Navigant Research Blog

Kansas City Takes a Flyer on EV Chargers

— February 11, 2015

Kansas City Power & Light (KCP&L), announced in late January that it will install 1,000 public EV charging stations in Kansas City, creating a dramatic increase from the 40 stations that are currently available. The stations are expected to be installed by the end of summer 2015.

According to Navigant Research’s report, Electric Vehicle Geographic Forecasts, there were only 2,687 EVs on the road in the entire state of Missouri at the end of 2014. The report also projects sales of 1,615 plug-in electric vehicles (PEVs) for the state of Missouri in 2015.

With such low PEV numbers in the state thus far, perhaps this move by KCP&L is an effort to encourage more PEV adopters in the Kansas City area. Even California, the largest adopter of EVs in the country, has fewer than 2,000 public EV charging stations. And Missouri, unlike California and other states with high PEV penetration rates, has no tax incentives for EV buyers.

Risky Business

The business proposition for the utility doesn’t look good, either. The network of chargers is estimated to cost $20 million, and the network will be free to the public for the first 2 years of operation. How many years will it take to recoup that investment through added sales of electricity and usage fees once implemented?  Perhaps KCP&L is following the path of California utilities that see significant value in controlling the flow of electricity and re-selling it through EV charging stations. Several California utility companies successfully petitioned the California Public Utilities Commission (CPUC) to allow utilities in the state to re-sell electricity via EV charging stations.

Nevertheless, California has far more EV users and according to PlugInsights, 81% of EV charging occurs at users’ homes, with just 10% of charging occurring at public stations (the remaining is mostly attributed to private charging stations and at workplaces). Thus, even if more Missourians do adopt EVs, the majority will likely be charging their vehicles at home.

Real Impacts

If KCP&L isn’t intending to make money from this initiative, but instead trying to reduce emissions, it would be better suited to convert the state’s existing power plants from coal to natural gas. This would be more cost effective and have a far more significant impact on emissions and air quality. Physically, it does not require much in the way of new equipment to convert a coal plant to run on natural gas. Missouri has one of the dirtiest electricity grids in the country, with coal accounting for a whopping 83% of the state’s electricity generation in 2013.

The map below, from the Union of Concerned Scientists’ report, State of Charge, shows that the gasoline vehicle mile per gallon (mpg) equivalent of an electric car is just 35 mpg in the SPNO region, where Missouri is located. This means that a gasoline car with 35 mpg, such as a Volkswagen Passat, would have the same impact on the environment as an electric car in Missouri (due to the high coal usage in the state). While KCP&L is moving toward removing a few coal power plants from its generation portfolio, an overhaul of the company’s electricity generation sources would have a much bigger impact on emissions reductions than building 1,000 EV charging stations that may or may not be used by consumers.

Electric Vehicle Global Warming Pollution Ratings and Gasoline Vehicle Emissions

(Source: Union of Concerned Scientists)

 

The Case for Smart Grids Grows in Britain

— February 11, 2015

We are reaching a tipping point in the movement toward smart grid deployments in Europe. There is growing agreement among stakeholders—utilities, regulators, and suppliers—that the benefits of the core technologies have been proven but that structural barriers still remain. The challenge now is to establish the right investment models, regulatory frameworks, and methods for appropriate cost and benefit sharing. These messages are reinforced by a new report on the results of one of Europe’s most ambitious smart grid pilots and by a new study of the impact of smart grids in Great Britain undertaken by Navigant Consulting.

Low Carbon London (LCL) is a £28 million ($43 million) smart grid and energy efficiency project led by the distribution network operator UK Power Networks. It was one of the first and most expansive of the projects enabled by the Low Carbon Network Fund, which was established in 2009 by U.K. energy regulator Ofgem. The £500 million ($768 million) fund has supported projects sponsored by distribution network operators to test the viability of new technology and operating and commercial arrangements.

