DOE’s Quadrennial Technology Review highlights “rich set of options”
The Department of Energy released its second Quadrennial Technology Review, which examines the current status of clean energy technologies and identifies hundreds of clean energy research opportunities that could support the effort to modernize the power sector as a whole, while also helping Americans to power their homes, businesses, cars and trucks more efficiently.
The report finds that emerging advanced energy technologies provide a rich set of options to address the nation’s economic, security and environmental challenges, but continued improvements in cost and performance are crucial to the large-scale deployment of these technologies.
“The energy sector in the United States has changed dramatically in recent years due to advances in clean energy technologies, increased oil and gas production and the increased risk to energy infrastructure from extreme weather, cybersecurity and other factors,” said Secretary of Energy Ernest Moniz. “The Quadrennial Technology Review is intended to serve as a blueprint for the Energy Department, its National Laboratories and the public and private sectors as we all work toward additional future technology breakthroughs that can help to mitigate the risks of climate change, modernize our energy infrastructure and enhance our energy security.”
“No challenge poses a greater threat to our future than climate change, which is primarily caused by carbon pollution from energy use,” said Dr. John Holdren, director of the White House Office of Science and Technology Policy. “The QTR makes clear that we have the technological know-how and innovative spirit to move to a low-carbon economy. It’s up to us to carry these opportunities through and make them a reality.”
Over the course of six technology chapters–grid modernization, clean power, buildings, manufacturing, fuels, and transportation–the QTR examines the current status of energy technologies and research opportunities to advance them in addition to key enabling science and energy capabilities.
In completing the review, a number of overarching themes emerged:
- Researchers found that the nation’s energy systems are becoming increasingly connected through the Internet and other technologies, which may provide a game-changing new paradigm for cost and emissions reduction.
- The range of options available to meet the nation’s energy needs is increasing, and this diversification creates a more dependable energy system and offers consumers new choices.
- The nation has embraced energy efficiency as a way to reduce energy use and costs, but substantial efficiency opportunities remain untapped.
- Breakthroughs in next generation high-tech tools including x-ray light sources and supercomputers are helping scientists find new ways to deliver cheaper, faster clean energy innovation.
The QTR also highlights the dramatic changes that have occurred in the American energy system over the past four years. The nation has increased wind energy capacity by 65 percent, increased solar capacity 9 fold, and replaced some of our oldest, least efficient power plants with cleaner, more efficient ones. At the same time, vehicle gas mileage has increased to record levels. In the four years since the first QTR was released, the United States has also become the largest producer of oil and gas combined. By pursuing the research and development opportunities, as well as the untapped opportunities for greater energy efficiency highlighted in the QTR, the U.S. can move closer to its clean energy future.
Sempra U.S. to expand Arizona solar power project
Sempra U.S. Gas & Power announced a 100 MW expansion of its Mesquite Solar complex in Arlington, Arizona, about 60 miles west of Phoenix. When completed in late 2016, the expansion, called Mesquite Solar 2, will produce enough power for 45,000 homes.
The entire output of the Mesquite Solar 2 expansion has been sold to Southern California Edison under a 20-year power purchase agreement. The contract is subject to approval by the California Public Utilities Commission.
“We are pleased to support Southern California Edison’s commitment to diversify its growing renewable energy portfolio through the development of Mesquite Solar 2,” said Kevin C. Sagara, president of renewables for Sempra U.S. Gas & Power. “The expansion of our landmark Mesquite Solar complex reflects the progressive vision and leadership by the state of Arizona and Maricopa County, and we look forward to delivering a new supply of clean, emission-free energy to California consumers.”
Construction on Mesquite Solar 2 is expected to begin this fall. The project will create hundreds of construction jobs, part of a multi-phase expansion that will employ about 600 workers at peak.
“Mesquite Solar 2 represents quality jobs for Arizona residents, as well as an economic boost to local businesses,” said Clint Hickman, Maricopa Counter supervisor. “I look forward to seeing this new phase of Mesquite Solar complex break ground later this year.”
