Sens. Jeff Merkley (Ore.) and Bernie Sanders (Vt.) have introduced a fantastic bill that deserves to be part of the climate/energy package the Senate votes on later this year.

The Thermal Energy Efficiency Act (S.1621) "would dedicate 2% of revenues from climate change legislation to fund combined heat and power, waste energy recovery, and district energy projects. Based on various estimates, this could mean roughly between $1 billion and $1.5 billion per year for clean energy infrastructure."

Sean Casten has written a great deal on the site about the enormous benefits of waste heat capture. You can also read great articles about it by Bill McKibben in Orion and Joshua Zumbrun in Forbes. But Sanders' press release sums up pretty well why this is a huge deal:

Thermal energy and combined heat and power (CHP) offer a huge opportunity for efficiency and emissions reduction using today’s technology. CHP can be used with a variety of fuel sources, including coal, natural gas, geothermal, biomass, oil, and waste.

According to the Department of Energy, moving from having 9% of our electric power as CHP today to 20% by 2030 would:

• avoid 60% of our projected increase in carbon dioxide emissions (equivalent to taking half of all passenger vehicles in the U.S. today off the road),
• create more than 1 million new jobs, and
• leverage new investments of $234 billion.

In order to achieve this, however, we need to increase long-term funding support for these systems. DOE has a stimulus-related funding application for $156 million for CHP, waste energy, and district energy. They have received 359 applications for projects valued at $9.2 billion. This represents a 25 to 1 ratio in terms of funding need to federal funding available. Based on the federal match, this shows that additional federal funding could leverage billions in state, local, and private sector dollars if more federal funding was available.

In their latest study, McKinsey & Co. says:

NPV[Net Present Value]-positive deployment of combined heat and power systems could increase from 85 GW in 2008 to 135 GW in 2020, representing a substantial opportunity to increase efficiency in primary energy and drive 1,390 trillion BTUs of primary-energy savings, reduce facility-level energy costs by $77 billion, and abate greenhouse gas emissions by 100 megatons of CO2e.

So a) this is an enormous opportunity to cost-effectively reduce climate pollution, and b) there's enormous, pent-up demand for coordinated resources and assistance.

Sounds like a good thing for a climate/energy bill to focus on!

I can't help noting that discussing waste heat capture is a frustrating undertaking. For one thing, it doesn't have a single name -- recycled energy; combined heat and power; cogeneration. For another, the opportunities are dispersed and diverse. It's difficult to figure out a 30-second elevator pitch for it. And finally, it's fairly boring and technical (thus the cat video). The barriers aren't technological. There won't be any whizbang breakthroughs in Popular Science. What's needed are regulatory changes, financing, and patient, persistent education.

It's not a sexy issue, but it's important. Kudos to Sanders and Merkley for taking it on.

Related Links:

Making buildings more efficient: rationalizing retrofit markets

Inhofe to Boxer: “We Won, You Lost, Now Get a Life!”

Making buildings more efficient: looking beyond price

More than perhaps any other company, McKinsey has documented how an aggressive energy efficiency strategy sharply lowers the cost of climate action (see "McKinsey 2008 Research in Review: Stabilizing at 450 ppm has a net cost near zero").

Today they released their most comprehensive analysis to date of this country's energy efficiency opportunity, "Unlocking energy efficiency in the U.S. economy." Bottom line: If this country get serious about energy efficiency - for instance, by passing a climate and clean energy bill like Waxman-Markey - then we can sharply reduce existing emissions at a large net savings to the public and U.S. businesses. McKinsey has a new cost-curve just of efficiency measures (click to enlarge):

The width of each column on the chart represents the amount of efficiency potential (in trillion BTUs) found in that group of measures.... The height of each bar corresponds to the average annualized cost (in dollars per million BTU of potential).

For those expecting to seeing efficiency below the line (i.e. negative cost), McKinsey has added a dashed line that represents the average cost of a new power plant. McKinsey said at the press conference today that all the measures above have a positive net present value.

McKinsey explains that these measures, if fully enacted over the next decade, would save a remarkable 1.2 billion tons of CO2 equivalent, which is 17% of U.S. CO2e emissions in 2005. In other words, the entire 2020 target in the Waxman-Markey climate bill could be met with energy efficiency at a net savings to U.S. consumers and businesses of $700 billion.

And what is even more stunning about this analysis is that it didn't even look at the transportation sector, where we know huge savings opportunities are possible (see "U.S. can cut half its transportation emissions by 2050").

