New York Times

August 9, 2010

Portugal Gives Itself a Clean-Energy Makeover

By ELISABETH ROSENTHAL

LISBON — Five years ago, the leaders of this sun-scorched, wind-swept nation made a bet: To reduce Portugal’s dependence on imported fossil fuels, they embarked on an array of ambitious renewable energy projects — primarily harnessing the country’s wind and hydropower, but also its sunlight and ocean waves.

Today, Lisbon’s trendy bars, Porto’s factories and the Algarve’s glamorous resorts are powered substantially by clean energy. Nearly 45 percent of the electricity in Portugal’s grid will come from renewable sources this year, up from 17 percent just five years ago.

Land-based wind power — this year deemed “potentially competitive” with fossil fuels by the International Energy Agency in Paris — has expanded sevenfold in that time. And Portugal expects in 2011 to become the first country to inaugurate a national network of charging stations for electric cars.

“I’ve seen all the smiles — you know: It’s a good dream. It can’t compete. It’s too expensive,” said Prime Minister José Sócrates, recalling the way Silvio Berlusconi, the Italian prime minister, mockingly offered to build him an electric Ferrari. Mr. Sócrates added, “The experience of Portugal shows that it is possible to make these changes in a very short time.”

The oil spill in the Gulf of Mexico has renewed questions about the risks and unpredictable costs of America’s unremitting dependence on fossil fuels. President Obama has seized on the opportunity to promote his goal of having 20 to 25 percent of America’s electricity produced from renewable sources by 2025.

While Portugal’s experience shows that rapid progress is achievable, it also highlights the price of such a transition. Portuguese households have long paid about twice what Americans pay for electricity, and prices have risen 15 percent in the last five years, probably partly because of the renewable energy program, the International Energy Agency says.

Although a 2009 report by the agency called Portugal’s renewable energy transition a “remarkable success,” it added, “It is not fully clear that their costs, both financial and economic, as well as their impact on final consumer energy prices, are well understood and appreciated.”

Indeed, complaints about rising electricity rates are a mainstay of pensioners’ gossip here. Mr. Sócrates, who after a landslide victory in 2005 pushed through the major elements of the energy makeover over the objections of the country’s fossil fuel industry, survived last year’s election only as the leader of a weak coalition.

“You cannot imagine the pressure we suffered that first year,” said Manuel Pinho, Portugal’s minister of economy and innovation from 2005 until last year, who largely masterminded the transition, adding, “Politicians must take tough decisions.”

Still, aggressive national policies to accelerate renewable energy use are succeeding in Portugal and some other countries, according to a recent report by IHS Emerging Energy Research of Cambridge, Mass., a leading energy consulting firm. By 2025, the report projected, Ireland, Denmark and Britain will also get 40 percent or more of their electricity from renewable sources; if power from large-scale hydroelectric dams, an older type of renewable energy, is included, countries like Canada and Brazil join the list.

The United States, which last year generated less than 5 percent of its power from newer forms of renewable energy, will lag behind at 16 percent (or just over 20 percent, including hydroelectric power), according to IHS.

To force Portugal’s energy transition, Mr. Sócrates’s government restructured and privatized former state energy utilities to create a grid better suited to renewable power sources. To lure private companies into Portugal’s new market, the government gave them contracts locking in a stable price for 15 years — a subsidy that varied by technology and was initially high but decreased with each new contract round.

Compared with the United States, European countries have powerful incentives to pursue renewable energy. Many, like Portugal, have little fossil fuel of their own, and the European Union’s emissions trading system discourages fossil fuel use by requiring industry to essentially pay for excessive carbon dioxide emissions.

Portugal was well poised to be a guinea pig because it has large untapped resources of wind and river power, the two most cost-effective renewable sources. Government officials say the energy transformation required no increase in taxes or public debt, precisely because the new sources of electricity, which require no fuel and produce no emissions, replaced electricity previously produced by buying and burning imported natural gas, coal and oil. By 2014 the renewable energy program will allow Portugal to fully close at least two conventional power plants and reduce the operation of others.

“So far the program has placed no stress on the national budget” and has not created government debt, said Shinji Fujino, head of the International Energy Agency’s country study division.

If the United States is to catch up to countries like Portugal, energy experts say, it must overcome obstacles like a fragmented, outdated energy grid poorly suited to renewable energy; a historic reliance on plentiful and cheap supplies of fossil fuels, especially coal; powerful oil and coal industries that often oppose incentives for renewable development; and energy policy that is heavily influenced by individual states.

The relative costs of an energy transition would inevitably be higher in the United States than in Portugal. But as the expense of renewable power drops, an increasing number of countries see such a shift as worthwhile, said Alex Klein, research director, clean and renewable power generation, at IHS.

“The cost gap will close in the next decade, but what you get right away is an energy supply that is domestically controlled and safer,” Mr. Klein said.

Necessity Drives Change

Portugal’s venture was driven by necessity. With a rising standard of living and no fossil fuel of its own, the cost of energy imports — principally oil and gas — doubled in the last decade, accounting for 50 percent of the country’s trade deficit, and was highly volatile. The oil went to fuel cars, the gas mainly to electricity. Unlike the United States, Portugal never depended heavily on coal for electricity generation because close and reliable sources of natural gas were available in North Africa, and Europe’s carbon trading system could make coal costly.

