Atmospheric Cooling = Strong Tornadoes

31 05 2011

We interrupt this rant for this special announcement.  Our cold spring in the northern plains is wreaking havoc in the form of tornadoes in the southern and middle parts of the country.

I think the weather phenomena had a lot to do with my interest in mechanical engineering.  Growing up on the farm in the flatlands, I had seen a great many black clouds approaching on the horizon.  As they drew closer, they would either brighten to a lighter gray and rain, or they get ugly.  If the approach is led by a dark band of clouds followed by blue-green solid color all the way to the horizon, there would be some serious energy release.  If there is continuous rumbling, it generally means hail – tornadic-type winds aloft.

Weather should marvel any mechanical engineer with interest in the thermal fluids side of the curriculum.  All weather conditions are driven by temperature differences in the atmosphere and it’s influenced heavily by ocean temperatures to the west from which prevailing winds and jet stream flow, at least in the northern hemisphere.  It’s a massive thermodynamic, fluids, and heat transfer model.

What is causing this year’s massive tornadic outbreak?  Unusually cold mid and upper atmosphere derived from cyclically cold Pacific waters.

The two best weather guys I’ve seen in the business are Tom Skilling from WGN and Joe Bastardi from  Bastardi is a historian and doesn’t get whisked away with the hype.  He states the mid levels of the atmosphere have cooled very rapidly in the past year as it did 60 years ago.  Did you know this?  No.  Why?  Because nobody is reporting it.  This makes sense because powerful storms, which are like engines, are driven by great temperature differences; NOT an overheating atmosphere.

Tornadoes form when warm air from the southeast plows into cold air from the northwest.  The warm, moist air rises into the cold mid levels of the atmosphere, and of course what goes up, must come down.  Condensing water vapor turns to rain and if cold and turbulent enough develops hail falling to the ground cooling the air as it falls.  This air flow can become strong enough to cause straight line downdrafts that can flatten buildings and trees like a tornado.  When the warm air channels, it can become like the vortex in your bathtub or sink.  It will start to rotate to form a tornado.  For a great cartoon of this, click here.  For the real deal, see this minute-long video from National Geographic – devastating.

Fortunately, the pattern that set up these storms in the south just broke over the weekend.  Hopefully, we won’t get our turn in the north but it’s certainly possible.  The jet stream, or line between cold and warm air has lifted far north, hence the warmer weather we are experiencing in the north.

All engines, including power plants, your car’s engine, jet engines, are driven by hot and cold sinks.  The greater the temperature difference, the greater the power, and efficiency.  A tornado is an engine. It is driven by temperature differences in the atmosphere and the “load” is the destruction it wreaks on the ground.  When towns like Joplin, MO appear to be run over by a giant lawnmower, the giant lawnmower requires tremendous power, delivered by an F4 or F5 tornado.

This presents an opportunity to generate electricity.  No; not from tornadoes, but from waste heat being dumped from power plants.

I would guess that when anyone thinks of a nuclear plant, they think of these cooling towers.  These towers work on a very simple concept.  Warm water from the power plant is pumped to the top and showered down through the tower.  Openings at the bottom let in cool dry air from the surroundings.  The warming and humidifying of the air causes it to rise and a natural draft occurs.  Therefore, fans are not needed.  Towers need to be tall enough and shaped like they are to generate sufficient air flow via “stack effect” to provide required cooling capacity.

This presents an opportunity to generate electricity.  Not just from the vertical rise in the tower, but all the way to the upper atmosphere.  If rotation were induced, an engine could be developed between the hot exhaust and the always very-cold upper atmosphere – a standing tornado, essentially.

Don’t laugh.  I first came across this in one of the power industry’s trade magazines a year or two ago, and it made a lot of sense.  It’s called an atmospheric vortex engine.  Here is a good paper on the topic from the Canadians, ay?

So I ask, why is the DOE not pursuing something like this, rather than the STUPID electric car?  Silly me.  This is potentially cost effective energy efficiency with huge potential from a ubiquitous plentiful source of free waste energy; not an ALICE IN WONDERLAND pipe dream.  If we can build nuclear reactors and sophisticated huge steam turbines, surely this simple concept can be harnessed.

