Tag Archives: policy

The History of Energy Efficiency

In today’s world, we have ample opportunities to be conscientious and energy efficient citizens. However, this has not always been the case. In the past, people thought that energy would eventually be quite inexpensive, and global warming was not yet discovered.

First, it is important to establish what exactly energy efficiency means. Something is more energy efficient if it takes less energy than something else to provide the same service. So an energy efficient dishwasher does the same task as a normal one, it just uses less electricity.

It could be said that the path to energy efficiency began with the 1973 oil embargo. Arabs stopped exporting oil to the U.S. because they were supporting Israel in a war against Egypt and Syria. The U.S. was heavily dependent on Middle Eastern oil at the time, and the embargo caused vulnerability that had not previously been experienced.

There was a time that had high inflation, high prices for many goods, and fears that we were entering a period of a lack of resources. The combination of these problems led the US to make policies on energy, including energy efficiency.

The first law about energy efficiency was signed by President Gerald Ford in 1975, called the Energy Policy and Conservation Act.

When President Carter took office, he founded the Department of Energy, which was a consolidation of the Federal Energy Administration, the Energy Research and Development Administration, the Federal Power Commission, and others. In the early 1990s, after a period of energy stability in the 80s, Congress made another policy to stay up to date on energy efficiency. Again in 2005, energy policies were updated to include new tax incentives and appliance standards.

More recently, the low prices of oil and natural gas have made maintaining energy efficiency much harder. It’s difficult to care about conserving energy when the benefits are not so easily seen. Involvement in conserving will no doubt take off much more quickly when energy prices being to climb again.

Since Obama has been in office, he has taken steps to address energy efficiency. In December of 2015, the government created a new energy-saving standard directed at commercial air conditioners and furnaces. Increasing the efficiency of these appliances could save $167 billion over the lifetime of the standard, as well as 885 million tons of carbon dioxide.

Renewable energy also can aid energy efficiency. Especially as more research is done and technology develops, renewables such as solar and wind power are becoming more and more efficient. Eventually, resources like these could be the answer to using energy in the best way.

Looking to the future, technologies and policies will continue to change. Phillip Murphy, the owner of Proxy Homewatch, a company that looks after second homes and helps owners become more energy efficient, says that he expects more government regulation in the future.

Murphy says, “I see similar regulation as the ones that outlawed incandescent bulbs as too inefficient—that took care of that”.

In the heating business, there are also developments on the horizon.

Josh Guthrie, the head of residential & commercial Sales for Bullman Heating and Air, says that, “every year it seems like something’s coming out new that’s more efficient than the last.” Water furnaces in particular are constantly being reevaluated and reengineered.

The future of energy efficiency looks bright indeed. Perhaps one day we won’t worry about energy efficiency at all because it will be something everyone takes for granted.

 

Food for Thought: Real Questions on Biofuels

To provoke conversation on biofuels’ future in the energy industry, questions need to be answered.

Students at the University of North Carolina at Chapel Hill were asked what their questions on biofuels were to help gauge a common understanding of the marketplace.

Students shared positive attitudes towards biofuels. However, some confusion remains as to the specific value of biofuel investment. Below are the questions posed by students.

 

“What are biofuels? And I’m not looking for a simple definition- I want a more in-depth explanation.”

Duoyun Zhou, from Shanghai, China, Class of 2018.
Duoyun Zhou, from Shanghai, China, Class of 2018.

Biofuels are fuels derived from the living matter of plants and animals. This matter typically refers to plant matter such as grasses, algae, or agricultural residue. This can also include animal fats and waste.

These materials are commonly referred to as feedstocks, or the raw materials used to create the fuel product. This biomass can be converted into various fuels, chemicals, and materials.

The conversion of biomass into a fuel product involves the use of microorganisms for fermentation. The fermented product is then created into a biofuel. The fuel can be used in a diesel engine and blended with traditional fuels.

