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June 30, 2009

Smart grid takes center stage

Why all the hype about the smart grid? Because both energy security and climate mitigation depend on it. “Smart grid” is the keystone for progress in three crucial areas: energy efficiency, renewable energy, and low-carbon transportation. To make headway on energy security we need to radically reduce our dependence on foreign oil. To make headway on climate mitigation, we need to radically reduce our carbon emissions. We're not talking about slight pull-backs, we're talking about 50-80% reductions over the next few decades. For energy security, it means we need to find alternatives for running our transportation fleet; something other than gas and diesel. The US military already spends upwards of $100B annually to protect Middle Eastern oil shipping lanes (ICTA); that money needs to go towards more productive investments. For climate mitigation, we need to greatly increase our energy efficiency and our use of renewable energy. The US spews 7 billion metric tons of CO2 per year, fully 20% of global emissions. Fuel combustion accounts for 94% of our CO2 emissions (EPA). The smart grid is the key to breaking out of this financial-social-environmental logjam. The smart grid encompasses many different power-management technologies. We're talking about two-way digital communication networks parallel to power lines, along with real-time monitors, smart meters, home automation networks, smart appliances and thermostats. All this needs to be linked together with common technical standards (see earlier blog post). The resulting digital toolbox offers both direct and indirect paths to the future.
  • Energy efficiency – The smart grid includes digital tools for managing demand. We've not had these before on a widespread basis. We're talking about an array of monitoring and control tools for utilities, residential customers, and commercial consumers. Demand-response tools help shave (or shift) peak electrical loads. With comprehensive data available, the smart grid supports variable pricing, incentives for load shifting, sub-metering, smart appliances, and household energy dashboards. When the right incentives are provided, consumers will reduce their energy use. Reduced energy use means fewer carbon emissions (climate mitigation) and fewer imported fuels such as liquid natural gas (LNG) and the remaining oil-fired plants (energy security).

  • Renewable energy – The smart grid also includes digital tools for managing supply. This allows utilities to make greater use of renewable and distributed energy sources. Because wind and solar power fluctuate unexpectedly, the legacy grid can only accommodate a small share of renewables. Even when wind or solar is available, utilities are required to have spinning reserves based on more stable sources such as coal, nuclear, and natural gas. A coal plant produces CO2 whether we are using the power or not. Greater integration of renewables will radically reduce carbon emissions (climate mitigation). Nuclear will also support renewables, but let's cover that in a different post.

  • Low-carbon Transportation - Biofuels will play a supporting role. Clearly we can grow fuel inside the US. But biofuels can't play a major role because they won't radically reduce carbon emissions. In the long run, electric vehicles (EVs) will play the major role because they allow substitution of imported oil for renewable sources of electricity. EVs and renewables go together. EVs make no sense if they are running on coal power. With the smart grid more renewables will come online and some of that will power our transportation fleet. For example, the smart grid will let utilities delay the full charge of a EV until excess power is available such as after midnight or when the wind is blowing. So the smart grid supports EVs in a major way (energy security + climate mitigation).
There is a lot going on in the smart grid “ecosystem.” In upcoming posts, we'll continue this thread and cover the major players. Our point here is that the smart grid deserves its recent hype; it is the keystone for solving the two biggest problems of our generation.

Posted by Carbon-Pros at 08:38 PM | | Comments (1) | TrackBacks (0)

June 29, 2009

Green IT

Some of our largest high-tech firms are adopting broad sustainability programs. Here is a list of some of our biggest IT companies along with a link to their latest efforts. If you scan through a few of the reports, you'll see  everything from energy-efficient server farms to low-powered microprocessor chips. Energy Star 5.0 is a hot topic since energy consumption represents around 80% of the carbon footprint of most IT equipment. You'll see high-level applications for carbon accounting and mico-level apps for monitoring electricity in the smart grid. There are hundreds of programs involved in corporate social responsibility and environmental protection. There are major continuing efforts to reduce waste and recycle what's left. There is a lot of talk about innovation driving future product road maps. Innovation is crucial. It is the only way we can move forward in a sustainable way. Every one of these companies needs to improve on their current efforts. That said, it is good to see the industry paying attention to sustainability and taking constructive steps in the right direction.

IBM Sustainable Solutions

http://www.ibm.com/ibm/green/index5.shtml

HP Eco Solutions

http://www.hp.com/hpinfo/globalcitizenship/environment/index.html

Cisco Environment

http://www.cisco.com/web/about/citizenship/environment/

Intel Eco Smart

http://www.intel.com/technology/ecotech/

Microsoft Environment

http://www.microsoft.com/environment/

Dell Earth

http://content.dell.com/us/en/corp/about-dell-earth.aspx

Oracle Environment

http://www.oracle.com/corporate/community/environment/

Accenture Environment

http://www.accenture.com/Global/About_Accenture/Company_Overview/Corporate_Citizenship/Environment/

CAP Gemini Environment

http://www.capgemini.com/about/corporateresponsibility/environment/

SAP Sustainability

http://www.sap.com/solutions/sustainability/

Posted by Carbon-Pros at 08:15 PM | | TrackBacks (0)

June 26, 2009

How much will Waxman-Markey cost consumers?

