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In a recent presentation announcing Tesla Energy Elon Musk estimated that the total surface area needed to generate enough power to get the U.S. completely off fossil fuel power generation is less than 1/4 of the Texas panhandle.
Solar PV has reached or is approaching parity with fossil fuel energy sources in much of the U.S. and distributed power generation, primarily rooftop solar PV, is disrupting the traditional electric utility business model. The fundamental problem is that as customers install solar PV on their rooftops or find alternative sources of power and even leave the grid, the utility's revenue, which is derived from selling electricity, declines. This in turn drives up rates for the utility's other customers which motivates them to also defect. Put another way the electric power market, which used to be based on a regulated monopoly provider, is giving way to a competitive market where the consumer has a choice. She can generate her own power or buy it from alternative sources such as Solar City. As battery costs drop, customers increasingly have the option of leaving the grid and participating in their own or a community microgrid.
I've blogged about several alternative solutions that utilities and regulators are proposing to meet the challenge of distributed renewable energy. The New York Public Utility Commission is moving the New York state utility industry toward a radical refinition of the utility business model. In the future in New York state the utility industry may be comprised of distributed system platform (DSP) providers, basically providing the grid but not directly selling energy. There will be an energy market with many energy providers including bulk power generators and many distributed energy generators - you and me with rooftop solar panels. Sacramento Municipal Utilities District ( SMUD) is moving from being a traditional centralized utility to a distributed utility providing localized grid services. In other words SMUD is getting out of the business of selling electricity and into the business of selling grid services. In Maryland the Energy Future Coalition (EFC) prepared recommendations for the Maryland smart grid among which the key recommendation was a new utility business model that would decouple utility revenue from selling electric power. Recently it was predicted that by 2020, the largest energy company in the world (by market cap) will not own any network (grid) or generation assets. It will just manage information about energy sources and consumers similar to Uber and Airbnb in their markets.
Some utilities like Hawaii's power utilities are embracing distributed renewable energy and adapting their business model. The Salt River Project has introduced a rate structure designed to charge solar PV customers for using the utility's grid infrastructure, but which incentivizes them through "time of generation" pricing to generate power at peak times when demand is high. Other utilities see rooftop solar PV as a threat to their revenue base and are penalizing customers who install rooftop solar PV, either by a fixed infrastructure charge or by reducing the rate the utility pays for customer-generated power.
I just came across another approach to address the problem of customers generating their own power leading to declining revenues for the utility. One utility's strategy is to not only lower the rates paid for customer-generated power but to make them (at least large customers) pay a fee (penalty) to leave the grid. There is an open question about whether this is even legal and it is being challenged in the courts.
NV Energy, which is owned by Berkshire Hathaway, is the power utility for Las Vegas. The casinos, to reduce their power costs which are significant as you might expect, have started finding alternative sources of power. For example, the Mandalay Bay is installing the largest rooftop solar PV array in the U.S. on top of its convention center (6.4-MW dc system with 21,324 solar modules expected to provide 20% of the resort’s power demand.). Others are looking to buy power on the open market. With the available alternatives the casinos and resorts are planning to leave the grid and Nevada Energy's monopoly. They want to do this because it saves them money.
The resorts and casinos consume about 7% of NV Energy's power. If they leave the grid, it will create a significant hole in NV Energy's revenue. NV Energy is an investor-owned utility and makes a profit which returns value to its investors. NV Energy's solution (with the acquiescence of the state power regulators): charge customers a fee for leaving the grid. According to the source, it will cost the casinos and resorts a fee (penalty) of $126.5 million to leave the grid. The penalty is to compensate NV Energy for investments it made to generate power for the casinos and to prevent raising rates for NV Energy's remaining customers.
The casinos and resorts are not the only customers of NV Energy to face a penalty for leaving the grid. A data storage company called Switch had the same problem last year when it decided to use renewable power to power its data center. It uses 3% of NV Energy's power and the company was told it had to pay $27 million to NV Energy to leave the monopoly's grid. Reportedly Switch and NV Energy came to an agreement where Switch is paying NV Energy to build a new solar farm in North Las Vegas. This looks like a policy whereby NV Energy pressures its big customers to remain with the monopoly and pay for its sustainability initiatives through the threat of a substantial penalty for leaving the grid.
Thanks to Derrick Oswald for pointing me to the NV Energy story.
According to GTM Research and the Solar Energy Industries Association new solar PC capacity in the United States set a new record in 2015. 7.3 gigawatts (GW) of solar photovoltaics (PV) were installed, exceeding natural-gas capacity additions for the first time. In 2015 solar was up 17% over 2014 and represented almost a third of new electric generating capacity additions in the U.S.
More than half of the new solar PV additions were utility-scale solar farms which was also a new record. Over 4 GW of utility-scale solar PV were installed which represents 6 percent year-over-year growth in this segment. The residential solar market grew 66 percent year-over-year. The non-residential market installed more than one gigawatt of new capacity in 2015, about the same as what was installed in this segment in 2014. The increasing rate of installations has been driven partially by dropping prices.
