Strengthening our region’s response to climate change

My latest at streets.mn is a review of how the draft version of Thrive MSP 2040, the new regional plan for the Twin Cities, addresses climate change.

Our region certainly can’t address this issue alone, but we have a responsibility to do our part.  The science also says we can’t wait another ten years to start addressing the problem.  However, as this plan is currently written, the specifics on climate response are too ambiguous, and risk being watered down during implementation.The regional plan is one of the state’s most significant pieces of land use and transportation policy. By fully embracing state goals and calling for strong response, this could be a document that makes Minnesota a national leader in climate change response.

Read the rest.

Xcel Energy: social cost of carbon is $21 per ton

Old news, but still worth posting. In October, Xcel Energy filed a report with the Public Utilities Commission defending the cost overruns of upgrading the nuclear power plant in Monticello. Via the Star Tribune:

Xcel filed the report in response to the state Public Utilities Commission’s pledge in August to investigate the Monticello investment. The company said that even with the cost overruns, the project benefits customers — saving an estimated $174 million through the remaining 16 years of its license.

Yet that cost-benefit number relies on a “social cost” comparison between keeping the nuclear plant, which emits no greenhouse gases, vs. generating electricity from a plant that does emit them. State law says utility regulators should consider the cost of greenhouse gas emissions, though they’re not currently regulated. Without carbon-emissions savings, the Monticello upgrade would be a losing proposition, costing customers $303 million extra over its life, according to Xcel’s filing.

In interviews, Xcel executives defended the investment, saying they would make the same decision today, even though the utility world has changed since 2008, when the project began. Natural gas, now a favored fuel for power plants, is low-priced thanks to the fracking boom. And electricity demand has lagged since the recession, dampening the need for new plants.

“If we didn’t have our nuclear plants, we would be taking a big step backward in terms of our CO2 accomplishments,” said Laura McCarten, an Xcel regional vice president.

If you dig into the dockets (CI-13-754), you can find that Xcel’s modeling assumptions include a price on carbon of $21.50 per metric ton starting in 2017.

Regardless of your feelings about nuclear power, a utility stating that the externalities of carbon should be priced when making energy planning/financing decisions is significant. The use of a ‘social cost of carbon’ (SCC) metric at the federal level has (not shockingly) been the point of some contention.  The Office of Management and Budget’s SCC is $35/mt in 2015 versus Xcel’s $21 in 2017.

Theoretically, we should start to see this figure or something similar used in all future energy planning decisions (Sherco, cough, cough) in Minnesota.  Unless of course, Xcel was only being selective in order to justify recovering this very large expense (and spare the shareholders).

It would be an interesting exercise to apply this Minnesota SCC to land use and transportation infrastructure and planning decisions.

Planet levers we can pull at home

leverBigCorners

At Ensia, Jon Foley explores how we can break the cycle of climate inaction:

Frankly, we cannot afford to waste more time in a state of denial, saying that maybe this time our national leaders will wake up and take the problem seriously. We need to look for leadership and solutions elsewhere.

More importantly, we need to match our climate solutions to situations where leadership is still effective. We need to find targeted, strategic opportunities to reduce emissions, matching solutions to effective leadership.

But just where are those targeted opportunities?

In the search for effective climate solutions, we need to look for what I call planet levers: Places where relatively focused efforts, targeted the right way, can translate into big outcomes. Just like a real lever, the trick is to apply the right amount of force in just the right place, with little opposition.

In the search for planet levers to address climate change, we should look for ways to significantly cut emissions that don’t require grand policy solutions, such as carbon taxes or global cap-and-trade schemes, or the approval of the U.S. Congress or the United Nations. We need practical solutions to substantially cut emissions that work with a handful of nimble actors — including a few key nations, states, cities and companies — to get started.

Focusing on cities presents a particularly good set of levers to address climate change. Cities represent a nexus point of critical infrastructure — for electricity, communications, heating and cooling, and transportation — that are already in desperate need of improvement, and shifting them toward low-carbon “climate smart” technologies is a natural progression. Done right, most of these investments would improve the health, economic vitality, efficiency and livability of cities. Most important, most cities largely avoid the partisan gridlock of our national (and some state) governments, making them an excellent place for making progress.

