Using the iPad in a Smart Grid

There has been quite a debate in the legal blogosphere about the utility of Apple's new iPad for a legal practice.  Long time legal blogger Nicole Black has started a new blog about the iPad, as has Josh Barrett, a Portland, Oregon business attorney.  They are generally positive about the iPad.  On the other side of the spectrum are Scott Greenfield, a New York lawyer, and Brian Tannebaum, a lawyer in Miami.

Whether or not the iPad is a good tool for the delivery of legal services is beside the point to me.  One area where I see the iPad, the iPhone (or any other smart phone for that matter) providing value to electric energy utilities and consumers is in the convenient utilization of smart grid technologies.

Energy conservation is the cheapest and easiest method to reduce energy consumption and ameliorate environmental problems associated with energy production.  Smart grid technologies such as Google Power Meter offer consumers the opportunity more readily control their energy consumption by monitoring usage and highlighting things and times of high energy usage.

Control4 has an app allowing consumers to control things like security systems, access lighting, and temperature.  An app integrating that control with software systems like Google Power Meter and extending it to allow to conveniently control when the dishwasher, clothes dryer, and other household appliances operate would be a step in the right direction of energy conservation.  Moreover, feeding that information to the utility in real time would better equip them to flatten the demand curve, thereby reducing the need for spinning up plants for stand-by capacity.

Let Me Know:  If your home was smart grid enabled, would you use an app that gave you more control over your energy usage?

Bloom Boxes Unveiled by Bloomenergy

Bloomenergy unveiled its long-awaited fuel cell technology today.  This is a story we have been following for some time, and have reported on extensively:

Will Bloom Boxes Make Your Electric Utility Obsolete

Bloom Energy to Unveil Bloom Boxes Wednesday

Bloom Boxes Could Promote Economic Development in Arkansas

According to the Bloomenergy data sheet a Bloom Box, which it now calls an Energy Server, uses either natural gas or directed biogas as fuel.  The fuel required at rated power is 0.661 MMBtu/hr of natural gas.  Its rated power is 100kw (the claim is that is enough to power 100 homes for base load -- this may actually be too low).

As for emissions, the data sheet states:

NOx <0.07 lbs/MW-hr
SOx negligible
CO <0.10 lbs/MW-hr
VOCs <0.02 lbs/MW-hr
CO2 @ specified efficiency 773 lbs/MW-hr on natural gas, carbon neutral on Directed Biogas

In addition, the fuel cells act not only as an electricity generator, but also as a storage device.  So electric power generated by solar or wind, for example, will be integrated with the "Energy Server" to further reduce the carbon footprint.

Moreover, the benefits of distributed generation are a reduction in the cost and complexity of transmission and distribution, the company asserts.

eBay CEO John Donahoe was quoted by Josh Lowenshon as saying that his company installed 65,000 feet os solar panels and powered 18% of its campus.  Then, it installed five Bloom Boxes and powers 15% of its campus.  Brian Kelly of Coke says the fuel cells are powering 1/3 of ifs Odwall plant; Brian Kelly of Cox indicates that they are powering 70% of its facility in San Francisco; and Bill Simon of Wal Mart says Bloom Boxes are carrying 60-80% of its energy needs at peak in the buildings where they are installed.

Now that we know more details about Bloom Boxes, tell us what you think.

Bloom Boxes Could Promote Economic Development in Arkansas

The new fuel cells manufactured by Bloomenergy, called Bloom Boxes, and partially unveiled Sunday night on CBS's news program 60 Minutes, will be further revealed during a  Bloomenergy announcement Wednesday at the headquarters of one of its first customers, Ebay.

For those who have not been following this story, the Bloom Box fuel cells are a stack of ceramic wafers with a proprietery ink on each side separated by a metal alloy.  Fuel (currently natural gas, but it may be operated with other fuels) goes in one side of the ceramic wafer, and oxygen goes in the other.  The resulting chemical reaction -- which does not involve combustion -- produces electricity.

According to the 60 Minutes report, Bloomenergy has installed the devices for 20 commercial customers, including Ebay, Wal-Mart, Google, and Fed Ex.  Reportedly, the fuel cells have reduced the cost of electricity for those customers, Ebay saving as much as $100,000 on its electricity costs.

