Michael Roberts reviews natural gas storage and production data recently reported by the Energy Information Administration and discusses how this data will likely affect energy prices in the coming months.
Cold January Temperatures Affected U.S. Use of Power and Natural Gas
January 2010 was a cold month for many people in the United States, particularly in the Southeast. The need for extra power and natural gas for heating caused natural gas spot prices to soar in early January, but prices are expected to be lower for the majority of the coming year.
Nike, Starbucks Lead Push in Oregon for Clean Energy Economy
Kicking off a race to jumpstart American jobs in a clean economy, Nike, Starbucks, and other businesses, unions and youth groups in Oregon are urging Congress to approve a comprehensive climate change legislation this year, reports The Oregonian.
Feds Moving Forward on Smart Grid Security and Privacy
The latest draft from NIST prescribes responses to growing unease about access to data.
Biodiesel as an Alternate Fuel
Biodiesel refers to a vegetable oil or animal fat based diesel fuel consisting of long chain alkyl is typically made by chemically these oils with an alcohol. Biodiesel is meant to be used in standard diesel engines and is thus distinct from the vegetable and waste oils used to fuel converted diesel engines.
Is the Smart Grid too Expensive?
The cost of upgrading the entire electric infrastructure in the United States will top $165 billion over the next 20 years. Regional projects are carrying big price tags as well. Some consumer advocates are questioning how it will all be paid for.
Saudi Arabia Fears a Peak in Oil Demand
Saudi Arabia's concerns that demand for oil will peak in the next decade is pushing the world's largest producer of crude to embrace clean energy in an effort to diversify its economy.
Whole Foods, Bed Bath & Beyond to Cut Suppliers Sourcing Fuel from Oil Sands
To cut their carbon footprints, retailers Whole Foods Market and Bed Bath & Beyond are dropping suppliers that source fuel from Canada's oil sands (also known as the Alberta Tar Sands), reports the Financial Times.
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The approaches to financing energy-efficiency projects are as varied as the need. Energy services performance contracts guarantee savings will meet or exceed annual payments to cover the project costs. Lease-purchase agreements are also popular. Some states offer tax credits and other incentives to companies that implement more efficient energy systems.
Using an Energy Performance Contract
Energy services companies (ESCOs) will design, install, finance, and manage energy-efficient systems in a customer's facility using energy savings they produce from new efficiencies to pay for the cost of the project. They enter into a performance contract with a company that states that the ESCO will guarantee the amount of savings the facility will achieve. These contracts typically run from four to ten years. The length of time is dependent on the project's complexity, the project type, and the savings payback period.
A baseline consumption profile is determined using past energy bills, and then savings are calculated using the actual energy bills received throughout the contract period. Usually both parties agree to monitor the savings on a regular basis-that way midcourse adjustments can be made and performance improved.
Performance contract projects must be of sufficient size, so that the savings generated by the project cover its costs over the length of time specified in the contract. Aggregating smaller projects into a single contract is a way to create the critical mass necessary to make performance contracting a viable option.
Lease-Purchase
Commercial leasing corporations, banks, investment brokers, financing companies or even the equipment manufacturers themselves will offer lease-purchase agreements as a means of reducing the costs of energy-efficient equipment. These leases are designed so that the energy savings actually pay the financing charges. Leases in which the lessee assumes ownership typically range from 5 to 10 years.
Capital leases have many of the same characteristics as asset ownership. Capital leases are long-term, no-cancel agreements in which the lessee assumes responsibility for maintenance, insurance, and taxes.
An operating lease, on the other hand, allows the lessee to use the asset, but does not include the rights and responsibilities of ownership. Operating leases are attractive to companies that regularly replace or upgrade equipment.
State Tax Incentives
Not all states have incentives, but some do. One way to learn if your state has special tax or other incentives for commercial energy-efficiency projects is to visit the Database of State Incentives for Renewable Energy (DSIRE).
Federal Incentives
The Energy Policy Act of 2005 Commercial Building Tax Deduction (§179D IRS Code) has been extended to 2013. You can receive a tax credit up to $1.80 per square foot in three different end use applications:
- Building envelope ($0.60/ft2)
- Heating, cooling, ventilation ($0.60/ft2)
- Interior lighting ($0.60/ft2)
The tax credit is available to owners or tenants (or designers, in the case of government-owned buildings) of new or existing commercial buildings. In order to qualify, you must save at least 50% of the energy cost of a building that meets ASHRAE Standard 90.1-2001. There are verification requirements involving software and certification requirements from a third-party.
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Article used with permission of Questline, Inc. Photo by Photos8.com
OPEC: Give Us Certainty to Invest
Crude oil prices are in the range OPEC wants. But uncertainty about the demand outlook remains a worry. The group's secretary-general, Abdalla El-Badri, suggests greater certainty over long-term oil demand is essential if member states are to justify upstream investments.
