Monthly Archives: October 2017

Update on Energy – October 2017

October 2017 has been an eventful month in US energy news.

Trump Administration Takes Steps to Repeal Clean Power Plan

On October 10, the Trump Administration’s USEPA submitted a proposal to repeal the Clean Power Plan (CPP), which mandates 32% reduction in CO2 emissions by 2030, undoing a signature achievement of the previous administration. The proposed change would repeal the CPP entirely, not just the portions that the Administration disagrees with. While the agency has said it will submit a future ”carbon” rule, it did not give any details of when that might be. Therefore, many think this represents repeal, but not replace, of CPP. While some commentators believe the CPP usurps the rights of states to regulate energy and would force a shift from coal, others say that CPP does provide states flexibility on how to comply with the greenhouse gas (GHG) reduction requirements. Even USEPA Administrator Scott Pruitt acknowledges that GHGs must be regulated due to the “endangerment” rulings made by the Supreme Court in 2007 and 2014; greenhouse gases meet the legal definition of an “air pollutant”, and the Clean Air Act requires its regulation to reduce emissions.

However, the impact of a repeal of CPP, if it survives the inevitable lawusits, is hard to determine. The US has already succeeded in reducing GHG emissions by 13% in the last 9 years, mainly because of a shift from coal to natural gas and growth in renewable energy (both due to market prices). Certainly more and more companies are learning that using cleaner fuels and energy conservation result in major, multiple financial benefits. The recent major storms, some of which were acknowledged to be exacerbated by Climate Change, impact businesses. Between these two, it will be interesting to see how business interests react to the potential elimination of the CPP and disincentives toward clean and renewable power.

USDOE Directs FERC to Issue Rules Supporting Nuclear, Coal

On September 29, USDOE Secretary Rick Perry directed the Federal Energy Regulatory Commission (FERC) to undertake rulemaking to enable generation assets in regional transmission organizations and independent systems operators to receive payments for reliability and resiliency benefits viewed as uncompensated under current market rules. If adopted, the proposed rule would provide revenue to coal and nuclear generators by allowing cost-based recovery, independent of normal market forces counteracting market forces that have recently have exerted significant downward pressure on rates. Coal producers and nuclear facilities would receive payments just for being “there” in case of an emergency, even if they are not used to supply a utility with electricity. Secretary Perry considers this a security issue, as making coal and nuclear sources more viable would raise the reliability of the US’s electric grid in case of market changes and its resiliency in case of severe storms or conditions. Others feel that this is a way to support the coal and nuclear industries; pay fees for not producing electricity. The proposed rule must be implemented by FERC, not USDOE; thus, it may take some time to go into effect.

Utility-Scale Solar Costs Fell 29% Last Year

A recent National Renewable Energy Laboratory (NREL) report showed that utility-scale solar costs fell 29% last year to roughly $35/MWh. This continues a trend as utility-scale solar power purchase agreement (PPA) costs have dropped nearly 75% since 2009. The report can be found: https://www.nrel.gov/docs/fy17osti/68925.pdf. The USDOE Laboratory based its study on 189 PPAs nationwide totaling nearly 11,800 MW. The cost decline is attributed to lower equipment component costs, improving efficiency of converting sunlight to electricity, and lower labor costs. The NREL study indicates that USDOE’s SunShot Initiative (https://energy.gov/eere/sunshot/sunshot-initiative) has already reached its 2020 cost target for utility-scale solar systems three years early. The report offered that the rate of cost reduction is declining; however, the growing flexibility given by new battery storage projects attached to utility-scale solar will only grow utility-scale solar project’s value.

CCES can help your company with technical issues concerning energy whether it be how to maximize financial benefits of being more energy efficient and how to have your energy system serve you more reliably and resiliently. Contact us today at 914-584-6720 or at karell@CCESworld.com.

U.S. Climate Change News October 2017

Trump Administration Takes Steps To Repeal the Clean Power Plan. On October 10, 2017, USEPA Administrator Scott Pruitt submitted to the Federal Register proposed legislation to repeal the Clean Power Plan, President Obama’s signature legislation to significantly reduce U.S. greenhouse gases (GHG) by developing stringent GHG emission standards for power production. As coal-fired power plants cannot reasonably meet these emission standards. The USEPA believes it is unfair to have legislation to target a particular fuel type, and began the repeal process to encourage growth in coal usage from U.S. mines. This is quite controversial as coal, a high emitter of GHGs, as well as other and toxic compounds, is still a major source of energy in the U.S. electric industry. By encouraging coal production and use, the U.S. would be hard-pressed to meet the Paris Climate Accord goals, although President Trump has already announced that the U.S. will leave the Accord anyway. In addition, much has been written that this move may make little difference, as other economic factors makes coal a non-ideal choice as a fuel for a utility (see below), such as the declining cost of building and operating a renewable plant. The public has 60 days from initial publication in the Federal Register to comment after which the USEPA must respond before making the repeal official.

