Why energy efficiency has more traction than green energy sourcing

Why energy efficiency has more traction than green energy sourcing

Summary: Pretty much every week I receive close to a half-dozen press release in my inbox that that are specifically related to energy services partnerships being inked with an eye toward improving the energy efficiency of some commercial office, campus or municipal government buildings.

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TOPICS: Banking
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Pretty much every week I receive close to a half-dozen press release in my inbox that that are specifically related to energy services partnerships being inked with an eye toward improving the energy efficiency of some commercial office, campus or municipal government buildings. Which is why I wasn't really all that surprised about the emergence last week of the Obama Administration's "Better Building Initiative," which calls for commercial building to become 20 percent more energy efficient over the next decade. For me, this program stands a much higher change of success within the existing political climate than do calls for more renewable energy sources. Don't get me wrong, I'm a big proponent of the latter which you can criticize me for all you like, but it looks like we need to take things one step at a time right now.

The program seeks to catalyze private sector investment in building improvements, for the simple fact that commercial buildings use roughly 20 percent of all the energy used within the U.S. economy. Much more, in fact, than those data centers and computers that we spend a lot of time worrying about. By focusing on retrofits and improvements, the White House proposes to help companies and building owners save up to $40 billion per year in energy bills.

The president is hoping for the following support for the plan:

  • Tax incentives that encourage building energy efficiency upgrades, transforming the current deduction into a more generous credit.
  • The creation of financing program. The Small Business Administration is being asked to help lenders develop options, while the President is proposing that the Department of Energy be used in some way to help guarantee loans for upgrades at places such as schools and hospitals.
  • A "Race to Green" streamlining of outdated municipal regulations that make this stuff much harder than it should be. Fix your regulations quickly, and your state might receive a grant.
  • The Better Buildings Challenge focused on universities, many of which have shown a great deal of leadership on energy efficiency matters.
  • Training for next generation building technology workers, so that this stuff is just routine in the future.

Here are just two examples of what energy efficiency initiatives like the ones being suggested by the White House could mean to your business. These were plucked from my aforementioned inbox, and were undertaken by organizations paying attention to this long before the Obama mandate:

  • Under a deal with energy services company Ameresco that has been in place since 2002, the 392-bed Children's Hospital Boston has made improvements that are now saving an estimated $950,000 in annual utility costs and $76,000 in annual maintenance costs. Those improvements include green lighting upgrades and the installation of lighting controls, water conservation measures that are made possible through new technologies, installation of variable speed fans in the heating, air-conditioning and ventilation systems, and a host of other technology-enabled upgrades. Says Paul Williams, director of engineering for the hospital: "Our ongoing energy efficiency work with Ameresco has resulted in an important reinvestment in our facility, with substantial operational and maintenance improvements. The changes were implemented in a cost-effective manner, without disruption to normal hospital operations. This project has benefits beyond financial as these improvements have enhanced the hospital environment for our patients and staff alike."
  • The second project I'll mention is one at Bentley University, which has reduced campus-wide electricity consumption by 10 percent over the past 11 months by using software from Info (the EAM Asset Sustainability Edition) in order to integrate its energy management concerns into its "traditional" asset management activities. That's the equivalent of turning all of the electricity on the campus off for 30 days. Think about that for a second. The university seeks to reduce its carbon footprint by 50 percent by 2015 and by 100 percent by 2030.

What will make energy efficiency in buildings work, of course, is a marriage of traditional facilities and information technology technologies -- from software to sensors -- which is why the likes of Cisco, IBM, Hewlett-Packard and others are all worked up by this topic. The administration's new program will only shed more light on this whole issues, which is why IT managers should get more familiar with role they could play in better building management.

Topic: Banking

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4 comments
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  • Government is the Problem Not the Solution

    Government should not spend tax dollars to encourage efficiency in commercial buildings. It is not necessary.

    Let entrepreneurs and existing building owners who keep up with and invest in new technology profit and those who don?t fail. It is a process called free enterprise and it really works when allowed to.

    And winners and losers are free advertisements for new and improved technologies.

    Government is the least efficient corporation and the deepest in debt. Government needs to go on a diet. If government has money to pick winners and losers then We the People are paying too much in taxes.
    Repeal
    • RE: Why energy efficiency has more traction than green energy sourcing

      @Repeal

      In theory, your position sounds nice, but in reality, your ideology is an epic failure.

      This should have been obvious with the financial crisis leading to "the Great Recession": the near total lack of effective regulation left the "free market" free to do disastrously foolish and wicked things with the financial system, such as Dun & Bradstreet lying about the credit-worthiness of CDOs, which lead to the current crisis in confidence still afflicting the economy today.

