Category Archives: Energy Management

Highlights of the Clean Power Plan of 2015

You have probably heard about the release of the final version of the Clean Power Plan on Aug. 3, 2015 (http://www2.epa.gov/cleanpowerplan). Clean Power Plan Fact Sheet: (http://epa.gov/airquality/cpp/fs-cpp-preview.pdf). It sets even stricter emission standards than the initial proposal of last year. The Clean Power Plan aims to cut GHG emissions by 32% from a 2005 baseline by 2030, while giving states greater flexibility to meet standards, such as that reductions do not need to begin to be achieved until 2020. Emission reductions must be phased in on a “gradual glide path” to 2030.

Overview

Under the Clean Power Plan, states must develop and submit a plan by 2018 to the USEPA for their approval containing the strategies to ensure that their power plants individually or as a group meet specific GHG performance rates for 2030 and for the years between 2022 and 2029. States will have until 2022 to begin phasing in emission reductions. This is a two year extension from the dates contained in the proposed rule.

States may choose between two approaches to meet their goals:
1. Emission standards plan – with power plant-specific emission rate or fuel-based requirements that a state must enforce that will achieve the required reductions.
2. State measures plan– includes a mixture of measures enforced by the state, such as power plant-specific emission reduction standards, renewable energy standards, and programs to improve energy efficiency not included in the “best systems” list. The federally-enforceable requirements (on the “best systems” list) and any state-only measures must result in all power plants meeting the state’s GHG emission reduction goal.

Specific Program Elements

The Plan contains a Clean Energy Incentive Program to further incentivize renewable energy, offering credits for renewable energy installed in 2020 and 2021. These credits can then be used for the compliance period starting in 2022.

The Clean Power Plan contains a “safety valve” allowing states relief of their emission reduction standard if there is risk of disruption of its power supply. A state may drive certain high-emitting power plants to retire quickly to meet a 2020’s reduction goal before a new source necessary to take its place in producing electricity is up and running. There are also allowances for states to request extensions to deadlines.

Finally, the Clean Power Plan allows for interstate trading of GHG emission reduction credits, giving another option to states – to procure credits from states which have achieved over-reduction of GHG emissions, beyond their goals. The Plan provides guidance for states who wish to establish such a trading program. The USEPA wishes to encourage such trading programs, such as the successful RGGI program in the Northeast.

Early Reaction

The early response has been mixed. Republicans will try to block its implementation, as it will certainly impact the power and coal industries. The National Association of Manufacturers is against the rule. The Plan will likely be challenged in court. However, 365 major companies and investors including General Mills, Mars, Nestle, and Unilever sent supporting letters for the Plan.

The Advanced Energy Economy (AEE) was upset that the Plan contains no credit for actions taken between now and 2020, and that energy efficiency was removed from “the best system of emission reduction” methods used to set state-by-state targets. The 3 main “best systems” listed are improved heat rate at coal-fired facilities, increased use of natural gas, and use of renewable (carbon-free) energy. It is understood, however, that energy efficiency programs can still be included in state compliance plans. It is likely that energy efficiency was removed as a “best system” because it represents efforts outside the property lines of power plants, which is harder to measure and may have legal obstacles for affected power plants.

CCES can help your building or company focus on your energy needs. We have successfully found reliable ways to save energy usage and cost of many building types. And we can translate such reductions into GHG emission reductions, too. We can develop and reduce your carbon footprint to obtain maximum financial benefits, too. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Basics of Sub-metering: Why It’s Good For You

Benefits of Sub-metering

Given the expense decades ago of purchasing multiple electric meters and the needed wiring, many multi-tenant buildings (both residential and commercial) have a single master or small number of meters to record electric usage. This leads to many issues, such as fairly assigning electric usage to specific tenant or operation and lack of motivation to conserve energy usage. If a building hosts a variety of tenant operations, it is likely one business or resident will pay more relative to what it is using (say, an office of any type compared to a restaurant). If you are paying a set percentage of the reading of the master meter, what motivation do is there to reduce usage?

