Author Archives: Marc Karell

Trump Administration Repeals Obama-era Fracking Rules

The Trump Administration’s Bureau of Land Management (BLM) published in the Federal Registry on December 29, 2017 a revision to reverse a 2015 rule that contained strict standards for how one performs hydraulic fracking on public lands.

https://www.federalregister.gov/documents/2017/12/29/2017-28211/oil-and-gas-hydraulic-fracturing-on-federal-and-indian-lands-rescission-of-a-2015-rule

For the Administration, this is part of their ongoing effort to rollback regulations and to encourage domestic energy production that will reduce energy costs for businesses.
This final rule is a rescission of most of the Obama-era rule whose effective date was June 24, 2015, which contained standards for fracking operations on public lands, including identifying the chemicals and the nature of the mixture of water, sand and chemicals injected to loosen shale oil and gas from rocks where it has adhered. It also contains standards to reduce the chance of contact between the mixture and underground supplies of drinking water.
This brings the debate about fracking back to the fore.

While oil and gas companies and their supporters want greater freedom to perform fracking operations, environmentalists were split. Some wanted an absolute ban on fracking, as they desire a carbon-free future and have an energy future dominated by renewable energy. Others understood that promoting natural gas, which emits greenhouse gases at about half the rate of coal, and enabling it to be plentiful and cheap in order to displace coal, leading to progress in meeting climate change goals and eventually be replaced by renewables as its costs decline in the future. Obama Administration leaders took this latter tack, encouraging fracking to reduce energy prices, yet protecting the environment and public health, too.

In opposition to this, oil and gas developers argued their fracking processes were continually improving over time and there was little evidence of harming drinking water supplies. These groups sued to stop the 2015 fracking regulation without success. With the new administration more sympathetic to oil and gas company concerns, it was a matter of time until the Obama rule would be repealed or altered. Oil and gas companies understood that many states had its own regulations protecting drinking water supply and the local environment, and were willing to comply with each state’s rules as they work in those states.

CCES has the experts to keep you up-to-date with technical interpretations of federal and state and city rules on energy and make sure you get the best information. Marc Karell, P.E., Principal of CCES will speak about recent new New York City energy rules at the New York State Bar Association Annual Meeting on Thurs., Jan. 25 at 9:20 am. See http://www.nysba.org/am2018/ for more details.

USEPA Announces 2018 Renewable Fuel Standards

On December 12, 2017, the USEPA published in the Federal Register final volume requirements and associated percentage standards for its renewable fuel standards (RFS) program for calendar year 2018, as well as the biomass-based diesel volume requirement for 2019. See: https://www.epa.gov/renewable-fuel-standard-program/final-renewable-fuel-standards-2018-and-biomass-based-diesel-volume

As can be seen in the table below, he annual volume quotas for how much renewable fuel must be added to gasoline and diesel are virtually unchanged from 2017. These values set national standards for distributors to reduce the overall use of petroleum-based fuel.

Final Volume Requirements                     2017            2018            2019
Cellulosic biofuel (million gallons)           311               288                 –
Biomass-based diesel (billion gallons)       2.0                2.1              2.1
Advanced biofuel (billion gallons)              4.28              4.29              –
Renewable fuel (billion gallons)               19.28            19.29              –

The reaction to this was mixed. Many had feared that the USEPA would reverse the trend and lower significantly the required introduction of various biofuel, which current leadership sees as a hindrance to business. For them this is a victory.

However, many in the renewable fuel industry saw keeping requirements pretty much flat as harmful to business growth. The National Biodiesel Board and the governor of at least one corn-growing state complained that keeping requirements flat would harm many U.S. business sectors, including farmers, producers, truckers, and consumers.

Meanwhile, the petroleum industry was also disappointed with the flat RFS volumes of the coming year, and that the USEPA’s failed to repair a flawed program that answers to corn and other interests.

CCES has the energy experts to help you assess your fuel and electricity sources to maximize financial benefits and to strategize to ensure you have reliable fuel sources. Contact us today at karell@CCESworld.com or at 914-584-6720.

