Peter M. O'Neill 1

AN ENGINEER’S EDUCATION & MUSINGS ON MAKING PUBLIC ENERGY POLICY

Peter M. O’Neill, MSEEChair, Ft. Collins Energy BoardChair, IEEE High Plains Section

4/22/2015

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Outline

Introduction Fort Collins policies & energy consumption

Systems thinking Transportation fuels example

Making public policy Issues, roles, metrics Conservation stories

Promising trends & opportunities

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Peter M. O'Neill 3

Introduction

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My Background

Recently semiretired from 37 years as engineer in semiconductor industry.

Came of age during oil shocks & environmental awareness of 1970’s.

Long interest in energy conservation & alternative energy. Built 2 very efficient houses Avidly read & experiment

Trying to put enthusiasm & knowledge to wider use. In 3rd year on Ft. Collins Energy Board where I have led

5-year revision of municipal energy policy Trying to work in energy research or industry

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Fort Collins Energy Board & Policy

Scope expanded from electric utility to all energy in 2011.

Nine members appointed by City Council. Advisory only, not judicial.

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Council needs visionary and innovation advice regarding the community’s energy future.

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Fort Collins Energy Policy Objectives

Reduce GHG emissions in proportion to energy’s share of these emissions

Reduce the emission of criteria pollutants Reduce the environmental damage caused by

energy extraction and production Maintain or improve the reliability of energy delivery Refine the role of our municipal utility in a changing

industry Retain more of our community’s energy

expenditures in the local economy Foster local economic opportunity in energy

efficiency, production, and operation

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Energy Policy Outline

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Climate Action Plan Process for 2015 revision

Upon staff proposal to aggressively revise goals, Council requested study

“What would it take”, not action plan

Committee of citizen stakeholders

First-ever modeling effort by Brendle Group, RMI

Adopted by City Council in March

GHG targets relative to year 2005:

20% reduction by 2020 80% reduction by 2030

2050 Net zero by 2050 Already down 5% in 2013

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Fort Collins Energy Overview

2013 GHG Emission by Use

2013 GHG Emission by Fuel

2013 Energy Consumption

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PRPA Electricity Sources

Coal75.3%

Hydro19.4%

Wind

4.9%

Gas0.2%

So-lar0.2%

2014 Energy

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Systems Thinking

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Transportation Fuels – Motivations

Gasoline & Diesel High energy density Fast fueling Traditional availability

Natural Gas Lower emissions New US sources

Battery Electric No emissions during use Much higher (3.3x)

conversion efficiency than combustion

Regenerative braking Creates mobility from

stationary primary energy source

Combustion/Electric Hybrid Use electric storage to

optimize combustion engine operation

Regenerative braking Hydrogen Fuel Cell

No emissions during use

High conversion efficiency

Can make hydrogen from any primary energy source

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Representative Cars

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Vehicle Make Model Weight (lb)

Gasoline Honda Civic DX 2,692

Natural Gas Honda Civic GX 2,910

Hybrid gasoline/electric

Toyota Prius 3,042

Hydrogen Fuel Cell Honda Clarity 3,582

Plug Hybrid electric mode (15 mi/charge)

Toyota Plug Prius

3,165

Electric (100 mi/charge)

Nissan Leaf 3,500

Similar size cars in 2009.

Attraction of Transport Fuels – Tank to Wheel Analysis

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Distance travelled from energy stored onboard.

Gasoline

Natur

al g

as

Hybrid

gas

oline/

elec

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ode

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0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Energy (MJ/km)

Gasoline

Natur

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as

Hybrid

gas

oline/

elec

tric

HFC fr

om G

CC

Plug

hyb

rid e

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020406080

100120140160180200

CO2 (g/km)

Full Story – Well to Wheel Analysis

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Quite different!

Distance travelled from primary energy source.