Seventy percent of energy required to fuel a thermal power plant (natural gas, coal, nuclear, fuel oil) is dumped to the surroundings.  Think of the potential – and nothing extraordinary is required.  Nature takes care of the vast temperature difference to drive the engine.  The efficiency of this second heat engine would be approximately 30% per the above paper.  This could take conventional power plant efficiency from the standard 30% to roughly 50%, roughly a 70% increase.  This is enormous.


I’ve always considered global warming to be driven by politics and self interest, knowingly or unknowingly – as in, I can make money from this.  It is fanned by sensational films like that described in the aforementioned Dumb Bear post, Al Gore (who’s film the UK banned from its schools) and even National Geographic – it sells – see how it works?  It’s easy.  More below.

The very cold spring and gobs of snow this winter have been devastating.  Dude!  Aspen reopened for skiing over the Memorial Day weekend – with more base now than it had on New Years Day!  This is normal?  It’s insane!  Mammoth Mountain in the Sierras still has 200-plus inches of snow – plan to ski through July 4!

How does paranoia void of logic and reason perpetuate?  The Center for Decision Sciences at Columbia Business School did a survey of 1,200 in-duh-viduals, “Those who felt that the current day was warmer than usual for the time of year were more likely to believe in and worry about global warming than those who thought it was cooler outside. They were also more likely to donate the money they earned from taking the survey to a charity that did work on climate change.”  Even if INDOORS is hotter, people tend to fear global warming more!

In other findings: if you eat soup frequently, check with an emotional counselor; want that job, wash your hands in hot water just prior to interview; worried about crime, get out of dodge when it’s hot outside.

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

New Years Collage

28 12 2010

I’ve corralled a mishmash of rather preposterous short stories for the year end rant.  This will be historic so be sure to pass it on to your enemies.

Case 1 comes from Engineered Systems Magazine or ES Magazine.  I was catching up on my stack of trade magazines over Christmas weekend (is this sick or what? – but it can be about as entertaining as National Lampoon’s Christmas Vacation).  September’s “Case in Point”  features an energy-saving project for Bangor Maine’s Discovery Museum, delivered by Honeywell.  An audit was followed by implementation of cost-effective measures.  The audit was completed in 2008 using the “Field Automation Service Technology” tool (FAST – I love acronyms – this is for real, theirs).  Findings included the not-so-unusual deferred maintenance like plugged air filters and heating/cooling coils among some more capital-intensive measures apparently.

One of the measures was to install a dual fuel boiler burner to take advantage of cheap natural gas as opposed to $3 fuel oil.  The results “dramatically impacted the museum’s bottom line”.  The museum paid $2,732 for fuel oil in March 2007 and only $39 in March 2008.  Well gaaaauuuullly!  (1) fuel oil is stored in tanks on site so you can spend money on fuel when and how you want and (2) they switched from using fuel oil to natural gas.  To ensure the savings persist, Honeywell was generous enough to throw in three years of service contract to maintain fresh filters.  So what were the real savings??

Case 2 begins with the opinion guys from The Wall Street Journal noting that the EPA is regulating the bejesus out of heavy industry, and in particular the utility industry.  This is to start in earnest after the first of the year, with EPA chief Lisa Jackson leading the way.

Starting in the midst of several salvos, the WSJ says utilities are being “forced to choose between continuing to operate and facing major capital expenditures to meet the increasingly strict burden[s], or else shutting down and building replacements [power plants] that use more expensive sources like natural gas. Either way, the costs will be passed through to business and consumers as higher rates, which is the same as a tax increase.”   My major problem with this is the usual case of government making things more expensive for the private sector, and guess who takes the beating?  It won’t be the government.

But even more bizarre and fishy smelling is a bunch of utility CEOs cheering on the EPA in a letter published in response to the Journal’s rant – like this will be good for their business.   They say that “Contrary to the claims that the EPA’s agenda will have negative economic consequences, our companies’ experience complying with air quality regulations demonstrates that regulations can yield important economic benefits, including job creation, while maintaining reliability.”  And throwing rocks through windows stimulates the economy and makes for carpenter and window factory jobs too.  This doesn’t pass the laugh test.

