Next100 - A Dialogue on the Next Century of Energy

Jul 11 2008

Silicon Valley Energy Summit Cheers Energy Efficiency

The next time Stanford University hosts a Silicon Valley "energy summit," it may want to find a larger space than the Arrillaga Alumni Center - like the football stadium across the street. Some 400 people - corporate leaders, mayors, regulators, state energy commissioners, economists, engineers, professors, consultants, venture capitalists and newly-minted graduates looking for jobs - jammed the center today to get a sense of where "The New Energy Economy" may be headed. Put a bet on Energy Efficiency.

Professor Jim Sweeney, director of Stanford's Precourt Insitute for Energy Efficiency, set the tone at the outset this morning: "The next 20 years will be dominated by energy efficiency."

Morning keynoter CPUC Commissioner Dian Grueneich echoed the message, noting that the CPUC's strategic draft plan for energy efficiency will be issued on Monday. The plan lays out four initiatives to reach "zero net energy" goals for new construction of commercial buildings in California by 2030 and a similar result for new home construction by 2020. The plan also sets goals for heating, ventilation and air conditioning systems and measures to ensure low-income ratepayers get a piece of the energy efficiency pie. The next round of energy efficiency funding in California will run $3 billion in 2009-2011, she said.

The Efficiency ball kept on rolling through the morning. Bob Hines, vice president of the Silicon Valley Leadership Group, a summit sponsor, retraced the group's steps in partnership with PG&E to develop and complete energy efficiency projects with the likes of companies like IBM, Yahoo and Cisco.

A separate panel walked us through the technical ins and outs of commercial building retrofits for high-efficiency chillers, cooling towers, exhaust relief fans, and high-efficiency transformers and flywheels. My head was spinning. But it stopped when panelist Mukesh Khatter, energy director at Oracle, said something very clear: Through energy efficiency programs, his company saved enough electricity to light up 1,700 homes.

Energy efficiency also headed PG&E CEO Peter Darbee's priorities. Energy efficiency "is our single most important opportunity...the 'first fuel' and among our most cost-effective solutions," he told the conference. "Our plan is to meet half of PG&E's aggregate demand growth in the next 10 years through efficiency savings."

Incentives are essential to promote energy efficiencies, Darbee said. "If we get the incentives right, utility energy efficiency programs can be a big part of the solution for California and the country."

Darbee also called for utilities to revitalize basic infrastructure and equip the power grid with smart technologies and smart meters; reduce the carbon intensity of power generation with the expansion of renewable power supplies; and set up a workable, market-based framework for greenhouse gas regulation. PG&E supports a cap-and-trade approach.

Bad news: Expect higher utility rates due mainly to rising fuel costs, hot demand in China and India for construction materials, more expensive renewable supplies, and big capital needs to fund infrastructure, Darbee said. Good news: Utility rates in California over the long term have risen less than the total increase in the consumer price index. And expected rate hikes in the state will be substantially below 20-30 percent increases forecast in other states. PG&E rates have been helped by lower prices for nuclear and hydro generation, hedging long-term power contracts, and efforts to reduce business costs.

Posted by: Leonard Anderson | Comments (0) Permalink