Category Archives: Environment

The Market Path to Green Energy

jesse_morris

Jesse Morris with the Rocky Mountain Institute shows off the headquarters building’s rack of batteries. By storing electricity and drawing upon it at optimum times, RMI qualifies for advantageous rates from its electric co-op.

Economic forces increasingly favor wind and solar. Creating the right regulatory incentives could accelerate the adoption of renewables, says the Rocky Mountain Institute. 

by James A. Bacon

Consolidated Edison, the utility that provides New York City’s electricity, confronted a challenge in the summer of 2014. Forecasts showed that demand for electricity in parts of Brooklyn and Queens would overload the company’s electric grid by 69 megawatts on the hottest summer days by 2018. The traditional solution would have been to build a sub-station at a cost of $1.2 billion.

Wondering if there might be a better way, Con Ed solicited ideas for alternative solutions. So far, it has gotten 80 suggestions. Some were so good that the company plans to employ a portfolio of techniques — mainly energy-efficiency measures, fuel cells and neighborhood-scale solar — to shave off 52 megawatts at a cost of only $200 million, according to Inside Climate News.

Although 2018 is still two years away, early indications are positive. The so-called Brooklyn-Queens Demand Management project is being watched widely as an example of how energy efficiency, solar power, battery storage and other green energy strategies can not only reduce carbon-dioxide emissions but save rate payers money.

That’s just one example of how innovation is blasting apart the traditional electrical utility model, says Jesse Morris, a principal with the Rocky Mountain Institute (RMI), whom I chatted with when I visited Aspen, Colo., earlier this month. (Sad but true, my idea of a vacation includes meeting policy wonks in the places I’m visiting.) RMI bills itself as a market-oriented, environmentalist think tank. Re-conceptualizing the electric grid is one of RMI’s main missions. And Morris is one of RMI’s leading thinkers on the subject.

I wondered if RMI was thinking about things we should be thinking about in Virginia. Meeting me in RMI’s net-zero energy headquarters building in Basalt, Colo., Morris outlined three “big, disruptive trends” he sees transforming the electric grid.

The Internet of Things (IoT). The Internet is permeating everything; every new appliance, device, sensor and actuator is being assigned an IP address, and each device is capable of talking to the others. As a result, businesses can track energy usage with unprecedented precision, generate unprecedented volume of data to analyze, and control systems with unprecedented precision. When millions of thermostats, lighting systems, hot water heaters and other energy-consuming devices are connected, managing the demand side of the electricity system is getting easier and easier.

Declining cost of enabling technologies. The cost of generating solar power and wind power is dropping steadily. Renewables are economically competitive with conventional energy sources in geographic “pockets” around the country, and those pockets are growing. Meanwhile, progress is being made in related technologies such as lithium ion batteries which can store excess electricity production from wind and solar and release the power when needed most. “The cost trajectory of batteries is incredibly promising,” says Morris.

Corporate demand. Many corporations are insisting upon green power. Indeed, environmentally sensitive companies like Amazon Web Services are driving the demand for solar power in Virginia where the company is building many of their energy-intensive data centers. “Last year,” says Morris, “more solar and wind farms in Virginia and North Carolina were deployed by corporations than utilities.”

While the grid of the future isn’t here yet, says Morris, it is coming. At present most experimentation is occurring in places like Hawaii, California and New York where there is a strong commitment to green power and high electric rates make it easier to justify investing in alternative approaches. But change is occurring everywhere. Con Ed’s Brooklyn-Queens project shows that the potential exists to save literally billions of dollars.

The Brooklyn-Queens approach to electricity infrastructure is not pervasive, he says, because state regulations don’t encourage most utilities to think like Con Ed. Power companies make money by building stuff — power stations, transmission lines, sub-stations, distribution lines, and the like — and earning a Return on Equity on their outlay of capital. Approaching a problem as Con Ed did, which saves the expenditure of $1 billion, doesn’t help a traditionally regulated power company grow. Regulators need to change rate structures to incentivize companies to economize like Con Ed. Continue reading

League of Conservation Voters Scorecard

Check out the 2016 League of Conservation Voters Scorecard. There are a lot more environmental issues in Virginia than coal ash, natural gas pipelines and the Clean Power Plan. –– JAB

Making Net-Zero Energy Affordable

Kelly Vaughn explains how exterior sun shades adjust the sunlight and energy admitted into the Rocky Mountain Institute headquarters building.

