By Mirella Vitale, SVP of Group Marketing, Communications & Public Affairs at ROCKWOOL GroupMarch 18, 2019
ROCKWOOL: Energy efficiency is the best way to create resilient cities and communities.
We’re at an inflection point in the battle against climate change. With each passing day, the time available to address climate change dwindles while the effects of global climate disruption become more pronounced. According to reports by NOAA and NASA, 2018 was one of the hottest years on record and it was accompanied by more than a dozen billion-dollar weather and climate disasters in the U.S. alone. It shouldn’t be surprising that 75% of Americans along with 75% of Europeans are personally concerned about climate change.
The U.S. and other countries have options for tackling the climate crisis. The drop in renewable energy prices from sources like wind and solar in places like Iowaand Minnesota have been more than welcome to ratepayers in many communities. It’s no wonder why cities like St. Paul and Kansas City are committed to getting more of their energy from renewables. It just makes the most economic and environmental sense.
But we can’t just fuel-switch our way out of global climate disruption. The speed at which we must transition the global economy to low-carbon fuels and power is daunting. In order to tackle the climate crisis and many of the resiliency issues that go along with it, leaders need to invest significantly in energy efficiency at a scale much greater than present levels. According to the UN Intergovernmental Panel on Climate Change (IPCC), investing in reducing carbon pollution from the building sector is 40% more cost-effective than investing in any other sector. That means we must drastically change how buildings and homes are constructed and improve our current building stock with energy efficient renovations.
Right now, more than 50% of the entire global population lives in urban places. In the U.S., nearly 80% of Americans live in urban areas. With such large population centers come significant energy challenges. Beyond keeping up with energy demand, ensuring energy is used efficiently is no small task. 40% of U.S. homes were built before 1970, meaning a large percentage of American homes in urban areas are old, outdated, and energy inefficient. Buildings are truly on the front lines of climate change.
This isn’t just a problem for the U.S. The global building fleet and construction sectors account for 36% of current global energy use and nearly 40% of global carbon pollution, according to the International Energy Agency. In the U.S. 40% of domestic carbon pollution stems from buildings. If we’re going to be successful in slashing carbon pollution during the next 12 years — cities will need to take immediate steps to curb energy consumption for commercial and home energy use.
It is true that retrofitting existing buildings on a mass scale in large population centers is a significant undertaking. There are upfront costs involved in renovating buildings with better, energy efficient insulation and materials like stone wool. But keep in mind that every year in the U.S. alone, $130 billion is wasted on unnecessary energy costs. Investments in energy efficiency more than pay back over time.
Finding ways to leverage significant investment in retrofitting existing buildings on a mass-scale should be a top priority for policy makers. It should mean requiring new buildings to meet the highest energy efficiency requirements such as those set by the nearly Zero Energy Building (nZEB) standard. It should also mean renovating existing buildings to meet the same high standards. Incentivizing energy efficiency retrofits and making the financing easier to complete projects should be a part of every bold climate action policy. And for big businesses and real estate developers, ensuring energy efficient materials are used in constructing new buildings should be a part of every current blueprint and business plan.
The good news is that there has already been significant progress. Many policy makers in cities like Chicago, New York and Boston and countries like Denmarkand France are already moving toward making the building sector more efficient through new energy efficient requirements, incentives and investments. They see the environmental and economic win-win of energy efficiency. On top of that, by using improved energy efficient materials such as stone wool, cities are also improving their resilience against fires and insulating against noise pollution, creating overall healthier cities.
But there is significantly more to be done and the clock is ticking. The path to creating stronger, more resilient communities and cities fundamentally rests on how they are built. It’s time our leaders ensured that our buildings will be able to stand up to and contribute to tackling the biggest challenge of our time – the climate crisis.
Mirella Vitale is Senior Vice President of Group Marketing, Communications and Public Affairs at ROCKWOOL Group.
- The Los Angeles Department of Water and Power (LADWP) is preparing a potentially world record-setting power purchase agreement (PPA) for solar + storage at 1.997 cents and 1.3 cents per kWh, respectively.
- LADWP presented the 400 MW solar, 800 MWh storage project to the city’s Board of Power and Water Commissioners on June 18, previewing its planned July 23 submission for approval. The solar + storage contract would beat out the previous U.S. record, a 2.376 cents per kWh solar project proposed by NV Energy in June 2018, with both the Nevada and California projects under developer 8Minute Energy.
The Eland Solar + Storage Center is the product of over 130 proposals and would be the first integrated battery/photovoltaic system for the LADWP, the utility said. The project will be built out in two phases, with 200 MW of storage and a 100 MW four-hour battery system over a 25-year PPA, slated to begin service in April 2023.
