Portsmouth based carbon capture firm completes pilot

Coal fired power plant in Bow, NH

I came across a recent report by SeacoastOnline about a company in Portsmouth called Powerspan that's doing some pretty cool work with carbon capture technology. Apparently, the firm just completed a pilot program on a 1 megawatt coal plant in Ohio that helped prove out their technology and lay the groundwork for a future commercial deployment.

Carbon capture is a technique that helps clean up the output from coal-fired power plants. In NH, PSNH is working on cleaning up emissions from our largest coal plant, Merrimack Station, but this effort will only remove mercury and sulfur dioxide, not carbon.

As I've mentioned before, for lots of reasons, coal is likely to be an important part of our energy mix for decades to come. Anything we can do to economically clean up the output from coal power plants is a good thing. It's neat that we've got a company right here in the seacoast of New Hampshire that's helping to solve this tough worldwide problem.

Although this is promising technology, Powerspan still has some big work ahead of them, especially in terms of economics. The firm's press release on the pilot indicates that using their technology will cost around $50 per ton of carbon removed from a coal plant's output. While this is apparently a breakthrough compared to competing carbon capture technologies, $50 per ton is still nothing to sneeze at.

Some very rough power generation costs (using $20 per ton for coal emissions)

For some perspective on that cost, consider the data in my power generation economics post from last July. In one of the later graphs, I priced carbon emissions at $20 per ton to show the impact of emissions on the economics of coal generation (see graph above). Generating a megawatt hour of power using coal can easily produce a ton of carbon emissions, so adding in a $50 per ton charge instead of $20 would significantly increase the cost of power from coal. In fact, adding $50 a ton for carbon capture would move coal's fuel and operating cost from 4.5 cents to 7.5 cents per kWh in the graph above. That could make coal uncompetitive versus other approaches.

Still, we shouldn't be too negative about the costs of carbon capture. The technology is still in its infancy and we're likely to see major breakthroughs along the way. Also, as long as we're subsidizing other emerging clean power generation technologies like wind and solar, it seems only right that carbon capture is included in the mix.

IMO, we should think of investing in power generation technology the way we think about personal investing. We should take a "portfolio" approach and diversify in order to minimize our risks and maximize opportunity. Even though wind and solar are showing great promise right now, we shouldn't put all our research eggs in one basket.

It's going to be a long haul to get to a cleaner energy future and I don't think anyone really knows what that future will look like. Personally, I'm glad to see these local folks working hard and smart to help us find the best way there.

Electricity in NH - Residential Solar PV

Thanks to generous federal and state incentives, solar PV electric systems are currently ON SALE in NH for almost 50% off!

Energy efficient solar home built by Heather Parker in Portsmouth, NH

New Hampshire resident Heather Parker included solar photovoltaic (PV) electric modules as part of her ambitious project to construct a super-efficient solar home in Portsmouth, NH.  This new home lives and breathes energy efficiency, right down to its bones.  The house sports a passive solar design,  super-insulating materials throughout, and a solar-thermal hot water heating system.  Each of these systems is interesting on its own, and you can read more details here and here.  But for this post, I'd like to focus on the home's solar photovoltaic electric system.

Solar Electric Systems - A case study

The photo above shows the array of 16 SunPower 210 watt PV modules, mounted on the right-hand side of the home's roof.  The 3.4 kW solar electric system was designed and installed by ReVision Energy, of Liberty, Maine.   Because Heather's home is so efficient, this 3.4 kW system should provide a large portion of the home's annual electricity needs.

inverter (right), solar meter (top left), PSNH  meter (bottom left)

In the photo above you can see the SunPower 3000m inverter, which was mounted on an outside wall to conserve indoor living space.  In addition to the inverter, ReVision Energy also installed a separate solar meter between the inverter and the home's main circuit panel.  Just underneath the solar meter is PSNH's electric meter.  This appears to be an Itron model C1S solid-state watt meter.  According to Itron's website, these meters can be equipped with optional "personality modules" to provide advanced features such as time-of-use (TOU) metering,  load profiling, and RF-transmission.

PSNH owned Itron C1S Digital Watt Meter

Solar Electric Systems - Price trends and sizing

The cost of photovoltaic (PV) solar modules has dropped rapidly recently and the efficiency of PV systems is ever increasing.  You'd think that generating clean electricity from the sun would be an economic no-brainer.  Well, as usual, it's not so simple.

According to the SolarBuzz.com retail price summary, PV modules currently retail for around  $4.34 per watt in the US.  An inverter to convert the system's DC output into AC that can be tied to the power grid runs another $.71 per watt.  Add in the cost of other supplies and installation and the total cost for a complete solar electric system can easily range between $6 and $10 per watt.   A new PV solar electric system, sized at 5kW-7kW to cover a good portion of a typical NH home's electricity usage of 7,000 kWh per year, could easily cost upwards of $50k.  That's a serious investment!  Of course, the easiest place to start reducing costs is with lower consumption, which Heather's house shows is possible.  Thanks to its super energy-efficient design, it uses about half the power that a conventional house uses each year.

OK you say, the upfront cost for a new solar electric system may be high, but it's a one-time charge and in exchange you get clean and free energy for years to come.   Also, in New Hampshire there's a $3 per watt rebate from the RGGI renewable energy fund, administered by the state of NH and the NH Public Utilities Commission (up to $6k max).  In addition, residential installations can qualify for a federal tax credit worth 30% of the installed cost of the system.  With all these great incentives, it's should be much easier for PV solar electric systems to be economical, even here in New Hampshire.

Running the numbers - Can a PV project make economic sense?

To find out how economical a new solar electric system might be, we need some data.  We need to determine how much electricity the system will generate.  A system that's rated at 5 kW, can only produce that peak output with perfect conditions.  As with other electricity generation approaches, we need to know the system's "capacity factor" or it's annual production rate.  Also, solar panels produce DC current that must be converted to AC for home and electrical grid use.  This conversion, along with other system losses, reduces efficiency.  We need to somehow find a way to take all this into account and extrapolate from raw system capacity into a realistic estimate of actual kWh production.  Then we need to somehow convert that production into dollars so we can perform a discounted cash flow analysis to see if it's all worth it.

