OK, that was just a bit tongue in cheek, but it is actually serious, and it raises issues of unintended consequences, which are not always easy to address. However, it is urgent that home owners, and building owners come to grips with it, for it will materially impact the value of their real estate holdings in the future.
It all revolves around a theme that is pervasive on this blog, and that is sub-optimization. You could spend a lot of money on energy efficient appliances and still not create an energy efficient solution. The whole gist of the Energy Star label (when it works as intended) is to focus on the individual function, and make that as effective as possible, but buying everything Energy Star-rated will not solve your problem, and may in fact cause you to spend a lot more money than necessary, thus sub-optimization leads directly to capital destruction (aka stupid investments). A big example is the issue of tankless hot water heaters that I've raised on this blog, which is a hopelessly suboptimal solution because renewable hot water solutions are so easy and plentiful. Eventually there are others, and they all boil down to one and the same thing, which is the systems approach, the holistic approach in which the building is central, and not the equipment. The focus is on operating cash flows, and long term building values. Thus, if you can implement solar DHW, it may pay to look your washing machines and dishwashers to make sure they can take in hot water, in lieu of heating cold water. For never mind how efficient is their heating element, if they can take in water from your solar thermal installation.
Once you put the building central, you can look at integration of various technologies, and implement them even in sequence, if necessary, something now, and something else five years from now, when you're done paying for what you installed today. This kind of preplanning is entirely possible when you figure out the engineering and economic interdependencies, and do not fall for the temptation to implement something now which will prevent you from doing the next logical step five years from now. If you are only looking at the available incentives and the Energy Star ratings, and let them prevail over proper engineering and planning, you are very likely to make these mistakes, which will cause you to spend the same dollar two or three times over over the life of your house or building. The incentives, as much as the ever so well intended Energy Efficiency ratings look only at the level of the individual function of subsystems.
Besides planning ahead your engineering integration of a whole house/building system, the general principle is not to overspend in places where it really does not pay off, for the highly efficient variants of products are often not only more expensive, but sometimes less reliable. Simpler is better in that case. Another examply of where you should break the mold is the reverse, namely you should probably overspend on LED lighting where it conerns far out of the way lighting. If you only look at the difference in energy savings, LEDs are still hard to justify for most applications, but not in out of the way spots, where their longer lifetime pays off in reduced hassle and maintenance cost. LEDs last two or three times (or more) longer than the alternatives, and by looking at both energy savings and maintenance savings the picture changes the more they are in hard to access locations.
By the same token, many forms of subsidy and incentives are geared to the use and installation of Energy Star rated equipment, and again there is no guarantee that this results in an optimal design from the standpoint of energy economics of the building, be it a home or an apartment house. The simplest example is that of the back-up water heater for a solar thermal, or geothermal hot water installation. For this function it may not at all be worthwhile to buy an Energy Star rated piece of equipment. The other example is the installation of solar pv systems financed by your local utility against a Power Purchase Agreement (PPA), which is a low yield investment, which extends their franchise, but is suboptimal from the standpoint of operating cost of your building, since even the worst solar thermal system offers a higher yield of energy than Solar PV.
The fundamental error is that energy efficiency and renewable energy are treated as interchangeable, when they are not. Energy efficiency is not additive to energy independence, but renewable energy is. Energy Efficiency should rationally be funded either directly from savings or by PPA from your utility or oil company, not from public money. Renewable Energy, if it is engineered sensibly, is the only thing that deserves public stimulus because it achieves energy independence, raises real estate values, and is a permanent improvement. There may be exceptions when energy efficiency is the only option, depending on the nature of the buildings, in which case policies should be flexible enough to support it.
Showing posts with label sub-optimization. Show all posts
Showing posts with label sub-optimization. Show all posts
Sunday, July 4, 2010
Renewable Energy is the Real Energy Independence
Energy independence is the goal of renewable energy, it is a make or buy decision, but in the transition we will simply have gradually decreasing dependence on fossil fuels, before we achieve complete self-sufficiency from renewable sources.
