 and the 11th time the record for hottest year has been set since 1998.

In a year punctuated by extreme weather across the country and the globe, 2014 will also be remembered as the year when seeds of coordinated global action to address climate change first took root. The federal Clean Power Plan, the Lima Climate Agreement, the United Nations Climate Summit, and the U.S.-China Climate Accord, among other major milestones, all highlight the growing awareness and importance of taking action to address climate change. Though many view these events as tentative first steps, they are nonetheless steps in the right direction.

Action at the national level has been long overdue and support for the Environmental Protection Agency’s proposed Clean Power Plan, which would set the first-ever national limits on carbon pollution from existing power plants, is borne from decades of work at the local level. The historical absence of a broader national agenda has spurred cities and states to act on their own, and local authorities are continuing to make significant, innovative strides forward.

That passion for change is evident in New York, which, in the spring, embarked on an overhaul of the state’s energy system to allow for cleaner, more efficient power. Not to be outdone, New York City’s Mayor Bill de Blasio has also set a monumental task of reducing carbon emissions by 80 percent by 2050. Neither of these efforts is straightforward, and success will require a systematic, holistic approach at all levels, involving a diverse coalition aligned with a common goal.

It is without question that the powerful hurricanes Sandy and Irene, which hit the East Coast in recent years, were catalysts in bringing about this much-needed tidal wave of change. The most visible signs of forward progress today are improvements that will help protect against the effects of increasingly severe weather – keeping the lights and heat on when they’re most needed. Elevated electrical equipment, flood barriers, and other high-visibility protective measures are already in place in many locations as utilities in the Northeast continue to fortify their energy systems.

As Con Edison, New York’s largest utility, enters year two of a four-year $1 billion storm-hardening plan, some of these early actions have already yielded benefits, preventing around 25,000 outages in 2014. The efforts of Con Edison and other utilities to improve the grid by making it more efficient and less polluting will only increase going into 2015.

Most investments by utilities will be less visible, but they will be important to setting the stage for a cleaner energy future. Utilities will need to invest in innovation and hire the best and brightest to keep abreast of rapid changes in technology.

The most encouraging prospect for the coming year is the New York State Public Service Commission’s ‘Reforming the Energy Vision’ (REV) memorandum calling for the development of demonstration projects that will align with the state’s vision of a 21st century energy system. Coming at the end of a year filled with much promise, the memorandum adds a much-needed call to action.

With New York’s new order, we see the beginnings of what a unified effort to transform our energy system could look like. The state is calling for more renewable energy, more options for people to take control over their energy use and costs, such as demand response (which pays customers to save energy when the grid is stressed), and a re-examination of how utilities interact with customers – all with the goal of reducing harmful pollution and expanding the penetration of clean energy resources to more New Yorkers. And, the newly created New York Green Bank is helping to make a lot of this possible by easing the ability to obtain financing for these projects.

Success in these endeavors will mean a future in which New Yorkers have greater control over how they use energy and how much they pay for it. Utilities will be able to cost-effectively manage their operations and pursue solutions that not only support their bottom lines but the environment and customers’ pocket books as well.

John F. Kennedy once said, “Change is the law of life. And those who look only to the past or the present are certain to miss the future.” Heeding this call, New York has planted the seeds of an energy system that will meet our future needs. I predict that, in 2015, we will begin to see some early blossoms from that effort.

Photo source: Christmas stock images

This post originally appeared on the Sallan Foundation. 

By Abbey Brown

Since the New York Public Service Commission (Commission) opened its Reforming the Energy Vision (REV) proceeding in the spring to modernize the state’s electricity system, a lot has happened. Namely, New York utilities are already working to align themselves with the broad objectives outlined in the REV proceeding. Here is an overview of efforts by the state’s big players:

CON EDISON – Brooklyn/Queens Demand Management Program

Growth in electricity demand in parts of Brooklyn and Queens is taxing infrastructure and will require action from Con Edison to ensure reliability. Con Edison could pursue a costly $1 billion substation upgrade to meet this rising demand. Instead, the utility is slashing needed investment by half and plans to invest around $500 million – $305 million in traditional utility investments and $200 million clean energy resources – to address the area’s growing energy needs as part of its Brooklyn/Queens Demand Management program. Measures include:

• Demand Response (a tool that pays customers to conserve energy when the electric grid is stressed): A new demand response system from energy services provider Alstom, which would allow 3.3 million customers to be compensated for the value they provide to the grid.
• Energy Storage: Battery-based energy storage for electricity produced when electricity demand is low (off-peak hours) for use when demand is high (peak periods), easing the burden on the electric grid at those times.
• Microgrids (which generate electricity nearby or on-site where it’s consumed): The development of microgrids to improve resiliency and enable the aforementioned demand response system.
• Electric Grid Resilience and Optimization: Expanded use of smart meters, which provide detailed electricity use data throughout the day, will improve response time to power outages and give customers more control over their energy usage.