Sound like a lot of work?  Well, as usual, there's an app for that.  No, not an iphone app.  I found a neat website that has the perfect tool for conducting financial analysis on residential PV projects.  It's called PVCalc.  This great tool integrates data on regional solar radiation, local electricity rates, and state and federal tax credits to provide users with an estimate of how much money a PV project can save each year and over its lifetime.  PVCalc is based on a calculator made by the National Renewable Energy Laboratory (NREL) called  PVWatts. Although PVWatts is very similar to PVCalc, I found the user interface on PVCalc to be much friendlier.  (FYI, I used this advanced version of the tool for the analysis below)

Composite of output from Heather's Sunpower 3000m inverter

As I said before, Portsmouth solar home owner Heather Parker was generous enough to share the details of her solar electric project, so we can use this "real world" data in our analysis.   The image above is a composite of four photos that shows the alternating output from Heather's DC to AC inverter.  I took these shots late in the afternoon near sunset, so the array was only producing 527 watts at the time.  In the mid-afternoon, the array produces as much as 2,700 watts.  Another inverter display shows that the system produced a total of over 9 kWh of electricity on the chilly November day I visited.  You can also see that since the system was installed a couple of months ago, it has produced a total of 735 kWh of electricity.  Finally,  the home's reduced intake of electricity from PSNH has already lowered carbon emissions from local power plants by an estimated 1,250 pounds.  

That all sounds good so far.  The environmental benefits of solar electric systems are undeniable.  But to figure out the economics, we need to do some number crunching.  For that, we turn to the PVCalc tool.  Here are the inputs that I fed into the tool (detailed descriptions of each input):

• Location - Portsmouth, NH 03801 - Pease Intl TradePort
  
• Electricity from PSNH, rate R - residential service
  
• Array type is fixed
  
• 3.4 kW DC rating
  
• 77% derate factor (more info on derate factor)
  
• 45 degree array tilt (on roof)
  
• 155 degree azimuth (direction roof faces)
  
• $23,450 installed system cost
  
• $840 annual electric bill (before project)
  

So how will Heather's project fare?  Well, as you can see below, the summary information tells us right away that this project has great promise.  If the analysis is correct, the payback time is just over 15 and a half years and the money saved over the 30-year life of the project is estimated at over $23k.   But those results just scratch the surface.  Take a look at the tool's output below:

Running the Numbers - Digging into the PVCalc output

Summary information and estimated annual savings

System Cost after Tax Credits and Rebates

Lots of good stuff in the PVCalc output, that's for sure.  You really can see that the tax credits and rebates are an important part of the equation.  In Heather's case, the credits covered almost 50% of the system's installed cost.    For fun, I manually calculated a break-even kWh price for the project.  It worked out to 22.1  cents per kWh without the tax credit and rebate factored in and 11.5 cents per kWh after subtracting them out.

Running the Numbers - Discounted cash flow analysis 

The PVCalc tool also does some sophisticated capital project analysis.  In particular, the tool performs a discounted cash flow (DCF) analysis to compute an internal rate of return (IRR) and net present value (NPV) for the project (these are shown on the amortization tab).  You may recall that I mentioned DCF when we did our analysis of commercial wind projects in NH.  When analyzing capital projects, even home solar electric projects, DCF is the gold standard because it factors in the idea that a dollar received today is worth a lot more than a dollar received in 30 years.

Estimated yearly cash flows for project (non-discounted)

To compute a net present value, the project's future cash flows are "discounted" or adjusted to "today's value" dollars.  Next,  these "present values" are added together and the initial project cost is subtracted from the sum or netted out.   If the resulting NPV is positive, the project will yield net savings (because the present value of future cash flows is greater than the project's cost).  If NPV is negative, the project is not likely to be economical.  Also, the higher the NPV, the better.  NPV is computed using a "discount rate" that takes into account the project's riskiness.  Since home energy efficiency projects are pretty low risk, a discount rate of 5% (which is the PVCalc default) seems appropriate.  It might even be little on the conservative side, but better safe than sorry.

Running the Numbers - What if things don't go as planned?

Below I made a table that shows what happens to the PVCalc outputs when some of the key input parameters are changed.   This "sensitivity analysis" helps identify how dependent the project's success is on the accuracy of the inputs.  Since it's impossible to predict the future with certainty, sensitivity analysis is helpful to show whether a project will still be economical if things don't turn out exactly as planned.

Right away, you can see that success for Heather's project is highly dependent on how fast PSNH's electricity rates increase over the life of the project.  The tool's default assumption is a 5% annual increase in rates.  The table above shows that with a more modest 3% annual increase, the NPV of the project declines significantly.  That's no surprise, since the value of the electricity produced by Heather's solar array is directly related to PSNH's electricity rates.  Still, even with a very modest 3% annual increase in rates (we wish!), the project still has a positive NPV, which means it will be economical even in that unlikely circumstance.  On the flip side, should electricity rates increase by 7% a year, the project's NPV would increase to nearly $9k, more than double the NPV of the baseline scenario.  A 7% rate of increase in electricity prices may sound high, but when you consider expected inflation rates,  the long-term outlook for fossil fuel prices, and pending carbon-pricing initiatives, 7% doesn't seem far-fetched at all.

You can also see from the table above that the system's derate factor has a huge impact on the project's economics.  The derate factor represents the overall efficiency of the system.  The solar array's raw DC output is multiplied by the derate factor to determine net electricity production, so the higher the derate factor the better.  With a 69% derate factor, instead of the 77% default, the NPV practically drops in half.  Conversely, with an 85% derate factor, the NPV increases by nearly 50%.  This shows that the PV array's nameplate rating is only part of the story.  The efficiency of the whole system has to be considered.  As an example, according to this NREL derate calculator,  increasing inverter efficiency by just 3% and keeping the panels from getting soiled could increase a system's derate factor from  77% to over 83%.  

Next, I varied the azimuth angle to see what that would do.  When Heather was deciding how to position the house on the lot, she had a dilemma.  By positioning the house so the roof faced south east instead of due south, she got a much nicer view.  However, Heather knew that facing the solar array at 155 degrees instead of due south at 180 degrees would reduce her available solar energy.  Using PVCalc, we can see that this decision only dropped the NPV by $500 and still left her with plenty of net savings.  Considering the nicer view, it seems like a smart tradeoff.  I also experimented with a 40 degree roof pitch to simulate what mounting the array on a 10/12 roof would do, compared to using Heather's 12/12 pitch roof (45 degrees).  That change actually resulted in a slight improvement in the NPV.  

