Navigant Research » Blog http://www.navigantresearch.com Wed, 30 Jul 2014 20:14:16 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 Buy a Car, Get a Solar Array http://www.navigantresearch.com/blog/buy-a-car-get-a-solar-array http://www.navigantresearch.com/blog/buy-a-car-get-a-solar-array#comments Tue, 29 Jul 2014 23:38:39 +0000 http://www.navigantresearch.com/?p=67956 BMW Canada is betting that electric vehicle (EV) drivers want to further reduce their carbon footprint by going solar.  The company’s new electric i3 comes with an added purchase incentive for Canadians: a 10% discount on a home solar system (only available in Ontario, Quebec, and British Columbia).  BMW partnered with Toronto-based PURE Energies, which will provide [...]]]>

BMW Canada is betting that electric vehicle (EV) drivers want to further reduce their carbon footprint by going solar.  The company’s new electric i3 comes with an added purchase incentive for Canadians: a 10% discount on a home solar system (only available in Ontario, Quebec, and British Columbia).  BMW partnered with Toronto-based PURE Energies, which will provide the solar home evaluations, panel installation, and relevant paperwork.

BMW Canada’s e-Mobility Specialist, Blair Dinsdale, stated in a press release that the solar energy offer “was designed to cover the exact amount of power you would use in the car, based on sun access in Canada.”  According to PURE Energies, a 6 kW system (24 panels) in Canada produces roughly 7,000 kWh of electricity per year.  The BMW i3 gets an estimated 100 miles of range per 27 kWh of electricity, as per the U.S. Department of Energy.  Thus, with a 6 kW solar system, a homeowner could drive the i3 nearly 26,000 miles per year exclusively on home-produced solar energy.

A Literal Sunroof

A February 2014 survey conducted by the Center for Sustainable Energy in California found that 32% of EV owners in the western United States already have solar panels on their homes.  While parts of Canada do not enjoy abundant sunshine, the province of Ontario does offer a feed-in tariff program to help offset the lack of year-round solar energy.

Although combining solar with EVs is not new, the move by BMW to offer direct discounts on a home solar system is a first for the industry, and a smart one.  According to Navigant Research’s 2013 Energy & Environment Consumer Survey, 79% of Americans have an overall positive impression of solar energy and 61% share the same impressions for EVs.  While not all consumers of EVs purchase the vehicle for environmental reasons, the ones who do place great importance on where the electricity to power the car comes from.  And, as you’d expect, EV owners align very closely with solar buyers from a demographic perspective.

Combining solar with EVs makes so much sense that several automakers are now showing prototype EVs with solar panels directly integrated onto the roof of the vehicle.  The Ford C-Max Solar Energi and the Sunswift eVe have built-in rooftop panels.  If BMW’s approach proves successful, we could see Tesla and SolarCity creating similar offers in the future.  For more information on solar and EV synergy, check out Navigant Research’s research brief, Solar and Electric Vehicle Cross-Marketing Strategies.

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With Thread, Nest Targets Wireless Energy Devices http://www.navigantresearch.com/blog/with-thread-nest-targets-wireless-energy-devices http://www.navigantresearch.com/blog/with-thread-nest-targets-wireless-energy-devices#comments Tue, 29 Jul 2014 22:47:12 +0000 http://www.navigantresearch.com/?p=67952 It’s been a busy year for Palo Alto, California-based Nest.  In January, the firm was acquired by Google.  Last month, Nest announced that it would acquire Dropcam, which offers a Wi-Fi-enabled portable camera that pairs with a cloud-based video monitoring service.  Days later, the company launched the Nest Developer Program, enrolling early partners Mercedes-Benz, LIFX, Whirlpool, [...]]]>

It’s been a busy year for Palo Alto, California-based Nest.  In January, the firm was acquired by Google.  Last month, Nest announced that it would acquire Dropcam, which offers a Wi-Fi-enabled portable camera that pairs with a cloud-based video monitoring service.  Days later, the company launched the Nest Developer Program, enrolling early partners Mercedes-Benz, LIFX, Whirlpool, and Jawbone.

More recently, Nest introduced Thread, a personal area network (PAN) specification for device interconnectivity.  This specification will be regulated by the Thread Group, of which Chris Boross of Nest will be president.  Competing with other wireless specifications such as ZigBee, Wi-Fi, and Bluetooth Smart, Thread is a low-power mesh-based solution that follows the IEEE 802.15.4 and IPv6 standards.