I agree with Jon that cities are a good place to focus, not only because they have “functioning governments” that aren’t deadlocked, but because they have some key policy levers that can be pulled without a great deal of opposition, without getting a huge number of actors involved (creating potential for gridlock or slow movement), and that could have significant emissions impacts in a short time period.

Here are some of the local climate levers I think we can lean on locally, mostly at the city level.

Community choice aggregation (CCA)

The deregulation of electric utility markets is usually associated with some bad outcomes.  However, it can have positive benefits as well.  Since July of this year, over 58,000 residents and over 7,000 small business customers in Cleveland have received a 21% savings on their electricity bill AND received electricity from 100% green sources (50% wind, 50% hydro) through the Cleveland Municipal Aggregation Program.

This type of program is made possible by the fact that in deregulated electricity markets, cities can act as bulk purchasers for all or many of their community’s electrical customers.  This large buying power allows cities to negotiate good terms – like low rates and high renewable percentages.  These programs also don’t require the dismantling or purchasing of local investor-owned utilities.  Six states allow CCAs, and to date eight cities have used this authority to secure cleaner, more affordable power for their residents.  Most allow customers to opt-out and stay with their existing utility if they choose.

A program that requires electric customers to basically do nothing and could reduce the city’s greenhouse gas footprint 3% seems like a pretty good lever.

Note: state legislation is required to make CCA a reality.

Community solar (solar gardens)

Most people in Minnesota (some say only a third) have a roof that is good for collecting solar energy.  Shading, orientation, structural integrity, and ownership structure are just a few of the potential barriers to putting solar on roofs.  Matching the demand for solar with the supply of best locations, developed at a large scale for efficiencies, is something community solar or solar gardens can do.  These programs could be a powerful climate lever.  According to Midwest Energy News:

Minnesota's first community solar project in Rockford, MN. Image courtesy Wright-Hennepin Cooperative.

Minnesota’s first community solar project in Rockford, MN. Image courtesy Wright-Hennepin Cooperative.

The idea is to let customers who can’t or don’t want to install solar panels on their own rooftop instead buy individual panels in a nearby solar development. The electricity generated by a customer’s panels is credited to their utility bill as if they were installed on their home or business.

New legislation makes this possible in Minnesota.  In Colorado, where the program has been in place since 2012, 9 megawatts of solar was sold out in 30 minutes.   That’s roughly the equivalent of 3,000 single family home-sized systems.  Time will tell if this demand by project developers translates into strong demand by consumers.

Solar gardens generally require state policy change (except in the case of a municipal or cooperative utility), but don’t require thousands of people making individual installation decisions, hiring contractors, finding financing, etc.  A smaller number of experienced installers can do big projects with (theoretically) lower costs, supported by community interest.  Customers can buy-in to solar projects at whatever level they choose (usually bound by a minimum and maximum) but can skip all the installation headaches.

Capturing waste heat from the sewer

This one is my favorite.  There is a large supply of wasted heat flowing directly beneath our feet all day because we’ve literally flushed it down the drain.  One estimate says we’re flushing away 350 billion kWh of energy each year.  That’s more than 35 Minneapolis’ worth of energy every year.

Neighborhood Energy Utility, City of Vancouver

Vancouver’s Southeast False Creek Neighborhood Energy Utility

Sewer waste heat recovery systems, or “sewer thermal”, work just like ground-source heat pumps to pre-condition air or water before they are used for heating and cooling (don’t worry, no sewer water or gas gets into your air conditioner).  In the Olympic Village neighborhood of Vancouver, sewer waste heat provides 70% of the annual energy demand of a district heating system (natural gas provides the rest).  National Geographic has a good overview of the growing attention being paid to sewer thermal.

All major cities have large sewer mains collocated with the highest density development. Tapping this waste heat resource would require digging up those pipes, but it can be done much more easily in conjunction with large new redevelopment projects.  And generally, there are few actors: wastewater utilities control the pipes, cities control the right of way.

