ANTARES Report Published on Colorado Energy Office Website

The Colorado Energy Office (CEO) released a report entitled, “Colorado Customer-Sited Energy Study.” The published report is a summary of a more detailed study completed by ANTARES late in 2015. Colorado Customer-Sited Energy Study_0_001The press release for the announcement can be found here. The purpose of the study was,

…to conduct a study to determine the size and characteristics of the market for customer-sited energy systems in Colorado. The study primarily targeted energy technologies that are eligible under Colorado’s renewable energy standard (RES), including solar photovoltaics (PV), small wind turbines, small and micro-hydropower, waste heat recovery, solar thermal heating, ground source heat pumps (GSHP), and energy storage.

As part of the effort, ANTARES constructed a large database and used advanced data analytics to validate data collected from a variety of sources. Data analysis included the use of geolocational data to validate address information and energy system data.

The importance of this work is that the baseline data will be useful in cataloging and characterizing the long-term performance of small-scale renewable energy systems across the Colorado. In the future, ANTARES believes that the data collection and analytical methods developed are broadly applicable to jurisdictions across the United States. ANTARES is engaging state energy offices across the country to complete similar assessments. Look for more reports to come in the near future.

2014 Energy Flow Charts Released by LLNL

The first time I saw one of these charts, I was a senior in high school in a Southern state where coal was king.  It was revolutionary to me: how very much energy we were using!  And how much of it was just wasted!  That moment was one of the reasons I went into energy engineering, and I’ve been keeping an eye on these charts ever since.

2014_us_energy

Lawrence Livermore National Laboratory (LLNL) just issued the most recent chart (above; press release here), which had some promising news.  LLNL points out that solar energy generation increased 33% and wind energy generation increased 8% versus 2013, and natural gas continued to displace higher carbon-intensity coal in electricity generation and petroleum in the transportation sector. These are small changes — I would love to see more than a pencil width shift in the lines on that chart – but they are in the right direction.  What is not so promising is that increases in wind capacity have slowed down versus previous years (see our blog post here about one of the reasons why), biomass contributions are almost unchanged, and geothermal is still only a drop in a bucket.

If you want to make your own changes to this chart, whether by improving your energy use efficiency or generating your own energy, please don’t hesitate to contact us.  We would love to help.

Learning to Look Critically at Your Vendor Energy Savings

Whenever I talk to a vendor, I always learn something new because they truly are experts in their field.  With that being said, even though these guys are really good, you have to keep in mind that they don’t work for you, they aren’t your energy managers, and they aren’t the ones who answer to upper level management as to why a project isn’t performing adequately.  At the end of the day, only you can make the final call if a project is a good investment or not.

As part of their sales pitch, many vendors present a high-level energy savings estimate showing you just how much energy or money you could be saving by implementing their equipment.  It is important to keep in mind that these energy savings estimates are based on a series of assumptions that may or may not be totally inaccurate for your facility.  You’ll need to do a “sanity check” and then make the decision as to whether or not you can reasonably believe the provided estimates.

Things to Look For

The vendor analysis will usually outline a series of assumptions that were used to complete the calculations (and if they don’t outline their assumptions, you need to be extra careful!).  Check the following metrics to make sure that they line up with what you would expect for your facility:

  • Annual hours of operation – how long is your equipment really on?  How much product are you really using?  Check the assumptions against your historical data.
  • Equipment efficiencies – Check boiler efficiency (%) and cooling equipment efficiencies (kW/ton).  These can really vary depending on the age, type of equipment (ex: steam boiler vs. hot water boiler), and how often the equipment cycles on and off (more cycling = less energy efficient).  When in doubt, check out the ASHRAE rated efficiencies for your type of equipment and rated capacity for a good starting point, and then make adjustments as needed depending on your situation.  Want some more reading material?  I really like this write-up, which was done by a PE engineer out in California and talks about looking critically at boiler efficiency claims.
  • Utility rates – Your natural gas rates in $/therm and electricity rates in $/kWh.  Make sure you take into account your supply rates too, if you go through a third party provider.  And check out this article that Clair wrote on utility rates that may be just a little too optimistic for their own good.
  • Historical utility consumption – We frequently look at historical utility bills to make sure that the level of savings proposed makes sense.  Total up your annual consumption and compare it to the vendor energy savings.  Anything that’s really high is probably too good to be true.
  • Peak Loads – You may have three 100 ton chillers, but maybe only two of them operate at peak load.  The vendor won’t know this until you tell them.  Conversely, maybe you have separate winter and summer boilers.  When does each one operate throughout the year?

