Assessments
This section includes articles about various types of energy assessments, such as energy audits and energy service companies.
Addressing Volatile Energy Costs through Supply and Demand
Dec 20th
Energy is playing a larger role in business profitability than ever before – and it’s growing more complex by the day as sourcing options get more difficult, and energy costs continue to be highly volatile. During the past five years alone, natural gas has ranged from $8.12/Mmbtu to $3.31/Mmbtu while crude oil has moved from $58.80/barrel to more than $100/barrel. As conditions change in energy and sustainability markets across the globe, windows of opportunity to tap new energy sources are continually opening and closing, and keeping track of these moving parts can be a time-consuming and data-heavy venture.
Traditionally, energy, efficiency, reliability, procurement and sustainability initiatives have been addressed by installation of more efficient operational assets, such as lighting, HVAC and building control software. However, with today’s perpetually rising energy costs, along with outside influences from consumers to Wall Street, and sustainability reporting requirements, companies are considering additional innovative ways to expand on the capabilities of operational assets by managing costs through smarter energy management on both the supply and demand sides.
How it Works
Supply – Simply put, intel about energy supply costs and regulatory landscape can help companies buy energy in a smarter way. In a deregulated market, purchasing energy at the best price can be a complex endeavor. It’s not enough just to issue a Request for Proposal (RFP) and choose what may appear to be the lowest price. To get the highest value for each energy dollar, it pays to take a more strategic approach to energy procurement, taking into consideration market dynamics, rate and data analysis, supplier and utility negotiations, budget concerns, risk strategy, market intelligence, contract terms and more. Focusing on these areas, an organization can take a proactive approach to buying energy, which ultimately will better control costs.
Demand – As discussed in a previous article addressing demand response (DR) programs authored by Schneider Electric’s Donald Rickey, smart grid technologies have evolved to allow a bidirectional flow of information regarding energy use and demand between end users and the electric utility. Over the past several years, demand response, or the ability for energy consumers to manage energy consumption in response to supply conditions, has evolved from a reliability tool used in peak emergencies to a solution for actively managing energy use. For example, energy pricing fluctuates throughout the course of a day, based on the demand the grid is experiencing. As a result, participants in demand response programs can monitor these costs and run energy-intensive business operations during times when costs are the lowest.
Traditionally, the operating model for energy supply and demand activities has always been conducted in a siloed manner, resulting in fragmented decisions regarding energy resources within an enterprise. In connecting the supply and demand pieces of the energy puzzle together, organizations can now be equipped with an end-to-end, holistic approach to overall energy procurement. This method not only allows comprehensive visibility into energy prices (along with the ability to better procure and manage costs associated with water, gas, electricity, steam and power), but also provides cost savings that can be redirected from energy bills to the business – positively impacting the bottom line.
How to Implement an Integrated Energy Model in Your Organization
Creating a model for effective energy management begins and ends with a comprehensive energy management lifecycle strategy that aligns with the goals of the organization and allows users to optimize energy purchase and use over time. When creating an integrated supply and demand energy management model, the following steps should serve as a guide:
1) Measure Current Energy Use: Get access to water, gas, electric, steam and other associated energy invoices to evaluate what is being spent today. In addition, consider an energy audit and use metering technology to gather information about how the organization is using energy. All information gathered through this process will provide valuable data and insight into the areas that need to improve to achieve lower energy costs.
2) Define a Strategy: With better visibility into the organization’s energy spendings, the next step is to create a comprehensive plan to meet and align with the company’s overall energy goals, risk appetite and budget.
3) Evaluate Partners: Seek out an energy management partner to implement a cost-effective solution to achieve the integrated supply and demand energy strategy.
4) Control Energy Use: Monitor operations to ensure reliability, uptime, power quality and billing accuracy.
5) Train Internally and Externally: It is important to make sure the people that are using the energy supply and demand systems – internally and externally – are properly trained on any new software, hardware or management tools. Without proper knowledge of how to utilize these technologies, the system may not operate at its full potential.
6) Continue to Optimize Performance: Utilize support services and reporting software to ensure that the organization is continuously achieving optimum energy cost and consumption now and in the future.
The Future of Integrated Supply and Demand
In the future, we will see integrated supply and demand models continue to evolve as more technology is introduced to the marketplace. In the short term, advances in handheld device applications will allow facility managers, company stakeholders and even CEOs to tap into crucial information regarding energy procurement and the company’s carbon footprint anytime, anywhere. The smart grid will also evolve to better include these devices, including mobile phones, to ensure that customers are making the smartest decisions about their energy use and procurement at any given time.
However, one thing is certain – in the future, energy prices will continue to rise, and organizations that do not choose to implement an energy supply and demand strategy will be making a decision that could potentially cost them valuable budget resources that could be applied to benefit other areas of their business.
Written by James Potach, senior vice president, Energy Solutions, Schneider Electric; Potach is responsible for energy management and procurement, power management and performance contracting.
