Prudes Trafficking Cud

10 05 2011

Having been in the EE industry for 15+ years and regularly attending conferences around the country (for just a few years), I find myself being volunteered to contribute to these conferences with planning, presenting papers, and “peer” reviewing others’ papers.  The planning, peer reviewing, and being peer reviewed are learning experiences as I gain awareness of how others think and what they find interesting and important.  I say “awareness” and not necessarily “understanding” because quite frankly, the way some people think, baffles me.

For example, I was talking with a gun collector the other day and prior to this I had thought people collected weapons like some people collect motorcycles.  They just clean and polish them weekly, talk to them like house plants and adore their magnificence.  Wrong.  He likes going to the range and shooting them.  I can understand this because I on the other hand enjoy going to the beach and skipping silver dollars off the water.  I get a rush from feelings of wealth and power as I do this.  This is not all.  I take a Porche 911 to the beach with my rolls of silver dollars because it would be really deflating to climb into the 2002 Honda Civic after my fill of dollar skipping.

The dollar-skipping Porsche story is a lie but I was just trying to draw a comparison to the weapon thing and came up short.

I am in the midst of reviewing some papers for the International Energy Program Evaluation Conference (IEPEC), but fortunately they are not boring.  In fact, I even used the overarching results from one of them as a lever in a recent proposal I wrote.  I reviewed them and presented one round of comments to the authors and I truly hope they found my comments to be beneficial and constructive to improving their papers.  My comments included suggestions like moving and rearranging some things, rewriting some sentences I had to read several times to understand, separating these from those, and I found a few typographical errors.  I thought I had written quite a few comments and I hoped they weren’t PO’d, and after hearing back, I don’t think they were.

However, I also had the chance to review comments others had written for peer review of papers our staff (not I) wrote for the ACEEE Summer Study for Industry.  Whoa!  Some were quite nasty, and likely written by an academic / government prude, anonymously of course.  Some of the findings, paraphrased to be more like Wonder Bread than a habanero pepper, are provided below.

No references documenting similar work.

The topic of the paper included a financing program for energy efficiency programs that has worked spectacularly.  The paper essentially started by saying utility financing programs suck, which outside the program(s) discussed in the paper is a universal truth.  Do I need a reference to prove the Minnesota Vikings have never won the Super Bowl?  Do I need a reference to say they blew three conference championship games since 1998?

I use references when I’m uncertain of something or if I am saying something controversial or hard to believe or as you can see below, to make a point.  If I know what I’m talking about, I don’t bother with references.

Papers should include mostly the author’s expertise, gained knowledge, and wisdom of his experiences, not a compilation of other peoples’ work.  Do we want high school term papers or real-life EE market experiences and lessons learned?  Quite frankly, when I reviewed the IEPEC papers I paid no attention whatsoever to the references (don’t tell the prude police).  There were plenty of fresh data to chew on and sitting here today a couple weeks after those reviews, I don’t think they needed any references at all.

No data to back up the premise.

This was ridiculous.  Data were clearly provided to demonstrate the wild success of the reported “financing” program.  There wasn’t much data to show other financing programs suck, but I don’t need a study to tell me beer from a major league baseball game is more expensive than beer purchased from a grocery store either.

There is plenty of research on barriers to EE in scholarly publications from think tanks like ACEEE or from the DOE and national laboratories. 

The DOE?  Is this the same DOE that promoted the destruction of millions of dollars worth of working assets as economic stimulus – i.e., throwing rocks through windows to spur economic growth?  I used to work for the DOE.  I don’t need the DOE to tell me the barriers to EE.  Scholarly?  Ha ha.  It is to laugh.  (Daffy Duck)

I’ve seen lists of EE barriers and they typically miss one of the 800 lb gorillas.  One of the most notable lists of barriers comes from the 2009 McKinsey study.  A basic barrier I don’t see in their list is lack of time due to competing priorities of end users.  Since lack of time isn’t noted, is it therefore not a barrier?

One ACEEE paper, which in fact looks pretty good, does not mention risk aversion as a barrier.  I can tell you, risk aversion is a major barrier.  Many projects will not go forward without a performance guarantee.  Since risk aversion is not noted, is it not a barrier?  Maybe it is merely an obstacle!

Lacks the intellectual rigor that ACEEE requires.

