The Energy Blog – by Andy Silber

This should never happen

On April 12th a lagoon holding cow manure failed, causing a spill of millions of gallons of waste into the Snohomish River. In the annals of industrial accidents this is pretty low on the horrific scale. But the tragedy is that the lagoon that failed should not have been there in the first place. Our attention is grabbed by failure and size, not by the slow, steady release of pollution that these lagoons routinely emit. As the manure breaks down methane, a powerful greenhouse gas, slowly rises, along with other noxious gases. In addition E Coli and other pathogens collect and are spread in fields when the manure is used as fertilizer.

This might be acceptable if it was a difficult problem to solve. But the opposite is true. Anaerobic digesters for dairy cow waste is a fully-realized commercial technology. In the digester the manure is eaten by bacteria in an oxygen-free environment and methane is created.  The gas is captured and can be used to power a generator, while the waste heat can be used to warm a barn or greenhouse or other farm uses. The manure in the digester is heated to a higher temperature than it would be in a lagoon, which kills off most of the pathogens like E coli. The benefits are many:

  • Improved air quality
  • Reduced greenhouse-gas emissions
  • Renewable electricity
  • Co-generation of heat for the dairy
  • Removed or greatly reduced risk of spills
  • High-quality bedding for the dairy cows
  • High quality fertilizer for the fields growing the feed for the dairy cows

A small percentage of dairy farms do have digesters, but most don’t. If they are so great, why doesn’t every dairy farm have one? This is a classic example of a market failure:

  • The farmer doesn’t pay for the reduced air quality, so he has no economic incentive to improve it.
  • The farmer doesn’t pay for the greenhouse-gas emissions, so he has no economic incentive to reduce them.
  • These projects are capital intensive and fall outside the expertise of the farmer, so the farmer doesn’t bother.

Though these projects do generate electricity and useful heat, the value of those products alone don’t generate enough revenue to make these projects happen. By selling renewable energy credits (RECs) and carbon offsets some projects do happen, but most dairy farms still use open lagoons to hold their waste. Since dairy farming is already a financially risky proposition, legislatures are loath to require digesters and the farmers are unwilling to invest in these projects themselves.

Even broad policy measures like Washington State’s I-937 and other renewable energy portfolio standards aren’t very effective in encouraging digesters. Utilities aren’t very interested in these projects because they are small (typically less than 1 MWatt or equivalent to less than one utility scale wind turbine) and more expensive than electricity generated at a large wind farm.  Also, these renewable standards still don’t capture all the value these projects have. Grants like those from the Department of Agriculture and the Recovery Act (Federal Stimulus) do help these projects happen, but not very quickly. A requirement for the largest dairy farms and Concentrated Animal Feeding Operations to install digesters would go a long way to bringing this technology into the mainstream, but I don’t expect to see that happen any time soon.

The Energy Blog – by Andy Silber

Today I attended a presentation in the Seattle City Council chambers about their goal to be carbon neutral by 2030. A distinguished panel made up of Congressman Jay Inslee, K.C. Golden from Climate Solutions, Alex Steffen from WorldChanging.com, and Jill Simmons from the City’s Office of Sustainability and Environment was joined by almost the entire council (Sally Clark was out sick).

The work on what climate neutrality means has just begun and plans on how to achieve it hasn’t even started, so this discussion was more about why it makes sense for Seattle to take this step. Jay Inslee talked about the importance to our economy to move towards greenhouse gas neutrality. K.C. Golden continued on that theme. Alex Steffen talked about the urbanization of the world, so it’s most important to find sustainable solutions for the cities. Jill Simmons spoke mainly about what the stage is before this new goal: our existing CO2 targets (80% below 1990 by 2050) and what programs we’re undertaking to reduce our emissions (e.g. bike plan, garbage trucks running bio-diesel). Mike O’Brien made a good point that this is about Seattle becoming a laboratory for “scalable, repeatable solutions”.

The audience was very supportive of the goal, but was interested in talking specifics. Questions from the audience included policies on vehicle miles traveled, bike sharing and school bus idling. The questions from the council members were much more general and included topics like birth control and poverty in the developing world.

My question (which I didn’t ask at the forum and was not addressed) was how is this new target better than the existing one. Audacious goals are great, but there’s no way we can eliminate our CO2 emissions in 20 years. I’ll just take transportation as an example. By 2020 there’s a chance that the majority of new cars sold in Seattle will be electric and charged using carbon-free electricity, but most cars on the road will be older and still powered by a liquid fuel. This is not something Seattle can control. We can create a market for new cars, but we can’t design and build them. Maybe there will be a breakthrough in bio-fuels and cellulosic ethanol will be the fuel of choice. But we can’t make that happen, other than creating a market. But the talk today was much more about moving away from the car towards walkable and transit friendly neighborhoods. A wonderful goal that I fully support, but those are changes that take place over a century, not twenty years. Are we going to bulldoze neighborhoods that aren’t walkable? About all we can do is build sidewalks and bike lanes (at the rate we’re going, it will take more than 20 years to get sidewalks across the city). Seattle’s transit is about half-way to being good enough that the majority of our residents will give up their car. And we don’t control the bus system, the county does and hasn’t been interested in growing it fast enough to meet current demand, much less a massive increase. And even if we did, those buses run on diesel. Bio-diesel in 20 years?maybe.