Kelly Vaughn explains how exterior sun shades adjust the sunlight and energy admitted into the Rocky Mountain Institute headquarters building.

The new Rocky Mountain Institute headquarters building in Basalt, Colo., demonstrates how to drive net energy consumption down to zero at a cost that offers a four-year payback.

by James A. Bacon

When the Rocky Mountain Institute (RMI) decided to build a new headquarters building in Basalt, Colo., it had its own high standards to uphold. The free-market, environmental think tank had set a goal of transforming four billion square feet of building space into smart, energy-efficient structures, enough to reduce energy consumption over five years by 398 trillion BTUs and prevent emissions of 50 million metric tons of CO2 — the equivalent of decommissioning 17 coal-fired power plants.

Doubling as a meeting center where legendary co-founder Amory Lovins could convene with Fortune 500 executives visiting nearby Aspen, the new facility had to push the envelope for passive, integrative design. But it also had to show that investing in energy efficiency made economic sense. There wasn’t much point in demonstrating cutting-edge approaches that were too expensive to replicate.

When the 15,610-square-foot Innovation Center opened in December 2015, it was one of only 200 buildings constructed to net-zero energy standards, meaning that it produced more energy than it consumed on an annual basis. But it was more than an ideological fashion statement. Although achieving net-zero and a design life of more than 100 years added an incremental cost of 10.8%, RMI will recoup that sum, primarily through energy savings, in just under four years.

I gained an interest in energy-efficient buildings when my wife worked at Richmond-based Tridium, developer of a software platform for smart buildings. Buildings account for about 60% of the electricity generated around the world, and energy constitutes a major expense of property ownership. A whole industry has grown up around using technology to wring electricity savings from HVAC and lighting. But the RMI Innovation Center went beyond tweaking its HVAC system — it dispensed with it altogether. Instead of paying for heaters, coolers and ducts, RMI invested in solar energy, sensors, insulation and passive design.

Exterior shot of the Innovation Center. Photo credit: Rocky Mountain Institute

Exterior shot of the Innovation Center. Photo credit: Rocky Mountain Institute

During my visit to Aspen earlier this month, I took a side trip to Basalt a few miles away to check out RMI’s Innovation Center myself. I wanted to see what state-of-the-art energy efficiency looked like and gauge what potential might exist for cutting electricity consumption and CO2 emissions by redesigning the built community. RMI was kind enough to assign Kelly Vaughn, a marketing manager with RMI’s communications team, to give my friend and me a tour.

The building sports many of the features one might expect from an energy efficient building — big windows with a southern exposure to the sun, shades to control sunlight entering the building, and solar panels to generate electricity on-site. Less visibly, the building is so tightly insulated that the Passive House Institute declared it to be one of the most air-tight buildings it ever measured. Heat is stored in concrete floor slabs and other thermal masses such as walls.

Also invisible, more than 120 submeters track temperature, humidity, CO2, lighting and other critical variables that feed into the building’s brain. “The building is so smart,” says Vaughn, “that it saves us from making stupid decisions. You don’t just walk up to the thermostat. The building makes critical decisions based on outdoor temperatures projected out to the next day.”

Most office lighting comes from outside, although RMI does use LED lights as backup.

Most office lighting comes from outside, although RMI does use LED lights as backup.

The building generates solar electricity, some of which it stores in a 30 kW lithium ion battery system. The batteries provide a buffer for periods of peak demand, such as the coldest hours of the coldest days of the year. The storage allows the building to keep peak demand under 50kW, which places it in a lower commercial rate class with its local electric co-op.

