Fuel Cell Case Studies Highlight Clean Resilient Power Technology

Author: Sarah Galbraith, Clean Energy Group | Project: Resilient Power Project

blogphoto-Intevsive-Care-UnitWith extreme weather getting both more frequent and more severe, resilient power has never been more important. Four new case studies, authored by the Clean Energy Group with support from the Northeast Electrochemical Energy Storage Cluster (www.neesc.org), showcase fuel cells in resilient power systems.

Last month, Slate Magazine published an article about the record-setting hurricanes we’ve already seen this season, happening in a year already on pace to be the hottest on record. A new study also suggests that storms will become increasingly frequent and stronger than anything we’ve seen before.

Recent history has demonstrated the impact of these types of natural disasters, so that part isn’t hard to predict: Millions of people will lose power, critical facilities like first responders and hospitals will run on faulty back-up power, and mobile communications will be lost, leaving some without access to emergency 9-1-1 services.

But our experience of these past storms has offered some glimmers of hope: Some communities and buildings were set up to weather an extended power outage. These places have the capability of generating their own clean energy while being separated from the power grid; during grid outages, they are able to supply electricity for critical services. In the years after these major weather events, like Hurricane Sandy, many other building owners and communities have installed similar resilient power systems.

The New York City Police Department, for example, installed a fuel cell in its Central Park Precinct and during the Blackout of 2003 was able to continue operations seamlessly at a time when emergency first responders were greatly needed. A fuel cell at South Windsor High School in Connecticut allowed the school to serve as an emergency public shelter when a snowstorm knocked out power for as many as 11 days in parts of the state. During the storm the school provided showers, warm meals, outlets, a nurse’s station, and a place to sleep for 600 people. Several hospitals in Connecticut have also installed fuel cells to support critical energy loads when the grid goes down, like respirators, operating rooms, and refrigeration for medicines. Cell phone towers have also used fuel cells to provide mobile communications services during power outages, which help to support access to emergency 9-1-1 services.

In addition to providing power during emergencies, these fuel cells run throughout the year, saving thousands of dollars on energy costs and reducing emissions of critical air pollutants and greenhouse gases.

A recent webinar hosted by Clean Energy Group, called “Fuel Cells for Educational Facilities,” provided an overview of the technology for resilient power systems. As part of the Resilient Power Project at Clean Energy Group, this webinar and case study series work in combination to demonstrate a readily-accessible technology option for communities looking to weather the next big storm.

The fuel cells for resilient power case study series is available here.

Alaska Helps Remote Communities Shift to Renewables

Author: Warren Leon, Clean Energy Group | Project: Clean Energy States Alliance

Photo permission - Alaska Energy Authority and Kodiak Electric Association

Energy is a major concern in rural Alaska. Households in many regions spend over 20 percent of their annual income on heat and electricity. In some communities, more than half of average household income goes toward home heat and electricity. Although many of these homes consume very little electricity, electric rates and fuel costs are high, and the cold climate means that lots of energy is required to heat even energy-efficient homes. Numerous small and remote Alaskan communities run on stand-alone electric grids and rely heavily on diesel fuel generators. Because Alaska does not have a statewide highway system, fuel is barged from Seattle to regional distribution centers, then delivered locally by air or boat. Winter weather can make deliveries impossible, so rural communities have to store 8 to 13 months’ worth of fuel onsite in tank farms to avoid fuel shortages.

Alaska is investing in renewable energy projects to provide remote communities with more secure and lower-cost energy. One notable example is the City of Kodiak on the Gulf of Alaska. Before 2008, Kodiak produced about 60 percent of its electricity from hydro and the balance from diesel fuel. Today Kodiak generates more than 99 percent of its power from hydro and wind energy, thanks to grants from the Alaska Renewable Energy Fund.

The Renewable Energy Fund, administered by the Alaska Energy Authority (AEA), was created in 2008. Its goal is to help the state generate 50 percent of its electricity from renewable sources by 2025. The fund awards about $25 million yearly to utilities, independent power producers, local governments and tribal councils. AEA evaluates proposals, then recommends projects to the state legislature for funding. AEA focuses on projects that it judges will deliver significant public benefits and that are located in high-cost areas.

Kodiak’s Transition to Renewable Energy

About 14,000 people live on Kodiak Island, which is home to Alaska’s biggest fishing port and the largest Coast Guard base in the United States. Kodiak Electric Association (KEA), a local cooperative, operates the island’s microgrid. In 2007, KEA’s board set a goal of generating 95 percent of its electricity from renewable sources by 2020. By 2014 it had already surpassed that goal, producing more than 99 percent of its power from wind and hydropower supported by a battery energy storage system.

