NAVFAC MIDLANT Interviewed about the Demand Response Event the First Week of July

By jcarmichael | Published: July 21, 2010

NAVFAC MIDLANT’s Marvin Newton is interviewed regarding the Norfolk VA Naval installations participation in the PJM-Dominion Demand Response Event, July 7, 2o10.

In a Press Release issued by NAVFAC it was stated,

Hampton Roads-area Navy base electric plants produced 35 megawatts of electricity, enough to power 35,000 households, July 7 as part of an emergency demand response (EDR) program with the PJM Interconnection electrical grid that serves several states on the East Coast.

The program is part of a power demand curtailment contract started in 2009 by NAVFAC Mid-Atlantic to reduce bases power demands on the entire grid when such demands are at their highest.

The contract is through the Defense Energy Support Center with curtailment service provider NuEnergen, of White Plains, N.Y. The contract calls for a total of eight electrical plants at Norfolk Naval Station, Naval Support Activity Norfolk, Norfolk Naval Shipyard, Portsmouth Naval Medical Center, Naval Air Station Oceana, Joint Expeditionary Base Little Creek-Fort Story and Dam Neck Annex to provide 35 megawatts of their own electricity for use on bases. This temporarily reduces the demand on the grid during peak usage emergencies, such as the heat wave that saw temperatures of 100 degrees on the East Coast during the week of July 5.

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The Navy and NuEnergen Combine to Save Energy, and Save Money During The Heat Wave

By jcarmichael | Published: July 10, 2010

In the recent heat wave across the east coast of the United States, major metropolitan areas experienced temperatures as high as 102 degrees.  Air Conditioning being the major culprit in energy consumption, these extreme temperatures placed an excessive burden on the Electric Grid to supply enough power to meet the demands of all of the customers. If the demand for electricity exceeds supply there is a very likely risk of blackouts, fires and other potentially disruptive outcomes.

On Wednesday July 7, 2010, this demand became too large for the PJM regional transmission organization to maintain stable power supply.  The Navy and NuEnergen to the rescue! 

 NAVFAC LOGO Large

Naval Facilities Command (NAVFAC) Mid-Atlantic, through NuEnergen, is enrolled in an Emergency Demand Response Program where, when called upon, the Navy Bases in Norfolk can generate and distribute their own electricity and remove some of their burden from the Dominion power grid.  The combined efforts of Norfolk Naval Station, Naval Support Activity Norfolk, Norfolk Naval Shipyard, Portsmouth Naval Medical Center, Naval Air Station Oceana, Joint Expeditionary Base Little Creek-Fort Story and Dam Neck Annex, provide 35 megawatts of their own electricity for use on bases.  Enough to power 35,000 households.

On Wednesday morning NuEnergen received notification from PJM that a Emergency Load Event had been declared.  Responders were given less than two hours to respond.  NuEnergen immediately began executing on established protocols with NAVFAC to begin generation and remove load from the grid.  Due in large part to the professionalism of the NAVFAC engineers and technicians, the Naval installations in the Norfolk region were all able to meet this challenging task and remove their loads from the grid in under an hour!

The benefits of this program are multifold.  Not only did the actions of NAVFAC Mid-Atlantic help to keep energy supply stable during a difficult time, their efforts save tax payers significantly. 

"We get approximately $60,000 in capacity credits this curtailment year for every megawatt enrolled in this reliability power grid program," said Marvin Newton, of NAVFAC Mid-Atlantic’s Utilities and Energy Management. "We may be required by PJM to curtail for up to 10 events per enrollment year (June through May), and if we’re able to meet the demand, it’s worth up to $2 million a year in credits."

NuEnergen provides curtailment and load response services for many institutions like the Navy.  For organizations interested in programs like this, NuEnergen performs a site survey to identify Curtailable and Generation capacity then enrolls that capacity with the requisite Regional Transmission Organization.  NuEnergen’s staff works with the client to identify needed protocols and insures that all personnel are aware of the processes involved in the event an Emergency is declared.  In such an event, NuEnergen serves as the quarterback in notifying all participants of an Event Declaration, insuring actions are being taken and reporting on performance after the conclusion of the event.

NuEnergen recommends participation in these programs for any large organization with sizable generation capacity or sizable load reduction capacity. 

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MIT Study Insists U.S. Gas Industry Should Support Carbon Pricing

By Aaron Paulding | Published: July 1, 2010

(Source: OECD/NEA)

(Source: OECD/NEA)

Increasing the nation’s natural gas power generation could be the first big step in reducing America’s dependence on fossil fuels in its electricity sector in the coming years.  According to a study by the Massachusetts Institute of Technology, the natural gas industry should start backing a price on carbon emissions, which would incentivize electricity generators to use natural gas rather than coal when the carbon price reaches a certain level.

