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DoGooder Equity

Energy Efficiency, Utility Stuff1 comment

Upon reading some manager/principal/owner interviews in business publications, the publisher asks, “What keeps you awake at night?”  My answer to that would be: Nothing.  The reason for this is utilities are regulated monopolies and the energy efficiency program portfolios they run are cost effective.  I.e., we, as an industry, are contributing to net wealth generation for consumers and not just redistributing it – it’s EE or power plants, poles and wires and either way, the consumer pays, and we are helping them pay less.

A major reason I am a huge advocate of EE programs is that they are cost effective, and what does that mean? – it typically means it is cheaper to run programs than build power plants and requisite transmission systems to pipe the electricity to points of use (distribution).  I sleep knowing I’m contributing to a wealthier, more efficient society that also happens to burn less resources.

One such cost-effectiveness test is the ratepayer impact measure test or RIM test.  The RIM test “measures what happens to customer bills or rates due to changes in utility revenues and operating costs caused by the program”[1].  Programs that pass the RIM test have a benefit to cost ratio greater than 1.0, indicating unit energy costs are reduced as a result of programs and therefore, programs benefit all customers whether or not they participate in programs.

So, I’m really liking this.  Customers that choose to do nothing benefit, but participants benefit even more.  However, like everything else, politics, do-gooderism, and waste seep into program portfolios.

Regulators generally frown upon and disallow utilities to make money on their programs.  This needs to change, and I’ve discussed this in the past.  The regulated utility business was created on a forever upward trend in demand and sales.  This has ground to a halt, and in some cases reversing largely as a result of EE programs.  Well by golly, whaddya say we let utilities in on the action in a cost effective manner where all B/Cs are >1.0?  Not allowing this is kind of the mirror image of do-gooderism.  Do-gooders don’t allow utilities to make money because they are obliged to give it away, apparently.

Small business programs are generally not cost effective but they exist often in the form of direct install (DI) programs for equity, as in fairness, reasons.  Small businesses as a whole send millions of dollars in EE riders (EE charges, typically 1% of the bill) to fund programs, but they are very difficult to serve effectively for a whole raft of reasons that can be part of another rant.  Rather than market to, and actually get small businesses to pay for projects like everyone else, it is less expensive from a program perspective to just give them stuff – replace lighting for example.  I.e. cost of free < cost of laborious arm twisting.  I understand this angle, but it is doesn’t make a lot of sense in the presence of a RIM B/C > 1.

Another political thing that seeps in is workforce development and jobs.  This torques me as it often adds to the cost and subtracts from the benefits to ratepayers.  In our space (buzzword of the year, which means market), it takes years and years and years to gain expertise to look at a building and say, that was built in 1979[2], it has rooftop units[3], electric reheat[4], the comfort is terrible[5], and half the variable air volume boxes likely do not function properly[6], partitions (interior walls) have been erected and demolished four times over and the zoning is dorked – all information gathered by Google Earth and street views without even stepping foot in the building or even the state in which it resides.  And so on and so forth for 20s buildings, 60s buildings, 80s buildings, 90s buildings.  A person learns what to expect after having been in dozens of these buildings and simply looking at a satellite image, and a street view is a bonus.

Regulators, administrators, and possibly third-party program implementers in some jurisdictions expect to train contractors how to fix these buildings.  Again, it’s do-gooderism over greater net wealth generation.  I would hire business partners (subs) that are competent and highly qualified to deliver results, as needed and locally when it makes sense.  I do not want to teach a 7th grade science class to set a broken femur – pins, rods, casts and all, which is essentially the equivalent of effectively indentifying and developing all cost effective measures that exist in a typical poorly-performing, wasteful facility or process.  It takes years, not a couple days or week to develop these skills.  Doing so is expensive, inefficient, ineffective, and bad for ratepayers.

We will create the need to hire people for our subs and ourselves.  What difference does it make if Jimmy and Sue work on our team or someone else’s?  That’s the way it works – the best for everyone involved.  Does anyone expect Fluor to be forced to hire local schmucks to build its power plants?  When it makes sense, such as buying concrete locally rather than trucking it from three states away, yes.  For structural engineering, not so much.


[1] California Public Utilities Commission

[2] From the architecture – dark and depressing.

[3] Can see them on Google Earth.

[4] Because Jimmy Carter thought we were going to run out of natural gas – no kidding.

[5] Because they distributed heat from the ceiling and heat rises.

[6] Everyone on the perimeter has a 1500 Watt space heater at their work station.

Dodging the Absurd

Energy Efficiency0 comments

In Stalin Lives, I mentioned our plan for securing an ENERGY STAR® clothes washer and dryer for our house.  What I did not mention was that the local appliance stores do not even stock gas-heated dryers.

Think about how stupid it is to generate electricity with maybe 35% thermal efficiency, lose 10% of it to line losses, as discussed last week, in it’s transport to the home and then use this high-value energy as a toaster coil to dry clothes.  We, as well as I am sure millions of households, use “gas”, natural gas in our case and propane in others, for space heating while at the same time we have a electricity guzzling clothes dryer.  Why? Because as I said, we bought the thing for an apartment that had only an electric energy supply for the dryer.  In other cases per the local appliance retailers, they don’t even stock gas dryers.

This is a huge opportunity for energy efficiency programs struggling to find cost effective savings in residential sectors because of appliance efficiency standards and the phasing out of the Edison incandescent light bulb.  There is one major problem, however – it doesn’t fit the current regulatory model because of fuel switching.  Measures that include fuel switching are not eligible for programs and incentives in just about every jurisdiction I know of.  This is one of the buggy whip holdovers that regulatory agencies are going to have to get over – among a bunch of other ones I’ll discuss in future posts.

The fuel switching argument goes something like this: electric consumers should not be cross-subsidizing gas consumers.  And, electric utilities should not be giving money away to shed load, reduce their revenue and turn it over to the gas company, which may or may not be the same utility.  Many if not most times, gas is provided by a different utility than the electric provider.

This is akin to the argument that utilities should not make money from energy efficiency programs, which can be done if regulators would allow it.  This also makes no sense.  Electric utilities are throwing money at customers to use less of their product all the time but typically it just results in less electricity consumption and not more of some other fuel consumption.

According to the Energy Information Administration, 61 million American households have electric dryers and they consume 1,080 kWh per year apiece.  That’s probably a little more than a load per day.  I’ll buy it.

I could spend the entire weekend digging for numbers and put this all together but instead, I’ll make some educated guesses.  Using 11 cents per kWh, the electric bill for an electric dryer runs about $120 per year.  A gas-fired clothes dryer would require a measly 38 therms to do the same drying.  Using a conservatively high natural gas cost of 80 cents, this is $30 per year.  Consumer savings is about $90 per year.  This is probably an 8-9 year payback.  Throw in $100 incentive and this brings it down to maybe 6-7 year payback.  I am not a program benefit/cost or total resource cost expert but, this has to be a passing score for a cost effective program.

New residences should also get incentives for natural gas hookups and even supply if the residence is in a town with natural gas running through its neighborhoods.  Before we moved into our house, ur apartment for instance was all electric but surrounded by natural gas distribution – stupid!!!  What gawdawful waste of resources.

What sort of impacts then are we talking about?  Sixty-six billion kWh, which would require about fifteen 500 MW power plants running 8,760 – that is if everyone took their turn such that there would be exactly 1.5 million dryers running at any one time – about 7,500 MW from the 15 power plants.  I would guess that at least half of these dryers could be replaced, meaning homes with these dryers have gaseous fuel to the residence already.

The above guesstimates are reasonable considering there are 40 million households with electric water heaters (everyone has a water heater and there are 40 million electric units and not everyone has a dryer and there are 60 million electric units – get it?).  Generally speaking, if people have natural gas or propane for their home they have a gas water heater, but not always; again, apartment buildings being the stupid cheapskates.  Electric water heaters in this country require about twenty-five 500 MW power plants running 24/7/365.  Surely a quarter of these could be lopped off, cost effectively as well.

