Between the Poles

Water conservation in industry: Why does using less water often cost more ?

At the Canadian Water Network conference we heard a fascinating presentation by Helmi Ansari, Director, Sustainability and Organizational Capability, PepsiCo Foods on how PepsiCo has reduced its water (and energy and waste) footprint and some of the business challenges specific to the water industry they have encountered.

PepsiCo is known internationally for its water conservation efforts.  Last year it won the Stockholm Industry Water Award for its 20 percent improvement in global water efficiency since 2006.

PepsiCo Foods Canada has 8 plants and 16 distribution centres in Canada and about 7000 employees.  PepsiCo's sustainability mantra is "leave no trace".  The long term vision is to run its business so as to leave no trace on the planet.  The vision is very aspirational, but I was quite surprised by how much real progress has been made. 

It started started in the early 90's when Pepsico created "green teams" in their plants.  The teams were responsible for environmental compliance. Then in the late 90s resource conservation teams were added.  Their goals were to reduce use of natural gas, electricity and water by 30 %, 25 % and 50 %, respectively, for every unit of food that they made.  Then in 2008 an initiative aiming at "net zero" plants  was started.  

Their interim commitments are aggressive

• Improve water efficiency by 75 %,
• Reduce manufacturing fuel usage by half
• Reduce fleet fuel usage by half
• No manufacturing plant and distribution centre waste going to landfills
• Lead in sustainable packaging innovation

The latest data shows that water efficiency has improved by  46 %.   Over 99% of the waste generated in PepsiCo Foods plants and distribution centres does not go to landfills.  According to Helmi this is the highest in the world for this type of industry and PepsiCo Canada was the first Pepsico subsidiary to achieve this objective. Fuel usage is down by a quarter, and fleet fuel usage is down by a quarter as well.  They have implemented heat recovery in every one of their plants.  According to Helmi they have the largest all-electric fleet in the world, and have just  completed the one millionth mile driven in all electric vehicles.

Reusing waste heat

Helmi gave an an example of energy saving through repurposing waste heat.  PepsiCo makes SunChips at their plant in Cambridge, Ontario.  They had a large boiler burning natural gas to produce steam to cook the chips.  After about a three year research and engineering effort, they were able to turn the boiler off because they are now cooking potatoes using waste heat from another process. SunChips for all of Canada are now being  cooked using waste heat that used to go up the stack into the atmosphere.

Net zero plant

Another impressive example is an entire plant that can run virtually off the water and electricity grid.  The Frito-Lay plant in Casa Grande, Arizona produces over a 100 million pounds of food a year.  In 2010 the plant received LEED Gold certification, apparently the first for a renovated food production plant.  Last year the whole plant was declared "near net zero" meaning it runs 90-100% off the grid,  90-100% of the water is recycled and over 99 % of its waste does not go to a landfill.  It has 36 acres of solar cells in an adjacent field; its own membrane bio-reactor  waste water treatment plant, with the treated water being reused in the plant, and a large boiler that burns landscape waste from a 75-mile radius, providing all of the plant's steam.  According to Helmi it is the only large scale food plant with this level of  sustainability.

Net zero using "potato water"

To make 4000 or 5000 pounds of potato chips per hour used to require about 120 gallons of water per minute.    A few years ago recycling technology was introduced which reduced water consumption to 60 gallons per minute.   After investing in more technology this was further reduced to  25 gallons per minute.  They are now looking at running the plant with "potato water", using the water in potatoes (potatoes are 80% water) much of which now goes up the stack as steam during the cooking process.  They calculate that if they can run their large chip plants entirely on potato water that would save a billion liters of water per year.

From a water conservation perspective, these are impressive achievements.  And you might expect that there were financial benefits that contributed to motivating PepsiCo to improve water efficiency, but surprisingly this is often not the case.

Business benefits ?

A major business benefit of a plant that can run on little or no water, is that it can be located in arid parts of the world, like Phoenix, Arizona, which is near where the Casa Grande plant is located.  Most of us would expect that another important business benefit of using less water is that it woud reduce costs.  The reality is quite different because of the way the water industry works.

