The New Energy Ethic: Of Pigs and Green Smoothies
What’s that you ask? And what in the world do pigs and green smoothies have to do with our energy bills?
You’ll have to read her remarks to find out. We promise it will be worth it!
The New Energy Ethic: Of Pigs and Green Smoothies
The theme of our keynote today is the “New Energy Ethic.” Ethics are, of course, rules for behavior which are based on moral principles. Applying rules of ethical behavior to how a business makes money or conducts itself isn’t new. The triple bottom line philosophy of profit, people, and planet – or financial, social, and environmental performance – was coined 20 years ago.
Energy companies in particular teeter in a precarious position with respect to public opinion. Accessing the raw materials or fuels needed to generate power can cause real human and environmental damage before the first CO2 molecule is released into the atmosphere. I’m not going to focus today, though, on a finger pointing exercise at the various energy companies from whom we purchase our power. Let us focus instead on the ethical choices we can make as consumers of that energy.
So what choices do we have? For there to be an ethical dimension to our energy use, we must also have the ability to make choices – and we must acknowledge that the impacts of those choices go beyond our personal sphere. Can we choose from whom to purchase our electric power? No, not in Virginia. Utilities have a monopoly in our state and they are regulated by a third party entity called the State Corporation Commission. But we can choose to pay extra to purchase a greener electron as with Dominion’s green energy program.
Depending on siting and other external factors, we can also choose to generate our own power through solar or other technology – assuming we can afford it. We’ll return to this option. Our current power generation portfolio is fossil fuel heavy – 58% of VA’s net electricity generation comes from coal, natural gas, and petroleum. Given the economic, social, and environmental impacts that result from these fuel sources, it is important not to waste energy. Or put another way, wasting energy can be viewed as an unethical energy choice.
A quick physics refresher for those who are decades out of elementary school: coal fired power plants implement four energy conversions in order to generate an electron for the grid, and then we have the line losses that come from stepping up and down the amperage of that current flow. By the time the cfllights up your dining room, only 5% of the original energy content from the hunk of coal is in use. So a little bit of energy saved at home makes a big difference in terms of the amount of energy that goes into the system.
Returning to the energy conservation side, there are behavioral choices we can make that effect how much energy we use or waste: thermostat settings, cold water clothes washing, turning off our lights, etc. conserve energy. But behavioral choices extend to our purchasing choices as well, right? What appliances and devices do we buy for our homes, and are they ENERGY STAR labeled, for example? And when something breaks, are we replacing or are we upgrading?
Once we’ve made these purchases, there is the potential for another layer of choice. In the “Intelligent Efficiency” realm, there is a neat intersection between behavioral choices and efficiency enabling technologies like smart meters, smart thermostats, smart appliances, and Home Energy Management Systems. These meters, sensors, and software can tell you all kinds of important things about your energy use like, hey, your cooling efficiency has dropped – go change your air filter! When tied into time of use pricing and demand response, intelligent efficiency turns energy as a cost into energy as an asset.
Taken a step further, we one day will have the “Internet of Things” informing our energy efficiency. The Internet of Things connects energy using appliances and devices to the internet, allowing us remote control and communication. In this reality, your house knows when your car leaves the office and turns up the heat in anticipation of your arrival, after adjusting for traffic patterns and the weather forecast. This technology exists today; it’s just not ubiquitous.
This kind of whiz-bang “Intelligent Efficiency” integrates very well with renewable energy options like solar. If you’ve paid any attention at all to the clean energy space in the past couple of years, you know that the cost of solar panels has come way down. The industry’s installations were 41% higher in 2013 over 2012. There are rock star companies with venture backing to provide one-stop shop financing and installation options like those offered by Solar City. They are making pv more accessible than ever for homeowners.
Tie that pv to the grid, and you can sell to Dominion during the day and buy your power back for less at night. Or maybe you put some battery backup in the garage and off ramp yourself from the grid entirely. There is a lot of buzz around what’s known as the coming utility death spiral which is predicated on a certain picture of the American home energy landscape: solar on the roof, the battery backup in the garage, and the offspring of Hal meets Siri running your home energy utility with grace and efficiency.
Of course, you might also have lipstick on a pig – because there is a big difference between a house and arenewable ready house. Before we get to adding renewables or when we get to adding the renewables – we really should make our homes more energy efficient. Doing the cost effective improvements like air and duct sealing, and adding insulation will improve the payback of the system installed. We can get to upgrading the HVAC or water heater as it breaks or outlives its useful life. Because wasting energy, particularly in this example, is neither an afterthought nor an accident – it is a choice.
Now before you think I’m giving you the big eat your peas and carrots before you get your dessert argument, I want to tell you that I categorically do not think of energy efficiency as mushy vegetables to feed to the dog under the table when the parents aren’t looking. I think of energy efficiency more like a green smoothie – you know, the one that tastes like all fruit and freshness, even if chopped up in there are the leafy greens you’d never normally eat…darn if that isn’t slurpy good.
Seriously. LEAP has helped many thousands of customers over the past four years. I can tell you that they love their energy upgrades. They love how much more comfortable their homes are – they’re quieter, less drafty, less smelly, and they’re healthier. And yes, they’re more affordable too.
I’ll give you a quick example of what I mean: Tim Leroux is LEAP’s Director of Operations. When he started working for LEAP, he got an energy audit on his home and did $16K worth of improvements: reconfigured and replaced ducts, air sealed, added insulation and put in an 18 SEER heat pump – the works. His energy bills were $4500 annually, and since doing the upgrade, he’s paid $1800 less. He’s looking at an 8 year payback assuming utility rates don’t rise, and a 4.9% annualized return. If we take the measure life of the heat pump at 14 years, he will have spent $16K and made $27K. And when the renewables reach grid parity in Virginia, he’ll be good to go with his renewable ready home. But if you were to ask Tim what he valued most from his upgrade, he will tell you that the health and comfort benefits outweighed the investment benefits for him and his family.
At LEAP we like to say we’re building our own virtual power plant of the present that produces negawatts instead of megawatts. Our power plant employs your neighbors who spend their paychecks in the local community. It improves the value and durability of our local building stock. The larger outcomes of our ethical energy choices to conserve, to be efficient, to drink of the green smoothie, create a virtuous economic cycle.
Energy efficiency is in fact the original distributed energy resource when you frame the discussion from a capacity perspective. Use less energy and you need less energy. Need less energy and perhaps we don’t pay for that new power plant of the future afterall. But even if your power plant of the future is a solar array on the roof, remember that the energy we don’t use will always cost less than the energy we have to pay to create.
The new energy ethic must be defined by more than the silver bullet one-off, because I’m here to tell you there isn’t one. Homes are quirky and unique. On the efficiency side, the New Energy Ethic involves contractors, your personal living space, financial investment and a triple bottom line payoff homeowners themselves can partake of in their home energy utility of the present.