Portugal is now on track to reach its goal of using domestically produced renewable energy, including large-scale hydropower, for 60 percent of its electricity and 31 percent of its total energy needs by 2020. (Total energy needs include purposes other than generating electricity, like heating homes and powering cars.)

In making the shift, Portugal has overcome longstanding concerns about reliability and high cost. The lights go on in Lisbon even when the wind dies down at the vast two-year-old Alto Minho wind farm. The country’s electricity production costs and consumer electricity rates — including the premium prices paid for power from renewable sources — are about average for Europe, but still higher than those in China or the United States, countries that rely on cheap coal.

Portugal says it has kept costs down by focusing heavily on the cheapest forms of renewable energy — wind and hydropower — and ratcheting down the premium prices it pays to lure companies to build new plants.

While the government estimates that the total investment in revamping Portugal’s energy structure will be about 16.3 billion euros, or $22 billion, that cost is borne by the private companies that operate the grid and the renewable plants and is reflected in consumers’ electricity rates. The companies’ payback comes from the 15 years of guaranteed wholesale electricity rates promised by the government. Once the new infrastructure is completed, Mr. Pinho said, the system will cost about 1.7 billion euros ($2.3 billion) a year less to run than it formerly did, primarily by avoiding natural gas imports.

A smaller savings will come from carbon credits Portugal can sell under the European Union’s carbon trading system: countries and industries that produce fewer emissions than allotted can sell permits to those that exceed their limits.

Mr. Fujino of the International Energy Agency said Portugal’s calculations might be optimistic. But he noted that the country’s transition had also created a valuable new industry: Last year, for the first time, it became a net power exporter, sending a small amount of electricity to Spain. Tens of thousands of Portuguese work in the field. Energias de Portugal, the country’s largest energy company, owns wind farms in Iowa and Texas, through its American subsidiary, Horizon Wind Energy.

Redesigning the System

A nationwide supply of renewable power requires a grid that can move electricity from windy, sunny places to the cities.

But a decade ago in Portugal, as in many places in the United States today, power companies owned not only power generating plants, but also transmission lines. Those companies have little incentive to welcome new sources of renewable energy, which compete with their investment in fossil fuels. So in 2000, Portugal’s first step was to separate making electricity from transporting it, through a mandatory purchase by the government of all transmission lines for electricity and gas at what were deemed fair market prices.

Those lines were then used to create the skeleton of what since 2007 has been a regulated and publicly traded company that operates the national electricity and natural gas networks.

Next, the government auctioned off contracts to private companies to build and operate wind and hydropower plants. Bidders were granted rights based on the government-guaranteed price they would accept for the energy they produced, as well as on their willingness to invest in Portugal’s renewable economy, including jobs and other venture capital funds. Some of the winners were foreign companies. In the latest round of bidding, the price guaranteed for wind energy was in the range of the price paid for electricity generated by natural gas.

Such a drastic reorganization might be extremely difficult in the United States, where power companies have strong political sway and states decide whether to promote renewable energy. Colorado recently legislated that 30 percent of its energy must come from renewable sources by 2020, but neighboring Utah has only weak voluntary goals. Coal states, like Kentucky and West Virginia, have relatively few policies to encourage alternative energies.

In Portugal, said Mr. Pinho, the former economy minister, who will join Columbia University’s faculty, “the prime minister had an absolute majority.”

“He was very strong, and everyone knew we would not step back,” Mr. Pinho said.

A Flexible Network

Running a country using electricity derived from nature’s highly unpredictable forces requires new technology and the juggling skills of a plate spinner. A wind farm that produces 200 megawatts one hour may produce only 5 megawatts a few hours later; the sun shines intermittently in many places; hydropower is plentiful in the rainy winter, but may be limited in summer.

Portugal’s national energy transmission company, Redes Energéticas Nacionais or R.E.N., uses sophisticated modeling to predict weather, especially wind patterns, and computer programs to calculate energy from the various renewable-energy plants. Since the country’s energy transition, the network has doubled the number of dispatchers who route energy to where it is needed.

“You need a lot of new skills. It’s a real-time operation, and there are far more decisions to be made — every hour, every second,” said Victor Baptista, director general of R.E.N. “The objective is to keep the system alive and avoid blackouts.”

Like some American states, Portugal has for decades generated electricity from hydropower plants on its raging rivers. But new programs combine wind and water: Wind-driven turbines pump water uphill at night, the most blustery period; then the water flows downhill by day, generating electricity, when consumer demand is highest.

Denmark, another country that relies heavily on wind power, frequently imports electricity from its energy-rich neighbor Norway when the wind dies down; by comparison, Portugal’s grid is relatively isolated, although R.E.N. has greatly increased its connection with Spain to allow for energy sharing.

Portugal’s distribution system is also now a two-way street. Instead of just delivering electricity, it draws electricity from even the smallest generators, like rooftop solar panels. The government aggressively encourages such contributions by setting a premium price for those who buy rooftop-generated solar electricity. “To make this kind of system work, you have to make a lot of different kinds of deals at the same time,” said Carlos Zorrinho, the secretary of state for energy and innovation.

