Sunday, March 31, 2013

Closer to Home* – Energy Conversion Efficiencies and Home Heating Fuels

This week I am not going to look at NH energy issues from my usual 30,000 ft viewpoint. Instead I want to focus right in on our homes and how we heat them. I was reviewing some publications from the Energy Information Agency and I was struck by the information on this map.


The map shows the predominant home heating fuel used in different parts of the country. In the bulk of the country, as shown by the states in blue, the key home heating fuel is natural gas. In much of the southern part of the country as well as the Pacific Northwest, most homes are heated by electricity (shown in red) and here in New England, New Hampshire is one of the handful of green states that rely on oil or kerosene for the bulk of home heating applications.
We in New England should be concerned about our dependence on oil for a number of reasons;
  • We are reliant on a fuel source which is largely imported.
  • We are reliant on a fuel source that has shown increasing price volatility over the past 10 years.
  • Unlike much of the US, we are not reaping the financial and reduced carbon emissions benefits of the natural gas bonanza.
There is not much we can do in the short term to change the situation but it is important to understand the consequences of our overt dependence on oil heat. Let's look at some specifics.
In the table below I have listed the various home heating sources we use in New Hampshire along with their recent retail prices, their energy content in BTU/unit, their cost in $ per million BTU ($/MMBTU) and then, using the energy conversion efficiency concepts for each fuel I introduced last week, I have calculated the cost of the useful heating energy produced from each type of fuel.
I have used some of these data points to generate the chart below which allows us to directly compare the costs of the input and useful heating output values for each of these fuel sources on a common basis, $ per million BTU: the information is quite revealing.

Natural gas is by far the cheapest fuel source. In fact, electrical heating is 3.4 times as expensive and oil heating is 2.6 times more costly on a thermal energy output basis. Wood heating, either with regular firewood or wood pellets, is far better cost-wise, than oil or electrical heating. In fact, the costs for wood heating are presently only 30% higher than those for natural gas.
Even though natural gas is such a low cost heating fuel at the moment, most NH residents cannot avail themselves of this choice as in most parts of New Hampshire natural gas is simply not available. Without the low cost choice, we have to select between wood, fuel oil, electricity or propane.
Part of our choice will be influenced by the relative volatility of fuel prices. In the figure below I have plotted the historical costs of the various home heating fuels on a cost per energy content, $ per million BTU, basis. (These prices are uncorrected for efficiency factors.) The green data points show that, for a long time, wood has been the low cost fuel in NH and sometimes by a considerable margin. Oil and natural gas prices (red and blue, respectively) closely paralleled one another but, just after 2007 the prices diverged, with big increases in oil costs due to world market prices and decreases in natural gas costs due to the US natural gas supply bonanza created by fracking technology.

Even more recently natural gas prices have dipped below those of wood. It turns out that wood prices have a high sensitivity to the price of oil-based fuels, like kerosene, which are used extensively in the harvesting, preparation and transportation of wood-based fuels. As a result, high oil prices have lead to recent price increases in wood-based fuel sources. Electricity costs per unit of energy are substantially higher than any of the other fuels, with propane prices falling between those of electricity and oil.
When looking at relative fuel prices we have to take into account a number of other factors. Oil prices are generally more volatile and my guess is that they are likely to increase in the future but, on the other hand, I wonder how long the natural gas bonanza will last and whether prices will skyrocket higher sometime in the future. The relatively low cost and low volatility of wood-based heat make it an option well worth considering for home heating applications, especially if you don't have access to natural gas. 
I wrestle with these issues myself and I can get quite worked up about them. Like most New Englanders, I heat with oil and that drives me to distraction. I take some small comfort that oil heat is presently less expensive than electric heat and that I am able to store about a month's worth of oil on my property in the big ugly black oil tank I have in my basement. The folks reliant on natural gas have no storage capacity and a gas supply pipeline problem can result in the immediate inability to heat a home. However, that is small consolation when I consider the extra cost of heating my home. I have an average New England home and I burn about 850 gallons of oil per year for heat and hot water. This past year my costs for oil were about $3200. If I could convert to natural gas I would save almost $2000 per year. I would far rather be spending that money elsewhere than on a carbon-intensive, volatile, imported energy source.
Going with wood pellet heating would allow me to save about $1700 per year and, because natural gas is not even an option, maybe it is time to think seriously about the wood pellet burner for my home heating needs. I am, however, left with one nagging concern: if everyone in NH changed from oil heat to wood heat, would the New Hampshire forests be able to support that amount of tree harvesting or would we end up importing wood from Canada and the other parts of the US and therefore undo some of the cost and carbon savings associated with wood heating?
I trust I have left you thinking about your home heating options and their associated costs. If you have natural gas, you are indeed in a fortunate position because the rest of us are faced with heating fuel decisions that are quite complex. If you have changed over recently to wood pellet heating, let us know what your experience was.
Until next time, remember to turn off the lights when you leave the room.
Mike Mooiman
Franklin Pierce University
(*Closer to Home was the third album from the 70's power trio, Grand Funk Railroad, and the song I'm Your Captain (Closer to Home) is, I think, one of their finer tunes. In fact, this was the very first American rock and roll record I was exposed to so I have a rather special connection with this album. For a bunch of guys from Flint, Michigan, they made some good music, wrote some great tunes and left a lot of good memories. This is one of those albums (along with Led Zep II and Dark Side of the Moon) that I have had on LP, 8 track, 4 track, CD and MP3 formats! I believe I am showing my age.)

