Energy Efficiency: Still Wasting in the Building

by Silvia Schmid

Last week’s conference “Building Energy Efficiency: Seeking Strategies that Work” offered the opportunity to discuss the many barriers to advancements in energy efficiency beyond current standards. The event was cohosted by the Wharton Initiative for Global Environmental Leadership (IGEL), the Institute for Urban Research at the University of Pennsylvania, the Wharton Risk Management and Decision Processes Center, and the Wharton Small Business Development Center, in partnership with the Energy Efficient Buildings Hub and sponsored by SAP. Speakers and panelists provided valuable insights on the current status of energy efficiency in buildings, addressing topics ranging from consumption measurement and increased transparency, to some of the psychological challenges inherent in adopting more energy efficient behavior. The common message throughout the day was how much remains to be done to make energy efficiency a mainstream priority.

Boosting Household Investments in Energy Efficiency

by Matej Hodek, Hyojoo Kim, Douglas Miller (C’12) & Antonia Weitzer

Despite widespread political support for measures promoting investments in energy efficiency in the residential sector, there remains vast, unmet potential. In order to better understand the reasoning behind meager investments in energy efficiency, a study was conducted by four graduate students at Imperial College London – including one former member of the IGEL team – to investigate the role of financial and non-financial factors affecting household decisions to invest in energy efficiency.

Water for Energy

by Iliana Sepulveda*

Water is essential for human life. It is also very useful for transportation, and agricultural and industrial production. Energy is also an essential ingredient. The relationship between these two resources has become an important topic for national security and for human development worldwide. With current available technology, vast quantities of water are required to produce energy (thermoelectric production as an example). Moreover, due to the geographical mismatch of water supply and demand, a significant amount of energy is needed to transport water where it is consumed, and to ensure that it has the proper quality for its different end uses (human consumption, agricultural uses, industrial production, and ecosystems protection).

Challenges and Opportunities of Investing in Cleantech and Renewable Energy

By Zhan Zhou*

Based on the database of the Cleantech Group, there are about 19,200 cleantech companies in the world, of which over 1/3  are based in the United States.[I] Despite some minor setbacks, there is no doubt that cleantech has become one of the most targeted sectors for both public and private investment. A few numbers can shed light on the fact that the cleantech industry has emerged to be a fast-growing industry of great political and environmental significance:

• During 2012 alone, cleantech companies around the globe raised $6.56 billion of venture capital across 732 deals [II]
• For the global Foreign Direct Investment (FDI), the cleantech sector ranked as the second largest sector after oil and gas by attracting $12 billion from the global FDI into the U.S. in 2011, making it the fastest growth sector for the past decade [III]
• Through July 20^th, 2012, the §1603 American Recovery and Reinvestment Act program had awarded $13.0 billion to nearly 45,000 renewable energy projects [IV]

Market Challenges
With a seemingly growing appetite for investment in cleantech, some important market challenges lie ahead.

A Portable Environmental Economics Lab

by Yixiu Zheng*

I started working on this project last semester, while taking a course in environmental economics.

As a subfield of economics, environmental economics draws on both microeconomics and macroeconomics[i], but it also has unique concepts of its own. I have seen that students who have never studied economics before can find terms like “property rights” and “marginal abatement cost” overwhelming. While scholars of economics often use historical data and experiments, environmental economics is a relatively recent discipline, developed first in 1950s in the U.S.[ii] There aren’t many experiments to build upon; for instance, the water rights trade doesn’t have a large scope of application, except for some arid areas like California and Australia. So how are students supposed to fully understand and apply these concepts in the real world?

I learn best through direct experience. This type of teaching doesn’t seem boring to me. And in fact, it is suggested that people do have a better memory when they put teachings into practice, for example, by trying to cook a meal rather than just reading its recipe. This is why I want to create a game about environmental economics.

Clean Energy Challenges and Opportunities for Investing in Sustainability

by Sharon Muli*

Jason Baxter of Drexel University

If the Earth had six massive solar installations measuring 200 miles long by 200 miles wide filled with 10% efficient solar cells, it could generate enough energy to meet global demand.  While this is a powerful vision that demonstrates the high potential of solar power, it sounds like a rather absurd thought. Yet this image raises a fundamental question; how can we take better advantage of solar power?

This issue was discussed during the Clean Energy and Sustainability Investing Workshop at the Wharton Social Impact Conference on November 16, 2012, organized by the Wharton Social Impact Initiative.  This year, the theme of the conference was “The Finance of Impact:  Innovative Approaches to Social Change”. The discussion of photovoltaics (PV) emerged as a clear example of how financial investments and technological development can lead to more sustainable change.

Household Energy Survey

Doug Miller, former Wharton IGEL Staff member, Penn alumnus, and now a Master’s student at Imperial College London, is currently working with three fellow graduate students on a project that investigates the factors affecting household investments in energy efficient technologies. Their survey aims to identify what determinants have the greatest impact on these investment decisions. They hope to receive responses from people living in the U.S., so that they can compare these to responses in Europe. The survey takes about 10 minutes on average to complete and will remain open until Friday.

Click here to begin the survey. Thank you for your participation.

 

Five Insights from ACORE’s National Renewable Energy Policy Forum

by Candice D. McLeod*

On February 6^th, the American Council on Renewable Energy (ACORE) held its 10^th annual Renewable Energy Policy Forum on Capitol Hill. The event featured a host of industry, financial and government leaders, who spent the day discussing the progress of the renewable energy industry, from the industry’s current purgatorial state due to impending policy deadlines to the potential implications of the current fiscal and partisan climates.