To ensure a stable power base when the forces of nature shut down, the system needs to maintain a base of fossil fuel that can be fired up at will. Although Portugal’s traditional power plants now operate many fewer hours than before, the country is also building some highly efficient natural gas plants.

To accommodate all this, Portugal needed new transmission lines from remote windy regions to urban centers. Portugal began modernizing its grid a decade ago. Accommodating a greater share of renewable power cost an additional 480 million euros, or about $637 million, an expense folded into electricity rates, according to R.E.N.

Last year, President Obama offered billions of dollars in grants to modernize the grid in the United States, but it is not clear that such a piecemeal effort will be adequate for renewable power. Widely diverse permitting procedures in different states and the fact that many private companies control local fragments of the grid make it hard to move power over long distances, for example, from windy Iowa to users in Atlanta. The American Society of Civil Engineers gave the United States’ grid a “D+,” commenting that it is “in urgent need of modernization.”

“A real smart national grid would radically change our technology profile,” said John Juech, vice president for policy analysis at Garten Rothkopf, a Washington consulting firm that focuses on energy. “But it will be very costly, and the political will may not be there.”

A 2009 report commissioned by the Pew Center on Global Climate Change estimated that the United States would have to spend $3 billion to $4 billion a year for the next two decades to create a grid that could accommodate deriving 20 percent of electricity from wind power by 2030 — a 40 percent to 50 percent increase over current spending.

The Drawbacks

Energy experts consider Portugal’s experiment a success. But there have been losers. Many environmentalists object to the government plans to double the amount of wind energy, saying lights and noise from turbines will interfere with birds’ behavior. Conservation groups worry that new dams will destroy Portugal’s cork-oak habitats.

Local companies complain that the government allowed large multinationals to displace them.

Until it became the site of the largest wind farm south of Lisbon, Barão de São João was a sleepy village on the blustery Alentejo Coast, home to farmers who tilled its roller coaster hills and holiday homeowners drawn to cheap land and idyllic views. Renewable energy has brought conflict.

“I know it’s good for the country because it’s clean energy and it’s good for the landowners who got money, but it hasn’t brought me any good,” said José Cristino, 48, a burly farmer harvesting grain with a wind turbine’s thrap-thrap-thrap in the background. “I look at these things day and night.” He said 90 percent of the town’s population had been opposed.

In Portugal, as in the United States, politicians have sold green energy programs to communities with promises of job creation. Locally, the effect has often proved limited. For example, more than five years ago, the isolated city of Moura became the site of Portugal’s largest solar plant because it “gets the most sun of anywhere in Europe and has lots of useless space,” said José Maria Prazeres Pós-de-Mina, the mayor.

But while 400 people built the Moura plant, only 20 to 25 work there now, since gathering sunlight requires little human labor. Unemployment remains at 15 percent, the mayor said — though researchers, engineers and foreign delegations frequently visit the town’s new solar research center.

Indeed, Portugal’s engineers and companies are now global players. Portugal’s EDP Renováveis, first listed on stock exchanges in 2008, is the third largest company in the world in wind-generated electricity output. This year, its Portuguese chief executive, Ana Maria Fernandes, signed contracts to sell electricity from its wind farm in Iowa to the Tennessee Valley Authority.

“Broadly, Europe has had great success in this area,” said Mr. Juech, the analyst at Garten Rothkopf. “But that is the result of huge government support and intervention, and that raises questions about what happens when you have an economic crisis or political change; will these technologies still be sustainable?”

http://www.nytimes.com/2010/08/10/science/earth/10portugal.html?scp=3&sq=energy&st=cse

New York Times

August 9, 2010

In Crackdown on Energy Use, China to Shut 2,000 Factories

By KEITH BRADSHER

HONG KONG — Earlier this summer, Prime Minister Wen Jiabao of China promised to use an “iron hand” to improve his country’s energy efficiency, and a growing number of businesses are now discovering that it feels like a fist.

The Ministry of Industry and Information Technology quietly published a list late Sunday of 2,087 steel mills, cement works and other energy-intensive factories required to close by Sept. 30.

Energy analysts described it as a significant step toward the country’s energy-efficiency goals, but not enough by itself to achieve them.

Over the years, provincial and municipal officials have sometimes tried to block Beijing’s attempts to close aging factories in their jurisdictions.

These officials have particularly sought to protect older steel mills and other heavy industrial operations that frequently have thousands of employees and have sometimes provided workers with housing, athletic facilities and other benefits since the 1950s or 1960s.

To prevent such local obstruction this time, the ministry said in a statement on its Web site that the factories on its list would be barred from obtaining bank loans, export credits, business licenses and land. The ministry even warned that their electricity would be shut off, if necessary.

The goal of the factory closings is “to enhance the structure of production, heighten the standard of technical capability and international competitiveness and realize a transformation of industry from being big to being strong,” the ministry said.

The announcement was the latest in a series of Chinese moves to increase energy efficiency. The National Development and Reform Commission, which is the government’s most powerful economic planning agency, announced last Friday that it had forced 22 provinces to halt their practice of providing electricity at discounted prices to energy-hungry industries like aluminum production.

