The Transition off of Fossil Fuels
[The following text is supplied by AERO’s Energy Task Force Co-Chair, Jim Baerg. We’ll be trying out a monthly Energy Update from Jim, featuring local, national, and world news on the topic of clean energy, meant to help us all stay informed and up to date these issues. If you’d like to join the conversation, share an opinion, or respond to content in these updates, please email us at [email protected] to subscribe to the Energy Task Force List Serve, where you can respond directly!]
Jim: Because this is the first edition of this monthly update, I’ve looked back to 2017 for some of the most significant stories. My suggested action items or opinions are red. Links are in blue.
Montana Energy News
RE and Transmission Working Group: In December, Governor Bullock convened a Renewable Energy and Transmission Working Group in Helena. He wanted to jumpstart communication and planning to deal with the eventual closure of Colstrip plants, the resulting available capacity on the transmission lines and the continued growth of large scale Wind and Solar projects. The groups invited were all the big energy players in the NorthWest. I happened to catch the proceedings on tv late one night. Very fascinating. I would have to say that NorthWestern Energy was the most reluctant party in the room. Agenda and participants; Video of the proceedings can be found here.
Public Service Commission (PSC): In 2017 the Montana PSC issued pricing guidelines for new generating facilities, setting limits on the amount and the length of contracts. They argued that electricity can be purchased very cheaply on the open market and therefore, in order to give consumers the cheapest utility rates, new facilities would have to match those prices. This angered both NW Energy, which wants to build new gas fired plants, and the Renewable community. Legal sparks have followed. MEIC has been leading the legal fight. Please support them. Billings Gazette Coverage; MTPR Coverage; More from Billings Gazette
Colstrip: The Colstrip generating plants are reaching the end of their lives, partially through age, and partially because most of the West Coast owners want to transition off of coal fired generation. This leaves an angry town that feels abandoned, a hazmat site that needs remediation and a potentially unused transmission line from Colstrip out to the coast. In the near term, I think the state (PSC, NW Energy, etc) should prioritize utility scale wind farms and solar arrays along the Colstrip transmission line and incentivize hiring Colstrip workers.
Talen Energy, the operator of the Colstrip plants, estimated in 2017 that the cost of cleaning up the Colstrip ash ponds would be $138 million (Billings Gazette).
Cleanup of the Colstrip ponds has begun.
Washington State utility regulators have reached an agreement outlining the timing and funding of the closure of the Colstrip plants #3 and #4. No date has been set, but the depreciation period has been accelerated to 2027 so as to recover costs for those units. Plants #1 and #2, the older of the four, are set to close mid year 2022 (US News and World Report).
Coal: A Montana Legislative Services report estimates that the number of power plants burning Montana coal could drop from 50 to 14 in less than 2 decades (Billings Gazette).
Two Japanese power plants are being developed to convert Montana coal into synthetic gas. About a million tons of coal from a Decker mine will be shipped over the next 30 to 40 months to supply the project. The new technology will reduce carbon emissions 15% over best quality coal technology (Billings Gazette).
Montana Renewable Projects:
Large Scale Wind: Montana’s largest (300 MW) wind farm is quietly developing northeast of Colstrip and plans to take advantage of newly available capacity on the Colstrip to Pacific NorthWest transmission line (Billings Gazette).
Martinsdale Hydro Storage: A large scale, 400+MW pumped storage facility is being developed near Martinsdale. When operational, the dual water storage system will perform like a very large battery, provide critical load leveling services to the grid, evening out the intermittency of renewable energy. By way of reference, the Judith Gap wind farm is 135 MW, so this storage project is at a pretty big scale and will contribute a lot to the region’s electrical grid stability (Gordon Butte Pumped Storage, GE Reports).
National Energy News
Fed Gov’t policies: Trump has ruled on the PV tariff case. He imposed a 30% tariff on modules at the border. The tariff will be reduced over 4 years and then end. This increase will drive up prices to some extent, more for large scale systems than small projects. The hope is that this effort will stimulate more U.S. manufacturing, though most observers are skeptical (PVTech.Org).
EPA: Last year, the EPA asked for new rules from the Federal Energy Regulatory Commission (FERC) to strongly favor coal and nuclear generation under the guise of grid reliability. The scheme was to guarantee continued operation for plants able to have 90 days of fuel on site. Recently, FERC rejected that proposal, after receiving a record number of comments, almost all negative. The decision states that such a proposal would raise rates, prop up uncompetitive industries and not increase reliability (Vox.com).
World Energy News
Australian Tesla Storage: Early reports of the large Tesla battery bank in Australia are positive. The bank was built within 100 days. The battery system provides both catastrophic backup services should there be a system failure on the grid and short term frequency control to. It performed well during two power outages (Business Insider; Fortune.Com)
Energy Trends, Topics and Concepts:
Renewable Energy Trends: Five renewable energy trends to watch for in 2018 from a European perspective (The Guardian)
Climate: 2017 was the 2nd or 3rd warmest year on record (NPR.Org, Scientific American). Climate related disasters cost the U.S. $300Billion last year, over 1.5Trillion since 1980 according to NOAA (Think Progress).
