Author Archives: Harold Turner

About Harold Turner

www.linkedin.com/in/harold-turner-27973914 This tells you most of what you need to know. I'm now old enough now to write about what I know ..... or invite others to write about what they know.

Harold Turner

2017 NH Business Energy Education Series: Vol 14 – What are “emerging technologies”, and can they help me?

What are “emerging technologies”, and can they help me? Answer: Depends on your age, and yes they can! Let’s face it, a lot of technological changes have occurred in the past 50 years of my working lifetime.  Consequently, your perspective on “emerging technologies” depends on your age.  It’s easy today to look at buildings (for example) that were built 50 years ago and mutter the words “What were they thinking?“, because of what you know to be true today.  However, a great deal of that “change” has come from both real time emerging technology and higher costs for energy products (electricity & fuels).  The miracle of the Free Market: the ebb and flow of supply and demand can produce amazing results.  Sometimes progressive thinkers invent things before we can dream them up, and once invented, we want them immediately.  Sometimes WE are the ones who clamor for answers and inventors respond with the solutions.  When it comes to producing energy and using energy, for the most part, change has evolved over the past fifty years more slowly than in other industries due to the “disruptive” nature of the commodity market changes …..as well as the governmental shift from monopolized markets to regulated markets to unregulated markets. We are all still waiting for the free, perpetual energy machine to reach the market!  And yes, from time to time we see “government” stepping in with programs or incentives to push us in a particular direction…………. or regulate us in such a way to accomplish the same thing.

On the energy supply side, we have seen dramatic swings in the pricing, origins (location), and extraction methods for crude oil.  Natural gas, once almost an afterthought, is now a global commodity with the expectation of large volumes of liquefied natural gas (LNG) to be exported around the globe from the US….. due to recently developed fracking extraction technology.  Massive sized wind turbine farms dot the landscape all over the globe, as do its sister renewable energy technology, solar PV farms.  Behind the meter PV systems are growing like wildfire on residential, commercial, and industrial rooftops all around the world. Nuclear energy, once the expected salvation for “cheap” electrical energy in the 1960’s, became politically impossible to site after numerous concerns for safety and health in the US….. but due to recent R&D capital infusions by wealthy entrepreneurs, may make a comeback in the future if it can compete financially.  Also away from the heavy environmental regulations of the US, hydropower energy has continued to expand to provide fossil fuel free electricity to millions of people around the globe, many of whom never had any electricity before.  Coal, once a staple of both fuel and electricity production, is now a dirty word in the American culture, and devoid of a cost effective “clean technology” scrub, may be discontinued completely in another 25 years in the US ………with coal exports headed outside the US to more emerging economies.  Once only known for building materials and firewood, trees have turned into Biomass (wood chips) used for both generating electricity and running boilers for heat and process steam……. not to mention processed wood pellets for stoves and boilers. Geothermal energy, used mostly in relatively smaller scale applications so far, has enormous potential for larger use.  Fuel cells, creating both electrical and thermal energy are in use already and will continue to expand as the technology and pricing continue to change.  Throw in new battery storage technology for storing excess energy (mainly from full run renewable generators like wind and PV), and the energy world continues to evolve. All of this has happened in the last 50 years with the cycle of “change” getting faster.

On the consumption side, we have witnessed a continuous education of the users of energy over the past 50 years to “conserve” or use less of all of these energy commodities. Cars, trucks, buses, homes, factories, office buildings, etc ………all using less fuel and/or electricity today.  Some of this change is driven by “government”, but a great deal is also driven by a combination of economics and societal change.  It is no longer acceptable to “waste” energy if the same task or product can be done more efficiently.  Entrepreneurs and product developers understand these dynamics, and the pace of “efficiency” changes has increased dramatically over the past 20 years.  Talk to a typical millennial and you will find they know no other mantra ………and they are just now entering into the front end of their highest earnings/spending years.  Government has assisted along side that trend line as well.  Industry is beginning to see a price flattening of the energy supply side of fuels and electricity on a regional basis, and there are significant regional differences based upon the costs of production of these commodities on a regional basis.  The further away from the source, the higher the “transportation” costs are going to be ……….in addition to any government taxes, fees, or policy costs that are regionally or locally applied.  Clearly, the costs for the transmission and distribution of electricity in the ISO-NE territory are on the rise in a largely monopolized industry……. and those costs will increase even more if outside security threats force greater “hardening” of our electrical grid system ………. leading to even more, smaller distributed energy resources (DER) to reduce the risks. Hint: You will be reading more about “microgrids” as time goes forward.  What is the risk to your company if the grid you are connected to goes down for any length of time?