There is an old saying I scoff at every time I hear it: “Work smarter, not harder.”  Whoever says that probably has never done either.  Necessity is the mother of invention.  The more work that gets piled on a person, the more they innovate so they can go home at a decent time and not have to work all weekend.  Although in some sectors, piling on more work means hiring more people out of “necessity” or just not getting certain things done out of “necessity” because the day starts at 8:00 and ends at 5:00 with an hour for lunch, period.

For energy efficiency, we’ve been working on the “harder” part.  We promote efficient equipment and systems but I think we need to wise up and consider promoting avoidance of the absurd.

You have probably seen the ad for the all-electric Nissan Leaf.  The opposite for some things like dryers, water heaters, and residential ovens/ranges, it isn’t quite as amusing, however.

Tidbits

At the Midwest Energy Solutions Conference I mentioned last week, three utility executives from major utilities including ComEd, Ameren, and AEP discussed the need for changing the utility business model because it doesn’t work with a non-growing and in some cases shrinking sales environment.  This will probably be the subject of a future post but it just occurs to me, speaking of the Leaf, that they obviously are not counting on electric transportation taking off because this would create huge demand and increase in sales.  When will the automakers come to the same conclusion?

Meanwhile another $115 million “winner” of favored Washington businesses, Ener1, a maker of lithium-ion batteries for automobiles quietly filed for chapter 11 bankruptcy last week.  Speaking of absurd, the death of the electric car is coming faster than I imagined.  The article mentions that not only are customers put off by limited range and luxury car prices, they fear lack of service and parts because only a few thousand exist and all the parts suppliers will be out of business.  On top of everything else, there is a vicious circle of doubt in buyers’ minds.

The article goes on to say, “The company said it reached an agreement with its main investors and lenders on a restructuring plan it says will ‘significantly reduce its debt and provide up to $81 million to recapitalize the Company to support its long-term business objectives and strategic plan.’”  Uh, sorry.  The only investor stupid enough to recapitalize a company with virtually zero demand for its products is the US government on behalf of the US taxpayer, but the political tables have turned.  Although the failure had little press, government recapitalizing failure will rightfully be lambasted.

Speaking of absurd, this winter has been absurdly warm from the plains to the east coast.  My recent electric bill said it was 10 degrees warmer than the same period a year ago when it was about average.  Alaska generally has the opposite extreme we have here in the upper Midwest.  Yesterday (Saturday) the low was minus 52 and the high? (get a load of this): minus 37.  WoW!  Normal things don’t like to work when it gets cold, say minus 20.  I can’t imagine the things that don’t work when it’s minus 52.  A condensing furnace for example may not work as the condensate may freeze or the exhaust may ice up blocking the flow of combustion air/gases.  Amazing.  What do they use for antifreeze in their vehicles?  Everclear?

No Pain? No pain.

Energy Efficiency0 comments

This will blow your mind.  How many large power plants (500 MW) does it take to cook the thanksgiving turkey across the nation – just the ones cooked with electricity?  Answer is provided below.  Guess.  Don’t be a loser.  Guess.

I’ve seen perhaps 100 ads for dust collecting contraptions that everyone including the buyers know will end up under the bed, in the closet, or basement, and finally onto the garage sale to somebody else who will decycle it.  These include the things like the Ab Buster 5000 (just made it up), junk you sit on, junk you rock on, junk you push/pull, slip/slide, squeeze or shake.  They get body builders that spend 5 hours a day in the gym pumping real iron, doing real body building, to demonstrate the use of this crap with a voiceover of something like, “You will notice results in 5 days with just 15 minutes a day”, which is technically true.  In 5 days the sedentary person’s gut, arms, or legs will be burning of lactic acid.  The reality of course is, the schmo that buys this stuff is thinking they may look like the dudes and babes on TV if they buy the dust collector.  I suppose that every once in a blue moon the stuff is actually used.

I’m more in favor of Rocky Balboa type training – simple stuff, like pulling a log through waste deep snow in Siberia.  I run and the only weather or conditions not fit for running are those that might kill me or give me permanent brain damage.  That would be limited to excessive heat.  Everything else varies from great (minus -30F or 35F wind and rain in the dark or above 85F) to perfect (everything between 0F and 85F).  There’s very rarely a legitimate excuse for not running.  Real influenza, 103F body temperature, and barely being able to sit up in bed qualifies.  I was there four years ago.  There are practically no equipment requirements.  Most requirements are provided by the state: that is roads, sidewalks, and when necessary bike trails (BORING).  The roads are always open.

You really only need one pair but a couple of these are for ice and snow and the rest have varying degrees of mileage so I can bleed a thousand miles per pair by rotating new, old, new, old.

Compare this to the gym.  And speaking of BORING, OMG, I was in Scottsdale at the Hotel Valley Ho a couple weeks ago; a fantastic 1950s retro hotel with a beautiful pool, patio area with immaculate greenery.  As I was on my way out the door at O’Darkthirty to run, I noticed a row of treadmills on the second floor indoors overlooking the outdoor pool area.  They were in use at least, but I was thinking what is wrong with those people?  Why would you run in place staring at CNN with an iPod ruining your eardrums next to a stinky guy, in stale, stagnant air?  I’d rather run laps in a Wal-Mart parking lot – or the Hotel parking lot, Interstate 5 in Southern California, or the tarmac at JFK in the rain.  In this particular case, it was just above 50F and perfect outside, plenty of sidewalks and not much traffic.

Maybe people need an excuse (gym) to “work out”.  I don’t get this.  Treadmills are stupid (see above).  Free weights cost not much compared to a few months of gym membership.  Stationary biking can be had for a decent $100 doohickey attachment and a $50 tire for the bike you already have (no one does stationary biking unless they bike for real).  There is nothing more brain damaging than riding a stationary bike.  If you want to live forever, ride a stationary bike because an hour seems like 8 hours, like reverse dog years.  Note THIS stuff is not dust collection material.  Only obsessive hard core people use this stuff – triathletes, for example use it in Wisconsin winters.  Nobody on TV sells stuff that actually works and gets used.  No BS here.

In “Oh Behave” and “Biscuit Discipline” I attempted to make a point that information to save energy or to be healthy alone is not enough.  Energy efficiency requires somebody, preferably multiple bodies if not all bodies being involved with constant favorable behavior to sustain savings over time.  Both EE and fitness require persistence and activity over time.  Grapefruit diets?  Not so much.

Long term health and EE have this in common.  Neither include simply buying your way to success.  Ready?

Switching gears just a little, last week I came across this pyramid for energy efficiency in homes, which I thought was pretty cool.  (Although as I type that, I’m thinking, wait a minute, the USDA food pyramids were complete flops, unless one rationalizes it was successful with the “created or saved” sort of government metric.)  It seems its creator has prioritized things very well for a residence.  It has renewable energy with the highest complexity and investment and I would add poor return on investment.

This spurred me to generate one of these for commercial buildings.  The pyramid base – the best stuff – the raw vegetables, fiber, and omega 3 of energy efficiency is retrocommissioning, operations, maintenance, and discipline to stay with it.  At the top: seven layer chocolate cake with chocolate drizzle and whipped cream – renewable energy.  By the way, it takes just over 100 large power plants to cook the TG bird I mentioned above!

Payback ranges and percent of total facility savings potential are guessed for each category of measure.  They are all wrong, so let’s just get that out of the way now.  Misguided applications of practically any technology can have 200 year simple paybacks.  Results can be all over the place and depend on many things possibly the greatest of which is, what is there now and how it is being used prior to implementation.  The years noted of course represent a range of typical simple paybacks for the technology.  The percentages represent the portion of TOTAL facility energy consumption the technology can achieve.  Note for renewables I have a high of 100%, representing most likely a wind turbine.  This can be done as Spirit Lake Schools (Iowa) had done many years ago.  They were generating wind energy long before wind turbines sprouted like chia heads in the surrounding areas.

The chart is for commercial facilities only; NOT industrial and manufacturing facilities.

*Building envelope measures can have fast paybacks if the existing condition is terrible.  For example, no roof or attic insulation – and in the case of flat roofs, the roof is pealed off anyway for replacement.