Real Life Examples

Facility #1 – This facility was installing a new tank-less hot water heater.  The vendor estimated that the facility was consuming 6,000,000 gallons of water each year, when in reality they were only consuming about 2,000,000 gallons (per their historical water bills).  This one assumption alone cut their energy cost savings down to 1/3 of the vendor’s initial estimate.  The vendor also estimated that the site was paying $1.00/therm of natural gas, when in reality the facility was paying close to $0.60/therm.  This cut their energy cost savings down even further.  The vendor estimated $30,000 in annual energy cost savings.  In reality, the energy cost savings were closer to $2,000.  Ouch…

Facility #2 – This manufacturing facility was upgrading their Building Automation System (BAS) that would automatically control their heating and ventilation units.  Initial vendor estimates projected that the facility would save a total of 80% of their existing natural gas consumption.  This magnitude of energy savings doesn’t seem realistic because the facility still needs to heat its large manufacturing area.  In reality, the projected energy savings are closer to 26% of the facility’s existing natural gas consumption.  Contributing factors to the over-estimation of the energy savings included over-estimating the facility’s annual run hours and under-estimating the new amount of outside air needed to keep the building pressurized.

However, not all of the projects that we evaluate are this far off.  Below is a bar chart summary of ten different vendor cost savings estimates versus the savings that were compiled by ANTARES for a random selection of past projects.  As you can see, some of the vendor estimates are close to, or even less than the energy cost savings that we evaluated for the project.  However, 2 of these 10 projects were disastrously different. It would be counterproductive to generalize from this sample, but in our experience, these are not isolated examples.

Vendor Savings Chart

What You Can Do

Make sure that your vendor has as much information as possible—utility rates, efficiencies, annual hours of operation etc.  The more information that you give them, the more accurate their calculations will be.  If you are spending lots of money on a new project – it may be a good idea to get a second opinion upfront, rather than pay for the forensic opinion after management asks you, “What went wrong?!”

Renewable Energy Tax Incentives – 2015 Update

The start of a new year always generates lots of questions on the current state of renewable energy tax incentives. This is particularly true for the Tax Increase Prevention Act, which was signed into to law on December 19, 2014. In a move that has become all too familiar to anyone working in this industry, the Tax increase Prevention Act took many of the biofuel and renewable energy tax credits that had previously expired at the end of 2013 and retroactively extended them through the end of 2014. It is important to note that as of January 1, 2015, these affected incentives have expired once again, and that their ongoing status for the 2015 year has not yet been addressed. This post will review what was changed by this legislation, and highlight the gist of some important incentives that are still available.

Biofuels

Some of the biofuels tax credits that were affected include the Second Generation Biofuel Producer Tax Credit and the Alternative Fuel and Alternative Fuel Mixture Excise Tax Credit, among others, which were retroactively extended through 2014, but not otherwise modified. The full list of extensions is rather long, and can be found at the Alternative Fuels Data Center.

Production Tax Credit (PTC)

The Section 45 Production Tax Credit (PTC) was also retroactively extended through the end of 2014. This is excellent news for the 4,859 MW of wind generating capacity that was installed in the US in 2014. This is four times as much wind as was installed in 2013, although far short of the record 12,000 MW of capacity installed in 2012. For more discussion on the PTC, background information, and the terms of its expiration, please see my post from January 2014.

Investment Tax Credit (ITC)

No legislative changes have been made to the Section 48 Investment Tax Credit (ITC) since the last update I posted. In summary, it is still available through the end of 2016 for the following technologies:

  • Solar, fuel cells, and small wind turbine are entitled to a credit equal to 30% of expenditures.
  • Geothermal heat pumps, microturbines, and CHP are entitled to a credit equal to 10% of expenditures.
  • At the end of 2016, the credit for solar will reduce to 10%, the credit for geothermal electricity production will remain at 10%, and the credit for all other technologies will expire.

Section 1603 Grant

The Section 1603 Grant, which was created by the American Reinvestment and Recovery act of 2009, is a close relative of the PTC and ITC.  Many people do not realize that although the deadline for submitting new applications for the Section 1603 Grant was October 1, 2012, the “placed in service” deadline associated with this grant is not until January 1, 2017, for several renewable energy technologies. Projects that applied for the Section 1603 Grant must be placed in service before the credit termination date, located in the table below by technology, and in the Treasury Guidance Document.

Section 1603 Grant summary

Renewable Energy Tax Incentive Summary Table

As always, DSIREUSA.org is a great place to seek out basic information on local, state, and federal incentives. If you have more complex questions, please give ANTARES a call. We have helped a variety of clients evaluate their opportunities for bringing alternative funding to their projects, including tax credits.

Basics of Ground Source Heat Pump Technology (Part 2)

In last week’s post, I gave you some things to think about regarding ground source heat pump (GSHP) or geothermal heat pump (GHP) technology design. GSHP technology takes advantage of the fact that the ground temperature stays relatively consistent throughout the year, and uses electrically powered systems to transfer energy to and from the ground. During the winter GSHP systems use the ground as a heat source, and during the summer they use the ground as a heat sink.

In this post I’m covering some topics on economics and project implementation. GSHP technology can be quite the expense, but picking the right designers/contractors to be on your team can vastly simplify the process and help manage costs.
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Basics of Ground Source Heat Pump Technology (Part 1)

We’re in the midst of finishing up some feasibility studies for ground source heat pump (GSHP) or geothermal heat pump (GHP) technology, so I figured that now would be good time to give you some basic things to think about when considering GSHPs.  In this post I’m going to cover some important design considerations, and in another post next week I’ll cover some important things about economics and installation.
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