The current Chinese five-year plan calls for using 20 percent less energy this year for each unit of economic output than in 2005. But surging production by heavy industry since last winter has put in question China’s ability to meet the target.

The success or failure of China’s energy-efficiency campaign is being watched closely not just by economists, who cite the campaign as one reason that growth of the Chinese economy has slowed down a little this summer, but also by climate scientists.

China’s energy consumption rose so sharply last winter that it produced the biggest surge ever of greenhouse gases by a single country. Power plants burned more coal to generate enough electricity to meet demand.

As China has become increasingly dependent on imported oil and coal, its national security establishment has become more visibly involved in energy policy and energy security, including efforts to improve energy efficiency.

Efficiency improved 14.4 percent in the first four years of the current plan, only to deteriorate by 3.6 percent in the first quarter of this year, according to official statistics. Mr. Wen responded by convening a special meeting of the cabinet in May to address the situation.

Energy efficiency was only 0.09 percent worse in the first half of this year than in the same period in 2009, according to statistics released last week.

Energy analysts said those statistics indicated improvement in efficiency in the second quarter that nearly offset the deterioration in the first quarter, although the government has not released separate figures for the second quarter.

Zhou Xizhou, an associate director for IHS Cambridge Energy Research Associates in Beijing, said that the ministry’s new list of factory closings was a strong measure to improve efficiency. But he added that China’s goal of achieving a 20 percent improvement by the end of this year compared with 2005 was “still a tall order for the rest of the year.”

The ministry said in its statement that the factories to be closed would include 762 that make cement, 279 that produce paper, 175 that manufacture steel and 84 that process leather.

The factories were chosen after discussions with provincial and municipal officials to identify industrial operations with outdated, inefficient technology, the ministry said.

The ministry did not provide figures for the percentage of capacity to be closed in each industrial sector. The ministry also did not say how many employees would be affected.

Closing factories is more palatable now than in the past because a labor shortage in many cities has made it easier for workers, particularly young ones, to find other jobs.

The list of steel mills to be closed appeared to emphasize smaller, older mills producing fairly low-end grades of steel.

Edward Meng, the chief financial officer of China Gerui Advanced Materials, a steel-processing company in central China’s Henan Province, said that the closing of such mills was consistent with the government’s broader goals of consolidating the steel sector and pushing steel makers into the production of more sophisticated kinds of steel.

The International Energy Agency in Paris announced last month that China surpassed the United States last year as the world’s largest consumer of energy.

China passed the United States as the world’s largest emitter of greenhouse gases in 2006. That milestone came earlier because of China’s heavy reliance on coal, an especially dirty fossil fuel in terms of emission of gases contributing to global climate change.

In addition to the energy-efficiency objective in the current five-year plan, a plan announced by President Hu Jintao late last year called for China to reduce its carbon emissions per unit of economic output by 40 to 45 percent by 2020, compared with 2005 levels. Carbon emissions are a measurement of a country’s man-made emissions of greenhouse gases like carbon dioxide.

Even if China meets its energy-efficiency goal this year and its carbon goal by 2020, its total carbon emissions are still on track to rise steeply in the next decade, according to forecasts by the International Energy Agency.

That is because of factors including rapid growth in the Chinese economy, growing car ownership and rising ownership of household appliances.

http://www.nytimes.com/2010/08/10/business/energy-environment/10yuan.html?scp=5&sq=energy&st=cse

New York Times

August 16, 2010

Wind Turbines Are Coming to New York, and Not Just Offshore

By PATRICK McGEEHAN

For years, New York officials have envisioned powering the region from a set of huge wind turbines in the Atlantic Ocean off Long Island. But well before an offshore wind farm would be up and running, giant turbines may soon be spinning much closer to the city.

Within three years, the Port Authority of New York and New Jersey hopes to have five wind towers, each more than 280 feet tall, operating on the west side of New York Harbor. Nearby, the City of Bayonne, N.J., plans to install an equally large turbine to power a sewage-pumping station. Meanwhile, the Department of Veterans Affairs is considering placing wind turbines on or near its hospitals in Manhattan and Brooklyn.

New York, it turns out, is a windy city, well suited for turning stiff breezes into electricity. If open space were not so rare, the city might be a prime spot for harnessing the wind, said Bill Baroni, deputy executive director of the Port Authority.

“Anybody who’s ever stood out at the dock in Weehawken waiting for a ferry just knows it’s a very windy area,” Mr. Baroni said. “Apparently, it’s a pretty good place to put windmills.”

In 2008, Mayor Michael R. Bloomberg announced his plan to use wind power to help reduce the city’s dependence on power plants that run on fossil fuels. So far, there are no large-scale efforts to harness the wind in the city, only token projects like the small turbines on the roof of an apartment building in the Bronx and a wind-powered electronic billboard for Coca-Cola in Times Square.

