Texas Military Bases Could Offer Timely Energy Relief to ERCOT's Power Grid as EPA Rulings May Force Shutdown of 1,300 MW's by Early 2012.
With record temperatures scorching Texas in July and August, there was yet more extreme heat in early September with the battling of wildfires as the total 100 degree days in 2011 went over the 100 day mark setting the new all time Texas heat record. The Texas grid operator ERCOT, (Electric Reliability Council of Texas) worked to maintain power stability across the large grid system to millions of electric consumers as ERCOT staffers worked diligently with generation supplier resources, while pulling MW's from DR (Demand Response) program load shedding customers, and calling up cogeneration, self generation units and juggling generation demand to meet the needs of electric consumers.
As if ERCOT's situation wasn't challenging enough, a press release on Tuesday 9/13/11 announced that EPA rules will force future shutdown of 1,300 mw's of ERCOT capacity as early as January 2012 from units operated by Luminant Company's Monticello plant, along with the loss of 500 jobs. As the seasonal shift in generation demand is slowly arriving, there is truly little rest for ERCOT operators. The 2011 winter impacts to power plants are recent reminders that ERCOT cannot rely on the fall or winter for relief to make up retirement of 1,300 mw's adding no comfort to grid management and planning.
ERCOT may find some relief however from the Department of Defense as most Texas military bases and installation's are ramping up their ability to self provide, and perhaps offer excess energy resources to the grid. The DoD is marching ahead in Texas with a wide range of research and solicitations for sources and ideas to implement onsite secure and renewable power and clean energy sources of all types, including wind, solar, clean energy combustion generation plus variable forms of WTE (waste to energy). These initiatives are already underway at numerous Texas military installations.
The military usage in ERCOT is estimated in excess of 400 mw's not counting other Federal energy users. Assuming if only the DoD among Federal users in the state were self providers or a DR energy partner, the ERCOT system could realize benefit and relief to the public power system. A Demand Response program of this size could add significant MW's to the local public's electric capacity in Texas and provide the ERCOT grid with a significant DR partner.
A major announcement was made by John M. McHugh, secretary of the army on August 10, 2011 of the establishment of the Energy Initiatives Office (EIO) Task Force at the GovEnergy conference last month in Cincinnati, Ohio. The EIO Task Force is part of the Office of the Assistant Secretary of the Army for Installations, Energy and Environment, and will serve as the central managing office for the development of large-scale Army renewable energy projects. The EIO Task Force will be fully operational by Sept. 15, 2011.
"The Energy Initiatives Office Task Force will help the Army build resilience through renewable energy sources while streamlining our business practices so developers can invest in and build an economically viable, large-scale renewable energy infrastructure," said McHugh, "To meet a goal of 25 percent renewable energy by 2025, the Army must use every opportunity to be energy efficient and draw power from alternative and or renewable energy sources."
The Army's scale of renewable energy production in order to provide enhanced energy security is estimated to require investment up to $7.1 billion over the next 10 years. This level of investment is expected to generate 2.1 million megawatt hours of power annually for the Army, as reported by the DoD on August 10, 2011.
The EIO Task Force will work within the Army to streamline existing acquisition processes and leverage industry for the execution of large-scale renewable and alternative energy projects on Army installations. Army installations currently are pursuing renewable energy infrastructure, but they often lack needed expertise. The EIO Task Force will fill this expertise gap and provide resources focused on working with the private sector to execute large-scale renewable energy projects. This is expected to result in increased interest by project developers and improved financial options for the Army.
As this infrastructure is built out, there will be a sizable amount of onsite generation capability and significant enough where the nation's military bases, and in the case of Texas, could have real world DR capability to interact with local grid systems and communities. A true "Smart Base or .... Micro Grid" if developed with state of the art digital technology would provide a functional benefit by supporting power needs through relief, curtailment or becoming self powered if needed locally . The open market rules that work in industry can be implemented through the contracting industry partners with the military. These strategies can work as non commercial tools to provide secure energy resources at the local military bases and around the nation, if pursued.
"Addressing our energy security needs is operationally necessary, fiscally prudent and vital to mission accomplishment," McHugh said at DOE.GovEnergy. Katherine Hammack, assistant secretary of the Army for installations, energy and environment added, "The Army must leverage opportunities in renewable energy, which will enhance energy security."
On the record, ERCOT benefited this summer from every renewable energy resource, wind, solar, biomass, and clean gas burning CHP plants during this year's long peak summer. All resource types were on daily call from the grid operator during this time, and without exception the US Military could very well become a best neighbor to the utility and great local citizen with a DR capability to reduce energy or self provide with onsite renewable resources. The ERCOT market at present operates a Demand Response program that is 1,063 MW in size of "load resource program" which is equal to three major power plants.
CHP Combined Heat and Power Growth -- Gaining Rapidly by Shale Gas Boost
Recent analysis from the state suggests the potential for CHP in Texas by 2023 could be roughly an additional 13,400 MW of economical CHP opportunities. The Federal Government and the DoD have numerous CHP contracts and operations with CHP projects. Within the state of Texas, a special CHP initiative in 2009 helped to advance rule making that passed legislation and was signed into law on June 17 of this year. The purpose of this legislation is to encourage the development and use of natural gas in CHP as clean energy.
