Green Wombat

photo: Reid Harris Cooper
Given that commercial buildings are responsible for about 20 percent of the United States’s greenhouse gas emissions, encouraging landlords and tenants to cut electricity is one key way to fight global warming. Problem is, there has been little incentive in places like California to do so. Why? Because in a skyscraper like the one Green Wombat inhabits in downtown San Francisco, state regulations have allowed only one meter and the landlord typically divides up the utility bill according to the amount of square feet each tenant leases. So, even if Tenant A installs energy-efficient lighting and takes other measures to cut electricity consumption but happens to have the biggest suite in the building, it’ll get stuck with the biggest utility bill. And though Tenant B might lease offices half the size of Tenant A’s it’ll pay far less even if it’s an energy hog and uses more power than its green neighbor.

On Thursday California regulators moved to remedy that conundrum by allowing utility PG&E (PCG) and building owners to install meters for each tenant. The idea is that "submetering" will provide an incentive for tenants to conserve energy by making them pay only for the electricity they actualloy use.

"The inability for commercial building tenants to reap in the benefits of investments made in energy efficiency and demand response has been a hurdle," said California Public Utilities Commission president Michael Peevey in a statement. "All it takes is price signals and a customer willing to make an investment in order to take advantage of the potential cost savings.”  Added PUC commissioner Dian Grueneich: "The prohibition on submetering in commercial buildings has been a barrier to energy efficiency for decades. This decision sets an example that the other utilities and the rest of the country can follow."

Presumably, the other two big California utilities, Southern California Edison (EIX) and San Diego Gas & Electric (SRE), will be able to implement submetering as well. PG&E and the Building Owners and Managers Association – which manages 600 million square feet of office space – have agreed to sub-metering. The hitch is that tenants – who directly control 1,600 megawatts of energy demand, according to the PUC – will have to agree to submetering in their lease. But if tenants can reduce electricity demand by 20 percent, the PUC says California can avoid building a 320-megawatt gas-fired power plant.

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photo: gkjarvis
California regulators Thursday unveiled a plan to produce 1.5 gigawatts of carbon-free energy by not building three massive power plants. Instead, they will tap “nega-watts” through an energy-efficiency program that will reward the state’s big utilities for saving electricity and penalize them for missing targets set by the California Public Utilities Commission.  "Energy efficiency is the best choice for meeting the energy needs of California’s citizens and its economy, while protecting the environment," wrote utilities commissioner Dian Grueneich and administrative law Judge Meg Gottstein wrote in a ruling detailing the plan.  "Producing ‘nega-watts’ … of energy by using limited energy supplies more efficiently is smart business, smart for California’s ratepayers and the least-cost way to address climate change."

The emphasis on energy efficiency has kept California’s per-capita electricity usage flat over the past three decades despite an explosion in the state’s population and an economic boom that made it the world’s eighth-largest economy. Now with a state cap on greenhouse gas emissions, regulators are upping the ante on energy efficiency as a way to avoid building new carbon-emitting power plants while renewable energy sources are put in place. If the state’s energy efficiency targets are met, regulators said that California would eliminate 3.4 million tons of carbon dioxide in 2008.

In a mind-numbingly complex 212-page ruling that has kept legions of lawyers and analysts employed, regulators laid out a formula for determining how PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric’s (SRE) energy efficiency programs will count toward meeting targets. If a utility meets 85 percent of the energy efficiency goals, for instance, it will earn a 9 percent rate of return on its investment, ratcheting up to 12 percent if all the targets are met. If the Big Three utilities’ energy efficiency performance falls below 50 percent of the target, then they would be penalized a collective $238.5 million, according to the plan.

