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Energy Storage is Now Part of the Future

Tuesday, January 31st, 2012

Today the power industry relies on antiquated, slow-responding fossil fuel generators to delicately balance power supply and consumer demand. The lowest cost energy is supplied by steam generation units burning coal, or combined cycle natural gas facilities.

 Peak power units, or generators that can be quickly dispatched on the hottest and coldest days of the year are the most expensive to operate and typically require dedicated peaker units that inefficiently burn natural gas or diesel fuel.

 Energy produced from solar and wind is becoming increasingly more competitive with traditional baseload generation, but these resources only generate electricity when the sun is shining or when the wind is blowing.

 This compounds the grid stability problem as underproduction from renewables increases our reliance on the faster responding polluting peaker units and overproduction can force fossil units to curtail production resulting in increased emissions. Additionally, power delivery networks suffer during times of peak demand or excess renewable production causing congestion within the transmission system and resulting in the inability to deliver a sufficient amount of power to end users.

 As a result of this inflexibility that exists in the system, consumers are often forced to pay a costly premium for energy consumed during peak times. The end result is less obvious to the majority of residential customers, but can have an impact on the bottom line for large commercial and industrial customers. This is a global problem and the solution lies in a smarter grid technology and the key is energy storage.

 Enter energy storage. Energy storage will enable a smarter grid and transform the way electricity is generated, transmitted and consumed. It will be used to supplement baseload generation by allowing these facilities to operate continuously at peak efficiency by charging a storage asset during times of low demand.

 When demand increases the storage assets can be dispatched to increase the capacity of the baseload facility transforming it into a virtual peaking plant. The inherent ability for storage to provide emissions-free capacity will allow these assets to be sited more quickly than peakers and the distributed nature will allow them to be strategically located at any scale next to load centers or points of congestion. When paired with renewables, energy storage will transform intermittent solar and wind into reliable and predictable mainstream generation sources.

 Storing energy will allow wind systems to minimize the curtailment that currently occurs during periods of over generation or congestion within the transmission system and will allow renewable energy to be transported from the rural generation sites and strategically stored next to load zones where it is most valuable.

 With greater grid stability, electric power quality will improve reducing severity of under-voltages, over-voltages (surges) and transients, meaning that increased power quality will have less adverse effects on digital equipment.

 Users will also benefit from storage by installing it on their side of the meter and allowing inexpensive off-peak electricity to be purchased and then later reused during periods of peak demand to reduce peak demand and time of use energy charges. The end result of a smarter storage-enhanced utility infrastructure is increased grid stability and flexibility ultimately resulting in fewer outages and lower rates to customers.

By Dax Kepshire

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Posted in Distributed Generation, Energy efficiency, Sustainable Solutions | No Comments »

Six Trends Driving Load Response

Wednesday, January 4th, 2012

Based on recent data, it is easy to see why a “dynamic” approach to electric load management (kW) will become the norm between utilities and energy consumers. The following article on load response drivers was contributed by Peter Kelly-Detwiler, Senior Vice President, Demand Response at Constellation Energy. — Eric Woodroof

 The need for load response – the curtailing of electricity consumption based on the electric grid’s changing stress levels – will only increase over time, especially as energy prices continue to reflect the growing demand for power.

 According to Greentech Media, the Federal Energy Regulatory Commission estimated that load response caused a reduction of 37 gigawatts in peak demand in 2009, and FERC projects this figure could rise to 188 gigawatts in 2019. At the same time, load response will play an increasing role as a backup for renewable energy generation, which is intermittent and cannot be stored.

 For busy facility managers balancing power demand and operations at one or more locations, initiating load response as part of an overall cost-effective energy management strategy is becoming easier – and even more necessary. Below are six developments driving adoption of load response, and how they are enabling increased energy efficiency and overall sustainability efforts:

 Real-time data – The energy consumption guessing game (in which a power bill arrives weeks after the energy is actually used) is no longer necessary. Real-time access to kW load data allows facility managers to leverage spot market pricing opportunities as well as monitor and react via automation technology. Imagine having an instant view of the correlation between outside temperature and energy consumption – new dashboard functionalities provide this monitoring capability. 

 Dynamic solutions from providers allow facility managers to see real-time prices and current power usage across multiple zones or facilities, serving to increase transparency and control. In some areas where prices are available, a “dashboard” can display the day-ahead price, thereby allowing managers to map the next day’s strategy (for example, pre-cooling) ahead of time.

 Load Response Incentives – Peak load management is critical for the stability of the energy grid and use of automation increases reliability and provides better risk mitigation with these responsive energy solutions.

 Utilities in New York and California offer incentives to participants to develop load curtailment strategies as well as installation of enabling automation and controls subject to their participation in load response programs. Attractive financial incentives from $200 to $300/kW of curtailed kW can be available to eligible participants.

