Recently, MIT released the Future of the Electric Grid after a two year study on the current state and future needs of this critical infrastructure. This latest “Future of…” report included a discussion of grid reliability. In this discussion, the reliability metric was introduced and then quickly followed by a discussion of the lack of usable data regarding outages. Specifically, the report’s authors stated that:

“…customers in the U.S. can expect to experience between 1.5 and 2 power interruptions per year and between 2 and 8 hours without power. This is on par with most European countries…”

But, they quickly insert the caveat that:

“Data on outages are neither comprehensive nor consistent, however. Most outages occur within distribution systems, but only 35 U.S. States require utilities to report data on [distribution outages]… it is accordingly impossible to make comprehensive comparisons across space or over time.”

This lack of comprehensive, usable data ties the hands of analysts wishing to provide a data-based evaluation of the current health of the nation’s electric grid. While available resources are certainly valuable, they could provide an inaccurate picture of the grid’s health. And, without an accurate picture, it is difficult to confidently identify where grid investments should be made.

[To download the new MIT report and see video from its launch, visit this website.]

Photo Credit:

1. Photo of power lines in Florida by timl2k11 and used under this Creative Commons License.

In order to move cutting edge research from labs to markets, these research institutions agree to let their discoveries leave the nest undertechnology transfer agreements. The general process for a technology transfer from the lab to a commercial organization is pretty straightforward:

1. Department of Energy (DOE) National Lab (or, more specifically, their research staff) discover something new and are issued a patent for their invention.
2. This patent is identified as a potential candidate for a technology transfer and so its information is placed in the DOEpatents database.
3. Companies that are interested in commercializing a technology from within the DOEpatents database.
4. An agreement is reached between the patent holder (normally DOE or, at times, the individual laboratory) that allows the company to license the technology for commercialization purposes.
5. Typically, proceeds from the licensing fees are then used to fund further research at DOE laboratories.

Lets take an example -

Northern California’s Lawrence Berkeley National Lab (LBNL) recently licensed the rights to an aerosol technology that could revolutionize building energy efficiency retrofit programs by making leaky ducts a thing of the past. Under a transfer agreement, between LBNL and Auroseal, the latter will be able to develop an aerosol technology that can disperse a sealant throughout a building’s existing ductwork, effectively sealing any leaks. This technology, developed by LBNL researchers, could vastly improve the energy efficiency of buildings by reducing energy losses due to inefficient distribution of air through the system.

This aerosol technology is just one case of discoveries from within the national laboratory system moving into society’s wider sphere. Over more than 7 decades, researchers within these national labs have developed technologies to harness nuclear power (both electric and geopolitical). They have discovered the foundational components for advanced battery technologies (think Lithium Ion), and how to make car airbags an economical option for all Americans (with MEMS technology).

Last year, during the Deepwater Horizon oil disaster, scientists and engineers from around the world analyzed technologies that could have the potential to help stop the oil leak and also assist in the cleanup the oil that has already escaped. One of the technologies that received significant attention was a large device capable of effectively separating oil and water using centrifugal acceleration. Owned by actor Kevin Costner’s company (Ocean Therapy Solutions), this technology was licensed to Costner for commercialization purposes through the tech transfer process.

The technology transfer program allows the discoveries resulting from basic science research to have significant impact outside of the laboratory. Through the technology transfer process, inventions funded by federal research dollars can be used to create new companies within the U.S. economy. And, with the funds received from licensing these technologies, the national lab system can help ensure its continued ability to fund cutting edge research.

Photo credit:

1. Map of DOE laboratory locations courtesy of the Department of Energy, Office of Energy Efficiency and Renewable Energy.

This power was originally published on Scientific American’s Plugged In.

This post was originally published on Scientific American’s Plugged In.

In September, headlines erupted when the solar company, Solyndra, announced that it would be filing for bankruptcy just 2 years after the company received $535 million in federal loan guarantees under the Recovery Act. The situation quickly led to questions about why this company failed. And, according to recent discussions and yesterday’s testimony by energy Secretary Chu, the root cause might be found in an overlay of softening solar demand in Europe and more than $34 billion in Chinese subsidies. This combination might have led to a market state where Solyndra simply could not economically compete.

Over the past 18 months, it appears that the Chinese Development Bank has extended more than $34 billion in credit lines to Chinese solar companies. This subsidy program, combined with a softening in European demand, contributed to a 27% drop in the price per kilowatt for solar panels. As a result, Solyndra’s CIGS technology was unable to complete with China’s traditional crystalline silicon photovoltaic (PV) cells.

Last week, the U.S. Department of Commerce announced that they will be opening an investigation into Chinese solar manufacturing trade practices. Specifically, Commerce’s International Trade Administration (ITA) will be looking to see if Chinese solar manufacturers have been dumping illegally subsidized PV panels into U.S. markets. This investigation is the result of a series of petitions submitted by SolarWorld and their six (unnamed) partners, which claims that the Chinese subsidy of their company’s solar companies might have allowed them to dominate U.S. solar markets enabling a flood of cheap imported panels. The results of this investigation will include a determination as to whether or not these subsidies violated international trade laws. Preliminary findings and decisions are expected to be released in mid-January.

If Chinas’s solar subsidies are found to violate international trade laws, the fall of Solyndra could be re-classified as a casualty of unethical practices by a foreign entity. This could cast a new light on the company’s bankruptcy. And, help to explain why this company went under despite sound technology and financial backing.

