uc tomkat carbon neutrality project - home - california … · 2017-07-17 · natural gas exit...

Natural Gas Exit Strategies

UC TomKat Carbon Neutrality Project

Emily Dowey & Rowena EngUC Santa BarbaraCHESC, June 2017

Our Agenda Today• Introduction to the UC Carbon Neutrality Initiative and TomKat Project

• The Challenge with Natural Gas and our working group approach

• Our proposed strategies ino Energy Efficiency: An Essential Strategyo Biogas: A “Drop-in” Strategyo Electrification: The Ultimate Strategy

• Key takeaways and Moving Forward

Introduction Natural Gas Challenge Energy Efficiency Biogas Electrification Moving Forward

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IntroductionTHEUCCARBONNEUTRALITYINITIATIVEANDTHETOMKATPROJECT


UC Carbon Neutrality Initiative (CNI)• Announced in 2013

• Net zero greenhouse gas (GHG) emissions across UC by 2025o 10 campuses, 5 medical centers, 3 national laboratorieso Scope 1 Direct Emissions o Scope 2 Indirect Emissions

• Emphasis on scalable decarbonization methods


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UC TomKat Carbon Neutrality ProjectLed by: Funded by:

• Goal: to advance the CNI by exploring the two biggest challenges

Carbon Neutrality Strategic Communication Working Group

Natural Gas Exit Strategies Working Group


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TheChallengewithNaturalGasTHENATURALGASPROBLEMANDOURAPPROACH


What is Natural Gas?• Fossil fuel consisting largely of methane extracted from

under the earth’s surface

• Usage across the U.S. has increased by 30% since 2001o Abundant and relatively cheapo Cleaner than burning coal

BUT

• Still emits CO2, which contradict efforts to decarbonize


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Fracking uses horizontal drilling and pressurized liquid to break up shale and extract natural gas

Natural Gas and Cogeneration at UC

• Most of this is used for on-site cogeneration plants o Also called Combined Cooling, Heat,

and Power (CCHP)o Produces 55% of UC’s electricity

• Currently 6-8 operating cogen plants at UC

Natural Gas 63%

Purchased Electricity

29%

Purchased Steam

4%

Other1%

Refrigerants1%

UC Vehicle Fleet 2%


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GHG emissions at UC

Barriers to Replacing Cogen• Highly efficient with low operating costs

• Large upfront investment with 40 yrs of useful lifetime = costly premature retirement

• Significantly less efficient and releases critical air pollutants, if operated at suboptimal capacity = difficult to gradually transition off cogen

• No one-size-fits-all solutionCogen plant at UCLA


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Working Group Approach• 30 members from UC campuses and the Lawrence Berkeley National

Laboratory

• Deliverableso Adaptable and scalable strategies for reducing reliance on natural gaso Final report (coming soon!)

• 3 proposed strategieso Energy Efficiency (EE)o Biogaso Electrification


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EnergyEfficiencyANESSENTIALSTRATEGY

Introduction Natural Gas Challenge Energy Efficiency Biogas Electrification Moving ForwardIntroduction Natural Gas Challenge Energy Efficiency Biogas Electrification Moving Forward

Role of EE in Exiting Natural Gas• Directly reduces GHG emissions from buildings

o Up to 50% from retrofitting existing buildings

• Generates cost savings fromo Avoided energy use and maintenanceo Implementation of future electrification projects

o Provides potential source of positive cash flow for biogas and electrification investments, if cost savings are redirected towards future emission reduction efforts


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Energy Efficiency at UC• >600 EE projects between 2004-

2014o Monitoring-based commissioningo Deep HVACo Smart lightingo Smart labs

• Funding mechanismso 2004 – Incentives from UC/CSU

Utility Partnershipo 2009 – Bond-based loans via

Statewide Energy Partnership

Energy budget for existing buildings at UC.


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• So far generated net $24M/yr in positive cash flow

UC Irvine Case Study• Avoided 21-26% of their Scope 1 and 2

CO2 emissions (2014) baseline

• Smart Labs Initiative (2008)o Reduced energy use by >50%o Advanced occupancy and air quality

sensorso Demand-based controlso Real-time data and continuous

commissioning

UCI’s newly constructed Sue and Bill Gross Stem Cell Research Lab. Its Smart Lab design producesenergy savings equal to removing 130 cars off the road for 20 years.