The report confirms previous estimates that the United States has about one hundred years of accessible gas reserves, a figure that has been boosted in the last two years by the rapid deployment of technology in shale gas recovery.  Due to these advances, natural gas consumption will play a greater role in the nation’s energy portfolio, with usage doubling by 2050.  Currently, gas provides 21% of the country’s electricity, and only emits half the emissions as coal per unit of power output.

Also, if a price is placed on carbon emissions along with a target to reduce emissions 50% from 2005 levels, gas consumption will double by 2040, rather than 2050, to comprise 40% of total electricity generation.  At that time, newer technologies such as wind and solar power will gain more market share as they become more efficient and scalable, phasing out both gas and coal generation.  The study claims that “a carbon dioxide price for all fuels without long-term subsidies or other preferential treatment is the most effective way” to leverage abundant domestic gas supplies to lower greenhouse gas emissions.  This carbon fee will help energy markets account for the pollution and efficiency of various technologies, without explicitly favoring one clean technology over another.  Therefore, electricity producers will be able to choose their method of greenhouse gas reductions based on whichever is most cost-effective, minimizing the premium for green technologies, while maximizing the environmental benefits.

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After 9-Year Battle, Federal Government Approves Cape Wind Project

By Aaron Paulding | Published: May 21, 2010

cape_wind_offshoreLast month, Secretary of the Interior Ken Salazar approved the construction of the nation’s first offshore wind farm.  He announced, “I am approving the Cape Wind project.  This will be the first of many projects up and down the Atlantic coast.”  On May 17, The Federal Aviation Administration (FAA) ruled that the Cape Wind Project off the coast of Cape Cod, Massachusetts “would not be a hazard to air navigation”.  The $1 billion construction project is expected to start by the end of the year and will include 130 turbines, each 400 feet long and providing 3.6 megaWatts (mW) of capacity.  The entire farm will encompass a twenty-five square mile stretch off of the coast, and will be capable of producing up to 468 mW of electricity with an average output of 182 mW, enough to supply 200,000 homes.  Cape Wind Associates, LLC, the project developer, expects that the turbines will generate enough power to supply 75% of the electricity demand for Cape Cod, Martha’s Vineyard and Nantucket.

The decision is precedent-setting, with some very important implications for energy markets and the environment.  The project will reduce Massachusetts’s carbon emissions from conventional power plants by 700,000 tons per year.  Nationwide, there are currently a dozen additional offshore wind projects, representing 2,500 megawatts of green power, in the planning or proposal stages that are now more likely to move forward.  Experts agree that Cape Wind and additional wind farms can easily power more than one-fifth of the nation’s electricity grid, and some say that wind farms could be built in Texas, North Dakota, and South Dakota that could potentially power the entire U.S. electricity grid.

While it is likely that Cape Wind Associates and the global climate will benefit from this decision, the outlook for the average electricity consumer may not be so positive.  On May 7, Cape Wind Associates announced that it would file a contract with state regulators under which National Grid would begin purchasing half of Cape Wind’s electricity for 20.7 cents per kilowatt-hour in 2013, about three times the price of the average monthly electricity rate for southeastern MA over the past four years.  However, this cost figure will include the purchase of Renewable Energy Credits (RECs), which National Grid can sell to generators that need to purchase credits to fulfill their renewable energy portfolio requirements.  In addition, the contract price would rise 3.5% per year for the 15-year contract, according to Cape Wind and National Grid.  In terms of consumer prices, a homeowner or small business owner that uses 500 kWh per month will see their bill increase by about $1.59 per month, or 2%.  However, according to the National Grid president Tom King, this energy price premium will be worthwhile in the medium and long run.  He asserted, “We recognize that all renewable energy, be it on or off-shore wind, solar or other sources, has a cost associated with it.  However, carbon-based electricity generation creates longer-term costs, impacting our health and our environment.”

Given that no new nuclear plants have been built in decades due to strong opposition and safety concerns, and that clean coal is very much an unproven technology, offshore wind looks promising.  However, it is baffling that so many environmentalists oppose such projects.  While it’s possible that the view of windmills may offend certain people native to the Bay State, and that the windmills could potentially disrupt some bird migration routes, it is important to step back and examine the bigger picture.  When electricity demand is highest, it is not the hydropower and nuclear plants that fire up to supply the additional demand.  Rather, natural gas and oil power are frequently the marginal producers, increasing pollution and carbon emissions.  Both China and Western Europe are outpacing the United States in expanding their respective wind power capacities.  The Cape Wind Project is an important first step in diversifying our energy portfolio, and quickly decreasing the demand on an aging and constrained power grid.

