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Entries categorized as ‘Energy Efficiency’

Natural Gas Shortages and the coming CHILL in America’s Living Rooms

June 3, 2008 · No Comments

Conventional, easy-to-get natural gas in the U.S. has already peaked and natural gas from all sources will peak in North America around 2010 and globally between 2030 and 2035.
Dr. Michael Smith, Energy Files Ltd., 2004“

The North American outlook for natural gas production is not good. Mexican production has been in decline since 1999. U.S. production has been in a plateau for some time. All the big finds have been tapped and are in decline. Currently, we are bringing new wells online at a maddening pace just to keep our domestic production flat. And the new wells are declining at rates as high as 80% in the first year. The size of the new finds is also diminishing. Over the past decade, the amount of gas found per foot drilled has declined by 50%.
Dale Allen Pfeiffer, The Natural Gas Cliff, October 2005

Since natural gas is used to heat over 60% of the homes in America and in about 70% of new homes, its important to know how it gets to our homes and how fragile natural gas is as a source of both direct heating energy and as an indirect source of electrical generation for cooling.

Natural gas consists mostly of methane. Conventional natural gas is found in underground formations of porous rock, and conventional, easy sources of NG in the U.S. peaked in 1973. To keep up with demand, we are now frantically drilling and keeping our supply heads above water with a combination of shale gas, tight gas(from non-porous rock formations), deep gas (from wells over 15,000 feet in depth), sub-sea gas, and coalbed methane gas. These “unconventional” sources all require more risk and capital for extraction. Nearly 20% of U.S. demand is filled with imports from Canada through our existing pipeline system and to a much lessor extent via imports of liquid natural gas (LNG) from Trinidad and Tobago.

Natural gas gets to our homes through a complex system of pipes or “lines”. Gathering lines connect drill rig production areas to natural gas processing or refining plants which separate out natural gas liquids, water, carbon dioxide, sulfur, and inert gases such as helium which would reduce the energy value of the gas. The refined gas is then piped into a 280-thousand mile North American transmission network. This network consists of 20 to 42-inch diameter pipes with compressor “boost stations” located about 75-miles apart to maintain sufficient working pressure.

Local distribution companies tap into to this network, providing a storage buffer, and metering the gas through a system of more than one million miles of mains and smaller trunk lines that bring gas to our homes.

Much of the soil in the Great Plains is little more than a sponge into which we must pour hydrocarbon-based [natural gas] fertilizers in order to produce crops.
Dale Allen Pfeiffer, Eating Fossil Fuels, 2004

Looming Natural Gas Shortages

No one knows how and exactly when shortages will occur, but shortages are inevitable, even in the context of exploiting new arctic natural gas sources and the building of a massive LNG (liquid natural gas) infrastructure. Both of these sources will take years to develop and to have an impact and will require billions of dollars in capital expenditures. LNG is our best hope of avoiding severe shortages, but dependence on LNG will thrust us into the international gas market, forcing us to compete for Middle Eastern and Russia gas with Europe and the emerging economies of India and China, at prices two to three times what we pay today. By the time arctic gas and imported LNG become available in meaningful quantities, we will have already begun a steady and irreversible decline in our current North American sources of production.

A few years ago people looked at L.N.G. as a solution to North America’s gas needs. But
today we see that there is less L.N.G. around than people expected, and there is more
competition for that L.N.G. from markets that are willing to pay more than the United States.

Nikos Tsafos, analyst with PFC Energy, 2008

At first higher prices will cause demand destruction in the industrial sector and manufacturers will convert to other energy sources like coal or move production to locations in the world where natural gas is still plentiful. Eventually, because modern agriculture is heavily dependent on fertilizer, and natural gas in the primary fertilizer feedstock, we may be faced with the dilemma of either heating our homes or putting food on the table.

Just as we will be forced to find new ways to configure and power a personal transportation system, we will have to find new ways (or revert to old ways) to moderate the internal environments of our homes. The equivalent of 500 HP forced air furnaces lumbering away in the basements of our poorly constructed and insulated homes will no longer be sustainable in a world of rapidly depleting fossil fuel supplies. In many ways the inertia of transforming over 100 million existing homes will be more difficult than transforming our transportation system and onus and urgency for change will fall on the homeowner.

Categories: Energy Efficiency · Natural Gas Peak Production · central heating and air conditioning
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The LEED Narrative – Going Beyond

May 20, 2008 · 7 Comments

I received an email this morning from Scot Horst , who chairs the LEED Steering Committee. He describes the behind the scenes narrative that has been going on since work began on LEED 2009.

Person A: “Global warming doesn’t give us much time.”
Person B: “But we can’t address much of anything, let alone global warming, if we’re only dealing with a small fraction of the entire built environment. We need to get everyone involved.”

Person A: “Yes, but why get them involved in a system that doesn’t take them far enough to save us from ourselves? We need our buildings to be restorative.”
Person B: “LEED can’t save us from ourselves. LEED, as a tool, can engage the market in transformation. That transformation is about people. It is not about LEED credits.”

Person A: “You’re missing the point. We have to be tougher. We have to go beyond.”
Person B: “No, you’re missing the point. We have to find ways to engage a market that has never thought about these issues before.”

Persons A and B: “Let’s find a way to do both.

”This is an engaging and very important narrative and perhaps the most important point for me is that LEED is a “tool” that helps to raise consciousness and “engage the market in transformation.” My personal view is that we must “go beyond” and that much of what we currently do in the green building movement, however well intentioned, is nothing more than rearranging the deck chairs on the titanic. The global warming mentioned in Horst’s narrative has provided the catalyst for both LEED and Architecture 2030, but focusing solely on warming misses the point. Warming is a symptom and not a cause. It has prompted us to take some action, but not to “go beyond”. As a premise for action it has been useful, but is easily attacked on it’s “scientific validity”. It is one of the canaries in the coal mine, but there has been is very little discussion of the coal mine. We need to expand the narrative and take a broader view.

Taking a page out of ecological economics, once you picture the built environment as a mere subset of our closed ecosystem, then your conceptual framework regarding sustainable building is forever changed. It means you have to accept that there are limits, and that we are not going to be able to grow forever. It implies the built environment must have some optimal size and level of consumption relative to the larger ecosystem. It means you cannot grow beyond that optimum without threatening man’s survival within that ecosystem. Out of this stream of thought flows a list of very troubling questions?

  • How do we stop growing?
  • What are the limits? What is optimal?
  • Does climate change tell us they have already been exceeded?
  • Do we face a kind of built environment armageddon when fossil fuel production peaks and begins to decline?
  • Is a zero energy standard imperative now?
  • What do we do? How do we do it?