There are arguments both for and against condemning China’s heavy subsidy of its solar companies. On the one hand, these subsidies have allowed for huge growth in the Chinese solar industry, which now accounts for three-fifths of the world’s solar panel production. This growth has allowed Chinese manufacturers to achieve enormous economies of scale that has led to an almost 2/3 drop in the price per kilowatt for solar panels since 2008 (with a 27% drop in just the last 18 months alone, according to Secretary Chu). These low prices have helped enable the United States to install more solar capacity, and to reap the associated economic and environmental benefits.

But, those against the dumping of heavily subsidized products into the market argue that this practice is unsustainable and will hurt U.S. markets in the long term. By artificially forcing the price of solar to go below what U.S. solar manufacturers can achieve (in the absence of their own set of government subsidies), China can effectively demolish the U.S. manufacturing capacity by gutting their customer base. While this might spell positive things for U.S. solar capacity growth, it could lead to a Chinese monopoly in the industry. This lack of competition could then allow China to control the world’s solar market.

Photo Credit:

1. Photo of solar panel by Andreas Demmelbauer and used under this Creative Commons License.

Note:

Previous Scientific American coverage of the Solyndra bankruptcy by David Biello (here) and Melissa C. Lott (here)

This post was originally published on Scientific American’s Plugged In. 

In the future, the world will demand more energy than it does today. While the exact amount might be disputed, with a global population expected to hit 9 (perhaps even 10) billion people by 2050, it is easy to see that the world’s demand for resources – including energy – will almost certainly increase. How society chooses to supply these megawatts of additional energy demand will have many impacts on the long-term sustainability of the world’s energy systems. And, the best way to supply the megawatts that society demands could be to not supply them at all.

In the heart of San Francisco, on the 18^th floor of 345 California Street lives a division of the second-largest energy company in the United States (ExxonMobil currently holds the top spot). Its parent company is one of the world’s largest producers and suppliers of oil and gas, but in this division more energy isn’t better – instead, less makes money. With its focus on energy efficiency (negawatts) before generation, Chevron Energy Solutions has found ways to successfully reduce the energy and environmental footprint of not only its parent company’s worldwide buildings, facilities and processes, but also government and public-sector facilities around the nation. And, since its creation in 2000, this company has demonstrated how energy efficiency can be a winning and profitable business model.

Over the past 11 years, Chevron Energy Solutions has completed hundreds of projects that represent billions of dollars in energy savings. As a result, the company has helped to eliminate millions of metric tons of greenhouse gas emissions and saved the country millions of gallons of water - all the while raking in a solid profit for Chevron shareholders. Examples of these projects can be found around the country.

One such project was completed in Colorado in 2009. Here, at the state’s Capital Complex facilities in Denver, Chevron Energy Solutionsengineered and installed energy efficiency improvements including building envelope and lighting retrofits, energy management systems, and HVAC system upgrades on 20 of the state’s government buildings. These retrofits, combined with the ground source heating and cooling at the Governor’s mansion and a more than 100-kW in solar PV installations, led to an overall reduction of the state’s energy demand for these buildings more than 30%. Since their installation, these upgrades have been responsible for reducing the state’s carbon dioxide emissions by more than 8,000 metric tons per year. Perhaps even more impressive, this project turned historic landmarks that were constructed in the late 1800s and early 1900s into some of the most energy efficient buildings in the nation (five are now LEED certified).

Very different examples of Chevron Energy Solution’s projects can be found in California and Maryland, where a greater portion of the final design was dedicated to clean energy generation. At California’s Pierce College, Chevron Energy Solutions effectively combined generation and efficiency by not only installing a 360-kilowatt (kW) cogeneration system, but also including waste heat recovery for use in heating the college’s outdoor pool. At Maryland’s Fort Detrick, reliability and resource use efficiency were the focus in a design was prepared for a newCentral Utility Plant (CUP). This facility now provides efficient high reliability electricity, steam, and chilled water to facilities owned by the Army, Department of Homeland Security (DHS), and the National Institutes of Health (NIH).

In total, Chevron Energy Solutions has completed hundreds of projects for customers around the United States. But, its biggest customer is its parent company – since 2000, the Energy Solutions division has delivered over $430 million in savings to its parent company through efficiency measure and clean generation technologies at its facilities around the world. And, with each project, this small division living within an oil giant has demonstrated the power of negawatts versus megawatts.

Negawatts refer to units of energy demand that are removed using energy efficiency. In the United States, negawatts represent some of the cheapest and most abundant sources of energy currently available. In the 2009 report by McKinsey and Company on “unlocking energy efficiency in the United States,” it was estimated that the US economy could shed non-transportation energy consumption by 23% by 2020, representing more than $1.2 trillion in savings for $520 billion in upfront investments. But, according to this report, the ability of the nation to achieve these savings will only be possible if it can overcome some significant barriers. In particular, the US is in need of an integrated strategythat:

1. Recognizes energy efficiency as an important energy resource
2. Formulates and launches a portfolio of proven, piloted, and emerging energy efficiency technologies and strategies
3. Identifies ways to provide the capital necessary to fund energy efficiency projects
4. Forges alignment between utilities, regulators, government agencies, manufacturers, and energy consumers
5. Fosters innovation in the development and deployment of next-generation energy-efficiency technologies to ensure ongoing gains

This strategy would undoubtedly help to pave the road for widespread energy efficiency in the United States. And, over time, this strategy could prove to be a winner for more sustainable energy systems design. But, in the private sector, an oil giant has shown that, while a federal energy efficiency strategy could be widely beneficial, reducing the nation’s energy use can already be profitable.