There are major advantages of integrating a bioproduct in our fuel supply. A biofuel market will decrease the use of fossil fuels in our oil supply for conventional automobiles.

An increase in demand for biomass materials will necessitate an increase in farming practices to meet demand. By creating such a market, rural economies are supported while dependency on foreign oil markets is reduced.

This product results in a cleaner fuel supply that will improve air quality as well as human health.

 

“Where can you get biofuels? Where is this supply coming from?”

Gursheen Kaur, MBA Class of 2017, from India.
Gursheen Kaur, MBA Class of 2017, from India.

Imagine that at your nearest gas pump, biofuels are the fuel source used to power your car.

The imagined scenario is already partially true–ethanol, a corn based fuel, is part of the traditional fuel mix in the United States. In the future, more competitive feedstocks can be integrated into the mix as well.

If biofuels experience successful market introduction, biofuel access could be so integrated it would go unnoticed by the average citizen. As drilling for oil becomes less economical, biofuels will become more competitive and will slowly become a larger portion of supply.

The three main biofuel products in the global market are bioethanol, biodiesel, and biogas.

Jordan Kern, Professor with the Institute for the Environment at UNC Chapel Hill, explained there is not one optimal feedstock choice.

“It depends on where you’re growing it and the resources available,” he said.

Jay Cheng, Professor of Biological and Agricultural Engineering at North Carolina State University, shared his thoughts on the matter.

Cheng explained that Brazil has a large bioethanol industry that accounts for approximately half of all automobile biofuel. Brazil’s success story in the biofuel industry goes back to the resources available to the country.

Cheng said their success was mainly due to their relatively cheap and high-yield sugarcane.

“What is the United States doing in the biofuels industry?”

Jinming Lin, from Memphis, Tennessee, Class of 2019.
Jinming Lin, from Memphis, Tennessee, Class of 2019.

Currently, biofuels provide about 1 percent of total United States’ energy needs. Ethanol, the primary biofuel in the US, is more expensive than gasoline on an energy content basis.

The United States government hopes to make this alternative energy source more economically viable. The US Energy Department plans to fund developments in biomass technology.

In January 2016, the department announced that 15 million in funding will be provided through 2020. Applicants hoping to capitalize on the opportunity must address technology improvements in processing and productivity.

In addition, the industry will be bolstered by military investment. In 2009, the Navy broadcasted that by 2020, half of fuel sources would be non-fossil fuels.

Since then, aircraft and ships have been have been powered by beef fat, municipal waste, palm oil, and algae. This aligns with the military’s commitment to security by reducing reliance on foreign oil.

Cheng also expressed a potential for the United States to utilize local biomass. A large amount of “wood pellets (are) shipped to Western Europe from southeastern states of the US for bioenergy production.”

Cheng thinks that the United States could better use this resource in order generate bioenergy as well as local jobs.

 

“What problems will you face in implementing biofuels?”

Abhaya Pratap Singh, from India, MBA Class of 2017.
Abhaya Pratap Singh, from India, MBA Class of 2017.

Unfortunately, biofuel production involves several drawbacks in terms of environmental best practices and industry infrastructure.

The largest environmental barrier is that large amounts of land are not readily available for the production of feedstocks. Biofuel production can lead to increased food and land use prices.

Biofuels create competition for land-use with food production. Increased crop-demand causes the price of those crops, and thus food derived from those crops, to increase. Meat and dairy product prices also increase, as it becomes more expensive for farmers to feed their livestock.

An increased demand for crops also leads to increased deforestation and destruction of natural habitats. This not only displaces indigenous peoples and endangers wildlife, it releases greenhouse gases into the atmosphere, contributing to climate change.

Fortunately, algal biofuels can address many of these issues because it does not compete with food for land use. Algal biofuel is a more expensive biofuel option. However, algal fuels could avoid issues of higher food prices and destruction of natural habitats.

Kern stated the issue surrounding infrastructure is a “chicken or the egg” kind of conversation.