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Sunday, March 24, 2013

Not So Classical Gas* - Energy Conversion Efficiency and Improvements in Natural Gas Technology

Last week I covered a ratio called capacity factor which some folks confuse with energy conversion efficiency. While the topic is still fresh, I thought I would cover energy efficiency this week to make sure there is a clear understanding of the two concepts. In my last post I noted that a great deal of energy technology is about converting energy from one form to another. For example, in a nuclear power operation we convert the nuclear energy holding the uranium nuclei together into heat which is then used to boil water to produce steam which drives a generator that produces electrical energy. The key to energy technology is to make these conversions as efficiently as possible.

The example I provided was my Prius versus a Maserati. I noted that the higher powered and larger engine of the Maserati could more rapidly convert the chemical energy in the gasoline into mechanical energy, i.e., rotation of the crankshaft, which is then converted into forward motion, or kinetic energy. However, I also noted that the Maserati does so less efficiently and that was cause for some smugness on my part.

  (Picture source: Maserati)

Let's be sure we understand the term conversion efficiency. Energy conversion efficiency is the ratio of useful energy produced to the input energy of the fuel used to drive an engine. It is typically calculated as a percentage: 
Energy Conversion Efficiency = (Output Energy/Input Energy) x 100
In automobile engines, energy conversion efficiencies are measures of how effectively the engine converts the chemical energy in gasoline into the mechanical energy of a turning crankshaft. The efficiencies are typically 25 to 35% for gasoline engines such as those found in a Maserati, 37% for my Prius and over 40% for turbocharged diesel engines. In fact, some turbocharged diesel engines can reach 47% conversion efficiencies. The rest of the energy is lost as waste heat. The useful mechanical energy that is produced is then used to overcome friction, turn the wheels and move me and the hunk of metal that constitutes my Prius from Concord to Manchester. Indeed, if we were to calculate the energy required to move one 200 lb man from Concord to Boston, we would determine, on that basis, that efficiencies are only of the order of 1%. The rest of the energy is lost as waste heat, waste energy during idling, overcoming friction, powering the devices in the car and moving the bulky metal can around me. That low overall efficiency is, for me, always pause for reflection.
The challenge with conversion efficiency is that one needs to be sure what one is comparing and recognize that there are many measures of efficiency. For example, when discussing automobile engines, we must not confuse fuel economy with energy conversion efficiency. Even though the fuel economy of a Prius is three times that of Maserati, it does not mean that the Maserati has a conversion efficiency one third of my Prius. The Prius owes most of its higher fuel economy to a lower vehicle weight plus its regenerative braking technology. In other words, the three-fold better fuel economy is more a vehicle issue than an engine issue.
While we are on the topic of engines, let's take a closer look at those extremely large engines in New Hampshire that are used to produce electricity. These engines can be coal-, oil-, wood- or natural gas-fired or even powered by wind or water. In this case we will measure efficiency by dividing the produced electrical energy by the input energy in the fuel which is used to drive the generator.
The table below shows the calculated aggregated conversion efficiencies for the various forms of electricity generation in New Hampshire. (Unlike last week, we have to resort to 2010 data as a full set of 2011 data is not yet available from the Energy Information Agency.) In this table, I have compared electricity output with the input energy consumption for each form of electricity production.