LCL focused on four core issues: demand-side response and distributed generation; network planning and operation; electrification of heat and transport; and the future distribution system operator. The project was completed in December 2014 and UK Power Networks has now produced a summary report titled DNO Guide to Future Smart Management of Distribution Networks.

A Green Light for Demand Response

One of the most important elements of the trial was its examination of the potential for demand response (DR) programs to ease pressures on the distribution network and provide financial benefits to customers. The industrial and commercial DR program had 18 MW under contract at its peak, running across 37 customer sites, and provided more than 300 MWh to the London grid at peak times. The result has strengthened confidence in the capability of DR programs to contribute to the better management of the distribution network.

The residential dynamic time of use (TOU) trial was one of the first of its kind in the United Kingdom. The trial was used to examine the role of dynamic TOU to support constraint management on the network and to balance energy supply to reflect the availability of renewable resources. During the trial, 95% of households saved money compared to the standard flat rate of the non-TOU control group. Another important finding was the high level of approval among customers for the TOU program, with 81% believing that “it should be the standard tariff for everyone.”

A Changing Landscape

As a result of the commercial DR program, UK Power Networks has been able to include demand-side response as part of its business-as-usual model and expects to save £43 million ($66 million) on the cost of its service to customers (£12 million, or $18 million, on the London grid alone) over the next 8 years. These savings will be made under Ofgem’s new regulatory framework for network price controls, which begins in April 2015. Through the RIIO (Revenue = Incentives + Innovation + Outputs) model, Ofgem aims to encourage network operators to make use of technologies such DR to reduce costs and improve performance.

In the future, we will see a greater role for DR at the distribution level in the United Kingdom. Today, the main program for DR is the Short Term Operating Reserve (STOR) program run by National Grid, the United Kingdom’s transmission system operator. However, modelling by the LCL team suggests that, by the mid-2020s, energy suppliers could be equally significant players as the grid operator, particularly as they seek to manage the impact of much greater renewables generation.

Overall, the findings from the LCL project reinforce the message from a recent Navigant study, prepared for SmartGrid GB, on the potential benefits of smart grid innovations to the United Kingdom.  That report, Making Smart Choices for Smart Grid Development, estimates that smart grid development can deliver £2.8 billion ($4.3 million) of value to Britain’s economy by 2030. These studies are part of a growing body of evidence for the importance of smart grid innovations to meeting the country’s energy needs. The challenge now, as both reports emphasize, is to continue to develop the right mechanisms for funding and benefit sharing to ensure that the momentum toward large-scale deployment is maintained.

 

Building Innovations Form Pivotal Spokes in the Circular Economy

— February 2, 2015

The annual World Economic Forum in Davos, Switzerland, has come and gone again, and the usual irony of 1,700 private jets delivering the global elite to discuss climate change and inequality was perfectly ridiculed by Jon Stewart last week. But, beyond the spectacle of outsized wealth, there are some valuable economic and policy projects that hold promise outside the weeklong schmooze-fest.

In particular, the Circular Economy, an ongoing project at the forum, aims to tackle the current paradigm of consumption in light of a future of constrained resources and exponential growth in demand.  The Ellen McArthur Foundation, which supports an ongoing dialog on the circular economy explains the concept as thus:  “A circular economy seeks to rebuild capital, whether this is financial, manufactured, human, social or natural. This ensures enhanced flows of goods and services.”  An important question is how the theory of the circular economy can become tangible, which was a hot topic for this year’s discussions in Davos.

Rethink, Remodel

In the run-up to this year’s event, a Forbes article explained that the circular economy “requires businesses to rethink more than just their resource footprints and energy efficiency. It demands a more radical remodelling of business models.”  Reflecting on the big ideas of the circular economy, it seems the intelligent building, smart city, and innovations in energy management could be an ideal proving ground for these concepts in action.

