Power Economics E-Book

Elena Cahill

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 247

Veröffentlichungsjahr: 2021

Beschreibung

Energy efficiency is more of a journey than a battle. It starts with small steps, taken at the local and state levels. It is a matter of identifying and then practicing good habits in our daily lives, at home and at work. Every idea and process described in this book, if performed reasonably well, will put money in your pocket. You will not only save money; you will probably make money--and you will take important steps toward saving the planet. Power Economics is a book for thoughtful people who want to cut their energy costs and diminish the harmful effects of greenhouse gas emissions. Climate change and global warming are not speculative fantasies. They are real. They threaten communities, towns, cities, regions, nations, and continents. Even if you don't care about polar bears and penguins, the effects of melting icecaps and shifting ocean currents will transform your life and the lives of the people around you. Power Economics offers practical steps and achievable strategies for reducing the destructive impact of climate change and global warming. Yes, we need energy to live and to sustain our economies. But we don't need to burn fossil fuels and release CO2 gas at levels that will result in a global catastrophe. There are reasonable alternatives to our current practices. None of the ideas that described in this book are entirely new or totally unfamiliar. They aren't extreme or bizarre. They won't require harsh or draconian measures to work. All of them follow basic rules of common sense and can be achieved at reasonable cost. "I have done my best to convey the complexity and urgency of the matter. I hope that you find this book informative and useful. Working together, we can shed many of our wasteful energy habits and begin the task of building a world that is safe, sustainable and healthy," writes author and energy expert Elena Cahill.

Leseprobe

Table of Contents

Cover

Title Page

Copyright

Dedication

Acknowledgments

Introduction

Quick Basic Concepts

It's a Calling

What about the Grid?

Economics versus Nature

Don't Put the Cart before the Horse

Endnote

Chapter 1: Good Building, Bad Building

Living Buildings

Systems Thinking

What Makes a Good Building?

Getting Down to the Nitty Gritty

Digging Deeper, Searching for Clues

Endnotes

Chapter 2: Stabilizing Demand

Techniques and Strategies for Stabilizing Demand

Islands of Energy

Generating Buzz

Wider Adoption, but Hurdles Remain

No Surprises

Endnotes

Chapter 3: Why Batteries Matter

Battery Culture

Enabling Energy Evolution

Electrifying Energy

Endnotes

Chapter 4: Energy and the Law

Carbon Dividends

Universal Property

Endnotes

Chapter 5: Your Role in Reducing Carbon Output

Simple Steps You Can Take Right Now

Enjoy Creature Comforts without Wasting Energy

Beware of Phantom Loads

Get an Energy Audit

Use DSIRE

Aim for Net-Zero Energy

Endnotes

Chapter 6: Focus on What's Doable

The Solar Brewery

Making Pasta and Conserving Energy

Finding Efficiencies in Steelmaking

195 Church Street

Chapter 7: The Power of Local Action

A Virtuous Circle

Everything Is Local

Strong Legal Framework Is Essential

Endnotes

Chapter 8: Conservation, Efficiency, and Generation

Inefficient Systems Are Everywhere

Building Codes and Energy Efficiency

Diving Deeper

Endnotes

Chapter 9: Pricing Energy: It's Complicated

Electricity Costs Are Variable and Inconsistent

A Patchwork of Grids

What about Fracking?

Power Plant Decommissioning

Where Do Renewables Fit In?

Multiple Factors Drive Energy Markets

Endnotes

Chapter 10: Understand Your Energy Bills

Calculating the Cost of Demand

Impact of Energy Deregulation

Considerations before Choosing Alternative Suppliers

Pricing Is Problematic but Cannot Be Ignored

Rate Class and Charges

What about Natural Gas?

Energy Is Subject to Sales Tax

Endnote

Chapter 11: Find the Money

Federal Tax Credits

Federal Depreciation and Tax

State Sales Tax Exemptions

Sales and Use Tax Exemption for Solar and Geothermal Energy

Local Property Tax Exemptions

Rebate Programs

Cash Incentives

Always Follow the Guidelines

Spend Time on the DSIRE Website

Demand Response Program

Loans, Interest Rate Buy-Downs, and Specialized Financing

Evaluating Energy Savings of Completed Projects

Choosing Your Project

Endnotes

Chapter 12: Educate and Communicate

Focus on the Positives

Politicians Need Reminding

Sharing Knowledge across State Lines

Internal Business Communications

Layers of Communications

Visual Cues and Rewards

Endnotes

Appendix A: Tips for Saving Energy at Home

Endnotes

Appendix B: Resources

Bibliography and Recommended Reading

Expert Sources

About the Author

Index

End User License Agreement

List of Illustrations

Chapter 10

Figure 10.1 Sample Energy Bill A

Figure 10.2 Sample Energy Bill B

Chapter 12

Figure 12.1 Environmentalist Voter Turnout

Guide

Cover Page

Table of Contents

Begin Reading

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POWER ECONOMICS

An Executive’s Guide to Energy Efficiency, Conservation, and Generation Strategies

