Archive for the ‘Economy’ Category

EIN appoints new Executive Director

Thursday, July 31st, 2014
Energy Independence Now (EIN) is pleased to announce that Brian Goldstein has been appointed as its new Executive Director.   Brian replaces Tyson Eckerle, who was appointed as the Governor’s ZEV Infrastructure Project Manager in California’s GoBiz office earlier this year.
Brian’s finance background and experience developing alternative fuel infrastructure are a perfect fit for EIN and its support for investment in clean vehicles.
“We are delighted to have Brian join EIN”, says Daniel Emmett, Chairman and Founder of Energy Independence Now.  “He will be leading EIN during a pivotal period for clean transportation, as the hydrogen fuel cell vehicles that we have long advocated for are poised to hit the market.”
Brian will continue to work with EIN’s team to support clean vehicle deployment in California, from a policy, industry, and community readiness perspective. “I am thrilled to be joining EIN, and looking forward to working with our dedicated partners to continue to promote the adoption of alternative fuels and advanced transportation technologies. ” say Brian. “EIN is poised to provide critical support to ensure a successful roll out of the next generation of hydrogen transportation technology in California.”

Energy Independence Now (EIN) is pleased to announce that Brian Goldstein has been appointed as its new Executive Director.   Brian replaces Tyson Eckerle, who was appointed as the Governor’s ZEV Infrastructure Project Manager in California’s GoBiz office earlier this year.
Brian’s finance background and experience developing alternative fuel infrastructure are a perfect fit for EIN and its support for investment in clean vehicles.

“We are delighted to have Brian join EIN”, says Daniel Emmett, Chairman and Founder of Energy Independence Now.  “He will be leading EIN during a pivotal period for clean transportation, as the hydrogen fuel cell vehicles that we have long advocated for are poised to hit the market.”

Brian will continue to work with EIN’s team to support clean vehicle deployment in California, from a policy, industry, and community readiness perspective. “I am thrilled to be joining EIN, and looking forward to working with our dedicated partners to continue to promote the adoption of alternative fuels and advanced transportation technologies. ” say Brian. “EIN is poised to provide critical support to ensure a successful roll out of the next generation of hydrogen transportation technology in California.”

AB8 – It began with an Idea

Monday, October 7th, 2013

As advocates for clean transportation, we float ideas constantly.  Some don’t go very far; some result in approximately $2 billion of funding for alternative fuels and vehicles and air quality improvement programs. To be fair, only one idea of ours has resulted in the latter.

On September 28, 2013, Governor Brown signed AB 8 (Perea), which extends critical alternative fuel and vehicle investments and diesel emission reduction programs through 2024. This tremendous victory for the State’s long-term environmental and economic health would not have happened without the planting and execution of one key idea: using the Clean Fuels Outlet (CFO) regulation to mandate the installation of hydrogen fueling stations.

Why was the CFO so important?

The CFO, originally created by the Air Resources Board in 1990 to provide methanol, ethanol, and CNG fueling outlets, was adapted and adopted in 2012 to ensure hydrogen station development kept pace with hydrogen fuel cell electric vehicle (FCEV) sales projections. The concept of the regulation was simple; if you sell gasoline or diesel in California, you need to provide a proportionally fair amount of clean fuels to meet projected demand. Adapting the CFO for hydrogen was an idea pitched and championed through the process by EIN.

For obvious reasons, oil companies were not fans of the CFO regulation and its 2012 changes. However, rather than pursuing a protracted legal battle likely damaging (or at least resource intensive) to both sides, the ARB and Western States Petroleum Association (WSPA is the trade association that represents the bulk of companies involved in petroleum business) struck a grand bargain: the ARB would put the CFO on the shelf if WSPA and its members could help pass legislation to fund hydrogen fueling stations.

AB8 was crafted in this vein; it effectively eliminates the CFO and supports public investment in hydrogen. However, hydrogen is only part of the story. The bill authorizes substantial investments in all alternative fuels and vehicles (hydrogen, electricity, biofuels, CNG, propane, etc.) and also extends the Carl Moyer Diesel Emissions Reduction and Air Quality Improvement Programs.