87% of U.S. solar PV capacity is concentrated in 10 states.
Total U.S. solar PV capacity now exceeds 25 GW, which is remarkably rapid growth when compared to 2010 when only 2 GW had been installed.
For comparison according to the American Wind Energy Association (AWEA) in 2014 about 2,500 turbines were installed, representing nearly 4.9 GW of new wind capacity. Wind energy represented 28 % of new generating capacity installed in 2010-2014. U.S. total wind generating capacity at the end of 2015 was 65.9 GW.
Capacity is one thing and actual generation another. According to the U.S. Energy Information Administration (EIA) in 2014 actual generation statistics show that coal, natural gas, and nuclear led by a wide margin followed by conventional hydroelectric, wind and solar.
Generation (Thousand MWh) Coal 1,581,710 Natural gas 1,126,609
Hydroelectric 259,367 Wind 181,655 All solar 27,227 Utility-scale solar 17,691 Distrib solar 9,536
Urbanization is a worldwide phenomenon. According to the World Bank, 54 percent of the world's population lives in urban areas today. By 2045, the number of people living in cities will increase by 1.5 times to 6 billion, adding 2 billion more urban residents. With more than 80 percent of global GDP generated in cities, urbanization can accelerate economic development, but it has to be managed in a way that decreases energy intensity (energy per unit of GDP).
Smart city technology is becoming an essential element in the development of the world's megacities. For example, the new Indian government's budget includes an allocation for initiating the development of 100 smart cities. Songdo IDB in Korea and Fujisawa in Japan are two smart cities already under development. China has 36 smart cities in development and a low carbon model city in Tianjin. Singapore plans to become a smart nation by 2015. Iskandar is Malaysia's first smart city. The Delhi-Mumbai Industrial Corridor (DMIC) incorporates smart city concepts.
According to a recent report, the global smart cities market is forecasted to grow from $410 billion in 2014 to $1.1 trillion by 2019 at a compound annual growth rate (CAGR) of 22.5%. This includes smart homes, intelligent building automation, energy management, smart health, smart education, smart water, smart transportation, smart security, and related services. Most of this activity is expected to occur in Asia and the Middle East.
Technologies and trends such as smart cities, smart grids, sensor webs, the Internet of Things (IoT), facilities and asset management, indoor and outdoor navigation, energy performance modeling and real-time, “big data” analytics are important for urban planners. In these technology domains, open standards encourage the sharing of information. The OGC Urban Planning Domain Working Group intends to discover requirements for open spatial standards in information systems involved in the planning, design, use, maintenance and governance of publicly accessible spaces.
According to the IPCC urban areas accounted for 67 – 76 % of energy use and 71 – 76 % of energy-related CO2 emissions in 2006. Cities are going to have to adopt a leading role in transforming to efficient, non-carbon energy, if we are going to be able to achieve a sustainable level of economic development.
In preparation for COP21 in Paris, all of the major developing nations have committed to decreases their energy intensity. For example, India has just released its commitments (INDC) to reducing emissions prior to the Paris COP meeting. The challenge for India is tackling climate change while at the same time improving the standard of living of its third of a billion poor.
According to Navigant worldwide 96 cities that have committed to becoming 100% renewable. These include Vancouver, Canada and San Francisco, California. According to the annual ranking by the Global Green Economy Index (GGEI) Vancouver is the world's fourth greenest city. According to the GGEI the top three greenest cities are Copenhagen, Amsterdam and Stockholm. The countries corresponding to these cities (Denmark, Netherlands, and Sweden) also rank high, in the top 5 country rankings. Canada is 12th. The Nordic cities have achieved their high standing with the help of their respective national governments, whereas Vancouver has achieved its high green ranking on its own with little help from the federal government. Two years ago the Dutch Ministry of the Interior initiated a joint project with the Municipal government of The Hague (Den Haag) to reduce and stabilize energy usage and costs in downtown Den Haag. The study area is roughly about a square kilometer where the buildings are large and owned for the most part by the National and Municipal governments.
Most of the world's electric power utilities have adopted a smart grid strategy at some level. This can involve distributed renewable energy (DER), reduced emissions from existing fossil fuel generation and various energy efficiency programs. Navigant Research has just released a report that investigates the fundamental shift in the way cities manage energy and their relationship with electric power utilities. It focusses on DER, demand management, EV vehicles and charging infrastructure and energy efficiency. The major technology suppliers according to Navigant are ABB, Accenture, AT&T, Cisco Systems, Hitachi, Huawei, Itron, Oracle, S&C Electric Company, SAP, Schneider Electric, Siemens, SSN, and Toshiba.
Navigant Research projects that the global smart energy for smart cities technology market will grow from $7.3 billion in annual revenue in 2015 to $20.9 billion by 2024. That represents a compound annual growth rate (CAGR) of 12.4%.
