Energy efficiency takes the main stage at the Energy Efficiency Forum
June 25, 2007
Posted by: johnsoncontrols 07:24 PM
By Paul von Paumgartten

One of the most exciting projects I work on all year is being a member of the Executive Council that plans the national Energy Efficiency Forum.  The 18th annual forum was held June 13-14 in Washington, DC, and the topic could not have been hotter.

The event actually started with a special session exploring onsite renewable energy.  It including a broad overview of the technologies, legal and financial considerations, and incentives and emerging markets for credits through Green Tags (for renewable energy) and White Tags (for energy efficiency).  In addition to subject-matter experts, we heard interesting case studies from an Illinois school district and the University of South Carolina, along with a great kick-off from Andy Karsner, Assistant Secretary for Energy Efficiency and Renewable Energy at the U.S. Department of Energy.  What was most interesting to me was the step-by-step approach.  Sometimes I think people believe renewable energy is too difficult to do – and I’m not going to suggest it’s simple – but it’s something that can be accomplished with good planning.

The Forum itself was a microcosm of what’s going on in the energy industry today.  First of all, the people in the audience represented a broad range of energy end-users – from the federal government to global industrial companies – along with energy industry and NGOs.  And the speakers were equally diverse.  Republican congressman Jim Sensenbrenner, who as the former head of the Science Committee vigorously defended his recommendations not to have the U.S. sign onto the Kyoto treaty.  He said any climate change solutions have to be realistic, affordable, globally inclusive and produce tangible results.  Energy efficiency certainly is right up in line with those goals.  In contrast to his speech, German Ambassador Klaus Scharioth talked about all the financial, environmental and social benefits his country is finding as it strives to comply with Kyoto mandates.  It was great to have both points of view, then have a panel of industry representatives talk about how it will play out in the marketplace.

Also interesting was Energy Secretary Sam Bodman’s keynote address about the role of government in promoting energy efficiency.  Ultimately, he said, “the transition to a more energy efficient economy will largely happen as a result of changes in the private sector.  The marketplace can move faster than government, can accommodate and absorb breakthroughs in technology more quickly and, overall, has better access to information.” 

 

To me, no matter your political affiliation or business, those are the keys: technology and information.  I think a timely combination – along with some additional government leadership on the local, state and national levels – will keep us going in the right direction.

The theme of the conference was “Energy Efficiency: Daring to Commit.”  It sounds like the time is now to do just that.

For transcripts, photos and more information, see www.eeforum.net.

Green Performance Contracting
June 05, 2007
Posted by: johnsoncontrols 05:59 PM
From Arizona state buildings to businesses in Michigan, performance contracting is being used to pay for capital projects that improve building performance.  It’s usually considered for energy or water projects.  Now it’s time to use “green” performance contracting to pay for a comprehensive approach to making buildings more sustainable.

Performance contracting removes a major barrier for public and private entities, which face ever-tightening budgets, to make necessary upgrades to their facilities. Depending on local regulations and laws regarding performance contracting, the traditional tools for implementing energy efficiency improvements can be expanded to address overall building and site sustainability.

Employing integrated design – a central element of green building philosophy – allows high benefits at low cost by achieving synergies between disciplines and technologies. The project development process requires some balancing of choices to produce an overall payback period that meets the building owner’s requirements.  Performance contracting is highly effective because energy savings only need to pay for the incremental cost of higher-efficiency measures rather than for the whole cost.  And green performance contracting is even better for overcoming any first-cost barriers for sustainable improvements.  

Green performance contracting can be used to achieve sustainability goals in new building design and construction and in existing buildings.  
•    New Buildings: Higher-efficiency choices are compared to the modeled performance of the as-designed less-efficient building. Applying performance contracting to buildings being designed and built is the perfect cure for pressure to “value engineer” the efficiency and sustainability out of new buildings as they are designed. In new buildings, performance contracting bridges the gap between the first-cost and life-cycle-cost perspectives by using long-term energy savings to pay for the incremental first-cost of high-efficiency measures.  