The conversion efficiencies are presented in the last column and are ranked from lowest to highest. The conversion efficiencies are generally low, and if we were to consider all the energy in NH produced from a single enormous generator – the Megarac 4500 from last week – the conversion efficiency for this device would only be 34%. The rest of the energy, 66%, is lost as waste heat.
Biomass has the lowest conversion efficiency, only 23%, partly because some of the energy is expended in driving off the water in the wood chips which can contain as much as 50% moisture. Coal-, nuclear- and oil-based fuels have conversion efficiencies in the low 30s. The conversion efficiencies for the State's hydroelectric operations are only 35%, which I found somewhat surprising: large hydroelectric operations are reported to have efficiencies of close to 90%, which means they can harness 90% of the energy in channeled water flow; even smaller operations are reported to operate with efficiencies of the order of 50% so the 35% figure for NH is a little puzzling. Modern three-blade wind turbines typically harvest about 40% of the available wind blowing over the turbine area so the 37% figure for wind is as expected. Natural gas, at 45%, has the highest conversion efficiency.
Natural gas is particularly intriguing as we are presently witnessing the large-scale switchover from coal- to natural gas-fired electricity generation. The driver for this switch has been low natural gas prices, but there has also has been a lot of research and development into gas fired turbines used for electricity generation which has significantly improved the conversion efficiencies of these devices. With modern gas-fired units, we have moved away from the classical way of generating electricity - burning fossil fuels to boil water to make steam to turn a generator which produces electricity. Instead, gas-fired generators are now of the gas turbine variety, where the turbine is propelled not by steam, but directly by the hot expanded gas that results from the combustion of natural gas. Moreover, because of new advanced turbine materials, we can run them at higher temperatures of operation which also improves engine efficiencies. With higher operating temperatures, we then have exit gases leaving at elevated temperatures. We are then able to harness these high temperature off-gases in a secondary operation to boil water to create steam to drive a secondary steam-powered generator. These units are known as combined cycle units and they can operate at very high efficiencies. A basic schematic of a combined cycle unit is shown in the figure below.
(Picture Source: Wikipedia)
The chart below, which is from an MIT report that reviewed advances in gas turbine technologies, shows how gas turbine technical advances have led to increased efficiencies for both simple(those without a secondary steam boiler) and combined cycle units (those with a secondary steam boiler). At the time of the report, units with 60% efficiencies were foreseen and today commercial units from both GE and Siemens are available that can achieve 60% or even slightly higher. These advances come as a result of years of turbine research for aircraft engines and energy generation as well as advances in materials that can withstand even higher temperatures.
It is these increased conversion efficiencies that are part of the attraction of natural gas. Not only does natural gas release less carbon dioxide per unit of input energy, but the energy conversion efficiencies are substantially greater than those of coal-burning operations: this further serves to reduce carbon dioxide emission per megawatt hour of electricity produced. In fact, per unit of electricity produced, carbon dioxide emissions from natural gas operations can be less than one half of that of equivalent coal operations. Over time, as equipment is improved, new investments are made and older, less efficient equipment is retired, I would expect the conversion efficiency of natural gas-based electricity generation in NH to creep up from the 45% noted in the table above. There clearly is a lot we can do to improve the existing efficiency of natural gas combustion in New Hampshire.
Returning to the conversion efficiency table above, we note that conversion efficiencies for technologies other than natural gas are surprisingly low. Technological advances over time should improve these. However, breakthrough advances, like those we have seen for natural gas, are unlikely. Instead, we will see small incremental improvements over time and, in my mind, continual improvement in efficiencies should be part of the operating philosophy of every electrical generator and should perhaps even be part of the permit to operate. Small incremental improvements in conversion efficiency can result in large bottom-line benefits for both generating companies and for the planet, as this will reduce the amount of carbon dioxide released per megawatt hour of energy produced.
But, instead of waiting for breakthrough energy efficiency technologies, there is something we could do right away. We should be focusing on that 66% of waste heat. We should be investigating applications where we harness that unused heat and find ways to distribute it to the community, such as you would find in district heating applications that are in common use in many of the northern European countries. If we did this, then we would certainly be getting away from the classical way of doing things - simply burning fossil fuels to produce steam to turn turbines which only generate electricity and a lot of wasted heat.
Hopefully this week I have left you with an appreciation of how low our energy conversion efficiencies are for electricity generation and that there are opportunities for improvement. You should also have a good understanding of the difference between energy conversion efficiency and capacity factor. Remember, energy conversion efficiency is the ratio of useful energy output to the input energy and capacity factor is the ratio of a generator's actual output compared to what theoretically could be achieved if the generator could be run 24 hours, 365 days per year.
Until next time, remember to turn off the lights when you leave the room.
Mike Mooiman
Franklin Pierce University