Given the benefits and reduction in costs to do so, sub-metering is becoming an option many are considering. At least two cities, New York and Philadelphia, have promulgated laws to mandate sub-metering in certain situations. A recent report in EE Reports (www.EEReports.com) provides robust guides to the basics of sub-metering.

Perhaps the biggest argument for sub-metering is the eventual cost savings. If each tenant of a building has its own electric meter and learns what they actually use and have to pay for it, behavior (when it comes to energy usage) will change fairly quickly. The DOE has published the range of 5-15% savings in energy usage as tenants absorb the meaning of their high bills, realize they can now control their usage, and begin to implement simple strategies to reduce usage (more efficient equipment, not leaving on equipment, etc.). And these strategies have a short payback, generally under 3 years. A recent study in a NYC high-rise residential building showed 20% overall energy savings.

Planning for Sub-metering

Like many things with energy, this is not a matter of going out and quickly buying and installing meters and expecting great savings. Planning is important. Ideally, the building owner should research different types of sub-meters with different types of data displays, such as graphical, by time (hour by hour), or basic digital. Hour by hour is particularly powerful as it may identify areas of electricity usage you were unaware of, such as why is usage so high at night? Or why is it so high during a certain period in the workday? What equipment or department or group may be responsible? In addition, with many paying special rates for high demand during peak periods, hour by hour data can help you plan and verify that electricity-using operations are moved to non-peak periods, saving you tremendous costs on high peak demand charges.

Also, make sure that sub-meters that you procure be able to be checked and calibrated; that they are part of your measurement and verification (“M&V”) operations to ensure they are operating properly over time.

For more information

See www.EEReports.com for the full “Metering and Sub-metering 101” and “102” Guides and more unbiased information about energy efficiency.

CCES can help you assess the value of sub-metering your buildings and can plan and manage its complete implementation to maximize your financial benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Ensuring our Energy Security: Microgrids

We have been fortunate in the U.S., especially compared to other nations. We gripe about many things, but electricity is pretty much steady and reliable. Unlike in some developing nations, it is rare that electricity is not delivered.

This may be changing. As we are getting out of our recession and technology grows and becomes more affordable, people and businesses are using more and more electricity: bigger, flat-screen TVs, more sophisticated smart phones, gadgets, etc. that do more things and thus need more electricity and have the battery charged more often. But the infrastructure needed to produce and transport this additional electricity right to our homes and businesses is expensive and needs upgrading. There is a growing risk – especially during the peak demand season, such as during hot summer workdays – that there will be electricity shortages and brownouts. What can we do to lessen the risk?

This is part one of ideas to ensure our electric security. Other ideas will be presented soon. Microgrids are catching on as a way to avert power outages and to allow greater local control of energy management. Having one’s own local or regional power plant was once considered laughable and unaffordable for any company or municipality. Of course, when the U.S. became electrified this was indeed the model, and to this day some old local utilities still exist. Large grid systems became more economical with help from government to encourage electrification of sparsely populated areas. But now technology is making microgrids affordable and economically beneficial in some cases for a series of companies or a portion of a whole municipality. And now with many large utilities acknowledging that they cannot keep up with the growing demand for electricity unless they can raise billions in infrastructure upgrades and politicians concerned about the reaction of ratepayers to the resulting steep rise in costs, a number of states have developed incentive programs to study and build microgrids.

Microgrids can be used as a backup to traditional grid electricity supply for peak demand periods only, reducing the risk of an electric failure. This is why many utilities actually favor these “competitors”, and therefore, some states are encouraging this, too. But if an entity is investing in a microgrid, it is certainly not going to want it to stay idle, but to operate continually, with the main grid acting as a backup if it needs to go down.

Microgrids became possible thanks to the improvement in technology and affordability of combined heat and power (CHP or “co-generation”), particularly thermal efficiency of 80% of fuel combusted producing and using both steam and electricity. If one or a group of entities can use both electricity and steam 24/7, then a CHP locally may be cost-effective, particularly as there is less loss in transporting energy long distances. Another factor that helped drive microgrid viability is renewable energy. With the drop in the cost of solar and wind energy, some new microgrids are incorporating these technologies in conjunction with fuel combustion. Also, improvements in storage technology (batteries) have helped, too.