He explained that the companies that refine fuels are different than those that produce cars. He illustrated no one will build a biofuel production facility if there are no cars on the market that can use the fuel.

Currently, issue also surrounds biofuels’ ability to compete with traditional fuel products.

“One of the main challenges for biofuels is the scale,” Cheng said.

He explained that most production facilities are small in size. This occurs “because the cost of the raw material transportation would be too expensive if the facility is big.” In contrast, most fossil fuel production facilities are huge, which gives fossil fuels a “competitive advantage.”

However, Cheng also noted that fossil fuel resources are limited, “and the cost for biofuel production is getting lower.” He expressed that in time, biofuels will become a better fuel option.

 

Friend or Foe: Big Players and the Renewable Industry

Many businesses are capitalizing on a growing clean tech opportunity in North Carolina- renewable companies, city developers, and venture capitalists. Large energy providers are often left out of the picture, perhaps as they’re perceived as heavily invested in fossil fuels. However, this may not be the case with the coming energy transformation.

Below, two Duke Energy representatives provide insight on Duke’s sustainability efforts. Elizabeth Bennett is a manager of the Distributed Energy Resources Group, and Hilary Davidson is Duke Energy’s Director of Sustainability and Community Affairs. Both shared their perspective on the role of sustainability in energy supply.

This Q&A explores the challenges and opportunities that renewables present for Duke Energy. The representatives also discuss Duke’s future plans to expand its sustainability efforts, bringing awareness to shifts in the energy market. (These interviews have been edited and condensed for clarity.)

Q: What trends do you see in renewable energy policy and the growth of big businesses? Do you have any insight on the future nature of the renewable industry ten years from now?

Elizabeth Bennett: I think questions about policy incentives are going to become less and less important because the economics is working.

Now it’s working differently for different customers. I know Duke would like to get to a point where we are able to connect customers with affordable solar options — and by customers I mean your big-box retailers but also your residential customers.

If you look over the border on what we’re doing in South Carolina, there’s a good example. Through legislation we have a way to invest and provide customers options for solar engagement. And we’ve rolled out a rebate program for rooftop and ground-mount installation on customer properties.

We’re also going to be rolling out a shared solar program. So for folks that live in apartment complexes, or that might not have a roof that’s conducive with solar, or that might not want to deal with the operations or a homeowner’s association that doesn’t like solar on the roof, then they can participate in the shared solar concept, or community solar.

So those are the kinds of things we at Duke would like to be able to invest in and provide for customers in the future. And I think there is going to be a pathway to do that. Now every state will be a little different, and that’s where policy comes in.

I would be careful not to look at a tax crediting expiring and say, ‘It’s the end of solar.’ And I think some people did, but it’s not slowing anything down. And especially with the federal government’s decision in the end to extend the ITC — that was significant. And I don’t think that’s being talked about enough.

And the only other thing I’ll say, and it’s somewhat obvious sometimes — a lot of people tend to forget that North Carolina ranked number two last year in terms of solar growth. And we are really proud to have been part of that.

Last year we constructed four large-scale solar facilities totaling 141 megawatts, and late last year we announced another 75 megawatts. And so our pace isn’t slowing down.

And I think as we look towards the future, if there’s anything to take away, it’s that we believe the utility has a big role to play in investing in solar and other renewable resources: bringing those to customers in an affordable and a reliable way, and growing them as part of our portfolio, but also balancing with the other resources we have and the other demands we have on the system.

Q: Why does sustainability make sense for Duke?

Hilary Davidson: It makes so much sense. It makes sense socially, economically, and environmentally. People always think, oh, it’s going to cost money to do sustainability things.

It really is all about long-term— making good business decisions that are good for the environment and good for people. It really saves you money.

One of the key things we really encourage folks internally— when we talk about sustainability, you start thinking differently when you think about conserving those resources. (Employees) think of new processes, they get very efficient, and they come up with new ideas. We have saved millions of dollars with employees with new innovative approaches of how they do their job.