Gasoline

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Hybrid

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Energy (MJ/km)

Gasoline

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50

100

150

200

250CO2 (g/km)

Tank to Wheel / Well to Wheel

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Gasoline

Natur

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as

Hybrid

gas

oline/

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HFC fr

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Energy (MJ/km)

Tank to Wheel

Well to Wheel

Gasoline

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oline/

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CC

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CC0

50

100

150

200

250

CO2 (gm/km) Tank to Wheel

Well to Wheel

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Systems Thinking – GHG Accounting

What is the system & its boundary? Production method

Emissions from production of energy within boundary Electric power plants, home furnaces, vehicles operated

within boundary Consumption method

Emissions from energy used to make what is consumed within boundary

Energy imported across boundary. But also ... Energy embodied in manufactured items, materials, food,

buildings brought across boundary for consumption within More sensitive to population growth – often ignored

Lots of opportunity to double count

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Making Public Policy

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Policies Interact

Municipal energy policy does not stand alone Climate Action Plan sets targets for GHG, not for:

Criteria pollutants: toxins, carcinogens, particulates Environmental damage from energy extraction &

production But most practical GHG strategies will reduce these.

Transportation inextricably linked to land use Land use patterns sets transport demand. Transport modes & availability enable land use

patterns.

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Policy Interactions (cont.)

Regional cooperation Don’t make policy in isolation Land use & building regulations can drive development to

neighboring towns Avoid policy benefits Exacerbate problems here with more VMT

Building codes Reaching limit of prescriptive approach Replace with modeling approach District heat/cool requires new shared infrastructure

Telecom Large energy consumption by customer premise

equipment usually not consideration by franchise agreements

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Benefits & Restrictions From External Policies

Federal product regulations benefit municipal policy sometimes w/o local effort: Vehicle fuel economy standards Energy Star appliances – replacement

accelerated by local rebates Ban on incandescent light bulbs

Can’t affect some big things Price of carbon Accelerate product efficiency standards

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Ability to Measure & Model Electricity consumption easy to measure with

municipal utility with AMI At least in front of meter Not distributed generation behind meter

Natural gas data harder to get from IOU w/o AMI Traffic modeled from few, infrequent fitting

points Beyond measuring what we do, policy

development needs models to predict how we will respond Response to O-Power usage comparisons known Response to TOU rates unknown

Technically very useful to have lots of personal data but gets into privacy issues

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New Metrics for FC Policy Community total energy use from electricity

and natural gas, normalized to weather & population

Distinguish growth in electrification of transport & heat from conservation in traditional electric use

Energy-related impacts of new development for development review process

Multi-modal transportation use & availability Fleet average fuel efficiency and the number

of electric vehicles in Fort Collins Energy affordability: bill to household income

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Possible Roles of Municipal Electric Utility

Distribute energy Certainly Only electric or district

heat/cool? Generate energy

Establishment of PRPA forbids significant generation by muni utility

But muni customers permitted unlimited generation – w/o utility financing

Conservation services Only electrical? Also heat, gas? Compete with private

industry?

Ancillary services Manage distributed

generation Manage loads - demand

response, balancing Share information that other

service providers can profitably use.

Smart grid control Direct control of selected

loads? Signal need & let user

choose how to respond? Real-time two-way pricing

and energy transactions? Require demand &

generation controllability? Public education

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Sharing vs. Independence

Popular belief that distributed generation means disconnecting from grid. Which grid: Electric, Natural Gas, Hot/Chilled Water? Fuel cell electric generation needs fuel pipeline.

Distributed as much a reason to connect as central generation: Both local generation & load are stochastic and don’t

correlate well. Geographic & type diversity help solar & wind immensely. Storage helps, but very expensive. Sharing makes most economical use of expensive

renewable generation & storage. CHP for use of heat, not grid independence.

Distributed generation is not building energy independence.

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Will we still need a utility?

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Pricing in FC Policy Recover costs, no profit Customer pays cost of his service Regionally competitive bills, not rates Clear, long-term rate direction Gradual rate/bill changes Pair inducements with enablers so as not to be

punitive, e.g. peak pricing with demand response As pioneer, seek corp. & gov. R&D funding Enable energy services to compete by charging by:

Attribute – what is delivered: energy, capacity, ancillary services

Temporal granularity – when it is delivered Locational granularity – where it is delivered

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Assisting Poor

Electricity from wind & solar more expensive per kWh than coal.

So keep bill same or less by improving efficiency.

Poor don’t have savings to pay for improvements up front.

Provide energy audit followed by grant, rebate, on-bill financing of energy improvements.