Rooftop Solar Gains Traction at Commercial Properties
As more governments push their renewable energy agendas, more businesses are starting to see the benefits of solar energy from both financial and environmental perspectives.
SEC: Businesses Should Disclose Climate Change Impacts
The Securities and Exchange Commission (SEC) has issued new "interpretive guidance" to companies to indicate how they should handle the impacts of climate change in their financial disclosures. The move may cause businesses to focus more on the issue of climate change.
Walmart Canada Adding Energy Efficient DC, Solar, Wind
In a flurry of announcements, Wal-Mart Canada plans to build an energy efficient distribution center, as well as add wind and solar to its operations.
Hydrogen is Not the Miracle Fuel of the Future
Despite miracle claims on the Internet, the notion of a "hydrogen economy" is really a myth. One thing is abundantly clear - hydrogen is not a viable energy resource.
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Clean Skies News talks to Michael Roberts, lead energy analyst of energy management firm Prenova, about the Energy Information Administration's reports out today on oil and natural gas inventories. Reports were delayed until Friday, Feb. 12 due to the severe weather in the Mid-Atlantic and Northeastern United States.
Real time pricing (RTP) tariffs enable electricity consumers to be charged prices that vary over short time intervals, typically hourly, and are usually quoted one day or less in advance to reflect contemporaneous marginal supply costs.
This contrasts with conventional electricity pricing tariffs that are based on prices that are fixed for months or years at a time to reflect average, embedded supply costs.
RTP has been investigated by the utility industry for the past 20 years, with programs offered at more than 70 utilities across the country in this time frame. The intended purpose of RTP was to allow energy users to reduce their usage when wholesale prices rise, thereby dampening price volatility. A second intended consequence has been to shift some of the control over pricing to the electricity end user.
According to a Lawrence Berkeley National Laboratory report, the primary motivation to offer RTP was "to build customer satisfaction and loyalty, by providing an opportunity for customers to realize bill savings. The second and third most common responses, respectively, were to reduce peak demand or encourage load shifting and to encourage load growth. The fourth most common response was to comply with a statutory or regulatory mandate."
The first RTP programs, implemented in California in the mid 1980s, charged customers an hourly varying price, quoted a day in advance, for all energy consumed. These initial RTP programs were introduced as a novel strategy for meeting demand side management (DSM) objectives and testing critical assumptions about customer acceptance and price response. Beginning in the early 1990s, a number of utilities, primarily in the Southeast and Midwest, introduced pilot and permanent RTP tariffs. During this period, electric utilities faced heightened competition for new and existing load (from other electric or gas utilities). In a way, RTP tariffs encouraged load growth by offering a rate structure that allowed customers to add new load without incurring additional demand charges.
The proliferation of new RTP programs began to subside in the latter half of the 1990s, as utilities focused their attention more directly on restructuring-related issues. However, there has been a recent resurgence in interest in RTP, since one of the potential outcomes is to reduce peak demand. According to the Berkeley report, "policymakers engaged in electric utility resource planning have also recognized that, by reducing peak demand, RTP could play an important role in a portfolio of strategies for cost-effectively meeting utility load obligations."
Despite these findings, the majority of electricity energy users are not aware of RTP and have not participated in these programs, even though a few programs across the country have achieved a significant level of participation. In 2003, a total of 2,700 non-residential customers, representing more than 11,000 MW of peak demand, were enrolled in the RTP programs in the Berkeley study that involved a survey of forty-three voluntary RTP tariffs offered in 2003.
Some of the findings of the Berkeley report include the following:
- Participation in most RTP programs is dominated by large industrial customers, with modest participation by large institutional customers.
- Most program managers report that some RTP program participants respond to prices less than $0.20/kWh. Two-thirds of the program managers that provided information on this metric indicated that at least some customers begin to respond at prices below $0.20/kWh. Often, these low-price responders are customers with on-site generation. About one-third of program managers reported that no participants appear to respond unless prices are at least $0.30 to $0.80/kWh.
- RTP programs reportedly achieved load reductions equal to 12% to 33% of participants' aggregate peak demand, across a wide range of prices. Among 8 programs with more than 20 participants, 6 have reportedly generated load reductions in the range of 12% to 22% of participants' combined non-coincident peak demand, while the other 2 have generated load reductions of approximately 33%.
- Most RTP programs have not been broadly and pro-actively marketed. Because of this, participation in most programs has declined in recent years.
- About half of the programs offered participants Internet-based access to their hourly consumption data on a real-time or day-after basis.
