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.

John Frank | Nov 16, 2011

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The DoD leadership is pressing for innovation from Utility participants, equipment vendors, and ESCO implementers to deliver a diverse range of secure onsite clean energy projects and EPC measures. Opportunities are now on the table that could free up the military's Demand Response capability to offer energy to the local Texas grid communities and develop a national model.

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.

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Comments

The author misses a point about demand managemnt. It is always wiser for the overall economy, though often more expensive, to load shift residential rather than productive industrial loads. Unfortunately simple unregulated pure capitalist system can't figure that out.

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"It is always wiser for the overall economy, though often more expensive, to load shift residential rather than productive industrial loads."

Len is correct here. What I have learned though when it comes to demand management, our utility companies do not care which of their customers load shift as long as they achieve their load reduction targets. Indeed, they and our governments have historically put far more resources into industrial demand management because they get greater load reductions with fewer customers participating i.e. a bigger bang for their DM dollar. So in essence it is cheaper as Len says to foster industrial DM than residential.

It may be cheaper for the utility companies and for our governments but not for the economy in the long run, but I suppose you might say what else is new – shorter term gains always tend to be favored over longer term pain when it comes to investing tax payer's money or our utility company's money.

"PNM has stepped up its campaign to rally public support to overturn a federal decision requiring costly pollution controls at the coal-fired San Juan Generation Station to combat regional haze.

Calling for adoption of a far less expensive alternative proposed by the state, PNM Resources President and CEO Pat Vincent-Collawn announced creation of the “New Mexicans for Common Sense Environmental Policy” website in an email sent this week to thousand of customers, employees and others."

http://www.supportthenmplan.com/

Seems to me, the Army would be better off abandoning the whole "renewable energy" debacle and concentrate on using their resources and dwindling money to defend the country. Ditto for the entire Department of Defense.

The "net zero" program looks like another hair-brained scheme hatched by the current regime.

As far as Texas is concerned, perhaps if they had concentrated on building natural gas fired power plants instead of renewable energy (and wind in particular), they would not have gotten in trouble in the first place. Also, might not be a bad idea to build transmission lines to obtain more power from the Midwest. we would be happy to sell them excess power from our coal power plants.

INTEL info received is that EPA proposed rules are altenergy business strategy ploys promoted by the Obama admnistration ... and its financial supporters.

Scott,

I am calling BS flyash and bottom ash are inert unlike garbage or other waste that contains carbon and hydrocarbon sources. Petroleum waste is almost pure carbon and can be readily burned to produce energy to processing it is not a feat. However, any carbon left in flyash is unburned coal from incomplete burning. Even if a third of the flyash will burn out that leaves two thirds of inert material that is already oxidized. I do not believe you have a process that will further reduce the ash and produce additional energy beyond burning out the remaining carbon. If so just set it up and start processing dirt it should be easier.

Also 1300 mw should not break ERCOTS back it is not that much in such a large system.

Per the EIA, Texas has about 103 GW of summer generating capacity. So, given that this last summer saw extended / multiple Level 2A conditions, loss of roughly 1% of capacity will be important in the short term, if it happens. That being said, it is also a manageable amount.

While the article pounds the drum about multiple sources of alternate generation, little was said about efficiency. Even less (effectively nothing) was said about permanent load shift opportunities. With thousands of schools, hundreds of hospitals, thousands of large office buildings and hundreds of governmental buildings, the opportunity for thermal load shifting is enormous. It is not unreasonable that this alone could represent several GW of capacity. Better still, it can be implemented quickly and cost effectively, with a rapid payback. This should be a prime target. There are other technologies that have the potential for similar benefit.

While "alternate energy" is inevitable, it would be more economic to place an emphasis in load shift and efficiency first.

"While "alternate energy" is inevitable, it would be more economic to place anemphasis in load shift and efficiency first. "

Right on.

http://www.prosefights.org/nmsea08232011/tasklamp/tasklamp.htm

"Also 1300 mw should not break ERCOTS back it is not that much in such a large system"

We read that ERCOT reported that without gulf coast wind-generated electrictry that Texas would have suffereed brown-outs this past summer.

Listen-up.

http://www.prosefights.org/wind/highlonesome/audio/mike.mp3

1 or 2 nuclear IFRs or LFTRs would solve the problem. Renewables don't have much scalability and I doubt they ever will.

Scott Brooks...Certainly we should aggressively develop LFTR technology. However, "1 or 2" will be inadequate to the task in Texas, particularly if 1.3GW goes offline in the next year. Further, given technological immaturity, neither LFTRs nor IFRs are near term solutions to a near term issue. Both are at least a decade away. Lastly, the issue in Texas is peak generation, not baseload. This is demonstrated quite simply and effectively by the $3000 / MWh bulk energy cost at peak. While LFTR technology may be better suited to load following than existing nuclear plants, that would be a suboptimal use of such a high capital asset. That is a key part of the allure of natural gas generation, even combined cycle.