My wife started working part time in Alaska so I’ve been watching the weather in Norton Sound for the last 2-3 months. most of the time, in has been much warmer in Western Alaska than in Montana.
Trends in Renewable Energy Prices: Large scale wind and solar systems, increasingly with battery storage, keep getting cheaper and are now out-competing even the cheapest fossil fuel generation systems.
An article citing the Lazard Study has the following: “A widely-used yearly benchmarking study — the Levelized Cost of Energy Analysis (LCOE) from the financial firm Lazard Ltd. — reached this stunning conclusion: In many regions “the full-lifecycle costs of building and operating renewables-based projects have dropped below the operating costs alone of conventional generation technologies such as coal or nuclear.”” (Think Progress)
Rocky Mountain Institute has a good discussion of generation costs that compares fossil fuels and renewable pricing, recent pricing around the world and the cost difference for utility scale and community scale (1MW to 3MW typically) solar systems (RMI.Org)
Here’s some big news that is making the rounds. In 2016, Excel Energy, Colorado’s largest utility put out an RFP for utility scale generating plants of all kinds. The results, which just came out, allowed for a present day comparison of prices between technologies. Most amazingly, bids for Solar+Storage came in cheaper than power from existing coal plants. An excellent article from David Roberts at VOX.
Demand Response is the notion that we can at least partially address the timing mismatch between when renewables generate power and when customers use electricity by utilizing technological and behavioral changes at the load end of the transaction. As a simple example, people quite commonly take showers in the morning before work or school, or at the end of the day. In the aggregate, this puts a large burden on the utility to have extra capacity available for small periods of time. Timers on hot water heaters would economically solve this problem and reduce the need for more generation during peak times. This sort of control will start to happen when there are price signals coming from the utility to their customers that reflect their additional costs during those periods.
Recently I ran across a small but significant story about Duke Energy, a big Eastern utility, needing to ask for customers to drop their usage during a recent cold snap because their coal plants couldn’t meet the need. This is the first step in consumer awareness of their part in the equation (ABC News).
Residential Building Science – #1: In this section, I hope go step by step through the process of making your existing or proposed home as energy efficient as possible. Remember, according to the people who look at the big picture, we need to reduce our fossil fuel use in homes by 80-90% off of 2005 levels to reverse global warming. The great thing about this goal is that it is often very doable, both in terms of the building techniques and the economics.
The basic requirements for high efficient homes, building form and orientation, high insulation levels, quality windows, air tightness and ventilation are well established, economic, and readily achievable with some re-training of the trades. In my own practice designing new homes, I rarely spend much time thinking about energy details until the end because those details have become second nature. I concentrate on designing the best, most livable home possible for the budget. Remember, a sustainable home is one that is enjoyed, that is durable and well maintained.
Although it is pretty gratifying to have extremely low utility bills, the real, personal benefit lies in the much improved comfort, fresh air, quietness, and cleanliness of the house. I’ve seen this in my 100 year old house as I’ve worked through it, and in the many reactions I’ve gotten from clients. The pleasure factor really goes up. Let’s get started!
As a starting point, I’d like to recommend a very good introductory book; “Your Green Home,” by Alex Wilson which was published in 2006. Alex is one of the leading energy researchers and publishers in the country, having put out invaluable information since the 1980’s. The book is invaluable because it looks holistically at what makes a green building. The main area where the book is outdated is in the PV world. Prices have come down so drastically that it makes some sense to include PV in the building project from the start.
When making a plan, let’s start with the big picture and develop a strategy. How much do homeowner or renters spend on energy every year? In Montana the average is about $1650 per year. That is an average for old and new houses, big and little houses, houses that are heated with gas, with electric and with propane. $1,650 is about $50,000 spent over 20 years which comes out your pocket and largely leaves the community. If you multiply that figure times the number of houses in your county, the total amount is astounding. Then factor in energy inflation! Saving energy makes great economic development sense.
If you are going to spend $50,000 over the next 20 years on house energy, then it seems to me that you have some money to work with fixing up your home. You can reasonably make an investment of $5k, or $10k or $20k that will pay back, depending on the measure, anywhere from 5 to 20% per year. And it is a guaranteed rate of return!
The trick is to be smart about it. It’s pretty easy to waste money thinking you are doing the right thing. For starters, don’t replace your windows, don’t buy a big PV system, don’t replace your furnace with a ground source heat pump. Rather, get an energy audit and start with the basics. Look for where you are losing the most energy and plug those leaks.
Here are the topics for the upcoming months:
- Tracking consumption, setting goals and budgets, deciding what to do, in what order
- How to do an Energy Audit, using a Blower door and IR camera, finding the invisible
- Managing construction costs, taking advantage of tax credits, grants and loans
- Issues: New home design; Building form and orientation
- Issues: Existing houses with difficult problems, finding advice
- Techniques: Air sealing
- Techniques: Insulation; basements, walls and attics
- Techniques: Mechanical Ventilation, just the right amount of fresh air.
- Techniques: identifying and conserving electricity; Lights, appliances, hot water
- Sizing and designing a PV system
- Installing PV
- Transitioning to an Electric Vehicle (EV)
We’ll see you next month.
Jim Baerg, Energy Task Force Co-Chair