Finally, a microgrid can go beyond just a reliable energy source for a group of users, but an information asset, as well. The need to coordinate microgrid operation with demand for steam and electricity makes them an effective energy manager for buildings and regions. Real-time data collected can indicate needs which the buildings can use to reduce peak demand or become more energy efficient, reducing costs even more.

More states and utilities are offering incentives for microgrids. Plan on one or a group of users who can use electricity and steam 24/7 and have a feasibility study performed of whether a microgrid is possible and what the costs and economic benefits may be.

CCES can manage the evaluation of your short- and long-term energy (thermal and electricity) needs. We can help you become more energy efficient and provide suggestions to widen your choices, giving you more control of your energy supply and cost. Contact us today at 914-584-6720 or at karell@CCESworld.com.

New York City Ushers In First Sub-metering Rule

New York City’s Local Law 88 is now in effect. This rule contains requirements for buildings that are 50,000 square feet or greater to upgrade their lighting and to install sub-meters. A future blog article will discuss lighting, but this one will discuss sub-meters. New York City is believed to be the first city in the nation to require sub-metering.

Urban Green Council has been leading the way to educate building owners and managers about LL 88 and to guide them on how to best comply. Representing UGC is Ms. Bonnie Hagen, LEED-AP, who can speak to your company or group at no charge. She may be contacted at bonnie@brightenergyservices.com.

Many buildings, particularly those with multiple tenants, whether commercial or residential, have only a master electric meter or a small number of electric meters. To save money for meter and wiring operations and maintenance many buildings maintain only a single master electric meter and charge tenants for their electric use in a variety of ways such as a flat fee which is independent of actual electric usage or on a formula based on the square footage of the building. Paying a set fee for electricity no matter how much one uses is a disincentive to be energy efficient or to otherwise conserve. In fact, this is punishing the people who do conserve electricity because they believe it’s the right thing to do.

Many anecdotes exist of the residents who leave their air conditioners on all day even though nobody is home so that their apartment is cool when they get home; they pay no extra fees for this luxury. Also, many stories have been shared about how people — once sub-meters are installed — have to pay based on their actual measured usage, scream when they see their first bill, and then go out and buy more efficient lights and, of course, do not leave on their AC all day anymore. Several reports indicate that this effect causes a decline in electricity usage and a demand reduction averaging 30%. This was the motivation for New York City to promulgate this rule in their effort to become more energy efficient and reduce the future infrastructure upgrades of unbridled demand.

LL 88 requires all large commercial buildings (greater than 50,000 square feet) to install sub-meters for its tenants who lease at least 10,000 sq. ft. by Jan. 1, 2025. While this deadline may seem far away, it really is not, given that many commercial leases are 10 years long. Now is the time to adjust a lease to account for sub-meters. LL 88 does not require the landlord or building manager to charge a tenant for electricity based on the readings of the installed sub-meter; it may continue to just charge how they have charged in the past. However, the sub-meters must be in place by then and tenants informed monthly of actual electricity usage. The landlord can decide how it installs sub-meters, whether install all of them at once, although that may be a bit disruptive of tenant operations, or as space is available (when a tenant moves out).

In addition to the improvement in energy efficiency that will result from installing sub-meters, it is anticipated that sub-meters will also reduce landlord-tenant disputes. For example, if a group of tenants share a meter and are assessed a share of the costs based on square footage, that may be unfair to a simple office which may have only lights and some computers if they pay the same proportion as a similar sized offices with specific energy-using equipment or situations, like refrigerators and freezers, more lights and those being on much longer than 9 to 5, etc. Sub-meters will more accurately determine electricity usage so there is a fairer distribution of costs and fewer disputes.

CCES has the experts to help your building prepare and comply with LL 88 (as well as the other Local Laws pertaining to energy, LL 84 and LL 87). Even if your building is not in New York City or is under the threshold, it is likely in your interest to install sub-meters and upgraded lights, and we can help you do it with minimal disruption and to achieve maximum financial benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.