And we have a group we call the Sustainability Corps, we kind of named it after the Peace Corps. And it has been really fun. So they have gotten energized and really saved so much money through their projects.

So you can reduce emissions or water and also costs and your budget. We quit tracking the numbers because it’s so embedded now because it’s so much a part of the culture.

Q: How much of these sustainability efforts are a reaction to the growing environmental movement and pressure from your customers for more responsible practices? Does this make your efforts relatively recent?

Davidson: We’ve been doing this a long time. I would say it’s not a reaction for us, and I can say that so passionately.

I’ve been doing this for 30 years at Duke. I helped write the first environmental report, and that was in 1993. Duke created the first environmental science center of all of the utilities in the 1970s.

So they’ve had a huge environmental focus for a long time. So that first external environmental report was kind of unique for utilities. That was not something that was typically done way back when.

So the whole movement changed. It was environmental for a while, and then social responsibility started, and then the name sustainability actually formalized — we formalized a corporate sustainability office in 2008. So we formalized the name at a certain point, but it’d been there in one form or fashion.

One of the things I’d like to say, you know, J.B. Duke, the founder of Duke Energy, started the Duke Endowment, and this was back in the 1920s. When he started the power company, he said, hey if I’m going to make money from this industry, I’m going to also give money and philanthropy back to the Carolinas and the community, which to me is sustainability.

So he started the Duke Endowment, which today is one of the hugest endowments, and it gives money to the Carolinas. To me, the foresight of that is just part of that whole philosophy.

Q: What opportunities and challenges have renewables presented to Duke?

Davidson: I think it has been another great asset to add to our diverse fuel mix. I think having diverse fuel options is our biggest asset and will continue to be our biggest asset in the future.

I think we always want to have a diverse fuel supply. We don’t ever want to go a single source of anything. I think just like a diverse stock portfolio, it keeps you healthy, and serves you well over time, so should a diverse fuel portfolio.

I’ve been in the industry long enough to see — I was around when gas prices went sky-rocketing, I was standing at gas lines in the 70s to fill up my gas tank, I’ve been around when Chernobyl happened, when Fukushima happened, I’ve been around when natural gas prices spiked. I’ve been around now with the shale-gas revolution, with how cheap gas is now.

You know, solar is fantastic. But I don’t know, something could happen with solar that we don’t even know yet. Sometimes we think everything is glorious, and sometimes things happen. So I guess keeping all options on the table is good.

The challenge of renewables for now, I would say, is storage. And from what I understand right now, the storage technology is not totally there yet, and also there is the expense of it. The sooner we can get there at an affordable rate is awesome. Understand we own about 15 percent of the utility-scale storage in the United States right now.

The other thing with the challenge with renewables is that it doesn’t always match the peak. And I think people don’t always understand that, it’s not always there at the right time. It’s intermittent, and that’s an issue as well.

Q: A quote from Duke’s 2014 sustainability report- “closing 40 coal-fired generating units… We’ve also invested more than $4 billion in wind and solar facilities and, in 2014, we committed $500 million to expand solar energy in North Carolina.” Oftentimes, there is a negative perception surrounding Duke because a large percentage of your generation is from coal. Their comment might be you could do better to invest more in renewables and efficiency. What would be your response to that?

Davidson: I guess what I would say to those people is please consider the entire population in North Carolina and the needs of your neighbors in this state.

Our customer base is not a high-income customer base. Those people cannot afford to have all of that power shut down and do really expensive renewables. You can’t just transition and shut everything down and pay off-site prices right now.

That wouldn’t make economic sense. Just like anything you need to transition. The path you are on is transitioning to a lower-carbon economy and future.

And that is the pathway underway; and you do it sensibly, and in a way that is not hurting people. You do it in a smart and economic way as those prices come down and as technologies come up.

One of the things with Duke — our stakeholders are everybody. So they’re all at complete different ends of the spectrum, and at the end of the day we have to keep those lights on for everybody.

