June 2007

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Making Energy Efficiency Accountable

Right now there is no off-the-shelf delivery process in place to develop truly effective energy efficiency improvements with long term performance assurance.


Thomas Hartman, P E
The Hartman Company

Contributing Editor

It was interesting to read recently that the Clinton Foundation has reached agreement with a number of cities and banks world wide to invest billions in improving the energy efficiency of buildings. This appears to be the first private initiative targeting greenhouse gas emissions on such a massive scale. But the first thing that came to my mind as I read about this effort was itís all too likely to end up being a bad investment. And without some new direction, it could do more harm than good for the cause of energy efficiency as the right near term electric energy resource.

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Hereís why. For years now, energy efficiency programs for buildings have had little or no accountability, and for that time, follow up studies have shown that projects in these programs have fallen considerably short of achieving their projected energy reductions. When one looks at the true potential of energy efficiency in many of these projects, the discrepancies between achievable and actual energy reductions are even greater. Thatís been ok for the electric utilities that have administered these programs because at the upper management level the real goal of expanding electric sales has not changed. Data developed from conservation programs has been used to quantify and justify the need for building new power plants. Finding that investment in energy efficiency has limited long term potential which fits fine into utility planning. So utilities have not done much to change an overall lighthearted approach towards energy efficiency nor the lack of long term accountability.

Now, we have an independent group who really wants energy efficiency to work. The hope is that a strong commitment to improving the energy efficiency in buildings will lead society down a new path toward mitigating the climate change resulting from our greenhouse gas emissions. Energy efficiency certainly can do that and, as I and others have said often, if properly applied it could do the job single handedly in the near term. But because of the lackadaisical approach to energy efficiency and the lack of accountability built into the efficiency improvement process our industry has taken over the last several decades, right now there is no off-the-shelf delivery process in place to develop truly effective energy efficiency improvements with long term performance assurance. I think we can all imagine the large engineering and construction players lining up with their polished presentations and fancy brochures that detail successful efficiency projects theyíve designed and managed. Of course the truth is, very few of these have really succeeded anywhere near as well they could or even as presented, and after a few billion dollars have been spent, those cities and banks participating in this program may conclude, as utilities already have, that energy efficiency has a limited potential and is cannot really be the major factor in reducing greenhouse gas emissions for the near term.

contemporary This outcome of course would be a real tragedy. The only way to avert it is for those of us in the industry who have experience with the positive and negative results of past and present energy efficiency programs to speak out honestly about the need to improve the content and accountability of our industryís approach to building efficiency improvements so that initiatives such as this one does not simply replicate the shortcomings of current programs.

How do we promote more effective energy efficiency efforts? Well, we need to make energy efficiency programs more like other investments. The last time I went to my bank to get a loan for a new house, the loan officer was amazingly uninterested in the features and details that excited me about my new home. What he wanted to know was how I could assure the bank I would pay back the loan. I continue to be amazed in speaking with utility efficiency program managers how the reverse is true. They want to know all about the technical issues, but accountability for the proposed energy savings is almost an afterthought. There is almost never any formal requirement that commits projects to actually achieve their projected savings, especially in the long term. We need to speak out and convey to those becoming involved in promoting efficiency that the current models available for improving energy efficiency in buildings are flawed. A fundamentally new model for investment in improving energy efficiency, whether it is to capture dollar savings or reduce emissions, must be developed that starts as a financial model similar to other investments. With the current state of controls and integrated networks, the accountability requirements for such a financial process do not require large budgets for measurement and verification nor ongoing commissioning. The reporting system can be easily built into each project and like my loan officer, the efficiency program manager should be able from her or his desktop computer to click on each project and see if we are up to date in our energy savings payments.

So if we have the opportunity, the advice we need to give to the Clinton Foundation initiative, and any other energy efficiency program that would really like to become successful, is to think like a bank and invest in those projects that provide the greatest large scale return and be a stickler for accountability over the entire life of the investment. Thatís the key to success. Such a level of diligence and accountability is not at all difficult to integrate into efficiency improvements, but is almost always absent in todayís efficiency programs.


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