At Chevron Energy Solutions, President Jim Davis and his team of just over 300 employees (about one-third are degreed engineers) see energy efficiency as one of the sharpest and strongest tools in our toolbox in meeting future energy needs. And, in using energy efficiency before implementing clean generation technologies, this energy services company shows the economic argument for first reducing demand. To understand how Chevron Energy Solutions has shown the power of economic energy efficiency projects in the United States, let’s look at their work in terms of the 2009 recommendations from McKinsey & Company.

1. Recognize energy efficiency as an important energy resource

Chevron Energy Solutions is built upon a business plan developed by its President long before he joined the ranks of the oil and gas giant. In this plan, Mr. Davis looked at energy customers in a holistic manner, from both a supply and demand perspective. Utilizing his business and commodity trading background and experience working in the middle of the deregulation of natural gas wellhead prices in the late 1980s, Mr. Davis took his understanding of how demand impacts a company’s bottom line and turned it into a successful business that focuses on efficiency first – and generation second.

If you ask Mr. Davis why Chevron Energy Solutions prioritizes energy efficiency, his answer is clear – his company thinks in terms of decades, not quarters and it recognizes the fact that energy efficiency is not only the cheapest resource available but also one of the most abundant. He does not think that there is much sense in putting solar panels all over a building with an inefficient building envelope or overblown lighting designs. And he will show you, through your pick of the company’s hundreds of projects, how efficiency before generation led to a better outcome for the facility’s occupants.

2. Formulate and launch an integrated portfolio of proven, piloted, and emerging energy efficiency technologies and strategies

In each of its projects, Chevron Energy Solutions is technology agnostic. Since it acts almost exclusively as a general contractor in outside projects (most of the actual construction is contracted out) and it does not directly supply the building materials or technologies that it installs, the company’s engineers focus on what technology will work best, not which is “in-house.” In this evaluation process, each of the technologies that the company implements is evaluated and tested before it is used on large projects, often through demonstrations on Chevron’s own facility sites. Over the past decade, the company has used technologies from solar thermal and PV to fuel cells, and less sexy options like more efficient pumps and motors for water supply systems and simplified lighting design. The company is constantly evaluating new technologies to meet the demands of changing work environments and project requirements.

3. Identify ways to provide the capital necessary to fund energy efficiency projects

Simple –

• Step 1: Identify available rebates and grant programs applicable to the project.
• Step 2: Determine the amount of internal funding that is already available (for example, existing bond funds)
• Step 3: Find financing – Prepare a Request for Proposals and send this request to financial institutions for bids.

Each step is completed with the help of the Chevron Energy Solutions finance staff. Granted, this work is not altruistic – the company makes money when a project is executed successfully.

4. Forge alignment between utilities, regulators, government agencies, manufacturers, and energy consumers

Unlike many Energy Service Companies (ESCOs), Chevron Energy Solutions’s external projects are almost exclusively in the public sector and federal markets. According to President Jim Davis, this decision was made because these organizations typically do not have the budgets and internal staff to handle sweeping efficiency overhauls.

For example, in a K-12 school district, staff members might be dedicated to identifying ways to build new classrooms or successfully teach the same number of children with fewer resources. But, it is rare to find staff assigned to identifying energy conservation and efficiency opportunities. Interestingly, by reducing utility bills, new classroom facilities could be easier to fund. As a part of Chevron Energy Solutions’s work, the company focuses on how to provide a comprehensive plan for these organizations. For example, the company can help to find ways to pay for replacing leaking roofs on your classrooms through energy efficiency savings.

5. Foster innovation in the development and deployment of next-generation energy-efficiency technologies to ensure ongoing gains

Chevron Energy Solutions often meets with venture capital (VC) firms to discuss potential up-and-coming technologies that it might be able to test on its facilities to establish if it might be a good fit for future project. While it does not directly invest in any of these companies, its sister company – Chevron Technology Ventures – does. And, even when Chevron has no hand in the capital behind new technology ventures, the company tries to be active in the design process for potentially beneficial technologies. According to President Jim Davis, his company prefers to be involved in the design processes early on, to help them foster their progress in a way that will increase the likelihood that Chevron Energy Solutions could use the technology in future projects.

Now, Chevron Energy Solutions is not an altruistic company whose sole aim is to help reduce society’s energy use and environmental impact. It is a business that’s first priority is to make a profit for Chevron’s shareholders. The results of this can be seen in the fact that Chevron Energy Solutions has chosen to focus primarily on the electricity side of the energy industry, effectively skirting many potential opportunities for reducing energy consumption.

In the electricity world, Chevron has relatively little to lose. Granted, a reduction in electricity demand in the US could result in less demand for natural gas or oil because both are used as electricity generation fuels. But, with natural gas sitting at $4 (per MMBtu) and oil only supplying 3% of the total annual generation in the US, the potential impacts are much smaller than if Chevron Energy Solutions focused on transportation efficiency.

So, when Chevron Energy Solutions designs proposals for its external customers that will reduce a building’s energy demand, their project is unlikely to lead to significant negative impacts on their parent company’s bottom line. By making this choice, Chevron Energy Solutions has been able to avoid internal turf wars. The company has also left many opportunities open for other businesses that might focus on energy efficiency strategies that directly reduce energy demand related to transportation sector activities.

