Illustrates Commitment to Energy Efficiency
This past week, in celebration of Earth Hour, United States Secretary of Energy Steven Chu announced that we are now saving more energy than we consume. Immediately there were questions from the Sierra Club, NRDC and the World Wildlife Fund about his statement. Apparently, there was some confusion with the initial press release as his statement was construed to mean that the US is saving 50% of the energy consumed. This is not the case. A follow up announcement by Secretary Chu clarified that the US is now saving 100% of energy consumed. Although this statement sounds “far-fetched,” it was made after DOE conducted extensive calculations integrating the combined effect of energy savings claimed by consumers, manufacturers, utilities and other federal governmental bodies. Can this be true?
DOE Provides Example
We contacted DOE for an elaboration of their statement. They said that these amazing results can be attributed to continuous improvement in the implementation of energy efficient measures and a “marked-to-market” accounting process. To illustrate their process we were given an example of improvements and evolution of residential lighting. For the basis of the calculation they used one thousand 100-Watt incandescent light bulbs, replaced by CFLs; then replaced by LED lamps. One thousand 100-Watt incandescent bulbs consume 100 kWhs of electricity (1,000 bulbs times 100 Watts divided by 1,000 W/kW) for each hour of operation. Replacing the incandescent bulbs with CFLs (that have equivalent light output) would consume 25 Watts per bulb. Assuming 80% market penetration of CFLs (as not everyone uses CFLs extensively) the savings are 60 kWhs (1,000 bulbs times 80% market penetration times the difference of 100 Watts and 25 Watts all divided by 1,000 W/kW) or 60%. Book the 60%. Now consider the implementation and use of Light Emitting Diode (LED) lamps. LEDs are more efficient than CFLs – they can save approximately 80% of the energy over incandescent light bulbs. Since LEDs are new to the market, DOE needed to reduce the assumption of market penetration. DOE utilized a conservative 50% market penetration for their calculations. Therefore, LED savings are 42.5 kWh (1,000 bulbs times 50% market penetration times the difference of 100 Watts and 20 Watts) or 42.5%. Add this 42.5% (due to LEDs) to the 60% savings from the installation of CFLs and you get 102.5%. QED.
Better Yet – T-12->T-8->T-5->LEDs
The DOE spokesperson used the following to illustrate how we can achieve significantly more than 100% energy savings. DOE referred to the T-12 –> T-8 –> T-5 –> LEDs evolution of commercial/institutional lighting. Simply put, the more evolutionary steps traveled for specific end use, the greater opportunity for savings. Conducting similar calculations for commercial/institutional lighting, results in savings of 123.45%. The greater savings are mainly attributed to a greater number of energy evolutionary steps.
Environment and Grid Implications
With savings of more than 100% the question is what happens to the grid? And what happens to the environment? And how was DOE alerted to this process? We pressed the DOE spokesperson on these issues. We were told that they were alerted to this phenomenon by monitoring carbon dioxide levels on Mt. Washington in New Hampshire. Their sensitive equipment picked up that CO2 levels were dropping over time. When they searched for an explanation, the progress in national energy saving level became the obvious answer. With natural gas (a fossil fuel) being the preferred fuel for generating electricity in that part of the county, lower CO2 levels makes sense. But that doesn’t explain what happens to the grid. With excitement, the DOE spokesperson explained that with more than 100% savings, the generators start to run like motors. With the generators operating like motors, the combustion gas turbines take in CO2 and water vapor from the air, and pump natural gas back into the pipeline. The most amazing thing is this gas is closer to pipeline quality gas than bio gas from digesters. And this is all achieved without any federal renewable energy subsidies.
What about Coal Plants?
Knowing that burning coal emits about twice as much CO2 as natural gas, we asked what happens to a typical coal stoker-boiler when more than 100% of the energy is saved in a region of the country where coal is the fuel source for generating electricity. We were told that because the typical coal plant burns coal to generate steam (which turns a steam turbine, to turn a generator) the fuel source is too far removed from the grid to reproduce coal. In this case, running the generator as a motor results in the production of ice by thermodynamically reversing steam turbine operation. This operation is especially attractive in metropolitan areas such as Chicago, where coal accounts for most electricity generation on the margin and a district cooling plant is located downtown. By reducing air conditioning load on hot summer days, this is now being considered a demand response resource by PJM (our regional transmission operator).
Nuclear Generating Stations
While nuclear generating stations would operate similarly to the coal plants and produce ice, considering the recent events in Japan, DOE wants to sidestep any nuke questions. Their concern is that the current nuclear safety debate will take away from the positive news associated with achieving 100+% energy savings. Also, nuclear generating stations are typically located away from populated areas, thereby eliminating any advantage of making ice.
We’ve been told that an Earth Day celebration is planned for the Washington Mall to commemorate this important national achievement. Don’t miss it!
The Absolute Best time to Buy Energy for Your Facility
When we visit a client to discuss their energy issues and challenges, almost invariably we are asked when is the best time to buy energy. And more specifically, when’s the best time for them to buy electricity and natural gas. The usual answers given are: 1) in the late spring, before it gets hot and natural gas storage is being filled; or 2) October, after the hurricane season is finished. I am happy to report, that after a two-month study, analyzing reams of data (or whatever the electronic equivalent is) from PJM and third party suppliers, we have now have a more refined answer. We now know the exact day and the precise time when it is best to buy electricity and natural gas.
We took into to consideration day of the week (knowing that Mondays are very volatile because of non-trading over the weekend and that Thursdays are crazy because that’s when the gas storage report comes out); and we looked at the time of day. We found that the ends of the trading sessions were times of poor liquidity or pent up demand, thereby generating unnecessary volatility. Capturing the most stable part of the day was key. We tested our answer over the last ten years of retail electricity price data and twenty years of retail gas price data. With a 95% confidence level (barely missed 99% confidence level) our answer was correct.