energy efficiency

What’s the deal with Republican attacks on the tire gauge?

I’ve had a few pundit types ask me what the deal is with the kerfuffle over the tire gauge. What’s the attack here on Obama? That pumping your tires is elitist? That it’s unbefitting a commander in chief to recommend auto maintenance? Apparently Republican attacks have become so baroque that they are now impossible for […]

Los Angeles utility starts to squawk as it stares down a $700 million carbon bill

Regulators have won praise for speed and thoughtfulness with which they have laid the groundwork for implementation of A.B. 32, the landmark bill that aims to bring California's greenhouse gas emissions down to 1990 levels by 2020. But even within a single state, climate change legislation creates winners and losers, and regional tensions are starting to show.

California's climate plan consists of a slew of new efficiency standards, regulations, and reduction measures -- as well as a cap-and-trade system to place a lid on total emissions. It's the cap-and-trade system that is part of the present pushback.

At issue in particular are the long-term contracts that the Los Angeles Department of Water and Power (DWP) has entered into for coal-based electricity. Although coal has kept L.A.'s electricity some of the cheapest in the state, the utility will have to pay enormous sums for carbon allowances under the new law.

It's always instructive to unpack some of the distortions that surround the politics of climate change legislation. Officials from L.A. seem to be trying out three different angles in their resistance to the bill. The first is that the steep cost of the allowances will divert money away from energy efficiency and renewable energy programs.

Energy efficiency, part 4

California and its utilities have achieved remarkably consistent energy efficiency gains for three decades. How did they do it?

In part, a smart California Energy Commission has promoted strong building standards and the aggressive deployment of energy-efficient technologies and strategies -- and has done so with support of both Democratic and Republican leadership over three decades. I talked to California energy commissioner Art Rosenfeld -- a former DOE colleague and the godfather of energy efficiency -- about what the state does, and here are some interesting details he offered, as discussed in "Why we never need to build another polluting power plant":

The cheaper the power, the more we use

I'm going to geek out for a second. But first, check out this graph:

I suppose there are two lessons:

1. Price and consumption are not perfectly correlated. Clearly there are many non-price factors affecting electricity consumption. (These include, at least, the local climate, building size and type, and local energy efficiency policies.) But still ...
2. Price definitely affects use, and the fit gets better as you move up the price axis. The more expensive electricity is, the less likely consumers are to be profligate.

In energy circles it's sometimes alleged that consumers are price insensitive or economically irrational about consumption. There's some truth to that, but it's only a partial truth.

These charts help demonstrate why carbon pricing can be effective. Putting a price on carbon -- or a price on energy -- acts to reduce consumption. Price is not the only factor and it may not even be the biggest factor, but it does appear to matter. And it appears to matter more above about 10 or 12 cents per kilowatt hour.

This hooks into a larger debate in the Western Climate Initiative.

Energy efficiency, part 3

This series is based in part on this Salon article: "Why we never need to build another polluting power plant."

Energy efficiency is by far the biggest low-carbon resource available, and it is as limitless as wind, PV, and solar baseload. It is also the cheapest power you can buy, by far.

California has cut annual peak demand by 12 GW -- and total demand by about 40,000 GWh -- over the past three decades. The cost of efficiency programs has averaged 2-3 cents per kW -- which is about one-fifth the cost of electricity generated from new nuclear, coal, and natural gas-fired plants. And, of course, energy efficiency does not require new power lines and does not generate greenhouse gas emissions or long-lived radioactive waste.

There’s only one way to get big near-term carbon reductions

If we want to stabilize atmospheric CO2 at 450 ppm around 2050 -- the minimum necessary, which still might carry major impacts -- we need to achieve at least 2 percent average annual net reductions in emissions, globally, starting in two years. Not only do the near term emissions reductions matter the most, but it will get easier, not harder, as we go along. Solar PV and solar thermal are likely to become cheaper than new coal plants in a decade or so. They will also probably become cheaper than wind around the same time, and together these resources will make it possible to eliminate about three quarters of fossil generation.

It may be possible to exceed the 2 percent rate. But the only way to know that is to achieve 2 percent first. Nothing weaker than 2 percent is particularly worth talking about, and anything stronger is very hard to achieve. Also, any strategy to reduce CO2 emissions must address ongoing growth. While there are many reasons to believe the rate of new growth will change, as it has done historically, it is at present about 1.5 percent per year. Thus a 2 percent annual net reduction in today's world means a 3.5 percent gross reduction.

This series discusses the implications of this goal for the U.S. electric industry.

Energy efficiency is the core climate solution, part 2

Energy efficiency is by far the biggest low-carbon resource available. It is also, as we'll see, every bit as renewable as wind power, solar photovoltaic, and solar baseload.

People who have little experience with what serious energy efficiency investments can do for a company or a state -- this means you, neoclassical economists who consistently overestimate the cost of climate mitigation! -- think it is a one-shot resource wherein you pick the low hanging fruit. In fact, fruit grow back. The efficiency resource never gets exhausted because technology keeps improving and knowledge spreads to more and more people.

After leading the country in comprehensive efficiency efforts that have kept per capita electricity demand flat for three decades, California does not merely believe it can continue at this pace, they plan to accelerate their efforts and actually keep electricity demand itself flat. I have discussed California's efforts and plans in previous posts, and will discuss them further in part 3.

The focus of this post is the best corporate example of the inexhaustible nature of the energy efficiency resource -- Dow Chemical's Louisiana division.

Energy efficiency is the core climate solution, part 1

Energy efficiency is the most important climate solution for several reasons:

1. It is by far the biggest resource.
2. It is by far the cheapest, far cheaper than the current cost of unsustainable energy, so cheap that it helps pay for the other solutions.
3. It is by far the fastest to deploy.
4. It is "renewable" -- the efficiency potential never runs out.

This post focuses on number one -- the tremendous size of the resource.

A simple regulatory fix to the coming power crisis

Our electric regulatory model is broken. It preferentially deploys expensive power sources before cheap ones. It compares the variable costs of dirty fuels to the all-in costs of clean fuels and deludes itself into thinking that the dirty, expensive power is economically advantaged. It places the interests of utility shareholders above the interests of other potential investors in our power grid, massively skewing capital allocation, even while it insulates utility investors from the disciplines imposed by a competitive market.

These problems arise fundamentally from the over-regulation of our electric sector, which has created stable utilities, but virtually no opportunities for the kind of economic "upside" necessary to attract entrepreneurs into the sector. This ought to be good news; after all, we Americans are really good at taking risks, deploying our prodigious entrepreneurial talents and making big financial bets. The problems we face all play to our strengths. Unfortunately, any positive change to our system is by definition deregulatory -- a word that has been politically poisoned by the botched restructuring (don't call it dereg!) in California and Enron's machinations. As factually irrelevant as those bogeymen may be to any discussion of deregulation, they present formidable political obstacles to reform -- and only the most quixotic windmill-tilter chases reforms that are politically untenable to both sides of the aisle.

Houston, we have a solution.