What will we do in 2030 when we find that people who have working gas furnaces don’t want to give them up or gasoline powered cars that they need to get to their job in Kent? Will we force them to buy carbon offsets (in addition to a federal carbon fee)? Will we force them to install heat pumps or buy electric cars? Will we say, “Oh well, we missed our target, but we did reduce emissions 40% below 1990, and that’s a great accomplishment”? If it’s the last, then might we be better off just setting an obtainable goal?

The Energy Blog – by Andy Silber

Comments for the 2010 Seattle City Light Integrated Resource Plan

by Andrew Silber, April 7, 2010

Introduction

The Integrated Resource Plan (IRP) process is a time for Seattle City Light (SCL) to look at our long-term vision and see if it connects to our values and our vision of the future. We are standing on the shoulders of giants who built an incredibly strong foundation. It is our responsibility to maintain and expand the vision of J.D. Ross and others who built one of the nation’s finest utilities. Now is the time to ask if we are living up to that tradition.

In many areas we are meeting this commitment:

  • Strong conservation and efficiency programs
  • Maintaining greenhouse gas neutrality
  • A healthy fish population in the Skagit
  • Establishment of the Rate Stabilization Fund
  • Development of the Asset Management System

There are other areas where we could be doing a better job of continuing the vision.

Plan for the bad years and the good years will take care of themselves

From the 2008 IRP

“In addition to an annual average basis, City Light must also have sufficient resources on a monthly, weekly and hourly basis. Since City Light is a winter peaking utility, the winter months are of most concern. City Light’s annual peak demand most often occurs in January. The 2008 IRP relies on a measure of resource adequacy that ensures that the utility has a 95% confidence level of meeting loads in any given January. Low generation capability is usually due to drought conditions in the Pacific Northwest. High customer demand is usually due to extremely low temperatures in the winter. The greatest threat to City Light’s resource reliability is the combination of low water and high customer demand for power.”

These difficult years are not just difficult for SCL, but for our entire region. If we are having resource adequacy issues it’s likely that the region is having resource adequacy issues. Everyone will be hitting the market at the same time, driving up the price of electricity on the spot market to painful levels. This situation (exacerbated by companies gaming the system to their advantage) happened earlier this decade and cost this utility and others dearly.

Rather than accept a 95% confidence level of meeting loads, SCL should focus on how to meet loads during these difficult years. Our customers expect nothing less. Relying on the markets as a fallback in drought years is a risky proposition, a risk that is not currently quantified. In the past our vast hydro system could manage even in a bad year, but as the region’s appetite for electricity grows and our capacity stagnates, the risk grows.

When looking at acquiring new non-hydro resources (including conservation), the significant value they would have in the cold, drought years must be included. At the margins there may be resources that are not cost-effective for 19 years, but pay for themselves on one cold week in January.

In order to justify planning around the bad years, we must estimate the cost of relying on the marketplace during these bad years. This is a difficult and assumption ridden process, but a low-precision estimate is better than no estimate at all.

Obtaining Energy from Smaller Renewable Projects

In the past the size of projects that SCL has built has always increased; from the Cedar and Tolt projects, to the Skagit dams and finally to the Boundary dam. But the era of building large dams has passed and it’s unlikely that SCL will again build a large project like Boundary.

But new resources will be needed, driven by climate change, load growth and our relationship with BPA.  Since BPA makes up such a large percentage of our supply, changes in our BPA contract is an especially large risk. It is likely that a carbon cost will come into play soon, which will make relying on the market very risky. As coal plants begin to shut down other sources of power will become more attractive, and therefore more expensive.

SCL hasn’t built a new generator since 1967 and only signed a few long-term contracts (e.g. Stateline Wind and Columbia Ridge landfill). Even though our need now is not pressing, SCL needs to start investing again in new resources. These projects will help SCL regain the expertise that will be needed to add production capacity.

These projects will initially be small compared to our loads (e.g. a 750 kW dairy gas digester, a 50 MW wind farm). SCL is particularly well suited to integrate wind because of the hydro projects that we own and operate. Since the main purpose of these projects is to develop expertise and hedge against long-term risks, it only makes sense for us to own them, not to enter into a long-term contract.

The voluntary renewable energy programs, Green Up and Green Power, could be a mechanism to bring some of these smaller and particularly green projects along despite their higher cost. For instance, dairy gas digesters improve air and water quality and remove methane from the atmosphere, making them greenhouse gas negative, as opposed to solar or wind which are greenhouse gas neutral. These small projects often are not developed because of difficulties raising capital. Our direct participation by signing power purchase agreements or becoming equity partners may be much more effective than just buying renewable energy credits.