Our very survival depends on how and when these questions are answered. LEED does not provide the answers, but it does help us to prepare.

Categories: Architecture 2030 · Ecological Economics · Energy Efficiency · Global Warming · Green Building · LEED for Homes · Net Zero Energy Home · Peak Oil · Sustainable Design · Zero Energy Buildings
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Phase Change Materials – The Future of Natural Indoor Climate Control

May 19, 2008 · 1 Comment

There are two ways to store heat and even out the diurnal or daily temperature swings in buildings. One is with massive material’s like stone, brick, and concrete the other is with phase change materials or PCM’s.

A material is said to “change phase” when energy is either added or removed to cause it to change from a liquid state to a solid state or from liquid state to a gaseous state. For example, it takes a considerable amount of energy to transform ice into water and in the process the temperature remains at 32° F. This energy storage capacity within the phase change is called “latent heat” and when harnessed allows for the storage of heat energy in a fraction of the volume required by materials like stone or concrete.

For building applications, you want this phase change to occur at or near the desired room temperature, so custom wax formulations are usually the material of chose. As the cost of energy has increased, interest in PCM technology has also increased.

In 2005, Oak Ridge National Laboratory teamed with Advanced Fiber Technology and BASF, demonstrated that a 2×6 wall insulated with cellulose insulation seeded with 22% PCM reduced the surface heat flow rate by 40%.

PCM seeded insulation is not yet commercially available, however BASF has developed a drywall product called SmartBoard™ that is available in the EU that incorporates microscopic polymer spheres filled with wax. Applying this 15-mm (0.59 inch) thick drywall product is the equivalent of adding a 9-cm (3.54 inches) thick layer of concrete. SmartBoard™ is supplied with a choice of two “switching” or PCM melt temperatures, 23°C(73.4°F) and 26°C(78.8°F) designed to accommodate both heating dominated and cooling dominated climates.

SmartBoard™ has been successfully tested in each major EU climate zone and was used by last year’s winner of the DOE’s Solar Decathlon.

2007 Solar Decathlon - 1st Place Entry by the University of Technology, Darmstad

In addition to SmartBoard, BASF PCM materials have been incorporated into several other building products in the EU:

  • Aerated Concrete by H+H Celcon, Germany
  • Gypsum Building Blocks by Saint Gobain Rigips, Switzerland
  • Gypsum Plaster by Saint Gobain Maxit, Germany
  • Radiant (active) Cooling Ceiling Tiles by MWH BARCOL Air, Switzerland and Ilkazel, Germany

Categories: Energy Efficiency · Green Building · Sustainable Design
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State of the Union 2010

April 16, 2008 · No Comments

“[The President] shall from time to time give to Congress information of the State of the Union and recommend to their Consideration such measures as he shall judge necessary and expedient.”
The United States Constitution, Article II, Section 3

Members of Congress, madame Speaker, distinguished guests, my fellow Americans…as many who have come before me, I stand before you this evening to fulfill a constitutional obligation. The first State of the Union address was delivered in straight forward manner to a newly formed congress by George Washington on January 8th, 1790. However, some two century’s latter, this time honored tradition has in devolved into political theatre with standing ovations predictably limited to one side of the aisle and political points cynically won from guests planted in the gallery. The American people deserve better, so this evening I will depart from my prepared remarks and tell the people of America and of the world what they need to hear rather than what they either want or expect to hear. Many will not like what I have to say, but this union and the world stand at a cross roads and there is no better forum than this to address this critical moment in history.

When George Washington delivered the first address in 1790 the population of the world stood at approximately 1 billion and the population of our new fledgling country was less than 4 million. Our nation’s borders had yet to reach the Pacific and many parts of the earth, including our great western states were still unexplored. Mankind’s footprint on this world was still relatively small. At the beginning of our nation’s life, it was just and reasonable to limit the focus of this address to our new and fragile union. However, today we cannot understand the state of our union without first putting it in both its historical context and in the context of the state of our planet. To do otherwise, would be to put us in grave danger.

In contrast to the time of Washington’s address, the population of the earth today exceeds 6.6 billion and our country’s population stands at nearly 304 million. As a result of that growth, mankind’s footprint on this world has in many ways begun to exceed the limits of the earth’s carrying capacity. We see the effects of these limits manifested in record high natural gas and heating oil prices, $200/barrel oil, $10/gallon gasoline, climate change, a persistent and prolonged state of financial crisis, the ongoing military conflicts in Iraq, Iran, and Afghanistan, and in the continuing food shortages and riots in both our country and around the world. But these issues, as serious and troubling as them may seem, are merely symptoms, not the root cause of the problems we face today.

When America’s space program provided us with the first photos of our planet from the perspective of space, we were awed not only by the beauty of our planet, but by it’s lonely isolation. One small planet providing an island oasis for humanity in an infinite universe. We can easily grasp the limitations of an island, but we have naively thought of the earth as an infinite source of life nurturing resources. The truth however, is that every planet like every island has a limited supply of natural resources and our planet is no different. As the world’s population and economy has grown, our natural resources have been systematically exhausted to the point were we can no longer depend on their increasing supply to fuel our economic growth and standards of living. Our undeniable reality is that we will have to accept and adjust to the limits imposed by the closed system we call Earth.

The challenge these natural limits will impose on our nation and the world will exceed any that we have faced either as a nation or as a community of nations. Our state of the world is that we have outgrown and exceeded the capacity of the earth to sustain the current level of population at current levels of consumption. Every other problem we face today is but a symptom of this one undeniable fact. Our choice is simple, we can either chase after symptoms and descend into a death spiral of conflict over dwindling resources, or we can use what remains of the earth’s resources to create a sustainable world for thousands of future generations. As a community of nations, we will have one chance and one chance only to accomplish this transition and the time is now. This is our moment to fail or succeed. If we fail to use what remains of our fossil fuel and other resources to successfully make this transition, the consequences will be dire and the world will return to a pre-industrial existence capable of sustaining only a fraction of the world’s existing population. Time is not on our side and we have only two, perhaps three decades to complete the task. It is incumbent upon this union, and the people of this nation to lead the world in this transition.