How Can You Manage Electricity Demand to Cut Your Electric Bill?

What is the Demand Charge?
by Sandy Gutner, P.E., ROI Energy Services

It’s true that understanding all the elements of your electric bill can be a daunting task. But it’s important if you are trying to control your electricity use and costs. If your organization uses a lot of electricity, you will notice that your bill does not look like your bill at home.

If you have a Demand Charge rate structure, the two types of use affect your electricity costs – demand and consumption. The names vary among utilities but the effect is the same. Demand and consumption each have a separate rate in part because they are measured differently. Demand is measured in kilowatts (kW), while the total amount of electricity used is measured in kilowatt-hours (kWh).

Plus there are several other charges that vary depending on these two components (e.g., fuel charge, non-fuel charge, taxes, environmental charge, etc.) If you can cut your demand you reduce the cost of demand as well as all of the charges that use demand in their calculation.

If you have a demand-based tariff, your utility has installed a special demand meter that tracks and records the highest level of electricity demand for each 15-minute (or 30 minute) interval during the billing period. All of the affected charges are multiplied by the peak demand.

Why Should You Care About the Demand Charge?

Obviously, like most factors in business it’s the money. If you can control the demand charge without impacting your business you can significantly lower your electricity costs.

Peak demand charges can represent up to 30% of your utility bill. Certain industries, like manufacturing and heavy industrials, typically experience much higher peaks in demand due largely to the start-up of energy-intensive equipment, making it even more imperative to find ways to reduce this charge – but regardless of your industry, taking steps to reduce demand charges will save money.

Show Me the Math: How Demand Charges are Calculated?

Consumption is measured at a rate based on kilowatt-hours (kWh), or how many kW were used in every hour. Demand is measured in kilowatts (kW) or the peak number of kW used in a short interval and measures the intensity of power draw.

Demand Charge shows how one business can pay over $50,000 per year more for electricity than the other even though they both use the same kWh. This example shows how managing the demand peaks saves over 12% even with the same consumption.

Sandy Gutner, P.E., is the President of ROI Energy Services, Weston, FL.
Website: www.ROIEnergyServices.com
Phone: 1-888-855-5471
E-mail: sgutner@ROIEnergyServices.com

ROI Energy Services is an engineering firm that offers energy saving solutions with a unique financial proposition for our commercial and industrial clients. Our financially viable turnkey solutions help reduce one of the most challenging operating expenses – energy consumption– and are paid for by the savings from reduced electricity costs.

Guaranteed Energy Savings Offers Unique Financial Proposition
ROI Energy offers a unique financial proposition to commercial and industrial energy consumers by creating energy savings solutions tailored specifically to meet their financial requirements. With a useful life many times greater than the payback period our clients reap long-lasting financial rewards. If the energy savings is less than our guarantee, we pay 100 percent of the shortfall –guaranteed

Renewable Energy, Water, Wastewater and More – 25 Years Engineering Consulting
The ROI Energy team has more than 25 years of experience providing engineering consulting services to public and private sector clients. We have represented owners’ interests in a wide variety of large-scale infrastructure projects including renewable energy, water, wastewater, and many others. The insight gained from this perspective has led us to our primary focus, which is adding value in everything we do.

Energy Risk Expected To Rise in U.S.

There is a growing concern that large sections of the U.S. and other countries will be at greater risk of blackouts or periods of electricity shortages due to a number of factors. This can have grave consequences on the economic growth of many companies. Uneven electricity production and delivery is common in developing countries which have problems with both power plants plus the infrastructure to deliver reliable power to people and industry. Much has been written about countries in Africa, Asia, and South America which are investing in economic growth, but cannot achieve it because of unreliable power. As a result, there is either dangerous (explosions, fires) power supply or limited growth, as investors demand surety in utilities. But even North America and Europe are beginning to show increased risk of disruptions, too. These issues, called “fuel poverty”, have gotten the attention of major governments and power companies.