Poor avoid audit because of fear of discovering code violations.

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Changing Behavior, Not Just Technology

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How to compress this highly skewed distribution?

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Changing Behavior, Not Just Technology

Concepts of community-based social marketing & behavioral economics. Information must spark action.

Carrots or Sticks? Reduce VMT by charging for parking or by providing more

frequent bus service. Charges, penalties, restrictions can drive traffic & development

to places w/o good energy policies. Liberty or Government dictates?

Listen to people say what they want or need. Tell people what they need to know & may not realize the

consequences of. Know when to end or change incentives

Net metering ultimately leaves nobody to pay for grid. End subsidies when technology is competitive.

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Privacy & Security Technologies like demand response &

distributed generation rely on more measurement, communication & control than traditional utility systems

Proper & beneficial uses: Matching demand to generation Minimizing customer energy costs Targeted marketing of efficiency services &

equipment? Opportunities for malicious use:

Steal customer identity or financial info Track customer behavior Hijack appliances

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Progress Slow, Many Small Parts

• 1.5% additional total city energy savings per year is among the best in the USA.

• Hope to increase to 2.5%/yr. by 2020

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Conservation Stories Residential PV subsidies fully subscribed early each

year. Tiered electric rates in summer 2012

City Council ordered w/o study Confounded by High Park fire, extreme heat Only largest customers used less energy Peak power demand not reduced

On-bill financing of home efficiency improvements Disappointing uptake Rental property: owner pays while renter benefits, no

incentive WiFi thermostats for demand response – High

uptake Time-Of-Use rates

Starting with a pilot because ... Guessing wrong could drop revenue below cost4/22/2015

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Promising Trends & Opportunities

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Trends & Opportunities

Home automation & IoT Optimized energy use Flexible demand response Even management of distributed generation & storage

Ancillary service aggregation Collect, model & control small, distributed loads,

generators & storage to create schedulable, dispatchable energy resources

Every person & vehicle with GPS connected to cellular network: Public transit more predictable & accessible Variety of vehicle rental & sharing

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Trends & Opportunities (cont.)

Communication & Control Predictive, stochastic modeling of renewable

generation, loads & demand response Transactive, self-organizing (not central) control Smart inverters to support grid & allow islanding.

(Current inverter standard is “do no harm”) Observation: One of biggest sources of improvement

in machinery in last half-century has been ability to turn design constants into operational variables.

Energy Districts Combined Heat & Power, microgrid Share thermal sources & loads in water loops like

electric grid Geo-exchange loops difficult to install → put under

streets & common areas to share

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The Big Barrier - Finance The major barrier to adoption of new energy

technology Most conservation technology pays off over

its life, while wind & PV generation are close.

Challenge is how to pay up-front for savings over time, especially given short-sightedness of households and companies.

Many models rely on special tax treatments that must end as renewables become common.

Adding cost of carbon (& other externalities) would make this work with straightforward accounting & w/o tax breaks.4/22/2015

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Technical Idea: Solar Photochemical Liquid Fuel Reactor

Some applications will always need high density energy storage Aviation Construction

Chemical energy density orders of magnitude greater than electrical or thermal storage.

Biologic conversion of solar to chemical (photosynthesis) extremely inefficient Sun annual average flux, latitude 40º – 232 W/m2

Photosynthesis in switchgrass – 0.27 W/m2 , 0.12% efficiency. Photovoltaic at 15.5% - 36 W/m2 , 133x better

Artificial photosynthesis: Generate liquid fuel from its combustion products (in air) and water by solar radiation.

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Acknowledgements

John Phelan – FCU Energy Services Manager Steve Catenach – Former FCU Light & Power

Director Lucinda Smith – FC Environmental Services

Director Greg Behm – Energy Board member, engineer John Bleem – PRPA Strategic Planning Director Rocky Mountain Institute – “Stepping Up”

Beyond my own reading and investigating, a lot of material and ideas in this presentation came from dedicated City of Ft. Collins staff and Energy Board members including:

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My Energy Experience

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Electricity Consumption Trend

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Household Consumption

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Electricity20%

Natural Gas65%

Gasoline 15%

Energy Consumption by Source

Me

Efficient Neighbors

All Neighbors

0 1,000 2,000 3,000

Electricity (kWh)

Me

Efficient Neighbors

All Neighbors

0 10 20 30 40 50 60 70

Natural Gas (Therms)

Can Individuals Afford Clean Energy?

