The Importance of Energy Efficiency

Energy use accounted for 82 percent of U.S. greenhouse gas (GHG) emissions in 2006, according to the Department of Energy (DOE). Energy efficiency is the best and quickest way to reduce GHG emissions. A report released last week by the American Council for an Energy Efficient Economy detailed how deploying semiconductors technologies generated “sizeable energy productivity benefits.”

The U.S. economy has grown by over 60 percent in 20 years, but energy demand only increased by 20 percent. The energy needed to produce $1 of the U.S. GDP continually decreased because of technological innovations. The ACEEE report predicts future innovations will continue the trend.

The report calculated that the “cumulative electricity bill savings enabled by semiconductors” may be greater than $1.3 trillion through 2030, and reduce carbon emissions by 700 million metric tons. In 2006, the “entire family of semiconductor-enabled technologies” created net savings of about 775 billion kilowatt hours (KWh). If 1976 technologies were used now another 184 power plants would need to be built.

Overcoming barriers to energy efficiency

There are barriers to overcome in regards to increasing energy efficiency. One of the main barriers is the lack of knowledge about efficiency opportunities, according to Midwest Energy. Midwest conducts free energy audits for their customers in order to demonstrate the importance of energy efficiency.

Another barrier is large upfront capital expenditures. Midwest pays the upfront cost of their customers’ efficiency upgrades, and customers repay the utility company via a monthly charge on their energy bill. However, the repayments are less than monthly energy savings, so the customers will still see a reduction in their bill.

The stimulus funds for power companies

The American Recovery and Reinvestment (ARRA) provides billions of dollars in federal funding and tax incentives for power companies to increase energy efficiency. Power companies can improve their infrastructure and facilities, or deliver efficiency programs and energy savings to customers with ARRA funds.

In 2008, the State Energy Program (SEP) received $44 million. ARRA waived a 20 percent cost share for states, and waived the provision that had limited capital investments to 50 percent of SEP funds. The funds from SEP are given to state energy offices. Energy efficient projects are funded through SEP.

The Energy Independence and Security Act of 2007 authorized the Energy Efficiency and Conservation Block Grant (EECBG), whose main purpose is to improve energy efficiency. Previously unfunded, ARRA provided $3.2 billion for EECBG.

The Weatherization Assistance Program has been around since the 1970s. ARRA provided $5 billion for the program in order to meet President Obama’s campaign promise to weatherize a million homes a year.

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Make the Building Sector More Energy Efficient

Buildings account for 40 percent of global energy use, according to a recent report for the Energy Efficiency in Buildings (EEB) project by the World Business Council for Sustainable Development. The EEB project, which began in 2006, focuses on six world regions: Brazil, China, Europe, India, Japan, and the U.S. The six world regions represent nearly two-thirds of the world's energy use. The estimated growth in all six EEB is 76 percent. 

The International Energy Agency calls for buildings globally to contribute 17 percent of emissions reductions below business-as-usual (BAU) by 2050. The U.S. will need to be at least 80 percent below BAU by 2050 to meet the goal. The report suggests six ways the building sector can take action to reduce its energy use:

• Strengthen codes and labeling for increased transparency
  
• Incentivize energy-efficient investments
  
• Encourage integrated design approaches and innovations
  
• Develop and use advanced technology to enable energy-saving
  
• behaviors
  
• Develop workforce capacity for energy saving
  

Cutting energy in the retail sector will help the U.S. meet the IEA's goal. The report lists recommendations, including the following:

• Audit the energy performance of retail buildings
  
• Enforce building codes
  
• Introduce subsidies for achieving high performance in buildings
  
• Regulate to phase out low performing buildings
  
• Get retailers to participate in energy awareness campaigns
  
• Use R&D to lower first cost and increase energy savings
  
• Introduce process incentives for developers so they will adopt integrated design approaches which achieve high energy efficiency
  
• Promote onsite renewable generation for all new retail developments
  

The sheer number of shopping malls in the U.S. means energy use needs to be cut in that sector. The report recommends the following:

• Smart metering will make stores in the mall aware of their energy use and motivate them to take action
  
• Install solar photovoltaic (PV) panels to replace some electricity from the grid
  
• Make changes to lighting inside and outside the mall
  
• Improve the cooling and ventilation systems
  
• Shade external glass

Sustainability is Important to America's Biggest Cities

The majority of Americans live in cities. According to the 2000 Census, 79 percent live in urban areas. Cities are where construction takes place, and where traffic congestion takes place. It is in cities where most greenhouse gas (GHG) emissions occur.