The 4,000-acre Mesquite Solar complex is among the largest photovoltaic solar facilities in the U.S. By late 2016, the complex’s three phases are expected to produce a total of 400 MW.
The company also expects to complete the 94 MW Copper Mountain Solar 4 project in Nevada during that time frame. By year-end 2016, the combined solar power portfolio of projects jointly owned by Sempra U.S. Gas & Power in Arizona and Nevada is expected to grow to more than 1,000 MW.
By Tom Tiernan, Senior Analyst, TransmissionHub
BPA transmission project between Washington, Oregon nears completion
The Bonneville Power Administration is nearing completion of the 500-kV Big Eddy—Knight transmission line connecting Oregon and Washington substations, with the $200 million project expected to be in service during the second week in November, a BPA spokesperson told TransmissionHub last month.
Construction of the line was completed earlier this month, while fiber testing and other work is ongoing, the spokesperson said.
In one of the more challenging elements of construction work, a helicopter flew rope across the Columbia River Gorge to string the power lines along the towers.
“The river crossing and installation of tower structures at the river crossing were the biggest construction challenges that we faced,” the spokesperson said.
Work on the project, designed to increase transfer capacity in the region and boost market access to renewable power projects, began in 2011, and was partially funded through the American Recovery and Reinvestment Act of 2009.
The line will stretch across 28 miles and provide a new path for power to cross between Oregon and Washington, BPA said in a Sept. 8 statement.
“More importantly, it will bring added capacity to an area that has seen rapid growth in renewable resources” and become a hot spot for power-hungry data centers, BPA said.
The growth in data centers in the area is partly due increased renewable resources being integrated into the BPA transmission grid, the BPA spokesperson said.
The 28 miles covers 14 miles of new right of way, connecting the existing Big Eddy substation, just east of The Dalles, Oregon, with the new Knight substation in Goldendale, Washington, along with 14 miles of a rebuilt portion of an existing line, the Harvalum—Big Eddy 230-kV line.
While the rebuilt line will operate at 230 kV, the towers, conductor and hardware are being constructed at 500 kV to provide additional capacity if the need arises in the future, BPA said.
The project involves 42 circuit-miles of high-voltage wire and 128 new towers, with each tower carrying two circuits.
For the Columbia River crossing, the BPA design team had to create towers that could withstand wind and ice storms while supporting nearly 300,000 pounds of wires. The crossing involves three towers – one dead-end tower in each state and one suspension tower on the Oregon side of the river. BPA noted that the dead-end towers can experience more than 1 million pounds of force.
The design also was unique because usually there are four or five towers for every mile of line, while the crossing has three towers for 1.2 miles of line, BPA said.
The suspension tower is 420 feet tall, which is nearly twice as tall as the dead-end towers on either side, yet the suspension tower weighs less than both of the dead-end towers due to BPA’s custom design.
Construction contractor Wilson Construction oversaw the stringing of the lines, which provided plenty of headaches but was completed in less than two months, BPA said in its statement.
To string a conductor across the river gorge, a helicopter had to fly a light rope through a sheave–a wheel that guides the rope–on the suspension tower, and then connect it to the tower on the other side of the river. Heavier rope and steel cable was then pulled across the river until the conductor was pulled through the sheave and in place.
The project includes 18 conductors and two additional wires that provide grounding and communication functions, BPA explained. The stringing work was done during June and early July, with crews placing spacer dampers on the line and measuring the line for tension once the helicopter work was completed, the BPA spokesperson noted.
Appalachian Power to implement energy efficiency pilot programs for low-income customers in Virginia
ROANOKE, Va.-In September Appalachian Power began offering new pilot energy efficiency programs targeting the needs of low-income Virginia customers and specific energy assistance program to help homeless military veterans.
These projects augment and support the company’s low-income weatherization effort launched earlier this year and will bring Appalachian’s commitment to its low-income customers in Virginia to over $1.8 million in the coming year.