ELENA CAHILL

Copyright © 2021 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Library of Congress Cataloging-in-Publication Data is Available

ISBN 978-1-119-70770-7 (Hardback)

ISBN 978-1-119-70808-7 (ePDF)

ISBN 978-1-119-70807-0 (ePub

Cover image: © Miguel Navarro / Getty Images

Cover design: Wiley

To Christina and Christopher Cahill, my inspiration and good informants in all matters

ACKNOWLEDGMENTS

Power Economics is a book for thoughtful people who want to cut their energy costs and diminish the harmful effects of climate change. I assure you that we can do both.

I have done my best to convey the complexity and urgency of the matter. I hope that you find the book informative and useful. Working together, we can shed many of our wasteful energy habits and begin the task of building a world that is safe, sustainable, and healthy.

For sharing their time and expertise, I thank the following people: Peter Asmus, Brandon Barnes, Ed Boman, James K. Boyce, Kim Cheslak, Angus Duncan, Matthew Goldberg, Rob Kaye, Tim Kelley, Warren Leon, Jason F. McLennan, Will Needham, Nick Nigro, Sandeep Nimmagadda, Bernie Pelletier, Mark Scully, Hugh Seaton, Nathaniel Stinnett, Amy Thompson, Scott Thompson, Chris Ulbrich, Chris Vigilante, and Elisa Wood. Their professional bios are included in a section at the end of the book.

I also thank Steve Diaz, Juan Manuel Avila Hernandez, Jamie Howland, Andreas Koall, Kristilee LaHaye, Cornelia Lévy-Bencheton, Matheus M. Lima, Bruce Maters, Arthur McAdams, Umberto Olivo, Al Peterson, Akshat Rathi, and Jean-Philippe Taillon for providing valuable insight and information.

I also wish to express my deep appreciation to Sheck Cho, Susan Cerra, and Samantha Enders at Wiley. Last, but not least, I extend my sincere thanks to Mike Barlow, who served as my editorial guide on this project. Thank you, Mike!

Minor portions of Power Economics are based on content I developed for a previous book, The Business of Energy. I have revised, expanded, and updated all of the content to reflect the current state of our endlessly fascinating energy culture.

INTRODUCTION

Climate change and global warming are not fantasies. They are real. They threaten communities, towns, cities, regions, nations, and continents. Even if you don't care about polar bears and penguins, the effects of melting icecaps and shifting ocean currents will transform your life and the lives of the people around you.

In this book, I will offer practical steps and achievable strategies for reducing the destructive impact of climate change and global warming.

A large part of the problem is caused by CO2 gas released into the atmosphere when we burn fossil fuels to create energy. Yes, we need energy to live and to sustain our economies. But we don't need to burn fossil fuels and release CO2 gas at levels that will result in a global catastrophe.

There are reasonable alternatives to our current practices. None of the ideas that I describe in this book are entirely new or totally unfamiliar. They aren't extreme or bizarre. They won't require harsh or draconian measures to work. All of them follow basic rules of common sense.

Every idea and process described in this book, if performed reasonably well, will put money in your pocket. You will not only save money, you will probably make money—and you will take important steps toward saving the planet.

Energy efficiency, I would argue, is more of a journey than a battle. It starts with small steps, taken at the local and state levels. This is a matter of identifying and then practicing good habits in our daily lives, at home and at work.

Yes, it would be nice if the federal government would step up and play a more active role in preserving the environment and preparing for the disastrous effects of climate change. But I'm not waiting for national politicians to rescue us.

I firmly believe that we can mitigate many of the negative impacts of climate change and global warming through community efforts and grassroots campaigns. Please don't wait for a top-down solution. That isn't going to happen. Instead of waiting for someone else to solve our problems, let's figure out how we can work together at the local and state levels to develop practical fixes.

