November 7, 2011

10.0 Energy Efficiency and Energy Conservation

Sustainable Energy Technology:

Market Pull and Technological Push
Market mechanism alone cannot stimulate the development and deployment of energy technologies fast enough to meet the urgent national need

While the market pull tends to favor incremental innovation, the technological push favors radical innovation. In a complex sector like energy, new innovation will require a system of both models: a technology strategy and a pricing program
(Weiss and Bonvillian, 2009)

Promising Energy Technologies

Sustainable energy technologies include wind-electric and solar photovoltaics. In addition: LEDs, replacing incandescent and fluorescent bulbs (converts electric voltage into light) Enhanced geothermal energy (inserts water into dry, hot subterranean rocks) Carbon capture and sequestration (stores carbon in saline aquifers or under the seabed) Improved battery technology (new lithium ion batteries with nanotechnology to be cheaper, lighter, and more powerful)
(Weiss and Bonvillian, 2009)

Power from Perspective: U.S. Energy Portfolios

Brainstorming session of ten policy experts Shaped into seven distinct perspectives (mindsets) Each perspective weights over 14 defining values and build its own national energy portfolio Including conventional and alternative energy sources Portfolio evaluation criteria (primary: energy independence, energy security, and GHG reductions; secondary: economic growth, technical feasibility, etc.) Commonalities among the portfolios to meet year 2030 energy demands: cellulosic ethanol, nuclear power, and energy efficiency
(Tonn et al., 2009)

Policy Interventions
The most important lessons is that public policies that are well-designed and implemented can overcome the barriers to greater efficiency, renewable energy use, and cleaner fossil fuel technologies
Transforming markets Innovation system for clean energy technologies Make policies predictable and stable RD&D, not just technology, but behavioral change Convenient financing and financial incentives No subsidies and internalizing externality Regulations or market obligations, etc. Information dissemination and training
(Geller, 2004)

Global Clean Energy Scenario

Energy Demand about 0.6% per Year Renewable Supply about 2.5% per year One-Quarter of Energy Supply by 2020 Over Half by 2050 All Energy Supply by 2100 Nuclear energy is phased out within 50 years Coal use is phased out in about 60 years Oil Use in about 90 years Natural gas use is phased out by 2100
(Geller, 2004)

Efficiency and Conservation: Examples (Andrew Rudin)

Improved Efficiency
More miles per gallon of gasoline More lumens per watt Occurs only while using energy Suggests no change in lifestyle Provided mostly by specialists Dependent on energy suppliers Mostly technical Promotes growth

Conservation
Driving less; using fewer total gallons Less artificial lighting Occurs while not using energy Questions need for end uses Provided mostly by end users Creates independence from suppliers Mostly behavioral Promotes sustainability

Efficiency-Input and Conservation-Output

Demand for Electricity: Derived demand
Dont desire energy for its own sake, but demand the good or service (output) that the electricity (input) provides.
For example; you desire music from your stereo (output) this requires electricity (input)

Efficiency focuses on adjusting the input requirement for a particular service. Conservation focuses on output decisions
(Croucher, 2011)

Conservation: Lifestyle
Socolow studies identical houses to show that the occupants were responsible for most of the variation in energy use Efficiency takes ratepayers off the hook by putting the responsibility on technology rather than on personal preferences. A big mistake Smil says that Americans wont accept lower-energy lifestyles. I disagree with him Using less energy is inherently beautiful, full of grace and more respectful of our environment
(Rudin, 2004)

Energy Star CFL

75% less energy and last up to 10 times (4 to 5 times) longer than incandescent (standard) bulbs Replacing one light bulb with a CFL: Light more than 3 million homes for a year Save more than $600 million in annual energy costs Prevent GHG equivalent to the emissions of more than 800,000 cars.
(DOE: Change a Light, Change the World Campaign, 2007)