PSE&G LONG ISLAND – Utility 2.0 Action Plan

PSE&G Long Island, which took over from the Long Island Power Authority in the wake of Superstorm Sandy, has developed its own Utility 2.0 Action Plan. PSE&G Long Island is ready to invest up to $200 million in infrastructure improvements and energy efficiency measures to help address peak capacity issues as part of a plan that will be updated yearly. PSE&G Long Island will also focus particularly on the Rockaways area in Queens, which was hit hard by Sandy.  Measures include:

• Demand Response: A demand response program to improve electric grid efficiency. The utility is currently seeking proposals for such a program to help meet growing energy needs by 2019.
• Energy Efficiency: A program to roll out retrofits to customers, including upgrades to heating/ air conditioning units and lighting systems, as well as an appliance replacement program.
• Electric Grid Resilience and Optimization: Incentives for commercial customers to install combined heat and power systems, which simultaneously produce electricity and heat from a single fuel source and can operate independently from the grid when it fails.
• Renewable Energy: An incentive program for solar energy installations between 200 and 2,000 kilowatt hours; solar projects within this range are currently not eligible for state incentives. The utility will also consider expanding rebates given to geothermal heating projects.

While the REV proceeding is still underway, these NY utilities aren’t wasting any time in acting....
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As part of its ‘Value for our Valley’ plan, Central Hudson Gas & Electric has come up with a plan to prepare for future storms, make its electric grid cleaner and more efficient, and improve service and reliability for their customers. The utility has committed to spending $215 million over the next two years to improve its system. Measures include:

• Demand response: A proposed demand response program for small businesses, facilities, and groups of residential customers to incentivize energy conservation during periods of peak electricity demand.
• Microgrids: Microgridsfor which customers can purchase a subscription in areas such as business parks, campuses, urban areas, and neighborhoods in the region.
• Electric Grid Resilience and Optimization: Enhanced voltage control, a technology to optimize electricity current flows, to reduce electricity waste, the use of automated devices to fix grid issues as they occur, and new technology to help integrate renewable energy into the grid.
• Renewable Energy: Large-scale solar farms that would allow customers to purchase solar energy on a subscription basis.

NATIONAL GRID – Connect 21

Since before the REV proceeding opened, National Grid had already been working on bringing its electric system into the 21st century. National Grid plans to invest nearly $10 billion in infrastructure over the next five years and is working to align company investments with the ongoing REV proceeding. This program, called Connect21, aims to drive economic growth in states and cities, reduce harmful pollution, promote cleaner energy, and improve grid efficiency. Measures include:

• Demand Response: A demand response program, already in place, that helps buildings lower energy costs during periods of peak electricity demand.
• Microgrids: A planned underground microgrid at Clarkson University in upstate New York, to be funded with the help of a state grant.
• Energy Efficiency: The launch of a multi-family energy efficiency pilot that will focus on heating equipment in a Queens residential building complex with 1,500 apartments and reduce heating costs by an estimated 15 percent.
• Electric Grid Resilience and Optimization: Grid technologies that will make pricing information transparent and lead to greater customer engagement.

While the REV proceeding is still underway, these utilities aren’t wasting any time in acting. Add to this the recent Commission order calling for demonstration projects that align with the proceeding, and the NYPrize competition awarding state funds to microgrid projects, and it is clear New York state is aggressively laying the foundation for a cleaner energy future. EDF will be watching these utilities to follow their progress, as well as the shape of New York’s evolving utility sector.

By EDF Blogs

By: Greg Andeck, EDF senior clean energy manager, and Ivan Urlaub, executive director of the NC Sustainable Energy Association

Rapid declines in the price of light emitting diodes (LED) technology suggest that the next generation of energy efficient lighting – LED bulbs – is on the verge of widespread adoption. LED bulbs will eventually make traditional, energy-hogging incandescent bulbs a thing of the past.

Price goes down, energy savings go up

In North Carolina, for example, one of the world’s largest LED bulb manufacturers, Cree, recently announced a new bulb that is up to 82 percent more efficient than an incandescent bulb. The bulb sells for about $8 at Home Depot, a price that means the bulb will pay for itself in energy savings in about a year.

That's a smart energy choice in the home – and a bargain. In 2013, the same wattage LED bulb was about $13, illustrating the dramatic cost reductions that are occurring throughout the industry.

Companies adopt efficient lighting

Some of the largest companies in the world are beginning to make LEDs the default lighting choice in their buildings. Food Lion and Walmart, for example, have introduced LED lights into their in-store refrigerators in North Carolina. LEDs emit very little heat, reducing electric bills in the refrigerated section.

U.S. Army is on board

In the eastern part of North Carolina, one of the largest Army bases in the world – Fort Bragg – is installing LED bulbs in aircraft hangars. The energy savings could go toward providing soldiers with additional equipment and training.

UNC system plans lighting upgrades

In 2013, the University of North Carolina system earned recognition for its aggressive plan to make major investments in LED lighting upgrades across 13 campuses and four other state facilities. These investments are projected to save North Carolina taxpayers about $25 million over seven years.

It will still take time for LED bulbs to appear in every home and business, just as it did for cell phones and computers, but these real-world examples show that LED technology is gaining widespread adoption. Energy efficient lighting saves people and businesses money and spurs job growth in the growing clean energy industry. That’s a bright idea that everyone can get behind.

By EDF Blogs

By: Abraham Weiner, 2013 EDF Climate Corps Alumnus

As an EDF Climate Corps fellow back in 2013, one task that was of particular interest to me was figuring out how to help my host organization fund, in whole or in part, its efficiency upgrades. In my research, the most unique funding source I found was the energy efficiency forward capacity market.

This program allows those who invested in energy efficiency over the last several years to go back and obtain additional incentive dollars on top of traditional utility rebates. This is essentially free money for organizations who have invested in efficiency measures. In fact, when I was a fellow, I identified over $50,000 in incentives that my EDF Climate Corps host organization was eligible for from projects completed before I even arrived.

