Posts Tagged ‘McKinsey’

Nuclear Power and Energy Efficiency

July 22, 2011

Ever since I got the ping from Aaron Goldfelder that this article was up, I’ve been meaning to share the link and add a few thoughts.  I think the folks at EnergySavvy, in their piece on nuclear power and energy efficiency, have done an excellent job laying out some of the advantages of putting energy-efficiency at the core of a sound energy policy.  The applies not just as the national and regional level, but all the way down to our individual homes, where part of the GreenHomes mantra is “reduce before you produce”.

For half the cost of replacing one nuclear power plant, we can retrofit 1,600,000 homes for energy efficiency and create 220,000 new jobs–that’s more than 90 times more jobs than you’d get from a power plant replacement.  –

The following graphic that the Savvy folks put together illustrates a couple of great points.  For an equivalent base load impact, energy-efficiency is cheaper AND it has a bigger economic impact in the form of job creation–jobs that mean more more dollars for families to spend on pizza, college, or a day at the lake, or generally just more money flowing around our communities.

This mirrors the findings of the much-heralded McKinsey report which pointed out that, go figure, reducing energy use actually saves money!  It saves money in the aggregate–and it saves money in your home.

My point is not an anti-nuclear one.  We do, though, need to look at energy policy overall.  Unless we descend into silliness, this shouldn’t be a partisan issue.  Left and right can agree because energy-efficiency–along with the benefits of greater energy independence, national security, and economic security–makes sense.  And thus efficiency should be the cornerstone of any good energy policy.


Speaking of natural gas, the “fracking” debate heats up. Where is efficiency in the conversation?

September 14, 2010

As reported in the Christian Science Monitor, the debate over hydraulic fracturing or “fracking”, is a hot one, coming to a head at EPA hearings in New York.  The article is worth a read, and points again to a broarder issue.  There is no free lunch when it comes to energy.  And generating electricity or heating our homes come at a real cost.  Some we pay directly on our utility bills.  Others we pay indirectly, on on tax bill, with government subsidies, tax breaks and such, and with increased costs in other arenas such as reduced water quality and other environmental damage that we wind up footing the bill for later.

And yet our energy policy and our energy practices pay way too little attention to energy efficiency.  The McKinsey report indicated that investing in efficiency could SAVE the country half a trillion dollars.  Amory Lovins and the Rocky Mountain Institute have been banging the drum for years (and saving some of their corporate clients millions in energy costs).  Linc Services is saving Massanutten Academy almost $7 million.  And we know our customers have been saving a lot in homes.  But it’s time a lot more people got on board with the common sense approach of energy efficiency first.  As we make reduce our energy needs, solving the energy problem gets a lot easier.


Efficiency First–A Vermont View

October 11, 2009

There was an interesting piece in today’s Burlington Free Press about the value of energy-efficiency and the good economics of starting with efficiency rather than with renewables.  This is the same mantra we’ve been repeating at GreenHomes, the conclusion reached in this year’s McKinsey Group report, and that a group of contractors and other members of Efficiency First was repeating to House and Senate members last week in Washington, DC.  [While you’re hitting the Free Press, check out a Q&A with Bill McKibben.]

Quoting the article:

Here are three options to substantially reduce heating cost and energy use, assuming current fuel prices:

 • Solar electric panel at a total cost of $185,000 with a homeowner cost of $74,000 and a taxpayer cost of $111,000. This amounts to $2,700 in savings a year.

• Geothermal heat pump at a total cost of $80,000 with a homeowner cost of $56,000 and a taxpayer cost of $24,000. This amounts to $1,670 in savings a year.

• 80 percent reduction in energy use through efficiency at a total cost of $55,000 with homeowner cost of $53,000 with taxpayer cost of $2,000. This amounts to $2,200 in savings a year.

Hmmm…that third option sounds better for the homeowner, the taxpayer, and the utility.
And speaking of Vermont, Vermont Congressman Peter Welch spoke to that above-mentioned group of contractors Wednesday night at Union Station in DC.  Congressman Welch has taken a strong leadership position on energy policy.   He was quoted from earlier remarks several times through the week.  “We should have the policy of efficiency first.”  Yes we should!


McKinsey EE Report on Comfort and IAQ

August 3, 2009

Whew—tons of good stuff in here.  I do talk a lot about energy, but it’s not just energy.  In fact, many of our customers are more interested in comfort and health and safety.