In the latest shot, the Journal points out the agenda driving the do-gooders – higher prices driven by other utilities as noted above, but the higher expenses don’t apply to certain utilities that are heavy in nukes.  This makes perfect sense.

A strong word of advice for these CEOs: play with the devil (U.S. Government) and you WILL get burned by command and control coming from Washington.  It’s only a matter of time before you will be looking down the long barrel yourselves.

Case 3, just in time for the warmer weather, airport snow removal by heated pavement!  OMG!  Of all the insane ideas, including air conditioning in 19 soccer stadiums in Qatar, manmade islands in Abu Dhabi and indoor ski slopes and ice rinks in the Marina Mall, this one tops them all.  Calculating the heat loss would melt a mortal Hewlet Packard RPN calculator.  Larger airports in cold climates, like MSP and ORD would require a small star (like our sun) to keep the concrete above freezing in worst-case weather.  And per my crude calculations, ORD has roughly 14 miles of runway that would take roughly a half million cubic yards of concrete alone (this is from me, a civil engineering / aviation zero).  This doesn’t include tarmacs or the infrastructure like underground rivers of antifreeze required for heating.  And just think of the disruption.

This is a really bad joke for an idea.  Intervention by someone with a brain may be required.  This comes from people who throw the number “trillion” around like it equals 10 million.  I forget where/who I was listening to but they didn’t use the word “trillion”.  They used “thousand billion” in it’s place – much more effective.

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

Another Committee – Alleluia

7 12 2010

Hide the kids.  The DOE has spawned an energy and renewable advisory committee.   You know, a diversified products / technology manufacturer like 3M or DuPont should examine the Byzantine labyrinth of government agencies as a model to develop the next bullet, explosion, radiation, fire, water, and bio proof wonder material.  I have to believe that if they could weave sewing thread or maybe two pound monofilament fishing line into such a fabric it would stop a 40 caliber projectile at point blank and not even cause a contusion.

Why does the country need this?  Why does the country need a debt commission for that matter?  We have a full time congress for goodness sake.  Isn’t that what they are supposed to be doing?  I suppose this is this too much to ask of 535 FULL TIME bureaucrats?

As anyone who knows anything would guess, the committee is dominated by academics and government wonks, although at least there is one utility guy on there.  Therefore, I am sure we will have a cornucopia of far out recommendations from a distant galaxy.  Most likely it will be heavy on far out technology and more spectacular policies like 15% or is it 20% ethanol blends for gasoline.  Maybe they can mandate its use, block imports, subsidize it with our money, steal our watch and tell us what time it is too.

Do these people or anyone at the DOE realize there is an industry of private sector product and service providers that work on our home planet of Earth with end users (also home-based on Earth)?  We are constrained to pesky things such as the laws of nature and economics and consumer whims.  I’ve said it a thousand times and I’ll say it a million more times, the savings potential from cost effective measures from current technologies and services is at least 30%.  See the McKinsey report from last year as backup for my hypothesis by people who know what they are talking about.

On the other hand, I read that this group is only going to meet twice a year and judging by the agenda of the first meeting it appears they won’t be inflicting too much damage on the citizenry.  If this is all they are going to do twice a year maybe this is simply a resume stuffer organization.  “Served on the Secretary of Energy’s Energy and Renewable Advisory Committee” would sound impressive for an introduction for a keynote address at Yale University’s spring graduation, especially for graduates with degrees in renewable energy management.


FIFA (Federation International de Football Association) chose Qatar to host the 2022 World Cup tournament.   Qatar, a tiny tumor of a country jutting into the Arabian Gulf is about the size of Connecticut, or about twice the size of Long Island (although saying it’s twice as big as anything is misleading).  Temperatures during the World Cup there will approach 426F, just below the point of spontaneous combustion of flammable items like paper but fortunately for most World Cup fans, above the melting point of the vuvuzela.  I rather like the vuvuzela, at least as comes across on the TV.  It’s hilarious like a cloud of June bugs or swarm of mosquitoes amplified a couple hundred fold.