In order to explain how this program works, I need to explain who PJM is and what they do. PJM Interconnection is a regional transmission organization. They coordinate the activity of suppliers, generators, and utilities to maintain an adequate flow of electricity on the grid. Their territory touches 13 states and the District of Columbia, and they are the largest electricity market in the world. They are also unique because they allow energy efficiency to participate in their forward capacity markets. Fortunately, my EDF Climate Corps host organization was in their territory.

Every year, PJM runs an auction for establishing the amount of capacity (think kilowatts, not kilowatt hours) needed to operate its grid. This is the capacity market. It is a forward market — this upcoming May, PJM will be establishing the capacity needed for the grid in 2019. PJM’s capacity markets operate on a 4-year window.

The exciting aspect of PJM’s forward capacity market is that it allows a kilowatt of energy efficiency (a negawatt) to be treated as if it was a kilowatt derived from a coal plant. Energy efficiency clears on PJM’s exchange alongside generators who are bidding in power from their fossil fuel plants. Building owners/renters who reduce their power demand are viewed by PJM as mini power plants. This equates to an energy efficiency incentive program that is not subsidized or mandated by state governments (like most utility rebate programs), but one that results from market-based economics.

So why is this important? Every single organization with facilities in PJM territory that has invested in efficiency since June of 2011 most likely has money on PJM’s table. Additionally, if those same organizations were to invest in efficiency today, they would be entitled to an annual payment for the next four years. Since PJM has a four year window, organizations can reach back to projects that have already been completed and bid them into PJM’s upcoming capacity auction. For some organizations, this could be hundreds of thousands of dollars just waiting to be uncovered.

There are a few stipulations to participating in PJM’s energy efficiency incentive program. Organizations who wish to participate cannot apply for these incentives directly. They must use a 3rd party for a variety of reasons, the most significant of which is PJM requires the projects be aggregated to a size that PJM finds reasonable. Additionally, some of the utilities in PJM territory are sending projects from their rebate programs to PJM’s capacity market. This means that, in a few utility territories, organizations cannot obtain both rebates and PJM’s incentive.

The Bottom Line: If you’re an EDF Climate Corps host or fellow, make sure to look into PJM’s energy efficiency capacity markets when evaluating a potential energy efficiency project. If you don’t, you might be losing out on a free lunch.

About Abraham and Encentiv Energy: After Abraham graduated from Case Western Reserve University’s Weatherhead School of Management, he became an Account Executive at Encentiv Energy. Encentiv Energy is a company that helps organizations identify and obtain all of the different financial incentives their energy efficiency projects qualify for. In only a few years, they have identified millions of dollars of PJM energy efficiency capacity credits alone.

This post originally appeared on our Climate Corps blog.

By Dick Munson

While the Environmental Protection Agency (EPA) sorts through the more than 1.6 million comments received on its proposed Clean Power Plan (CPP), one group is stepping out to pledge its support of the landmark proposal. 53 Illinois legislators recently signed a letter urging the EPA to finalize the plan, which will set limits on carbon pollution from existing power plants for the first time ever.

Power plants currently account for nearly 40 percent of the nation’s carbon pollution and Illinois’s proposed target would result in a 33 percent reduction in the state’s carbon output by 2030. Fortunately, due to impressive state efforts to invest in clean energy over the past few years, Illinois is well-positioned to meet the challenge.

CPP is an economic opportunity

The Illinois legislators argue the CPP will help the state “achieve even greater cuts in our emissions, health benefits for all our citizens, and will spur further growth in our state’s economy.” The CPP will further the state’s transition to a clean energy economy by attracting investment in innovation, creating more jobs, and keeping electricity prices affordable.

Illinois is already home to nearly 100,000 clean energy jobs, and that number is expected to grow nine percent this year. To put that into perspective, the clean energy sector is roughly equal to the size of the state’s real estate and accounting industries combined.

Furthermore, the state’s energy efficiency standard, established in 2008, has already saved consumers nearly a billion dollars.

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Illinois supports the EPA, clean energy

These members of the General Assembly said the EPA has both the clear authority as well as the responsibility to reduce greenhouse-gas emissions that contribute to global warming. Unlike some states that have reacted to the plan with the-sky-is-falling predictions, Illinois state leaders “pledge to work with both U.S. EPA and Illinois EPA to ensure we have a strong plan that works for Illinois to reduce carbon emissions.”

This kind of support is a clear choice for Illinoisans; clean energy is popular in the Land of Lincoln. Hart Research found a whopping majority of Illinois voters – 71 percent – support EPA enforcing new limits on carbon pollution. A separate poll by Fairbank, Maslin, Maullin, Metz & Associates (FM3), and Public Opinion Strategies found remarkable support for investing in clean energy: 95 percent for energy efficiency, 88 percent for wind energy, and 80 percent for solar energy.

To thank the legislators for their leadership, a coalition of environmental groups produced a short video featuring Tony Award-winning director, Anna D. Shapiro:

EPA’s final rule is expected by June 2015, after which each state must develop an implementation plan to reduce carbon pollution and meet its target. EDF looks forward to continuing its work with legislators and regulators on the development of an effective plan that builds on Illinois’ already substantial clean energy progress.

By EDF Blogs

By: Stacy Small-Lorenz, Conservation Scientist, and Jim Marston, Vice President, US Climate and Energy

Climate change will have major impacts on birds and their habitats, according to a recent report from the National Audubon Society. Scientists project climate change will drastically alter and shrink habitats in the U.S. for many bird species. These findings add to mounting evidence that natural systems are at serious risk for climate change impacts, which we must act swiftly to mitigate.