Startling the Global Community, Canada Withdraws from the Kyoto Convention
Dec 16th
Canada has announced its intention to withdraw from the Kyoto treaty on greenhouse gas emissions (GGE), sandbagging the other signatories to the convention. The Kyoto protocol, initially adopted in Kyoto, Japan in 1997, was designed to combat global warming with the agreement allowing countries like China and India take voluntary, but non-binding steps to reduce their greenhouse gas carbon emissions.
International condemnation was swift.
China’s Foreign Ministry spokesman Liu Weimin said at a news briefing, “It is regrettable and flies in the face of the efforts of the international community for Canada to leave the Kyoto Protocol at a time when the Durban meeting, as everyone knows, made important progress by securing a second phase of commitment to the Protocol. We also hope that Canada will face up to its due responsibilities and duties, and continue abiding by its commitments, and take a positive, constructive attitude towards participating in international cooperation to respond to climate change.”
Xinhua, China’s state news agency, labeled Ottawa’s decision “preposterous, an excuse to shirk responsibility” and implored the Canadian government to reverse its decision so it could help reduce global emissions of GGEs.
Beijing’s comments are significant, not least because the PRC is currently the world’s biggest producer of GGEs after the U.S., but China has stalwartly insisted that the Kyoto Protocol remain the foundation of the world’s efforts to curb GGE emissions, which scientists maintain are a significant contributor to global warming. Pleading its special status as a developing nation, China at the recently concluded climate change negotiations in Durban was granted an extension of the terms of implementing the Kyoto protocol until 2017 even as it bowed to pressure to launch later talks for a new pact to succeed the Kyoto protocol that would legally oblige all the big GGE producers to act.
Japan also expressed displeasure at the Canadian decision, but in a more nuanced approach, Japanese Environment Minister Goshi Hosono urged Canada to continue to support the Kyoto agreement, which included “important elements” that could help fight climate change.
UN climate chief Christiana Figueres opined in a statement released to the press, “I regret that Canada has announced it will withdraw and am surprised over its timing. Whether or not Canada is a party to the Kyoto Protocol, it has a legal obligation under the convention to reduce its emissions, and a moral obligation to itself and future generations to lead in the global effort.”
A spokesman for France’s Foreign Ministry called Canada’s decision “bad news for the fight against climate change.”
Even plucky Southern Pacific island nation Tuvalu weighed in with its lead negotiator Ian Fry bluntly stating in an e-mail to Reuters, “For a vulnerable country like Tuvalu, it’s an act of sabotage on our future. Withdrawing from the Kyoto Protocol is a reckless and totally irresponsible act.”
The silence from Washington on the issue was significant, as the United States Bush administration refused to sign the protocol, arguing instead that China and other big emerging emitters should come under a legally binding framework that does away with the either-or distinction between advanced and developing countries.
Toughing it out, Canadian Minister of the Environment Peter Kent stated that the protocol “does not represent a way forward,” adding that meeting Canada’s obligations under the Kyoto convention would cost $13.6 billion, asserting, “That’s $1,546 from every Canadian family – that’s the Kyoto cost to Canadians, that was the legacy of an incompetent Liberal government.”
Canada’s decision nevertheless has garnered a few supporters. Australian Minister of Climate Change Greg Combet has defended Canada’s decision, remarking, “The Canadian decision to withdraw from the protocol should not be used to suggest Canada does not intend to play its part in global efforts to tackle climate change.” One might note here that coal is Australia’s third largest export.
So, why the abrupt Canadian volte-face? Canada has the world’s third-largest oil reserves, more than 170 billion barrels and is the largest supplier of oil and natural gas to the U.S.
The answer may lie in Canada’s far north, in Alberta’s massive bitumen tar sands deposits, a resource that Ottawa has been desperate to develop. Since 1997 some of the world’s biggest energy producers have spent $120 billion in developing Canada’s oil tar sands, which would be at risk if Ottawa went green in sporting the Kyoto accords.
According to the Canadian Association of Petroleum Producers, more than 170 billion barrels of oil sands reserves now are considered economically viable for recovery using current technology. Current Canadian daily oil sands production is 1.5 million barrels per day (bpd), but Canadian boosters are optimistic that production can be ramped up to 3.7 million bpd by 2025.
So, what’s the problem?
Extracting oil from tar sands is an environmentally dirty process and the resultant fuel has a larger carbon footprint than petroleum derived from traditional fossil fuels, producing from 8 to 14 percent more CO2 emissions, depending on which scientific study you read.
So, Canada acceding to the Kyoto Treaty terms would effectively kill the burgeoning Canadian tar sands extraction industry. The Canadian tar sands already suffered a massive setback earlier this year when the Obama administration effectively sidelined the Keystone XL pipeline, which was due to transport tar oil production across the U.S. to refineries on the Gulf Coast.
So, Ottawa on the Kyoto convention has effectively drawn its line in the sand(s.)
Where things go from here is anyone’s guess.
Written by. Dr. John C.K. Daly for OilPrice.com. The opinions expressed in this article are solely those of the author, Dr. John C.K. Daly. For more information on oil prices and other commodity related topics please visit http://oilprice.com
Natural Gas: The Clean Alternative
Dec 12th
It has been common knowledge for quite sometime now that natural gas is a suitable clean alternative to all fossil fuels. Natural gas can reduce greenhouse gas emissions and its reserves are abundant. Sure, it’s not on par with renewable sources of energy such as solar and wind. But let’s get real; solar, wind, biomass, geothermal lack the installed base to make a difference.