Our union began with a simple declaration penned by Thomas Jefferson.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness

Historically, as we pursued these simple Rights, we have much we can hold with pride and much we must hold with shame. As a country we have been both a shinning beacon of hope, opportunity, freedom, and prosperity; and we have also practiced slavery, committed genocide against our native populations, and covertly and overtly meddled in the affairs of other sovereign nations. We have won wars justly fought in the name of freedom and lost wars with murkier political and moral aims. Today we are no longer the the republic our founding fathers envisioned. We have become the most powerful nation in the history of the world….a virtual empire with over 800 foreign military posts and bases and a military budget exceeding the next 46 countries combined. If you add all of the money spent to maintain and support our worldwide empire by the DOD, the CIA, the Treasury, the FBI the State Department, Homeland Security, the Veterans Administration, and the interest we pay on past military expenditures, it amounts to well over $1-trillion per year and growing. This figure does even include the “supplemental” funds being spent on our current middle east conflicts. These expenditures are not sustainable, and the slow creeping growth of this overreaching empire has turned us into the world’s largest debtor nation and moved us far from the founding principles and ideals of our nation.

The economic success we experienced for the better part of the last century has given us the highest standard of consumption in the world, but by many measures, not the highest quality of life. For many of us, our pursuit of happiness has become a frantic, costly, and unsatisfying pursuit of the trivial and meaningless. In just a few decades we have managed to transform the strongest, most dynamic manufacturing economy in the world into a economy completely dependent on consumerism and debt. In a country with a negative savings rate, record high credit card debt, and declining home values, our consumer led economy is long past sustainable.

Yet it is from this point in our history that we must face our greatest challenge. If we continue to look at symptoms, our situation to many will seem hopeless and out of desperation and fear we will be tempted to blame others for our problems. Demagogues have and will call for pre-emptive military action against those that control what remains of the world’s rapidly depleting natural resources. But there can be no peace in the context of scarcity and no pursuit of happiness without peace. The root cause of our problems will not and cannot be solved by military action.

No other resource defines our current state than the world’s declining reserves of oil. Beginning with the discovery of oil in Pennsylvania in 1865, our country rapidly became the world’s first oil economy and this cheap and abundant energy resource would be the fuel and engine of growth that enabled us to become the world’s greatest economic power. However, U.S. production of oil peaked in 1971 and the petroleum power center quickly moved to middle east. Today it is painfully evident that oil production has peaked world wide and at current rates of consumption and depletion only half of what the world uses today will be available in just two decades. We will face similar “peaks” and painful declines in the production of coal, natural gas, and even uranium in the not so distant future.

Transitioning to a post fossil fuel world will not be easy. It will require sacrifice, high levels of cooperation, leadership, and the personal effort of every citizen of both this nation and of our community of nations. The last time our nation and much of the world was called upon to truly join together for a common cause was during WWII. That generation met it’s challenge and now it is our turn. The stakes have never been higher and the future of humanity literally hangs in the balance.

There will be some that say that “the market” will naturally adjust to the decline in fossil fuel resources and that all we have to do is stand back and trust in the magic of free markets. There is an element of truth is that view and one could point to recent growth in the renewable energy segment as proof of the validity of that position. However, like it or not, government is an integral part of the “market” and decades worth of federal and state laws, tax codes, and zoning and building regulations have been erected in direct or indirect support of our fossil fuel dependent economy. These laws, codes, and regulations will have to be rapidly deconstructed and rewritten to support a new sustainable, steady state economy fueled by renewable energy sources.

I have referenced population size several times in this address, and now I must return to this difficult and sensitive topic. The topics of human life and family size in this country have always been sacred, however as a nation and as a community of nations, we must face the very real limits of our planet to sustain life. The earth has a limited carrying capacity and can only support a reasonable standard of living for a given population size, and this capacity has already been exceeded. The world’s population can now only grow at the expense of our collective living standards and at the risk of increased and severe suffering. The only rational and humane course of action, is to limit and then reverse population growth in both the U.S. and the world.

The political, economic, and technical challenges we are facing are unprecedented and nothing we have faced in the past has prepared us for this moment. For the first time in human history we cannot meet these challenges and expect to succeed merely as individuals, or political parties, or as religious groups, or as nation states or as blocks of nations. To meet this challenge at this time, the entire world of nations must all join together in order to succeed or risk the catastrophic collapse of civilization.

Over the coming days I will be outlining a broad range of programs to meet this challenge. There will be no time for the usual political posturing or distractions, or for the interference of vested interests. Reason and events tell us that we all share the same vested interest and that our very survival is at stake. The american people will expect Congress to act boldly and decisively. The world will be watching.

First, to free up the required capital and additional engineering and R&D talent required to make the transition, I am proposing that we begin to aggressively reduce the expenditures of our military empire. A reduction in our current defense budget by 50% would still leave us spending as much as the next 5 countries combined. We can no longer afford to have our military robbing us of the nation’s industrial capital and technical talent. We must and will create a new manufacturing economy in America based on renewable energy and other sustainable technologies.

This new economy will be powered by electricity derived from solar and wind for our peak power demands, and most importantly by geothermal energy for our base load demand. In order to meet the challenge of making the transition to a post fossil fuel economy, I am proposing a government funded and fast tracked “Manhattan Project” to replace all of our coal fired power plants with geothermal energy by the year 2030.

Since we can only meet our future energy needs by addressing both the demand and supply sides of the equation, we must aggressively revise our tax codes to provide both credits and write-offs for a much broader array of energy conservation technologies and products. For example, we currently provide no incentives for solar hot water heating and rather than leading the world, as we must and should, the U.S. ranks behind both Solvenia and Albania in the the application of this technology.

The challenge of transforming our food supply may be one of our greatest. Food in U.S. travels an average of 1,500 miles from farm to table and we are dangerously dependent on oil and natural gas which supply the feedstocks for the pesticides, herbicides, and fertilizers on which our centralized and mechanized industrial food system depends. As evidenced by our growing food crisis, this system is rapidly becoming unsustainable and to help bridge the transition to a more localized food delivery system we will reinstitute the “victory garden” program of WWII and create millions of citizen farmers to secure our nations food supply.

Our residential, commercial, and industrial buildings consume 73% of our electricity and 20% of our natural gas. Easy and cheap energy has made building designer’s environmentally complacent and for the last 100 years we have relied on brute force heating and cooling solutions to prop up building designs totally inadequate for their environment. That practice must end and I am proposing that all new buildings in this country be designed to a zero energy standard and that tax incentives be put in place to help convert our existing building stock into some semblance of energy efficiency.

The pattern of our homes, cities, and transportation systems was created in a time of cheap and abundant fossil fuels. As oil and natural gas become increasingly scarce we will have to reshape our patterns and style of living. The new plug-in hybrids that are just appearing on the market will help to replace our use of liquid fuels for driving, but this new technology will soon cause us to exceed our electrical generation capacity. Our one car, one person pattern of commuting from isolated suburbs to work and shopping centers will have to be transformed. As a start, I am proposing that all knowledge workers be allowed the right to telecommute and to write off the the use of their home offices on their individual tax returns. We must also divert much of our unproductive defense budget and aggressively invest in light rail transportation systems and in our national rail system. In addition, our residential zoning laws will have to eased so that our pattern of suburban sprawl can naturally evolve new centers and nodes of commerce within walking and bicycling distance of our population.