If, as a business, you exhaust your ability through competition to lower the commodity pricing of your energy, you are left with five basic options:

  • Move/expand your operations to a lower cost region of the country or the world
  • Take actions to use less energy and/or less “peak” priced energy where you already are located
  • Do nothing, and pass the costs on to your buyers (if you can)
  • Do nothing, and pass the costs on to your shareholders (if you dare)
  • Become a direct participant (purchaser) of electricity in ISO-NE

We have certainly witnessed these options, or combinations of these options, play out in New Hampshire and expect to see more of that in the future.  That assumes (see Blog Post #12) that government continues to fail to provide any creative solutions on the industrial electrical rate relief front.

Aside from than moving away to another region, becoming an ISO-NE participant, or doing nothing, the last option is to cut commodity use.  Most of those (cutting consumption) options require the use of your own capital, and installing new technology.  Be sure that you have exhausted your ability to cut supply costs through competition, even if that also requires bringing in a third party buyer like a Freedom Energy Logistics type company (Blog Post #10) to accomplish it …. or going directly to ISO-NE as a direct purchaser. We have already talked about undertaking an internal energy plan (Blog post #8): and incorporating energy efficiency (Blog post #9): and using alternative fuels like Biomass (Blog post #13) from Froling Energy.  The most unpopular thing I have to tell any industrial operation is, quite frankly, the need to get past the normal criteria for internal paybacks of 18-24 months for use of your own capital when doing some energy improvements………understanding that its a tough sell for Wall Street.

Private Equity held companies have more flexibility to take (investment) actions that are “out of the box”, as do closely held and/or family held enterprises.  Whatever capital intensive changes you do make, they are likely to give you financial benefits for the next 20-25 years, or sometimes longer.  That is a decision only you can make.  If I had any magic energy bullets to give you ………I probably wouldn’t be writing this blog for you today because I would be way too busy spending my $$millions or playing golf or both!  Cheers………. HT!

Smartflower Plus

2017 NH Business Energy Education Series: Vol 13 – Biomass Heating Comes of Age By Jim Van Valkenburgh

Biomass Heating Comes of Age: Not Just Woodchips & Cordwood Anymore

Guest Blog By Jim Van Valkenburgh, VP Sales & Marketing at Froling Energy in Peterborough, NH

The use of Biomass as a heating fuel has a long history in New England but it seems to be under-appreciated by the general public.  Solar arrays that are popping up all over our region are getting a lot of attention lately but Biomass is still providing more kilowatts of energy than all of the Solar system combined.  Those are kilowatts of both heat and electricity derived from wood in power plants, boiler systems, plus wood and pellet stoves in countless homes.

The people of Froling Energy are happy to be a part of the modern wood heat movement that has so positively impacted the economies of broad rural areas of New England.  Having a new paying market for low grade wood is very important to loggers due to the shutting down of numerous paper mills and wood fired power plants.  We believe that much more can be done with Biomass for heating all kinds of buildings and this will have real, positive economic impacts on our region.

Froling Energy has focused on the technology of biomass boilers for almost 10 years and has accumulated a long list of happy customers who, all together, are no longer burning over 1 million gallons of fuel oil each year.

As with most businesses, technology and innovation have made significant improvements in the biomass industry.  It may surprise many that most of this development has happened in Austria.  Twenty years ago the Austrian government made a commitment to convert a large percentage of their energy use to biomass.  Today, modern biomass heating systems are commonplace in large and small buildings and Austrian boilers are the most advanced in the world:  clean burning, fully automated and very reliable.  As a result, they dominate the US biomass market.

Observing what is happening in Austria now allows one to gaze about 10 years into the future of the US biomass market. What can we see there?    Today their biomass market is divided up fairly evenly among 3 distinct biomass fuels:  Green Chips, Dry Chips and Pellets.

  1. GREEN (not dry) WOOD CHIPS began the movement of the automated central heating of buildings using biomass.
  2. PDCs—Precision Dry Wood Chips have come along to fill the wide gap in cost and adaptability between Green Chips and Pellets.
  3. WOOD PELLETS were an important new fuel starting about 2005:  a versatile, simple to use fuel that is easy to transport and deliver.

You may be asking, “What about woodstoves?”  Our industry is focused on fully automatic, self feeding central boiler systems.  Any devices that are manually loaded, like a wood stove, chunk wood boiler or pellet stove, are not considered in this discussion.

The US central biomass heating market is split between Green Chips and Wood Pellets.  Dry Chips account for less than 1% here.  (Froling Energy is looking to change that—read on.)   Let’s look at the two extremes of the market that have taken hold in the US:  Boilers that burn Wood Pellets and very large boilers burning Green Chips.

 

GREEN WOOD CHIP BOILER SYSTEMS

Green Chip systems make the most financial sense for organizations that are BIG fuel users.  There are many successful installations of large green chip boiler systems on rural campuses and public schools in Vermont, New Hampshire, Massachusetts and New York.  Green chip boiler systems tend to be most common in situations where they are offsetting 100,000 gallons of fuel oil or more per year.

