Navigant Research Blog

Carbon-Saving Innovation in the Airline Industry

— July 7, 2015

Relative to the rapidly changing automotive industry, which pumps out new models every year, the airplane industry has evolved at a considerably slower pace. This is not surprising, given that around 1,000 aircraft are made by Airbus and Boeing, the leading manufacturers. Unlike cars, changes in design and function take longer to incorporate into planes. For some time, the airline industry has been under pressure to increase its fuel efficiency and lower its greenhouse gas (GHG) impact. While airplanes contribute to 2%–3% of global GHG emissions annually, some posit that the high altitude of those emissions has a greater impact on climate change.  This past month, the U.S. airline industry has been put on notice to reduce the amount of GHG from air travel.

Citing the right to regulate emissions as part of the Clean Air Act, the U.S. Environmental Protection Agency (EPA) reported that almost one-third of global aircraft emissions originated from U.S. aircraft. To address this, President Obama has charged the EPA to begin crafting rules similar to the draft Clean Power Plan (111(d)) that addresses power plants and utility energy use.  European carriers have been under similar pressure from the European Commission.

The Path toward Change

There are two fundamental ways that airplanes can reduce fuel use: they can use a lower GHG fuel source and they can make more efficient planes.

For airplanes, the lower GHG fuel source has been biofuel, either from biological sources or waste products. As discussed in Navigant Research’s Aviation and Marine Biofuels report, choosing biofuels also helps hedge against increases and variability in fuel costs. The volatility of aviation fuel cost over the last 5 years can be seen in the figure below.

Monthly Cost and Consumption: 2000-2015

carbon airlines

(Source: U.S. Department of Transportation)

It is interesting to note, however, how relatively flat U.S. and international fuel consumption has been over the past 15 years. The United Nations’ International Civil Aviation Organization (ICAO) projections have cited the rapid growth of European plane travel in forecasting that fuel demand for air travel could result in a 300% to 700% growth in emissions by 2050.

U.S.-based United Airlines just announced an unusual step in securing biofuels for its planes. In late June, it was announced that the company is investing $30 million in Fulcrum BioEnergy. Once production of the waste-to-jet fuel has matured, United will be able to purchase up to 90 million gallons of jet biofuel.  Fulcrum already has a deal with Cathay Pacific and has received funding from the U.S. Department of Defense with the aim of becoming another military jet fuel provider.  Yet, United is not putting all of its eggs in one basket; it already had a deal with AltAir Fuel, which began in 2009.

 

Google Weaving an IoT Web

— June 12, 2015

Recent announcements by Google that it is developing the Weave communication protocol are expected to make waves in the building automation ecosystem, possibly to the chagrin of incumbent equipment manufactures for commercial and home equipment. Weave is centered on Brillo, the Google-developed lightweight operating system, essentially a minimalist version of Android. With Weave, Google may be trying to quickly capture the mind-share of end consumers who want and answer to the question, “how can I quickly connect all of my home systems?”

With Weave, all Brillo devices (and Nest) are self-discoverable, making them, in theory, plug-and-play. A consumer could connect the new wireless door lock with the wireless lights, all through an Android phone. The proposed ease of connecting devices was introduced in Navigant Research’s recent Home Energy Management report, as being a challenge for consumers. This integration is contingent on the wireless protocols being interoperable, as mentioned in a recent blog.

Feeling Threatened?

For equipment manufacturers that sell into the commercial markets, Weave poses a threat in two ways. First, this is yet another communication protocol to incorporate into equipment, adding a step to the integration. On the commercial side, integration firms have been stepping up to manage that issue. Weave is not the first extensible system to be developed with an easy user interface (e.g., Android) in mind (see Apple’s Homekit). Weave’s approach is not anchored on iOS, of course, and is therefore more open.

More significantly, the entrance of Google and Weave are expected to force the small and medium commercial market suppliers into a quandary. The small and medium commercial market is vast, and is in need of energy and cost-saving solutions.  These customers do not have the funds to invest in large solutions, and in some ways are like residential consumers; HVAC does not keep them up at night. In this light, do original equipment manufacturers (OEMs) keep selling single end-to-end building automation system solutions, focusing on the value of a single integrated system, or do they appeal to the ease of integration with a solution like Weave? Most small or medium-sized commercial building owners or tenants have heard of Nest. But how many have heard of BACnet or LonTalk?

During a recent Lightfair panel discussing the promise of convergence of the Internet of Things  (IoT) and automated building controls, it was reiterated that IoT-based building integration solutions exist, and are being deployed. The linchpin in wide-scale deployment will be people wanting easy solutions. Weave is certainly going to push the adoption wave; it will be interesting to see how integration solution providers and OEMs respond.

