The Fossil Future of Thermal Generation

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The Fossil Future of Thermal Generation

The Fossil Future of Thermal Generation

The calls for a 100% renewable energy market in NZ are often met with large amounts of criticism, "We are 85% renewable already", "Thermal back up is required for periods of drought and low wind", "Going 100% renewable will only increase prices as more generation will be required" etc etc etc. Quite frankly, this is an outdated way to think of the market based on large scale generation models and long distance transmission. New Zealand in transition Unlike most other countries, NZ is well positioned to further reduce reliance on thermal generation, given our geography, population spread and isolated energy system i.e. we are not importing or exporting electricity to other countries like many do in Europe or North America. A good first step could be to remove thermal baseload generation from the market, in recent time this has been achieved with Otathuhu closing in 2015, much of the "slack" was taken up by new and efficient running of Geothermal stations. But how do we take this further, how do we remove the requirement for Huntly et al while still retaining large users such as NZ Steel and Rio Tinto? Battery Storage and the New Zealand network From my perspective the largest potential lies in battery storage whether it be fixed assets or leveraging the electric transport fleet in years to come. If generators / network companies considered either installing large scale industrial batteries at remotely located or congested sub-stations or operating networks of small scale batteries installed across thousands of residential homes, massive amounts of money would be saved by not having to build new hydro dams or geothermal plants. Ever increasing costs of maintaining such a large transmission and distribution system for such a small population is surely a compelling event for infrastructure owners to invest in new technologies and new business models to sustain revenue into the future. If we apply Moore's law to batteries, they will half in price and double in capacity in the next 18 months which should see them become extremely viable. Considering the above, the case for thermal becomes much less compelling. Examples from abroad In recent times, Germany has made huge steps to curtail the reliance on thermal generation with numerous renewable generation initiatives. The following article was written by Yaniv Vardi, CEO of Panoramic Power and highlights a number of valuable points that New Zealand might take on board. In a world facing pressing challenges from climate change and rising carbon emissions, entire countries are becoming laboratories to test potential solutions. Nowhere is this truer than in Germany, where their aggressive plans to address climate change, encoded in the ambitious Energiewende, call to phase out nuclear and carbon-based energy sources and invest in renewable energy sources – such as solar and wind. The Energiewende plan envisions a non-nuclear Germany that cuts its carbon emissions by 80% by 2050. As lofty a goal as this may be, the plan is on pace to meet and even exceed benchmarks. Even though not everyone is on board, and some claim the Energiewende is overzealous and could strangle business in favor of pushing an unrealistic energy policy, progress well underway. What is the Energiewende, and what has it done so far? The Energiewende is a sweeping plan for "the full-scale transformation of [German] society and the economy" along the lines of renewable energy. Passed in 2010 in its most recent form – but with social and political roots that stretch back 20 years prior – the Energiewende schedules a complete phase-out of nuclear-generated energy by 2022, an 80% cut in carbon emissions by 2050 and supports additional investment in renewable technologies such as wind and solar. The Energiewende has three main components: proliferation of renewable energies, reduction or compete phase out of nuclear- and carbon-based energy sources and increased energy efficiency.  Germany is well on its way to completing these goals successfully and in a timely fashion. Currently, the first two components are well underway, while early progress has been made toward heightened efficiency. By 2014, 27% of German electricity was generated by renewable sources. Since 2011, Germany has halved its consumption of nuclear energy and shut down nine of its 17 nuclear reactors. On its surface, the Energiewende appears to be working. It doesn’t mean, however, that the policy isn’t free of critics. Some have vocalized sharp critique, casting doubt on the viability of the energy plan. But do these arguments hold water?   The continuing energy debate Not everyone is sold on the promises of the Energiewende. Some, like economist Heiner Flassbeck, argue that an energy system primarily supported by wind and solar, without any aid from nuclear sources or fossil fuels, is ultimately not tenable. Flassbeck's critique is related to what critics call "the intermittency problem," that wind and solar don't always generate electricity at reliable levels. If the renewable sources fail to produce enough energy to meet the nation's demand, and Germany successfully phases out all nuclear- and carbon-based energy sources, there would be no fallback to generate the additional energy needed. Critics say removing that backup would be a crucial mistake. However, proponents argue that intermittency can be solved with greater grid connectivity – geographical diversity, they suggest, should often balance out any shortages – and the development of better storage technologies. At present, wind energy must be used as it is generated; if cost-effective storage methods emerge, the intermittency of wind power becomes less of a concern. In addition, alternative sources have proven themselves to be sufficient. Just last year, German solar power providers generated so much electricity that they actually had to pay to offload it. And while naysayers may declare this the product of a ham-fisted public policy that actually dims the long-term viability of commercial energy production, the fact that there’s enough clean energy production to bring this hypothetical conflict to life, is itself encouraging. Energiewende critics also raise concern about inflated electricity costs. In Germany, utilities are required by law to pay energy producers that sell back to the grid. Those payments are set at fixed, above-market prices, which utilities pass on to consumers in the form of a surcharge on their electric bill. As a result, German consumers experience higher than average energy costs. In 2016, the surcharge amounted to 22.1%. In the U.S., consumers pay less per kilowatt hour, a fact favored by critics of Germany’s energy policy. Despite the heightened electricity rates, German consumers are still widely in favor of the Energiewende. More than 80% of respondents of public opinion polls said they were in favor of a low-carbon and nuclear-free economy. Higher energy costs, it seems, do not deter the Germans in their bid for a cleaner energy system. Toward a viable, national energy management model Despite critics' appeals to hold tight – at least for the time being – to the nuclear- and carbon-based status quo, Germany's energy efficiency policy is making a compelling case study for a more sustainable model. The methods may be bold, but they seem to be working. Germany reduced greenhouse gas emissions by 27% and produced 27.4% of its electricity from renewable sources. Renewable energy made up 13.5% of the market as well – all while shuttering nuclear facilities and growing the overall economy by 1.9% (the fastest rate in the G7). While Germany is phasing out non-renewable energy sources like coal at a slower pace than nuclear energy, the Energiewende is setting the stage for a new system founded on renewable energy technologies. As storage methods improve and proliferate, and distribution networks become more connected, the problem of intermittency should become less and less burdensome – in other words, high-producing regions will be able to support low-producing regions. While the Energiewende is aggressive bordering on single-minded, it has already demonstrated its viability as an energy system capable of supporting an advanced, forward-thinking economy. Even as the German policy has implemented drastic changes in a relatively short amount of time, the German economy has continued to grow unabated. If the world is serious about combating climate change and meeting the targets of the Paris climate accord, Germany's Energiewende is a model to emulate, not dismantle. Yaniv Vardi is the CEO of Panoramic Power, a leader in device level energy monitoring and performance optimization