Much of the coverage (see here and here) of the Nest/Thread announcement has asked whether we really need another standard for networking in-home devices.  Thread, though, has some advantages over Wi-Fi and Bluetooth.  Wi-Fi uses a lot of power, which makes it impractical for low-power battery-operated devices such as thermostats or smoke alarms.  Bluetooth Smart is already installed in most smartphones and is low power, but its range is limited.  ZigBee has encountered problems with vendors making proprietary adjustments to the specification, making it impossible or very difficult for devices to interoperate.

Looking for Options

The burgeoning number of entrants in the networking protocol space signals increased competition and perceived high value to be found in the market for connected devices.  For retail consumers, this means better products at lower prices that are easier to integrate into their connected life schema.

Unfortunately, for utilities looking to integrate energy-saving devices such as smart thermostats and lighting controls into their energy efficiency and demand response programs, multiple network protocol alliances present problems.  In order to implement these programs, utilities are subject to numerous technology restrictions and standards from state public utilities commissions or regional independent system operators.  OpenADR and ZigBee Smart Energy Profile are among these standards, and the further that protocol competition pushes the retail device market away from these, the narrower the options will be for utilities.

Sacramento Municipal Utility District (SMUD) has engaged in extensive research on different models of smart thermostats, hoping to identify those that are easy to use and will yield a stronger customer experience (as well as meet energy efficiency and curtailment goals).  However, any model that the utility looks at is subject to a number of technical requirements.  Since these are set by regulating bodies, it’s unlikely that requirements will remain in stride with developments driven in the commercial market.  As it is, the economics of utility deployments are not always favorable to vendors, particularly in programs where more than one thermostat option is offered and sales volumes are uncertain.  It remains to be seen whether vendors will offer devices and platforms that can be used by the organizations that will require them to meet energy efficiency directives and load curtailment needs.

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Energy Efficient Solutions for Retail Stores Begin To Emerge http://www.navigantresearch.com/blog/energy-efficient-solutions-for-retail-stores-begin-to-emerge http://www.navigantresearch.com/blog/energy-efficient-solutions-for-retail-stores-begin-to-emerge#comments Wed, 23 Jul 2014 20:24:05 +0000 http://www.navigantresearch.com/?p=67863 The retail landscape is in flux, to say the least.  Earlier this year, Staples announced the closure of 225 stores.  Troubled Best Buy isn’t closing any stores this year, but it was one of the several retailers to close stores in 2013).  Things aren’t all so bleak for big box retail, though.  Costco is in [...]]]>

The retail landscape is in flux, to say the least.  Earlier this year, Staples announced the closure of 225 stores.  Troubled Best Buy isn’t closing any stores this year, but it was one of the several retailers to close stores in 2013).  Things aren’t all so bleak for big box retail, though.  Costco is in the midst of a 5-year plan to open 150 new stores.  Meanwhile, Walmart announced a strategy of shifting toward 10,000 SF to 40,000 SF grocery and convenience-type stores, away from 200,000 SF superstores.  Large retailers are rethinking their physical footprint.  Part of the shifting landscape comes down to the fact that brick-and-mortar stores, particularly warehouse-type stores, are costly to operate.  Moreover, the energy efficient operation of these assets is hindered by factors such as unpredictable occupancy, high ceilings, and vast open space.  However, smart building technologies are being developed for the specific challenges that face retail buildings.

There are numerous approaches to improving the energy efficiency of buildings (see Navigant Research’s reports Energy Efficiency Retrofits for Commercial and Public Buildings and Building Energy Management Systems).  But many of these aren’t appropriate for large, big box retail buildings.  A recent brief from Johnson Controls’ Institute for Building Efficiency provides a thorough analysis that quantifies the cost and payback of various building efficiency improvements for commercial office buildings.  It details 16 measures that represent 90% of possible energy savings.  Unfortunately, most of those do not address big box retail; they focus on using energy for building occupants, not for empty spaces.  That translates to providing cooling, lighting, and even power for computers only when occupants are in the space.  Though these measures work in office buildings, healthcare facilities, schools, and many other commercial buildings, they don’t provide the same opportunity to many retail spaces.

What does a smart retail look like?