Lowering Energy Costs of Data Centers

Data centers and their servers within them are of growing importance to companies. As companies have painfully learned during non-functional periods, such as breakdowns, severe storms, or blackouts, the cost for a company of losing data is tremendous. It has been cataloged that many companies went out of business as a result of hurricanes or other natural disasters that caused data centers to stop functioning and lose data. After all, a lot of what a company is its data. Without which (for controls, sales, marketing, etc.) it can be existential. Even “small” companies realize the importance of a high-quality data center system.

Therefore, in utilizing larger and more redundant equipment and systems, companies are finding themselves paying a heavy energy cost penalty. Not only must they operate large amounts of energy-using equipment, but to prevent malfunctions (often due to excessive heating of systems), such data centers are often cooled 24/7 to very low temperatures, extracting a cooling energy penalty, too.

What can be done to maintain the reliability of a data center, or but save some energy costs, too?  The federal government’s Energy Star lists 12 items an operator can do to manage and minimize energy use and costs of a data center. See: https://www.energystar.gov/products/low_carbon_it_campaign/12_ways_save_energy_data_center These include decommissioning non-functioning systems, consolidating under-used servers, utilizing fans with variable speed drives, utilizing HVAC with air-side or water-side economizers, and others. The webpage lists several case studies.

Another way to reduce costs and improve reliability is to implement combined heat and power (CHP cogen) systems to supply electricity for data centers. CHP utilizes the waste heat from a boiler that would otherwise be lost to produce electricity, reducing the amount purchased from the local utility. Early data centers were often located remote from other offices or facilities of a firm, but the more recent trend is to co-locate a data center within an existing facility, often the corporate headquarters. This makes CHP more appealing, as it can produce electricity and steam for multiple functions besides a data center.

According to Persistence Market Research (https://www.persistencemarketresearch.com/mediarelease/us-combined-heat-and-Power-systems-market.asp), growth in CHP for data centers in the U.S. will be at 3.4% annually through 2024, as business owners see rising energy costs, and need to minimize the rising usage with maintaining a reliable data center. A growing number of utilities encourage companies to generate their own electricity and putting less demand onto the grid, and will provide financial incentives to incorporate. Revenue sales of CHP systems for data centers is estimated to reach $277 million in 2024, and will be predominantly high in five high-use energy states known to have corporate and data centers, California, New York, Washington, Texas and Massachusetts.

Data centers with greater and more sophisticated servers will become more common as the risk of losing data through natural disasters or loss of power becomes recognized as a critical issue for a company’s survival. These more redundant systems have an energy penalty associated with it, therefore, driving efforts to maintain such systems in a reliable manner while minimizing energy costs.

CCES has the technical experts to help you assess all of your company’s or building’s energy needs and be able to have you function normally and reliably, while reducing your energy costs and getting additional financial benefits, as well (improve sales, reduce O&M, etc.). We are here to maximize your financial benefits for utilizing smart energy conservation methods. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Upcoming Trends In The LED Market

The use of more energy efficient LED lights to replace incandescents and fluorescent lights has reduced total carbon dioxide emissions by an estimated 570 million tons in 2017, according to a report issued by IHS Markit, or by 1.5%.

LEDs achieve this because they are more efficient than current light sources, using, on average, 40% less electricity for the same amount of light compared to fluorescents and about 80% less electricity than incandescents. An incandescent filament source needs about 7 watts to produce about 100 lumens of light. A fluorescent source needs about 2 watts to produce the same light. Metal halides and high-pressure sodium bulbs about 1 watt. LEDs, however, can produce this same amount of light using just 0.5 watt. Given this differential at many thousands of facilities, encompassing hundreds of thousands of light sources, that is many megawatts of power not needed and, therefore, all the more oil or gas or coal that needs to be combusted to make that power. Thus the major reduction in CO2 emissions.

Although LED lights are more expensive than current light sources, these electrical reductions make converting to LED lights quite economical, “low hanging fruit”.
Initially, there was objection to LED lighting based on their inability to be dimmed or the quality of light not being complementary to certain uses. But in time, these issues have been resolved, and LED lights today are dimmable and can have its intensity altered.