However difficult, we must begin to face the limited carrying capacity of earth with regard to population. As a beginning, I am proposing that our tax codes be revised to support and reflect a stable and sustainable population, and that the tax credit for dependents be limited to one child. Out of fairness this new policy will not be retroactive nor apply to adopted children.

Lastly, we must change the way we keep score. One of the reasons we are in this mess is that classical economics assumes that natural resources like oil are infinite and makes no accounting of their depletion nor of the negative environmental effects of their use. We can no longer count the clean up of a super fund site as having the same positive impact to our gross national product as the building of a 747. To make matters worse, for decades our government has cooked the books to make things look considerably better than they appear. If we were held to the same accounting standards as our fortune 500 companies our annual deficits would actually be about ten times what is normally reported and we would have had to declare bankruptcy long ago. If we are to successfully transition to a sustainable way of life in the next 20 years then we must be able to accurately and reliably measure our progress and to that end I am proposing that we upgrade our national accounting practices to comply with a more realistic and accurate ecological economics standard.

The next two decades will be extremely disruptive and difficult and it is unlikely that any of us will emerge without great hardship and sacrifice. If there was ever a time for courage, for hard work, for faith, for strength of character, now is that time. I am counting on the people of this nation, on the people of the world, and on our community of nations to meet these challenges for the benefit of our children and grandchildren and for a thousand generations to come.

Thank you all and may God bless our nation and this planet.

This “address” is obviously a fiction and although much of what I say is factual even today, I doubt that any politician would have the courage the be this honest until things were well beyond the point of no return.

The market has begun to respond and it is not by accident that plug-in hybrids will begin to appear just as the general public is becoming aware of “peak oil”. The basic story line will run its course and we may just muddle through and make the transition in time to prevent a significant die-off of the world’s population. My guess is that it will be a messy transition with much political posturing, great suffering, and considerable military mischief.

Whether or not we do manage to muddle through, in the end, the world will no longer resemble the one we know today.

Categories: Building Codes · Energy Efficiency · Global Warming · Green Building · Natural Gas Peak Production · Net Zero Energy Home · Peak Oil · Sustainable Design · sustainable economics
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How our Homes became the Equivalent of a Hummer

December 3, 2007 · 9 Comments

“In 1946, when the American post war housing boom started, the average house was 1100 square feet and housed 5 people. Fifty years latter, in 1996 the average house would grow to 2200 square feet and house 2.6 people and by 2007, fueled by easy credit, the average American home would would become the equivalent of a Hummer, “weighing in” at super-sized 2,400 square feet.”

In 1934, during the depths of the Depression, Congress passed the National Housing Act to strengthen a deeply troubled housing market. This act created the Federal Housing Administration (FHA) which was amended in 1938 to create the Federal National Mortgage Association (Ginnie Mae) – an entity designed to help mortgage lenders gain access to capital for mortgage loans. An important element of this legislation was to make mortgage funds available to more Americans by protecting lenders from the risk of default. In its earliest days, Fannie Mae nationalized the mortgage industry by creating the first mechanism in America for selling individual mortgages (backed the U.S. government) into a secondary market.

When the FHA and Fannie Mae were created, the housing industry was flat on its back:

  • Two million construction workers had lost their jobs.
  • Housing finance was a fragmented, inefficient and illiquid. Mortgage rates varied considerably from region to region. In some economically distressed regions there were simply no funds available.
  • Terms were very difficult to meet for homebuyers seeking mortgages.
  • Lending institutions would issue a mortgage, collect payments, and file the mortgage away until the principal was paid off. A lack of available, consistently priced capital put a hard ceiling on the number of new mortgages that could be issued.
  • Mortgage loan terms were limited to 50 percent of the property’s market value. Borrower’s were faced with a 50% down payment and a repayment schedule spread over three to five years and ending with a large balloon payment.
  • America was primarily a nation of renters. Only four in 10 households owned homes.
  • Homes were NOT considered as investments and refi’s and equity withdrawals were extremely rare.

In the 1940’s after WWII, the FHA and the GI Bill helped finance millions of homes for returning veterans and their families. This post war period would mark the peak of American economic dominance. We were still the world’s major oil producer AND exporter and due to the devastation of the European manufacturing base, we dominated the world in virtually every industrial and manufacturing sector.

Fueled by cheap and abundant fossil fuel energy, this period would also mark the beginning of an American landscape built around the automobile and the “American (suburban) Dream”. These were “heady” times and the freedom of movement afforded by the automobile combined with affordable housing for millions of returning GI’s would prove seductive. We would build cars and homes as if the gasoline, natural gas, fuel oil, and electricity that made driving and comfortable home dwelling possible would be cheap and abundant forever. The big lumbering gas guzzling V8’s of the forties and fifties would be driven home to the energy guzzling, thinly insulated, drafty homes of a new suburbia. The cars would last about 5 five years. The homes however would last an average of 75 years.

 

In 1946, when the American post war housing boom started, the average house was 1100 square feet and housed 5 people. Fifty years latter, in 1996 the average house would grow to 2200 square feet and house 2.6 people and by 2007, fueled by easy credit, the average American home would would become the equivalent of a Hummer, “weighing in” at super-sized 2,400 square feet. The peaking of U.S. oil production in 1971, the formation of OPEC in 1973 and the associated energy crisis’ of the 1970’s would force much needed improvements in our building codes. However, today’s homes are still grossly under-insulated and 1/3 of their energy losses are still the result of air leaks through poorly constructed exterior walls! Our home energy standards are possibly worse than our car and truck CAFE standards (federal mileage requirements).  Look underneath the hood of our homes and you’ll 500 HP, super charged forced air furnaces lumbering away in our basements and holding the cold at bay with the brute force of natural gas and oil. We are still behaving as if cheap energy sources are forever.

Adding to the problem is the current culture of “homes as investments” and average ownership cycles of only 5 years. We are a culture with a myopic time horizon where granite countertops, super-sized floorplans, and home-equity financed SUV’s trump energy efficiency and solar hot water systems. This “housing bubble” culture may soon be going the way of the dinosaur with the fall of the sub-prime loan market, the collapse of Wall Street’s sleazy and toxic secondary market for home mortgages, and the first serious decline in home values since the great depression. However, the final death blow will come with the peaking of fossil fuel production, fuel shortages, blackouts, and the obvious and urgent need to transform our housing stock into some semblance of energy efficiency.

