Energy Exchange: ICP

Three hospitals in England recently cut energy costs in half after spending the equivalent of $18 million in energy efficiency upgrades. The projects got a much-needed boost from a certification that gave investors confidence the retrofits would bring returns. With millions of buildings in need of upgrades and the emergence of a $20-billion retrofit industry in the United States […]

Cities around the world are taking the lead on fighting climate change, making huge commitments to reduce pollution and meet the goals of the Paris Agreement. And it’s a good thing they are. According to C40 Cities Climate Leadership Group, 75 percent of global greenhouse gas emissions come from cities, and about half of this […]

No one ignores an opportunity to save billions of dollars. Numbers of that size are enough to make an audience take notice, even in a business like commercial real estate, where deals in the hundreds of millions and billions are commonplace. Each year the U.S. spends over $400 billion on energy for our buildings, many […]

A recent decision by New Jersey utility regulators to standardize energy efficiency procedures for commercial buildings could have a major impact – not just on the Garden State – but on energy markets nationwide. The reason: It gives investors more confidence in performance and returns which is exactly what can fuel a big push to […]

The Paris climate negotiations can set the stage for a global shift on climate change – when our world’s emissions finally stop rising, level off, and begin to fall. There is reason to be optimistic: from China to the United States, from Europe to South Asia, countries are coming together with commitments to cut climate […]

 By: Jeff Milum, Director of Market Development, Investor Confidence Project  40 percent of all energy in the U.S. is used by buildings, which also accounts for one-third of our country’s greenhouse gases emissions. This represents a huge opportunity, both for climate action and financial gain. There’s just one problem: Project developers often have trouble finding […]

The large-scale adoption of energy efficiency in buildings is a key to achieving a cleaner environment, lower utility bills, and more comfort for customers. But increasing private capital investment in the energy efficiency market has been a big challenge. Environmental Defense Fund’s Investor Confidence Project (ICP) addresses one specific barrier to more energy efficiency investment: […]

By: Karen Penafiel, Vice President, Advocacy, BOMA International At its Every Building Conference this summer, the Building Owners and Managers Association (BOMA) International announced the relaunch of its BOMA Energy Performance (BEPC) toolkit.  BEPC is an industry-vetted, proven process to plan, procure, and implement performance-driven building retrofits that has been used in successful projects around the […]

By: Max Wycisk The Investor Confidence Project (ICP), Environmental Defense Fund’s (EDF) signature buildings efficiency finance program, is sometimes hard to explain in a nutshell. Ultimately, the program aims to create confidence among investors financing energy efficiency projects by standardizing how projects are designed and implemented across the commercial buildings sector. But how do we […]

By: Matt Golden, Senior Energy Finance Consultant A few days ago, economists from the University of Chicago and the University of California, Berkeley released a study that called into question the cost-effectiveness of energy efficiency. The study was based on the team’s analysis of energy savings shortfalls in the Michigan low income Weatherization Assistance Program. Since […]

By: Matt Golden, Senior Energy Finance Consultant The Investor Confidence Project (ICP), an Environmental Defense Fund initiative designed to unlock investment in energy efficiency, announces the launch of the ICP Quality Assurance Credential for companies with the skills, training, and experience to provide independent review of ICP projects. This last of three key credentials authorizes third-party […]

By Scott Henderson, Advisor to Metrus Energy While many in the clean energy industry are familiar with the use of power purchase agreements (PPA) to finance solar energy systems at commercial and industrial facilities, many may be surprised to know that there is a similar contract for funding energy efficiency retrofit projects. Called an 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 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.

A quick scan of the US climate & energy news will tell you 2014 was a very big year….
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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.

Photo source: DAVID ILIFF. License: CC-BY-SA 3.0

By Victor 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 EDF Blogs

By: Victor A. Rojas, Senior Manager, Financial Policy, and Paul Stinson, Program Coordinator

It’s understandable that many people would look at falling oil prices and wonder what it might mean for clean, renewable energy sources. Some recent headlines even suggest that cheaper crude might spell doom for the burgeoning clean energy economy.

