4-29-05 USGBC Cogeneration Presentation

LEED : USGBC Cogeneration Presntation.

My notes on the talk by Richard Holzer & Jack Rosenthal (Glumac), Orange County Chapter of the United States Green Building Council, USGBC meeting, 4/29/05.

Richard Holzer only spent a brief few minutes bragging about his company, Glumac. He gave some numbers and examples of the LEED projects that the firm has done, and claimed credit for the "first LEED building on the west coast". He stated that the company had 47 LEED Accredited professionals, 6 of which were in Irvine. The Glumac note cards, passed out for participants to jot questions on, were lined with lime green highlights and printed with the catch phrase "Glumac. Engineers for a sustainable future".

Very quickly, however, Holzer acknowledged that when doing cogeneration projects, Glumac nearly always favors a turnkey process of design build participation. Glumac, as the project engineer, sets the parameters for a cogeneration plant design which is furnished by a company called Northern Power (www.northernpower.com) who designs and provides inner workings of the cogeneration plant, its controls, and connections. According to Holzer, engineers attempting to take on cogeneration projects in a traditional design - bid - build manner face an impractically difficult challenge. There is a tremendous time investment in the design of these systems.

Holzer turned the floor over to Jack Rosenthal, the main presenter. Rosenthal's presentation included a good deal of sales type information on cogeneration systems. It was speckled with useful facts and figures and concepts, and some outright selling propaganda. (Cogeneration sales presentations often lean on the idea of 80 - 90% efficency, a level of excellence achievable only under optimum conditions.) When selling cogeneration, common talking points are: high electricity rates, volatility of electricity rates, reliability of the electrical utility, "rolling blackouts", and the "split" between gas rates and electricity rates on a common unit basis. The ideal customer for cogeneration would have 24/7 operations, a high cost of outages, and a constant need for heat and power.

Some key concepts presented were as follows: Distributed generation is when power is generated in small or on-site power generation stations, as opposed to centralized generation by power plants. Distributed generation ties into the local power grid. Self Generation is a generation station for a purpose that does not tie in to the local grid. Selling back to the grid is when a distributed generation station produces more power than it has a demand for on site, and sells power to the local utility. This is generally a bad deal for the owner who has to get rid of his excess power at whatever price the utility offers. If the system is to be tied into the local grid, sophisticated controls must comply to the utility requirements to avoid any risk to the grid. Distributed generation plants may utilize a variety of energy generation equipment including Combustion turbines, reciprocating engines, photovoltaic cells, fuel cells, or microturbines. Microturbines are of particular interest because of the efficieicys available when the waste heat can be re-used. Other equipment used in cogeneration include heat exchangers, silencers, absorptive chillers, cooling towers, and controls.

An important distinction should be made between distributed generation facilities and emergency generators. Since distributed generation stations are designed to run consistently, the air quality requirements are very different from emergency generators. In fact, air pollution and discharge concerns are a consistent issue in distributed generation plants. Catalytic converters are normally required to clean the stack discharge to meet emissions standards for engines as set by the local air quality management districts (AQMDs). AQMDs generally require that distributed generation stations meet the "Best Available Control Technologies" (BACT) to control emissions. Often, to achieve financial incentives from utility providers, plants will be required to exceed BACT. Also, since distributed generation stations are nearer to population, locating the stack discharge can be quite a challenge. Silencers will often be required for noise.

Conceptually, and in it's most simple form, the benefit of cogeneration is better usage of fuel. To produce, for example, 30 units of power and 70 units of heat, one could utilize a 55% efficient power plant and an 80% efficient boiler. That would take 150 units of input. Alternately, one could utilize a cogeneration system to produce 30 units of power and 70 units of waste heat from 110 units of input. The overall units of input are lower for the same useful energy.