Internally, the story is a bit different but the result is the same. At many Chevron facilities, the oil and gas that is produced on site is used directly to meet the energy needs in the facility. According to President Jim Davis, there is a strong motivation to reduce the amount of product consumed on site. Because, for every unit of oil or gas that is consumed instead of being shipped, Chevron has lost a piece of merchandise that could be sold.

Since it was founded in 2000, Chevron Energy Solutions has experienced an average growth rate of 20% per year. Perhaps the main message that this gives us is that an integrated strategy for pursuing energy efficiency can pay off. And, that the best unit of energy is often the one you do not have to supply at all.

Photo Credit:

1. Photo of Colorado Capital Complex at night by Chevron and used with their permission.
2. Photo from inside Fort Detrick’s Central Utility Plant (CUP) by Chevron and used with their permission
3. Photo of classroom in Chicago area school by Chicago 2016 Photos and used under this Creative Commons License.

Over a period of 18 minutes and 50 seconds, Mr. Gates discussed the importance of keeping the price of energy low (in order to reduce poverty and spur growth) while simultaneously reducing the carbon dioxide emissions from our energy supply to reduce the impact of global warming on the world’s most susceptible populations.  And, in fine engineering style, Mr. Gates framed his entire argument with a simple (and powerful) equation:

According to this equation, carbon dioxide (from our energy supplies) is a function of four things – people, services, efficiency, and CO2 emissions per unit of energy.

• People (P) refers to the number of people living on the planet, with a magnitude of about 7 billion today and an expected value closer to 10 billion by 2050.
• Services (S) refers to all of the services that we use, including things like the food that we eat, clothing that we wear, electronics, heating, transportation, etc.
• Efficiency (E) refers to the energy used for each service. This number has actually been dropping over time, though it is nowhere near zero (and probably can’t be)
• CO₂ per unit of energy (CO₂) refers to the amount of carbon dioxide that is released into the environment for each unit of energy that is demanded to provide the services that the world’s population uses.

This equation shows us that, if we want to bring total energy-related carbon dioxide emissions to zero, only one factor that can get us there, CO₂per unit of energy. (Note: technically, bringing the world’s population to zero, eliminating energy use for services, or getting rid of services could achieve the same impact, but it is unlikely that we would want to do this).

One could argue that we do not need to bring our emissions all the way to zero in order to avoid the biggest negative impacts of global climate change. But, according to Mr. Gates, this argument does not work:

“If you sum up the CO2 that gets emitted, that leads to a temperature increase, and that temperature increase leads to some very negative effects. The effects on the weather and, perhaps worse, the indirect effects, in that the natural ecosystems can’t adjust to these rapid changes, and so you get ecosystem collapses.

Now, the exact amount of how you map from a certain increase of CO2 to what temperature will be and where the positive feedbacks are, there’s some uncertainty there, but not very much. And there’s certainly uncertainty about how bad those effects will be, but they will be extremely bad. I [have] asked the top scientists on this several times, do we really have to get down to near zero? Can’t we just cut it in half or a quarter? And the answer is that, until we get near to zero, the temperature will continue to rise…This is something that has to get to zero.”

So, how can we get our emissions to zero? According to Mr. Gates, this will require some “energy miracles.” But, in using the world “miracles” he is not saying that we have to achieve the impossible:

“…when I use the term miracle, I don’t mean something that’s impossible. The microprocessor is a miracle. The personal computer is a miracle. The Internet and its services are a miracle. So, the people here have participated in the creation of many miracles. Usually, we don’t have a deadline, where you have to get the miracle by a certain date…this is a case where we actually have to drive full speed and get a miracle in a pretty tight time line.”

How do we get to this miracle? According to Mr. Gates, we need to start by investing in more research and simultaneously create a market that incentivizes reducing carbon dioxide emissions from our energy systems.

You can view Mr. Gates’s entire TED talk, with Q&A by Chris Anderson below, or on the TED talks website or YouTube channel.

Photo Credit:

1. Picture of Bil Gates’s equation from his February 2010 TED talk from the youtube video found here.

In the future, the world will demand more energy than it does today. While the exact amount might be disputed, with a global population expected to hit 9 (perhaps even 10) billion people by 2050, it is easy to see that the world’s demand for resources – including energy – will almost certainly increase. How society chooses to supply these megawatts of additional energy demand will have many impacts on the long-term sustainability of the world’s energy systems. And, the best way to supply the megawatts that society demands could be to not supply them at all.

In the heart of San Francisco, on the 18^th floor of 345 California Street lives a division of the second-largest energy company in the United States (ExxonMobil currently holds the top spot). Its parent company is one of the world’s largest producers and suppliers of oil and gas, but in this division more energy isn’t better – instead, less makes money. With its focus on energy efficiency (negawatts) before generation, Chevron Energy Solutions has found ways to successfully reduce the energy and environmental footprint of not only its parent company’s worldwide buildings, facilities and processes, but also government and public-sector facilities around the nation. And, since its creation in 2000, this company has demonstrated how energy efficiency can be a winning and profitable business model.

Over the past 11 years, Chevron Energy Solutions has completed hundreds of projects that represent billions of dollars in energy savings. As a result, the company has helped to eliminate millions of metric tons of greenhouse gas emissions and saved the country millions of gallons of water - all the while raking in a solid profit for Chevron shareholders. Examples of these projects can be found around the country.