One solution is to adopt more clean, renewable energy. Utilities have been investing in large-scale wind energy farms at an impressive rate, resulting in 127 million tons of avoided carbon dioxide a year in the U.S. – the equivalent of taking 20 million cars off the road.

But a tricky challenge persists in the effort to make our energy system more sustainable overall: large, utility-scale wind energy developments have been known to kill bats and birds and risk fragmenting sensitive habitats. And while wind turbines kill far fewer songbirds than building collisions or cats, raptors and bats are still at risk for turbine collisions.

However, we believe clean energy and wildlife conservation do not have to be mutually exclusive. Research on the topic is underway and technology is emerging to help minimize the environmental impacts of wind turbines on birds and bats.

Turbines, birds, and bats

Turbine design has advanced from the lattice-tower designs of yesterday to large monopole structures that are less attractive to perching birds of prey. But newer, larger turbine designs still present a danger to soaring raptors and foraging, insectivorous bats. Furthermore, as mono-pole turbines grow larger with bigger rotor-swept areas, we need to seek ways to minimize risk to vulnerable migratory species like Whooping Cranes. This calls for guiding turbine siting away from sensitive habitats and important migratory flight paths and more toward disturbed lands.

Scientists, conservation organizations, and industry leaders are currently pursuing a variety of technological solutions, such as distributed energy and energy efficiency improvements, smart siting, experimental turbine designs, and wildlife mapping, monitoring, and detection technology to reduce wildlife risks.

Technological solutions are in the works

EDF is a founding member of the American Wind & Wildlife Institute (AWWI) that seeks practical solutions to the most intractable challenges of wind energy and wildlife conflicts. According to AWWI Director of Research and Evaluation, Dr. Taber Allison, “Technological solutions being explored by the wind industry have great potential to avoid and minimize risks to bird and bat species of conservation concern.” Some of these technological solutions include:

• Monitoring technology: Some facilities now use “bio-monitors,” which are basically people monitoring the skies with binoculars for approaching eagles and California condors, in conjunction with radar. Bio-monitors can alert operators to curtail turbine arrays as raptors approach. In other cases, radio scanners are employed to detect transmitter tags on condors in order to curtail turbine operations as they approach. According to Dr. Allison, there is great interest within the wind industry and conservation communities in developing detection technology, but right now the best solution appears to be a combination of radar detection and human monitors.

On other fronts, Cornell Laboratory of Ornithology’s BirdCast project uses radar to produce detailed bird migration forecasts that could be useful to inform wind energy operators about bird migration patterns in real time, allowing them to adjust turbine operations.

• Smart curtailment: Curtailment of wind turbines has shown to be the most effective approach to reducing bat kills, and “smart curtailment” is being pilot-tested in some places as a way to selectively shut down turbines when bats are present. Patterns of bat kills have been linked to environmental variables such as wind speed, humidity, and passage of weather fronts. Smart curtailment involves a central command center that can send messages to individual turbines to shut down when conditions arise that could contribute to bat fatalities. Curtailment isn’t necessarily aligned with manufacturers’ specifications for turbine operation, however, and may have real or perceived impacts on energy reliability, so there’s still a pressing need to optimize operations in a way that balances wildlife fatalities with energy production.

• Deterrence: Deterrence technologies that broadcast ultrasonic noise, which discourages bats from foraging around turbines, can also be effective, but this new technology is still daunting and not as effective as curtailment.

• Turbine design: Exploratory research into new turbine designs also shows promise. Aerodynamics research at Caltech is exploring how smaller, vertical-axis turbines can be arranged to take advantage of air drafts. This technology is patterned on fluid dynamics observed in schooling fish, with potential for maximizing local energy production while reducing a wind farm’s overall footprint on the landscape. Smaller, local wind facilities using lower-impact turbine designs also have the potential to reduce peak energy on the electric grid, resulting in less demand for utility-scale energy development.

• Mapping and smart siting: Conservation scientists and the wind industry have been mapping wind and wildlife resources in an effort to optimize siting of wind facilities in places with high wind production but relatively lower biodiversity impacts.

This week, a research meeting is being held by the National Wind Coordinating Collaborative in Colorado to discuss wind energy and wildlife interactions. Also, the Department of Energy is showing interest in innovative technological solutions to reduce wildlife impacts of wind energy, and EDF recently signed on to a letter addressed to Energy Secretary Moniz, along with wildlife conservation groups and wind industry representatives, requesting that research funds be directed to this effort.

Transforming the electric grid to minimize environmental impacts

By and large, most known bird and bat fatalities attributed to wind energy occur at wind farms where large turbines are concentrated. Part of the solution is distributed energy generation, like smaller on-site wind turbines and rooftop solar that produce power where it’s consumed.

Distributed energy generation is more efficient, affordable, and reliable than off-site, utility-scale power generation. By producing renewable energy right where it’s consumed, we’re matching energy demand with supply locally and sustainably, thereby shrinking our energy footprint on the land and in the skies. EDF’s Clean Energy Program is working to reform the regulatory system and transform our country’s outmoded electric grid to clear the way for more distributed energy options.

Another obvious way to reduce the impact of utility-scale wind farms on birds and bats is by reducing our total demand for energy through conservation. It has been estimated that by 2020, the United States could reduce its annual energy consumption by 23 percent through energy efficiency measures, offsetting the need for additional energy infrastructure build-out. This could cut greenhouse gas emissions by over a gigaton – the equivalent of taking the entire U.S. fleet of passenger vehicles and light trucks off the roads – and reduce peak demand on the electric grid.