Over 75 of the 40 biggest cities in the U.S. say they either have plans to reduce their greenhouse gas GHG emissions or are developing them, according to a new report by Living Cities. Eighty percent of the cities surveyed listed sustainability as one of their top five priorities. Only one in six cities said sustainability is not a top priority.

Four in ten cities believe their efforts to encourage and mandate green building is among the most advanced. Two-thirds of cities mandate LEED silver standards for new city-owned or city- funded construction. One in four cities has green building mandates that go beyond city buildings and apply to private construction.

One-fourth of cities reported success in recycling, water conservation, and greening their vehicle fleets. Three out of ten reported advancements in energy conservation.

One in three cities surveyed have begun to develop green jobs training programs with local colleges. One in six already has such a program in place. Nearly all cities surveyed would like to attract green-collar jobs and industries.

Between one-fourth and one-half of cities surveyed said they are investing in building new light rail, adding streetcar or subway lines, expanding local bus systems, encouraging walking and cycling, and subsidizing public transportation for city employees.

There’s still room for improvement

In each of the survey’s three main areas (green building, green jobs, and green transportation), the report lists recommendations. One of the main ways cities can support green building, including retrofitting, is to “gain access to systems with sufficient capacity to fund” projects.

There’s still room for improvement

In each of the survey’s three main areas (green building, green jobs, and transportation), the report lists recommendations. One of the main ways cities can support green building, including retrofitting, is to “gain access to systems with sufficient capacity to fund” projects.

Green job training programs need to provide “not only job placement services but also continued career advancement.”

Cities need to encourage density to reduce commuting and encourage residents to use public transportation. Denser development leads people to drive 20 to 40 percent less, according to recent research. 

Portland Oregon: the most sustainable city

Last year, SustainLane ranked the top 25 sustainable U.S. cities. The number one spot went to Portland, Oregon. The city has strict land-use policies, and an urban growth boundary. The goal of Portland is to be a “20 Minute City,” where residents spend 20 minutes or less commuting from home to work.

Last September, Portland Mayor Tom Potter said, “Portland's support of local farmers and farmers' markets; its explosion of green buildings and commitment to renewable energy, and its emphasis on mass transportation, including light rail and bicycles, shows that a city can not only be kind to the earth, but also flourish economically and grow by being green.”

Study Shows Bioelectricty Better Than Ethanol

A new study concluded that vehicles powered by bioelectricity provided 80 percent more miles of transporation per crop acre than vehicles running on ethanol made from corn or switchgrass. Conducted by researchers from Stanford University and the University of California, Merced, the study looked at the lifecycle of bioelectricity and ethanol technologies. 

In miles per acre, bioelectricity powered vehicles performed better. The output of bioelectricity powered vehicles is on average 112 percent greater than ethanol, and can prevent or offset the release of up to 10 tons of carbon dioxide per acre. 

In one example, a small truck powered by bioelectricity could travel almost 15,000 miles while the internal combustion equivalent only traveled 8,000 miles. In another example, a small SUV with an internal combustion engine traveled about 9,000 highway miles, while the bioelectricity powered one traveled 14,000 highway miles.

"The internal combustion engine just isn't very efficient, especially when compared to electric vehicles," said co-author Eliott Campbell of U.C. Merced "Even the best ethanol-producing technologies with hybrid vehicles aren't enough to overcome this." 

 
"We found that converting biomass to electricity rather than ethanol makes the most sense for two policy-relevant issues: transportation and climate," said co-author David Lobell of Stanford. "

Obama estabishes the Biofuels Interagency Working Group

Earlier this month, the Obama administration establish the Biofuels Interagency Working Group to advance biofuels research. President signed a Presidential Directive to established it, and announced that it would receive $786.5 million from the American Recovery and Reinvestment Act (ARRA). 

"We must invest in a clean energy economy that will lead to new jobs, new businesses and reduce our dependence on foreign oil," said President Obama. "The steps I am announcing today help bring us closer to that goal. If we are to be a leader in the 21st century global economy, then we must lead the world in clean energy technology. Through American ingenuity and determination, we can and will succeed."