 Automation – The ability to remotely and automatically control a single (or multiple) facility’s power use has completely changed the load response playing field. The addition of this element means that instant, real-time actions can be made for (both anticipated or unexpected) load response events while continuous monitoring during all other times provides a critical tool in the energy management arsenal for today’s facility managers.

 This advancement has changed power usage strategies in a range of industries, now having the flexibility to automate and then select from various pre-engineered strategies.

 For example, hotel ballrooms would be potential zones for load curtailment, unless a facility is hosting a wedding in a particular ballroom, during which time that specific zone would be off-limits for adjustments.

 This type of setting can be automated as facility managers are able to choose which assets to deploy or avoid, ultimately enabling the facilities manager to reduce energy costs without compromising the critical mission of providing a safe, comfortable, and secure environment to the tenant or its guests. Beyond helping to avoid a potential grid emergency, automated capabilities help to promote sustainability efforts and foster overall energy efficiency and awareness.

 Apps – Combining real-time data and load response automation with mobile computing applications gives operations departments more control than ever. Facility managers are often juggling multiple locations that can be tens or even hundreds of miles apart. 

 This can present difficulties in addressing immediate on-site power issues. Now, mobile applications (commonly referred to as “apps”) are available to bring dynamic energy management directly into the hands of busy, traveling facility managers.  For example, Constellation Energy’s VirtuWatt is accompanied by an iPhone app that serves as an ideal mobile energy budget protection system, enabling instant control in response to various grid conditions or market signals.   

 Alliances – Some load response providers have created unique alliances with generation and transmission entities to provide a consortium of electric distribution cooperatives with direct, custom benefits of load response. Such alliances enable access to all of the benefits of demand response, including the real-time data, automation, and apps, directly through utility providers, giving businesses another route to energy efficiency management.

 These alliances will help provide cost-effective load response solutions which are integrated with channel partners’ energy optimization solutions, and further minimize the incremental investments for adoption or adaptation of these solutions.

 Savings – The bottom line is that most load response participants choose to participate because of the savings. And in fact, the economic benefits for participating in load response programs are generally increasing as energy becomes more valuable and market volatility increases.

 For facilities with the ability to curtail load, this is an opportunity to take a closer look at how the primary driver can serve as a launch pad for greater control in the form of real-time monitoring, automation and mobile access to energy use.

 When combined, the factors above create a powerful – and easily implemented – strategy for engaging in load response. The load response landscape is rapidly evolving into “dynamic energy management” through the combination of technology, automated monitoring and control, mobile access and innovative ways for participation. For the cost-conscious energy manager, it is fast becoming a necessity to develop a comprehensive energy management strategy in order to effectively manage overall energy costs.

 Energy markets have become more volatile and more complex, and there is no sign that this dynamic will change anytime soon. Fortunately, there are tools to help. Strategic load curtailment is fast becoming a next-generation strategy for facility managers as they look to navigate our uncertain energy future.

Posted in Energy efficiency, Sustainable Solutions | No Comments »

Jones Act Stifles Growth

Tuesday, December 20th, 2011

For the uninitiated, the Jones Act is a 1920’s law that says any freight carried entirely in U.S. waters must be transported by U.S.-owned ships and crewed by U.S. citizens. Sounds good on the surface, but as with most well-intentioned government action it does not trump the law of unintended consequences, and those consequences are becoming painfully obvious.

The Act was written to protect U.S. shipping jobs against those rascally foreigners, before trucking was seen as reliable or trustworthy. If a European shipper were to cruise into a U.S. harbor and offer to carry U.S. freight at, say, a 10% discount to standard rates, the company would have a distinct competitive edge. To a U.S. shipping company, the foreign firm would appear to be “stealing” jobs (though they would see it as earning new business.) But what if you are a company that needs shipping? Then the low-cost shipping company is good news. Without the Jones Act, high-cost shippers would have to lower their rates to compete. So those that buy shipping services are penalized.

The law of unintended consequences arose in Summer 2010 when oil from a broken well head gushed into the fishing and recreation waters of the Gulf of Mexico. A modest and ill equipped armada of U.S. ships attempted to skim oil from the water’s surface but was overwhelmed by the task. At least one huge Taiwanese vessel, A Whale, designed just for such work and capable of filtering enormous volumes of oily water, was ready and waiting nearby to assist. Many other foreign vessels docked in North Sea ports had offered assistance but were rebuffed for reasons unclear although The Jones Act is often cited. President Obama eventually waived the act but only after precious days were lost.

Now we are presented with a great opportunity of building the first offshore wind farms in the Great Lakes and on the Atlantic Coast. One project scheduled for the waters near Cleveland will be a modest start of five turbines, 20 MW. But before construction begins, enormous investments are needed for support equipment, docks, barges, cranes, and special vessels that the Jones Act says must be owned and crewed by U.S. companies – all for five turbines now and the possibility of more later. Canadian companies might like to share the costs and crews for their offshore work, but the Act forbids common-sense cooperation.