The city’s Economic Development Corporation has been studying the feasibility of putting turbines atop buildings, including a warehouse at the Hunts Point Cooperative Market in the Bronx. But the high hopes rest on a partnership, with utility companies and the New York Power Authority, that has designs on building a wind farm on about 65,000 acres of the Atlantic floor. The New York consortium said at the end of June that it would apply for a 25-year lease on the site, with hopes of generating as much as 700 megawatts of power there by 2016.

While city officials navigate the logistical and political shoals of that ambitious plan, other agencies are pressing ahead on more solid ground.

The Port Authority’s proposed project at Port Jersey on the border of Bayonne and Jersey City would be similar, in appearance and purpose, to a wind farm that was built at a sewage-treatment plant in Atlantic City five years ago. The authority is seeking suggestions from companies that might be interested in managing the project on how to set up the turbines. Mr. Baroni said it could be operating by 2013.

When the winds are high, the five turbines would produce as much as 7.5 megawatts — enough to run at least 2,000 homes, he said. The authority plans to use the power generated to operate the container port there, then to feed the surplus energy into the local power grid, offsetting some of the authority’s consumption elsewhere.

“This is a commitment the Port Authority is making to reduce our carbon footprint and be better neighbors,” Mr. Baroni said. “It will allow us to both save money and also be good for the environment. Somebody’s got to go first, and it’s going to be us.”

But the City of Bayonne may tap the wind quicker. Construction of a 262-foot-tall turbine has already begun at a plant operated by the city’s Municipal Utilities Authority. That $5.6 million tower, which would be the biggest wind turbine in New Jersey outside of Atlantic City, is expected to start producing more than enough energy to power the plant by September. The city plans to sell the excess power, saving at least $150,000 a year, said Stephen J. Gallo, executive director of the utilities authority.

“It will be iconic,” Mr. Gallo said. “It will be the first windmill in New York Harbor. You’ll be able to see it from anywhere on the water.”

Both projects in Bayonne would help New Jersey achieve its stated goal of developing 200 megawatts of wind energy onshore by 2020. The state’s energy master plan also calls for producing 3,000 megawatts of wind energy offshore within 10 years.

In late 2008, the state’s Board of Public Utilities provided $12 million in rebates to three companies that are racing to build the first wind farm 12 miles or more off the coast of New Jersey. At the end of last month, the State Legislature approved a bill that would provide $100 million in tax credits to the developers of offshore wind farms.

But those deepwater projects would cost about twice as much to build as turbines on land, wind-energy developers say. Mr. Baroni declined to say how much the Port Authority expected to spend on the wind farm it plans to build at Port Jersey, but he said New Jersey had already offered $3 million toward the project. The Atlantic City turbines cost $12 million when they were erected in 2005 by Community Energy, a company based in Radnor, Pa.

Brent Beerley, executive vice president of Community Energy, said the Mid-Atlantic Coast was an attractive location for wind farms because the wind tended to be highest when demand for electricity was at its peak. The power produced also does not have to travel far to reach the consumers who pay the most for it, Mr. Beerley said.

“It’s a windy site in general, but unlike other wind farms, the time of day and the time of year that the wind blows strongest there matches when consumers use electricity,” he said. “We have very strong summer winds and daytime winds.”

The wind power generated in Atlantic City has sold at “relatively good” prices, and the project has exceeded its revenue targets so far, Mr. Beerley said. He added that the second important benefit that wind farms generate is federal tax credits, which attract big banks to invest in the projects.

Without that incentive, it would be difficult for private developers to finance a project like the one the Port Authority is proposing. Mr. Beerley, who said his company might bid to build the project, said it appeared to be feasible and potentially beneficial to the metropolitan area.

“It’s a real amount of power and it will offset a significant amount of fossil fuel use locally,” he said.

The idea is not universally popular, though. On July 8, the Board of Freeholders of Monmouth County, N.J., decided to oppose the construction of a wind turbine at a wastewater treatment plant in the Raritan Bay shore town of Union Beach after a resident fanned dissent with a Web site, www.noturbine.com.

And what about the appearance of five fans as tall as 30-story buildings forming a swirling backdrop to the Statue of Liberty?

Mr. Baroni, a former state senator from central New Jersey, said people actually liked to gaze at the big turbines. In Atlantic City, he said, casino-hotel guests often requests rooms that offer a view of the wind farm atop the sewage plant, instead of the ocean and beach.

http://www.nytimes.com/2010/08/16/nyregion/16turbines.html?ref=nyregion

New York Times

August 15, 2010

Air-Conditioners That Run When Nobody’s Home

By SAM DOLNICK

In a handsome prewar building in Greenwich Village, a tenant struggled to remember the last time she turned off her air-conditioner. Upstairs, a young couple admitted to having let the window unit run for four days while they went out of town for a funeral, thinking it would be nice, amid the July heat wave, to return to a cool apartment.

Another resident of the 160-unit building, on Seventh Avenue between 13th and 14th Streets, says he leaves the air-conditioning on when he goes to work, when he sleeps at his girlfriend’s apartment, even when he leaves the country on vacation — and only partly out of sympathy for his cat, Kitty.

“My A.C. is pretty much running 24/7,” Kitty’s owner, Michael Perlo, a 28-year-old television producer, said with more bravado than guilt. “Not having to pay for electricity makes me a little bit more reckless.”