The overall themes were clear – more financing options for renewables, renewable energy policy stability, and China setting the global rhythm.

Here are five main insights drawn from the forum:

1. Renewable energy markets continue to grow significantly. Perhaps we should stop referring to them as “alternative sources” of energy
2. Economic security -keep your eye on Iowa and rural America
3. More policy stability, please
4. More financing options -MLPs  & REITs
5. Don’t throw the baby out with the bathwater

1. Renewable energy markets continue to grow significantly. Perhaps we should stop referring to them as “alternative sources” of energy

John R. Norris, Commissioner, U.S. Federal Energy Regulatory Commission (FERC) opened the panel Renewable Energy Market Growth with the statement, “[if] it wasn’t for an economy that’s walking with a limp and a dramatic decrease in natural gas prices, the renewable energy market would be twice the size.”

The Food-Water-Energy Nexus: A Global Issue

The global population is projected to hit eight billion people within 20 years. With a growing population, dramatically more food, water and energy is needed. Yet even today, food and water supplies are becoming increasingly stressed in the face of climate change, development and unsustainable natural resources consumption. Recent drought-caused food price hikes have provided a glimpse into what the resource-constrained future would look like without significant action.

The concept of the food-water-energy nexus refers to how each one of those things affects the other. Water is the most important part of this nexus, because it cannot be created or substituted. Water also directly affects both of the other items. For example, most forms of energy production require substantial amounts of water for cooling and mining. Agriculture accounts for more than 70 percent of global water withdrawals. By comparison, around 16 percent of global water withdrawals are for the industrial sector. More than three billion people will be living in water-stressed areas by 2020.

Many Approaches to Energy Efficiency: Ceres’ Business for Innovative Climate & Energy Policy (BICEP) Energy Efficiency Event

Amanda Byrne is pursuing a Master of Environmental Studies with a concentration in Environmental Policy at the University of Pennsylvania. She worked at ICF International for four years primarily supporting EPA’s ENERGY STAR program after graduating from Penn State with a Bachelor of Science in Energy, Business and Finance.

On December 15, 2011, many leaders in the energy efficiency industry came together in Philadelphia to talk about initiatives they are taking on, and to collaborate via roundtable discussion on how to effectively build on this momentum. Many types of stakeholders were represented including utilities, non-profits, government agencies, and service providers among others from the private sector. Select case studies were presented by Johnson Controls, Metrus Energy, The Reinvestment Fund, the City of Philadelphia’s Green Works program, and Liberty Property Trust. I was lucky enough to help out at the event and listen in to the discussions that developed. As someone who has worked in the energy efficiency industry for several years, I thought this event was particularly eye-opening. In addition to possible approaches, real solutions to making energy efficiency mainstream were discussed. For example, a municipal representative suggested that one approach to selling energy efficiency to elected officials is to present the opportunity in a way that can be used to sell it to constituents.

Other topics covered throughout the event included energy efficiency goals and incentives, building codes, building labeling, behavior change, and risk mitigation. The points that follow include key highlights of the day’s discussion:

• Setting energy efficiency goal levels appropriately is critical to achieving the goals. Incentives for achieving goals, including tying employee bonuses to goal achievement, can help ensure goals are met.
• Building code adoption and implementation have their barriers at the state and municipal levels, but enforcement seems to be the biggest issue. Solutions to enforcement include utility credits towards their Energy Efficiency Resource Standards goals for training code officials; and implementing codes based on building performance outcomes rather than taking an input approach. (If interested in learning about current building codes, visit U.S. DOE’s Status of State Energy Codes.)
• Most attendees agreed that building energy labeling is important. However, it is becoming more and more mainstream to build efficient buildings. So labeling systems need to keep up. It is also important to encourage the public to think about building energy consumption the way they think about vehicle fuel efficiency. (If interested in learning about current building energy rating and disclosure policies, see comparison matrices and maps here.)
• Building design, energy consumption indicators, and gadgets can only go so far – building tenants need to evolve their behavior within the building to ensure maximum energy reductions are realized. Training facility managers and others on this topic can help battle behavior issues. Some attendees commented that color-based energy price indicators have been extremely effective. Marla Thalheimer, Sustainability Manager at Liberty Property Trust, also shared that by simply installing an energy monitoring system in a building, a 4% energy consumption reduction was realized without implementing any retrofits. In other words, the building achieved large energy savings from energy consumption visibility alone.
• Risk mitigation is a key feature of energy efficiency, and should not be forgotten. Energy efficiency mitigates not only energy cost risks, but also operational risks. When a building runs more efficiently, equipment within the building has a reduced chance of encountering problems.

The event’s discussions concluded by addressing the idea of whether or not we have reached a tipping point in energy efficiency efforts. Some did not think so, but others suggested we might be there at the state and city levels, as more and

Image from Censtarenergy.com

more localities are setting goals to reduce greenhouse gas emissions and reduce energy consumption. It was also suggested that we are at least heading in the right direction. Innovation is increasing, and trends including urbanization and reduction of commercial space are pushing us towards more energy-efficient lifestyles.

It is clear that there is plenty of progress to be made towards a more energy-efficient and sustainable society; but forums like these prove that we are in fact moving in the right direction whether or not the tipping point has been reached. During this Ceres event, gaps and solutions were brought to light by diverse leaders in the field. This type of exchange is crucial to making change happen. So keep the key points from this event in mind as you walk through your office building, your home, or attend your next class. The more these ideas are discussed and debated, the better!