Tidbits

Some folks are proposing a switch to using lumens as the metric for selecting light bulbs for purchase at your favorite home improvement store.  This would be in lieu of incandescent wattages or equivalents thereof.  Uh huh.  Around 1980 the US was going to be the last country on the globe to convert to metric units.  You know – base 10 everything with common sense conversions like a milliliter equals a cubic centimeter.  Fuggedaboutit!  Not gonna happen.  Funny thing is, by mid-engineering-school career, every engineer clamors to use metric only.  Six months out of school they are polluted by old timers who like incomprehensible units like mass in units of grains – and so the insanity lingers perpetually.

TGTBT You Can Believe In

Energy Efficiency, Utility Stuff1 comment

In 1984 was not like 1984, I talked about greeting change with gusto to win the future but with few specifics.  This post will cover one such “innovative” way for all stakeholders to benefit from energy efficiency.

The typical utility-sponsored energy efficiency portfolio works like this:

  • A small percentage of billed energy consumption, aka a rider is paid by customers to fund EE programs.
  • Programs provide incentives for energy efficient equipment and in some cases services such as studies.
  • Evaluators determine impacts attributable to programs and make recommendations for improvement.
  • Regulators oversee it all to help ensure consumers aren’t being ripped off – a primary role of government.
  • Consumer advocacy groups, some of which are in business solely to bash utilities and add no constructive value whatsoever, object to everything.  Other advocacy groups can be great as they understand the utility business and that it is not a charity like The Salvation Army.

Many utilities have, at some point, added financing to their portfolios with dismal results and no wonder.  Customers can typically get lower interest rates on the market or with banks and other lending institutions.  Why waste time with the utility or program?

The chair of New Jersey’s Board of Public Utilities wants to “look into cutting the subsidized rebates, saving the average residential customer more than $2 a month”. (don’t spend that all on one place)  He wants to look at creating a revolving loan program over time, rather than collecting money from everyone on their energy bills and paying it out to some customers in the form of rebates or other services described above.

Of course, as described in the 1984 post, this was met with angst and resistance by a variety of stakeholders.  A chump from the Sierra Club says residential customers won’t use the program for purchasing an efficient furnace, for example.  And this is based on????  It would probably take care of some free riders for people like me who would buy the efficient thing anyway and why not take the $100 rebate from the program I have been paying into?  I wouldn’t do the financing because I hate monthly payments and it’s more hassle than the 39 cents saved.  Other people, it seems, will finance a new 16 oz claw hammer from The Home Depot if given a chance.  They are probably the same people who write a check at the convenience store for a soda and two hot dogs.

The American Council for an Energy Efficient Economy declares finance programs are used by only 1% of consumers and that for one program, when given the choice between financing and incentives, 90% of respondents choose incentives.  This is grapes and cantaloupes.  The time-strapped reader like me would read 1% of respondents like financing and 90% like incentives.  Nice try.

What’s the problem with financing programs and lousy participation?  They suck.  They generally offer nothing a person can’t get from the bank or selling bonds for large end users.  They provide no other services, such as cost/benefit analysis for customers.  How to make financing attractive: lose the rigidness, forget the no-benefit program that ran for five years with three participants, and break with the status quo that most utilities cling to at all cost.

Stakeholders need to change their mindset and actually consider EE as a resource – a replacement for power plants and infrastructure.  From the customer perspective it is a replacement for paying for therms and kWh.  Combine this with the usual demand side management funds and utilities could create a vibrant and active financing program.  It could be marketed by something jazzy like TGTBT – to good to be true.  Looks like a bridge doesn’t it?  I can see it now.

Gimmicks aside, the first thing that would help a ton is adding the payments to the monthly bill.  Energy efficiency is a resource delivered to customers so why not pay for it rather than paying for kWh and therms?  I have heard from more than one utility that their software, SAP or similar, cannot handle on-bill financing.  You have got to be kidding me.  That’s like saying a smart phone can’t make phone calls.  The answer to any question involving ability for computation on a computer is, yes it can.

On-bill financing makes it easier for customers to make projects happen.  Depending on the corporate bean counter, this may allow for treating the project as a lease rather than a capital purchase that requires approval from God.  Once the credit risk has been cleared, customers with more than one facility can implement projects in multiple facilities.

From a utility perspective, why not earn the same return on capital as is used for power plants and infrastructure?  This is blasphemous to some regulators but especially consumer advocacy groups because this means utilities would make profit on EE projects.  Egad.  Well heeyaah!

Having watched utilities for years, I have to wonder whether some really want to reduce their customers’ energy consumption through EE programs.  Many, for sure those running programs, do but it seems some are given instructions from the board room to just make it look good.  Thoughtful executives and boards know what is good for their customers is good for the utility because prosperity results in expansion and … more consumption!  And vibrant programs are good for public relations making it easier get what is wanted through rate cases, and they surely are good for the Eco Devo department for luring new big customers.

Returning from that digression, wouldn’t it be a good thing to grant the same profit on selling EE as utilities make selling energy?  This should make the executives and the board much happier than collecting money from their customers and distributing it to others driving down consumption, presumably.  Regulatory and consumer advocacy agencies need to get on board with profit driven EE programs.  As long as the program is as cost effective for the customer, what’s wrong with making money on it?

Another pillar in TGTBT is a savings or cash flow guarantee.  This typically triggers a stampede for the exits among utility folks.  I have not seen a study on this but guarantees are definitely a critical piece of doing an EE project for some customers.  Transparency is something desirable for these contracts as well.  Customers see how much the project actually costs and what the finance charges and fees are.  They could even competitively bid the project to help ensure good pricing.  This all allows for a much more desirable proposition than the typical performance contract which essentially is a contract that says, “trust us, we are not ripping you off.”

Putting all these elements together isn’t absent challenges, including credit ratings of customers.  Such a program may not work well for residential customers, particularly those who don’t own their residence.  The administrative costs may be prohibitive.  Default rates would be higher among residential customers because people move from residence to residence, and out of utility territory, much more easily than businesses, schools, factories, and institutional buildings can.  Indeed, for C&I customers such programs have been very successful with negligible savings challenges and puny default rates.

Recapping, key elements include: granting normal return on capital for utilities, very low finance rates for customers, and guaranteed performance.  On-bill financing makes things easier for customers but isn’t absolutely essential.  The other three pieces are.

Tidbits

I read more hype regarding the Fukushima nuclear plants last week in The Wall Street Journal.  It was a bit like the ACEEE statement above.  Paraphrasing, “trace amounts of dangerous plutonium was found within a 30 mile radius of the plant.”  I’m sure I have trace amounts of some fried cheese balls I ate in high school – plated out on an artery somewhere too.  They also detect strontium, iodine, cesium, this, that and the other – some with half lives of 30 to 90 years.  OMG!  We’re all going to die.

I would say that 99% of the population has no idea what a half life even is.  It is the point at which half a particular isotope has decayed to a lower energy state – I.e. half the gammas, alphas, neutrons have been puked out.  So all else equal, the longer the half life, the less intense the radiation, but 99% probably think it will be lethal for that long.

How many people have died from the reactor accidents?  I haven’t heard of any yet.  Zero.

Blackouts for a Rounding Error

Energy Efficiency, Government, Renewable Energy, Utility Stuff0 comments

This week features an overload of potential topics but let’s start with this one: Can we put some adults in charge in certain seats of power in Washington.  I’ve mentioned in previous posts, the EPA is running wild when it comes to mandating emissions requirements from power plants.  Lisa Jackson, head of the EPA and her cronies make policy in a vacuum sometimes with no regard to implications, at all.

People can govern with the carrot – providing incentives to do the right thing; sugar – handouts to politically favored, typically dead end technologies or businesses (see tidbits below); and the stick – clobbering the politically unfavorable.  In the EPA case, they use the flail or if they’re feeling nice, the billy club.

