Taking on Parmenides

23 09 2010

We do a LOT of energy efficiency program evaluation and measurement and verification work all over the country; make that North America.  Program evaluation consists primarily of process evaluation (process) and impact evaluation (impact).  Our work is almost entirely in the impact side and I know just enough to talk dangerously about process.

Impact is the analysis of what energy savings are really attributable to the program.  This includes verifying the physical installation and determining the actual savings using some sort of engineering analysis.  This actual savings is known as gross savings in the business.  It also includes determining whether the program actually influenced the project to happen.  For example, some would do a project or buy an efficient piece of equipment regardless of the program and just take the money because they can – and hey, they are paying into the program so there is nothing wrong with this in my opinion.  These program-influence factors are applied to the gross savings to determine net savings – savings the program can take credit for.

Largely, evaluation teams consist of economists (impact and process) and engineers (impact) although there are many people with liberal arts degrees in the business as well.

Many times in determining the gross savings we get into spats with program implementers and sometimes utilities regarding what the actual savings really are.  Many times for large custom projects, the energy analysis we have to evaluate varies from pathetic to essentially non-existent.  “We installed a control system.  Savings = 15%.”  That’s it.  Analyze that!  Other times we will have an actual analysis and just plainly an incorrect application of engineering and physics or the operating conditions are much different than originally assumed.

Last week we were preparing to do impact for a huge low income weatherization program.  Past evaluations for that program have turned up results that are only a fraction of what the utilities think they ought to be.

Consider how to estimate heating savings in this case.  A house is heated by natural gas, which is also consumed by other appliances including possibly a stove and a water heater.  The analysis is easy.  You can see on the monthly billing data (gas consumption) how much gas is used to heat the place.  It’s everything above the June through July average.  Savings in this case are more or less proportional to the consumption for heating.  It is as plain as the nose on your face.  But the utilities think otherwise.  While I certainly don’t want to arm them with any arguments, they could use Parmenides, the 2500 year old and dead philosopher.

I took a four credit philosophy course as an undergrad.  The discussions in class seemed bizarre but definitely thought provoking.  If you haven’t studied or read philosophy, you would most likely think it bizarre.  But I am far, far, far (way far) from an expert on the topic.

One thing I remember discussing at length was, what does it mean for a being to be?  Is there really anything that exists other than your mind?

I had to do some “research” to find philosophical terms.   I’m talking about idealism.  Idealism is the argument that your mind is all that exists and that the world is mental itself or an illusion created by the mind.  Sound bizarre?  Not so much if you think about it.

You’ve probably seen the HDTV ads that have stuff jumping out of the screen – like the picture is so real viewers purportedly see footballs flying out of the TV, right at them.  Consider a person comes into my office and I ask him what he sees out the window.  After a looking around to make sure he’s not on candid camera, the answer is: Coney Island hot dog joint and Deaf Ear Records.  “Really?”, I respond.  How do you know?  I can see it.  How do you know it’s not just an illusion?  How do you know it’s not the world’s most expensive and lifelike television?  Good God!  I can go downstairs, cross the street and touch it.  What more do you want?  I can prove motion is an illusion and that you won’t really go anywhere, much less get out of this room, but that’s beside the point right now.  So go ahead and touch it.  What does that tell you?  Why do you call it Coney Island?  It says so.  Really?  How do you know?  I can read it.  Read what?  By touching it?  Why don’t you ask that guy who just got off the plane from Moscow what it says?  You can’t prove anything.  It’s all an illusion formulated in your mind.

The sky is blue.  OK.  But what if blue in your figment-of-imagination world would be green in my world?  Who is ever going to know?  We can both look at the same color and declare it to be the same thing – yeah sure, it’s blue.  But a color is a color only because somebody told you so way back when and you correlated it to what you saw and it has been as such ever since – in your fantasy world.  What is the definition of blue anyway?  My dictionary defines it in part as the color of a clear unclouded sky.  Great.  That doesn’t explain anything.  What color is a blue car under a clear unclouded sky… AT NIGHT?  Why don’t you ask that color-blind 100 lb rodent that is eating the seedling I just planted what color his snack is.

