Factoid: Exploring the Possibility of Solar Energy from the Moon

Published to LA Confidential, Winter 2018

We have often wondered, ‘Does life exist on other planets?’ Although we may not have infinite answers to extraterrestrial life on other planets, one concept that does exist out there is potential energy. Specifically, the possibility for lunar-based solar power (LSP).

According to a 2017 Forbes article, the concept of LSP involves developing solar power collecting stations on the Moon’s surface, which would convert sunlight into electricity and be wirelessly transmitted to Earth. Supporting this concept of a more sustainable source of clean electricity by using solar panels to collect sunlight on the Moon is retired University of Houston physicist, David Criswell.

By Criswell’s own models of his proposed 20 terawatt LSP system, he provides an eventual projected wholesale price of 0.001 cents per kilowatt hours (kWh) of electricity. At present, an average American household pays in the range of 12 cents per kWh. By comparison, the future not only appears to be built on the complete use of clean energy, but the possibility of LSP may lead to significant savings. Although it is a fantastic idea to ‘Klingon’ to, the idea of LSP may still be lightyears away.

Source: Physicist Wants To Beam Solar Energy Back From Moon’s Surface


Working out the Tribbles of On-Site Power Storage

Published to LA Confidential, Winter 2018

On-site battery power storage is a hot new energy option, but it does not come trouble-free. As Captain Kirk learned in Star Treks “Troubles with Tribbles” episode, some problems are easier to solve than others.

At this time, most utility batteries are being installed to manage frequency regulation, provide synchronized reserves, and other ancillary services of interest solely to grid operators. How much a retail power customer may save by installing a battery system, however, depends on a customer’s utility tariff rate, and how the power storage system is operated.

There is no question that the state of the art in battery storage systems is advancing rapidly, while at the same time, expanding production capability at locations such as Tesla’s “Gigafactory” is causing prices to fall significantly (in dollars per kWh of storage capability). Following a trajectory much like solar photovoltaic (PV) systems, battery storage is becoming cost effective in more and more applications.

While battery pricing has been rapidly dropping, care is needed to consider the balance-of-system expenses that can significantly increase total installed cost. But even if costs fall enough to yield an attractive payback, is power storage an out of this world option? Not necessarily. Let us look at a few of the other “tribbles” that need to be addressed, regardless of pricing.

Fire codes – While a few applications of batteries (e.g., “hoverboards”) have given some people pause about installing them in their buildings, recent New York City Fire Department regulations on stationary lithium-ion batteries have favorably addressed fire prevention and suppression concerns. In a 97-page report issued earlier this year, NYSERDA and the City found that “The installation of battery systems into buildings introduces risks, though these are manageable within existing building codes and firefighting methods when appropriate conditions are met.”

Regarding a potential fire, the study found that the batteries it tested emitted toxic gasses that may be “mitigated with ventilation rates common to many occupied spaces” finding that “toxicity is similar to a plastics fire” already a factor in most office environments with their computers, copiers, printers and furniture. Among the other key findings in the report are that water, by far the most common fire suppression agent, is the most effective extinguisher for a battery fire, and that thermal runaway (i.e., fire spread among battery cells) may be addressed by cell module design.

Space and weight considerations – Any battery big enough to actually manage a building’s daily peak load will be large and heavy. While basement floors may be capable of holding stacked battery cells, locating on an upper floor or roof may require structural enhancements.

Leasing issues – To get around the high first cost, a few firms lease their batteries to customers. They secure the large dollar utility and/or governmental incentives up front, and the leases offer them a guaranteed revenue stream for 7 seven (or more) years. Customers need to understand that a lease does not assure that power storage will indeed cut their electric bills. Smart battery software is needed to optimize charging and output, with a performance guarantee that delivers a stated minimum savings, or a payment if it is not achieved.