Straightening out the EPA’s unfeasible power plant emissions regulations is a challenge, but let’s start with next year in Texas.  According to FuelFix.com, “In July [this year], the Environmental Protection Agency issued the final version of its Cross-State Air Pollution Rules, which require reductions in nitrogen oxide, sulfur dioxide and particulate emissions that cross state lines and contribute to ground-level ozone.”  According to this article and the Electric Reliability Council of Texas (ERCOT), the law would shutter 1,400 MW of coal-fired generation next year.  That’s about three typical large power plants.  Texas was already on the brink of rolling blackouts this summer.  Do the math.

According to The Wall Street Journal, EPA emission requirements due in three years, with a penalty of shutdown if not met, are impossible to meet in that timeframe.  Duke Energy and Southern Company say their average scrubber retrofit time is over 50 months.  I can imagine so.  This is not like replacing the catalytic converter on your car.  These are humongous pieces of equipment.  If I recall correctly the retrofit of a scrubber on Alliant Energy’s Lansing, IA plant cost $70 million dollars and that plant provides 300-350 MW.  It is relatively small.  Thus the retrofit costs in the neighborhood of $200,000 per MW or $200 per kW, which is roughly equal to incentives for energy efficiency projects in end user facilities – which is also roughly equal to one year’s savings.  Therefore, the scrubber retrofit represents roughly one-year of generating revenue from the plant.  Customers pay.

According to the American Council for an Energy Efficient Economy, plants at risk for near term shutdown due to EPA blind thuggery[1] produce anywhere from 6,000 to 60,000 MW of generating capacity.  And we in the Midwestern rustbelt – great lake states from Ohio to Wisconsin and everything in between – have an inordinate share of these plants with 16% of TOTAL summer capacity at risk.  I don’t know what our reserves are, but I doubt regulators would allow construction of 16% excess capacity.  In other words, we would be in deep doo doo and subject to roaming blackouts in hot weather.

The Wall Street Journal reports the EPA estimates full compliance with the ozone law would cost $90 billion per year.  The US uses 3.6 trillion kWh annually, half of it from coal. Thus the new ozone law would cost a nickel per kWh of coal generated electricity.  That’s a 50% or more price increase in the rust belt – huge.

What’s the benefit?  According to the EPA, 12,000 lives.  That’s $7.5 million dollars per “saved life”.  And 12,000?  That’s about 30% of a rounding error.  How is this number derived?  I don’t expect to read obituaries stating Johnny Appleseed died of ozone complications at the age of 42.  And who are these victims?  Probably rickety elderly folks.  Thirty-five year old fathers of three I doubt will succumb to a few more molecules of ozone.

Moreover, consider most power plants are built away from population centers on lakes and rivers and their exhaust stacks are, what, 500 feet high?  Ozone generated as a result of power plants is thus dispersed widely before it reaches breathing altitudes. Uh, this is why exhaust stacks are so tall.  Conversely, automobiles and especially short haul trucks and buses spew their exhaust essentially in your face right on the street level by your place of work, parks, and at your home.  I was behind a concrete truck the other day, and if that thing didn’t spew more particulate and hydrocarbon in a day compared to a 500 MW coal fired power plant, I’d be amazed, really.  Every time the thing accelerated it coughed an opaque cloud of soot – and I mean, BLACK.  There are thousands of these things on the road, again in your face.

Ozone is a molecule of three oxygen atoms as opposed to the two-atom type we need to live.  Ozone is used as a cleaner and a purifier.  It is used to sanitize water and numerous indoor air quality enhancers have touted ozone generation as a great thing, although not endorsed by me, to be clear.  It is used to sanitize hospitals, laundry, food, and in the manufacture of pharmaceuticals.  One time I checked into a hotel and mistakenly, all they had for me was a smoking room so they said, if you wouldn’t mind we will clean the room with ozone for you.  Per Ms. Jackson, I was lucky to have survived.  Even so, once I unpacked at home, everything smelled like an ashtray.

Ozone is also created when lightning sizzles through the air.  I was reading last night that some place in Venezuela produces lightning that keeps our needed ozone layer high the sky intact.  Sounds like a Hugo Chavez scam to me.  Lightning provides the fresh, post-thunderstorm smell I’ve been told – but doesn’t plain old rain smell fresh too?  Since ozone is a gas, how do these cleaning operations avoid these extremely low levels the EPA is targeting?  If they used any level of ozone required to clean the hotel room, it must be enough to kill a couple hundred of the aforementioned 12,000.  This could be the second coming of asbestos.

On Friday of last week, the President to his credit, or more cynically in a Hail Mary to hold the rust belt states next year, suspended the implementation of Ms. Jackson’s agenda.  But at the same time this is the problem and a big reason the economy remains in the crapper.  Uncertainty.  Two year this or that, even if it’s the right idea, is a bad idea because people obviously think, what then?  And what’s a utility going to do?  Start investing a few hundred million to upgrade plants when they don’t know whether or when the rules will go into effect?  Utilities are over a barrel, dudes.

Could it be that Ms. Jackson’s real agenda is shutting down the coal industry and not so much about keeping a few thousand folks with pacemakers, stents, and a bowl full of daily prescription drugs around for another year?  If we want to end coal, let’s have it out in public, in the political arena where there is a price to pay – not by stealthy backdoor pranks.

If were a utility executive, I would be stuffing with every energy bill mailing or emailing the goings on with these issues and how it would impact customer bills.  I would be as factual and neutral as possible.  Otherwise, when the hammer comes down and prices go up the utilities will take a bludgeoning while those responsible will be saying “Not me.  It’s the utility’s fault.”  This is standard MO in Washington.

I’m no coal advocate, but I am an advocate of truth and honesty, minimizing economic impact – and making public policy in public, through the political system, not by unelected, unaccountable hacks with an agenda.

Tidbits

In other news, solar panel companies are failing left and right, with Chapter 11 filing for panel maker Solyndra last week. The feds backed a half billion dollar loan and Solyndra also succeeded in burning up a billion dollars in venture capital.  The venture capital is an indication of the problem.  Most everyone it seems thinks these alternative energy forms and technologies are like the tech sector of the last 30 years.  It is NOT.  There is no Moore’s Law for solar panels and electric cars.  Indeed, one of the solar-panel-company failures was that of an Intel spinoff.  Venture capitalists will learn quickly but I doubt Washington ever will.

Next in line: electric-car battery makers and companies like Tesla that make electric cars only.  I haven’t seen anything yet.  This is just a prediction and I’ll be sure to let you know when these manufacturers of things nobody wants or needs start to drop like dominos.

Lastly, on the bright side, the Energy Center of Wisconsin featured an interview with long-time EE advocate and author David Goldstein.  It was very good and I will report on that and of course add my commentary, maybe next week.  Or maybe not.


[1] My term.  The ACEEE must be nice to the EPA.

written by Jeffrey L. Ihnen, P.E., LEED AP

No Policy?

Energy Efficiency, Government, Renewable Energy, Sustainability, Utility Stuff0 comments

As administrations and congresses come and go, one thing remains the same: “there is no clear energy policy”, and “we need to reduce our dependence on foreign oil”.  Neither one is ever addressed.

First, what the heck is a clear energy policy anyway and are we sure we want one?  When the government messes with any market, the result is always negative for consumers and in some cases bordering on catastrophe.  The only exception I see is utilities, which lend themselves to monopolistic efficiency.  You may need to lie down after that head-spinning oxymoron.  But seriously, in order to have economies of scale, it makes sense to create giant, relatively efficient power plants where fuel can be hauled by the trainload of coal equivalent and power distributed inexpensively to end users.  So the government regulates these monopolies I would say with success as energy costs are dirt cheap.

Most other government interventions I can think of result in disaster.  Consider the current pathetically weak economy.  First off, the reason for the deep, deep recession we fell into three years ago was fueled like monsoon rains fuel future wildfires in the deserts of AZ and CA – by the government.  In the 1990s congress was pushing for home ownership for every American.  Add to this Fannie Freddie Mae Mac, which socialized the risk (taxpayers) and privatized the benefit (home buyers).  On top of this add politically motivated easy money by the federal reserve.  The result was exactly as I say – a growing stock of fuel for a massive fire to crash and burn.  Entities from the government, financial institutions, and individuals contributed to the massive bubble that popped with a horrific bang.  We are in the third year of a housing hangover – imagine a three-day hangover from a bender you may have enjoyed in your wild and crazy youth.

