Energy efficiency by the numbers

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In my letter to the editor published Oct. 9 (“Bringing efficiency to the energy equation”), I pointed out that a key finding of the McKinley study in the United States was that a program offering 50 per cent rebates, funded by an electricity rate increase of only four per cent, gives a 24 per cent reduction in customers’ electricity bills.

Many American jurisdictions spent 10 times more than we do to help their customers save energy, and thereby avoid expensive new generation expenses, at only one third the cost.

My next letter, published Oct. 31, showed we have more potential here for efficiency savings than in the U.S. if we use efficient heating plus others sources of efficiency.

Potential reductions of 45 per cent of our total production were identified, most being in the presently inefficient heating sector.

Potential savings were four times the 885 gigawatt energy production of Holyrood for the year 2011.

It is necessary to quantify the saving and cost effectiveness for the customer and the power companies of the efficient heating systems. There are three types.

 Type 1, earth or water source, is the most efficient, using 75 per cent less electricity and is effectively used in large government and commercial buildings. For residential homes, it has limited use.

It is expensive, with an installed cost about $4,000 per 1,000 watts of heat.  

Type 2, air source ducted, generally cannot fully heat during very cold conditions and needs backup electric heaters. They are about 35 per cent less efficient than type 1 and provide little offset against the system peak demand reduction. The installed cost is about $2,000 per 1,000 watts of heat, and problematic for older houses, because of the need to install ducts.

 Type 3, air source mini-split variable speed, reduces electricity by 50 to 80 per cent, about 67 per cent on average for our climate, and can provide full heat under cold conditions without backup electric heaters. They give excellent peak demand reductions, 50 per cent at

-15C, 60 per cent reduction with modest oversizing.

This nearly matches the cold weather performance of type 1, and some models operate down to -25C. At an installed cost of about $1,500 per 1,000 watts of heat (at -15C), they are the most cost-effective. Across the country, shipments rose 46 per cent in 2011 over the year 2010. They also cool and dehumidify in summer.

Installations in Newfoundland often use a central heater to serve 70 per cent of the heating load. More complete coverage would have two or three heaters on the main level and one or two in the basement. Inverter technology and other advances has increased reliability and life expectancy can be 20 to 25 years, with compressor warranties from seven to 10 years. Installed cost for an average house would be $8,000.

High efficiency stand-alone hot water heaters save about 60 per cent on energy use and cost about $1,800 installed.

An average electric heated house consumes 15,000 kWh per year, with heat 69 per cent of the total, and each contributes 5.2 kw towards the system peak demand.

Type 3 heaters reduce average household demand of about 55 per cent, 2.86 kw each.

For Newfoundland Power’s 151,000 residential electric heat customers (a portion of the total) this would mean a 432 megawatt system reduction.

Hot water consumes 11 per cent of domestic energy, 792 kWh on average.

Efficient hot water tanks saves another 30 MW on the system peak demand, for a total of 462 MW, or almost equal to the full peak 490 MW maximum capacity of Holyrood, and 1.5 times the full 300 MW allocation of Muskrat Falls power for the island.

The energy savings of 5,619 kWh for heat and hot water per house (for 151,000 houses) is 848 gWh system saving, 96 per cent of the full production (885 gWh) of Holyrood last year. Allowing a 20 per cent “rebound effect,” it would be 77 per cent of Holyrood production in 2011. Assuming 13,000 residential conversions per year, 40 MW system demand reduction per year would reduce Holyrood to zero production in 12 years, achieving 98 per cent green energy. An eight per cent surcharge on rates (0.9 cents per kWh) for residential and commercial would generate about $52 million per year.

This would allow for a 40 per cent rebate to 13,000 customers, where the installed cost for the heating is $8,000 and for hot water is $1,800. The cost for 151,000 units would be $1.5 billion.

 With conversion for commercial, all residential and other efficiency options, demand reductions well exceeds Holyrood’s capability and can give total energy savings well exceeding our forecast needs to the year 2030.

Efficient space heating would save 32 per cent on the overall residential bill, and that’s a conservative estimate. An average power bill of $200 per month, with an eight per cent surcharge and 32 per cent saving gives a net $53 per month reduction. A $300 per month present bill would see a reduction of $80 per month.

Even with the surcharge, this is a 26 per cent saving. Efficient hot water would save another five per cent ($11 to $16 per month), for a total of about 31 per cent. This is 29 per cent more than the typical American efficiency saving of 24 per cent.

These savings would allow the customer payback in 7.5 years, not including interest costs, and net savings of over $11,000 over the life of the equipment. For 151,000 residential conversions, it represents $120 million annual customer savings, and over $100 million in oil expenses savings for Newfoundland Hydro.