While a fresh cut log would be nearly impossible to light in a wood stove or fireplace, fresh wood chips burn well in a green chip boiler.  That is because the chips go from wet to dry fairly quickly as they enter and pass through the boiler.  By the time they make it to the fire grate, the heat of the boiler has driven out the moisture so that they burn very well.

Green wood chip boiler systems have evolved nicely to be quite well automated and reliable, but they are only economically viable for heating campuses and other large multiple building complexes.  This is due to the large infrastructure costs required to purchase and install the large scale material handling and boiler systems.  Big green chip boilers are typically fired up around Thanksgiving and run straight through until about the first day of Spring.  They modulate their output, adjusting to a heat load like a pellet boiler, but they don’t turn off and cannot turn low enough for the intermittent loads of fall and spring.

A ton of Green chips is significantly less costly than a ton of Pellets to buy (75% less+), however nearly twice as many tons are required to generate the same amount of heat.  That’s because green chips contain between 40% and 55% water by weight.  Part of the heat from the burning chips is used up when that water is boiled off inside the boiler.

Burning Green Chips brings with it a number of other costly requirements:  Large volumes of Green chips need to be stored under cover, usually in large boiler buildings with deep concrete pits and “live floor” material handling systems operated by complex hydraulics and connected to big augers and belt conveyors that move the chips into the boiler.   These buildings must have large garage doors that 18 wheel trucks frequently dump their loads into.  Particulate matter in flue gas is a concern for all biomass boilers and green chip boilers tend to need expensive Electrostatic Percipitators and/or other expensive devices in order to pass local clean air regulations.

Green chips need to be purchased from reliable suppliers—not just low bidders.  This cheaper, rougher, and more basic fuel simply requires more monitoring by a trained staff.  Green chips must be managed well by technicians to prevent mold growth and freeze-ups.

Maintenance staff must also keep their eyes on the big, complex green chip mechanical systems.

 

WOOD PELLET FIRED BOILER SYSTEMS

The earliest “fully automatic” pellet boilers from Europe were first imported to the US in 1997.   Initially it seemed that these boilers were ready for commercial use and many were installed.  Unfortunately they required too much manpower to keep them running reliably.  They could run for a few days without attention but once a week cleanings were mandatory and daily check ups proved to be good practice.  “Burn-backs” occasionally happened where the fire in the firebox would migrate through augers into the pellet feed system, creating a dangerous situation.  Improvements were needed.

Around 2010 (when Froling Energy got into the business) a new generation of fully automated pellet boilers began to be imported from Austria by OkoFEN and Froeling.   The systems proved to be much more reliable so sales grew steadily with the help of a couple of solid US distributors.  With boilers ranging from 40,000 to 200,000 BTU/hour, a wide range of residences and small commercial buildings like town halls, churches and small schools installed systems. Staging 2 or more of them together was an effective way to get more firepower.

Sales were good and as time passed Froling Energy got into progressively larger installations.  We went from installing fairly small boilers in homes and small offices to multiple boilers that could heat large areas.  In the past few years we are installing biomass boilers with outputs of one to three million BTUs as a matter of course. New England Wood Pellet in Jaffrey had established itself as a reliable supplier of bulk wood pellets at a steady price.  Times were good.  The price of oil was averaging $3 a gallon and people were looking for options to oil.  Wood pellet boilers had become a least cost, viable alternative.

Why did people buy pellet boilers?  We found that fuel cost savings drove most of these purchases.  Anyone with green leanings will be happy that a viable biomass option was available but if the savings of a fuel switch didn’t pay for themselves in less than 10 years it was unlikely that a project would go forward.

We discovered that larger pellet boiler systems typically pencil out better than small ones.  If more fuel is being offset you get more savings.  And if you add in an old, failing oil boiler and/or a leaking 10,000 gallon oil tank, an investment in a biomass boiler system has a better return on investment than any conventional options.  Within a few years we were installing one and two million BTU/hour pellet boiler systems in schools and commercial businesses.

Things were going well in the biomass boiler business for Froling Energy.  Customer systems were not without problems but we pushed through, learning all the way, building a solid customer base.  Froling Energy has focused on customer satisfaction since day one—fixing troublesome boilers and always working to make things right.

 

A NEW FUEL IN THE US:  PDCs—SEMI-DRY WOOD CHIPS

Back in Austria and in much of northern Europe where the biomass heating market is mature a third fuel has evolved.  Pellets are a perfect refined fuel for small boilers and green chips are the least cost fuel for big fuel users–but at a time today of $2 per gallon oil, neither of these systems pencils out very well in terms of Return on Investment.  PDCs have changed that, especially in the medium to large boiler market.  PDCs (precision dry wood chips) are green wood chips that are chipped down to a smaller size and then dried down to 25% moisture content.  They are made under quality control standards that result in a more consistent product—similar to wood pellets.

