Translating renewables and energy efficiency into dollars and good sense

Left to my own devices, I could spend a good deal of time immersed in new studies of renewable power and energy efficiency, announcements for which land in my email box or turn up on my Twitter feed almost daily.

As Marilyn would undoubtedly have done were she still here.

But even without her, I received two this week that underline current efforts to quantify the value of green technology within our existing economy specifically in terms that will make sense to financial institutions, investors and policy makers.

The first, from Bloomberg New Energy Finance and funded by energy giant, BP, aims to set out a method for comparing coal, oil and gas reserves with renewable reserves, an effort emerging from an industry group called the Renewable Reserves Initiative. BP is apparently a leading member.

The study points out that renewables constitute an increasing amount of the world’s primary energy — that is the underlying energy sources needed to generate the electricity required to power the world’s economy. In 2010, renewables accounted for 13 percent of primary energy, a figure expected to rise to at least 20 percent by 2035, according to the International Energy Agency.

“In spite of this, the world still lacks a widely-agreed upon methodology for comparing renewable energy projects with each other, and with fossil fuels. The increasing popularity of renewable technologies presents a challenge to companies, governments and investors more used to thinking in terms of finite fuel reserves,” the Bloomberg report says.

What the powers that be need, the report says, is a method that will nail down the “total quantities of energy achievable” from renewables. While clearly stating that its results are intended only as an initial, hypothetical model, the report shows the challenges of comparing finite fossil fuel reserves to inexhaustible renewables.

For example, while daily output from an oil well tapers off over its productive lifetime, the output of a wind farm, an example used in the report, while intermittent, remains stable. Another point of inequal comparison is that fossil fuels, once out of the ground may not necessarily be used to produce directly usable power; renewables for the most part are.

The Bloomberg report proposes going at the problem by looking at the financial viability of projects, comparing proven fossil fuel reserves with wind and biomass projects either in operation or likely soon to be, and converting the total energy output of renewables into an equivalent measure of barrels of oil. Again, for hypothetical purposes, the report provides results from the U.S. and Brazil.

In the U.S., as might be expected, wind and biofuels are dwarfed by coal and natural gas reserves, but together exceed oil. Wind reserves are calculated at the equivalent of 23 billion barrels of oil, while biofuels come in for 26 billion barrels. Oil stands at 31 billion barrels.

While the numbers might seem to still favor fossil fuels, it is encouraging to remember that the renewable resources will continue to grow while fossil fuel reserves are finite, and the report doesn’t touch solar and geothermal potential or compare the social and environmental costs of  fossil fuels vs. renewables.

The U.S. is also a mature economy compared to an emerging economy such as Brazil where the report shows biofuel reserves at the equivalent of 28.6 billion barrels versus 22 billion barrels for coal and 15 billion barrels for oil.

Such numbers indicate the kind of global shift toward renewables that may be occuring — another report from China this week showed that new wind generation exceeded new coal-fired power in the country for the first time last year. The fact that fossil fuel companies such as BP are attempting to quantify the potential of renewables speaks volumes in and of itself.

The second study strikes a bit closer to home, literally, speaking to ongoing efforts to qualify the economic impacts of energy efficiency for homeowners and mortgage lenders.

Funded by the Washington, D.C.-based Institute for Market Transformation, a nonprofit promoting energy efficiency, researchers from the University of North Carolina found that energy efficient homes were 32 percent less likely to go into default than standard homes.

Using a national sample of 71,000 home loans drawn from CoreLogic, a leading source of information tracking for the lending industry, the study compares default risks for standard homes with homes that earned an Energy Star rating, meaning they were at least 15 percent more energy efficient than a standard home.

How to define standard versus Energy Star is based on something called a HERS rating, which stands for Home Energy Rating System. A standard home, presumably one meeting the building code for any specific state or jurisdiction, is rated at 100, with energy efficiency lowering the score. An Energy Star home typically earns at least an 85 HERS score.

The study was carefully designed to weigh and balance for a range of variables. The homes chosen for review covered 38 states and the District of Columbia and included both older and newer single-family homes with prices averaging about $220,000 and 30-year, fixed-rate mortgages originating between 2002 and 2012. That is, the standard homes were not all old and in ill repair and the Energy Star homes were not all new and upscale.