 

In Profit Crunch, Oil Firms Look to Big Data

— June 5, 2015

New_Picture_webAs the price of crude continues to fall and the availability of places for oil companies to store oil shrinks, oil and gas companies are looking for ways to reduce costs and preserve profits. Operational efficiency is a familiar path—one that leads to layoffs, up to 75,000 coming at companies big and small, as reported by Continental Resources. At the same time, some companies are looking inward to big data as a way to make operations and exploration more efficient. We’ve written about the large potential for big data to make buildings, for example, more efficient. And it’s clear that the value of big data lies in its context.

In the case of oil and gas, it is important to keep in mind how diverse this industry is. The use of data in oil exploration and production is wholly different from its employment in oil refining, distribution, and marketing.

Down the Stream

According to the panel members of a recent Cleantech Forum panel on the digitization of the oil and gas industry, there’s scant consensus on data models and formats in single business units, let alone across an entire company or the industry. The spread of digitization is not universal, either. This presents a clear challenge to the industry–data analytics are only useful when the data is consistently collected and, well, analyzed. But it also presents an opportunity. Any company that can figure out how to collect, integrate, and analyze data across the oil and gas stream—from wellhead to gas pump—will be able to unlock the potential of both operational efficiency and optimization. Those gains in efficiency will save money and help the companies achieve their sustainability goals.

A few companies are already testing that promise. WellAware is looking to bring a new Internet of Things (IoT) network for oil and gas, providing customers a view into the production, conveyance, and processing of petroleum products. The Texas-based firm deploys sensors and gathers data from existing monitors to provide visualizations and analytics on system performance. To compete with OSIsoft, an incumbent in oil and gas data collection and historian services, WellAware will provide hardware and advanced analytics—two offerings that OSIsoft either does not offer or outsources.

Human Input

A different approach, one based on large time series data analysis, is offered by Mtelligence Corporation and MapR, a provider of the powerful open-source Hadoop solution. Called Mtell Reservoir, the solution will focus on real-time and historical sensor data analysis to provide system managers operational insight. Given the large volume of data gathered in a drilling operation and the time it takes to load and analyze data, an in-stream solution will have great value.

These big data solutions are poised to give oil and gas operators greater intelligence and insight into operations. However, they don’t close the loop on operations, removing the need for people making decisions. This is due in part to the complex nature of drilling through multifaceted substrates and processing materials of varying quality. Production technologies like directional drilling and fracking have changed the oil and gas business and are in part responsible for the current low oil prices. Data analytics may help to stem the profit losses in the near term.

 

Seeking Reliable Power, Hospitals Go Local

— April 21, 2015

A few weeks ago, Hitachi in India announced that it is working on a pilot at the All India Institute of Medical Sciences (AIIMS) hospital in New Delhi that focuses on energy efficiency. The project has three major goals: to upgrade the facilities of AIIMS, install a highly efficiency data center, and incorporate the data from the energy management system (EMS) to optimize the facility’s overall performance. This is the latest example of energy management coming to the fore in healthcare facilities. The drivers and barriers for advanced energy management in healthcare are detailed in Navigant Research’s recent report, Energy Management for Healthcare Markets.

The energy management for healthcare market expected is to grow from $949 million in 2015 to over $2 billion in 2024, driven by government regulation on one hand and corporate strategy on the other, both working to keep costs low for hospitals. According to the U.S. Energy Information Administration, energy conservation measures have been employed by hospitals at high rates, yet our research shows that the integration of these system with digital EMSs is less universal.

Surviving Disaster

Improving the energy posture of hospitals can also help them become more resilient. After events like Hurricane Katrina (when the failure of hospital power systems was citywide and catastrophic, as revealed in Sheri Fink’s devastating account, Five Days at Memorial) and Hurricane Sandy, hospitals are incorporating plans to function without utility-based power in the face of a disaster. At the simplest level, a highly energy efficient hospital running with efficient HVAC and lighting systems would need less power than an inefficient one. But the hospital’s ability to leverage onsite backup power can make the difference, literally, between life and death in a disaster.

One Wisconsin healthcare system has taken the concept of resilience to its logical extreme. Gunderson Health System has endeavored to generate its own power from a myriad of sources. This includes burning biomass from waste wood, employing dairy waste digesters, using methane captured from local landfills, and gathering power from wind turbines on farms in the area. Gunderson claims to be the first energy-independent healthcare system in the world. More significantly, the system presents itself as an example of a locally powered healthcare facility, proving that it’s integrated into the local community.

Going Micro

Unlike Gunderson, most hospitals use diesel generators for power backup. These generators are seldom-used but ready to deliver backup power when needed. And if you’ve ever been near the hospital when they’re running, you know how unpleasant they are to be around. While the price of crude oil has dropped in global markets, electricity prices have not universally fallen. The use of fossil fuel-based generators as backups poses an interesting question: If the price of gas stays low, as forecasted, will hospital facilities shift their use of petroleum generators to essentially become microgrids, to save costs?

Although most facilities are not prepared to do so at present, it’s highly likely that all new healthcare facilities will introduce more flexible backup power, to avoid more Katrinas in the future.

 

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