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ACEEE Blog


December 20, 2012 - 10:52am

By Sara Hayes, Senior Manager and Researcher, Policy and Utilities


Last month the International Energy Agency (IEA) released its World Energy Outlook 2012 and unfortunately the world outlook is not so good. To be more precise, a key conclusion of the report is that “Taking all new developments and policies into account, the world is still failing to put the global energy system onto a more sustainable path.” The report forecasts dramatic increases in global energy consumption and found that subsidies for fossil fuels increased by almost 30% from 2010, amounting to $523 billion in 2011. All of this in spite of a long-term global effort to find a solution to climate change. 

Unfortunately, this version of the future doesn’t depart much from what we’ve seen in the past. Certainly there are new findings, but a future where global energy consumption increases dramatically as China, India, and other non-OECD countries develop has been on the horizon for a while. However, the really critical findings in this latest version of the Outlook relate to an opportunity for global leaders to take control of this future by balancing the world’s energy...


December 19, 2012 - 6:18pm

By Steven Nadel, Executive Director


Much of the equipment and production processes in America’s factories are decades old and not as efficient as modern equipment and processes in use by many of our international competitors. While some factories have been modernized, many have not. Modernizing these factories will allow them to better compete in world markets by improving product quality and reducing product costs, including savings through reduced energy use. Modernization of our factories will build on several competitive advantages the U.S. now has—low electric and natural gas prices (relative to the rest of the world) and lower labor costs due to higher productivity.

As we emerge from the Great Recession, many industrial firms have capital to invest, but a nudge from the tax code could spur substantial additional investments here in the U.S.  We suggest three possible tax policies that could spur investment in a new ACEEE working paper. The paper recognizes that any incentives need to be low cost because of concerns about the federal budget deficit and a desire by many tax reform proponents to reduce tax rates by reducing tax expenditures.

The first policy we examine would allow repatriation of company...


December 7, 2012 - 4:49pm

By Sara Hayes, Senior Manager and Researcher, Policy and Utilities


This week in Doha, Qatar, world leaders are struggling with how to reduce greenhouse gas emissions fast enough, and in amounts great enough, to protect people from the droughts, food shortages, rising sea levels, and severe weather events that climate change is likely to bring.

Leaders are debating a range of solutions including carbon sequestration and policies and practices to help people prepare for the effects of climate change (“adaptation”). In fact, world leaders have been meeting to discuss possible solutions to climate change for 20 years. Yet the cheapest, cleanest, and fastest resource the world has for reducing greenhouse gas emissions remains vastly underused: energy efficiency.

Energy efficiency means better practices and technological innovations that reduce energy consumption while getting the same or better results. Airtight houses that keep people comfortable. Cities with clean, fast public transit, light bulbs that produce the same amount of light for a fraction of the energy...


December 6, 2012 - 1:48pm

By Anna Chittum, Visiting Fellow


As noted in recent blog posts by Forbes contributor William Pentland and the New York Times’ Andrew Revkin, it’s instructive to look at where the lights stayed on during Hurricane Sandy to understand what makes certain places more resilient than others. While 8.5 million customers lost power during Sandy, a small number of facilities (including residential buildings, hospitals, universities, and public service facilities) kept their power, heat, and critical equipment running.

These facilities were able to do this because they used a technology called combined heat and power (CHP), a suite of highly efficient technologies that can run on a variety of fuels. Unlike traditional backup generators, CHP systems typically provide heat and power to facilities during regular operations. They tend to use natural gas and highly efficient turbines and engines to serve their very local loads, but they...


November 30, 2012 - 12:51pm

By Martin Kushler, Senior Fellow


Congratulations are in order to energy efficiency supporters in Ohio who were able to thwart an attempt by FirstEnergy to ram through an amendment to gut Ohio’s energy efficiency resource standard (EERS) during the current lame duck legislative session.

Ohio passed a strong EERS in 2008 and has been making steady progress implementing the policy, exceeding the annual energy savings targets each year. ACEEE assisted The Ohio Manufacturers Association in preparing a...


November 23, 2012 - 2:14pm

By Anna Chittum, Visiting Fellow


Combined heat and power (CHP) systems efficiently generate multiple types of power, usually electricity and thermal energy such as steam, using a single fuel input. These systems can run on a number of fuels and serve energy needs in a variety of sectors. They save users money and reduce overall emissions compared to traditional generation of electricity and thermal energy. For these reasons, states have increasingly looked to CHP to help meet rising energy efficiency goals such as those set by energy efficiency resource standards (EERS).