Retrofit of Typical Motor-Pump System

An Economic Advantage of Reduced Energy Consumption

The United States used 10% of its GNP to pay the national fuel bill, but Japan used only 4% The difference was $200 billion that the U.S. did not have available to invest in other areas As a result, the average Japanese product has an automatic cost advantage of about 5% in the U.S. market

Estimated Average Electricity Savings Potential for a Typical House in Austin, Texas

Zero Energy Buildings

By 2050, new buildings will consume zero net energy from external power supplies and produce zero net CO2 emissions To achieve those goals, the buildings will require a combination of onsite power generation and ultra-efficient building materials and equipment
World Business Council for Sustainable Development (WBSCD)

Zero Energy Buildings: New Jersey

The demonstration home is 80% more energy efficient than conventionally built homes
The home combines energy efficient design and radiant floor heating with 2.5 kW PV system and a 4 kW solar thermal system
(DOE Newsletter, 2006)

Industrial Cogeneration
A recent study done for EPA has estimated that 96 GW of electric power could be provided in the U.S. by recycling industrial waste heat in 19 industries. This would amount to 11.5% of current generating capacity in the U.S.
(Ayres et al., 2007)

The U.S. market could pass that for nuclear power, reaching 100,000 MW, equivalent to 15% of the U.S. power supply
(Applied Energy Services)

Cogeneration Schematic

Fuel Economy
Raising the CAF standard to 50 miles per gallon would save at least 2 to 3 million barrels a day
(Guterl)

Improving the average fuel efficiency of vehicles in the United States by 2.7 miles per gallon would equal all U.S. oil imports from the Persian Gulf
(Lovins quoted in Fred Guterl)

Estimates of Energy Required by Various Modes

Alternative Fuel Vehicle

Improvements in fuel economy alone cannot solve the problems of oil availability and clean air Equally important in the long run is the use of alternative fuels, preferably those production and combustion add no net carbon dioxide to the atmosphere Only three fuels meet this ideal criterion: hydrogen (non-fossil fuels); biomass (photosynthetic offset); and electricity (non-fossil fuels)
(Ayres, et al., 2007)

Cost-effective Energy Savings Potential

The Activities involved in Integrated Resource Planning

Targeted DSM
In a competitive environment, it is necessary to change the focus to targeting DSM programs that address not only generation needs but T&D problems as well
(Byrne and Wang et al.)

Other name is demand-response programs. Demand-response programs (initiatives to reduce electricity use during peak demand periods) could improve the reliability of the electricity system
(Government Accountability Office, 2004)

Energy savings are most important in evaluating efficiency investments while peak load reduction is the most important in evaluating demand response
(Spees et al., 2007)

Demand Response Programs

The Energy Independence and Security Act of 2007 requires the FERC to conduct a National Assessment of demand response potential and report to Congress The peak demand without any demand response is estimated to grow at an annual average growth rate of 1.7 percent, reaching approximately 950 GW by 2019 (BAU) Under the highest level of demand response, it is estimated that the 2019 peak load could be reduced by as much as 150 GW, compared to the BAU

A typical peak power plant is about 75 MW, so this reduction would be equivalent to the output of about 2,000 such power plants
(Rattle Group, 2009)

Large vs. Decentralized Combined Heat and Power (DCHP)

A new large plant can be built for fewer dollars per kW of generating capacity, but it applies only to capital cost for the plant itself, not the fuel and not transmission and distribution (T&D)

A recent study by the Carnegie-Mellon Center for Electric Industry Analysis shows that a system based on many decentralized generation units located near users can achieve desired reliability with only 5% reserve margin, rather than the standard 15% margin
(Ayres, et al. 2007)

Decentralized Combined Heat and Power (DCHP)

The U.S. will need 137 GW of new capacity by 2010, costing $84 billion, plus $220 billion for additional T&D. Casten has estimated that meeting this demand with DCHP would cost only $168 billion, with no additional needs for T&D CHP accounts for over 50% of the electric power generated in Denmark; 39% in the Netherlands; 37% in Finland and 31% in Russia; Germany gets 19% and Poland, Japan and China are at 18%
(Ayres, et al. 2007)