Many retailers have aggressively pursued demand-controlled ventilation, lighting and controls upgrades, and advanced efficiency compressors for HVAC and refrigeration to reduce operating costs.  But the cutting edge of smart building technology for retailers focuses more on the consumer experience than on energy efficiency.  GE Lighting and BryteLight, for instance, are using next-generation LED fixtures to provide location-based services for retailers.  Similarly, the Open Group, a consortium that enables the achievement of business objectives through IT standards, has outlined a use-case of using sensors to provide real-time information to retail customers.

However, Massachusetts Institute of Technology’s SENSEable City Lab has recently unveiled a concept to use smart sensing technology to reduce energy consumption.  Local Warming creates a controllable heating zone around an individual occupant, leaving the rest of the space at a neutral temperature.  The solution relies upon a Wi-Fi-based motion tracking system that controls a system of mirrors and rotating motors to direct an infrared energy beam onto an occupant.  In the future, LED technology can further reduce the complexity of the system by allowing a more distributed source of infrared heat.

Local Warming Concept

(Source: SENSEable City Lab)

While the system is not specifically designed for retail, the most compelling application for Local Warming is clearly big-box retail.  These retail spaces are typically large and sparsely occupied.  Additionally, infrared heating has long been employed in large retail spaces.  Infrared heaters, which transfer heat through radiation rather than convection, warm occupants without having to warm the air.  In warehouse-like stores, with lots of air relative to the number of people in it, infrared provides an efficient method of heating.  Local Warming may signal a shift in the use of advanced sensor and location-based services in retail to the development of more advanced efficiency solutions.

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European Grids Look to RF Mesh Networks http://www.navigantresearch.com/blog/european-grids-look-to-rf-mesh-networks http://www.navigantresearch.com/blog/european-grids-look-to-rf-mesh-networks#comments Wed, 23 Jul 2014 19:10:13 +0000 http://www.navigantresearch.com/?p=67857 Communications networks for smart grids have evolved very differently in Europe than they have in North America, with power line communications (PLC) and cellular technology, thus far, as the leading forms of communications for smart meter connectivity across the pond.  Here in the states, the availability of unlicensed (free) spectrum in the 900 MHz band [...]]]>

Communications networks for smart grids have evolved very differently in Europe than they have in North America, with power line communications (PLC) and cellular technology, thus far, as the leading forms of communications for smart meter connectivity across the pond.  Here in the states, the availability of unlicensed (free) spectrum in the 900 MHz band has led to the leadership of proprietary radio frequency (RF) mesh solutions, such as those provided by Itron, Silver Spring Networks, Elster, Tantalus, Landis+Gyr, and others.

The European Commission, however, has taken steps in recent months to bring 48 European nations into alignment on spectrum policy across the continent.  Specifically, for smart meters and smart grid applications (and other machine-to-machine [M2M] applications), the European Conference of Postal and Telecommunications Administrations (CEPT) announced in February a framework whereby 5.6 MHz of spectrum, from 870 MHz to 875.6 MHz, will be set aside for unlicensed M2M uses, including smart meters and grids.  Details can be found in CEPT’s Electronic Communications Committee (ECC) Report 189.

Indoor Reading

CEPT cited several reasons for supporting interoperability, including the creation of economies of scale and cost reduction, reduction in the risk of cross-border interference, and greater flexibility.  The choice of sub-1 GHz spectrum, where propagation characteristics are stronger than at higher bands, makes the spectrum suitable for reading meters that may be placed indoors, even in basements — a common practice in European nations.

Ofcom, the United Kingdom’s telecommunications regulatory body, this year made amendments to its Wireless Telegraphy Act that allow for commercial operations on a license-exempt basis at 870 MHz to 876 MHz as of June 27, 2014; similar action is likely across the 48 nations that participate in CEPT.

This is good news for vendors, like those named above, but also for utilities across Europe seeking more flexibility in their smart meter and grid deployments.  RF mesh solutions are often less expensive than PLC for near area networks, although that varies widely depending upon the structure of the grid in the region as well as the topography.  Nonetheless, some smart meter/communications solutions providers have struggled financially over the past couple of years after ramp-up for American Recovery and Reinvestment Act (ARRA) funding created a spike in demand that has since fallen rather sharply.