States, Cities And Private Businesses Put U.S. Halfway To Paris Climate Accord Goal. According to a study released on September 25 by New Climate Institute and the Climate Group, efforts to address climate change by states, cities and corporations have already put the U.S. halfway toward its Paris Accord climate goal despite the current Administration’s attempt to reverse recent federal efforts. The study estimated that such efforts will cause GHG emissions to drop by 12-14% below the 2005 baseline by 2025. The study, based on certified data from the Carbon Disclosure Project, found that U.S. private sector commitments were the biggest factor in reducing GHG emissions. The decline in emissions are being caused mainly by these commitments of switching from fossil fuel combustion to renewable power.

First State-Wide, Economy-Wide Carbon Tax Is Proposed. Earlier this year, a bill was introduced in the Massachusetts House and another in the Senate that would establish a tax on fossil fuels with the goals to reduce GHG emissions and return the proceeds to consumers and businesses. https://malegislature.gov/Bills/190/H1726. Both bills would impose an initial tax of $10 or $20 per ton of CO2 emissions, rising to $40 per ton in the future. Several years ago, the USEPA estimated that the cost of a ton of GHG emissions was about $42 per ton, which was why they chose this endpoint. It was understood it needed to be approached gradually. Both bills require refunding of some or all of the tax proceeds to households and businesses.
It is estimated that should either bill become law the price of gasoline and heating fuel in Massachusetts would eventually rise by about 35 cents per gallon. The bills contain rebate programs to incentivize energy efficiency, rewarding businesses or households that reduce energy usage per employee (or member), not just energy usage as a whole.

Currently, Massachusetts enforces GHG reduction rules targeted to power plants. However, with electric generation comprising just 28% of GHG emissions in Massachusetts, legislators felt it was time to regulate other sectors, as well, particularly, the transportation sector, which accounts for about 30% of statewide GHG emissions.

While certain business groups are concerned about competitiveness and disproportionate impacts, the bills have many co-sponsors. Therefore, it is likely that some such bill will pass and with a sympathetic governor, a carbon tax would become law in Massachusetts, perhaps signed in 2018, going into initial effect in 2019.

CCES has the technical experts to help you assess your energy needs and help you be more energy efficient, which has many financial benefits, including preparing for future carbon taxes or monetization of GHG emission credits. Contact us today and we can help at 914-584-6720 or at karell@CCESworld.com.

Breathe Easier: What To Do About Indoor Air Pollution By Jackie Edwards

If you think about air pollution, your mind conjures up images of smog, fog and busy city streets. You don’t necessarily imagine that your home or workplace could be a major perpetrator of pollution, that could actually be one of the main factors contributing to conditions like asthma, COPD, and even skin problems such as eczema and psoriasis. It is estimated that the indoor air we breathe could be between two and five times more toxic than the air we breathe outdoors. Given that productivity loss due to sick time off is a growing issue for workplaces, how did it get to be such a problem, and how can we address it?

Household items are part of the problem

While the main causes of indoor air pollution are combustion related, one only need to look deeper into the home or office to find more surprising causes of such issues. Items such as furniture, carpets and flooring, and personal care products – everything from shampoos and hairspray through to air fresheners and cleaning products. https://www.budgethomeservices.com/the-air-in-your-home-is-dirtier-than-outside-and-what-you-can-do-about-it/

They all have the potential to contribute to indoor air pollution.  https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3018511/

Air pollution explained

The USEPA rates outdoor air pollution using a scale on the Air Quality Index, or AQI. The levels are registered as follows:
Good = 0 to 50
Moderate = 51 to 100
Unhealthy for sensitive groups = 101 to 150
Unhealthy = 151 to 200
Very unhealthy = 201 to 300
Hazardous = 301 to 500

Outdoor air in most urban places in the U.S. falls in the 100-150 range.

At risk groups

Unsurprisingly, it is children and the elderly who are most at risk from indoor air pollution, as active children breathe in more (polluted) air per body weight than adults and seniors have weakened defenses. Conditions like asthma are the ones that are more likely to keep children out of school than any other. Mold and mildew in damp classrooms can also contribute to indoor air pollution and breathing difficulties.

Similarly, the elderly can also be troubled greatly by chronic breathing problems, that are contributed to by unclean air, particularly if they live in sheltered accommodation or are living in a care home where heating has to be on to a high level and at all times of the day.

But even working age adults are vulnerable to illnesses caused by indoor air pollutants and could lose significant time at work or suffer pre-mature death if not addressed.