It should be noted that this analysis does not include energy efficient buildings the market for which Navigant has estimated in a separate study to be $307.3 billion in 2014 growing to $623.0 billion in 2023.
India has just released its commitments (INDC) to reducing emissions prior to the Paris COP meeting. India houses 30% of the world's poor (363 million people) and 24% of the global population without access to electricity (304 million). The challenge for India is tackling climate change while at the same time improving the standard of living of its third of a billion poor.
On a per capita basis India is barely on the same chart as the U.S. and Canada. Depending on what is included in the calculation, India is the world's third or sixth largest emitter. On a per capita basis India is 137th. Per capita emissions in the US in 2011 were 4.5 tonnes of carbon, while India's were 0.45 tonnes, 1/10 of U.S per capita emissions.
On a per capita basis electric power usage is also extremely low in India. Indian per capita electricity consumption reached 1010 kilowatt-hour (kWh) in 2014-15. In comparison, China has a per capita consumption of 4,000 kWh and developed nations average about 15,000 kWh per capita.
India is taking climate change seriously. A year or two ago India announced a voluntary goal of reducing the emissions intensity of its GDP by 20–25% by 2020 compared to 2005 levels. Despite having no obligations per the Convention (UN Framework Convention on Climate Change), a number of policy measures were initiated to achieve this goal. India's emission intensity per unit of GDP has decreased by 12% between 2005 and 2010. The United Nations Environment Program (UNEP) in its Emission Gap Report 2014 recognized India as one of the countries on course to achieving its voluntary goal. The energy intensity of the economy has decreased from 18.16 goe (grams of oil equivalent) per Rupee of GDP in 2005 to 15.02 goe per Rupee GDP in 2012, a decline of 2.5% per annum.
In its just released Intended Nationally Determined Contribution (INDC) for the period 2021 to 2030, India has committed to reducing the emissions intensity of its GDP by 33 to 35 percent by 2030 from 2005 levels. Even more impressively, it has committed to achieving 40 % cumulative electric power installed capacity from non-fossil fuel based energy resources (renewables and nuclear) by 2030. It also committed to creating an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030.
A detailed estimate of the cost of India's climate change program has not yet been finalized, but it is recognized that significant international resources will be required to achieve its goals. The amount will depend on the gap between the actual cost of the implementation of India's commitment in the INDC and what can be allocated from India's domestic sources. A preliminary estimate suggests that at least US$ 2.5 trillion (at 2014-15 prices) will be required for meeting India's climate change actions between now and 2030.
One of the things India is doing to help achieve both emissions reduction and improving the standard of living of its poorest citizens is developing 100 smart cities (under the Smart Cities Mission). These next generation cities will provide core infrastructure and a decent quality of life to its citizens by building a clean and sustainable environment. Smart solutions like recycling and reuse of waste, use of renewables, protection of sensitive natural environment will be incorporated to make these cities climate resilient.
The Atal Mission for Rejuvenation and Urban Transformation (AMRUT) is a new urban renewal mission launched by the Government of India for 500 cities with the objective of ensuring basic infrastructure services such as water supply, sewerage, storm water drains, transport and development of green spaces and parks by adopting climate resilient and energy efficient policies and regulations.
The Indian Government has recently launched the Clean India Mission with the objective of making the country clean and litter free by applying modern solid waste management in about 4041 towns covering a population of 306 million. It includes constructing 10.4 million household toilets and half a million community and public toilets.
Dedicated Freight Corridors (DFCs) are being introduced across India. The first two corridors are the 1520 km long Mumbai-Delhi (Western Dedicated Freight Corridor) and the 1856 km long Ludhiana-Dankuni (Eastern Dedicated Freight Corridor). The projects are expected to reduce emissions by about 457 million ton CO2 over a 30 year period.
Delhi Metro is India’s first municipal rail project to earn carbon credits. Delhi Metro has already installed 9 solar power generation facilities and plans to increase their number.
India has recently formulated a Green Highways (Plantation & Maintenance) Policy to develop 140,000 km long “tree-line” with plantation along both sides of national highways.
In India forest and tree cover has increased in recent years as a result of national policies for the conservation and sustainable management of forests. Forests and tree cover has increased from 23.4% in 2005 to 24% of India's geographical area in 2013. The Indian Government's long term goal is to bring 33% of its geographical area under forest cover. India has improved the carbon stock in its forest by about 5%, from 6,621.5 million tonnes in 2005 to 6,941 million tonnes in 2013.
According to the annual ranking by the Global Green Economy Index (GGEI) Vancouver is the world's fourth greenest city. The most recent GGEI analysis covers 60 countries and 70 cities. It tracks how investors rank the appeal of cities and countries as markets for green investment and it provides a global measure of performance in key efficiency sectors, including buildings, transport, tourism and energy. It also integrates environment & natural capital measuring perceptions and performance in environmental areas like air quality, water, forests and agriculture. According to the GGEI the top three greenest cities are Copenhagen, Amsterdam and Stockholm. The countries corresponding to these cities (Denmark, Netherlands, and Sweden) also rank high, in the top 5 country rankings. Canada is 12th. The Nordic cities have achieved their high standing with the help of their respective national governments, whereas Vancouver has achieved its high green ranking on its own with little help from the federal government.