We respect all of the different viewpoints that there are, truly. We do have the extreme activist end of things, where they want everything totally green right now. If you look at the entire population it’s actually not a high percentage of what most of customers actually want.

Most of our customers say, we really want an affordable bill because we’re just trying to survive, and I need to stay in business in this state. So there are some heavy social issues that are going on. And that’s obviously very critical.

There are health issues, there’s social issues, education issues, which is all part of sustainability. Those are equally important as the environmental and green part of it. And so that’s what you have to think about.

Really when you think triple bottom line, you need to be thinking of all of those in the long-term, and not doing a drastic reaction to just one component of it and sacrificing other things. People might not like you, and you might get beat up for it. But you still need to do the right thing to make sure no one is getting hurt in the long-run.

Energy-Efficient Policies and Regulations

The boundaries of power of the United States government are constantly being pushed. As technology advances, it is becoming increasingly easier to use energy efficiently. The government has the power and is justified to promote energy efficiency.

There are multiple ways the government can “nudge” citizens in efficient directions. Experts believe internalizing energy costs, changing the tax structure, and informing the public could all help. The government is implementing some measures to increase energy efficiency despite opposition.

The Senate struck down an energy bill in 2014. It was meant to provide mandates that would improve building efficiency. If passed, it would have been the first major energy legislation since 2007.

President Obama responded to the bill’s failure by promoting the Better Buildings Challenge. This initiative commits participants to cutting energy usage by 20% by 2020. Companies such as Wal-Mart, General Mills, Volvo, and Wholefoods pledged to reach this goal.

Obama also pushed for eco-friendly legislation, an on-going battle that continues in the bipartisan government.

“President Obama is committed to taking responsible steps to address climate change, promote clean energy and energy efficiency, drive innovation, and ensure a cleaner, more stable environment for future generations,” the Obama Administration released in a press statement in August 2015. This press statement went on to outline what his steps entail.

His policies promote the implementation of energy-efficient technologies in low-income housing. They toughen mileage rules on cars and trucks. Energy-efficient standards for appliances were strengthened and new loans boosted green energy sources.

Most recently, the Obama administration halted new leases for coal mining on federal lands. The EPA has also released new regulation to stem carbon pollution from power plants.

These regulations have hit home in some states more than others.

Democrat presidential candidates Hillary Clinton and Bernie Sanders have expressed their agreement with these policies.

Not everyone is as happy though. “The president’s policies have already ravaged coal country, destroying jobs and people’s way of life, and this will increase that suffering,” House Speaker Paul Ryan responded to the new coal policy.

Critics state that regulation and policy reform is not necessary. The cost of energy itself should provide incentive for choosing energy efficient options. However, many believe efficiency must be regulated because people won’t always make the smartest choice.

The Supreme Court will assess one of the Obama administration regulations for constitutionality. The regulation deals with electrical grid operators paying customers to reduce consumption at peak times. The judges will come out with their decision by June 2016.

 

 

Citations

Obama Steers Climate Battle “Upstream” With New Coal Policy

National Journal: Web Edition Articles (USA) – January 15, 2016

The Experts: How Should Governments Encourage Energy Conservation?

The Wall Street Journal- April 17, 2013 10:31 a.m. ET

FACT SHEET: President Obama Announces New Actions to Bring Renewable Energy and Energy Efficiency to Households across the Country

The White House: Office of the Press Secretary – August 24, 2015

Energy Efficiency: Markets or Mandates?

September 1, 2014 – The Sallan Foundation

Obama push keeps energy efficiency moving

TODAY – May 14, 2014

Find Policies & Incentives by State

NC Clean Energy Technology Center

Who Are You Calling Irrational?

June 1, 2015 – U.S. News and World Report

Supreme Court to review U.S. electricity market efficiency rule

May 4, 2015 – Reuters

National Energy Policy

American Council for an Energy- Efficient Economy

Four reasons to be wary of energy-efficiency mandates

May 1, 2015 – Brookings