In addition to building nine new stadiums and renovating a couple others, they will be supplying OUTDOOR air conditioning for these stadiums.  They will probably need to build a couple thousand MW power plants as well.

South Africa boasted that theirs was the greenest World Cup ever.  If Qatar says anything about green, they will have to use Venus as the baseline alternative for measuring the savings realized.  If I were them, I would just go with it and say this is the most ridiculous idea of all time.  We will proudly burn as much energy as half the countries with teams at the tournament.

I can almost guarantee they will build a photovoltaic plant the size of the country in the Saudi Arabian desert and that’s what we will be hearing about.

Too see how much money people in this region have, do a Google Earth or Maps of Dubai.  Apparently there isn’t enough moonscape barren coast on which to build opulent homes, so they make their own islands or “palms” where the strips of land take on the pattern of the veins in a palm leaf I guess.  And they have all the huge sky scrapers including the world’s tallest building.  What for?  By the looks of it, the only people who work there must be those that take care of the people who live there.  And why the tall buildings?  My impression has always been skyscrapers are needed for land-locked cities like New York and Hong Kong.  UAE makes Phoenix look like the Amazon basin.  There is nothing there.  Just pave it over and sprawl out so there is something to do with your time – like drive your 12 cylinder Italian sports car to the spa, bank, casino and back home.  The place is so un-natural it creeps me out.

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

Freeloaders and Geniuses from the Universe Next Door

19 10 2010

You know what torques me off, or make that torques us off more than anything else?  I’m saving it for a future rant.  Stay tuned.

No really, it’s “prospective” clients, many times end users that have screwed up buildings beyond reproach or wasting energy as though they just want to release all the carbon locked up in fossil fuels and get it over with.  They ask for help but in no way intend to pay for it or take action for anything substantial.  We may have even demonstrated, clearly by benchmarking or other means with specific measures that they could make their utility shut down a 500 MW power plant if they would just do something.

But no!  They want to know something trivial like how much energy/money they’ll save with a system that will put unattended PCs to sleep and not mess with anything substantive.  Never mind every PC on the planet has this built in and it’s about as hard to negotiate as turning on the television.

They’ll ask how to catch a three pound shad when you have a loaded harpoon with a giant blue marlin at point blank range (just go with the metaphor even if it is totally absurd).  Take the damn harpoon and shoot the thing, man!  Well gee, I just don’t know.  I haven’t used one of those things before.  I might shoot myself in the foot.  Is that tip sharp?  And they keep coming back for more panfish advice.

You may have spotted these people in public.  They go to the grocery store around noon Saturday to eat everything available for sampling, for their lunch, and probably leave with a half gallon of milk and a loaf of private label bread.  They sample six beers in a brew pub, order a can of Pabst and leave no tip.

And then there are those who believe the utility should pay for everything, and I mean everything.   We were working a school district for retro-commissioning and I believe they have some good opportunities, but when the board discussed it, a genius said, no.  He wanted the utility to build a remotely-sited wind turbine (because their location is lousy for wind energy) paid by the utility to generate electricity for their facilities and do it on a net metering sort of contract.  I am not kidding you.  Gee, that’s a great idea.  Let me get right on that.  I almost got brain damage from oxygen deprivation.  I was laughing so hard.  I’ve heard of customer entitlement mentality but this was from another universe.  How do you calibrate a customer like that to life here on earth?

We also have to beware of death by a thousand cuts.  A client may only want a half baked high-level assessment.  No matter how loud and clear we describe WHAT the project IS NOT, after we present the results that clearly meet the contract scope of work, some start asking for details on specific measures.  Where do I buy one of these?  Do you know any good contractors?  What capacity of doohickey do I need?  Some utilities, thankfully, are offering compensation to answer these sorts of questions.

Think of it this way.  If your house is a hog, it’s probably because it leaks like a sieve.  You can’t just take a couple tubes of silicon and slop it on some windows.  I know what I don’t know, and I know there are a boat load of places for infiltration/exfiltration to occur and like life in the commercial and industrial world, if you want results, you need to hire somebody who knows what they are doing.  I’ll pay a guy $500 to do it right before using a buffoon for free, any day.