One such project was completed in Colorado in 2009. Here, at the state’s Capital Complex facilities in Denver, Chevron Energy Solutionsengineered and installed energy efficiency improvements including building envelope and lighting retrofits, energy management systems, and HVAC system upgrades on 20 of the state’s government buildings. These retrofits, combined with the ground source heating and cooling at the Governor’s mansion and a more than 100-kW in solar PV installations, led to an overall reduction of the state’s energy demand for these buildings more than 30%. Since their installation, these upgrades have been responsible for reducing the state’s carbon dioxide emissions by more than 8,000 metric tons per year. Perhaps even more impressive, this project turned historic landmarks that were constructed in the late 1800s and early 1900s into some of the most energy efficient buildings in the nation (five are now LEED certified).

Very different examples of Chevron Energy Solution’s projects can be found in California and Maryland, where a greater portion of the final design was dedicated to clean energy generation. At California’s Pierce College, Chevron Energy Solutions effectively combined generation and efficiency by not only installing a 360-kilowatt (kW) cogeneration system, but also including waste heat recovery for use in heating the college’s outdoor pool. At Maryland’s Fort Detrick, reliability and resource use efficiency were the focus in a design was prepared for a new Central Utility Plant (CUP). This facility now provides efficient high reliability electricity, steam, and chilled water to facilities owned by the Army, Department of Homeland Security (DHS), and the National Institutes of Health (NIH).

In total, Chevron Energy Solutions has completed hundreds of projects for customers around the United States. But, its biggest customer is its parent company – since 2000, the Energy Solutions division has delivered over $430 million in savings to its parent company through efficiency measure and clean generation technologies at its facilities around the world. And, with each project, this small division living within an oil giant has demonstrated the power of negawatts versus megawatts.

Negawatts refer to units of energy demand that are removed using energy efficiency. In the United States, negawatts represent some of the cheapest and most abundant sources of energy currently available. In the 2009 report by McKinsey and Company on “unlocking energy efficiency in the United States,” it was estimated that the US economy could shed non-transportation energy consumption by 23% by 2020, representing more than $1.2 trillion in savings for $520 billion in upfront investments. But, according to this report, the ability of the nation to achieve these savings will only be possible if it can overcome some significant barriers. In particular, the US is in need of an integrated strategythat:

1. Recognizes energy efficiency as an important energy resource
2. Formulates and launches a portfolio of proven, piloted, and emerging energy efficiency technologies and strategies
3. Identifies ways to provide the capital necessary to fund energy efficiency projects
4. Forges alignment between utilities, regulators, government agencies, manufacturers, and energy consumers
5. Fosters innovation in the development and deployment of next-generation energy-efficiency technologies to ensure ongoing gains

This strategy would undoubtedly help to pave the road for widespread energy efficiency in the United States. And, over time, this strategy could prove to be a winner for more sustainable energy systems design. But, in the private sector, an oil giant has shown that, while a federal energy efficiency strategy could be widely beneficial, reducing the nation’s energy use can already be profitable.

At Chevron Energy Solutions, President Jim Davis and his team of just over 300 employees (about one-third are degreed engineers) see energy efficiency as one of the sharpest and strongest tools in our toolbox in meeting future energy needs. And, in using energy efficiency before implementing clean generation technologies, this energy services company shows the economic argument for first reducing demand. To understand how Chevron Energy Solutions has shown the power of economic energy efficiency projects in the United States, let’s look at their work in terms of the 2009 recommendations from McKinsey & Company.

1. Recognize energy efficiency as an important energy resource

Chevron Energy Solutions is built upon a business plan developed by its President long before he joined the ranks of the oil and gas giant. In this plan, Mr. Davis looked at energy customers in a holistic manner, from both a supply and demand perspective. Utilizing his business and commodity trading background and experience working in the middle of the deregulation of natural gas wellhead prices in the late 1980s, Mr. Davis took his understanding of how demand impacts a company’s bottom line and turned it into a successful business that focuses on efficiency first – and generation second.

If you ask Mr. Davis why Chevron Energy Solutions prioritizes energy efficiency, his answer is clear – his company thinks in terms of decades, not quarters and it recognizes the fact that energy efficiency is not only the cheapest resource available but also one of the most abundant. He does not think that there is much sense in putting solar panels all over a building with an inefficient building envelope or overblown lighting designs. And he will show you, through your pick of the company’s hundreds of projects, how efficiency before generation led to a better outcome for the facility’s occupants.

2. Formulate and launch an integrated portfolio of proven, piloted, and emerging energy efficiency technologies and strategies

In each of its projects, Chevron Energy Solutions is technology agnostic. Since it acts almost exclusively as a general contractor in outside projects (most of the actual construction is contracted out) and it does not directly supply the building materials or technologies that it installs, the company’s engineers focus on what technology will work best, not which is “in-house.” In this evaluation process, each of the technologies that the company implements is evaluated and tested before it is used on large projects, often through demonstrations on Chevron’s own facility sites. Over the past decade, the company has used technologies from solar thermal and PV to fuel cells, and less sexy options like more efficient pumps and motors for water supply systems and simplified lighting design. The company is constantly evaluating new technologies to meet the demands of changing work environments and project requirements.

3. Identify ways to provide the capital necessary to fund energy efficiency projects

Simple –

• Step 1: Identify available rebates and grant programs applicable to the project.
• Step 2: Determine the amount of internal funding that is already available (for example, existing bond funds)
• Step 3: Find financing – Prepare a Request for Proposals and send this request to financial institutions for bids.