Is New Zealand business ready for Artificial Intelligence?

Is New Zealand business ready for Artificial Intelligence?

A decade or more ago I used to defeat chess playing computers for a small wager. It was simple stuff really – just find a weakness and ruthlessly exploit it – in my mind computers were basically binary and thus “stupid”. Today chess masters are fair game for computers. My party trick is ancient history and I am frankly a little scared about what happens when computers can outsmart humankind.  Terminator anyone? Some would argue that we have nothing to fear. Others feel exactly the opposite. Stephen Hawking recently wrote “The full development of AI could spell the end for the human race”. Elon Musk – founder of PayPal, Solarcity and Tesla called it “Summoning the demon”. The impact of AI in New Zealand Putting aside visions of Arnie and terminators for the moment we should also look at the impact that AI might have on New Zealand businesses. Most kiwi business owners and leaders are constantly aware of the need to innovate, optimise and seek competitive advantage by being cleverer than the guy overseas. Thus, we find ourselves asking: How do we get the best out of what we have? How do we employ better people and make them more effective? How do we use the limited space we have at our disposal? How do we get the machines that we paid heaps for to be more efficient? The questions are endless but sadly the time and money we have is not. I cannot count the number of times I have spoken to business people who know what needs to be done to make companies better, faster or quicker but simply don’t have the spare time to do it. Here is where Artificial Intelligence comes in. It not only analyses the data to answer the question but it can also act on the insight, often in real time. Don’t believe me? How do you think Amazon remembers your book purchases and even title searches and then suggest others that may be of interest? AI also allows Amazon to identify your location, match it to the right supply chain service to execute the sale and delivery via the cheapest and most direct route. Amazon's arrival in Australia is causing tremors across the whole retail industry there. It’s not just books they sell, you name it, they have it, at a price too cheap to resist. At the heart of this frighteningly effective, multinational monster is Artificial Intelligence We have always had AI – it has just been too expensive to make that much of a difference. Now it’s available as a service from the likes of Google (Google AI) and IBM – (Watson) and numerous clever startups. The availability of world class AI a via Software as a Service model means that we don’t need supercomputers and massive budgets to take advantage of AI in New Zealand. Next month I will describe examples of how AI is being used to optimise business’s use of energy and compute resources to save money and compete.