Increased risk of unreliable energy supply has been influenced by affordability, security, and sustainability issues. Many areas have seen a sharp increase in electricity demand in recent years and the capital cost to upgrade infrastructure to produce and deliver the additional power is very large. In some cases, necessary upgrades are not affordable without large rate increases or government assistance, two areas that politicians prefer to avoid. Many utilities recognize that offering incentives to be more energy efficient is cheaper than implementing full infrastructure upgrades, but will take longer and is a gamble of whether this will be sufficient to reduce the needed investments sufficiently. Thus, more people and business will be at risk of “fuel poverty” in the future.

This is also a long-term issue. While the recent recession tamped down energy demand, it is beginning to rebound. Several think tanks predict a worldwide doubling of energy demand between recent years and the 2030’s, something that cannot be met in terms of development and delivery without R&D and implementation of renewable energy, as fossil fuel availability is limiting, due to political and practical considerations.

What can your company do to reduce your risk of unreliable energy supply?

1. Preparation. Your company and facility should routinely develop an energy plan. How much and what types of energy does your company need to function? How much might it grow in the future? Where do you get your energy from? Are there other, more reliable sources? Looking forward, what energy sources may be more reliable for you in the future, such as renewable or certain sources plentiful near where your operations are? I was involved a few years ago with a confidential client that wanted to build new facilities in Asia, and I performed an evaluation of the energy sources around that region, and determined that wood is expected to be plentiful in the area, but fossil fuels not. Therefore, new boilers and cogen needed to be able to operate as well combusting wood as it does oil and gas, as wood should be plentiful in the next 20 years, but fossil fuels which has to be shipped in to region, may become more expensive in the future.

2. Invest in smart technology that will provide both information on energy use and paths to energy efficiency. Smart metering provides the opportunity for you obtain useful data on your energy usage and demand, which can provide you a truer picture of your costs, risks, and future. Knowledge of usage provides you with ideas to reduce your usage in the most cost-effective manner.

3. Renewables/clean energy is the long-term path to go. Depending on power from fossil fuels will be at risk in the future due to its finite nature, the more difficult it is to find and refine fossil fuels (raising its cost), and the political situation. Even in a positive scenario, fossil fuel costs will go up and down with conditions, and make planning harder. As renewable energy becomes more established and efficient, prices are coming down for installation, and the source of power is plentiful and free. Utilities in the US are being forced to generate more power from renewables; but they are realizing the advantages of these technologies.

CCES has the experts to help you establish short-term and long-term energy planning to increase your efficiency, reduce costs, and reduce risks of unreliable supply and delivery. Contact us today at 914-584-6720 or at karell@CCESworld.com.

President Obama Submits Budget for Energy

On Feb. 2, President Obama released his fiscal year 2016 budget, including money for his climate change agenda, both in reducing greenhouse gas emissions and preparing to adapt to climate change effects. Items include offering incentives for states to reduce their reliance on coal-fired power; $1.29 billion for the Global Climate Change Initiative; $400 million to map flood risks; $200 million for a Dept of Agriculture to plan for extreme weather events; and funding for coastal, drought, and wildfire resilience programs. There will likely be a budget fight with Congressional Republicans, who mainly campaigned against spending on climate initiatives. The Senate has already passed a rule ordering approval of the Keystone Pipeline project (with some Democrats joining Republicans), but not by enough votes to overturn a likely veto. Congress will likely work to defeat other proposed rules, such as the USEPA’s Clean Power Plan.

The fiscal year 2016 budget request is $29.9 billion for the Dept of Energy (10% increase). The DOE would have about $5 billion to spend on clean energy technology programs. The USEPA’s fiscal year 2016 budget request is $8.6 billion (6% increase). This includes large increases for the administration’s latest climate change initiatives. This will come at the expense of some traditional environmental programs.

For energy upgrade planning, the budget request seeks to make permanent the renewable energy production tax credit and investment tax credit and reduce many oil and gas tax incentives. The budget would permanently extend the deduction for energy efficient commercial building property, provide a CO2 investment and sequestration tax credit; extend the current tax credit for 2nd generation biofuel production; provide a tax credit for the production of advanced technology vehicles; provide a tax credit for medium and heavy-duty alternative-fuel commercial vehicles; extend the tax credit for the construction of energy-efficient new homes; and reduce excise taxes on liquefied natural gas to bring it into parity with diesel fuel. The House Ways & Means Committee and the Senate Finance Committee have not indicated how or when it will move on extending the large number of tax incentives for energy that expired in 2014.