The center “maximizes existing transmission capacity because it can deliver the full output during most of the year,” said Barner. The solar portion of the project is intended to act as generation from roughly 7 a.m. to 7 p.m., and the battery will kick in from 7 p.m. to 11 p.m., depending on system needs, according to the utility.
“This is like music to my ears,” Commissioner Christina Noonan told LADWP. “I wish that every procurement request laid out this way — over 130 offerings, lowest price in the United States, great capacity. … I’m very, very, very impressed.”
California is seeking more generation in order to meet its peak system reliability needs from 2019 to 2024, and last week launched a procurement track that would add 2 GW of new resources. LADWP noted projects such as the Eland Center are important toward meeting high capacity needs.
“We need to have more capacity on our system and this is an inexpensive way, and a clean way, to do that,” said Barner.
Prices for solar are expected to continue falling, potentially dropping as low as $14.07/MWh through 2022, according to an August 2018 report from Greentech Media Research.
LADWP is “actively negotiating” two more PPAs that it hopes to present to the commission by the end of the year, as part of its 100% clean energy goal, Barner said.
Utility Dive excerpt, July 2019, www.utilitydive.com/news/diversifying-the-northeast-power-mix-is-offshore-wind-storage-key-to-the/557412/
As the Northeast power system evolves toward reliance on large scale renewables, storage, distributed energy resources (DER) and other load balancing strategies will be essential, say stakeholders. And offshore wind and storage may be a better answer for the reliability challenges of the Northeast’s dark winters than solar-storage hybrid projects, but a diversity of resources will be essential.
“These technologies are not competitive, they are complementary, and will be part of a portfolio with demand response, load reduction programs and transmission for wind,” Public Service Electric and Gas-Long Island (PSEG-LI) VP for Power Markets Paul Napoli told Utility Dive. “It is not about home runs. Each part of the portfolio has to get on base. That’s how we win the game.”
Reliability benefits of Off Shore Wind (OSW) + storage. OSW has a 60% to 75% coincidence with winter peak demand periods, giving it a particularly high winter reliability value.
There is a need for a portfolio of zero emission resources that maintains high reliability, Huber said. Initially, over-procurement of renewables to protect against variability, with economic curtailment when necessary, may be the least cost solution. Hydropower and existing pumped storage can fill gaps, and “solar and newly added storage will be supplements,” he said.
OSW “seems an obvious choice if there is transmission to deliver it into load pockets because, in the right offshore locations, it can help cover peak demand,” he added. In the near term, if U.S. offshore wind proves to be low in cost and aligns with peak demand, “economic curtailment may be cheaper than storage.“
The right price signals will “mature” technologies for directly addressing peak demand and atypical extreme weather events, he added. An example is Massachusetts’ Clean Peak Standard (CPS), a concept Huber created, that would compensate technologies for peak demand reductions and load shaping.
Through 2030, solar plus storage on land and OSW, with some complimentary storage to align supply and demand, will dominate the Northeast’s renewables, with existing fossil fuels continuing to have a role in the power mix, Huber said.
To reach 2050 emissions goals, fossil generation will need to phase out “without compromising reliability, even during extreme events like a polar vortex,” he said. “By 2030, system operators will have learned how renewables and other technologies perform and can begin to shrink fossil fuels’ role.”
Reliability “is not about choosing between resources, it is about choosing between conditions and constraints,” Energy Storage Association Policy VP Jason Burwen agreed.
A transmission constraint that prevents getting generation from the bulk system to a local area “requires either new transmission or locally available resources,” Burwen said. “Storage can serve local reliability if there is local generation to charge it.”
Where there is no constraint, OSW, onshore wind or utility-scale solar can be used, Burwen said. And pairing them with storage can transform the resources from variable to dispatchable resources.
New York “is probably the most difficult place in the northeast to add utility infrastructure, which makes it a good place for both storage and offshore wind.” Doug Copeland Manager, Atlantic Shores Offshore Wind Development
Recent research shows OSW’s reliability along the Northeastern coast is significantly better than onshore wind because its production profile better aligns with higher loads, Lawrence Berkeley National Laboratory (LBNL) Research Scientist Andrew Mills told Utility Dive.
A soon-to-be published LBNL study on the reliability of solar, storage and solar plus storage revealed the importance of longer duration storage for reliability, Mills said. But the solar-storage reliability contribution to winter-peaking systems like those in New England is lower, while OSW has a 60% to 75% coincidence with winter peak demand periods, giving it a particularly high winter reliability value.
These and other studies also suggest that increasing storage flattens and lengthens the peak demand period, Mills said. “With 20% of load met by storage, it may take 10 hours of storage duration instead of 6 hours to get significant reliability value.”
New York “is probably the most difficult place in the northeast to add utility infrastructure, which makes it a good place for both storage and offshore wind,” Atlantic Shores Offshore Wind Development Manager Doug Copeland told Utility Dive.