The pilot programs support 2015 legislation by the Virginia General Assembly and Gov. Terry McAuliffe’s initiative to assist low-income customers with home weatherization and help homeless veterans access permanent housing.
“These pilot projects will show more customers how to reduce energy usage and lower their costs,” said Charles Patton, Appalachian’s president and chief operating officer. “We will evaluate these programs as they progress to determine if they should be adopted as energy efficiency offerings from Appalachian Power in the future.”
There will be three pilot programs focusing on veterans, energy efficiency education for customers in assistance programs, and weatherization and efficiency upgrades to a multi-family residential building:
- Homeless military veterans receiving support from the Virginia Housing Development for Veterans through the Virginia Wounded Warrior Program and Total Action for Progress will be eligible for energy assistance funding from Appalachian. These veterans can receive an “energy voucher” that will be used to establish an account with the company and/or make payments on an electric bill. The program will be evaluated based on the number of veterans served during the pilot and the effectiveness in helping end homelessness.
- Energy efficiency education will pinpoint customers who receive assistance paying their electric bill and mail them information regarding measures they can take to save energy and reduce bills. The mailing will provide information regarding programs offered to assist commonwealth customers with energy conservation including those offered by Appalachian and by agencies in the area. The educational mailing will include an offer for a free energy conservation kit that includes compact fluorescent light bulbs, high efficiency aerators, and LED night lights.
- A multi-family residential pilot project will weatherize and improve the energy efficiency of a selected apartment building. The project will be studied to determine the energy savings achieved and an evaluation of tenant savings and impact on bill payments. The weatherization may include air sealing of the dwelling and duct work and improvements to the heating and cooling system. Energy efficiency measures include lighting upgrades, high efficiency faucet aerators, water heater upgrades and auto-off power strips. The evaluation includes a report of the costs of each component of the upgrade and expected savings, the actual energy usage for each unit before and after the upgrade, and the unit’s payment record before and after the upgrade.
In 2014 and 2015, Appalachian received approval from the SCC and planned or initiated a number of new residential energy efficiency programs in Virginia. They include a low-income weatherization program, home performance assessments and rebates, appliance recycling, discounts for energy efficient lighting and appliances, efficiency incentives for manufactured housing, and an air conditioning summer peak demand reduction program.
Appalachian Power has 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power). It is a unit of American Electric Power, one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 32,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a 40,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.
Utility mergers lagged behind global M&A activity in 2Q
The proposed Southern Co.-AGL Resources merger has gained much of the attention in the utilities sector, but overall mergers and acquisitions (M&A) activity within the industry this year was lagging well behind the mammoth dealmaking going on elsewhere in the economy.
An Ernst & Young (EY) report indicates that global M&A fell to a six-year low of $50.9 billion in the global power and utilities (P&U) sector for the first half of 2015.
The Asia-Pacific P&U saw the most robust M&A action in the second quarter with about $9.3 billion in deals, nearly 90 percent of that happening in China. Ernst & Young’s report indicates that India, Indonesia, Pakistan and Japan are ripe for potential deals, while valuations are strong in Europe, especially in the renewables arena.
Second-quarter dealmaking in the European and Americas P&U sectors fell 50 percent and 13 percent, respectively, quarter over quarter.
The year started out strong, but second-quarter global M&AS in P&U included only 96 deals worth about $21.2 billion.
“Despite the deal slowdown, valuations remain strong for many assets, particularly in renewables, T&D and generation,” Matt Rennie, EY’s global power and utilities transaction leader, said in a statement. “During the second half of the year we expect to see M&A rebound as companies respond to the sector’s ongoing transformation, particularly regulatory reforms and electrification in emerging markets.”
The study does not include the recently announced plan by Atlanta-based utility giant Southern Co. to acquire AGL Resources Inc., the natural gas-focused utility also headquartered in Atlanta. That deal is reportedly worth $12 billion in total enterprise value.
Economy wide, M&A activity both in the U.S. and globally is surging toward an all-time high, according to Reuters. Domestic M&A totaled $1.4 trillion as of August, while global dealmaking was already close to the $3 trillion peak reached in 2007, according to reports.