With a reported $400 million in venture capital backing, principally from Kleiner, Perkins, Caufield & Byers, led by John Doerr, the stakes are obviously high for Bloomenergy.  And the company is not without its critics, as pointed out by Paul Keegan in Fortune Brainstorn Tech:

"I definitely think Bloom is over-hyped," says Jacob Grose, senior analyst at Lux Research, which specializes in emerging technologies . . . .  "what Bloom offers does not seem to be unique -- other fuel-cell companies are doing very similar things.  The real question is whether Bloom has unlocked the secret of how to make thiese things cheap, and I'm very skeptical of that."

One hopeful that Bloomenergy has done just that is the reason K.R. Sridhar and his secretive company has decided to go public.  According to the Keegan article,

Turns out it wasn't his idea -- his customers are forcing him to show his hand.  "They are pushing, he admits.  "They are saying if you're not going to say anything we're going to go out and say we're doing this."

If its customers want to publicize what it is doing, then the company must be doing something right.

DOES THIS BENEFIT ARKANSAS?

Electric energy law and policy are some of the most intriguing issues of our day.  The purpose of this blog is to foster a discussion of the issues and at least imagine some of the policy alternatives and other ideas that might lead to energy independence, economic development, and a healthier environment.  These are some ideas about how technologies like Bloom Boxes can benefit our state (or any other state for that matter):

  • Manufacturing.  Arkansas is already becoming a leader in renewable energy manufacturing, with significant facilities for the production of wind turbine component parts, including blades and nacelles.  Let's hope the Arkansas Economic Development Commission, its Arkansas Energy Office, and regional organizations such as the Arkadelphia Regional Economic Development Alliance are working to attract these types of companies utilizing emerging technologies.
  • Utilities.  Although we speculated last November whether Bloom Boxes would make your electric utility obselete, that will probably not be the case.  More likely, utilities will install Bloom Boxes at substations, turning the substations into generating facilities.  The real question is will Bloom Boxes make generating facilities like the Turk plant and the White Bluff facility obselete?
  • Municipalities.  Municipalities can benefit from Bloom Boxes in a number of ways:
    • Municipal owned utilities.  Arkansas law provides a mechanism for municipal owned utilities.  In the future Bloom Boxes may provide a viable generation alternative for municipalities and, for those municipalities with a large enough landfill, landfill gas may provide at least a portion of the fuel for the Bloom Boxes.
    • Sustainable communities.  Employees and employers both are increasingly concerned with the sustainability of operations, as the Keegan article notes.  A community that can provide cleaner electricity production would be attractive.
    • Community job creation.  Municipal owned utilities create jobs for the local community.
  • Commercial and Residential.  The Keegan article notes that Ebay saved $100,000 in electricity costs after installing Bloom Boxes, an example of more efficient energy production being a good business decision.  The possibities for residential implementation are numerous.  Here are two:
    • Residential developers could make a Bloom Box generating station a part of the development, to be operated and maintained by a property owner's association.
    • Individual homeowners could band together and install a Bloom Box serving two or more residences, and make its operation and maintenance a covenant running with the land.  Thereafter, subsequent purchasers of the property would be obligated to continue participating in the operation and maintenance, as well as continue receiving the benefit of the cheaper electricity.

 

Bloom Energy to Unveil Bloom Boxes Wednesday

Bloom Energy is expected to unveil its Bloom Box fuel cells Wednesday.  We noted the potential for Bloom Boxes to be a game changer some time ago.  And anticipation for an announcement has been mounting, especially since the Bloom Box was featured in "60 Minutes" program by Lesley Stahl.

If the reports about the abilities of the Bloom Box are correct, it truly could be a game changer.  So far the claims are that:

  • The primary material in the Bloom Box is beach sand, a plentiful and ubiquitous resource, which is baked into thin ceramic wafers.
  • The wafers are painted with proprietary inks on each side.
  • Oxygen is introduced to one side and fuel (typically natural gas) is introduced to the other.
  • The result is a chemical reaction (not combustion) that produces electricity.

Google, Ebay, Wal-Mart and others have reportedly used the bloom boxes extensively.  In the "60 Minutes" report by Stahl, the Ebay CEO indicated that Bloom Boxes at the Ebay campus performed much better than the acres of solar panels on Ebay roof tops.