WARNING: What you are about to read may cause severe brain damage.  Position yourself to protect your head or don a helmet before reading.

From a resource preservation perspective, the “energy policy” we’ve had over the years has been good for energy conservation.  Why?  Because if there is one thing that motivates people more than anything, it’s money.  Conservationists and greenies say our energy prices are artificially low because of government subsidy.  I disagree, totally.  100%.  If we REALLY wanted low energy prices, including electricity and petrol, we could have it by tomorrow afternoon, theoretically.  We could collapse the oil prices immediately by passing bills and signing into law the domestic production of more oil in addition to importing from our friends, the Canadians.  Last time increased domestic production was discussed the argument was that it wouldn’t have an impact for 10 years and then it would be minimal.  Wrong!  As I mentioned before, people are not rats.  We prepare for, hedge and bet on future to reduce and take advantage of risk.  Announcing future substantial domestic production increases would have an immediate effect.  Conversely, the strategic oil reserve, if I remember correctly includes a month of US consumption and is not even worth talking about with regard to easing prices.

There are an estimated 3 trillion barrels of oil locked up in shale and a huge chunk of that is under mountain states of the United States.  Incidentally, at today’s consumption rate, shale oil alone would last nearly 100 years (worldwide).

We could also go forward with the pipeline from the tar sands of Alberta, Canada.  The tar sands hold an estimated 1.7 trillion barrels; enough to fuel the United States for over 200 years per my calculations.  With roughly 300 years of oil supply along the Rocky Mountains of North America alone, I think I can skip the flood of offshore oil available in the Gulf and up and down the east and west coasts of the country.  Peak oil?  Sure.  Sometime a few hundred years down the road.  It depends on what you call reserves.

Similarly, we have glut of natural gas like we haven’t experienced in my lifetime due to: (1) hydraulic fracturing technology and (2) horizontal drilling technology.  Without investigating exact numbers and areas, this vast trove runs from Ohio through Appalachia to New York with a bunch of states in between and around (as just one deposit).  And we already know the U.S. is the “Saudi Arabia” of coal.

The North American Oil stocks discussed above are under federal government control.  The oil shale in the west is mostly under U.S. government property.  We could build the pipeline from the tar sands to refineries all over the country if Washington chose to do so.

I almost forgot.  We are running low on oil from the North Slope of Alaska – that is, oil from the permitted area of the North Slope.  Flows are becoming too low to maintain enough temperature for the oil to flow freely from Prudhoe Bay to Valdez.  If more land isn’t opened for drilling, this fortune in assets, the pipeline, may need to be mothballed.

So we have an “energy policy”, consisting of greatly constrained domestic production in lieu of buying oil from the most volatile regions of the planet and in some cases, directly from dictators who will and do mow down their own people if they get out of line.  The “subsidies” include tax deductions for depleting reserves, like depreciation every other business uses, plus gobs of military spending to keep the “peace” in these volatile regions.  You may call that a big fat subsidy.  I call it a choice.

We are paying dearly for this energy policy: Tax dollars for defense, policy-driven HIGH energy prices, human lives, higher prices for renewable energy, higher prices for alternate fuels, e.g., natural gas versus coal, higher food prices because 40% of our largest crop is used to make fuel – one of the stupidest policies imaginable, and so on.

It isn’t all bad although there are mistakes along the way and shortages of honesty and full disclosure.  One positive byproduct is sustainability (except for ethanol) in reducing energy consumption today for use by future generations.  That is a good thing.  I most highly prefer to cut waste and not drill and mine willy nilly.

Ironically, it isn’t for altruism for future generations but out of selfishness that this is happening.  It’s selfish because Americans want tolerably priced energy but they don’t want look at its production or transport in any way, shape, or form – literally.  We therefore choose to go make messes in others’ countries.  On top of this, in the US where renewable energy is generated on the Great Plains and nobody there complains about it, greenies in the cities don’t even want transmission lines through the country  to charge their frivolous Nissan Leafs with it.  We should force them to decide where they want their power from.  They don’t want anything, except energy – by Merlin the magician.

Tidbits

If you have read many of these posts you would know I’m a blasphemous heretic with respect to climate change (or probably more of an out-of-the-closet loud mouth).  For a few samples, you may be interested in seeing Green Jacket, Cigar, Gold Rings and Disneyland, This is not Tee-Ball, and Law of Gravity, Repealed.  Without recapping any of that, this week I came across one more detail that screams don’t bother.  Manmade CO2 emissions are three percent (3%) of total CO2 emissions with nature making up the other 97%.  So if we spend a gazillion dollars and all sacrifice our firstborn we can reduce total CO2 emissions by maybe 1%.  Also, according to recently released analysis of NASA data by Ph.D. climate scientists, climate computer sims, upon which all the hype is based, far underestimate re-irradiation of heat back to space.  In English, the earth dumps heat through the atmosphere at much greater rates than the computers predict.  I have 14 trillion reasons we should instead be focusing on a far more irrefutable, immanent disaster we can actually do something about.

This just in:  The EPA, FDA and other sundry alphabet soup shills for business have declared the evil Bisphenol A (BPA) plastic is more or less harmless.

written by Jeffrey L. Ihnen, P.E., LEED AP

Atmospheric Cooling = Strong Tornadoes

Energy Efficiency0 comments

We interrupt this rant for this special announcement.  Our cold spring in the northern plains is wreaking havoc in the form of tornadoes in the southern and middle parts of the country.

I think the weather phenomena had a lot to do with my interest in mechanical engineering.  Growing up on the farm in the flatlands, I had seen a great many black clouds approaching on the horizon.  As they drew closer, they would either brighten to a lighter gray and rain, or they get ugly.  If the approach is led by a dark band of clouds followed by blue-green solid color all the way to the horizon, there would be some serious energy release.  If there is continuous rumbling, it generally means hail – tornadic-type winds aloft.

Weather should marvel any mechanical engineer with interest in the thermal fluids side of the curriculum.  All weather conditions are driven by temperature differences in the atmosphere and it’s influenced heavily by ocean temperatures to the west from which prevailing winds and jet stream flow, at least in the northern hemisphere.  It’s a massive thermodynamic, fluids, and heat transfer model.

What is causing this year’s massive tornadic outbreak?  Unusually cold mid and upper atmosphere derived from cyclically cold Pacific waters.

The two best weather guys I’ve seen in the business are Tom Skilling from WGN and Joe Bastardi from AccuWeather.com.  Bastardi is a historian and doesn’t get whisked away with the hype.  He states the mid levels of the atmosphere have cooled very rapidly in the past year as it did 60 years ago.  Did you know this?  No.  Why?  Because nobody is reporting it.  This makes sense because powerful storms, which are like engines, are driven by great temperature differences; NOT an overheating atmosphere.

Tornadoes form when warm air from the southeast plows into cold air from the northwest.  The warm, moist air rises into the cold mid levels of the atmosphere, and of course what goes up, must come down.  Condensing water vapor turns to rain and if cold and turbulent enough develops hail falling to the ground cooling the air as it falls.  This air flow can become strong enough to cause straight line downdrafts that can flatten buildings and trees like a tornado.  When the warm air channels, it can become like the vortex in your bathtub or sink.  It will start to rotate to form a tornado.  For a great cartoon of this, click here.  For the real deal, see this minute-long video from National Geographic – devastating.

Fortunately, the pattern that set up these storms in the south just broke over the weekend.  Hopefully, we won’t get our turn in the north but it’s certainly possible.  The jet stream, or line between cold and warm air has lifted far north, hence the warmer weather we are experiencing in the north.

All engines, including power plants, your car’s engine, jet engines, are driven by hot and cold sinks.  The greater the temperature difference, the greater the power, and efficiency.  A tornado is an engine. It is driven by temperature differences in the atmosphere and the “load” is the destruction it wreaks on the ground.  When towns like Joplin, MO appear to be run over by a giant lawnmower, the giant lawnmower requires tremendous power, delivered by an F4 or F5 tornado.