The Corporate Power Perspective: Evaluating Strategic Energy

The focus of the recent Energy Management Association of New Zealand (EMANZ) conference held in Wellington centered on disruptive technologies and how this would impact the traditional models of the energy supply chain. While presentations focused mainly on generators, distributors and retailers, customers also need to consider how emerging technology can drive strategic decision making when it comes to the consumption of energy.   The installation of smart metering over the last few years throughout New Zealand has assisted mainly companies that generate, distribute and retail energy with very little benefit being delivered to customers. In the retail space we are starting to see the application of time based pricing for SME customers but retail pricing products in this space remain in their infancy as the attitude of traditional suppliers appears to be a wait and see approach. One thing is for certain, data will play a massive role in the future structure of energy supply and customers who control their data will be steps ahead of those that don't. We truly believe that customers who take a proactive strategic approach to measuring consumption beyond the data available on their invoices (whether it be energy, ICT or waste) will have a competitive advantage in their market place compared with businesses who don't. The below article was written by Jon Rabinowitz, Head of Marketing - ‎Panoramic Power, while US-centric there are strong commonalities that apply to the market in NZ. If your business would like to discuss how energy can become a strategic lever for competitive advantage, Total Utilities would welcome the opportunity to meet with you. Contact us here.  It goes without saying that all industries need energy to function. It also goes without saying that energy can be a costly burden. However, this doesn’t mean that companies can’t take control. All it takes is a thorough understanding of how energy is used in order to reel it in and turn it into a strategic and perpetual resource. In today’s world of smart technologies and interconnected devices, companies looking to up their game and improve their outcomes can relatively easily turn to data to reveal otherwise hidden operational wastes and points of friction. Strategic energy management technologies, in particular, shine a light in these once-dark corners, plotting a clear map for operational enhancements and cost reduction. To gain a better handle on how professionals across all sectors relate to the role energy plays within their operations, we surveyed managers from the retail, manufacturing, commercial building and healthcare industries. In doing this, we wanted to understand how business men and women see the impact energy spend has on their organizations now, where they think it’s headed, and if their companies are beginning to adopt more energy-enlightened policies. Constructive or Destructive, the Effects of Disruption Depend on You Duly applied energy insights provide businesses with the power to maximize assets, comply with regulations, expand production capabilities and control costs in ways that weren’t fathomable just a few years ago. For many industries, this profound but non-flashy shakeup of logistics and management best practices will constitute the digital disruption the market’s been on the lookout for. When approached through a digital lens, energy purchasing, distribution, monitoring and management can propel companies forward and past their competitors. As the benefits of digitizing energy for strategic advantage become clearer and its practice more commonplace, managers understand that they, at minimum, need to brace themselves for the changing tide. More than half of managers surveyed – 53%  – understand that digital disruption will impact their business, somehow, in a significant way, and 40% have a plan in place to deal with it. Meaning that those 13% who know enough to be concerned but have no plan in place are consciously setting themselves up for failure. Since energy runs through every critical asset at work, there’s no better way to digitally map your operation than by studying the flow of electrons. The 40% of energy-aware companies planning for disruption are the ones that will seize the moment and secure a competitive advantage for themselves. In which ways can a company put itself ahead with an EMS? The Smart Money’s on Strategic Energy Most companies are still spending a large portion of their budgets on energy bills – about 60% of companies are shelling out more than 5% of their total overhead on energy, while 24% report spending more than 15%, a mind-boggling six or seven-figure expenditure. These numbers show no sign of going down, either, with less than 10% of respondents seeing a downward trend in energy overhead. Beyond the straight-forward waste-reducing, money-saving use of a strategic energy management system, smart businesses are increasingly leveraging the deep insight potential of energy analysis within their broader asset performance management (APM) strategy. Despite the huge benefits, our survey found that a majority of companies – 57% – have no tools or systems in place to guide their asset performance management strategies, let alone those that incorporate energy management systems. There is a clear operational advantage for companies that not just implement EMS and APM, but that set these systems up to inform upon each other and work as a comprehensive operations management tool. Half of companies with such EMS-based APM strategies in place manage to keep their maintenance and repair costs below 10% of total overhead. Conversely, only 27% of those without EMS-based APM can claim the same. That means that almost a quarter of survey respondents are missing an easy opportunity to reduce their maintenance costs using strategic energy insights to schedule smart, predictive maintenance rather than wasting money and disrupting operations with reactive or preventative regimens. Powering Profits Now and into the Future In this age of corporate upheaval, the companies that come out on top will be those that use energy data to improve their core operations and boost their brand – positioning themselves dually as the belle of the balance sheet ball and the quintessence of corporate social responsibility. Interestingly, while 70% of companies have PR programs and 68% report that environmental policies have affected their operations in some way, only 52% have Corporate Social Responsibility (CSR) initiatives in place. That means that close to 20% of companies aren’t using what they’re already doing to advance their PR agenda. Looking at the results, our survey confirmed the notion that most business leaders believe their industry is on the cusp of dramatic change. Still, many are struggling to identify and prepare for the changes ahead. Some are successfully using EMS to reduce wasteful spending and some are using APM to improve their production process. Few are using both systems to bolster and complement their combined function. Those that are, are running at a level of efficiency well ahead of their corporate peers. By collecting data from the equipment you already use on a daily basis, you’ll identify opportunities to control costs, maximize assets and achieve unprecedented operational efficiency. The result is a win for everyone in the organization – from the COO, to the machine operators held back by a broken machine, to the PR professionals who can use these efforts to promote your company. With a healthy, progressive perspective on energy and operations, the opportunities to improve and excel are truly endless.