Experience to date suggests that customers are not likely to gravitate in large numbers toward RTP on their own accord. To extend participation beyond a few large industrial customers, aggressive marketing and education campaigns must be undertaken to reach medium-sized customers and to successfully identify price responsive customers other than just those that have participated in interruptible rates or that have on-site generation.
Source: Berkley National Lab, 2003. A Survey of Utility Experience with Real Time Pricing
Photo by Peter Kaminski
Bacteria Rebuilt to Make Oil
Researchers have engineered a common type of bacteria to produce biodiesel and other goodies from plain old plants. The microbial trickery, detailed today in the journal Nature, promises to add "nature's petroleum" to America's energy supply within the next few years.
EPA Issues Renewable Fuel Standards
Wednesday, the Environmental Protection Agency finalized its revision to the Renewable Fuel Standard (RFS) program. New determinations allow corn ethanol to pass. Can we cry foul?
ENERGY STAR "Leaders" Saved $48M Last Year
The U.S. Environmental Protection Agency's Energy Star Leaders prevented the emissions of more than 220,000 metric tons of carbon dioxide and saved more than $48 million across their commercial building portfolios in 2009.
DOE Requests $2.4 Billion for Renewable Energy, Efficiency in FY 2011
The President's proposed budget for fiscal year (FY) 2010 includes $2.36 billion for the DOE Office of Energy Efficiency and Renewable Energy, a 5% increase over last year's funding. The budget also includes $3-5 billion in loan guarantees for renewable energy and energy efficiency projects.
Safety and Cost of Smart Meters Questioned
Residents in Sebastopol, California are worried that the installation of smart meters by Pacific Gas and Electric is a health hazard. The city held a town hall meeting to hear consumer concerns over radiation from the meters' electromagnetic fields.
DOE and EPA Join States to Speed Progress on U.S. Energy Efficiency
DOE and the U.S. Environmental Protection Agency (EPA) are leading an effort to create a new State Energy Efficiency Action Network, which will help states achieve their maximum cost-effective energy efficiency through targeted technical assistance.
IBM ‘Cloud Computing' Data Center Saves 15% in Energy Costs
IBM has launched a new energy efficient data center that, in turn, lowers the carbon footprint of clients who use it for "cloud computing." The data center, in Research Triangle Park, N.C., can continuously read temperature and relative humidity throughout the operation, adjusting cooling in response to changes in demand.
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Constructing and operating buildings uses an enormous amount of energy, water, and materials; and creates large quantities of waste. Green building design (also known as sustainable design) concepts were established to help create new buildings that were integrated to lower resource usage, reduce waste, and improve the indoor environment. The LEED (Leadership in Energy & Environmental Design) rating system was successfully established by the U.S. Green Building Council (USGBC) as a standard for developing sustainable new buildings.
LEED-EB Certification for Existing Buildings
The number of existing commercial and public buildings far outweighs the number of new building projects, and these existing buildings use far more energy and create more waste. Many commercial and institutional building owners have established environmental policies, such as recycling programs and energy management systems, in an effort to save money and improve worker health and safety, but how do existing building owners measure the environmental performance of their building from an overall perspective?
In 2004, the Green Building Council developed the Green Building Rating System for Existing Buildings (LEED-EB). This system uses sustainable performance standards to rate existing buildings in terms of their energy efficiency and environmental performance. At the same time, it provides guidelines for measuring and documenting the environmental fitness of a facility and suggests procedures and technologies for improving sustainability and performance.
The Established Goals and Objectives of LEED-EB
The LEED-EB system addresses building operations, maintenance, and system retrofits. In essence, the system establishes goals and objectives, along with suggested strategies and technologies in the following areas:
- Exterior Environment - Institute programs and practices that encourage sustainable site development and reduce the impact on the surrounding environment. These can include sedimentation and erosion control, alternative transportation strategies, exterior maintenance, reduced site disturbance, storm water management, and light pollution policies.
- Energy and Atmosphere - Achieve high levels of energy efficiency and system performance, establish programs for renewable and alternative energy use, and support ozone protection protocols through ozone depletion strategies in refrigerants and other areas.
- Water Efficiency - Implement strategies to reduce potable water use, and limit or eliminate water pollution discharge. Some suggested technologies and practices include automatic water control systems, high-efficiency irrigation technology, and on-site wastewater treatment and reuse systems.
- Material Usage and Waste Management - Reduce overall materials use and waste disposal through recycling programs, reuse strategies, and sustainable purchasing programs.
- Indoor Environmental Quality - Establish minimum indoor environmental quality performance to contribute to the health and well being of building occupants. These include smoking prohibition, asbestos and PCB management programs, increasing outdoor air ventilation, and establishing and implementing an indoor air-quality management program.