Nobody really knows. The bill is complex. Opponents say it will costs thousands of dollars for the average family. Proponents say the costs will be negligible for most people and could reduce the energy bills for some. The Environmental Protection Agency (EPA) recently updated their cost estimates for Waxman-Markey. They say energy costs will rise on the order of $80-111 per household per year. They also estimate that gasoline prices would go up about three cents per gallon per year. That's right, only $0.03/year. That's rounding error compared to the $1.00-$2.00 swings we've seen the past few years. The costs are so low because the bill gives away the majority of the emission allowances rather than auctioning them. The Pew Center on Global Climate Change has a useful synopsis on some of the misinformation being circulated about the bill. If the EPA is anywhere near correct, the additional costs are a bargain considering what's at stake.

Posted by Carbon-Pros at 09:56 PM | | TrackBacks (0)

June 25, 2009

Framing the carbon issue

The EPA says that carbon dioxide emissions are “a form of pollution” subject to control under the US Clean Air Act. Congress wants to control carbon emissions to “fight climate change.” These are the negative arguments. As any business communicator knows, when addressing your market, it's best to focus on positive messages. We recommend taking a close look at the dynamics in your marketplace and focus on the positives. The positives are: 1) consumers want to buy from responsible companies, 2) employees want to work for them, 3) energy efficiency saves money, and 4) public perceptions that a company is "doing the right thing" enhances brand value. Those are pretty good business reasons to make sure your company is reducing its carbon footprint. NPR ran a segment yesterday saying the carbon issue is being framed in negative terms in Washington DC. Focusing on negatives may be the way things get done on Capitol Hill, but it's not the way to run a successful business. Don't wait for the negatives to kick in, start taking action now, and for the right reasons. Grow your company and increase your profits.

Posted by Carbon-Pros at 07:41 PM | | TrackBacks (0)

June 24, 2009

Business sustainability at a tipping point?

Our company name is Carbon-Pros but we are wholly focused on business sustainability. Visit the website for Sustainability-Pros and you'll find yourself redirected right back here. Whereas the “green movement” is focused on environmental protection, sustainability is broader. It is based on the three pillars of 1) economic profitability, 2) social responsibility, and 3) environmental protection. More and more companies are gravitating in this direction with their long-term vision. If the recession teaches us one thing, it's that long-term success cannot be taken for granted. The strategies that worked in the past may not work in the future. A report released today by Aberdeen Group finds that sustainability has become a top-5 executive issue across an array of industries and geographies. Their data also show that sustainability leaders have achieved a competitive advantage within their markets. The survey had global reach and included more than one thousand executives. At Carbon-Pros, our working definition for sustainability is “achieving long-term financial success while measurably improving both society and the environment.” The breadth of sustainability has strategic implications. This not a new and untested concept. The first-movers are ten years down the sustainability path. As momentum grows, having a specific vision of how your company embraces sustainability will become a critical success factor. In the spread of new ideas across the business landscape, we're moving beyond the pioneer phase and into the early adopter phase. This is a good thing. The sustainability pioneers have pushed the bleeding edge to a tipping point; they are the executives with arrows in their backs. The second wave, the early adopters, are the ones that will ride on the experience curve of the pioneers. The second wave will make fewer mistakes, take advantage of new technologies, and make money embracing the change.

Posted by Carbon-Pros at 08:06 PM | | TrackBacks (0)

June 23, 2009

NZE Step 8 (2009): Finding a path to zero, part I

Given the steps taken over several years, we had reached new decision point. We had to decide whether we were satisfied with achieving net-zero electricity or whether net-zero energy was feasible. In considering our total energy load, we had to factor in five gas appliances which consume about 750 therms per year. Our gas appliances include : 1) forced-air furnace, 2) hot water tank, 3) cooktop, 4) barbecue, and 5) fireplace. The energy in 750 therms of gas is equivalent to about 30,000 kWh. That a lot of energy, it's about as much as we use driving a car for a year. With current technology, there is no way we can generate that much electricity on our roof, we don't have enough south-facing space. Besides it would be prohibitively expensive. Luckily, distributed generation technology has come a long ways. Heating our house and our water consume the bulk of our natural gas. So the real question is how can we heat the house and make hot water with a reasonable amount of solar PV or solar thermal (wind is not feasible in our neighborhood). My wife and I figured that if we had a way to replace the two big gas appliances with renewables, it would not be difficult to replace the other ones. The stovetop can be replaced with a high-efficiency electric induction range. The barbecue can be converted back to charcoal briquettes made from sustainability harvested forests (e.g. a renewable resource). The gas fireplace can be converted back to wood or sealed up. For heating the house, we'd like to install a geothermal system. It uses an electric heat pump to move heat from the earth into the house in the winter. In the summer, it reverses the loop, moving heat from the house back into the earth. This eliminates the largest gas appliance with an electric one using about 4,500 kWh. It also eliminates our very old central air conditioner saving up to 1,000kWh. Geothermal (ground-source) heat pumps are hyper-efficient. Whereas our "high-efficiency" gas furnace is 95% efficient, the heat pump will be 400-500% efficient. Instead of needing 22,000 kWh it needs only 4,500. Subtract 1,000 kWh for eliminating our air conditioning load and we're within reach of generating that much power on our roof. The other major gas user is our big fat hot water tank. It's oversized because we had three kids living at home until recently. Now it's just a hog. It burns about 22 therms/month for hot water including 12 therms/month wasted in standby loss. Standby loss from heating water 24x7 kills efficiency. That's a big reason why more people are switching to tankless, on-demand hot water heaters. We have two clean-tech options. First and most obvious living in Colorado is solar hot water. Second, and lesser known, is using  geothermal to preheat our water to about 90 degrees. From there we can use either solar thermal or solar electric to bring the water temperature up to 120 degrees. That leaves us with a few more decisions which I'll cover in a future post. --JCB