We can reduce our energy footprint, on the ground and in the skies

Given the ultimate importance of renewable energy to mitigate climate change, there is an urgent need to find practical and affordable solutions to wind energy impacts on birds, bats, and their habitats so that renewable energy becomes fully sustainable. We believe it can and must be done.

By Marita Mirzatuny

Source: Verizon

The holidays are upon us. As we prepare to gather with our friends and family, eat too much, and lounge around watching football, many people use this time to reflect on what they are grateful for. Being able to pay one’s electricity bill probably doesn’t make most people’s list, but for many Americans, it might.

The average household spends $1,945 annually on electricity, and homes with the lowest 20 percent of income spent nearly six percent of their income on energy bills. For many households, the cost of energy remains unaffordable. To put it in perspective, compared to middle- or upper-class homes, low-income households spend about twice the percentage of their income on energy. Yet, as Greentech Media points out, “many [energy management] solutions are tailored to the biggest homes, those awash in thousands of square feet of central air with a pool pump. Other solutions are tailored for middle-class homes, such as aggressive rebates for more efficient appliances. Many apartment-dwellers, however, do not own their major appliances."

The future of smart home, energy-saving technologies is often more focused on affluent, early-adopters who benefit from innovative ways to save energy because they can afford the newest gadgets. Thankfully, these people are using their buying power to lead the way, as more demand will bring prices down for everyone. While it is important for all of us to conserve and better manage energy use, low-income individuals have the most to gain. Yet the technologies that can enable savings are often out of financial reach.

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Enter Pecan Street, Inc.

As a partner to the largest energy research database in the world, EDF is always impressed by the hundreds of trials and deployments that Pecan Street oversees. They are finding the real-world answers needed to secure our democratized energy future, free of pollution and full of savings. But again, if our focus is only on the wealthier classes, we are not fulfilling the opportunity that a smart, distributed clean energy world presents.

In November 2013, the Verizon Foundation and Pecan Street launched a pilot in the Austin area to investigate both quantitative and qualitative energy use data from multi-family and low-income residents. The project, entitled Smart Solutions for Affordable Housing, enlisted 140 apartment volunteers who are provided with Samsung Galaxy tablets, smart thermostats like Nests, and wireless internet service.

Using Pecan Street’s online energy portal, residents receive real-time information and guidance on their energy consumption, electric bills, and the condition of their appliances, as well as their heating and cooling systems. Once residents overcome the digital divide and feel comfortable with the technology basics, they are empowered to control their energy use. Seeing their energy use more granularly will, according to Verizon, "help participating customers cut their energy costs and procure the long-term benefits of a low-carbon economy."

The residents speak for themselves

"I fought to the bitter end against the computer revolution. Heck, I was like that with the microwave. But this technology has become part of my routine, part of my day,” says Jim Mayfield, a retired mortgage broker who lives in Wildflower Terrace, the senior living apartment complex.

Akemy Acosta, who lives with her husband Alan and their second-grade daughter, didn’t see much connection between technology and energy, other than the fact that their favorite gadgets need to be plugged in. "The ability to see our energy use on a computer screen has had a big impact,” says Ms. Acosta. Now she is more deliberate about using curtains to shade the windows and using their Nest to shave air conditioning bills. Most powerful is the impact the research has had on how she views the world. “I think about energy now. I notice all the solar panels in town. I recognize hybrids on the road. It’s like a flip was switched on in my head.”

Austin is known for being a modern, tech-savvy town. But issues like energy efficiency and renewable energy are not mainstream in Austin’s Hispanic communities, she says. “It’s great that Pecan Street is working with renters. We need to be part of this change, too. And we like to save on our energy bill, too!”

Beyond Pecan Street

The success of the Smart Solutions for Affordable Housing pilot is timely, as the Public Utility Commission of Texas (PUCT) works to complete the state’s multi-billion dollar smart grid investment. As I've written before, Texas has more smart meters than any other state in the U.S. – 7 million meters. This infrastructure has provided efficiencies to an antiquated electric grid. However, meters are only half the answer. Customer-facing technologies (i.e. the interactive systems within the home) are the other part of this puzzle and have not been deployed with as much zeal.

To realize wide-scale adoption, the PUCT asked the three largest electric transmission providers in the state to provide low-income families, with the infrastructure (including the Internet) needed to access energy use data and respond to price signals. Other regions have deployed similar pilot projects, such as PowerCentsDC, and found that nearly all participants (regardless of household income) saved money, though low-income customers can save more than average on certain programs.

The Verizon work at Pecan Street is some of the most important research that has been conducted to date, as data in this arena has been lacking. To help solve the data gap and learn more about energy use in low-income and multifamily buildings, Secretary of the U.S. Department of Housing and Urban Development (HUD) Julián Castro recently called on utilities to provide data for multifamily housing.

As we celebrate the tidings of the season, let’s not forget that, while Texas is making strides in its journey toward a clean energy future, many of our neighbors are still struggling to pay for their electricity bills. While we plan ways to give back to those in need this month (as a whopping 34 percent of all charitable giving is done in the last three months of the year) consider Gridmates, an Austin-based startup leveraging crowd-sourcing to give the gift of warmth and electricity this holiday season (or any time of the year). Every one of us should feel empowered to take advantage of energy-saving technologies. And Pecan Street is helping us get there.