Finally, I experimented with some financing options to see how they might affect the project's NPV.  I assumed cash payment for all my earlier scenarios, but I wanted to see how using a home equity loan would impact the results.  Since a home equity loan is usually tax deductible, part of the interest paid on the loan is "refunded" and that will defray the project's costs.  You can see that with a 5% home loan, the NPV of the project increases from $3,719 to $4,971.  That increase in NPV is largely the result of the tax break on the financing, as shown on the last page of this pdf report.  To do a complete cash vs. finance analysis, you'd need to also factor in the after-tax return you expect to receive by investing the cash instead of using it to pay for the project.

Solar Electric Systems - What's the bottom line?

As you can see, varying these input parameters causes the NPV to bounce around all over the place.  This is why sensitivity analysis is so important.  It let's you evaluate a project under a range possible of outcomes.  Based on this analysis, it's a pretty good bet that the project's NPV will fall somewhere between $0 and $9000, and any of these outcomes would be great for Heather.   Our sensitivity analysis has shown that in the face of many uncertainties, the project's economics are quite robust.

So after lots of number crunching, it looks like Heather's solar electricity project is a winner, both for the environment and for her pocketbook.  Even if some of her assumptions about the system's efficiency or PSNH's future electric rates turn out the be wrong, it's very likely that this project will still be a great investment.  Plus, no matter how you slice it, dumping 2 tons less of carbon into the air every year can't be a bad thing!

Links:

  PVCalc Home

  PVCalc Output w/no financing (pdf)

  PVCalc Output w/loan (pdf)

  Yarmouth, ME high school real-time PV solar output

  NHSEA Green Building Open House 

  Green Alliance Blog Post    

  NY Times article - Is Solar Power Expensive or Competitive

News You Can Use - Appliance Rebate Edition

Kenmore high-efficiency washer and dryer

Yesterday, our washing machine died after a relatively short life of only six and a half years.  It's one of those newfangled front-loading machines.  These new machines can really get clothes clean and they're great from an energy efficiency standpoint, but IMO they're much less reliable than the old-fashioned top-loaders of yesteryear.  Our last top-loader gave us around 15 years without a service call before it died.  Granted, my sample-size is small, but I'm beginning to wonder if the higher capital costs and replacement costs of these new designs negate all the efficiency savings benefits.  Replacing your washer twice as often is expensive and can't be very environmentally friendly.

Anyhow, despite the fact that our old washer was energy efficient, I thought we might be able to benefit from the appliance rebate program that was part Recovery and Reinvestment Act of 2009 (stimulus bill).  Some have called the program cash-for-appliance-clunkers.  Unlike the auto cash-for-clunkers program, the appliance rebate program is administered by the states.  Each state is allocated funds for the program ($1.2 million for NH) and submits an implementation plan to the US Dept. of Energy for approval.

Now the bad news - well for me anyway.  New Hampshire decided to buck the national trend and try to be a bit innovative in their implementation of the appliance clunkers program.  Instead of offering rebates for air conditioners, refrigerators, washing machines, and other appliances, New Hampshire's Office of Energy and Planning decided to target the rebates at home heating equipment and hot water heating systems (including solar-thermal).  Their official press release notes that there's  already a state rebate program for energy efficient appliances, so targeting these new rebates toward heating and hot-water applications will give New Hampshire a bigger bang for the buck, energy efficiency-wise.  

On its face, the plan seems to make sense and it's always good to see New Hampshire leading rather than following the herd in terms of innovative state programs.  I'll try not to be bitter that Uncle Sam won't be helping to buy us a new washing machine.  

Hmmm.  Come to think of it, maybe a new thermal-solar hot water system might be nice - as long as I can get some help paying for it, that is...

Links:

  US DOE Recovery Act info for NH

  NH Office of Energy and Planning website

  NH OEP press release from Oct 15

  NH OEP program application to DOE

  NHBR article from Nov 6

Borrow a kill-a-watt meter from... the local library?

In Portsmouth now everywhere in NH, residents can "check out" a kill-a-watt electricity meter from the library as if they were borrowing a book.

I've blogged a few times about the kill-a-watt electricity consumption meter. This device is simple to use and helps track down power hungary appliances in your household to save money and reduce your carbon footprint.

The meter provides a real-time readout of the wattage consumed by an attached appliance and can also track power consumption over time. For example, you can plug your refrigerator into the kill-a-watt for 24 hours to see its daily power usage. Next, you can multiply the power usage by your electricity rate (say around $.15 per kWh) to get the daily cost of running your fridge.

One snag is that the device costs just under $25 and this initial investment can really eat into your potential savings. Portsmouth residents however, can "check out" a kill-a-watt meter from their local library as if they were borrowing a book.

Apparently, the city of Portsmouth is in a friendly competition with the city of Keene to see which town can inform more of their residents about how to reduce their carbon footprint. As part of the effort, two kill-a-watt devices were purchased for the library. It seems like a clever idea to increase awareness and to help residents save some money. Maybe other NH towns could follow this lead?

Here's a link to the Portsmouth Library's web page on the kill-a-watt.

UPDATE: It looks like Portsmouth wasn't the first town with this idea. Check out the comments on the above post for lots of other libraries doing it as well.

UPDATE2 (1/23/09): According to this tweet I just saw from PSNH, and this PSNH energy brief, apparently all NH libraries have kill-a-watt meters that can be loaned out. It's probably a good idea to call first though, since I'd bet these will be hot items.

News You Can Use - LCD TV Edition

I recently read an LA Times news report about new energy efficiency regulations that have been proposed in California for televisions.  The draft proposal by the California Energy Commission implies that TV manufacturers are not using the most efficient technologies available and could easily reduce the energy consumption of new TVs by almost 40% by 2013.  

I was skeptical to say the least.  Most new televisions use LCD technology that's an outgrowth of the computer laptop market.  Manufacturers of computer laptops have been relentless in their attempts to reduce laptop power consumption to improve battery runtime.  If there were any easy LCD power savings available, I was sure the marketplace would have already ferreted them out.  

