Author Archives: Marc Karell

Recent U.S. DOE Report Shows Positive Signs for Wind Market

In August 2018 the U.S. Department of Energy (DOE) issued its 2017 Wind Technologies Market Report (https://www.energy.gov/eere/wind/downloads/2017-wind-technologies-market-report). The report tracks trends in installation, technology performance, cost, and price of wind power. Overall, the DOE report shows strong current growth and predicts this would continue into the next decade.

In 2009, power purchase agreements (PPAs) for wind power peaked at a price of $70/MWh. However, improvements in technology and implementation have lowered the price to about $20/MWh in 2017. The “wind belt” of the Great Plains has a lower average PPA price than the rest of the country. It follows that most wind power projects and the lowest prices would occur there, having the nation’s highest and most consistent wind speeds. DOE believes the PPA price will not drop significantly in the foreseeable future.

As a whole, U.S. wholesale electricity prices have declined in the last decade due, in part, to the overall decline in natural gas prices. Therefore, the wholesale energy market value of wind has followed along this major market indicator and declined similarly. Another factor influencing the cost of wind power is the decline in turbine prices as demand for wind grows and manufacturers devote more effort to production.

Due both to incentives from federal, state, and some utility players and to the decline in the price of wind energy, the wind power market in the U.S. has grown. The federal Production Tax Credit (PTC) has been cited by developers as a large motivator. Security is important, and investors and developers know that the PTC will be in place at least through 2021, encouraging wind farm development. There is concern that PTC will be phased out at that time, but many factors, including politics, will come into play as we get to 2021.

Even if the PTC is phased out, the wind market is likely to continue in the U.S. due to market forces, such as the low prices of PPAs. As there is economic growth and population shifts within the country, power is needed. Wind farms are certainly competitive cost-wise with building a new traditional gas or oil-fired power plant. In addition, wind may vary in the short-term, but if placed right it should provide a hedge against any future uncertainties about availability and price of natural gas.

CCES has the expertise to provide technical background to determine whether your building or company can benefit from generating your own power from renewable sources, like wind or solar. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Financial Factors Point to 2019 As The Best Time to Invest In Energy Upgrades

One of the most common complaints from building owners who want to upgrade their facilities, be more energy efficient and green, and save costs is that they do not have the funds to invest in those energy-saving technologies. If they can just get access to capital cheaply, they would make the investment and reap the benefits and savings in the future. As has been discussed in these writings, energy upgrade is a great investment, as good as any in any bank or on Wall St. A well-designed and executed project can net the building owner or company 20%, 30% or greater return on investment per year. Given that, a number of financial institutions have begun specializing in energy project financing. They realize with returns like these the risk of a borrower not having the funds to pay a loan back is very low. With low risk, they can afford to offer relatively low interest rate loans. Never has funds been so available for energy upgrade projects.

One area of lending specifically for energy projects is Commercial Property Assessed Clean Energy or C-PACE (in some areas, known as PACE). With C-PACE, building owners can begin to implement smart energy upgrades quickly and re-pay over a long time through a voluntary benefit assessment lien, levied and recorded against the benefiting property, to be repaid along with property taxes. C-PACE allows building owners to potentially finance 100% of the cost of energy upgrades with, in most cases, only positive cash flow. The team assesses the likely future energy cost savings over time and arranges payments based on those projections, so that there is only positive cash flow. In the meantime, the upgrade is completed and the owner gets the benefits while repayment is made. Payments are usually made at the same time as property taxes are paid to the municipality, which transfers C-PACE payments to the lender. The owner knows when payment is due and how much.

A C-PACE loan is repaid through a long-term assessment, similar to property taxes, spacing out payments longer than traditional 7-year financing. Therefore, energy cost savings will exceed annual C-PACE payments for nearly all applicable projects. Only positive cash flow. While the owner receives a long-term asset upgrade, tenants get lower overall expenses and a more productive work environment.