(*Classical Gas is the name of a guitar instrumental tune, written and performed by Mason Williams in 1968 who, at the time, was a writer on the Smothers Brothers Show. For an instrumental, it was a big hit, reaching #2 on the charts. Forty five years later I still think it has a lot of appeal. Take a listen to the acoustic version without all the orchestral filigree.)

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Tuesday, March 19, 2013

I’ve Got the Power!* – Electricity Production in New Hampshire

My post this week is part informative and part instructional. When we debate and discuss energy issues, a couple of key concepts come up time after time and to be a contributor to an energy discussion, we have to know, or familiarize ourselves with, some technology and terminology. This week I want to explain two fundamental energy concepts. The first is the difference between energy and power, and the second is capacity factor. I will then show how they can be applied to electricity production in New Hampshire.  

Let's start with the difference between energy and power. The terms energy and power are often used interchangeably. This is OK in a general conversation, but in an energy related discussion it can lead to confusion, misunderstanding and bad decisions. It is essential to be specific about which term you are discussing so let's take a crack at distinguishing between the two.
The standard scientific definition is that Energy is the ability of a system to do work. It is a quantity which we need to get something to move, heat up, light up, burn, explode, etc. Energy also comes in different forms, for example, electrical energy, chemical energy, nuclear energy, kinetic energy etc. and much of energy technology is about converting one form of energy to another in the most efficient manner. Some of the more common units of measurement for energy are kilowatt hours (kWh), megawatt hours (MWh), BTUs, among others.
Power, on the other hand, is the rate at which energy is produced from a fuel source or is converted from one energy source to another. Units of measure for power include kilowatts (kW), megawatts (MW), BTU/hour or horsepower.
The confusion between these two often stems from the similarity of the units like kilowatt hours, which is an energy unit, and kilowatts, which is a power unit. However, it is necessary to understand that even though the units seem similar, there is a world of difference between them. This difference stems from the simple mathematical relationship between energy and power;
Energy = Power x time.
One my students in the Energy and Sustainability program at Franklin Pierce University recently noted that energy and power are analogous to distance and speed. Energy, like distance, is a quantity, whereas power is a rate like speed. Like the relationship between energy and power, the relation between distance and speed is written as;
Distance = Speed x time.
Let's consider a simple backup generator that I have been eyeing at Lowe's – the Generac 5500 Watt Portable Generator.
  (Picture source: Lowes)
This unit is rated at 5500 Watts or 5.5 kilowatts (kW), so the power of the unit is 5.5 kilowatts. If I were to run this unit for 1 hour, I would produce,
5.5kilowatts (kW) x 1 hour = 5.5 kilowatt hours (kWh)
of electrical energy that I could use to run my home. Running it for 24 hours would produce 5.5 kW x 24h = 132 kWh of electrical energy. The power rating of 5.5 kW is a measure of the rate at which the backup generator can take the chemical energy in the gasoline and convert it to electrical energy that I can use to keep my home running during a blackout. The larger the motor on the generator, i.e., the greater the power, the faster is the rate of energy conversion. In automobiles we are looking to convert the chemical energy in gasoline into forward kinetic motion to get us from point A to B. Again, the greater the power of the engine, the faster will be the rate of energy conversion. The pictures below illustrate this point.
(Picture source: Maserati)
The Maserati with its higher power, and larger, 700HP motor has the ability to more rapidly convert the energy in the gasoline tank into forward kinetic motion than my trusty and somewhat dusty blue Prius with its 80 HP motor. These two automobile engines, under specific circumstances, can produce the same amount of energy, however, the Maserati can do so in substantially less time. The Maserati will do so a lot less efficiently than the Prius but with a whole lot more fun. Even if I can't barrel down the highway at very high speeds, at least I will have my energy efficiency smugness to compensate me for the lack of admiring or envious glances for my ride. We will come back to the topic of energy conversion efficiency in a future blog post.
Let's go back to the Generac 5500 generator unit so we can discuss the second fundamental concept for this post – capacity factor. If I could run the generator solidly for 24 hours a day the whole year, I theoretically could produce;
5.5kW x 24h/day x 365 day/year = 48,180 kW of electrical energy.
However, if I were to use the generator only for 1 week during the year, say during a blackout, I would produce;
5.5kW x 24 h/day x 7 days = 924 kWh of electrical energy.
Dividing actual produced energy by the maximum that theoretically could have been generated in a 24/365 scenario produces a ratio called the capacity factor. In my case, it produces a figure of 0.019 which converts to a percentage of 1.9% and that would be the capacity factor of my generator for that year. In other words, my generator only ran at 1.9% of its maximum potential output. The capacity factor is a useful measure of how much of the capacity of an energy generating device was utilized over a time period, typically one year.
With these basic terms, energy, power and capacity factor under our belts, let's turn back to New Hampshire energy issues and particularly electricity generation. I have examined the 2011 electricity generation figures for New Hampshire that were published by the Energy Information Agency (EIA) and have combined, in one table, the number of generating units, their combined power, the energy produced from these units and the overall calculated capacity factors.
In 2011, there were 149 energy generating units in New Hampshire ranging from the large nuclear power at Seabrook, four coal fired plants, the wind farm in Lempster and 93 small hydroelectric operations, among others. The combined nameplate capacity of the generating units was 4,490 Megawatts or 4.5 Gigawatts, and they generated just over 20 million megawatts of electrical energy in 2011.
On examining the capacity factors, it is interesting to note how far they are from 100%. The only way a generating device can run at a capacity factor of 100% is by running 24 hours 365 days a year which is simply not practical or realistic. Equipment breaks down and has to be repaired or has to be shut down for maintenance. Moreover, power plants generating electricity make operating choices, based on prevailing wholesale electricity prices, fuel prices as well as demand to throttle back their units from their name plate capability. This reduces the amount of electricity produced which, in turn, reduces the capacity factor.
The units with the highest capacity factors are nuclear and wood fired operations which operated with capacity factors of 76% and 70%, respectively. These operations supply a great deal of the base load power to the electrical grid and therefore tend to run all the time except for maintenance shutdowns and reduced output during periods of low demand such as late evening and early morning hours.
Coal and natural gas ran at about 50% of their capacity and wind energy, which is very much dependent on wind speed and availability, has a capacity factor of 0.31 which is typical for wind projects. Oil and diesel based generators only have a capacity factor of 0.017 or 1.7%, which indicates these units are seldom used, due to the cost of producing electricity from oil. They function as back-up generators and are only used in an emergency. In many respects they are just like the small Generac 5500 unit, my present object of desire.
Even though the 149 New Hampshire based generating units are run by different operators with different technical and economic considerations, it is useful to consider their aggregated capacity. As noted above, the combined nameplate capacity of the generating units is 4,490 Megawatts or 4.5 Gigawatts. This combined capacity in a single unit would be one mammoth sized generator - we could call it the "New Hampshire Megarac 4500" – which is almost a million times larger than that unit I have my eyes on at Lowe's. 
(Generator Picture source: Lowes)