Remaining Energy Efficiency Potential

A very substantial technical, economic and achievable energy efficiency potential remains available in the U.S. Considerable opportunities still exist to achieve costeffective savings via energy efficiency policy. Energy efficiency policy clearly represent more of a pipeline to the future than a pipe dream The set of socially cost-effective opportunities is even higher than suggested by the estimates which focus only on the private returns
(Tietenberg, 2009)

Efficiency Technologies: EPRI vs. RMI

Criticism on RMI Estimates

The RMI curve indicates a 75% efficiency increases at an average cost of only 0.6 cent per kWh saved
Energy savings are overestimated, while costs are underestimated Free rider issues are not considered It is not reflected the fact that the ratio of measured to projected (engineering) savings was 63% AEEI was not considered
(Joskow and Marran)

A Schematic Supply Curve of Conserved Energy

Cost of Conserved Energy: The Formula

The Paradox of Efficiency

Curtail in the short term, but long-term impacts are opposite New uses multiply faster than the old ones get retrofitted: Efficiency is improved at the margin More efficient means faster, more miles traveled, and more energy consumption Knowledge-intensive goods grows faster, but does not reduce energy consumption New forms of demand materialized around the new fuels (coal: steam engines, electric power plants) The better energy extracting technology, the cheaper the energy, and we consume more of them
(Huber and Mills, 2005)

Self-Deception: Efficiency with Reduction

Technological efficiency alone offsets continued growth in energy services (Refutation: reduction only come about by reining in the demand for energy services) De-coupling between energy consumption and GDP (Refutation: growth in activities pushes energy consumption upwards)

Technological Efficiency Trap

A larger house consumes more energy for space heating, but less energy per square meter (Geometric Effects) The larger economy, the more energy efficient (due to economy of scale and structural change), but a bigger economy is more energy consuming
(Wilhite and Norgard, 2004)

Rebound Effect
Stanley Jevons (The Coal Question, 1865) is the first person who recognized the rebound effect
(Wilhite and Norgard, 2004)
The direct rebound effect is the increased use of energy services induced by the reduction in their price due to greater efficiency The indirect rebound effect is caused by the reduction in the cost of energy services, so the consumer has a little more money to spend on all goods and services
(Herring, 2006)

Magnitude of Rebound Effect

Argument that the direct rebound effect will lead to a net increase in energy use appear to be grossly exaggerating the magnitude of the phenomenon (Geller and Attali, 2005) Some rebound effect is a fact, but probably less than 20% of the savings
(Wilhite and Norgard, 2004)

The rebound effect is minimal a loss of no more than 1 or 2% of the direct energy savings
(Geller and Attali, 2005)

Efficiency with Sufficiency

An increase in resource efficiency alone leads to nothing, unless it goes hand in hand with an intelligent restraint of growth
(Sachs, 1988)

The full direct savings from more efficient technology could be realized if the goal was to provide for people a certain sufficient amount of energy services, and then level off
(Wilhite and Norgard, 2004)

Reducing Rebound Effect

Combining efficiency of technology with sufficiency in energy services (Wilhite and Norgard, 2004) Carbon taxes and combined policy of green electricity (renewables) and energy efficiency (Herring, 2006) Reinvestment in natural capital rehabilitation
(Wackernagel and Rees, 1997)

Moral restraint and cultural change (wasteful life style) (Rudin, 1999) Less working hours and more leisure (Wilhite and
Norgard, 2004)

Invest the savings from the lower energy bill in even less energy intensive forms for providing energy services, such as passive space heat and cooling designs for buildings (Wilhite and Norgard, 2004)

South Koreas Energy Consumption and CO2 Emissions in 2020

A Supply Curve of Avoided CO2 Emissions in South Korea

Nuclear Moratorium through Energy Efficiency Improvements

Energy Options Full Implementation (100%)
30.3 MTOE (121.2 TWh) 33.6 MTOE (149.5 TWh)