Upcoming Trends

Case studies have shown that spaces lit by the right LEDs have a whiter or higher quality of light, resulting in better worker productivity and better school performance. More vendors are specializing in such LEDs that will more likely result in better performance as their way of separating themselves from the pack.

Another item that has been driving the LED market is government or utility incentives. Such organizations have paid some of the upfront cost to building owners willing to change out large quantities of lights because this represents a relief to a stressed utility infrastructure. However, as LED light prices have been coming down, these organizations realize that the pure economic benefit of a building upgrading their lighting with LEDs is great enough; incentives will not add that much to the fine payback LEDs result in. The trend in utilities is to use incentive funds for other, more expensive energy-saving technologies and less for LEDs.

Finally, LEDs were initially more popular in states like NY, NJ, CT, MA, and CA, partially because energy-saving and greenhouse gas-reducing is part of their cultures, but also because the economics were better there because electric rates are higher in those states than in others. However, with more competition and the further drop in LED prices, even in other US states where electric usage rates are lower, converting to LEDs makes a lot of sense financially. Expect to see sales rise in the Midwest and the South.

CCES has the experts to help you assess whether now is the time to convert to LEDs for your commercial space. We can evaluate potential savings, payback, and IRR for you to determine if this is the right time. If you go ahead with a conversion, CCES can manage the project for you, saving you time to concentrate on other things, while ensuring that anticipated cost savings and other benefits are achieved. You reduce cost without the hassle. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Environmental Evaluation of the Trump Administration’s 1st Year

December 2017

Recently, President Trump boasted about the number of regulations he repealed or otherwise inactivated, as the most in history. We’re not sure how factually true that statement is, but it certainly is true that the most active agency in carrying out this de-regulation was the USEPA. There have been a number of roll backs of Obama Administration rules and initiatives, headed by the Clean Power Act, as part of the Trump Administration’s desire is to encourage coal production. A recent article also stated that not only has the agency lost much in the way of personnel, but it is enforcing existing rules with much less vigor than in the recent past, even under a past Republican administration. See https://www.nytimes.com/2017/12/10/us/politics/epa-enforcement-methodology.html

In addition, the Trump Administration has cut drastically environmental and public health research and has scrubbed mention of Climate Change from its websites, educational materials, and conferences, including terminating research in these areas.

One of the few areas that the USEPA has remained active is in Superfund cleanups. The degree of cleanup has accelerated in the past year. Many think prioritizing certain Superfund cleanup projects coincides strongly with where valuable mineral and oil and gas deposits are found, which can be profitable for future owners or miners in the area.

However, one other area that has disappointed many in the environmental community is the President’s vigorous attempt to free up federal land for mining and oil exploration, including the Arctic Wildlife Refuge and several national parks, such as Bears Ears National Monument, in which President Trump announced that the section of this monument that is protected from private use and exploration will be reduced by 1 million acres or 85%, the largest reversal of national monument protections in US history. The proposed change has been challenged in court by conservation groups.

The good news in all of this is that this news has galvanized the environmental community and many citizens, worried about the impacts of repealed environmental rules on the health and wellbeing of millions in this country. Many states will maintain and strengthen their rules. Several political candidates have discussed environmental concerns, something that rarely happens. In addition, global images, such as extreme haze and people walking around with filters in India and China have shown all the importance of smart, workable environmental regulations.

However, all in all, 2017 was not a good year for environmental protections and governance in the U.S.

CCES has the experts to help your company stay in touch with environmental regulations and provide technical assistance on how to comply in the least expensive, yet reliable way, without disrupting operations. Contact us today at karell@CCESworld.com or at 914-584-6720.