A quick review of the supply source and demand sector data from the U.S. Energy Information Administration (EIA) given below shows that:
- Coal is the primary supply source for Electric Power Generation; the largest energy demand sector.
- Petroleum is the primary supply source for the Transportation industry; the second largest demand sector.
- The 8% contribution of renewable energy to U.S. energy pathway is primarily from biomass (50%) and conventional hydroelectric power (35%). Not including these sources, solar and wind makeup only 0.8% of the entire energy supply for the U.S. economy; see EIA Renewable Energy Consumption and Electricity Preliminary Statistics 2009.
OK, the U.S. and for that matter most developed countries of the word are fossil fuel based economies. Will renewables ever make an impact on the economy? As far back as the mid 90’s, some of us thought they would. But due to the high capital cost, poor reliability, site specificity, intensive real estate requirements, and the need for local, state and federal incentives, renewables are creeping forward at such a small pace society needs an interim alternative to alternative energy.
In such a scenario, natural gas comes to the rescue and serves as the clean energy bridge to the future. Shale gas the new source of today’s natural gas, which has contributed to an increase in domestic reserves, has had a deep impact on the U.S. economy. A report from IHS Global Insight points out that shale gas created jobs, reduced consumer costs for natural gas and electricity and increased local, state and federal tax revenues. Furthermore, natural gas requires no innovation to burn in an electric power generation station or combust in any internal combustion energy on the road. And finally, natural gas is cheaper. If this is not what is needed to bolster our economy, then someone better come forth ASAP with a more viable solution.
Although, environmentalists will argue that natural gas is a limited fossil fuel, it seems like the industry is Robbing Peter to Pay Paul! On face value this appears to be true, but as we wait to realize the benefits of clean energy, society is burning lots of coal and petroleum, while exporting dollars to feed our thrust for harmful fossil fuels. For the foreseeable future, burn we must!
The following chart clearly shows that natural gas is a much cleaner source of energy than other more ‘conventional’ fossil fuels.
Fossil Fuel Emission Levels | |||
Pounds per Billion Btu of Energy Input | |||
| Pollutant | Natural Gas | Oil | Coal |
| Carbon Dioxide | 117,000 | 164,000 | 208,000 |
| Carbon Monoxide | 40 | 33 | 208 |
| Nitrogen Oxides | 92 | 448 | 457 |
| Sulfur Dioxide | 1 | 1,122 | 2,591 |
| Particulates | 7 | 84 | 2,744 |
| Mercury | 0.000 | 0.007 | 0.016 |
Source: Natural Gas Issues and Trends 1998 | |||
The only conundrum is the slow rate of adoption of compressed or liquefied natural gas vehicles (CNG and LNG) in the transportation industry. Here too, natural gas is cheaper than fossil fuels, the cost of conversion is significantly less than Electric Vehicles (EV), and does not have the range anxiety of EVs. NGV America reports that there are about 112,000 NGVs on U.S. roads today and more than 13 million worldwide. Considering the fact that there are about 255 million registered vehicles in the U.S. the number of CNG and LNG vehicles are pitiful.
In closing, either go natural gas today or live with an ever-increasing environmental and economic threat from coal and petroleum. As of now, seeing our economy run by a large percent of truly clean and renewable fuels is unfortunately a distant dream.
References:
- EIA: http://www.eia.gov/totalenergy/data/annual/pecss_diagram.cfm
- EIA: http://www.eia.gov/cneaf/alternate/page/renew_energy_consump/rea_prereport.html
- IHS Global Insight: http://www.ihs.com/info/ecc/a/shale-gas-jobs-report.aspx
- NGV America: http://www.ngvc.org/about_ngv/
- Bureau of Transportation Statics: http://www.bts.gov/publications/national_transportation_statistics/html/table_01_11.html
The opinions expressed in this article are solely those of the author Dr. Barry Stevens, an accomplished business developer and entrepreneur in technology-driven enterprises. He is the founder of TBD America Inc., a global technology business development group. In this role, he is responsible for leading the development of new and emerging technology driven enterprises in the shale gas, natural gas, renewable energy and sustainability industries. To learn more about TBD America, please visit: http://tbdamericainc.com/
Innovators ‘home’ in on energy
Dec 9th
Fortunately for the rest of us, some people missed the message, the one that says we’re in an economic slide so slippery there is no climbing back up.
I had a chance to speak to several of these optimists recently. No, they are not members of the Pollyanna Club; they are green energy entrepreneurs, those who are innovating and growing companies as the rest of the world downsizes. (See Energy Entrepreneurs Flock to Renewables Bonanza in Renewable Energy World magazine.)
These are folks that can’t stop creating no matter how mucky our outlook. In fact, problems seem to incite their inventiveness.
Their inventions are diverse; as are they, but their activities are converging into some trends.
Silicon Valley and the energy industry are teaming up more and more. “You can’t throw a softball around here without hitting another solar company,” said Dan Shugar, Solaria’s chief operating officer, from Silicon Valley.