Don’t rock the boat.  I think I’m going to throw up.

This sort of comment casts a cloud over ACEEE in my mind.  To be clear, I like ACEEE.  They put on good conferences and produce/sponsor some informative papers – stuff I can use.

Reads like an advertisement and offers no new information or analysis.

This is entirely bogus.  The word “Michaels” does not appear in the paper.  Yet I review one (1) paper from the last summer study for industry – one that is close to home involving Focus on Energy – and “Focus” is noted no fewer than 31 times.  For example, Focus:

  • promotes savings and technologies through
  • is a statewide energy conservation program (not efficiency?)
  • is managed by SAIC
  • program’s success comes through their active (should be “its”, not “their”)
  • program’s success results from leveraging
  • program tends to be vocal promoters
  • energy advisor has reviewed and blessed (blessed?  This is the intellectual rigor he talks about?)
  • absent a program such as Focus on Energy, would not have been installed
  • blah, blah, Focus, blah, blah

Nope.  No self promotion here!  I believe the prude should review some past works.

Ok.  I had to sneak a peak at one more paper; this time from one of the benevolent, intellectually superior, omniscient, and of course objective DOE laboratories.  This one was on the salvation that wireless technology will bring.  Have a seat; empty your mouth of any food or drink.  The paper was co-authored by a vendor of the technology using analysis provided by Honeywell.  Suely, there is no agenda or self interest in this one.

To once again clarify myself, I do not begrudge anyone for tooting their horn.  Anyone who thinks busy professionals write papers and present results at conferences with no self interest is a naïve stupe.

There is limited evidence to support the conclusions.  There is a small out of date case study but it lacks justification for any of the assertions.

C’mon dude!  The results:  Traditional financing programs: 0.  Subject “financing” program: savings of 1.5% of sales for many years.  In case you are new to EE program goals, 1.5% is enormous, like the Oregon Ducks averaging 47 points per football game or the Badgers scoring 83 points in one football game last year.  Both are incredible.  Don’t believe it?  Look it up yourself, prude!

I do not want to read high school term papers of reconstituted cud.  I do not want to read a doctoral thesis or six-line sentences full of four syllable words.  I want to read something I can use or at least find interesting.

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

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EE: LOOK and THINK!

9 02 2011
An overarching theme of the Energy Rant is that much energy policy has a feel-good foundation of fluff.  Last week I ranted about the feel-good dream of having plentiful, inexpensive renewable energy.  This will take a miracle because conventional sources are still huge and growing.  We have enough coal, natural gas, tar sands, oil shale, and offshore energy to last beyond our kids’ great grandchildren.  Of course most readers of this are champions of energy efficiency, but energy efficiency also has too much feel-good fluff.

Consider compact fluorescent lights, which despite my rant about it’s mandate a few weeks ago has been a fantastically successful development from the private sector sped along with the aid of EE programs.  That market has been pretty well transformed, especially in states with high rates and years of EE programs behind them.  Here’s the “problem” – the program has been successful.  The market is transformed.  Programs can no longer take credit for it but they don’t want to let go of the “savings”.  Well c’mon! 

This guy’s letter from the National Resources Defense Council illustrates this.  He is responding to a recent Wall Street Journal opinion piece describing the “ineffectiveness” of California CFL programs.  An independent evaluation of the program demonstrated that savings were much less than claimed.  Sounds familiar per our first hand evaluation of some similar programs.  He says the op-ed is based on a “consultant report that makes arbitrary and unsubstantiated reductions to the benefits of the compact fluorescent lamp program”.  Well if that isn’t the cat calling the kettle black.  Talk about unsubstantiated.  I’m sure there’s nothing in the report to back up its conclusions.  The guy probably hasn’t even read the executive summary.

Per our experience, this hack’s comments are unfortunately not uncommon.  Utilities, program administrators, and implementers do not want to be told their programs are saving less than they claim – as they almost always are.  I’m not sure who did the above evaluation in California but I will bet my house that they did not underestimate savings because: (1) it jibes with results we see for similar programs and (2) evaluators do not hammer savings for fun because it can lead to confrontation.  We tell it like it is; not how someone wishes it would be. 