Based on 2011 data, this NH Megarac 4500 was operated at a capacity factor 0.51 which means the combined NH generating facilities only generated 51% of the energy that was theoretically possible. So, if we lose some of generating units in state, we have some excess capacity. However, we need to keep in mind that practical considerations such as cost and availability of fuel and maintenance requirements need to be taken into account when we shutdown generating units and expect others to operate at higher capacity factors. We also need to keep in mind that New Hampshire electricity generation is not an island unto itself. We feed into and draw electricity from the ISO-New England bulk power generation and transmission system which coordinates electricity supply and demand throughout New England. The six New England states have a combined capacity of about 35,000 MW of electrical capacity from 860 generating units.
Hopefully this has been an informative and instructional post and you now know the difference between energy and power and you have an appreciation for capacity factors. As you can see, we have a lot a capacity for generation in New Hampshire but it is crucial to appreciate that not all this capacity can be tapped at any one time. Running these generators depends on complex number of issues which include demand, cost of and availability of fuel, maintenance shutdowns and financial considerations and it all functions remarkably well most of the time due to the coordination of supply and demand that happens in the ISO-New England grid system.
In the meantime, if you see me in the parking lot at Lowe's trying to load a Generac 5500 into my dusty blue Prius, stop and give me a hand. Until next time, remember to turn off those lights when you leave the room.