Moreover, the Bloom Boxes are reportedly very fuel efficient.  We have seen reports that the boxes are 50-60% more efficient than producing electricity through traditional gas turbines.  And, in this age of carbon consciousness, the emissions are far lower than other fossil fuel electricity generation methods.

Oh yes . . . and the cost?  Commercial versions under testing at Google, Ebay and other locations currently sell for around $800,000.  Home models, with a target availibity of within five years, are supposed to come in below $3,000.

 

Renewable Energy Needs a Level Playing Field

We often hear statements that clean, renewable energy is just too expensive as compared to energy derived from fossil fuel.  In Arkansas, arguments are being made in the Public Service Commission's "Sustainable Energy Resources (SER)" docket (08-144-U), that fossil fuels (coal) is the cheapest form of fuel for electricity production.  However, not all of the costs of producing electricity from coal are included in your monthly utility bill.  There are external costs -- increased health care costs, damage to timber and agricultural production, among many others -- that are real costs we each pay, however they may be hidden in.

In the Wall Street Journal's Environmental Capital Blog, Keith Johnson writes:

For policymakers, these externalities represent an opportunity as much as a headache.  For all the worries that a bigger role for government in the energy business -- from cap-and-trade schemes to solar-powered subsidies -- represents a retreat from free markets, that's hardly the case.  Energy markets aren't "free" today, and the playing field is anything but level.

New energy policies that seek to redress those problems, and unleash rather than further stifle a genuine market for energy, will point the way toward a new energy future that makes sense, both environmentally and economically.  That's because, if new policies set out to tackle those externalities once and for all, the environmental answer will quite often become the economic answer.  Everything has its price -- and its cost.

We agree.  As we have previously said, the Public Service Commission docket on Sustainable Energy Resources represents an opportunity for Arkansans to propose policy alternatives.  Arkansas has a wealth of resources for the production of electricity, and should take advantage of the opportunities for the economic development of the state, especially in its rural areas.

 

Renewable Energy Incentives Historically and Economically Justified

I recently read comments by Forrest Lucas, the owner of Lucas Oil (which has its name on the stadium where the Indianapolis Colts play), opposing the construction of a biomass generating facility in Crawford County, Indiana.  The article in the Louisville Courier-Journal by Grace Schneider quotes Mr. Lucas as saying, apropos of government-sponsored grants, property tax abatements, state incentives and federal tax credits for such facilities:

If these guys come in with their own money, it's one thing.  This is about America wasting huges sums of money. . .  This is not just about Crawford County or the state of Indiana.  It's not a good thing for the country.

which made me wonder if government (public) support for those developing industries is such a good thing.  Afterall I strongly believe, as the country at large does, that free market capitalism is best way to create national wealth and raise the standards of living for the greatest number of people.  I take from his comments that Mr. Lucas believes that, too.

But after thinking about it I concluded that public programs designed to support and encourage the development of alternative and renewable energy sources is a good thing.  There are three basic reasons for this conclusion:

  • Public support for new technologies and industries, whether through tax policies or direct subsidies, have been utilized from the country's beginning to create a economic growth;
  • Considering the significant public subsidies to fossil fuels, alternative and renewable energy sources suffer, at least partially, from an artificially created competitive disadvantage;
  • Based on our ongoing need to develop clean energy and foster energy independence, no source of energy should be eliminated from the portfolio yet.

GOVERNMENT SUBSIDIES TO NEW INDUSTRY AND INFRASTRUCTURE HAS HISTORICALLY BEEN THE CATALYST FOR ECONOMIC GROWTH

 

 

Anyone with a smidgen of knowledge about the economic history of this country knows that free markets are aided and sustained by government rules and regulations, government investments, and government tax policies.  Certainly the Father of free market capitalism as practiced in the United States, Alexander Hamilton, understood that.  Just read Hamilton's First and Second Reports on Public Credit and his Report on Manufactures.  Likewise, the tariffs of 1816 and 1828 were taxes designed to protect and spur the growth of particular economic sectors.  That has been the case throughout the country's history.  In his book Bold Endeavors: How Our Government Built America, and Why It Must Rebuild Now, the investment bankerFelix Rohatyn eloquently describes some of the government programs upon which our free market economy is built:

  • The Erie Canal
  • The Transcontinental Railroad
  • The Rural Electrification Administration
  • The Interstate Highway System

There are other, but you get the idea.