PDCs are 35% less costly than wood pellets and can be delivered by a blower truck through a 5” diameter pipe.  That’s a significant difference.  The usual way of delivering any kind of wood chips is by a live floor truck.  Being able to blow them into a silo cuts the infrastructure costs by $150,000.  Not having to construct a building containing storage pits with live floor material handling systems saves at least that much money again.  Not having to maintain all that extra equipment saves a lot in man hours over the years.

PDC boiler systems are a hybrid that costs about 10% more than a similar pellet only system.  The biggest differences from a pellet system are the size of the silos and the mechanics of the material handling system that brings fuel from the storage silo to the boiler.  Pellets flow like water while PDCs (and Green Chips) stack up.  If pellets are drawn out from the bottom, pellets from above flow downwards.  If chips are pulled from the bottom, the upper chips just stay in place.  Force must be applied to make them move.  The most common and least cost method is a rotary extraction device or “sweeper arm” which moves under the pile, pushing chips into an auger channel below everything.  From there, rigid augers move the PDCs directly into the boiler.

Most European pellet boilers over 500,000 BTU/hr can burn either pellets or PDCs.   If a system is built to handle PDCs, it can also burn wood pellets as a “back up fuel”.  However a system that’s built for pellets is not able to move PDCs.

Who manufactures PDCs?  Froling Energy makes and delivers them in blower trucks to multiple customer sites.  One other company in New Hampshire makes a semi-dry wood chip and delivers them in live floor trucks.  We expect others to join into this market as it expands.

 

FUEL COMPARISONS

Price per ton of each of these three important biomass fuels is surprisingly different.  But don’t be fooled by price per ton because increased cost is due to increased value to the customer, which is added by levels of processing.  To replace 10,000 gallons of fuel oil you would need 83 tons of pellets, 107 tons of PDCs or 162 tons of green chips.   All three are sourced from the same wood material. Water content and size/shape are the biggest variables which impact the ease of handling, delivery methods, and stability on site.

 

THERMAL RECS

What are Thermal RECs?  Renewable Energy Certificates.  RECs are bought by power companies who are required by each state’s Renewable Portfolio Standards to generate fixed percentages of their delivered power from renewable sources.  Solar RECs are quite commonly understood as one of the key factors to making practical the generation of electricity with solar photovoltaic arrays.  Where solar systems create RECs by generating megawatts of electricity, biomass boilers create Thermal RECs based on the net amount of heat they produce.

New Hampshire was the first state to authorize Thermal RECs.  Today, NH Thermal RECs can be sold for between $12 and $25 each.    Thermal RECs are only available in New Hampshire at this time but Massachusetts is making plans to offer them in 2018.

Burning one ton of pellets can generate about 4 T-RECs while a ton of PDCs generates about 3 and Green Chips generate about 2 per ton.  (These are rounded estimates.  Each situation will vary.)

 

PDCS REVITALIZE A DIFFICULT MARKET

In recent years where the price of oil has pushed below $2 a gallon, the availability of PDCs with a net cost of about 80 cents a gallon of oil have kept our crews busy.  Wood pellet systems have lost momentum.  As a result, most of the new boiler systems that we have installed lately have been set up to burn PDCs.

PDCs make a biomass boiler system a much better investment and have the potential to add growth and stability to the low grade wood market in New England.  Our most recent PDC Boiler projects include the Merrimack County Jail in Boscawen, NH, Plymouth Regional High School in Plymouth, NH, a third PDC boiler room at Whelen Engineering in Charlestown, NH and the Applegate Housing Project in Bennington, VT.  This summer our crews remain very busy doing boiler installations.  We see a bright future in this industry so long as we keep advancing the technology.

 

Download a PDF of this blog post here: http://bit.ly/2tcoiNk

Download a PDF of Froling Project – Merrimack County Department of Corrections here: http://bit.ly/2sJLH8q

Download a PDF of Froling Project –Whelen Engineering Boiler System #3 Burning PDCs: http://bit.ly/2rUNkNF

590 Hancock Rd

Peterborough, NH  03458

603-924-1001

FrolingEnergy.com

[email protected]

 

2017 NH Business Energy Education Series: Vol 12 – Do my elected representatives have my back?

Do my elected representatives have my back? Answer: It all depends upon who YOU are.  Energy policies, like so many others, have opposition forces on both sides of every issue.  Sometimes it is a “business” class v. “residential” class battle; sometimes it is a “provider” v. “consumer” battle: and sometimes it is a “Big company” v. “Small” company battle.  Since this series centers around “business” energy issues, assume for the most part this discussion is currently a “provider” v. “business consumer” battleground ………. and inside of that subset, we’ll go one subset further and drill down into the “provider” v. “industrial rate consumer” battleground as this is the most dynamic energy front in New Hampshire today.