California was one of 12 states not included, apparently due to privacy regulations and address inconsistencies.

Not only were Energy Star homes 32 percent likely to default, but the researchers found that the more efficient the home, the less likely it was to default or prepay its mortgage, which banks don’t like as it cuts into their profit.

The default rate for Energy Star homes was about 8 percent, compared to 15 per for standard homes. About 23 percent of Energy Star homes prepaid their mortgages vs. 33 percent for standard homes.

Such results suggest that mortgage lenders should “require information about energy costs and encourage an energy audit or energy rating during the process of mortgage underwriting,” the report says.

It also recommends that financial institutions – specifically major home mortgage lenders Fannie Mae and Freddie Mac –take into account the higher value of energy-efficient homes to provide “the underwriting flexibility needed to cover the modest additional cost of energy efficiency features.”

Translation: Provide better and more affordable financing for middle-income homeowners for home energy retrofits. Energy efficiency pays for itself and will prop up, not hurt, the housing market.

 

Pushing green energy ceilings — wind and solar hitting new highs

The sun is setting in the Coachella Valley as I type this, but somewhere on the other side of the world, I feel certain, it is shining and possibly there’s a solar panel there converting the sunlight to electricity and reducing the carbon emissions that fossil fuel power would have generated.

The spread of solar around the world is part of the story contained in figures from the European Photovoltaic Industry Association.  As of 2012, the world had a bit more than 101 gigawatts of PV running around, producing the same amount of power as 16 coal or nuclear plants of 1 gigawatt each, while reducing carbon emissions by 53 million tons.

Of those 101 GW, just shy of 30 GW were installed last year, about the same as 2011, the EPIA said. What’s more important, the geographic spread of PV installations is expanding.

Thirteen gigawatts of solar are now outside Europe, compared to 8 GW in 2011, the EPIA reported. Germany is still the world leader, with 7.6 GW, while China has 3-5-4.5 GW and the U.S. has 3.2 GW. Another report from Greentech Media projects growing solar markets, about 3 GW, in Africa and Middle East in the next two years.

Meanwhile, wind energy is also hitting new highs in terms of how much power it supplies in different states, according to Pete Danko writing on the Earth Techling website.

From midnight Monday to midnight Tuesday, three wind farms in eastern Washington pumped out 16,593 megawatt-hours of power, or about 23.5 percent of the power Puget Sound Energy needed for its 1.1 million customers. Danko writes:

While wind power rises and falls with the varying wind speed – obviously – Puget Sound said its three wind farms are providing at least some power two-thirds of the time and on average are supplying about 10 percent of the power its customers use.

Texas is also breaking records on wind production. The state leads the nation in wind installations over al,l and at 7:08 p.m. on Feb. 9, those turbines were spinning away, producing 9,481 megawatts of power, 10 percent over the previous record of 8,667 MW.

The Feb. 9 high mark represents 28 percent of the load on the state’s power system.

Meanwhile in Colorado, Xcel Energy reported that wind power accounted for 16 percent of the 35.9 million megawatt hours of electricity it sold in 2012.

The missing link to drive those numbers even higher is, of course, storage. California may be taking a step toward new green energy ceilings to break with a recent decision from the state’s Public Utilities Commission ordering Southern California Edison to add 50 MW of grid storage over the next eight years.

Writing about the order on Greentech Media, Jeff St. John notes it’s a relatively small amount of storage, but provides a signal that the state is serious about integrating wind and solar power onto the grid by the 2020 deadline for reaching the state’s renewable energy goal of 33 percent.

In the context of total energy production, in the U.S. or worldwide, all these new benchmarks may be relatively small, but they reflect a vision and momentum that will continue to push renewable energy ceilings higher and higher.

 

California and LEED — No. 9 or No. 1?

The U.S. Green Building Council has tallied up new LEED buildings certified in states across the U.S. last year to see which are the most green-friendly, but the results, released on Wednesday may seem to some a bit skewed.

The organization that established the Leadership in Energy and Environmental Design rating system for energy efficient and sustainable building design — and made it the gold standard for public and corporate buildings across the country — bases its top 11 list on square footage of LEED-certified space per capita.