WSPA support was critical to the effort.  In California, any bill that raises fees or taxes must achieve a 2/3-majority vote in both the Assembly and Senate to make it to the Governor’s desk. AB8 would not have passed without WSPA’s political clout. In short, the CFO turned WSPA into powerful alternative fuel and vehicle advocates.

As with any action of this magnitude, it takes a village to bring a long-term vision to fruition. A tremendous amount of credit rests on the shoulders of the ARB and legislative leaders, as well as the broad coalition of organizations that worked to generate support for AB 8.  AB 8 would not have happened without them.  But it also would not have happened without the CFO Regulation, which turned out to be a good idea made even better.

Gasoline Prices Worldwide and Its New, Greener Competitors

Monday, February 6th, 2012

Well into the second month of the New Year, Americans continue to feel that all too familiar sting at the gas pumps. Though it is very clear that citizens remain unhappy about the current cost of fuel found at gas stations nationwide, Californians coming in at about $3.71 per gallon of regular unleaded, they may find themselves frowning a little less often once they hear how much other countries are paying for that same gallon. The US national average for regular unleaded as of January 25th was $3.39 per gallon, about $0.28 higher than prices last year at this time. Canada faces an average national price of about $4.67 per gallon with Japan reaching approximately $6.98 per gallon according to a report conducted by the International Energy Agency in December of 2011. France, Germany and Italy saw unleaded premium prices (95 RON) of $7.40, $7.51, and $7.83 per gallon respectively with the United Kingdom following at about $6.42 per gallon as of January. The IEA also reported Spain reaching a price of $6.44 per gallon with Australia’s national average trailing in at $5.45 per gallon. Lastly, Mexico currently pays a very tempting $2.86 per gallon for regular unleaded as a result of federally funded gasoline subsidies – a program whose extent remains uncertain.  

So with the majority of the world paying much more at the pump, why is it that our prices remain so low in comparison? Well for one thing, the governments in these countries with higher prices tax far more per gallon than our own does. For instance, Germany, the UK, and Japan pay $4.42, $4.76, and $3.10 in taxes alone respectively, while the US only pays about $0.41 for every gallon purchased as of the end of 2011. Furthermore, subsidies offered to the oil industry by the national government also work to keep US prices low through corporate income tax breaks, tax-free construction bonds, and the funding of programs that mainly benefit motorists and the oil industry.  

With the US national average price of gasoline expected to be even higher in 2013, Americans may find themselves looking for even the smallest amount of relief when it comes to transportation fuel costs. Surprisingly and fortunately, it can be found in the very alternative fuels that were once believed to be more expensive than their conventional counterparts. According to a recent report conducted by the US Department of Energy in October of 2011, ethanol (E85) and compressed natural gas (CNG) averaged $3.19 per gallon and $2.09 per gasoline gallon equivalent (GGE), respectively. Similarly, propane averaged $3.06 per gallon and biodiesel (B20) averaged $3.91 per gallon – with ethanol, propane and biodiesel showing a decrease in national averages from the last fuel report. Furthermore, the costs associated with driving a plug-in hybrid electric vehicle (PHEV) are equivalent to about $0.75 per gallon of gasoline according to a study done by the Electric Power Research Institute (EPRI) in 2007. Though the years to come may not bode well for conventional fuel prices, American citizens who currently depend on gasoline have cheaper, alternative fuel options that they can migrate to with their next vehicle. These fuel advances have come a long way and are far more appealing than they once were: they can increase energy independence, decrease emissions, and save consumers money.   

By Christine Jaramillo

The Vast Majority of Voters Support Increased Fuel Economy Standards

Friday, January 6th, 2012

As gas price increases continue to creep up on us in the wake of the New Year, the majority of affiliates across the main political parties surprisingly find themselves in support of a common ideal. In a statewide survey conducted in July of 2011 by the Public Policy Institute of California (PPIC) on opinions regarding the environment, it was found that an astonishing 84% of state residents favored the requirement of automakers to significantly improve the fuel efficiencies of their vehicles. More specifically, 90% of Democrats, 81% of Independents and 76% of Republicans shared this particular view. Californians also demonstrated strong support (80%) for an increase in federal funding of the development of renewable energy sources such as solar, hydrogen and wind technologies. In light of the formal address made by President Obama on July 29th announcing the newly agreed upon plans proposing more stringent fuel economy and greenhouse gas standards, this collective and majority opinion could not have come at a better time. According to the latest Kelly Blue Book consumer survey taken in May 2011, “the vast majority of car shoppers (84%) said that gas prices have influenced [their] vehicle considerations… [and] indicated that better fuel economy was their main reason for planning to purchase their next vehicle.” Automotive companies manufacturing such fuel efficient vehicles have the numbers to prove it too. As of May 2011, GM, Honda and Nissan all show increasing trends in market sales of their hybrids as well as their other fuel efficient vehicle models. Taking all of these factors into account, the transition to better transportation energy practices is very promising and becoming more feasible.