Michael Keller...Although the military should have an initial emphasis on energy efficiency, renewables are hardly "another hair-brained scheme hatched by the current regime". The wars in Iraq and Afghanistan finally drove home to senior military that the existing use of energy is a severe vulnerability, tactically, strategically, financially. The efforts to improve energy use at domestic facilities serve multiple purposes, including facilitating the development of improved energy use "in the field".

Regarding, construction of transmission lines from Texas to the Midwest: 1) If constructed, the Tres Amigas facility would largely accomplish this goal, and more, without the need for extensive new transmission. 2) The Midwest itself may have some energy challenges if EPA rules are enacted that cause shut down of the most polluting (and generally least efficient) coal burners in the Midwest.

Lastly, although it may not be the most cost effective solution, with $3000 MWh energy prices for extended periods even solar PV (when used in a distributed fashion on "mid-sized" installations) may be cost justifiable. This is particularly true given the generally contemporary nature of PV generation with peak load.

Mike Alexy above has it mostly right. Just needs to add in a realtime market system so customers actually will figure out the effects of dumb consumption.

Len Gould...Thanks, I agree that a realtime market system could be very helpful.

In the interim, lots of alternate actions could be taken. I offered the example of thermal storage. With an attractive subsidy from the utility, I would expect good acceptance by the market. Although I haven't done the detailed calcs for this in Texas, based on prior work for a different State and the horrendous costs the utilities in Texas paid last summer for peak energy (and appear likely to pay next summer) I would not be surprised at simple payback for both, the customer and the utility, on the order of 3 to 4 years, maybe less. The real challenge will be getting the utilities to recognize the cost x probability of ongoing extreme peak loads and high bulk energy costs.

Other target applications could include, for example: low efficiency lighting used during the day; electric hot water heaters (shouldn't all residential units be DR?); etc.

In an informal study I performed using data for another State, I easily identified more than 5% of the combined overall residential & commercial load that could be cost effectively reduced (efficiency) or shifted from the afternoon peak period. Applied to Texas, that could be about 5 GW, huge. (I stopped at 5% but could have gone higher.) More important, not only could it be accomplished cost effectively, it can be done quickly, with no new technology to invent and a straightforward consumer education effort.

I'm a little puzzled. How does renewable energy power a fighter-bomber or a main battle tank? It doesn't.

Once again, the mission of the military is to defend the country. That role does not include participating in grossly ineffective wastes of money involving "crony" green energy. The military using energy more efficiently frees up money for the their primary mission and that makes sense.

Subsidies from the utility to customers for usage reductions? That's like sending bears out to harvest berries....

Len...Your are, of course correct. Given a choice, the utilities would rather "subsidize themselves". In the the context of this discussion, that would mean building more gen & transmission facilities. However, if one "runs the numbers" it is obvious that certain alternate technologies can provide "capacity" at a lower capital cost to the utilities than building such new facilities. Again, a good example of this is thermal storage for load shifting. This particular technology,has the added "benefit" of not substantially reducing the total energy the utility would sell, just time shifting it to a lower load period. Other technologies could be similar. As this becomes more widely understood, I believe that broad use of such technology is inevitable.

Michael...You ask, "How does renewable energy power a main battle tank?" Your self response, "It doesn't", may be broadly correct today, but only in a very limited context. The reality is that "renewables" have a very real potential to power such a vehicle, directly and/or indirectly. "Renewable" technology could be used to power such equipment directly by establishing bioreactors or waste to liquid fuels conversion plants near areas of operations. Such technology is still relatively immature, but it is progressing. A critical drawback is that the fuel such facilities presently produce is relatively expensive. However, while it is expensive to buy algal "biofuel" at $20 (or more) a gallon in the States, that same fuel would be considered very cost attractive at a FOB in Iraq.

A more nuanced, but much more near term, example is the indirect use of "renewables" to provide liquid fuel. Again lets use the example of a FOB in Iraq. These facilities must be supplied by fuel truck caravans. These are risky, and expensive events that occur regularly. The fuel they carry can be used to operate electric generators at the FOB or HUMVEEs (or main battle tanks). If solar PV is used to provide a portion of the electric energy used by the FOB, the fuel not used by the generators can be used to power other equipment, reducing the need for resupply. This may seem insignificant. But, if you consider that in extreme cases, fuel delivered to combat zones can cost upwards of $400 / gallon and lives, PV becomes a very cheap alternative. Add in the lives lost delivering the fuel and the substantial tactical and strategic issues and "renewables" cen become very attractive.

I am far from suggesting that "renewable energy" is the solution to all issues. Clearly substantial further development s needed. However, developing, qualifying, improving and helping to cost reduce such technologies by using them on domestic military facilities can be a very reasonable approach. Energy is an extremely complex aspect of our military and economic environment. Simply declaring "renewables" to be "grossly ineffective wastes of money" is far too sweeping a generalization.

Note: the Army is engaging industry and starting what will be a very extended process, 10 years or so of implementation though not expected in 2012.