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Large Remaining EE Potential• 12% reduction in Scope 1 and 2 emissions from 2004-2014 EE projects


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Large Remaining EE Potential

Remaining Baseline Electricity Use

59%

Ext Lighting2%

Monitoring- based Commissioning

6%Deep HVAC

8%

Smart Labs12%

Interior Lighting14%

Total Potential Electricity Savings

42%

UC Electricity Efficiency Potential


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Remaining Baseline Natural Gas Use

72%

Smart Labs7%

Monitoring-based Commissioning

9%

Deep HVAC12%

Total Potential Natural Gas

Savings28%

Large Remaining EE PotentialUC Natural Gas Efficiency Potential


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EE Financing for Biogas Premium• Assumed premium of $3/MMBtu

• Applied potential EE savings to 14 scenarios with different combinations of UC campus characteristics:o Campus typeo Gas/electricity ratioo Electricity priceo EE improvements to dateo 2009-2012 debt burden

o Analysis limits EE at the point where it reduces cogen production


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EE Financing for Biogas: Non-Cogen Scenarios

• Most non-cogen scenarios can fully finance the biogas premium

Electricity EE

Natural Gas EE

AvoidedUse(%)

2025 Biogas Premium2028 Biogas Premium

2028 Surplus


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EE Financing for Biogas: Cogen Scenarios

• Financing of biogas premium is more challenging for campuses using cogen

Electricity EE

Natural Gas EE

AvoidedUse(%)

2025 Biogas Premium2028 Biogas Premium

2028 Surplus


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UC-wide Results• 52% of total UC biogas premium funded in 2025

• 75% funded in 2028 (after 2009-2012 debt is paid off)

• New debt of $360M with net cost savings of $19M/yearo ~19 year payback period


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Strategies for Cogen Turndown• UC Irvine cogen case studyo Reduce load by up to 40% (operating at 60% capacity)o Lean premixed combustiono Downstream exhaust gas cleanup

• Use cogen for ancillary grid services o Support the integration of renewable

energy into the grid by providing capacityor voltage support during shortages


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Energy Efficiency Recommendations1. Organize purchased utility and carbon mitigation costs as stand-alone financial units

2. Resolve barriers and accelerate EE implementation

3. Identify approaches to ensure persistence of EE savings

4. Investigate part-load operation of cogen plants

5. Prioritize implementation of EE projects at medical centers

6. Capture EE while avoiding natural gas reliance in new construction and major renovations


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BiogasA“DROP-IN”STRATEGY


How is Biogas a Feasible Strategy?1. Biogas is considered a renewable source of energy because it does not emit any more carbon than the natural decomposition of the biomass would release.2. Energy efficiency initiatives’ positive cash flow can cover the additional cost of biogas when compared to natural gas.3. Biogas can serve as an interim solution in carbon neutrality goals while more time consuming electrification plans can be implemented.


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Where Does Biogas Come From?• Methane and hydrogen come from biomass (manure, food waste, landfills,

municipal, etc).


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How Can Biogas Be Used?• Purified and injected into the natural gas pipelines• Used in fuel cells to create hydrogen for electricity or cars• Burned or anaerobically digested to produce electricity


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Source and Site Location• Some regions are more apt to source their biomass locally.

• The site of biogas production and deployment depends on:o The purity of the biogas; can it be injected into the pipelines directly?o The location of sourced biomass; does the entity have the means to

construct their own gasification plant?


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Scalability Issues• Potential, nondisruptive biogas

only accounts for 1.5% of current U.S. natural gas usage

• Currently only 1% of U.S. dairy farms are capturing manure for biogas creation

• Early implementers can use biogas as a bridge to carbon neutrality


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Cost: Biogas versus Natural Gas• UC has paid on average $4-5

/MMBTU for natural gas over the past decade.

• UC has paid on average $5-8/MMBTU for biogas.