Software – Key to securing serious dollar savings are the algorithms (i.e., computer formulae) that determine when, and how much, power should be stored or discharged. At this time, there is no easy and standardized way to compare them. A good program needs algorithms that, in real time, take into account:

  • Supply price/tariff structures, and/or a third party’s contract terms.
  • Day Ahead and hour-ahead wholesale supply pricing.
  • Seasonality and timing of the existing delivery tariff.
  • Wholesale ancillary service opportunities and requirements (e.g., response time).
  • Facility’s recent and projected daily load and reactive power profiles.
  • Projected output profile of on-site generation (e.g., solar PV system).
  • Projected weather conditions.
  • Battery condition/degradation.

Navigating such issues requires expertise in tariffs, power procurement, and energy contracting. Luthin Associates has all three, and would be happy to offer its guidance to customers ready to explore the options of power storage.

For a more extensive explanation, please click on the link for the related article: The elusive art of predicting energy storage savings in the real world


Beaming up Best Paybacks at a 271-Year Old Institution

Published to LA Confidential, Winter 2018

Bill Broadhurst has been Princeton University’s energy manager since 2009. During those 8 years, he has handled challenges that range from raising efficiency in buildings built before the American Revolution, to designing state-of-the art systems for 21st century facilities.

Princeton’s 10 million square foot campus in New Jersey has an advanced central plant, equipped with dual-fueled boilers and cogeneration, variable-speed pumps and motors, thermal energy storage, and free cooling through its cooling towers. Cogeneration, Thermal Storage and Steam-driven turbine chillers minimize peak demand charges for cooling, and a centralized geothermal system is on the drawing boards. Power delivery to the campus from the local utility is on a high-tension real-time pricing tariff, with supply purchased from a competitive third-party supplier.

With HVAC and lighting systems installed literally across centuries, Broadhurst has found ways to enhance energy efficiency wherever possible, while meeting the University’s climate change goals. Those efforts have resulted in 70-80% of the facility’s lighting being converted to LED, and DDC controls installed in most of its 150 buildings. About half of them are optimized via control system optimization software run by his operators monthly. While all new buildings have hydronic heating systems, many of the older structures still have steam radiation. Broadhurst has replaced over 5,000 steam traps in them, plus a variety of other controls.

In those older buildings, he has had to deal with asbestos, rusted pipes, and the need to preserve their historical and architectural integrity, including many antiquated light fixtures. Even upgrading tubular fluorescent fixtures has been an occasional challenge. “To meet budgetary constraints, we switched out those lamps with Type A tubular LEDs (TLED)”, said Broadhurst. “Those are the ones that use a fixture’s existing ballasts. While Type B and C units [which use internal or external LED drivers] might have been more energy efficient, that would have required electricians to service since the safety labels on the fixtures might not be read or seen by janitorial staff.” As part of that upgrade, most fixtures are now controlled by occupancy sensors.

Pre-energy crisis HVAC equipment has also offered challenges. Old hot/cold deck and dual duct distribution systems, as well as unit heaters and terminal A/C units, must be renovated instead of being scrapped due to the high cost of replacing them with modern units. But Broadhurst continues to find ways to make them more energy efficient. Pneumatic controls have been replaced with digital controls. Many fan coil units are also controlled by occupancy sensors. Other energy-related systems have not escaped his eye: even domestic hot water piping has been insulated.

Princeton is now getting ready to embark on its next 10-year capital plan, and Broadhurst has a wish list of energy carbon-cutting options. With his skill and perseverance, he may indeed “go where no energy manager has gone before.”

Assimilating Distributed Energy Resources into Competitive Power Markets

Published to LA Confidential, Winter 2018

Imagine a friendly Borg that, instead of forcing assimilation, says, “Come join our Collective, and let us profit together.” That’s essentially what the New York Public Service Commission (NY PSC) is saying through its Reforming the Energy Vision (REV) process. Distributed Energy Resources (DERs), such as on-site solar and combined-heat-and-power (CHP) plants, would participate in local grids to produce and trade power.

REV is being pursued by the NY PSC, DER providers, and other energy service stakeholders. It is based on the transformation of electric utilities into distribution-level system operators (DSOs) analogous to the New York Independent System Operator (NYISO), which operates the wholesale transmission system across the State. However, instead of giant power plants and other utilities, a DSO would enlist end users and localized small power producers (e.g., community solar).