This presents an opportunity to generate electricity.  No; not from tornadoes, but from waste heat being dumped from power plants.

I would guess that when anyone thinks of a nuclear plant, they think of these cooling towers.  These towers work on a very simple concept.  Warm water from the power plant is pumped to the top and showered down through the tower.  Openings at the bottom let in cool dry air from the surroundings.  The warming and humidifying of the air causes it to rise and a natural draft occurs.  Therefore, fans are not needed.  Towers need to be tall enough and shaped like they are to generate sufficient air flow via “stack effect” to provide required cooling capacity.

This presents an opportunity to generate electricity.  Not just from the vertical rise in the tower, but all the way to the upper atmosphere.  If rotation were induced, an engine could be developed between the hot exhaust and the always very-cold upper atmosphere – a standing tornado, essentially.

Don’t laugh.  I first came across this in one of the power industry’s trade magazines a year or two ago, and it made a lot of sense.  It’s called an atmospheric vortex engine.  Here is a good paper on the topic from the Canadians, ay?

So I ask, why is the DOE not pursuing something like this, rather than the STUPID electric car?  Silly me.  This is potentially cost effective energy efficiency with huge potential from a ubiquitous plentiful source of free waste energy; not an ALICE IN WONDERLAND pipe dream.  If we can build nuclear reactors and sophisticated huge steam turbines, surely this simple concept can be harnessed.

Seventy percent of energy required to fuel a thermal power plant (natural gas, coal, nuclear, fuel oil) is dumped to the surroundings.  Think of the potential – and nothing extraordinary is required.  Nature takes care of the vast temperature difference to drive the engine.  The efficiency of this second heat engine would be approximately 30% per the above paper.  This could take conventional power plant efficiency from the standard 30% to roughly 50%, roughly a 70% increase.  This is enormous.

Tidbits

I’ve always considered global warming to be driven by politics and self interest, knowingly or unknowingly – as in, I can make money from this.  It is fanned by sensational films like that described in the aforementioned Dumb Bear post, Al Gore (who’s film the UK banned from its schools) and even National Geographic – it sells – see how it works?  It’s easy.  More below.

The very cold spring and gobs of snow this winter have been devastating.  Dude!  Aspen reopened for skiing over the Memorial Day weekend – with more base now than it had on New Years Day!  This is normal?  It’s insane!  Mammoth Mountain in the Sierras still has 200-plus inches of snow – plan to ski through July 4!

How does paranoia void of logic and reason perpetuate?  The Center for Decision Sciences at Columbia Business School did a survey of 1,200 in-duh-viduals, “Those who felt that the current day was warmer than usual for the time of year were more likely to believe in and worry about global warming than those who thought it was cooler outside. They were also more likely to donate the money they earned from taking the survey to a charity that did work on climate change.”  Even if INDOORS is hotter, people tend to fear global warming more!

In other findings: if you eat soup frequently, check with an emotional counselor; want that job, wash your hands in hot water just prior to interview; worried about crime, get out of dodge when it’s hot outside.

written by Jeffrey L. Ihnen, P.E., LEED AP

New Years Collage

Energy Efficiency, Government, Sustainability, Utility Stuff0 comments

I’ve corralled a mishmash of rather preposterous short stories for the year end rant.  This will be historic so be sure to pass it on to your enemies.

Case 1 comes from Engineered Systems Magazine or ES Magazine.  I was catching up on my stack of trade magazines over Christmas weekend (is this sick or what? – but it can be about as entertaining as National Lampoon’s Christmas Vacation).  September’s “Case in Point”  features an energy-saving project for Bangor Maine’s Discovery Museum, delivered by Honeywell.  An audit was followed by implementation of cost-effective measures.  The audit was completed in 2008 using the “Field Automation Service Technology” tool (FAST – I love acronyms – this is for real, theirs).  Findings included the not-so-unusual deferred maintenance like plugged air filters and heating/cooling coils among some more capital-intensive measures apparently.

One of the measures was to install a dual fuel boiler burner to take advantage of cheap natural gas as opposed to $3 fuel oil.  The results “dramatically impacted the museum’s bottom line”.  The museum paid $2,732 for fuel oil in March 2007 and only $39 in March 2008.  Well gaaaauuuullly!  (1) fuel oil is stored in tanks on site so you can spend money on fuel when and how you want and (2) they switched from using fuel oil to natural gas.  To ensure the savings persist, Honeywell was generous enough to throw in three years of service contract to maintain fresh filters.  So what were the real savings??

Case 2 begins with the opinion guys from The Wall Street Journal noting that the EPA is regulating the bejesus out of heavy industry, and in particular the utility industry.  This is to start in earnest after the first of the year, with EPA chief Lisa Jackson leading the way.

Starting in the midst of several salvos, the WSJ says utilities are being “forced to choose between continuing to operate and facing major capital expenditures to meet the increasingly strict burden[s], or else shutting down and building replacements [power plants] that use more expensive sources like natural gas. Either way, the costs will be passed through to business and consumers as higher rates, which is the same as a tax increase.”   My major problem with this is the usual case of government making things more expensive for the private sector, and guess who takes the beating?  It won’t be the government.

But even more bizarre and fishy smelling is a bunch of utility CEOs cheering on the EPA in a letter published in response to the Journal’s rant – like this will be good for their business.   They say that “Contrary to the claims that the EPA’s agenda will have negative economic consequences, our companies’ experience complying with air quality regulations demonstrates that regulations can yield important economic benefits, including job creation, while maintaining reliability.”  And throwing rocks through windows stimulates the economy and makes for carpenter and window factory jobs too.  This doesn’t pass the laugh test.

In the latest shot, the Journal points out the agenda driving the do-gooders – higher prices driven by other utilities as noted above, but the higher expenses don’t apply to certain utilities that are heavy in nukes.  This makes perfect sense.

A strong word of advice for these CEOs: play with the devil (U.S. Government) and you WILL get burned by command and control coming from Washington.  It’s only a matter of time before you will be looking down the long barrel yourselves.

Case 3, just in time for the warmer weather, airport snow removal by heated pavement!  OMG!  Of all the insane ideas, including air conditioning in 19 soccer stadiums in Qatar, manmade islands in Abu Dhabi and indoor ski slopes and ice rinks in the Marina Mall, this one tops them all.  Calculating the heat loss would melt a mortal Hewlet Packard RPN calculator.  Larger airports in cold climates, like MSP and ORD would require a small star (like our sun) to keep the concrete above freezing in worst-case weather.  And per my crude calculations, ORD has roughly 14 miles of runway that would take roughly a half million cubic yards of concrete alone (this is from me, a civil engineering / aviation zero).  This doesn’t include tarmacs or the infrastructure like underground rivers of antifreeze required for heating.  And just think of the disruption.

This is a really bad joke for an idea.  Intervention by someone with a brain may be required.  This comes from people who throw the number “trillion” around like it equals 10 million.  I forget where/who I was listening to but they didn’t use the word “trillion”.  They used “thousand billion” in it’s place – much more effective.

written by Jeffrey L. Ihnen, P.E., LEED AP

Another Committee – Alleluia

Energy Efficiency, Renewable Energy, Sustainability0 comments

Hide the kids.  The DOE has spawned an energy and renewable advisory committee.   You know, a diversified products / technology manufacturer like 3M or DuPont should examine the Byzantine labyrinth of government agencies as a model to develop the next bullet, explosion, radiation, fire, water, and bio proof wonder material.  I have to believe that if they could weave sewing thread or maybe two pound monofilament fishing line into such a fabric it would stop a 40 caliber projectile at point blank and not even cause a contusion.

Why does the country need this?  Why does the country need a debt commission for that matter?  We have a full time congress for goodness sake.  Isn’t that what they are supposed to be doing?  I suppose this is this too much to ask of 535 FULL TIME bureaucrats?