Energy is producing its own crop of rising Mark Zuckerbergs and Steve Jobs, who I suspect will be the next generation of business legends.
Perhaps most significant, a lot of today’s innovation focuses on bringing consumers and businesses greater efficiency and control over energy in their homes and businesses, whether through cell phone apps that let you adjust your thermostat while miles away, financing mechanism that make solar affordable to the rest of us, or windows that generate electricity on two sides, using a form of artificial photosynthesis that takes advantage of both the sun outside and the electric lights indoors.
These are just a few of the new energy innovations that focus on what’s right here in my home or even in the palm of my hand. Getty Images, which studies how energy companies speak to consumers through pictures, calls this new trend “Homing in on Green.”
“While pictures of wind turbines and oil rigs remain popular, Getty Images has seen a marked 40 percent increase in images that showcase efforts to ‘go green’ on a smaller scale – for example, images of people swapping old light bulbs for energy efficient counterparts, neighborhoods with solar paneled roofs, families drying laundry outside, rather than relying on technology,” said Getty Images in announcing the third edition of its research report, The Curve.
Are these images actually getting through to people? Do consumers have any sense of the magnitude of change occurring in energy and how it will affect their day-to-day lives? It seems not. Most people are not even aware of federal and state financial incentives they can receive if they integrate new energy technologies into their lives, according to a survey sponsored manufacturer Emerson. Among the 1,007 US adults who participated in the September 2011 poll, 61% were unaware of the financial assistance available.
So, while big things are happening in energy; consumers by-in-large don’t know it yet. But the changes are coming, this time right to our doorsteps – and even if we’re not at home, we’ll be able to let them in, using probably just our cell phones.
Written by Elisa Wood; who is a long-time energy business writer and is co-author of the report, “Energy Efficient Lighting Explained: A guide for business people who aren’t lighting techies.” To read more of her articles on energy visit www.RealEnergyWriters.com
SunPower Supplies Solar Panels for 3.8-MW Solar Facility in France
Nov 29th
SunPower supplies solar panels for 3.8-MW solar facility in France
SunPower Corp. has delivered 12,000 high-efficiency E19 / 320 solar panels to GDF SUEZ Group subsidiary La Compagnie du Vent for 3.8-MW solar power plant. The solar facility, which is estimated for completion in the summer of 2012, will be La Compagnie du Vent’s largest ground-mounted photovoltaic installation to date. The solar power plant is expected to generate about 6,270,000 kWh of power each year.
ENN Solar Energy, NERC team up to convert New Jersey landfill into 4.3-MW solar farm
ENN Solar Energy has partnered with National Energy Renewable Corp. LLC to convert aNew Jerseylandfill into a 4.3-MW solar facility, which will produce over 100 million kWh of electricity over its lifetime. The solar project, which employs about 9,000 ENN’s PV panels, is located on the south slope of the Edgeboro Landfill inEast Brunswick,New Jersey. The project utilizes very large state-of-the-art thin film silicon solar modules from ENN plus an innovative construction technique that helps to enable the use of a variety of wasteland for renewable energy production.
Ernst & Young: Ukraine is attractive place for renewable energy investment
According to the latest Ernst & Young Renewable Energy Country Attractiveness Indices,Ukraineis an attractive emerging market for renewable energy. The new report explains Ukrainian renewable resource potential as “impressive” and lists tax incentives available to green energy companies: corporate tax exemption on sales for 10 years starting January 1, 2011, VAT exemptions on certain imports and a 75% reduction of land tax on the purchase of land for green energy projects.
According to Ernst & Young, hydropower is the leading source of renewable energy inUkraine. The potential of the hydropower industry inUkraineis estimated at 2.3 GW. The country has 22,400 rivers that allow for small hydro plants to be built across the country. In addition, the report noted thatUkrainehas strong solar potential.
Can Renewables Survive in the U.S.?
Nov 23rd
For renewable energy in the U.S., the question of survival and growth is still unanswered. After all, the Department of Energy has been funding renewable energy research and development since its inception some 34 years ago from the consolidation of the Federal Energy Administration, the Federal Power Commission and the Energy Research and Development Administration, which was tasked to manage the nuclear weapon, naval reactor, and energy development programs. Concurrently, support for biofuels, photovoltaic and solar thermal energy systems, wind and geothermal systems and hydrogen have pervaded all government leaders’ speeches as the way to achieve energy independence and environmental stewardship.
Furthermore, the New York Times (NYT) reported that by 2009 the renewable energy industry supplied 8% of the energy consumed in the U.S. (see following chart). Though not counting conventional geothermal, which today is not considered a renewable source of energy, renewable energy still supplied about 5% of all our energy needs. One could say, 5% is better than no percent. Additionally, the same NYT report claims the U.S. solar market has grown to a $6 billion industry.
In comparison, American Petroleum Institute’s (API) report “Putting Earnings into Perspective” suggests that the U.S. Oil and Natural Gas (O&G) industry brought in about $1.2 trillion in revenues in 2010. Another API report states that, “since 2000, (O&G) has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.” With this enormous market potential and federal and industry spending on alternate energy, surely the renewable energy industry has to succeed, or so it would seem.