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New York DEC Decision Raises Questions on Indian Point’s Future

By Aaron Paulding | Published: April 21, 2010

Earlier this month, the New York State Department of Environmental Conservation (DEC) denied a water permit renewal to the Indian Point nuclear power plant, declaring that the plant’s method of drawing water to cool its towers violates the Clean Water Act.  The DEC maintained that the plant’s water intake process destroys plankton, eggs and small fish that become trapped against the filter screens.  Additionally, the water pumped back into the river is twenty to thirty degrees warmer, further disrupting the microenvironment surrounding the pipes.  If Entergy, the plant’s owner, cannot secure DEC approval before the existing permits expire in 2013 and 2015, the company will be forced to spend more than $1 billion in upgrading the cooling system, or worse, shut down the facility permanently.  Even if Entergy does choose the former, the project will require closing both nuclear reactors for nearly a year.

Indian Point Nuclear Power Plant in Buchanan, NY

Indian Point Nuclear Power Plant in Buchanan, NY

Further complicating Entergy’s difficulties, the company is still deciding how to cope with a decision in Vermont in February in which the State Senate voted to close down the Vermont Yankee plant after 2012 because of safety fears.  Indian Point produces 2,000 megawatts of power or 30% of New York City’s electricity demand and Vermont Yankee generates power for 33% of Vermont.  If these two plants are closed, electricity rates for consumers will likely increase sharply.  As it is, New York City has some of the highest electricity rates in the country, and Vermont’s rates are well above average.  Higher electricity costs will certainly be a burden to businesses and residents in these areas, and may even coerce some companies to relocate where their operating costs are much lower.  Since Indian Point and Vermont Yankee supply so much power to their respective regions, any replacement capacity will probably come from large fossil fuel sources, increasing greenhouse gas and particulate emissions.

Forcing Entergy to shut down these two plants is irresponsible.  The electricity grid is already constrained and energy prices will only increase as the economy strengthens.  If the plants close, prices will become far more volatile, creating uncertainties for thousands of businesses.  While environmental and safety hazards should absolutely be a concern, careful safety inspections and incremental infrastructure upgrades are the answer here, not terminating all nuclear generation facilities.

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FERC Approves Google Energy as Power Marketer

By Aaron Paulding | Published: March 30, 2010

google-energy-solarwindThe Federal Energy Regulatory Commission granted Google Energy, LLC permission to become a power marketer, allowing the company to purchase and resell electricity in wholesale markets. Google will have the authority to sell energy, capacity and ancillary services at market-based rates in the NYISO, PJM, ISONE, CAISO, and MISO markets. Google representative Niki Fenwick explained, “Right now, we can’t buy affordable, utility-scale, renewable energy in our markets. We want to buy the highest quality, most affordable renewable energy wherever we can and use the green credits.”

In reviewing Google’s application for power marketing status, FERC confirmed that Google does not own any electricity generators to sell power in wholesale markets nor do they own any transmission facilities, intrastate natural gas pipelines, or sources of coal supplies and coal transportation systems. Any electric generation capacity that Google controls is strictly for the purpose of running on-site facilities and providing back-up power in the event of an emergency. Because of this decision, the company will be better able to achieve its goals of managing the risks of energy price volatility within its large portfolio, and Google will have better access to renewable energy credits and carbon offsets for its large data centers. Other large companies with similar authority include Wal-Mart, Alcoa, the Safeway grocery store chain, Kimberly-Clark, and Merk & Co.

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Carbon Reporting Software Market Set for Explosive Growth

By Aaron Paulding | Published: February 10, 2010

According to a recently published report by Groom Energy Research, the market for carbon reporting software, known as Enterprise Carbon Accounting (ECA) software, is expected to increase seven-fold by 2011 as more firms begin measuring and reporting on their carbon emissions.  While these programs allow a company to input its direct emissions data, they also calculate the customer’s indirect emissions output by electric generators supplying power to them.  The ECA programs will even recommend strategies to reduce greenhouse gas emissions based on the company’s operations and production processes.