Each step is completed with the help of the Chevron Energy Solutions finance staff. Granted, this work is not altruistic – the company makes money when a project is executed successfully.

4. Forge alignment between utilities, regulators, government agencies, manufacturers, and energy consumers

Unlike many Energy Service Companies (ESCOs), Chevron Energy Solutions’s external projects are almost exclusively in the public sector and federal markets. According to President Jim Davis, this decision was made because these organizations typically do not have the budgets and internal staff to handle sweeping efficiency overhauls.

For example, in a K-12 school district, staff members might be dedicated to identifying ways to build new classrooms or successfully teach the same number of children with fewer resources. But, it is rare to find staff assigned to identifying energy conservation and efficiency opportunities. Interestingly, by reducing utility bills, new classroom facilities could be easier to fund. As a part of Chevron Energy Solutions’s work, the company focuses on how to provide a comprehensive plan for these organizations. For example, the company can help to find ways to pay for replacing leaking roofs on your classrooms through energy efficiency savings.

5. Foster innovation in the development and deployment of next-generation energy-efficiency technologies to ensure ongoing gains

Chevron Energy Solutions often meets with venture capital (VC) firms to discuss potential up-and-coming technologies that it might be able to test on its facilities to establish if it might be a good fit for future project. While it does not directly invest in any of these companies, its sister company – Chevron Technology Ventures – does. And, even when Chevron has no hand in the capital behind new technology ventures, the company tries to be active in the design process for potentially beneficial technologies. According to President Jim Davis, his company prefers to be involved in the design processes early on, to help them foster their progress in a way that will increase the likelihood that Chevron Energy Solutions could use the technology in future projects.

Now, Chevron Energy Solutions is not an altruistic company whose sole aim is to help reduce society’s energy use and environmental impact. It is a business that’s first priority is to make a profit for Chevron’s shareholders. The results of this can be seen in the fact that Chevron Energy Solutions has chosen to focus primarily on the electricity side of the energy industry, effectively skirting many potential opportunities for reducing energy consumption.

In the electricity world, Chevron has relatively little to lose. Granted, a reduction in electricity demand in the US could result in less demand for natural gas or oil because both are used as electricity generation fuels. But, with natural gas sitting at $4 (per MMBtu) and oil only supplying 3% of the total annual generation in the US, the potential impacts are much smaller than if Chevron Energy Solutions focused on transportation efficiency.

So, when Chevron Energy Solutions designs proposals for its external customers that will reduce a building’s energy demand, their project is unlikely to lead to significant negative impacts on their parent company’s bottom line. By making this choice, Chevron Energy Solutions has been able to avoid internal turf wars. The company has also left many opportunities open for other businesses that might focus on energy efficiency strategies that directly reduce energy demand related to transportation sector activities.

Internally, the story is a bit different but the result is the same. At many Chevron facilities, the oil and gas that is produced on site is used directly to meet the energy needs in the facility. According to President Jim Davis, there is a strong motivation to reduce the amount of product consumed on site. Because, for every unit of oil or gas that is consumed instead of being shipped, Chevron has lost a piece of merchandise that could be sold.

Since it was founded in 2000, Chevron Energy Solutions has experienced an average growth rate of 20% per year. Perhaps the main message that this gives us is that an integrated strategy for pursuing energy efficiency can pay off. And, that the best unit of energy is often the one you do not have to supply at all.

Photo Credit:

1. Photo of Colorado Capital Complex at night by Chevron and used with their permission.
2. Photo from inside Fort Detrick’s Central Utility Plant (CUP) by Chevron and used with their permission
3. Photo of classroom in Chicago area school by Chicago 2016 Photos and used under this Creative Commons License.

In September, headlines erupted when the solar company, Solyndra, announced that it would be filing for bankruptcy just 2 years after the company received $535 million in federal loan guarantees under the Recovery Act. The situation quickly led to questions about why this company failed. And, according to recent discussions and testimony by energy Secretary Chu, the root cause might be found in an overlay of softening solar demand in Europe and more than $34 billion in Chinese subsidies. This combination might have led to a market state where Solyndra simply could not economically compete.

Over the past 18 months, it appears that the Chinese Development Bank has extended more than $34 billion in credit lines to Chinese solar companies. This subsidy program, combined with a softening in European demand, contributed to a 27% drop in the price per kilowatt for solar panels. As a result, Solyndra’s CIGS technology was unable to complete with China’s traditional crystalline silicon photovoltaic (PV) cells.

The U.S. Department of Commerce has announced that they will be opening an investigation into Chinese solar manufacturing trade practices. Specifically, Commerce’s International Trade Administration (ITA) will be looking to see if Chinese solar manufacturers have been dumping illegally subsidized PV panels into U.S. markets. This investigation is the result of a series of petitions submitted by SolarWorld and their six (unnamed) partners, which claims that the Chinese subsidy of their company’s solar companies might have allowed them to dominate U.S. solar markets enabling a flood of cheap imported panels. The results of this investigation will include a determination as to whether or not these subsidies violated international trade laws. Preliminary findings and decisions are expected to be released in mid-January.

If Chinas’s solar subsidies are found to violate international trade laws, the fall of Solyndra could be re-classified as a casualty of unethical practices by a foreign entity. This could cast a new light on the company’s bankruptcy. And, help to explain why this company went under despite sound technology and financial backing.