•    Existing buildings: Green performance contracting provides a mechanism for implementing and financing the building’s efficiency and sustainability upgrades, including improved operations.  Achieving sustainable building performance in existing buildings can be done at reasonable costs. If needed, system or building upgrades can be spread out over time and implemented when capital dollars become available.

Green performance contracting provides comprehensive integrated solutions to a wide variety of building, site and infrastructure improvements, and it allows building owners to pay for these building sustainability improvements, including capital improvements or renewable energy, with funds in the organization’s expense budget.  

Michael Arny is president of the Leonardo Academy, which promotes environmental improvement and sustainability. A series of white papers on green performance contracting is available on the Leonardo Academy’s web site.  “The Users’ Guide to Green Performance Contracting” explains how public and private sector building owners can use green performance contracting to implement sustainability in their buildings. Three supporting white papers outline specific areas in detail.  All of these white papers are available at: www.leaonrdoacademy.org

What Will It Take for Businesses to View Energy Efficiency as Sexy as Solar?

Posted by: johnsoncontrols 05:58 PM

More than three decades after the 1970s oil embargoes, and President Jimmy Carter's famous Sweater Speech extolling the virtues of doing less, energy efficiency remains the ugly stepchild of environmental improvement. True, green advocates urge us to walk instead of drive, shun clothes dryers for clotheslines or swap out incandescent light bulbs for compact fluorescents. But these are suggestions that few folks heed, since such notions suggest "doing without," a concept unacceptable to most Americans, and to many others around the globe.
But for companies, it's a different story. Energy efficiency has a strong foundation in a bottom-line-centric world. And there are rich resources -- case studies, how-to manuals, calculators, incentive programs, technical assistance agencies, and more -- to help companies manage the process. There's also a sizeable industry that's grown up around helping companies audit, assess, implement, and finance energy-efficiency solutions.
And yet, we've barely begun to harvest the low-hanging fruit, let alone sow the seeds of an economy that can continue to grow and prosper using continually less energy from oil and other polluting resources.
It's long been axiomatic that energy efficiency is the awkward stepchild of renewables -- that is, that it's sexier to install cutting-edge renewable-energy technologies like solar panels than to engage in more prosaic (and less-visible) measures to get more value out of each BTU or barrel.

That mindset has bedeviled proponents of efficiency -- people like Amory Lovins, who for some thirty years has promulgated the notion that we can solve our energy and climate challenges by harnessing existing technologies that allow us to garner ever-greater economic productivity out of fewer barrels of oil, tons of coal, cubic feet of natural gas, and pounds of uranium. (Lovins' 1997 white paper, Climate: Making Money and Making Sense (download - PDF) remains one of the best articulations of how companies and economies can profitably harness efficiency.)

The world is ripe with efficiency opportunities. ("The low-hanging fruit," as Lovins puts it, "is mushing up around our ankles.") His Rocky Mountain Institute points out that in industrial settings, "there are abundant opportunities to save 70% to 90% of the energy and cost for lighting, fan, and pump systems; 50% for electric motors; and 60% in areas such as heating, cooling, office equipment, and appliances." In general, up to 75% of the electricity used in the U.S. today could be saved with efficiency measures that cost less than the electricity itself.

But what will it take for businesses to harvest this bounty of opportunity? At what price of electricity or barrel of oil will it become “worth it” for companies to make the investments that, most analysts agree, can repay themselves in as little as a few months? What rate of return must these investments yield to make sense to companies?

These are questions that forward-thinking business leaders will need to answer in the coming months and years, as climate and energy issues continue to garner attention. The answers to these questions will be of increasing interest not just to CFOs, but also to their shareholders and customers, for whom companies’ energy use and climate footprint are gaining increased importance.

On May 17, Johnson Controls will release results from a first-ever Energy Efficiency Indicator, a research report that examines how much North American businesses anticipate energy prices increasing and how they are responding.   (Results will be posted here and at http://www.johnsoncontrols.com/cg-pressroom.) It will be interesting to view and assess the results to see where energy efficiency ranks in the minds and strategies of U.S. companies -- and the potential for companies to harvest all that low-hanging fruit.

Joel Makower is Executive Editor of GreenBiz.com.

Public Policy Blog

Posted by: johnsoncontrols 05:56 PM

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Climate Change Blog

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