Investments for the offshore work on the Atlantic Coast will be much greater, possibly reaching billions, in jack-up barges and cable-laying vessels that already exist in Europe. It would make better sense to hold costs down by leasing that equipment and experienced crews from the UK, while green U.S. crews get their sea legs. But again, the Jones Act mines that harbor.

Some lawmakers cannot acknowledge that we live in a world economy. If the Act is not modified, or better yet scrapped, the U.S. offshore wind industry may never get off the water. Competition is always healthy and that law, a tax in another form, stifles it. It is time to deep-six the Jones Act.

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Posted in Energy efficiency, Solar power solutions, Sustainable Solutions, Wind solutions | No Comments »

Review of Induction vs. LED Street Lighting

Tuesday, December 13th, 2011

Both systems have high first costs that are somewhat offset by reduced maintenance and related costs. Both currently have similar efficiencies, although the LEDs are continually improving on that measure. The induction systems have been in use for many years with proven results, while LED systems are new and much of their performance is “projected.”

The high pressure sodium (HPS) lighting system you currently use has been, and continues to be, the street lamp of choice in many communities because of their efficacy and life span. The yellowish-pinkish light they cast is adequate for general lighting and security. For a variety of reasons many cities are opting to retrofit their street lighting with white light. In addition to the LEDs and induction lamps you are considering, metal halide and fluorescent lamps also provide white light.

One of your first decisions concerning new lighting systems will be whether you need the new products to utilize the existing pole infrastructure. That will determine fixture type and mounting height to control the light distribution, and you need to know if the new source will be capable of providing the desired light level. Both induction and LED products should be seen as luminaire packages (lamp, driver/ballast/starter, fixture), not retrofit components to place into existing fixtures. For this reason the efficacy of the fixture, not just lumens per watt of the light source, is what is important to proper light distribution. Also consider whether the new technology is compatible with your current or planned control system.

Because of the difficulties in comparing two very different light sources with standard measurements, test installations are strongly recommended so color and intensity can be viewed in the real world where they will matter. White light, as you know, can have many shades, from yellow to blue.

Information on the U.S. Department of Energy’s Solid State Lighting (SSL) website offers good information about measuring and describing the light performance of LEDs and some comparative information as well. Look at the information in the “Using LEDs” section.

The induction lamp comes in several color temperatures, from almost warm to cool, with a CRI of 80. For a better understanding of LED color and measurements, see the publication Color Rendering Index and LEDs.

With a high first cost but an actual useful life of approximately 70,000 hours, induction lamps are more of a solution to a maintenance problem than an improvement in efficiency (at 50-60 lumens per watt). They are especially good in tunnels, on bridges, and other places where the long life reduces the risks and costs involved with changing out spent lamps. Induction lamps do very well in cold weather, and so do LEDs. Be sure with either technology that your operating conditions fall within their tolerances.

White LEDs are starting to be used in low-level street lighting. LED lights do not currently have the power to act as high-mast general lighting, but are being installed as high as 35 feet high in some GATEWAY demonstration projects, which you can read about at the “Solid-State Lighting GATEWAY Demonstration Results” website. LEDs do carry a high first cost, but promise an extended lamp life and around 40% energy savings over existing technology. Current efficacy is about the same as fluorescent lamps with the very cool, bluish colors having the best performance, but these numbers change rapidly as the technology develops.

The useful life of LED systems is still a matter of much debate, as they do suffer from lamp depreciation, fading away rather than abruptly failing. Lamp life in the range of 35,000 to 50,000 hours of useful life is being suggested rather than the 100,000 or 200,000 hours that some manufacturers initially claimed. Standards have been and continue to be developed for LEDs and you can keep up with them at the “Standards Development for Solid-State Lighting” website. Read more about lamp life and see comparisons to other common sources in the publication Lifetime of White LEDs (PDF file). Note that linear fluorescent lamp life is coming very close to projections for LEDs, and induction lamps (though not listed) at 60,000 hours or more may be longer lasting.

Plenty of bright white light is not the only factor involved with street lighting. A growing number of cities are responding to the request of the International Dark Sky Association to preserve our view of the stars in the night sky. Besides the light source, the Dark Sky group seeks to reduce light trespass and light pollution, or sky glow. Light trespass is the light that falls onto another’s property, or shines through their windows, and can be addressed by fixture placement and design, or additional shielding. Light pollution can be partially addressed by fixtures that do not allow light above a particular angle. Both full- and semi-cutoff fixtures reduce how much light is directed upwards, but a percentage of light will be reflected off the ground surface and contribute to sky glow, often visible for miles away above a city. LEDs have the advantage of being highly directional so good design can aim light only in the areas it is desired. Other light sources often produce light that is bounced off the back of a fixture before exiting it, while some light never escapes the fixture.