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

By Michael Panfil

Last week the New York Times reported that, for the first time in history, clean energy resources like solar and wind are becoming cost competitive with conventional coal in some markets. This paradigm shift, where clean energy is beginning to compete head-to-head with traditional energy sources, calls for a change in perspective.

This ‘change in perspective’ is a movement toward what I would describe as “sustainable sustainability” – in which “sustainable” means the ability to stand the test of time, and “sustainability” refers to an environmentally responsible approach to making, moving, and using energy. In other words, we must find a way to ensure clean energy resources remain competitive in the marketplace and become ‘business as usual’ resources in the overall energy mix. The International Energy Agency (IEA) does a great job of explaining the need for this shift:

In the classical approach, variable renewables are added to an existing system without considering all available options for adapting it as a whole. This approach misses the point. Integration is not simply about adding wind and solar on top of ‘business as usual’. We need to transform the system as a whole to do this cost-effectively.”

Sustainable, or environmentally beneficial, energy resources must be holistically integrated into the market – not placed in a set-aside – to compete with traditional fossil fuel resources. To do this, we must leverage existing market trends and reform antiquated rules that hinder progress toward a future in which clean energy makes up a significant portion of our electricity generation.

A New Paradigm Shift to Sustainable Sustainability

One way that we are already seeing a shift toward this new paradigm is in markets. Navigant Research predicts worldwide revenue from smart grid technologies is expected to grow from $44.1 billion in 2014 to $70.2 billion by 2023. Global corporations like Walmart, Google, IKEA, FedEx, Costco, and Johnson & Johnson are investing in renewable energy resources in a big way because it makes practical, financial sense. Other global tech companies – including Apple, Google, Samsung, and yes, even Airbnb – have all recently entered the smart home energy arena in a move that illustrates the profitability of the growing clean energy sector.

Financing clean energy projects has also become more affordable than ever before, and more accessible for a broader population. A recent ACEEE study found that energy efficiency is two to three times cheaper than traditional power sources. Solar and wind power are becoming cost-effective in many parts of the world, with one research firm boldly predicting that solar will become cost-competitive with natural gas by 2025. Likewise, demand response – an energy savings tool that pays people to shift their electricity use to times of day when there is less demand on the power grid or when more renewable energy is abundant – has proven to be a low- to no-cost option. Creative financing options like on-bill repayment, Property Accessed Clean Energy (PACE) programs, and green banks are responsible for some of this shift, but market penetration for previously novel energy technologies has also played an important role.

These changes illustrate that clean energy resources are becoming not only the environmentally preferable and sustainable choice, but the economically preferable one as well.

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Unlocking Sustainable Energy Resources

It would be tempting to assume we must only continue trending towards lower costs, better economics, and technological improvements – and that this is all we need to fully integrate sustainable energy resources into ‘business as usual.’ Unfortunately, however, it is not so simple.

Subsidies for the oil and gas industry still far outpace those for clean energy resources. IEA recently reported that internationally, “fossil fuels are reaping $550 billion a year in subsidies and holding back investment in cleaner forms of energy.” That’s around four times the amount renewables currently receive.

Compounding the issue, the legal system governing energy was created to regulate the types of power we had when those laws were enacted (i.e., traditional fossil fuel sources like coal). As the system has evolved to incorporate varied types of energy resources – from solar and wind power, to demand response, energy storage, and energy efficiency – regulations have been updated, but in no organized or consistent way.

Simply put, this goal of sustainable sustainability, where clean power has the opportunity to compete with traditional sources of power, is being inhibited because the rules of the game create an uneven playing field which puts clean energy resources at a disadvantage.

Examples are numerous. A recent court case, for instance, has prohibited demand response from participation in wholesale energy markets – a blow to not only environmental interests, but consumer pocketbooks as well. In 2013 alone, demand response saved people in the mid-Atlantic region $11.8 billion. Likewise, the Federal Energy Regulatory Commission does not include the cost of carbon emissions when calculating electricity rates, essentially requiring society to bear the devastating health and environmental costs. Even clean energy resources that are already installed are stymied. For example, a recent Brattle Group study found that already installed energy efficiency isn’t being accounted for in energy forecasts, which could be costing consumers $433 million a year.

Although it may not be surprising that the way energy is currently governed disadvantages sustainable resources, there is no reason for these resources to continue competing on an uneven playing field. Rather, with clean energy resources proving their competitive edge, there is every reason to do the opposite. Sustainable sustainability should be the goal of regulators and lawmakers, with updated and amended regulations and laws suited for the present and future, rather than the past. Without this evolution, a future in which sustainable resources are themselves sustainable, secure investments will be impeded.

By EDF Blogs

By: Matt Golden, Senior Energy Finance Consultant

Last week, EDF’s Investor Confidence Project (ICP) co-hosted an energy efficiency finance networking event in San Francisco, bringing together 70 local project developers, for the first-ever SF Inter-Connect. Held in collaboration with San Francisco Department of the Environment (SF Environment) and Pacific Gas & Electric (PG&E) on November 12 at the SF Environment offices, the event gave each investor, much like in ‘speed dating’, exactly five minutes to pitch the crowd on their products, describing how they worked and what kind of projects the investor was looking for.

The Investor Confidence Project is accelerating the development of a global energy efficiency market by standardizing how Investor Ready Energy Efficiency™ projects are developed and energy savings estimates are calculated. The ICP system offers a series of protocols that define industry best practices for energy efficiency project development and a credentialing system that provides third-party validation. This leads to increased confidence among building owners and investors in the reliability of projected savings.