People vote their elected public officials into office………..companies don’t.  However, companies (and/or their executives) spend far more money supporting and influencing New Hampshire political candidates that the average voter does. On the NH citizen legislative side, where both our NH House and NH Senate members serve for the total sum of $100/year, individual citizens (voters) have equal access to their elected representatives, which as a citizen is a very good thing. However, sometimes that works against “corporate interests” in NH, at least more so that in other states.  For example, in New Hampshire, businesses pay a business income tax (a high one) and people pay no income taxes. However, BIG business interests do hire lobbyists and donate a lot of money to candidates.  Among the biggest businesses in the state are investor owned regulated electric utility “businesses”, and hence they hold a disproportionate share of the influence over energy policy in New Hampshire.  To counterbalance the legislative “clout” of these regulated industries, our statewide business associations and local chambers of commerce need to align their own state legislative advocacy efforts toward their respective unregulated industries member’s interests……….. while leaving the regulated industries interests to be pushed by their own lobbyists for their shareholder interests. It is the responsibility of the elected Officers and Board Members of these many business/commerce groups to guarantee that this happens, and that must be well known to state legislators.

In previous blog segments we have talked about electric rates, specifically about high (compared to  national averages) electric rates in New Hampshire.  Higher rates are synonymous with being in New England, and more broadly speaking, the Northeast.  We are where we are geographically, and that is not going to change. Where New Hampshire really comes up short (for the consumer) is our high industrial electric rates as compared to Maine and Vermont, who are our east and west competitors for attracting industrial class companies with both blue and white collar jobs.  On this score, our elected government representatives and business representatives have specifically failed (i.e.-not been successful) in advancing energy policies that could keep NH industrial companies competitive with ME and VT companies when it comes to electricity rates. More has to be done in New Hampshire to keep our high intensity (electrical) energy industries in the state.  There are numerous proposals/actions that could be passed into law to directly help this vital subset of our business economy. Some of those initiatives will require legislators to choose support for regular private company interests overs those of the “regulated” public utility company interests, if New Hampshire is to retain or attract certain kinds of industrial operations in our state and the jobs that go with them.

Here are a couple examples of 2017 “DRAFT” proposals that could have been advanced this year, but were legislatively passed over for consideration in deference to bigger utility corporate interests in building Electric Transmission lines and Natural Gas pipelines:

 

1) NH TAX CREDITS FOR INDUSTRIAL CLASS ELECTRIC CONSUMERS

https://www.scribd.com/document/347940233/NH-Tax-Credits-for-Industrial-Class-Electric-Consumers-DRAFT-2017-Changes-to-Section-77-A-5-Credits

Legislation would provide for sun-setting tax credits for the targeted class of industrial electric ratepayers to construct/install self-generation.  NH credits would be in addition to the Federal tax credits available for the same projects.

PURPOSE: To lower the payback period to purchase and install self-generation for industrial class customers in order to encourage those investments.

 

2) CHANGES TO CHAPTER 362-A LIMITED ELECTRICAL ENERGY PRODUCERS ACT

https://www.scribd.com/document/347943141/Dv2-Draft-2017-Changes-to-Chapter-362-A-Limited-Electrical-Energy-Producers-Act

Legislation would expand access to in-state renewable energy sources for in-state retail sales.

PURPOSE:  To expand the growth of in-state private Distributed Energy Resources (DER) and facilitate access to these lower cost resources for Industrial and Municipal consumers.

 

However, sometimes its good when the legislature votes to not pass proposed changes , as this NO vote can be equally as important to the same customers. This was the case recently when a NH House committee failed to pass SB128, as approved by the NH Senate.  This legislation, in its current form, may lead to increases in energy costs in the future if energy supply “competition” is diminished, and regulated utilities choose to add their own capitalized projects into the rate base. Consumers do NOT have the upper hand at the NHPUC.  Utility companies have the upper hand at the NHPUC and that is unlikely to change, as one group has far more financial resources at their disposal than the other.  Litigating at the NHPUC is simply not a fair fight …….. not conjecture, just a reality demonstrated by history.

Hopefully, in 2018, we may see a greater appetite by our legislative and business leaders to advance changes that have a clearer and more immediate cost benefit to energy consumers than we saw demonstrated in 2017.  As we have previously articulated in our earlier blog posts, New Hampshire is almost certain to continue to see higher than national average energy rates across all non-indigenous fuel options, due to the added costs of transporting those commodities into the region. This is compounded by higher than average regional (ISO-NE) transmission and distribution costs.  However, that does not mean that New Hampshire is incapable of crafting its own plan …….and unique approach to lowering (or slowing the increase of ) the total costs of energy to industrial consumers on a annual basis.  Rates are very important, but the actual total bill is what gets paid each month. As a “small government” state, we have the ability to implement strategies that meld together the best of what free enterprise and government can accomplish …… if we have the collective will to put our industrial consumer’s interests first.

