Navigant Research Blog

Greening the Skyscraper

— August 21, 2012

As Nate Berg noted in his recent story in The Atlantic, “Is There a Limit to How Tall Buildings Can Get?”, skyscraper construction has long been a competition, a way for cities to flaunt their economic might and sophistication over others.  Berg explores the limits of this race, concluding that even today’s tallest buildings, such as the Burj Khalifa in Dubai, which soars to 828 meters (and which is now most famous for having Tom Cruise jump off of it), don’t come close to the technical limits of what is possible.  In fact, William Baker, the head structural engineer at architecture firm Skidmore Owings and Merrill, argues that “We could easily do a kilometer.  We could easily do a mile.  We could do at least a mile and probably quite a bit more.”

So why haven’t we even hit the 1-kilometer mark yet? There are a few challenges, such as the elevator system, funding, allowing for natural daylight, and a simple lack of demand for super skyscrapers in real estate markets.  Many of these factors are notably the same as the challenges in the green building market.  However, as total green building space swells to 53 billion square feet by 2020, as Pike Research forecasts in its report, “Green Building Certification Programs,” the challenge of reconciling the drive to go higher with the drive to go green will gain urgency.

Cumulative Certified Green Building Space, 2012-2020

(Source: Pike Research)

The certification of the Empire State Building as LEED Gold last year was hailed as a milestone not only because of that building’s fame but also because it became the world’s tallest LEED-certified building (it was the world’s tallest building, period, from 1934 until 1972 when the World Trade Center’s North Tower was completed).  That achievement dispelled any myths that tall buildings couldn’t be green as well.  As green building has virtually become a standard feature in Class A office building construction, developers of tall buildings will inevitably need to consider going green in order to ensure a building’s value in increasingly competitive real estate markets.

The stipulations of green building certification programs harmonize well with tall building construction, given the complexity of such megaprojects.  For example, many of the design processes typically conducted in green construction, such as building commissioning and building information modeling (BIM), are also required for tall building projects like the Burj Khalifa.  Although that building didn’t receive a LEED certification, these quasi-green measures helped it meet design specifications with minimal delay and reduced financial risk.

However, a number of major challenges lie ahead for green skyscrapers.  As construction markets shift toward zero energy building, for example, all new construction in Europe is expected to be by 2021, integrating on-site renewable energy may be difficult when a building is so high that only limited roof space is available for solar panels or other renewable sources.  Most zero energy buildings today, such as the National Renewable Energy Laboratory’s Research Support Facility in Colorado, have low-lying designs that allow for enough roof space to power the buildings underneath.  Technologies such as solar building skins will help address this challenge in the long term but are simply not commercially available today.

Tallness and greenness can and have coexisted nicely over the last few years, and it likely won’t be long until a building that breaks the height record also breaks the record for tallest green building.  Until then, we anticipate that most green building construction will be a bit more down to Earth.


Southern Africa’s Natural Gas Rush

— August 21, 2012

With many headlines focusing on the energy and power markets in Africa, and with the announcements of the conference line-ups for Power-Gen Africa 2012 and Clean Power Africa, the attention of the smart energy world is once again firmly on Africa.  Meanwhile, the natural gas gold rush in America has driven a number of speculators to seek the next bonanza.  China, now Africa’s largest trading partner, already has a number of energy investments in Southern Africa, specifically in natural gas exploration and production.

Non-Chinese producers are also moving in.  Australia based Kinetiko Energy, for example, has increased its potential in-place resources at its Amersfoort coal-bed methane gas project in South Africa to 2.4 trillion cubic feet of gas. This is up a whopping 41% from previous estimates. In mid-August state oil company PetroSA signed an agreement with Indian oil and gas exploration company Cairn India Group for crude oil and natural gas exploration in the Orange Basin on the west coast of South Africa in Cape Town.

A large increase in natural gas production in Southern Africa would have far-reaching effects in the areas of demand for coal, nuclear power, and renewable energy.  At present, South Africa relies heavily on coal for its electricity and is increasingly looking at renewable energy projects, though those plans are still nascent.  Eskom, the South African monopoly utility, is also pushing forward plans for a nuclear resurgence in South Africa. Earlier in 2012 Eskom confirmed its plans to move forward with a program to add 1.2 gigawatts (GW) of new nuclear capacity, with initial tenders expected be announced around the end of 2012.

Of the three fuels (coal, nuclear, and renewables), coal would be the easiest to replace and would provide the largest gains in terms of carbon emissions reductions.  A new wave of natural gas could also help unlock a surge in renewable energy, with natural gas plants providing base load power and renewables the peak power – assuming that reliable energy storage was also in place.  The biggest winner, though, could be fuel cells.

Fuel cells are highly efficient natural gas conversion devices, and with South Africa’s increased interest in fuel cells having an abundant supply of cheap fuel would go a long way to removing market barriers for local adoption.

