Posts from "December 2012"


10 energy numbers to remember from 2012

  • By Barry Fischer
  • December 19, 2012

Sometimes energy makes headlines, sometimes it doesn’t.  But it almost always has important implications for the global economy, the environment, and our day-to-day lives.

Here are 10 energy statistics from 2012 that capture some of the most noteworthy trends of the year, and that will shape the energy world in the years to come.

+96%: the increase in electricity generation capacity from natural-gas power plants in the US between 2000 and 2012

Natural gas, one of the three key fossil fuels in our energy economy (along with coal and petroleum), continues to ascend as a major force.

One prominent example: during the month of April, for the first time ever documented in the US, the amount of electrical generation from natural gas was equal to the amount generated from coal, which has historically been the country’s predominant fuel for power plants. This moment has been on its way for a few years now, as natural gas’ share of electricity generation has been steadily increasing, while coal’s share has been steadily declining (now around 42% on average, down from 52% in 2000).

The fuel’s growing role in the US is tied to the recent boom in gas production from previously untapped shale formations (e.g. in North Dakota, Pennsylvania, and Texas), which as of September 2012 account for 35% of the country’s dry natural gas production (compared to just 2% ten years ago). The plentiful supply of natural gas helped cause the fuel’s price to dip to a ten-year low earlier this year ($2.75 per thousand cubic feet), making it more competitive relative to other energy supply sources, including renewable energy (which now accounts for 13% of US electricity generation, mostly in the form of hydropower).

$0.41: How much it costs per year to charge an iPhone 5

Smartphone sales volumes in 2012 were huge  – estimated at 717 million retail shipments worldwide (a 45% lift over last year).

But their energy consumption is minuscule.

study by Opower in September revealed that charging the iPhone 5 costs just $0.41 per year, and charging the Droid Galaxy SIII costs just $0.53.

The collective energy demand of all those phones is nothing to sneeze at, but in the bigger picture, a global increase in smartphone usage is likely to cause lower overall energy consumption…

How so? Many consumers now use their smartphones to do things (e.g. internet, media, games) that they used to do on bigger, energy-hogging devices (e.g. computers, televisions, and game consoles).

Source: Opower (September 2012)

2017: year in which the US will become the world’s largest oil producer

According to a report published in November by the International Energy Agency, the United States will overtake Saudi Arabia as the world’s leading oil producer by 2017, and will become a net oil exporter by 2030. The US will see a significant increase in its onshore crude oil production over the next decade, while improved fuel efficiency in transportation will also lead to a gradual decrease in oil imports.

These two trends indicate that the country will become less reliant on energy imports. The US today imports about one-fifth of its total energy needs, but is projected to be more than 90% self-sufficient in how it consumes energy by 2040.

#1: 2012’s rank in the list of the warmest years ever recorded in the contiguous United States

2012 was a sizzling year. Through the end of November, the year’s national average temperature was 3.3°F above the 20th-century average, and 1.0°F warmer than the previous record-setting January-November period (in 1934).

Across the country, blistering temperatures triggered new records for hourly electricity demand in multiple states, from Idaho to the Carolinas. Outlier’s analysis shows that when temperatures soar, home energy consumption can spike even higher, as Americans crank up their air-conditioners:  compared with an average summer day, homes use up to 40% more electricity when the mercury surges past 100°F.

Nor is it cheap to address this dynamic. To ensure smooth and cost-effective management of the electric grid on extreme-heat days, US-based utility companies are budgeting around $1.3 billion per year on programs that are specifically designed to address peak energy demand.

23.8 miles per gallon: the fuel efficiency of the average new car sold in the US in the first half of 2012 (a record high)

Consumers now rank efficiency as their highest priority when shopping for a vehicle, helping to drive the record-breaking gas mileage of new cars sold in America (up about 23% since 2004).

In addition, stricter fuel economy standards, adopted by Congress in a bipartisan bill in 2007, have now taken effect and will rise to an average of 35.5 miles per gallon by 2016. The European Union’s average auto fuel efficiency is already around that level, and is headed toward 48.6 mpg by 2015.