Over the last six months, the price of crude oil has fallen by about 40 percent, currently trading below $60 a barrel, the lowest it’s been since 2009. Continuing global production and oversupply mean oil prices could remain low through the winter months and well into 2015.

While it’s true that stocks for some of the more trusted, clean energy investments are being dragged down by dipping oil prices, it doesn’t mean demand for clean energy is also suffering. In fact, as oil prices have tumbled, demand for energy efficiency and renewable energy only keeps growing.

Oil can mean energy, but energy doesn’t mean oil

The historic correlation between the price of oil and the demand for renewable energy has been increasingly weakened in today’s global markets. Like apples and oranges, we use oil and renewables to make completely different types of juice: oil primarily to produce transportation fuels, and renewables primarily to generate electricity. From an economics perspective, oil and renewables are not substitutes: when the price of one decreases, demand for the other does not decrease.

But, if the falling price of oil doesn’t affect demand for renewables, why does it seem to weaken renewables stocks, even as solar power, for example, is growing faster than ever before? Simply put, it’s a problem of perception.

It is engrained in the public consciousness that the price of oil represents the price of energy in general. This correlation is a perceptual challenge with widespread financial and political repercussions. The mistaken logic that all energy is cheap because oil is cheap can create a disincentive for investors, policymakers, and customers to support renewables and energy efficiency.

Promise for a cleaner, more reliable energy future

If oil price volatility doesn’t mean reduced demand for renewables, then what, in fact, does it mean? According to Christiana Figueres, the UN’s climate chief, it means that investing in fossil fuels like oil is an increasingly risky strategy. At the recent UN climate talks in Lima, Peru, Figueres maintained that the instability of oil prices “is exactly one of the main reasons why we must move to renewable energy, which has a completely predictable cost of zero for fuel.”

What’s more, as noted in a market report from Bernstein Research last month, “Renewable energy is a technology. In the technology sector, costs always go down. Fossil fuels are extracted. In extractive industries, costs (almost) always go up.”

In other words, now is the time to be building the foundation for a stable energy future protected from the price volatility of fossil fuels. The good news is we’re well on our way. From solar, to wind, and energy storage, we’re reaching tipping points that promise further cost reductions and market acceptance for clean energy technologies.

Now is the time to be building a stable, clean energy future protected from the price volatility of…
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It’s just as important to continue progress on the financial policy front. To that end, creative financing mechanisms, new asset classes, and public/private market solutions that facilitate capital engagement are making clean energy investing more accessible and more secure than ever. In the last year alone, demand for green bonds has soared from about $11 billion to more than $40 billion as more and more marquee banks, corporations, and multilateral organizations have entered the marketplace.

As the market embraces this new asset class, it’s crucial that we shift from proving green bonds’ efficacy to building out market infrastructure and developing meaningful standards for transparency, disclosure, and integrity.

Similarly, we need to advance the policies and tools that standardize markets for energy efficiency investments, which hold extraordinary potential for immediate energy and cost savings. Initiatives such as EDF’s Investor Confidence Project (ICP) bring together building owners, project developers, finance providers, and utilities to create a transparent market for trading in energy efficiency projects. In so doing, ICP lays the groundwork for securitization in the industry, which promises to catalyze project deal flow and unlock the vast potential of energy efficiency.

Advancing these and other financing tools is critical to the growth of the clean energy economy – and growing the clean energy economy is one of the best ways to correct the mindset that demand for renewables is linked to the price of oil. Ultimately, these efforts help put our country on the path toward a stable energy future unfettered by the need for subsidies and unhindered by the volatility of fossil fuels – and that’s a headline we’d like to read.

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.

ICP / SF DOE / PG&E Networking Event Fires Up Energy Efficiency Pros @PACE_Now @PGE4Me @CA_1st…
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