Investors who participated included:

• BluePath
• Clean Fund
• HUB International
• Joule Assets
• Metrus
• New Resource Bank
• Renewable Funding
• SCI Energy

Perhaps most importantly, a good time was had by the lively crowd, which appeared to take full advantage of the casual networking format that was the main focus of the event. ICP’s goal was to facilitate deal flow by connecting local contractors, installers, engineers, and project developers with investors such as Property-Assessed Clean Energy (PACE) finance firms, insurance providers, energy service companies, and municipal financing and incentive programs.

Based on feedback from investors who left with a hefty stack of business cards in hand, we believe the event was a success. With numerous participants asking when the next SF Inter-Connect will take place, the only question is when and where.

By Vic A. Rojas

In order to fund the transition to a low-carbon economy at a pace rapid enough to prevent runaway climate change, the International Energy Authority has estimated that an annual $1 trillion will be required globally. What policies or mechanisms can be used to facilitate private capital engagement on so grand a scale?: Green banks, which are government-created financial institutions that use attractive interest rates and other incentives to leverage money from the private sector to fund clean energy projects.

Earlier this week, EDF co-hosted the first day of the two-day, second annual International Green Bank Summit in our New York City headquarters, bringing together green bank stakeholders from around the world. The summit focused on how green banks can better leverage limited amounts of public capital to engage and accelerate the deployment of private capital into essential energy efficiency, renewable energy, and climate change mitigation initiatives.

Green banks are catalysts

With one dollar of public finance leveraging about three dollars of private capital, global green banks have catalyzed nearly $20 billion dollars to date in clean energy projects around the world and expect to raise more than $40 billion over the next five years. So far, only a handful of countries have developed green banks.

In the United States, several attempts to establish a federal green bank have failed, leaving states such as Connecticut, New York, Hawaii, and New Jersey to take the lead. The ultimate success of these sub-national entities will be significantly enhanced if they work in concert across geographical boundaries and pursue the same best practices. Events such as the International Green Bank Summit promote this dialogue, giving global thought leaders the opportunity to compare notes and support collective efforts.

One challenge for green banks is showing the private sector that they serve to facilitate, enhance, and accelerate private capital flows into the clean energy market – a market in which the private sector is currently not engaged at the necessary scale. To do this, they must have a keen focus on additionality, or the notion that private capital market engagement would not have occurred without the parallel engagement or intervention of a green bank.

Green banks are not in the business of concessionary lending, providing grants, or taking on risk that the private markets are not prepared to assume. Rather, they aim to bridge the financing gap that exists due to market barriers. By leveraging their limited pool of public capital to reduce risk in very clear and defined market investment opportunities, green banks support private capital engagement in profitable energy efficiency and renewable energy projects.

EDF and @NYSERDA convened international leaders to talk green banks, the future of clean energy...
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International Green Bank Summit

Hosted by the NY Green Bank, a division of the New York State Energy Research and Development Authority, the summit attracted participants from the Connecticut Green Bank, the New Jersey Energy Resilience Bank, and the Hawaii GEMS program, in addition to representatives from Japan, Australia, Malaysia, and the United Kingdom. The event welcomed leaders from green banks that recently opened to those that have been in operation for several years, as well as individuals and groups who are exploring the possibility of setting up a green bank and working diligently toward that end.

Richard Kauffman, Chairman of Energy and Finance for the State of New York, kicked off the conversation with a powerful message that the time to act on climate change is now, setting an inspirational tone for the leaders in attendance. From there, the summit provided green bank representatives the opportunity to share ideas and best practices, learn from one another, and discuss strategies for a coordinated effort to catalyze the clean energy financing markets.

Although green banks operate in markedly different social, political, and commercial contexts, discussion focused on how developing a standardized approach is critical to scaling green bank efforts. My colleague, Rory Christian, Director, New York Clean Energy, described EDF’s own Investor Confidence Project, which standardizes the development of energy efficiency projects, “something we at EDF believe is a key part of pushing toward a clean energy future.”

Going forward, we can expect greater coordinated communication between global and regional green banks to maximize their effectiveness.

The need for private capital engagement

Essential to raising substantial amounts of private capital to address the climate change imperative are new market finance tools like:

• entities (such as green banks),
• creative finance mechanisms (being developed and deployed by green banks), and
• asset classes (such as green and climate bonds)that can engage new classes of investors.

Green banks serve to incentivize and jumpstart broader private capital market engagement for clean energy projects. Ideally, we will reach the point at which the private sector can step in and take the lead in realizing the full potential of the dynamic and profitable clean energy market. But we aren’t there yet, and events such as the International Green Bank Summit play a key role in helping us get there.

Andy Darrell, my colleague and EDF’s Chief of Strategy, US Climate and Energy, summed it up nicely when he concluded, “Prosperity and environmental protection go together; it is important to make markets work well on behalf of the environmental outcomes we try to accomplish.”