      That is, because of the failure to regulate, the so-called "free market" failed to live up to the promise of "The Wealth of Nations", instead leading to economic collapse. Despite the technical definiton of 'recession' saying it is now over, we -still- have absurdly low inducement to invest, even with bargain basement interest rates. This is the major reason why we are having our THIRD "jobless recovery" in a row.

      There is another reason your ideology is a total failure: Google 'externality' and look at ANY of the explanations of it that pop up.

      I saw, for example, Wikipedia's "In these cases in a competitive market, PRICES DO NOT reflect the full costs or benefits of producing or consuming a product or service, "
      (emphasis mine).

      But that is EXACTLY the problem with energy costs. The price we pay or oil or coal FAILS to realistically reflect the real costs to the whole society of continuing to kill off phytoplankton with excess CO2. If the cost did reflect it, you would much rather pay the lower costs of solar/wind and even nuclear power.

      Even more to the point, because it is externalities we are talking about, we CANNOT rely on "entrepreneurs[sic]" to invest in new technology. There is no payoff for it, as long as people are paying an unrealistically low price for carbon.

      So recapitulating in brief: there are TWO common reasons for your "it really works when allowed" to fail 1) externalities and 2) sagging business confidence leading to low inducement to invest.
      mejohnsn
  • Completely backward. reply to mejohnsn

    The economic collapse was caused ENTIRELY by regulation, namely the communist re-investment act which started the enforcement of riskier and riskier loans. If that act was not in place there never would have been the massive housing collapse since the normal rules of finance would have applied, not the distorted REGULATED market.<br><br>I do have to agree with the original poster, track record being any indication, the $15K tax break will actually cost $100K once you figure in the buerocratic cost. Want some proof, the cash for clunkers, the epitome of Government in action...<br><br><a href="http://www.foxnews.com/opinion/2009/08/05/lurita-doan-cash/" target="_blank" rel="nofollow"><a href="http://www.foxnews.com/opinion/2009/08/05/lurita-doan-cash/" target="_blank" rel="nofollow">http://www.foxnews.com/opinion/2009/08/05/lurita-doan-cash/</a></a><br><b>Federal government staffing for 3 divisions doesn't come cheaply. Add to it other administrative and overhead costs for office space, telecommunications, power, equipment and furniture, as well as costs for meetings, photocopying, paper, pens, help desk support. When the government's costs of running the program are totaled up, each clunker is likely to cost taxpayers around $6,000 per car. </b><br><br>So it cost $6K to give away $4K. Or more explicitly, it cost the taxpayer $10K to get $4K into the hands of the consumer. Right on track, it costs exactly twice as much for the government to do anything.<br><br>Also, they could practice what they preach...<br><a href="http://townhall.com/tipsheet/katiepavlich/2011/01/26/government_wants_you_to_turn_off_your_lights_while_they_keep_theirs_on" target="_blank" rel="nofollow"><a href="http://townhall.com/tipsheet/katiepavlich/2011/01/26/government_wants_you_to_turn_off_your_lights_while_they_keep_theirs_on" target="_blank" rel="nofollow">http://townhall.com/tipsheet/katiepavlich/2011/01/26/government_wants_you_to_turn_off_your_lights_while_they_keep_theirs_on</a></a><br><b>For several months, we kept track of the lights left on in a dozen federal buildings, including the Departments of Commerce, Agriculture, Transportation and Energy always checking after 10 p.m., each on at least six occasions<br>...<br>The low end is about $200,000 a month. The high end more than a million. One month's electricity bill at the Department of Labor topped a MILLION dollars. That was a bill paid in July of last year. The month before, the department paid a bill of nearly $700,000. And utility costs of that magnitude are not unusual. </b><br><br>So, lets leave the government out of EVERY aspect of this except they should ADVERTISE and EDUCATE that people/companies can save a lot if they become more energy efficient. I could personally do without having to pay $100K for every $40K tax rebate.<br><br>TripleII
    TripleII-21189418044173169409978279405827
  • energy efficiency

    Cuts proposed by Republicans in the budget for energy-efficiency programs may push production overseas. President Barack Obama?s administration has set a goal of doubling electricity from clean-energy sources such as wind and solar power by 2035. The president wants to advance research to put 1 million electric vehicles on U.S. roads by 2015. House Republicans have proposed reducing the budget for the department?s Office of Energy Efficiency and Renewable Energy to $1.3 billion for 2012, compared with a White House recommendation for $3.2 billion, according to documents from the House Committee on Science, Space and Technology.
    http://cashadvancesus.com/tough-financial-times-american-dream/
    Steven Harrison