At one of their plants in a small town where PepsiCo was the only major industry they were able to reduce water consumption by 40%, but they found that next year their water bill went up 40 %.  When they talked to the water utility, they were told that the utility worked on a fixed cost basis, and since the Pepsico plant was the only major industrial water consumer, rates had to be increased otherwise the water utility wouldn't be able to meet its obligations to its suppliers.

There is another problem.  When a plant uses a lot of water the effluent is very dilute, but as less water is used the effluent becomes more concentrated.   For example, reducing water consumption from 120 gallons/minute to 25 gallons/minute means the plant's effluent becomes roughly five times more concentrated.  At one of their plants that managed to reduce water usage by 55-60%, they are now having to pay much more for waste water treatment and their total water-related costs have actually increased.

Pepsico is at a point where as they continue to be more water efficient in North America, they're not seeing a financial benefit.   Their most water efficient plants are in Europe, North, Africa, and Australia where the pricing structure is very different and they are rewarded for conservng water. 

Unsustainable water service delivery model

Don Lowry, past President and CEO of EPCOR Utilities, gave his perspective on what is a pervasive North American water problem, a water service delivery model that is not sustainable.  North American industries that use water are caught in yesterday's paradigm of regulation which does not recognize the total cost of water, from acquisition through to treatment and re-injection.  Because water is managed on a fragmented basis, top water efficiency performers like PepsiCo are being penalized.   PepsiCo is being charged at the top rate because the pricing structure was designed with a view to punish people who have high concentrations.  According to Don breweries are in a similar situation.  As they have become more efficient, their effluent has become more concentrated and as a result their water-related costs have gone up, to the point where many of them are looking at how they can convert their effluent into something else so they can avoid high waste water treatment charges.

Water as a free commodity

According to Don the fundamental problem is that water is treated as a free commodity.  The water pricing model means that you are not being charged based on the volume of the commodity you consume, but on the cost of processing it to convert it to a potable state. If it was priced as other commodities are, such as natural gas or oil, conservation would be very financially rewarding.

Earth hour reduced demand by 448 MW in Ontario

The Ontario Independent Electricity System Operator (IESO) has reported that demand for electricity in Ontario was reduced by 448 megawatts (MW) or 2.7 per cent as a result of Earth Hour.  According to Toronto Hydro electricity demand dropped 205 megawatts, about 7%,  during Earth Hour in Toronto.

Last year Earth Hour reduced demand by 423 MW.

The difference between energy conservation and energy efficiency

There's a fascinating post on the Sustainable Buildings Centre blog that outlines how the world energy community has tended to stop using "energy conservation" and to use "energy efficiency" instead.

According to the blog post, after the 1970s oil crisis, in the framework of the Organization for Economic Co-operation and Development (OECD) the International Energy Agency (IEA) was established by the International Energy Program agreement, which was amended in September 2008. Neither the original agreement or the later revison  mention “energy efficiency”, but fo refer to “energy conservation” and the goal of reducing the growth of energy consumption:

exchange of national experiences and information on energy conservation; ways and means for reducing the growth of energy consumption through conservation.

The author of the post then did some research on Google and compiled some fascinating statistics on the number of mentions of the two terms in books indexed by Google.  The results showed that the use of "energy conservation" in books increased exponentially in the 1970s, but then dramatically dropped in the early 1980s. "Energy efficiency" on the other hand had a much slower rise in the 1970s, but surpassed "energy conservation" by the middle of the 1980s.

After further research, it turned up that the Shared Goals of the IEA adopted at the IEA Ministers meeting in Paris in June 1993, was the first official mention of “energy efficiency” in the context of the IEA.

Improved energy efficiency can promote both environmental protection and energy security in a cost-effective manner. There are significant opportunities for greater energy efficiency at all stages of the energy cycle from production to consumption. Strong efforts by governments and all energy users are needed to realise these opportunities.

The author of the post notes that ”reducing the growth of energy consumption” disappeared along with "energy conservation".  Apparently, the energy community decided to replace the concept of “energy conservation” with “energy efficiency” which as the the author of the post points out is not the same thing.  Energy efficiency is the ratio between the energy service delivered and the energy consumed to deliver said service. In other words, doing the same with less.  Energy conservation involves reducing overall energy consumption in addition to improving energy efficiency.