Hybrid and electric vehicles are on the rise too. November was the biggest ever month for electric-vehicle sales in the US, pushing the year-to-date sales figure to 47,500. Though that’s only around 0.4% of US automotive sales this year,  utilities have indicated that the national electricity grid is prepared for those numbers to grow significantly.

1 in 3: proportion of US households that now have a smart meter

Utilities around the world continue to undergo an infrastructural transformation that is changing the way customers and energy companies interact with energy data.

The number of smart meters in the US has grown more than fivefold during the last 5 years. There are now more than 36 million US homes with smart meters, which enable real-time communication of electricity usage data (and in some cases natural gas data, too).  Real-time energy information can offer benefits to utility companies (e.g. pinpointing outages and monitoring power quality) as well as customers (e.g. understanding one’s usage patterns can empower customers to shift energy usage to times of day when energy prices may be lower).

It’s projected that more than half of US households will have a smart meter by mid-decade. And market researchers envision that the worldwide market for smart grid data analytics will grow steadily through 2020, with cumulative worldwide spending from 2012-2020 totaling more than $34 billion.

2: Number of nuclear reactors in the US that were licensed for new construction in 2012 – the first licenses granted by federal regulators since 1978

Two new nuclear reactors are expected to go online in Georgia by 2017, after they received federal regulatory approval this February – marking the first time since 1978 that the US Nuclear Regulatory Commission (NRC) has granted a license to build a new reactor.

The project cost for getting these reactors built and online is estimated at $14 billion; the reactors will be able to produce 2,200 megawatts of power.

Nuclear power provides the US with about 18% of its electricity. Of the 104 operating nuclear reactors at 64 plants across the US, about half are over 30 years old. The reactors now under construction in Georgia are the first among many that are being contemplated: 16 other plants across the country have applications with the the NRC to build 25 new reactors.

50: Number of nuclear reactors that Japan has announced it plans to close by 2040

Elsewhere in the world, Japan has responded to its March 2011 Fukushima incident by shifting away from nuclear energy.  Just two years ago, around 50 nuclear reactors generated around 30% of the country’s electricity. As of this week, only 2 of them are in operation, while the others are undergoing safety review. The Japanese government announced in September that it plans to phase out its reliance on nuclear power by around 2040. Germany, Switzerland, and France have also signaled an intention to shift away from nuclear generation in the coming decades.

56.2%: Percentage of energy that is wasted by the US economy each year

In the latest update to its analysis on US energy flows, Lawrence Livermore National Laboratory released a report in October showing that despite improvements in technology and efficiency, the US still wastes more energy than it uses.  The country is just 43.8% energy efficient.

Take a look at the energy flow diagram below. Of the 97.3 quadrillion British Thermal Units (known as “quads”) of raw energy inputs that flowed into the US economy in 2011, only 41.7 quads were constructively used at the end of the day (as “energy services”). The other 55.6 quads were, in essence, wasted. This waste, summarized in the top right of the flow diagram below, is euphemistically classified as “rejected energy.”

Source: Lawrence Livermore National Laboratory (October 2012)

Most of the economy’s energy waste stems from the electricity production sector (because most power plants are relatively inefficient) and the transportation sector (internal-combustion vehicles are relatively inefficient, but as indicated above, they are getting better).

1.7 terawatt hours: The cumulative household energy savings achieved by Opower’s customer engagement and behavioral efficiency programs through the end of 2012.

A reduction in consumption by 1.7 terawatt hours (i.e. 1.7 billion kilowatt hours) translates into reducing household electric and gas bills by nearly $200 million, and cutting greenhouse gas pollution by an amount equivalent to taking 250,000 passenger vehicles off the road for a year.

In early 2013, Opower will hit a cumulative energy savings milestone of 2 terawatt hours. From there, we’ll keep up the momentum throughout the year, doing our part to empower customers in the US and around the globe to become more energy efficient.

We’re confident that our efforts will, at the very least, help move our economy toward a future in which it uses more energy than it wastes (see 56.2% statistic above).

Special thanks to Katie DeWitt, David Moore, Efrat Levush, Ashley Sudney, and Peter Kjeldgaard.