By Christine Jaramillo

The 2011 LA Auto Show and What’s in Store for Roads Worldwide

Tuesday, December 20th, 2011

Car buyers everywhere have every reason to be excited. Whether they’re browsing for luxury, power, performance, or efficiency – they can expect to find themselves frequenting the gas pumps a little less often over the next coming years. The 2011 LA Auto Show officially opened to the public on November 18th and concluded exhibit viewings on the 27th.  Despite the premiere of a staggering 1,000 new vehicles, the most notable aspect about this year’s show was the significant increase in vehicle fuel efficiency across the board in all categories. In light of Obama’s new fuel efficiency standard of 54.5 mpg by 2025, car manufacturers wasted no time in working towards this goal with design innovations appearing in both their debut models as well as models already in production. The show displayed a total of 15 vehicles with 40 plus mpg, 35 hybrid and plug-in hybrid vehicles, 9 clean diesel vehicles, 7 electric vehicles, 13 alternative fuel vehicles and 2 fuel cell vehicles.

In the spirit of competition, Best of Show recognitions were made and selected based on fuel efficiency, tailpipe emissions, and incorporation of innovative technologies that allowed vehicles to meet California’s Clean Car Standards. For the Working Truck category, the blue ribbon went to the Ford F-150 with EcoBoost, followed by the Toyota Tacoma as the runner up. For the Sporting Car category, the blue ribbon went to the Honda CR-Z Hybrid Coupe followed by the Mazda3 SKYACTIV as the runner up. For the Non-Sporting (midsize) Car category, the blue ribbon was awarded to the 2013 Chevy Malibu Eco with the 2012 Toyota Prius Plug-in placed as runner up. For the Herding Car (SUV/Minivan) category, the blue ribbon was awarded to the 2013 Ford C-MAX Energi Plug-in Hybrid with the Toyota Prius V placed as runner up. And lastly, for the Compact (or subcompact) Car category the blue ribbon went to the Hyundai Elantra followed by the BMW i3 as the runner up. Vehicles and technologies recognized for Best of Show are either currently on the market or expected to be on the market within the next 2 years.

So to all those prospective buyers looking to purchase the greenest car of 2012 – look no further. The Honda Civic Natural Gas won the 2012 Green Car of the Year Award and boasts the cleanest-running internal combustion engine certified by the U.S. Environmental Protection Agency. The model gets 48 mpg on the highway and releases tailpipe emissions at levels that render it untouchable by any competing engines of its kind. Automotive manufacturing companies are making extensive improvements in vehicle fuel economy and couldn’t be doing it at a better time. With gasoline prices expected to reach record highs in 2012, the demand for more efficient and cleaner-burning cars by drivers all over the world could not be more present.             

By Christine Jaramillo

Study: Barely Noticeable Impact on Small Business from Clean Energy Standards

Wednesday, October 6th, 2010

October 6, 2010 — California’s landmark clean energy law (AB 32) will have virtually unnoticeable impacts on small business, according to a new study by The Brattle Group. The study updates an analysis done in December 2009 to calculate the effects of AB 32 on a Los Angeles restaurant, which also concluded the economic impacts could be measured in pennies.

“Small businesses will experience a barely noticeable impact from California’s transition to clean energy,” said Jurgen Weiss, a principal of The Brattle Group and co-author of the report. “Similar to last year’s findings, the changes from implementing clean energy policies are minor. They’re actually smaller than the typical price fluctuations that small businesses already face, and are much smaller than the expected rate of inflation.”

The new analysis, “The Economic Impact of AB 32 on Small Business: An Update,” examines a San Diego-area based grocery store and tortilla production facility that specializes in Central American and Mexican foods. The analysis shows that AB 32 will cause a rise of less than 0.1% in the average price of retail goods by 2020 – literally three cents more for a year’s worth of tortillas.