So I decided to dig a little further into the draft proposal and I found my answer on page 10 of the report.  Although there's plenty of hand waving about potential innovations that might reduce television power consumption, the real reason why dramatic power reductions can be achieved without increasing cost is this:

Significant reductions in energy consumption can be achieved in Plasma and LCD TVs by adjusting the contrast and brightness screen settings by manufacturers before shipping TVs to the retailers. The power consumption of the TV drops significantly with screen setting modifications. On average, plasma TVs will consume almost 21 percent less power when set to a low power factory preset, sometimes called “movie” or “pro” settings.

Ok.  Now  we're getting somewhere.  Apparently, television manufacturers ship TVs to retailers with the brightness max'ed out.  This gives their TVs greater showroom appeal.  Unfortunately, it also causes the TV to consume more power than needed, and unless consumers lower the brightness once they get the sets home, power is wasted.

Now this is news I can use.  I decided to test out the theory with our Samsung LCD TV.   First, I measured the TV's power consumption with the default factory settings.  My trusty kill-a-watt meter showed a reading of 160 watts.  Next, I  adjusted the brightness to its lowest level.  Surprisingly, there was only a slight drop in power consumption, so I returned this setting back to its default.  Next, I noticed a "backlight" setting on the TV's display menu.  I adjusted the backlight from 5 down to 2.  With that, I saw a dramatic reduction in power consumption - from 160 watts down to 116 watts.  Given the lighting conditions in the room, this low setting seemed pretty workable.  

This simple change reduced power consumption by 44 watts per hour.  According to Wiki Answers (if it's on the Internet, it must true, right?), the average American watches over 8 hours of TV per day.  This means that the average household could save 128 kW per year of electricity (44*8*365/1000) or around $20.   

That may not sound like much savings, but when you consider that it's free money, and also consider the reduction in greenhouse gasses from reduced power plant emissions if everyone makes the change, it seems like it could be worth it.  Of course, now that we're armed with this new information, we don't have to wait for new regulations to start saving.

Electricity in NH - Star Island Edition

Ever dreamed of living off the grid, perhaps on a remote Island?

Star Island - Located seven miles off the coast of Rye, NH

If you've been out to Star Island, one of the Isles of Shoals, you know that it's one of New Hampshire's gems. Earlier this summer, my wife and I had the pleasure of returning to Star Island for a brief visit. Despite the Island's natural setting and the calming ocean breezes, the nerd in me couldn't help but contemplate the infrastructure required to keep this remote Island humming.

The Oceanic Hotel on Star Island

Star Island is home to an educational conference center that's run by the non-profit Star Island Corporation. Each summer, hundreds of conference attendees and vacationing day-trippers pour in, ready for a dose of Island living. The Island's nineteenth century Oceanic Hotel is quite rustic by modern standards, so much so that conference brochures describe the accommodations as "comfortable, but not modern." Still, the basics are well covered including electricity, indoor plumbing, and a fully equipped dining hall and snack bar.

Dining room and snack bar at the Oceanic Hotel on Star Island

Even providing just the basics can be a challenge, when you're seven miles away from the mainland. Water for the Islanders is supplied using a three-tiered approach including untreated seawater for outside washing and running the sewage treatment plant, rain water cisterns for showers and laundry, and a reverse-osmosis desalinization plant for potable water. All of the Island's wastewater is treated by an EPA approved wastewater treatment system. In addition to the water and sewer systems, the conference center provides meals for hundreds of guests which requires significant refrigeration and food preparation equipment.

All of these things require electricity, lots of electricity. In fact, according to Star Island Corporation's Island Engineer, Tietjen Hynes, during the peak season the Island uses about 1,500 kWh of electricity each day. Most of this electricity is produced by a pair of 125 kW generators that are powered by diesel engines. One generator is powered by a John Deere 4045 engine and the other by a CAT 3304b engine. To get an idea of the scale of these power plants, consider that they are about 25 times the size of a typical 5 kW emergency backup generator. In fact, the John Deere 4045 diesel has 4.5 liters of displacement and provides over 160 horsepower. Below is a sample photo of a generator that uses this engine.

So how much does it cost to produce electricity on Star Island? Island Engineer Hynes says that the generators consume around 100 gallons of fuel to produce the 1,500 kWh of electricity that's needed each day. The fuel must be brought in by boat, so Ill assume a $3.50-$4.00 per gallon delivered fuel price. That yields an "energy cost" of around 25 to 30 cents per kWh. That rate doesn't include capital costs or operating and maintenance costs which, given the short season and tough operating conditions, could easily add another 5-10 cents to that kWh rate. Even at this reasonably large scale, it's tough to even come close to power company costs with do-it-yourself electricity generation.

Given the remote location and the high cost of generating electricity with diesel, the Island seems like a great candidate for renewable energy sources like wind and solar. In fact, the non-profit that owns the Island has made a commitment to sustainability and has sought out ways to improve efficiency and reduce the environmental impact of their electricity production.

Elliott Memorial Building with five 125 watt photovoltaic panels installed

A few years ago, the Elliott Memorial Building was equipped with photovoltaic panels to provide power for the Island's winter caretakers. You can see the five 125 watt photovoltaic panels in the photo above. These are attached to a bank of eight 110 Ah deep cycle marine batteries and an inverter that converts the battery output to alternating current. The system provides the winter caretakers with the convenience of 24x7 ac power, without having to run a generator non-stop. According to Island Engineer Hynes, by using the solar panels and the batteries, the winter keepers are able to reduce generator run-time to just a couple of hours each day. It looks like the winter keepers have a more sophisticated version of the rudimentary blackout system I described in this earlier post.

In addition to the solar panels on the Elliott Memorial Building, the Island also has a new 5 kW Helix Wind S594 vertical wind turbine that was installed by Waterline Industries of Seabrook, NH.