This may have to do with the different emissions goals of the developed world and the developing world, principally China, but also India, Brazil, and others, in reducing emissons.  China's goal is to reduce its energy intensity, the amount of energy required to produce a unit of GDP, because China will not agree to halt its economic development (China's per capita emissions are much less than the United States) and so its emissions will continue to grow, but not as rapidly. The developed world, especially the EU, has tended to set goals to reduce the absolute level of emissions.

Distributech 2013: LEED credits for demand response for commercial buildings by June 2013

In the U.S. buildings are responsible for 72% of U.S. electricity demand, 55% of U.S. natural gas demand, and 40 % of U.S. CO2 emissions.  36% per cent of the buildings electricity load is due to commercial buildings.

California has some of the most aggressive mandated emissions reduction targets in the country.  They include

• 33% renewable energy by 2020
• Reduction of GHG emissions to 1990 levels by 2020
• The California Public Utilities Commission's Long Term Energy Efficiency Strategic Plan calls for 60% to 80% statewide reduction in electrical lighting consumption by 2020. (lighting accounts for nearly 30% of California's electricity use.
• New residential construction to be net-zero by 2020.
• New commercial construction is to be net-zero by 2030.
• Governor Brown’s Executive Order B-18-12 calls for a 20% reduction in state energy purchases by 2018.

LEED

The US Green Building Council is responsible for the enormously successful LEED program.  Currently 10.3 billion square feet have been registered, of which 2.7 billion square feet has been certified under the LEED program.  According to the USGBC, currently 1.7 million square feet are LEED certified every day.

Last year at Distributech the US GBC and its partners Environment Defense Fund, Lawrence Berkeley Lab, and Skipping Stone launched a LEED-DR pilot program (DRPP) designed to encourage the adoption of demand response among owners of commercial buildings who have generally lagged in adopting DR.  Southern California Edison (SCE) is a major sponsor of the LEED-DR initiative.

Demand response at Southern California Edison

This year Mark Martinez of SCE gave an overview of  SCE's DR program.  In the U.S., commercial buildings represent 36% of the electricity load, but the majority of commercial building owners have shied away from DR programs.  A number of reasons are given for this.

• Limited number of energy focussed facility managers
• Lack of familiarity with utility DR programs
• Perception that DR is disruptive
• Concerns over loss of control
• Lack of specific knowledge around costs/benefits
• Concerns over ongoing operation changes

In the past utilities have paid major users, typically large industrial customers, not to use electric power at times of peak load.  The process has typically been manual, managed by telephone. 

But now SCE is reaching out to a much broader group of consumers necessitating automated demand response (ADR).  Its approach for motivating  commercial customers to adopt ADR is both a carrot and a stick.

The carrot

For nonresidential new construction SCE offers financial incentives,  $300 per kW of verified automated load shedding  and up 100% of the incremental cost of DR enabling equipment.

The stick

Given the state's aggresive emissions reduction program many building owners can see the writing on the wall as the state moves in the direction of mandating DR through the state building code.

The California Energy Code, part 6 of the California Building Standards Code which is Title 24 of the California Code of Regulations, were created by the California Building Standards Commission in 1978 in response to a legislative mandate to reduce California's energy consumption. The standards are updated periodically by the California Energy Commission to allow incorporation of new energy efficiency technologies and methods.

For example, smart lighting  is now mandatory in California.  The California Energy Commission recently updated its Title 24 Energy Efficiency Standards, improving what “up to code” means by 25 percent for residential buildings and 30 percent for commercial buildings. The new standards, which take effect January 1, 2014, introduce requirements for photosensors, occupancy sensors and multi-level lighting controls.  In the not too distant future, many expect that DR will also be mandated through the building code.

The benefits to commercial building owners from participating in SCE's DR program are

• Incentives for early adopters that won't be available when DR is mandated.
• Avoid retrofit costs later. 
• Claim LEED points

From SCE's perspective the LEED-DR program helps get people to start thinking about DR when they design buildings.

DR and peak load management

Many utilties are finding that DR is the least cost and best fit for peak load management. It is much cheaper than building additional gas-fired 'peakers".  Automated DR will enable SCE to shed load much more rapidly than is currently possible. The California ISO, which is responsible for operating most of the grid in California, currently does not count DR as a dispatchable resource because it is not as fast and reliable as the ISO would like. As DR becomes more automated, it should move in the direction of becoming a dispatchable resource.