NOTE: This is not a solicitation to weatherize my house.


Wall Street Journal readers responded to the source article from last week’s column.

Commenting on the letters, the National Resources Defense Council guy projects avoidance of 300 large power plants and $12 billion in annual savings.  In an Energy Brief a couple years ago, I projected 156 large power plants (500 MW apiece) and $9 billion in savings.  Close enough for hand grenades but I’m guessing he’s a little heavy on the power plants.  Is there diversity figured into his numbers?

Osram, a German company is retooling one of its American plants to manufacture efficient lighting.  Meanwhile, General Electric is whining that it has to close its last lighting plant in the U.S.  Jeffrey Imelt is a terrible CEO for GE.  General Electric used to be an entrepreneurial innovative company under Jack Welch.  Now it is a company in search of markets for status quo products and services, and government handouts.  If you don’t innovate you die in the private sector.  It matters not what you do.

One guy argues CFLs will require more heating energy consumption.  Yawn.  Fuel oil would be cheaper heat and if incandescent bulbs are such a great source of heat, what about summertime?  The electrical engineer makes good points that CFLs are not as bright as advertised.  We’ve always recommended CFLs at 33% the power, as opposed to 25%, of the incandescent being swapped out.  This is essentially the next size larger CFL than “recommended” in the business.

Another guy plays the mercury card.  Yawn.  I dismissed that fallacy in the same Brief.

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

Get a Grip

10 08 2010

As you may have heard, this year China powered past (cheesy pun warning) the United States in total energy consumption.  Apparently, back in 2007, they surpassed the US in carbon emissions.  This makes sense as almost 70% of China’s electricity is derived from coal as compared to just under 50% in the United States.  In the U.S., nuclear and natural gas make up most of the other 50%, roughly split evenly with renewable energy rounding out the 100%.

In recent years, or especially since President Obama moved into the White House, there have been multiple verbose incomprehensible cap and trade policies drafted, but they are dead for now.  By the way, I maintain my position that substantial nationwide carbon limits are not going to happen in my lifetime.  If it didn’t happen since Obama took office with a filibuster-proof senate and a large majority in the house, it ain’t going to happen anytime soon.  Why?  Democrat senators from Midwestern states where coal is still king (not that this is a good thing) and coal producing states like West Virginia result in filibuster, if not an outright minority.  E.g., Jay Rockefeller will vote party line on everything but carbon caps.

There remains one possibility, however – that carbon caps may be legislated through the courts, which of course is not how things, especially major things like this, should become the law of the land.  In one example, the EPA in 2007 was handed the power to regulate carbon dioxide because it is a “pollutant” per the clean air act.  Again, this is like declaring water, another vital molecule that makes biological life possible, a pollutant because water kills.  Recall, I wrote on the blog a few weeks ago you can die by drinking too much water.  People drown, to the tune of 400,000 deaths worldwide each year[1].  Floods devastate communities – at least $3 trillion per year[2].  Water causes lightning, which kills about 24,000 per year[3].  And heat wave deaths – always have a large component of high humidity.  Aside from illegal activity (human smuggling), when was the last time you heard of heat related deaths in Arizona?  You don’t.  It’s Chicago, Memphis, New Orleans, Kansas City, Little Rock.  Water is dangerous.

You may be thinking, there’s nothing we can do about water.  Really?  How about banning swimming in rivers, lakes, and oceans and slapping $1,000 fines on people for not WEARING their floatation devices?  Move everything out of the 500 year floodplain.  Mandate air conditioners for every household and if you can’t afford one the federal government will provide one.  Sound familiar?  Thousands of lives would be saved per year.

The bottom line is, 98% of legislators are too cowardly to vote for the right thing, or wrong thing I guess, if it threatens their political career.

Sorry.  I got way off track.  I can’t help but railing against the preposterous.  Life has risk.  Is there anything, ANYTHING, worth doing if there is no risk?  There are costs and there are benefits.

