Posted: 9/26/2010 8:01:43 AM EDT
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From the New York Times.
SAN FRANCISCO — Energy efficiency is a way to meet the world’s growing energy needs, just like building more power plants — except that it costs less, emits no carbon dioxide or radiation, and does not rely on scarce resources in potentially hostile places. Efficiency is often confused, detrimentally, with conservation. Conservation connotes making do with less — turning down the heat or driving a smaller car. Efficiency means getting more bang per buck. For example, California’s 35 years of efficiency standards for appliances have created refrigerators that use 75 percent less electricity than models from the 1970s. Yet today’s refrigerators are larger, have more features and cost less in inflation-adjusted dollars. In transportation, “we could double fuel economy for light-duty vehicles by 2035 without changing the size or acceleration of vehicles,” said Lester B. Lave, an economics and engineering professor at Carnegie Mellon University in Pittsburgh and the chairman of a 2010 report on efficiency potential from the National Academy of Sciences. He said buildings could use nearly 60 percent less electricity by 2030 by installing existing technologies, like compact fluorescents or LEDs, insulation, double- or triple-paned windows, and on-demand or solar hot water heaters. Tuning up and optimizing settings on climate controls would also contribute. Experts say that economy-wide efficiency improvements could have a head-turning effect on the U.S. energy mix, helping to halt climate change, reduce energy insecurity and fix the economy. Yet in the vociferous debate about how to get off fossil fuels, efficiency has taken a back seat — partly because of the difficulty of talking about it concretely. “It’s harder to talk about something that doesn’t exist, that you don’t produce,” said Cathy Zoi, the assistant secretary for energy efficiency and renewable energy at the U.S. Energy Department. Highlighting this blind spot is a recent book, “Invisible Energy: Strategies to Rescue the Economy and Save the Planet,” by David Goldstein, a physicist who won the MacArthur genius award in 2002 and works as energy program director at the Natural Resources Defense Council, a nonprofit environmental advocacy group. Mr. Goldstein argues that the United States could reduce its projected energy consumption 88 percent by 2050, and that a 30 percent reduction is possible by 2020. Other estimates are somewhat lower. The National Academy of Sciences study, on which he was a consultant, found that projected U.S. consumption could be cut 17 percent to 20 percent by 2020. McKinsey & Co., using prerecession consumption projections, put the potential reduction at 23 percent by 2020. The American Council for an Energy-Efficient Economy, an efficiency advocacy group, estimates the savings at 17 percent to 20 percent over the period, and 40 percent to 60 percent by 2050. But Mr. Goldstein stands by his figures. “I found it very frustrating because if you’re trying to do this in a sound, scientific way, you’ll find that you’re faced with a tradeoff” between being believable and being right, he said during an interview. Mr. Goldstein looks at what is possible; other reports tally what is likely. Ms. Zoi said she had worked with Mr. Goldstein on efficiency issues for many years. “He pushes the envelope with the technical potential and he helps to define the debate,” she said. Mr. Goldstein argues that mistaken assumptions in mainstream studies have led them to greatly undervalue the potential gains. For example, he says, most look only at current technology without taking adequate account of technological change. Steve Nadel, executive director of the energy efficiency council, agrees. “Even things like LED lighting and smart manufacturing, technologies in which we’re investing lots of money to make them a reality, are not usually included in these studies,” he said. The academy report, for one, only counted existing technologies, Mr. Lave said, acknowledging that it probably underestimated true potential as a result. “The unlikely thing is that there will be no technological advances over what we have available today,” he said. Mr. Goldstein factors in potential gains from now-unknown technologies by extrapolating from past performance. The efficiency of refrigerators and air conditioning units, for example, has improved about 4 percent a year over the past 35 years, according to data from the Association of Home Appliance Manufacturers. Ultimately, efforts will bump up against physical limits, but that point is still far away, he said. Ms. Zoi, who works on appliance standards for the energy department, agrees. So do the manufacturers. In August, the association recommended that the U.S. government set standards to improve the efficiency of refrigerators, freezers, and washing machines 26 percent to 42 percent by 2015. The performances of other appliances would improve to a lesser degree. Mr. Goldstein says that most reports also err on the side of perceived prudence because planners prefer a conservative approach: if they rely on potential efficiency gains rather than building new power plants, they risk taking the rap for future power outages. But that approach to supply security has a cost. “When you’re deciding how much attention and money to throw at efficiency compared to other choices, a lowball estimate means you’re committing the country to very expensive resources when you could have spent a third as much,” Mr. Goldstein said. Utilities are among those who favor a more conservative approach, partly because they have to pay fines in some states if they fail to meet efficiency targets. A report last year by the Electric Power Research Institute, a body financed by the energy industry, put the potential reduction in projected consumption at just 8.7 percent by 2020. Lisa Wood, executive director of the Institute for Electric Efficiency, part of a trade association for utilities, said she believed that a realistic target was somewhere between that figure and McKinsey’s 23 percent. But Mr. Goldstein says his higher estimates are fully realistic — based on his