Regulators said the plan was intended to steer the utilities away from the “steel-in-the-ground” mindset that building new power plants was the best way to make money. By focusing efforts on energy efficiency, utilities could avoid financing and capital costs associated with constructing new power plants, and California consumers would save an estimated $2.7 billion between by 2008. What the plan did not do was identify specific energy efficiency measures the utilities must take to meet the targets. But in the past, programs have included everything from handing out compact fluorescent light bulbs to giving rebates to data center operators that cut electricity use by using more efficient computers. One hope is that interactive "smart meters" capable of monitoring household appliances energy use will encourage conservation by allowing utilities to vary the price of electricity according to demand.

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Energy efficiency software may not be the sexiest of businesses but it’s starting to attract the attention of Silicon Valley venture capitalists as "green computing"  gains momentum. Case in point: Seattle-based startup Verdiem has scored $8.3 million from Kleiner Perkins Caufield & Byers and six other investors. Verdiem makes power-management software for corporate personal computer networks that lowers energy usage. That allows companies to save money, of course, but also show their green cred by reducing greenhouse gas emissions from electricity generation. Green Wombat wrote about Verdiem back in December and you can check out this post for more details on the company’s business model.

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Home may be where the hearth is but it’s also where 17 percent of greenhouse gas emissions are generated in the United States, according to the U.S. Environmental Protection Agency. So depending on your perspective, it’s either heartening or appalling that just 12 percent of new single-family homes built in the United States in 2006 qualified for the EPA’s Energy Star high efficiency designation. The 200,000 homes winning the Energy Star rating last year are 20 percent to 30 percent more efficient than standard dwellings. That brings the total Energy Star homes in the U.S. to about 750,000. The states with the most Energy Star homes are Alaska, Arizona, California, Connecticut, Delaware, Hawaii, Iowa, Nevada, New Hampshire, New Jersey, New York, Ohio, Texas, Utah and Vermont. The EPA’s report does not indicate the average size of an Energy Star house but as the 3,000-square-foot McMansion becomes the tract home of the 21st century, the housing obsesity crisis will continue to blunt efforts at energy efficiency. After all, installing a high-efficiency air conditioner tends to lose its impact if you need two of them to cool your abode.

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photo: -evidence-
Toronto is launching a campaign to replace conventional lighting with high-efficiency, long-lasting LEDs across the city. In a program promoted by Durham, North Carolina, LED company Cree (CREE), Toronto will install solar-powered LED lighting in parks and switch to LEDs in parking garages, among other things. The city is also converting its iconic CN Tower to LED lighting. A similar program is underway in Raleigh, North Carolina.

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photo: green wombat
Gathering at a solar-powered building on the Google campus, a host of tech giants today announced a major push to improve the energy efficiency of computers – an effort they claimed could save $5.5 billion and reduce greenhouse gas emissions by 54 million tons by 2010. (The equivalent of taking 11 million cars off the road or shuttering 20  500-megawatt  coal-fired power plants.) Normally fierce competitors – Google (GOOG) and Yahoo (YHOO), Intel (INTC) and Advanced Micro Devices (AMD), Dell (DELL) and Hewlett-Packard (HPQ), HP and Sun Microsystems (SUNW), Microsoft (MSFT) and everyone – are cooperating on the Climate Savers Computing Initiative. (Apple, despite Steve Jobs’s recent green manifesto, was conspicuous in its absence.) "The reality today is that the average desktop computer wastes half of its energy – half the energy coming out of the wall plug is unused," said Urs Holzle, a Google vp for operations, at a press conference. By 2010, Climate Savers aims to make desktop computers 90 percent energy efficient and servers 93 percent. That would add about an average $20 to the price of a personal computer and $30 to a server. The alliance also will campaign to get power management software installed on computers to turn them off at night or lower their electricity usage when idle. "The fact that 90 percent of computers are capable of but not utilizing these power management technologies is startling," said Intel executive Pat Gelsinger. "This is not a technology problem. We can build energy efficient [power] supplies today. It’s a matter of industry choice."  Holzle and Gelsinger said it is yet to be decided whether computers that meet the alliance’s standards will sport some sort of Climate Savers seal of approval like the Energy Star stickers awarded by the U.S. Environmental Protection Agency.