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June 22, 2009

Community supported agriculture (CSA)

Did you know the average tomato travels 1,500 miles before it reaches the dinner table? Farmers markets are great because we get to buy fresh local food, direct from the farmers. It's a win-win for everyone at the market. My wife and are big fans and always look forward to early summer when our local market gets rolling. This year, we also joined a community supported agriculture (CSA) program. If you are not familiar with the name you've probably heard of the idea. In a CSA, members buy a share of the crop in advance of the harvest. You can think of them as farm-based co-op programs. CSAs bring us one step closer to the farmers who grow our food. We joined the Grant Family Farms CSA. Our season is 26 weeks long with weekly delivery to a nearby location. During enrollment, we customized our order from a range of options. “Shares” vary depending on the quantity and selection of food. For example, Grant Family Farms offers:
  • Family vs. couple vs. single shares
  • Veggies and/or Fruit
  • Eggs and/or meat
  • Mushrooms
  • Cut flowers

Money is paid upfront (invested) for the season, meaning we may get slightly more or less food depending on the size of the harvest. Just like any other shareholder we experience both the upside and the downside of the (farming) business. CSA members are true partners in the local food system. CSA's have been gaining traction since coming over from Europe in the mid-1980s. This season, we have more than 400 CSAs across the US. There's probably one in your area. The USDA's website on sustainable agriculture offers a search tool for finding CSA's. The first weeks of our program have been wonderful. I'm looking forward to eating the freshest, local, organic foods all the way through the end of the 2009 harvest. --JCB

Posted by Carbon-Pros at 05:04 AM | | TrackBacks (0)

June 19, 2009

Global Reporting Initiative

GRIGlobal Reporting Initiative provides a set of voluntary guidelines, definitions, indicators, and templates to help standardize sustainability reporting across industries and nations. GRI is applicable to organizations of all types and sizes. You define your own reporting boundary and determine which of the 100+ measures to include. Indicators are divided into core performance and “additional” to indicate their relative applicability. Templates are provided for major industry sectors and smaller enterprises (SMEs). GRI has thousands of members; the framework can seem complicated but it's the closest we have to a global standard. GRI's core performance indicators support TBL (triple-bottom line) reporting. GRI uses six categories because societal impacts are divided into community, product responsibility, labor practices, and human rights. FYI, here is our summary of GRI's top-level performance indicators.

Economic

  • Financial performance

  • Wages and direct economic impacts

  • Indirect economic impacts

Environmental

  • Materials

  • Energy

  • Water

  • Biodiversity

  • Emissions, effluents, waste

  • Products and services

  • Transportation

  • Fines and sanctions

  • Overall

Societal

  • Society

    • Community and civic contributions

    • Corruption

    • Public policy

    • Anti-competitive behavior, fines, and sanctions

  • Labor practices

    • Employment and labor/management practices

    • Health and safety

    • Training and education

    • Diversity and equal opportunity

  • Product Responsibility

    • Customer health and safety

    • Product and service labeling

    • Marketing communication and customer privacy

  • Human rights

    • Procurement practices

    • Non-discrimination and union support

    • Child and compulsory labor

    • Security practices and indigenous rights

Posted by Carbon-Pros at 07:22 AM | | TrackBacks (0)

June 18, 2009

Triple Bottom Line

Managing and reporting on the 3Ps of profits, people, and the planet is also called managing the triple-bottom line (TBL). In the age of sustainability, managing your TBL is a critical-success factor. First suggested by John Elkington in 1994, TBL is an expansion of traditional accounting to cover your company's impact on society and the environment. The concept has grown in popularity over the past decade. Andy Savitz' book, The Triple Bottom Line, is an excellent overview and contains many good examples. You can think of TBL as a “balanced scorecard” for sustainability reporting. If you already use a balanced scorecard for internal performance then it can be adapted for sustainability. Measures on the financial side can be the same as your traditional reporting with a few extensions. They include revenue, expenses, profit, taxes paid, jobs created and the like. Measures of social performance vary widely but might cover direct and indirect community impacts, human rights policies, labor practices, charitable donations, matching contributions, employee community service hours, and product responsibility initiatives. Measures of environmental performance vary depending on your industry. In the services sector, environmental measures include carbon-related metrics such as overall footprint, carbon per employee, per customer served, and/or per dollar revenue. Additional measures include overall energy usage, green energy offsets, airline miles traveled, employee commute miles, paper and office materials usage, recycling programs, and carbon offsets purchased. In the industrial sector, additional measures cover smokestack metrics, water quality testing, and waste generation. It's a good idea to measure and report your use of "sustainable alternatives" such as web conferencing instead of airline miles and electronic billing and reporting instead of printing and mailing. All measures can be annualized and compared on a year-over-year basis. They can be benchmarked against global and industry norms. For comprehensive reporting, the GRI provides a set detailed of guidelines and a global site for posting sustainability reports.