experience working in California with the state’s recently retired energy commissioner, Art Rosenfeld, a pioneering innovator of efficiency policies. Begun in the 1970s, California’s efficiency program implemented appliance standards and building codes and decoupled utility profits from electricity sales. The result has been to hold consumption steady despite a population growth of about 43 percent, making the state the most efficient per capita in the country. “We halved per capita electricity use over the past 30 years,” Mr. Rosenfeld — who now advises the U.S. energy secretary, Steven Chu — said during an interview. “In terms of past trends,” he said, Mr. Goldstein’s estimate “is not as crazy as it sounds.” The debate about the potential scale of efficiency savings matters because, aside from environmental benefits, it has a direct bearing on the economy. “We spend about $1.1 trillion each year on our utility bills in this country,” said Ms. Zoi, of the Energy Department. “And let’s just say we could really easily reduce this by 20 percent. That’s an extra $200 billion you could put into productivity of other things like health care, schools, businesses that grow.” Being more efficient would also make the U.S. economy more competitive. “There’s a tremendous amount of energy — and money — to be saved in the commercial and industrial sectors,” Mr. Lave said. Still, the obstacles to efficiency are many. “Policy makers are supportive of energy efficiency in concept, but there’s this whole argument of ‘just leave it to the market,”’ Mr. Nadel said. Politically, too, building a power plant brings visible, vote-winning jobs, so “efficiency is everyone’s second choice,” he said. But some market incentives are misaligned. “Major energy providers make more money out of kilowatt-hours that they sell rather than the ones that they don’t sell,” Ms. Zoi said. Decoupling utility profits from the amount of energy sold, as California did in 1983, is a way to fix this problem, and it is a growing trend. Twenty-nine other U.S. states have since followed that lead or are about to do so, according to the Institute for Energy Efficiency. Ms. Zoi said the U.S. Energy Department was giving the states information and grants to help them develop effective policies. One strategy is an energy efficiency resource standard, setting targets for annual efficiency improvements, accompanied by performance-based cash rewards or penalties. The institute says 25 states have implemented target-based incentives or are about to do so — mostly in association with decoupling. Still, Ms. Wood said, the utilities trade group would rather see a federal cap on carbon emissions than an array of state standards. Mandates that impel utilities to adopt a set quota for wind or solar generation, or efficiency savings, can be difficult for managers, she said. “If everybody had to meet a carbon goal, then you’d do what made sense from a cost-effectiveness perspective, and the order would be energy efficiency first.” U.S. efficiency legislation is frequently included in energy or climate bills. But because these bills have politically controversial elements, efficiency policy languishes. For example, the American Clean Energy and Security Act, which is currently stalled in Congress, would set an efficiency savings target of 5 percent by 2020. The House of Representatives and Senate versions of the Save American Energy Act, also stalled, call for 15 percent electricity savings and 10 percent natural gas savings in that period, which would eliminate the need to build 390 power plants, according to the energy efficiency council. Progress is also hindered in both residential and commercial buildings by split incentives between landlords and tenants, Ms. Zoi said. Investments to improve a building’s energy system are paid for by the owner, who usually does not pay the utility bills. “There’s no incentive to make those capital investments,” Ms. Zoi said. The cost of energy plays a role, too. States with comparatively high prices for energy, like California, have made the most striking progress. Similarly, businesses were motivated to make upgrades and consumers to buy smaller cars when the price of oil hit $147 a barrel in July 2008. Reluctance to change is evident in politics as well. Without real-world examples, policy makers are nervous about taking whole-of-economy steps, Ms. Zoi said. To combat this inertia, the American Recovery and Reinvestment Act has financed more than 7,000 efficiency projects, she noted. But perhaps the biggest barrier to maximizing energy efficiency is the natural reluctance of people to try something new. Mr. Lave, chairman of the Academy of Sciences study, said the industrial sector was illustrative. “It’s clear there’s a lot of low-hanging fruit around,” he said. “It’s also clear that companies are utterly uninterested” in making an investment unless it earns an annual return of at least 40 percent, he added. “It’s not rational.” “The question is: Why don’t you pick up these $100 bills that are lying on the floor?” |
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In transportation, "we could double fuel economy for light-duty vehicles by 2035 without changing the size or acceleration of vehicles,” Undo all the emissions and regulations of the past 25 years, and you can. ETA: Oh, the article mostly asks the government to make more standards, regulations and requirements. When it costs $1 million dollars R&D to meet regulations that will save a fraction of that cost, how is this a good thing? If people ask manufacturers to do better, and it can be done with minimal cost, I'm all for it. When the government mandates improvements, I am not. |
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What are you, Captain Planet now all of a sudden? The only green energy I'm interested in is the type that saves me greenbacks. If it don't make dollars then it don't make sense. No, these two posts reflect a long term interest for me. I've been an advocate for efficiency and conservation for about five years now, in one form or another. And yes, these things will save you money. |
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Yes, efficiency is an excellent thing.