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Gasoline10%

Electricity9%

Natural Gas11%

Water6%

Sewer & Drainage

8%Trash2%

Cable TV14%Internet

5%

Phone & DSL18%

Phone, mobile19%

My Energy & Other Utilities Take my utility expenses

2 people, 2 cars, 2 cell phones Efficient house Live close to activities Count all electric as purchased

from utility (ignore PV) Energy only 30% Discretionary > 32%

A lot didn’t exist 20 years ago but has great use

Could make room for substantial energy cost increase Wouldn’t get more use for it Would use less

Peter M. O'Neill

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Rejected Slides & Partially-Developed Ideas

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Residential Consumption

Generally, poor people use less energy so bills are also lower, but still higher relative to income.

Contrary to expectation that poor have low efficiency so forced to consume more energy.

Third quartile of use

Second quartile of use

median

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Sum of Many Small Advances

Fort Collins Climate Action Plan Framework4/22/2015

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Decarbonizing Heat

Space, water, process heat account for ~20% of GHG.

Can only go so far with conservation. CAP calls for substituting renewable electricity &

biofuels for fossil fuels. Don’t want electrical resistance heating. Electric alternative is heatpump (with thermal storage?) Geo-exchange only heatpump for Colorado winter

nights Wells are expensive & messy Alter code & practice to build shared wells with

subdivision infrastructure What happened to solar thermal with storage?

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Some Alternative Mission Statements

Mike Weedall of E-Source, formerly director of Bonneville Power Authority: " Improve our customers' lives, strengthen thecommunity we serve, protect the environment ..." 

Utilities changing rapidly due to technological & market forces.

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Smart Meters

Privacy Data collection and transmission

Collects data in 15-minute or 1-hour intervals Transmits several times per day via brief signal Encrypted

Not frequent enough to identify appliance Even mechanical meter can be read by prowler to

assess occupancy Health effects

0.1% transmit duty cycle (86 seconds per day) and 250mW transmit power.

Lower energy density than many other RF sources, e.g. cell phone, WiFi access point

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Involving the Public Seeking public input

Proper forum & format Vocalism vs. democracy

Gaining public acceptance Cost is only energy topic on most citizens’ minds Social marketing concepts

Suspicions by some elements of society Gov. or utility spying & control Global warming doubters Belief that “an exponential can last forever”

(contrary to Gordon Moore & reason) Technical knowledge of public.

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Authority of Government & Utility Relative to private industry

Distributed generation: Own or only connect? Efficiency services: Offer or leave to industry? Operational information that other service providers can

make novel uses of: Share or restrict? Energy policy compliance

Education & awareness? Lead by example? Incentives? Requirements? Penalties? Direct implementation by government or utility?

Smart grid control Direct control of selected loads? Signal need & let user choose how to respond? Real-time two-way pricing and energy transactions? Require demand & generation controllability?

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Some financing models:

On-bill financing Loan by utility for improvements paid in bill. Strive for pmt ≤ energy savings. Use aggregation & borrowing power of utility.

Lease Company borrows money to make improvements, which

they own. Company sells benefit to utility with tax benefit, e.g. PV

power purchase agreement. Customer repays company lease with utility bill saving.

Community generation ownership Allows those w/o proper site to invest at utility scale. Federal tax benefit that nonprofit muni can’t take.

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Public (& Press) Misunderstanding

Energy (generation) vs. Power (demand, capacity) Source capacity factors vary widely Coal 88%, Wind 40%, Solar PV 17%

Load to source matching – instantaneous, not just day and night

Carbon intensity of source Energy source vs. energy carrier Distributed generation not building independence

Solar needs sharing even with storage Thermal gen needs fuel pipeline CHP for use of heat, not grid independence

Biological effects of RF from smart meter

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Stranded Assets

Coal plant has life of 40 to 70 years Rawhide is cleanest coal plant in state

Shut it down or shut dirtier plant on another system and sell output to them as PRPA adds renewables

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