Climate Savers members – which also include non-tech companies like Starbucks, green groups the World Wildlife Fund and the Natural Resources Defense Council, as well as MIT and the U.S. EPA – pledge to practice what they breach, ensuring their own operations make use of power management software and install the most efficient computers. 

Ok, as important as computer energy efficiency is, it isn’t exactly the sexist green issue around – you won’t probably won’t find Darryl Hannah touting her new high efficient PC power supply. So the scribes from various daily newspapers and national magazines lured to Mountain View by the allure of the Googleplex seemed to be a bit underwhelmed by the news. But to Green Wombat, the event’s real significance – besides the obvious positive impact on greenhouse gas emissions – was the fact that once again the tech industry is out front on global warming, racing ahead of the federal government to devise a solution to ever-escalating power consumption by our digital society. Come July, the U.S. EPA will require computer power supplies to be 80 percent efficient. But the tech alliance unveiled today will begin to exceed that by next year if they keep their pledge. Contrast that commitment from computer manufacturers, chip companies and customers with the recent actions of the auto industry, which continues to fight efforts to raise energy efficiency standards of their products.

Toward the end of the event, Google co-founder Larry Page, just back from a trip to Africa, stopped by to endorse Climate Savers. "We can make great, great progress," he said. "We can also make computers better by doing this….By taking out some of the inefficiencies we can make them quieter and more reliable. The amount of power computers are using is increasing and the importance of computers in our lives is also increasing."

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photo: Ian David Blüm
California, Connecticut and Vermont are the most energy-efficient states in the U.S., according to a new report by the American Council for an Energy-Efficient Economy. The Washington, D.C.-based non-profit analyzed federal energy data and surveyed state policies to rank states based on, among other things, their spending on energy efficiency programs, appliance and equipment energy efficiency standards, building codes, and tax incentives for energy efficiency. The 74-page report was funded by the U.S. Environmental Protection Agency.

The top 10 most energy efficient states in 2006:

• California, Connecticut and Vermont (tie)
• Massachusetts
• Oregon
• Washington
• New York
• New Jersey
• Rhode Island, Minnesota (tie)

The 10 least energy efficient states:

• North Dakota
• Wyoming
• Mississippi
• South Dakota
• Alabama
• Missouri
• Arkansas
• Oklahoma
• Tennessee
• Alaska

"The top 10 states are generally characterized by having limited in-state supplies of conventional fossil energy resources," the report’s authors wrote. "They have long understood that they cannot rely on conventional resources for security of supply or other reasons. By contrast, the lower-scoring states have been typically endowed with abundant amounts of traditional energy resources that have been historically inexpensive."

The green states’ investments in energy efficiency have paid off, according to the report, in job creation, lower air pollution and greenhouse gas emissions, less expensive energy bills and a more sustainable growth in energy demand.

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These days even the daily ritual of shaving can make an environmental statement. Or so hopes Braun. The division of consumer products conglomerate Procter & Gamble (PG) said today that its line of men’s electric shaver chargers had become the first to win Energy Star certification from the U.S. government. Braun says its shaver chargers consume 64 percent less electricity than standard shavers. Based on the number of shavers it sells in the U.S. market, that translates into the annual elimination of about 5.6 metric tons of planet-warming carbon dioxide, according to the company. It’s just another example of how simple lifestyle/product changes can add up when it comes to cutting greenhouse gases – and how corporations are competing to give their products a green image. "With environmental awareness at an all time high, and consumers and businesses alike looking for ways to reduce their carbon footprint," Braun said in a press release. While we won’t get into the electric shaver vs. shaving-with-a razor-while-the-hot-water-runs debate, Green Wombat notes if you really want to embrace what Braun calls "green grooming," you can just let that beard grow.