Forget round-the-clock doormen or views of Central Park. This sweltering summer, the most coveted New York real estate amenity is two little words that in other times can go unnoticed: “utilities included.” Mr. Perlo and his neighbors live in a building where not just heat and hot water, but electricity, is part of their monthly rent — a more-common-than-you’d-think arrangement caused by old-fashioned wiring in which a building has a single “master meter” tracking power use rather than individual meters tied to each tenant. They can blast their air-conditioners all summer long without paying a dollar extra.

Con Edison counts about 250,000 apartments across the city, not including public housing projects, that do not have individual meters tracking electricity consumption, compared with roughly 1.75 million that do. One large management company, Cooper Square, estimates that these units expend at least 30 percent more electricity year-round than their counterparts.

So while lucky tenants across the city relax beneath arctic gusts, their landlords and building managers are left to worry whether these weeks of record-challenging heat will break the bank.

And regardless of who pays the electric bills, there is a considerable environmental cost: a 2009 report said that residential buildings account for 39 percent of the city’s greenhouse gas emissions, and 40 percent of the energy that buildings use is spent on heating and cooling.

“Using it when you’re not home is outright irresponsible and disrespectful of all the rest of us,” Dan Hendrick of the New York League of Conservation Voters said. “There’s no good way to look at this. The worst thing is, you’re warming our climate to cool your apartment for your own comfort.”

But as any introductory economics course might explain, tenants who blast air-conditioners on their landlord’s dime are making rational, predictable choices.

“This is Homo economicus coming out in full feather,” said Prof. Lawrence J. White of New York University’s Leonard N. Stern School of Business. “When something is free, until some point of satiation, you will take up a lot of it.”

New York State’s Energy and Research Development Authority, in part out of concern over the environmental effects of excessive air-conditioning, is planning to offer building owners financial incentives to install “submeters” that measure individual consumption, a major construction project that can require a significant upfront expense.

Under an earlier incentive program, the state helped convert 426 buildings in the city over the last decade, said Jeffrey Gordon, a department spokesman.

The new conversion project will focus on submeters, which track individual electricity use but still feed a single utility account paid by the building owner or manager. (Some landlords then charge tenants based on actual consumption.) That is simpler than individual metering and is seen as an improvement over master meters because it introduces a level of accountability, according to state energy officials. Con Edison estimates that there are 30,000 apartments in the city with submeters.

David Kuperberg, the chief executive officer of Cooper Square, compared two co-op buildings he manages on the Upper East Side. Annually, the one with a master meter used 1.38 kilowatt hours per square foot more than the one with submeters, he said, costing an additional $52,000 a year. Over all, Cooper Square’s 45 or so master-metered buildings have energy costs 14 to 24 percent higher than their submetered counterparts, Mr. Kuperberg said.

But installing submeters almost always sets off a battle with tenants who are loath to give up what they see as a perk, even if it could lower their rent or maintenance charges.

“Many of these properties have older populations, and some people are scaring them, saying that if you do this your costs are going to go up,” Mr. Kuperberg said. “Nothing could be further from the truth.”

Indeed, some tenants in Mr. Perlo’s building in the Village have become upset at a submeter plan in the works by the management company, Northbrook Partners.

Mr. Perlo said that Northbrook had agreed to knock $150 off his monthly rent; but some residents fear their air-conditioning habits would surpass that.

“It’s the end of an era,” lamented his neighbor, a telecommuter, who spoke on the condition of anonymity to avoid angering her landlord. “It was a great treat.”

Northbrook officials declined to discuss the matter.

Two years ago, a similar kerfuffle unfolded at Stuyvesant Town and Peter Cooper Village, the famed middle-class enclaves overlooking the East River that had long offered “free” — at least to tenants — electricity.

Tishman Speyer Properties, which bought the complexes in 2006, announced plans to install individual meters in each unit as part of an effort to reduce energy use by 20 percent.

The news distressed some long-term residents, sparking newspaper articles and blog posts, including one that announced, “No More Free Electricity.”

Tishman Speyer abandoned the plans amid larger financial problems that ended with a default on the properties.

Danielle, a social worker who asked that her last name not be used, definitely considered free air-conditioning among the “pros” for the two-bedroom apartment in Stuyvesant Town that she moved into last month.

She and her roommate have kept their two units running almost constantly ever since, partly for her purse-size dog, who is in the house all day, but also for that moment, after trekking through the sweaty subways and steaming sidewalks of the city in summer, when they open the door and get to feel a chill.

“I don’t want to walk into a hot apartment at the end of the day,” Danielle said, simply. “It’s nice to not have to worry about it.”

http://www.nytimes.com/2010/08/16/nyregion/16chill.html?_r=1&ref=nyregion&pagewanted=print

City of Dallas considers starting own power company

12:00 AM CDT on Saturday, August 7, 2010

By ELIZABETH SOUDER / The Dallas Morning News
esouder@dallasnews.com

Dallas could become an electricity provider.

The city is considering creating its own retail electric provider to procure power for city-owned facilities. That could lop $4 million off the city's annual budget but would require expertise to operate.

A city-owned power company could eventually serve customers outside of city government, but that's not the initial goal.