LEED DR credits

The basic requirement for LEED-DR credits are that the building must be capable of shedding 20kW or 10% of load whichever is greater. They can sell this to an aggregator or to the utility. To earn LEED DR credits the owner needs to demonstrate curtailment. This often means that tenants and others participating in the program will require training.

In June after a mandatory ballot, LEED V4 including LEED DR will come into force.  At that time developers who satisfy the requirements for LEED DR will get full LEED credits.

Geodesign Summit: Changing how we manage our built environment

David Bartlett, who leads IBM's Smarter Planet initiative, believes there is an " immediate requirement to significantly and urgently change the way our built environment is managed."  And he is very sanquine about the capacity of our evolving technology to do this.  The Internet of Things is approaching a trillion objects.   Moore's law conrtinues to operate so we have incredible processing power.  The cloud is enablng us to make this processing power available to just about anybody with any type of device any where. Big data technology is enablng analytics in real-time.  We are rapidly approaching havng enough computing capacity to capture digitally, visualize and model our entire built environment.  IBM's Smarter Planet initiative is aimed at helping to make this happen.  According to David 42% of the world's energy goes to buildings so improving the efficiency of buildings is a primary focus of the Smarter Planet intiiative.

In October 2009 President Obama signed a directive calling for a more sustainable operations  strategy across the federal government. Commercial buildings use roughly 40 percent of the energy in the United States and the federal government owns approximately 182 million square feet of office space nationwide.  The U.S. General Services Administration (GSA) has a goal of reducing energy usage across federal buildings at least 30 % by 2015.                                                                                                                                                                                                                          
The GSA has contracted IBM to create a cloud-based centralized system that will monitor building performance and feed information into a central building management dashboard. It is expected that better analytics will help the government automate building controls to help property managers take more active control over building performance.

The initial focus during the first year of the smart building initiative will be 50 buildings (including the White House) that have already been identified as energy inefficient. It is estimated that the project could save approximately $15 million in operational costs annually.

Where do we start ?

A frequent question that David often gets after an organization buys into the smarter planet vision is where do we start.  IBM has developed a capability maturity model that offers a roadmap for organizations to use to assess their current situation to determine at what stage they are and then provides guidance to what they should prioritize to get to the next stage.

Motivating change

One of the most important tools in motivating change is transparency.  The internet faciliates transparency.  President Obama's administration has made government transparency using the internet a top priority.  David has found that transparency and gamification is extremely powerful in motivating change and in overcoming institutionalized inefficiencies ("but we have always done it this way").

Crowdsourcing green at the Los Angeles Unified School District

IBM has found that educational institutions and defense departments are the most receptive to the Smarter Planet vision. 

The Los Angeles Unified School District (LAUSD) is an interesting example.  LAUSD, which is the second largest school district in the country, decided it wanted to be the nation's greenest school district..  LAUSD has 700,000 students and more than 14,000 buildings spread out over 710 square miles.  But they had no budget for doing the green initative.  What they did have was an IBM asset management system and a lot of students with mobile phones.

Students, teachers and staff became part of the solution.  A mobile app developed by an IBM partenr was installed on students and others' mobile phones that made them all green monitors and reporters identifying maintenance issues such as leaky faucets and broken air conditioning units by sending text messages and photos through their mobile phones. The mobile app sends the photos and texts for analysis to the server where a GIS shows staff where the problem is located and records the problem in the asset management system.  Gamification was used to encourage compeitition, for example, for who is the best green reporter.  Within the first eight months of implementing the program LAUSD responded to more than 750 maintenance requests. Things are getting fixed and students and others feel like active participants in the program to make the schools greener. 

IBM plans to announce the next three school districts to participate in the Smarter Planet program.

Using energy density mapping to target customers for consumer energy conservation programs

At the EDIST 2013 Conference in Toronto today, Cory Slinger of Horizon Utilities provided an update on Horizon's energy mapping for conservation and demand management (CDM).   I have blogged about Horizon's energy density mapping initiative before.  The objective of the initiative is to try to take the guesswork out of identifying customers on whom to target conservation and demand management (CDM) programs. 