This brings me back to the illusionary energy savings.  Now that we know energy savings like everything else is all an illusion anyway, we can fool ourselves and put any number to it that we want.

Quite possibly, the program evaluation industry may be a gold mine for out-of-work philosophers and theologians!  Utilities could have a team of philosophers to take on the evaluation team’s philosophers.  Engineers and economists on the evaluation team would argue with their counterparts on the implementation team regarding the illusionary savings and the philosophers could duke it out over… something.  See what I’m sayin?  If so, it’s just a figment of your imagination.  These people only exist in your mind.

Epilogue

For more on Parmenides, see this article, and in particular the Achilles and Tortoise paradox.  Since learning that we still earn vacation while taking vacation (eons ago), you never need to return to work.

I earn roughly 3 hours of vacation every week.  So if I take a week off I’ve used 40 hours but earned another three.  I’ll take those three Monday morning, but I’ve earned 0.225 hour during those three hours.  While I take that 13.5 minutes of vacation, I earn another minute.  And it goes on forever, like eternity.  Now do you think this philosophy stuff is stupid?

Contest

Above I said I can prove motion is an illusion.  That was a lie, at the time.  Since I’m telling you it was a lie, it isn’t, is it?  On “The Big View” website, number 3 from Zeno attempts to prove motion is an illusion.  For $10, explain why his hypothesis is wrong.  The best answer wins, unless they are all horrible.  Prize money will be split in case of a tie.  If there are 10 or more correct answers, it wasn’t difficult enough so no prize.  Contest ends September 30, 2010 AD.  Send responses to kjk@michaelsengineering.com.  There is a 50 word limit.  Responses that are too long will be rejected.

written by Jeffrey L. Ihnen, P.E., LEED AP





ACEEE Summer Camp 2010

24 08 2010

Well here I am again – a prisoner in the penitentiary that is the Minneapolis Airport.  Northwest Airlines now part of Delta Delta Delta can I help ya, help ya, help ya (YAH! – you can get me the hell out of here) can’t fly through a swarm of mosquitoes without being delayed.  This is the burnt crust on the dessert that was otherwise a great week.  And as usual, I can’t help but sit here and ignore the MASSIVE amount of energy gobbled up by this place.  It’s a bowl of hot soup outside.  It is about 68F inside and the baseboard heaters are roasting away.  Typical.  If we couldn’t cost effectively save 2 million kWh and a hundred thousand therms per year in this place, I would be ashamed.

OK.  That’s a lead-off mini rant.

This past week I attended the American Council for an Energy Efficient Economy’s Summer Study (i.e., summer camp) at Asilomar (a-SILL-oh-mar) conference grounds in Pacific Grove, CA.  It is quite a massive conference with about a thousand energy efficiency professionals from all over the country and a few international attendees.  The Aussies always seem to have a contingency there.

The conference features 11 panels (which I would call tracks) on residential and commercial issues including (1) residential technologies, design, performance and analysis and (2) residential program design, implementation, and evaluation.  Then there are the same two tracks for commercial facilities and programs.  There is one for utility programs, market transformation, human and social dimensions (behavioral issues and programs), and four others.

It’s a great conference featuring many great presentations.  Each track features six papers per day for five days: 11 x 6 x 5 = 330 papers, roughly!  Most of the ones I attended were at least partially interesting to me but on average were very good.  But this is the Energy Rant.  There has to be something wrong or what’s the point?

There are two comments / complaints that I had generally for many of the presentations.  First, I thought the military, followed by engineers, were the worst offenders of overusing acronyms.  No.  There were plenty of acronyms flying every which way.  I’ve been in the industry 15 years and there were many that were new to me.  If you’re like me, as soon as somebody says something and I’m thinking to myself “what the heck does that mean”, I’m stuck there trying to figure out what HIM means while the presenter drones on.  HIM is not the opposite of HERS in case you were wondering, but most people in the industry I am sure don’t know what HERS is either.  Some examples (and these are just the tip of the iceberg):