Mercado International 2000 is family-owned and operated since 1995 and employs 30 people in the San Diego region. Mercado was selected for this case study because of its higher-than-average energy use in a highly competitive industry to ensure the study would provide a conservative estimate of AB 32’s potential economic effects.

Gerardo Hererra, the owner of Mercado International 2000, said, “This study has shown me that our store can continue providing our customers with excellent customer service, fresh products, and affordable groceries while reducing our own energy use and helping the state meet its clean energy and climate goals. It’s a win-win-win situation.”

The report, issued by the California Business Alliance for a Green Economy, uses empirical data on the cost characteristics of small businesses to estimate the economic impacts of AB 32. The update to the original report incorporates newly available energy market data and analysis and applies this to a new small business case study. The overall results confirm the 2009 findings.

“Our business members understand that transitioning toward clean, reliable sources of energy will ultimately save money and drive the creation of new jobs,” said Susan Frank, coordinator for the California Business Alliance for a Green Economy. “Small businesses prove every day that they can improve their bottom line while using cleaner energy, reducing waste, lessening dependence on fossil fuels, and improving energy efficiency.”

The Brattle Group projected the likely changes in electricity, natural gas, and gasoline prices due to the major AB 32 policies: pollution cap that puts a price on carbon, a 33% renewable energy standard, increased energy efficiency measures, and a low-carbon fuel standard.

“I have taken a number of modest steps to improve energy efficiency in my business, all of which have benefitted my bottom line and given me a competitive advantage,” said Thomas Ackerman, Vice President of Spirit Graphics in Chula Vista and member of the California Business Alliance for a Green Economy. “This study confirms what I already knew: AB 32 won’t hurt small businesses, and in the long term, it will be good for California companies.”

The report is available online at http://www.brattle.com/Brattle_Economic_Impact_of_AB_32_Report.

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The California Business Alliance for a Green Economy is a network of more than 925 small, mainstream businesses and business associations around the state who believe that a healthy and prosperous future for California depends on a clean, green and efficient economy. Visit us at www.ca-greenbusinessalliance.com.

The Brattle Group provides consulting and expert testimony in economics, finance, and regulation to corporations, law firms, and governments around the world. The firm combines in- depth industry experience and rigorous analyses to answer complex economic and financial questions in litigation and regulation, develop strategies for changing markets, and make critical business decisions. For more information visit www.brattle.com.

Clean Tech Industry Surges in California

Tuesday, July 27th, 2010

Venture investments in the clean tech industry for the first half of 2010 are up 65% from the same period last year and are at a record total of $4.04 billion worldwide according to research firms Deloitte and The Cleantech Group. Fueled by progressive legislation such as AB32 (the Global Warming Solutions Act), California has positioned itself at the center of the cleantech world, bringing in $980 million and 67% of the North American total.

The renewable energy and clean tech sectors have been the one bright spot in a recessed California economy. Since 2005, California green jobs have grown 10 times faster than the statewide average. In order to maintain the catalyst for innovation and expansion in these sectors, it is critical that the proposed Dirty Energy Ballot initiative to suspend AB 32 (Prop. 23) is defeated by California voters in November. The proposition is backed, and almost entirely supported, by two Texas oil companies whose concern is profit, not the public welfare of California’s citizens. We cannot allow the Texas oil companies to inhibit the rapid growth of an emerging clean energy sector and kill hundreds of thousands of quality clean tech jobs for Californians (500,000 now with 1.2 million jobs forecast by 2020), while most of California’s largest employers support implementation of AB32. Instead of exporting the wealth of California to polluting Texas oil companies and unstable foreign regimes, we need to invest the next Californian dollar in clean, renewable energy production such as the recently announced wind farm in Kern County, CA, which will be the largest wind farm in the U.S. and create 1,500 jobs.

