Global Environment & Society Academy

Student uses GESA grant to visit US Energy Information Administration (EIA) Conference 2015

On June 15 and 16 the US Energy Information Administration (EIA) hosted its annual energy conference.

Seth Berkman reports from Washington DC

Professionals from the energy industry, regulators, policy analysts and researchers attended the conference to discuss trends and challenges for the energy sector. The conference covered multiple topics—North American, domestic and international oil and gas markets; residential and commercial energy consumption; and greenhouse gas (GHG) emissions.Throughout the conference several themes emerged.

Attending the conference as a Carbon Management MSc student was a learning experience in more ways than one. I was able to measure what I have learned throughout the year, while widening the frame I use to look at energy issues. Importantly, the conference gave me the opportunity to get a sense of what topics are prioritized by the US energy community.Despite my advance understanding that many conference attendees would not share my commitment to and awareness of climate change, it still felt strange, indeed somewhat uncomfortable, to be surrounded by so many with a different outlook and set of goals for the energy system. Still, despite the relative dominance of representatives from the oil and gas industry, it was apparent that emissions and efficiency are receiving increasing attention in the US, even if for many, these concerns remain secondary at best. If nothing else, this serves as reassurance that a great deal of work remains to be done.

Seth BerkmanMSc Carbon Managment student 2014-2015
Seth Berkman

The importance of investment in energy infrastructure came up several times. In an opening plenary session, JB Straubel, Cofounder and CTO of Tesla Motors responded to a question regarding whether Tesla is a car company or an energy company by saying that for electric cars, the two are inseparable. In order for electric cars to serve customers in the way that people have come to expect, Tesla has had to invest in a network of “superchargers.” This system level thinking has enabled Tesla to radically disrupt the auto-industry for, arguably, the first time since the Model T in 1907.

Melanie Kenderdine, the Director of the Office of Energy Policy and Systems Analysis, commented that given the increasing frequency of extreme weather events and US’s aging infrastructure, resilience is more and more important. She argued that hardening infrastructure before failures occur is more cost-effective than responding to failures after they have happened. That is, like in health care, an ounce of prevention is worth a pound of cure—a sentiment that was echoed by US Secretary of Energy, Dr. Ernest Moniz. She also noted that transmission and distribution (T&D) infrastructure, not just shifting energy generation technology, can have significant impacts on GHG emissions. For example, while Boston and Indianapolis both have substantial natural gas distribution systems, Indianapolis has far less methane leakage because its pipelines are newer.

Distributed energy generation has been receiving increasing attention. This has invited questions about what the impending energy transition means for large-scale electricity T&D infrastructure. Specifically, if residential and commercial energy users will soon be able to cost-effectively go off-grid, will this undermine the value of investments in T&D infrastructure? To assess this question, Michael Kline, an analyst with The Brattle Group, created an idealized “stress test” to compare the best case, levelized cost of off-grid electricity (generated by rooftop solar PV) with the EIA’s 2015 Annual Energy Outlook projections for residential and commercial electricity prices in 2025 for three US counties. The stress test found that even under very favorable assumptions about cost reduction in solar and energy storage, the levelized cost of off-grid electricity is projected to be at least twice as expensive as on-grid electricity in almost every case.

He and other panelists concluded that, even with distributed energy playing a larger role in electricity production, the grid provides important benefits that can increase the efficiency and reliability of intermittent, renewable generation technologies. This emphasizes again that infrastructure investment must be an important part of the clean energy transition.

Dr. Moniz made some insightful comments about the nature of energy security in the 21st century. He argued that a 20th century conception of energy security dominated by concern over price shocks in oil and gas markets is outdated and myopic. Instead, energy security should include the impact of natural disasters, climate change in addition to global and domestic energy markets. These comments were made in the context of his discussion on when and for what the US Strategic Petroleum Reserve should be used.

Not surprisingly, the conference took on the tenor of its host, EIA, which largely functions as a data collection and analysis agency. As such, many presenters said that data can and must be a resource for directing smarter policy. This point was voiced strongly in the context of implementing energy efficiency measures.

Cliff Majersik, the Executive Director of the Institute for Market Transformation argued that information is the life-blood of effective markets. At the moment, we have very little data on the energy efficiency of buildings. As such, tenants are unable to respond to efficiency. This underlies the EIA’s expansion of its efforts to collect and publicize data on building energy efficiency such as the Commercial Buildings Energy Consumption Survey (CBECS), the Energy Star program, and the Department of Energy’s Buildings Performance Database. The aim of these programs is to make data available to the public so that third parties can produce added value from the information (such as targeting the least efficient buildings for improvement). Even without additional initiatives, the exercise of benchmarking has been shown to stimulate energy and emission reduction.

Efficiency experts also argued that emission regulatory structures must find a way to credit energy efficiency measures in the same way that they count contributions from renewables and low carbon energy sources. While they acknowledged that there are challenges associated with calculating emission reduction relative to hypothetical baselines, they also pointed to studies showing that, averaged over an aggregate, baseline projections for building electricity consumption and emissions are very accurate and reliable.