Energy policy Talk to CSU - Walter Scott, Jr. College of ...

Energy policy Talk to CSU - Walter Scott, Jr. College of ...

AN ENGINEERS EDUCATION & MUSINGS ON MAKING PUBLIC ENERGY POLICY Peter M. ONeill, MSEE Chair, Ft. Collins Energy Board Chair, IEEE High Plains Section 4/22/2015 Peter M. O'Neill 1 Outline Introduction Systems thinking Fort Collins policies & energy consumption Transportation fuels example Making public policy Issues, roles, metrics Conservation stories Promising trends & opportunities

4/22/2015 Peter M. O'Neill 2 Introduction 4/22/2015 Peter M. O'Neill 3 My Background Recently semiretired from 37 years as engineer in semiconductor industry. Came of age during oil shocks & environmental awareness of 1970s. 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 5year revision of municipal energy policy Trying to work in energy research or industry 4/22/2015 Peter M. O'Neill 4 Fort Collins Energy Board & Policy Council needs visionary and innovation advice regarding the communitys energy future. Scope expanded from electric utility to all energy in 2011. Nine members appointed by City Council. Advisory only, not judicial. 4/22/2015 Peter M. O'Neill 5 Fort Collins Energy Policy Objectives

Reduce GHG emissions in proportion to energys 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 communitys energy expenditures in the local economy Foster local economic opportunity in energy efficiency, production, and operation 4/22/2015 Peter M. O'Neill 6 Energy Policy Outline 4/22/2015 Peter M. O'Neill 7

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 4/22/2015 GHG targets relative to year 2005: 20% reduction by 2020 80% reduction by 2030 2050 Net zero by 2050 Already down 5% in 2013 Peter M. O'Neill 8

Fort Collins Energy Overview 2013 Energy Consumption 2013 GHG Emission by Fuel 4/22/2015 2013 GHG Emission by Use Peter M. O'Neill 9 PRPA Electricity Sources 2014 Energy Coal; 75.3% Solar; Gas; 0.2% Wind; 4.9% Hydro; 19.4% 4/22/2015 Peter M. O'Neill 10 Systems Thinking 4/22/2015 Peter M. O'Neill

11 Transportation Fuels Motivations Gasoline & Diesel High energy density Fast fueling Traditional availability Combustion/Electric Hybrid 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 4/22/2015 Peter M. O'Neill 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 12 Representative Cars Similar size cars in 2009. Vehicle

Make Model Gasoline Natural Gas Hybrid gasoline/electric Hydrogen Fuel Cell Plug Hybrid electric mode (15 mi/charge) Electric (100 mi/charge) Honda Honda Toyota Civic DX Civic GX Prius Honda Toyota Clarity Plug Prius Leaf 4/22/2015 Nissan Peter M. O'Neill Weight

(lb) 2,692 2,910 3,042 3,582 3,165 3,500 13 Attraction of Transport Fuels Tank to Wheel Analysis Distance travelled from energy stored onboard. CO2 (g/km) Energy (MJ/km) 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 e in l o as G s e ic CC tr ga

od G c l m a le ur ic /e om t r r e t f a N lin C ec l o F s e H d i ga br id y r h yb

H ug l P 4/22/2015 ic tr c e El 200 180 160 140 120 100 80 60 40 20 0 e in l o as G Peter M. O'Neill as ric de

CC t g o G c l m le ra m e c u / i o t r r e f a ct N lin C e l o F s e H d i ga

br id y r h yb g H u Pl e El ric t c 14 Full Story Well to Wheel Analysis 250 200 150 100 50 0 H yb rid G as ol in

N e at u ga ra so lg lin as e/ el Pl ec H ug FC tr ic hy fr om br Pl id ug G el CC ec hy tr br ic id Co el

al ec El t ric ec tr G ic CC f ro El ec m tr Co ic al fr om G CC 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Distance travelled from primary energy

source. Energy (MJ/km) CO2 (g/km) e al ... ... ... as CC CC in c c o l g i c i G G e r C l o l r t a /e m ct as

ec e ur l e o om om G l t r r n r e i f f e f a ol N id d C ic ic i s r F r r r t

b t H b ga ec hy ec l l hy ir d E E g lu ug l yb P P H Quite different! 4/22/2015 Peter M. O'Neill 15 G as ol in N e at

u ga ra so lg lin as e/ el Pl ec H ug FC tr ic hy fr om br Pl id G ug el CC e hy ct br ric id Co el al ec El

t ric ec tr G ic CC fr El om ec tr Co ic al fr om G CC 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Tank to Wheel Well to Wheel 4/22/2015 G

as H ol yb in N rid e at ur ga al so ga lin s e/ el Pl ec H ug FC tr ic hy fr om br Pl id G ug el CC ec hy

tr br ic id Co el al ec El t ric ec tr G ic CC fr El o m ec tr Co ic al fr om G CC H yb rid Tank to Wheel / Well to Wheel Energy (MJ/km) CO2 (gm/km)

Peter M. O'Neill Tank to Wheel Well to Wheel 250 200 150 100 50 0 16 Systems Thinking GHG Accounting What is the system & its boundary? Production method Consumption method

