Navigant Research Blog

Is Recycling Garbage?

— December 28, 2015

Recycling has been a topic of recent media trash talk. Energy consumption associated with the practice, particularly through transport, is high, negating many of its environmental benefits. In addition, the price of many recyclable commodities has fallen dramatically (aluminum fell from $0.80 to $0.37 per pound in recent months), undermining the economics of recycling. However, depending on the material, recycling can still have a major environmental benefit. Recycling aluminum saves 10 tons of CO2 per ton of metal. Glass, on the other hand, only saves 0.34 tons of CO2 per ton of material, and these small savings are quickly offset by emissions from transportation, collection, and distribution. Cities are increasingly seeing that recycling is, in many cases, just not worth the investment.

In Portland, Oregon, for example, recycling recovery rates (the amount of recyclables recovered from municipal waste) fell between 2013 and 2014. Some of this decline is easily explained by reduced circulation of magazines, junk mail, and newspapers. However, the construction of new buildings rose in the city, increasing the amount of metal and wood waste that could have been recycled. The WestRock paper mill, Portland’s wood processing facility, closed in October of 2015 due to financial troubles. The cost of recycling remains high elsewhere as well, especially for curbside recycling. In Augusta, Maine, the cost of recycling is $879 and $113 per ton for curbside collection and collection at Augusta City Center, respectively. On December 17, the Augusta city council voted to end curbside recycling in May 2016.

Recycling is still very popular among consumers. In fact, since its introduction in the 1980s, there are now more than 9,800 curbside recycling programs in the United States. However, recycling is, and always has been, energy intensive and costly. Materials like aluminum are beneficial to recycle, but for plastic and glass, the current systems and technology makes the practice economically and environmentally unfavorable. For recycling to work, the system has to change.

Technology to the Rescue

Recent advances in recycling technology could solve many of these problems. For example, Epson’s new waterless PaperLab allows offices to recycle up to 6,720 sheets of paper a day onsite. This eliminates the need to transport heavy, used paper. In Denver, Colorado, Alpine Waste is setting up a state-of-the-art Styrofoam recycling system. This will allow the city to process a previously hard-to-recycle material and prevent a lengthy trip to far-away processing facilities.

Another improvement involves a new type of easily recycled plastics. Discovered by Eugene Chen and Miao Hong of Colorado State University, the material is known as poly(GBL), and can be reduced to its original monomer state (for remaking into plastics) at 220°C  and 300°C (428°F and 572°F) for linear and cyclic polymers, respectively. The process to recycle poly(GBL) completely breaks down polymers and does not require the same high level of energy or water as previous plastic recycling systems—since the raw material doesn’t reach as high of a temperature, less water is required to cool it. This material promises to be cheaper to produce and recycle than many petroleum- or bacteria-derived plastics currently in production.

The current system of recycling is not cost or energy efficient. However, many recent advances have been made to usher in more efficiency. Arlene Karidis of Waste Dive, a news source dedicated to covering of municipal waste, recently published an article stating that technological advancements in recycling are expected continue in 2016, with increased emphasis being placed on safety, automation, and separation of materials. As 2015 ends, the year ahead promises a renewal in the way we think about recycling.


What Is the Next Frontier for EV Charging?

— December 23, 2015

We’re in the auto show time of year, and so far this one is the season of the go big or go home plug-in electric vehicle (PEV) announcement. At the Los Angeles Auto show, Audi announced that in 10 years it expects 25% of its car sales to be plug-ins. To reach this target, the company will be offering plug-ins throughout its vehicle portfolio. At the Frankfurt Auto Show in September, the company revealed a concept version of one of these future offerings, a battery-powered quattro SUV. Although not connected to an auto show, Ford’s December announcement that it would add 13 new electric options to its vehicle lineup by 2020 was noteworthy in part because it came from a non-luxury brand OEM.

When these and other new PEVs roll out from 2017 on, the PEV market will shift into a new phase, marked by real diversity of offerings across vehicle platforms. Right now, the PEV market is somewhat hampered by the limited number of segments where plug-ins are available. OEMs have focused mostly on the smaller vehicle body types for PEVs like the Nissan LEAF, the Chevrolet Volt, and the BMW i3. This isn’t a criticism of the OEMs—it made sense to roll out a new technology like EVs on a limited scale to test consumer interest. As a practical matter, the weight and cost of adding lithium ion (Li-ion) battery capacity to a plug-in vehicle in 2010 naturally led OEMs to target small vehicle platforms requiring less power. But with Li-ion battery costs dropping at a faster rate than many projected in the last 5 years and pack prices projected to decline 5%-6% annually through 2020, OEMs are well-positioned to offer plug-in options throughout their vehicle portfolios, including vehicles with larger capacity like SUVs. At a minimum, this greater variety expands the potential buyer base, and it is a critical development in a market like the United States where bigger still reigns supreme.

The Next Big Challenge

These announcements are also pointing toward the next frontier in the EV charging market: fast charging. If the PEV market is going to look more like the mainstream vehicle market, with plug-ins a common option, customers will have to be able to use them like mainstream vehicles. While many of the new PEVs will be plug-in hybrids without range limitations, many will be battery EVs with a 200-mile or longer range. This will make them a no brainer for daily driving habits but will still limit their ability to cover drivers’ long-range driving needs. The solution is likely to be the development of fast charging networks along highways, spurred by automaker investment. This is the approach being taken by Tesla with its Supercharger networks. For the broader rollout of fast charging, the auto industry players will have to grapple with how much to pay for it, how such a network would be run, and how to cooperate with each other in this effort.