Room to Grow

Europe is poised to be the next big growth area for smart metering, thanks to the EU’s 20-20-20 initiative, which a majority of European nations support.  Navigant Research estimates that current penetration of smart meters across Europe is just 15%, compared with more than 40% in North America.  While several nations have made significant progress in deployment (Italy, Scandinavia), Germany isn’t yet on board with the 20-20-20 initiative, and the United Kingdom and France are just getting rolling.  In Eastern Europe, there has been minimal activity to date, particularly in Russia, home to nearly 100 million meters.  For details on Navigant Research’s global smart meter forecast, look for our report Smart Meters, slated for publication later this year.

The Market for Smart Meters, Europe: 2013-2023

(Source: Navigant Research)

Smart meter shipments in North America are expected to total 121 million between 2014 and 2023; that total is forecast to be 221 million in Europe.  That’s more than $18 billion in anticipated revenue for smart meters — a market of which surely every smart meter vendor will take note.

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Lighting Innovation: Not Just LEDs http://www.navigantresearch.com/blog/lighting-innovation-not-just-leds http://www.navigantresearch.com/blog/lighting-innovation-not-just-leds#comments Wed, 23 Jul 2014 19:00:32 +0000 http://www.navigantresearch.com/?p=67854 Attendees at the LightFair convention in Las Vegas could be excused for thinking that the show was exclusively focused on LEDs and that LED lighting has already taken over the vast majority of the market.  Surveying the convention floor, new LED products were on display in every direction, and even the big traditional lighting companies [...]]]>

Attendees at the LightFair convention in Las Vegas could be excused for thinking that the show was exclusively focused on LEDs and that LED lighting has already taken over the vast majority of the market.  Surveying the convention floor, new LED products were on display in every direction, and even the big traditional lighting companies seemed to only be showcasing their LED offerings.

Ones to Grow With

However, while LED lighting is starting to represent the majority of sales in some applications, such as street lighting (see Navigant Research’s report, Smart Street Lighting), many other applications, such as office lighting, are still monopolized by older lamp technologies and are only beginning to see competitive LED products.  Moreover, some companies are devoting R&D dollars to develop new non-LED products, and there will certainly be a role for those products to play in a future that will be largely, but not completely, taken over by LEDs.  A few examples of companies that highlighted non-LED products at LightFair are:

  • Indoor Grow Science (IGS) – This company had a much-visited display of its high-pressure sodium (HPS) grow lights, which feature a patented method for venting waste heat so that it does not negatively impact plant growth.  A company representative explained that while IGS is working on LED-based grow lights, there are a number of challenges involved that its officials believe will leave the indoor agriculture industry using HPS and metal halide lamps at least for the near future.  Heat dissipation still has to be managed with LED lamps.  In addition, plants require UV-A and UV-B light, which standard LEDs do not supply.  While UV LEDs are available, they generally degrade faster, which could leave a grower with a light that looks operational to the eye but is not meeting the needs of the plants.
  • Luxim – Having made a splash at LightFair 2013 with impressive demonstrations of its light emitting plasma (LEP) technology, Luxim impressed again this year with the launch of its Resilient brand of industrial-strength products that include LEP, LED, and induction-based lamps.  While LEP lamps have a tiny market share, this company makes a strong case that they can be the right choice in applications that require very bright lights, especially those that benefit from a small point source of light.  Another advantage is a lack of any flicker, which allows for the use of very high-speed photography in sporting and other applications.
  • Genesys – While not an official LightFair vendor, this company’s representatives were busy at the conference making the case for their gHID ballast.  As opposed to typical HID ballasts that operate at a frequency of 50 Hz  to 60 Hz, the Genesys product runs at over 100,000 Hz, increasing efficiency to be comparable to LEDs, as well as extending both lamp and driver life by factors of 2 to 3 times and 3 to 4 times respectively.  The gHID ballast is largely being sold as a retrofit product, where it can often fit inside existing luminaires or be attached outside of them.  Therefore, it does not require the complete infrastructure change that many LED retrofits involve.  In the longer term, the company sees its product as complementary to LEDs, providing a solution for applications where LEDs may not be as successful such as higher wattage lights.

While these companies showcased innovative non-LED products, the leadership of LEDs at LightFair 2014 would be hard to deny.  Out of 27 entrants for the innovation awards in the commercial indoor category, all 27 were LED-based.  Other lamp types may maintain sizable portions of the installed base for years to come and may continue to make sense in certain specific applications, but it’s undeniable that the age of the LED is upon us.