McKinsey explains "The central conclusion of our work":

Energy efficiency offers a vast, low-cost energy resource for the U.S. economy - but only if the nation can craft a comprehensive and innovative approach to unlock it. Significant and persistent barriers will need to be addressed at multiple levels to stimulate demand for energy efficiency and manage its delivery across more than 100 million buildings and literally billions of devices. If executed at scale, a holistic approach would yield gross energy savings worth more than $1.2 trillion, well above the $520 billion needed through 2020 for upfront investment in efficiency measures (not including program costs). Such a program is estimated to reduce end-use energy consumption in 2020 by 9.1 quadrillion BTUs, roughly 23 percent of projected demand, potentially abating up to 1.1 gigatons of greenhouse gases annually.

The United States is only beginning to tap the efficiency opportunity. McKinsey has a separate, much shorter report released this month on the stimulus, "Energy: Investing in efficiency," which finds, "nearly $100 billion in new spending on energy-related projects will have a huge impact."

Whereas McKinsey thinks we could save 9.1 quads after a decade of serious investment, an analysis by the American Council for an Energy-Efficient Economy (ACEEE) says the Waxman-Markey bill will "only" achieve that some time in the mid-2020s (see "The triumph of energy efficiency: Waxman-Markey could save $3,900 per household and create 650,000 jobs by 2030").

The new McKinsey report has an excellent discussion of the barriers to efficiency and how to address them, which they summarize in this figure:

The good news is that the climate and clean energy bill - together with the stimulus and Obama's budgets - would address many of those barriers with strong building and appliance efficiency standards, a large increase in R&D for efficiency technologies, major investments in energy efficiency by states and utilities, and, of course, a price on carbon. I would add that the key to breaking down the remaining barriers is to two terms of an Obama administration led by efficiency advocates like energy secretary Steven Chu and Federal Energy Regulatory Commission chair, Jon Wellinghoff - see FERC chair on new nuclear and coal plants: "We may not need any, ever."

I am especially pleased that the report analyzed combined heat and power since it is a core, but neglected climate solution. I will discuss what they say about CHP - and what needs to be done to break down the barriers to more CHP - in a later post.

Kudos to McKinsey for another first-rate piece of work.

Related Links:

Treat energy efficiency like a utility

Rural Electric Cooperatives: Efficiency measures more important

Confusion in the Senate regarding allowance allocation

There's a monster in our basement. It eats fistfuls of dollar bills, guzzles No. 2 heating oil, and belches filthy clouds of soot and CO2. We have to kill it before it kills us. Only problem is, we and our tenants are dependent on it -- this being New England, we need something down there to keep us from freezing our butts off when winter rolls around again.

Nothing to fear but furnace itself.Ever since my partner Edith and I bought our 100-year-old Boston triple-decker two years ago, we've been plotting the demise of its beastly old, big-as-a-refrigerator, criminally inefficient, oil-fired boiler. Now we've found an unexpected solution, and it's taking shape right under the gluttonous old fiend's outstretched cast iron pipes. We're replacing our monster with a state-of-the-art, super-efficient micro-combined heat and power system.

Huh?

Combined heat and power -- or cogeneration, as it's also known -- captures the waste heat from generating electricity to heat a building. Thomas Edison himself thought it up in the late 1800s, but only now, in the face of 21st century energy challenges, is it starting to catch on for small-scale use. Ours is one of the first 80 or so residential MCHP units to be installed in the entire country. And it should cut both our total annual energy cost and our carbon footprint by roughly half.

Looking for Heat in All the Wrong Places

We knew when we started househunting that we'd almost certainly have to invest in a significant energy upgrade. Homes in the U.S. use roughly 20 percent of the country's energy and produce roughly the same share of carbon emissions; and a huge amount of that -- as much as 60 percent by some estimations -- is wasted. Older homes tend to be especially inefficient, and the one we ended up buying was no exception.

The old beast in the basement.Peter Thomson

In many ways, our modest urban three-family is a paragon of efficient resource use, built to accommodate a lot of people comfortably on a very small patch of land. But energy-wise, the house and its heating system remain relics of a distant era. By the time we first crossed its threshold, heating oil was heading toward $4 a gallon and atmospheric CO2 toward 400 parts per million. We knew the consequences were potentially catastrophic, for us and the planet.

But we also knew we'd have to be patient -- we were putting down a mountain of cash on the house, and it would be a while before we could make another big investment.

And despite its faults, our boiler was a little like my dad: still lumbering along in relatively fine shape even after eight decades or so. The thing may not have been designed for efficiency, but it sure was built to last.