Horizon is required to meet CDM objectives mandated by the Ontario Energy Board (OEB). The OEB has established hard targets for 2011-2014 for peak demand and energy consumption for each electricity distribution company (LDC) in Ontario.  In the case of Horizon their objectives are to reduce peak demand by 5.6% and consumption by 4.9%.  The mandated targets are aggressive and Horizon has found that it needs to look at new ways to identify customers with high energy footprints and energy density mapping is one of the key technologies that they are looking to to help them meet their CDM goals.  One of the distinguishing characteristics of Horizon's approach to CDM is that they are treating it as a marketing challenge.

Horizon has partnered with public organizations including Municipal Property Assessment Corporation (MPAC), Teranet, and others to provide them with detailed building and property information such as building age, sun exposure, heating type, air conditioning, and parcel data.  They also partnered with NRCan/CanmetENERGY for standard metrics for different building types, with Environics for Prizm lifestyle profiles and data, and with Canadian Urban Institute who manage the GIS.

All of this data has been brought together and managed in a GIS.  The GIS not only provides data management, but also has tools for linking different data sets using a common index.  For example, in the raw data there was no common index that could link Horizon's electricity usage data and Terranet's parcel files.  By using the GPS coordinates of each meter it was possible to link customer electricity usage data to specific parcels.

Another interesting aspect of Horizon's approach related to privacy.  Horizon's energy density mapping is highly granular, at the building level, which means there is the risk of identifiable individual energy usage information.  To ensure privacy, they have followed the Ontario Privacy Commissioner's Privacy by Design guidelines to endure that no electricity usage information can be traced to individual customers.

The intention is to roll out targeted campaigns in 2013 to identify customers who are likely to respond to CDM programs.  Horizon have already piloted a campaign in which they sent letters to every customer with an air conditioner, alltogether about 90,000 customers.  They found that the response was very poor, only about 3,800 signed up. [Correction: 331 responses were received on a mailout of about 90,000, which was much less than Horizon had hoped for. 3,800 is the total number of people who have signed up since June of 2012.  Thanks to Cory Slinger for the clarification.] They also expected that the group that would be most interested in the CDM program would be the younger, more enrvironmentally aware, affluent segment.  But to their surprise when they looked at the data more closely using demographic profiles for different neighbourhoods, they found that people in the lower midde income and older age brackets were the most responsive to the CDM program and that the primary motivation for this group is financial,  reducing their electrciity bills.  The next CDM campaign will focus on this customer segment.  Using paired campaigns is the approach they will follow throughout 2013 and 2014.  The end goal is a set of best practices for CDM programs based on their experience in these campaigns.

Consumer energy usage tracking software - who's the customer ?

Powermeter

Google PowerMeter was a software project of Google's philanthropy division, Google.org.   It was targetted on consumers and was designed to help consumers track their home electricity usage.  PowerMeter users could monitor their energy consumption online via an iGoogle widget, but it required that the utility had to agree to connect their smart meter data with Google.  Later Google started working with h/w manufacturers to develop gadgets to collect data directly from certain types of meters.  Google said that they did not intend to make money with the product, but wanted to contribute to reducing greenhouse gas emissions.   Google PowerMeter was launched on October 5, 2009, and retired on September 16, 2011, after about a two year run.

Hohm

Unlike Google Microsoft intended to make money on its energy management software Hohm through advertising.  LIke Google, Microsoft was interested in the consumer, not the utility, partly because they saw the consumer ultimately controlling demand and secondly because they assumed that consumer awareness of the Microsoft brand would attract users.  Microsoft announced that it was shutting down Microsoft Holm May 31, 2012, citing a “combination of weak customer demand (recession, energy efficiency not mainstream) and the lack of a coherent national energy policy [that] encourages solutions like Hohm.“

Several reasons that have been suggested for the failure of these two products from two of the largest software companies on the planet.   The market for energy management tools was still in a very early stage.   It required the consumer to opt-in, when the only successful utility applications required the consumer to opt-out.  Google.org isn't an energy company and really didn't know how to market to utilities. 

But the one that makes sense to me is the question of whether Google's or Microsoft's real customer should have been the utility or the consumer and whether utilities found the idea of a Microsoft or Google insinuating itself between the utility and its customers with access to electricity usage data attractive.