The intelligent building is characterized by automated and responsive systems that maximize efficiency in consumption and productivity.  Intelligent buildings offer a new sort of resource that extends beyond the walls of any single facility to support key goals of grid modernization and the development of smart cities.  The technology exists to enable this kind of facility optimization, and investment in intelligent buildings and smart cities can demonstrate the benefits of a circular economy.  The following examples highlight how companies are bringing solutions to the intelligent building and smart city marketplace that align with the opportunity of the circular economy.

  • Philips has committed to the circular economy and the company’s lighting as a service offering aims to engage cost-constrained customers and manage the end-of-life treatment of lighting and system components.
  • Schneider Electric and Autodesk have announced a new partnership to bring innovation to building lifecycle management and “drive a deep and long-term transformation in the construction industry, providing greater value to each user and contributing to solve the energy challenge.”
  • Cisco’s position is presented as an “engineering strategy around the Internet of Everything [supporting] the transition to a circular economy, with new connected devices enabling the tracking of products, components and materials for re-use and recovery; new business models through greater connection with customers; and more effective reverse logistics chains.”

While the circular economy might seem like a lofty ideal that will demand major shifts in our consumption mindset, advances like these demonstrate steps in the right direction.

 

For Hospitals, a Path to Resilience

— January 27, 2015

My colleague Madeline Bergner recently wrote about efforts to reduce the greenhouse gas emissions from hospitals and other healthcare facilities.  That effort is paralleled by a movement to make these spaces less vulnerable to natural disasters and other disruptions, as well.

In December, President Obama gathered healthcare leaders to announce a set of new recommendations for making the country’s healthcare facilities more climate resilient.  Hurricane Sandy caused over $3 billion in damage to healthcare facilities alone, triggering federal attention to the issue.  At the event, the U.S. Department of Health and Human Services announced a web-based Climate Resilience Toolkit as well as a best-practices guide, “Primary Protection: Enhancing Health Care Resilience for a Changing Climate.”

The guide describes a number of issues that have caused hospitals to lose power during recent disasters.  These include reliance on local infrastructure (namely local [municipal] steam generation), aging infrastructure, and a reliance on onsite diesel generators, which are often poorly maintained and rely on limited fuel supplies.

A Holistic View

The report also cites a challenge in the approach to backup power.  Backup systems are viewed as having no value during normal operations, and therefore “are less likely to attract adequate investment and maintenance from the private sector.”  By viewing backup power as emergency-only, the hospital is viewing power in binary terms; the big diesel generator is there when you need it, and takes up space (and money) when you don’t.

A more holistic view of energy use can lead to a more resilient facility.  The report cites a number of strategies, including the use of combined heat and power, energy efficiency, and passive survivability.  This last concept drives building design and functionality so that hospitals can still function without power.  With operable windows, passive heating and cooling, and naturally ventilated spaces, these levels of resiliency can be accomplished.

Generator Hospital

Navigant Research’s reports on Grid-Tied Energy Storage present a range of technologies that can aid in power management all the time, not just during a crisis.  By viewing grid connectivity as a continuum, facilities can mitigate the effects of disasters and make money by selling power into the grid.  The resilient healthcare facility of the future may not just be one that can survive a disaster but one that provides power to the community 365 days a year.

In upstate New York, the town of Potsdam just announced a microgrid project that will connect 12 facilities using 3 MW of combined heat and power, 2 MW of solar, 2 MW of storage, and 900 kW of hydro-electric generation.  The local hospital is a key stakeholder in this project, led by Clarkson University.  Other partners include General Electric (GE) Global Research and GE Energy Consulting, National Grid, and the National Renewable Energy Laboratory.

Innovative technology is not only being deployed for the entire hospital facility.  At the Texas Scottish Rite Hospital for Children in Dallas, Texas, flywheel manufacturer Vycon installed two 300 kW flywheel systems just to power the imaging facility.  The benefits of flywheels include high reliability, power density, and overall quality, as well as the quiet nature of backup power.  While the hospital has only suffered a few power outages in recent decades, the protection of the expensive equipment from power spikes and voltage drops is of great value.

 

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