In another boost for the California economy, electric vehicle manufacturer Tesla Motors recently signed a contract with Toyota Motor Corporation and will open a manufacturing facility for its Model S at the NUMMI plant in Northern California. On June 29, 2010, Tesla netted $226 million through its Initial Public Offering (IPO) and the high-profile automaker is poised for success in large part due to complementary California policies such as AB 32 and the Zero Emission Vehicle (ZEV) program. Other recent evidence of California’s growing renewable energy sector includes: a solar project by Southern California Edison which will hire more than 1,200 workers in the Inland Empire; the Chinese auto and battery maker BYD Co. locating its North American headquarters in downtown Los Angeles and hiring California workers; and Spain’s leading wind company Power System opening its U.S. office in San Diego. Frequent announcements from global businesses regarding their migration to California’s incubator of cleantech innovation reinforce the benefits of aggressive climate change policy.

Targeted, efficient regulation can provide the necessary catalyst for economic growth and prosperity. Solutions that are good for our environment and good for public health are also good for businesses across the state. California must continue to be a leader, as it has been in many other industries, developing a renewable energy sector, using cutting edge 21st century technology. In doing so, we will create thousands of jobs for American citizens across multiple levels and industries. We will ensure that our society can meet our needs, without sacrificing the ability of future generations to meet theirs.

Conservation and efficiency never work…except in one of the world’s most prosperous countries

Monday, April 16th, 2007

EIN wishes it could operate solely on funds raised by getting $1 for every time we hear or read that environmental standards and conservation programs will wreak economic havoc. Every time an initiative to improve air, water, or environmental quality comes up in California, the Chamber of Commerce and others warn us it will kill growth and put people out of jobs. Yet, California’s been pushing ahead with some of the world’s most progressive environmental regulations while consistently outpacing national GDP growth.

Yesterday’s Wall Street Journal provides further proof that environmental management is good for an economy. For the past 30 years, Denmark has managed an aggressive energy efficiency program that has held total energy consumption stable while doubling GDP.

Similarly, on this morning’s NPR “Morning Edition,” we hear how water conservation efforts in Santa Fe, New Mexico have succeeded while maintaining 4 straight years of growth.

POWER PLAY
How Denmark Paved Way
To Energy Independence

Thirty-Year Plan Uses Wind, Taxes, Pig Fat; Consumers Pay More

By LEILA ABBOUD
April 16, 2007; Page A1

HORSENS, Denmark — Nothing goes to waste in the new Danish Crown slaughterhouse in eastern Denmark. Even the inedible fat of 50,000 pigs killed and processed here each week is used to heat the plant.

Turning pig blubber into heating oil is one of several techniques Danish Crown uses to save heat, water and electricity. The abattoir recently developed a method of scalding and removing hair from pig carcasses that conserves heat.

“We redesigned the whole manufacturing process to save energy,” says Søren Eriksen, technical director of Danish Crown, a meat company that produces $11 billion of pork and beef annually. “Everything is reused.”

[Slaughterhouse]
Danish Crown
Workers prepare pigs’ meat for export to Japan and U.S. at Danish Crown’s new, energy efficient slaughterhouse.

Danish Crown is part of Denmark’s successful 30-year effort to keep its energy consumption in check. Through a wide variety of government-driven initiatives, this small northern European country has overcome one thorny challenge of global warming: how to dramatically reduce energy consumption while maintaining a solid growth rate and low unemployment. The downside is higher taxes and costs for businesses and consumers.

Today hundreds of thousands of Danish homes and other buildings are warmed by surplus heat from power plants. Government policies have spurred developers to build homes with thick insulation, and consumers to buy energy-efficient appliances. Utilities that can’t meet government energy-savings guidelines can buy credits from companies that have invested in efficiencies.

The result of these and other policies is that Denmark’s energy consumption — the amount of fuel it uses to heat its buildings, drive its cars and power its economy — has held stable for more than 30 years, even as the country’s gross domestic product has doubled, according to the International Energy Agency, a Paris group that tracks energy prices and policies. During the same period, energy consumption in the U.S. has risen 40%, while its GDP has quadrupled. The average Dane uses 6,600 kilowatt hours of electricity a year, compared with 13,300 for the average American.

[Peter Bach]

“You can’t just sit back and wait for market forces to do this for you,” says Peter Bach, a civil engineer who has worked as a regulator at the Danish Energy Authority for 26 years.

Some of Denmark’s approaches can’t be easily replicated elsewhere. U.S. policy makers and businesses have resisted the type of aggressive intervention and regulation behind Denmark’s successes, concerned about higher costs and taxes, reduced competitiveness and slower growth.