Through a DSO, DERs and retail power customers will generate on-site power for export to the grid, making resources such as solar, CHP, and power storage systems more economically viable and competitive with electricity from large power stations. Since more power would be generated and consumed locally, less investment and construction of centralized generation and transmission would be required.

The key to making this concept into a viable reality has been compiling a report of the customer and distribution system interval data needed to support a real-time local power market. That system is not simply a group of interconnected wires. Instead, it is a complex set of nodes running at multiple voltages within each zone, involving many of the substations, transformers, relays, feeders, etc. At this time, access to that level of data is available only through utilities, and not in the real-time that may be needed by participants.

A former chairman of the Federal Energy Regulatory Commission (FERC), Jon Wellinghoff, stated, “The sharing of distribution-level data by New York utilities can fundamentally change the way utilities and third-parties operate not just in New York, but throughout the whole country…[and could offer] market-based solutions” to problems that are presently confronting power markets and utilities.

What might this mean to commercial and industrial power customers?

Those producing and/or storing power could join in the potentially lucrative market for ancillary services, which is, at present, typically populated by wholesale power traders, producers, and utilities. Such services include frequency regulation, synchronized reserves, and black start, each of which has its own monetary value. However, participation may involve a high level of technical sophistication, metering, telemetry, software, and automation: reaction times are measured in seconds, rather than hours.

Present wholesale power pricing is passed through to customers based on the zone in which each is located. New York State’s grid has 11 zones, 3 of which are in Con Edison territory. As power flow data becomes more granular (i.e., shorter time intervals), localized pricing based on nodes (e.g., at substation transformers, of which there are hundreds) becomes feasible. A customer’s location near a node may then impact its supply (and perhaps its delivery) pricing, just as its zonal location does now.

The market value of a customer’s power generation and/or storage may also rise. Instead of it reducing merely the customer’s own electric bill, a DSO would allow it to send power out to the grid to other customers unrelated to it. At times when wholesale pricing is high, a customer could choose to sell some (or all) of its on-site power to profit from such market movements.

A customer’s physical location on the local grid might also have a tradeable value. A customer may rent space to a developer’s power system based on wholesale pricing at the nearest node. Many existing rooftop photovoltaic (PV) systems are located on leased space, but are presently limited as to size, distribution, and the pricing of the power they produce. Rules being developed now would allow systems that are geographically separate to aggregate into larger groups to facilitate participation in markets.

Luthin Associates closely follows developments in REV as well as the DSO, and stands ready to assist customers in their efforts to participate in this new frontier of energy services.

For further discussion on this topic, please click on the link for the related article: How utility data sharing is helping the New York REV build the grid of the future

Luthin Associates, Alongside Other Firms, Helps Clarkson Avenue Microgrid Project be Selected as a Stage 2 Winner in the NY Prize Competition – Receiving a $1 Million State Grant for Microgrid Engineering and Design

Luthin Associates recently partnered with Burns Engineering, Customized Energy Solutions, Siemens, NYPA, Matrix New World Engineering, Michael Barnas PLLC, and ConEdison in the NY Prize competition. The NY Prize competition is a first-in-the-nation competition to help communities create microgrids. A microgrid is a standalone energy system that is capable of operating on its own in the event of a power outage. One purpose of the project is to create a network of users who rely on the same microgrid. This community of microgrids will allow for local power generation using clean and efficient energy sources including, but not limited to wind, solar, and combined heat and power (CHP). Luthin provided consulting services for the Clarkson Avenue Microgrid Project in Brooklyn, NY. Clarkson Avenue comprises 11 city blocks with three hospitals that provide medical and mental health services. These three hospitals, the New York State Office of Mental Health (Kingsboro Psychiatric Center), State University of New York (Downstate Medical Center), and Kings County Hospital Center, curated a microgrid that will use CHP and renewable sources, fuel cells, energy storage, and modernized transmission as well as distribution technologies.  The Clarkson Avenue Microgrid Project was selected as a Stage 2 winner, and received a $1,000,000 grant to develop a comprehensive engineering, financial, and commercial assessment of creating a microgrid at their proposed location. Luthin will use their expertise in developing CHP feasibility studies, knowledge of energy regulatory policy, tariffs, and rate structures, as well as experience in analyzing and estimating energy costs to assist with the development of the Clarkson Avenue Microgrid Project.