Helix Wind S594 5kW vertical wind turbine

The turbine was just recently installed and the project has hit a small snag that shows just how tricky alternative energy systems can be when you're "off the grid." Island Engineer Hynes explained that the Helix turbine is intended to be used in grid-tied systems and must be fed relatively steady 60 Hz ac line power in order to produce electricity. This is a failsafe to protect utility workers from unexpected back-feeds on the power grid. Unfortunately, the Island's diesel generated electricity varies between 57 Hz and 62 Hz and this variation prevents the Helix turbine from reliably generating power. One other challenge in using wind power for commercial off-grid applications is that there's no option for net-metering, where unused power can be sold back to the utility. In off-grid applications, the turbine's output must be consumed when it's produced or stored in expensive and sometimes impractical battery systems.

Despite these issues, Ms. Hynes believes the new turbine will ultimately be used to provide electricity for the Island. She's working with Helix Wind and the distributor on a plan to connect the turbine to the existing solar battery bank and inverter to provide power to the Elliott Memorial Building and the Doctor's cottage.

View of the Helix Wind turbine and the solar panels on the Elliott Memorial Building

On nearby Appledore Island, the folks at the Shoals Marine Laboratory (SML) recently installed a Bergey 7.5kW wind turbine and 4.4 kW of photovoltaic panels to help reduce their generator fuel consumption. Although the prospects for the project are very promising, the project's cost was nothing to sneeze at, coming in at over $100k for just the wind turbine, tower, and related equipment.

Wind Turbine on Appledore next to WW II tower that houses weather instruments

Despite the minor technical snags and the somewhat high capital costs, the folks at Star Island and at the Shoals Marine Lab are proving that using renewables to generate standalone Island power is becoming more feasible as the technology continues to improve and prices continue to drop.

Cap and trade vs. a carbon tax

David Brooks over at granitegeek.org did a recent post about a great report at SolveClimate.org about cap-and-trade.  The three part series (part I, part II, part III) by Abby Schultz  analyzes what we can learn from already established pollution trading schemes.

Meanwhile, the WSJ and Felix Salmon's blog are rehashing the carbon-tax vs. cap-and-trade debate.  Salmon also did an earlier post in 2007 on why he thinks cap-and-trade is better that's also good reading.

Also, you may remember that I did a couple of posts on cap-and-trade and Waxman-Markey last month.

Personally, I'm not sure which approach is the clear winner, but my guess is that either could work if well implemented and either could be a miserable failure if botched.    In terms of simplicity and transparency, the carbon tax seems to win.  While for flexibility, cap-and-trade probably wins.  But IMO, that debate is moot.   Most political analysts believe that there's zero chance of any carbon tax bill passing in the US, leaving cap-and-trade as the only politically viable way forward (assuming you think the problem needs to be addressed - which I do).

I actually read through most of the cap-and-trade provisions of the Waxman-Markey Bill, and they appear to be painstakingly stitched together  to create a perfect blend of winners and losers so as to just barely get the bill passed.  For better or worse, I don't think a carbon tax bill would have been able to pull off such a delicate political balancing act.  Whoever said the legislative process was a lot like making sausage sure got that right.

Watts up with these CFL bulbs?

The other day, I was doing a check of our power outage gear and I encountered a problem with the power draw of some compact fluorescent light bulbs.  In the photo above, you might be able to read that it's a 20 watt bulb.  Even though the bulb is only a 20 watt bulb, because of some weirdness in how CFL bulbs work, the draw of the bulb can be considerably more than 20 watts (more later).

Don't get me wrong, CFL bulbs are great.  I have a zillion CFL bulbs installed all over the house, including some nifty recessed ones in our kitchen (see above).   We have 8 recessed lights in the kitchen and they used to have 85 watt incandescent bulbs.  When I switched over to CFLs, we went from 680 watts to only around 160 watts and we get roughly the same light.  Since this light is on for 6-8 hours a day, the savings are substantial.  You just can't beat the efficiency of CFL bulbs.

But back to my issue - well sort of.  First a detour.  While I was away from home in the winter of 2006, DW had to deal with a nasty 3-day power outage.  If it weren't for her ingenuity and persistence, we would have certainly had frozen pipes.  Following this near disaster, I purchased and installed a 5,500 watt generator.  It gives us water, heat, light, and a few other essentials whenever the power goes out.

I talked to my electrician and did some research on connecting the generator and found that most transfer switches (that allow you to plug a generator into your home wiring) are limited to just 6 or 8 circuits.  The way modern homes are wired, the actual draw from each circuit is pretty small and 5,500 watts can run a lot more than 6 circuits if you're careful about how you do it. 

I decided on this GenTran 50 amp transfer switch.  This is way oversized for our generator, but it gives us lots of options.  At first, I thought I'd need to be picky about which circuits I lit up when on generator power, but after some experience, I learned that as long as you pay attention to the big stuff (toasters, coffee makers, hair dryers, microwaves, etc), everything else is just noise and runs fine.  Of course, I make sure I switch on the circuits one at a time to ease the startup load on the generator.  Also, I installed voltage meters to go with the amp meters so I can watch the load levels.

This setup worked great during the December 2008 ice storm outage.  As great as it was to have, I was hesitant to run the generator non-stop.  It's loud and it seems wasteful to have it on all the time.  For us, running it in the morning for a couple of hours, and then again in the early evening for dinner seemed to be a good balance.   Also, when the power goes out for a short time, it doesn't make sense to haul out the generator and fill it with gas just for a 2-3 hour outage (which most tend to be).  

So to help with the time when the power is out and the generator is off, I picked up this Xantrex portable power pack (basically a battery and an inverter) to give us some light and a little power.  It works great and even though it was pricey (I got it on sale for around $120), it fills an important role.  It's great for camping and other remote power needs and I actually use it a lot more than the generator.

Since the power pack above takes 35 hours to recharge with the AC charger, I also wanted a smart battery charger that could do quick charging during my limited generator runs.  This 25/10/2 amp Black & Decker unit is currently on sale at the B&D outlet in Kittery for $27 and fits the bill nicely.  It's a smart charger that automatically adjusts its output to the battery, so it can really pour in the juice in a hurry.  With the 35 28 Ah Xantrex unit, it gets the job done in 2-3 hours instead of 35 (This isn't great for battery life, but it's workable in a pinch - I use the slow charger whenever I have time).

Also, while I was at the Black & Decker store, I picked up an additional power pack (this one has a 19 Ah battery, with DC only output) for $41 on sale.  I couldn't let such a great deal go, and I have a small dc/ac inverter that I can use with it.  This setup can give me some additional runtime, or power a couple laptops or a small tv.  It also can be used to jumpstart a car or inflate tires.