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MMA Renewable Ventures is a San Francisco firm that finances and owns massive rooftop solar arrays for companies that want to power their operations with green energy but don’t want to shoulder the considerable capital outlay of installing such systems. Today the MMA Renewable Ventures (MMA) is launching a new business to finance energy efficiency projects. The target: mid-sized companies – regional retailers, grocery stores, manufacturers and the like – that want the benefits but not the expense of high-efficiency lighting, energy-conserving heating and cooling systems and other technology. Here’s the deal: MMA Renewable Ventures will conduct an assessment of a client’s operations and then arrange for the installation of energy-efficient systems. In return, MMA Renewable Ventures receives a fee based on the resulting energy savings. "The customer takes a look at what they’re spending for energy knowing full well they have equipment in their building that’s not being used efficiently," MMA Renewable Ventures CEO Matt Cheney tells Green Wombat. "All the customer wants is saving and doesn’t want to own equipment. We guarantee a certain amount of savings." MMA Renewable Ventures also will do deals where it shares the money saved on energy costs with the customer, who takes ownership of the equipment at the end of a multi-year contract. Cheney says MMA Renewable has "a pipeline of clients" but declined to identify them.

Cheney acknowledges that energy efficiency isn’t as sexy as solar but says its a wide-open market, given rising electricity costs and growing pressures to reduce greenhouse gas emissions. It’s also national market, with state incentives and tax breaks for companies that make energy efficiency improvements.

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Paul Zeven, CEO of Philips Electronics’ North American operations, dropped by Business 2.0 yesterday to chat with Green Wombat about the the future of LED lighting and the company’s support of a campaign to eliminate planet-warming incandescent light bulbs. In March the electronics and lighting giant called for the phase-out of traditional light bulbs in the U.S. by 2016 in favor of compact fluorescent bulbs, which use 70 percent less electricity and last about a decade. But going green in this case would seem to be the equivalent of going out business, given that incandescents comprise 95 percent of Philips’ (PHG) worldwide light bulb market. But Zeven says Philips is positioning itself for the future with its CFL products and LED technology. (Philips owns Lumileds, a Silicon Valley company that makes LEDs.)  In any event, he says the phaseout of incandescents is inevitable, citing the growing movement to ban the bulb: Australia is outlawing traditional light bulbs, Ontario recently moved to do the same while California is considering legislation to bar the sale of incandescents beginning in 2012. Zeven notes that Philips has also been in discussions with European Union officials about phasing out traditional bulbs. "What we’re seeing is that consumer demand, the actions of the retailers and the media are making this an issue and that alternatives are needed," says Zeven, a dapper native of the Netherlands who runs Philips’ North American operations from New York.

A few hours before our meeting Wal-Mart (WMT), which aims to sell 100 million CFLs by 2008, announced that it was working with Philips, GE (GE), Osram Sylvania and Lights of America to slash the amount of toxic mercury used in the high-efficiency bulbs to reduce their environmental impact and increase consumer acceptance. "Wal-Mart can have a tremendous impact," says Zeven. He was in San Francisco to give a speech at a conference and afterwards he said a woman approached him to say she had replaced all 129 light bulbs in her house with CFLs and had given a package of the bulbs to her father. "Two to three years ago most people had not heard of CFLs," he says.  The impact on global warming from something as simple as changing a light bulb is staggering: If the United States switched to CFLs it would save $18 billion a year in
electricity costs and eliminate 158 million tons of carbon dioxide
from the atmosphere –  the equivalent of shutting down 18 coal-fired
power plants, according to the Lighting Efficiency Coalition, coalition of environmental groups and corporations.

But Zeven sees CFLs as an intermediate step until LED technology can be perfected and the cost lowered for mass home and office use – something he predicts is another 10 or 20 years away. An LED – light emitting diode – is essentially a semiconductor chip and uses less electricity than even a CFL. LEDs theoretically can last for decades, dramatically lowering greenhouse gas emissions. Lights that virtually never burn out, of course, also changes the economics of the lighting business. "It’s a whole new ballgame for us as an industry," Zeven says, noting that there will always be new demand as cars, televisions and other gadgets increasingly rely on LEDs.

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