How did Vancouver do this ?
I have blogged on several occasions about geospatial developments at the City of Vancouver. Vanmap, which is the City's geospatial portal, was an early development that has supported a number of the City's green initiatives. Vancouver was one of the first cities that made its geospatial and other data open and free.
Yesterday at Ottawa's City Hall, Andrea Reimer, Vancouver's Deputy Mayor, described in a fascinating presentation how Vancouver achieved its high GGEI ranking and its plans to rise even higher to become the world's greenest city by 2020. In addition the City has recently committed to running 100% on renewable energy by 2035. This means only green energy sources for electricity, heating and cooling and transportation.
This all started about a decade ago, when a public consultation about greening the city attracted an incredible 2300 people. The enthusiastic response was unexpected. It cost participants ten dollars and the organizers were expecting something on the order of a few hundred people. It turned out that they had to change the venue twice to accommodate everyone. The mega response clearly showed a tremendous interest in green by Vancouver's citizens. From this beginning Vancouver's greenest city initiative has continued to be a grass roots movement supported by the City government.
The City started off with some quick start projects which had high visibility and were inexpensive. These included separated bicycle lanes, provision for organic waste (food scraps), a deconstruction bylaw, drinking water stations, community gardens, urban commercial farms, green buildings, city power utility that generated electricity by burning sewage and waste, commercial car sharing, and an urban forest initiative.
The City developed the Greenest City Action Plan (GCAP) which focussed on 10 goal areas addressing three overarching areas of focus; zero carbon, zero waste and healthy ecosystems. The 10 goal areas were arrived at by a process of public consultation.
The Greenest City Action Plan includes commitments to sharply reduce greenhouse gas emissions, both from City operations and the community; generate 100 per cent of electricity from renewable resources; and implement the greenest building codes in North America. This commitment has helped stimulated the local green economy. 5% of all jobs in Vancouver are green and Vancouver is among the top 10 green technology clusters. World-leading companies such as Westport Inovations (advanced natural gas engine-maker), General Fusion (nuclear fusion), Ballard Power Systems (hydrogen fuel cells) and Saltworks Technologies (waste water remediation) are based in Vancouver. In Vancouver's case economic development and greening the city have gone hand in hand.
The results of the greenest city initiative to date are impressive; for example, 8% reduction in greenhouse gas emissions, 18% reduction in waste going to landfills or incinerators, 18% reduction in water use per capita, 19% increase in jobs in the green sector, 30% increase in food assets, and 10% increase in trips by bicycle, on foot or using public transit.
Vancouver's greenest city initiative is an amazing story with concrete measurable achievements. As David Chernushenko, Ottawa City councilman, said in his comments after Andrea's presentation, there is no reason from a technology perspective that other cities such as Ottawa cannot follow in Vancouver's footsteps with their own solutions reflecting their unique environment. But the key ingredient that enabled Vancouver's green revolution is broad public participation, which Vancouver had right from the beginning.
At the beginning of May Elon Musk gave a presentation is which he offered his vision of an alternative to fossil fuels as the future of humanity's energy sourcing and delivery. Musk's long term objective is global carbon free energy for power generation and transportation. He announced Tesla Energy and its first products, lithium-based Powerwall consumer (10 kWh) and Powerpack utility-scale (100 kWh) batteries. He also discussed a third product, GigaFactory, which he described as a gigantic machine to manufacture Powerwall and Powerpack batteries.
Elon Musk is an entrepreneur with a vision for humanity. He is the chairman of SolarCity and his vision for practical carbon-free energy helped start the company. SolarCity has already had significant transformative impact on the traditional power utility business model. He is also the founder and CEO of Tesla Motors, a manufacturer of electric vehicles and batteries. (He is also CEO of Space-X, but that's another discussion.) Musk is proposing a fundamental transformation of how the world works, by developing an alternative model for how energy is sourced and delivered. He believes it is possible with solar and batteries to wean the world off fossil fuels and reduce anthropogenic CO2 emissions to near-zero.
The world's electric power and transportation is powered by burning fossil fuels. The result is that anthropogenic CO2 emissions have pushed atmospheric CO2 concentrations (first recorded by climate scientist Charles Keeling) to levels not seen even in the paleoclimate record.
Musk thinks that collectively we should do something about this, but is has to be practical (and not win the Darwin award). His proposal for a solution has two parts.
1. Solar Musk pointed out that we have this "handy fusion reactor in the sky" in the sun. We don't have to do anything except harvest the energy. Musk calculated the total surface area needed to generate enough power to get the U.S. completely off fossil fuel power generation. Shown as a blue square on Musk's slide it covers less than 1/4 of the Texas panhandle.