As anyone who knows anything would guess, the committee is dominated by academics and government wonks, although at least there is one utility guy on there.  Therefore, I am sure we will have a cornucopia of far out recommendations from a distant galaxy.  Most likely it will be heavy on far out technology and more spectacular policies like 15% or is it 20% ethanol blends for gasoline.  Maybe they can mandate its use, block imports, subsidize it with our money, steal our watch and tell us what time it is too.

Do these people or anyone at the DOE realize there is an industry of private sector product and service providers that work on our home planet of Earth with end users (also home-based on Earth)?  We are constrained to pesky things such as the laws of nature and economics and consumer whims.  I’ve said it a thousand times and I’ll say it a million more times, the savings potential from cost effective measures from current technologies and services is at least 30%.  See the McKinsey report from last year as backup for my hypothesis by people who know what they are talking about.

On the other hand, I read that this group is only going to meet twice a year and judging by the agenda of the first meeting it appears they won’t be inflicting too much damage on the citizenry.  If this is all they are going to do twice a year maybe this is simply a resume stuffer organization.  “Served on the Secretary of Energy’s Energy and Renewable Advisory Committee” would sound impressive for an introduction for a keynote address at Yale University’s spring graduation, especially for graduates with degrees in renewable energy management.

Tidbits

FIFA (Federation International de Football Association) chose Qatar to host the 2022 World Cup tournament.   Qatar, a tiny tumor of a country jutting into the Arabian Gulf is about the size of Connecticut, or about twice the size of Long Island (although saying it’s twice as big as anything is misleading).  Temperatures during the World Cup there will approach 426F, just below the point of spontaneous combustion of flammable items like paper but fortunately for most World Cup fans, above the melting point of the vuvuzela.  I rather like the vuvuzela, at least as comes across on the TV.  It’s hilarious like a cloud of June bugs or swarm of mosquitoes amplified a couple hundred fold.

In addition to building nine new stadiums and renovating a couple others, they will be supplying OUTDOOR air conditioning for these stadiums.  They will probably need to build a couple thousand MW power plants as well.

South Africa boasted that theirs was the greenest World Cup ever.  If Qatar says anything about green, they will have to use Venus as the baseline alternative for measuring the savings realized.  If I were them, I would just go with it and say this is the most ridiculous idea of all time.  We will proudly burn as much energy as half the countries with teams at the tournament.

I can almost guarantee they will build a photovoltaic plant the size of the country in the Saudi Arabian desert and that’s what we will be hearing about.

Too see how much money people in this region have, do a Google Earth or Maps of Dubai.  Apparently there isn’t enough moonscape barren coast on which to build opulent homes, so they make their own islands or “palms” where the strips of land take on the pattern of the veins in a palm leaf I guess.  And they have all the huge sky scrapers including the world’s tallest building.  What for?  By the looks of it, the only people who work there must be those that take care of the people who live there.  And why the tall buildings?  My impression has always been skyscrapers are needed for land-locked cities like New York and Hong Kong.  UAE makes Phoenix look like the Amazon basin.  There is nothing there.  Just pave it over and sprawl out so there is something to do with your time – like drive your 12 cylinder Italian sports car to the spa, bank, casino and back home.  The place is so un-natural it creeps me out.

written by Jeffrey L. Ihnen, P.E., LEED AP

Freeloaders and Geniuses from the Universe Next Door

Energy Efficiency, Renewable Energy, Sustainability0 comments

You know what torques me off, or make that torques us off more than anything else?  I’m saving it for a future rant.  Stay tuned.

No really, it’s “prospective” clients, many times end users that have screwed up buildings beyond reproach or wasting energy as though they just want to release all the carbon locked up in fossil fuels and get it over with.  They ask for help but in no way intend to pay for it or take action for anything substantial.  We may have even demonstrated, clearly by benchmarking or other means with specific measures that they could make their utility shut down a 500 MW power plant if they would just do something.

But no!  They want to know something trivial like how much energy/money they’ll save with a system that will put unattended PCs to sleep and not mess with anything substantive.  Never mind every PC on the planet has this built in and it’s about as hard to negotiate as turning on the television.

They’ll ask how to catch a three pound shad when you have a loaded harpoon with a giant blue marlin at point blank range (just go with the metaphor even if it is totally absurd).  Take the damn harpoon and shoot the thing, man!  Well gee, I just don’t know.  I haven’t used one of those things before.  I might shoot myself in the foot.  Is that tip sharp?  And they keep coming back for more panfish advice.

You may have spotted these people in public.  They go to the grocery store around noon Saturday to eat everything available for sampling, for their lunch, and probably leave with a half gallon of milk and a loaf of private label bread.  They sample six beers in a brew pub, order a can of Pabst and leave no tip.

And then there are those who believe the utility should pay for everything, and I mean everything.   We were working a school district for retro-commissioning and I believe they have some good opportunities, but when the board discussed it, a genius said, no.  He wanted the utility to build a remotely-sited wind turbine (because their location is lousy for wind energy) paid by the utility to generate electricity for their facilities and do it on a net metering sort of contract.  I am not kidding you.  Gee, that’s a great idea.  Let me get right on that.  I almost got brain damage from oxygen deprivation.  I was laughing so hard.  I’ve heard of customer entitlement mentality but this was from another universe.  How do you calibrate a customer like that to life here on earth?

We also have to beware of death by a thousand cuts.  A client may only want a half baked high-level assessment.  No matter how loud and clear we describe WHAT the project IS NOT, after we present the results that clearly meet the contract scope of work, some start asking for details on specific measures.  Where do I buy one of these?  Do you know any good contractors?  What capacity of doohickey do I need?  Some utilities, thankfully, are offering compensation to answer these sorts of questions.

Think of it this way.  If your house is a hog, it’s probably because it leaks like a sieve.  You can’t just take a couple tubes of silicon and slop it on some windows.  I know what I don’t know, and I know there are a boat load of places for infiltration/exfiltration to occur and like life in the commercial and industrial world, if you want results, you need to hire somebody who knows what they are doing.  I’ll pay a guy $500 to do it right before using a buffoon for free, any day.

NOTE: This is not a solicitation to weatherize my house.

Tidbits

Wall Street Journal readers responded to the source article from last week’s column.

Commenting on the letters, the National Resources Defense Council guy projects avoidance of 300 large power plants and $12 billion in annual savings.  In an Energy Brief a couple years ago, I projected 156 large power plants (500 MW apiece) and $9 billion in savings.  Close enough for hand grenades but I’m guessing he’s a little heavy on the power plants.  Is there diversity figured into his numbers?

Osram, a German company is retooling one of its American plants to manufacture efficient lighting.  Meanwhile, General Electric is whining that it has to close its last lighting plant in the U.S.  Jeffrey Imelt is a terrible CEO for GE.  General Electric used to be an entrepreneurial innovative company under Jack Welch.  Now it is a company in search of markets for status quo products and services, and government handouts.  If you don’t innovate you die in the private sector.  It matters not what you do.

One guy argues CFLs will require more heating energy consumption.  Yawn.  Fuel oil would be cheaper heat and if incandescent bulbs are such a great source of heat, what about summertime?  The electrical engineer makes good points that CFLs are not as bright as advertised.  We’ve always recommended CFLs at 33% the power, as opposed to 25%, of the incandescent being swapped out.  This is essentially the next size larger CFL than “recommended” in the business.

Another guy plays the mercury card.  Yawn.  I dismissed that fallacy in the same Brief.

written by Jeffrey L. Ihnen, P.E., LEED AP

Get a Grip

Energy Efficiency, Government, Renewable Energy, Sustainability0 comments

As you may have heard, this year China powered past (cheesy pun warning) the United States in total energy consumption.  Apparently, back in 2007, they surpassed the US in carbon emissions.  This makes sense as almost 70% of China’s electricity is derived from coal as compared to just under 50% in the United States.  In the U.S., nuclear and natural gas make up most of the other 50%, roughly split evenly with renewable energy rounding out the 100%.