Perhaps RMI’s greatest innovation is to re-think the 68º-to-72º temperature zone maintained in most office buildings by taking an innovative approach to delivering thermal comfort. “We’ve thought beyond what temperatures we need to maintain in a building and expanded our ideas about how to deliver comfort on an individual level, allowing us to expand our temperature bandwidth from 67º to 82º,” says Vaughn.  Continue reading

Putting the Clean Power Plan in Perspective

climate_changeby James A. Bacon

Governor Terry McAuliffe has created a working group to recommend concrete steps on how to reduce carbon-dioxide emissions from Virginia’s power plants. As the task force undergoes its deliberations, I hope it will consider the tradeoffs between economic costs and environmental benefits.

Writing in the Wall Street Journal today, Bjorn Lomborg, president of the Copenhagen Consensus Center, noted that implementation of the Clean Power Plan would reduce global temperatures a grand total of 0.023 degrees Fahrenheit by 2100. From what I can glean from the Internet — readers, please point out if I have missed something — the Obama administration has not disputed that the magnitude of the change would amount to no more than a small fraction of a degree.

Rather than contest the numbers, the Obama environmental team has made two arguments: (1) that the Clean Power Plan regulating the electric power industry is only one element in a package of initiatives, such as promoting energy efficiency and improving better gas mileage for cars, that will have a much bigger impact, and (2) the United States needs to take the lead in order to persuade other CO2 emitters like India and China to accede to the United Nations framework for attacking man-made global warming.

Lomborg contends that the total U.S. package, of which the Clean Power Plan is only a part, will reduce global temperatures by only 0.057 degrees, and if the whole world follows through with commitments to the U.N. agreement, the forecast rise in global temperatures would moderate by only 0.3 degrees.

That’s the big picture. While one can reasonably argue that Virginia must “do its part” to achieve these benefits, it is also worth asking what difference Virginia’s contribution to that effort will make. In 2014, Virginia consumed 112 million kilowatt hours of electricity, about 3% of the national total. Assuming that Virginia’s implementation of the Clean Power Plan accounts for a comparable 3% of the national figure, the Old Dominion will contribute to a .0007-degree reduction. (Implementation of the administration’s other measures would increase Virginia’s total contribution to about .0017 degrees, but those are not an issue at the state level.)

For purposes of discussion, let’s assume that the Clean Power Plan wins the Supreme Court stamp of approval and moves forward as the law of the land. The plan provides states different paths to achieving its goals. The big decision facing Virginia at that point will be which of four broad approaches to adopt: one of four flavors of a “rate-based” plan or “mass-based” plan. (See here for details.)

All four options would reduce CO2 emissions, although one of the mass-based options would reduce it more than the others. Thus, the debate is over the difference between the two plans. When we ponder the trade-offs between the cost to Virginia rate payers, the reliability of Virginia’s electric grid, and benefits to the global environment, we should recognize that the most consequential decision Virginia can make will lead to a reduction (assuming the climate models are valid) of some fraction of .0007 degrees, with a margin of error of a couple ten thousandths of a degree, in global temperatures by 2100.

I fully concede that these are back-of-the-envelope calculations, and I’m sure they can be refined. I may have overlooked important considerations. I’m open to information that anyone can provide to help refine them, and I solicit your input. Consider this a starting point for discussion.

I’m not being a global warming “denier” here. I’m accepting the proposition that human-caused climate change is real, that the net impact to the world will be negative, and that the way to deal with the threat is to re-engineer the global energy economy. But I do think it is important to give Virginians an honest accounting of the costs and benefits. Citizens should press the McAuliffe administration either to acknowledge the rough validity of the numbers I have presented or to present their own numbers.

How Not to Turn Enemies into Friends

Governor Terry McAuliffe displays his CO2 emissions executive order. Photo credit: Richmond Times-Dispatch

Governor Terry McAuliffe displays his CO2 emissions executive order. Photo credit: Richmond Times-Dispatch

by James A. Bacon

Does Governor Terry McAuliffe deliberately misrepresent what skeptics of the prevailing Global Warmig Orthodoxy think, or does he simply repeat what others have said about what skeptics supposedly believe? Either way, we have a problem. Here’s what he said yesterday before signing an executive order to convene a work group to deliver recommendations for carbon reductions:

Now, some of our legislators have trouble keeping up with the times on this topic. They don’t believe the overwhelming science supporting climate change.

