Impact of Energy Efficiency on the System

Tags: energy efficiency, ice storage, Homestar, ice energy
31 Jan 9:06am
Posted by CleantechBlog
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by Jigar Shah, Founder SunEdison and CEO of the Carbon War Room

I was looking at the new Homestar program on the Efficiency First website here: http://www.efficiencyfirst.org/home-star/

To start, it would be an amazing effort on the part of the Federal government. This comes on the heels of a huge effort on the part of the government to weatherize homes across this country. As many of you who know me, this is right up my alley. The problem with this program is that Homestar doesn't really fundamentally shift our priorities as a nation. Assuming there is $23B of money available over 2 years available, here are some options:
1) PACE - property tax financing. This money could be used as a first loss guarantee available to the first $230B of non-recourse financing by cities. This would NOT be a Federal loan guarantee. As many of you know I find the Federal loan guarantee generally allows banks to be lazy and cuts out small contractors that can't afford to do the paperwork

2) Utility on bill payment mechanisms - with the threat of PACE above, you might finally see utilities offer this program in a large enough quantity to offset the need for new generation facilities period. The beauty of this method is that it protects utility profits with decoupling or other half measures that really do not scale fully. The utility can use this method to carefully roll out energy efficiency in the best interests of its shareholders. Physical equipment like ice storage: http://www.greentechmedia.com/articles/read/coming-to-so-cal-53-megawatts-of-ice would be my first choice. It shift peak power to off-peak power and reduces overall air conditioning by making ice at night when it is cooler. This technology by itself could reduce demand charges for customers by over 30% while make the utility more profitable by smoothing out generation usage. In this case the $23B would be used as a 20% subsidy to be matched by 80% utility money for energy efficiency. The 20% would pay for the "utility profits" and usher in a new way of thinking.

The reason this is better than Homestar can be best summed up by the article below. When the utility sells less electricity, it needs to raise rates to cover its fixed costs. The Federal government would spend its $23B in energy efficiency only to see almost 50% of that be charged back to rate payers in bill increases . . not catalytic.

http://www.miamiherald.com/news/florida/story/1325051.html

``It's a balance,'' said Mayco Villafana, FPL spokesman. ``If you do too much energy efficiency, a la what the conservationists are asking for, you are going to increase electric rates. You are reducing consumption but you still have to pay for existing power plants, transmission lines plus any new
construction.''

It's a classic chicken-and-egg dilemma for the utility regulators. They've let the companies start charging customers for new nuclear power and natural
gas-powered generators based on the companies' predictions that Florida needs to double it electricity capacity by 2050. But if conservation reduces demand, will existing customers be forced to pay more?

``How outrageous is that?'' asked Kristin Jacobs, a Broward County commissioner and chairman of the county's Climate Change Task Force. ``We should just continue to stumble along in our wasteful excessive ways?''

You can find out more about Jigar Shah and how the Carbon War Room is fixing market failures to create Climate Wealth at www.carbonwarroom.com
Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