There are several factors driving the growth in carbon monitoring programs.  One is the newly active Environmental Protection Agency regulation, which requires facilities that produce more than 25,000 tons of greenhouse gases per year to disclose their annual emissions figures to the EPA.  However, for companies below this threshold, increased pressure from customers and investors to project a greener public image is the leading impetus in purchasing ECA software.  More than 2,000 companies now voluntarily report their emissions to the Carbon Disclosure Project, a program designed to establish customer baselines for greenhouse gas emissions levels and help participants take efforts to reduce emissions from year-to-year.  Additionally, the desire to drive long-term cost and energy savings through sustainability investments such as energy efficiency programs and infrastructure upgrades has propelled the ECA market.  A third leading factor driving ECA software purchases is mandates from large buyers, such as Wal-Mart, to measure the environmental footprint of operations throughout their supply chains.  Suddenly, Wal-Mart’s 60,000 suppliers demanded carbon software to measure their emissions levels.

The report also notes that the ECA software and services market exceeded $380 million in 2009, while venture capital investment totaled $46 million in ECA start-up companies.  As regional voluntary carbon markets become more mature in the next several years, carbon reporting software will be an indispensable tool for thousands of companies.  NuEnergen currently offers a Carbon Footprint Tracker on our EnerTrac energy dashboard to assist our clients in inventorying their various sources of greenhouse gas emissions.

NuEnergen's Carbon Footprint Tracker

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U.S. Energy Department Affirms Wind Power Potential

By Aaron Paulding | Published: January 22, 2010

turbines1According to a study released by the Energy Department’s National Renewable Energy Laboratory, wind could produce 20% of the electricity required by households and businesses in the eastern U.S. by 2024, although this would require a $90 billion investment in the power grid.  “We can bring more wind power online, but if we don’t have the proper infrastructure to move that power around, it’s like buying a hybrid car and leaving it in the garage,” said David Corbus, the project manager for the study.  In order for the goal to be realized, the grid must be equipped with better power lines that can support the load during windy hours and carry the electricity to cities where demand is highest.  The current grid cannot utilize all the wind power produced during windy periods, which wastes a vast amount of potential clean power.

For wind generation to comprise one-fifth of eastern electricity production, wind farms must be built on both land and in favorable offshore locations, and about 22,000 miles of new power lines must be installed.  Wind power capacity must increase by ten times current levels to about 225,000 megawatts.  Unfortunately, large offshore farms such as the Cape Wind project in Massachusetts have been delayed for years due to local opposition, even though the project could provide renewable energy to 400,000 households.  The Interior Department will finally decide this spring whether to approve the wind project.  Despite the project delays and the recession, U.S. wind electricity production increased 29 percent from January to October 2009 compared to the same period in 2008.

One way the federal government could help boost the wind power industry is by mandating a national renewable portfolio standard (RPS), requiring utilities to purchase a minimum amount of their energy from clean generation sources.  Currently, several eastern states such as New York, New Jersey, Connecticut, Maine, and New Hampshire have an RPS exceeding 20% by no later than 2025, but a national goal with a single target year would much better incentivize building additional wind farms and other renewable sources in the coming years, by sending proper price signals to contractors.

By increasing wind power generation and other renewable sources to these levels, carbon emissions are projected to decrease by an additional 4.5 percent by 2024.  However, if no more wind farms are constructed, emissions will rise.  Additionally, growth in wind power will diversify the national energy portfolio and create green jobs.

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Getting Smarter - Smart Grid on the Rise

By Aaron Paulding | Published: January 21, 2010

solar-arrayWhile the original electrical grid facilitated the industrial innovations of the 20th century, the smart grid will inspire the green advances of the 21st. “Without it, most of the other green technology won’t work,” says Ben Kortlang of KPCB, a Silicon Valley venture-capital firm.  While technologies in fields such as communications and medicine have steadily advanced in the past century, electrical grids still utilize nineteenth century technology to power twenty-first century appliances.  Half of the grid is more than forty years old.  This antiquated network creates several problems.   Currently, peak power plants are built in order to supply power to the grid during peak demand hours on just a couple of the hottest days of the year.  Constructing new plants requires an investment of $1 billion or more and overcoming numerous regulatory obstacles, making the process take years or even decades to complete.

Moreover, utilities are still dependent on customers to tell them when there is a power outage.  Recent figures suggest that outages cost the U.S. economy $150 billion every year.  Nearly 10% of electricity is lost from the U.S. grid due to technical problems and theft.  Connecting the grid via a communication network will allow utilities to reroute broken paths and repower the grid almost instantaneously.

Interest in smart grid technology that will make our electricity grid much more efficient is picking up steam.  Since the grid is aging and needs to be updated soon, it is sensible to upgrade to the best available technology.  Venture capital firms have invested over $1 billion in smart grid start-ups since 2004.  Also, the federal government is overseeing a $3.4 billion program to modernize the grid through a series of infrastructure and efficiency projects across the country. According to the Brattle Group, a consultancy, the benefits of a smart grid may reach $227 billion over the next 40 years, depending on which other policies are implemented in tandem.  If utilities provide customers with real-time usage information and introduce dynamic pricing models, charging rates based on the concurrent electricity demand, consumers will realize $45 billion in cost savings.