Categories: Building Codes · Energy Efficiency · Natural Gas Peak Production · Peak Oil · Solar Hot Water · Sustainable Design · central heating and air conditioning

“One Last Chance” for a Sustainable Future?

November 20, 2007 · 3 Comments

“It has often been said that, if the human species fails to make a go of it here on the Earth, some other species will take over the running. In the sense of developing intelligence this is not correct. We have or soon will have, exhausted the necessary physical prerequisites so far as this planet is concerned. With coal gone, oil gone, high-grade metallic ores gone, no species however competent can make the long climb from primitive conditions to high-level technology.
This is a one-shot affair. If we fail, this planetary system fails so far as intelligence is concerned. The same will be true of other planetary systems.On each of them there will be one chance, and one chance only.”
Sir Frederic Hoyle, British Astronomer, 1964

 

 

Hoyle’s “necessary physical prerequisites” are not yet gone, but the extraction of our most critical non-renewable energy resources will soon reach a geological milestone, and production will peak and then decline. This will set a two to three decade clock on our last and only chance to achieve a sustainable society.

  • The consensus is that the production of oil has already peaked (2006) or will peak shortly and that serious shortages will occur by about 2010
  • Natural gas production in N. America will peak between 2010 and 2015
  • Uranium extraction will peak in 2025 and shortages are possible as early as 2013 when we can no longer depend on the recycling of Russian nuclear warheads to meet demand.
  • Coal will peak around 2025 at about 30% above the present production

“…we don’t have to run out of oil to start having severe problems with industrial civilization and its dependent systems. We only have to slip over the all-time production peak and begin a slide down the arc of steady depletion.”
Howard Kunster ,The Long Emergency, 2005

 

 

 

We are left with the choice of only two future paths of development. The “business as usual” path will lead us to tragically overshoot the earth’s carrying capacity, resulting in economic collapse, and a dramatic reduction in the earth’s population as we return to a pre-industrial revolution standard of living. The second path represents Hoyle’s “last and only chance” to wisely use our remaining fossil fuel resources to build a sustainable and renewable energy foundation for a new steady-state world economy. An economy and society with a stable population that falls within the limits of our planet’s carrying capacity. I fear that the greater probability lies with the first path, but know we have both the knowledge and means to forge the second.

 

On the supply side, the second path requires that we rapidly replace our current extractive, non-renewable energy model with renewable sources like geothermal, solar, wind, and wave power. It will be a future dominated by electrical power as liquid fuels become increasingly scarce. However, it will not be enough to reach a stable, sustainable future without major changes to the demand side of the energy equation.

 

As we enter this period of sustained crisis and begin the journey down the path of ecological stability, it will quickly become evident that the only reasonable standard for building design will be a standard of net zero energy consumption. Because we lack information, initially this will be part science and part intuition based on passive heating and cooling lessons from the past. Eventually we will come to know the embodied energy of every building material and component and make many decisions based on the EROIE (energy return on investment of the energy embodied) of building products like insulation, low-e glazing, PV panels, and wind turbines. Houses will become smaller and change shape as energy trumps fashion and becomes the primary design factor. A whole new industry will emerge to help homeowners convert over 100-million thinly insulated, poorly constructed homes into some semblance of energy efficiency. Pattern’s of development and zoning laws will change as the age of the automobile comes to a close. Populations will shift and migrate as the end of cheap air-conditioning makes living in many parts of the country less desirable. Home landscaping will change from ornamental to edible, and grey water irrigation will become commonplace as the energy costs to move and purify water change our attitudes about this precious natural resource. Local materials will dominate construction and the age of imported italian granite countertops will come to an end.

 

The longer policy makers wait to take action the lower the probability of success. When shortages become evident we may still fall into denial. Demagogues and special interests will deny the limits of geology and blame OPEC, Islam, environmentalists, or speculators. If allowed, they will cloud the issue and cost us precious time.

Our “last chance” will be a battle. It will not be an easy time.

Categories: Carrying Capacity · Energy Efficiency · Natural Gas Peak Production · Net Zero Energy Home · Peak Oil · Sustainable Design · Zero Energy Buildings · passive solar design · photovoltaic

Fantasy Economics and the Sustainable Society Revolution

November 6, 2007 · No Comments

“Macroeconomic theory in our text books conveniently behaves as if the ecosystem does not exist all the while consuming products and services from the ecosystem which fuels economic growth.”
Mark Anielski

“Despite evidence that the ecology does in fact exhibit constraints in accordance with the laws of physics, we continue down a ruinous path too afraid, paralysed, or unable to acknowledge the truth since such a revelation would put in question all we have pursued since the Industrial
Revolution. This would mean that the pursuit of increased wealth and prosperity by current generations will impose a high price on future generations.”

Mark Anielski

In a perfect Adam Smith world, markets are supposed to efficiently set prices based on relative supply and demand. In the real world, a host of other factors can effect price. Federal and local governments add sales and other taxes. Governments impose tariffs and import duties. Cartels increase and decrease supply to achieve political or financial objectives. Central banks increase the money supply, improving “liquidity” while fostering monetary and price inflation.

 

However, prices for many goods also reflect a fantasy economics that assumes an infinite supply of non-renewable raw materials and zero costs associated with the consumption and disposal of goods. For example, the economic activity associated with an asbestos plant and economic activity to clean up the resulting super-fund site are both counted as positive contributions to our GNP.

 

Crude oil is another great example. Non renewable resources like oil follow a bell shaped supply curve. During the easy to find and extract “up” side of bell curve, supply out-strips demand and prices are low. In most minds supply and reserves are thought to infinite and no thought is given to conservation. Think of Hummers, NASCAR, and SUV’s as the symbols for this side of bell curve. Indirect costs like pollution, suburban sprawl, energy insecurity, and climate change are NOT factored into the price, but are paid none the less through higher healthcare costs, lower productivity, taxes, military adventures, and “natural” disasters.

 

As we reach the top of the bell curve as in the case of oil today, demand is approaching the limits of supply and prices have increased rapidly. According to the IEA, supply reached an all time production in May of 2006 of 86.11-million barrels per day in July 2006 and in 2007 the price of crude oil has increased by about 70% to over $95 per barrel as we draw down the developed world’s stockpiles. And yet even these prices do not reflect the true costs of depleting this non-renewable resource.

 

As we roll over the top of the oil production bell curve sometime around 2010, supply will decline and at some point after conservation and replacement technologies fail to close the gap, a painful path of “demand destruction” will become our only option to balance the supply-demand equation. The economic recession caused by this demand destruction will be just another hidden cost of the economic fantasy of “unlimited” non-renewable resources.