Energy efficiency however, is a subgoal, and it is counter-productive if it is elevated to the primary goal, for it tends to include the unstated assumption that all our buildings can do is to consume energy, based on the recent subscription model of fossil fuel based consumption, and thus it overlooks the productive capacity which is now a reality, with increasing numbers of renewable technologies becoming available at building scale. In short investments in, or subsidies for "energy efficiency," such as is now common practice, do not optimally augment values of building stock, but are instead supportive of extending the franchise of oil companies, utilities, and constitute a subsidy of technology manufacturers, and therefore come at the expense of real estate values on the margin. Or, to put it differently from the standpoint of extending the fossil fuel franchises, energy efficiency is additive, so that in a fair world the providers of those fuels should pay for it, not the building owner.
If we focus purely on Energy Efficiency, i.e. reducing consumptions through various forms of economizing, be it through technology or sacrifice of convenience, we are locking ourselves into the consumption model, the subscription model of fossil fuels, which is the unstated assumption behind "Energy Efficiency." If instead we see energy efficiency from a production standpoint, there is a direct capital trade-off against installed capacity. Your boiler doesn't live forever, but your investment in energy efficiency by means of improvements to the building envelope directly reduces the size of your next boiler, and depending on where you are in the life-cycle of your boiler, this may be more or less relevant. Depending on what other things you undertake in your building, the economic life of your boiler may become shorter than its mechanical life expectancy.
Energy Independence with Renewable Energy will never arrive if we focus on energy efficiency only, we will merely extend the fossil fuel economy a bit longer. In this area failing to plan is definitely planning to fail. There has to be deliberate planning to shift from the consumption model, which is the model of the utilities and oil companies, to the production model, which is the model of renewable energy and of increasingly energy independent buildings. The most important aspect of renewable energy technology is that it is coming down to building scale in a variety of ways, and thus the opportunity arises to produce the energy right where it is used, and avoid high transportation costs (including some transmission losses), as well as avoiding the subscription model of energy. This is a make or buy decision, and with current technology we are shifting to a situation where the economics favor local production. This is particularly evident in metropolitan markets where the transport costs of energy are some of the highest.
Energy efficiency however, is a subgoal, and it is counter-productive if it is elevated to the primary goal, for it tends to include the unstated assumption that all our buildings can do is to consume energy, based on the recent subscription model of fossil fuel based consumption, and thus it overlooks the productive capacity which is now a reality, with increasing numbers of renewable technologies becoming available at building scale. In short investments in, or subsidies for "energy efficiency," such as is now common practice, do not optimally augment values of building stock, but are instead supportive of extending the franchise of oil companies, utilities, and constitute a subsidy of technology manufacturers, and therefore come at the expense of real estate values on the margin. Or, to put it differently from the standpoint of extending the fossil fuel franchises, energy efficiency is additive, so that in a fair world the providers of those fuels should pay for it, not the building owner.
If we focus purely on Energy Efficiency, i.e. reducing consumptions through various forms of economizing, be it through technology or sacrifice of convenience, we are locking ourselves into the consumption model, the subscription model of fossil fuels, which is the unstated assumption behind "Energy Efficiency." If instead we see energy efficiency from a production standpoint, there is a direct capital trade-off against installed capacity. Your boiler doesn't live forever, but your investment in energy efficiency by means of improvements to the building envelope directly reduces the size of your next boiler, and depending on where you are in the life-cycle of your boiler, this may be more or less relevant. Depending on what other things you undertake in your building, the economic life of your boiler may become shorter than its mechanical life expectancy.
Energy Independence with Renewable Energy will never arrive if we focus on energy efficiency only, we will merely extend the fossil fuel economy a bit longer. In this area failing to plan is definitely planning to fail. There has to be deliberate planning to shift from the consumption model, which is the model of the utilities and oil companies, to the production model, which is the model of renewable energy and of increasingly energy independent buildings. The most important aspect of renewable energy technology is that it is coming down to building scale in a variety of ways, and thus the opportunity arises to produce the energy right where it is used, and avoid high transportation costs (including some transmission losses), as well as avoiding the subscription model of energy. This is a make or buy decision, and with current technology we are shifting to a situation where the economics favor local production. This is particularly evident in metropolitan markets where the transport costs of energy are some of the highest.
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