Opower

Opower is an example of a different approach to "behavioral energy efficiency".  Instead of doing an end-run around the utility,  Opower has focussed on the utility as their direct customer and has aimed at helping the utility make energy efficiency,  including Time-of-Use (TOU) or Peak-Time Rebates (PTR),  palatable or even attractive to the utility's consumer customer base.  As a result Opower has grown since their first customer in 2007 and now claims to be working with 75 utilities, including 8 of the10 largest in the U.S., with their energy monitoring software being used in 15 million homes globally.

IEA projects that current energy trends will lead to a 3.6 °C rise in Earth's temperature

The World Energy Outlook 2012 just released by the IEA makes for fascinating reading.

Primary energy demand

First of all the IEA projects global energy demand to increases by over one‐third between now an 2035 driven by emerging economies. There are projected to be dramatic shifts in the energy mix as collective share of oil and coal drop by fifteen percentage points to 42%.  However, because of increased use of natural gas fossil fuels remain the principal source of energy worldwide.  Unconventional gas (shale gas) is projected to surposs coal in the primary energy supply mix by 2035.

The United States, which imports about 20% of its total energy supply, is projected to become nearly  self‐sufficient in net terms by 2035, primarily because of unconventional oil and gas, bioenergy, and improved fuel efficiency in transport.

Large‐scale investment in energy‐supply infrastructure is required.  It is estimated to amount to about $37 trillion over 2012‐2035, which is equivalent to 1.5% of global GDP.   Of this the oil and gas supply infrastructure will require $19 trillion; while $17 trillion will be required by the power sector for generation, transmission and distribution.

Electricity

Demand for electricity is projected to grow by over 70% to almost 32 000 TWh by 2035.  Over half of the increase is projected to come from China and India alone.  Generation from renewables globally is projected to grow  from 20% to 31% of total generation.

Water and energy

Global freshwater use for energy production in 2010 totalled 583 billion cubic metres (bcm), or some 15% of the world’s total water use. Of that, water consumption – the amount used but not returned to its source – was 66 bcm.  It is projected that water use will increase by 20% over 2010‐2035 (compared to 70%  more energy production), while consumption will increase by 85%.   These trends are the result of more efficient power plants with advanced cooling systems that reduce overall water use but increase consumption.

Energy efficiency

Several major energy‐consuming countries (China, United States, the European Union and Japan) have adopted new energy efficiency measures over the last year.  Implementation of these programs is projected to reduce global energy intensity (energy consumption per unit of GDP) by1.8% a year through to 2035.  This is a major improvement compared with only 0.5% per year over the last decade.

The buildings sector is singled out as having tremendous potential for energy efficiency gains (one third of the world's total energy consumption is by buildngs), but four‐fifths of this are not projected to be realized, primarily due to non-technical barriers.

Emissions

The IEA projects that energy‐related CO₂ emissions will rise from an estimated 31.2 Gt in 2011 to 37.0 Gt in 2035.  It is estimated that this would result in a long‐term average temperature increase of 3.6 °C at the Earth's surface.

The IEA has investigated an alternative scenario which if implemented could result in a lower estimated temperature rise at the Earth's surface.  The "Efficient World Scenario" assumes a more efficient allocation of resources which will increase global economic output by $18 trillion by 2035.  It requires an added investment of $11.8 trillion in efficient end‐use technologies.   This investment is projected to be  more than offset by a $17.5 trillion reduction in fuel bills and a $5.9 trillion cut to supply‐side investment.

In this scenario global primary energy demand growth is halved compared to the most probable scenario.  Energy intensity is assumed to improve at 2.6 times the rate over the last 25 years.  It is projected that oil demand will peak before 2020 and decline through 2035,  Coal demand in 2025 is projected to be lower than today. Natural gas demand is projected to continue to increase but at a lower rate than currently projected in the most probable scenario.

As a result, energy‐related CO₂ emissions are projected to peak before 2020 and decline to
30.5 Gt in 2035.  The IEA estimates that this would result in a long‐term average temperature increase of 3 °C.

Improving the energy-efficiency of buildings in the U.S.

The Department of Energy's (DoE) Quadrennial Technology Review 2011 has some very interesting statistics about energy use by buildings and DoE's priorities in meeting the Adminstration's goal of improving the energy efficiency of commercial and residential buildings by 20% within a decade.