We’ve recently completed impact (savings) evaluations for programmable thermostats; let’s just say in a state with a temperate climate – a state that has been lampooned in this rant a couple times.  A programmable thermostat is 98% a heating-energy-saving technology.  In the referenced temperate climate, where you can heat the entire house with a toaster oven, or at most your basic kitchen oven, what do you expect?  Even in states that need heating, the attributable impacts can be tiny.  Reasons for poor attributable savings include customers not using their furnaces; they were the programmable thermostat, programmable thermostats replacing programmable thermostats, and programmable thermostats in permanent override. 

Impact evaluation for residential end users is often done by billing regression, which is a sexy term for comparing the bills before implementation to the bills after implementation and making appropriate adjustments.  Consider evaluation for programmable thermostats with the only gas-using device in the home being the furnace.  Billing regression is the ONLY way to go.  Any engineering analysis is going to have much lower precision and confidence.  But noooo!  The program people didn’t like the regression results.  Can we “engineer” savings? NO! 

The other thing I’m seeing is rules changes to capture more savings.  Incentives are limited by total dollars per year per customer, minimum paybacks, and maximum percentage of measure cost.   This of course protects against free riders.  Then there is the incentive itself – how much incentive is there per kWh, kW, or therm saved?  Some utilities are greatly increasing incentives, lowering payback limits, and increasing annual payout limits.  Does this result in more attributable energy savings?  Probably not much.  Evaluations will probably show they are mainly making more projects eligible and thus claiming more savings.  I estimate free ridership will go up a lot.  Program evaluators walking into the evaluation of these “upgraded” programs should prepare for pushback and maybe a little firestorm in some cases. 

Some utilities whine to regulators that they’ve already done a great job of saving energy and all the easy stuff is gone (hence the expanded pay out and slackening rules discussed above).  I don’t buy it.  First, their 20th century programs are running low on remaining opportunity.  Could be, but there are alternatives if they AND the regulators would open up to program innovation.  Second, opportunities are created every day by engineers, architects, contractors, building owners, tenants, the milkman, janitor, cooks… you name it. 

I haven’t seen any studies yet but I would bet there is more opportunity for cost effective measures in NEW buildings – ones that are already built.  You just need to be capable of seeing the hand in front of your face and know how to “read” – i.e., understand what you are looking at.  Buildings are loaded with opportunities we find but rarely see coming out of programs.  Why?  Perhaps because in many cases there is no equipment to sell.  Examples:  grocery store has a main air handler maintaining 75F in the space and at the same time an adjacent one is struggling to maintain 70F.  The little one is cooling like crazy in the summer and pumping cold outdoor air all winter to try to get to 70F while the main unit is burning gas like crazy to make up for it.  Obviously, this is an incredible opportunity and a very simple concept.  Somebody just has to LOOK.  And THINK!  This is far more common than a congressman would ever imagine.

In another program evaluation, the administrators were whining about the difficulty of capturing gas savings even though programs are new to the state.  Good grief.  The only reason gas savings are “difficult” to capture is there is no gas lighting technology.  So as directed by the utility, I provided maybe a dozen major gas saving opportunities that apply to many facilities, I think all of which were for commercial and industrial end users.  “Oh, we are already aware of and understand these technologies and applications”, say the implementers.  Uh huh.  Sure.  And we haven’t seen any yet for some reason.  Reminds me of Cliff Claven
 
written by Jeffrey L. Ihnen, P.E., LEED AP




The Delectable Light Bulb

13 10 2010

The Wall Street Journal this week weighed in on the ban on incandescent from the energy bill of 2007 signed by Bush to phase out the incandescent light bulb by 2014. Naturally, their opinion is that banning products that are essentially harmless and in demand from citizens is bad policy.  As usual, I have multiple points of view on this issue as well.

First, I agree with the WSJ that ramming things like this down peoples’ throats is never a good idea.  It appears that next month we are going to see the political fallout of such lawmaking processes.  In the energy efficiency business we have to remember who we are ultimately working for – energy consumers.  There are already plenty of foes of energy efficiency programs.  The last thing we need is a public uprising against EE.  Ultimately regulators are appointed by governors.  I don’t really want to see a candidate ride a wave of uproar into the governor’s mansion on a platform with planks to dismantle EE programs.

