Navigant Research Blog

Offshore Wind Farm a Milestone for New England Energy

— May 18, 2015

At an industrial facility in Rhode Island, work has finally begun on what will likely be America’s first offshore wind farm. Originally proposed in 2008, Providence-based company Deepwater Wind’s project has overcome significant headwinds to receive permits, sign power purchase agreements, and finally begin construction. Made up of only five turbines, work on the relatively small project comes at a time when New England’s energy future faces uncertainty. The region generates almost no energy locally, being dependent primarily on natural gas and coal imports from other parts of the country. As a result, consumers are susceptible to volatile rates due to severe weather and supply constraints. A proposal to expand natural gas pipelines represents one way forward for the region, while the wind farm on Block Island represents a very different path.

As a former resident of Block Island, I have been intently following the progress of this project since its initial announcement. While working on the ferry to the mainland, I spent many hours on a nearly empty ship hauling truckloads of diesel fuel to be burned at the island’s one power plant. It comes as no surprise that island residents have to pay some of the highest electricity rates in the country, around $0.50 per kWh. These rates are significantly higher than even Hawaii, where expensive electricity has set off a rush of solar PV and other local energy generation.

Looking Ahead

The wind farm is a crucial component of Block Island’s energy future. Deepwater Wind claims that once operational, the farm could reduce island electricity rates by nearly 40%. Many island communities around the world have recently initiated ambitious plans to wean themselves off imported fuels completely by integrating locally generated energy. Local energy storage has been an important aspect of many islands’ plans to reduce dependence on imported energy, as discussed in a recent post by my colleague Anissa Dehamna. A great example of this can be found on Kodiak Island in Alaska. Global power electronics provider ABB worked with the local electric cooperative to install both battery and flywheel-based energy storage systems to help stabilize the output from the island’s wind turbines, and to store excess power generated at night to be used at times of high demand. The addition of energy storage on Kodiak Island has enabled up to 100% penetration for renewable energy and greatly reduced diesel consumption.

The development of the wind farm on Block Island will present great opportunities to demonstrate the value that other clean energy technologies can provide. The island is an interesting case due to the dramatically smaller population outside of the summer months. There are only around 1,000 year-round residents on the island, meaning demand for electricity most of the year is only a fraction of summer demand. For most of the year, the 30 MW output from the wind farm will be far more than is needed to power the island. By integrating local energy storage, the island could easily be a net exporter of energy through the soon-to-be-built transmission line connecting the mainland while only ever using locally produced clean energy. This can provide substantial benefits to residents through lower electricity rates and a much cleaner, more reliable power system.

 

What the Shaheen-Portman Bill Signals for Building Efficiency

— May 15, 2015

On April 21, the U.S. House of Representatives passed S.535, otherwise known as the Energy Efficiency Improvement Act of 2015, sponsored by the bipartisan Shaheen-Portman team. In light of the congressional standstill on climate change and comprehensive energy policy as my colleague Ben Freas has previously blogged about, does this action suggestion a sea change in energy policy? Likely not. This bill is primarily about studies and voluntary initiatives, with one important distinction: embedded in Title 3, there is an amendment to the 2007 Energy Independence and Security Act (EISA) that requires investment in energy efficiency building upgrades for all non-ENERGY STAR-rated federally leased spaces. This single element of the law holds the potential to incentivize energy efficiency investments in a large portion of the commercial building stock.

This amendment updates the High-Performance Federal Buildings section of EISA and establishes a lease contingency tied to energy efficiency. As the amendment states, “The space is renovated for all energy efficiency and conservation improvements that would be cost effective over the life of the lease, including improvements in lighting, windows, and heating, ventilation, and air conditioning systems.” In addition, the buildings must be benchmarked through the U.S. Environmental Protection Agency’s (EPA’s) ENERGY STAR Portfolio Manager.

Navigant Research published the report Energy Efficient Buildings: Global Outlook in late 2014 and presented the following snapshot on average payback periods for selected energy efficiency measures.

Payback Periods for Select Energy Efficiency Measures: 2014

Casey Blog Chart

 (Source: Navigant Research, Deutsche Bank)

Looking at that menu of retrofit options, this EISA amendment has the potential to drive substantial investment in the commercial building stock. According to the U.S. General Services Administration (GSA), the largest public real estate manager, of the 195,578,680 SF under lease in 2015, the average lease term is 11.5 years. This term suggests the efficiency retrofit clause can enable investment in a broad array of measures, including all of the examples in the figure above.

Window of Opportunity

Despite the contention of climate change and the congressional reluctance for private sector mandates, energy efficiency has proven to generate bipartisan support with the potential to influence the real estate industry. As building owners vie for federal leases, this amendment will force the issue of energy efficiency, and in the longer term, this may be an important policy driver for greater investment across the commercial building stock. If efficiency can become a competitive differentiator in real estate, there will be significant underlying climate change benefits without the hurdles that have faced congressional action.

 

5G: What It Is and What It Isn’t

— May 15, 2015

Anyone who follows the communications industry with any regularity has been hearing a lot lately about 5G technology—the amazing next generation of mobile (and fixed) technology that promises ubiquitous, low-latency, high-bandwidth connectivity. 5G will power the Internet of Things and provide always-on coverage for a hyper-connected society. Conceptually, energy cloud connectivity will be a piece of cake for 5G networks. Practically, however, it’s a long ways off.

What Exactly Is 5G?