There are achievable win-win solutions to be found inside of New Hampshire if we all pull in the same direction.  Failing the passage of targeted industrial initiatives, like those examples above, it would take a very BOLD action, such as a comprehensive re-balancing of all three electric rate structures (industrial, commercial, and residential), to bring down the state’s industrial electric rates.  Again, since people vote their elected officials into office, it’s highly unlikely there would ever be the political will to lower industrial rates while increasing residential rates to get there, even though that might be precisely what is needed to compete with Maine and Vermont.

 

Here is a recent open letter from one of New Hampshire’s large manufacturers with big energy loads……..asking for solutions:

An open letter on NH’s pressing energy needs

We must do something now to reduce costs, increase availability

To: Government officials and citizens of New Hampshire
New Hampshire is facing a crisis that is growing bigger every day!

The crisis is the availability and cost of energy. New Hampshire is the most expensive state in the nation for energy. This huge
energy cost and availability issue will soon have a very serious impact on the state of New Hampshire in maintaining the
manufacturing base of its economy.

Manufacturing contributes significant amounts of tax dollars to support the state. It also pays high (if not the very highest) wages to
its employees. To do either of these, manufacturing is going to need to reduce its energy costs, or we will gradually find these
companies moving to other states that can and will supply manufacturers with the required energy for as low as 25 percent of what
it now costs in New Hampshire.

The unwillingness or the inability of our elected officials at all levels to stand up and get something done really upsets me.
We have heard a lot about Northern Pass. In order to satisfy a small minority of the people in this state, we have more than doubled
the cost of Northern Pass construction, reduced the amount of power it will transmit, and will likely increase the cost of electricity,
not reduce it as it was promised to do.

So that solution now does not help manufacturing, and we may very well see the same thing for those who could use less
expensive natural gas with a pipeline. Both of these solutions should have been done many years ago.

Our elected officials had better look at what is good for the state and jump on the bandwagon that will benefit the state.
Representing the wishes of a very small minority and ignoring the needs of the working people is not a good political approach.
The working people in manufacturing need energy to keep their jobs, or we will see a rapid reduction in manufacturers in the state.
Manufacturers supply a large majority of the tax dollars. That tax revenue will disappear, and New Hampshire will be faced with
having only a sales and income tax, and that benefit will soon disappear.

Please put the pressure on the elected officials to get something going that will drastically contribute to reducing energy costs and
increase its availability.

John F. Olson
Executive Vice President
Whelen Engineering
Charlestown

To their credit, Whelen Engineering has forged ahead (using their own capital) to undertake several biomass projects , with help from Froling Energy , to reduce their costs of energy in order to stay competitive in their markets and keep jobs in New Hampshire:

Cast Study Available: FEPR – Whelen Engineering Bsm

 

NH State House

Biomass Boilers – Froling Energy

 

 

 

 

 

2017 NH Business Energy Education Series: Vol 11 – NH’s Ten Year State Energy Strategy: Past, Present and Future by Kate Epsen

NH’s Ten Year State Energy Strategy: Past, Present and Future.

Guest Blog by Kate Epsen,  NH Sustainable Energy Association 

 

Raise your hand if you know that NH has a 10 Year State Energy Strategy…

If your hand is still on your lap, you are not alone.  In 2013, a bipartisan bill (SB 191) passed the Legislature to create a state energy strategy. The bill set up an Advisory Council, which included Democratic and Republican representatives and senators, as well as a Public Utilities Commissioner, the Director of the Office of Energy and Planning, and the Department of Environmental Services Commissioner.  This Council oversaw the creation of the strategy and approved the final version, produced by the Office of Energy and Planning with the additional support of consultants, and public input.  This was a big effort, but it is always difficult to reach everyone using scant public resources.

So what IS our state’s energy strategy?

In short, our state’s energy strategy is a collection of recommendations, which, if implemented, will yield a future (2025) that offers consumers more energy choices at affordable prices, greater amounts of clean energy powering our homes and businesses, greater private investment leveraged toward energy infrastructure, and more retained dollars in our state’s economy as a percentage of spending.