Making energy use transparent

According to the EPA, the commercial and residential sectors were responsible for 40% of US greenhouse gas emissions from the burning of fossil fuels (which is itself responsible for 79 percent of emissions) in 2011.  And in most major cities, it’s the large buildings (usually commercial buildings) that are associated with half or more of the energy consumption and associated greenhouse gas emissions.  Making these buildings more energy efficient could be a significant climate lever, but that requires knowing how they are performing now and motivating action from their owners and managers.

Nine cities in the US (and many more internationally) are addressing building energy use by making energy usage information more transparent.  Building rating and disclosure policies (typically enacted by cities) require large buildings to use widely adopted benchmarking tools to measure their energy performance, and generally require them to disclose this information, along with a score, to the public.

NYCenergyuse

In New York City, one million residents can now see how much energy and water their apartment buildings consumed.  In total, over 2 billion square feet of real estate in New York City is now benchmarking building energy and water performance each year.  This information isn’t just for tenants, building owners and managers, real estate professionals, and energy service providers can all use this information to improve the performance of the building stock.  In 2012, in their first report on benchmarked buildings, New York City estimated that:

If all comparatively inefficient large commercial buildings were brought up to the median energy use intensity in their category, New York City consum­ers could reduce energy consumption in large buildings by roughly 18% and GHG emissions by 20%. If all large buildings could improve to the 75th percentile, the theoretical savings potential grows to roughly 31% for energy and 33% for GHG emissions. Since large buildings are responsible for 45% of all citywide carbon emissions, this translates into a citywide GHG emissions reduction of 9% and 15% respectively. Much of this improvement could be achieved very cost-effectively through improved operations and maintenance.

An EPA study also showed that buildings doing benchmarking reduce their energy usage.  An analysis of 35,000 large buildings over three years showed that these buildings showed a 7 percent average energy savings.  Many of these policies are very new (NYC has only reported results for two years), so time will tell how increased public scrutiny of energy performance influences energy use.  But ask any building professional, and they will tell you that the first step to improving efficiency is measuring what is currently being used.

LED streetlights

Streetlights typically account for a significant portion of the electricity used by a city government enterprise.  For Minneapolis, its 31 percentNavigant says up to 40% can be typical.  Water treatment (for drinking) and wastewater treatment are two other major sources of energy use for cities or regional government entities.

Streetlight retrofits can often be done by a city itself, if they own the lights, or by the utility, which is also sometimes the owner.  Retrofits can be quick (a few years), and the paybacks, both in greenhouse gas emissions and cost, can be significant.

LA's Hoover Street before and after LED lighting retrofit. Image via Los Angeles Bureau of Street Lighting

LA’s Hoover Street before and after LED lighting retrofit. Image via Los Angeles Bureau of Street Lighting

Los Angeles recently completed the world’s largest swap-out, replacing 140,000 lights.  Los Angeles estimates it will save $7 million in energy costs and $2.5 million in avoided maintenance costs (LEDs can last as long as 20 years, versus the standard lights 6).  The project will be paid off in seven years.  New York City, Las Vegas, Austin Texas, San Antonio, and Eden Prairie, Minnesota are all switching.  For cities in the metro that don’t own their own lights, Xcel Energy is testing 500 LED lights in West Saint Paul, and could set a new rate for cities once the test is complete.  Initial results are showing energy use is cut in half, while the quality of the light has improved.

These are some examples of “levers” I think can be pulled relatively quickly, and without a great deal of political wrangling. And maybe more importantly, they can be done at the local level, usually by cities.  Cities are demonstrating they can and will move on climate, breaking what Jon calls the “cycle of climate inaction”.

There may be other strategies which are essential to addressing climate change, but which require engaging many more stakeholders and/or take significantly more time (an example might be residential building energy retrofits).  These strategies may be just as critical, often because they may address issues besides energy and climate – like environmental equity.  But if we want to work on a timetable that’s anything close to what they experts call for, we should identify and prioritize these short timeframe, high-impact levers we can pull at home.