There are arguments both for and against condemning China’s heavy subsidy of its solar companies. On the one hand, these subsidies have allowed for huge growth in the Chinese solar industry, which now accounts for three-fifths of the world’s solar panel production. This growth has allowed Chinese manufacturers to achieve enormous economies of scale that has led to an almost 2/3 drop in the price per kilowatt for solar panels since 2008 (with a 27% drop in just the last 18 months alone, according to Secretary Chu). These low prices have helped enable the United States to install more solar capacity, and to reap the associated economic and environmental benefits.

But, those against the dumping of heavily subsidized products into the market argue that this practice is unsustainable and will hurt U.S. markets in the long term. By artificially forcing the price of solar to go below what U.S. solar manufacturers can achieve (in the absence of their own set of government subsidies), China can effectively demolish the U.S. manufacturing capacity by gutting their customer base. While this might spell positive things for U.S. solar capacity growth, it could lead to a Chinese monopoly in the industry. This lack of competition could then allow China to control the world’s solar market.

Photo Credit:

1. Photo of solar panel by Andreas Demmelbauer and used under this Creative Commons License.

Note:

Previous Scientific American coverage of the Solyndra bankruptcy by David Biello (here) and Melissa C. Lott (here)

[Originally published on 11/18/11 on Scientific American's Plugged In]

Last summer, Castlen Kennedy went on a 10-day, 2,500 mile roadtrip from Austin, Texas to Boston, Massachusetts. Driving with her friend, Cheryl Dalton, Castlen drove through 13 states in this 10-day period, all in the comfort of a Chevy Tahoe that had been converted to run on natural gas, in addition to gasoline. Over the 2,500 miles, Castlen and Cheryl managed to drive exclusively on natural gas, saving about 22% in total fuel costs and 25% in carbon dioxide (CO₂) emissions compared to a gasoline vehicle. And, they showed how this alternative fuel can work even in the face of limited infrastructure.

The “chicken and the egg” problem is often cited as being a killer of alternative transportation fuel proposals, including natural gas. For shorter trips, owners can fill their tanks with natural gas or charge their batteries with electricity in their own garage. But, alternative fuel vehicle owners can face difficulties when going on a roadtrip that requires them to travel longer distances.

Today, the transportation sector is optimized for petroleum-based fuels. There are nearly 130,000 fueling stations around the country where on can fill their vehicle with gasoline and (often) diesel. But, in most cases, the infrastructure doesn’t currently exist for alternative fuels on a large scale, a notable exception being the E10 that can be found at almost every filling station thanks to federal regulations. For example, there are only about 1,000 natural gas filling stations throughout the United States, which can pose a problem to natural gas vehicle owners.

During their roadtrip, Castlen and Cheryl showed how one can successfully navigate through the limited infrastructure problem (with a few sacrifices in spontaneity). While their Tahoe had the ability to run on gasoline, they were able to use natural gas exclusively for their 2,500 trek from Austin to Boston. And, since they were followed on their journey by a gasoline-only Chevy Avalanche (running with the same engine and chassis as the Tahoe), Castlen and Cheryl were able to provide a real-world comparison of natural gas versus gasoline for long distance travel.

I recently spoke to Castlen about her trip, to get her perspective on the lessons learned from this experience.

MCL: Could you tell us a bit about how the idea for this trip came about?

CK: As a graduate student studying policy and geosciences, natural gas – in particular shale gas – was being discussed regularly in the classroom. I was also working part time for an oil and gas producer where the impact of the shales and the increase in domestic supply had sparked conversation of new and increased ways to utilize natural gas – transportation was one of those options. I decided to explore natural gas as a transportation fuel for my thesis research and decided an actual on-road experiment would add a personal narrative to my research.

MCL: Why did you decide to use compressed natural gas (CNG) as your fuel for this trip?

CK: CNG is an alternative fuel and while I had read plenty about the advantages and disadvantages I wanted to experience them first hand. I knew the fuel burned cleaner and was cheaper than gasoline, but the lack of refueling stations presented a serious challenge for natural gas vehicles.

MCL: What were you hoping to learn from this experience?

CK: Discussions in the classroom and at work, coupled with the national attention that Natural Gas Vehicles (NGVs) were getting through ideas such as the “Pickens Plan”, focused on the NGV application for heavy duty and fleet vehicles – or those that tend to have lower payback periods. I was curious as to whether or not NGVs may be a viable option in the passenger vehicle market, and wanted to determine for myself whether or not the benefits outweighed the drawbacks. I also wanted to document the story and allow others to follow along as I tried to make the journey.  I used a website where I maintained a blog and used social media to share my experiences along the way.

MCL: If you plot the driving route from Austin to Boston using Google Maps, it shows a total distance travelled of 1,958 miles. Why did you choose the 2,500 mile route?

CK: There are approximately 1,000 compressed natural gas (CNG) stations in the country, compared to nearly 130,000 gasoline stations. In order to go from CNG station to CNG station and refuel, I had to travel out of the way in some instances.

MCL: Did you have any trouble during the drive – for example, when trying to fill up the Tahoe?

CK: The station equipment varied a little from station to station. For example, some of the new stations were easier to use – at some stops it took a little longer to figure out how to operate the equipment.  Another problem we ran into was access at some of the stations. Not all CNG stations are open 24 hours or to the public for that matter, so its important that drivers know the details of each station before they arrive. I called each station several times before the trip to confirm and reconfirm their hours, public access and what forms of payment they accepted.

MCL: What were the main things that y’all learned about using CNG as a transportation fuel?