Anyhow, back to my CFL problem and the power outage test-run I was doing.  I wanted to be able to really light up a room with the non-generator power backup system.  Not just with a faint candle glow, but with bright light.  The Xantrex power pack, with its 28 Ah battery (~330 watts for 1 hour), should have no problem doing that, even for several hours, as long as I use efficient CFL lighting.  So I dusted off an old 3-socket lamp from the basement and inserted 20 watt CFL bulbs (see first photo) in each of the sockets.

I expected no problems with this setup, since the power pack can sustain 480 watts of draw and the 3 bulbs added up to only 60 watts.  Unfortunately, I was wrong.  When I hit the switch I was greeted with a sustained flicker from all three bulbs.  Confused and perplexed, I did what any guy would do.  I tried it again, and this time it worked.  Then I let it rest and tried it again, and got flicker.  Finally, I unscrewed one of the bulbs and tried yet again and it lit fine.  Next, I screwed the third bulb back into its socket.  It also lit up fine and now the room was as bright as day.  For fun, I hooked up a 100 watt fan (because I could), and sure enough, it ran fine along with the lights.

Hmmm, I thought.  That doesn't make sense.  I tore everything down, let everything rest a bit and repeated my experiment.  Sure enough, same result.  What was going on I wondered? Why the intermittent results with the 3-bulb setup?

I set out to track this thing down with some help from google.   Within a few minutes, I learned about something called "Power Factor" and the issues that the low power factors of many CFL bulbs can cause.  Power factor has to do with how a CFL bulbs sips  juice from its 120 volt AC input.  After reading a bunch of stuff, including this thread on an alternative energy site, I thought I had it figured out.  

But on reflection, it didn't quite make sense.  The inverter I was using to generate the AC can provide almost 10 times the needs of the three bulbs.  Even taking the power factor issue into account, along with other inefficiencies, the math said this should work.

Then I found an even more technical post about CFL bulbs and power factor. This one gave me the clue I needed.   The post is very technical, but it contains a key piece of info - How much instantaneous current does a 20 watt CFL draw?  The answer sure surprised me, and it explained my problem.  The scary looking waveform labeled "Tek Run" that's about mid-way down this page shows that a 20 watt CFL can draw as much as 200 watts of instantaneous current.  Multiply that times 3 and I'm right at the limit of my system, and my guess is that this is the issue that I had.  I knew that inductive loads like big motors can have a huge startup draw, but I never would have guessed that a CFL bulb could draw this much peak current, even if only for an instant.  

Electronics in the base of a CFL - courtesy of wikipedia

Apparently, the CFL draws a lot of juice for part of the time, but then nothing during the rest of the time.  My guess is that this peak current is even higher at startup, especially when I look at the size of the capacitor (black cylinder)  in the photo above.  It may be that the inverter in my power pack isn't very robust and although it had enough juice, it just couldn't hold it together well enough to get all three bulbs going on the first try.  

Anyhow, it seems that when using smaller inverters and multiple CFLs, things may work better if they're not all turned on at once.  Incidentally, once I got the bulbs on, I left them on for over three hours before the inverter cut out due to a low battery.  That was an hour or two less than theoretical max, but considering the draw of the inverter itself, as well as other inefficiencies, and the fact that the battery is a couple of years old, it seemed about right.

Electricity in New Hampshire - Cap and Trade update

Ok.  Now that I've done a quick primer on what cap-and-trade is all about, I'll dig into the latest news out of Washington on the Waxman-Markey energy and climate bill.  The bill is a cap-and-trade carbon emissions bill modeled after similar legislation enacted in Europe. 

Recently, the Congressional Budget Office (CBO) released a report about the expected costs to the average family of the proposed legislation.   As it happens, the results of the study are less interesting to me than one of the inputs to the study.  The main input that surprised me was the CBO's estimate of  the cost of a 2020 permit to release a ton of carbon emissions.  Their models have it priced at $28.  That's obviously a big difference from the near term $3.23 per ton pricing we're seeing for the Regional Greenhouse Gas Initiative (RGGI) auctions.  It makes some sense of course, because the number of carbon allowances is expected to decline over time.  But even though I've seen estimates as high as $10-15, I hadn't seen a credible source such as the CBO publish a number so high.  To make matters worse, the CBO is projecting emissions allowances will cost even more in the years following 2020.

The impacts of new carbon legislation are likely to be felt most from PSNH's Merrimack Station and similar coal fired power plants.  As I've posted before, the 496MW Merrimack Station is an important part of PSNH's power generation portfolio.  It's also one of the largest sources of carbon emissions in the state.  The plant generates around 3 million megawatt hours of power and emits about 3.5 million tons of carbon each year.  For comparison, a natural gas plant would emit just over half as much carbon to produce the same amount of power.

When the results of the latest RGGI auction came in at $3.23 per ton of carbon emissions, things looked relatively good for Merrimack Station w.r.t. emissions costs.  $3.23 per ton times 3.5 million tons results in an $11 million annual emissions cost.  Nothing to sneeze at, but pretty manageable when you consider that by using coal instead of gas or oil, the plant is probably saving us $100-$250 million per year on fuel.

However, if you assume something like the CBO's estimate of $28 per ton, the economics of coal become tenuous really fast.  $28 per ton times 3.5 million tons leaves us with a $98 million annual carbon bill for the plant.   When you add in the $457 million capital cost for the mercury and sulfur scrubber (spread over 15+ years), plus the $10+ million per year it will cost to run the scrubber, coal could become the most expensive fuel for making electricity, rather than the least expensive.

Fortunately, that's the worst case scenario and likely wouldn't kick in until after Merrimack is retired.  Currently for 2020, the proposed legislation calls for giving away credits to cover as much as 83% of power plant emissions at no cost.  That would cut the $98 million in carbon cost down to under $20 million for 2020.  In addition, further offsets may be available from investments in renewal energy sources.  

An important point to consider is that the carbon allowance allocations are based on the current emissions from electricity production.  If PSNH were to retire Merrimack Station in 5 years, they would still get the $80 million worth of free allowances for 2020 (and other years).  In that case, they could buy electricity from other sources and sell the $80 million in carbon allowances to offset the cost.   Regardless of how you slice it, this bill could significantly increase opportunity cost of making coal-based electricity.

