Navigant Research Blog

Bioenergy Transition: The Challenge Ahead

— October 13, 2014

Despite the relative abundance of biomass as a fuel source in many places, the bioenergy industry has failed to gain the traction as a cornerstone renewable resource that many envisioned just 5 to 10 years ago.  Facing stagnant industry growth, the industry is in desperate need of a shot in the arm from policymakers.

Baseload biomass plants, for example, were especially hard hit by the restricted lending and general economic malaise of recent years.  Commercial installed capacity was historically much higher than wind and solar power combined, but it has been eclipsed by wind generation sources in recent years.  Global installed capacity currently stands at an estimated 3% of global generating capacity.

The European Union (EU), which envisioned a broad surge in bioenergy power and heat production to deliver its 20-20-20 goals, expects to achieve just 83% of its target by 2020.  A combination of market forces, weakened policy support, contentious debate over the sustainability of bioenergy, and the relative success of wind and solar has stifled investment across the industry.  Contending with similar but more severe headwinds, growth for the bioenergy industry in the United States has been mostly nonexistent.

New Openings

With the regulatory vice tightening on carbon-emitting power producers in the past year, however, the opportunities to co-fire diverse biomass feedstocks in coal-burning plants or switch these plants over to dedicated biopower production looks to be shaping up as an attractive proposition again.  As a feedstock, biomass remains a compelling option for reducing carbon emissions from centralized power plants because it eliminates the need for a significant overhaul of existing hardware.

Unfortunately, while recent policy and regulatory developments in the EU and United States look promising on paper, they are unlikely to give the industry the boost it needs in the near term.

Under its framework for climate and energy policies presented in January 2014, the European Commission called for 27% renewables by 2030.  Meanwhile, the Environmental Protection Agency’s (EPA’s) proposed Clean Power Rule in the United States is a potentially positive development for the bioenergy industry.  Yet, biomass will need to be recognized under the Clean Air Act as a renewable source of energy, with a favorable carbon profile when compared to fossil fuels, for the industry to gain significant traction.

Cost Gains

Longer-term developments look more positive.  According to a recent McKinsey Insights article, bioenergy in Europe has the potential to lower the levelized cost of energy (LCOE) by up to 48% by 2025 through gains like boiler efficiencies and greater plant standardization.  Although the relative abundance of cheap coal and softer emissions regulations in the United States (relative to Europe) require greater LCOE gains to reach price parity with coal-based generation, these developments would be positive for bioenergy development in both regions.

For bioenergy to capitalize on these positive trends, logistical challenges related to the collection, aggregation, transportation, and handling of biomass will need to be overcome.  Higher growth will depend on breakthroughs in carbon densification processes for biomass resources, for example, and the increasing commoditization of biomass feedstocks (including the expansion of the international trade in pellets) for power production.

 

Cities Are Making the Energy Cloud a Reality

— October 12, 2014

The possibilities for procuring and distributing clean, low-cost electricity offer challenges to cities and utilities – but also opportunities to forge new relationships and lay the foundations for cities that are clean and efficient in their energy use.

I’ve written previously about the close relationship between smart cities and smart grids.  Early projects have largely been driven by utility programs for the piloting and demonstration of smart grid technologies and to gather intelligence on consumer and business responses to energy management programs.

The challenge is to integrate the lessons learned from these projects into broader smart city programs.  Cities have played a role in these pilots but have largely been supporters of utility-driven technology programs.  This is changing as cities develop more extensive energy management strategies of their own.  Boston, for example, is working closely with its local utilities (National Grid and NSTAR) to reduce its $50 million-plus energy costs and meet the goal set in 2007 to reduce greenhouse gas (GHG) emissions 25% by 2020 and 80% by 2050.   The city is targeting energy consumption across residential and commercial properties.  Other initiatives include the introduction of an energy management system for Boston’s public buildings and the deployment of LED street lighting.

New Collaborations

Minneapolis is going further.  The city is using the renegotiation of its franchise relationship with its utilities (which governs their access and use of city resources such as roadways and buildings) to establish a new form of collaboration that it believes can be a model for the rest of the United States.  The proposed Clean Energy Partnership between Minneapolis and its electricity and gas suppliers, Xcel Energy and CenterPoint Energy, will create a new body focused on helping the city meets its climate action goals of reducing GHG emissions 15% by 2015 and 30% by 2025 based on a 2006 baseline.

The increasing focus of city leaders on energy efficiency, reduced GHG emissions, and the development of a more resilient infrastructure requires close partnership with utilities.   Cities like Boston and Minneapolis are pushing their utilities to help them meet their commitments, but the cities themselves are also taking a more active role.  The Greater London Authority (GLA), for example, has become the first local government authority in the United Kingdom to be licensed as a “junior” energy supplier.  This enables London to buy power from small generators and sell it to other public bodies at an attractive rate.   The city expects to be buying and selling power by early 2015, and it hopes to reduce energy costs for London while also boosting the local renewable energy industry.

A Vision Emerges

The emerging energy vision for smart cities integrates large- and small-scale energy initiatives: from improvements in national infrastructure through citywide increases in efficiency to expanded local energy generation.  Cities will thus become clusters of smart energy communities that can exploit the benefits of the new energy systems, such as distributed generation, dynamic load management, and active market participation.

This synergy presents an excellent example of the opportunities and challenges presented to utilities by the emergence of the energy cloud.  Utilities need to see cities as more than demonstration sites for technology.  Cities are ideal partners for developing the new relationships and the new services core to that energy cloud vision.