By Gernot Wagner

By: Kenneth Gillingham, assistant professor of economics at Yale University’s School of Forest & Environmental Studies, David Rapson, assistant professor of economics at the University of California, Davis, and Gernot Wagner, lead senior economist at EDF

The rebound effect from improving energy efficiency has been widely discussed—from the pages of the New York Times and New Yorker to the halls of policy and to a voluminous academic literature. It’s been known for over a century and, on the surface, is simple to understand. Buy a more fuel-efficient car, drive more. Invent a more efficient bulb, use more light. If efficiency improves, the price of energy services will drop, inducing increased demand for those services. Consumers will respond, producers will respond, and markets will re-equilibrate. All of these responses can lead to reductions in the energy savings expected from improved energy efficiency. And so some question the overall value of energy efficiency, by arguing that it will only lead to more energy use—a case often called “backfire.”

In a new RFF discussion paper, “The Rebound Effect and Energy Efficiency Policy,” we review the literature on the rebound effect, classify the different types, and highlight the need for careful distinction between causal links—which are indeed worthy of the “rebound” label—and mere correlations, which are not. We find, in fact, that measures to improve efficiency, despite potential rebound effects—are likely to improve welfare, generally.

Among the key questions about the rebound effect are a) whether the net benefits of energy efficiency increases are positive (for a costless improvement, the answer is almost certainly “yes”), and b) whether the increase in demand for energy services uses so much additional energy that it leads to greater, rather than less, demand for energy itself (the answer is almost certainly “no”).

Our findings are clear: while it is possible for rebound effects to be large in some settings, there is no reliable evidence supporting rebound effects so large that improving energy efficiency leads to more energy use. Backfire is theoretically possible, but even the theoretical predictions rely on channels that are either a) second-order in magnitude (and thus unlikely to overwhelm primary effects), or b) lacking in empirical evidence of their existence and magnitude. Globally, we have little reason to worry about backfire. While there is much uncertainty about the size of the so-called “macroeconomic rebound” (how re-equilibration of markets and such hypothesized effects as induced innovation from the energy efficiency improvement may lead to a rebound), we consider a plausible upper bound of the total effect to be in the range of 60 percent (that is, 60 percent of the potential energy savings will be lost to rebound), with most studies pointing to a smaller effect.

Regardless of its size, we find that the rebound effect is very likely to be welfare-improving. In fact, in the extreme, energy efficiency improvements that come about from innovations or otherwise have no cost are unequivocally welfare-enhancing. If the improvements come with costs, such as air pollution from more driving or more expensive technology, those need to be weighed against the energy savings, emissions savings, and welfare benefits from the policy.

In short, undue emphasis on backfire is a mere distraction. Or as we put it in a recent letter to the editor of the New York Times: energy efficiency improvements such as “LEDs alone won’t solve global warming or global poverty, but they are a step in the right direction for both.”

This post originally appeared on Resources for the Future.

By Jim Marston

We knew this was coming. Everyone knew. The power sector is the single largest source of carbon pollution in the U.S. and one of the largest in the world, yet there are no limits on how much carbon power plants can emit into our air. The U.S. Environmental Protection Agency’s Clean Power Plan (CPP) for new and existing power plants is urgently needed, is well within Texas’ reach, and can ensure that Texas (more so than other states) forges a strong and prosperous clean energy economy.

But this week, the Electric Reliability Council of Texas (ERCOT), which manages roughly 90 percent of Texas’ power grid, issued a report that overestimates the challenges posed by the CPP to the state’s electric grid reliability. Furthermore, it failed to appropriately recognize key tools available to ERCOT and the state to meet the proposed CPP.

Here’s a breakdown of what the report missed:

• ERCOT appears to have looked at growing existing energy efficiency programs, rather than the full-scale of what Texas could achieve under the CPP. Energy efficiency, one of the main building blocks in the CPP, is the best means to lower electricity prices for Texans. The Brattle Group found in its report for the Texas Clean Energy Coalition that the potential for energy efficiency savings in Texas is significant – saving $2 – $5 for every $1 invested. Regardless of the CPP, failing to improve Texas’ efficiency efforts hurts Texans.
• The analysis forecasts a boom in solar generation, but it doesn’t take into account the full potential of residential and distributed solar energy, which will not only help Texas meet the CPP, but also help lower prices for homeowners and businesses.
• ERCOT fails to include energy storage technologies that help integrate more West Texas wind energy and solar power by providing backup power when the sun isn’t shining or the wind isn’t blowing. Energy storage can also help provide electricity at a moment’s notice, enhancing electric grid reliability.
• The report does not recognize the real opportunity available to enhance system reliability through demand response, which rewards people for using less electricity, rather than turning on coal-fired power plants to meet electricity demand. Demand response helped ERCOT avoid rolling blackouts last winter, can respond quickly in times of need, requires little to no water, and improves air quality. This is the type of performance worth investing in.

The big picture

Obviously, grid reliability is a critical component of ERCOT’s mission, and the best way to secure reliable power for Texans is to harness more homegrown energy using innovative, clean technologies. Texas has the nation’s most competitive electric grid for a reason – ingenuity and smart planning.

Texas can own its future by designing its own plan to achieve the carbon reductions that are so urgently needed while protecting the grid all Texans rely upon (including the opportunity to achieve compliance with the CPP over a 10-year period). Texas can take a page from the numerous power companies in the state that are already proving a low-carbon energy system is dependable and low cost. With the CPP, Texas has another opportunity to lead the nation by harnessing more West Texas wind energy and lower-carbon fuels, tapping into the state’s solar energy potential, and building out its energy efficiency programs. But the benefits don’t stop there. Implementing the Clean Power Plan in Texas will also ensure healthier and longer lives for Texans.

This is the big-picture thinking Texas needs. And now is the time for Texas to tap into the ingenuity and smart planning our state is known for.

Photo source: Dpysh w

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