Mike Mooiman
Franklin Pierce University

(*The title of this week's blog comes from 1990's tune by Snap!, a German rap/pop group. Their song "The Power", features an incessant "I've Got the Power!" refrain. You do know the song, but as soon as I thought of it, the refrain became a relentless mind worm burrowing its way into my brain and I have not been able to get rid of it. Annoyingly, I now mentally hear it every time I flip a light switch. Here is the Youtube clip but be forewarned about that mind worm.)

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Monday, March 11, 2013

Post 11 – Keeping up with the Joneses – How are We Doing Compared to Our New England Neighbors?

Over the past months, I have lasered in on the energy profile of New Hampshire but have provided relatively little comparative data to give you a sense of how we are doing relative to our New England neighbors. So this week we are going to look over the fence and see if we are keeping up with the Joneses.  

Let's start off by looking at energy intensity. If you recall from my last post, there are two measures of energy intensity: there is the amount of energy that goes into producing one dollar of GDP and then there is energy use per person. These energy intensity measures are presented in the table below for the six New England states. Averages for New England and the US are provided for comparison.
The first thing to note is that Connecticut is the most energy efficient state as they use substantially less energy than the rest of the New England states to produce a dollar of GDP. In fact, they are at an impressive 48% of the US average consumption. New Hampshire sits squarely in the middle of the pack, with energy intensities close to the New England average. Maine has the poorest energy intensity figure for New England. Their energy requirement per dollar of GDP is even above that of the US average. Part of this is due to that fact that Maine has more energy intensity industries, particularly the paper and pulp mills. Maine uses 34% of its energy consumption for industrial usage, the highest of any of the New England states. Here in New Hampshire we only use 14% of our energy consumption for industrial purposes.
When we look at the energy use per capita, we note that the New England states use less energy per person than the US average. However we also note, a little unexpectedly, that little Rhode Island has the lowest use per person, which suggests a complicated relationship between economic output, personal and industrial energy usage for the New England states. (It also leaves me with a mental image of all those Rhode Islanders huddled into those big, fancy Newport, RI mansions in the winter months collectively reducing their per capita usage.)
Because of its energy intensive industries, Maine tops the list in per capita usage for the New England states and New Hampshire again finds itself in the middle of the pack. By both measures of energy intensity, the New England states are at about 72% of the US average.
Let's turn now to the overall energy supply portfolio and compare the New England states. Energy supply is equal to the overall gross energy inputs into the states and excludes the effect of any energy exports. This is the most straightforward basis of comparison and also allows contrast with national numbers. The two doughnut charts below show how the New England states compare to the US as a whole.
A few key differences are notable. The New England states are more heavily dependent on oil and natural gas than the rest of the US, but a substantially smaller portion of our energy supply comes from coal – only 5% of our energy consumption comes from coal vs. 21% for the US. This suggests we are more vulnerable to oil price and natural gas prices increases. On the other hand, we have more energy from non-fossil fuel sources, nuclear and renewables, 22% vs. 17% for the US.
The collection of charts below shows the same set of energy source allocations for the individual New England states.