Long-Term Contracts vs. Owning: What Would J.D. Ross Do?

The IRP process with a 20 year horizon is going to prefer contracts with 20-year duration over owning. Over the last 40 years all of our production growth has been in contracts, not in developing resources that we own. But if we take a longer vision, it’s likely that it’s better to own than rent. As Independent Power Producers snatch up the prime sites for renewable energy production, it will become more and more expensive to meet our demand.

If one looks at the decision to build the Boundary project in this light, it’s clear that our current low rates are based on logic that would not happen today. Just as current rate payers are benefiting from investments that were made to build the Skagit and Boundary projects, future rate-payers will suffer for our lack of investment.

Demand Response

Most utilities think of Demand Response (DR) in terms of smoothing out peak loads, which has a high value. Since the constraint for SCL is energy and not power (i.e. we can increase output from the dams to meet demand, but eventually we run out of water) DR has less value when viewed in terms of smoothing peak loads, though it does have some in cases where transmission or substation loads are near critical levels. The value for SCL is not in reducing loads when demand is high, but in increasing it when demand is low and power is cheap.

Here’s how it might work:

  1. SCL directly owns a wind farm and typically adjusts the output of the hydro system to balance the output of the wind turbines.
  2. At some point the hydro system can go no lower; maybe it’s already at zero flow or constrained by flood or fish concerns.
  3. SCL sends commands to deep freezers to go colder, hot-water or space heaters to go hotter.
  4. This might be the only energy that a deep freezer or hot-water heater needs for the entire day.
  5. When the wind farm output decreases or demand increases, the temperature settings return to normal. We’ve stored the energy in cold food and hot water and homes.

This model doesn’t make sense for shaped output like we get from the Stateline project, but the region’s ability to shape power is limited. The amount of intermittent resources we can shape ourselves is significant and at a very low cost. The first portion of shaping (i.e. reducing output from our dams) is free. The DR elements needed to go further will be more expensive, but have additional benefits (e.g. to reduce demand during an outage, allow us to sell more or buy less power when the market is high). The value of DR will be particularly valuable during drought years as will the intermittent power that it allows us to integrate.

Conclusion

Due to the sound management that SCL has enjoyed for most of its history, none of these issues are a crisis. I’ve just outlined some suggestions that will help us maintain our reliability, low-rates and environmental stewardship for generations to come:

  • Prepare for the worse, not the cheapest on a typical year
  • Don’t count on the market to deliver cheap power on a drought year
  • Start developing new power sources
  • Take a longer term view
  • “What would J.D. Ross do?”

The Energy Blog – by Andy Silber

Welcome to Andy Silber‘s Energy and the Environment Blog at Sustainable West Seattle. Let me start with letting you know a little bit about myself and what I hope to accomplish with this blog.

  • First education. My studies have been as a physicist, with a bachelor’s from U.C. Berkeley and a Ph.D. from MIT. Physicists look at energy they way that accountants look at money. We track it, we count it, and when the numbers don’t add up, we know that something interesting is happening (though it usually isn’t embezzlement in our case). Even in high school I was interested in energy policy, devouring articles in Omni Magazine on how micro-fusion plants were only 20 years away. Thirty years later they’re now 40 years away, a sign of the progress we’ve made in estimating how difficult a problem fusion is.
  • Next experience. In 2001 the Cheny Energy task force was meeting and purposing very stupid ideas. During the ENRON driven energy crisis Cheny was actually discouraging conservation, while the people of California cut power consumption 10% overnight. I felt that action at the state level was our only hope for the near term and that led me to found the Energy Committee of the Cascade Chapter of the Sierra Club. We worked on supporting windfarm development in the face of NIMBY (Not In My Back Yard) opposition, commenting on utility Integrated Resource Plans, and building connections with other groups. A major effort for us was Initiative 937 that requires most Washington electric utilities to get 20% of their energy from renewables by 2020. We were involved from the decision to try for an initiative, to writing the initiative, to collecting signatures (my infant son and I got 1,400 signatures), to working for its passage.

Until recently energy policy has been a hobby, not a profession. In September I accepted a position at Seattle City Light in the Conservation Resource Division. At some point I’ll write a blog posting about my project. I’m learning a lot about what it takes to actually make things happen and what the barriers are. Sometimes there are good reasons why good ideas are harder to accomplish than they should be. That’s also something I’ll be writing about. One thing I want to make abundantly clear is that I’m not writing as a representative of Seattle City Light. The thoughts in this blog are my own.

I’ll be writing about energy conservation, renewable energy, policy, and maybe even politics. If there are particular issues you’d like me to write about, drop me a line at andyds11@me.com.

(Editor’s note:  Andy Silber is also a founding member of Sustainable West Seattle and has a long-standing interest in both energy systems and transportation systems.  This is the first of what will be a continuing Blog on Energy.)