Climate Change News End of Year – 2017

Trump Administration Reiterates Objection to Paris Climate Agreement

The big US climate change news of the year is President Trump’s announcement that the US will pull out of the Paris Climate Accord because developing nations would get to play by a different set of rules from those of the US. The Paris Accord is voluntary, however, as each country would determine how much greenhouse gas emissions it can reduce. At the time the Accord was signed, the Obama Administration said it would decrease US GHG emissions by 28% by 2025. The U.S. is already about halfway to meeting the goal due to large turnover of coal-fired power plants to natural gas and other changes, triggered by market forces. Meanwhile, China said that its GHG emissions would rise before tapering off around 2030 because of power plants already operating. As a developing country, China would be permitted to prioritize growth, even though it is the world’s largest GHG emitter. In addition, the richer nations will contribute to a $100 billion fund, seen as an investment, to help developing nations reduce GHGs. These areas are what the current administration object to, although the US would be the only nation in the world not to be part of the Accord if it pulls out.

While President Trump, despite discussions with world leaders, reiterated his desire for the US to pull out of the Paris accord late in the year. However, a series of horrific disasters (several major hurricanes and rain events and wildfires in California) in the second half of this year have widely been analyzed as having been worsened by climate change. As a result, public opinion polls indicate a solid majority of Americans (even conservatives) believe that climate change is real and harmful, and a majority believe the government should do something about it. Whether that will cause President Trump to reverse course and stay in the Paris Accord is unknown.

In the meantime, a number of US states and cities have stated that they will pursue policies that would reduce GHG emissions in alignment with those required of the Paris Accord. California is perhaps the most resistant to the federal rejection of the global agreement, and is looking to forge an agreement with other nations and provinces to establish a market-based system to encourage major GHG emitters to decrease emissions by global standards. Massachusetts has confirmed its goals initially formed through their Global Warming Solutions Act of 2008, an 80% reduction in GHG emissions by 2050. Both New York State and New York City have active plans to achieve the same goals.

EIA Projects 0.6% Annual Growth in GHG Emissions

The US Energy Information Administration projects that growth in global GHG emissions from energy-related sources will drop to 0.6%/year through 2040 despite increased energy consumption. See https://www.eia.gov/outlooks/ieo/. GHG emissions rose by about 1.8% per year from 1990 to 2015.

The EIA says that this decrease is/will be caused by the continued switch to renewable sources of energy, estimated to rise in use by an average 2.3% per year between 2015 and 2040. Nuclear power consumption is estimated to increase by 1.5% per year over that period. The small rise in GHG emissions is still projected despite these advances because of increases in energy-using processes due to projected business growth.

The EIA projects the average growth in commercial energy use of 1.2% per year from 2015 to 2040, with the highest rates of growth in developing nations.

US Supreme Court To Rule on Solar Power Growth and Regulation

On December 1, the US Supreme Court announced it would hear a case about whether a utility can charge ratepayers a fee for having solar panels. SolarCity initially sued Salt River Project, an Arizona utility, over its 2015 decision to charge a fee for solar power systems operated by individuals. SolarCity argued that these fees were implemented in order to make rooftop solar systems too expensive to be competitive, in violation of federal antitrust laws. Salt River Project argued that they had the right to levy this fee as part of its statutory pricing process, exempting it from federal antitrust laws.

A district court and circuit court made different rulings. The US Supreme Court expressed interest in deciding whether utilities are exempt from antitrust laws in its decision and rate and fee-setting process. The Court’s decision, expected in June 2018, will be closely watched by the solar power industry for its future ramifications.

CCES has the technical experts to help your entity (company or municipality) remain knowledgeable about changes in climate change rules and policies throughout the US, and about changes in technologies to help you assess the right policy and GHG emission reduction goal that is right for you. And to enable you to maximize financial benefits from addressing climate change. Contact us today at karell@CCESworld.com or at 914-584-6720.

DOE Plans Major Changes To Its Appliance Energy Conservation Program

On November 21, 2017 the US DOE issued a Request for Information (RFI) that provides notice DOE is considering wholesale changes to its energy conservation standards program. The current program for reducing energy consumption contains mandatory, minimum efficiency standards for appliances and other consumer, commercial, and industrial products that must be revisited every six years. The RFI suggests that the Trump Administration may replace this mechanism with a more market-oriented one. The RFI specifically solicits feedback on how trading schemes might be applied to energy conservation. The Federal Register notice was published on November 28 (see https://www.federalregister.gov/documents/2017/11/28/2017-25663/energy-conservation-program-energy-conservation-standards-program-design) giving interested parties 90 days to comment (February 26, 2018).

