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S-Network Global Indexes > Ardour Global Alternative Energy Index > Energy Efficiency

Energy Efficiency

Conserving energy provides the most effective investment in the energy technology market today. Besides being cost efficient (any saving falls directly to the bottom line), many like to quote the saying that the "Greenest" kilowatt of energy is the one never used. To accomplish these savings, consumers have a growing set of choices to save energy, either through conservation measures where they choose to reduce non-critical loads, or through higher efficiency equipment and control systems.


Lighting is one of the largest areas energy demands in the residential and commercial markets and thus remains one of the prime targets for the introduction of improved technology. This market for products is also significant, with the general illumination market (office, residential and basic commercial lighting applications such as ceiling or wall mounted, desktop and floor based fixtures) averaging over $70 billion in annual sales.

Compact fluorescents and LED lighting are just some of the advanced technologies that have made their way into the market. Besides saving money for consumers through reduced energy bills, their use is also an effective way for utilities to reduce the growth of demand. For that reason, many utilities participate in rebate programs to encourage the greater use of these products in order to reduce their peak demand throughout their region.

White Tags

White tags are to energy efficiency as a renewable energy credit (REC) is to renewable energy—a means to quantify an amount of energy saved from investment in either equipment or process changed. Two states have already included White Tags into their Renewable Portfolio Standard (RPS) programs due to the real environmental benefit that energy efficiency brings to the energy mix.

Quantifying and packaging the savings involved in an energy efficiency program, facilitates the monetization process needed to help pay for the development and expansion of energy efficiency programs. This has proven to be a very successful and necessary component in the development of renewable energy programs, so many feel that this type of product will similarly help the development of the energy efficiency market.

Green Buildings

Improving the energy efficiency of buildings is gaining visibility in the last few years, especially through the recent development of the Leadership in Energy and Environmental Design (LEED) program. At the heart of the LEED program is the Green Building Rating System®—a voluntary, consensus based national standard for developing high-performance, sustainable buildings.

Through the LEED program, "green building" can be defined through a common measurement standard to promote integrated, whole-building design practices, and to provide a complete framework for assessing building performance and meeting sustainability goals, including energy efficiency. Including thermal energy storage systems in the design helps buildings qualify for points in the "Energy & Atmosphere" section toward the overall total score of the building.  A higher score ensures not only lower overall operating costs of the building, but corresponds to a healthier building environment, and thus a greater demand for space in the building by potential tenants.


The measurement of the use of energy is the most fundamental issue in managing energy use. The supply side of the industry is based on the exact measurement as to how much and when energy is produced. The demand side of the power industry has always had less accurate knowledge as to their energy usage, but that was not a significant issue in the prior regulated market.

High energy prices and the slow but inexorable movement towards deregulation of retail energy markets has been making the metering of the demand side ever more important. For many years it has been known that an important issue with energy efficiency programs (both governmental and corporate) is the verification of those savings. All of these efforts rely on the deployment of advanced energy metering technologies.

Demand Response

Demand Response (DR) programs create a dispatchable and verifiable reduction in system load. Demand Response refers to customers "selling" load back to the system in response to a market signal. The goal of these utility-run programs is to provide an additional and flexible resource for the system-operator during peak demand periods so as to prevent wholesale power price spikes or blackouts—isolated or system wide. End-use customers (large commercial and industrial customers) are paid a capacity-based ($/MW) monthly fee for participating in the program, plus an energy-based ($/MWh) fee for the amount of power not used. Demand response programs directly reduce prices and price volatility and enhance customer choice. They provide options for consumers to alter their usage during peak demand to both protect against losses, and provide a means to even generate revenue if their load is flexible. Integrated into a regional market, these programs can be self-sustaining since they align the needs of the system operator (more resources) with those of load serving entities (a market to sell the timely resource) and customers (minimize their cost of electric service).