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In the Islands, Renewable Energy Scales up Rapidly http://www.navigantresearch.com/blog/in-the-islands-renewable-energy-scales-up-rapidly http://www.navigantresearch.com/blog/in-the-islands-renewable-energy-scales-up-rapidly#comments Tue, 22 Jul 2014 16:20:55 +0000 http://www.navigantresearch.com/?p=67798 Renewable energy project developers are touring islands these days, salivating at the opportunity to displace diesel-powered electricity systems that can cost as much as $1/kWh with significantly lower-cost clean power.  Prominent examples include Iceland, where, according to the country’s National Energy Authority, roughly 84% of primary energy use comes from indigenous renewable energy sources (the [...]]]>

Renewable energy project developers are touring islands these days, salivating at the opportunity to displace diesel-powered electricity systems that can cost as much as $1/kWh with significantly lower-cost clean power.  Prominent examples include Iceland, where, according to the country’s National Energy Authority, roughly 84% of primary energy use comes from indigenous renewable energy sources (the majority from geothermal); Hawaii, where energy costs are 10% of the state’s GDP, and where the state government has set a goal of reaching 70% clean energy by 2030; and Scotland (part of a larger island), with a goal of 100% renewable energy by 2020.  Several smaller, equally interesting island electrification initiatives present great opportunities for companies looking for renewable energy deployment opportunities that are truly cost-effective for customers and developers.

These opportunities include:

  • In Equatorial Guinea, a 5 MW solar microgrid planned for Annobon, an island with 5,000 inhabitants off the west coast of Africa, is intended to supply 100% of the power for residential needs.  The project is funded by the national government with power produced at a rate 30% cheaper than diesel, the current primary fuel source.  The project is scheduled for completion in 2015 and is being installed through a partnership between Princeton Power Systems, GE Power & Water, and MAECI Solar.
  • The Danish island of Samsø is the first net zero carbon island, where 34 MW of wind power generate more electricity than is consumed on the island.  Fossil fuels are still utilized, so  Samsø is not truly a 100% renewable energy island as often reported.  The project was conceived and designed as part of a 10-year process begun in 1997, following the Kyoto climate meeting in Japan.
  • The island of Tokelau, an atoll in the South Pacific, is home to 1,500 inhabitants and produces up to 150% of its electrical needs with solar PV, coconut biofuel-powered generators, and battery storage – displacing 2,000 barrels of diesel per year and $1 million in fuel costs.
  • El Hierro, the westernmost of Spain’s Canary Islands, is home to 10,000 residents.  With an innovative combination of wind power and pumped hydro acting in tandem, the island is projected to generate up to 3 times its basic energy needs.  Excess power will be used to desalinate water at the island’s three desalination plants, delivering 3 million gallons of fresh water per day.
  • The Clinton Global Initiative has a specific Diesel Replacement Program for islands, focused on deploying renewable energy projects and strategies tailored to the unique needs of its 20 island government partners.  The objective is not only to create cost-effective solutions to reduce carbon, but also to help many of these island nations reduce the often enormous debt that results from relying on imported diesel fuel for electricity.

There are many more opportunities, including Crete, Madeira, Bonaire, La Reunion, the U.S Virgin Islands, and the Philippines (7,127 islands) – which last summer set a 100% renewable energy target within 10 years.

Not all of these projects, particularly the more sophisticated ones, have gone smoothly.  The logistical challenges of island construction add to the overall cost of the projects.  The risk of extreme tropical weather events is always present, including the risk of actually being underwater if sea levels rise as anticipated.  Thus far, financing for many of these projects has come from public-private partnerships, and as I’ve written previously, the coming avalanche of adaptation funding means those avenues are expected to be around for the foreseeable future.  But given the strong economic arguments for residential systems, resorts, agriculture, and other energy-intensive applications that often rely on diesel power for electricity, onsite distributed projects often pencil out without public assistance.

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California Calculates the Value of Time in Energy Efficiency http://www.navigantresearch.com/blog/california-calculates-the-value-of-time-in-energy-efficiency http://www.navigantresearch.com/blog/california-calculates-the-value-of-time-in-energy-efficiency#comments Tue, 22 Jul 2014 16:10:35 +0000 http://www.navigantresearch.com/?p=67801 The 2013 update to California’s Title 24 building energy efficiency standards went into effect on July 1, 2014.  In addition to increasing overall building efficiency requirements over the 2008 standards, this update set out more stringent lighting requirements for both residential and non-residential buildings. The 2013 update also includes changes to California’s time dependent valuation (TDV) [...]]]>

The 2013 update to California’s Title 24 building energy efficiency standards went into effect on July 1, 2014.  In addition to increasing overall building efficiency requirements over the 2008 standards, this update set out more stringent lighting requirements for both residential and non-residential buildings.