Tax Incentive Uncertainty Surrounds Fuel Cell Vehicles

— December 23, 2015

It’s no secret that incentives continue to play a key role in the progress of alternative energy technologies. Witness the significant media attention given to the last-minute U.S. federal funding legislation, which included a long-term extension for solar energy tax credits out to 2020. The solar industry association is claiming that the tax credits will help solar installations in the United States reach 100 GW by 2020. What’s unusual about this extension is the 5-year timeframe. In recent years, Congress has been loathe to pass legislation establishing long-term energy tax credits. Coupled with Congress’s tendency to pass annual spending bills at the last possible hour, this has led to a constant state of uncertainty regarding energy tax credits.

A sense of certainty is critical for potential adopters or investors, and this extends to knowing whether or not tax credits will be in place. This is not what happened for fuel cell vehicles (FCVs), which are among the technologies that received yet another short-term extension of the federal tax credit through 2016. As a practical matter, this incentive will do little to truly push the FCV market, since there are very few of these vehicles currently available in the United States. The FCV market is just beginning to enter the early commercial phase, with the Toyota Mirai and Hyundai’s fuel cell crossover vehicle (called the Tucson in the U.S. market). Both are available in California, but at limited volume. Toyota has indicated its plans to sell around 3,000 fuel cell Mirai models in the United States through 2017; the Mirai had close to 2,000 pre-orders in California as of October, so Toyota could reach that goal. However, the company has also set a production cap of 3,000 units annually. Honda will be next in the U.S. market with a new commercial FCV, the Clarity, set to be introduced in 2016.

The U.S. fuel cell car market will be in limited supply mode through 2016 while the tax incentives are in effect. Any real impact would be felt closer to 2020, when the market will need to ramp up to sales in the tens of thousands, as noted in Navigant’s most recent Fuel Cell Vehicles report. This next phase of the market is when incentives will be critical, unless the price premium for a fuel cell car has dropped close to parity with a hybrid.

Setting an Example

By contrast, the South Korean government is making a major move to encourage FCV adoption in the long term, announcing a huge new subsidy of around $23,250 for purchases, around a third of the price of a Hyundai FCV in the country. The government plans to build out hydrogen stations with an eye toward building the FCV market to 630,000 vehicles by 2030. It’s surprising that it took the government this long to develop an aggressive FCV adoption strategy, given Hyundai’s commitment to fuel cells and the incentives in place in South Korea for other fuel cell technologies. Nevertheless, it looks like the country is putting in place a long-term strategy of subsidies and investment to promote FCVs domestically.


Moving Beyond the State of California at CAISO

— December 23, 2015

The California Independent System Operator (CAISO) is one of nine independent wholesale grid operators in North America. Today, roughly two-thirds of the U.S. electrical grid is managed by independent system operator (ISO) entities, which manage and coordinate all generation resources, including the large and rapidly growing amount of variable renewable resources.

California’s recent passage of legislation increasing the target for meeting 50% of total state demand for electricity from renewables by 2030 underscores why the CAISO is moving in new directions that will likely require a name change as it expands its access to out-of-state resources.

ISO Control Areas for North America

Peter CASIO Blog 1

(Source: California Independent System Operator)

Various studies—including one from the Regulatory Assistance Project—confirm that these impartial grid operators lower overall costs of power supplies, as well as enhance the environmental performance of the power sector. With current trends toward coal plant retirements and the subsequent increase in reliance upon variable renewables such as solar and wind power, it turns out, however, that bigger is indeed better.

Since I am a strong advocate for decentralized distributed energy systems such as microgrids, this may seem like an odd argument to make. To put this statement in context, consider the following truism I learned while researching my book on wind power: the larger the control area for a balancing authority such as a utility or an ISO, the less an issue the variability of wind. Why? Chances are that the wind will not all die at once if you can manage this resource over a large swath of wind resource areas. This general axiom also applies to solar energy, though the dynamics are different.

Today, CAISO serves an estimated 35% of the electric load in the West, but this number is expected to grow steadily over the next several years due to the creation of two new organized markets designed to help the state meet its aggressive energy goals, programs highlighted at the recent Paris Climate Summit.

The two recent major market expansions by CAISO are:

  • Energy Imbalance Markets. CAISO is now reaching out to utilities outside of its traditional control footprint to purchase ancillary services. The Energy Imbalance Market (EIM) improves the efficiency of dispatching resources by using devices and sophisticated software systems that analyze the needs of the grid every 5 minutes and automatically find the lowest-cost generation to meet demand. Without an EIM, utilities have to meet demand with resources in their own service areas, which can translate into having to start higher-priced generation or dip into even more expensive energy held in reserve.

CAISO Energy Imbalance Market Participants (Partial List)

Peter CASIO Blog 2

(Source: California Independent System Operator)

  • Regional Energy Markets. An even more dramatic step by CAISO is creation of a fully integrated Regional Energy Market. The control area of CAISO may encompass many new partners. The first step is to integrate with the system resources of PacifiCorp, which has control area of over 11 GW of resources in Oregon, Washington, Idaho, Nevada, and Wyoming. The diversity of resources available in these states, ranging from hydro to wind and fossil fuels, will help diversify the energy economy managed by CAISO. Benefits of this integration include resource procurement savings, lower peak capacity needs, and more efficient unit commitment and dispatch.

Given these looming changes, CAISO will need a new name. This is just speculation, but I would bet it will rebrand itself as the Western Regional Independent System Operator (WRISO) at some point in the future.


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