When looking at the cost of a lighting system, the first costs of both purchase and installation must be considered, as well as its care and maintenance (the costs of which, over time, tend to be much higher). Don’t forget to include disposal costs of spent lamps. Also be aware that the presence of mercury in a lamp may be affected by state laws. LEDs do not contain mercury.

As you know, there is more to a cost-effective street lighting system than just energy-efficient lamps—labor for maintenance, the ability to retrofit existing infrastructure versus a new design to accommodate different technology and usage needs, controls, complying with recommended lighting levels, and applicable codes all must be considered. Below are some additional resources on this topic I hope will be interesting to you.

The Lighting Research Center has two older (2003) publications that provide excellent information about the issues encompassed in street lighting systems, although they are not up-to-date with the induction or LED/SSL technology, and mercury vapor lamps are considered obsolete. Access them through the Lighting Research Center website.

  • NYSERDA How-to Guide to Effective Energy-Efficient Street Lighting for Municipal Elected/Appointed Officials – 32 page booklet
  • NYSERDA How-to Guide to Effective Energy-Efficient Street Lighting for Planners and Engineers

 

You can watch for details about the soon-to-be-activated U.S. Department of Energy Municipal Solid-State Street Lighting Consortium. The consortium is being set up specifically to help the many municipalities hoping to upgrade their street lighting to LEDs as a result of stimulus funding.

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Zero Energy Home Lessons

Tuesday, December 6th, 2011

In November 2010, the Best Practices Research Alliance cut the ribbon on its Energy Efficiency Lab Home outside Pittsburgh. A collaborative research-based community focused on improving the quality and performance of homes, the Alliance was founded by IBACOS, a building science consulting firm and team leader for the Department of Energy’s Building America program.

The lab home is part of an ongoing effort by IBACOS and its Alliance to test methods and materials that will make net-zero-energy homes affordable for production home builders to build and the average home buyer to purchase.

The 2,700-square-foot lab home, which will stay unoccupied for three years while testing continues, features a super-insulated enclosure, a ground-source heat pump system, three different HVAC distribution systems, a high-efficiency lighting system, and solar panels. The lab home project team, which was headed by me and central Pennsylvania home builder S&A Homes, found out first-hand about the obstacles likely to crop up during the construction of a zero-energy home like the lab home.

What follows are 10 lessons learned from the project. For more on the lab home, visit: www.theresearchalliance.org/lab-home.aspx.

1. Design with production in mind
For high-performance homes to be widely available, production builders have to be able to build them at a reasonable price. “Our goal as a builder is to maximize energy efficiency without creating price barriers for future homeowners,” says Chris Schoonmaker, VP of S&A Homes. That’s why the lab home was designed with off-the-shelf products and processes that production builders either already know of and use or could adopt and modify to fit within their existing infrastructure.

Reed Kneale, VP of operations with O.C. Cluss Lumber and Building Supplies, which produced and assembled the lab home framing, says one key to gaining his employees’ acceptance for some of the new methods and materials used was sticking to production-minded processes. “I can attest it was real-world  techniques, on steroids,” he said.

2. Think outside the box when it comes to materials
In order to achieve high-performance homes, designers and builders may find themselves using commercially available materials in new ways. For instance, rather than relying solely on interior air sealing or the use of spray foam insulation to provide the air-tightness strategy, the lab home uses well-detailed and integrated housewrap on the exterior to reach the extreme air-tightness targets of the project. In addition, the home features 2 inches of foam sheathing on the exterior that would normally be used for interior basement walls.

The sheathing’s pre-rabbetted channels along the vertical edges, which incorporate the use of furring strips for fastening, allowed the team to use common framing nails to attach the foam to the wall, rather than expensive long screws. The furring strips also provided a nail base for vinyl siding, saving money while netting the aesthetic requirements and thermal performance desired.

3. Staggered stud design pays off
Even though many standard-panel design software products don’t accommodate staggered-stud layouts, the team decided it was the best approach for the project. Designing the lab home’s above-grade wall system using 2×4-inch, staggered framing resulted in several clear advantages. Staggering the studs means fewer direct pathways for energy loss through the wall, and the smaller dimensional lumber is less expensive than larger dimensional studs, meaning lower costs for the builder and potentially the homebuyer.

The wall panelization and onsite framing contractors also found that the framing strategy was an easy alternative, requiring minimal training and few changes to their standard methods. As an added bonus, running electric services through the walls was easier and more efficient for the installer than their typical method of drilling through studs and top plates, since wiring could be woven through the stud bays.

4. Make sure your materials are readily available
Even with commercially available materials, sourcing for a high-performance home can be difficult, since those materials may not be lying around a local supply yard. It was determined that a 3-inch-thick polyiso board would work best for inside the formwork of the foundation walls, and the supplier confirmed it was available. However, when it came time for the foundation walls, the supplier said the board would first have to be manufactured, potentially resulting in a month’s delay.