Additionally, a Times article in April 2001 reports “in one sense green energy is already achieving scale—in new power generation. Solar is growing faster than any other form of energy, and new statistics from the American Wind Energy Association (AWEA) showed that wind added 5,116 MW of new capacity last year. That’s 26% of all new energy generation added in the U.S. in 2010, second only to natural gas, which supplied 40% of new power. (Shale gas—it is for real.) Since 2007 wind has added an average of 35% of all new capacity—twice the amount of new coal and nuclear combined”
Renewable Energy Consumption in the Nation’s Energy Supply, 2009
Source: Energy Information Administration, Office of Coal, Nuclear, Electric and Alternate Fuels
So why the skepticism? It appears that the growth of the U.S. solar and wind segments of the industry is slowing down. The Times article noted above goes on to say that, “2010 wasn’t the best year for the wind industry. Thanks in part to regulatory uncertainty last year and the post-recession collapse of the tax equity market that helps fund many renewable energy projects, just half as much wind was installed in 2010 as in 2009. And the U.S. has fallen behind China as the world’s wind leader—China now has some 45,000 MW of wind installed, compared to 40,000 MW in the U.S. China added 18,900 MW of wind in 2010, nearly four times more than the U.S.” The slack and uncertainty in the U.S. solar industry was readily apparent at the Solar Power 2011 International tradeshow recently held in Dallas, TX. The myriad of solar module manufactures (vast majority Chinese) all indicated the same theme – the current situation in the U.S.is less than desirable. Hence the reason why there is an oversupply and large inventory of solar panels being dumped on the U.S. market, possibly below cost.
This uncertainty, whether temporary or the start of a downward spiral, may be due to a combination of factors such as:
• High capital cost for installed capacity.
• Lack of reliability to satisfy demand 24/7.
• Low PPA rates.
• SREC / REC fluctuations and inability to lock-in long-term purchase agreements.
• Geographic constraints.
• Regulatory hurdles.
• Large real estate requirement for solar.
• Costly maintenance for wind turbines.
• Erosion of support for subsidies by congress.
• Lack of a federal energy policy.
• Demise of some key federal incentives.
• Erratic retail gasoline prices.
Another look at the Energy Consumption chart shows biomass to comprise 50% of the renewable energy capacity. Without biomass and hydrothermal, the renewable energy industry is almost negligible, i.e., about 1.2% of the energy consumed in the U.S.; though, this deficiency presents a tremendous opportunity for growth of renewables.
Biomass which will continue to grow is more of a sustainable than renewable energy technology. In any event and no matter what it is called, biomass will continue to grow. Why, because the factors stated above, for the most part do not come into play. Take the case of Municipal Solid Waste (MSW). The technology exists to convert MSW into biofuels or electrons. Problematic MSW that is brought to landfills can be converted onsite to useable energy. Economic benefits exist on both ends, i.e., disposal cost saving on the front-end and revenue generation on the back-end.
The cost of solar modules which were +$3.00 per watt a few years ago can be purchased today around $1.00 per watt. This trend is in the right direction. While manufacturing efficiencies and competition have contributed to the rapid drop in prices, the glut of solar panels in the market and dumping by Chinese manufactures may have more to do with lowering prices. At the end of the day, a solar farm will cost about $3.25 watt, at best; a gas-fired electricity power generation plant will cost south of $1.25 per watt. Therefore, a utility that is not faced with gross penalties for using conventional fuels will install new capacity with gas.
Theoretically, sooner or later a business has to stand on its own two feet. Long-term subsidies are the wrong tool. However, until the subsidies are removed from the oil industry, renewables need subsidies to compete on a level playing field. Either remove subsides for both renewable and O&G or provide equal incentives for both. For starters, O&G subsidies include:
• Enhanced Oil Recovery Credit.
• Expensing of Intangible Drilling Costs.
• Tertiary Injectants Deduction.
• Passive Loss Exception for Working Interests in Oil Properties.
• Percentage Depletion Allowance.
• Manufacturing Tax Deduction.
• Reduced Geological and Geophysical Amortization Period.
In closing, growth of renewable energy market (solar, unconventional hydropower, geothermal and wind) will only be achieved if the factors stated above are addressed in a strategic U.S. energy policy that reflects the long-term interests of our country. If not, solar and/or or wind won’t cut the mustard in the foreseeable future.
Let’s not criticize the power company for using inexpensive fossil-fuels. Customers scream bloody hell every time the retailer raises their electrical rate. Few if any are overjoyed at a rate increase. Everyone likes a low cost of energy. Today, the most effective way to hedge the trend against renewables is to be energy efficient, adopt sustainable energy technologies, and be smart about how you use a precious commodity like the little electron.
The opinions expressed in this article are solely those of the author Dr. Barry Stevens, an accomplished business developer and entrepreneur in technology-driven enterprises. He is the founder of TBD America Inc., a technology business development group. In this role, he is responsible for leading technology driven enterprises through ideation, development and commercialization. To read his other discussions, please visit: http://barryonenergy.wordpress.com
Petroleum Savings if all Passenger Vehicles in U.S. were Hybrids or EVs!