On that basis, Washington, D.C., with 110 new LEED buildings totaling 22,246,445 square feet leads the pack with 36.97 square feet per capita. We’ll rack that up to government buildings, such as the LEED gold U. S. Mint Building (below)  and other national groups going green with large projects, and the district’s relatively small population.

There are only so many residents you can fit into a 10-mile square. Most of the people who work in D.C. and use those new buildings probably live in the surrounding suburbs.

Meanwhile, California, with 540 new LEED projects totaling 54,252,993 square feet only narrowly made the list at No. 9. Our per capita in 2012 was 1.46 square feet. Even though the state is absolutely No. 1 in number of projects and total square footage, we are penalized by our nation-leading population.

All that said, while I may gripe about USGBC’s figure juggling, there’s no arguing with the success of the LEED system. Almost any major city today is practically jammed with LEED projects, San Francisco being a case in point. Northern California has about 760 LEED projects.

This success is based not only on bottom-line savings on direct things such as energy use, but intangibles, such as building comfort and health of inhabitants.

Worldwide, more than 15,000 commercial projects have been certified under LEED, with more than 35,000 additional projects in the pipeline, totaling more than 10.3 billion square feet of space.

 

Obama puts climate change on second term agenda

At his Inauguration in Washington, D.C., President Barack Obama has spoken out strongly on climate change and renewable energy.

None

“We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.

“None can avoid the devastating impact of raging fires, and crippling drought & more powerful storms.

 ”The path towards sustainable energy sources will be long…But America cannot resist this transition; we must lead it.

“We cannot cede to other nations the technology that will power new jobs & new industries – we must claim its promise.”

In response to the inaugural address, the greenies on twitter are happy campers.

 

 

Desert Mirage team takes 2nd in national KidWind competition

Great news from Arthur Kimball at Desert Mirage High School in Thermal — the school’s KidWind team, sophmores Arturo Gutierrez and Jesus Gutierrez (who are not related to each other), took second place in the national KidWind competition in Washington, D.C. April 27-29.

The KidWind program is aimed at getting K-12 students interested in  science, technology, engineering and math – referred to as  STEM — through having them design model wind turbines. The Desert Mirage team went to D.C. after taking second place in a regional competition here in the Coachella Valley.

Unfortunately, only four high school teams were in competition at the national level , versus many more teams from elementary and middle schools, Kimball reported. Still the Desert Mirage students’ second place was no easy deal; they were up against some top private schools, such as National Cathedral School from D.C., an elite girls’ school, which took first place.

“The competition was stiff,” Kimball said. “But they could indicate their learning by looking at other teams’ designs and making suggestions.”

The students and teachers also had time for a day of sightseeing, taking in the Smithsonian Space and Aeronautics Museum — where they were fascinated by propellers, Kimball said — as well as the Pentagon, Arlington National Cemetery and all the monuments.

And, Kimball said, they’re already looking forward to next year’s competition, when the KidWind organizers promised at least one high school team from each of the 20 states now participating in the regional competitions.

“Now we know what we’re doing, we’re going to bring the heat,” he said.

 

Desert Mirage wind kids head to DC

Today’s Renewable Energy Roundtable at UC Riverside’s Palm Desert campus started out with a presentation on some of the programs underway at area high schools to get kids interested in and prepared for careers in green energy and technology.

Arthur Kimball, who has started a green academy at Desert Mirage High School in Thermal, reported on the impact of the recent KidWind competition — in which area high school teams competed in designing and building model wind turbines. A Desert Mirage team placed second, making them eligible to go to Washington, D.C. for a national competition, April 27-29.

The winning students have since gone to Saul Martinez Elementary School in Mecca to teach a group of 5th graders about wind power and turbine building, but Kimball said, the word quickly spread around school and soon, everyone was trying to crowd into the cafeteria where the wind presentation was taking place.

The only solution was to ask the Desert Mirage students back for a schoolwide presentation.

Kimball sees the upcoming trip to D.C. as a chance for his kids to get an even better idea of the career and education opportunities available to them in green tech. He did a little ad hoc fundraising at the roundtable because, he said, while his program is state funded, none of the money can be used for out-of-state trips. 

After announcing he was short $2,500 to for the trip, a basket was quickly passed — knocking close to $500 off the shortfall.

Anyone who wants to chip in can call Arthur Kimball at 909-633-5211.