Building owners commonly express concern that a C-PACE loan binds it to the building. While the buyer does have the obligation to pay back the loan once they take over ownership, the C-PACE lender has no say regarding the sale.
The C-PACE lender does not impose traditional lender requirements, such as quarterly reporting, maintenance of debt covenants or similar requirements. One less item for the building owner to worry about.

Things are topsy-turvy in government, in terms of energy policies and incentives to upgrade one’s energy systems. But waiting is not the answer because there is much money being wasted waiting and in the meantime operating old, clunky energy inefficient systems. This is simply not good business. As funds are now more readily available with terms that are more acceptable, 2019 is the best time to borrow funds and move forward and evaluate, design, and implement good energy upgrade projects.

CCES has the experts to help you plan the most financially beneficial energy upgrade project. We can give you several options to save money on energy and related systems and you can choose the one(s) most beneficial to you. CCES knows the PACE and C-PACE programs, as well as other lenders to help your projects go to reality and get the most benefits for you. Contact us today at karell@CCESworld.com or at 914-584-6720.

How To Avoid Acrimony When Talking About Environmental (and Other) Matters

Not that long ago we could have discussions with family, friends, colleagues, and clients about many topics in a civil way. Unfortunately, nowadays many such conversations are fraught with politics and anger. These conversations are still necessary for us as a country, a civil society and, specifically, environmental and energy discussions to serve our clients. How can we have such conversations without someone blowing up, making an uncomfortable scene, and perhaps losing a friend or client?

Whether it’s getting together with family for the holidays or talking about environmental, energy, or other policies with colleagues and clients, here are several approaches that should result in a meaningful exchange of views, avoiding acrimony, leading to respect.

1. Ask open-ended, nonjudgmental questions. Try to inquire how a situation impacts that person personally or how the company operates, and/or its bottom line. As an example, ask a person how a certain rule or availability of a fuel impacts their lives or company. Remember, that even the best-intentioned rules that you agree with may have a harsh impact on certain others.

2. Listen carefully to that person’s answer, even if you disagree with it. Even if you feel that this person is too sensitive to the impacts or you believe he or she is exaggerating them, remember it is still important to that person or company. Therefore, listen with respect, so that you expand your understanding of the family member, friend, or client. Don’t presume you know every situation, even if you know the person or company well.

3. Echo back to this person their viewpoint; summarize back the person’s answer or concerns. Upon hearing it from somebody else, he or she may think about it and modify the stance. At a minimum, the person will have to acknowledge they are being listened to, a feeling missing in the current polarized world. Many times I have done this with others and see genuine smiles of gratitude on their faces.

4. Find and verbalize any areas where you agree with this person. Avoid verbalizing disagreements; at least initially. State where you agree with this person’s point of view; show sympathy. State that you understand that a certain rule may have an outsized impact on that person or firm, that they are doing their best to comply, and that you wish the rule can be tweaked to make things easier for the person or firm. At this point, you could begin to gently provide your view about the overall good of the rule, mention other impacts of the rule that the person may not realize are beneficial, or suggest ways to lessen the perceived negative impacts.

5. Story-telling is a good way to engender a civil conversation. Share your thoughts by telling a real story about a similar experience that happened to you in your personal life or with a prior project or client. I have done this a number of times to show I understand and to let this person know that he or she is not alone, that others are impacted, too, and that there are ways to minimize such impacts.

You never know. Such an approach might lead to exploring opportunities to improve the person or firm’s life; a chance for a new, beneficial project. I have worked with many clients over the decades whose views toward energy and environmental rules are fundamentally different from mine. While these five tips are no guarantee of success, these can go a long way toward having healthy family interactions and foster positive, long-term business and client relationships, too.

CCES has the experience to help you evaluate and make the best of environmental and energy rules that impact your company. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Not Too Far In The Future: Portable Air Monitors

In recent years there has been growth in the development and availability of small, hand-held air quality monitoring devices or air sensors; even some that can be drone-mounted. The US EPA already has standards for bigger, traditional monitors. But such smaller devices can determine air quality in indoor space or the contributions of different sources to small areas of outdoor space. One area holding back this technology from even greater use and growth is the lack acceptable standards by the US EPA for using such equipment and the handling of its data. Companies, groups, etc. are reluctant to purchase and use such units if the data from them may not be accepted or trusted.

