Energy’s Changing Realities: Are You Taking Advantage?

November 3, 2014 By Marc Karell

Marc Karell

The US Energy Information Administration (EIA) publishes nationwide and regional energy use data. While changes from year to year are not great, a longer view reveals a lot. From 2007 to 2013, total US energy use dropped 5%, while the GDP rose 6%. The US is becoming more energy efficient.

Our mix of energy sources has changed over this time, too, toward “cleaner” sources. The percentage of energy from coal dropped from 23% to 19%; oil from 39% to 33%. Meanwhile, the percentage of total energy from natural gas rose from 23% to 27% and from renewables (including hydroelectric) from 6% to just under 10% during that span. These trends will likely continue in the future as prices of natural gas and renewables continue to drop relative to other fuels. For example, unit prices on solar panels fell by 80% from 2008 to 2013.

While some of this has been caused by big power companies shutting down units or whole power plants using coal or oil and replacing with natural gas and renewables, another factor is the growth in distributed or decentralized energy (DE). More communities, corporate parks, and industrial facilities are beginning to build their own power plants to become independent of big centralized systems and to better manage their power.

Combined heat and power (CHP) is a great example, raising thermal efficiency to as high as 80% or greater and generating electricity from the same fuel combusted. Communities are building microgrids, small power plants serving their needs. Finally, more buildings are using renewable power and/or fuel cells. These forms of DE will be beneficial as they result in much fewer transmission lines and reducing the loss of electricity. More and more states recognize the value of DE in terms of saving existing infrastructure, which otherwise would cost the utility or state many tens or hundreds of millions of dollars to maintain or expand for demand. Therefore, many states and utilities offer incentives for companies or groups to build their own DE plant.

How do these trends affect your company? Do you have facilities that may be fit for a fuel change or installation of DE? In general, switching to natural gas or installing renewables is relatively inexpensive with fairly quick paybacks because the fuel source is cheaper (natural gas) these days or free (sun, wind, etc.). DE requires a much larger investment upfront, but it may be spread among a number of users of the technology.

CHP, microgrids, etc. often are functional for 20 or 25 years or more. So while the payback of the initial investment may be relatively long, you have an opportunity to save quite a bit of money in the long run. Perhaps more important is the reduction in risk and costs from losing power in a storm (a tree taking down a faraway line that serves your facility).

What should you do? Perform an energy evaluation of your facilities. What energy source does each facility use for electricity and heat/hot water? Is it feasible to switch one’s boilers to natural gas (is there a natural gas line nearby)? To switch to CHP (room to install it? makes economic sense?). To install and operate renewables, such as solar, wind, geothermal (proper conditions)? What might the costs be to switch or install CHP, renewables, etc.? What are the potential savings based on current and projected energy prices? What added benefits may you gain from such an energy uplift (reduced risk, lower air emission rates and permitting requirements, better productivity or fewer distractions of your workers, such as fewer oil truck visits)? A thorough energy evaluation can lead you in the right path and save you the most money.

Marc Karell is owner of Climate Change & Environmental Services. CCES has the experts to perform a meaningful, cost-saving energy evaluation for your facilities. We can pinpoint benefits of different options, including incentives which your facility may qualify for. We can manage the implementation of any energy upgrades (efficiency, fuel change, etc.) you choose and ensure you get the maximum benefits possible. Contact us today at 914-584-6720 or karell@CCESworld.com.

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