2. Batteries The obvious problem with solar energy is that the sun does not shine at night and even during the day the the power generated varies. Energy captured from the sun needs to be stored. Battery technology has evolved to the point where the size of the batteries needed to wean the U.S. power generation off fossil fuels is the size of a pixel ("the red pixel") on Musk's slide.
In Musk's view what is needed is a battery that simply works. A battery that doesn't require a lot of space, is reliable, works with existing home electrical networks and solar installations, is safe, can be used for years and is affordable. The Tesla Energy consumer battery, the Powerwall, is wall-mounted and comes in different colours so you don't need a battery room. It stores either 7 kWh (priced at $3000) or 10 kWh ($3500) and can be stacked for up to 90 kWh. To put this in context the average Ontario homeowner uses about 800 kWh a month in energy which translates to an average of 27 kWh a day. The Powerwall comes with a 10 year warranty.
What it gives you is peace of mind. You don't have to worry about being without power after an ice storm. It also gives consumers energy independence. Together with solar panels with these batteries consumers can go completely off the grid. This presents a huge challenge to the traditional electric power utility business model, comparable to the impact of cell phones on traditional land-line telephone companies.
Powerwall is targetted for homes and small commercial sites. You can order the Powerwall right now on the Tesla web site. Musk said that shipping will start in 3 to 4 months. Initially the rampup will be slow because the batteries will be made in Tesla's Freemont, California factory. But next year the rampup will accelerate as Tesla transitions to its Nevada Gigafactory.
Tesla is not the only company producing this type of battery. Aquion Energy and Iron Edison are also also producing consumer-scale power batteries. You can see how Tesla's Powerwall and these other companies' products compare from a financial perspective here.
Powering remote locations
Battery power is even more crucial for people in remote locations where there is no grid (remote parts of India and Africa), electricity is intermittent (many urban areas in India), or extremely expensive (northern Canada). Musk thinks that the Tesla Powerwall can scale globally. What he expects to see is what happened with cell phones and landlines. The cellphone leapfrogged the landline. There wasn't any longer a need to put landlines in remote locations. People on islands or remote locations can install solar panels and Tesla Powerwalls and never have to worry about electicity lines.
Utility-scale battery storage
The Tesla Powerpack (100 kWh), which is designed to scale infinitely, can provides gigawatt power. According to Musk Tesla Energy is already working with a utility on a 250 mWh Powerpack installation.
Emphasizing that the Powerpack is a reality, Musk announced that the entire evening event had been powered by Powerpack batteries that had been charged by the solar panels on the roof of the building where the event was taking place. The entire evening was powered by stored sunlight.
Tesla's competitors in this market include Eos Aurora and Imergy Flow. You can see how Tesla's Powerpack and other companies' products compare financially here.
The big picture: transitioning the world to sustainable energy
Musk calculated that 900 million Powerpacks would be required to transition the world to renewable electric power (90,000 GWh). To transition the world to renewable electric power and electric powered transportation would require 2 billion Powerpacks.
Musk made the case that this is something that humanity is capable of by looking at what humanity has already done with transportation. There are about 2 billion cars and trucks on the road. About 100 million cars and trucks are produced every year so that the world's transport fleet gets refreshed every 20 years. Musk's argumemnt is that if we can do it with vehicles, it is within our power to do it with batteries.
This is the reason that Tesla's approach in developing the Gigafactory is to treat it as a product. They are designing a giant machine for making batteries. Musk foresees that there needs to be many gigafactories in the future. He emphasized that this is not something that Tesla is going to do alone. Many other companies need to develop their own gigafactories.
Musk also announced that Tesla's policy of open sourcing patents will continue for gigafactories, Powerwalls, Powerpacks, and other technologies.Musk foresees with this technology a future where the Keeling curve will flatten and where there will be no incremental anthropogenic CO2 increase. The path that he has described based on solar panels and batteries is the only path that he knows can achieve this. In his view it is something that we must do, that we can do, and that we will do. I have to agree with Ed Parsons. This is on the level of Steve Jobs revolutionizing consumer electronics and commercial music delivery, but working on the "slightly bigger challenges" of carbon-free transportation and power generation.
In November, 2012 Navigant Research released a report on building optimization and commissioning services in which it estimated that the global market for these services amounted to $2.2 billion annually in 2012. Navigant predicted that the market would double to $4.4 billion by 2020.
I have blogged several times about the growing importance of energy performance modeling based on BIM for new buildings or from scan to BIM models for existing buildings. Navigant Research has just released a new report, Building Optimization and Commissioning Services, that updates the previous estimates and suggests that the market for these services (which include energy performance analysis) is increasing more rapidly than the initial report from Navigant suggested.