The Renewable Energy Fund awarded a total of $16 million to Kodiak to install six 1.5 megawatt wind turbines; add a third 10-megawatt turbine to its existing hydropower facility; and a three-megawatt battery storage system, which eliminates the need to curtail generation from Kodiak’s wind turbines and provides spinning reserve capacity in combination with the island’s hydropower facility. In 2014, Kodiak installed the newest phase of its renewable upgrades: two one-megawatt flywheels to power a new electric crane at the busy port of Kodiak, replacing a diesel crane.

“Without the Alaska Energy Authority, we could not have done it nearly this fast,” says Darron Scott, president and CEO of the Kodiak Electric Association. “These have been very cost-effective projects for our community, but without the help and support and financing, it would have been too hard on our balance sheet to do all of this so quickly.”

Multiple Benefits

Displacing diesel fuel with renewable power has produced multiple benefits for Kodiak. Scott estimates that the island has avoided use of 6.9 million gallons of diesel fuel at roughly $3.50 per gallon since 2009. Kodiak residents paid approximately 2.5 percent less for electricity in January 2015 than they did in January 2001, without any adjustments for inflation. And because the island’s diesel generators now are used mainly for backup, residents are insulated for the long term against oil price spikes. By virtually eliminating diesel generation, KEA has also avoided about 77,000 tons of greenhouse gas emissions, 2.2 million tons of NOx, 86 tons of carbon monoxide, 47 tons of particulate matter and 43 tons of volatile organic compounds.

AEA hopes to replicate Kodiak’s success in other remote communities. “It’s incredible how much Alaskans have learned since this program started,” says Sean Skaling, AEA’s program development and project evaluation director. “We’ve really dialed in on what works and what doesn’t, and we’re still learning.”

In summarizing the achievements of the Kodiak project, Alaska Senator Lisa Murkowski remarks that: “Both the Alaska Energy Authority and the Kodiak Electric Association are putting into practice five principles that I believe are in our national interest. And those are to make energy abundant, affordable, clean, diverse, and secure.”

 

This blog post was written by Jenny Weeks and Warren Leon, and was originally published in the Clean Energy States Alliance (CESA)’s 2015 report “Clean Energy Champions: The Importance of State Policies and Programs.” This report provides the first-ever comprehensive look at the ways states are advancing clean energy and suggests how to further encourage clean energy growth. For more information about CESA, please visit www.cesa.org.

This blog post was also published in Renewable Energy World.

Resilience for Free: Protecting Vulnerable Communities

Author: Seth Mullendore, Clean Energy Group | Projects: Clean Energy Finance, Resilient Power Project

Clean Energy Group, through its Resilient Power Project, has released a new report analyzing the economics of resilient solar PV and battery storage (solar+storage) systems for multifamily affordable housing. The report, Resilience for Free, models project expenses and savings/revenue over a 20-year period in three metropolitan areas: Chicago, Washington, D.C., and New York City. While market factors vary significantly from city to city, each case points to one conclusion: resilient power can be provided at little to no net cost to help support those residents that need it most in an emergency.

Chicago, IL: While the economic proposition for solar in Chicago is not very favorable with a negative return over 20 years, combining solar with battery storage can greatly improve project payback. This is because battery storage systems in Chicago are eligible to participate in the PJM Interconnection frequency regulation market, which balances rapid fluctuations between supply and demand on the electric power grid. With the addition of frequency regulation revenue, a 100-kW/50-kWh lithium-ion battery system can reduce a project payback from over 20 years for a stand-alone solar system to fewer than 12 years for a resilient solar+storage system. The addition of a larger, 300-kW/150-kWh, battery system further reduces simple project payback to just over six years.

Washington, D.C.: Market conditions are very good for the solar-only option in Washington, D.C. This is because the District has put into place an aggressive solar mandate, which has led to historically high prices for Solar Renewable Energy Credits (SRECs). Higher SREC values result in an impressive 3.5 year simple payback for a solar-only project in D.C. Like Chicago, D.C. energy storage systems can participate in PJM’s frequency regulation market. Because of this, adding batteries to a PV system to make it energy resilient also provides favorable economics with an almost identical project payback period as a solar-alone project. Over the lifetime of the project, the solar+storage system achieves a much higher cumulative return and, because it can power essential electric loads during a power outage, provides a resiliency benefit for residents that stand-alone solar cannot.