Through the EIO Task Force, the Army is planning to conduct an aggressive outreach effort to attract and engage private industry to foster strategic and financial collaboration in support of the Army's installation energy needs. Officials say these projects could lead to the production of over 140 Megawatts of renewable energy, reclamation of over 500 million gallons of water per year, elimination of a million tons per year of landfill deposition of solid waste, and creation of nested micro-grids to enhance energy security on the installation.
Fort Bliss, Texas has reached out to industry in its effort to become the first large scale Net Zero military installation. Citing a $1.5 billion investment potential, Fort Bliss is looking to industry to obtain their knowledge of technologies and processes for sustainable and renewable alternatives for energy, water and waste reduction. Designated by the Army as a Pilot Integrated Net Zero Installation to achieve net zero status in Energy, Water, and Waste by 2020, Fort Bliss aims to achieve Net Zero Energy by 2015 to be followed by Net Zero Water and Waste by 2018. But with budget challenges, Hammack said the Army doesn't have the funds available to pursue the things it needs to increase energy security.
"What we are doing is leveraging the authorities given by Congress, and have identified that the Army is looking for about $7 billion of private sector investment on Army installations," Hammack said.
With that kind of investment, the Army hopes to get about 2.1 million MWh of energy. The Army seeks "utility scale" energy production, Hammack said, something she said amounts to 10MW or larger. She also said it is "unreasonable" to ask an installation to put the level of focus necessary into such projects.
"It'll take an effort above and beyond the daily activities at our installations and garrisons," she said. The energy initiatives task force will bear most of the burden of enticing industry to get on board with Army energy goals, Hammack said. The team is made up of "focused individuals whose primary task is to work with the private sector to develop these kind of renewable and alternative energy projects. To attract the private investments, we need to have biddable projects -- we have to do our homework," Hammack said. "We have to do our due diligence to make sure these projects have the appropriate information, facts and background that is necessary for a developer and for the finance community to invest in."
The industry is responding as seen by a number of recent strategic alliances across industry partners and joint developments, acquisitions and strengthening in marketing efforts such as:
- Boeing and Siemens: announced formation of an alliance to support DoD microgrid management with collaboration centered on secure solutions, lower operational costs, energy efficiency and energy security.
- Schneider Electric: acquired Summit Energy the largest energy management services firm to manage future technology, foreseeing obvious long term industry growth in smart grid management and real time energy information between grid and customers. Schneider's acquisition can include large experienced global staff to support Schneider's government contract services.
- PEPCO Energy Services: is expanding their management presence and technical focuses to new regions of the country supported by the proven business capabilities and record of success in DoD and Federal project delivery and long term operation and maintenance. Companies such as Chevron Energy Solutions, Constellation New Energy and others are aggressively pursuing large scale projects in solar, wind and expanding with personnel hires also.
Industry collaboration will make a real difference in improving the DoD's contracting for renewable sources, and the network systems that are vital to the nation's protection. The ability to develop and deliver energy security strategies and the use of efficiency is vital for the military's future and important to the DoD's impact to being a good energy neighbor to local communities.
With energy-efficient technologies that enable 'smart' production, transmission and consumption, the military can achieve unprecedented levels of power reliability, quality, efficiency and energy independence, according to the DoD. The state of Texas alone is ahead of other grid operators with a nearly completed Smart Meter installation schedule. With pilot tests already being conducted at residential and commercial customer levels, the focuses are on everything from time of use, real time pricing, and to tailored or structured usage schedules.
As DR programs mature and create commercially useful deployment histories, the grid operators and utilities, along with power suppliers will then have detailed information on metered consumption, load patterns for a better understanding where generation resources can best respond to loads, demand, or both. The management of grid stability and reliable delivery in peak times as ERCOT have experienced can indeed come from the new growth in renewable energy resources, wind, solar, biomass, and clean CHP plants. Grid operators and the US Military could become strong utility neighbors with this relationship model in Texas and work with private industry and communities.
For the "Grid" record book, ERCOT reported an all time high load demand of 68,294 MW's on 8.24.2011 at 15:57 and declared Level 2A (electric emergency alert) warnings which is one call away from rotating outages. Power costs in real time or LMP (locational margin pricing) in economic terms was selling at $3000/mWh commercially, as ERCOT regularly ran through their bid stack of resources and ancillaries. Calls to the summer demand response program participants began numerous times in the afternoon, with 50% of those resources often deployed. The grid reported stressed system conditions often, regularly reaching the max load for the current day and 3 day forecast plans.
The DoD may uncover audit opportunities around the corner as the Texas bases may have consumed peak levels of power during the Coincidental Peak Measurement snapshots. On days when significant strain was on the system many marketers and suppliers were watching conditions and alerting their customers to consume less or manually conserve through the peak hours. Utility review audits will help to establish any merits for a DR program review.
The big picture opportunity for industry from the DoD is an ambitious industry contracting initiative to be delivered on a major scale of implementation, capturing energy conservation & efficiency technologies and installing renewable energy systems at large capital project levels with energy savings to the DoD. This is an exciting level for business development if you are an equipment and technology participant or an ESCO and EPC serving Federal participants.
The Army's scaled estimate of $7.1 billion over 10 years is a good starting place. The targets for the Air Force, Navy, and Marines are high too.
References ** Katherine Hammack, John McHugh quotes and information taken from Army.mil publications.
** Katherine Hammack, John McHugh quotes and information taken from Army.mil publications.