Posted by Carbon-Pros at 08:11 AM | | TrackBacks (0)

June 17, 2009

Jumpstart energy security

US energy security and climate mitigation are overlapping but different issues. Whereas climate mitigation deals with reducing the carbon intensity of the entire US economy, energy security deals with reducing oil imports from the Middle East. We have a variety of paths to reduce carbon emissions but we don't have any near-term options for getting off oil imports. Solutions such as plug-in hybrid electric vehicles (PHEVs), electric vehicles (EVs), and hydrogen fuel cells are too far out into the future. With 250M cars on the road, we can't change the transportation mix fast enough. This is gnarly problem; innovation is badly needed. Recently, Robert Burgelman and Andy Grove asked their students at Stanford to solve the energy security problem (McKinsey). Their premise was that waiting 20 years for PHEVs to dominate the highway was unacceptable. So what else can be done? The class came up with an interesting idea: Spend $10 billion to retrofit part of the existing transportation fleet with hybrid-drive technology. That's right, take conventional cars and trucks and convert them to hybrids. They suggested a goal of retrofitting 1M vehicles within three years (at $10,000 per vehicle). This won't solve the energy security problem but it will accelerate development of the required technologies. With government funding in the lead, private money will quickly follow. If successful, the program would rapidly accelerate domestic battery development. With the battery problem solved at least partially inside US borders, PHEVs and EVs would penetrate the market more rapidly. That in turn will help transform the US auto industry. And the increased electric demand will help accelerate the transformation of public utilities. Put in the context of our energy security problem, $10B is not a lot of money.* As a side-effect, climate mitigation gets a boost by switching transportation to electric, while at the same time switching electric to renewable sources feeding through a smart grid. The power of innovation keeps us optimistic. On the one hand the twin problems of energy security and climate mitigation seem insoluble. But when we put bright minds together and ask them to solve the insolvable; we can generate very interesting solutions.

* Compare this $10B investment with the $100B annual spending by the US military protecting Middle East shipping channels and the $700B we paid Saudi Arabia for oil imports during the two years 2007-08.

Posted by Carbon-Pros at 07:21 AM | | TrackBacks (0)

June 16, 2009

Consider all your stakeholders

A company incorporating sustainability puts emphasis on achieving long-term positive results for all stakeholders. The broader term “stakeholders” is preferred because it includes everyone and everything impacted by your company. This means shareholders AND employees, customers, suppliers, governments, society, and the environment. A focus on sustainability therefore requires measurement and goal-based performance reviews in each of the three dimensions of sustainability: financial, social, and environmental. While some of the impacts on employees, customers, and suppliers are covered in your financial reporting; they only capture part of the story. Measuring impacts on society and the environment typically require new measures to answer questions such as:

  • What is your company's impact on the local, regional and national population? Support for  education? Charitable contributions? Civic partnerships? Community service?
  • What is your impact on the environment including air quality, water quality, land use, and waste production?
  • Does your company comply with all applicable labor and environmental laws? in what areas do you exceed legal and regulatory standards?
  • What are your weakest areas of social and environmental performance?
  • What programs are in place for continuous improvement? What are your specific improvement goals?

It's crucial to recognize that sustainability does not ignore profitability. An unprofitable company is unsustainable. But a profitable company that mistreats citizens and pollutes the atmosphere won't be profitable for long. Managing and reporting on the 3Ps of profits, people, and the planet is also called managing your triple-bottom line (TBL). In the age of sustainability, managing your TBL is a critical-success factor.

Posted by Carbon-Pros at 08:12 AM | | TrackBacks (0)

June 15, 2009

What is business sustainability?

Business sustainability can be defined as “achieving long-term financial success while measurably improving both society and the environment.” Common to all definitions of sustainability is measuring company results in three crucial areas: financial, societal, and environmental. These are the three pillars of sustainability. To grow sustainably, a company must replenish its sources of capital and remedy its impacts on society and the environment. A sustainable business does not run out of capital. Nor does it harm the communities and the environment in which it operates. By operating within the within the carrying capacity of its supporting systems (financial, societal, and environmental), it can operate indefinitely. Speaking more generally, the World Commission on Environment and Development defines sustainability as: "[meeting] the needs of the present without compromising the ability of future generations to meet their own needs.” (Wiki) Business sustainability comes up more and more in boardrooms and executive suites around the world. When directors and executives talk about sustainability, they reach beyond traditional financial metrics to measure impacts on all stakeholders. Sustainability does not ignore profitability. An unprofitable company is unsustainable. If sustainability consultants seem to focus primarily on the societal and environmental issues, that's because they are the less understood elements we need to integrate into management thought and action.