Major Policy Commitment (65%)

30.3 MTOE (121.2 TWh) 21.8 MTOE (97.2 TWh) 28% 38.8% to provide 24.0TWh

New Nuclear Plant Capacity Energy Efficiency Improvements

Increased LNG Capacity Factor

None

Energy Efficiency Gap

There is a relatively low penetration rate for apparently cost-effective energy efficiency technologies
Typically wait for when replacement decisions must be made Standard new model is more efficient than what people are used to and costs less than the high efficient model Applying higher implicit discount rates than in NPV calculation of a given option Uncertainty about actual future savings Indecision about when to invest: current product or wait for the next generation Lack of information, loss aversion (greater from a loss than from an expected gain), liquidity constraints (lack of access to credit markets), and principle/agent problem (landlord/tenant)
(Croucher, 2011)

Conservation Gap
Vampire losses
Leaving things in standby mode (Laptops, TV, phone charges plugged in)

22% of US households had 2 refrigerators

Old one is typically between 10-19 years old
When update appliances, people dont always decommission the old ones

PCs in 68% of households

17% leave on when not using, 26% in sleep mode
(Croucher, 2011)

Direct and Internal Factors Affecting Efficiency Decisions of Energy Sectors

Institutions Influencing Efficiency Decisions of Energy Sectors

Energy Efficiency Policies:

Appropriate pricing (correct price signals) is a necessary condition for promoting energy efficiency
Energy efficiency institutions (including co-ordination at international level) Quantitative targets for energy efficiency improvements with generally annual monitoring requirement Regulations (mandatory use of solar water heaters in Spain; phase-out of use of incandescent lamps in Australia) Energy efficiency certificates for existing buildings Labeling and standards for electrical appliances Financial incentives (including tax incentives) Mandatory audits Fully informing consumers about energy efficiency actions (SEU, ESCOs) Car purchase taxes, fuel taxes, and efficiency obligations for utilities (WEC, 2008)

Ranking (Scorecard) of State Energy Efficiency Policies (2009)

Ranking of U.S. states according to adoption and implementation of energy efficiency policies Six energy efficiency policy areas:
Utility-sector and public benefits programs and policies Transportation policies Building energy codes Combined heat and power State government initiatives Appliance efficiency standards

The top 10 states: CA, MA, CN, OR, NY, VT, WA, MN, RI, ME
The score improved from 15 to 17 points (8 spots from last year): ME, CO, Delaware, DC, SD, TN
(ACEEE, 2009)

Ranking (Scorecard) of State Energy Efficiency Policies (2010)

Ranking of U.S. states according to adoption and implementation of energy efficiency policies Six energy efficiency policy areas:
Utility-sector and public benefits programs and policies Transportation policies Building energy codes Combined heat and power State government initiatives Appliance efficiency standards

The top 10 states: CA, MA, OR, NY, VT, WA, RI, CN, MN, ME The bottom 10 states: AK, LA, OK, MS, WV, KS, NV, WY, MI, ND
NH (22), NJ (12), DE (27), DC (19), MD (16), PA (16)
(ACEEE, 2010)

Energy and Water: Washers

Inefficient washers will waste precious water resources about 14 trillion gallons cumulatively by 2030 Thats enough drinking water to supply the current usage of all U.S. households for a year and a half!

Todays washers using new technology (horizontal-axis) consume about 40% less energy than todays most common models

Copenhagen Conference
Negotiators meeting in Barcelona for the last round of UN climate talks before a big conference in Copenhagen (COP-15) in December 2009 are working on negotiation texts that have no reference to water and its management as tools for climate change adaptation
(Stockholm International Water Institute, 2009)

Consortium for Energy Efficiency

At the end of 2010, twenty-six U.S. states have introduced some form of an energy efficiency standard/goal for regulated electricity utilities.
In 2007 $2.7 billion (rebate) was allocated to encourage the adoption of energy efficiency measures. Whilst in 2010 it is expected to be $5.4 billion