"The primary purpose is to serve their own facilities, to control their own destiny in terms of what they pay for electricity," said John Bick, managing principal for Priority Power Management, which is advising the city on creating an electric company.

Organizing the company will take a couple of years.

So the city signed a three-year contract with TXU Energy to buy electricity for "much" less than 9 cents per kilowatt-hour, said Bick, who also negotiated the deal for the city.

He declined to give an exact figure, but the deal saves taxpayers as much as $7 million a year. The city uses about 2.2 billion kilowatt-hours a year to juice up more than 800 facilities, traffic lights and water pumps.

Dallas will also buy renewable energy credits to cover 40 percent of the power.

Last year, those credits cost the city about $1 million, according to a June slide presentation posted on the city's website. Next year, the cost would be between $500,000 and $1.1 million, according to the presentation.

TXU will also pay for up to $812,000 in energy-efficiency upgrades.

TXU and Priority Power declined to give other terms of the contract. City staff members also didn't provide the information.

Even though the renewable-energy credits cost extra money, council member Ann Margolin said they're worth it.

"I had some doubts about whether it was worth the cost, but I became convinced," she said. Buying renewable-energy credits makes Dallas a more likely candidate for federal grants, she said.

Once the three-year contract ends, the city would be free to create its own electricity provider. Electricity retailers must be licensed by thePublic Utility Commission and must meet certain credit standards to operate.

Dallas, with its sterling municipal credit rating, could meet the credit standards at a lower cost than other major Texas power companies that carry junk ratings.

The city would also have to hire people or find contractors with the expertise to trade wholesale power and hedge against swings in prices. Poor operation could leave the city with losses.

"Basically, it's removing one level of middleman," Margolin said. "Ultimately it would shave about 3 percent off of our total electric bill. And our electric bill being in the 70, 80 million-per-year range, that's a significant amount of money."

Once Dallas establishes the electric company, it could begin to sell power to outside customers.

Bick with Priority Power, which is researching the issue for the city, said Dallas could use the power company to help lure big companies to town. The city could offer a major company cheap electricity for a certain amount of time, he said.

Or, the city could sell power to regular customers. Residential operations could create a revenue stream for the city.

"If they have already invested in infrastructure and technology to send bills out for water bills, then maybe it's just a natural extension to do the other," Bick said. But he emphasized selling power beyond city facilities is just an idea at this point.

http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-txudallas_07bus.ART0.State.Edition1.26c3ff7.html

To solve pollution problems, planners examine steam heat in Fairbanks

by Christopher Eshleman/ceshleman@newsminer.com

10.26.09 - 02:30 am

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FAIRBANKS — The roots of downtown’s largest plant tunnel under much of the city, thick steel pipes twisting beneath intersections and sidewalks on their way toward the city’s biggest buildings.

Instead of absorbing water, however, these roots deliver it, and are a major unseen space heating supplier.

Private and public utility specialists have for years looked at expanding the pipe network — a district heating system that feeds the bulk of downtown’s commercial landscape with cheap heat. Any expansion would cut community-wide heating costs. Aurora Energy, which owns the network, estimates the system replaces the need for 2 million gallons of fuel oil per year, and say it could easily expand two- or three-fold.

But it could be awhile before any such expansions occur. A study early this year estimated the work needed to connect the grid to Hamilton Acres, Shannon Park, Island Homes and another neighborhood just south of Aurora’s downtown power plant could cost more than $200 million.

“It’s obviously just way too big of a project to build at once,” Buki Wright, president of Aurora Energy, said earlier this month. But Wright said the company sees potential in expanding the underground system slowly, particularly if work is coupled with nearby construction projects.

Unseen power

The report was part of a look by Aurora, which is owned by the Usibelli family — operators of the Interior’s biggest coal mine — and the borough government at how the system might grow and whether it could take a bite out of chronic wintertime air pollution. Aurora bought the district heat system and its parent power plant when city officials privatized Fairbanks’ utilities 11 years ago.

It has expanded the system significantly since then. Borough officials, who were facing federal environmental problems because of air pollution in Fairbanks, chipped in more than $20,000 last year to study expansion options.

The underground system consists of insulated steel pipes carrying hot water away from the power plant and returning cooler water to the plant.

Older pipes carry unconverted steam. Much of the system is housed in downtown’s one-story utility corridor, which offers visitors an impressive tour.

The city built the corridor, a sort of underground hallway, before the utility privatization. Aurora was able to expand district heating largely because of that investment, which eliminated the need to dig trenches.

Under the corner of Second Avenue and Lacey Street, the corridor’s floor drops, deepening the hallway to roughly two stories as the heating system’s welded steel arms and elbows bend this way and that on their way to customers’ basements.

“When they built this, it was like building a ship in a bottle,” said Steve Ferree, who manages Aurora’s power plant. “It was really tight.”

A cleaner option

The pipes originate from the coal-fed electric plant, which produces roughly 30 megawatts of electrical power. A large boiler incinerates the coal, heating water and turning it to scalding steam pressurized to more than 800 pounds per square inch. The steam powers the turbine that eventually produces electricity.

