How to Go Green without Going Crazy

Utilities worry about a lot of things, such as keeping the lights on, earning a return for investors, and making regulators and customers happy with their service.

Now there is a new worry: How can they protect customers from what one utility refers to as “mental fatigue?”

In this particular case, the utility raises the issue as it prepares to invite homeowners and small businesses to select from among new and possibly complicated rate options made available because of smart meters.  The new rates should lead to greater energy efficiency.  But that won’t happen if customers become overwhelmed by their complexity, throw the bill insert into the trash, and turn to the next thing demanding their attention.

Mental fatigue is a big problem not only when it comes to homeowners, but also businesses and organizations faced with technical decisions required to green their facilities. Start with the basics. Do you pursue energy efficiency or renewable energy or both? And then, do you choose to make actual physical changes, such as installing combined heat and power systems or solar panels, or do you buy from among the more virtual products such as energy efficiency certificates or renewable energy credits (RECs). And to make it even more difficult there are now a growing number of RECs to choose from: solar RECs, zero emissions RECs, low emissions RECs and more. (See my article on US RECs in the December issue of Platts Energy Economist.)

Analysts Patrick Costello and Roshni Rathi recently prepared a report for RealEnergyWriters.com that sorts through the many options presented to companies trying to go green. The detailed analysis attempts to give direction to organizations by using examples drawn, interestingly, from information technology and telecommunication companies. These industries are known for their progressive, game-changing strategies and many have led the way in reducing energy usage and emissions in their data centers, according to Costello.

The report, “Data Center Energy Efficiency, Renewable Energy, and Carbon Offset Investment Best Practices,” points out that seven of the top ten organizations inNewsweek’s Green Rankings were IT or telecom companies with IBM, HP and Sprint Nextel in the lead. IBM won further kudos this week from the European Union, which bestowed its code of conduct recognition on 27 IBM data centers for their energy efficiency. IBM met a 2007 goal to double the IT capacity of its data centers within three years without increasing its electricity usage.

But not all data centers are run by firms the size of IBM. Many are small and don’t have the kind of resources of a large IT firm, so don’t even know where to begin when installing or purchasing energy efficiency or renewable energy. REC purchases, in particular, can confound the uninitiated.  Two markets exist for RECs, one voluntary and the other regulated by states, and each state has its own way of defining what constitutes a legitimate REC.  “It is really important to be careful about what you purchase and where you purchase it. People often don’t have an understanding of what they are buying,” Costello said.

They don’t understand and sometimes they wish they didn’t have to. Mental fatigue may be a new occupational hazard for the energy-consuming public.