Nov 23rd
A month ago, I was asked the question: “What would be the impact on petroleum usage if all cars (passenger vehicles) in the U.S. energy efficient, such as Toyota’s Prius?” This discussion is all about how to derive a sound answer to this question.
The Toyota Prius is a four-door hatchback gasoline-electric hybrid vehicle with a 1.8-liter gasoline engine that produces 98 horsepower and 105 pound-feet of torque that’s used in conjunction with two electric motors and a special planetary gear set that functions as a continuously variable transmission (CVT). Total system power is 134 hp. According to Toyota, the 2012 Prius (standard model) has an EPA rating of 51 City / 48 Hwy, combined fuel economy estimate of 50 mpg – “which is tops in the hybrid game.” It is a 5-passenger car with a curb weight of 3,042 lb. (1,380 kg).
The analysis took into consideration U.S. passenger cars only. It excluded the 101 million other highway vehicles registered in the U.S. The analysis was review by a reputable independent 3rd consultant in New Jersey. The consultant’s comments were:
“I’ve done similar research and calculations within the last few months. I’m not crazy about the assumption – ‘straight line’ allocation of gasoline consumption. Motorcycles, for example, probably consume a very small amount of gasoline per vehicle per year compare to passenger cars and SUV’s. Nonetheless, even if you toss in SUV’s and tweak the ‘straight line’ assumption you might only get to 15-20% savings; so on an order of magnitude basis I’m in agreement.”
The analysis goes as follows:
In closing, at first glance a 19% gross savings in petroleum consumption was considered somewhat low. If electric passenger cars, SUVs, motorcycles and other personal vehicles are taken into consideration, the savings becomes obviously much higher. The same goes with trucks and other vehicles, which at this time maybe under development for some level of hybridization and electrification. Also, this analysis includes U.S. only, as other countries possible do the same, global petroleum consumption will be cut even further.
One item not included in the analysis is the source of imported petroleum. In a previous discussion “Economists’ View – Fossil Fuels Pose Major Threats to the U.S. Economy,” I summarized an April 2011 EIA report on the makeup of U.S. oil imports by country of origin.
The report showed:
• 61.1% from Non OPEC countries
• 38.9% from OPEC Countries
• 22.6% from Canada
• 14.7% from all Persian Gulf countries
• 9.6% from Saudi Arabia
• 9.3% from Mexico
• 8.0% from Algeria
• 6.1% from Russia
• 4.5% from Iraq
• 4.4 from Colombia
• 4.0% from Algeria
From this perspective, a 19% reduction in petroleum consumption would potentially render all oil imports from Persian Gulf counties unnecessary, politics aside.
A final comment relates to the economic cost of replacing all 100% gasoline burning passenger vehicles to hybrids or even more expense EVs. Considering the purchase price of a Prius is about $25,000 (on the low side), the cost to replace 137 million passenger cars is about $3.4 trillion (less any trade deductions). By any measure, this is not a paltry number. Economics, financial stability and time will tell.
To the extent that all U.S. passenger cars would be powered by some level of electricity, one thing is certain that at the end of the day the environment and the citizens of the U.S. would become the ultimate beneficiaries. The question is what will the U.S. and the rest of the world do?
The opinions expressed in this article are solely those of the author Dr. Barry Stevens, an accomplished business developer and entrepreneur in technology-driven enterprises. He is the founder of TBD America Inc., a technology business development group. In this role, he is responsible for leading technology driven enterprises through ideation, development and commercialization. To read his other discussions, please visit: http://barryonenergy.wordpress.com
IEA Report Advises Governments to Embrace Renewables and Nuclear
Nov 15th
The good news is that on 8 November the International Energy Agency released its 2011 “World Energy Outlook.”
While it will cheer nuclear advocates, overall the report makes for grim reading.
Pulling no punches, the report states at the outset, “There are few signs that the urgently needed change in direction in global energy trends is underway.”
Stripped of its cautious language, the IEA report essentially noted that should present trends continue, the world’s governments through a lack of progressive initiative embracing alternative energy sources would continue to rely on ‘tried and true” fossil fuels, resulting in increased pollution, more fossil-fuel dependency and increasingly upward energy prices.
For environmentalists, this is all good news, but the report contained a caveat virtually anathema to all green movements, that accordingly, governments should reconsider their reluctance to embrace nuclear power, as it does not generate greenhouse gases.
Like many discussions in Western economies since 2008, when the global recession first began to draw blood, the issue of reliable energy production ultimately devolves down to dollars and cents issues.
The grim reality for environmentalists is that no single renewable energy resource, from wind power to solar energy through biofuels, has remotely become competitive with kilowatt hours of electrical energy generated by coal or oil-fired power plants. The debate pits those opposed to a transition to greener technologies to those considering the bottom line, despite greenhouse gas emissions.
Even worse for the environmentalists, the IEA report advocates that as a short-term solution, governments ought to reconsider nuclear power, as it produces zero CO2 emissions. Projecting into the future the report notes, “A low-nuclear future would also boost demand for fossil fuels: the increase in global coal demand is equal to twice the level of Australia’s current steam coal exports and the rise in gas demand is equivalent to two-thirds of Russia’s current natural gas exports. The net result would be to put additional upward pressure on energy prices, raise additional concerns about energy security and make it harder and more expensive to combat climate change. The consequences would be particularly severe for those countries with limited indigenous energy resources which have been planning to rely relatively heavily on nuclear power”.