In recent years, or especially since President Obama moved into the White House, there have been multiple verbose incomprehensible cap and trade policies drafted, but they are dead for now.  By the way, I maintain my position that substantial nationwide carbon limits are not going to happen in my lifetime.  If it didn’t happen since Obama took office with a filibuster-proof senate and a large majority in the house, it ain’t going to happen anytime soon.  Why?  Democrat senators from Midwestern states where coal is still king (not that this is a good thing) and coal producing states like West Virginia result in filibuster, if not an outright minority.  E.g., Jay Rockefeller will vote party line on everything but carbon caps.

There remains one possibility, however – that carbon caps may be legislated through the courts, which of course is not how things, especially major things like this, should become the law of the land.  In one example, the EPA in 2007 was handed the power to regulate carbon dioxide because it is a “pollutant” per the clean air act.  Again, this is like declaring water, another vital molecule that makes biological life possible, a pollutant because water kills.  Recall, I wrote on the blog a few weeks ago you can die by drinking too much water.  People drown, to the tune of 400,000 deaths worldwide each year[1].  Floods devastate communities – at least $3 trillion per year[2].  Water causes lightning, which kills about 24,000 per year[3].  And heat wave deaths – always have a large component of high humidity.  Aside from illegal activity (human smuggling), when was the last time you heard of heat related deaths in Arizona?  You don’t.  It’s Chicago, Memphis, New Orleans, Kansas City, Little Rock.  Water is dangerous.

You may be thinking, there’s nothing we can do about water.  Really?  How about banning swimming in rivers, lakes, and oceans and slapping $1,000 fines on people for not WEARING their floatation devices?  Move everything out of the 500 year floodplain.  Mandate air conditioners for every household and if you can’t afford one the federal government will provide one.  Sound familiar?  Thousands of lives would be saved per year.

The bottom line is, 98% of legislators are too cowardly to vote for the right thing, or wrong thing I guess, if it threatens their political career.

Sorry.  I got way off track.  I can’t help but railing against the preposterous.  Life has risk.  Is there anything, ANYTHING, worth doing if there is no risk?  There are costs and there are benefits.

Back to China.  China’s energy consumption has DOUBLED in the past 10 years while the United States’ energy consumption has decreased slightly.  For all intents and purposes, it’s been flat.

Here is something that will knock your socks off – since 1999, China has installed 416 gigawatts of coal-fired power plants.   “So what?”, you may be thinking.  A gigawatt is like a trillion dollars.  To give that perspective, a trillion dollars in $100 bills wouldn’t fit in a three car garage, tightly packed and stacked to the rafters.  Likewise 416 gigawatts can be generated by 832 large 500 megawatt power plants or 208,000 wind turbines by nameplate capacity.  This is eighty giant coal-fired power plants per year!!  And they have 330 more giant power plants on the drawing board.  Over the same period, the United States has built coal plants totaling 12 GW, or a measly 24 giant power plants.  China is averaging 80 per year, while the U.S. is averaging 2.4 per year.  GET A GRIP!

This is like giving Lance Armstrong a two day lead in the Indy 500 with his bicycle (he would be the US) but China has just taken the lead with the typical 225 mph Indy car.  It’s actually worse than that. It’s more like me running the Indy 500 versus the 225 mph Chinese Indy car passing me by.

In 2006, China generated as much electricity from coal as did the United States.  At the time they had 484 GW of operational coal plants.   Very roughly, they’re adding 10%, at least per year.  This blistering pace will fade with time, but it is fair to say they will have double the coal-fired electricity generation compared to the U.S. within 5 years.

Conclusion:  If we are truly concerned about carbon emissions and climate change, China has to do something.  The reality however is that whatever the U.S. can stomach will be of zero consequence considering the Chinese Indy car.  Unlike the floating continents of garbage that is choking the mighty three gorges dam and the 100 tons of benzene spilled in the Songhua River, carbon dioxide makes its way around the globe.  It doesn’t matter where it comes from.


[1] http://www.who.int/violence_injury_prevention/publications/other_injury/en/drowning_factsheet.pdf

[2]http://environment.nationalgeographic.com/environment/natural-disasters/floods-profile

[3] http://www.lightningsafety.com/nlsi_history/intl_safety_initiative.html

written by Jeffrey L. Ihnen, P.E., LEED AP

Decoupling, Stupid

Energy Efficiency, Utility Stuff1 comment

One way the utility business works like the rest of the economy is that it sells its products/commodities at a price that is higher than the cost of production, on average.  The more utilities sell, the greater their gross profit.  This is at odds with utilities’ incentive to save energy with energy efficiency programs.  As a result, some utility executives are opposed to energy efficiency programs.  That is a short-sighted view but that’s a story for a different day.

As a result of this dichotomy, a pricing mechanism known as decoupling has been developed.  This NREL paper gives a pretty good overview.   It says simply that “Decoupling is a rate adjustment mechanism that breaks the link between the amount of energy a utility sells and the revenue it collects to recover the fixed costs of providing service to customers.”  There are a number of specific ways to do this, some of which are described in the NREL paper, but the bottom line is utilities are less reliant on sales for their well being.

This may seem like an ingenious idea, but I see a lot of significant, if not major hang-ups.  One of the benefits is reported to be price and revenue stability.  But here’s the problem as I see it: revenue stability equals profit volatility.  Take the lousy economy we’ve had the last couple years.  Utility sales are way down but the utility keeps collecting bills that are closer to the long term averages, which means prices increase (if I know math, and I think I do).  They are selling less but there is this decoupled “fixed” cost pasted to customers’ bills.  Good for them.  What about the customers?  They are cutting back on everything due to wage pressures, layoffs, production cutbacks, and lower profits.  So what do they get in return?  A higher energy costs per unit purchased, just what they don’t need.

The opposite is also true.  Say we get a really hot summer.  Now the utility has to sell, and generate or purchase a lot more energy.  In this case, a lot might be 10% more, but that has a huge effect on price.

I just watched a demand response webinar.  Demand response incentivizes customers to cut back during peak periods when energy costs are very high because everything but homeowner’s Honda generators are putting power on the grid.  One way to deliver demand response is to pass the cost of putting the last kilowatt of power on the grid.  I don’t know where the last kW comes from for sure, but it’s way expensive and for good reason.  As full capacity is reached, power generators (companies) either charge the arm of your first born or we get brown outs.  So when the utility passes this cost to the customer the cost is huge, like 5-10 times normal cost.  Peak power is very expensive.

Back to the hot weather.  Now the utility has to sell all this really expensive electricity with less ability to recover (1) the extra high price of electricity and (2) the larger volume of energy delivered.  I suppose if you have real-time pricing described above, this will be mitigated.  But many states including MN and WI have decoupling pricing mechanisms in place, but practically no demand response or real time pricing.  The decoupling in MN and WI is news to me, but if NREL says so, it must be true.

So it seems to me that decoupling presents at least as many and as big of problems as it solves.  Did Washington come up with this?

When I interview with job candidates I usually explain the utility market and why energy efficiency programs are implemented –to keep costs down by delaying or avoiding the construction of power plants, poles and wires.  Again, it seems to me decoupling is at odds with this because the intent is to protect revenue, not prices.  If you protect revenue the “societal” benefits would seem to be lower to me.

In general, not just talking about utilities, decoupling supply and demand is a horrible idea.  Despite all the political bomb throwing regarding healthcare, the number one cause of soaring healthcare costs, which continues to go unaddressed, is the decoupling of premiums and services rendered.  For decades the system worked like this: pay a flat rate and consume all you want.  It doesn’t take a genius to predict what will happen.  In California, they kinda sorta deregulated the electricity market last decade.  They decoupled generation from delivery, deregulated wholesale prices for the utilities but capped consumer prices.  Result: utility bankruptcies and the Governator in a recall election.

I am not saying decoupling is going to result in any sort of disaster like these examples, but messing with Econ 101 supply and demand is almost never a good idea.  If we want to protect revenue, why not just build it into the rate case.  Societal benefits may take the same hit, but at least customers pay for what they consume, “real time”.

If we want to control consumption and keep prices in check, we need all the market effects of supply, demand, and pricing that we can get.  A complete free for all would go too far for a bunch of reasons I’ll save for another day, but we need more pricing response, like demand response described above, not less.

written by Jeffrey L. Ihnen, P.E., LEED AP

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