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Business Officer Magazine

On Balance

U.S. Secretary of Energy Ernest Moniz outlines his department's efforts to help colleges and universities advance their power priorities. A nuclear physicist, Moniz is founding director of the MIT Energy Initiative.

By John Walda

Where Ernest Moniz Puts His Energy

*As U.S. Secretary of Energy, Ernest Moniz would rather do than debate. While there is plenty to discuss regarding climate change, for instance, Moniz believes the need for conversation is on the implementation side-what to do and when-not whether to take action. In his role, advancing President Obama's energy agenda has entailed pursuing new partnerships, including opportunities to collaborate with the Department of Education.

In this interview, Moniz outlines Department of Energy (DOE) efforts to help colleges and universities advance their energy priorities-a need he knows well as a former professor and director of the Massachusetts Institute of Technology Energy Initiative and MIT Laboratory for Energy and the Environment.

There is strong focus within our membership on implementing sustainable energy practices on campus. Many of our members are ready to move beyond the low-hanging fruit in energy-related savings to invest in bigger energy projects. How can the Department of Energy help the higher education sector with things like renewable energy bonds, extending Section VII of the Energy Independence Act, and so forth?

Many of those issues are under the aegis of the Office of Management and Budget, and to a certain extent, the Treasury. One thing DOE can do, and is doing, is helping with investment in clean energy. Following an interagency process that we led this past August, we published a guide on federal financing mechanisms for clean energy projects that identifies program structures and incentives, and this can be used by colleges and universities the same as other entities.

We also encourage higher education to support students in research projects—especially those aimed at energy efficiency—and these projects can be accomplished through existing funding mechanisms. One example is our Energy Frontier Research Centers program, which aims to transform the way we generate, transmit, store, and use energy. Nearly two thirds of these centers are located at universities. Incorporating an undergraduate research component through these can be quite impactful.

In one example from my days at MIT, undergraduates developed an energy intensity map of campus infrastructure. For one building with an unusually high energy intensity, students tracked the problem as stemming from improper management of chemical hoods. By implementing an operational change, enormous energy was saved. This led to another project modeling air flow, resulting in a redesign of the hoods of a new building under construction that now has half the energy intensity of comparable buildings on campus.

In another example, through our Better Buildings Alliance program we try to propagate best practicesfor energy efficiency, anduniversities are certainlypart of that discovery. In fact,there is a specific university group in the Better Buildings Alliance that is working with various green revolving loan fund approaches. I know that MIT, for instance, is already claiming on the order of $3 million annually of operational savings from energy projects alone over the past five or six years. This represents real money going back into education of students.

Through our own government agencies we encourage the use of energy savings performance contracts, and during the past two years within the federal government, we've generated more than $700 million of commitments in this area. This kind of activity transfers extremely well in institutional settings like colleges and universities.

We will soon announce collaboration with a major U.S. corporation around STEM education and energy efficiency that we plan to push out to our schools and colleges.

While this isn't exactly in response to your question, these are examples of how we're approaching energy savings across sectors, including within higher education, where we continue to invest through a range of grants-related programs. For instance, we recently announced funding for Delaware State University for solar technology research that will help drive down solar installation costs. The funding also assists curriculum development to offer STEM education opportunities to groups underrepresented in these fields.

You mention the importance of students, and we find they often are leaders on campus on energy efficiency initiatives. A couple of programs that are highly visible are the department's Solar Decathlon and the DOE Scholars Program. Is there potential to enhance and expand these programs in terms of funding so that more universities can get involved?

These two programs in particular represent high-leverage funds and I certainly want to maintain them, if not grow them. The Solar Decathlon is a fabulous program where the integration of technology and efficiency is critical, and these students come up with terrific ideas. We must do more of this. But, with budgets constrained through sequestration, we'll have to see what happens going forward. What I've said from Day One is that energy efficiency is at the top of my priority list, and we have in fact picked up the pace on getting rules out for efficiency standards, which apply to everyone across the board.

You've mentioned the need to encourage multiple agencies to work together on big cost-cutting issues and analysis. Is the Department of Education one of those agencies that you see working with more effectively?

First, within DOE, we've set up a new organization called Energy Policy and Systems Analysis to provide principal support for this kind of activity. In fact, the president in his climate action plan specified something called the Quadrennial Energy Review, which in effect is a cross-administration integrated approach to energy policy and energy programs, and this new DOE organization serves as the executive secretariat for that administrationwide activity.

We want to develop the analytical base for the programs and the policies that we put forward, and this is another area where we want to help grow national capacity through better economic analysis, including analysis for colleges and universities.

Eventually, as recommended by the President's Council of Advisors of Science and Technology, we also aim to take more of a social science approach to energy challenges, which we think is extremely important. Secretary Duncan at Education, and many other colleagues in the administration, will be serious partners in these efforts. Clearly, we have a strong emphasis on trying to do our part with STEM education, with the Department of Education and National Science Foundation leading the interagency effort in that regard. In fact, we will soon announce collaboration with a major U.S. corporation around STEM education and energy efficiency that we plan to push out to our schools and colleges.

Can you elaborate on what you mean by this social science approach to solving energy challenges?

The scope of social science is defined in different ways, but as I indicated, economic analysis is absolutely critical, and I believe we need to substantially expand our capacities in this arena. For a quarter century at least, the challenges in this area were not viewed as cutting edge within economics departments. When you consider energy efficiency and energy conservation, these clearly are rooted in strong behavioral components and lead to, I think, more research in that area. This could be very consequential in terms of how we establish incentive programs.

Something we want to accomplish with this Quadrennial Energy Review process that's going on across the administration is bringing in different capabilities in setting energy policy. And so, our colleagues at the National Science Foundation, Department of Education, and others, will all be part of this.

Stepping back from energy policy and higher education, the atmosphere in which you work has changed significantly since you were at DOE more than 10 years ago as under secretary for energy during the Clinton Administration. For instance, we know a lot more about the science of climate change, but it also is an issue that has become increasingly politicized. How would you characterize the challenge of your job within this new context?

Regarding climate and energy policy challenges, the president's climate action plan is quite aggressive and based exclusively on existing authorities within the administration. While it might be preferable to work on legislation with the Congress, if the time isn't right for that, then we will attempt to use our existing executive authorities to the maximum.

It's my personal view that we have turned the corner in terms of widespread understanding—including within the Congress—about the need to take prudent action on climate change. Now, there are very different views within our own political system and internationally in terms of what we do, when we do it, how much we do, and so forth. And yet, it's important to recognize that we have largely moved the debate to questions of implementation as opposed to whether we need to act at all on climate.

The most recent IPCC [United Nations Intergovernmental Panel on Climate Change] assessment report is something of a watershed. The scientific community is cautious, and appropriately so. As I've said in hearings in the Congress, I believe that the need for taking action on climate change does not hinge on the output of complex models. These models are important, and we need them to understand regional consequences and the like, but we seem to be past the need for convincing the majority that anthropogenic activities are influencing our climate and that prudent action is required. And that's a good thing.

JOHN WALDA is president and CEO of NACUBO.