You may call it 'nonsense' if you like, but I've heard nonsense, compared with which that would be as sensible as a dictionary!
SAID THE RED QUEEN TO ALICE/Through the Looking-Glass…
There is a saying that the two things you should never see made are laws and sausage. As a political activist from the city once hailed as HOG Butcher of the World, I can confirm the truth of it.
Today I am adding a third thing to the list—the sometimes working of my mind. This installment of the What Now series focuses on energy efficiency—particularly in low-income communities and for at-risk populations. What follows is but background for what may appear an impossible suggestion. Regarding the impossible, I have two words to offer: President-elect Trump.
Efficiency has never been accorded its proper place in the clean energy and climate policy framework. It is not that policy makers fail to comprehend its foundational importance; it is the multi-faceted nature of the problem they confront when trying to integrate it into the scheme of things.
Renewable energy technologies like solar, wind, biomass and kinetic benefit from having a clear and straightforward purpose—the production of heat and power at competitive rates. The environmental benefits of renewable generating technologies are of course important.
In an economic sense, however, they are additive not pivotal. It is possible to make a compelling case for wind and solar solely on price parity—that is their present and potential price competitiveness.
To be sure, I and every clean power advocate ever known talks about opportunity benefits, e.g. modularity, security, job production and a means for meeting environmental targets, when marketing renewable energy technologies and policies. Absent the proven potential to match the price of fossil fuels, however, renewables go nowhere.
Well, that’s a bit harsh. Let’s say they would go somewhere, only more slowly. Witness the commercialization pace of woody biomass, tidal and other second tier renewables.
Notwithstanding that the abstract value of efficiency is readily recognizable, its market value tends towards the situational. Depending upon a person’s particular circumstances, e.g. who and where they are in the cosmos, efficiency may be a boon for you and a bust for your neighbor.
Centralized power merchants, for example, have been known to view efficiency negatively because it decreases demand. On the other hand, decentralized system sellers—particularly in the residential market—often embrace efficiency. Smaller systems are comparatively less costly, leading to shortened payback periods.
For low-income communities and at-risk populations, e.g. unemployed blue collar workers and seniors, the benefits of efficiency are not entirely energy-centric. Assigning a value to efficiency for these groups is complicated—involving health, employment, the difference between eating and heating and needed home improvements.
Yes, I know: renewables exhibit many of these same value propositions. They don’t, however, achieve them as neatly, easily or quickly for all groups. I am not denigrating the worth of renewable energy technologies; I am simply saying the value of their currency for some is not what it might be for others.
It is important to have an energy efficiency policy unburdened by renewables. Lumped with solar, wind and other energy technologies within an energy/environment policy framework, efficiency invariably and immediately faces a competitive disadvantage.
Look no further than the Clean Energy Incentive Program (CEIP) within the Clean Power Plan (CPP). Although the CPP recognizes the importance of efficiency, EPA has chosen to conjoin solar and efficiency in both extra credit pools.
States are given a great deal of latitude in deciding how to meet their environmental targets. The CEIP and the Plan are indifferent to whether emissions targets are met because of greater power production from cleaner sources or reduced demand.
A ton of carbon saved is a ton of carbon saved. All things equal, states and utilities are going to follow the path of least resistance. Why wouldn’t they?
Efficiency programs are comparatively costly to administer. A large solar project incurs transaction costs but can realize economies of scale. Weatherization efforts are generally comprised of a series of activities for which fewer economies are available.
Unlike solar or wind projects, efficiency programs also require a system of evaluation, measurement and verification. If X is the amount of carbon emitted per kWh of solar and Y is the carbon value of coal, then all I need do is subtract X from Y to know how much carbon I’m saving.
Efficiency measures require more complicated calculations; and, their operation needs to be verified. Although not difficult, these steps add to program costs.
The probable loss of the CPP is particularly unfortunate in terms of its having highlighted efficiency as a legitimate mitigation strategy and its incorporation of the principles of Environmental Justice (EJ) into the workings of the regulatory scheme.
The CPP by any interpretation is an imperfect vehicle for the promotion of either EJ or efficiency retrofits. It is, however, one of the few programs out there that recognizes and supports—if only in sympathy—energy efficiency in at-risk communities. Weatherization (WAP) and the Low-Income Home Energy Assistance Program (LIHEAP) remain the nation’s core initiatives to assist low-income populations.
Of the two, only WAP holds any real potential to improve systemically the health and welfare of at-risk populations, while also contributing to the reduction of greenhouse gases (GHGs). LIHEAP is barely more than an income transfer program between the government and utilities—using the misfortune of the ratepayer as a vehicular excuse.
It is not that payment of a utility bill lacks value for the family otherwise facing loss of electricity; it is that such payments do nothing additive to reduce either GHGs or a family’s monthly utility bill.
There are multiple reasons low-income weatherization programs should be playing a more prominent role on the energy/climate stage. These include: lower monthly utility bills; improved indoor/outdoor air quality; workforce opportunities; reduced respiratory and other health problems related to the burning of fossil fuels; less need for new power plants; expanded markets for energy efficiency appliances; and, long-term improvement of the built environment.
The weatherization program is not without its problems. The major one being too few dollars to capitalize the millions of opportunities. The U.S. Department of Energy’s weatherization program sought to weatherize a total of 66,600 residences in FYs 2015-2016. Between 2017 and 2022, an additional 150,000 homes are being targeted.
According to researchers at Oak Ridge National Laboratory, assuming “poverty rates remain stable, the pool of eligible homes would…increase from…35 million to 50 million. Given this projected population increase, one could expect an additional 375,000 additional low-income homes to be eligible for WAP each year. This…in addition to unmet demand.”
The three-year average of annually available federal WAP funds is around $200 million. The inadequacy of funds for weatherization retrofits is obvious. Less obvious is how these tens of millions of homes could realistically form the foundation of a Trump Administration initiative.
I have in mind a new public/private partnership to solve this problem that I am calling A Republican Energy Efficiency Reinvestment Act (AREERA). I believe it could become part of a nativist clean energy/environmental justice agenda paid for largely by private sector investments.
You may call it 'nonsense' if you like, but first hear me out. Unfortunately, you will have to wait until later. Look for the next in the What Now series when I prove that the workings of my mind are somewhat like making sausage.
Joel B. Stronberg
Joel Stronberg, Esq., of The JBS Group is a veteran clean energy policy analyst with over 30 years’ experience, based in Washington, DC.