If governments want to impose EE and other green standards for their facilities, that is fine by me as long as they are not completely stupid with my tax money. Wait a minute – Snap out of it Jeff… I must have nodded off to the land of gumdrops and lollipops – I was talking about Washington using money wisely and miserly.  That will happen as soon as San Francisco makes its way to Juneau by movement of tectonic plates.

As I recall reading an article in one of the greenie publications I get, an author also thought it is bad policy to ram LEED requirements onto the private sector.  I agree.  It is our job to sell the public on energy efficiency by reward not by training up and deploying an army of the green police.

Secondly, keep the feds out of this kind of stuff because they have a habit of writing bills and passing them without any knowledge of what is in the foot-thick stack of paper they are voting on and/or they are ignorant of the costs and benefits and certainly the consequences the bills they fight over.  Do any of them even use CFLs?  Do they have any concept that they take a minute or two to reach full brightness from a pretty darn dim start?  Do they have any clue that CFLs are even worse at starting in cold conditions and never do come up to rated brightness in many of these cases?  Have the Vikings won the Super Bowl in the past 45 years?

Compact fluorescent light bulbs have their place for sure.  I use them wherever there are significant burn hours.  But there are many poor household applications such as closets, pantries, refrigerator, outdoor lighting, and bathroom lighting (at least for men – ooooh!).  Sure, I could get LED lighting for these applications and those would pay back in… see the San Francisco / Juneau connection above.  Somebody needs to figure out how to get CFLs to come up to brightness in a few seconds and work in cold weather.

So as usual, congress passed something that is undoable.  No.  I’m not going to bother to read the law because I’ll be locked up in a seizure after reading (or trying to) just a few pages because it is so painful to read and understand.  Come to think of it, how can a ban on incandescent bulbs take more than one page of typed text?  Actually, the repeal is two pages.  Give that man a bubble gum cigar for brevity anyway.  Incandescent lights will still be manufactured or there will be a major rebellion.

Compact fluorescent bulbs have dropped in price by 80-90% in the short 15 years I’ve been in the business.  While they still only make up 10% of installed residential bulbs as stated in the Journal, they are flying off the shelf at three times that rate.  The market is clearly swinging in the CFL direction.  My mother, as one example, has installed them in most of her fixtures and while I hate to admit it, I had no influence on that.

Tidbits

Last week I made up a story explaining how energy efficiency results in more energy consumption as consumers have more money to spend on things.  The story started with steel manufactured in China, shipped to Ontario, tires coming and going and so forth.  That was a lame attempt at the insanity.

I popped this open on Sunday night and it tracks a series of manufacturing events I should have dreamed up.  Rio Tinto, a huge international mining company, mines and ships iron ore from Australia to a steel plant in China.  There it is processed into plate steel that is shipped to Caterpillar’s Decatur, IL plant that builds the behemoth dump trucks – the ones that look like Tonka trucks but their tires are 12 feet tall.  From IL, the truck is shipped in pieces to – you guessed it, the Rio Tinto mine in Australia.  You gotta love it!

Sorry I couldn’t make that up.

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





Upside Down Consequence of EE?

5 10 2010

Many posts ago, I wrote “The More You Spend, The More You Save” explaining how poor system control wastes energy but results in even greater energy savings for efficient equipment.  For example, consider an air handling system that wastes heating energy provided by an efficient boiler.  The boiler saves x% versus a conventional model, so x% multiplied by greater use (wasted energy) results in “more” savings.

Recently I picked up on buzz that argues greater efficiency results in greater energy consumption.  At one point I recall reading in the Wall Street Journal an editorial that argued more efficient vehicles just result in people driving more.  They live further from work.  They go on joy rides.  They visit the in-laws more.  I scoffed at this argument, at least at current gasoline costs and anything near them.  If I buy a hybrid that gets 50 mpg versus a “sports car” like an Infiniti G35 coupe that goes half as far on a gallon of gasoline, I will drive more.  No.  Way.

I will drive more (barely) if (1) I have a car that is fun to drive and (2) I am in an area where it is fun to drive.  While I haven’t driven a hybrid, I don’t think it would meet my criteria for #1.  As for #2, western Wisconsin is a driver’s and biker’s paradise because (1) it is scenic (2) there are lots of smooth, paved, and curvy roads on which to drive and (3) there is minimal traffic.  Quite frankly, I’m much more concerned about striking a deer, coon or coyote than another vehicle.  I used to live in the DC metro area.  Forget it.  You might as well drive a tin can because you are going nowhere fast.  I grew up in Southwest Minnesota.  Forget it.  You can drive for miles without moving the steering wheel.  But even so, living here in driver’s paradise, I have limited time so I never, ever think, “ooh boy, a 45 minute drive is only going to cost me $2.79 in gasoline – let’s drive!”

