Energy efficiency is often the ugly stepsister in alternative-energy conversations because quantifying its potential effect is difficult; how do we determine the real value of all those avoided kilowatt-hours? Two current efforts to answer this question are drawing on a fast-growing digital resource—data—and they could help decision-makers compare and document efficiency’s environmental value against other possible green-boosting strategies.

Until now, we have only really been able to measure the value of proposed or implemented efficiency improvements in terms of how many kilowatt-hours they’ll save. But this basic before-and-after approach oversimplifies the real value of efficiency investments by overlooking variables such as where and when that avoided electricity might have been generated. Whether a watt was generated in hydro-rich Washington or the coal-dependent Midwest might not matter to an end-user, but it should make a difference in larger efforts to reduce greenhouse gas emissions.

Energy Points, a Cambridge, Mass., startup company, has developed a simple, intuitive measurement system to help corporate planners understand the real value of efficiency and other possible sustainability investments. The company has assembled enormous databases of localized energy data, along with sophisticated algorithms that can help users weigh the environmental benefits of, for example, a lighting upgrade in an Ohio office building against a water--conservation initiative in drought-ridden Texas.

“When it comes to sustainability, people don’t have any quantitative way to think about the problem. It’s highly unintuitive,” said Ory Zik, Energy Points’ founder and CEO. The company’s solution is a new metric, an “energy point,” that will allow companies to compare seemingly disparate project proposals “with one number that is both intuitive and accurate.”

Almost as important, these energy points also could provide a way for large corporations to document sustainability performance to shareholders and other investors. Many companies publish annual sustainability reports with their annual financial reports, and energy points could become a way for these organizations to visually represent their annual efforts to the investment community.

In this system, one energy point represents the primary energy in a gallon of gas. The company determines a project’s energy point rating by using electricity and water data, which is detailed down to individual ZIP codes, to calculate the embedded energy a sustainability effort might save once it is implemented. Zik said his company can now help planners evaluate projects in the five categories most important to corporate sustainability officers: electricity use, transportation, waste disposal, water use and direct heating.

Energy Points has spent this spring beta testing its system with a number of Fortune 500 companies. However, the company hopes to go to market as an add-on feature to the enterprise resource planning software large corporations use to understand and manage data about their operations and finances. This would elevate sustainability decisions to the same level of importance as company-wide human resource planning and customer-relationship efforts, an indication of how important such questions have to senior corporate managers.

Electric utilities face a similar need for apples-to-apples comparisons when they evaluate options for rolling out efficiency--improving incentive programs across their service territories. Investors, activists and state utility regulators may all want information on how such measures might reduce carbon dioxide (CO2) and other greenhouse gas emissions, since, in many cases, ratepayers will end up paying the bill. Currently, utilities rely on averages across all their generation resources, but the Electric Power Research Institute (EPRI) has developed a tool that can provide much more specific information.

EPRI’s new offering draws on data that is every bit as detailed as that used by Energy Points. In this case, though, developers were especially interested in CO2 emissions, based on when and where proposed efficiency programs might take place. These researchers also modeled the time-of-day patterns—“load shapes”—of 23 different types of equipment, from residential air conditioning to industrial process heating. By combining what utility data told them about both baseload and peak generating sources (and related CO2 emissions) with this load-shape information, they calculated the effect of equipment-specific efficiency improvements on related CO2 emissions.

The resulting information could, for example, help utilities understand the emissions impact of commercial--lighting upgrade incentives against systems to automatically set back home air conditioners. The tool is set up so utility planners can easily adjust load and generation data through the use of an intuitively designed Excel spreadsheet.

In addition to efficiency-program planning, the data also could prove helpful in predicting effects of demand-side management, according to Sudeshna Pabi, an EPRI senior project engineer. The research group is also working to improve the tool’s functionality by enabling the end-user to see the emissions effect of a fuel switch, such as an industrial plant’s decision to move from natural gas to electricity for process heating.


ROSS is a freelance writer located in Brewster, Mass. He can be reached at chuck@chuck-ross.com.