Good question. The answer is, they’re still figuring it out. “They” being a multitude of organizations and standards bodies worldwide that are currently working independently; once they’ve each come up with working definitions, they will then all need to agree to standards and spectrum alignment issues, among others, before a final answer emerges. But 5G sounds really good on paper, especially the part about less than 1 millisecond (ms) latencies and 1–10 gigabits per second (Gbps) connections. Here are the generally agreed upon working specs for a 5G network:

  • 1–10 Gbps connections to end points in the field (not theoretical maximum)
  • 1 ms end-to-end roundtrip delay (latency)
  • 1000 times bandwidth per unit area
  • 10x–100x number of connected devices
  • 99.999% availability
  • 100% coverage
  • 90% reduction in network energy usage
  • Up to 10 year battery life for low-power, machine-to-machine devices

Cool, right? The problem is that there is currently no way that all of these conditions can be met simultaneously. Rather, certain characteristics will be needed for certain applications, while other characteristics are needed for others. And creating a ubiquitous, less-than-1 ms latency network may simply not be physically possible across large geographies. This is a pretty tall order. Delivering even a few of these goals will be tough while simultaneously reducing network energy consumption by 90.

When Will 5G Really Happen?

It may sound cynical, but it’s unlikely that 5G will become a meaningful communications platform anytime even close to 2020, which is the target date that most standards bodies have set for initial commercial deployments. For years in the nineties, I wrote articles about the zero billion dollar wireless data industry. Following the hype cycle, it took another 15 years before all the necessary components came together and real billions were generated by wireless data. Particularly given the lack of agreement today on the goals and purposes of 5G networks, it will be a decade or more before real-world installations develop. For an excellent overview of the issues and challenges faced in defining and developing the 5G networks of the future, check out this white paper from GSMA.

What Does 5G Mean for Utilities

Over the longer term, 5G infrastructure may power futuristic applications like autonomous driving and virtual reality as well as smart grid applications. But for utilities today, existing communications technology is more than adequate—in places where it’s available.

The bigger challenge for utilities is getting those networks more widely deployed with a holistic strategy for a multitude of energy cloud applications. Monitor the 5G evolution if you’re curious about how engineers plan to defy the laws of physics, but when it comes to your utility’s network, consider the best existing solutions for the smart grid applications of today and tomorrow as you build and extend connectivity throughout the grid.

 

Tesla Introduces a Missing Piece for PEVs

— May 15, 2015

In late April, Tesla announced the expansion of its product line beyond cars to include battery systems for homes and utilities. Called the Powerwall, the system can store 7–10 kWh of energy and respective costs are $3,000 and $3,500. Adding a battery to a home enables greater utilization of solar generation and of off-peak pricing in time-of-use (TOU) rate plans. For utilities, the home system may be considered a threat because it enables consumers to bypass services entirely; however, it also presents opportunities to mitigate potential energy management problems stemming from the rapid increases in residential solar installations and plug-in electric vehicle (PEV) adoption happening now.

Challenges

The grid is constantly being monitored to match electricity supply with demand. As demand fluctuates throughout the day, resources are ramped up or down in response to keep grid frequency within a narrow range of around 60 Hz. The more reliable generation resources are in responding to shifts in demand, the more cost-effective the grid is. Traditional generation resources like nuclear, coal, and natural gas are dependable generators; however, renewable resources like solar are not, because generation depends on the weather. This means that solar requires additional grid resources like batteries to backfill lapses and absorb spikes in generation.

PEVs can create additional problems because most can consume up to 6.6 kW from home electrical infrastructure. The most power-intensive appliances in a home (clothes dryer, dishwasher, or oven) can use from 2 kW to 5 kW. While there is enough energy produced by the grid to supply massive amounts of PEVs, there may not always be enough power (instantaneous energy). So the challenge created by PEVs is the collective charging behavior of a 9-to-5 workforce that plugs in at the end of the work day.
In the near term, this behavior is a threat to distribution-level transformers in neighborhoods with high PEV concentrations. In the long term, this may exacerbate problems stemming from widespread solar generation, as the sun will be setting when people are plugging in. The theoretical lapse in generation and leap in consumption will require grid operators to ramp generation assets quickly and significantly; not a cheap or easy exercise.

Solutions

The root cause of the above challenges is that most electricity is consumed almost immediately upon generation because there are few storage resources on the grid. The PEV itself can be a solution, as grid operators can manage battery charging; or, in more advanced PEVs, the car itself may be able to supply power back to the grid. In both cases, the PEV owner is compensated financially and most of the costs of adding grid-level storage are avoided by the electric power sector. Pilot programs utilizing PEVs for such services are already underway. However, there will always be limits to these services, as PEVs are not always plugged in, don’t always need a charge, and sometimes do need to charge regardless of compensation.

Enter the home battery. Though the upfront costs are high for the homeowner, there are multiple economic benefits that may be had by both the owner and the utility. As mentioned above, it enables lower energy costs for the homeowner, and for the utility, a home battery can directly mitigate the challenges posed by intermittent residential solar generation and PEV charging at the distribution and generation level. Even more than that, it provides an opportunity for energy aggregators and utilities to incorporate homeowners into lucrative grid-service markets in a manner that is more reliable and consistent than PEV integration into these same services. Though reservations have been significant early on, the $3,000–$3,500 price point will be a hard sell to individuals in the mass market; it’s unlikely home batteries will exhibit similar gains to PEV and residential solar market growth without some financial incentives from utilities and/or governments, both of which stand to benefit from this technology.

 

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