On examination of these charts we learn the following:
  • New Hampshire has the lowest dependence on oil and, except for Vermont, the lowest dependence on natural gas. Much of this is driven by the large amounts of nuclear power we generate.
  • Massachusetts is highly dependent on fossil fuels, particularly oil and natural gas.
  • Vermont has very little natural gas but a lot of nuclear power, no coal-burning plants, a decent amount of renewable energy and, of the New England states, the highest percentage of imported electricity. Seeing Vermont's high dependence on nuclear, all from the Vermont Yankee Nuclear Power Plant, makes one wonder what Vermont would do for power requirements if they closed down the plant.
  • Maine burns almost no coal but a good amount of oil and natural gas. However the large component of renewable energy in the ME energy portfolio took me by surprise and left me scrambling to do more research. According to the Energy Information Agency, Maine generates a lot of electricity from hydroelectric operation and burns an enormous amount of wood for electricity generation and heating purposes. They also have a larger number of wind projects than the other New England states.
  • Rhode Island is highly fossil-fuel dependent, with 96% of its energy requirement coming from oil and natural gas. There is no coal burning in RI and only a small amount of renewable energy.
  • Connecticut is similar to New Hampshire, with a good amount of nuclear power but the state is still heavily fossil-fuel dependent and has relatively little renewable energy.
So what are our main takeaways from all this information?
  1. Compared to the Joneses, i.e., our New England neighbors and the rest of the US, we, here in NH, have room for improvement. We are at 70% of the US average which is good, and we are neither the best nor worst of the New England states. Connecticut and Rhode Island set the standards for energy intensity.
  2. Clearly New England, and especially our neighbors, is not coal country. There is no coal burning in Rhode Island and Vermont and very little in Maine. Coal usage is low in New Hampshire, Massachusetts, and Connecticut and, driven by cheap natural gas and more stringent environmental regulations, there will be further reductions over time.
  3. Overall, in terms of renewable energy, New Hampshire does well, with 11% of the energy supply from renewable sources. Only Vermont and Maine do better. However, we are all still highly dependent on fossil fuels for our energy needs.
Each state has its own particular challenges. Vermont is struggling with decisions regarding an aging nuclear power plant, Rhode Island with its 96% dependence on oil and natural gas, and the rest of us with the fate of coal-fired power plants. Ultimately, I believe a portfolio approach to energy is best. We need more renewables, we need more nuclear, we need more natural gas and, in the meantime, coal has a place and needs to be part of our portfolio. Prudent energy planning requires that we reduce energy risk by not becoming too dependent on any one or two energy sources. We want to avoid the situation that the Rhode Island, with its over-dependence on oil and natural gas, finds itself in. Any substantial increases in the costs of these fossil fuels will have disastrous impacts on the already strained economy in Rhode Island.
I am fond of telling my students, in the MBA in Energy and Sustainability program at Franklin Pierce University, that when it comes to energy, there is no free lunch. Every time we turn on a light, drive to work or take a hot shower we create an impact on society, the environment and the future of our planet. Good energy decisions require data, analysis, planning, impact assessment and, ultimately, the implementation of difficult decisions that will impact someone. We owe it to future generations to make these difficult decisions now and to reduce our energy consumption. It really is time to stop kicking the empty oil can down the road or into our neighbor's yard. Most of us, I believe, understand that we need to do something concrete rather than fighting every energy project that comes our way. The challenge is figuring out what we need to do. What do you think we should be doing?
Until next time, remember to turn off those lights when you leave the room.

Mike Mooiman
Franklin Pierce University

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Tuesday, March 5, 2013

Where Have All the BTUs Gone?

I have been away for a few weeks at conferences and have chatted to all sorts of different experts about energy issues. However, during my time away I have been nagged by an important open question. In my last post, I stated that I don't consider the 25% renewables by 2025 goal to be an achievable one, and I presented data that showed that whatever progress we have made over the past few years has been as a result of energy usage reductions rather than increased amounts of renewable energy. Regardless of my viewpoint on the achievability of the goal, these energy savings are great as I believe we can accomplish more through energy savings than we can from new renewable energy sources. Nevertheless it is critical to understand what we are doing to save energy so we can do more of the same. So to paraphrase the words of the old Pete Seeger song "Where Have all the Flowers Gone," I want to know "Where Have All the BTU's Gone?" 

In-state energy use in NH has decreased by 9% since 2005 - see my last post. Some possible reasons include: 
  • The Great Recession of 2008/2009 resulted in lower economic output and therefore less energy consumption.
  • Increased fuel costs have caused us to moderate our energy-consuming habits.
  • Through various State, Federal and privately funded energy savings programs, we are becoming more energy efficient, and we are able to accomplish more with less energy input.
  • We have a smaller population and therefore fewer of us in NH are using energy.

Let's dispense with the last point first. From 2000 to 2010, the NH population grew from 1.24 million to 1.32 million – a 6% increase. So not only are we using less energy – we are using less energy while the State population is growing. Because census data are only collected on a per decade basis, it is useful to look at energy usage on a similar basis, so let's take a look at energy consumption since 2000, shown in the chart below.

The blue bars show that in the first half of the decade (except for the post 9-11 economic downturn in 2001), there was a continuation of our decades' long run up of energy consumption. In fact, from 1990 to 2000 our energy consumption increased 16%. We reached a peak of in-state consumption of 331 trillion BTU in 2004. Since then energy consumption has turned around and had dropped off 11% by 2010. I have overlaid data for the NH Gross Domestic Product (GDP) as the red line, and, except for the post 9-11 slow down in 2001 and a dip for the 2008/2009 Great Recession, the decade saw a 14% increase in GDP. So our decrease in energy consumption preceded the Great Recession by a number of years. There is no doubt the recession did encourage further energy savings as we, like Jimmy Carter, turned down the thermostats, took to wearing more sweaters and sat closer to the fire.