So we started with the low-hanging energy-saving fruit: we caulked cracks, installed low-flow water fixtures, swapped our incandescents for CFLs, and added insulation (incredibly, after 100 New England winters, our house was still wearing the equivalent of a spring jacket).

These improvements helped curb the monster's appetite, but the beast was still not broken. So we started researching alternatives.

We began with grand visions of the big three renewables: solar, wind, and geothermal.

Alas, while our research revealed exciting advances in those areas, none were yet a good fit for our property or budget, so we resigned ourselves to making a more conventional swap -- from our ancient, no-better-than-65-percent-efficient oil guzzler to a decorous modern, 95 percent natural gas sipper.

That swap alone would bring a huge savings, in money, energy, and carbon. Gas is cheaper and has more energy per unit of mass, and burning it produces nearly 30 percent less CO2. And switching from a heating and hot water system that wastes at least 35 percent of its energy would mean a huge boost in efficiency.

But we also knew that the electric grid we draw our power from is an even bigger hog per unit of energy than our ancient boiler. We were eager to tamp down its appetite as well, if only by a tiny fraction, and willing to invest a bit more up front to make that happen. And just as we thought we were out of options, a new one came into view.

As a journalist covering the environment and energy, I'd first caught sight of micro-cogeneration maybe fifteen years ago -- a blip on the far edge of the radar screen. "Someday soon," everyone had said, and there it sat, like nuclear fusion or cellulosic ethanol, a promising energy breakthrough, always just out of reach. But now, here were the EPA and the Sierra Club and even Popular Mechanics suddenly extolling the benefits of micro-CHP, and there was an actual brochure, for an actual product, from an actual company -- which, it turned out, was just a few towns away. We picked up the phone.

Watts, Happening Now

The company was called Climate Energy, a joint venture between a little local engineering firm and the big national heating equipment manufacturer ECR International. After seven years of R&D, they'd just brought their first product to market: the Freewatt system, which pairs a 95 percent efficiency gas heating unit with a small, 1.2 kilowatt, gas-fired Honda generator.

Honda's generator: a model for the future?HondaHere's how it works, in a nutshell: When a home needs heat or hot water, the first part of the system to fire is not the furnace but the generator. It burns gas to produce electricity, and also produces an unavoidable byproduct, waste heat. But instead of venting that heat, the MCHP unit uses heat exchangers to capture some of it and pump it into the heating system. Then, if the demand for heat exceeds what the generator can provide, the furnace itself kicks in. The electricity, meanwhile, is either used in the house or fed back onto the grid. Together, the system produces heat, hot water, and electricity at more than 90 percent efficiency. That's 10 percent better than even the highest-efficiency boiler paired with a comparable amount of electricity from the grid, and more than 50 percent better than our current system.

This first Freewatt system was built around a hot-air furnace, which is what heats most houses in the U.S., but -- damn! -- not ours. But the company promised to have a forced hot water system available soon. If we were willing to take the leap of faith that goes along with being early adopters, we could soon be among the first in the country to embrace this long-promised technology.

We loved the idea. We were also terrified. This would be a very expensive experiment.

We set out to do a direct comparison of the ten-year costs of each system. The upfront expense was easy; including some major replumbing that we'd have to do for either system, a conventional high-efficiency gas system would cost us roughly $20,000, while the MCHP would cost us about $23,500, about 15 percent more.

Click image to enlarge.

Running the longer-term numbers, though, was another story. It turns out that the array of variables involved in comparing the cost and efficiency of heating and hot water systems is mind-boggling. Roll in the added complexity of switching fuels, generating some of our own electricity, and trying to calculate carbon emissions, and it was almost enough to send us running to the basement to give our dependable, uncomplicated old monster a bottle of Geritol and a winter-long hug.

After weeks of research and calculations, we finally arrived at a rough bottom line: either system would likely save us at least $3,000 a year in fuel while improving our overall efficiency by more than 30 percent, and cutting our carbon emissions by more than 40 percent, or almost nine tons. But the Freewatt would reduce our emissions by roughly another two tons a year. It would also save us at least $500 a year on electricity, which meant we could pay off the difference between the two systems in about seven years.

We took a deep breath, crossed our fingers, and took the leap.

Leap, and the CHP Will Appear

And now, there it is, a sleek array of white boxes, tubes, pumps, valves and pipes, settling in next to our fuming, red-faced monster and climbing the granite walls of our foundation. Soon, the Freewatt system will be hooked into the plumbing, and our house will have made a 100-year leap into the future. Our friends and neighbors are already lining up to come over and see it.