The Energy Policy Conservation Act (EPCA) requires the DOE to set minimum energy conservation standards for over 60 consumer, commercial, and industrial products. Manufacturers and importers must test and certify that their covered products meet all applicable energy conservation standards prior to initial distribution and annually after that. EPCA also requires DOE to review each energy conservation standard at least every six years for potential revision. This contains an “anti-backsliding” provision, preventing the DOE from loosening energy conservation standards for any reason.

The Trump Administration has put on hold several new energy conservation standards promulgated late in the Obama Administration. DOE Secretary Perry has called this program “overly burdensome”.

The RFI solicits feedback and suggestions on how market-based approaches might be used to improve energy efficiency. The RFI uses as a model established market-oriented approaches in other areas, such as the automotive corporate average fuel economy (CAFE) standards, which permit automobile manufacturers to average the fuel efficiency of their automobiles across their entire fleet rather than have to comply with the individual fuel efficiency standard of each vehicle class. The RFI also cites the USEPA Acid Rain Program, a large regional cap-and-trade program, which succeeded in achieving significant reductions in power plant SO2 and NOx emissions by creating emission credits to be bought and sold to meet mandatory reduction goals. The RFI wishes to achieve energy use reductions at high efficiency and reduced cost.

The RFI is the DOE’s first significant attempt to modify the energy conservation standards program since it was enacted in 1987. Any changes to the rule can significantly impact energy and electricity usage and with that energy costs for all businesses and residents nationwide, greenhouse gas emissions and management of our electric grid, including the number and types of power plants nationwide. The public and manufacturers and importers of appliances have until February 26, 2018 to submit ideas and comments to the DOE for consideration in its redesign of the program.

CCES has the experts to help you plan and design your energy management program to maximize the direct financial benefits of minimizing energy use, including the most energy efficient equipment. Contact us today at karell@CCESworld.com or at 914-584-6720.

Another Financial Benefit of Energy Efficiency: Improved Space Utilization

This blog and newsletter have published many articles substantiating the many different ways a building owner, manager, or tenant will benefit financially from implementing smart proven energy efficiency strategies. Besides saving on one’s direct energy bill, there is improved asset value, making space more attractive to increase demand from tenants, reduced O&M, and higher productivity and retail sales. Now here is another one. Philips Lighting recently released a study estimating that businesses globally could reduce their office space per employee by as much as 50% and realize savings of up to $1.5 trillion just in reduced rental costs if office buildings were refurbished to the most efficient current standards. $220 billion of the savings is estimated for North America. Real estate costs are a major concern to any business; any opportunity to reduce the fixed cost of rental space can be very beneficial. See: https://www.businessgreen.com/bg/news/3017951/refurbish-offices-to-save-usd15tr-philips-lighting-tells-business

These estimations were based on the results of an actual move by a major Deloitte office into a space considered very advanced in terms of energy efficiency. Deloitte reduced their space utilization from 50.2 sq. ft. per full-time employee to 24.9, not only saving on the amount of space they needed to rent, but on their energy costs, too, as they had less space to condition, light, and service. Deloitte also attributed increases in worker productivity and wellbeing in the new space, in part, due to the energy efficiency improvements.

The new office space used by Deloitte uses LED lighting and smart technology allowing employees to adjust the lighting and temperature at their own workspaces via a smartphone app. The system also provides building managers with real-time data on both energy usage and office utilization to help maximize energy and operational efficiency, based on data collected by sensors embedded in the lighting.

CCES has the technical expertise to help your office or any other space become more energy efficient, whether your goal is, like Deloitte’s, to be high tech or whether your goal is more modest. We can help you incorporate the right technology for your budget and goals to attain the greatest financial benefit, whether it be controlling real estate costs, utility costs, or to boost productivity and asset value. Contact us today at karell@CCESworld.com or at 914-584-6720.