 

What does all this have to do with “The Sustainable Home Blog”? Is this just a self-indulgent rant, rambling for the sake rambling? The reason I keep returning to the topics of economic theory and peak oil is that they everything to do with limits and reason for sustainable building.

 

The green building movement is already big business and we may have reached a tipping point in 2007, where more than 50% of the key decision makers in the business world of building have reached the conclusion that the movement has legs and that a decades long bull market for all things green is an opportunity worth pursuing. What is the source of this apparent demand for these new green products and buildings? Is it global warming, rising energy costs, insurance claims from sick building syndrome, or the urge to “do good”? I think it’s all of these reasons and more, but “going green” is still more fashion than necessity, and collectively, it has not entered our consciousness that there are limits to growth in a closed ecosystem and that our current path of “development” threatens our very survival.

 

That’s all about to change. The ecosystem has been sending us warning signals (the effects of air and water pollution, species loss, climate change, etc.) for decades, but because these signals didn’t have a direct individual impact on the majority of world’s inhabitants, we have continued on a path of unsustainable global development modeled after the American standard of living and consumption. As we push up against the geological limits of peak oil(~2010), peak natural gas(~2015), peak coal(~2025), and peak uranium(~2025), the cheap energy that’s been driving development since the beginning of the industrial revolution will will no longer be either cheap or abundant and we will come face to face with our own unsustainable reality. No combination of known technologies will even come close to filling the gap left by these declining non-renewable energy sources and it will take decades for us to recognize the natural limits to growth of our ecosystem and transition to a steady-state and sustainable economy.

As we enter this period of sustained crisis, it will quickly become evident that the only reasonable standard for building design will be a standard of net zero energy consumption.  Because we lack information, initially this will be part science and part intuition based on on passive heating and cooling lessons from the past.  Eventually we will come to know the embodied energy of every building material and make many decisions based on the EROIE (energy return on investment of the energy embodied) of building products like insulation, low-e glazing, PV panels, and wind turbines.   Houses will become smaller and change shape as energy trumps fashion and becomes the primary design factor.  A whole new industry will emerge to help homeowners convert over 100-million thinly insulated, poorly constructed homes into some semblance of energy efficiency.  Pattern’s of development and zoning laws will change as the age of automobile comes to a close.  Populations will shift and migrate as the end of cheap air-conditioning makes living in many parts of the country less desirable.   Home landscaping will change from ornamental to edible, and grey water irrigation will become commonplace as the energy costs to move and purify water change our attitudes about this precious natural resource.   Local materials will dominate construction and the age of imported italian granite countertops will come to an end.

We might look back and call this the sustainable society revolution.  A revolution where in we deconstruct, modify, and replace much of what we thought and built during the industrial revolution.  In a very real sense, its already started and we’re just seeing the first signs.

 

 

Categories: Energy Efficiency · Global Warming · Green Accounting · Green Building · Natural Gas Peak Production · Net Zero Energy Home · Peak Oil · Steady State Economics · Sustainable Design · Zero Energy Buildings · central heating and air conditioning · sustainable economics

Definitions of Sustainability and a Steady State World

October 23, 2007 · No Comments


”…the world’s richest 20 per cent of the population consume 86 per cent of its goods and services, over half its energy and nearly half its meat and fish.”

Given how few buildings architects actually design in this country compared with the EU for example, I’m not sure how relevant the profession is to the topic of sustainability.  However, I was curious enough to see what might be the official AIA word on the subject.  I found this posting on the internet from the AIA Committee on the Environment.

 “The linked domains of sustainability are environmental (natural patterns and flows), economic (financial patterns and equity), and social (human, cultural, and spiritual). Sustainable design is a collaborative process that involves thinking ecologically—studying systems, relationships, and interactions—in order to design in ways that remove rather than contribute stress from systems. The sustainable design process holistically and creatively connects land use and design at the regional level and addresses community design and mobility; site ecology and water use; place-based energy generation, performance, and security; materials and construction; light and air; bioclimatic design; and issues of long life and loose fit. True sustainable design is beautiful, humane, socially appropriate, and restorative.”

My first reaction to this lengthy, rambling definition was huh???!!! what the %$#@ does that mean?  No wonder I hear quotes like “If it’s not beautiful, it’s not sustainable” from celebrity architects.  Definitions like that, however well meaning are a license to do just about anything.  So I thought maybe one of the leading schools of architecture would be more helpful and provide a definition with some substance.  I found this posting on the Carnegie Mellon School of Architecture’s site.

“Sustainable design is a collective process whereby the built environment achieves new levels of ecological balance through new and retrofit construction, towards the long term viability and humanization of architecture. Focusing on environmental context, sustainable design merges the natural, minimum resource conditioning solutions of the past (daylight, solar heat and natural ventilation) with the innovative technologies of the present, into an integrated “intelligent” system that supports individual control with expert negotiation for resource consciousness. Sustainable design rediscovers the social, environmental and technical values of pedestrian, mixed use communities, fully using existing infrastructures, including “main streets” and small town planning principles, and recapturing indoor-outdoor relationships. Sustainable design avoids the further thinning out of land use, the dislocated placement of buildings and functions. Sustainable design introduces benign, non-polluting materials and assemblies with lower embodied and operating energy requirements, and higher durability and recyclability. Finally, sustainable design offers architecture of long term value through ‘forgiving’ and modifiable building systems, life-cycle instead of least-cost investments, and timeless delight and craftsmanship.”

 Again, a long, rambling definition full of academic architectural jargon like “timeless delight”.  Is this representative of the sustainable mind candy being fed to the future building designers of america?  What about limits?  What about carrying capacity?  What about the huge energy drain, climate impact, and unsustainable ecological footprint of our existing building stock?  Where is the call to action?

Looking for answers, I found the following on the Presidio School of Management’s “Sustainability Dictionary” website.  Apparently in the academic world there are three different flavors or “criteria” of sustainability.

Social Criteria:

  • Socially desirable
  • Culturally acceptable
  • Psychologically nurturing

Financial Criteria:

  • Economically sustainable
  • Technologically feasible
  • Operationally viable

Environmental Criteria:

  • Environmentally Robust
  • Generationally Sensitive
  • Capable of continuous learning

Although I can sympathize with architectural profession’s emphasis on social criteria such as beauty and “timeless delight”, I don’t think it serves a world facing climate change and a looming carrying capacity crisis brought on by the “peak” production and supply of oil, gas, and coal.  The AIA and Carnegie Mellon definitions allude to “environmental criteria”, but only in vague terms.  What is needed is a sustainable building standard that addresses the very real limits to carrying capacity and our obligations to future generations.  Unfortunately, LEEDS, Energy Star, or any other “green” standard falls far short of meeting such a standard.