The greenhouse gas benefits of autonomous vehicles

stanley side view (2005-023-040)

Autonomous vehicles may bring a myriad of benefits, but I anticipate that one of the largest may be the actual reduction in the total size of the vehicle fleet.  Eventually autonomous vehicles will allow “whistlecar” service, and whether fully autonomous or not would, this service is likely to fundamentally change the ownership model of automobiles.  Like present-day car-sharing services or taxis, a whistlecar subscription would mean one car could serve the needs of many people, instead of remaining parked most of the day waiting for its one owner to return.  Once you’re done with a car, it can drive off and serve someone else in the vicinity, drive to a charging station (if it’s electric), drive to a garage for service, or perhaps even deliver packages.  When you can subscribe to an on-demand travel service available 24-7 (and eventually cheaper than owning a car), many people will choose not to own.

Setting aside all the other benefits of autonomous vehicles for the moment, I’ll explore just this one: the benefits of a reduction in the car fleet.  And in a limited way: the greenhouse gas implications of this reduction in vehicles. Continue reading

How much should utilities pay for distributed solar power?

Close-up of completed project - Gibbs Dairy goes solar

In the energy and climate circles, there is a lot being written lately about the threat to the traditional utility model from distributed, renewable energy sources.  David Roberts has been running a series describing the problem and looking for solutions.  Chris Nelder also has a good read on the topic.

One of the key issues is the idea that utilities want to avoid “stranded assets”, or infrastructure they still have to pay to maintain with a shrinking pool of customers.  As some customers get more power from solar, sales of electricity shrink, leaving utilities with the same distribution infrastructure to maintain using less revenue.  Some utilities, the latest being a municipal utility in San Antonio profiled by David Roberts, argue they shouldn’t pay customers the “market” rate for electricity their customers generate with rooftop solar, but instead should pay them a wholesale rate, or the same as they pay for other electricity on the grid.

The thinking here is that paying the wholesale price will put renewable energy on an even playing field, and help keep the old utility model more financially whole, since wholesale prices are typically much lower than market prices.  For example, the 5-year average wholesale price for electricity in the grid area that serves Minnesota was $53.62 per MWh for the period ending in 2010, according to FERC.  This is for the “peak” time of day, meaning the afternoon, which is also the time solar is most productive.  That’s equal to roughly 5 cents per kWh, which is the unit at which typical household sales are measured.  Last month I paid about 11 cents per kWh to Xcel before taxes, fees and other charges like WindSource.

At 5 cents/kWh, rooftop solar would take a very long time to pay off.  Many fewer people would likely choose to install it.  However, those in the renewable energy world will tell you that 5 cents/kWh doesn’t pay the owner of a system for some of the benefits solar energy has over wholesale electricity.  We should actually be looking at a “value of solar” that includes not just the wholesale energy price, but reimbursement for other values.  There is movement right now in Minnesota to legislate that a true “value of solar” be computed for future projects.  So what other value does solar energy have that utilities might value?

For one, it can be more efficient.  Whenever you transmit electricity or long distances, you lose some due to resistance (heat).  EIA estimates these loses at 7% nationally and 7.4% in Minnesota.  That means utilities are generating more kWhs than are needed to make up for the losses, and thus the customer is paying more for each kWh.  If you’re generating power very close to where you use it, you minimize these losses and the extra generation.  Distributed solar energy should actually be valued 7% above wholesale prices by a utility if you think it will reduce these line losses.  If you include that 7% bump, 5 cents becomes almost 6 cents per kWh.

The other value is the reduced environmental cost of solar generation.  There is plenty of discussion about what the optimal cost of carbon should be, and it all depends on what you adopt as your discount rate.  Here is a must-read on discount rates, also by David Roberts.  If you think that climate change will have a net drag on the economy in the future, your discount rate is likely low, and the optimal cost of carbon gets up into the $50 to $100/ton range.  Carbon levels per unit of electricity produced vary quite a bit across the county, but in Minnesota and parts of the upper Midwest, they averaged 0.738 metric tons per MWh in 2009 (the latest year for which EPA has data).  At that rate, a high carbon tax might add between 3.5 and 4.5 cents per kwh.

