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

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Decoupling, Stupid

16 06 2010

One way the utility business works like the rest of the economy is that it sells its products/commodities at a price that is higher than the cost of production, on average.  The more utilities sell, the greater their gross profit.  This is at odds with utilities’ incentive to save energy with energy efficiency programs.  As a result, some utility executives are opposed to energy efficiency programs.  That is a short-sighted view but that’s a story for a different day.

As a result of this dichotomy, a pricing mechanism known as decoupling has been developed.  This NREL paper gives a pretty good overview.   It says simply that “Decoupling is a rate adjustment mechanism that breaks the link between the amount of energy a utility sells and the revenue it collects to recover the fixed costs of providing service to customers.”  There are a number of specific ways to do this, some of which are described in the NREL paper, but the bottom line is utilities are less reliant on sales for their well being.

This may seem like an ingenious idea, but I see a lot of significant, if not major hang-ups.  One of the benefits is reported to be price and revenue stability.  But here’s the problem as I see it: revenue stability equals profit volatility.  Take the lousy economy we’ve had the last couple years.  Utility sales are way down but the utility keeps collecting bills that are closer to the long term averages, which means prices increase (if I know math, and I think I do).  They are selling less but there is this decoupled “fixed” cost pasted to customers’ bills.  Good for them.  What about the customers?  They are cutting back on everything due to wage pressures, layoffs, production cutbacks, and lower profits.  So what do they get in return?  A higher energy costs per unit purchased, just what they don’t need.

The opposite is also true.  Say we get a really hot summer.  Now the utility has to sell, and generate or purchase a lot more energy.  In this case, a lot might be 10% more, but that has a huge effect on price.

I just watched a demand response webinar.  Demand response incentivizes customers to cut back during peak periods when energy costs are very high because everything but homeowner’s Honda generators are putting power on the grid.  One way to deliver demand response is to pass the cost of putting the last kilowatt of power on the grid.  I don’t know where the last kW comes from for sure, but it’s way expensive and for good reason.  As full capacity is reached, power generators (companies) either charge the arm of your first born or we get brown outs.  So when the utility passes this cost to the customer the cost is huge, like 5-10 times normal cost.  Peak power is very expensive.

Back to the hot weather.  Now the utility has to sell all this really expensive electricity with less ability to recover (1) the extra high price of electricity and (2) the larger volume of energy delivered.  I suppose if you have real-time pricing described above, this will be mitigated.  But many states including MN and WI have decoupling pricing mechanisms in place, but practically no demand response or real time pricing.  The decoupling in MN and WI is news to me, but if NREL says so, it must be true.

So it seems to me that decoupling presents at least as many and as big of problems as it solves.  Did Washington come up with this?

When I interview with job candidates I usually explain the utility market and why energy efficiency programs are implemented –to keep costs down by delaying or avoiding the construction of power plants, poles and wires.  Again, it seems to me decoupling is at odds with this because the intent is to protect revenue, not prices.  If you protect revenue the “societal” benefits would seem to be lower to me.

In general, not just talking about utilities, decoupling supply and demand is a horrible idea.  Despite all the political bomb throwing regarding healthcare, the number one cause of soaring healthcare costs, which continues to go unaddressed, is the decoupling of premiums and services rendered.  For decades the system worked like this: pay a flat rate and consume all you want.  It doesn’t take a genius to predict what will happen.  In California, they kinda sorta deregulated the electricity market last decade.  They decoupled generation from delivery, deregulated wholesale prices for the utilities but capped consumer prices.  Result: utility bankruptcies and the Governator in a recall election.

I am not saying decoupling is going to result in any sort of disaster like these examples, but messing with Econ 101 supply and demand is almost never a good idea.  If we want to protect revenue, why not just build it into the rate case.  Societal benefits may take the same hit, but at least customers pay for what they consume, “real time”.

If we want to control consumption and keep prices in check, we need all the market effects of supply, demand, and pricing that we can get.  A complete free for all would go too far for a bunch of reasons I’ll save for another day, but we need more pricing response, like demand response described above, not less.

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





EE Lemmings

25 05 2010

Automobiles have really changed over the past 30 years, and in some ways for the worse.  Back in the 1970s before hardly anyone purchased imports, imports were small and domestic vehicles were hulking behemoths.  Then it was the second, or was it the third or fourth – doesn’t matter – energy crisis hit in the late 1970s and domestic cars shrunk in a big way.  The Ford Mustang went from a muscle car to feeble runt.  A 1982 Mustang was the first car I owned.  It was also by far the crappiest car I ever owned.