CCES has the experts to help you qualify for all applicable incentives on the federal, state, and local levels so you can gain the maximum financial benefits from your energy upgrade. Contact us today at 914-584-6720 or karell@CCESworld.com.

Use PACE for Successful Energy Upgrades

As we are getting out of a recession, the overwhelming building stock in the US is existing buildings, built well before recent energy efficient technologies were made practical. How can such building owners afford upgrades of old energy systems? Ironically, the older the building, the more need there is for upgrades and the more money is needed for such upgrades. But, older buildings are likely “poorer” (attract fewer premium tenants), and may have less money “in the bank” or access to fund needed to invest in upgrades. To address this conundrum, a number of states are subsidizing a program called Property Assessed Clean Energy or PACE to simplify access to finance specific energy efficiency upgrades.

In PACE, the building owner has access affordably to low-cost capital needed to begin energy efficiency projects. The building is the collateral, not the person or business. Unique PACE conditions make this attractive to lending institutions to participate.

PACE financing is typically used for entire facility upgrades, not individual projects. A PACE loan enables the building owner to perform pre-approved energy upgrades with little or no up-front payments. Before financing is approved, proposed projects are vetted technically and financially for success and will provide a given return based on estimated cost savings. The degree of the loan and a schedule is determined to allow repayment primarily from cost savings, to attain positive cash flow for the owner at all times. The owner is less likely to skip payments because it comes from savings.

In most communities, PACE repayment is tied to the building’s property tax payments; it is a line item in their municipal or state property tax bill. The government entity collects payments and transfers it to the PACE agency or directly to the bank. Payment tied to its tax bill also allows the owner, if desired, to spread the cost among tenants.

PACE does have a number of requirements for it to work, such as the local municipality or state formally signing on to participate and willing to add it as a line item and collect and manage payments. The building owner must not be in bankruptcy, and must not have failed to pay property taxes and mortgage, generally, for the previous 3 years. PACE loans are also often limited to 10 to 20% of the total assessed property value.

Might a PACE long-term loan be an anchor around an owner’s neck, complicating a desired sale of the building along the way? While the loan and the potential lien is tied to the building and the buyer must agree to continue to make payments, the new owner should understand that future PACE payments are for upgrades that reduce other costs (energy) in an overall positive cash flow, and raise the building’s value.

Most important, PACE can remove the strong obstacle many owners have to performing an energy upgrade, and allow access to needed upfront capital in an affordable way.

CCES is an approved PACE technical provider in New York under the Energize-NY program. We can help you determine which energy efficiency projects can benefit you the most, determine the scope of useful projects, estimate project costs and energy cost savings, and help determine the right financing approach involving PACE or similar vehicle. Contact us today at 914-584-6720 or karell@CCESworld.com.

Energy Trends in 2014 and Beyond

It’s hard to measure change when you are living through it. But I believe we will look back on 2014 as a year of major change and progress in energy. While many people, companies, governments looked askance at new (and some not so new) energy technologies, it seems like in 2014, entities were more interested in discovering more and listening. Renewable energy definitely became mainstream. Evidence of this is that even in some red states with governors and legislators against heavy restrictions, few if any states have rolled back their renewable portfolio standards of their utilities. And many even raised the percentage that a utility must obtain power from renewable sources. Also, several major financial institutions (Citigroup, Deutsch Bank, etc.) openly advised their best clients to consider renewable energy because it works, has many advantages, and the companies that supply them and infrastructure around them are now stable. And a lot of it is the people speaking. According to the US EIA, installation of solar PV in the US increased by 4-fold (400%) from 2010 to 2014. A lot of this growth is due to financial. Solar PV prices have dropped due to the drop in silicon prices and the greater competition for larger projects. But much is also due to entities and companies looking at solar more seriously and accepting it. And all this despite the drop in oil and natural gas prices due to excess supply.