How do we address these issues?

One of the key ways to help solve these issues is proper and adequate ventilation throughout the home or workplace. Keeping doors and windows open or on a vent facility to keep air circulating all the time can be of real benefit. While commercial buildings are designed for a constant ventilation flow, sometimes such systems do not work or are not optimal. https://www.epa.gov/indoor-air-quality-iaq/improving-indoor-air-quality

However, that’s not the only thing you can do:
• Make sure any appliances that are flammable are adequately ventilated.

• If you have a clothes drier, make sure there is no blockage and it ventilates the dust outside rather than inside.

• Storage of chemicals, paints, inks, garden poisons, and kerosene or gasoline should be kept strictly away from where workers spend the most time or any living quarters, preferably locked in a safe space outside.

• Try not to overuse candles, smoke indoors or the grill on your oven

• After you’ve bathed or showered, open your windows and keep them like this for at least forty-five minutes, but preferably longer.

• Adding air filters to bedroom spaces can make a difference to people at both ends of the age spectrum who suffer from breathing problems, as can installing a professional HVAC system to your home.

Why Energy Should Be Incorporated As Part of Your Company’s Strategy

It’s approaching the end of the year, which means self-evaluation of your company. What went well; what did not. What can be changed or should be incorporated to ensure growth moving forward? Historically, companies focus on sales and profits. Look at the headlines in major business journals: “XYZ Reports Auto Sales Jumped by X% In 1 Year”, etc. Expenses are pretty important, but the one that most companies seem to focus on is labor, as in how can it be lowered (lay off workers, increase automation, etc.). While companies cumulatively spend billions on energy annually, that expense is considered a fixed expense with little need for managing. This is a mistake. Companies can reduce energy costs and at the same time reduce risk and improve resilience.

Energy should be more important to a corporation given the fixed supply of it and issues involving regulations due to environmental, climate change, and business trends. Companies can now make choices about its energy sources and usage that it could not have made before with impacts on profit, costs, and flexibility. This is exemplified by the shift in the U.S. from traditional industrial manufacturing to more IT, cloud-based services by corporations, where energy costs can be a potential deal breaker.

Sources

Companies now have many more options of where energy comes from than before. A major new force is renewables. Solar, wind, hydro have been around for a while, but major technological advances now make building an operating a solar PV farm comparable to purchasing electricity from the local utility or running your own cogen. With the growing number of states who want to achieve a higher percentage of power derived from renewables and utilities wanting to get more facilities to become independent because of infrastructure concerns, incentives exist to sweeten the pot even more if one wants to invest in renewable power.

Another approach is to look at site-specific approaches and restrictions. You have a specific facility in a certain country or region. What are the sources of energy that are most easily accessible and plentiful in that region? Companies should make sure that equipment is capable of using that fuel or be ready to invest in new plants to secure that energy source. And they should take the long view. Which fuels may be impacted by future climate change rules or by future shortages for political or technical reasons?

Usage

Obviously, reducing usage of a fuel critical for your operations will reduce costs. But doing so will also improve your operational flexibility. If there is a looming shortage of a critical fuel, and you use less of it than your competitors, that flexibility puts you in a more commanding position, needing less. Being able to use more than one type of fuel for critical operations is beneficial, too, and gives your firm tremendous flexibility to ride price upheavals.

An overlooked issue in minimizing energy usage and improve flexibility is treatment of heavy equipment. Boilers, AC equipment, electric generators all need to be maintained and replaced at the appropriate times. It is a positive investment to perform retro-commissioning to maintain that the equipment is operating as you wish it; for you, the owner, to get your money’s worth. Also overlooked is proper training. Sometimes the first to be let go are maintenance workers; they appear not to contribute to the “bottom line”. But good maintenance people and managers (overseeing good procedures) can lengthen the effective life of equipment and keep down usage and costs very effectively.

How-To

A key to getting energy to be taken seriously as a top-of-the-line corporate interest is to have the top person, the CEO, involved. He/she should understand the importance of managing energy in a robust way and what the benefits are to the company’s moving forward. There may be doubters in the C-suite, including people who may not want Energy to “elbow its way” into decision making. But if the CEO understands the ultimate value of considering, tracking, and managing energy sources and usage, then those doubters can be silenced. So invest time in educating the entire C-suite, but particularly the CEO and update him/her on developments.

Make sure that energy is tracked as well as other business items, such as sales, workforce, profits, etc., and is included in business reports. Make sure that gains and benefits are explained and recognized.

CCES can help your company develop a robust energy program to serve your company. Its infrastructure, as well as technical evaluations of strategies to raise its value in the company and to demonstrate financial benefits. Contact us today at karell@CCESworld.com or at 914-584-6720.