That’s one argument that doesn’t hold water in my opinion.  On the other hand, some people do run efficient stuff like lighting for longer hours because it’s efficient.

The other argument made in these articles is that the money freed up by spending less on energy results in redirection of that extra money toward other goods and services – and those goods and services result in more energy consumption to extract, process, manufacture, transport and operate.  I do buy into the merits of this argument whether the end-user is a homeowner, service provider, or manufacturer.  I never really bought into the notion that energy efficiency programs result in lower revenues for utilities.  Maybe they understand this and hence the rah-rah from utilities for energy efficiency programs.  I don’t blame them.  By far the main driver of EE is saving money and increasing profits.  See “This is Not Tee-Ball“.

Just think how this turns the energy efficiency business and policies on their heads.  In “Paying to Lose,” I discussed how utilities have to make their savings goals or they may get hammered by regulators.  This, in turn, improves the bottom lines of their customers allowing them to expand.  What a racket.  Rather than utilities spending money for their customers to use less of their product, they are actually using their CUSTOMERS’ money to sell MORE of their product.  And how about “Decoupling Stupid,” that allows utilities to recover revenue “lost” to energy efficiency?  They spend their customers’ money to increase sales and meanwhile essentially get reimbursed for the “savings”.  Cool!

We have also discussed the underperformance of LEED facilities.  In “LEED and the NOT Happenin’ Savings,” I described how LEED buildings weren’t meeting energy performance targets because of lousy commissioning.  Well hail to the lousy commissioning agents!  They are actually reducing global energy demand and greenhouse gas emissions.  Now that end user won’t be able to afford a new vehicle manufactured in Ontario with steel from soot belching plants in China shipped across the Pacific, through the Panama Canal to the Gulf of Mexico and transported by rail to Toronto or someplace – and tires from tariff protected Ohio that are shipped to Canada and back to the California border once installed on the automobile.  They also won’t be driving their phantom car.  (California won’t allow the car cross state lines because of the embedded energy, so Los Angeleans have to drive to Reno to pick up their car – I just made that up but it is probably true or at least accurate or emblematic, but certainly driving a new car across state lines into the golden state causes cancer and birth defects like everything else in CA does)

And I consider Michaels Energy.  Our facility uses practically no energy but in recent years our air travel has gone from virtually zero to hundreds of thousands of passenger miles per year.  And from the destination airport, we drive all over the place.  Soon for example, we will have about five people zigzagging all over California verifying energy efficiency measures that probably save less than the gasoline burned to prove it.  Somebody has to do it!

So go ahead and turn that thermostat up, open the window for some fresh air and click on that 70 inch plasma TV, have a beer and save the planet, Homer.

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





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





Horse and Buggy EE Programs

8 06 2010

In many states, energy efficiency programs are meeting annual savings goals and their incentive cash is depleted in a fraction of the year.  States where energy efficiency programs are a new offering are especially quick to meet goals.  These states include Ohio, Michigan and Illinois.  These states rely heavily on lighting, which accounts for somewhere in the range of 90% of the total savings.  Even mature states like Wisconsin and California still get well over half their savings from lighting and other prescriptive measures (rebates).  Wisconsin surpassed goals and ran out of incentives last program year.

There are many ways to solve the “excess savings problem” from reducing or eliminating incentives on some things or eliminating program offerings.  In Wisconsin, they are sort of cutting incentives across the board and getting rid of comprehensive energy retrofit in existing commercial and industrial (C&I) facilities, where everyone knows the greatest potential exists.  Comprehensive energy retrofit in WI is dead because they killed feasibility studies.

Wisconsin must know something Minnesota, Iowa, Illinois, Michigan, New York, California, Johnson Controls, Honeywell, Siemens, and dozens of energy service companies (ESCOs) around the country are oblivious to.  These states’ programs rely substantially on comprehensive energy retrofit and it’s actually the holy grail of energy efficiency.  But not in Wisconsin.