Looking ahead to 2015 and later, if prices of fossil fuels continue to drop, will that cause a reduction in renewable energy and energy efficiency projects? Many analysts believe that renewable power, and particularly solar PV, will remain competitive even in this environment because of continued competition, improvements in battery technology, and greater renewable financing capabilities to satisfy the public and businesses. It is also recognized that fossil fuel prices will only drop a certain amount. Once oil, for example, drops below a certain price, many projects become non-profitable (such as Alberta tar sands and deep sea drilling) and will be halted, reducing the supply and raising the price again. Thus, as energy efficiency projects use less energy and renewable uses free sources (i.e., the sun, wind), fossil fuels will likely be positioned somewhere compared to renewables.

Renewable power will likely grow even more in the future once enhanced inexpensive technology for energy storage is made available. Given the growing acceptance of climate change and the effects of more frequent droughts and severe storms, energy storage to keep operating in case of a disaster is of greater importance, and will be addressed when reliably and affordably developed.

Another energy trend that became very public in 2014 is the need to conserve electricity usage and peak demand nationwide or at least reduce its growth very soon. From urban to rural areas, governments and utilities have understood that if growth of peak demand is not better managed, it will cost regions across the country many billions of dollars in infrastructure upgrades, added costs that will be difficult to pass on to consumers. Therefore, many governments and utilities have expanded their incentive programs greatly to reduce both electricity usage and demand during peak times (summer weekdays from 2 to 6 pm). Probably the biggest outcome of this concern is the mainstreaming and encouragement of entities to implement combined heat and power (CHP or co-generation). With some adjustments, a building’s boiler can also produce electricity from the leftover heat from steam or hot water production that would otherwise be wasted. This home-grown electricity can reduce costs (generating your own electricity, not taken and bought from the grid) and reduce reliance on the grid in case of a failure, which will both provide the building with backup power during a weather emergency or utility problem and lessen the need of the utility to implement a large infrastructure expansion. While CHP has a large upfront investment component, many utilities are offering very large incentives to make it cost effective, as well as reducing the risk of upheavals and losses during an emergency. 2014 will also go down as the year where CHP, although in existence for quite some time, became acceptable and taken seriously.

ConEdison Solutions recently published a white paper with a hypothetical example, using a 1.2 million square foot building in New York City (http://go.conedsolutions.com/l/51452/2014-10-27/h74w#.VJSPvl4AAB). Such a building after investing $3 million in upfront costs for a CHP system and backup generator, would realize annual savings and revenue from reducing their peak demand of nearly half a million dollar per year. This hypothetical installation would also qualify for about $1 million in incentives through the government and utility, for a rough simple payback of 4 years, as well as reliable backup power in case of an emergency.

With these developments and the growing mainstreaming of creative energy solutions and upgrades, 2015 promises to be a greater year for adoption of energy technologies to save you costs, reduce risk from emergencies, free up staff, and otherwise benefit you! Have a happy, healthy, and peaceful New Year!

CCES has the experts to help you assess how well you will do with new energy technologies, such as renewable power, combined heat and power, microturbines, and/or energy efficiency throughout your buildings and portfolio. We can assess not only what will be your immediate financial gains from each perspective upgrade (energy cost savings), but also the ancillary gains, such as reduced O&M costs, making your properties more attractive to renters or buyers, and risk reduction by producing your own electricity. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Potential 2015 Environmental/Energy Policy Issues

The public went to the polls on Nov. 4, and gave the Republicans control of both houses of Congress. There are now 31 states headed by Republican governors, of which a number have both houses of their state legislatures also controlled by Republicans. What may be the near-term future of environmental and energy rules and programs?