Follow @OpowerOutlier on Twitter

Author’s note: The analysis and commentary presented above solely reflect the views of the author(s) and do not reflect the views of Opower’s utility partners.

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Five behavioral science stories worth remembering from 2012

  • By Katie DeWitt
  • December 17, 2012

Behavioral science was big in 2012. From shaping this year’s election season to reminding people to schedule dental check-ups, organizations across sectors are applying the psychology behind behavior change in innovative ways.

Here’s a look back at a few of the most interesting examples of behavioral science in action this year:

1. It got out the vote

Groups from across the political spectrum used social pressure to encourage higher voter turnout on Election Day, building on the idea that citizens are more likely to vote if they know their neighbors are voting. The scientific basis for this strategy dates back to a large-scale field experiment conducted during the 2006 elections in Michigan. And a 2012 academic paper describes a groundbreaking Facebook experiment involving 61 million users, which found that people who received a banner message encouraging them to vote and showing them which of their friends had voted were more likely to head to the polls than any other group.

In advance of this November’s election, political groups put these insights into practice, by mailing out tens of millions of “Voter Report Cards” that compared each recipient’s historical voting record with their neighborhood’s average turnout rate.

2. It helped people save money

Publicly committing to a savings goal may be a more powerful incentive to put more money in the bank than getting a higher interest rate. A randomized field experiment evaluated the savings behavior of Chilean bank customers who received a 0.3% interest rate, versus those who received a 5% interest rate. The 0.3% interest rate customers were, unlike the 5% rate customers, encouraged to publicly announce their goals for how much they aspired to save.

In the end, the low interest-rate customers made 3.5 times as many deposits and saved almost twice as much money as the high interest-rate group. The outcome reinforces the idea that social incentives can be more powerful than monetary ones.

3. It made solar panels popular

study based on a decade of California data found that rooftop solar panels are contagious within neighborhoods. For every extra 10 roofs with solar panels within a given zip code, the probability that an additional household installed panels increased by 7.8%. Keeping up with the Joneses just got greener.

4. More people showed up at the gym

A company called GymPact – which allows people to bet on their ability to work out at the gym (or run/walk) a certain number of days per week – reported that 86% of people who enroll in their program end up doing the workouts they commit to.

How it works: If you slack off and miss a workout, you get penalized (e.g. your credit card is charged $5). But if you meet your gym-going goal, then GymPact pays you a small prize. Underlying the GymPact motivational model is a key principle in behavioral economics, called “loss aversion,” which says that people hate losing something even more than they like winning it.

5. More people even showed up at the dentist

A group of German dentists found that patients who received simple check-up “reminders” were more than twice as likely to schedule a check-up as those who did not. This outcome suggests that well-timed reminders, or “prompts,” are some of the most simple and cost-effective ways to promote positive behavioral changes.

We look forward to reporting on the newest developments in behavioral science in the coming year, as the discipline continues to make waves across the globe.

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Clever campaign in Denmark: if you save energy, you get free pizza

  • By Barry Fischer
  • December 13, 2012

A recent public energy-savings campaign in Denmark leveraged a powerful incentive that, across nations and cultures, always seems to produce impressive results. The incentive: free pizza.

The campaign, commissioned by the Danish energy company Vestforbraending (in collaboration with the creative marketing firm Anew), involved opening a new pizzeria called “Vest Pizza” in the northwestern suburbs of Copenhagen. The restaurant’s sole purpose was to reward the community’s aggregate energy savings.

In preparation for the cold season, Vestforbraending sent out 8 winter-time heating conservation tips to their customers, then subsequently measured the total reduction in winter heating load. The more heating energy saved by the community, the more pizzas the restaurant would heat up and give away.  On the opening night of the restaurant, neighbors earned 163 free pizzas — an amount proportional to the community’s energy savings during the first phase of the campaign.

Creative Sandbox; Vest Pizza (November 2012)

Although the experiment mainly confirms that offering free pizza is a surefire strategy to achieve any goal, it also highlights a few approaches that may be helpful in designing other energy conservation campaigns: empower people with specific seasonal advice, tap into the power of community, and frame the benefits in a tangible way.

Check out the video below to see the Vest Pizza campaign in action.


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