Wisconsin instead relies on the discount model.  See Incentive or Discount, January 12, 2010.  The powers that are believe this is the most cost effective (only) way to deliver savings and that feasibility studies once paid for by the program just rot on the customer’s shelf.  But there are numerous ways to avoid this.  You just have to develop an integrated program that holds customers accountable for implementing measures.

When Wisconsin (Focus on Energy, Focus for short) took over the energy efficiency programs from the investor-owned utilities about 10 years ago, one of the goals was market transformation.  Market transformation simply means making energy efficient products and services the normal way of doing business such that ratepayer-funded programs are no longer needed, or their need is greatly reduced.  Market transformation has long since been cast aside.

Instead, Focus has been transformed into something that seems to be directly at odds with its market transformation charter.  Service providers in the market, ones with expertise and no bias (don’t sell stuff) are locked out by an apparatus that cannot work for them.  Eliminating feasibility studies was the equivalent of adding a mote full of alligators around the fiefdom with razor wire atop the castle wall to keep the serfs out.

The idea that feasibility studies are a waste of money is just plainly incorrect.  Nearly all of our feasibility studies are acted on.  Last year we kicked off a retrocommissioning program with three pilot studies – no commitment from the owners whatsoever.  We just wanted to demonstrate potential.  Two of three have already been implemented.  One has almost a year’s savings accumulated with 25-30% electric and gas savings, on their bills.  The third project is close to implementation, which will probably be completed by year’s end.

In another study, we projected 30% savings for a high school. Actual results were 40% savings, indicated by energy bills.  One college campus: 20% gas and electric savings projected, 20% savings realized.  Another campus 15% and 22% electric and gas savings projected, respectively.  Actual savings from bills: 25% and 20%.  A medical clinic with about 25% savings projected:  actual savings in the first 3 months of post-implementation operation total a full half year of projected savings.  Every one of these projects needed measure identification, cost and savings estimates, and return on investment analysis.  We started with a blank slate.

We have a study underway for a huge food processor and are projecting 3.5 million kWh savings, from only a portion of their air handling systems (68 units).  We are looking forward to moving on to the ammonia refrigeration and compressed air systems. This customer has been very progressive with energy projects over the past 7-8 years and is willing to get everything that meets their financial criteria.  In fact, when we delivered the proposal they agreed to move forward with the study on the air handlers but said, “but I don’t think you’ll find anything”.

The bottom line is, a comprehensive program that includes front-end screening, study, Implementation design, implementation, functional performance testing of measures, and customer training will be acted on by customers.  Of the 10 or so projects, including dozens of campus buildings, where we have used this process, savings have been 20% or more in every case, up to 40%, and actual savings from pre and post implementation bill comparisons have always come in above study projections.  Projects include everything from retrocommissioning to major equipment/system retrofits to new controls systems.

Ironically, we completed a “no risk” study with Focus last year including controls, refrigeration and HVAC.  The customer went forward with all recommended measures.  Again, all we started with was a customer that wanted to cost-effectively save energy, a blank sheet of paper.  No “pre-packaged” projects.  I.e., no free rider.

From a program perspective, this is very cost effective because savings are huge and concentrated and studies do not get stranded.  The problem with some (as in, not all) program administrators whether they be third parties or utilities is they are steadfastly wedded to the status quo with a divorce rate Vatican City would cheer.  The typical disjointed process with reams of paperwork and delays at the outset, no assistance between study and implementation, no hook or commitment from customers to do anything with the study, and no functional testing at the conclusion of implementation is doomed to fail.

The solutions to the “waste of money” issue are simple and they work very well, but some administrators and in some cases regulators need to open their minds and ditch their horse and buggy program paradigms.

And by the way, the attribution rate, which is the savings that occur as a result of an integrated program including feasibility studies, is near 100%.  See the food processor guy’s quote above.  He didn’t think we would find anything.  Tell me.  Would these 3.5 million kWh savings have occurred in the absence of a thorough investigation?  How does a customer who buys an efficient boiler have any idea what the incremental cost and energy savings of his new equipment are?  Does that constitute decision making based on energy efficiency?  Perhaps some programs could improve their attribution rates on C&I programs if they would actually lead customers to implement energy efficiency measures rather than chasing contractors, like lawyers chasing ambulances, to capture savings that are going to happen in the marketplace anyway.

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