Efficiency savings from heating, hot water and all other efficiency options is massive, very cost effective and can be staged and ramped up to offset thermal generation.

It can achieve the additional energy needs up to the year 2030 and satisfy peak demand requirements.

These savings are self-financing with a surcharge and consumer savings on power bills. Wind energy, according to Manitoba Hydro's latest report, is reliable, up to 10 per cent of our generation. This amount of extra wind allows wind to triple from 54 to 162 MW at a cost of about $240 million. The extra 77 MW of small hydro costs $398 million.

The island wind and hydro together are $638 million. Efficiency would be the major cost-effective source and, in combination with small hydro and wind, would be the least-cost option by far. It would carry our power needs to 2041 or longer, and achieve 98 per cent green energy.  Any retail electricity price increases would be more than offset by customer energy savings. Staged wind and small hydro additions, concurrent with efficiency savings, could reduce Holyrood production to zero in seven to eight years.

Even without an efficiency rebate program, customer conversions to these efficient systems have compelling economics and presents a serious risk to the load growth forecast. By assuming that efficiency has reached a saturation point, Nalcor and Manitoba Hydro International’s error is a serious risk in forecasting island power needs, and may lead to a serious financial burden for our province.  


Winston Adams lives in Logy Bay. He has a B.Eng. (electrical) and experience in

generation and distribution and heating systems. He is not a member of the

 Professional Engineers and Geoscientists Newfoundland and Labrador.

Organizations: Newfoundland Power, Manitoba Hydro International

Geographic location: Holyrood, United States, Newfoundland Manitoba Logy Bay

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Recent comments

  • Winston Adams
    November 27, 2012 - 10:33

    Cyril, these units are now mass produced and are competitively prices, but still not cheap. In the Usa you can buy them at Home Depot. I beleive Rona may carry them. The problem is getting the correct size and correct installation and set up. I would envisage nfld power being a supplier, as they could purchase on alarge scale direct from the factory. The installind dealer would buy direct from them. There would be no room or profit potential for me or any wholesaler in this arrangement. An holistic approach for energy efficiency make the best choices for keeping the cost to the consumer lowest. The engineering aspect to size the units, where my skill might be used for large commercial buildings, can be avoided for residential if appropriate guidelines are mandatory and used by the installing dealers. This is the best and most cost effective way for residential markets. And this way a company such as mine is bypassed. But my skills have always been on the commercial side, so this is not a loss or disappointment for me. JohnSmith's suggestion that I wiil get rich selling units that will solve our energy needs- 1.I'm rich enough, though many are richer. 2 the market for these is structured such that it is not worthwhile for me to try and profit from sales of these residential units. 3 John is trying to discredit the efficiency solution .

  • Cyril Rogers
    November 26, 2012 - 22:34

    The fact that Winston Adams owns a company that sells these products should qualify him as someone with lots of product knowledge and expertise. Does Mr. Adams have a vested interest in this product? I am sure he would like to sell many more of them but he has also requested that NALCOR conduct an independent study to verify his findings. Knowing how they operate, they would find someone who sells regular baseboard units, find that they are much cheaper to purchase, and declare they are the least cost option. Silly, I know, but that's all the faith I have in the findings of NALCOR and the government, given their reluctance to conduct comprehensive studies.

