Sunday, February 14, 2010

Renewable Energy Target A Negawatts Market

Wind turbines (Vendsyssel, Denmark, 2004)Image via Wikipedia

The failure of Copenhagen along with the sheer complexity of ETS (one which is going probably do more for financial institutions than the real economy) requires stepping back to re-consider how to achieve the aims of reducing CO2 emissions. In the post "The Fallacy of the Carbon Market" I made the point that market-based reduction methods don't have to be carbon based.

Here I want to look at using a negawatt based market to reduce energy demand. Markets consist of supply and demand. The supply of negawatts is easy - it is all the effiecency changes that can be done (insulation, improved appliances etc.). The sticking point is demand. How to create demand for negawatts?

The renewable energy targets provide the mechanism for creating demand, by allowing negawatts to count towards those targets, power companies can choose to use negawatts rather than other forms of renewable energy to meet their obligations.

Negawatts would be created by doing an audit of end user (household, office, factory etc) to benchmark the energy consumption. The purchaser then pays for improvements (adding insulation, triple glazing the windows, more efficient HVAC etc). The difference in energy consumption after the improvements are installed is benchmarked. The amount of negawatts is the difference between the before and after benchmarks. These negawatts would count to the power companies renewable energy target for 1 to 5 years.

The advantages of this approach are:
  • Much simpler measurment, audit and verficiation
  • Doesn't impose large scale price increases on end-users
  • Increases productivity of the economy generally
  • Frees up end-user cash for other users

Negawatts address the simple physics problem that we can't build enough renewable energy sources in the time required in order to effectively replace enough carbon based energy production. A sustainable negawatt market will drive the development of new efficiency measures and devices leading to situation that energy demand falls as our ability to generate substantial energy from renewable sources increases. We are addressing the problem from both a supply and demand side, achieving a better overall solution.

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