RENEWABLE ENERGY SOURCES COULD COMPETE BETTER ECONOMICALLY BUT FOR THE GOVERNMENT SUBSIDIES TO FOSSIL FUELS.

Fast forward to today and consider the debate on government tax policies and other incentives that are designed to spur the development of alternative and renewable forms of energy.  Opponents of these forms of energy often say that they are too expensive, that the generating capacity of wind, solar, biomass and other forms of renewable energy would not exist without government subsidies.  That is undoubtedly true.  But here is another truth:  those forms of generation are at a greater competitive disadvantage than they would be if not for government subsidies to fossil fuels.

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Municipal Electricity Production From Biomass Will Promote Economic Development

I once heard a preacher say there is nothing wrong with fishing with your kids on Sunday morning.  Fishing is a wholesome activity, and especially good if you are spending the time with your family.  However, he went on to say that an even better activity is spending that time with them in church.  Both activities are good; just one is better than the other.

The same principal applies to Arkansas's growing biomass industry.  Phoenix Renewable Energy is building biomass plants in Camden and El Dorado for the the production of wood pellets.  The pellets will be used in Europe for home heating and electricity production.  That is good.  Certainly those communities in South Arkansas can use the jobs and economic development that Phoenix is creating.  There may be an even better use for Arkansas's biomass potential, however.

We previously noted that Arkansas has the biomass potential to produce 150% of the state's residential electric needs.  Moreover, biomass is certain to have an increasing share of the U.S. electricity generation portfolioWhy not utilize that fuel within the state, rather than importing fuel (coal) for electricity production, and exporting dollars?  Arkansans currently spend 10.1 billion annually for fossil fuel, a significant portion of which is fuel for the production of electricity.

The Arkansas Code, sections 14-206-101 through 14-206-112, permits Arkansas municipalities to acquire or construct, and operate, an electric public utility plant for the production, transmission, delivery, or furnishing of any public service.  Moreover, section 14-200-101 permits municipalities owning or operating facilities may extend service to rural areas contiguous to the municipality.  Municipalities in Arkansas with nearby biomass stocks, including timber and wood products waste, biomass feed stocks grown on marginal agricultural land, and even municipal waste, in conjunction with companies like Phoenix Renewable Energy, should consider municipal electric power generation and distribution.  The benefits are obvious:

  • Local economic development -- through the construction and operation of facilities, as well as through the manufacture and installation of distributed generation systems made an integral part of a municipal electric utility.
  • Keeping the money for fuel costs in the community -- rather than importing fossil fuel and exporting dollars, the money for fuel stays in the local economy.  Arkansas timber owners, loggers, and wood products manufacturers would have a ready market for what would otherwise be waste products.  Moreover, Arkansas farmers and landowners would have additional cash crops.
  • More local control of energy production -- decisions about energy production would be made locally, rather than by entities far away without knowledge of local conditions and needs.
  • Creating a sustainable community -- What industry wouldn't want to locate in a community with sustainable power production and what employees wouldn't want to relocate to an environmentally conscious community?
  • Incentives for integration of smart grid technologies and distributed generation -- In a sustainable community, grass roots efforts at distributed generation could be rewarded through a net-metering policy that purchases any excess generation, rather than our current state system that is like a cell phone plan where you surrender the unused minutes.

Point to remember:  Lest you think municipal electric generation from biomass is a pie-in-the-sky proposition, read about the Joseph C. McNeil Generating Station in Burlington, Vermont.  That electric power generating station has been producing power from wood waste for Burlington for nearly 30-years.

Arkansas Nuclear One Turns 35; Entergy Cuts Carbon Emissions 17.5 Percent

Arkansas Nuclear One, which provides one-fourth of the electric power in Arkansas, and more than half sold by Entergy Arkansas, turned 35 this month, according to an article in Arkansas News.  Entergy supports climate change legislation, and in 2001 voluntarily capped its carbon emissions to the previous year's release.  More importantly, it has since reduced its emissions by 17.5 percent, to 43.9 million tons in 2008.  According to company officials, Nuclear One is emissions free.

Regarding the importance of climate change legislation, the article quotes Entergy Chairman and CEO Wayne Leonard as saying:

We're playing Russian roulette with the planet and our economy.  The difference is there's a bullet in every chamber except one.  We have to answer the question of whether we're more important than future generations.  I believe with all my heart that everybody involved in this debate in their own heart knows what the answer to that question is.

