Posts Tagged ‘American Clean Energy and Security Act’

2.5 Cents Per Kilowatt Hour: America’s Cheapest, Cleanest Fuel ‘Holds Steady’

October 6th, 2009

It’s not news that energy efficiency is cost-effective.  But new numbers from the American Council for an Energy-Efficient Economy (ACEEE) quantify just how cheap the resource has become relative to other power generation types.

The figure today: two and a half cents per kilowatt-hour (kWh).

That’s one-third or less the price of any new source of electricity, making efficiency the cheapest option available – conventional or renewable – and a no-brainer investment for big utilities.

ACEEE notes, for instance, that in 2008 coal cost between 7 and 14 cents per kWh; natural gas cost between 7 and 10 cents per kWh; and wind between 4 and 9 cents per kWh.  In terms of new nuclear, some estimates put its price at 15 cents per kWh, or more.

The main point is straightforward: Conventional energy costs are climbing, and coming carbon regulation will kick those costs up even more.  Not the case with energy efficiency.  The price of saving a kilowatt has stayed steady or dropped over the last half decade, reinforcing why states and utilities are adding aggressive efficiency programs, and forcing this question: Why aren’t the feds doing the same?

Saving Energy Cost-Effectively: A National Review of the Cost of Energy Saved through Utility-Sector Energy Efficiency Programs” updates ACEEE’s frequently cited research from 2004.  The original data determined that the average cost of delivering energy efficiency programs in the U.S. was 3 cents per kWh.

The 2004 study reviewed the cost-effectiveness results from nine top states.  The current, more in-depth version expands that to 14 states – California, Connecticut, Iowa, Massachusetts, Minnesota, Nevada, New Mexico, New Jersey, New York, Oregon, Rhode Island, Texas, Vermont and Wisconsin.

The conclusion is pretty much the same: Efficiency is the safest energy investment there is and the cheapest power source left.  Expect more of the same for the foreseeable future:

“The U.S. Energy Information Administration (EIA) estimates that in 2020 new conventional power plants including coal and nuclear will cost about $0.10 per kWh, or four times higher than current energy efficiency program costs,” the study finds.

The research findings should have implications in U.S. Senate deliberations on climate legislation and state-level decisions about new power, ACEEE says.

According to the group, the new numbers are the talk of the Hill.  But whether they will have the desired impact is another story.

States are certainly moving forward – California the fastest. The climate-action leader just passed a three-year, $3.1 billion energy efficiency budget for the state’s four biggest utilities. It’s the largest commitment ever made by a state to energy efficiency.

But not all governors are marching in sync.

“While funding for energy efficiency has rebounded from the low point that it reached during industry restructuring [during the mid- to late 1990s], many states still lack well-funded comprehensive energy efficiency programs,” writes ACEEE.

Most analysts agree the federal government could use its considerable power to steer all states toward greater efficiency.  And the American Clean Energy and Energy Security Act (ACES), the nation’s potential future climate law, has been seen as the best hope.

The bill passed the U.S. House in June.  As it stands, its energy efficiency building and appliance codes would create 600,000 new jobs and avoid the need for 419 new coal plants by 2030, according to an August analysis by ACEEE.

Those potential gains are impressive.  But adding a federal energy efficiency standard (EERS) would substantially increase them.

In fact, if the U.S. were prepared to require utilities to get 10 percent of new capacity from efficiency by 2020, over 1 million new jobs would be created and the need for 512 new coal plants averted through 2030.

Consulting firm McKinsey has run its own numbers on efficiency, and they’re just as striking.

The U.S. could save $1.2 trillion in ten years by investing $520 billion in efficiency improvements, according to a July 2009 study.  In a 2007 report, McKinsey found the nation could offset 85 percent of the projected incremental demand for electricity in 2030 with efficiency alone, “largely negating the need for the incremental coal-fired power plants.”

Most agree a national EERS would help achieve these gains.  Such a standard would cut global-warming pollution faster and cheaper than any other resource, eliminate the need for power plants, slash demand for new and costly transmission upgrades and even save consumers money.

But the policy has been all but ignored in the drive for a post-coal economy.  The primary opponents are utility companies.  The reason is simple: The profits of most are still tied to the amount of electricity sold.

There’s still a possibility Congress could blaze a new trail on efficiency. Sens. John Kerry (D-Mass.) and Barbara Boxer (D-Calif.) just released their draft of the Senate’s sibling to ACES, and the chamber will soon step into fierce debate over its provisions.