One of the most important ways states can support and encourage CHP through policy is by explicitly including CHP as an eligible resource in an EERS or other portfolio standard. An important caveat is that when designing portfolio standards, energy efficiency targets need to be set based on an energy efficiency potential assessment that includes new CHP. Portfolio standards are most supportive of CHP when they treat CHP savings as equivalent to those from other efficiency resources. Six states do this, and one, Massachusetts, actually...


November 20, 2012 - 11:59am

By Ethan Rogers, Senior Manager, Industry


As the nation begins to ponder tax reform next year, we have an opportunity to create a new corporate tax structure that encourages investments that benefit society, such as energy efficiency, as well as the businesses that make these investments. In the report Industrial Energy Efficiency and Tax Reform, released today, ACEEE analyzes current tax reform proposals with the purpose of understanding the potential each has to encourage investments in the industrial sector in general and in energy efficiency in particular. Encouraging industrial modernization is important to energy efficiency because the energy intensity of manufacturing correlates directly to the vintage of the equipment. As older, less efficient equipment is replaced with newer, more efficient equipment, we can anticipate the energy needed to produce a good or service will decrease. Therefore, in addition to encouraging energy efficiency outright, it also makes sense to encourage industrial modernization.

So although none of the corporate tax reforms currently under consideration prioritize energy efficiency, we wanted to know how each might potentially influence investments that might reduce the energy intensity of the industrial sector. The most commonly discussed proposal is that of...


November 15, 2012 - 11:41am

By Shruti Vaidyanathan, Senior Transportation Analyst


A comprehensive approach to transportation energy efficiency must include a combination of strategies targeted at both vehicle fuel efficiency and travel behavior. While the federal government has taken the lead on fuel efficiency, local and regional policies that reduce the need for driving are also essential to achieve an efficient and sustainable transportation system.

Today ACEEE released a new local guide to help municipalities and metropolitan regions identify policies to expand transportation choices and improve transportation system efficiency. The toolkit is targeted at local policymakers and stakeholders interested in reducing transportation-related fuel consumption in their communities. Policies addressed in the toolkit are divided into four key categories:

  • Policies to integrate land use and transportation that encourage the creation of compact, transit-oriented, and multi-use communities to enable access to additional transportation choices.
  • Policies that extend transit networks and create integrated street networks that are accessible to all road users be they in cars, on transit, on bikes, or on foot.
  • Pricing mechanisms that provide drivers with an incentive to change their driving behavior by charging more for inefficient travel choices. These mechanisms include congestion pricing...


October 25, 2012 - 9:32am

By Christopher H. Russell, Visiting Fellow, Industry


The economy took center stage at times during this year’s presidential debates, but scant attention was paid to the manufacturing sector, which remains an important driver of economic growth as well as energy use. Evidence of a resurgent, domestic manufacturing sector has strategic implications for energy policy as well as the economy. Understanding Industrial Investment Decision Making, a new research report by ACEEE, examines the dynamics of capital investment that drives industrial energy use and competitiveness. 

There’s no question that the manufacturing sector struggled during the past decade, as revealed in macroeconomic data [links to PDF]. However, we find uneven changes in output as some industries advanced while others declined. Interestingly, almost all industries boosted their productivity during this time period, due in part to the closure of older, less efficient facilities. In the short run, this leads to higher capacity utilization as surviving production facilities take up the slack, but another force may accelerate this trend. 

Rising costs of foreign operations are causing a growing number of corporations to “...


October 23, 2012 - 12:45pm

By Steven Nadel, Executive Director


With the election approaching and the parameters of the race becoming clearer, I thought now is a good time to reflect on the implications of this election for energy efficiency.

Following the election, control in Washington is likely to be split—neither party is likely to have a free hand. As of this writing, the New York Times’ FiveThirtyEight blog gives the Democrats an 88% chance of retaining control of the Senate based on the latest polls as well as historic patterns in each state. They don’t provide odds for the House of Representatives but chances are very high that the Republicans will retain control. And then there’s the Presidency, which as of this writing FiveThirtyEight rates as a 70% chance Obama will win and a 30% chance Romney will win. In other words, the odds are very strong that we will continue to have split control of the federal government. 

Given this likelihood, the $64,000 question is whether the current partisan standoff will continue. We do expect a few big “package deals” regarding the budget, debt ceiling, and perhaps tax reform. In addition, a farm bill may happen in 2013 and a transportation bill in 2014, as both of these are “must pass” bills with broad support. Beyond these items the outlook is very unclear...