The energy productivity of the United States has increased by more than 85% during the paat three decades. Energy productivity, often called energy intensity, is the gross domestic product divided by the total energy consumed and is a measure of how much energy is required to produce a dollar of GDP. Developong countries like China, whose per capita emissions are much less than the U.S., prefer energy intensity as a measure of their contribution to emissions reduction.

In the U.S. 40% of primary energy consumption and 72% of electricity is used by commercial and residential buildings. HVAC, lighting, water heating, and electronics account for about three-fourths of primary energy demand for buildings. Energy usage in commercial buildings is dominated by lighting. In residentail buildings most of the energy is used for heating. Electricity accounts for 40% and 53% of site energy use in residential and commercial buildings, respectively. Fuels for heating and cooking account for 60% and 47% of energy usage in residential and commercial buildings.

Approximately 60% of the commercial floor space and 75% of the homes that will be occupied in 2030 have already been built.

Department of Energy priorities

Many of the cost-effective energy efficiency measures available today for buildings and industry are not implemented because non-technological barriers, such as split incentives, inhibit their deployment.. It is estimated that technologies already available or soon to be available could reduce building-related energy consumption by 25% to 45%.  It has been deomnstrated that an integrated approach to building design, construction and operation can cost-effectively yield energy savings exceeding 50% in new builds.

For existing buildings energy savings of more than 40% savings have been demonstrated in retrofits in a variety of climates, including more than 20% savings over the current minimum (building code) requirement. 

According to DoE key enablers for deploying these technologies include

• calibrated data through distributed sensors
• validated modeling
• real-time control of a building’s components and their interactions with the electrical grid.

Study finds under-investment in energy efficiency compared to energy supply

According to a major new study [Nature Climate Change 2, 780–788 (2012)] the EU, the U.S. and the major developing countries allocate two thirds of their public R&D budget to energy-supply technologies, but as was identified in a recent review of US energy research and developmen [Department of Energy Quadrennial Technology Review (DOE, 2011)], there is a persistent under-investment in building, industrial and vehicle end-use efficiency compared with investment in clean electricity supply.

Directed innovation efforts (innovation targeted on a specific problem or need, in this case climate change mitigation) not only involve public R&D investments but the entire system of innovation for new energy technologies. This article assesses the balance between directed innovation efforts for energy supply and energy efficiency end-use technologies in response to the challenge of climate change mitigation. 

The study finds that directed innovation efforts in energy technology have reinforced the dominance of the energy-supply industry over energy efficient end-use.  It concludes that energy-efficiency in end-use is marginalized in directed innovation efforts.  For example, since the  late nineteenth  century, for every dollar in US  Federal  subsidies  to efficient end-use  technologies, 35 dollars have  gone to energy-supply technologies.  As another example, since 1974 more public funding in developed countries have been invested into nuclear fusion than on all effcient end-use technologies combined.

The analysis concludes that there is a pronounced and pervasive asymmetry in the innovation system for energy technologies. As a recent example [Galiana, I. & Green, C. Let the global technology race begin. Nature 462, 570–571 (2009)], proponents of  R&D-led climate change mitigation identified six technology options that deserved R&D  support. Of the six, five relate to energy supply.  

The study also finds that directed innovation efforts are misaligned with their required outcomes. Inputs to the innovation systems fall into categories of analysis and modelling; technology roadmaps, collaborations, portfolios and programmes; public research, development and demonstration (RD&D) investments; and niche market investments.  Outputs from the innovation system includes market diffusion, learning and social returns on investment, and mitigation potentials of energy technologies for climate stabilization.  The study finds that whereas the outputs of innovation emphasize the importance of efficient end-use technologies, inputs focus on energy-supply technologies.  For example, the magnitude of the subsidies for fossil-fuel consumption is estimated at about $500 billion, much larger than the estimated $160 billion invested in a post-fossil-fuel energy supply. As another example, renewable electricity supply (wind and solar PV) and smart grid technologies dominate public support for R&D. Directed innovation efforts are focussed on energy-supply technologies to mitigate climate change in an aready heavily subsidized energy supply  market, effectively marginalizing effcient end-use technologies.

The overall conclusion is that directed innovation efforts are "strikingly misaligned" with the needs of an emissions-constrained world and that much greater R&D effort is needed to develop the full potential of efficient end-use technologies.