New York City: Conditions for solar+storage are less advantageous in New York City. There are no favorable market opportunities for battery systems and, due to regulations and permitting standards, lithium-ion batteries cannot be sited indoors in the city. New York City does have a generous solar incentive, which helps solar-only systems achieve a short payback of just over four years. However, unlike Chicago and D.C., making the PV system resilient with the addition of batteries has a negative effect on project economics in NYC. Adding a 30-kW/60-kWh lead-acid battery to the system extends the project payback period to over 14 years. The battery can be used to reduce utility bills through management of demand charges, but these saving are not enough to completely offset the cost of the battery. With the implementation of targeted incentives, cities like New York could overcome market barriers to encourage more resilient solar+storage system deployment.

These findings support increased exploration and investment in solar+storage technologies for multifamily affordable housing and other critical facilities supporting vulnerable populations. The technologies exist to improve power resiliency in communities when disaster strikes and, as this analysis shows, there’s no economic reason not to begin deploying them today.

Clean Energy Group will be hosting a free webinar to provide more detail on the findings from this report on October 29th. Webinar information is available here.

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Photo credit: Bright Power

This blog post was also published in Renewable Energy World.

New Hampshire Promotes Better Wood Heating

Author: Samantha Donalds, Clean Energy Group | Project: Clean Energy States Alliance

Photo by Samantha Donalds, Clean Energy GroupNew Hampshire’s location in northern New England means that the winters are long and cold. Heating costs are high and can be crushing for many households, especially because many parts of the state do not have access to cheap energy from natural gas. For affordable heating, many residents turn to the same resource that has been keeping homes in the state warm for centuries: wood.

Wood is abundant in New Hampshire, but older wood stoves are frequently highly polluting and inefficient, and require significant fuel storage space. New Hampshire policymakers have therefore taken several steps so that residents can purchase new equipment using improved biomass heating technologies that address these issues.

Helping Residents and Businesses Switch to Wood Pellets

The New Hampshire Public Utilities Commission created a Residential Wood-Pellet Boiler and Furnace Rebate Program. It offers rebates of 30 percent (up to $6,000) for high-efficiency, bulk-fed, wood-pellet central heating boilers and furnaces. The pellets are made from compacted sawdust and other industrial waste byproducts left over from lumber, manufacturing, construction, and woodworking industries. Since lumber and woodworking companies are abundant in New Hampshire, wood pellets present a plentiful local fuel source. Wood pellet boilers are highly efficient, inexpensive, and compact, making them an excellent modern alternative to wood, propane, or oil. When wood pellet fuel is delivered in bulk, which New Hampshire’s program was specifically designed to facilitate, wood pellet boiler systems offer the same convenience as oil heating systems. To date, the residential program has dispersed close to $1.5 million in rebates to almost 300 participants, with an applicant investment of close to $4.2 million.

The Public Utilities Commission also created a rebate program for commercial applications. The Commercial and Industrial Bulk Fuel-Fed Wood Pellet Central Heating Systems Rebate Program offers a rebate payment of 30 percent of the cost of equipment and installation, to a maximum of $50,000. An additional incentive of up to $5,000 or 30 percent of the system cost is offered if thermal storage is included. To date, a total of $383,000 has been dispersed to 20 non-residential projects,  with an additional $.5 million in process or reserved. The average non-residential rebate has been just over $20,000.

RPS Carve-Out

To better promote wide-scale market growth and technological development of biomass thermal technologies, New Hampshire became the first state to add a carve-out for renewable thermal technologies to its Renewable Portfolio Standard. This carve-out requires utilities to produce or otherwise support a minimum amount of renewable thermal energy each year.

“This is an important step forward in efforts to gain equal consideration for thermal energy,” said Joseph Seymour, Executive Director of the Biomass Thermal Energy Council, an industry trade association. “With little happening on energy policy in Washington, efforts must focus on state policy to achieve a more fuel and technology neutral incentive structure for renewable energy. New Hampshire has led the way in showing the nation that it is possible to enhance state RPS programs by adding thermal energy.

Impacts Beyond New Hampshire

States across the country are looking at New Hampshire as a leader and a model for supporting renewable thermal technologies. For example, other states, such as Maryland, have explored adding renewable thermal requirements to their RPS.

 

 

This blog post was originally published in the Clean Energy States Alliance (CESA)’s 2015 report “Clean Energy Champions: The Importance of State Policies and Programs.” This report provides the first-ever comprehensive look at the ways states are advancing clean energy and suggests how to further encourage clean energy growth. For more information about CESA, please visit www.cesa.org

This blog post was also published in Renewable Energy World.