The 2013 update also includes changes to California’s time dependent valuation (TDV) calculation.   Used only in California, TDV is a tool to gauge the value of energy efficiency measures.  Unlike other metrics, such as site or source energy (measured in kBtu), TDV includes the cost to provide energy based on time of use, as well as other variations in cost due to climate, geography, and fuel type.

TDV was developed in 2005, and was updated in both 2008 and 2013, to help California meet the energy efficiency goals established in Title 24.  In the 2013 update, the California Energy Commission (CEC) changed the TDV calculation to account for climate sensitivity by separating California into 16 different climate zones.  This alteration helps reflect differences in energy costs driven by climate conditions, which vary considerably throughout California.

Finer Grained

One of the key barriers to wider TDV adoption is developing values for each climate zone.  As stated above, California alone has 16 climate zone values.  Another limitation is that many state officials are unaware of it: California is the only state that uses TDV, whereas metrics such as site and source energy are much more commonly employed both nationally and internationally.  Further, TDV does not account for the potential grid modernization costs necessary to export excess electricity back to the grid.

But since TDV accounts for differing energy costs based on a range of factors, it more accurately captures the societal cost of energy consumption that’s missed in assessments based only on source or site energy parameters.

In the coming years, as California tries to build more zero energy buildings (ZEBs), TDV will play an important role in determining whether a building meets the required energy use intensity to qualify as zero net energy.  The forthcoming Navigant Research report, Zero Energy Buildings, will provide an update to the 2012 iteration, and look further into the benefits and challenges associated with TDV as a metric.

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In New York, Greening Older Buildings http://www.navigantresearch.com/blog/in-new-york-greening-older-buildings http://www.navigantresearch.com/blog/in-new-york-greening-older-buildings#comments Mon, 21 Jul 2014 23:12:14 +0000 http://www.navigantresearch.com/?p=67795 Building energy efficiency has reached the mainstream.  Clean energy technologies have become so common that technical training in renewable energy and energy efficiency retrofits is becoming more and more accessible. Green City Force (GCF), a Brooklyn, New York-based non-profit, has trained nearly 300 young adults living under the poverty line in NYC for careers in the [...]]]>

Building energy efficiency has reached the mainstream.  Clean energy technologies have become so common that technical training in renewable energy and energy efficiency retrofits is becoming more and more accessible.

Green City Force (GCF), a Brooklyn, New York-based non-profit, has trained nearly 300 young adults living under the poverty line in NYC for careers in the green economy with the group’s Clean Energy Corps.

The Clean Energy Corps supports a variety of projects related to energy and efficiency, including energy audits in low-income homes, urban agriculture, and energy efficiency retrofits.  The corps provides its members with an academic and technical training program to prepare them for college; the program leads to certification for entry-level work in energy efficiency and includes GPro, a nationally recognized certification in building science.

Retrofitting

One of the major partners for Green City Force, and for the Clean Energy Corps specifically, is the New York City Housing Authority (NYCHA).  More than 8.4 million people reside in New York City, and 615,199 of them are served by the authority’s Public Housing and Section 8 programs.  This represents 7.4% of the population of New York City.  Together, both programs cover 12.4% of the rental apartment stock in one of the most expensive cities in the world.

The Housing Authority’s property portfolio is equally impressive and rivals commercial housing developers.  The NYCHA oversees 334 developments, including 2,563 buildings and nearly 178,000 apartments.  In contrast, the Chicago Housing Authority has 21,000 apartments in 128 properties.  Los Angeles has 2,491 apartments across a portfolio of 93 properties.   Only 20% of the developments in NYCHA’s portfolio are less than 30 years old, and one-third of the authority’s developments are more than 50 years old.  Modern buildings are built with energy efficiency in mind, but older buildings have more room for improvement.

The More the Better

GCF develops service projects in partnership with the Housing Authority, city agencies, and other non-profits.  One example is the Love Where You Live Challenge, which bring corps members together with fellow NYCHA residents to reduce energy use in homes.  Corps members gain experience and skills, while the Authority reduces its energy costs.  NYCHA spends $535 million annually on utilities.