I am confident that if we move forward purposefully, with open eyes and a strong sense of resolve, we will turn the tide. We have the power and the strength to accomplish the mission. And we have a responsibility to future generations. Let's not drop the ball. We can do this!

Quick Basic Concepts

I'm not a scientist or an engineer. In conversations, I tend to use words such as energy and power interchangeably, yet they have different meanings and it's important to understand the distinction between them.

Energy

comes in many forms, such as mechanical, chemical, thermal, electrical, and radioactive. Energy is required to perform work and it's typically measured in joules. Calories are also a measure of energy.

Power

describes how quickly or slowly energy is consumed when it's doing work. Power is typically measured in watts (W) and kilowatts (kW).

I also speak often about energy efficiency, which refers to the concept of minimizing energy loss during the process of doing work. When a device or a process is “energy efficient,” that usually means it's doing the most amount of work with the least waste.

Now let's switch from physics to economics. I mention financial incentives several times in this book because they are fundamental to jump-starting the behavioral changes we need to solve our energy problems. In the United States, we've been blessed with an abundance of energy sources. As a result, we haven't been forced to think much about using energy efficiently.

We no longer have that luxury. We still have plenty of energy sources, but it's becoming increasingly clear that our atmosphere has a limited capacity for absorbing the harmful by-products of our energy-intensive economy.

If we don't get serious about using energy more efficiently, we risk losing the world we love. That's why we need to change our energy habits and use energy more wisely. One of the best ways to help people change their habits is by providing them with tangible incentives and rewards for their new behaviors.

Why are incentives necessary? Because it's highly unrealistic to expect large numbers of people to suddenly abandon their long-standing habits and embrace unfamiliar ones, even when there are logical and compelling reasons for adopting new behaviors. We're all creatures of habit, and old habits die hard.

It's also completely unrealistic to expect businesses to adopt energy-saving strategies that won't generate ROI (return on investment) for seven or eight years. Businesses need to see ROI within two years, and that's where incentives can make all the difference. With the right financial incentives, most of the business owners that I know are happy to invest in energy projects.

Well-written rules and regulations can also serve as incentives. People, companies, and governments generally follow rules, especially when those rules are enforced and there are penalties for not following them. The use of coal to generate electricity has fallen sharply in recent years, due in part to regulations that make coal less economical than other fuels. Because the health risks associated with burning coal are inarguable, most people are more than okay with the idea of using less coal. But laws, such as The Clean Air Act and The Clean Water Act, which require industries to reduce pollutants,1 create the incentives necessary to initiate and sustain meaningful change.

Together, we're all standing at the threshold of a new era, and nobody can say with absolute certainty what will happen next. If it takes some incentives to get the ball rolling in the right direction, I'm all for them.

Ten years from now, we won't need to incentivize people to use energy more carefully and conscientiously. Good energy practices will be considered normal. They will be an invisible part of everyday life. Today, however, we need those incentives to get us across the threshold. They're playing an important role by helping us move forward as a society that cares about the environment and the quality of our lives.

It's a Calling

Similar to many people in the energy business, I am intensely passionate about my work. Here's why: Every time I help my customers reduce wasted energy and save money by using energy more efficiently, I know that I am making the world a better place for future generations. I feel a strong and direct sense of connection between my work and the quality of living that will be experienced by our children, grandchildren, and great-grandchildren. For me, energy is more than a business—it's a calling.

I hope this book will inspire, encourage, and enable you to move forward with an energy-efficiency project at your home, company, school, park, playground, church, synagogue, mosque, temple, ashram, or wherever you gather as a community. Any building, any structure, and any open space can become the site of an energy project that contributes to reducing our collective carbon footprint. There are a lot of different ways to use energy more wisely, and this book will show you how.

What about the Grid?

You've all heard about “the grid,” which has become the common term for describing our fantastically complex network for delivering electricity from providers to users. It's not unusual for someone to approach me after I've given a keynote speech or presentation and tell me that we could solve all of our energy problems if we just modernized our national grid. In a sense, that is true, but it's not especially helpful.

There are multiple power transmission grids or “interconnections” in North America. These grids are synchronous, which means they all deliver power at the same frequency: 60 Hz. Because they are synchronous, they can share power and serve as backups when there are overloads.