For more details, please visit:


What’s Going on Behind the Curtain?

Published to LA Confidential, Summer 2017

The Wizard told Dorothy and her friends many tales of his amazing powers, but a strong breeze blew away his credibility when it pushed aside the curtain, revealing those tricks as little more than noise and smoke. Such may be the case with energy account auditors, they may claim savings based more on a customer’s misplaced trust of the auditor than on any real financial wizardry.

Long before the pursuit of dollar savings from energy efficiency became a business, a cottage industry existed that focused on finding errors in utility billing. While some have estimated that up to 2% of bills contain errors, much of the savings may instead derive from fixing inadvertent errors made by customers, such as taking service under a sub-optimal rate, failing to pursue available economic development rate options, or misunderstanding how rate-making proceedings work.

The typical pitch of auditors goes something like this, “At no charge, I will review your utility bills for the last two years. If I find a way to save you money, I will pursue it and split the savings with you. It is a no-lose proposition. If I find nothing, you pay me nothing. Whatever I recover for you is “found” money. If a mistake was never uncovered, you would never have received that refund on your own. Just sign here, and I will get started right now identifying the errors and obtaining refunds.  ”

Many facility managers jump at such an opportunity without realizing just how much they could be giving up. Some auditing contracts take 50% of the savings from one-time refunds, and a like amount for costs that would have been incurred had the mistakes never been corrected, for up to five years.

A nationwide clothing chain that was expanding rapidly, opening a new store almost every day,  had a deal with an auditor whose primary trick was finding better rates shortly after each new store opened. In such cases, the auditor merely switched the customer to better rates and took 50% of the rate difference for five years, creating a cozy little cash flow for himself.

In essence, the auditor was depending on the ignorance of store managers rushing to open their doors, never looking to see if the rate offered by the utility was the best option. Recall that, when a new account is opened, many a utility need not offer the best option, only  one that’s appropriate to the customer’s rate class. In Con Edison’s service territory, the utility is required to help the customer pick a rate that is, “most favorable to the Customer’s requirements.” A time-of-use or other rate may yield a lower annual cost, but savings need to be independently verified before paying the auditor. If savings occur during part of the year, with losses occurring at other times, the auditor should be paid only on the net annual savings.

When this little scam was exposed, the customer asked the auditor if a fixed fee arrangement could be used, under which the auditor would simply check what rate was proposed before an account was opened and ensure that it was the best option, thus avoiding the need to later switch. When the auditor heard that idea, he threatened to sue the customer for “loss of anticipated revenue”.

However, similar to The Wizard of Oz, some auditors have better tricks up their sleeves.

Auditors may stretch the intent of their “free savings” contracts to include claims that their participation in a ratemaking proceeding yielded savings specific to their customer. Rate changes are realized through the efforts of a number of individuals, not just the auditor (who may not even have been significantly involved in the rate making process.) Nevertheless, auditors may look at a rate increase request that is reduced by a certain percentage after negotiation, and claim that same percentage against the customer’s bills as a savings for which they should be compensated. The auditor thus derives an enormous savings claim through the efforts of others.

In another case, an auditor wriggled his way into a facility’s demand response (DR) efforts based on an email he had sent to the customer years before, informing said customer about the utility’s DR program and incentives. At the time, the customer was aware of the opportunity, but unable to pursue it due to a lack of controls of equipment. After working with a DR provider to install the necessary devices, the customer secured both a one-time incentive and the annual DR revenue by cutting peak demand when requested. The auditor then made claims to portions of both the incentive and the ongoing revenue, based purely on that email. As often occurs with such demands, the customer refused the claim, only to find itself in civil court facing a possibly large financial judgment. In the end, it was cheaper to pay a portion of the claim than to pay legal fees.