There are four broad categories prioritized to achieve this outcome, each of which include many recommendations:

  1. The electric grid of the future. In order to keep our grid reliable, affordable and able to accommodate the increasing trend toward de-centralizing our power system, NH must modernize both our grid and the utilities that own and operate that grid.
  2. Increased investments in cost-effective energy efficiency. In our regional energy system, NH is losing ground to its neighbors on reducing our energy use and thereby reducing our share of costs. NH can saved hundreds of millions of dollars by investing in the cheapest form of energy: efficiency, conservation, and demand reduction.
  3. Fuel diversity and choice. The Granite State contains no indigenous fossil fuels, and is therefore subject to outside market forces for these fuels. Also, in a time of growing reliance on natural gas to generate electricity, NH can better invest in state-based renewable fuels to hedge against supply disruptions, volatility, constraints and other issues that arise from such dependencies and imbalances.
  4. Increased transportation options. The state’s transportation sector accounts for 35% of our energy use and 46% of our energy expenditures, so reducing these figures through expanded options like mass transit, electric vehicles and infrastructure is critical to our economy and to the well-being of our people.

In addition to a very comprehensive suite of recommendations, the state energy strategy provides excellent baseline energy information and data for NH, as well as offering analyses on technical and economic potentials of what we can realistically achieve.  Summarily, the report is a call to action:

All of these recommendations will take effort and resources to implement. Some require state agency activity, some require legislation, others require private market activity, and many require a combination. The time for action is now. “

Where are we today?

In the two and a half years since completing the strategy, we did act, and we are making progress.  The state created an Energy Efficiency Resource Standard, which will leverage public-private funding mechanisms to invest in saving greater amounts of energy and saving hundreds of millions of dollars for all NH consumers.  The PUC also held an investigation into Grid Modernization (the final report is here), thanks to HB 401 in 2015.  And this year, there is legislation to improve our state’s Renewable Portfolio Standard to increase our resources that come from in-state sources like biomass and solar energy (SB 129).  We still have a lot of work to do, however, to achieve any of the goals for the transportation sector and to deploy much higher amounts of distributed generation.

While it is a very useful road map, the energy strategy is far from perfect.  There are some clear gaps and shortfalls in it.  For example, the overall strategy contains a qualitative vision for the end of the ten-year period, but lacks quantitative goals or metrics by means of measuring success toward this vision.  Also, it does not comprehensively address a few critical and topical issues, upon which our state will make tough decisions. These issues include energy transmission and generation infrastructure opportunities and challenges, embodied lately in Northern Pass, natural gas pipelines, and wind-siting controversies.

Throughout the creation of this strategy, there was opportunity for the public to participate and provide significant comments and critiques. You can read all the public comments that were submitted here. The comments came from diverse stakeholders who are invested in and passionate about NH’s energy future: feedback and ideas came from utilities, individuals, business leaders, and advocacy groups. For example, our organization, NHSEA and the NH Clean Tech Council, offered detailed comments and suggested that we set a goal around keeping our energy dollars in-state and associated actions that would achieve such wealth retention.

Looking to the future, our new Governor may choose to update or even re-do our state’s energy strategy.  While there is certainly room for improvement, there is much in the existing strategy that is worth preserving, and worth pursuing.  Many of us are still learning about the strategy, implementing its good ideas, and working toward that 2025 vision. Let’s build on what we’ve learned, not start from scratch.  Just as it was the case in 2014, the time for action is now.

And you start easily…just raise your hand.

 

Kate Epsen is the Executive Director of the New Hampshire Sustainable Energy Association (NHSEA)

 

2017 NH Business Energy Education Series: Vol 10 – “Our 3 Energy Market Disruptors” by Gus Fromuth

Guest Blog  by Gus Fromuth,   FREEDOM ENERGY LOGISTICS

 

               “ Our 3 Energy Market Disruptors”

My subject topic is on the disruption presently occurring in the Energy market, specifically electric energy here in New England, and why we should be celebrating it. While I will focus on the Eversource/PSNH franchise market, much of what I have to report is applicable throughout the region. I’ll start with a screenshot from the Union Leader of this past December – “High-Priced Power for NH Industry” The New England average is 12.19 cents, while New Hampshire is 12.33 cents.

 

NH as well as all New England is portrayed in this story as having very costly rates, especially in comparison to other parts of the country. If there were no way around this for the Eversource rate payers it would vastly disincentivize anyone from considering expanding business to NH, if energy were a big cost of doing business.

 

The 12.33 cents is basically the cost of the commodity coming from Eversource, who, with over 500,000 customers serves upwards of 70% of the NH retail electric market. So, this is where we are today; I’ll return to this topic. First I will cover the upheavals that have brought us here. Disruptions by their very nature are unpredicted and unexpected. In the case of the New England’s energy market, the first move, implemented by elected officials in five of the six states was certainly expected to be a game changer.

 

The First disruptor to roll out:

 

Legislation that passed in the late 1990s deregulated the electricity market in New England and required regulated utilities like Eversource to divest generating stations to competitive suppliers. That caused a lot of changes. As you may know, Eversource held on to its power plants, except for the Seabrook Nuclear. This radical makeover of the industry was the most profound since enactment of the industry’s first comprehensive regulation by Congress in 1935. Overnight this lead to the creation of what are called Merchant Power Plants- generation facilities once owned by franchise utilities, now owned by commercial operators, free to price their power at whatever the market will bear.

