New $5M prize gives towns and cities more incentives to promote energy efficiency

Georgetown University will open a new contest tomorrow, dangling a $5 million prize for cities across America to improve their efficiency. Open to almost 9,000 communities with populations between 5,000 and 250,000 residents, the program will track entrants over a two-year period and grant the award in 2017.

The winner will be the community that reduces its electricity and natural gas consumption the most, controlling for regional variations and scale. However, the goal isn't just to put up the best numbers; the community that takes home the prize will have to curb energy use in a way that others can follow.

"The ultimate measure of success is a significant and replicable approach for managing energy efficiency in communities," said Francis Slakey, a physics professor at Georgetown and the executive director of the contest.

The Georgetown University Energy Prize is the latest program to prod people to cut their energy use, joining a cornucopia of incentives for making improvements, including efficiency loan guarantees, low-cost financing, weatherization grants, regulations and time in the national spotlight.

Alongside renewable energy and low-carbon fuels, energy efficiency is an important tactic for curbing greenhouse gas emissions. With a growing population, efficiency is the best bet for pushing back against expanding energy needs. A report last year found that energy efficiency could offset most demand increases in the United States (ClimateWire, Jan. 18, 2013).

'A little friendly competition'

"People know it's in their best interest, but they aren't doing it," said Slakey. "If you just introduce a little friendly competition, that's enough to stir up passion and get people involved."

Competitors in the contest will have access to expertise from the Department of Energy and regional strategy workshops to motivate homeowners and businesses to cut power, gas and water use. More than 50 cities have already declared their intent to compete for the prize, which is sponsored by industry groups and nonprofits.


Kathryn Clay, executive director on the American Gas Foundation, one of the prize sponsors, noted that the benefits of energy efficiency spread beyond the ratepayer. Even some utilities whose business involves delivering energy benefit when customers use less.

"The profitability of a natural gas utility is unconnected to the volume of natural gas they sell," Clay said. "You're paying for the service and the certainty."

Besides contests like this, both the public and private sectors are coming up with new ways to get smart thermostats, double-pane windows, occupancy sensors and better insulation into homes and offices.

Earlier this month, a public-private consortium unveiled a new instrument to proffer cheap loans for efficiency projects, getting investors to bet on energy efficiency to ramp up financing availability nationwide (ClimateWire, April 14).

DOE is also pushing and pulling for energy efficiency. In February, the agency proposed new rules for commercial clothes washers that could cut carbon dioxide emissions by 6 million metric tons over 30 years while saving consumers $940 million. Revisions to rules for electric motors, commercial refrigeration and furnace fans will likely emerge later this year.

Last week, DOE also recognized 12 winners in its Lighting Energy Efficiency in Parking Campaign. The program offered technical assistance to facility managers in selecting and installing energy-efficient lighting. Annually, the winners will save 45 million kilowatt-hours and $4 million.

The project helped the department understand what was keeping people from making upgrades that would save them money. "What we discerned was this group could benefit from procurement specifications," said Kathleen Hogan, deputy assistant secretary for energy efficiency at DOE.

Another issue was timing. "You're trying to catch a time when somebody is ready to do a significant upgrade across a whole facility, as opposed to replacing a bulb," she added.

At the other end of the pipeline, DOE announced a new batch of loan guarantees, including more efficient buildings and retrofits as high-priority targets for the $4 billion worth of support (Greenwire, April 16).

"Energy efficiency is turning out to be another exciting high-tech area that does need scale-up cash," said Mark Muro, senior fellow and policy director for the Metropolitan Policy Program at the Brookings Institution.

Though many of the individual components of an energy efficiency strategy are relatively cheap, like fixtures and sensors, fitting them together to yield the biggest cuts in energy use is a complicated endeavor, requiring extensive research, development and validation, according to Muro.

Getting Fairbanks beyond the easy steps

Loan guarantees demonstrate how major efficiency projects play out in the real world. "Then the hope is that private developers would take that technology and invest the equity money," said Peter Davidson, executive director of the loan programs office at DOE.

These incentives also sweeten the deal for state and city officials that want to cut energy use but don't have billions of dollars at their disposal. "[Local] governments are nervous about getting into this market. They don't have experience with it," said James Barrett, chief economist at the American Council for an Energy-Efficient Economy, another sponsor of the energy prize. "The risks are low, but local governments need loan guarantees for reassurance."

Even though pursuing efficiency has many environmental and economic benefits, incentives like loan guarantees, prizes, public accolades and cheap financing remain essential.

"Both businesses and individuals are paying utility bills that are small compared to other expenses in their lives," said Merrian Borgeson, a researcher at Lawrence Berkeley National Laboratory. "It's not always enough to get them excited about it."

On the other hand, a city like Fairbanks, Alaska, with some of the highest energy costs in the nation, has exhausted all of its cheap fixes, warily eyeing interventions that are more robust. "The low-hanging fruit's been plucked, so to speak," said Nadine Winters, a former elected official from Fairbanks who is now campaigning to give her city a shot at the $5 million prize.

Alaska has its own weatherization and efficiency incentives, but the people who were interested have already taken advantage of these programs. City officials in Fairbanks are now grappling with the complicated task of changing human behavior, coaxing people to switch off unused lights and turn down the heat.

Among their tactics are local energy reduction contests led by schools, as well as public awareness campaigns. Winters hopes the national competition for the Georgetown University Energy Prize will spur people in Fairbanks to take action on energy efficiency.

"I think we are, at the end of the day, going to be like any other community, figuring out what motivates people and incentivizes them," she said. "I think what we're looking at is not reinventing the wheel but maybe realigning it."

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