CK: We had a similar vehicle (same engine and chassis) follow us but run on gasoline so we would have some comparative data. The CNG vehicle saved about 24% on fuel costs, averaging 11 cents per mile in total cost, while the gasoline vehicle averaged 14 cents per mile.  I also had an emissions test performed on the vehicle and learned that there was a 25% reduction in CO2 emissions [compared to the gasoline vehicle].

Total trip data:

MCL: If the United States were to move toward a higher number of natural gas vehicles, what big-picture changes would need to be made?

CK: Infrastructure is the biggest challenge. Vehicles need places to refuel. There is an effort underway that focuses on [access to CNG for] heavy-duty (HD) trucks and plans to build out infrastructure to support them. As these stations pop up to support the HD market, the full market will benefit from increased refueling stations.

Texas, for example, recently passed legislation to encourage the heaviest trucks on the state’s major interstate’s to convert to natural gas, and even set up a grant program to help cover the cost of station development. In addition, the NAT GAS Act, currently pending in the US Congress, would offer incentives for both HD and light duty vehicles and help speed up the conversion of vehicles to natural gas.

MCL: Any big barriers currently sitting in front of higher use levels of natural gas for the U.S. transportation fleet?

CK: Infrastructure as mentioned above, but the other major challenge is the incremental cost of NGVs over traditional gasoline or diesel-powered vehicles. The vehicles cost more up front, even though operation costs are lower because of the reduced fuel costs. This is why HD trucks are such an ideal fit – they travel more miles than the average passenger vehicle, and can get a faster payback. As more are ordered we hope to see the incremental cost to come down. The same can be said for the passenger vehicle market.

MCL: Thanks, Castlen.

You can view Castlen’s video from the conclusion of her trip below. In it, she briefly discusses the challenges you face when trying to drive an alternative fuel vehicle across the country.

Photo credit:

1. “Tracking the Trip” graphic from the Green American Roadtrip blog and used with permission

In February 2010, Bill Gates stood up and presented a TED talk on what we can do to improve the lives of the poorest 2 billion people on the planet. Perhaps surprisingly, this talk was not on vaccines or seeds, but instead was focused on how energy – and the carbon dioxide emitted by our energy systems – impacts this population. And how we need “energy miracles,” though innovation that will lead us to zero carbon dioxide emissions.

Over a period of 18 minutes and 50 seconds, Mr. Gates discussed the importance of keeping the price of energy low (in order to reduce poverty and spur growth) while simultaneously reducing the carbon dioxide emissions from our energy supply to reduce the impact of global warming on the world’s most susceptible populations.  And, in fine engineering style, Mr. Gates framed his entire argument with a simple (and powerful) equation:

According to this equation, carbon dioxide (from our energy supplies) is a function of four things – people, services, efficiency, and CO2 emissions per unit of energy.

• People (P) refers to the number of people living on the planet, with a magnitude of about 7 billion today and an expected value closer to 10 billion by 2050.
• Services (S) refers to all of the services that we use, including things like the food that we eat, clothing that we wear, electronics, heating, transportation, etc.
• Efficiency (E) refers to the energy used for each service. This number has actually been dropping over time, though it is nowhere near zero (and probably can’t be)
• CO₂ per unit of energy (CO₂) refers to the amount of carbon dioxide that is released into the environment for each unit of energy that is demanded to provide the services that the world’s population uses.

This equation shows us that, if we want to bring total energy-related carbon dioxide emissions to zero, only one factor that can get us there, CO₂ per unit of energy. (Note: technically, bringing the world’s population to zero, eliminating energy use for services, or getting rid of services could achieve the same impact, but it is unlikely that we would want to do this).

One could argue that we do not need to bring our emissions all the way to zero in order to avoid the biggest negative impacts of global climate change. But, according to Mr. Gates, this argument does not work:

“If you sum up the CO2 that gets emitted, that leads to a temperature increase, and that temperature increase leads to some very negative effects. The effects on the weather and, perhaps worse, the indirect effects, in that the natural ecosystems can’t adjust to these rapid changes, and so you get ecosystem collapses.

Now, the exact amount of how you map from a certain increase of CO2 to what temperature will be and where the positive feedbacks are, there’s some uncertainty there, but not very much. And there’s certainly uncertainty about how bad those effects will be, but they will be extremely bad. I [have] asked the top scientists on this several times, do we really have to get down to near zero? Can’t we just cut it in half or a quarter? And the answer is that, until we get near to zero, the temperature will continue to rise…This is something that has to get to zero.”

So, how can we get our emissions to zero? According to Mr. Gates, this will require some “energy miracles.” But, in using the world “miracles” he is not saying that we have to achieve the impossible:

“…when I use the term miracle, I don’t mean something that’s impossible. The microprocessor is a miracle. The personal computer is a miracle. The Internet and its services are a miracle. So, the people here have participated in the creation of many miracles. Usually, we don’t have a deadline, where you have to get the miracle by a certain date…this is a case where we actually have to drive full speed and get a miracle in a pretty tight time line.”

How do we get to this miracle? According to Mr. Gates, we need to start by investing in more research and simultaneously create a market that incentivizes reducing carbon dioxide emissions from our energy systems.

You can view Mr. Gates’s entire TED talk, with Q&A by Chris Anderson below, or on the TED talks website or YouTube channel.

Photo Credit:

1. Picture of Bil Gates’s equation from his February 2010 TED talk from the youtube video found here.