  • One presenter was talking about RCAs.  Somebody in the audience asked what an RCA was and the response was, “it’s a diagnostic tune-up”.  What?  How do you get RCA out of that?  As it turns out it’s a refrigerant charge and airflow maintenance program for residential.  We’ve been evaluating those for the past two summers but I hadn’t heard this term before.
  • HIM = high impact measures.  I might file a gender bias charge here.  Why not highly efficient retrofit?  Does NOW know about this?
  • EEPS = energy efficiency portfolio standard.  In case you’re still wondering, this is the guide for soup to nuts energy efficiency programs – plan, design, develop, promote, implement, and evaluate.
  • MHP and how it integrates with CHP and RTP.  OK.  I know CHP = combined heat and power so MHP is something like that.  Maximum heat and power?  No.  Mandatory hourly pricing, which is a tariff or billing method used in the state of New York.  RTP = real time pricing.  As I understand it, MHP is the same as day ahead hourly pricing, which is just what it sounds like – Hourly prices are set for the next 24 hours so large customers that this applies to can plan rather than get charged in “real time”.
  • CPP-D.  While I sat in this one I figured out most of this – critical peak pricing –  fairly early on.  What the ___ is the D for?  Never figured it out until I got home and read the paper.  Default, as in critical peak pricing default rate.  Is this a default like defaulting on bond payments or default like the automatic standard value?  Neither.  It’s a rate, as in tariff.  And by the way, if they had used CPP-DR for the whole thing it would really be confusing because DR is “default” for demand response.  The acronyms are getting used up, folks.  Coin ‘em while you can!
  • CRC.  This one relates to the CPP-D above.  It is customer reservation charge.  This is the 50% of the customer’s summer peak protected from CPP rates.
  • CEAC.  This one cracks me up.  It is clean energy application centers.  What the ____ does that mean?  This was used in the presentation but does not appear in the paper.  The paper also fails to even explain what it is.

Ok.  That’s about enough of those things.  This is only a small fraction of the acronyms found in the presentations and papers that I attended/read, and by definition, I attended less than 10% of them even though I went to all that I could.

Another thing I noticed is that many of the presentations/papers were analyzing the bajeebas out of the finest details like air handling systems and daylighting.  This included what every terminal (zone or room) unit was doing every minute of the day versus what the controls was telling the stuff to do and how to model venetian blinds in a daylighting application.  Five minutes into these presentations I’m thinking, what on earth are you going to do with these data?  I’ve contended before that using ice cores and tree rings to determine what the climate was doing a million years ago is like measuring your garage with the car odometer.  Whatever you say!  These studies, however, are like measuring the distance from San Francisco to New York with a ruler.  Just the opposite.

Lastly, I can’t help but beat on government again, because it’s so easy.  The EPA was a platinum sponsor.  Bonneville Power Administration (BPA) and National Renewable Energy Laboratory (NREL) were silver sponsors.  Sponsorship is for advertising.  Why are these federal agencies spending my money and their competitors’ money to promote themselves?  All they have to do to stay in business is be sure to always spend at least 100% of their annual budgets and keep asking for more.  And results?  Fuggedaboutit!  Vinnie and Joey take care of that.

To end on a high note, California is a great and beautiful state.  It’s just too bad Sacramento, which is also a great city, has it so screwed up to the point that industries are fleeing left, right and sideways.

I conclude everything causes cancer in CA.  My motel room contains materials that are proven to cause cancer and birth defects.  No kidding.  This was posted right outside my motel room door.  If you read the literature that comes with your car, that too causes cancer and birth defects.  I would say the driver is more likely to cause severe injury or death than the upholstery.  These are symptoms of a psychotic state government.

So that wasn’t a high note.  If you haven’t visited California’s central coast, do it.  From Big Basin (ancient redwoods and sequoias) to Santa Cruz, Monterey, and Big Sur.  There are sandy beaches, unbelievable forests, rocky shores with tide pools with all kinds of wildlife, and some of the best farmland in the world – strawberries, artichokes, and garlic to note a few.  There is very little syrupy crappy tourist pits along the way too so it keeps the riffraff out – or maybe there are no tourist pits because there is no riffraff??  It is colder than most people imagine, this year more than average per the locals.  It never got above 65F and mornings featured fog and about 52F.  Perfect weather in my world.