But it's expensive to implement. I live in Tucson. Average summer high temperatures are in excess of 100°F. My home is masonry with no insulation in the walls, and single-pane windows. The construction precludes wall insulation - drywall is attached directly to the masonry without any airgap. I could replace my windows with dual- or triple-pane, but the cost is prohibitive (to me). I'd love to have an on-demand water heater. Priced one recently? Including installation? Were you aware you'd definitely have to upgrade the gas or electric feed to the tankless heater in order for it to provide you that hot water? Solar water heaters work OK here in AZ - about nine months of the year. My sister pulled hers off her roof. It was a maintenance nightmare. Retrofitting commercial buildings isn't any cheaper by volume, either. Efficiency is best implemented in the basic design, not as a retrofit. Increasing automobile efficiency is, by comparison, simpler, because automobiles have a limited life. They get replaced on a fairly regular basis. Structures are another kettle of fish. They last decades. |
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This is just more typical greenie BS. What gets lost in all this "efficiency" obsession is whether one actually saves money or loses money in the process of replacing older appliances with newer ones. The claims you see of "it'll pay for itself in X number of years" are highly dubious since most such products have not actually existed long enough to make such claims, e.g. they are just overly optimistic projections. Then of course you have both your subsidies for "green" products coupled with cost-inducing restrictions on older products that skew actual cost/benefit analysis. Two questions for the OP: Was the cost of your older appliance fully depreciated? And had it in actuality out-lived it's functional usefullness? Remember the old adage "Use it up, wear it out, make it do or do without"? In economists terms that is actually efficiency - You use a certain product as long as you can until it is no longer functional, then and only then do you replace it. What's happening now is that producers of this so-called "green" technology are trying to use the power of the police state to force consumers to jettison perfectly functional products they currently own and instead buy their "earth friendly" products. In the big picture, you are not "saving" any money since you are paying higher taxes to pay for the subsidies and regulations, and you are paying an even much greater price in the loss of consumer choice. |
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Two questions for the OP: Was the cost of your older appliance fully depreciated? And had it in actuality out-lived it's functional usefullness? I disagree with you premise. It is often possible to replace something and save a lot of money. Consider that a new refrigerator might use half the energy that an old one does. Assuming that you don't have cash flow issues you can save a lot of money. Keeping an old one around because it will last longer doesn't always make sense. I actually had a friend whose gasoline bill was so high that he parked his Jeep, bought a Honda and came out ahead. Why do you insist on using the term depreciated? As I am not a business I received no tax benefit by keeping the older equipment around. The house was bought well used; the furnace itself was in need of replacement because of mounting repair costs. The replacement would have paid for itself based on repair costs alone. Why should we wait for something to outlive its usefulness? Many things are useful long after they become more expensive than a replacement item. |
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Retrofitting commercial buildings isn't any cheaper by volume, either. Efficiency is best implemented in the basic design, not as a retrofit. Increasing automobile efficiency is, by comparison, simpler, because automobiles have a limited life. They get replaced on a fairly regular basis. Structures are another kettle of fish. They last decades. I strongly agree with this. Retrofitting for efficiency is not always easy, but in many cases it is. My own personal story? Replacing a boiler and with payback being in four years. Or less, considering the mounting repair costs for the old unit. I'm also well aware of how hot Arizona gets. If you use CFL or LED lighting you can save money on A/C. Additionally, switching to a heat pump for water heating has a good payback. Lastly, on the issue of cash flow, I think that government incentives should be geared towards no interest loans for upgrades, with a special emphasis on replacing oil boilers and furnaces with gas. Paying 30% is not the same as financing. Some municipal governments already do this by attaching the loan to the property taxes. When the property is sold the debt goes with it. |