Energy Efficiency I

Where will our energy come from?

Not a trivial question because moving from our reliance on fossil fuels takes a long term commitment. Energy efficiency is a much cheaper, faster way to get to energy independence than building a whole new generation of renewable sources.

There are many methods currently in place that promote, incentivize and advocate energy conservation. For the transportation sector, the government has introduced a “gas guzzler” tax on low fuel economy vehicles in an effort to dissuade people from buying these large inefficient vehicles. From the perspective of the residential sector, heating and cooling systems have become far more efficient in energy usage than they were just 10 years ago, and changes are being made continually to make them even more efficient.

Around the world, governments have become actively seeking ways to reduce energy usage, as the effects of coal become clear in our skies and waterways. One approach has been passive houses. In Germany in the 1990s, houses were built using design techniques so that they require little to no energy for heating and cooling, using the sun, shade and other natural climate events to do the work for them. There are 3000 passive houses in existence around the world today, only 13 of which are in the United States, so much more research and investment will have to take place into these houses before they become a wide scale reality.

From a commercial standpoint, smart usage of light and space can limit energy waste. Smart meters inform employees of the amount of electricity being expended so they can be more conscious of their usage. According to the US Energy Information Administration (EIA) in 2014, residential and commercial buildings accounted for 41% of energy use in the United States which equates to about 40 quadrillion British thermal units. For the industrial sector, energy consumption needed to produce paper and steel have fallen by around 40% in recent years. Spending on oil and petroleum refining as well as cement production has also dropped by 25%. The industrial energy usage agenda is being pushed by governments, which is forcing companies to be more efficient and forward thinking. While all of these are examples of efforts being made to conserve energy, there is clearly more that can be done. The goal is to use half as much energy in 2030 as we did in 2007.

It is very clear that policy makers aren’t going to spend infinite sums of money to reduce energy uses or greenhouses gases so it is vital to make changes where the return is the greatest. In this issue and the next, we look at what industry is doing to make markets in energy efficiency work ... efficiently. It is a complex topic with lots of moving parts. We look at some of the financing options, as well as creating certainty for the markets and how companies are investing in a carbon challenged world.