Deploying smart meters across Britain turned out to take longer than expected.  In a surprise move, on May 10, the U.K. Department of Energy & Climate Change (DECC) announced it will postpone the mass rollout of smart meters for another year.  The extra time is needed for vendors to work out technical issues associated with the new equipment and conduct further testing, the Department said.

Before the delay, the plan called for installing more than 50 million smart meters (both electric and gas) in about 30 million homes and businesses, beginning in 2014 and lasting through 2019.  Now the massive deployment will begin in the fall of 2015, with expected completion by the end of 2020.

Vendors for the most part welcomed the delay.  Angela Knight, chief executive of Energy UK, an industry trade association, said the delay was a prudent move, allowing the program to “be completed in a more efficient and cost-effective manner.”

Nonetheless, for vendors counting on 2014 deployments, this delay has to hurt at some level.  Companies like Landis+Gyr, a major meter supplier to British utilities, and Trilliant, which supplies smart meter communications gear to British Gas, will need to push back their manufacturing schedules.  They’ll have to find other business as they wait for clarity on technology issues in the United Kingdom.

For utilities, on the other hand, the delay brings relief.  They can now take time to better plan for the massive deployments and the logistical challenges they entail.  However, this delay does not signal a complete halt to new smart meters in the United Kingdom.  British Gas, for instance, has already deployed some 800,000 smart meters as part of the first phase of the national rollout, and a government spokeswoman said there is nothing to stop energy suppliers from installing smart meters now, even as there is a delay in the nationwide rollout.

Consumers won’t be able to manage their consumption with the latest technology as soon as expected, but the new metering system should have fewer glitches once it moves to the big rollout stage in 2015.

The delay shouldn’t come as a big surprise.  Reshaping the grid on a country-wide scale is a huge undertaking, and getting it wrong would set the United Kingdom’s smart grid back by years.

Low prices for abundant natural gas, along with smoother regulations and volatile gasoline and diesel prices, are driving operators of fleets to increase their consideration of both compressed natural gas (CNG) and liquid natural gas (LNG) as a fuel.  Additionally, the impending launch of the Cummins Westport ISX12 G engine is generating real excitement in the natural gas truck market.  This 400 hp engine slots between Cummins Westport’s ISL 8.9L and Westport’s 15L engines.  The result is a vehicle market that is expected to grow at a rate of 14% this year in North America (compared to a global rate of about half a percent).

The two forms of natural gas vehicle fuels are both growing, but although CNG systems are more compact and cheaper to install on trucks, LNG systems give longer vehicle range.  The result, as The New York Times reports, is that the long distance trucking industry is increasingly looking toward LNG as an option to replace diesel.

But that’s only half the story.  The number of LNG stations is set to grow significantly in the next couple of years.  Navigant Research forecasts that about 200 new LNG stations will be open in the United States by 2015, with more in the works.  This expansion is critical to sustain sales growth in the vehicle market.  At the moment, in answering the chicken-and-egg question of whether vehicles or refueling stations have to come first, the answer is clearly that vehicles are ahead of the stations.

Rising Demand, Rising Prices

At the same time, there are new concerns about the price of natural gas.  The Henry Hub gulf coast spot price is $3.81/million BTUs, its highest point since September 2011, and well above the low of $1.95 seen last April.  Demand for natural gas is on the rise for electricity production as well as vehicles, but supply continues to outstrip demand.  At the moment, natural gas cannot be exported to countries without free trade agreements with the United States, but that may change.  President Obama’s new Department of Energy nominee, Ernest Moniz has stated that he supports LNG exports to non-free trade agreement countries, which could have a greater impact on demand.  Charles Ebinger of the Brookings Institute, however, testified that the price of electricity would not be significantly affected by wider LNG exports.

Does that mean the price of CNG and LNG as a vehicle fuel will also be relatively unaffected?  This question is challenging to answer, because prices for CNG and LNG will not going be influenced in the same ways.  In looking at CNG, Navigant Research estimates that about 17% of the gasoline gallon equivalent (GGE) price at the nozzle is related to the price of natural gas (about $0.35 to $0.40).  The remaining 83% of the price is determined by the cost to compress and cool the gas, profit margins, taxes, and so on.  So, even if the price of natural gas does eventually hit the $8/MBTUs that Forbes contributor Richard Finger expects, CNG will see a about a $1.40 GGE increase but will likely still be priced below gas and diesel.  According to America’s Natural Gas Alliance, the natural gas price component of LNG, on the other hand, consists of about 45% the diesel gallon equivalent (DGE), so an increase in the cost of natural gas has a bigger impact on the LNG price.

The result is the price of natural gas has to remain low in order to help grow the LNG truck market.  The incremental costs for an LNG truck can run between 60% and 80% more than a diesel truck.  The result is that the combination of government vehicle purchase incentives and the fuel incentive ($0.50 per GGE) become even more critical to keeping the payback on the LNG trucks attractive as the price of natural gas climbs.