After waiting two weeks, the project team opted for an alternate solution — using readily available 2-inch-think polyiso board and applying a separate layer of polyiso to the inside of the foundation wall after the forms were stripped. The change in thickness of foam inside the formwork (from 3 to 2 inches) meant ordering new break-back form ties, delaying the project by an additional week. All told, the material availability and sourcing issues, coupled with weather delays, increased the cycle time for the foundation by about one month.

5. Little improvements add up
The lab home aimed to evaluate how effective the use of a well-sealed and integrated exterior housewrap would be toward reaching an aggressive building-envelope leakage rate of 0.60 ACH50. IBACOS tested the house when the housewrap was sealed on the exterior and integrated with the foundation and attic air barriers before any other interior air sealing or insulation measures were initiated. To our surprise, the leakage rate was only 3.0 ACH50. Each additional air-sealing measure offered incremental improvements that made a significant difference.

With the application of spray foam to strategic areas in the attic (e.g., over top plates of interior-partition walls, wiring and plumbing penetrations, and recessed light fixtures), the leakage rate was 0.88 ACH50. With spray foam in the band joists, it was 0.77 ACH50, and when the wall cavity insulation and drywall were installed, it dropped to 0.65 ACH50. After all the trim, caulking, and painting were completed, the lab home scored 0.54 ACH50, surpassing our target.

There are different approaches that can be used in different combinations, for varying degrees of cost and effort, to achieve aggressive levels of building air-tightness — and little details can have a big impact.

6. Constant communication and collaboration are required
Because the methods and materials used in building high-performance homes are sometimes unfamiliar to trade partners, strong communication and collaboration practices are crucial to success. Everyone agreed that insufficient communication, both between the builder and trade partners, and within the trade partners’ organizations, was one of the biggest barriers to overcome when constructing the lab home. This was addressed, in part, by including the trade contractors upfront in the planning and design process, which was a major focus of the project.

Trade partners that were expected to overlap and interact during construction were brought in to the IBACOS headquarters to participate in training and the development of mock-up assemblies. For example, not only was the HVAC contractor part of the HVAC system planning process, but so were the plumbing, electrical, and ground-source heat pump ground-loop contractors. Engaging with the trades made them feel like part of the process, and we learned as much from them as they did from us.

7. Evaluate partners before you begin
Subcontractors don’t always need to know a specific skill going into the construction process, but they must be willing to learn. The lab home’s first siding contractor was skeptical of installing siding over the foam sheathing on the exterior of the wall, partly because the manufacturer wouldn’t warranty the job — manufacturer standards required fastening 16 inches on center, rather than the 24 inches on center that was necessary because of the furring strips. Despite agreeing on how to execute the installation, the installers reverted back to their standard practices, placing some nails through the foam. After repeated attempts to explain the importance of the specified details, the decision was made to have another installation company complete the job.

8. Management buy-in is crucial
Communication will help, but if the resistance to change and collaboration is coming from upper levels of management, it may not be enough. If a contractor’s management team is not committed to improving the performance of the homes they build, then the field crews are less likely to engage in or learn from the experience. In contrast, the managers from both the geothermal ground-looping and plumbing trade contractors understood the educational and marketing benefits of being involved with a project like the lab home, which resulted in a high level of cooperation and field crews viewing the project as an opportunity to learn.

9. Don’t beat up your trade partners
It’s important to remember that with the downturn in the housing market, many trades are suffering. When you ask them to change a building process, you need to remember that they are sometimes doing so with a significantly reduced staff, reduced capacity, and often at no additional cost. You can improve the chances of buy-in by showing a little love — perhaps even compensating them for the additional time required for the learning curve with the first few high-performance projects, while being clear with your intent for standard pricing moving forward. Always trying to get more for less may succeed in the short-term, but can backfire in the long-term.

10. In-field supervision is critical, especially with first-timers
Even after the upfront planning and scopes of work have been agreed upon, some trade partners may still cut corners and make field adjustments without securing approval, impacting the quality and performance of the home. Having a presence on the job site and coaching the trades will help, especially early on in the learning process, but vigilance is key.

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Seizing Microgrid Opportunities

Saturday, December 3rd, 2011

Discussion of national energy policy—to the extent it occurs at all in today’s political climate—focuses on spurring power generation from sources that pollute less and building transmission capacity to interconnect that generation with often distant load within the macrogrid.

The importance of that discussion is obvious, particularly as it seeks to curb greenhouse gas emissions. The need to interconnect low-emission generation, however, should not divert the attention of energy policymakers from the equally compelling need to move the country toward a power delivery system anchored in microgrids that co-locate generation, load and storage while minimizing energy sprawl and transmission losses. This different paradigm distributes generation close to load—distributed generation—and enables investment in microgrids that reliably can deliver generation free of traditional but often unnecessary regulatory overhang. Incentives for microgrids should be priority energy policy at federal and state levels.