Emissions from production of energy within boundary Electric power plants, home furnaces, vehicles operated within boundary 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 4/22/2015 Peter M. O'Neill 17 Making Public Policy 4/22/2015 Peter M. O'Neill 18 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. 4/22/2015 Peter M. O'Neill 19 Policy Interactions (cont.) Regional cooperation Dont 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 4/22/2015 Peter M. O'Neill 20 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 Cant affect some big things Price of carbon Accelerate product efficiency standards 4/22/2015 Peter M. O'Neill

21 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 4/22/2015 Peter M. O'Neill 22 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 4/22/2015 Peter M. O'Neill 23 Possible Roles of Municipal Electric Utility Distribute energy

Manage distributed generation Manage loads - demand response, balancing Share information that other service providers can profitably use. 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 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? 4/22/2015 Smart grid control Conservation services Only electrical? Also heat, gas? Compete with private industry? Ancillary services Public education Peter M. O'Neill 24 Sharing vs. Independence Will we still need a utility? Popular belief that distributed generation means disconnecting from grid.

Distributed as much a reason to connect as central generation: Which grid: Electric, Natural Gas, Hot/Chilled Water? Fuel cell electric generation needs fuel pipeline. Both local generation & load are stochastic and dont 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. 4/22/2015 Peter M. O'Neill 25 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 4/22/2015 Peter M. O'Neill 26 Assisting Poor Electricity from wind & solar more expensive per kWh than coal. So keep bill same or less by improving efficiency. Poor dont 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. 4/22/2015 Peter M. O'Neill 27 Changing Behavior, Not Just Technology How to compress this highly skewed distribution? 4/22/2015 Peter M. O'Neill 28 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. 4/22/2015 Peter M. O'Neill 29 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: 4/22/2015 Steal customer identity or financial info Track customer behavior Hijack appliances Peter M. O'Neill 30 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 4/22/2015 Peter M. O'Neill

31 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 cost

4/22/2015 Peter M. O'Neill 32 Promising Trends & Opportunities 4/22/2015 Peter M. O'Neill 33 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 4/22/2015 Peter M. O'Neill 34 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 4/22/2015 Peter M. O'Neill

35 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 Peter M. O'Neill 36 Technical Idea: Solar Photochemical Liquid Fuel Reactor

Some applications will always need high density energy storage Chemical energy density orders of magnitude greater than electrical or thermal storage. Biologic conversion of solar to chemical (photosynthesis) extremely inefficient Aviation Construction Sun annual average flux, latitude 40 232 W/m 2 Photosynthesis in switchgrass 0.27 W/m 2 , 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. 4/22/2015 Peter M. O'Neill 37 Acknowledgements

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: 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 4/22/2015 Peter M. O'Neill 38 My Energy Experience 4/22/2015 Peter M. O'Neill 39

Electricity Consumption Trend 4/22/2015 Peter M. O'Neill 40 Household Consumption Electricity (kWh) All Neighbors Energy Consumption by Source Efficient Neighbors Me Gasoline - Saturn; 15.11% 0 1,000 2,000 3,000 Electricity; 19.73% Natural Gas (Therms) All Neighbors Natural Gas; 65.17% Efficient Neighbors Me 0 4/22/2015

10 20 30 40 50 60 70 Peter M. O'Neill 41 Can Individuals Afford Clean Energy? 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 didnt exist 20 years ago has great use My Energy & Other Utilities Electricity; 8.70% Phone & DSL; but 18.36%

Could make room for substantial energy cost increase Wouldnt get more use for it Would use less 4/22/2015 Phone, mobile; Gasoline; 10.10% 18.58% Peter M. O'Neill Natural Gas; 10.64% Water; 5.84% Sewer&Drainage; 7.68% Internet; 4.64% Cable TV; 13.93% Trash; 1.54% 42 Rejected Slides & Partially-Developed Ideas 4/22/2015 Peter M. O'Neill 43 Residential Consumption

Third quartile of use median Second quartile of use 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. 4/22/2015 Peter M. O'Neill 44 Sum of Many Small Advances Fort Collins Climate Action Plan Framework 4/22/2015 Peter M. O'Neill 45 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. Dont 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? 4/22/2015 Peter M. O'Neill 46 Some Alternative Mission Statements Utilities changing rapidly due to technological & market forces. Mike Weedall of E-Source, formerly director of Bonneville Power Authority: " Improve our customers' lives, strengthen the community we serve, protect the environment ..." 4/22/2015

Peter M. O'Neill 47 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 4/22/2015 Peter M. O'Neill

48 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. 4/22/2015 Peter M. O'Neill 49

Authority of Government & Utility Relative to private industry Energy policy compliance 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? 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? 4/22/2015 Peter M. O'Neill 50 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 cant take.

4/22/2015 Peter M. O'Neill 51 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 4/22/2015

Peter M. O'Neill 52 Stranded Assets Coal plant has life of 40 to 70 years Rawhide is cleanest coal plant in state 4/22/2015 Shut it down or shut dirtier plant on another system and sell output to them as PRPA adds renewables Peter M. O'Neill 53

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