These issues are explored further in a new Navigant Research white paper, Smart Cities and the Energy Cloud.  I will also be discussing these developments in my presentation on Smart Cities at Korea Smart Grid Week in October and at European Utility Week in November.

 

Building Automation Shifts to Integrated Controls

— October 12, 2014

Building automation system (BAS) controls have long acted as a cash cow for vendors.  Historically, they were built on closed, proprietary communications protocols, virtually guaranteeing steady revenue from future maintenance and upgrades.  Now, though, customers are migrating to control systems with open protocols, such as BACnet and LonWorks, to gain greater flexibility and interoperability.  The emergence of these standards is changing the landscape of building controls.

The shift to open protocols largely benefits building owners (and has unsurprisingly been driven by the demand of building owners).  Competition is increased, as all vendors are on equal footing, which drives down prices.  Naturally, controls vendors are now exploring alternatives to gain a competitive advantage and regain steady revenue.  One emerging strategy is integrating more intelligence and more controls into HVAC equipment.  Even though more vendors can compete with open systems, the more intelligence that is shipped with HVAC equipment, the less there is available for controls companies to install, thereby protecting revenue from the increased competition.

Rapid Adaptation

Johnson Controls seems to be adapting to the changing environment rapidly.  The company made two important announcements in September.  First, it is reorganizing its building efficiency business to separate the North America branch from the global products business.  This will enable the company to focus on high-margin HVAC product lines, notably air distribution and ventilation solutions and variable refrigerant flow (VRF) systems.  The second announcement signaled plans to divest Johnson Controls’ Global Workplace Solutions business.

As I noted after Johnson Controls’ acquisition of Air Distribution Technologies, the move was not about products but about controls.  Johnson Controls’ joint venture with Hitachi to provide VRF systems follows the same strategy.  VRF systems represent lower potential revenue for controls suppliers because controls are typically provided by the equipment manufacturer.  Moreover, because VRF systems use refrigerant as the heat transfer medium instead of air, the need for complex air-side control of supply air temperature and humidity is obviated.  By shifting its focus to HVAC products, Johnson Controls is ensuring that its controls stay relevant.

 

The NFL Tackles Energy Efficiency

— October 12, 2014

On September 14, the San Francisco 49ers played the first game at their new home, Levi’s Stadium in Santa Clara, California.  Though it has its detractors, the new stadium is one of the most energy efficient sports venues in the world.  The 49ers partnered with clean energy leader NRG Energy to install a 375 kW solar power system across the stadium.  The installation will generate enough electricity annually to offset the power consumed during all home games.

In addition to onsite power generation, the stadium has installed low-flow water fixtures in all bathrooms, and water is reclaimed whenever possible to be reused for irrigation and other purposes.  A 27,000 SF green roof provides extra insulation and reduces the demand for heating and cooling.  Whenever possible, the builders used recycled and reclaimed materials during construction.  All of these features have led to Levi’s Stadium being the first U.S. professional football stadium to achieve LEED Gold certification.

Efficient Competition

Unfortunately for San Francisco fans, the 49ers lost their opening home game to another team that has made a commitment to sustainability.  The Chicago Bears completed a full renovation of the iconic Soldier Field in 2003, making it a goal to improve performance and efficiency while also reducing the stadium’s carbon footprint.  These efforts also earned recognition from the U.S. Green Building Council (USGBC) in the form of a LEED – Existing Building Certification.  Although Soldier Field does not have any onsite renewable power generation, it does boast many energy saving features, such as LED lighting with a networked control system and a green roof on the parking structure.

Given their very high energy usage, many other stadiums around the world have implemented efficiency features.  The most popular are efficient lighting/control systems and low-flow water fixtures.  More capital-intensive projects to install renewable power generation on stadiums are also becoming common.  Lincoln Financial Field, home of the Philadelphia Eagles, has the ability to generate 3,000 kW of renewable electricity onsite, the most of any stadium.  Eleven thousand solar panels have been installed, along with 14 eye-catching vertical axis wind turbines, which are intended to be a visual representation of the team’s commitment to sustainability.  FedEx Field outside of Washington, D.C. and MetLife Stadium in New Jersey boast 2,000 kW and 314 kW of generating capacity, respectively.

Power Houses

Two other highly efficient stadiums belong to two of the league’s top teams.  The Seattle Seahawks and the New England Patriots are both powerhouse teams, likely to meet in this season’s Super Bowl in Arizona.  Seattle’s CenturyLink Field produces 830,000 kWh annually with an onsite solar installation.  The Patriots’ home field in Foxborough, Massachusetts also features solar power generation, a 525 kW array installed by NRG Energy.  One of the distinctive features of this stadium is an integrated building energy management system that optimizes HVAC, lighting, and other systems.

Sports teams have a unique ability to influence their home communities in positive ways; their visible commitments to sustainability tend to have ripple effects throughout the community.  Energy efficient stadiums support local green businesses that are able to put their expertise on display in large-scale projects.  Saving energy and money and helping fans understand the impacts of their actions is a win for everyone.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Electric Vehicles, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Smart Grid Practice, Smart Transportation Practice, Smart Transportation Program, Utility Innovations

By Author


{"userID":"","pageName":"Articles","path":"\/blog\/articles?page=3","date":"10\/20\/2014"}