New Branding and New Services

Intelligence without ambition is a bird without wings. Drawing is the honesty of the art. Salvador Dali Today Total Utilities announces its new branding. Over the last 18 years we have worked hard to assist companies in controlling consumption and cost. It's an exciting day for us and we are proud to share this with you. From today you'll see a change in the way we look, including our new ribbon logo. The spherical shape represents the whole as we take a 360 degree approach to understanding our clients and their utility requirements, whether it be Energy, Waste and ICT or Insights, Strategy and Solutions. What doesn't change is our desire to create a sustainable future for New Zealand businesses and how they manage their utilities by continuing to deliver ongoing value for our clients. We continue to work hard to provide new services to assist our clients such as Energy Monitoring and Targeting through wireless non-intrusive energy senors, Cloud Computing Analytics for consumption of computer services and qualitative and quantitative reporting aligned to overall financial strategy. Total Utiltities About Us Presentation We remain committed to delivering a personalised service and assisting our clients navigate a rapidly evolving commercial market place by underpinning strategic thinking. I would like to thank our existing clients for your continued loyalty and confidence in our company. To prospective clients, I hope that you will partner with us to discover real world solutions for sustainable utility consumption and cost optimisation.

Production Management and the Industrial IoT

In the first two parts of this series I looked at what the internet of things (IoT) actually is and then at the Energy Management possibilities for businesses competing on the world stage. In this, part three, of the series we get down to the nitty gritty of Manufacturing Production Management and how measuring energy flows and consumption can inform critical decisions. I could make this complicated but if we really get down to the basics there are three main categories that require constant attention in a production environment: People, Processes and Technology. People – Creating Feedback Loops In the context of production management one of the most important variables is the performance of individual staff members. How someone uses equipment, works within a team, learns to adapt to new systems can make the difference between a highly profitable unit and one that is not. What drives people’s decisions and actions will often come down to feedback loops. By using the Internet of Things to deliver energy monitoring information we can give people useful data about what is happening on their production line. For example, if we can demonstrate that the team’s correct use of energy efficiency tools delivers a better product this not only reinforces their behaviour it also opens up the opportunity for them to take this information and find even better ways to improve efficiency. How we use technology can be directly connected to the energy a unit or group of units consumes. If a lathe is running at full tilt throughout an eight hour shift does that necessarily mean that unit is being properly used? Or is the operator just running it on full because it that is what they were told to do when they first started years ago? People make decisions at work every day. How you create feedback loops will inform those decisions more effectively and in doing so improved performance, job satisfaction and company results. Processes Every experienced Production Manager can tell you that each team on a production line is quite different and that their results vary considerably. The bigger question is “what causes this?”. By monitoring the flow of individual products and components through a production line we can identify bottlenecks, part shortages and defects quickly and effectively. With the Internet of Things we can break down a process into its smallest components, create various quality checkpoints along the way and eventually ensure near 100% accuracy, complete adherence to standards and instant identification of faults and tolerance variances. Many would suggest that this is already the case in many well-run sites. But what happens off site with the parts we order and the products we ship? The key to the internet of things is that our production process begins at the point where a component is ordered , right through the creation of unique SCU’s or products and all the way to the end user’s home, office or factory. This is because we can now potentially track billions of components throughout the supply chain at a cost much lower than we ever thought possible. Technology Remember the Internet of Things is not just adding an RFID tag to a unit and tracking it. It is about potentially billions of components that communicate. This can be back to a central point, with multiple other components, with the warehouse, the truck and of course with the end user. By integrating Internet of Things components to the technologies we use in making things we can establish how one production line consumes energy at a fairly constant rate while another’s consumption appears to ebb and flow throughout the day. In this instance we might have identified human errors, a malfunctioning device or quality issues with the parts or components being used on this line. For the first time in our history we can easily measure our technology’s performance down to the tiniest detail. We are no longer limited by the number, location or stage of development of any component. The Internet of Things opens a world of opportunities for us to deliver better quality at a lower cost and more reliably than ever before.

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