An interesting piece in the Sunday Times today headlined “Grid to get switch to your fridge’ nearly caused me to choke on my coffee. It starts with the sentence, ‘Fridges, freezers and ovens could be automatically switched off in homes across the country as part of new plans to reduce energy consumption’ before going on to explain that proposals to the European parliament will ensure that appliances are fitted with remote switches that will enable them to be switched off remotely when ‘the UK’s generators struggle to meet demand for electricity’. David Davis, the Conservative MP apparently told the Mail on Sunday, ‘There is a Big Brother element to this and it shows the energy suppliers passing down their incompetence to the customers. They should be supplying energy as customers need it, not when they want to give it.’ So what is it all about and should we be worried?

Proposals to remotely control appliances to manage demand have been around for decades as part of so-called ‘smart grid’ initiatives. Managing demand to match supply is already practiced in industry and commerce through market mechanisms whereby consumers are paid to switch off load at times of peak demand – so called load management or demand response. Paying consumers to switch off load is cheaper overall for the system than increasing supply at times of peak demand and therefore benefits everyone. It also has an environmental benefit as units of power not used (‘saved’) don’t have any environmental impact whereas units generated by standby generators, or power stations on hot standby have a relatively high environmental impact. Through market mechanisms the benefits are shared between producer and consumer.

Fridges and freezers are thermal stores and can be switched off for short periods without any significant impact on the internal temperatures. In any future electricity market regime we need to see greater balance between the supply side (generation) and the demand side (energy efficiency and demand response) and ‘smart’ appliances that can be controlled remotely could play a significant role in this. At times of peak demand millions of fridges and freezers could be turned off for short periods (subject to internal temperature over-rides) without anyone noticing any effects or any food safety issues. The technology is relatively straight-forward, the rationale is clear – what is missing is an attractive business model that makes it stack up and attractive to consumers. The business model could be based on cheaper or even free appliances (subsidized by the demand response payments from the grid) or selling appliances with a cheque paid to the consumer every time demand response is triggered. Such business models would prove highly attractive and involve people in their energy system much more than at present.

The right business model requires the right regulations in place and this is why energy efficiency and demand side advocates are still working to ensure there are demand side mechanisms in the Electricity Market Reform (EMR). If the regulations are appropriate then new business models could appear.

So, is having a remote switch in your fridge or freezer really a sign of Big Brother on the horizon? Well it could be if there was no choice in when the switch was used or if the consumer does not share in the benefits but that seems highly unlikely. With the right regulation and the right business model it could prove to be a very popular business proposition.

There is still often confusion about what we really mean by energy efficiency. It is a phrase that comes with a lot of baggage and associations with doing less and sacrifice – the old idea of ‘energy conservation’. It even gets confused with renewable energy sometime which is strange given renewables are a means to generate energy and not a way to improve efficiency.

First of all ‘energy’ itself in the way that we use it today is a relatively modern and confusing term – we should really talk of fuel and electricity as they are very different and incompatible sources of services – you can’t put petrol in your laptop. Physicists and engineers also know that energy is always conserved in any process so the terms, ‘energy conservation’, ‘saving energy’ and even ‘consuming energy’ are technically incorrect.

The term ‘energy efficiency’ incorporates two concepts. The first is energy efficiency in its technical sense – useful energy out/energy in – which is usually reported as a percentage – and can only be applied to devices that convert one type of energy to another such as engines (chemical energy to motion), electric motors (electricity to motion) or light bulbs (electricity to light). The second concept is energy productivity, usually reported as energy in/useful output, which applies to passive devices such as buildings which convert energy into other services such as comfort. We are familiar with some everyday measurements of energy productivity, such as miles per gallon or litres per 100 kilometre for car fuel efficiency and others including energy input to a building per square metre to produce a certain temperature for a certain period of time; energy use per passenger mile for aircraft; or energy per one thousand tins of beans produced in a factory. So what we normally call ‘energy efficiency’ is really a combination of energy efficiency in its technical sense and energy productivity.

Just to add to the story, when we commonly talk about energy efficiency in a macro-sense we often mean a series of processes rather than a status at a single point in time. The energy efficiency of all technologies tends to improve over time because there is a basic human desire to spend less, invent new technologies and improve existing technologies. As well as the constant incremental technological (and behavioural) changes, there are the major paradigm-busting changes such as a compete change of an industrial process that work to improve energy efficiency over time.

So to sum up, the phrase ‘energy efficiency’ is a combination of technical energy efficiency and energy productivity, and it is also a process of continuous improvement.

On my recent travels through the American mid-west (my favourite and a much maligned part of the US) I was asked the question, “who is ahead in energy efficiency, the US or Europe?”. This is an interesting question I have thought about a lot over the last few years. The first part of my answer is that the grass always looks greener on the other side. On an earlier visit to the USA to attend the 2012 ACEEE financing forum I was intrigued by the general reaction to the UK situation which was characterised as, ‘you guys over there have it so good because of all the advanced policies you have’. I explained that what may look like great policy from afar doesn’t always look like that when you see it up close and have to work within it. As we know the UK energy efficiency policy has evolved a lot in the last 2 years but it is still far for ideal, with a multiplicity of policies and programmes and still much uncertainty, particularly about using the Electricity Market Reform to boost demand for demand side activities.