 

Also entering the energy market place where a new breed of energy traders, marketers, brokers and vendors; generally referred to as Competitive Energy Providers. For many business and commercial customers, they replaced the utility as the energy provider.

 

Starting about 15 years ago a competitive market was birthed here in New England. On one hand, you had a newly acquired power plants, freed from the rate of return restrictions imposed by utility regulators. These could seek profit-maximizing returns as they peddled their power throughout New England. on the other hand, jumping at this economic opportunity for electricity marketers. They would compete head to head with utilities and with each other to sell commodity power to the millions of eligible business and household consumers in the region.

 

The natural tension created by forces that sought to sell power at high prices vs those luring customers with the lowest possible pricing created a market that is more efficient and functions more equitably then the old regulated system. This injection of customer choice, this abundance of buyers and sellers and removal of rigid pricing models is but one compelling feature of this new electricity era.

 

The second disruptor to hit the market and foul up carefully laid plans:

 

The cost to make electricity plummeted. The regional power grid operator, ISO NE, reports the wholesale price of electricity has fallen from 6.3 cents in 2014 to 4.1 cents in 2015 (35%) and 2.89 cents in 2016 (29%)

 

What’s the reason? Look no further than western Pennsylvania and the Marcellus shale geographic region of the state. Abundant natural gas deposits have overwhelmed markets and displaced other fossil feels that once generated far more power. Coal and Oil have largely ceased to play anything other than a seasonal or peaking role in the New England generation fleet.

 

Other factors suppressing price is the notable absence of growth in demand for electricity. Energy efficiency measures have also taking market share in the sense that investments in new forms of lighting and conservation expenditures are running ahead of expansion in usage. Aside from plummeting prices there is another headline associated with the growing dominance of natural gas as the preferred fuel for generation. And it’s far less polluting then cousins Coal and Oil. The transition away from those fuels, starting in 1999, has brought with it a 26% reduction in power plant emissions of carbon dioxide, a 66% drop in nitrogen oxide and 94% of sulfur dioxide pollution has been eliminated.

 

The third financial asteroid to hit the Energy market:

 

This has all been very good news for consumers. But it has been harrowing for generators that don’t fuel with natural gas. Let’s look at the New England supply stack. This graph tells the story of how a power plant is financially dispatched to run. This system runs the cheapest generators all the time. The progressively more expensive plants kick in as powered demand rises and compensation to the generator increases. The thing is, that the new were forms of energy generation are cheaper than the legacy power plants with tomb they are competing. The supply stack shows the emergence of wind and solar on the very front and at the dispatch chain.

While very cheap to operate, they are also irregular and unpredictable performers. Unlike other power plants they do not have on and off switches. Weather permitting, they will put out the same quality electrons as a nuke, Hydro or gas plant. But the economics for wind and solar operators are hugely different than their rivals in the legacy generation business. Armed with capacity income, renewable subsidies and tax allowances, wind and solar can operate profitably even if they are paid zero, or less than zero for their energy. Yes, you heard that correctly. Looking at the supply stack, if the price were to drop below zero, wind and solar resources would very likely continue their electricity production. This creates a price sink into which all the other generators up the price latter are sucked into.

 

Solar and wind are way behind in terms of the volume of energy they can produce. But renewables, coupled with the economics of the gas effect, have caused the owners of two nuclear plants to terminate operation. This is troubling on a number of fronts. Renewables are a good thing but they aren’t equipped to be our prime-time suppliers of energy. Without storage capacity, the random nature of their energy production can’t maintain the reliability standards every household and business depends on.

 

In the case of nuclear- it provides clean, abundant energy at very affordable prices. They were a long-term investment and now the most expensive part of the relationship is behind us. The benefits are flowing.

 

I began this commentary with the headline from three months ago that declared New Hampshire and greater New England to be ground zero for high energy prices. If I were to summarize, the benefit of the disruptions I have described are not naturally flowing through to you, the rate payer. In other words, some proactive steps must be taken by you, the business owner, and you the home owner, to get access to the cheaper energy available in NH and New England. In other words, don’t rely on the headline.

 

Profound disruptions in the energy economy have created significant material opportunities for you, the energy consumer, to buy an expensive power. You must know where to look for it and we will provide some tips on how to do just that in a future blog.

 

 

The Faces of Energy Management

Gus and Bart Fromuth of Freedom Energy Logistics, LLC

 

The Freedom Team

E [email protected]

5 Dartmouth Dr. Ste 301
Auburn, NH 03032

P 603.625.2244
F 603.625.8448