Building commissioning services
Buildings are becoming more complicated to build, maintain and operate. Navigant points out that the actual performance of the building is often poorer than was intended during design. Building optimization and commissioning services, which were developed in the United States and United Kingdom in the 1960s and 1970s as a quality assurance measure for new buildings, are now being used as a tool to ensure operational and energy efficiency. According to Navigant commissioning has grown rapidly driven by the wide spread adoption of green building certification programs over the past decade as well as by government regulations and incentives. In addition owners are beginning to realize that "green building" practices can actually generate substantial savings during the operations and maintenance phase of a building.
The Navigant report focuses on three types of commissioning services;
Initial commissioning - This happens as part of handover over a new building and focuses on the building's actual performance compared to what was intended in the design and constrcution phases.
Retrocommissioning- This applies to existing buildings. It targets optimization of heating, ventilation, and air conditioning (HVAC), lighting, and other mechanical or electrical systems to identify areas of investment to improve the building's performance.
Monitoring-based commissioning - This is a process that was developed by the Energy Systems Laboratory at Texas A&M University. It tracks the actual performance of an existing building to ensure that performance goals are being me and to identify new areas for investment to improve building performance.
The market driver for these building optimization and commissioning services is the fact that in many parts of the world 40% of energy is consumed by buildings. In the U.S. 70 % of electric power demand is due to buildings. Currently the primary motivation for energy performance modeling are aggressive building codes that push energy efficiency, for example, the 2013 California Green Building Standards Code (Title 24). Other motivations are customer driven certification such as LEED and other "green" certification programs and financial incentives from local governments and power utilities to reduce energy consumption and peak load.
Measures aimed at improving the efficiency of buildings have been introduced in Europe, the U.S. and Japan. A major area of focus in the EU is “nearly zero energy” buildings. For new buildings, the European Commission has mandated 2020/2021 as the deadline when all new buildings will have to be designed to be “nearly zero energy”. For public buildings the deadline is even sooner, by 2018/2019. The Government of Japan put forward its "zero emissions buildings" target in April, 2009. The announced objective mandates that all new public buildings will be “zero emissions” by 2030. The U.S. Energy Independence and Security Act of 2007 (EISA 2007) requires that by 2030 all new Federal facilities must be "zero net energy" (ZNE) buildings. In 2007, the California Public Utilities Commission (CPUC) adopted aggressive targets for ZNE - all new residential construction in California to be zero net energy by 2020, all new commercial construction in California to be zero net energy by 2030, and 50% of existing commercial buildings will be retrofit to ZNE by 2030. According to a report from Navigant Research, global ZEB revenue is expected to grow from $629.3 million in 2014 to $1.4 trillion by 2035.
Navigant says that increased use of monitoring-based commissioning, integration into building information modeling (BIM), and cloud-based organization and distribution of commissioning documents have the potential to improve both the commissioning process and building efficiency. But according to Navigant the industry has not yet made adoption of these technologies a priority. In contrast the lower costs of data loggers and control equipment has provided the most important technological impact on the market.
Navigant estimates that global revenue in 2014 amounted to about $2.7 billion, of which the majority of the revenue went to initial commissioning. It projects that the market will grow to about $4.7 billion in 2020 (compared to an estimate of $4.4 billion in the earlier Navigant report), and about $6.6 billion in 2024. It expects that revenue for building optimization and commissioning services will grow at a compound annual growth rate (CAGR) of 9.1% from 2014 to 2024.
Navigant predicts that retrocommissioning presents a large market potential over the forecast period because existing buildings are generally not very efficient and because the stock of existing buildings is so much larger than the new buildings that will be built in the next decade. In addition there are new regulatory requirements. Navigant mentions New York’s Local Law 87 and California’s CALGreen.
Currently monitoring-based commissioning is a smalll, niche market, because there are "few building owners with enough knowledge to demand it." Navigant expects that technological improvements in building automation systems and building energy management systems will drive more demand for this type of performance monitoring and improvement so that by 2024 revenue will exceed $1 billion.
Conservation voltage reduction (CVR) or volt-var is an approach to demand response (DR) and energy efficiency (EE) that can provide major benefits without significant alterations to the power distribution system, unlike other DR/EE approaches. Volt-var is used to reduce demand and energy consumption during peak load when electricity prices are inflated and demand may exceed the available energy while maintaining customer voltage power quality according to tolerances mandated by the regulator to protect consumer and utility devices. Peak demand can be reduced typically by 2 to 4 %. The business benefits are a greater percentage of energy delivered to paying customers, reduced investment in peaking generation plants or in buying power from generators at peak market prices, and a reduction in the environmental impact of energy delivery (reduced emissions).
For the past seven years the Electric Power Research Institute (EPRI) has been leading a smart grid demonstration project initiative that includes regional demonstrations and supporting research focusing on smart grid activities related to integration of distributed energy resources (DER) including distributed generation, storage, renewables, and demand response technology. A number of well-known electric power utilities have participated in this program by developing and reporting on smart grid demonstration projects.