The NYCHA is not the only public agency using innovative approaches to promote energy efficiency.  The Washington Metropolitan Area Transit Authority (WMATA) recently awarded Philips Lighting a 10-year lighting performance contract to upgrade lighting across 25 parking garages to LED lighting.  Instead of paying out of pocket for the 13,000 fixtures, WMATA will share the savings in energy costs with Phillips over the 10-year period.

For disruptive technologies such as energy efficiency, the more business models in the market, the more accessible the clean energy economy becomes.

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Amid Global Turmoil, Oil Prices Oddly Stable http://www.navigantresearch.com/blog/amid-global-turmoil-oil-prices-oddly-stable http://www.navigantresearch.com/blog/amid-global-turmoil-oil-prices-oddly-stable#comments Fri, 18 Jul 2014 17:32:01 +0000 http://www.navigantresearch.com/?p=67719 The world has entered a zone of maximum upheaval.  From the Atlas Mountains of North Africa to the Hindu Kush, in Afghanistan, the Middle East is in flames.  The destruction of a Malaysian airline over Ukraine, almost certainly shot down by Russian-backed separatist rebels, threatens war in the Black Sea region.  Libya is being torn [...]]]>

The world has entered a zone of maximum upheaval.  From the Atlas Mountains of North Africa to the Hindu Kush, in Afghanistan, the Middle East is in flames.  The destruction of a Malaysian airline over Ukraine, almost certainly shot down by Russian-backed separatist rebels, threatens war in the Black Sea region.  Libya is being torn apart by competing militias, while parts of Iraq are under assault by the murderous Islamist force known as ISIS.  Syria remains a bloody horror show, and Israeli troops have launched a ground invasion of Gaza.  At no time since the terror attacks of 2001 has the world seen such conflict and instability.

So why aren’t oil prices higher?

Prices spiked briefly after the news on July 17 that Malaysian Air flight 17, en route from Amsterdam to Kuala Lumpur, was shot down by a surface-to-air missile fired from eastern Ukraine.  U.S. oil futures rose $1.99 a barrel, up 2% on the New York Mercantile Exchange, to reach nearly $104.  That was the largest one-day jump since June 12, when ISIS launched its offensive in Iraq, according to The Wall Street Journal.  But markets quickly calmed: the next day, benchmark crude had retreated below $103 a barrel on the NYME.  The shocks of recent days had caused a tremor across world petroleum markets, not a tsunami.

No Lost Sleep

“At any given point of time, global financial markets are always at risk from geopolitical disturbances, but this time around nobody’s losing sleep over it,”  wrote Malini  Bhupta in the  Business Standard, India’s leading economic newspaper, in a column headlined “Markets shrug off geopolitical risks as oil prices remain stable.”

Before the latest outrage in Ukraine, oil prices had actually been easing: in mid-July U.S. crude fell below $100 a barrel for the first time since May.  That’s not to say that prices aren’t high; as Steve LeVine, of Quartz, points out, geopolitical disturbances have removed around 3.5 million barrels of oil a day from world markets since last fall, and if the world were a more stable and peaceful place, oil prices would likely be well below $100 a barrel.  But given the current unrest, a price per barrel of $125, or higher, would not be startling.

The ability of the market to absorb multiple shocks and keep prices relatively stable is an indication of structural changes that have taken place in recent years.

Awash in Conflict, and Oil

According to Liam Denning, writing in The Wall Street Journal’s “Heard on the Street” column, the “forward curve” – the price of oil scheduled for delivery months or years in the future, based on the trade in futures contracts – has flipped in recent weeks, meaning that prices for contracts nearer in time are now lower than those further out.  When the curve slopes upward like that, it’s an indication that supplies are plentiful.  “The global oil market no longer looks quite so panicked about Iraq,” commented Denning.

More broadly, the world’s supply of oil has been climbing for years, and continues to do so despite the current crises.  What’s more, the sources of that supply have diversified; the Middle East no longer has as a dominant role in world production as it did 10 or even 5 years ago.