Posted by Carbon-Pros at 07:43 AM | | TrackBacks (0)

June 12, 2009

NZE Step 6 (2008): Data monitoring

Shortly after we installed solar PV, we bought a data monitor. Our system has a centralized inverter, typical of most installations. The inverter takes DC power generated by the solar array and converts it to AC power for use inside our home. The data monitor measures and records the kilowatt-hours (kWh) generated on the roof. The inverter a good place for monitoring because the solar power flows though it before joining the electrical service panel. Data logging occurs at frequent intervals whenever the sun is shining. Our inverter manufacturer, SMA, offered several options for receiving data feeds including direct-to-PC, wireless-to-countertop display, and Ethernet-to-Internet for capture on SMA's web portal. We chose the latter option because it was the most flexible approach. From the web portal, we can see real-time and cumulative statistics. And we can view it on any device from our PCs and Macs to our iPhones. Therefore we know what's going on whether we are at home or traveling. Data monitoring has been more valuable than we anticipated. If not for the data monitor, we'd have no idea how much power is coming off the roof. Solar PV is totally silent and because our panels are installed flat to the roof, they are virtually out of sight. The SMA web portal sends us a daily email with production statistics and provides web access to accumulated data. Last May, we had a defective breaker shut off the power feed from the roof. Fortunately, our installer receives the same daily emails, noticed that our production had dropped to zero, and quickly fixed the problem. Without monitoring, we may not have noticed the outage until our month-end utility statement. In the future, several components in the "smart grid" will perform a more complete monitoring function including energy production (if any) and energy consumption by circuit. Even though SMA's monitor only provides production data (not consumption) it has become a daily reminder of our electrical usage. This has led to an ongoing effort to reduce usage through better lighting, more efficient appliances, and reduction of phantom loads. With a year of minor tweaking behind us, we have shaved about 10% off our annual power use. This year, we estimate that our solar array will produce about 90% of our electricity. We last paid for electric usage in February 2009. With the meter running backwards every week of the summer, we don't expect to pay any more usage fees until November 2009 when the days are short and the snow is flying. Now that's a happy thought. --JCB

Start at the beginning with NZE step 1.

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June 11, 2009

NZE Step 5 (2007): Solar PV, phase I

Our previous posts on "NZE" were concerned with tightening efficiency and reducing energy consumption. This step is the first of several to turn our home into a distributed power plant. A major enabler for this step began in 2004 when Colorado residents passed Amendment 37 creating a Renewable Portfolio Standard (RPS) of 10% by 2015. Two years later, state legislators effectively doubled the RPS to 20% by 2020. Around that time, the state's largest electricity provider, Xcel Energy, began offering rebates to encourage installation of grid-tied solar PV. The rebates and credits amounted to $4.50/watt at a time when systems were selling for $9.00/watt. The rebates have come down slightly, but PV costs have come down even more. And starting this year, the 30% federal tax credit is no longer capped at $2000. DSIRE provides a directory of incentives for your locale. Solar PV is a hot market, even during these economically challenging times. For technical and economic reasons, we decided 2007 was right time to move into solar PV. We hired a local company, Flatiron Solar, to design and install a 5,250 watt system. It was designed to maximize production from our second-floor south-facing roof while being aesthetically beautiful. We chose an all-black system from BP Solar consisting of 30 panels along with a centralized inverter from SMA. The array blends perfectly with the house. The system was sized to provide about 80% of our electrical needs annually with the expectation that we might be able to reduce our future electrical usage through additional energy efficiency improvements. --JCB

Read about NZE Step 6 or start at the beginning with NZE step 1.

Posted by Carbon-Pros at 08:29 AM | | TrackBacks (0)

June 10, 2009

Smart Grid City

We are fortunate to work in Colorado in a community that supports carbon reduction through energy efficiency, renewable energy, and smart grid technology. Yesterday, Rebecca Johnson from the University of Colorado, and Craig Eicher from Xcel Energy gave us an update on the the roll-out of the smart grid in Boulder. Xcel Energy, the Minneapolis-based, investor-owned utility, has been deploying smart grid infrastructure since April 2008. To date, Xcel has laid more than 200 miles of fiber-optic cable. They are ready to deploy broadband-over-power-line (BPL) communications to 40,000 households. Xcel has installed 10,000 devices on the network with real-time monitoring and are ramping up for broad deployment in 2010. Xcel and its partners will use this pilot project as a test-bed to experiment with various demand-response tools including variable pricing, incentives for load shifting, sub-metering, smart appliances, and household energy dashboards. No one really knows how consumers will change their behavior when given real-time information about their energy consumption and costs. The few studies with real data have found that consumers reduce energy use an average of 10% just by having information readily available. This may be an early-adopter effect that won't prove true for the mainstream, but most people like to save money so we will likely see energy savings just from the information feed. More important, smart grid technologies give the utility flexibility to more pro-actively manage both supply and demand. This supports the integration of renewable and distributed energy sources since wind and solar production can fluctuate unexpectedly. Integration of renewables will help reduce carbon emissions. Utilities are required to have ‘spinning’ reserve capacity of approximately 7% of anticipated load. Spinning reserve is generation that is synchronized to the system and is available to come online within minutes should demand spike, equipment fail, or wind power decrease unexpectedly. In other words, they have a regulatory requirement to overbuild. As customers, we are required to pay for that spare capacity just so we don't run out of power for a few minutes on a hot afternoon. The demand-side management tools on the smart grid give Xcel the ability to reduce its peak load. They could shut off a percentage of central air conditioners for five minutes at a time, or they could temporarily lower the temperature setting on electric hot water heaters on a hot afternoon, or they could delay the full charge of a plug-in hybrid until after midnight. This won't be an invasion of privacy. It will apply to customers who give permission and join the program. The smart grid represents the future of electricity. There are hundreds of unknowns. Therein lies the importance of city-wide pilots such the Boulder project. Soon, Xcel and its partners will be able to test the thousands of interconnections required and experiment with a wide range of technologies and incentive packages. The lessons learned will be invaluable for mass-deployment. The federal stimulus package set aside $4.5 billion for smart grid projects. That's a lot of money, but we have even more at stake considering the twin goals of energy security and carbon mitigation. Smart grid projects will pay for themselves over time. The US DOE estimates that modernizing the national electrical grid could save between 46 and 117 billion dollars over the next 20 years. It's good to see us moving on this important front.

