Sunday 26 April 2015

Waking the 'sleeping giant' of energy efficiency

A message from Dr Steven Fawkes (Sept 2012)

Energy  efficiency  can  play  a  major  role  in  addressing  the  multiple  challenges of improving energy  security,  reducing  the  environmental  impacts  and reducing costs  to  consumers,  as well as creating economic growth and jobs.   We need to urgently develop the tools to wake up, what Angela Merkel recently referred to as,“the sleeping giant“.

The German Prime Minister’s reference has prompted the question how do we significantly scale-up energy efficiency? A  scale-up  of  energy  efficiency  deployment requires  an  increase  in demand,  supply  of products  and  services, and availability of  financing.  These  preconditions  need  to  occur across all sectors of the economy.  Many companies in heavy industry claim they have invested in as much energy efficiency as they  can because  of  the high costs  associated with  efficiency.  However, opportunities  still remain, both in retrofit and major process change.
Electric Natural Gas Buses: Cleaner AND Greener

In commercial transport  there  is  a  demand  for  greater  energy efficiency  but  the  main constraint is the equipment replacement cycle as energy use is largely locked in by vehicle choice. There is a lot of variation in demand in the commerce industry  with  large retailers typically carrying programmes  that have  produced good  investment  returns  for  many  years.  In smaller organisations there is a latent demand for energy efficiency but the constraints are more around lack of capacity. However,  there  is  increasing recognition in  non-domestic  buildings of the potential  to holistically retrofit buildings in a way that can produce energy savings of 30-80% but still little demand.
The Empire State Building, where savings of 38% were achieved with a three year payback  period  on  the  marginal capex has  shown the art  of  the  possible. 
Empire State Building Night
Empire State Building

Constraints include  the  well-known split  of landlords’ and  tenants’  incentives,  the  nature  of  commercial property financing and short term investor behaviour. Across all organisations there is a need to increase knowledge amongst decision makers as many opportunities to improve energy efficiency are still being missed because clients don’t  know what can be done.  Capacity and knowledge needs to be built from the board, through energy managers and down to the shop floor.

Unfortunately,  housing demand  is  a  more  difficult  issue.    The  Green  Deal  has  a  target  of retrofitting  14 million homes, which  implies  a  massive  increase  in  demand  for  energy efficiency.  Although most householders would prefer lower energy bills this is not the same as demanding an energy-efficiency retrofit. A retrofit implies disruption equivalent to having a major extension.

Energy efficiency is abstract and unlike an extension it is hard to enjoy or display.  Very few people wake up and think of buying some energy efficiency, they are more likely  to  wake  up  and  think of buying  an  object  of  desire  such  as  a  new  car  or  a  new computer.  Making  efficiency  desirable is particularly difficult  because  of the  level  of disengagement that consumers have from their energy bills and suppliers, with bills largely seen as another form of unavoidable taxation.

The  other  aspect  of  demand  for  energy  efficiency in  households is  behavioural  change. Opower, a customer engagement platform for the utility industry, has produced measurable savings  by giving  consumers  information  about  their  own  energy  use  compared  to  their neighbours usage,  so  called  “neighbour  power”.  Onzo, a  data  and  analytics  service  for utilities, has technology that can provide consumption data for individual appliances as well as the whole house. Impressive savings and reduction in peak loads have been achieved with this approach.

On the supply side we need to build capacity in several areas, particularly measurement and verification of  savings (M&V), integrative design  techniques, and supply  of financing products. M&V should be an essential element of all energy efficiency projects. 

The Empire State Building retrofit has shown the power of integrative design but these design techniques are  still  not  widely used. 
IR Image Showing Differing Heat Loss
Traditional component  rather  than  system engineering  design techniques are  still the norm in practice and classroom.  We need to increase the supply of architects and engineers trained in integrative design techniques.

Financing  for  cars  does  not  make  people  buy  cars,  and  the  same  is  true  for  energy efficiency.  It  does,  however, enable  them  to  overcome  the  barrier  of  upfront  cost.    Many different  designs  of  energy  efficiency  financing  techniques exist  and  in the  USA there  has been a flowering of innovation. Even in the US, however, the market remains tiny (c.$5bn) and not  widely  recognised  by  the  financial  sector. Only  standardisation,  such  as  we  saw develop in the renewables industry, can lead to a mass finance market.

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