Among those megadeals include Berkshire Hathaway’s $30 billion buyout of Precision Castparts.
EYE ON the world
Regional Markets, Better Forecasting Critical for Renewable Integration in Asia
The share of renewable energy (RE) has been gradually increasing in the global electricity mix. Some of the European countries such as Denmark obtain nearly 60 percent of their needs from renewable sources. In other countries like Germany and Portugal, the renewable electricity, excluding large hydro, accounted for about 32 percent and 30 percent of the total power generated.
With ambitious plans and supporting mandates, several Asian countries will witness their renewables share in the total energy mix soon cross the 20 percent mark. This presents immense challenges for utilities to manage intermittency and uncertainties presented by solar and wind power.
As renewables move from niche to becoming mainstream sources of energy, it is also necessary to ensure that the relevant infrastructure is in place to manage the increased output. Possible issues encountered include the need for increased accuracy of supply and demand predictions and problems with controlling the voltage and frequency in the local grid.
This means that the power utilities have to invest heavily on backup power generators using gas or coal and also in Transmission & Distribution (T&D) network upgrades to handle intermittency. Utility companies worldwide are spending an average of US $25 billion annually on T&D maintenance and upgrades.
According to Ravi Krishnaswamy, Vice President, Energy & Environment, Frost & Sullivan, Asia Pacific, utilities will face the double impact of reduced revenues from selling energy.
“This is due to the fact that several customers have started to generate their own renewable electricity in addition to the increased need to invest in T&D upgrades to support renewable integration,” he noted.
However, to tackle this challenge some of the utilities such as RWE and E.ON from Europe and NRG Energy from the US have started deconstructing their business model. These companies are helping their own electricity customers to install and own renewable energy plants, thus effectively turning them into “˜prosumers’ and creating a virtual power plant through an asset light approach.
This move by the utilities only addresses one side of the challenge, which is customer owned generators, mainly rooftop solar. The bigger challenge will still be to integrate several gigawatts of large solar and wind farms into the power grid.
Frost & Sullivan’s new research, “˜Global Perspective on Integration of Renewable Energy into Grid’ focuses on several case studies and best practices.
Among them are:
In 2013, Denmark saw the capacity of its renewables reach 5GW with onshore wind making up the biggest share. Renewables met 62 percent of Denmark’s power demand in 2014, up from 33 percent in 2013.
Denmark has set a very ambitious target of generating 50% of its electricity from wind power alone. However, this is not without its challenges. These challenges include overhauling its ageing transmission lines, managing extreme wind power variations and Increase domestic power flexibility to battle regional competition. Denmark is able to overcome this by having a well-integrated grid with the European and Nordic market. It has also adjusted its coal plants to become more flexible in order to balance the intermittent wind power generated.
On average, renewable energy meets 30% of the power demand required in Germany. The country has planned to increase the share of renewable energy to 35 percent by 2020 and an average share of 50 percent by 2030.
Germany has the advantage of a strong and reliable power grid system that leaves the transmission system operators (TSOs) and utility companies to manage RE absorption with very little modifications. Through the effective use of coal surplus and the ability to manage power exports to neighboring countries to offset any fall in electricity prices, Germany has successfully managed to integrate renewable energy into its power grid.
In 2014, renewable generation accounted for 13 percent of the total electricity produced in China. Moving forward, the country plans to reach 100 GW of installed wind power capacity by 2020. The biggest challenge faced by China is wind curtailment and it has lost more than $1 billion annually since 2011. China is developing energy storage systems and also building ultra-high voltage transmission systems to interconnect demand and supply centers.
“The ability to analyze demand patterns for electricity and integrate them with accurate weather forecasting will help utilities avoid stranded investments into expensive T&D upgrades for renewable integration. This will make information the most valuable commodity in the power grid of the future,” explained Krishnaswamy.
Frost & Sullivan’s report titled “Global Perspective on Integration of Renewable Energy into Grid” is set to publish this month.