Thus it’s reassuring to see this mentioned on page 13 of the report

Impact on comfort and health.  Energy efficiency upgrades, including proper insulation and sealing against air infiltration [emphasis added], can address a number of common residential problems, such as drafty rooms, cold floors in the winter, damp basements, dry air, musty odors, and mold.  Because people spend up to 90 percent of their time indoors, many of these issues can lead to health risks, contributing to chronic allergies and asthma, as well as periodic illness.  Sick building syndrome (SBS), which is associated with poor indoor air quality, can manifest itself in building occupants as irritation of the eyes, nose, throat, or skin, as well as other ailments.  Flaws in HVAC systems, emissions from some types of building materials, volatile organic compounds used indoors, and inadequate exhaust systems may be contributing factors.  Severe problems with heating or cooling systems, for example, can result in dangerous concentrations of carbon monoxide or radon gas.  Air and duct sealing and periodic maintenance of HVAC equipment can mitigate a number of these risks.  While quantifying the impact of higher air quality on health is difficult, research suggests that the benefits are significant.  Improved indoor air quality can reduce symptoms of SBS by 20 to 50 percent, asthma by 8 to 25 percent, and other respiratory illnesses by 26 to 76 percent.

Right on!


More on the McKinsey EE Report

August 3, 2009

Reading the McKinsey energy efficiency report again over the weekend I noted that one of the solution strategies cited (p.39 of the report) Home Performance with ENERGY STAR, the Building Performance Institutie (BPI) ,and the promotion of home performance solutions such as those of the heart of the GreenHomes approach.

 They call out the need for proper sizing of HVAC equipment and duct sealing—things you’ve seen mentioned here.

 The report mentions a lot of barriers.  Including education, contractor capacity, and financing.  But we address all of these on a daily basis.   So I’m encouraged because we see it working for our customers every day—and it means it really is possible on a broader scale.


McKinsey Energy-Efficiency Savings Estimates $530-630 BILLION

July 30, 2009

The new McKinsey report is getting a lot of traction in the media right now—and I’ve see different versions of savings and costs cited (see the NY Times, Forbes, and the WSJ blog, for example) .  Here’s what I read:

  • $1.2 trillion in savings (net present value)
  • $520 billion in upfront investment (NPV)
  • $50-150 billion in program costs (NPV)
  • Net savings (also NPV), therefore, of $530 billion to $630 billion

That’s a deal!

And this would deliver  the U.S. 23% energy savings by 2020.   And the price to achieve this savings, sliced another way, is 68 percent below the forecasted price of energy in 2020.  Or as the report states, “Put another way, even the most expensive opportunities selected in this study are attractive over the lifetime of the measure and represent the least expensive way to provide for future energy requirements [emphasis added].”

In any event, I’m glad people are reading this and paying attention to it.  The main conclusion I cited yesterday sums it in energy-wonk-speak.   And more to the point, why not increase energy security, decrease energy independence, and since the energy-efficiency gains are largely derived from investments at the local level, boost the economy?


McKinsey: Homes a Big Piece of the Puzzle.

July 29, 2009

The McKinsey report I just mentioned says that more than a third of our energy-savings potential is in our housing stock.

New McKinsey Report: Energy-Efficiency Pays

July 29, 2009

McKinsey Report CoverMcKinsey&Company just released a report on Energy Efficiency in the U.S. Economy .  The main conclusion of their work is the following:

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 persistant 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 with 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.

This is hardly a surprise—energy efficiency makes sense!  The financial value of energy savings more than offsets its cost.  But there’s more…

I’m glad they’ve also documented what we’ve known for some time, namely that energy savings is only part of the equation. 

For example, in the residential sector, energy efficiency upgrades can help reduce exposure to volatility in energy prices, reduce basement water damage, decrease food spoilage, and extend clothing life.

They go on to talk about the positive impacts on comfort and health, productivity, and standards of living.  We already know this to be true—it’s what our clients tell us every day!

The report (a 6MB PDF download) is not light reading—but it’s full of great information.  And it supports the contention that GreenHomes’ home performance approach is barking up the right tree.


It Starts at Home: National Geographic article

March 9, 2009

This month’s National Geographic has a nice article about the big picture of saving energy at home.   My favorite part of this article is a great depiction of the McKinsey cost curve showing that energy-efficiency in buildings makes a lot of sense—it’s something we should be aggressively pursuing regardless of climate change or energy security. We should be doing it because it saves us money! As the WSJ article that I mentioned in my last post says, efficiency is the right place to start. 


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