This was the first giant step for domestic auto makers toward import fuel efficiency and of course it was disastrous.  Millions of buyers experienced the same thing I did and did the same thing I did; started buying imports and never went back.

Getting on with the topic at hand – just look at how automakers of all stripes and origins have morphed into the same styles.  Let’s look at how the Ford Taurus (formerly the LTD), Honda Accord, Volvo, and BMW 535 have changed from 1978 through today.

1978

2010

Back in the day, you could look at a silhouette of a car – or better yet, I could draw it on paper and you could tell what brand it was, and I draw as well as I play violin (I don’t think I’ve ever had my hands on one).  In 2010, all you have to do is change the front grille and unless you study cars like an anal-retentive buyer with every issue of Consumer Reports and Buyers Guides for the past five years, you would never be able to tell what brand they are.  They only have a tiny vestige of auto heritage left in about one square foot of the front of the vehicle.

Here’s an entrepreneurial thought: the “import” makers should sell optional “domestic” front ends and leave their stores open around the clock.  This way the few remaining people who wouldn’t be caught dead in an import could sneak in the back door with a big hooded rapper sweatshirt on at 3:00 AM Monday morning and drive out with a car they really want and nobody would ever know it’s an import.  Their parents would let them in the house.

This paragraph is a bit of a guess because I’m not THAT old to know for sure.  Over the same period of 30 years, energy efficiency programs have “evolved”, more like devolved, in the same way.  Back then there were few efficient technologies (products) and energy efficiency required brain power.  A portfolio of programs probably got the most savings from custom measures like upgrading systems and controls, replacing controls, adding heat recovery, changing incandescent lighting to fluorescent and boring building envelope improvements.  Compact fluorescent and T8 lighting, if they existed back then, probably cost as much as the modern laptop   Check out that baby!

In 2010, program portfolios are like modern cars.  Just take the utility logo off one and slap on the next logo and voila, ready to launch.  They typically consist of prescriptive incentives for residential lighting, heating and cooling, appliances, appliance recycling, and maybe ENERGY STAR® new construction; and commercial and industrial prescriptive incentives for like categories plus maybe commercial new construction and retrocommissioning.  Prescriptive measures, those that receive incentive for achieving some equipment efficiency threshold, probably account for 80-90% of savings – more for newer programs, maybe less for mature programs.

Program implementation has become a marketing campaign for technologies; efficient versions of everything available in the marketplace.  There is nothing wrong with this, but codes and standards can drive these.  Take the home furnace.  Is there any need for an 80% efficient non-condensing furnace anymore?  Any contractors who install 80% efficient furnaces should be fined, speaking facetiously.  It’s just stupid.  Compact fluorescent lighting is pretty much in the same category.  This gravy train of easy savings is about to end as incandescent lighting is phased out.  Moreover, I would say the market has already transformed to CFLs and possibly not even for energy efficiency.  Many consumers choose them because they don’t burn out.  Less maintenance and pain in the kiester to keep up with failing light bulbs.  In commercial and agricultural facilities, these maintenance savings swamp energy savings.  People are expensive.  Good light bulbs are not.

Some states are sharply increasing goals and what are program administrators doing in response?  More of the same.  Some are just increasing incentives, even doubling them in some cases.  This is like trying to significantly cut federal spending and taking entitlements and defense off the table.  There isn’t much left to work with.  Cost premium of efficient stuff is only one barrier to energy efficiency.  At some point, you could literally give away efficient stuff and still not meet goals.

Program administrators and utilities need to put everything on the table and go back to the early days of custom efficiency, and comprehensive energy retrofit, retrocommissioning and demand response for commercial and industrial facilities.  Industrial programs are woeful all over the country, including in California.  Measures like “pump off controllers” for oil wells and numerous oil refining measures are complete free riders – measures that would happen regardless of any efficiency programs.

Administrators also need to think outside the box with “incentives” as well.  There are many ways to do this but I’ll have to save that for another day because I’m out of time.  But for now, let’s just say to take it to the next level, administrators are going to need custom measures, which requires engineering expertise.  It looks good for us!

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