When will the US EPA develop such standards? The US EPA has had a number of in-house meetings and workshops with manufacturers and potential users to understand the use of indoor and outdoor air sensors. The US EPA needs to establish uniform standards to address issues for small air monitors for equipment design, usage, and maintenance and for data quality, interpretation, and management. The US EPA has been asked by facilities, public groups, and state agencies to develop policy on the use of air sensor data, such as for compliance with the federal government’s own NAAQS.

The US EPA is considering development of a certification program for air sensors. The agency recently produced a report evaluating peer-reviewed literature and other sources of information on a variety of sensors to identify criteria needed to make these policy decisions about appropriate techniques for operation and treatment of data collected See peer_review_and_supporting_literature_review_of_air_sensor_technology_performance_targets.pdf are appropriate for the intended application. The American Society for Testing and Material International (ASTM), which has done much work on establishing stack testing standards is involved with small air quality monitoring units, too.

We are in the midst of an information revolution. Nearly everybody has their own mobile phone, which does much more than call somebody, but is a repository of much information. It is easy to imagine a time – maybe relatively soon – when most offices, homes, retailers, gyms, etc. will have their own air sensors and be able to know the air quality of their spaces. With this data, people can change conditions to improve worker productivity, comfort of shoppers, and the health of residents or patients. Sensors can produce actual data that determine the air quality impacts of behaviors like cooking, barbequing, smoking, cleaning, and burning candles.

But first we need to have standards on how to use and maintain the equipment and manage and analyze the data. And for this, we are awaiting US EPA guidelines or rules.

CCES can help your entity evaluate your air quality and perform the technical tasks to determine whether emissions comply with current federal and state laws and to improve the quality. Contact us today at 914-584-6720 or at karell@CCESworld.com.

EIA Report on 2017 CO2 Emissions

On October 31, 2018, the US Energy Information Administration (EIA) released its report on US greenhouse gas (CO2) emissions in 2017. See: https://www.eia.gov/environment/emissions/state/

US energy-related CO2 emissions fell in 2017 to 5.14 billion metric tons, a drop of 0.9% from 2016 levels. Energy-related CO2 emissions dropped 14% (861 million metric tons) since 2005, and in 7 of the previous 10 years. Most of this year’s decline was due to continued reduction in coal combustion by fuel and in electric power by sector. CO2 emissions from the transportation sector rose slightly in 2017, exceeding those from the electric power industry sector for the first time since estimations began. Please note that before one celebrates too much, the electric power segment decline in CO2 emissions in 2017 were caused, in part, by a slightly milder summer nationwide (and lower demand for space cooling) compared to 2016.

In the longer term, from 2005 to 2017, the US economy grew by 20%, while US energy consumption fell by 2% and energy-related CO2 emissions decreased by 14%. Therefore, US economic growth in 2017 was 29% less carbon-intensive, and energy consumption was 12% less carbon-intensive.
Looking ahead, EIA projects that US energy-related CO2 emissions will rise by 1.8% (nearly 100 million metric tons) in 2018, then remain virtually unchanged in 2019.

While US energy-related CO2 emissions declined in recent years, the EIA estimates that global energy-related CO2 emissions rose by 21% (6,040 million metric tons) from 2005 to 2017. This rise in emissions was led by China, India, and other Asian nations, which collectively increased by slightly more than this amount. EIA projects that the rate of global growth of energy-related CO2 emissions will slow to 1% in 2018 and remain essentially flat in 2019.

The EIA estimates that the 4 states that emit the most energy-related CO2 emissions per capita (in order) are Wyoming, North Dakota, West Virginia, and Alaska. All of these states did reduce per capita CO2 emissions in the last decade, Alaska by 32%.

CCES has the experts to help you determine your company’s carbon footprint and recommend strategies to reduce it that will also save you costs and improve worker efficiency. A win-win: a better environmental footprint and many financial benefits, too. Contact us today at karell@CCESworld.com or 914-584-6720.