• Natural gas prices are forecasted to be $5-8/MMBTU by 2037.

• Biogas prices are projected to be about $10/MMBTU in the next cycle of bidding.


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Progress of Other Universities• Other universities have already explored the feasibility/implemented:

• Eastern Illinois Universityo Coal power plant replaced with biomass gasification plant

• Colby Collegeo Gasification plant handles 90% of campus steam, reducing oil

consumption by 100,000 gallons annually


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Progress of the UC• UC signed two long-term contracts in 2016 that will offset ~10% of system-

wide natural gas use.

• UC Office of the President has released proposals to acquire another 30% of natural gas usage.

• No campuses have plans to install on-site gasification units.


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Biogas Recommendations1. Procure funds from the positive cash flow of energy efficiency initiatives.2. Determine the location of biogas production and where it will enter the electrical grid or be inserted into natural gas pipelines.3. Categorize what end uses of natural gas biogas will offset.4. Create a timeline for biogas purchasing and classify biogas as a short- or long-term strategy.


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ElectrificationTHEULTIMATESTRATEGY


What Does Electrification Entail?• Procurement of carbon-free electricity

• Installation of central or building-level infrastructure


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Renewable Electricity SourcesProgress

• UC has commissioned 80 MW of solar energy in Central Valley to replace 10% of system-wide electricity use.

• Campuses are implementing solar on-siteo UC Santa Barbara has implemented almost 5 MW of rooftop solar in the

past year.

Obstacles

• Off-site renewable power is not scalable and on-site is not as varied or abundant


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Where is Natural Gas Used?

• The first step to electrification is answering this question for a given entity.

• The result of this study will guide what can be accomplished with electrification versus the other two solutions.


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Opportunities for Electrification

• Electrify all new construction• Convert gas boilers to electric• Electrify buildings not connected to central system• “Prune” buildings from central system due to distance• Convert central system to electrical via water loop


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UC Santa Barbara Heat Recovery SystemPlan:

• Replace current gas-fired boilers with an energy efficient “central plant” heat-pump system

• Construction cost of $6.6-8.2 million

Result:• Total energy savings of up to 1 million therms• Natural gas cost savings of up to $890,000/year• CO2 emissions savings of up to 8.850 tons/year


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Lawrence Berkeley National Lab• A heat recovery chiller and

heat pump system and electric boilers designed space and water heating

• Compared to gas boilers for space and water heating, this option will save 47% more GHG emissions and cost 8% less annually.


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Electrification Recommendations1. Invest in net zero carbon electricity such as solar or wind power.

2. Invest in storage for these technologies to combat scalability issues.

3. Electrify all new construction, stand-alone buildings, and those distant from the central plant.

4. Electrify central plant system with heat recovery system.


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MovingForwardKEYTAKEAWAYS


UC’s Biggest Obstacles• Reliance on and availability of natural gas

• Limited and variable financing options for various campuses due to cogeneration plant binding or failure to capture cost savings for reinvestment in decarbonization

• Absence of shared high prioritization of UC carbon neutrality


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Big Picture TakeawaysEnergy efficiency, biogas, and electrification complement one another to result in a carbon-free UC campus.

Our findings provide general strategies that many campuses can modify to fit their current energy usage profile.


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Acknowledgements

Acknowledgements• David Auston, IEE, Project Director, Co-PI• Alan Meier, LBNL, Co-PI• Steven Davis, UCI, Co-PI• Igor Mezic, UCSB, Co-PI• David Victor, UCSD, Co-PI• Karl Brown, CIEE, Energy Efficiency Co-Chair• Jordan Sager, UCSB, Energy Efficiency Co-Chair• Rebecca Zarin Pass, LBNL, Biogas Co-Chair• David Weil, UCSD, Biogas Co-Chair• Lisa McNeilly, UCB, Electrification Co-Chair• Mark Modera, UCD, Electrification Co-Chair• Carrie Kappel, NCEAS, Project Manager

…and all other members of the TomKat Natural Gas Exit Strategies Working Group

uc tomkat carbon neutrality project - home - california … · 2017-07-17 · natural gas exit...

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