Back to China.  China’s energy consumption has DOUBLED in the past 10 years while the United States’ energy consumption has decreased slightly.  For all intents and purposes, it’s been flat.

Here is something that will knock your socks off – since 1999, China has installed 416 gigawatts of coal-fired power plants.   “So what?”, you may be thinking.  A gigawatt is like a trillion dollars.  To give that perspective, a trillion dollars in $100 bills wouldn’t fit in a three car garage, tightly packed and stacked to the rafters Likewise 416 gigawatts can be generated by 832 large 500 megawatt power plants or 208,000 wind turbines by nameplate capacity.  This is eighty giant coal-fired power plants per year!!  And they have 330 more giant power plants on the drawing board.  Over the same period, the United States has built coal plants totaling 12 GW, or a measly 24 giant power plants.  China is averaging 80 per year, while the U.S. is averaging 2.4 per year.  GET A GRIP!

This is like giving Lance Armstrong a two day lead in the Indy 500 with his bicycle (he would be the US) but China has just taken the lead with the typical 225 mph Indy car.  It’s actually worse than that. It’s more like me running the Indy 500 versus the 225 mph Chinese Indy car passing me by.

In 2006, China generated as much electricity from coal as did the United States.  At the time they had 484 GW of operational coal plants.   Very roughly, they’re adding 10%, at least per year.  This blistering pace will fade with time, but it is fair to say they will have double the coal-fired electricity generation compared to the U.S. within 5 years.

Conclusion:  If we are truly concerned about carbon emissions and climate change, China has to do something.  The reality however is that whatever the U.S. can stomach will be of zero consequence considering the Chinese Indy car.  Unlike the floating continents of garbage that is choking the mighty three gorges dam and the 100 tons of benzene spilled in the Songhua River, carbon dioxide makes its way around the globe.  It doesn’t matter where it comes from.




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

Energy Efficiency Stimulus and Oversight

17 11 2009

Most energy efficiency programs are required by regulators to be evaluated to ensure ratepayer money is being spent wisely and reported savings are being achieved.  If only such oversight were to happen for the millions/billions/gazillions being shelled out to state and local governments in the name of energy efficiency.

State and local governments have Amazon-wide budget gaps to fill, and I can assure you that earmarks (dirty word) for energy efficiency will find their way to plug budget holes to keep buildings open, replace roofs, buy new lawn mowers and pickup trucks, and avoid staff reductions.

We in Wisconsin have already experienced this during the last recession.  Starting in about 2000, most money collected by utilities for programs was turned over to Madison to be distributed from the ivory tower.  The recession of 2001 resulted in a major budget gap (major at that time – it probably looks like a hairline fracture compared to what we have now).  There, coming in from investor owned utilities, was a nice cash stream of $80 million per year.  The state government swiped half of it.  It pretty much eviscerated the energy efficiency programs and brought the industry to a slow crawl.  Incentives were pathetic.

Thankfully, the Public Service Commission has taken control of cash flow now to help ensure ratepayer money is used to save energy, reduce demand, and delay/avoid construction of power plants and transmission systems as intended, rather than filling in a tiny portion of a humongous budget hole.  Now energy efficiency incentives in the state are what I consider to be very attractive.

These federal funds should either be funneled through established credible program delivery channels such as utility programs or, in some cases, state governments (as long as it is out of reach of the legislative and executive branches), or there should be third party impact evaluation of projects emanating from block grants to local governments and other private sector grant writers.

If there is no oversight, vendors, consultants, engineers, architects, whoever can declare whatever savings they want. Or worse, as noted above, the funds will go toward new park benches and decorative street lights.

We welcome the oversight and technical review of our work because we are going to do things right regardless of whether others review our work.  In a competitive market, the more technically astute and persnickety the reviewers are, the better for us.  While LEED® takes its lumps for being too cumbersome, time consuming, and nit-picky, I think it would be a big mistake to slack off the review process.  It will weaken a strong brand.

The bottom line is, if you have no rigorous third party review, you can expect pennies on the dollar of proclaimed savings.

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