The shiny new system, installed (see a labeled version of this photo here).Peter ThomsonWe still don't know exactly how this leap will pay off, given all the variables, including things completely out of our control, like how cold next winter is, and how well our tenants manage their heat. We don't know how well the technology itself will work, or even how the new company that designed it will fare. We're going out on a limb here, and there's a small chance it could fall out from under us.

But we know that if the U.S. is going to make the huge changes required on energy consumption and carbon emissions, some people are going to have to go out on limbs, try new technologies and start to seed the market. Without early adopters there'll be no massive transformation.

We're willing to take the risk. And we're fairly certain our gamble will mean we'll even save money in the long run. We're slaying our own little monster, and hopefully helping give birth to something that will help us all slay a much bigger one.

Related Links:

Ask Umbra on ditching dirty things

Ask Umbra’s video advice on composting

Fair, Ambitious & Binding: Essentials for a Successful Climate Deal

Related Links:

What Do Coal and Dirty Dorm Rooms Have in Common?

Making buildings more efficient: rationalizing retrofit markets

Obama administration may (finally) offer greenhouse-gas targets

Related Links:

Ask Umbra on ditching dirty things

Climate Hope: Inspiring 2009 Books for Clean Energy

What Do Coal and Dirty Dorm Rooms Have in Common?

Related Links:

On “climategate”

What Do Coal and Dirty Dorm Rooms Have in Common?

Making buildings more efficient: rationalizing retrofit markets

Related Links:

Ask Umbra on ditching dirty things

Climate Hope: Inspiring 2009 Books for Clean Energy

What Do Coal and Dirty Dorm Rooms Have in Common?

Related Links:

Making buildings more efficient: rationalizing retrofit markets

Making buildings more efficient: looking beyond price

Merkley wants Senate jobs bill to help finance building efficiency retrofits

Related Links:

Ask Umbra on ditching dirty things

Climate Hope: Inspiring 2009 Books for Clean Energy

What Do Coal and Dirty Dorm Rooms Have in Common?

Related Links:

SolarCity makes electric cars an even smarter investment

Lamar Alexander loves the earth too much to support solar and wind

Caveman congressman attacks—watch out, solar family

Related Links:

Making buildings more efficient: rationalizing retrofit markets

Making buildings more efficient: looking beyond price

Merkley wants Senate jobs bill to help finance building efficiency retrofits

Related Links:

Making buildings more efficient: rationalizing retrofit markets

Making buildings more efficient: looking beyond price

Merkley wants Senate jobs bill to help finance building efficiency retrofits

Related Links:

Energy Trust and the Big Hope

Weatherizing Portland

National Day of Action Against Coal

Related Links:

‘Copenhagen Diagnosis’ offers a grim update to the IPCC’s climate science

Making buildings more efficient: rationalizing retrofit markets

Making buildings more efficient: looking beyond price

Related Links:

Making buildings more efficient: rationalizing retrofit markets

Is there a tradeoff between economics and the environment?

Making buildings more efficient: looking beyond price

Related Links:

Making buildings more efficient: rationalizing retrofit markets

Making buildings more efficient: looking beyond price

Merkley wants Senate jobs bill to help finance building efficiency retrofits

Related Links:

Making buildings more efficient: rationalizing retrofit markets

Is there a tradeoff between economics and the environment?

Making buildings more efficient: looking beyond price

Related Links:

Is there a tradeoff between economics and the environment?

‘Heretic’ battles straw man

Two senators push to ramp up nuclear energy

Related Links:

‘Copenhagen Diagnosis’ offers a grim update to the IPCC’s climate science

Make the kids pay: The economic effects of climate change on future generations

Corn-based meat and ethanol: burning the planet to a crisp

FutureGen, the U.S. Department of Energy's massive "clean coal" demonstration plant, will be sited in Mattoon, Ill., officials announced this morning. Three other potential locations for the plant each lobbied heavily for the roughly $1.8 billion project to be built on their turf -- one other site in Illinois and two others in Texas. The FutureGen project, which also aims to eventually produce some hydrogen from coal, is generally regarded by greens as an expensive bad idea that diverts funds from efficiency improvements and genuinely clean, renewable forms of energy. But the project, a government/industry partnership, has been exciting coal folk who are thrilled at the (distant) possibility of viable "clean coal" and carbon sequestration technology, if indeed there are such things. The project aims to be online by 2012.

Related Links:

Ask Umbra on ditching dirty things

Climate Hope: Inspiring 2009 Books for Clean Energy

What Do Coal and Dirty Dorm Rooms Have in Common?