Off the Northeastern coast, OSW and transmission are foundational to any portfolio of resources, while the value of storage “is very location specific,” he said. “As more offshore wind comes online in New Jersey, storage can mitigate its system impacts. In New York City, the system is very congested and stressed and the need for storage will come much sooner.”
Fortunately, note stakeholders, policies are already in place to spur that deployment and bring the market for both OSW and storage to scale.
The rise of OSW and storage
Currently, OSW’s midpoint unsubsidized levelized cost of energy (LCOE) is $92/MWh and its capital cost is $3,025/kW, according to the 2018 Lazard report. By comparison, natural gas ranges $41/MWh to $74/MWh.
But advances in Europe and China have brought prices to as low as $61.56/MWh and $51.48/MWh in 2018, according to the Global Wind Energy Council (GWEC) April 2019 market report.
With scale, U.S. prices can match those in Europe, National Renewable Energy Laboratory (NREL) Research Scientist, Walt Musial told Utility Dive last year.
That is why states like New York, New Jersey and Massachusetts have set targets for both storage and offshore wind, and Maryland requires a portion of its renewable portfolio standard come from offshore wind and has a 30% investment tax credit for storage. Connecticut has a 2 GW offshore windmandate and Maine and Delaware currently have policy in place encouraging offshore wind buildout as well.
Following state mandates, utilities and developers are also getting in the game.
Consolidated Edison (ConEd) has a competitive solicitation out for 300 MW of storage by December 2022, as a result of state mandates in order “to get the market moving,” the utility’s Resource Planning Manager Aydemir Nehrozoglu told Utility Dive.
Scale is coming fast. Currently, only one 30 MW U.S. project is operational, but eight projects representing 1,958 MW are in development, a June 2019 industry white paper reported.
The unsubsidized levelized cost of a utility-scale solar plus storage project with 4-hour lithium ion batteries is $108/MWh to $140/MWh, and its capital cost is $1,559/kW to $2,162/kW, Lazard reported in November 2018.
More important are Lazard’s forecasted drops in storage costs, Huber said. By 2022, the cost of lithium ion storage is expected to drop 28% and longer-duration flow battery chemistries are forecasted to fall 38% to 45%.
Those price drops will become important as the penetrations of large scale renewables rise, and developers and utilities seek a balanced portfolio of resources.
Building the right portfolio
Mandated OSW targets will also help to drive transmission upgrades, regardless of what happens in the storage market, said Nehrozoglu.
Transmission is inadequate to deliver OSW in certain parts of its Long Island territory served by pre-1970s natural gas peakers, he said. Additionally, new transmission and natural gas pipelines face permitting challenges and the 660 MW potential deficit is too large to be served cost-effectively by battery storage.
The need is “15 or 20 times” bigger than non-wires solutions like ConEd’s pioneering portfolio of demand side management resources in the Brooklyn-Queens Demand Management project, ConEd Utility of the Future Group Manager Michael Harrington added.
“The solution will be a mix of new technology resources and traditional resources, some owned and operated by the utility and some by third parties,” Harrington said. “The hard question is exactly what that portfolio is.”
To address that question, Eversource has initiated a partnership with offshore wind developer Orsted, Charlotte Ancel, the utility’s director of clean energy, told Utility Dive.
An Eversource 25 MW, 38 MWh battery installation is expected to reduce outages by 50% for Provincetown and two other Cape Cod communities, Ancel said. Another 5 MW, 20 MWh hour installation on Martha’s Vineyard will allow the retirement of five diesel generators that serve peak demand.
To meet policy goals, “all the resources have to work together, but we don’t expect home runs, we just want singles, because winning this game will be a team effort.” Paul Napoli, VP, Power Markets, PSEG-LI
Eventually, “this battery storage will be paired directly with offshore wind, large scale hydro, or utility-scale solar,” she said. “It will also provide significant value as a distribution system asset, as Eversource’s distribution system evolves into a platform to accommodate small-scale, flexible resources like electric vehicles and smart thermostats.”
U.S. OSW developer Deepwater Wind is working on the 130 MW Southfork project that “will feed its production directly into our Long Island territory’s east coast,” PSEG-LI’s Napoli said. In anticipation, the utility is considering new transmission, has interconnected distributed solar, built two 5 MW batteries and added load management programs.
The portfolio led to a competitive solicitation in 2015 and has been expanding in the Southfork load pocket since 2016-2017, he said.
This new way of serving load is built around “many circumstances and probabilities” and “a portfolio of traditional and new technologies,” Napoli said. To meet policy goals, “all the resources have to work together, but we don’t expect home runs, we just want singles, because winning this game will be a team effort.”
Correction: An earlier version of this story had an incorrect target date for ConEd secure 300 MW of storage. The company’s goal is December 2022.