The U.S. Senate Committee on Energy and Natural Resources has jurisdiction over the efficiency measures.  ACEEE Policy Director Suzanne Watson told SolveClimate that committee member Sen. Charles Schumer (D-N.Y.) is expected to introduce a 10 percent EERS amendment on the Senate floor as part of climate and energy legislation, once “health care is put to bed.”

Mid-October is the likely time for this to happen.

“There is good support in several quarters for that.  Senators are prepared to stand up for energy efficiency statements on the senate floor the week of October 12, much like what we have seen other senators do related to renewables,” Watson said.

On Energy, Obama Finds Broad Support

August 28th, 2009

Poll Shows Backing for Reform Efforts, But Cap-and-Trade Bill Is Harder Sell:

Most Americans approve of the way President Obama is handling energy issues and support efforts by him and Democrats in Congress to overhaul energy policy — including the controversial cap-and-trade approach to limiting greenhouse gas emissions, according to a Washington Post-ABC News poll.

Even as public support has slipped for Obama’s health-care proposals, support for ambitious changes in energy policy has been steady.  Although the issue of health care arouses more intense feelings than energy policy does, those who do feel strongly about energy and climate policy tend to tilt toward the administration’s position and a broad majority of people echo Democratic lawmakers’ views on the benefits of proposed changes.

Nearly six in 10 of those polled support the proposed changes to U.S. energy policy being developed by Congress and the administration.  Fifty-five percent of Americans approve of the way Obama is handling the issue, compared with 30 percent who do not.  A narrower majority, 52 to 43 percent, back a cap-and-trade system; that margin is unchanged since June. A cap-and-trade system would set a ceiling for the nation’s greenhouse gas emissions, and it would allow firms to buy and sell emissions permits.

“Something definitely has to be done,” said Marian Eldridge, a former legal secretary from East Windsor, N.J., who participated in the survey.  ”Anything’s worth a try at this point.”  She said she tries to “ignore the politics; you get discouraged.”  But she said that higher energy costs were “inevitable” and that “we’re too dependent on other countries.”

Despite public support for an energy and climate bill, the prospects for legislation remain uncertain.  The House narrowly passed a measure in June, but not before inserting a multitude of provisions for consumers, interest groups and corporations.  The Senate remains divided over how to move forward, and getting 60 senators to back an end to debate could be difficult.  Adding to that challenge is the thin public support for the cap-and-trade approach if it were to raise consumers’ costs.  Although 58 percent of those polled would support the plan if it reduced greenhouse gas emissions and cost them an extra $10 a month, support drops to 39 percent if new monthly costs reached $25.  Moreover, the Senate’s calendar is crowded with legislation on a variety of matters, including health care, appropriations, an increase in the debt ceiling and the extension of a nuclear weapons treaty with Russia.

Effect on Jobs

Majorities of those surveyed say changes in energy policy would address global warming and not raise energy costs.  Although many proponents of a cap-and-trade bill say it could spur job creation in the renewable-energy sector and foes say it would drive jobs overseas, a plurality of Americans — more than four out of 10 — think that the legislation would have no effect on employment in their states.  Fewer than one in five say that the reform efforts would lead to job losses; more than twice as many see added jobs.  GOP criticism of the House energy and climate bill appears to have primarily influenced Republicans themselves.  Among Republicans, support for cap-and-trade legislation has dipped from 45 percent to 37 percent since a poll taken in June.

“It will make the cost [of energy] go up too high for people,” said Mary Lou Pomeroy, an elementary school teacher’s assistant in Renton, Wash., near Seattle.  ”I think there’s a lot of people struggling and seeing their income reduced, and we don’t need things that cost more.  I’m just not sure that’s our biggest issue. . . . I think health care right now is bigger. or the huge deficit.”

Support for the plan among independents has increased slightly, with a narrow majority now in favor.  Overall, a slight majority of those polled say changes to energy policy would help address global warming, while a third say they will not.  A slim 5 percent volunteered that global warming is not an issue.

Obama’s goal of putting 1 million electric cars on the road by 2015 strikes a chord.  More than eight in 10 people say they support the development of electric car technology.

Some people see the government’s Cash for Clunkers program as a symbol of energy policy, even though it is separate from the comprehensive House legislation.  Nearly seven in 10 backed using cash rebates to encourage people to buy more fuel-efficient cars .

Eldridge, the New Jersey resident, said, “I think the clunker thing was a good idea.  It helped get some garbage off the roads.”  Pomeroy, however, predicted that many people who traded in clunkers would be unable to make payments on their new cars. And she viewed the government’s difficulty in getting payments to dealers as symptomatic of government involvement in the economy.  ”I don’t think our government is all that great at efficiency,” she said.