But there is no single grid covering North America. Strictly speaking, the grid isn't an official entity—the grid is everything that generates, distributes, and consumes electricity. The grid is us—it is inseparable from our modern culture. Everyone who makes, sells, or uses electricity in any way, shape, or form is part of the grid.

So when someone tells me, “We need to reform the grid,” it's a lot like hearing someone say, “We need to reform our health-care system.” Where do you begin? Do you tear everything down and start from scratch, or do you tinker around the edges and make small improvements wherever you can? How much change is too much and how much is too little? Who is ultimately responsible and who shoulders the costs?

These aren't easy questions. The grid isn't something that arose fully formed after years of rigorous analysis, thorough testing, and meticulous planning. The grid expanded organically, with minimal supervision. For better and for worse, the grid is our offspring. We are its parents and we are ultimately responsible for it.

The grid serves a geographic area of extraordinary size and amazing diversity. Because of its scale and complexity, the grid resists simple solutions. That's one of the reasons we're still burning coal and kerosene to generate electricity in some parts of our nation. Solving the grid's problems might be easier if there were a central authority that could harmonize all of its various pieces. But apart from the Federal Energy Regulatory Commission (FERC), no such overarching authority exists.

Another major obstacle to grid modernization is ignorance. For most of us, the physics of electricity is not a topic of daily conversation. When we think about electricity, we typically imagine it as a substance that moves through wires. But it's not a substance—it's a form of electromagnetic radiation, a wave traveling at nearly the speed of light. Unlike familiar commodities, such as soybeans, corn, eggs, and even crude oil, electricity is consumed moments after it's produced. It's certainly one of the most perishable products we use.

And there are legitimate reasons for relying on multiple sources of energy to produce the continuous flow of electricity we need to sustain our lives and our economies. Inconsistent and variable sources such as wind and solar cannot provide the quantity and quality of electricity required by heavy industry. The same goes for hospitals, data centers, food processing plants, military bases, and other facilities where losing power would be catastrophic.

We cannot simply say to millions of Americans that they won't have any electricity for two or three days because the wind isn't strong enough or the sunshine is blocked by clouds. That's not how our culture works.

I purposely used the word culture because I firmly believe that our grid has become synonymous with our culture. When we flip a switch, we expect the lights to go on. When we turn on an air conditioner, we expect the room to get cooler. When we put a grievously ill patient on a ventilator, we expect the ventilator to pump oxygen and to extend the patient's life.

But the costs of variable energy sources are plummeting, making them realistic alternatives to traditional sources such as natural gas and coal. Wind and solar are now eminently viable choices; and with every passing day, the economic argument in their favor grows stronger.

Economics versus Nature

At their primal core, most of our problems with energy arise from an epic and unresolved struggle between temporary human laws and the eternal laws of Mother Nature. If I were placing a long-term bet, I'd put my money on Mother Nature.

Sure, we humans will win a couple of battles, but in the end, Mother Nature will rule. Energy resources follow physical laws. They don't care about the nuances of supply and demand. They don't care about energy trading markets. The molecules, atoms, and electrons that enable us to drive our cars, watch our widescreen TVs, heat our homes in winter, and keep them cool in summer have absolutely no interest in our momentary human desires or in our political systems.

The largest single challenge for power companies is weather. We can't control the weather; all we can do is respond to its changes. The basic advantage of having a collection of grids is that when the weather in one part of the country changes and the demand for power rises or falls, the grids can compensate reasonably quickly, usually within minutes.

Don't Put the Cart before the Horse

When I began writing this book, people asked me why I wasn't focusing more closely on clean energy. My answer is straightforward and simple: you can't put the cart before the horse. You can't do this backwards. Before you can take full advantage of clean energy, you need to be using energy efficiently.

You can have the cleanest energy in the world, but if you're trying to heat or cool a building that is inefficient, you're going to lose money and release more carbon into the air than if you were using your energy efficiently. From my perspective, that's the definition of wasteful. You can have all the good intentions in the world, but if you're wasting energy, you're not helping the planet.

I'm all about making money in ways that are conscientious and socially responsible. I love that some of my friends refer to solar energy as “locally grown, artisanal electrons.”

Every process and tactic and trick of the trade that I describe in this book will put cash in your wallet and help the communities around you. That's the beautiful part of becoming energy efficient.

I titled this book Power Economics because I deeply believe that if you understand the basic economic principles of energy consumption, you will use energy more wisely and more economically. We've all heard the expression that knowledge is power. Knowing the basics of energy economics will empower you. So let's get started.