However, cogeneration can take many forms. Any two or more types of power generation that can be coupled into a single point of production is an opportunity for cogeneration. Compressors, air compressors, or pumps, for example, can be coupled to the microturbine shafts to produce more than one form of useful energy. the many forms of cogeneration have many different operating efficiencies. A waste heat recovery microturbine, as described above, can offer source energy efficiencies up to 80 or 90%. Less direct cogeneration methods, such as absorptive chillers, will be less efficient, but may make economic sense.

Cogeneration systems are installed based on the economic benefit of doing so. The first and last task in cogeneration application is an economic analysis of the initial cost, estimated or forecast energy rates, and operating cost savings over time, and return on initial investment. Cogeneration systems require a significant first cost capital investment. The magnitude of this first cost ranges from $1800/kw for an IC engine with heat recovery to $3000/kw for microturbines. In one hotel resort case study, the layout of the site made cogeneration unattractive due to pumping energy to get the waste heat where it was needed. Cogeneration works best where there is a constant and centralized need for power and heat. Another case study was a potato processing plant, where waste heat could always be used to heat water for the process.

Some utilities do offer financial incentives for distributed generation plants, as they do aid the utility shed load from the grid. In order to receive financial incentives from a utility, Rosenthal presented, cogeneration systems need to meet a set of criteria. Efficiencies must be 60% or better. BACT should be utilized to improve the emissions over AQMD requirements.

The heat and focus of the economic analysis is what Rosenthal called the "spark spread", the difference in cost of producing energy via the cogeneration plant and buying energy from the utilities. From this, the returns on capital investment are determined. The spark spread, however, is tied to energy rates, both present and future. So, Rosenthal spent a little bit of time talking about energy rate forecasting, quoting the oil futures markets, the California Energy Commission (CEC) forecasts, and some older forecasts from the 1970s in which he was personally involved.

Rosenthal and Holzer fielded questions after the presentation. Attendants asked about first cost and reliability. I posed my long-standing question as best I could. From an air pollution only standpoint, are distributed systems worse than centralized generation? Rosenthal answered by talking about how a large portion of California's power is produced outside the state.

Travis 4/29/05

P.S. - From my slanted, leftist, environmental communist surfer perspective, I have doubts. The economic basis of decision for cogeneration is great for the owner's economics, but I question that it necessarily translates to green benefits. There is an assumption that if power is more cost effective, it is better for the environment, and greener. That has not been proven to me. I suspect that there are market conditions where lower efficiency cogeneration systems (absorption chillers in office buildings) may be economically justified but not represent an actual improvement in fuel resource usage or air emissions over the state grid production. Cogeneration plants are not generally green power - water, solar wind or geothermal - while some of the state's grid is. And from a local pollution standpoint, which as a surfer is all I really care about, I suspect that these small plants in our communities are pumping the air full of nasty stuff for me to breathe, and then it washes into the ocean, helps the water stink, kills the fishes, bla, bla, bla.