Posted by Carbon-Pros at 11:58 AM | | Comments (1) | TrackBacks (0)

What is a smart grid?

The term “smart grid” refers to a set of related technologies based on common technical standards. It's not one specific technology but rather it's made up of many components (Wiki), most of which do not exist in the legacy transmission-distribution system. Key components include:

  • Two-way digital communication network – this runs alongside existing power lines to provide detailed information about operations including the status of millions of components along with dynamic data about supply and demand.
  • Real-time monitors – to be installed at generating plants, transmission and distribution lines, and substations to report operational status and to respond to changing conditions.
  • Smart meters – to do more than just track lump-sum monthly usage; they also track usage by time of day and day of week, they automatically report outages and can monitor usage on multiple circuits.
  • Home automation network – this lets the smart meter transmit control information to major load centers (such as air conditioners and plug-in hybrids) and major appliances.
  • Smart appliances and thermostats – these must adhere to the same technical standards so they can receive signals requesting temporary load reductions or informing them that electrical costs are at peak levels.

It's the combination of all these (and more) that we refer to as the smart grid. It's always difficult to change existing infrastructure on a mass-scale, and the grid is truly a mass-scale infrastructure. 

Posted by Carbon-Pros at 09:10 AM | | TrackBacks (0)

June 09, 2009

Renewable energy update

In the renewable energy industry, solar photovoltaic (PV) and wind get most of the press, and rightly so. Solar PV is best known as a small-scale distributed power source for use on rooftops. For example, we have a 5.25KW array on our roof and through net metering it generates about 90% of our electricity. Wind is best known as a utility-scale centralized power source. Our local utility, Xcel Energy, owns or purchases 3 GW of wind capacity. As of YE2008, the US leads the world with more than 25 GW of installed wind generators. Wind is cheap enough to be competitive with natural gas, whereas solar PV is still too pricey for mainstream utilities (Hawaii excepted). Utility-scale wind is estimated to cost $0.056/kWh, compared with coal and gas at $0.052/kWh (Wiki). Solar PV averages $0.25/kWh but costs are falling rapidly. At utility-scale, Concentrated Solar Power (CSP) is cheaper at $0.10-.15/kWh, but still too expensive for widespread use. Solar economics are expected to reach parity with wind, gas, and coal by 2015 to 2020 (Wiki). Long-term cost projections heavily favor wind and solar over fossil fuels and other renewable sources. For starters, they are abundant sources of energy available everywhere on the planet. Global development of solar and wind will go a long ways toward stabilizing national energy security interests. Solar and wind have the advantage of zero “fuel costs” during their operating life whereas the price of coal and gas is subject to volatility and rising over the long-term. On the down side, the majority of costs for renewables are paid up front when the plant is built. The global credit crunch has slowed but not stopped the growth of roof-top solar and the construction of new wind farms. Another obstacle is the lack of cost-effective storage solutions to smooth out power production. Wind turbines can spike from zero to several hundred megawatts in fifteen minutes. That's not helpful when it happens when demand is going down in the evening. Major advantages will accrue to solar and wind when the US market sets a price for carbon. This is likely in 2010 driven by cap-and-trade legislation and agreements coming out of the Copenhagen Climate Conference. With a market price for carbon, coal plants will see their long-term operating costs go up; as will natural gas plants. While utility-scale CSP has promise over the long-run, solar PV is viable in many markets today. It is a great choice for distributed power solutions in sunny regions. With utilities embracing centralized wind and home and business owners embracing distributed solar, these two technologies are increasingly important to our energy and climate security.

Posted by Carbon-Pros at 09:05 AM | | TrackBacks (0)

June 08, 2009

Solar thermal at utility-scale

Most of us think of solar thermal as a renewable source of domestic hot water. A lesser known application of solar thermal is for utility-scale power plants. The technology is called Concentrated Solar Power (CSP). Heat from the sun is concentrated by mirrors or lenses to obtain higher temperatures than can be achieved through flat-plat collectors. Concentration reduces the plant's environmental and economic footprint per kWh generated. At utility scale, CSP has major advantages over solar photovoltaic (PV). For starters, the costs are lower ($0.10-.15/kWh) compared with solar PV ($0.25/kWh). Plant performance is also better matched to a utility’s electrical load. Like PV, CSP works best when outside temperatures are hottest and demand is greatest. Better than PV, the heat can be stored and used for generation in the evening when demand is still high but the sun is no longer available. This reduces intermittency, one of the drawbacks of renewable energy sources. Perhaps most important, a CSP plant uses a turbine to generate electricity from heat. When the sun is not shining, natural-gas boilers can be used to heat the fluid and spin the turbine. This combination of CSP supplemented with natural gas promises to be as reliable as a standard fossil-fuel power plant but with minimal carbon emissions. (Economist). Several technologies are in operation today. The two most common designs are parabolic troughs and power towers (Wiki). Parabolic troughs use a curved trough to reflect solar radiation onto a pipe containing the working fluid. Power towers use mirrors to focus the sun's energy on a central tower giving it the advantage of higher temperature and more efficient generation and storage. CSP technology is advancing rapidly. NREL estimates that by 2020 the cost of producing electricity from CSP will drop to $0.054-.0621/kWh putting it on par with wind. Capacity factors will range from 50% to 70%, much better than solar PV and wind.