Dividing energy consumption by GDP dollars yields a number called GDP energy intensity, which is a measure of the amount of energy, in BTUs, it takes to produce a dollar of GDP output. In the table below you can see our energy intensity for some key years and how it has changed since 1990.

Our decrease in energy intensity is clear and this mirrors a long-term decrease for the whole US. In fact, in NH our energy intensity is typically 30% lower than the USA average. Generally speaking, our energy intensity has decreased and we are able to produce more GDP output with smaller energy outlays. This comes from an increasing awareness of the energy components of our industrial output as well as our move away from energy-intensive industries such as mining, steelmaking and general heavy manufacturing.

Another energy intensity measure that is often calculated is energy use per person. These numbers for NH and the USA are shown below.


Here we see an increase in per capita consumption to 2004 and then a 12.5% drop off from 2004 to 2010. Again our per capita consumption is, on average, about 30% lower than that of the US total. In fact, on a state basis, NH is way down the list in per capita energy use – we are at position 44. Rhode Island and New York, which have the lowest use of energy per person, have per capita values 15% lower than ours. On the other hand, states like Alaska and Wyoming have usages three times greater than ours.

So our energy usage has declined and is lower than the US average, but it still begs the question – "Why?". To get a better view of the decrease, I have looked at the four main components of our in-state energy consumption, viz., transportation, commercial, residential and industrial use and how they have changed since 2004. I have plotted the data for 2004 and 2010 for each of the sectors in the chart below.
In 2004 our energy usage was 331 trillion BTU and in 2010 it was 296 trillion BTU – a 35 trillion BTU decrease. This is an 11% decrease in our in-state energy consumption. Transportation usage only decreased by 2%, commercial use declined by 12%, residential usage decreased 10%, and industrial usage dropped by 27%.

The pie chart below shows which sectors contributed the most to the 35 trillion BTUs savings. Most of the decrease came from the industrial sector which contributed 40% of the savings, next was the commercial sector which provided 33% of the savings, followed by residences with 20% and a small portion by reduced transportation usage. I note that another blogger on NH issues, Brian Gottlob at Trendlines, has done a similar analysis. (In fact, I subscribe to the Trendlines Blog and I always find his data-based take on NH economic issues interesting. I encourage you to do the same.)

So where does the impressive decrease in industrial energy consumption come from? Contrary to what many folks think, this is not due to erosion of our manufacturing base. In fact, NH's manufacturing base has held up well over the past decade. On average, we get 15% of our state GDP from manufacturing, compared to 12% for a US average and based on some recent data we are even seeing an increase. What is different is that our manufacturing is changing – it is no longer the heavy manufacturing of years gone by, and, based on discussions with manufacturers, I know that energy is now a top-five expense in most manufacturing companies. Companies have invested in many projects to reduce energy costs and, as a result, manufacturing is now more energy efficient than ever before.

To get a better sense of the industrial energy usage in the state, I have extracted the energy used in industrial activities as well as the industrial GDP component to calculate the industrial energy intensity. This data are shown in the table below and I have included the data for the US as a whole as well. 

The key point to note is that industrial energy intensity has decreased over the past decade for both NH and the US, however there was an impressive decrease in NH industrial intensity from 2004 to 2010. This was an almost 50% significant decline in the State's industrial intensity since 2004. I don't have a ready explanation for this decrease but it is surprising and warrants further review and continued tracking.

As usual, I have flooded you with data, charts and information and there is a lot more I could ply you with. At this time I have to leave you with only a partial understanding of why we have been able to reduce energy usage in New Hampshire. There is more to this picture and I too need to better understand why we have been able to decrease energy usage in New Hampshire since 2004 even though economic output, measured by GDP, has increased. I plan to do some more research and I will share my findings with you over the course of the next few months. Nevertheless, this is what we know so far:
  • Our energy intensity on a per capita and a per GDP dollar basis has decreased steadily and our numbers are amongst the lowest in the USA.
  • Most of our energy savings have come from reductions in industry energy usage and from commercial applications.
  • The industrial energy intensity has been reduced by almost 50% since 2004.

What do you know and what can you contribute to this discussion? Feel free to leave a comment or send me an email.

Until next time, remember to turn off those lights when you leave the room.

Mike Mooiman
Franklin Pierce University