If consumers were just able to access real-time usage information, they would reduce consumption by 6.5% on average.  If variable pricing schemes were also implemented, users would reduce their demand by 10 to 15% during peak hours.  Essentially, variable pricing and real-time monitoring would allow consumers to implement their own micro demand response programs voluntary, scaling back their electricity usage when price signals compel them to do so.  Customers would save money and the overall electricity demand curves would be less volatile.  Thus, utilities would no longer have to purchase as much backup capacity.  The customers’ and the grid operators’ interests would therefore be better aligned, especially if revenue decoupling programs were implemented nationwide to maintain utility’s profit margins as electricity usage decreased.

A more intelligent grid design would allow the transfer of electrons from locations with an oversupply of power to points where demand is high and the grid is stressed.  Smart appliances such as clothes dryers and dishwashers could be programmed to run only during times of low demand.  If a plug-in electric car were not being used during peak daytime hours, the utility could pay the car owner for withdrawing some of the storage power out of the car battery to redistribute electricity across the grid where it is needed.  Smart grid technology would also allow renewable energy sources to be better incorporated into the grid.  Smart appliances could be programmed to run only when wind turbines or solar panels are feeding power into the grid, making these intermittent sources of energy more useful and the grid cleaner.

Morgan Stanley predicts that growth in smart grid technology will exceed 8% per year, reaching $100 billion by 2030.  Cisco expects the smart grid communications network to eclipse the size of the internet.  Although the specifics of these predictions may vary, they all include one overarching theme; smart grid is a sensible way to improve the nation’s energy infrastructure, and if planned properly, the returns on smart grid investments will generate cost savings that will greatly exceed the up-front capital expenses of modernizing the grid.

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EPA Implements Mandatory Greenhouse Gas Emissions Reporting Rule

By Aaron Paulding | Published: January 14, 2010

co2_emissionssmokestackAs per the new Environmental Protection Agency regulations, facilities that produce in excess of 25,000 metric tons of greenhouse gas (GHG) emissions per year must begin to report their annual emissions to the EPA, effective January 1, 2010.  Under this rule, only direct emissions occurring on the facility’s grounds are included in determining its total emissions; it will not include the facility’s indirect emissions resulting from electric generation at power plants supplying the facility.  The regulation will not require the facility to reduce its emissions at this time, but the first annual emissions report covering the 2010 calendar year will be due by March 31, 2011.  As the EPA collects these data over the next several years, the agency will decide on effective policies to mitigate greenhouse gas emissions.

This legislation includes emissions of the most common greenhouse gases, including carbon dioxide, methane, nitrogen dioxide, hydrofluorocarbons, petrofluorocarbons, sulfur hexafluoride (SF6), and other fluorinated gases, which have extremely high global warming potentials.  Since the most powerful greenhouse gases, such as SF6, have global warming potentials that are ten or twenty thousand times as strong as carbon dioxide, only 1-2 tons of annual emissions of these gases can cause an industrial facility to exceed the mandatory reporting level.

The new rule will cover approximately 10,000 locations, including industrial gas suppliers, as well as electricity generation facilities, stationary fuel combustion sources, petroleum refineries, landfills, customers with high heating oil consumption, and heavy trucks and equipment.  The EPA estimates that this program will cover 85% of U.S. greenhouse gas emissions.  Most commercial buildings will not meet the minimum threshold that mandates emissions reporting, which is equivalent to the annual emissions of about 2,300 homes or that of 4,600 passenger vehicles.   If a facility exceeds the emissions threshold of 25,000 tons of carbon dioxide equivalence during any given year, the facility owner or manager will be required to report annual emissions electronically to the EPA each year until the building can reduce its emissions below 25,000 tons for 5 consecutive years, or below 15,000 tons for 3 years.

In addition, building heaters such as water heaters that burn fuel qualify as a stationary fuel combustion source under the EPA’s definition.  Therefore, they must be included in determining if the facility exceeds the emissions threshold of 25,000 tons, and must be included in any mandatory reporting.  The EPA has posted a calculation tool on their website to help facilities determine their requirements under the regulation.  If a commercial building has a maximum rate heat input capacity greater than 30 mmBtu per hour, the facility manager must complete further calculations to determine if it meets the threshold of mandatory reporting.   Please visit the EPA’s GHG Mandatory Reporting Applicability Tool website to learn more information.

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