If you add all this up, (an economically optimal price on carbon, savings from transmission losses, and a wholesale price consistent with the 5-year peak average), you get a value of solar energy between 9.5 and 13 cents per kWh.  That’s at or above the market rate I’m paying in Minnesota right now.  Check out my extremely messy spreadsheet if you want to see the math.

Keep in mind there are other values of solar energy I haven’t considered in my calculus.  The Minnesota House legislation includes the savings from delaying capital investments in distribution infrastructure, savings from not having to build more generation, fuel price hedge value savings (not having to bet on fuel costs), and the value of local employment generated by manufacture and installation of solar energy.

How much would a 10% solar standard reduce Minnesota’s greenhouse gas emissions?

Presenting Curt Tosh's farm-based solar project - Solar Works in Central Minnesota!

This week a bill was introduced to the Minnesota legislature to establish a 10 percent solar energy standard by 2030.  This would be on top of the existing requirements for utility renewable energy, bringing the total amount of energy coming from renewables in the state to at least 35 percent in 2030.

This bill is being promoted for it’s job creation aspects, but clearly a key benefit is the reduction in greenhouse gas emissions from the electricity generation sector (which currently produces 32% of the state’s greenhouse gas emissions).  So, by how much would a 10% solar standard reduce Minnesota’s emissions?  Would it allow us to meet our greenhouse gas reduction goals?

The first (and easier) part of trying to put some numbers to this is estimating how much electricity Minnesota will use in 2030.  EIA summaries tell us that Minnesota consumed a little under 68 million megawatt hours in 2010.  Power projections produced for the Annual Energy Outlook tell us that in MRO West (our electricity grid region), the annual growth in electricity consumption will be very modest through 2030, typically under 1% annually.  If you assume these growth rates apply to Minnesota, we may consume over 73 million MWh in 2030, or 8 percent growth over 20 years.

ElectricitySalesThru2030

10 percent of that is 7.3 million MWhs in 2030.  Figuring out exactly how much greenhouse gas this would save is trickier.  In 2010, electricity generation accounted for 32% of the total 155.6 million metric tons of CO2 equivalent emissions.  Rough math using EIA consumption figures provides a greenhouse gas coefficient for Minnesota electricity of 0.73 metric tons of CO2e per MWh.  However, this figure will surely go down over the next 20 years as utilities work to meet the existing renewable energy mandates already on the books.  Xcel Energy, which has to meet a more aggressive renewable energy standard then the rest of the state, already has a coefficient closer to 0.5 mt/MWh, which will be declining (see slide 17) to something like 0.42 mt/MWh by 2025.

So, assume the state’s net greenhouse gas coefficient for electricity is somewhere around 0.5 mt/MWh in 2030 (assuming other utilities and imported electricity are both dirtier than Xcel).  If 10% of our electricity demand is met by solar energy, this would be a savings of 3.6 million metric tons of CO2e.  3.6 m metric tons is about 2.3% of our 2010 emissions total, or about 7% of emissions from the electricity sector in 2010.

Using an net coefficient average emissions factor for calculation may be too simplistic, but it’s the best I’ve got right now.  Those more in the know say that renewable energy like solar will most frequently replace natural gas production, rather than coal or nuclear, as gas is easier to cycle on and off.  I’m not sure whether this would increase or decrease the benefit of this level of installed solar (but I’m working on it).

Update: I was pointed to this journal article by Carbon Counter, which attempts to calculate “marginal emissions factors”, rather than average factors. It turns out, since the Midwest is coal-heavy, usually an “intervention” (adding solar, for example) would displace coal power first, rather than gas.  The marginal emissions factor they calculate for the Midwest is about 13% higher than the 0.73 mt/MWh I mention above.  The Midwest is somewhat unique in this regard, as most regions show gas as the most common “marginal fuel source”.  It also has the highest marginal emissions factor of all the regional electricity generators looked at in the study.  A 12% increase over 3.6 million mt is 4.03 million mt.

At something near 3 or 4 million metric tons of emissions saved, would a 10% solar standard help us meet our state emissions reduction goals?  Nowhere near on its own, but it would be a significant step in the right direction, especially when combined with strong action in other sectors like transportation and agriculture.  Think of it as part of the Minnesota version of the wedge game.