AEP Smart Grid Demonstration
Con Edison Smart Grid Demonstration
Duke Energy Smart Grid Demonstration
EDF Smart Grid Demonstration
Ergon Energy EPRI Smart Grid Demonstration
ESB Smart Grid Demonstration
Exelon (ComEd/PECO) Smart Grid Demonstration
Hawaiian Electric Company (HECO) Smart Grid Demonstration Project
FirstEnergy Smart Grid Demonstration
Hydro Quebec Smart Grid Demonstration
KCP&L Smart Grid Demonstration
PNM Smart Grid Demonstration
Sacramento Municipal Utility District Smart Grid Demonstration
Southern California Edison Smart Grid Demonstration
Southern Company Smart Grid Demonstration
As an example, AEP's smart grid demonstration project is based on a 10,000 customer pilot that includes smart meters, communications, end-use tariffs and controls, and distribution automation and volt/var control. It integrates other distributed and end-use technologies that are being evaluated by AEP including four MW scale sodium sulfur battery installations, two 70-kW roof-top photovoltaic systems, a new 5.7 kW concentrating solar technology, three 60 kW natural gas-fired reciprocating engines capable of combined heat and power generation, two plug-in hybrid electric vehicles, a large air conditioning system, two 10 kW wind turbines, and several 25 kW community energy storage systems (CES).
Currently a significant amount (about 10 %) of electric energy produced by power plants is lost during transmission and distribution to consumers. About 40 % of this total loss occurs on the distribution network.
In a recent blog, Jared Green, Project Manager for EPRI's Smart Grid Demonstration Initiative reported a surprising finding from the Initiative. Through the Smart Grid Demonstration Initiative EPRI found that volt-var control was was one of the most effective technologies in reducing energy demand. EPRI reported that most of the utilities that ran demonstration projects had already deployed or were deploying volt-var technologies to optimize their distribution grids. Results from the demonstration projects showed that a significant reduction in energy demand could be achieved. EPRI's analyses showed that for each 1 % reduction in voltage a corresponding 0.4-0.7 % reduction in energy demand was achieved.
For utilities that used volt-var control for targeted demand reduction, volt-var can reduce peak demand as well. Duke Energy, for example, reported reducing peak demand by about two hundred megawatts (MW) during the 2014 cold period in the Eastern U.S. It has been estimated that in the U.S. with every one percent reduction in peak demand there would be a reduced need to build a 7,900 MW power plant.
Even greater control and reduced risk can be achieved by Integrating volt-var with advanced metering infrastructure (AMI) and GIS. Volt-var/AMI/GIS provides greater precision in managing voltage reduction. At Distributech 2014, Tantalus reported using GIS is to produce voltage maps. Voltages reported by smart meters can be mapped geographically in real-time across the entire distribution network in the form of isovolt maps. This makes it possible to rapidly identify areas of low voltage and correct them in real time.
Methane is one of the more potent greenhouse gases for global warming. In June, 2013, President Obama issued a Climate Action Plan to cut the pollution contributing to climate change. An important part of the strategy involves cutting domestic greenhouse gas emissions. In March, 2014 the Administration issued Strategy to Reduce Methane Emissions, which outlined steps to cut methane emissions. The administration estimates that implementing this strategy could reduce greenhouse gas emissions by up to 90 million tonnes in 2020. The administration expects that this initiative will make an important contribution to meeting the Administration goal of reducing U.S. greenhouse gas emissions in the range of 17 % below 2005 levels by 2020.
Methane warming power
There is disagreement as to just how much more potent methane is than CO2 in warming the atmosphere. The EPA has estimated a factor of 21 times compared to carbon dioxide. But Robert Howarth, an environmental biology professor at Cornell University, has argued that it is actually 72 times as powerful as carbon dioxide in terms of its warming potential.
Methane leaks from oil wells and natural gas wells and systems
In the United States the EPA estimates that emissions of methane directly from human sources were equivalent to approximately 560 million tonnes of carbon dioxide pollution (assuming that methane's warming potential is 21 times that of carbon dioxide) in 2012, representing 9 % of all the greenhouse gases emitted as a result of human activity. Methane emissions are projected to increase to a level equivalent to over 620 million tonnes of carbon dioxide pollution in 2030. The main sources of human-related methane emissions are agriculture (36 percent), natural gas systems (23 percent), landfills (18 percent), coal mining (10 percent), petroleum systems (6 percent), and wastewater treatment (2 percent).
An important area of uncertainty is how much methane is leaking from shale gas and shale oil wells. Howarth has argued that the type of shale gas drilling taking place in Texas, New York and Pennsylvania generates particularly high emissions of methane. A study has estimated that between 3.6% to 7.9% of the methane from shale-gas production escapes to the atmosphere in venting and leaks over the lifetime of a well.
A recent study has used spatial analysis to investigate the spatial distribution of anthropogenic methane sources in the United States by combining comprehensive atmospheric methane observations, extensive spatial datasets, and a high-resolution atmospheric transport model. Based on the results of this analysis the authors conclude that the US Environmental Protection Agency (EPA) underestimates methane emissions nationally by 50%. The study found that methane emissions due to the animal husbandry and fossil fuel industries have larger greenhouse gas impacts than indicated by existing inventories.
