Comments on: Energy Debate Watch http://www.terrarossa.com/energy-debate-watch-19/ Where Conservatives Consider a New Energy Future Sun, 12 Oct 2008 16:50:50 +0000 http://wordpress.org/?v=2.5.1 By: James Bell http://www.terrarossa.com/energy-debate-watch-19/#comment-5276 James Bell Sun, 08 Jul 2007 15:16:13 +0000 http://www.terrarossa.com/?p=191#comment-5276 I am frustrated by congress. On the one hand they want to drive policy to save energy, but on the other side they ignore innovation and opportunities. Specifically there are several bills headed through the senate and the congress that will mandate that every government building engage in some form of an energy performance services contract (EPSC). Under these contracts, vendors make major changes to the facilities by putting in more efficient chillers, lighting, etc. Since these upgrades can cost a great deal, the contractor uses a bank to finance the effort and pays back the bank with annual savings seen by the government. So rather than committing billions of dollars directly, the government uses performance savings to fund the effort (off balance sheet). BTW: that is what the air force tried to do to fund the 767 Tankers. If I recall a bunch of people went to jail for end running congressional oversight. The problem is the proposed laws mandate the government pursue any savings opportunity that has a payback of 15 years or less. So, if you were an EPSC and you knew your customer had to accept a 15 year payback, what would you do if say you could achieve a 20% energy reduction with a payback of just say 5 years? You would be tempted to throw in a bunch of other equipment, with poor payback performance, until the net payback was 15 years. The other thing about 15 year paybacks is, once spent; a customer won’t plan to upgrade their equipment for another 15 years. Do we honestly believe that no new innovation for energy savings will emerge in the next 15 years? My guess is that in 2-3 years, CFLs will be old school and everyone will be talking about LED lights. But, the government having spent all that it can won’t be able to switch to LED, because they will still be on their 15 year payback funded off balance sheet by a bunch of banks. The GAO covers this and many other issues in a great report: http://www.gao.gov/cgi-bin/getrpt?GAO-05-340. The congress instead should insist on getting real information about building performance and than target near terms savings. Texas A&M has proven that 20% of the energy used by buildings is wasted because of mis-configured building systems and poor maintenance. The congress’s plan using a standard EPSC approach costs about $4.5/square foot and saves upwards to 25% of the current energy. Using the Texas A&M methodology achieves a savings of 20% and costs I am frustrated by congress. On the one hand they want to drive policy to save energy, but on the other side they ignore innovation and opportunities. Specifically there are several bills headed through the senate and the congress that will mandate that every government building engage in some form of an energy performance services contract (EPSC). Under these contracts, vendors make major changes to the facilities by putting in more efficient chillers, lighting, etc. Since these upgrades can cost a great deal, the contractor uses a bank to finance the effort and pays back the bank with annual savings seen by the government. So rather than committing billions of dollars directly, the government uses performance savings to fund the effort (off balance sheet). BTW: that is what the air force tried to do to fund the 767 Tankers. If I recall a bunch of people went to jail for end running congressional oversight.

The problem is the proposed laws mandate the government pursue any savings opportunity that has a payback of 15 years or less. So, if you were an EPSC and you knew your customer had to accept a 15 year payback, what would you do if say you could achieve a 20% energy reduction with a payback of just say 5 years? You would be tempted to throw in a bunch of other equipment, with poor payback performance, until the net payback was 15 years.

The other thing about 15 year paybacks is, once spent; a customer won’t plan to upgrade their equipment for another 15 years. Do we honestly believe that no new innovation for energy savings will emerge in the next 15 years? My guess is that in 2-3 years, CFLs will be old school and everyone will be talking about LED lights. But, the government having spent all that it can won’t be able to switch to LED, because they will still be on their 15 year payback funded off balance sheet by a bunch of banks. The GAO covers this and many other issues in a great report: http://www.gao.gov/cgi-bin/getrpt?GAO-05-340.

The congress instead should insist on getting real information about building performance and than target near terms savings. Texas A&M has proven that 20% of the energy used by buildings is wasted because of mis-configured building systems and poor maintenance. The congress’s plan using a standard EPSC approach costs about $4.5/square foot and saves upwards to 25% of the current energy. Using the Texas A&M methodology achieves a savings of 20% and costs

]]> By: James Aach http://www.terrarossa.com/energy-debate-watch-19/#comment-5242 James Aach Fri, 06 Jul 2007 17:26:31 +0000 http://www.terrarossa.com/?p=191#comment-5242 As I have before, I would invite readers interested in the good and bad of nuclear energy to get some insider perspective via my novel "Rad Decision", available at no cost online at http://RadDecision.blogspot.com and also in paperback. Too many energy commentators and experts have no practical experience in the field - - and everyone knows how reality can put the kabosh on the best laid plans. As I have before, I would invite readers interested in the good and bad of nuclear energy to get some insider perspective via my novel “Rad Decision”, available at no cost online at http://RadDecision.blogspot.com and also in paperback. Too many energy commentators and experts have no practical experience in the field - - and everyone knows how reality can put the kabosh on the best laid plans.

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