Address Your Peak Demand To Really Reduce Costs

It used to be that a building utilized an electricity meter, which recorded how much electricity was entering the building during a month (billing cycle), it would be recorded, and the building owner would be charged for that electricity used (in kilowatt-hours). Simple: the more usage, the more one would pay. But some time ago that changed for many utilities. As the economy grew and technology grew, electricity demand rose greatly. However, keeping up with the growth in demand became a challenge due to more farflung buildings and infrastructure upgrades to provide power. For many utilities, it is possible that they cannot deliver electricity to all users in an area, especially during peak demand, which is a hot, summer afternoon when there is maximum usage of air conditioning. Technology has made this worse. For example, people can be comfortable and well air conditioned in their offices and with their smart phones, at the same time, start their air conditioners at home, so the house is comfortable when they walk in.

Being thus challenged, utilities began to confer an additional charge to certain customers for peak demand in addition to the electric usage charge. Having a very high demand (in kilowatts) for a short period – even for just 15 minutes – in a one-month cycle can become very costly. In fact, utilities often charge for peak demand on a sliding scale, with the highest such charges being conferred in the summer. Therefore, while a robust energy audit to reduce usage is a good thing, such an audit should reveal opportunities to also reduce that peak demand, as well.

To address the issue of peak demand, first study your electric bills and see for yourself what your peak demand charges are. How high are they? What rates does your utility use? What has been your historic peak electric rate (peak kW) and how does it vary by season? Once that is better understood, here are some inexpensive, but effective strategies to reduce the peak energy costs, yet still serve your building power needs.

Let’s use an actual example. A large building’s July electric bill indicates a peak demand of 136 kW during one short period due to several rooftop air conditioning units cooling most of the building, many rooms being lit, and a number of laptops, flatscreen TVs, and other plug load operating. The building owner pays $35 per peak kW, a very high rate

Reduce Usage – Reducing usage, of course, not only reduces that charge, but also your peak demand and charge. Simple example: a building replaces 100 fluorescents of 40 watts each with 100 LEDs of 16 watts each. Assuming 50 hours/week of operation, the reduction is 2.4 kW in peak demand and 520 kWh in usage per month. At $35/kW and $0.08/kWh, savings is over $125/month, with three-quarters of this from reducing peak demand. If building can de-lamp fixtures or dim LEDs, savings would be greater.

Modify Scheduling – This building is incurring this high peak demand cost because it is operating many energy intensive processes simultaneously. Modifying the schedule can alleviate this problem of multiple equipment operating, if certain equipment can cycle off during peak hours. Can the rooftop units be rotated such that there is no period when all are operating simultaneously? In other words, operate a couple of them earlier in the day and have them turned off during a particular hot period, but the rooms have been cooled sufficiently for comfort. A building management system (BMS) can be programmed to effect such a solution, such as turning off certain rooftop units during peak times and dimming certain lights, especially those near windows receiving sunlight. For example, a “typical” 20-ton rooftop unit has a demand of 24 kW of power (the actual number depends on its efficiency). If a BMS can ensure that 2 units are not operating at all times, then that peak demand of every unit being on would be reduced by 48 kW. At $35/kW, this would reduce the peak charge by $1,680, well worth the effort. And this is for one month, although the rate represents the summer months, so over one year, the savings would not be this figure times 12.

A related example of scheduling to reduce peak demand is to implement an HVAC scheduling program taking into account the predicted weather to turn on certain units during the night, even if the building is unoccupied, instead of a custodian turning on all of the units at the start of the day. This is applicable to both cooling (air conditioning) and to electric heating. Operating an electric heating unit when it may be very cold at night and the building is not occupied may increase usage slightly, but will reduce the need to use it during occupancy, and, thus, given high demand rates, will reduce peak demand and thus, reduce overall electric costs, even if overall usage rises slightly.