In the United States, the natural gas boom is simply providing an already powerful economy with increased access to cheaper fuel.  A natural gas boom in Africa, by contrast, could have truly revolutionary impacts in terms of rural electrification, grid stability, and decreased carbon emissions.


Uranium Enrichment Company Fizzles, For Now

— August 18, 2012

It’s been a tough summer for USEC, Inc., formerly U.S. Enrichment Corp., the private company set up in 1992, after the fall of the Soviet Union, by the U.S. government to process uranium from dismantled Soviet warheads and sell it on the open market to the nuclear power industry.  Uranium prices have declined since the Fukushima nuclear accident last year, and USEC – which went public in 1998 and makes its money enriching uranium purchased on the open market for enrichment and resale to nuclear plant operators ‑ has seen its financial position crater.

On July 31 the company reported dismal financial results, including a loss of $92 million for the most recent quarter.  USEC’s share price has languished below $1 for months, and the company is faced with delisting from the New York Stock Exchange if the price doesn’t recover.  The company, which uses an outmoded gaseous diffusion process to enrich uranium, has staked its future on the modern American Centrifuge plant, which it plans to build in Ohio, but that program has been on life support since the Department of Energy (DOE) declined to issue a $2 billion loan guarantee for the project in 2009.

Since then, USEC has eked out its existence on dozens of millions of dollars in DOE stopgap funding. But this week, citing “competitive pressures with an oversupplied market and the continued delay of the Department of Energy loan guarantee,” Standard & Poors lowered its already lousy rating on USEC’s corporate debt.  The company has already acknowledged that, barring some miraculous recovery in the world uranium market, it will be unable to continue operating its Paducah Gaseous Diffusion Plant beyond the spring of 2013.  If USEC is unable to secure DOE funding for the American Centrifuge project, its days as an independent entity are almost certainly numbered.

USEC has received less publicity than ill-fated DOE loan guarantees to renewable energy companies, like Solyndra, but the outcome, at this point, looks equally dismal.  USEC was formed at a time when there was an urgent need to reprocess Soviet nuclear materials for peaceful use, but that source is nearly exhausted.  CEO John Welch’s ambitions for the new centrifuge plant were developed during talk of the anticipated “nuclear renaissance,” which for the moment looks like more of a retrenchment.  Nevertheless, Welch continues to speak about the worldwide nuclear buildout: “The rest of the world is moving on quite aggressively” on nuclear power, Welch told reporters last week. “As far as we’re concerned, we see a long-term market for our services that’s very strong.”

Even with Japan moving to restart at least two reactors in coming months, that sounds wishful.  The nuclear renaissance may still happen – particularly if China moves ahead with its plans for the more than two dozen reactors now under construction – and many experts believe that uranium supplies will tighten in coming decades.  But even in a recovering market for uranium, it’s not clear that USEC has a viable business.  And it’s even less clear that the U.S. government should spend more money to prop it up.


New OpenADR Spec Will Boost Auto-Demand Response

— August 18, 2012

The long-awaited OpenADR 2.0a profile specification was launched on August 8. Expected to have a positive impact on the demand response (DR) market, especially automated DR (ADR), the new spec will spur the development and deployment of new OpenADR-certified smart grid technologies that utilities and grid operators across the world can use to facilitate and augment DR programs.  In particular, devices based on this new specification will operate on a lower-cost, faster, and more reliable and efficient communications system.  Using a common language (XML) and existing Internet technology, DR signals can be sent directly from a demand response automated server (DRAS) via a client to the building automation and control systems on customer sites.  Thanks to this two-way messaging capability between a DRAS, which publishes information, and a client that subscribes to the information, utilities, grid operators, and curtailment service providers (CSPs) will be able to manage peak demand and load shifting in an automated fashion.

OpenADR 2.0a is the first of three profile specifications that will be developed and tested using a standard data model based on the OASIS Energy Interoperation (EI) specification.  While the objective of the 2.0a specification is to support the simplest devices installed in commercial, industrial, and residential settings, future specifications will address more complex situations, such as dynamic pricing.  As such, further iterations will be able to address a much broader DR market that takes wholesale pricing into account.  The second spec, OpenADR 2.0b, is currently being developed by the OpenADR Alliance in coordination with the ISO/RTO Council to enable price-based DR.

Before the launch, OpenADR 2.0a  underwent numerous tests and refinements by various OpenADR members, such as Akuacom, a unit of Honeywell, EnerNOC, IPKeys Technologies, and Universal Devices.  Using a newly developed OpenADR Test Tool by QualityLogic, they have confirmed that the specification successfully interoperates with their respective products.  Going forward, this test tool will be used for all certification tests, including pretesting and development of new first-generation smart grid technologies.

OpenADR 2.0a will not only spur new design and development of standardized and interoperable products to help utilities, grid operators, and CSPs accelerate their implementations of ADR, but it will also enable full-scale implementation of OpenADR by lowering the cost of technology, thereby boosting adoption.  The OpenADR standard will eventually become an integral part of ADR implementations in the United States and in other countries where DR is taking root.


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