Clean Energy Is Growing, But Maybe Not Enough

Usually around this time, I do some research for a blog article I write most Decembers summarizing the year and forecasting where energy and environmental items may go in the future. In November, a very well-written article came out in the NY Times that essentially did the job for me. Here is a link: https://www.nytimes.com/2018/11/12/climate/global-energy-forecast.html?action=click&module=News&pgtype=Homepage

Despite the US government being antagonistic to renewable power and trying to favor traditional “dirty” fuels, such as coal, the world’s markets have spoken and clean energy is competitive with traditional power plants worldwide. Coal is declining in its biggest user country, China, and in the US, too, despite government efforts to the contrary. Over the past 5 years, the average cost of solar power has declined 65% and onshore wind by 15%, with further declines predicted in the future. For many locations and situations, it is now cheaper to build and operate a solar or wind farm than a fossil fuel-driven power plant.

But there is a problem: The International Energy Agency recently published its annual World Energy Outlook (https://webstore.iea.org/world-energy-outlook-2018) which has forecast that despite robust growth of clean energy, it will not meet the GHG emission reduction goals scientists developed to reduce the grave physical threats of climate change. While the agency predicts that by 2040 renewable power will supply 40% of the world’s electricity and China will be close to abandoning coal combustion, the decrease in GHG emissions will not be sufficient to prevent the temperature rise that is likely to result in great damage. Many coal and oil-fired power plants are fairly young and not likely to be replaced by solar until the utilities have gotten their share of the investment.

Similarly, GHG emissions from the transportation sector is predicted to peak in the mid-2020’s as countries strengthen fuel-economy standards and electric vehicles become more acceptable. However, oil use, a large GHG emitter, will still be high as it will continue to be used for space heating and manufacturing plastics and other chemicals.

However, with all these projected gains, the report predicts that GHG emissions will not decline, but continue to rise slowly until 2040. Projected population and economic growth will simply mean more vehicles on the road, plastics in use, etc.

The paper indicates that governments will need to play a key role to bring down GHG emissions. The report notes that the world invests $2 trillion annually in energy infrastructure. Incentives to develop and/or implement clean energy in place of coal and oil will need to expand beyond this to prevent catastrophic effects of climate change.

CCES has the expertise to help your firm or entity evaluate ways to benefit from converting to clean, renewable energy and energy efficiency to improve your climate change or sustainability program and bring many financial benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Can California Become Carbon Negative?

On September 10, 2018, California Governor Jerry Brown set California on an ambitious clean energy path signing Senate Bill 100 (SB 100), which requires that by 2045, 100% of California’s electricity be generated from carbon-free sources. In addition, Governor Brown signed off of a new statewide goal to reduce California’s overall greenhouse gas (GHG) emissions to zero by 2045 and then go negative thereafter. SB 100 also requires that its implementation does not increase carbon emissions elsewhere in the western grid and does not permit resource shuffling, a limitation that effectively prevents California from relying on fossil fuel generation from outside the state to serve the state’s electricity needs.

SB 100 makes California the world’s largest economy to commit to generating 100% of its power from clean energy. California has been steadily increasing its renewable portfolio standards, from an initial goal of 20% by 2017 to 60% by 2030, to the 100% by 2045. SB 100 does give California some flexibility. While hydropower and nuclear power do not qualify as renewable energy under renewable portfolio standards, these likely will qualify under SB 100, as they are “zero-carbon”. SB 100 also leaves open the possibility for other carbon-reducing innovations such as carbon capture and sequestration technology should it ever become practical.
SB 100 requires all California state agencies to incorporate this policy into all relevant planning and to issue joint report to the California legislature by January 1, 2021, and every four years thereafter discussing progress toward the goals.

Many opponents of the bill do not believe California can meet these goals unless it joins a larger regional market to have access to carbon-free energy from outside the state. This will mean entering into agreements with these other neighboring states to develop their own large renewable energy projects from which California can use the energy in its grid. It may be difficult to convince some of these states to replace traditional fossil fuel plants with more renewable power. If they can do so, then California may be able to reach a goal of negative carbon emissions in the future.

