Just about every plan to achieve a clean-energy, low-carbon future includes a large helping of energy efficiency. But while it’s true that efficiency is generally much cheaper than generation, energy efficiency as we know it faces an existential challenge.
The rate at which we’re deploying efficiency is simply not keeping pace with utility and grid needs. But even if we were able to achieve scale, in the current construct, it’s unclear how we would pay for the massive investment required.
Fortunately, there is another way. We now have the data, market and financing in place to procure energy savings to solve time- and location-specific grid problems. Bundling projects into portfolios turns efficiency into an investor- and procurement-friendly product that has manageable and predictable yields.
By treating efficiency as a genuine distributed energy resource (DER), we can stop relying on ratepayer charges and programs and instead unleash private markets and project financing to deploy and fund energy-efficiency projects in the same way we do solar, wind and other energy resources — through long-term contracts, creating cash flows that can be financed like grid infrastructure through project finance rather than consumer credit.
Read more (Greentech Media)