It's early in the process, and I don't mean to sound alarmist, but IMO, the CBO carbon allowance estimate should be a wake up call for us here in NH.  Although there's major uncertainty as to what the final bill will look like, or even if a bill will pass at all, the cost estimates of carbon emissions are pretty staggering and are sure to reignite the debate about the economics of the scrubber project and what our power generation portfolio should look like over the next 10-20 years.

Personally, I'm still uncertain about the scrubber.  The economics of the project depend on several unknowable things.  Legislative actions or market pricing for coal and gas could easily change the math at the drop of a hat.  To be sure,  having coal in our energy mix does provide a hedge against possible oil and gas price hikes, but the cost of the hedge is now less certain.  Anyone who claims this is a slam dunk one way or another has a really good crystal ball.  OTOH, if $28 per ton is even in the ballpark of the cost of the damage that a ton of carbon is doing to our health and to the environment, then electricity from Merrimack Station may not be such a great deal for us after all.   

I'll sure be following this debate on the edge of my seat, doing my best to understand the tough and complicated issues and hoping our leaders can call it right.

(Update: Many reports on the bill mention that 35% of the allowances will go to the electricity sector, yet I posted that the free allowances could  cover up to 83% of electricity related emissions.  The explanation is that the 35% of allowances going to the power sector will cover 90% of power generation related emissions.  In other words, the electricity sector accounts for just over 35% of total carbon emissions.)

Links

NY Times Article on cap and trade bill costs for families

WSJ: Cap and Tax Fiction

RGGI would be preempted by Waxman-Markey in 2012

Cost of bill state-by-state from coal lobby group (assumes $15/ton)

Coal lobby fights back on climate bill

Electricity in New Hampshire - Cap and Trade Overview

There's been some discussion on cap-and-trade legislation out of Washington lately, and this could have an important impact on electricity rates in NH and on how we generate power in the next 10-20 years.  I'm starting with a quick and very simplistic primer on what a cap-and-trade system is.  If you already know what it is, you can skip this post.

New Hampshire in general, and PSNH in particular, is highly dependent on fossil fuels to provide the electricity we need to run our industry and to keep our homes comfortable.  Unfortunately, while burning fossil fuels can be a great way to produce low-cost electricity, doing so emits pollutants that can be harmful to our health and to the environment. 

Economics has a term for situations when the parties engaging in a transaction don't bear the full costs of the transaction.  These transactions are said to have "externalities." In the case of power plants using  fossil fuels, the costs of the pollution that's emitted  aren't paid by either the power producers or the power consumers.  Because someone else pays the bill (the folks down wind in the next state), the producers and consumers don't have any incentive to limit the pollution or find a better way to make power.  It's as though I had the right to dump my trash in my neighbor's back yard.

When externalities exist, usually government regulation can be used to fix an otherwise broken market system.  The idea is that regulations could be made so polluters pay for the damage that their pollution causes.  In a perfect world, those payments would go to the folks injured by the pollution in the downwind states.  It makes a ton of sense at a high level, but of course, the devil's in the implementation.

Imagine a world where we knew, down to the penny, how much damage 1 ton of CO2 emissions would do to our health and to the environment.  In that case, we could just introduce a carbon emissions tax that charges polluters that exact amount for each ton of CO2 that they emit.  Sounds simple right?  The problem is we don't know how much the damage from a ton of emissions costs, and even if we did, changing the system overnight to price in that damage would cause a big shock and could have a devastating impact on our economy.

Instead, legislators in Washington are working on a system called cap-and-trade.  Under this system, rights to emit carbon are created by the government, almost like dollar bills.  Each year, the government would print a certain number of emissions permits, and then somehow distribute them, probably by selling them.  Everyone who wants to emit a ton of carbon has to get one of these permits.   So just like an eBay auction, polluters bid on the carbon permits.  Since there's a limited supply of permits, some polluters may not get one, and will have to find another way to run their business without emitting carbon.   In the real system, permits are sold years in advance so polluters can have time to either buy a permit or clean up their emissions.  Also,  the permit buyers might not be polluters at all.  They could be speculators thinking that the price of the permit will go up as  the year it "matures" approaches.  They're hoping to sell their permit to some hapless power plant owner that didn't plan ahead.

Anyhow, the idea is that companies will change how they do business and pollute less (by installing scrubbers, etc) because if they don't, they'll have to pay for their pollution.  They could either spend the money on a permit, or on a scrubber.  If the scrubber costs less, they'll do that.  In some situations it may be economically optimal for some firms to continue polluting, but at least they'll be paying the full cost for the right.  It might turn out that once the costs of pollution are factored in, some businesses will raise prices, or even go out of business.  It sounds harsh, but the idea is to make markets work by including all the costs of production, even pollution, into the pricing of products and services.

Electricity in NH - Merrimack Scrubber (addendum)

In my earlier post about the Merrimack Station scrubber project, I mentioned that PSNH generally runs Merrimack at full capacity, since at any given time it can usually produce power for less cost than the other options.

I meant to include a neat graphic from PSNH's 2007 Least Cost Integrated Resources Plan that drives home the economics of electricity production, especially for PSNH, and helps explain why PSNH feels that Merrimack Station is too important to shut down.  

The graphic above shows how PSNH satisfies demand for electricity during a typical summer day.  MK1 and MK2 are the two coal units at Merrimack Station.  You can learn more about Newington and Schiller from this earlier post.  Next, VTY  stands for the Vermont Yankee Nuclear plant, which PSNH has a 3.3% stake in.  Finally, IPP stands for Independent Power Producers and represents long term contracts that guarantee power delivery to PSNH at fixed rates. 

The graph clearly shows the roles that various electricity sources play in providing the power needed on  a hot summer day.  Hydro, nuclear, coal, and wood plants provide the baseload generating capability.  Then, as demand increases during the day, plants with more expensive fuel sources, like Newington Station,  kick in.  