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I am a merchant banker and co-founder of Jane Capital Partners LLC, where I head the energy and environmental practice, and prior to that worked in venture capital, private equity and investment banking in the tech and energy sectors. We have co-founded four emrging startups in cleantech and IT (in superconductors, fuel cells, RF, and carbon credits) since the tech wreck, and advise the technology and venture investment arms of three multi-nationals. In all of it, I have been lucky enough to work with some amazing colleagues, bosses, and partners. Besides Cleantech Blog, I am a contributing editor of AltEnergyStocks.com, and contributing author to Inside Greentech. Along with our own, the blogs I regularly read include Jim Fraser's The Energy Blog, Rob Day's CleantechVC, Tyler Hamilton's Clean Break, Joel Makower's Two Steps Forward, and Inside Greentech. My areas of expertise are always a work in process, but I have been quoted, cited, or interviewed on energy, alternative energy, and cleantech issues by numerous online and print publications including Red Herring, Energy Intelligence, Time.com, Bloomberg, San Francisco Chronicle, Forbes.com, Ethical Investor, Wall Street Reporter, and FT.com among others, on topics ranging from: cleantech, solar, ethanol, blogging, technology commercialization, corporate venture investment, energy prices and policy, technology transfer, carbon trading, and renewable and alternative energy. Feel free to contact me at dikeman@janecapital.com. Mr. Richard T. Stuebi Richard Stuebi has nearly 20 years of experience as an executive, entrepreneur and consultant in the energy industry, with most of the past decade focused on advanced energy technologies. He is currently serving as the BP Fellow for Energy and Environmental Advancement at the Cleveland Foundation, one of the largest community foundations in the US with over $1.6 Billion in assets. He works with various public and private sector stakeholders to promote commercial activity in advanced energy in the Cleveland area. Mr. Stuebi has authored numerous articles that have appeared in such leading industry periodicals as The Electricity Journal and Public Utilities Fortnightly, and has presented at numerous major energy conferences. He is a contributing columnist to Cleantech Blog, writing on alternative energy issues, news and events. Prior to joining the Foundation, Richard founded NextWave Energy, a professional firm focused on capitalizing upon new business opportunities stemming from innovative energy technologies. As President of NextWave Energy, he assisted several emerging and established private-sector clients in various aspects of business development, including strategy and capital formation. Previously, Richard was a senior vice president at Louis Dreyfus, the global commodity trading firm and was a management consultant in the energy practice of McKinsey & Co. Richard earned degrees in economics from the Massachusetts Institute of Technology and Stanford University. His areas of expertise include: Economics in alternative and renewable energy, energy policy, trade, and development. Cleantech finance and technology strategy. You can contact him at rts@nextwave-energy.com. Ms. Heather Rae Heather is a green marketing expert and a long-time advocate of green technology and sustainable business. Through her consultancy Brae Consulting, Heather has worked for energy companies, cleantech startups, and nonprofits (she is currently working with a home energy efficiency program of the Maine Governor's office). Her previous corporate marketing experience includes Xcel Energy (demand-side management and green power) and Qwest Communications. A hands on expert - Heather has practiced what she preached. She is certified in high performance residential building (Green Advantage®) and has served as co-director of Colorado's Interfaith Power & Light. Readers of Cleantech Blog will know that Heather converted a retired school bus into the Brae Bio Bus, a recreational vehicle running on biodiesel (B100) with solar panels for auxiliary power, and recently drove it across the country blogging the experiences in finding biodiesel in different parts of the US. Having reached her destination at Maine Home Performance, a program of the Maine Governor's Office where Heather is helping design programs to certify and link Maine contractors with homeowners who want to "go green", Heather is now tackling the conversion of an 1880s Maine farmhouse into an energy efficiency and green showcase. Heather graduated from Wesleyan University and is a contributing columnist to Cleantech Blog writing on green and sustainable products and marketing from the consumer's point of view. Her areas of expertise include: Green marketing programs and strategies, grass roots green and sustainable programs for consumers, using green technologies in the home. You can contact her at heather.rae@braeconsulting.com Mr. John Addison John is an accomplished writer, speaker, and expert in technology marketing and strategy. He is one of the IT converts that are driving the cleantech industry. Since 1992, his marketing consultancy OPTIMARK, Inc. has provided educational programs, market intelligence, market development and partner development for technology and government leaders. A believer in cleantech's potential to change the world for the better, John is the Publisher of the Clean Fleet Report and serves on the Board of the California Hydrogen Business Council. He is a contributing columnist to Cleantech Blog. He is the author of the book Revenue Rocket on channel marketing in technology, and the upcoming book Save Gas, Save the Planet on what we as individuals can do to help save the planet. Earlier in his career John was an area channel manager for Sun Microsystems. For three years, he led a sales team to 300% annual growth in 15 states, increasing revenue from $4 to $110 million. He has taught courses about marketing and innovation at U.C. Davis and U.C. Santa Cruz Extension. He is a popular speaker in the Americas, Europe and Asia. You can find more of his speeches and articles on his websites Clean Fleet Report and Revenue Rocket. His areas of expertise include: Technology marketing and marketing strategy, channel marketing, fuel cells and the hydrogen economy, alternative fueled fleets, and California's energy tech corridor. You can contact him at johnaddison1@gmail.com. Dr. Peter Beadle Peter is the owner and CEO of GreenJobs.com. He is an is an experienced technology executive and an expert on a wide range of green and energy technologies, including photovoltaics, fuel processing, fuel cells, and oil & gas technologies. Green Jobs is one of the few dedicated job sites for the renewables and cleantech industry. They put out the online Green Directory, as well as a weekly newsletter on People News in cleantech. Peter is a contributing columnist to Cleantech Blog writing on renewable energy news and events. Peter holds a PhD in Physical Chemistry, and previously served President of BP Solar's North American division. Prior to that he held a number of positions in R&D and technology management within British Petroleum. His areas of expertise include: Solar, fuel cells, oil & gas, renewable energy job market You can contact him at Peter@greenjobs.com.

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