Explaining how an Arizona Public Service Co. line worker who was switching out a capacitor could have caused a power outage for millions of households and businesses in the Southwest and Mexico, Rich Sedano of the Regulatory Assistance Project said, “There are a lot of critical pieces of equipment on the system and we have less defense than we think.”

Sedano’s summation could apply to power failures that seem to occur with increasing frequency in recent years, including the colossal 2003 outage that cast into darkness 50 million people in the Midwest and Northeast and the 2005 outage that sapped energy out of Los Angeles. The cost of these outages runs into the hundreds of millions and even billions of dollars.

The underdefended system to which Sedano referred are North America’s three high-voltage macrogrids. Those grids comprise interdependent tradeoffs between high- and low-voltage transmission lines, large and small generating stations proximate to or remote from load and storage or the absence of storage.

Brittleness is a characteristic of how the grid has evolved. In general, the more a grid’s ability to deliver energy reliably depends on the uninterrupted and interdependent operation of large, centralized power stations and long-distance transmission lines, then the more brittle and vulnerable the system is to disruption from causes both natural—storms and earthquakes—and human—errors or intentional acts of sabotage or terrorism. Today we depend predominantly for our power on a brittle, outdated, centralized system that wastes power and frequently experiences cascading failures producing brownouts or blackouts.

In contrast, a microgrid is a localized grouping of electricity generation, energy storage and loads that operate synchronously connected to but sometimes independent of a traditional macrogrid. A distinguishing feature of a microgrid is its ability during a grid disturbance to separate and isolate itself from the macrogrid seamlessly with little or no disruption to the quality of power service to loads within the microgrid and without exacerbating disruptions in neighboring systems. To operators of the surrounding macrogrid and neighboring microgrids, the microgrid presents itself as a single, self-controlled entity. These characteristics produce many desirable attributes. The microgrid can seal itself off from and open its circuits to other failing elements of the macrogrid and stop cascading outages. It also can accommodate interconnection with many small-scale distributed energy resources, including storage in the form of electric vehicles and other innovative applications, without the same concerns for excessive current flows into faults and voltage fluctuations. Taking these attributes as a whole, the microgrid has been characterized as power industry democracy in which local landowners, generators and resource managers can become largely self-sufficient.

Although it’s not a near-term substitute for the macrogrid in many applications, the microgrid can become a valuable complement to it. But for microgrids to achieve their potential, incentives to invest in microgrids must be extended and expanded, and regulatory barriers to the proliferation of microgrids must be ended.

Distributed forms of generation, such as building-appurtenant solar generation, and remote metering capability are core infrastructure for a functioning microgrid. To put these investments on a level playing field with utility investments in central-station generation and metering requires grants and special tax incentives such as credits and accelerated depreciation. The American Recovery and Reinvestment Act of 2009 provided tens of millions in seed money for many projects, including an 8.28-kW bank of solar collectors on my roof. Those incentives must be made permanent in recognition of the cost-saving and reliability benefits microgrids provide.

Reforms to utility regulatory regimes, primarily at the state level, also will be required for microgrids to mature. Particularly helpful would be model legislation from think tanks such as the National Regulatory Research Institute (NRRI). NRRI would be particularly well-suited to the task because democratizing knowledge needed to regulate the power industry is embedded in its mission statement. This legislation could reform how small-scale public utilities are defined so that distributed generation within a microgrid could reliably provide localized service beyond net metering for its own usage, without becoming subject to the regulatory overhang of traditional utility accounting and ratemaking.

by: Dan Watkiss

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Posted in Distributed Generation, Energy efficiency | 1 Comment »

Productivity and the Economic Value of Lighting

Tuesday, October 25th, 2011

 Lighting is for people so that they can see and be productive. It follows, then, that lighting system improvements that increase worker productivity can yield a high return on investment. Consider, for instance, the cost associated with an employee. Assume that the direct costs of the employee, including wages, taxes and benefits, are $60,000 per year. This means that the employee is paid almost $29 per hour, based on 40 hours per week and 52 weeks per year. Normal lost time due to holidays, vacations and sick time are part of the benefits.

A typical office worker requires about 100sqft of dedicated space, mostly actual work area and access to it. Modern lighting systems consuming energy at the rate of 1.0 W/sqft or less, operating 3,500 hours per year (work time plus cleaning and other non-working hours) cost about $40 per worker per year to operate, including energy and maintenance. The annualized owning cost for a typical office lighting system costing about $2.50 per square foot is about $30 per year. In other words, the total cost of owning and operating the lighting system is about $70 per employee per year, or the same as about 2.1 hours of employee labor cost, or about 1/10 of 1% of annual productive work hours.

Based on these values, an improvement to an ordinary lighting system that increases employee productivity is very quickly amortized. A 1% improvement in productivity throughout the year would realize a benefit to the employer worth $600 (0.01 x $60,000). Investing $600 per employee in improved lighting, if it provided that small increase in productivity, would produce a 100% return on investment forever. A more modest investment of about $300 per employee would return 200% forever. For reference, a first-quality office chair costs $600-$900. The potential return on investment is substantial for well-designed lighting systems.