Defying “peak oil” predictions, world crude production increased roughly 50% over the last 30 years, rising from about 50 million barrels a day in 1983 to 76 million in 2012.  Regions that were negligible producers before the turn of the century are now significant oil suppliers: Africa’s production has doubled since 1983, as has South America’s.  Despite the current civil war, oil production in Iraq has soared, growing from about 300,000 barrels a day in 1991 to 3 million in 2012.  Driven by new drilling in the tar sands, Canada has more than doubled its production in the last 20 years.

And then, of course, there’s the United States, which in 2011 became a net exporter of petroleum products for the first time since the post-World War II era.  In  short, the world is awash in petroleum, and barring an all-out war between Putin’s Russia and the West, is likely to remain that way for some time.

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How Can the United States Pay for Road Upkeep? http://www.navigantresearch.com/blog/how-can-the-united-states-pay-for-road-upkeep http://www.navigantresearch.com/blog/how-can-the-united-states-pay-for-road-upkeep#comments Thu, 17 Jul 2014 06:04:54 +0000 http://www.navigantresearch.com/?p=67651 More vehicles throng U.S. roads each year, expansion necessary to support them and with less money to fund road repairs.  The root of the problem is that road construction funds are largely derived from taxes on gasoline and diesel fuel, and U.S. consumption of both is declining and will continue to decline.  The increasing fuel [...]]]>

More vehicles throng U.S. roads each year, expansion necessary to support them and with less money to fund road repairs.  The root of the problem is that road construction funds are largely derived from taxes on gasoline and diesel fuel, and U.S. consumption of both is declining and will continue to decline.  The increasing fuel economy of new vehicles combined with rising penetrations of alternative fuel vehicles (AFVs) is having a marked impact on U.S. fuel demand.

In the upcoming report Global Fuel Consumption, Navigant Research forecasts that liquid fuels (gasoline, diesel, and biofuels) consumed by U.S. vehicles will decrease from approximately 160 billion gallons in 2014 to around 104 billion gallons in 2035.  Meanwhile, forecasts from the Navigant Research reports Light Duty Vehicles and Medium and Heavy Duty Vehicles indicate that the U.S. vehicle fleet will grow from approximately 250 million to nearly 270 million in 2027 before beginning a slow decline.

More Per Gallon

If the status quo funding mechanism is maintained, annual federal gasoline and diesel tax revenue will decline from current levels of about $30 billion to near $20 billion in 2035.  Meanwhile, over the same time, the fleet of vehicles in use will grow by 10 million.  However, in the near term, the federal Highway Trust Fund and Mass Transit Fund are headed for insolvency before the end of the year.

A number of short-term funding options have been proposed that will likely push a decision on a long-term solution out past the November mid-term elections.  However, one long-term solution emerged last month from two U.S. senators who proposed raising the federal gasoline and diesel tax by $0.06 per gallon over 2 years and then indexing the tax to inflation for following years.  The tax has been stagnant since 1993, at $.184/gallon of gasoline and $.244/gallon of diesel.  Raising it would probably be the easiest long-term solution to implement, since the machinery for tax collection is already in place.

U.S. Federal Gasoline/Diesel Tax Revenue and Vehicles in Use, United States: 2014-2035

(Source: Navigant Research)

What this proposal has in ease of implementation, though, it lacks in political appeal and fairness.  Taxes are a bitter pill for any Republican member to swallow, and pushing through a hike on gasoline and diesel, no matter how small or sensible, is likely to be impossible.  Additionally, as the tax stands now and the proposal will maintain, motorists who drive newer fuel efficient vehicles pay less tax, and those who drive AFVs pay no tax per mile driven, despite that they are using the same roads as owners of less fuel efficient conventional vehicles who bear more of the tax burden.  As the tax was designed to make those who use the road pay for the road, the above scenario is an unintended consequence to the advantage of alternative fuel and fuel efficient vehicle owners.

Dollars Per Mile

In early 2009, Secretary of Transportation Ray LaHood recommended that the federal government should look into a vehicle miles traveled (VMT) tax.  The VMT tax would clock vehicle owners’ mileage and then tax them on a per-mile basis.  While this solution would not be easy to implement, it would be a fair way of collecting taxes in line with the original purpose of federal gasoline and diesel taxes.  It could also be used as a tool to manage traffic along specifically congested corridors.

Despite the suitability of a VMT tax, it is unlikely it will emerge as a legitimate policy option in the near term, due to a lack of political support and a tested method for implementation.  Rather, owners of older conventional vehicles will likely pay more at the pump – or traffic is only going to get worse.

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