Posted by Carbon-Pros at 05:57 PM | | TrackBacks (0)

Power plant capacity factor

When you compare the output of varying technologies such as wind, solar, and nuclear, always consider the capacity factor. A power plant's "capacity factor" is the percentage of actual power output compared with its theoretical output if it were continuously running at maximum capacity. Because all plants need to shut down for periodic maintenance, and because they often run below maximum capacity, power plants do operate at 100% capacity on a daily basis. For example, we have a 5.25KW solar PV array installed on our rooftop but it only produces maximum power for a few hours on bright sunny days. If the system ran continuously at maximum, it would produce 3,780kWh per month (5250 watts x 30 days x 24 hours/day = 3,780,000 watt/hours). That would be awesome because we would be selling power to all the homes on our block. We monitor our roof-top production and find that it averages about 500kWh per month due to clouds, snow, and DC-AC conversion losses. Running the numbers (500/3780) shows that our PV system has a capacity factor of 13%. This sounds low but is not out of line for our four-season location. Here are some rough measures of capacity factor for conventional and renewable sources of electricity (Wiki).

  • Nuclear power 92%
  • Base load coal plant 70-90%
  • Thermal solar power tower 73%
  • Geothermal plant 73%
  • Combined cycle gas plant 60%
  • Wind farms 20-40%
  • Solar PV in Arizona 19%

Posted by Carbon-Pros at 03:04 PM | | TrackBacks (0)

June 05, 2009

What is carbon?

My colleague, Bob Monnet, posed a great question this morning. In his newly released book, The Age of Carbon, Eric Roston gives a 300-page answer. Please buy Eric's book for the real answer. That said, let's look at a few interesting aspects of this super-atom which is essential to life.

  • Carbon (C) was born from the earliest stars, “shortly” after the big bang. The creation of C from primal atomic elements was surprising due to the near-zero odds of the required three-way atomic collisions.
  • By the time Earth was born (4.5 billion years ago) C was a big part its composition. Life as we know it, is built on carbon-based molecules. Amino acids feature C at their center and DNA is mostly C.
  • The Earth's carbon cycle began “shortly” after the planet was born. It involves the flow of C through land surfaces and sediments, through terrestrial plants and animals, through oceans and marine life, and through the atmosphere (BioCycle).
  • In the atmosphere, the combination of carbon and oxygen (CO2) protects us from extremes of hot and cold. Its steady-state concentration at 280ppm has been the cradle for human development.
  • Today, we measure an ever-increasing concentration of CO2 in the atmosphere. Our "industrial revolution" has helped grow CO2 concentration to 380ppm.
  • Due to the greenhouse-effect, the higher the concentration of CO2, the more heat is trapped, and the warmer the planet.
  • In the past 100 years, we have warmed the planet by three-quarters of one degree Celsius. That might not sound like much, but scientists say that two degrees Celsius may be a tipping point where many of Earth's natural cycles could change. Six degrees could lead to mass extinction (Mark Lynas).
  • Carbon takes on widely divergent forms. Pure carbon ranges from graphite to diamonds. Graphite is soft and black whereas diamonds are hard and clear.
  • Most of us consume a steady volume of carbohydrates to maintain our health and energy levels.
  • All of the fossil fuels we use to power the economy are hydrocarbons. The vast majority of plastics are also composed of C and hydrogen.
  • Running a business consumes a lot of energy. Most of it is generated by burning fossil fuels. Combustion of fossil fuel releases into the atmosphere CO2 that was previously locked inside the Earth's crust. It therefore adds to the atmospheric concentration and contributes to climate change (sources from human activity).

Business sustainability is a broad concept and C plays a growing role. A key question is asking how much C does your company produce? Reducing carbon emissions has become a key element of corporate social responsibility. Carbon legislation is now under consideration by governments around the world. Measuring and reducing carbon emissions therefore, is moving from the domain of social responsibility into the domain of legal and regulatory compliance.

Posted by Carbon-Pros at 04:17 PM | | TrackBacks (0)

Sources of carbon from human activity

*The major sources of GHGs due to human activity are:

  • Burning of fossil fuels and deforestation (carbon dioxide)
  • Livestock manure and land-use changes (methane)
  • CFCs and halons in refrigeration, fire suppression, and manufacturing
  • Agricultural activities, including the use of fertilizers

*The major sources of CO2 from fossil fuel combustion are:

  • Solid fuels such as coal: 35%
  • Liquid fuels such as gasoline: 36%
  • Gaseous fuels such as natural gas: 20%
  • Global shipping and air transport: 4%
  • Cement production: 3%

*Excerpted from Wikipedia.