But while sketching out a bleak scenario should governments remain largely disengaged to the larger issues involved in energy production, the IEA report nevertheless ends on a cautiously optimistic note, with its authors concluding, “International concern about the issue of energy access is growing. The United Nations has declared 2012 to be the ‘International Year of Sustainable Energy for All’ and the Rio+20 Summit represents an important opportunity for action. More finance, from many sources and in many forms, is needed to provide modern energy for all, with solutions matched to the particular challenges, risks and returns of each category of project. Private sector investment needs to grow the most, but this will not happen unless national governments adopt strong governance and regulatory frameworks and invest in capacity building. The public sector, including donors, needs to use its tools to leverage greater private sector investment where the commercial case would otherwise be marginal. Universal access by 2030 would increase global demand for fossil fuels and related CO2 emissions by less than 1%, a trivial amount in relation to the contribution made to human development and welfare.”
Accordingly, what is most notable about the IEA report is two things.
First, energy options beyond dependence on traditional fossil fuels such as coal and oil not only exist, but are available in significant amounts to make a serious contribution.
Secondly, as Germany’s experience in weaning itself off nuclear energy is showing, the alternatives are more expensive than current power production modes.
According to the IEA’s scenarios then, the issue of global power production over the next two-three decades devolves upon two major issues.
The first is cost, which will undoubtedly be an uphill struggle for many governments seeking to meet the population’s rising energy demands, who will be loathe to endure increasing energy bills.
The second consideration is the contentious issue of global warming, and the impact of traditional fossil fuel-fired power plants belching vast amounts of CO2 into the atmosphere.
While even the most diehard proponents of traditional power plant electrical generation do not deny that their facilities emit significant amounts of carbon dioxide, they denigrate the concerns of environmentalists as ‘fuzzy science.”
So, at the end of the day, the two fundamental issues facing the world’s nations seeking to satiate their population’s demand for reliable and inexpensive power devolve down to cost and scientific projections. We’ll leave the final word to the IEA, which laid out three scenarios, ranging from best- to worst-case – “The wide difference in outcomes between these three scenarios underlines the critical role of governments to define the objectives and implement the policies necessary to shape our energy future.” Accordingly, the major question is whether global governments will have both the cash and political will “to shape our energy future” to the best possible ends.
Written by. Dr. John C.K. Daly for OilPrice.com. The opinions expressed in this article are solely those of the author, Dr. John C.K. Daly. For more information on oil prices and other commodity related topics please visit http://oilprice.com
The Impact of Germany’s Decision to Phase out Nuclear Energy
Nov 14th
On 30 May, in the aftermath of Japan’s Fukushima nuclear disaster, German Chancellor Angela Merkel announced that Germany would close all of its 18 nuclear power plants between 2015 and 2022, which produce about 28 percent of the country’s electricity.
Eight have now been taken offline, and with the winter coming on, Berlin is scrambling to make up the energy shortfall lest the country suffer blackouts combined with the need to import massive amounts of electricity.
Despite Germany’s Kreditanstalt fur Wiederaufbau (German Development Bank) being set to underwrite renewable energy and energy efficiency investments in Germany worth $137.3 billion over the next five years, Merkel’s government has now announced that in addition to going green, it will also build a dozen coal-fired power plants as part of the country’s future energy mix. In order to assure the energy transition, the government also plans to subsidize new natural gas power plants as well.
Now the consequences of the 30 June Bundestag law phasing out nuclear power are impacting. On 19 October Germany’s Minister of Economics and Technology Philipp Roesler somberly told Parliament, “The real work starts now,” adding that the ministry now had the goals “To ensure the security of the energy supply and to protect the environment, within acceptable financial conditions.” Afterwards, Environment Minister Norbert Roettgen told legislators at the same session, “Renewable energy and energy efficiency are the two pillars of the new energy policy.” The next day Roesler in the company of Finance Minister Wolfgang Schaeuble in a joint press conference informed reporters that Germany had sharply lowered its 2012 growth forecast to 1 percent. In April, the month following Fukushima but before the German government decided to phase out nuclear power, the Economy Ministry had predicted a 2012 growth rate of 1.8 percent.
The government’s newly pragmatic approach contrasts with the hopes of many environmentalists, who believe that Germany now has an historic opportunity to embrace renewable power rather than pursuing the retrograde step of commissioning new coal burning power plants.
But government ministers are increasingly concerned primarily with ensuring the security of the nation’s energy supply, even though the 30 June legislation mandated that Germany’s share of energy from renewable sources must increase from 17 percent to 35 percent in 2020 and reach 80 percent by 2050. A modest start has already been made, as since the eight reactors were closed Germany increased its share of electricity produced from renewable energy sources from 17 percent to 20.8 percent.
But the renewable power sources will be costly. On 19 October the German Association of Industrial Energy and Power Users complained that electricity price had increased even though its quality has decreased and noted that next year its members will see their electrical power invoices increase by 9 percent.