Now, I can’t speak for Virginia’s legislators, but I can speak as a skeptic of Global Warming Orthodoxy, and I don’t know of a single reasonably informed observer who doesn’t believe in “climate change.” Skeptics believe that climate is dynamic, and that it has changed throughout human history. Indeed, they emphasize the cyclical nature of climate, as seen in the alternation between the Roman Warm Period, the Medieval Warm Period, and the modern era with cooler periods. The question is not whether “climate change” exists but what role human activity plays in causing climate change. As even the most ardent advocates of anthropogenic (human-caused) climate change will acknowledge, it is difficult to tease out the human impact from natural climate variability.

Climate skeptics do understand that, all other things being equal, an increased percentage of carbon dioxide (CO2) in the atmosphere will warm the planet. The question is how much will it increase warming? The computer models predicting steep temperature increases over the 21st century assume the existence of feedback loops in which more CO2 increases temperatures, which increases the evaporation of water (another greenhouse gas), which increases temperatures even more. How that process works still remains an object of scientific inquiry. An unresolved question is the extent to which water in the atmosphere leads to more cloud formation, which reflects sunlight, which cools the planet and counteracts the presence of greenhouse gases to some degree. For the most part, computer models have significantly over-stated warming compared to the historical record. Yes, global temperatures have risen, and, yes, this is the hottest decade since humans have been measuring global temperatures (not “in human history,” as Secretary of State John Kerry recently mis-spoke) but it is not as hot as the computer models of twenty years ago said it would be.

Once we move from the domain of “how fast are temperatures rising and what role do humans play” to “what do we do about it?”, we depart the realm of science and enter that of philosophy and public policy. The Global Warming Orthodoxy reaches far beyond science. It proclaims that the only proper response to warming temperatures is to re-engineer the world’s energy economy in order to reduce CO2 emissions. Even among environmentalists, there is disagreement how to go about this. While championing efforts to combat global warming, the Obama administration concedes that there is a legitimate role for natural gas as a transition fuel to renewable fuel sources, and for nuclear power as a source of base-line electric generation. Many Virginia environmentalists are hostile to both natural gas and nuclear, preferring all new electricity production be renewable. Reasonable people can debate the pros and cons of an all-renewable energy grid, but this is not a debate about “science,” much less about “settled science.” It is a debate about technology, economics, and the trade-offs between electric rates, grid reliability and clean fuels.

There appears to be a widespread prejudice that global warming skeptics (and by that, I mean skeptics of the Global Warming Orthodoxy) are anti-scientific knuckle draggers. In era of polarized politics, I suppose there is no dispelling that notion. But the skeptics themselves know differently. And McAuliffe, by suggesting those who disagree with him “haven’t kept up” with scientific thinking belittles their intellect and, thereby, diminishes any chance of winning cooperation with his agenda.

Republicans and Leftists Are Outraged, Outraged, I Tell You

Nishizaki Sakurako and Bando Kotji in "Yoshino Mountain"by James A. Bacon

Here’s what I missed in yesterday’s quickie post about Governor Terry McAuliffe’s plan to convene a clean energy task force: Both Republicans and leftist environmental groups are attacking the move, though for opposite reasons.

Republican legislators see the initiative as an end run around the state budget, which specifically prohibits any spending on the federal Clean Power Plan for reducing CO2 emissions from electric power plants while it is being challenged in the U.S. Supreme Court. Normally, such accusations strike me as political blather, but Brian Coy, a spokesman for the governor’s office, confirmed that that was precisely the motive. Here’s how the Washington Post summed up his statement: “The governor did not create the work group to assuage environmental groups but rather as a way to dodge the Republican-controlled General Assembly.”

House Speaker William J. Howell, R-Stafford, was not pleased: As quoted by the Richmond Times-Dispatch, he said: “This order is another deliberate attempt to circumvent the legislature and the will of Virginia voters.  The governor is developing a troubling tendency to prefer Washington-style executive action instead of the dialogue and collaboration that Virginians expect and deserve.”