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June 04, 2009

Green roofs and roads?

Energy Secretary Steven Chu says that making roofs and roads a lighter color could have the equivalent effect of taking every car in the world off the road for 11 years. Eleven years? That's a long time without cars spewing CO2. By replacing dark-colored roofs and pavement with lighter colored, reflective alternatives, we can offset 44 metric gigatons of GHGs annually. Massive changes to roofs and roads are not going to happen right away but it helps explains why the market for “green roofs” is a growth segment within the energy efficiency market. There are two types of green roofs. One type carries sufficient soil to grow grasses and green plants but that's not what Secretay Chu is talking about. The other type of "green roof" is white or silver. In warm climates they keep the conditioned space below from soaking up heat from the sun. If the space is air conditioned, they save electricity by reducing the cooling load. Similarly, black asphalt roads soak up 10-15% more heat than paler concrete. But more important to climate change, "green" roofs and roads reflect more of the sun's radiant heat back into space and out of our atmosphere.

Posted by Carbon-Pros at 09:18 AM | | TrackBacks (0)

June 02, 2009

Cap-and-auction

There is another, rarely discussed, option to cap-and-trade and carbon taxes. Among others, the American Solar Energy Society recommends a "cap-and-auction" program targeted at upstream carbon sources. Such a program would auction permits to sell carbon at the point where fossil fuels enter the economy. Coal mines, oil wells, natural gas wells, and import terminals would be required to hold permits for the carbon embodied in their products. They would bid on permits with more-carbon intensive fuels requiring more permits. This would narrow the target of regulation to roughly 2,000 sources, while having an economy-wide affect on fossil fuel users. Cap-and-auction is not as straightforward as a revenue-neutral carbon tax, but unlike a tax, a cap insures that the US achieves a defined carbon reduction within a defined time frame. You can find more details about this type of program at Solar Today.

Posted by Carbon-Pros at 12:20 PM | | TrackBacks (0)

Carbon regulation update

Last month, we suggested that carbon legislation from Congress was preferable to carbon regulation by the EPA. The idea being that a carefully crafted bill would go easier on the economy. The Waxman-Markey bill, just emerging from House committee, already shows signs of political horse-trading. The 932 page bill is loaded with loopholes and exceptions (see for example WSJ or Economist). The bill proposes to give away 85% of US carbon permits, auctioning the remaining 15%. Some analysts refer to cap-and-trade as cap-and-tax, after all, nobody likes taxes. What's emerging from committee, can be called cap-and-gift. Following the Wall Street and Automotive bailouts, this bill could be the next US government welfare program for big business. Cap-and-gift eliminates an important source of government funding (auction revenue) and could result in windfall profits for our largest companies (selling excess permits). The current draft favors electric utilities, but as the bill moves through congress, the scope of preferential treatment will surely expand. Thankfully, there are restrictions in the bill to put some of the savings back into taxpayer pockets. The bill also supports greater use of "offsets" which can be subject to abuse. We need a bill that's both economically viable and environmentally effective. To be fair, implementing a national carbon reduction program is a daunting task. Neither conservatives nor environmentalists support the bill in its current form. Like it or not, Waxman-Markey is the best thing going at this point in time. What's needed are an increase in the percentage of permits sold and a tightening of carbon reduction targets.

Posted by Carbon-Pros at 08:46 AM | | TrackBacks (0)

June 01, 2009

Climate change as a market transition

As a business owner and executive, you should view climate change primarily in business terms. Whether you believe the science or not is irrelevant. What is relevant is that markets are changing, and changing rapidly. The legal and regulatory environment has already changed in most developed countries, and here in the US it will change rapidly over the next two years. These changes are the first wave of a long term trend. One the certainties we face is the creation of a market and/or regulatory price for carbon. Carbon pricing affects the cost of energy and will have ripple effects up and down the value chain. This has strategic implications such as affecting your operational costs, your product investment decisions, and the value of your assets. Mid-2009, we are operating in a recessionary cycle that has temporarily reduced the cost of oil and many energy-intensive products. Virtually all energy experts say that oil prices will rise steeply once the economy starts to grow. Adding the incremental cost of carbon to the rising price of energy will steepen the cost curve and magnify the impact on business. In the same time frame, increasingly disruptive weather patterns heighten the need to review operational security. And not just for companies with facilities on the seacoast. Virtually all companies can benefit from reviewing their insurance coverage, emergency back-up power, data storage and recovery procedures, and business continuity plan. If you are a climate skeptic, fine. But don't base your business decisions solely on personal views. Otherwise, you may not be fulfilling your fiduciary responsibly to stakeholders. If you are running a public company, Sarbanes-Oxley section 302 requires disclosure of all material risks. Does climate change pose a material risk? Maybe not. But the risks vary by company, by industry, and by geographic location. More and more businesses think climate change represents a material risk and are making carbon- and climate-related disclosures. Understanding the risks requires a systematic assessment of your company's exposure to carbon pricing and to disruptive weather patterns. A high-level assessment is not as difficult as it sounds; the 80-20 rule applies. It does, however, require management time and attention. Waiting to assess your exposure is not recommended. Conduct an assessment, then you'll have a sound basis for making business decisions about climate change. An excellent primer is Climate Change: What's your business strategy?

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