But there are also savings to be had from lighting systems which use less energy. How should productivity be maintained or even enhanced while reducing lighting energy use? In new systems, there are a variety of options including enhanced daylighting. For existing installations, doubling the cost of a typical lighting system retrofit enables the addition of dimming or other controls and an opportunity to utilize better performing and more attractive design options that minimize bad lighting.

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Posted in Energy efficiency, Lighting solutions, Retrofits, Sustainable Solutions | No Comments »

The Time for Solar is Now

Tuesday, October 18th, 2011

Solar energy has proven to be a viable alternative and sustainable way of meeting U.S. energy requirements. In the short term, however, key issues are impacting the solar energy industry. Most notably, the Federal Section 1603 Grant program, originally scheduled to expire at the end of 2010 and extended through 2011, likely will not be renewed.

 The program, part of the American Recovery and Reinvestment Act of 2009, provides 30 percent cash rebates for qualified projects. The 30 percent grant is in lieu of certain tax credits, although projects are still eligible to depreciate 100 percent of the system, less half the cash grant or investment, for qualifying energy systems put into service between Sept. 8, 2010, and Dec. 31, 2011. Many financial institutions are more willing to lend with the grant as a down payment. Commercial companies essentially can purchase a solar installation’s equipment with no money down.

 Time is dwindling to do a solar installation this year and qualify for the 1603 grant. But there are ways to safe harbor, or lock in the grant. If a company cannot finish a solar installation by the end of 2011, it is still possible to get that check for 30 percent. One way to lock in the grant is to pay 5 percent of the installation’s cost, which would constitute an irrevocable contract. If the equipment subsequently is delivered by March, a company still can get that 30 percent check.

 Our company recently completed a solar installation for Kalustyan Corp.’s 100,000-square-foot food-processing plant in Union, N.J. For this importer and processor of food products from the Middle East and Asia, the 700-KW rooftop installation was completed with the help of federal and state incentives. Estimated to be worth about $100,000 of Kalustyan’s electricity, the installation covers most of the single-story industrial building’s rooftop. Kalustyan’s lender accepted the 30 percent federal grant as a down payment, so the company purchased the entire system without putting any money down.

 The industry also faces the pricing volatility of solar renewable energy certificates (SRECs), which are tradable certificates based on energy generated by solar electric systems that can be sold or traded on the open market, separately from the power.

 Many states have solar energy incentives. New Jersey is No. 2 behind California in solar installations. The state’s advantageous rules on net metering of electricity coupled with state incentives, including SRECs, have been key factors. The problem is pricing volatility. Mirroring trends elsewhere, SREC values in New Jersey have fallen from about $600 in early 2011 and $500 as late as mid-June to current pricing of about $150. That falloff is attributable to so much solar being built; it’s a supply-and-demand issue. The more solar that is built—with much of that current uptick in demand related to companies seeking to complete their projects before the federal grant program expires—the more SREC prices have dropped. Utilities only must purchase a certain number of SRECS every year. There are solutions to SREC pricing. Specifically, there are ways of locking into forward contracts and loan programs that take the risk out of the SRE.

 

  On the technological front, however, the prices of solar system equipment have fallen. It’s tied to volume. There is a lot of competition. Compared with a year ago, prices have fallen between 10 and 25 percent, depending upon the market and installation size.

 There are other ways to take advantage of current pricing and incentives. If a company must replace a roof, it is possible to bundle the cost of the new roof into the solar installation. In terms of the federal 1603 grant program, for example, the key benefit derives from the accelerated bonus depreciation, enabling a company to bundle that into a portion of the roof’s cost. Photovoltaic panels generally rely on the reflectivity of a roof. If a company installs a white TPO roof—a reflective roof that also provides the benefit of cooling a building—bundling the cost is possible. If a company plans to spend the money on a new roof, this is another way to save money on the roof and a solar installation. Solar systems’ and roofing components’ working together are just part of sustainability. Solar is a valuable alternative in helping protect against rising energy costs and saving companies money while reducing the carbon footprint. Upgrading, for which financing is typically available, however, can take a substantial bite out of a company’s electric bill. The potential of lowering overall operating costs by lowering electric as much as 80 or 90 percent can provide any business with a substantial competitive advantage.

 Why invest in solar now? Property owners should evaluate their long-term energy opportunities and liabilities. Because energy prices are expected to rise tremendously during the next two decades, businesses should evaluate opportunities for renewable energy and energy efficiency programs.

 The payback of a solar or energy efficiency project can be quick, as has been demonstrated across the country. More important are the benefits that will accrue to property owners for 25 years or longer.

 With the expected long-term rise in energy prices, many businesses may be unable to survive. Doing something now, including carefully navigating the incentive- and pricing-related issues discussed, can help those businesses avert potential problems.