According to a White House press release, the group will deveop a comprehensive biofuel market development program, coordinate infrastructure policies impacting the biofuel supply, and identify new policy options to promote the environmental sustainability of biofuels.

Energy Efficiency Investments Declined Last Year

Last week the results of the third annual Energy Efficiency Indicator survey were released. The survey is conducted by Johnson Controls Inc. and International Facility Management Association.

For the second year in a row, the survey showed businesses are spending less on energy efficiency. However, 71 percent of survey respondents said they are paying more attention to energy efficiency than they were a year ago. Last year, 72 percent said they paid more attention to energy efficiency.

Although 58 percent said energy management is very or extremely important, only 46 percent expect to make energy efficiency improvements financed with capital expenditures, down from 56 percent in 2008. Sixty percent expect to spend less than ten percent of their facilities related budgets on energy efficiency.

Respondents cited limited capital availability (42 percent) and unattractive paybacks (21 percent) as the two biggest obstacles to enacting energy efficiency projects. Almost 50 percent require payback periods that are less than three years.

Sixty percent think that natural gas and electricity prices will increase over the next year, down from 80 percent in 2008. Thirty-one percent do not expect prices to increase.

The majority of respondents (85 percent) think that legislation mandating energy efficiency and carbon reduction is likely within the next two years. Forty-four percent said government incentives are extremely influential in making energy efficiency decisions.

"I think we'll see substantial change next year," said C. David Myers, president of Building Efficiency for Johnson Controls. "And I think that change will be action where activity was laggard this year. I also think there will be a better economic environment next year compared with what you see today."

Businesses Affected By Healthcare Costs

Healthcare costs continue to increase. Over the past decade, insurance premiums charged to employers increased 119 percent, four times faster than wage increases. During 2002 to 2007, health insurance premiums for employers increased almost five times faster than inflation.

For every $100 spent in the U.S. on healthcare, five countries (Canada, Japan, Germany, U.K., and France) spend only 63 cents, according to a recent study by the Business Roundtable. Most Americans, 170 million, receive health insurance through their employer. Based on a survey of  428 companies, 46 percent of employers plan to shift healthcare costs to their employees in 2010.

"While today's economic challenges span the globe, companies in other countries may be better able to weather the storm in part because the value that their healthcare systems deliver," said Business Roundtable Chairman Harold McGraw.

Another recent survey by the Robert Wood Johnson Foundation revealed that 36 percent (one in three) of small business owners said rising healthcare costs will likely cause them to cut some of the benefits for their employees. Almost half (42 percent) said "making health care more affordable" should be priority for federal government. 

The number of small businesses that provide health insurance is decreasing every year. In 2007 it decreased by 59 percent in 2007, in 2000 it decreased by 68 percent, according to the Kaiser Family Foundation.

“Many small business owners have already reduced their health benefits and asked employees to pay a larger share of the premium, and still they struggle with the ever-increasing costs,” said Risa Lavizzo-Mourey, M.D., president and CEO of the Robert Wood Johnson Foundation. “They want health care reform that reduces the burden on their business and where all Americans have affordable health insurance.”

Small businesses are more affected by rising healthcare costs. Small businesses pay 18 percent more for health insurance than large companies, according to a January 2009 study by the Commonwealth Fund. In 2006, 35 percent of businesses with fewer than 10 workers offered health insurance, but 98 percent of companies with 1,000 or more employees did.

What do CEOs really think of employer-based health coverage?

"There are employers that don't want the responsibility, and we are in that category," said Carl T. Camden, CEO of Kelly Services (KELYA). "My health-care costs total more than my profits. 

"CEOs overwhelmingly want out of this business," said Benjamin Sasse, an Assistant Secretary of Health & Human Services under President George W. Bush . "They just do not want to be seen as more willing to dump [benefits] than their competitors are."

"CEOs are focused on the bottom line," said Len Nichols, director of health policy at the New America Foundation. "They know high health-care costs put U.S. companies at a competitive disadvantage."

 

James Hagedorn, CEO of Scotts Miracle-Gro (SMG), said, "If someone said to me, 'you can pay the same amount [for health care] and we will redeploy to a national system,' I'm fine. Why would I argue with that?"