Peak Shaving – Another way to reduce electric demand in a peak period is to create electricity during other time periods to use during what would normally be your peak demand. During periods of low electricity demand, the building can charge batteries with electricity from the grid. Then during times of high electric demand, the building can use the stored electricity instead of having it provided then. Between the capital costs of the batteries and the loss of some electricity in time, this can be a costly option, but it may be economical if the building pays a high peak demand rate. This can also be applied specifically to cooling. Chillers can create ice at night, which is a cooling energy storage. Air can then flow through the ice to provide cooling for the building during a period of peak use, while using little electricity (just for the fans, not to make the cool air).

Alternative Energy – Renewable power, such as solar PV and wind can help reduce peak demand charges, as such sources of power does not require electricity from the grid. Whatever electricity is produced by the solar array is less to be supplied by the utility. Two negatives. One, such systems are expensive to install. Also, they depend on the presence of sun (or wind). If there is a hot day calling for a high cooling demand, but it is also cloudy, then the solar panels cannot produce the needed electricity to meet the basic building demand. Thus, there is no reduction in peak demand from the utility, and the building owner pays the same high demand charge as before.

CCES has the expertise to help your building or company reduce your energy costs, whether it be the usage or the demand portion. We can help you devise strategies to fit your needs for reliable power, while minimizing those high demand costs. Contact us today at karell@CCESWorld.com or at 914-584-6720.

Interest In New Gensets Is Growing

The number of facilities choosing to generate their own electricity using generators or “gensets” is growing. Companies are recognizing that the physical and business impacts of even one severe storm can undo all the planning a business does and even wipe out or severely hurt the business. In addition, with the acceptance of climate change as real the chances of a severe storm impacting a facility will rise in the future. A facility having its own secure source of electricity independent of the grid and its wires and vulnerable infrastructure can better ensure that basic functions can be maintained in a storm, saving personnel and processes and having electricity to maintain operations during such events. As a result, the genset market has been growing.

Part of this growth is due to another phenomenon, some utilities provide financial incentives for facilities to procure and operate gensets to relieve them as they are unsure of reliable power and don’t want to hurt key users in their area. In addition, several such programs require the genset operator to go off the utility’s grid and operate the genset for distinct periods during peak demand periods (hot weather) to relieve pressure on the grid. These programs, often called “Demand Response” or DR, can be lucrative for facilities. The utility pays most of the capital cost of the genset, the facility fully owns it, and they get paid a fee each time a DR event occurs and a genset is used.

One complication of such programs, however, is environmental. The federal Clean Air Act, followed by nearly all states, specifically exempts from permitting and meeting emission standards gensets that are used only in emergencies (this includes the necessary regular exercising of a unit). However, once a facility uses a genset in a DR program, this exemption goes away. Therefore, facilities entertaining joining a DR program must set aside budget and effort to obtain the proper air permit (or modify its existing one) and comply with any applicable emission standard. Nitrogen oxide (NOx) is the most common pollutant that is regulated. If the NOx emissions of your genset exceeds the regulatory standard, it may be necessary to retrofit the unit with Selective Catalytic Reduction (SCR) or equivalent technology. The cost of such a retrofit can approach 6 figures. The USEPA designates models as meeting certain “tiered” standards. Tier 4 gensets are the most advanced and will likely currently meet all applicable emission regulations. Tier 3 gensets probably meet most of them. Tier 2 units probably do not meet many of them, again, if applicable. So if you are procuring a new genset, look to invest in a Tier 4 which should meet all applicable NOx emission standards. Particulate matter (PM) is sometimes regulated, too. A sure way to meet any PM standard is to combust natural gas, not to mention it is currently cheaper than oil. Natural gas-fired gensets are particularly selling well these days.

Finally, another variation of the genset that many facilities are considering is combined heat and power or CHP, where both steam and electricity are produced by the unit. The improvement in efficiency can save significant fuel costs. It is important for an experienced engineer to evaluate whether your demand for both steam and electricity and when the demand occurs will make CHP a good investment.

CCES can help your firm determine whether a genset or a CHP can be beneficial for you, as well as manage its procurement, installation, testing, and use to maximize the financial benefits. We can determine likely financial costs and savings. We can perform the needed environmental permitting and determine whether it meets existing applicable emission limits. Contact us today at karell@CCESworld.com or at 914-584-6720.