Energy Sources

The public’s preferences regarding energy sources to meet the nation’s needs remain mostly the same as they were at the start of the decade, with a modest uptick in support for new nuclear power plants and a decline in support for building oil-, coal- or natural gas-fueled plants.

Solar and wind power enjoy near-universal support; nine in 10 people support further development.  More than eight in 10 favor requirements for greater fuel efficiency.  Broad majorities also favor requiring increased energy conservation from businesses and consumers.

Fifty-two percent favor building more nuclear power plants, but that support drops to 35 percent if the new plants were within 50 miles of the respondent’s home.  Support for building nuclear plants is up about six percentage points since 2001.

The poll was conducted Aug. 13-17 among a random national sample of 1,001 adults. The results have a margin of error of three percentage points.

By Steven Mufson and Jennifer Agiesta

Polling director Jon Cohen contributed to this report.

Climate Legislation Could Be a Catalyst for Energy Efficiency

August 19th, 2009

By Lauralee Martin and Mindy Lubber

In the business world, discussions over the proposed climate and energy bill now before the Senate focus on cap-and-trade, the mechanism by which power companies will be rewarded for producing more energy through solar and wind sources and discouraged from continuing to use coal and other sources that release carbon dioxide and other greenhouse gases.

Corporate supporters of the American Clean Energy and Security Act believe the establishment of a market for renewable energy credits is necessary to address the threat of climate change and to avoid other problems associated with oil and coal. Critics say it will drive up electric rates as power companies pass through the increased cost of generating renewable energy to their customers.

But this debate on one aspect of the bill ignores its overarching intent and misses a big opportunity that ACES presents to U.S. businesses.

If the bill is about promoting renewable energy, it is even more about catalyzing energy efficiency, a goal likely to save companies far more money than cap-and-trade will cost them. If ACES makes a kilowatt-hour cost more, it also offers ways for companies to use fewer of them. So, while electricity rates may increase modestly, the actual bills that businesses pay will go down.

For most companies outside the manufacturing sector, the majority of electricity used comes from the facilities they own and lease: Heating, ventilation, air conditioning, lighting, computers and other machines in buildings are collectively responsible for nearly 40 percent of all energy use and a similar percentage of total greenhouse gas emissions in the United States. In some U.S. cities, buildings are responsible for three-quarters of all emissions.

Energy use can be significantly reduced in commercial buildings with little or no upfront cost. Simple things like turning lights off at night can save 10 percent or more. Professional building managers can save another 10 to 15 percent by tweaking HVAC systems.

Even greater reductions are possible for owners who can spend the money. New York’s Empire State Building, for example, recently embarked on a $20 million energy retrofit that will pay for itself within a few years. A team led by Jones Lang LaSalle determined that the retrofit will reduce the building’s carbon dioxide emissions by 105,000 metric tons over 15 years, equivalent to the annual emissions of 17,500 cars.

When the work is done, the 102-story art deco skyscraper will be more energy efficient than 90 percent of all office buildings, using half the energy per square foot of an average building. Consider the huge reductions in carbon dioxide, not to mention the enormous cost savings, if owners of the tens of thousands of other large buildings around the country would invest the time and money to maximize efficiency.

Under ACES, many will. The bill establishes a national building code mandating energy improvements for new and substantially renovated buildings (Section 201), and it creates a Retrofit for Energy and Environmental Performance program for upgrading existing buildings with energy improvements (Section 202).

REEP creates mechanisms for public funding, loan guarantees, interest subsidies and other credit support to help owners make energy improvements. Requiring owners to enhance efficiency while providing the means to do so represents a balanced solution that will put a big dent in greenhouse gas emissions.

If the 70 percent of electricity use that comes from buildings could be cut by a third in 10 years and by half in 20 years, what would be the effect on the cap-and-trade system? With less demand for electricity from the commercial sector, power companies may discover they can stay within their capped emission levels without relying heavily on renewable sources.

In addition, the push for energy reduction has positive effects on the economy. Not only does it create jobs in many industries, but it ultimately makes businesses operate more cost-efficiently, a key driver of profitability.

Ultimately, though, the best reason to pursue energy conservation is the most universal: Economic growth based on nonrenewable energy sources is a model that cannot be sustained indefinitely. As we have seen with the recent economic meltdown, turning a blind eye to growing problems only makes dealing with them later much more painful. The need for energy action is apparent. An effective, sensible action plan is on the table. We should seize this opportunity.

Solve Climate