Not all groups view nuclear power as the right alternative to reduce emissions and retard climate change.  The article notes that the Sierra Club in Arkansas is opposed to nuclear power because of nuclear waste.  The Sierra Club supports the use of wind, solar, and geothermal, along with natural gas a a bridge fuel, to provide electric power and reduce carbon emissions.

Our Take:  Every type of electric energy generation has its own drawbacks.  Wind and solar are emissions free, but are intermittent and require a lot of land and significant investments in transmission.  Coal is cheaper, but the emissions are a primary driver of climate change.  Natural gas has fewer emissions than coal, but is subject to price volatility.  Nuclear power solves the problem of emissions, but there are safety concerns and problems disposing of nuclear waste.  However, if the overriding goals are energy independence and stopping climate change, then each form of generation should be seriously considered and implemented where and when appropriate.

Wind Coalition Seeks to Intevene in White Bluff Docket

The Wind Coalition, a group devoted to the development of wind energy in the United States, is attempting to intervene in the Arkansas Public Service Commission's White Bluff Docket, wherein Entergy Arkansas and the other owners of the White Bluff generating facility seek approval for environmental upgrades.  According to the Wind Coalition's filings, its

members have begun acquiring land rights to potentially construct wind farms in and near Arkansas, and are willing and able to provide renewable energy in Arkansas to [Entergy Arkansas] or other companies.  A Declaratory Order from the Commission indicating that the Project (which, as structrured, has no renewable generation component) is in the public interest would potentially preclude the Wind Coalition from providing such renewable energy to [Entergy Arkansas] or another entity in the future.

In addition, the Wind Coalition states that permitting it to intervene would:

  • ensure that wind energy is considered on the same playing field as other types of generation such as coal, nuclear, and natural gas;
  • assist in the evaluation of Entergy's price assumptions for coal supply; the capital costs of wind power; wind capacity factors; the economic impacts of joining the Southwest Power Pool; and whether Entergy considered the improved import capability from the upcoming transmission upgrades approved over the next four years;
  • assist the Commission in developing a full, fair and adequate record upon which to base its decision concerning whether the White Bluff upgrades as currently structured is in the public interest.

Entergy asserted in its original petition that it "considered whether renewable generation and efficiency alternatives would be appropriate for comparison" but "concluded that it would be unrealistic to assume that either alternative" would be effective.  If the APSC permits the Wind Coalition and other similar groups to intervene in this docket, submit additional evidence, and independently evaluate Entergy's analysis, would certainly go far "in developing a full, fair and adequate record upon which to base its decision regarding the proposed White Bluff upgrades.

Arkansas PSC Staff and Entergy Arkansas Ask For Delay in White Bluff Proceeding

The Arkansas Public Service Commission Staff sought a suspension of the procedural schedule in the Commission's White Bluff docket on December 3.  Entergy Arkansas joined in that effort today.

The requested delay is based upon the response of the U.S. Environmental Protection Agency and U.S. Forest Service to the proposed permit for the facility to be issued by ADEQ.  In a letter to the Arkansas Department of Environmental Quality regarding the permit application for the White Bluff upgrades, the EPA noted that:

we do not feel an SO2 emission limit of 0.15 lbs/MMBtu has been shown by the Arkansas Department of Environmental Quality (ADEQ) to be BART [Best Available Retrofit Technology]. . . [W]e do not believe ADEQ has properly conducted its BART analyses . . . including the Entergy White Bluff facility, as required by 40 CFR 51.308.  Had this analysis been performed, we feel that a more stringent control level would have been likely shown to be BART.

The U.S. Forest Service echoed those concerns.

The upshot is that action by the EPA and other federal agencies could delay the implementation of the upgrades beyond the 2013 target date.  Therefore, the Commission Staff and Entergy have requested a suspension of the procedural schedule until the federal concerns are addressed by the ADEQ.

More important than the procedural delay, however, is the effect of the federal action on whether the project, as proposed, can move forward.  If there is a change in the allowable emissions rate, that may effect whether the technology proposed to be used is sufficient to meet the new allowable emission rate.

The more fundamental issue the Commission will have to address is whether, in light of other existing generating resources, the facility upgrade should be approved at all.