But in Denmark, much of the country’s energy sector is in the hands of nonprofit cooperatives, with residents as shareholders, which makes it easier for government to direct policy with little opposition from business interests. With a population of 5.5 million people, Denmark also is a social welfare state that puts a higher priority on things like generous health care, free schools and guaranteed pensions than on profits, low taxes and individualism.

Danish consumers and businesses clearly pay a price for the energy programs. A Dane buying a new car must pay a registration fee of approximately 105% of the car’s value, plus additional taxes on fuel. Danish companies pay 43% more per megawatt hour of electricity than companies in the U.S., 24% more than in France and 19% more than in England, according to Dansk Industri, an industry trade association. Denmark’s high energy costs and its costly social-welfare system likely slow its economic growth in comparison to the U.S., but haven’t kept its economy from becoming one of Europe’s strongest, says Jonathan Coony, an energy specialist at the World Bank.

Yet Denmark has remained dogged about conservation. Like other countries, Denmark embarked upon its energy-saving crusade after 1973, when Arab nations temporarily cut off oil exports to countries that supported Israel. Many nations, including the U.S., relaxed their efforts as soon as the geopolitical situation stabilized. But Denmark, along with Japan, was one of the few countries that persisted.

Denmark was heavily dependent on imported oil in the 1970s, and the oil crisis helped set off a prolonged economic recession. To cope with the immediate energy shortage, driving was banned on Sundays. Some towns turned off street lights and schools cranked down the heat.

[chart]

The experience convinced government officials that the country couldn’t rely on foreign oil. So in 1976, a government led by the Social Democratic Party laid out a series of ambitious energy plans, including developing renewable energy from wind turbines, exploring the North Sea for oil and natural gas, and conserving energy. Denmark is now self-sufficient in energy and actually exports oil, gas and electricity.

One key policy change was a gradual increase in taxes on the consumption of oil, natural gas and electricity. Taxes now make up more than half of Danish households’ electricity bills; prices at the gas pump doubled once fuel taxes took effect.

High energy costs, coupled with rising labor expenses, have made it harder for many companies to compete, especially in energy-intensive sectors like steel and cement. In 2005, 14% of the Danish labor force worked in manufacturing, down from 28% in 1966, according to Danish government statistics.

High energy taxes have been “good for the country, but not good for companies,” says John Tang, energy and environmental manager at Dalum Papir A/S, a 133-year-old company that makes glossy paper for magazines out of recycled materials. Mr. Tang says several Danish paper companies have gone out of business in the past 15 years, leaving Dalum with one main rival in Denmark.

But Danish companies that did survive, like Dalum, were forced into strategies that gave them a head start on European rivals that are just now starting to become energy-efficient. Dalum overhauled its factories to save energy in the 1990s, installing more efficient motors and redesigning heating systems to waste less heat, says Mr. Tang.

High taxes have also been a burden on consumers. Yet Danish individuals have largely acquiesced to the higher energy prices. In an opinion poll by the European Union last year, more people in Denmark than in any other country said they would be willing to pay higher prices for energy derived from clean sources.

In addition to raising taxes, the Danish government in the 1980s embarked on a massive overhaul of the heating system. Homes used to be heated entirely with oil, often in inefficient individual boilers in their basements.

[chart]

In a project financed largely by municipalities and local banks, Denmark developed a combined heat-and-power system in which surplus heat produced as a byproduct at power plants would be transported in insulated pipes to heat homes and offices. This “cogeneration” or “district heating” technology wasn’t new, but had thus far been confined to close-knit communities such as university campuses, or in Eastern Europe under Communism.

Building the district-heating system was a pharaonic undertaking that took a decade. Streets had to be torn up to install massive underground pipes. Power plants needed to be moved or built closer to people’s homes or offices so that heat could be transferred over shorter distances. The heat is transported from hundreds of small power plants near cities, compared to 15 big power plants that supplied electricity nationwide in the mid-1980s.

When representatives from Denmark’s energy regulator introduced the idea to local officials in towns and counties, “they thought we were crazy,” recalls Mr. Bach. But the government bulldozed ahead, promising that district heating would, among other things, bring lower prices. Today it’s cheaper than heating with natural gas or oil.