Author:  Adam Putter

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10,000th LEED Building Certified

Tuesday, October 4th, 2011

The Green Building Certification Institute (GBCI) has certified the 10,000th LEED commercial project. Created in 2000, the LEED green building program has become a global symbol of sustainable building certifying more than 1.4 million square feet of new and existing buildings every day.

“Business leaders around the globe are using LEED to design, build, maintain and operate their buildings,” said Rick Fedrizzi, president, CEO and founding chair, U.S. Green Building Council.

“Ten thousand commercial certified buildings stand as a powerful example that a strong triple bottom line translates to real, tangible success.”

The Live Oak Family Resource Center in Santa Cruz, California, which was awarded LEED Platinum by GBCI today, is the milestone project earning the 10,000 th LEED certification.

A vibrant community center, Live Oak Family Resource Center is a place for families to come for guidance, information and referrals on childbirth and parenting, health education and services, youth and senior programs, food distribution and other community needs.

“We’ve just scratched the surface of what‟s possible in the green building field,” added Fedrizzi.

“In 10 short years, we’ve fundamentally changed how we construct and operate buildings and communities, and during that time LEED has continued to evolve, pushing sustainable building practice forward with each evolution.

But there’s much more to do. The market continues to embrace LEED as the leadership standard it was meant to be and our kids deserve the outcomes that green buildings contribute to their future.”

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Is The World of Electricity Flat?

Friday, September 23rd, 2011

  by Tanya Bodell, FTI Consulting

 In his best-selling book Thomas Friedman uses the notion of “flatness” to denote how “more people can plug, play, compete, connect, and collaborate with more equal power than ever before.”

The term also describes how electricity markets and projected prices are evolving. In the power sector, new market structures and public policy are enabling more technologies and market participants to interconnect. Resulting projections include flatter prices and lower expected volatility. It seems fair to ask: Is the electricity world flat?

Capacity Markets

Capacity markets were introduced to make up for the missing money that price caps and other political limits placed on the potential upside for independent generation. By covering portions of the fixed costs associated with building a new power plant, capacity markets send price signals to new entrants and decrease the need for scarcity pricing in energy markets. Enabling demand resources to participate in capacity markets has had a stunning impact on the price signal.

In New England, about 10 percent of recent capacity market allocations have been awarded to demand resources. In a recent round of PJM’s Reliability Price Model market, nearly 13,000 MW of demand response bid into the market, and around 9,000 MW cleared. Excess generation supply and the inclusion of demand-side resources are pushing capacity prices to minimum allowed levels.

Energy Markets

New regulations promise to open energy markets to the impacts of demand response, as well. The Federal Energy Regulatory Commission’s recent Order No. 745 enables demand resources to bid into the market and be compensated at locational marginal prices. Enabled by new pricing structures, smart meter information and tax subsidies for energy efficiency and distributed generation, demand curves likely will become more elastic and shift to the left. Long-term projections of electricity prices should consider the price-deflating impact of reduced demand for electricity.

Renewable Resources

Increased integration of renewable resources also reshapes wholesale power markets. With low marginal cost, many renewable resources enter the dispatch merit order at the lowest end of the supply curve. This extends expensive supply resources beyond demand levels, resulting in lower prices. In some markets, hourly demand hovers at the flattest part of the supply curve, decreasing disparity between on-peak and off-peak prices. Increased renewable penetration is decreasing market prices and reducing price volatility.

Storage

The long-standing inability to store electricity has established electricity as the commodity with greatest price volatility, as revealed by competitive wholesale market prices. Technological advances in energy storage promise to change this. Batteries can be used for peak shaving, flattening the difference between on- and off-peak prices. Flywheels can be used to minimize errors associated with following the ACE signal, decreasing the level of ancillary services required for regulation. A fleet of plug-in electric vehicles is envisioned as a means of firming otherwise volatile output from renewable resources. Storage will make more efficient use of the generation resources required to meet demand and will enable demand response to variable generation. As energy storage solutions commercialize, expect flatter peaks.

Natural Gas

A big wild card with respect to flat prices is what natural gas prices will do. After experiencing unprecedented volatility and heights, peaking at $14 per million British thermal units (mmBtu) in 2008, gas prices have fallen to around $4.50 per mmBtu. Influenced by the seemingly endless supply of shale gas, the impact of increased supply will wear off if fracking controversy or unforeseen difficulties in accessing shale gas are realized. If market expectations prevail, however, lower gas prices will continue to depress electricity prices.

Outlook

As the electricity industry continues to drift through the market-based doldrums of high supply and low demand, depressed market prices seem inexorable. Regulatory support for energy efficiency threatens to delay demand recovery. New technologies further position the industry for an extended period of reduced prices and volatility.

Is the electricity world flat? Of course not, electricity remains one of the most volatile commodities traded. But structural changes promise to alter the traditional shape of the industry. It might be time to plot a new course.

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