Meanwhile, McAuliffe’s initiative was belittled from the left, who cited his support for the Atlantic Coast Pipeline and Mountain Valley Pipeline, which would supply natural gas to Virginia and other Southeastern markets, as evidence that he is not serious about combating climate change. A joint statement by the Virginia Student Environmental Coalition, the Chesapeake Climate Action Network, and Virginia Organizing called McAuliffe’s initiative “a minor environmental policy” dwarfed by the harm of natural gas transportation and combustion.

The kinds words came from mainstream environmental groups who have been working through the administration to implement the strictest of the Clean Power Plan alternatives available to the state.

The governor is trying to reconcile his desire to combat climate change with his priority of creating jobs. Thus, he defends construction of two natural gas pipelines through the state on the grounds that they will create economic opportunity for the Tidewater region of the state, which is effectively precluded from competing for important categories of industrial expansion due to an insufficient supply of natural gas. At the same time, he has supported the federal Clean Power Plan (CPP), which seeks to curtail CO2 emissions from Virginia power plants. If the CPP passes legal muster, the Department of Environmental Quality (DEQ) will be charged from choosing from one of four broad approaches for the state to implement the plan. Environmentalists favor the option that would curtail CO2 emissions the most, although industry consumer groups worry the approach would drive up electric rates. McAuliffe has not yet endorsed an option.

Bacon’s bottom line: I’m still not sure what the fuss is all about. McAuliffe has already enacted a series of measures driving state government to pursue energy efficiency goals and to purchase solar energy. There is not much else that he can legally do. This new working group can recommend anything it wants, but it won’t have power to spend a dime. Meanwhile, the big action revolves around the Clean Power Plan. If the Supreme Court upholds its constitutionality, the focus turns to the already-instated DEQ working group to recommend how to implement it. If the Supremes nix the CPP, regulatory decision-making effectively reverts to the State Corporation Commission, which responds to legislative guidance enacted into law, not to gubernatorial directives.

I regard this whole hoo-ha as political theater — a kabuki production in which the actors rigidly play out their assigned roles.

McAuliffe Establishes Clean Energy Working Group

carbon_reduction

by James A. Bacon

Governor Terry McAuliffe has set up a work group to recommend concrete steps to reduce “carbon pollution” from Virginia’s electric power plants. Utilities cut carbon emissions 21% between 2005 and 2014, and the group will focus on how to continue the trajectory “in a way that makes clean energy a meaningful part of Virginia’s energy portfolio.”

“Many of the largest employers on the globe have made it clear that the availability of clean energy is a key part of their decision-making process when it comes to new jobs and investments,” said McAuliffe in a press release, in an apparent reference to Amazon Web Services and other companies who are working to develop clean energy sources for their Northern Virginia data centers. “To continue attracting competitive and innovative businesses, we need to invest in a 21st century energy policy to ensure our grid is reliable, affordable, and clean.”

The electric sector is responsible for 30% of man-made carbon dioxide emissions in the Commonwealth, stated the press release. “The electric sector is changing rapidly through increasing reliance on low and zero carbon resources. As such, it is vital that the Commonwealth could continue to facilitate and engage in a dialogue on carbon reduction methods while simultaneously creating a pathway for clean energy initiatives that will grow jobs and help diversify Virginia’s economy.”

While the work group is tasked with reducing carbon emissions, it shall “consider” the impact of such initiatives on electric reliability, electric rates, affordability for low-income communities, and economic development, among other factors. The group also shall reflect a diverse range of perspectives from scientists, energy experts, business leaders and environmental advocates.

McAuliffe has already convened a work group to update the Kaine administration’s report on climate change, and a group to advise the Department of Environmental Quality (DEQ) on how Virginia should implement the federal Clean Power Plan. Other actions have set up a Solar Energy Development Authority, directed state agencies to implement energy efficient practices, and set procurement standards to get 8% of their electricity from renewable sources within three years.

Bacon’s bottom line: It’s not clear to me what this group will accomplish that the others have not. But I guess it never hurts to take another bite of the apple.