4-24-05 The Mexican's Hands

My former neighbors, Robert and Mary, habitually called me over to their apartment to look at computer problems. Having spent the majority of my days staring at computer screens either at work or home, I was a moderately well qualified resource for minor problems, and could usually offer practical advice.
Before he moved out, Robert promised me a repayment. Knowing of my fondness for multi-cultural experiences, he told me "We'll have you over to my parent's house, and have my mom cook her tacos."
"You'll love it" he said. "They're real Mexicans."
Months later, my wife informed me the night had been set. We were directed to a single story house in the city of Orange.
My wife, daughter, and I arrived at the appointed time, and met Robert's parents. They were introduced to us a "Larry" and "Mary", no doubt Americanized versions of their names.
Larry was a portrait of hospitality. We were complete strangers in his house. He didn't mind. He invited us in to sit in their living room. Larry asked my name, and shook my hand with large square hand. I could feel the callouses of a lifetime labor. But, his grip was soft and friendly.He had trouble remembering my name, and asked me three times until he could say it.
Our daughter ran off to play with Robert's children. My wife, Jenn, expressed concern for her getting into things.
"Will she be OK running around?" Jenn asked.
"Oh." Mary told us. "She's not the only little child who runs around here. How many grandchildren do you have now, papa?"
"Twenty one." he answered, in his slow and calm voice.
Larry and his wife, Mary, had been in the house in Orange, CA for over fifty years, having purchased it as a new home in the early 1950s. He told me that when they bought the house Disneyland was under construction and there were only a handful of small housing developments in the area of Anaheim and Orange. "This whole area", he said motioning with his slow and steady big right hand, "was all orange groves. I used to walk over the way to get oranges."
Bits of Larry's story came out over the course of the evening. He had migrated to the US as a young man from Mexico, probably during or just after the Second World War. He spoke of working for a time in a tuna packing house in San Diego on the harbor. "He was the can man" Robert joked. Larry said he was responsible for making sure that the girls who packed tuna had cans. He did a job for the union, as a construction worker in Oceanside. "In those days, when the job was done, you had to find more work." His did a stint operating a tractor in LA county. "They said that they had work for me and a house." "No down payment" he told me. "It was $11,000, and now it's worth $600,000." He was one of the first home owners in the newly developed area. He drove the tractor for four years, then quit. "It jars your body so badly" he said. By then, he was married. Larry was invited to join a construction union. Larry had worked union construction for the next 25 years. He listed jobs that he worked on: Camp Pendleton, UC Irvine, and a handful of buildings and developments that I hadn't heard of. He retired in the late 1980s, probably with a union pension.
But, as his family chided, Larry was an unstoppable worker, even in retirement. "I've done all the work on this house." he told me, as he gave me a tour of the place, pointing out with squared tough fingers all the pieces of work that he had done. A backyard sunning patio was enclosed, roofed, with two windows and a ceiling. "Acoustic tiles." he said proudly, pointing a cupped hand at the ceiling. He explained how he had improvised the installation, lacking the traditional hangers that would hold such tiles in an industrial building. Most recently, he had built a self standing "tool shed" in the backyard. Robert told us how the family expressed concern when Larry took on the task of roofing it by himself. "I was out here one day." Robert told me. "He was up there and I was throwing two by fours up to him!"
Larry's brick and landscape work was impeccable. The whole house was surrounded by immaculate brick and stucco planters and walkways. There were concrete areas in-lain with brick, brick steps and porches, yellow stucco planter walls and fences with brick tops. He had done all the masonry by hand. He told me that the planter walls were concrete block, covered in stucco. The back yard had a patio cover, and a brick built up barbecue with racks for a grate a solid steel grilling surface. "When we have the family here." He told me. "We bring out more tables and chairs, and can cook everything on this: the tortillas, the meat, everything."
Most of the trees bore fruit. There was a peach tree, a pear tree, and an avocado tree. He pointed to the tiny avocado buds forming. In a month, he told me, the tree would produce several hundred avocado. "I have some friends in Mexico, and I take them boxes of avocados, or I give them away around here." He explained how the avocado plant didn't need watering, explaining the process with slow deliberate hand gestures. "You just dig a dyke around it, and rake all the fallen leaves into it. Then when it rains, the leaves become the fertilizer for the tree in the next season." In the planter with the avocado tree were a string of tomato plants. "I stopped growing the peppers" he told me. "Every kid that we've ever had here plays with the peppers and gets burned in the eyes." He laughed. He told a few stories about children, running into the house after having played with the peppers and touched their eyes. As we walked towards the back porch of the house, he pointed excitedly to a potted cactus plant, gently touching a small flower. "Bet you never seen one of those." He said. The cactus had bloomed a flower: a small but thick, perfectly shaped, five pointed star. "They stink really bad, too."
When dinner was served, Larry's wife never sat. She stood at the stove, moving tortilla after tortilla over into a lightly greased pan. She had a routine that had been practiced for years. She placed a tortilla into the pan, flipped it, added meat, folded it, flipped it one more time, and placed it on a plate. Every motion was timed perfectly, a timing that only comes with practice. She wouldn't eat until everyone was finished. Even then, she never sat down.
At the table, Larry instructed us on how to create the tacos: add lettuce, some cheese, and salsa. The salsa was homemade red salsa, medium spicy. In a separate container there was green salsa, a bit hotter. "My son made that batch." Larry told us. "He makes it here and brings it to the workers in San Diego." The tacos were large with crisp shells. Robert told us that his mother had been making tacos the same way since he was a boy. The men at the table kept count of how many they ate, almost as a competition. I tried to stop after three, but Larry nodded towards the taco plate, urging me into my fourth and fifth.
After dinner, we sat on the front porch and watched Robert's daughters play with ours in the slowly setting sun. A baseball game had begun at Angles stadium several blocks away, a structure fifteen years younger than the house we were in.
In the city of Orange, by the end of the decade this house was built, there were 8,500 housing units. Over the next twenty years, the number more than tripled. By 1980, there were 30,700. Today, the area is practically developed to maximum capacity. There are 41,800 living units, 40% of which are rented. The demand for housing has pushed the average price of single family homes up over a half million dollars. Based on a ten percent down payment, and a mortgage which is less than 35% of family gross income, only about 30% of the area households could afford to make such a purchase.
Larry's life seems impossible in the modern economic era. Thirty years of free market deregulation, breaking of unions, consistent devaluation of minimum wages, and the rise of the low wage unskilled worker have made the prosperity of laborers a fading segment of the population, soon to be but a memory. Today's labor contractors hire at the lowest possible levels of wages and benefits to increase labor dollar efficiencies and compete with global market economies. Only public sector construction religiously utilizes union labor for a majority of trades.
When Jennifer and I left, I got the feeling that I had seen a glimpse into something very different from that which I have known in my life. I had been raised to go to college, and taught that success came from education, capital investment, smart savings, and entrepreneurship. Larry was a man with a different understanding of American opportunity. Aided by a very different time, and a largely regulated economy with an emphasis on fairness and the value of labor, Larry had prospered. He had come to the country with nothing, learned English by immersion, and taken advantage of union jobs and opportunities for workers. His life and his family were built not with capital investment and entrepreneurship, but with his big strong and gentle hands.