But that’s not the only usable energy. When the steam has cooled to roughly 300 degrees, less than one-half its original temperature, it leaves the turbine rooms still carrying enough energy to heat offices, homes or buildings. Much of that heat is then transferred to the insulated pipes leading to and from large customers such as the 12th Avenue federal building. During winter cold snaps, the district heat system produces about 75 million British thermal units — enough energy to heat an Olympic-sized swimming pool from 32 to 147 degrees — after electrical power generated at the plant is excluded.

The dual benefits coming from one energy generation process makes the plant a “cogenerator,” where steam, as a byproduct of electrical generation, supplies heat without producing any extra carbon emissions or air pollution. (The University of Alaska Fairbanks also heats largely through its own district heating system.)

Aurora says its heating system could expand significantly — up to another 130 million British thermal units, or 38 megawatts, of heat power — with little or no loss of electrical generation. That would be enough to heat another 1,500 to 2,000 homes in dense neighborhoods. The study, however, said such an expansion could cost $240 million to build. District heat construction is expensive because it often involves tearing up streets and sidewalks and laying two lines — a feed and a return — of welded, insulated pipe in each direction.

“It’s likely the project would need to be constructed in many phases based on available funding for a given year,” a synopsis of the study reads.

Common alternative

District steam or water systems often heat entire communities in northern climates around the world. Ferree speculated they are particularly handy where high taxes on petroleum products make district heat prices competitive. Outside the United States, governments often remain involved with operations and it can be profitable as a stand-alone enterprise. The Seattle Steam Company, which serves about 200 customers with steam heat, has burned fuel oil or natural gas to produce steam heat and recently converted a boiler to combust biomass.

Customers in downtown Fairbanks continue to sign up for hot water heat, which costs about two-thirds to three-quarters as much as fuel oil. Ferree said Mt. McKinley Bank, the Morris Thompson Center and part of the state railroad’s property have all hooked up in the past two years.

In 1982, the district heating system, then owned by the city, expanded to include its water-based lines, as a demonstration project, after a multimillion-dollar grant arrived from the state. Energy specialists reported spending more than $2 million to prepare public buildings including Ryan Middle and Lathrop High schools and the public library for hot water heat. The switch cut heating costs at those buildings by $100,000 within months, and the project was expected to pay for itself within seven or eight years, according to a 1983 Daily News-Miner article. Homeowners hooked to the project said they saw a 40 percent drop in their heating bills, an engineering report from the following year stated.

The engineers also, however, found that it could cost far more to keep expanding lines to homes — up to $50,000 per house. Ferree said changes in technology have since cut that figure in half, enough to make district heat’s large construction costs affordable to larger customers or properties near main lines.

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Striving for green answers Group that helps unemployed focuses on energy efficiency for businesses, buildings

By ERIC ANDERSON BUSINESS EDITOR  First published: Saturday, October 24, 2009

COLONIE -- There were eight of them, holding instruments not much larger than an iPod and pointing them at light fixtures throughout the Albany Marriott Hotel on Wolf Road. On Friday, three of them returned to reveal what they had learned: By replacing its incandescent lights with light emitting diodes, the hotel could save $9,000 on its monthly electric bill. The group has been trained by Strive, an organization in East Harlem that equips the unemployed to get and keep meaningful jobs. They work for Eco Answers US, which provides energy audits, among other "green" services. On Friday representatives of Strive and Eco Answers were at the Marriott, addressing the annual Minority and Women-owned Business Enterprise conference of the Dormitory Authority of the State of New York. Theirs was part of a larger presentation on the effort to construct buildings that are energy efficient and environmentally friendly. Strive was founded nearly a quarter-century ago and has trained more than 40,000 workers, said Eric Treworgy, its CEO. Last year, it saw the need for green skills training, which includes everything from brownfield remedia, tion to energy audting and installing photovoltaic systems. Bill Thomas of Eco Answers told of his company's initiatives, including energy audits of New York City subway stations and a facility in Fall River, Mass., that has begun producing LED-powered tubes to replace fluorescent lights. "One of the techniques that is the low-hanging fruit is lighting," Thomas told the audience. The Dormitory Authority, which finances construction not only of dormitories but also laboratories, health centers, libraries and other government and nonprofit buildings, is striving to make new construction as green as possible. "We have a policy that every project we do will be at least LEED silver," said Jodi Smits Anderson, director of sustainability programs for the Dormitory Authority, referring to the certification program of the U.S. Green Building Council. Nancy Goshow, managing partner of New York City-based Goshow Architects, described how her office used computer-controlled lighting fixtures, paints and furnishings free of volatile organic compounds, and nanotechnology-based coatings that are antimicrobial on such things as keyboards, phones and door handles. "We're living in a healthy, clean environment, and that makes me want to go to work every day," she said. While LEDs and other energy-efficient products typically have higher upfront costs, Thomas said the return on investment can be measured in months. With the state pushing for an 80 percent reduction in greenhouse gas emissions below 1990 levels by 2050, Thomas and others are counting on a growing market that will also be a generator of new jobs. It's "the birth of a new industry," Thomas said. http://www.timesunion.com/AspStories/storyprint.asp?StoryID=856814