For the next 200MW of peak demand, PSNH turns to independent power producers, like Granite Ridge, LLC or Newington Energy.  Generally, it will already have contracts in place to make these purchases at pre-negotiated rates.  Finally, if demand increases beyond those contractual arrangements, PSNH may be forced to buy power on  the spot electricity market and pay whatever the market rates happen to be at the time.

So, if you're a utility like PSNH, it's best to know ahead of time how you're going to get the power to satisfy your customers' electricity demand.   Opponents of the scrubber project suggest that PSNH could just enter into more long-term contracts with Independent Power Producers to make up the difference, while PSNH believes that doing so would result in higher electricity rates.

Electricity in New Hampshire - The Merrimack Station Scrubber Project

A discussion about electricity in New Hampshire would be incomplete without mention of Merrimack Station in Bow, NH.   Readers may recall that Merrimack Station is one of the 5 largest power plants in the state.  In fact, Merrimack Station is New Hampshire's largest coal-fired power plant, as well as the largest plant in PSNH's power generation portfolio.

Merrimack Station's two coal-fired units were built in the 1960s and are rated at 496 megawatts total, together providing over 10% of the power generation capacity in the state.  Because it's fueled by coal, Merrimack Station is always able to produce power at a lower cost than any other fossil fuel powered plant in the state.  As a result, it's almost always running at its maximum output.

Coal arrives at Bow Station from Portsmouth multiple sources (see comments below for more info)

Coal is the least expensive fossil fuel for power plants by far.  The heat energy contained in a fuel is measured in millions of British Thermal Units (MMBtu), and fuel costs are compared using dollars per MMBtu.  For 2009, coal is estimated to cost $2.16 per MMBtu, natural gas $4.35, and oil between $8.60 and $12.23 depending on the grade.  The cost for each fuel can bounce around wildly, but coal seems to always end up the cheapest.

OK, coal is cheap.  So what's the problem you might ask?  Well, coal may be cheap, but burning it emits lots of pollution and those emissions result in health and environmental issues that come with their own costs.

Fuel emissions data from theEnergyGuy.com

In the table above, the pollutants listed are carbon dioxide (CO2), sulphur dioxide (SO2), nitrogen oxides (NOx), carbon monoxide (CO), hydrocarbons (HC), and particulate matter (PM). 

Over the years, our collective understanding and appreciation of the dangers of these toxins has increased and that's resulted in several mandates to reduce emissions at power plants around the country.  In 2006, the NH legislature decided that NH too needed to clean up the output from its coal-fired power plants.  The result was a directive to PSNH to install a mercury and sulfur dioxide scrubber at Merrimack Station.

PSNH got moving on the directive and made a plan to connect the scrubber to the exhaust from the plant's two generating units.   You can see the stack for the new scrubber on the left side of this recent photo from Merrimack Station in Bow.

The photos below show that construction is well underway.  Even on a Saturday, when these shots were taken, crews were hard at work all around the site.

I couldn't help but notice the porta potty sitting on a platform at the top of the new stack.  I guess it makes sense, as  I'm sure it's a long trip down.  Seeing this close-up gave me renewed appreciation and respect for the construction workers who take on projects like this.  I'm not that afraid of heights, but that stack is waaaay up there!  

Although construction on the scrubber is well underway, the project has become very controversial lately.  The main source of the controversy was a cost increase that PSNH announced last year.  The original estimate for the scrubber was $250 million dollars, but once PSNH had completed the design and started the contracting process, they increased the estimate to $457 million.  

Since I'm late to the party, I won't get into a detailed analysis of the pros and cons of the project.  Check out the links at the end of this post, or google "merrimack station scrubber" if you're up for some digging.   

I'll end with a  list of the highlights of the pros and cons, as well as a listing of some of the hidden and not so hidden forces at work pushing for and against the scrubber.

Arguments in favor of the scrubber:

• Coal is cheap (about $2.00 per MMBtu compared to $4-10 for gas or oil)
  
• Using coal keeps our energy portfolio diversified and secures supply (comes from US and south america not middle east)
  
• The plant itself is paid for and has life left in it
  
• The project will result in needed jobs in industries that are suffering
  
• It's needed to comply with the law and in the end we'll have one of the cleanest burning coal plants in the country

Arguments against the scrubber:

• Coal may be cheap but when you add in the scrubber, the cost per mwh is no bargain
  
• The plant will still emit lots of bad stuff  even after scrubber is done
  
• The plant is very old and big stuff could break in the next 15-20 years, costing more money
  
• The plant's boilers are old and finicky - they only burn special coal blends that can be tough to find and cost more
  
• New cap-and-trade legislation and other laws could make emisions more costly than they are now - Many argue that this plant requires an emissions "free lunch" to be cost competitive.  Once the costs of the plant's other non-scrubbed emissions are priced in the plant could become very expensive

 

As with any public decision, politics and special interests are usually at work, sometimes behind the scenes.  $457m is a very large project so there's plenty of raw cash at stake.  But IMO, there's more than just the construction dollars at play as far as special interests go.

Forces pushing for the scrubber:

• Deregulation laws prevent PSNH from building or owning new plants - once Merrimack Station closes, PSNH loses about 40% of its generation capacity for good
  
• Equipment manufacturers, construction workers, powerplant workers, and associated unions and trade groups will gain from project contracts
  
• The coal industry wants to secure demand for their product
  
• Some ratepayers believe keeping the plant operating as long as possible will keep rates lower

Forces pushing against scrubber:

• Environmentalists don't like coal because it pollutes and the mines leave behind a mess - they'd prefer the plant shut down
  
• Independent power producers (TransCanada Hydro, FPL, etc) will have less competition if the plant shuts down
  
• Regional natural gas and oil suppliers would prefer their fuels were used to make power instead of coal
  
• Some ratepayers are worried about rates skyrocketing because of the project

Google Map of Merrimack Station in Bow, NH

View Larger Map

A brief PSNH infomercial on the scrubber project

Links

Full Text of NH Scrubber Law

PSNH info about Clean-Air (scrubber) project

Nashua Telegraph article on the scrubber debate

Letter from Gary Hirshberg/Stonyfield Farm arguing against the scrubber

Letter from Gary Long - Don't Scrub the Bow Scrubber

US Dept. of Energy - Short term Energy Outlook

Recent WSJ Article about prices of coal vs. gas

Sierra Club Info about Coal Pollution