A similar claim was made when an auditor learned that a customer had secured an electric price discount by participating in an economic development program. Anyone who has been involved with such programs knows the application process is time consuming and may involve a lot of paperwork, record keeping, and other bureaucratic efforts to obtain the discounts. The auditor had no role in the process, but made a claim anyway to a portion of the annual discount. He was able to point to the minutes of a meeting he had with the client years before when such programs were generally discussed. The contract between the auditor and the customer had no “sunset” date, so it was still legally in force. Once again, the situation ended up in court, with an out-of-court settlement the cheapest way to resolve it.

Some auditors could put the Wicked Witch of the West to shame with their boldness. While reviewing invoices from a third-party power supplier with whom the auditor had a commission based brokering relationship, he found that a monthly floating price for gas that had risen during the winter had never fallen again when weather moderated. The customer had not noticed that the price had instead gotten “stuck” at the high point for months. The auditor then laid claim to 50% of the refund he secured for the customer, even though the auditor had acted as the broker for the supplier that was cheating the customer. One wonders how often that scam has been run on customers that trust too much or do not have the time or understanding to review their bills.

Bottom line, before signing a bill auditing contract, be sure to limit the ways an auditor may claim savings. Otherwise, you may find yourself spending more on attorneys than you’ll save on your bills.

Is Courage Needed to Pursue DER?

Published to LA Confidential, Summer 2017

Energy efficiency and renewable projects are no longer skipping down the same yellow brick road as they were this time last year. Similar to the Cowardly Lion, some are inching courageously forward despite doubts from customers and the industry, while others have stepped off the road until the way forward becomes clearer.

Changes at both the federal and state levels are creating a less certain future, but Dorothy assures me that the basic reasons for pursuing distributed energy resource (DER) projects remain viable, regardless of which federal policies remain intact.

While relatively little federal energy grant money is distributed directly to commercial and industrial (C&I) customers that implement energy projects, some of it was routed to them in the past via state agencies and utilities receiving federal funding. If that earlier support is cut back, some programs may not be renewed, or remain robust.

As New York State (NYS) pushes its Clean Energy Standard (under which programs like NY-SUN are supported), the NY Public Service Commission (PSC) and NYSERDA have been “resetting the table” on how future incentives and rebates for DER may be provided. For instance, support for Combined Heat and Power (CHP) projects is now limited to systems with capacities of 3 MW or less. The imminent shutdown of the Indian Point nuclear power plant has created uncertainty regarding forward capacity and power pricing after 2020, even as two nearby gas-fired plants and a 1,000 MW power line from Canada may be arriving at about the same time. Add to that the recent PSC order re-valuing various aspects of DER, and it is as if a flock of flying monkeys are swirling around your head.

While local utility DER rebates are almost as high as a year ago, new tariffs for all NYS utilities are appearing that re-define the value of excess power from such resources such as Photovoltaics (PV), CHP, and energy storage. Recently, net metering rewarded owners of such systems at the full supply value of utility electricity regardless of when that excess was fed back into the grid. That process created an incentive to build large systems that could provide much of the valuable power beyond what is needed by a host facility for many hours each year.

However, now a “value stack” that consists of separate variable values for energy, capacity, demand reduction, societal benefits, among others, will determine the level of remuneration to each DER system. For example, under one alternative, if a PV system produces low kW due to a heavy rain storm that is coincident with the grid-wide peak, it will be paid for only the capacity it produced at that particular hour, for each month in the following year. The energy it produced will now be paid at the hourly locational based marginal price (LBMP), rather than the utility’s monthly billed supply price. Fearing that its financial positions could suddenly go “underwater”, one local PV developer has pulled back on several community solar projects.

Despite these uncertainties, others are pushing ahead, finding ways to quantify, and where necessary, financially hedge any potentially negative impacts. With a little luck and a great deal of number crunching, we may all finally get to a truly “green” Emerald City.