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written by Jeffrey L. Ihnen, P.E., LEED AP





IPO Return, Treasury Risk

13 04 2010

If there’s one thing that most people painfully realized over the past couple years, it’s that there is risk in putting your money in anything in hopes of earning a return on investment.  Riding a company into bankruptcy is an obvious one.  I’ve done that several times by investing in fast-growing start-ups, initial public offerings (IPO) and stock options.  Invest $3,000 for 100 shares of common stock and a few years later the company emerges from bankruptcy (isn’t that a cute phrase – it sounds like a daffodil blooming in spring but it’s more like rummaging for your charred silverware after your house burned to the ground) … anyway that investment may “emerge” at 10 shares worth $6 apiece, or if they liquidate you get a check for 36 cents.

If you avoid Bernie Madoff funds, you can greatly reduce your risk by buying mutual funds, which more or less track the entire stock market.  Corporate bonds might be next.  In the case of bankruptcy, provided the government doesn’t take over the company, you are first in line to get your money back.  Next might be U.S. government bonds but I wouldn’t go near them now as their value moves in the opposite direction of interest rates.  Just take a look where interest rates are now compared to historic numbers and do the math.  You CAN lose a lot of money in bonds.  Then there are money market funds that invest in super safe short term treasuries, but right now you earn about nickel a month per $1,000 invested.  Finally, there’s cash in the bank, which earns even less or zero but at least the first $100,000 is insured by the feds (the minimum was increased to something but I don’t care).

Commercial and industrial facility owners can invest in energy efficiency.  Lighting would be the bonds of energy efficiency, with the exception that you’re virtually guaranteed a return on investment as long as you can do 5th grade math to ensure you aren’t being ripped off.  Beyond that, the vast majority of energy efficiency projects carry the full gamut of risk from guaranteed savings (which isn’t free) and just buying a new piece of expensive equipment or system that may not save you a dime or could even increase your energy costs.

The big money is in custom measures and the risk varies depending who is identifying the opportunities and who, if anyone, is calculating savings.  If you browse our website you will find we identify measures and quantify savings all the time.  For many large projects we take a two phase approach to the analysis.  Phase 1 is to identify opportunities and guesstimate cost and savings to within plus or minus 40%, which means a project guesstimated to have a 2 year payback may actually have a payback from less than a year to more than 4.5 years, with the most likely being 2 years.

Phase 2 is a detailed analysis, sometimes with quotes from contractors, and energy analysis based on specific equipment performance characteristics, construction documents, and metered data.  After Phase 2, the guesstimates are sharpened to within plus or minus 10%, perhaps.  Now that 2 year payback would range from 1.6 years to 2.4 years, with the most likely being 2 years.

So energy analysis can take your project from a completely unknown return on investment to something that is close to guaranteed, and if you want, that can be added too.  The cost of hiring a firm that knows what they’re doing, delivering both quantity and accuracy of cost and savings estimates, is considered by end-users to be anything from reasonable to outrageously expensive.  Owners with smaller facilities and especially government ones tend to be at the latter portion of that range.  Large industrials may be closer to the front.

But the kicker is, utilities that run efficiency programs often pay for a good share or all of the energy analysis, sometimes even both phases of analysis described above.  But yet, end users may baulk.  We recently completed phase 2 analyses that largely demonstrated our phase 1 estimates were pretty good and some representatives of customers were scoffing that phase 2 was a waste of money.  Well look at the “uncertainty analysis” above and tell me, would you use “free money” from the utility to shore up your investment certainty before you invest a dime to implement anything, OR NOT?

As my colleague says, “It’s a no BRAINER!  Gee willikers!”

As an investment, an energy efficiency project may pay for itself four or five times or even more over its lifetime.  Peter Lynch who ran the Fidelity Magellan fund during the 80s would call doubling your investment a one bagger; tripling, a two bagger and so on.  This makes energy efficiency a likely two bagger and in many cases a four bagger.  It’s a home run with the risk of a money market fund.

Why doesn’t everyone get on this ride?  There are many reasons; some good ones and some utterly stupid ones.

written by Jeffrey L. Ihnen, P.E., LEED AP