This political change may have a particularly strong impact on environmental policies as the partisan division on these policies has grown, with more of those identifying as Republicans in polls wishing to roll back many current environmental rules. With Republicans controlling the Environment and Public Works Committees, they have the power to bring up what they want for investigation and for voting. One area sure to be brought up is USEPA regulations on coal-fired power plants. President Obama issued an executive order earlier in 2014 designed to reduce CO2 emissions from the nation’s coal-fired power plants by 30% of 2005 levels by 2030. The USEPA is working out the details following guidance from the Clean Air Act. Plants will be given flexibility on how this is to be achieved. However, these rules regulating heavily-polluting coal have been called a “war on coal”, and their repeal even has support from some Democratic legislators from coal-mining states, arguing it unfair to target one industry and that it will cause jobs to be lost and electricity rates to rise. Republicans will likely attempt to pass a bill negating these rules. However, it is unclear if they have the 67 votes in the Senate to override an expected presidential veto. Even if they cannot overturn the rule, they could hold hearings or withhold the funding needed to enforce the provisions.

Another important area is the Keystone XL Pipeline, a proposed pipeline to transport mainly Alberta tar sands oil to Nebraska where it will then be transported by existing pipelines to oil refineries in Texas and Louisiana. Proponents (mainly Republicans) are in favor of it to diversify our energy sources. Opponents point to the risk of leaks and contamination and the encouragement of using a source that is very inefficient (takes a lot of energy to extract oil from the tar sands) and causes high greenhouse gas (GHG) emissions. President Obama has waited for studies to be complete to make the decision on whether or not to build the pipeline. In 2015, the Republicans may try to pass a bill “forcing” the President to approve the Keystone XL Pipeline.

Another issue of importance is climate change, and whether the US will or will not be a leader in the global battle to reduce GHG emissions to limit the effects of climate change. Next year a major climate change conference will be held to make “binding decisions” on worldwide future steps. The new Chair of the Senate Environmental & Public Works Committee is expected to be James Inhofe, a known climate change denier. He has openly stated that he will do all that he can to stop any steps by the US to be leaders in climate change or to push any federal legislation through. President Obama will continue to issue executive actions to address climate change, such as ordering federal agencies to reduce GHG emissions, raise fuel standards, and reduce GHG emissions from coal combustion. However, these will not be as encompassing or effective as nationwide regulation. Any global climate change agreement that comes out of next year’s conference may have trouble being approved by the US Senate as is required; however, President Obama may try to frame it as an agreement that does not require US Senate approval.

Finally, there are calls on the extreme right of the Republican Party to de-fund or even shut down all together the USEPA and/or the Dept of Energy. To these people, they are seen as purveyors of wasteful programs and may cost the economy jobs. Mainstream Republicans understand the polls that a majority of Americans are concerned about the environment and admire renewable energy research. While Congress, which controls appropriations, may cut back on the budgets of the agency and department, impacting enforcement and research operations, it is unlikely that a bill shutting them down altogether and rescinding rules like the Clean Air Act and Clean Water Act can have enough votes to override a presidential veto.

As for energy, the new Republican majorities, supported by the oil industry, are likely to pass bills that favor existing fossil fuel combustion. They purport to an “all of the above” strategy to give maximum flexibility and opportunity in terms of energy sources. There is some discussion about ending programs that favor or provide incentives for renewable sources. However, leaving all energy sources out there on the playing field for the market to decide would hurt cleaner renewable sources (solar, wind, etc.) which are newer and less established financially. It is unclear whether the new Republican-led Congress will repeal or reduce the scope of current renewable energy incentives. Of course, there is a chance that ending all or most renewable energy incentives may backfire on the Republicans, as more Americans are getting used to renewable power and believe it is a powerful solution to many ills (climate change, pollution, etc.).

As for states, it is impossible to predict what more Republican-led states may do in the energy and environmental realms. Many state environmental rules are mandated by federal rules, so they cannot be repealed or not enforced. Many states that have participated in cap and trade for GHG emission reductions (Northeast in RGGI) and have Renewable Portfolio Standards have seen an increase in revenues (without having to raise taxes) and/or reduction in infrastructure spending (electric lines). Therefore, it is hard to believe that these states would take major action to repeal or rescind the standards.

CCES has the experts to perform a technical assessment of the status of current and proposed changes to federal and state environmental and energy regulations and how they may affect your facilities. We can help you design technical solutions to demonstrate compliance at the lowest cost, and provide energy and operational flexibility. Contact us today at 914-584-6720 or karell@CCESworld.com.