CCES can help your firm understand your electric bill and your sources of electricity to enable you to be most economic in your energy use and most efficient. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Cybersecurity Is Important For Everyone

By David J. Rosenbaum, Citrin Cooperman & Co.

Why is an article on cybersecurity appearing in a blog and newsletter on energy and environmental matters? Because this is a situation of grave concern to all companies, municipalities, etc. As engineers, we are involved in compiling and managing data, mainly through complex computer systems. However, data is now at risk of being stolen, altered or deleted, and this can have mammoth impacts on all kinds of firms.

Who is at risk? Any entity…
• connected to the Internet
• storing data electronically or in the Cloud
• involved with the Internet of Things (IoT).
Who may pose the threat to you and your data? Hackers, like you read about in the news. But employees, clients, and regulators, too.

What must cybersecurity protect?
• “Computers”, such as desktops, laptops, tablets, smart phones
• Networks, such as servers, firewalls, peripheral devices, IoT
• Data at rest (on computer hard drives, removeable media, in the Cloud)
• Data in motion (email, the web, wifi, phones)

What are the objectives of cybersecurity?
• Confidentiality: safeguarding records and information
• Integrity: protecting data from unauthorized access, change, or destruction
• Availability: ensuring that data is available to those authorized to view it.

Whether you are a big firm or a one-person shop, your data is vulnerable. Cybersecurity does not/cannot prevent a breach; it enables you to manage the risk. If you think spending money on cybersecurity is an issue, think of the costs of a breach including forensics, technology expenditures, notification, legal, system downtime, fines and penalties, and reputational.

A key to cybersecurity is employees. Users, often, unknowingly introduce threats by opening emails or clicking on links. Therefore, training is important.

To begin a cybersecurity assessment, the entity must understand:
• What information is maintained that needs to be protected
• Which systems maintain the information and who controls it
• How the information is currently protected
• Which rules/standards apply to data in question (i.e., HIPAA, PCI, privacy, etc.)

National Institute of Standards and Technology (NIST) framework for improving critical infrastructure cybersecurity. Core:
• Identify. Develop organizational understanding to manage cybersecurity risk
• Protect. Develop and implement appropriate safeguards of infrastructure
• Detect. Develop and implement appropriate activities to detect an event
• Respond. Develop and implement appropriate actions once event detected
• Recover. Develop and implement appropriate activities to restore capabilities.

Cybersecurity Best Practices:
• Assess your risk
• Determine applicable rules/standards to comply with
• Develop written cybersecurity policies. Must be written.
• Implement Best Practices (i.e., complex passwords, firewalls, antivirus, backups)
• Train employees to be aware and alert and implement best practices
• Audit, test, and upgrade policies, practices, and security

Yes, cybersecurity is another responsibility and headache for managers already overwhelmed with responsibilities. But given the costs listed earlier, this needs to be done. Remember, it is not a matter of if, but when you’ll be subject to a cyber attack.

Citrin Cooperman’s Technology Consulting group has a practice focused on cybersecurity. Its TRAC Cybersecurity Services include risk assessment, penetration testing services, and remediation strategy. Contact David Rosenbaum at 914-693-7000 or at drosenbaum@citrincooperman.com.

Some Thoughts on Hurricane Michael

This month Hurricane Michael caused widespread destruction on the Florida panhandle, southern Georgia, and the Carolinas, entering as a Category 4 hurricane with 155 mph winds and storm surges of many feet. Now the process of assessing the personal and property losses and rebuilding is beginning. Total losses for property damage and disruption of business are likely to be in the billions of dollars. It will likely take months for power and services to be fully restored, and years to rebuild and recover.