After record 2012 temperatures, another sweltering summer looms in the southeastern United States.  And the region lags behind other parts of the United States in efficiency policies and gains.   Two recent reports that focus on energy efficiency efforts across the country offer different opinions as to why this is, but the causes may be more related than they first seem.

The first is an American Council for an Energy-Efficient Economy (ACEEE) study, Trusted Partners: Everyday Energy Efficiency Across the South, that focuses on four southern states: Georgia, Mississippi, Alabama, and Louisiana.  Researchers found that while consumers are interested in efficiency, they don’t necessarily want government-backed mandates pushing for efficiency.  The combination of strong resistance to government intervention and slow regional economic growth has led to a dearth of effective energy policies in these states.  While the researchers offer a number of recommendations, ultimately it’s about understanding the population and using trusted institutions to drive behavior change.  There are many hurdles to increasing energy efficiency in the South, but changing behaviors and attitudes is the first step toward reducing consumption.

The second study, by CO2 Scorecard, comes with slightly more divisive results.  The most eye-popping statistic from their research was that traditional Republican – or ”red” – states use 55% more energy per capita than “blue” (or Democratic) states.  Researchers for this study claim they examined all possible variables, and the results consistently showed a strong correlation between voting habits and energy use.

We All Benefit

Given the weight of each report’s results, it’s worth examining them further.  The four states in the ACEEE study are traditional red states; according to ACEEE’s 2012 State Energy Policy Scorecard, all scored poorly (Georgia was highest at 33^rd and Mississippi came in dead last).  ACEEE’s study also found that Southerners are interested in efficiency.  But since energy prices are lower in the South than in other parts of the United States, incentives to use less are weaker.  Southern states also lack capital to pay for energy efficiency measures – at both the state and consumer level.

So how do you convince money-strapped consumers, utilities, and governments – in states that traditionally view government activism with suspicion – to spend time and money building up efficiency infrastructure?  I tend to agree with ACEEE’s findings that public education is the key to reaching these states.  Rather than a dirty, government-mandated word, efficiency can be presented as a commonsense approach that benefits everyone in the community and leads to cost savings – which can compound into more savings when scaled up.  Starting slow and gaining the trust of the people will open doors in the energy-hungry Sunbelt.

China has now outpaced the United States as the world’s biggest emitter of greenhouse gases (GHG).  With a power sector that relies heavily on coal and continued aggressive construction of coal-fired power stations, the country currently accounts for almost 50% of global coal consumption.  According to the European Commission’s Joint Research Centre, China’s carbon emissions increased 9% in 2011 to 7.2 tons per person.   This figure is only slightly less than the European average of 7.5 tons – though significantly less than the average American at up to 17.3 tons per person.

Realizing the need to address the country’s serious GHG emissions problem – especially with record smog levels in Beijing – the Chinese government is taking a number of steps.  It plans to add 49 GW of renewable energy capacity this year and develop an energy plan with the goal of gradually transitioning from fossil fuels to cleaner energy sources, such as hydropower and intermittent resources like wind and solar power.  In 2012, about 15 GW of wind and 3 GW of solar energy capacity were added.

New Lows

Most noteworthy is the government’s effort to curb CO2 emissions by initiating a new carbon emissions trading pilot scheme.  It is set to launch seven such pilots in various cities and provinces this year that are expected to eliminate at least 700 million tons of annual emissions.  The first pilot will be kicked off on June 17 in Shenzhen (southern China) to initially include 635 companies that were responsible for 38% of the city’s total GHG emissions in 2010.  This pilot scheme will create the second-largest carbon trading scheme in the world, after the European Union Emissions Trading System (EU ETS).  Beijing and Shanghai may soon follow suit, though neither city has scheduled a launch date yet.

It remains to be seen if the Chinese carbon trading program will be as successful as the EU ETS scheme, which has indeed reduced carbon emissions since it was initiated in 2005.  But will China, like the EU, eventually face the challenge of a growing surplus of allowances?  Recently, the European Parliament proposed to delay the release of 900 million CO2 emission permits in order to stop over-flooding an already saturated market (mainly caused by the economic recession, which has depressed emissions more than anticipated) – a decision that was narrowly defeated soon thereafter in a parliamentary vote because of fear of raising costs for businesses in a sluggish economy.  Earlier this year, permits traded at below €3 ($3.90) a ton – compared to €7 ($9.10) a ton last year and €25 ($32.50) a ton in 2008.  Shortly after the vote, carbon allowances dropped to €1.70 ($2.20).  It is clear that carbon trading can be fraught with problems, and the Chinese market will undoubtedly face its own unique issues in the years ahead.  Still, China should be able to draw upon the EU’s experience and its hard-won lessons.