Buildings are rated on a point system in six different categories. A total of 85 points is possible. The point breakdown in each category is as follows:
- Energy and Atmosphere (23)
- Indoor Environmental Quality (22)
- Materials and Resources (16)
- Sustainable Sites (14)
- Water Efficiency (5)
- Innovation in Operations and Upgrades (5)
Buildings receive certification on four different levels: basic certification, silver, gold, and the highest rating-platinum. For complete details, see the Green Building Rating System for Existing Buildings (LEED-EB) from the U.S. Green Building Council. The following are benefits of greening existing buildings:
- Reduced Building Operating Costs - Energy and water efficiency initiatives will increase the bottom line by lowering consumption and reducing utility bills.
- Increased Efficiencies - Material recycling and reuse programs, along with waste disposal management, help to lower costs and increase productivity.
- Increased Worker Comfort and Productivity - Improved indoor air quality and enhanced exterior environments will contribute to occupant health, safety, and comfort, and help employees to be more productive.
- Improved Building Maintenance - Collecting and analyzing building performance data from an overall perspective will often uncover opportunities to improve building maintenance procedures and reduce repair costs.
- Enhanced Public Relations - Improved efficiencies and increased environmental performance can be publicized to improve market position and lead to better relations with government regulators and the community in general.
LEED-EB Case Study
A number of prominent buildings have already received LEED-EB certification. Some of these include the following facilities:
- National Geographic Headquarters
- Thomas Properties Group/California EPA Building
- Johnson/Diversey Global Headquarters
- Johnson Controls Brengel Technology Center
- King County King Street Center
An excellent example of the green building rating system in action is the Thomas Properties Group EPA Headquarters in Sacramento, California. The facility is a 950,000 square foot office building located in the downtown area. According to the USGBC, the building received a platinum LEED-EB rating by incorporating the following measures:
- Alternative Transportation - Easy access to bus lines or light rail, adequate bicycle storage facilities, and 24 charging stations for alternative fuel vehicles.
- Water Use Reduction - High-efficiency fixtures, waterless urinals, and other measures help to reduce water use to 20% below required levels.
- Renewable Energy - 736 photovoltaic panels generate solar energy that is delivered to the utility grid.
- Recycling - 210 recycling bins are located throughout the facility and a 50% recycling waste stream was achieved.
- Green Cleaning - Uses cleaning products that have received the Golden Seal Charter Team certification from the State of California.
The project cost an estimated $1.2 million dollars with an annual net savings of $610,000, allowing for a simple return on investment in less than two years.
Photo by Wonderlane
Obama Speech: Nukes, Offshore Drilling and No Love for Cap-and-Trade
President Obama's State of the Union address covered a lot of energy ground. He spoke about nuclear energy and offshore drilling, but carefully avoided Cap & Trade.
SEC to Require Disclosure of Climate Change Risks
The Securities and Exchange Commission chose to require businesses to publicly disclose the impact of climate change on their businesses.
California Adopts Nation's First Statewide Green Building Standard
California has adopted the first-in-the-nation Green Building Standards Code, which will take effect on January 1, 2011. The code includes mandatory inspections of energy systems for nonresidential buildings, as well as a variety of water conservation measures.
U.S. Crude Oil Imports Decreased by 9.2% in 2009
The American Petroleum Institute (API) has announced that the imports of crude oil and related products dropped by 9.2% in 2009. With U.S. crude oil production up 7% over 2008 levels, the United States also moved slightly closer to energy independence.
Quaker Oats Cuts Energy Use, Earns Cash Incentive
Quaker Oats, part of PepsiCo, has earned more than $100,180 in rebates, in addition to lowering its energy bill, for reducing the company's energy consumption at its Cedar Rapids facility, reports Interstate Power & Light Company, an Alliant Energy company.
Cincinnati among the First to Experience a Smart Grid
More than 700,000 energy consumers living in the Cincinnati, Ohio area will soon witness the transformation of their power system into a modern smart grid first hand. Eventually, Duke Energy will install smart meters for its more than 1.5 million customers in Ohio, Kentucky, and Indiana in a project worth $1 billion.
The Price of Energy
The price of energy has a very strong influence on the energy choices governments and individuals make. Here is a list of current prices for some of the more common energy options on an energy equivalent basis.
Top 10 Sources for U.S. Oil for 2009
Canada remained the top supplier to the U.S., and their total exports to the U.S. actually increased slightly.
Senate Wants Clean Energy, Solar in Jobs Bill
With comprehensive climate legislation on hold, Senate Environment and Public Works subcommittee will focus on clean energy job opportunities at an upcoming hearing as President Obama calls on Congress to pass a jobs bill that puts more Americans to work.
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