Insurance

Many properties suffered damage from both the high wind and water surge. There is confusion and heartbreak as some property owners may not be covered by their insurance policies, which, in some cases, cover losses caused by wind (and wind-driven water), but not damage caused by “flooding” (defined to include “storm surge”). Some property owners will only receive payment for damage demonstrated to be covered by the wind only, and not subsequent flooding. For example, if extreme wind removes the roof from a building and the policy covers wind damage, then the homeowner is clearly entitled to a new roof. But if the subsequent rain and storm surge, which may not be covered in some policies, damages the inside of the house, that damage may not be covered. There is litigation ongoing concerning insurance coverage for “concurrent” actions of wind and water acting independently, but causing damage. There are lessons to be learned for anybody in a hurricane zone wishing to be properly covered.

Did Climate Change Cause Hurricane Michael?

The consensus from the scientific and, specifically, the meteorological community, is that Hurricane Michael would likely have happened anyway, but reached its extreme intensity because of climate change. The Gulf of Mexico contained much more energy in heat and warm water, than normal for this time of year, making the hurricane more water-intensive and stronger. This also accounted for the speed of its intensification. It was originally predicted to be a low-level hurricane, strength-wise. But in the last couple of days before landfall, it intensified greatly due to the high energy in the Gulf, surprising many residents and prognosticators. This complicated evacuation efforts, as officials did not communicate the true intensity of Michael until the last moments before landfall.

Building to Withstand Extreme Storms – It Can Be Done

It was interesting to see that so many of the homes in the path of Michael were not just torn away, but leveled into little bits and splinters. Yet, in Mexico Beach, one home survived with minimal damage, while neighboring homes were completely destroyed. This NY Times article describes this building: https://www.nytimes.com/2018/10/14/us/hurricane-michael-florida-mexico-beach-house.html?action=click&module=Most%20Popular&pgtype=Homepage   The owners built this home anticipating storms in the future, and built this to withstand such wind speeds (up to 250 mph) and on stilts well above any anticipated storm surge. The building was more expensive than the others in the area, but was obviously worth it given how it needs minimal repair, while the neighboring buildings were completely destroyed.

CCES can help your firm understand and cope with Climate Change better. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Insurance Industry Urged To Divest From Fossil Fuel Activities and Firms

A coalition of NGOs, including the Sierra Club, the Waterkeeper Alliance, the Rainforest Action Network, and Greenpeace, has been putting pressure on certain industries to encourage renewable energy and end support of the fossil fuel industry for some time. The latest industry to be targeted is insurance based on the logic that while attempting to protect us from catastrophic risk, supporting the dirtiest fossil fuel industries is, instead, adding to worldwide climate change adverse risk.

These NGOs sent letters to the CEOs of 22 major US insurance companies, urging them to stop insuring projects of and to start divesting from companies that produce coal and those that extract and transport tar sands. These US insurers hold hundreds of billions of dollars in coal, oil, gas and electric utility stocks and bonds. Similarly, the letter requested that these major insurance companies underwrite and invest in more clean energy companies and projects.

In addition, these NGOs recommended that these insurance companies insist that all insured quantify the carbon footprint of their projects as a prelude to being insured. Campaign leaders claimed that several insurance companies have divested about $30 billion from coal companies and stopped or limited insuring the coal industry in recent years.

Climate change-caused or -enhanced incidents pose great risk to insurance companies. More than 10,000 claims were filed from the Carr and Mendocino fires, whose intensity were said to be contributed to by climate change, totaling $845 million in insured losses.

Insurance industry leaders, regulators, and business leaders acknowledge that climate change is a major strategic issue for the industry, and are beginning to be addressed in terms of their business model. As we see with the intense recent storms of Florence and Michael in the US, not to mention recent very deadly storms, tsunamis, and typhoons in Indonesia, the Phillipines, and India, there is an increase in the frequency and intensity of storms, and in particular, more rain, which has caused widespread flooding and destruction. The insurance industry is being hit hard by this increase in destruction and is being urged to take more steps to both add climate change to their risk equations and to take an active part in investing in a future to mitigate climate change.

CCES has the experience to help your firm cope with climate change, evaluate risk and protections for your business and asset, and reduce your carbon footprint. Contact us today at 914-584-6720 or at karell@CCESworld.com.