 

In 1987 the U.N. World Commission on the Environment and Development [commonly known as the Brundtland Commission] set the table for the what has been a 20 year debate on the meaning of sustainability.  The classic and oft quoted definition from the commission is:

“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”


This definition is not far removed from the “seventh generation” philosophy of the Native American Iroquois Confederacy,  a philosophy that put forth that chiefs should consider the effects of their actions and decisions seven generations into the future.  However, as often as I’ve seen the commission’s definition quoted, I rarely see anyone expound on what the commission meant by their simple, elegant definition.

 

Digging into the actual report I found that even 20 years ago the commission was deeply concerned about the impact development and population growth was having on the world’s carrying capacity with respect to several important environmental criteria.

  • Global Warming
  • Ozone Depletion
  • Species Loss
  • Desertification
  • Deforestation
  • Air, water, and soil pollution

In making it’s case for sustainable development, the commission’s report would define carrying capacity as:

“The population that can be supported indefinitely by an ecosystem
without destroying that ecosystem”

Although not generally part of our awareness, it is no secret that various regions and country’s of the world compete for carrying capacity and the so called developed world imports a large portion of it’s own carry capacity at the expense of other country’s and peoples. The commissions report states that:

“The Earth is one but the world is not.
We all depend on one biosphere for sustaining our lives.
Yet each community, each country, strives for survival and prosperity with little regard for its impact on others.
Some consume the Earth’s resources at a rate that would leave little for future generations. Others, many more in number, consume far too little and live with the prospect of hunger, squalor, disease, and early death.”

Carrying capacity is not just a function of population.  The actual population that can be supported by the earth’s ecosystem is also a function of the average standard of living or level of consumption of that population.  Lower consumption levels allow the support of a larger population, and conversely higher consumption levels will support proportionally less population.

 

Today we find ourselves in a world of 6.6 billion people in which the world’s richest 20 per cent of the population consume 86 per cent of its goods and services, over half its energy and nearly half its meat and fish.   Another 1.4 billion people in China and India (nearly 5 times the population of the U.S) are rapidly growing their economies and as they begin to approach the developed world’s level of consumption and energy density, their rising demands on the earth’s carrying capacity is driving up energy, commodity, and food costs around the world.  As the world’s collective economic growth rapidly depletes non-renewable resources such as oil, gas, and coal we will soon be faced with a carry capacity crisis in a post peak world in which countries desperately complete for resources in a limited ecosystem.  The commission’s report predicted this condition twenty years ago when it stated that:

“The ultimate limits to global development are perhaps determined by the availability of energy resources and by the biosphere’s capacity to absorb the by-products of energy use.  These energy limits may be approached far sooner than the limits imposed by other material resources. First, there are the supply problems: the depletion of oil reserves, the high cost and environmental impact of coal mining, and the hazards of nuclear technology. Second, there are emission problems, most notably acid pollution and carbon dioxide build up leading to global warming.”

 Many informed people in and out of government are painfully aware of this impending carrying capacity train wreck.  Unfortunately,  it is the nature of governments to only respond to an immediate crisis.  Another problem, one that the Brundtland Commission omitted from their report, is our almost religious belief in economic growth.  Even modest rates of growth mathematically become exponential, so that in the context of a closed ecological system, “sustainable growth” and “sustainable development” are eventually rendered oxymorons.  In order to survive, at some point in time we will have to respect our planet’s limits in terms of carrying capacity.  This will mean the acceptance of limits to our population size and to our levels of consumption and waste, and the transition to a steady-state economy.

 

The following definition of steady-state economics is from the Encyclopedia of Earth.

 

The phrase “steady state economy” originated from ecological economics, most notably the work of Herman Daly, but its roots are in classical economics, most notably the “stationary state” by economist John Stuart Mill. The steady-state economy is often discussed in the context of economic growth and the impacts of economic growth on ecological integrity, environmental protection, and economic sustainability. Therefore, use of the phrase “steady-state economy” requires a clear definition of economic growth.

Economic growth is an increase in the production and consumption of goods and services. For distinct economic or political units, economic growth is generally indicated by increasing gross domestic product (GDP). Economic growth entails increasing population times per capita consumption, higher throughput of materials and energy, and a growing ecological footprint.

Theoretically and temporarily, a steady state economy may have a growing population with declining per capita consumption, or vice versa, but neither of these scenarios are sustainable in the long run. Therefore, “steady state economy” connotes constant populations of people (and, therefore, “stocks” of labor) and constant stocks of capital. It also has a constant rate of throughput; i.e., energy and materials used to produce goods and services.

 The “growing ecological footprint” of economic growth only becomes problematic as we begin to push up against the limits to carrying capacity.  This can occur locally in an “island” economy or globally as we are beginning to experience today.  Getting back to architecture and the massive ecological footprint of our building stock, our homes are but a subset of years of unsustainable development that are pushing the limits of carrying capacity.  This is especially true when we consider the energy consumption and climate impact of both residential and commercial buildings.  My personal definition of sustainable building design is:

Sustainable building design meets the needs of the present without compromising the ability of future generations to meet their own needs for shelter. In order for our built environment to be supported indefinitely by the earth’s ecosystem without destroying that ecosystem, sustainable building design must be based on a net zero energy standard.  A net zero energy standard, in no way constrains designers from creating buildings that are socially desirable, culturally acceptable, and psychologically nurturing. 

 

 

 

 

Categories: AIA · Brundtland Commission · Carrying Capacity · Energy Efficiency · Energy Star · Global Warming · Green Accounting · LEED for Homes · Natural Gas Peak Production · Net Zero Energy Home · Peak Oil · Steady State Economics · Sustainable Design · Zero Energy Buildings · sustainable economics

More Musings on Sustainable Building

September 11, 2007 · No Comments

“. . . to be considered sustainable by any rigorous definition, buildings must become energy neutral and either be built or converted to a “zero energy” building standard”

If we accept that “sustainable” takes its meaning from “sustainable agriculture“, or “the ability … to produce food indefinitely, without causing irreversible damage to ecosystem health”, then the definition of sustainable building must take on a more precise meaning. A more rigorous meaning that is quite different than what typically passes for a “green” building. (See Difference between Green and Sustainable)

What exactly might that mean? To answer that question it’s helpful to have a basic understanding of “carrying capacity”. Generally speaking, “carrying capacity” is the supportable population (animals, plants, trees, people, etc.) in a closed system, given the resources (food, water, energy, etc.) available within that system.