Today about 61% of households in Denmark are heated by district heating, a system Mr. Bach estimates accounts for about half of Denmark’s energy savings in the past 25 years. The cost of the overall project is hard to know because much was done on the local level. But in Copenhagen’s prosperous eastern suburbs alone, workers spent six years and about $475 million to tear up the streets to install the pipes.

To build on the success of the new heating system, the government introduced a new building code in 1979 that forced people to build their homes with thicker insulation and tighter-sealing windows that would preserve energy.

The building code is tightened periodically. It lowered Denmark’s heating bill by 20% between 1975 and 2001, even though some 30% more heated floor space in buildings and homes was built during that period, according to the Danish Energy Authority.

Torben Mikkelsen, a veterinary surgeon and father of two, spent $105,000 last year to insulate his white single-level house and to replace sliding-glass doors and floor-to-ceiling windows with airtight models. Mr. Mikkelsen expects to save at least 60% on his heating bill, which last year totaled $5,400.

Mr. Mikkelsen says it doesn’t bother him the project will take 30 years to pay for itself. For years, his family couldn’t stay warm enough no matter how high they turned up the heat. “It’s much more comfortable in the house now,” he says.

Some local officials have taken conservation even further. In 2001, Willy Eliasen, then mayor of the town of Stenløse, some 25 miles from Copenhagen, decided to develop a new parcel of land. Homes on the land, he decreed, would have to be 50% more energy-efficient than what the building codes required.

Some construction companies balked, saying the new rules would cost too much, and didn’t bid. But today the parcel has some 250 houses and apartments, many made of yellow brick and all with thick insulation panels. All have been sold and construction is under way for another 500 homes.

[Torben Mikkelsen]

In the mid-1990s, the Danish government turned to energy-guzzling appliances, which consumers bought even when more efficient models were available. All appliances sold in Denmark bear an efficiency label that, according to EU standards, rates the appliance from “A” for the best to “G” for the worst. In 1995, a government study found that only one quarter of the fridges and freezers sold in Denmark had ratings of A or B.

A government-funded organization called the Electricity Savings Trust introduced a temporary subsidy program that gave $100 rebates, payable at the cash register, to people who bought appliances with A ratings. In exchange for the subsidies, the stores promised to devote more marketing and advertising to energy-efficient appliances and also to stock a wider variety of models.

“There are many options to choose from,” said Greta Andreasen as she was shopping for a fridge at an appliance store in Copenhagen last month. Before her were 10 refrigerator models — all with ratings of B or better, and half with grades of A+ or A++. The most energy-efficient models cost from $75 to $150 more than the other models.

With three national rebate campaigns from 1999 to 2005, the Trust passed out some $20 million in subsidies to consumers. In 2005, 92% of the freezers and fridges sold in Denmark had A ratings.

Denmark’s center-right government, elected in 2001, has adopted more of a market-oriented approach to conservation. Its key target: utilities, which until recently, played mostly an advisory role. They would lend meters to households, for example, so residents could pinpoint which appliances in their homes were sucking up the most electricity. But the utilities, which distribute oil, electricity and gas, were never held accountable for whether their counseling worked or not.

In 2005, the government ruled that utilities would have to meet a certain level of energy savings every year by law. Utilities can meet their targets any way they want. An electricity company, for example, can persuade an industrial client to introduce more eco-friendly machines into its factory.

But some are skeptical the conservation goals can be met. “All the easy energy savings have already been implemented in many industries,” says Ole Sundman, head of energy services at the giant state-owned energy company DONG Energy. “It will be more and more difficult to find energy savings, and more expensive.”

Utilities are getting help. Along with the new targets, the government has set up a virtual exchange where utilities that have trouble saving energy can buy credits from any company that has saved energy. Last year, Dalum Papir was able to recover much of the $1 million it spent to replace electric dryers with those that run on natural gas. It did this by selling energy savings to a natural-gas company that needed to meet its annual energy-savings target. The company paid Dalum $625,000.

Mr. Bach, who has been working on Denmark’s energy-conservation drive for a quarter of a century, scoffs at suggestions that all the feasible savings have already been made. He believes companies and individuals can conserve more, especially on homes and cars.

“It’s like the apple trees I have in my garden,” he says. “They grow low-hanging fruit every year.”

Write to Leila Abboud at leila.abboud@wsj.com