National Climate Assessment: trouble ahead

duluth flood - mpr

A draft of the US National Climate Assessment was released about a week ago, and the outlook for changes headed to the Midwest and country as a whole is not good.  Minnpost has a good look at the Midwest section (emphasis mine):

Climate change will tend to amplify existing risks from climate to people, ecosystems, and infrastructure in the Midwest. Direct effects of increased heat stress, flooding,

drought, and late spring freezes on natural and managed ecosystems may be altered by changes in pests and disease prevalence, increased competition from non-native or opportunistic native species, ecosystem disturbances, land-use change, landscape fragmentation, atmospheric pollutants, and  economic shocks such as crop failures or reduced yields due to extreme weather events.

These added stresses, when taken collectively, are 

projected to alter the ecosystem and socioeconomic patterns and processes in ways that most people in the region would consider detrimental.

Much of the region’s fisheries, recreation, tourism, and commerce depend on the Great Lakes and expansive northern forests, which already face pollution and invasive species pressure – pressures exacerbated by climate change. Most of the region’s population lives in urban environments, with aging infrastructure, that are particularly vulnerable to climate-related flooding and life-threatening heat waves.

CC Midwest temp rise

Over at MPR, Paul Huttner also has a good overview, highlighting the coming “climate shock” of project 5-degree warming headed to Minnesota.

 

Bottom line?

This magnitude of warming will likely cause some dramatic… and potentiallyalarming changes in our Minnesota Landscape.

Our forests will shift north. Pine forests may dissapear, and transition to hardwood forests in significant sections of northern Minnesota.

Prairies will also overtake areas that are now forested…possibly even the parts of Twin Cities metro.

Increases in the frequncy of extreme rainfall events will create more events like the multiple “500 to 1,000 year” flood events seen in Duluth and southern Minnesota in the past 9 years.

The changes we’re already observing in Minnesota will continue…and the pace of change is likely to quicken in the next 30 years. Our children will live in a very different Minnesota than our parents did.

How are we doing to address this challenge?  Haven’t US greenhouse gas emissions gone down recently?  Yes, but unfortunately not enough, and we can’t just worry about US emissions.  From the report’s mitigation section (emphasis mine):

Even absent a comprehensive national greenhouse gas policy, both voluntary activities and a variety of policies and means at federal, state, and local levels are currently in place that lower emissions. While these efforts represent significant steps towards reducing greenhouse gases, and often result in additional co-benefits, they are not close to sufficient to reduce total U.S. emissions to a level consistent with the B1 scenario analyzed in this assessment. 

And remember, hitting that B1 scenario is critical if we want to avoid the most dangerous impacts and potentially runaway climate change.  For more on what the world might look like if we stay on the emissions path we’re on, take a look at the World Bank’s most recent report on 4-degree warming.

Linking spending decisions, greenhouse gases, and social games

Via the inbox, I get word of a company trying to develop an app/website to make the greenhouse gas impacts of your spending decisions plain.  Of course, they’d like your support to get started.

Many frustrated Americans would like to take climate action
into their own hands, but it’s hard to know where to start. Enter Oroeco.com.

“The basic idea is that every dollar we spend on products or services impacts the environment and society for better or for worse,” says Oroeco’s CEO, Ian Monroe, who also teaches courses on climate change and renewable energy at Stanford University. “The problem is that these impacts aren’t apparent when we’re deciding what to buy, particularly now that global supply chains have shifted problems half a world away. We are building a tool that automatically connects purchase data from debit and credit cards (via Mint.com) to scientific climate impact data – so you can track the climate footprint of your groceries, gas, airfare, home energy, clothing, etc. You can also see how you compare to your friends and earn points and prizes.”

There are lots of services to track home energy usage/impacts, like Opower and the now defunct but awesome Microsoft Hohm.  I’m not familiar with others that go beyond energy use to purchasing decisions.

Some communities try to inventory consumption impacts, like King County and the City of Minneapolis, but an app/game will probably be a lot more effective at reaching residents and consumers.