New Mexico Attracts Jobs and Revenues with Renewable Energy Tax Credit

Author: Warren Leon, Clean Energy Group | Project: Clean Energy States Alliance

New Mexico has abundant fossil fuel resources: in 2013, it ranked sixth in the nation for crude oil production, seventh for natural gas and twelfth for coal. It also has some of the best solar and wind energy resources in the United States. Over the past decade, New Mexico leaders have positioned the state as a major growth area for renewable energy by developing effective policies and programs, along with financial and other incentives, including a state-level renewable energy production tax credit. These policies have attracted millions of private and federal dollars, generated construction and manufacturing jobs, and boosted state revenues from land leases for renewable energy projects. They are also helping diversify New Mexico’s electricity production, thereby reducing the potential impacts if the price of fossil fuel-fired electricity increases in the future.

Production tax credits (PTCs) give investors an incentive to build or finance renewable energy projects. They typically are offered for a fixed period to help new industries scale up. Unlike investment tax credits, which reward investors for building a project and typically are paid up-front when the project is put into service, PTCs are paid over time and are based on the amount of electricity generated.

Offering a PTC helped New Mexico compete with other Western states for energy investments. Those states are major energy producers with excellent wind, solar, and/or geothermal resources. In particular, Colorado has a well-developed green economy, a skilled labor force, and world-class research institutions that make it a regional leader in clean energy and environmental technologies. To attract investments in its clean energy sector, New Mexico needed to provide equally attractive business conditions for renewable energy companies.

Attracting Wind Developers

In 2002, New Mexico’s public utility commission adopted a Renewable Portfolio Standard that required investor-owned utilities to generate 5 percent of their electricity from renewables by 2006 and 10 percent by 2011. Five years later the legislature increased New Mexico’s renewable electricity targets to 15 percent of electricity by 2015 and 20 percent by 2020. Before it set those targets, New Mexico had very little renewable energy online, so the state had to scale up renewable energy production rapidly.

To attract energy developers, the state hired an international firm to produce “investment grade” maps of the state’s wind resources. This data gave companies reliable information to make decisions for siting wind projects. The state then offered wind and biomass energy producers a PTC of $0.01 per kilowatt-hour against their corporate taxes. To qualify, companies had to develop at least 1 megawatt of generating capacity before January 1, 2018. (This size requirement ensured that the credit would support construction of commercial-scale projects.) Each qualifying project could earn credits for producing up to 400,000 megawatt-hours of electricity annually over its first 10 years of operation. Solar energy was later added to the state’s PTC, so that solar producers can now receive credits that average $0.027 per kilowatt-hour for their first 200,000 megawatt-hours per year, generated over 10 years.

In the first 10 years in which New Mexico offered the production tax credit, developers built 10 wind energy projects with 794 megawatts of generating capacity and 21 solar projects with 232 megawatts of capacity. Additional projects on a waiting list of tax credits would provide another 677 megawatts of wind and 65.5 megawatts of solar (the state caps the total number of credits that can be awarded each year).

Energy Projects Generate Land Revenue

Wind and solar energy projects in New Mexico have generated approximately $2 billion in construction activity. Moreover, because many of the plants are sited on lands leased from the State Land Office, state land leases are projected to provide $574 million in revenues for the state, or about $15 million per year. Other renewable energy projects on private lands are providing supplemental income for landowners, many of whom are farmers and ranchers.

“We have a lot of ranchers who are not making enough money from grazing and farming. This is a great opportunity for them to use their land and gain some economic benefit,” says Erica Velarde, clean energy program manager for New Mexico’s Energy Conservation and Management Division. Today New Mexico is a recognized state leader in the renewable energy sector. In 2013, Ernst & Young ranked New Mexico sixth nationally for wind and fourth for solar in its state renewable energy attractiveness indices. Six other states have enacted renewable energy production tax credits. The state may increase the number of credits available under the PTC to accommodate demand from energy companies. “Industry wants to raise the cap, and the legislature is considering it,” says Velarde.

 

This blog post was written by Jenny Weeks and Warren Leon, and was originally published in the Clean Energy States Alliance (CESA)’s 2015 report “Clean Energy Champions: The Importance of State Policies and Programs.” This report provides the first-ever comprehensive look at the ways states are advancing clean energy and suggests how to further encourage clean energy growth. For more information about CESA, please visit www.cesa.org.

This blog post was also published in Renewable Energy World.