  • Winston Adams
    November 26, 2012 - 17:04

    DISCLOSURE: I stated that I have experience in heating systems. I am 64 years old, on the verge of retirement, including business interests. Beyond my experience in the power generation and distribution field, I have been involved entirely in commercial projects. I supplied all the air moving equipment for the Clarenville and Burin Hospitals in the 1980's. I have not been involved in the retail level at any time. I have helped procure a few efficient heating units for mostly family members who had little prior knowledge of such energy savers. My keen interest in such systems dates to the 1970, my first attempt at research was to put warm water in a plastic pipe and check it's heat transfer rate, to see if it was more economic than copper pipe. Plastic is now the common way for type 1 systems. My experience with commercial systems pointed to a day when such technology would be economic enough to bewidely used for residential applications. My research for the residential use commenced 3 years ago. Others were installing these prior to then, but without actual research data for our climate. When the PUB hearing started I felt it important and necessary to bring this to the attention of the PUB and did so. I was asked by the staff there if I wanted my company name on correspondance that would be public. I considered this and answered no. 1. I was not not advertising my company throught this submission.2 The Telegram had written a piece saying companies were afraid to oppose Muskrat falls least they be blackballed by government. 3 the main proposal was that efficient heating for residential use are major energy savers. I did not want or had time for numerous calls from prospective residential customers seeking advise on sizes , models or procurement of such equipment. Hence my instruction not to use my company name. Nevertheless, I noticed afterward that the person who assisted with my presentation document had my company name on the back page. I have neither sought business nor received business from my efforts to bring the knowledge of the existance of this technology to the public and the power companies, and it's importance as to forecast loads for power,and to the power cost of residents in respect of the Muskrat Falls debate. In the prior months, on these postings, to inform both John Smith and Maurice Adams of the benefits of such technology, I offered to assist them in sizing and selection of a suitable system if they had doubts, and as they were heavily involved in promoting their own views on Muskrat Falls. I have offered my research to Nalcor, without charge, but they expressed no interest. You will find no advertisements my me or my company to sell these systems. The cost to an assistant to prepare the document for the PUB presentation was about 800.00 . I would estimate my time for the past 10 months, if aimed at procuring other business instead of my efforts on the public benefits of the efficiency issue, is worth not less than $100,000.00 . If I were not indepentent in fiancial means I would have been forced to abandon my efforts. My success in business is in large part from my engineering skills, to recognize good technology, to assist others to avoid misapplication, and never to mislead any one which would get both them and me in trouble. The truth of my arguments and proposals are self evident by arithemic. And the application of mathematics of energy equations, which world class manufactures use for their designs and stake their reputation on. If that is not so, other engineers in our community will and should point out my errors. I would rather be shown to be in error then be wrongly smeared by John Smith. However if he is attempting to expose any conflict of interest on my part,iIt is appropriate that he should do so. Hidden aggendas are usually a problem. And I hope John's alert DON'T result in a avalanche of calls from people wanting to buy these systems from me. I just can't deliver on that. So don't bother. I have critizied the government and power companies for not providing such valuable information to residents. My proposal calls for a separate Efficiency Corporation to seriouly help consumers on these issues. It is interesting that in recent months John Smith has used ridicule to dismiss the idea of the benefits of energy efficiency. He was silent on part 1 and part 2 letters. In this piece, putting numbers to this idea, obviously raises the bar. It seems he prefers to smear rather than dismiss. Not all are dismissing this idea. After all, it is working well in America and around the world. I doubt if John's attempt to smear will work any better than his ridicule. I beleive John knows, as I do, the truth of the efficiency argument- that is is the least cost power option.

  • John Smith
    November 26, 2012 - 14:51

    I think it would be imporatnt to mention as well that Winston owns a company that sells these efficient heaters that will solve all our energy needs. LOL

    • David
      November 26, 2012 - 15:46

      John – this things work. They are made by large, international manufactures such as Mitsubishi, Toshiba and Panasonic (and a few others). Fortis is even aware of them, but it seems they are only promoting them in NS, not Newfoundland. From their Maritime Electric web site on efficiency, I quote: “ENERGY STAR-qualified air source heat pumps are generally around 200% efficient, meaning the space heating energy provided is double the energy used by the heat pump. By comparison, electric baseboard and electric boilers have 100% efficiency.” I believe Fortis is speaking to the Type 2 systems Winston described, not the more efficient Type 3. Again, I am a registered, practicing, professional engineering. What qualifications do you have when speaking to the validity of these systems?

  • David
    November 26, 2012 - 14:35

    My in-laws installed a mini-split heat pump (type 3 described above) in their small house last Feb. They turned all their electric heaters off, set the thermostat for their heat pump to 22C (day and night) and watched their power bills for Feb, March and April drop by 35-40% each month. Their house is more comfortable than ever, and they can even use a/c in the summer if they need it. These things really work, and work well. But like all equipment, you get what you pay for, so you need to install a quality unit. They went through the federal / provincial eco grants and got $1000 back on a $3000 installation cost. With this rebate (33%), they will pay off their unit in 4-6 years (if the price of power stayed constant). Note the federal program has since been cancelled and the provincial grant caps at $500. I am a professional engineer and I just had this type of heat pump installed in my 4 bedroom house last week. So far so go, but I’ll have to wait until Jan and Feb before I see what type of impact it has had on my power bills. I’ve spoken to some of the refrigeration contractors in the city, and they are installing more and more of these units all the time. Just as people switched from wood and oil heat to electric over the last 20 years, they are going start switching from electric to mini-split heat pumps.

  • Virginia Waters
    November 26, 2012 - 13:43

    Nowhere, Smitty, in his letter does Adams suggest turning down the heat as a solution to our energy needs. But of course it's so much easier to ridicule the messenger than refute the facts. It would not surprise me if you are - as some have suggested - a Steve Kent or some other piss-ass power-hungry wannabe but I take some comfort from the knowledge that after the next election, if not before then, we will discover who it is that NALCOR and the Dunderdale government have been paying to spread their Muskrat propaganda.

  • John Smith
    November 26, 2012 - 12:46

    Now there's an intelligent answer to our coming energy needs...let's punish people for turning up the heat...give me a break.