Here's an overview of topics I will cover in this book:

Chapter 1

: Good Building, Bad Building.

Our homes and buildings account for roughly 40 percent of the energy consumed annually in the United States. If our buildings and their systems were optimized to save energy, instead of wasting it, many of our environmental problems would become manageable and ultimately solvable.

Chapter 2

: Stabilizing Demand.

Your energy costs depend largely on how much energy you use. Yet there is another critical factor in the equation—demand stabilization—and it's incredibly important, both to your checkbook and to our planet's long-term health.

Chapter 3

: Why Batteries Matter.

Today, most of us are passive consumers of energy produced in large power plants. In the very near future, however, most of us will also become energy producers. The traditional one-to-many model of energy distribution will evolve rapidly into a many-to-many network of users and suppliers. Traditional relationships between energy providers and energy consumers will change radically.

Chapter 4

: Energy and the Law.

There are federal regulations governing the transmission of energy resources such as natural gas and electricity. But there is no common set of laws or regulations governing how energy is consumed at the individual level. That's left to the states and municipalities. As a result, there's a large degree of variability that makes it difficult to establish coherent energy standards.

Chapter 5

: Your Role in Reducing Carbon Output.

There is an inescapable link between wealth and carbon output. Bigger is not better, especially from an environmental perspective. If you own a large home, it's probably creating more pollution than your neighbor who owns a small home. The same holds true for automobiles. If you drive a big gas guzzler, you're polluting more than your friend who drives a compact hybrid.

Chapter 6

: Focus on What's Doable.

Most of the owners and executives I work with are genuinely interested in energy. They like the idea of being smart leaders and good stewards of our shared environment. For them, energy efficiency isn't a passing fad—it's become a deeply embedded part of their lives, influencing every aspect of their worldview. They've become “energy believers.”

Chapter 7

: The Power of Local Action.

“Think globally, act locally” is more than a cliché. We don't like to have solutions imposed on us by largely invisible authorities. We're more likely to adopt homegrown practices that appeal to our innate sense of virtue. In our hearts, most of us are kind and generous. When given the opportunity, I believe that we will act in the common interest and do the right thing.

Chapter 8

: Conservation, Efficiency, and Generation.

The most direct way of conserving a limited resource is by using less of it. Conservation isn't a new idea; even single-cell organisms such as amoebas and algae have mastered the essentials of conservation. Yet many people resist the simple notion of applying basic conservation techniques to reduce their use of energy. What do microscopic life forms know that we don't?

Chapter 9

: Pricing Energy: It's Complicated.

The power economy is a complicated beast, shrouded in lore and mystery. In this chapter, we will pull back the curtain and reveal the inner workings of the strangely convoluted ecosystem that supplies power to our homes and businesses. We will also look at some of the main drivers of price fluctuations in energy markets. These drivers include fracking, power plant decommissioning, and the steady rise of renewable energy.

Chapter 10

: Understand Your Energy Bills.

I cannot overstate the importance of understanding your power bills. In this chapter, we dive deep into the weeds and emerge with a clearer understanding of how you are billed for energy. If you own or operate a business, this knowledge is essential.

Chapter 11

: Find the Money.

Money is everywhere—but you have to know where to look. Numerous economic incentives are available for conserving energy, using energy more efficiently, and generating energy without harming the environment. This chapter will give you a brief overview of the many financial opportunities that already exist and can be tapped into.

Chapter 12

: Educate and Communicate.

What good are our beliefs unless we act on them? What's the point of acquiring knowledge if we don't share it? How can we make genuine progress if we talk only with people who already agree with us? In this chapter, we'll take a look at techniques and advice for sharing the message, raising awareness, and dealing with naysayers. Changing the long-standing habits of a culture won't be easy, but I'm confident we can shift the attitudes of enough people to make a lasting difference in how we generate power and consume energy.

As you can see from the topics I've chosen to address, this book is about finding practical answers to genuinely difficult problems that threaten our existence as human beings. I am less interested in theory than I am in achieving practical results. I do not expect to win a Nobel Prize for writing this book, but I do expect that you will glean helpful information that you can begin using immediately to reduce waste, trim your energy costs, formulate doable projects, apply for incentives, complete your projects successfully, and make our world a safer place.

Endnote

1

.  

https://www.eia.gov/energyexplained/coal/coal-and-the-environment.php

Chapter 1Good Building, Bad Building

S