-Travis 4/27/05

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Notes:
While there's only really one paragraph of hard data here, I'll go ahead and give you my sources.
1. For demographic information on the city of Orange, I used the census data from 2000, compiled here. This is a very good website, that I use a lot.
2. Disneyland was started in 1955, and Angel stadium was completed in 1966. For another article I did on these, see this blog.
3. My housing price information is based on the ongoing coverage of home prices in the Orange County Register See, "Cheaper loans little relief - O.C. mortgage rates dip from a week ago, but home prices continue to rise amid low supply." Orange County Register, The (Santa Ana, CA) April 22, 2005 Author: HANG NGUYEN. Unfortunately, the register wants you to pay to see the articles on their website. But, if you have a library card, you should be able to use this engine. Ask your public library for access. It rocks.
4. My numbers for the mortgage calculation in the last line of the third to last paragraph are as follows: Let's say you are going to buy a house for $500,000. You drop $50,000 as a down payment (good for you for saving that up), and wind up with a mortgage payment of $450,000. At today's 5.53% interest rate (which I'm sure you qualify for), your payment would be $2563.63 according to these guys. So, working backwards, for that to be 35% of your gross, you would need an annual gross family income of $87,895. Based on the population data (see note # 1), 63% of the households in Orange, CA make less than $75,000 and 78% make less than $100,000. So, I'm guessing that, conservatively, 70% of the people make less than $88,000, leaving 30% that could afford this "average" house.
5. In the second to last paragraph, I mention some general trends of the last 30 years, which are more difficult to back up in quick sources. But there's a whole ton of reading that can be done on things like union membership, minimum wage, overall decline in wages , and of course, immigrant workers.