To simplify, for our built or human environment, the Carrying Capacity (human population) of earth can be described as a function of:

 

  • Standard of Living or Rate and Efficiency of Consumption
  • Renewable Resources
  • Non-Renewable Resources
  • The Rate of Technical Innovation
  • Timeframe considered

All of these factors are interrelated. If our timeframe is limited to a hundred years or so, then rapid depletion of non-renewable resources like oil is not a factor because the carrying capacity contributed by the oil’s energy content will not collapse within that timeframe. However, if we want to create a sustainable environment lasting many thousands or even hundreds of years, then that environment cannot be based on non-renewable resources.

In truth, due to the vast array of interactions between innumerable inputs and outputs the carrying capacity of earth in absolute terms in unknowable, but it doesn’t take much imagination to accept that there must be limits. For example, the U.S. represents about 5% of the earth’s population of over 6 billion people and consumes 25% of the worlds non-renewable oil resources. So it’s a fair assumption that it would far exceed the earth’s carrying capacity if the balance of world’s population were to attempt to achieve our “Rate and Efficiency of Consumption (Standard of Living). However, that’s exactly what is happening today in China and India.

 

Within any closed system like planet earth, there are critical constraints to carrying capacity. For most of human history food, water, and biomass energy sources like wood where the primary constraints, however technical innovation and an apparently “endless” supply of fossil fuel (coal, oil, gas) energy greatly expanded the world’s food supply. In fact, since the discovery and exploitation of oil’s energy dense chemistry a little over a hundred years ago, the world’s population has increased from about 1.3 billion to 6.6 billion. Of the current population, about half live in poverty, one fifth are severely undernourished, and the balance of us live in comparative comfort and health.

Even those of us living in comparative comfort and health are now facing two serious constraints to the apparent safety of our carrying capacity. Both of these constraints are related to our use of fossils fuels.

 

Global warming threatens both the world food supply with rising temperatures and our coastal built environment with rising sea levels. Declining crude oil production after we reach “peak oil” will essentially collapse the contribution to carrying capacity provided by cheap oil over the last 100 hundred years. Without rapid and sustained technical innovation, the end result will be either a drop in population or standard of living or both.

What does this have to do with sustainable building? Since buildings are both a major consumer of energy and responsible for approximately 50% of the world’s green house gas emissions, to be considered sustainable by any rigorous definition, buildings must become energy neutral and either be built or converted to a “zero energy” building standard. Anything less may be marketed as “green” but cannot be considered sustainable.

Categories: Carrying Capacity · Energy Efficiency · Global Warming · Green Building · Net Zero Energy Home · Peak Oil · Sustainable Design · Zero Energy Buildings

Energy Productivity and the “Fifth Fuel”

August 28, 2007 · 2 Comments

McKinsey and & Company released a report in May titled Curbing Global Energy Demand Growth: The Energy Productivity Opportunity.   The report documented how we could reduce the world wide annual energy demand growth rate between now and 2020 from about 2% to around 1%, simply by improving energy productivity.

Not surprisingly, the report states that the “… most substantial productivity improvement opportunity is in the global residential sector, which is also the world’s largest consumer of energy with 25 percent of global end-use demand.  By implementing available technologies such as high-insulation building shells, compact fluorescent lighting, and high efficiency water heating, the sector’s energy demand growth would more than halve, from 2.4% a year to only 1.0% a year.”

The report also states that:

 “Consumers lack the information and capital they need to become more energy productive, and tend to make [decisions based on] comfort, safety, and convenience priorities.  In addition, a range of policies dampen price signals and reduce incentives for end users to adopt energy productivity improvements.”

The report argues that policy changes will be necessary before consumers will take significant action to improve the energy efficiency of their homes.  In other words, nothing will happen without leadership from our policy makers

In an example of enlightened leadership, Duke Energy filed a request (also in May) with the North Carolina Utility Commission proposing regulatory authorization to be rewarded for investments in energy efficiency much like they would for a new coal fired electrical plant.  I don’t often use enlightened and Duke Energy in the same sentence, but their Save-a-Watt program represents an exciting new business paradigm and addresses the some of the policy issues outlined in the McKinsey report.   This is a promising new development that could help pave the way to a more sustainable future.

The following bullets are a summary of benefits Duke sees is this new business model for consumers, themselves, and by extension other electric  utilities.

 

  • Allows for the treatment of energy efficiency as a “Fifth Fuel
  • It would displace a portion of the electricity otherwise needed to meet it customers’ energy requirements with zero air emission conservation, and also reduce the amount of new generation that would otherwise be required
  • It would lower costs for customers, when compared to the costs that result would from the addition of new electrical generation resources.
  • It would offer the potential to substantially lower costs for customers who participate in energy efficiency programs (PV, solar hot water etc.).
  • Would provide customers the opportunity to lower their environmental footprint through direct participation in energy efficiency.
  • The program would provide more choices and options that help customers manage their energy costs in an environment of rising energy prices
  • The program would create new energy efficiency service jobs in order to implement energy efficiency programs.
  • The program would provide the Company with an incentive to make significant, sustainable investments in energy efficiency and rewards the Company for the results produced and the risks taken.

The filing by Duke explains this new “energy efficiency” business model as follows:

“The Save-a-Watt approach will encourage and compensate the ultility for investments in energy efficiency at 90% of the avoided supply-side costs.  Under traditional regulation, a utility is allowed to recover the depreciation and operation costs for a new plant and also earn a return on the un-depreciated plant.  Under the save-a-watt regulatory approach, the utility would be allowed to recover 90% of the depreciation and operating costs avoided by not building the new plant and also  earn a return.”

“The Company assumes some risk in the proposed save-a-watt approach.  Revenues collected through the proposed energy efficiency rider are intended to cover program costs and the financial impact of lost sales, but will be based on actual results achieved.  Lost sales occur when energy efficiency programs reduce energy consumption, thus reducing the revenues available to cover fixed costs between rate cases (e.g. investments in utility infrastructure).”

In perfect accord with the McKinsey report, Duke goes on to say that:

“…customers are unlikely to sacrifice comfort and convenience to participate in energy efficiency.  In addition, the initial capital outlay associated with some programs could be a significant barrier to customer participation.”

In addition to addressing capital outlay hurdle for consumers, some of the elements of proposed Save-a-Watt program include:

  • discounted or free Compact Fluorescent Lamps
  • discounted energy efficient air conditioning and heat pump units
  • remote power management of  air conditioning and heat pump units
  • PV and solar hot water systems free to the consumer (pilot program)
  • energy efficiency capital cost financing through Duke (pilot program)
  • monthly billing statements correlated with historical usage and weather data to facilitate ongoing improvement

Categories: Coal Fired Power Plants · Duke Energy · Energy Efficiency · Save-a-Watt · photovoltaic · sustainable economics