As for the economics of the shift, electricity from conventional coal fired plants costs roughly $83 per megawatt-hour, the price increases roughly 50 percent to $124 per megawatt-hour for wind energy, $207 per megawatt-hour for offshore wind power, and $268 per megawatt-hour for solar, the last more than three times the cost of coal-fired electricity.
Despite the fact that renewable energy has such high differential costs, most Germans accept it. According to a recent TNS Infratest survey, 79 percent of Germans polled felt that the “new energy” fees were “reasonable,” with only 15 percent considering them “too high.” Germany Trade & Invest economic development agency photovoltaic-industry expert Tobias Homann said, “With the decision to abandon nuclear power earlier this year, it was clear that the road ahead would be challenging. But Germany is in a very promising position to be the first industrialized country to rely entirely on renewable energy.”
Despite the cost associated with renewable energy Germany is one of the world’s largest producers of wind power, with 27 gigawatts of generating power installed, roughly 16 percent of the world’s current wind power generating capacity in the world, making it Europe’s biggest consumer of electricity from wind power.
In the new austere Germany, the shift to renewable energy sources comes at a bad time for the exports-driven German economy, as increased energy costs can only add to the expensiveness of exports. Needless to say, despite Germany’s commitment to preserving the euro, further uncertainties are introduced into German economic long-range planning.
Economic teething problems aside, Germany’s abandonment of nuclear power and embrace of renewable energy will be closely watched around the world not only by nations but the globe’s nuclear and renewable power industries. While startup costs and transition problems have yet to be resolved, Germany is betting on its future, and future generations using solar and wind power will not have to bury energy wastes with a half-life of tens of thousands of years.
Written by. Dr. John C.K. Daly for OilPrice.com. The opinions expressed in this article are solely those of the author, Dr. John C.K. Daly. For more information on oil prices and other commodity related topics please visit http://oilprice.com
Zero touch energy audit: Will it change the game?
Nov 7th
What new energy efficiency technologies will change the game? I’d like to use this space on occasion to explore that question and get your feedback on companies that I profile.
This week’s company is FirstFuel Software, which it appears could make the conventional energy building audit go the way of the buggy whip.
FirstFuel ‘audits’commercial buildings from afar. No human ever needs to set foot in the building and no monitoring or measurement devices are installed on the premises, hence the audit is “zero touch.”
The Massachusetts-based company relies on a Geographic Information Systems (GIS), the Internet, and a proprietary algorithm to remotely analyze a building’s energy use. The program requires some data from the utility, but not a lot: the address of the building and one year of hourly interval electric and gas billing information. It combines this information with building characteristics mapped through GIS and high frequency weather and climate data.
After running all of the information through its algorithm, FirstFuel comes up with a series of specific recommendations to improve the buildings efficiency, the cost and the expected savings.
FirstFuel, which has financial backing from Battery Ventures and Nth Power, describes its work not so much as auditing, but as mining useful data to make sense of a building’s energy profile.
“We sell information. We provide the intelligence about the performance of buildings,” said Swapnil Shah, co-founder and CEO, in an interview. Shah is the veteran of three software startups that have gone to IPO or acquisition: Open Environment, WebSpective Software and mValent.
FirstFuel’s work doesn’t end with the audit; the platform continues monitoring and measuring the building to see if the energy efficiency upgrades are working and how the building stacks up against other like structures. The information flows via a portal that serves as home to a relationship the platform attempts to cultivate between the utility and customer. The goal is to get the customer engaged and motivated about energy efficiency.
What’s interesting is the scale FirstFuel appears to offer. Many states have energy efficiency targets, some with financial penalties if utilities fail to make the grade. Meanwhile, the Obama administration has set a goal to reduce energy use in commercial buildings by 20 percent over the next decade. Given that commercial buildings consume 20% of our energy, and there about five million commercial buildings in the US, how does a utility get to all of them in its territory with an on-site energy audit? How does it even decide which buildings should get priority because they offer the most bang for the buck?
Shah thinks FirstFuel’s platform offers the solution: “We can do hundreds of buildings in the time it takes to do one energy audit” Shah said.
The software is being tested in about 50 buildings. A Department of Energy-funded project earlier this year evaluated the accuracy of the system against data from 50 submeters at a 312,000 square-foot LEED Platinum National Grid building in Waltham, Massachusetts. FirstFuel took about 19 hours to complete its zero touch analysis of the building and came up with results close to that of the submeters, according to the study, conducted by Fraunhofer CSE.
In another case study, FirstFuel analyzed the energy usage of five municipal buildings in Lexington, Massachusetts, and found ways to save 7.3% of the buildings $1.6 million budget with no investment required by the building owner. FirstFuel identified operational problems that if fixed could save energy without installation of any new equipment in the building. For example, lights were on in the building when no one was there and thermometers were not set at best temperatures.
So is FirstFuel a game changer? How will this technology affect the conventional energy auditing business? Please post your thoughts here. Thanks!
Written by Elisa Wood; who is a long-time energy business writer. To read more of her articles on energy visit www.RealEnergyWriters.com.
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