A source of methane in the atmosphere are leaks from natural gas distribution systems. A partnership between the Environmental Defense Fund (EDF) and Google Earth has released the first interactive maps showing methane leaks from gas distribution systems under the streets of Boston, Indianapolis and part of New York City.
The Administration's strategy is to target reducing methane emissions from several sources;
Landfills: The Environmental Protection Agency (EPA) will propose updated standards to reduce methane from new landfills and determine whether to update standards for existing landfills.
Coal Mines: The Bureau of Land Management (BLM) will release an Advanced Notice of Proposed Rulemaking (ANPRM) to gather public input on the development of a program for addressing waste mine methane on lands leased by the Federal government.
Agriculture: The US Department of Agriculture (USDA), EPA and the Department of Energy (DOE) will jointly release a “Biogas Roadmap” outlining voluntary strategies to accelerate adoption of methane digesters to reduce U.S. dairy sector greenhouse gas emissions by 25 percent by 2020.
Oil and Gas: The EPA will assess several potentially significant sources of methane and other emissions from the oil and gas sector. If EPA decides to develop additional regulations, it will complete those regulations by the end of 2016. In addition the BLM will propose updated standards to reduce venting and flaring from oil and gas production on public lands.
Improved data collection: The Administration intends to implement better data collection and measurement will to improve the understanding of methane sources and trends and enable more effective reduction of methane emissions.
As part of that strategy in April, 2014, EPA released five technical white papers that present information on potentially significant sources of emissions in the oil and gas sector and options for reducing emissions. According to the Energy Information Administration (EIA), in 2011 there were an estimated 504,000 producing gas wells and an estimated 536,000 producing oil wells in the U.S. Natural gas development is expected to increase by 44% from 2011 through 2040 and crude oil and natural gas liquids (NGL) are projected to increase by approximately 25% through 2019.
Two of the white papers prepared by the U.S. EPA Office of Air Quality Planning and Standards (OAQPS) describe methane emissions due to (1) gas emissions when fracked and refracked oil wells are brought into production and (2) leaks in gas production (natural gas wells including shale gas) , processing and transmission.
Emissions from completions and ongoing production of hydraulically fractured oil wells
One of the activities identified as a potential source of emissions to the atmosphere during oil development is hydraulically fractured oil well completions which are operations conducted to bring a new fracked oil well into production or to maintain or increase the well’s production capability as a result of refracking. The EPA white paper estimates of nationally uncontrolled methane emissions from hydraulically fractured oil well completions range from 44,306 tons (40,194 tonnes) per year to 247,000 tons (224,000 tonnes) per year. There is no data on the proportion of this methane that is vented, flared or captured and sold.
Leaks are defined as methane emissions that occur at onshore production, processing and transmission facilities. It does not include leaks in gas distribution systems (see EDF and Google Earth above). This includes leak emissions from natural gas well pads, oil wells that co-produce natural gas, gathering and boosting stations, gas processing plants, and transmission and storage infrastructure. The white paper cites estimates of approximately 332,662 tonnes of potential methane leak emissions from gas production, 33,681 tonnes from gas processing, and 114,348 tonnes from gas transmission.
The EPA has just (Jan 29, 2015) issued a call inviting small businesses, governments, and not-for-profit organizations to participate in a Small Business Advocacy Review (SBAR) Panel that will focus on the development of a rule to reduce emissions of greenhouse gases including methane and volatile organic compounds (VOCs) for the oil and natural gas industry. The agency intends to add equipment and processes, including hydraulically fractured oil wells and leaks from new and modified well sites, to those currently covered by existing standards.
EPA plans to propose a rule this summer (2015) and take final action in 2016.
Largest reservoirs of methane
An indirect effect of global warming is the destabilization of methane hydrates by warming ocean currents on the floor of the ocean. Methane hydrates are the largest reservoir of organic carbon on Earth and there is the potential that the total volume of methane hydrates being destabilized by warming ocean currents could be significant. Methane is also stored in shallow Arctic reservoirs of peat, such as submarine and terrestrial permafrost, which is also being affected by global warming.
As part of the 2009 Copenhagen Accord Canada committed to a target of a 17 % reduction in emissions below 2005 levels for Canada’s economy as a whole. Without action from governments, consumers and businesses since 2005, emissions in 2020 are projected to be 857 megatonnes (Mt). Projected emissions taking into account all current measures since 2005 including land use, land-use change and forestry (LULUCF) are expected to reach 727 Mt in 2020. 611 Mt represents Canada’s Copenhagen target level of emissions in 2020 (17% below 2005 levels).
According to Environment Canada’s Canada Emissions Trends 2014, sector-specific regulations currently in place, primarily in electric power and transportation, will reduce emissions by about 130 Mt in the year 2020. For example, in 2007 the Ontario Government committed to phasing out coal generation, representing 19 % of power generation in the province, by 2014.