So back to the question. The next part of the answer is of course is that the USA is actually 50 countries with a common currency and generally a common language whereas Europe is 27 countries with no common language and 23 with a common currency. This makes if difficult to compare the US and Europe. Anyway, having caveated the answers with all of the above here is my take on the question.

In parts of the US (and an increasing number of places) the realisation that energy efficiency is a huge opportunity to create value has sunk in and as always when that happens in the US a lot of very talented people and a lot of investment flows into the opportunity. Secondly efficiency has been decoupled from the climate change issue which removes a lot of debate and allows believers or non-believers in climate change just to get on with it. Thirdly the link between efficiency and job creation is really starting to be taken seriously, more so than in Europe. Some US (and Canadian) cities are making great progress on long-term energy plans based on efficiency and linked to economic development. Energy efficiency financing is more advanced in the USA where the market is growing and transforming itself from a publicly funded activity (mainly stimulus and rebates) to a privately financed activity. In Europe my take is that most often ‘energy efficiency financing’ implies public funding of some kind.

There is probably more potentially transforming technologies coming out of the US than Europe, and that is everything from systems that seriously reduce the cost of re-lamping with LEDs to totally radically data centre cooling technologies. That just reflects the huge scale of R&D in the US and the interest of the Venture Capital industry. The UK and Europe is better at energy management, particularly around Monitoring & Targeting (M&T) and motivation programmes. On the subject of policy the answer depends entirely on what you are comparing. There is little doubt that advanced US states like Massachusetts are way ahead in areas such as decoupling electricity revenues for volumes. They now appear to have decoupled electricity demand growth from economic growth. Europe (although not the UK) is ahead on integrated utilities selling power and heat generated in efficiency CHP and Dh stations.

So at the end of the day, it depends which jurisdictions you are comparing, what you are comparing and where you are looking from. There are examples of bets practice in both the USA and Europe. I can’t help feeling though that ‘Yankee ingenuity’ and the pursuit of value will in time produce better rates of improvement (from different bases) in the USA than in Europe.

When I was doing my PhD I met Brenda Boardman who was doing her PhD investigating the then little known or understood problem of fuel poverty. Brenda and I were both funded by the joint committee of what was then the Science and Engineering Research Council and the Economic and Social Research Council (I think those were the proper names) – anyway – it was radical stuff for the early 1980s having inter-disciplinary people combining technical subjects with economic and social subjects.

Since then, in a large part down to Brenda and her excellent work, fuel poverty has become an industry and I mean that in a positive way. Of course it should have been an industry that worked itself out of a job by solving the problem. In 2000 the government set a legal target of eliminating fuel poverty among vulnerable consumers by 2010 and all households in England by 2016 (2018 for Wales).

So how are we doing? The numbers in fuel poverty are going up – an estimated 6 million people now spend more than 10% of their income on energy and some estimate it could be 9 million within 3 years. That is shocking. It is a crisis with huge costs to individual health as well as to the health service.

Even more shocking – ‘On average, at least 7,800 people die every year from living in cold homes – more than four times the number of people who die on British roads.’

The solution is clear. Use the money from the carbon tax it collects to super insulate homes in fuel poverty. The Energy Bill Revolution has got it right. Sign the petition and tell the government to ‘just do it’.

http://www.energybillrevolution.org/whats-the-campaign/

The ‘Aspen Daily News’ reported yesterday that the city’s energy efficiency programme is ‘working too well’. To be fair the comment was journalistic and the Mayor of Aspen actually said the issue is ‘a good problem to have’. Aspen’s electricity demand has been declining by 1.3 per cent annually since 2008 even while the number of electricity accounts has gone up by about 2 per cent a year. Two years ago the city had estimated that electricity consumption would fall by 1 per cent a year. Although the article doesn’t give data on the state of the Aspen economy over the period a quick internet search suggests that the upmarket ski resort is doing well – employment has risen 7.38 per cent in the last year (compared to a US average of 0.35 percent) and tourism continues to thrive with a 10 per cent increase in lodging occupancy in the year from July 2011.

The impact on electricity demand seems to have been achieved by a combination of a tariff structure in which large users pay higher rates – sometimes as much as four times more than the base rates – and energy efficiency programmes including weather proofing, energy audits and the installation of upgraded equipment. The effect on the city’s utility was that electricity revenues were 5 per cent ($370,000) down on budget – a ‘significant shortfall’ – and as a result rates will have to be increased.

The interesting thing about this story is that Aspen’s experience shows that it is possible to decouple electricity usage and growth in the economy – something that is still considered impossible by many energy analysts. Other cities (and countries) should look closely at the Aspen example.