Friday, February 12, 2010

Community Energy SWOT analysis

After attending this year's Harvesting Clean Energy conference in Kennewick, WA, I realized that I needed to collect my thoughts about Community Energy in a living document. The following is a S.W.O.T (Strengths Weaknesses Opportunities Threats) analysis of community energy. Please feel free (even obligated!) to edit, re-phrase, add or subtract in the form of comments. I'll modify as needed.


STRENGTHS:

Community-scale Energy production an ideal solution to the energy and climate challenges we face now and will continue to face in the future. Here's why:

1. Community-scale energy production makes maximum use of the power generated due to the proximity to its subsequent use. Much lower line losses, much less power lost to heat, lower install costs due to lack of need for BLM permits and other land use issues.

2. Community groups exert effective and positive peer pressure to combine energy efficiency analysis and retrofits with energy production, multiplying the impact of installations. Adoption of new technology is smoother and faster when members of a group do it together.

3. Community groups are more accountable and cognizant of their responsibility to "do it right", making the connections to the grid reliable, ensuring proper contractor vetting, and providing a single point of contact for many people thereby reducing utility oversight requirements compared to multiple individual installations.

4. Pride in collective ownership engenders ongoing care and maintenance, reducing downtime due to neglect and vandalism.

5. Educational opportunities are enhanced due to proximity. It's easier to take a field trip that you can walk to rather than chartering a bus to Ellensburg. Kids need to see the systems in person to absorb the full impact of the changes we're making (and that they will be improving upon in the future).

6. Public displays of consciousness are viral: This is akin to the famed "Prius Effect" where one community installation can lead to many more in a positive feedback loop. The Pemco building downtown is a great example.

7. Energy Security and Disaster Preparation: Every community-municipality has a vital requirement and obligation to provide emergency services in case of disaster. Haiti and Katrina are not the exception, they are the rule. Here in the Northwest, we are subject to regular, major, natural and atmospheric disasters. We will continue to experience earthquakes (http://earthquake.usgs.gov/earthquakes/states/washington/history.php), heat waves (103 degrees last summer, with little respite due to a lack commonplace air-conditioning), wind storms (Inaugural storm), flooding (Nisqually Valley, 1-5 at Chehalis/Centralia), snow storms (last years' 2-week storm with sub-freezing temps), and volcanic eruptions (St. Helens, possibly Rainier). Without independently produced emergency power, emergency services and shelter are much harder to provide and rely upon.

8. Homeland and National Security: massively deployed community energy production can greatly insulate us from global energy vulnerability. Reducing our current reliance upon the importation of 2/3 of our total energy (oil and natural gas) from other countries can ensure a more stable geopolitical stance for the USA. Energy independent communities lead to an energy independent country.

9. Electric grid reliability is increased as efficiency increases (lowering loads) and generation is distributed. Much like the robustness of the distributed Internet, a distributed electrical grid is less fragile and susceptible to massive cascading failures such as occurred on the East Coast during 2003 affecting 10 million people (http://en.wikipedia.org/wiki/Northeast_Blackout_of_2003). The so-called "smart grid" is one attempt to mitigate grid unreliability, but simply distributing power production itself (when done properly and effectively) has the potential to greatly increase grid robustness and reliability.

10. Reducing carbon-derived energy production proportionately reduces our contribution to global climate change and its various negative downstream effects. It's also a far more healthy solution in terms of local and global air quality.

11. Community-scale energy production keeps money, taxes and decision-making leverage within our municipalities. Energy independent communities keep jobs, money, and influence under our control and oversight. We still need the grid, but we can reduce our dependence upon it and decrease vulnerability to grid anomalies or outages with more local production/infrastructure/protections. Community power can even be a source of reliable long term income and investment generation, based on incentives, overproduction payback, conservation schema (sales of green tags, carbon offsets), and tax credits.

WEAKNESSES

Community Energy is not a panacea, and can potentially create dangerous "island" thinking while underestimating complexity and vulnerability.

1. There is solid evidence that shows when people produce their own power, they proportionately waste it. If communities overestimate their energy security, they are more likely to waste power and behave irresponsibly regarding efficiency and conservation. Proper efficiency analysis and retrofits are essential. Ongoing meetings to assess energy use and waste are essential to long term reduction of consumption, which I refer to as "consumption creep". The downside of the "Prius Effect" is shown by the evidence that many electric and hybrid drivers over time end up driving more rather than less than they did before owning their fuel-efficient vehicle. (http://www.qualityplanning.com/index.cfm?event=showNews&newsId=46&displayType=page) This can even make these ostensibly carbon-conscious folks inadvertently more environmentally destructive. What makes many people drive more efficiently? A real-time display of MPG. With homes, it's even more important to remain vigilant: without an energy dashboard or other real time feedback mechanism, building occupants can end up using more energy than they did before the community power project was begun.

2. Community energy projects are subject to the downsides of over-consensus decision making: Too many people with too little expertise making too many decisions that can have quite serious negative consequences, especially regarding complex issues like electricity production and use. I would not want the community itself doing the community energy project. I would want the community to choose a reliable and trustworthy project coordinator and installer.

3. Reliability issues: In the PNW, we are subject to very spotty direct solar radiation patterns, and over-reliance on any one power source can make it more vulnerable to issues. The grid is still the best source of baseline (lights almost always on) power. Wind power on the smaller scale is expensive and also unreliable. Biofuel generation is reliable, but difficult to use in an urban setting, and batteries are expensive. If a community is targeting full or even partial off-grid power production, it's important to reiterate that the sun shines during the day and wind is inconsistent in most regions. Proper power baseline load calculations are required, and spike curves must be accounted for. Community power is not a simple game to play, it requires long term thinking and planning alongside substantial financial backing. Without proper planning, the already complex reliability issues can become dangerous and costly.

4. Political issues and potential conflict: while it's increasingly becoming acceptable to promote, community power is nevertheless still associated with left-right politicism and internal conflict. Poor communication during the planning stages can derail even the most basic installations. Personalities within different interest groups can present significant roadblocks to smooth project management. Just as debilitating, the current debate between environmentalists in their own communities can often pit animal rights activists against solar and wind proponents as evidenced in the Mojave projects in California and the more local wind projects in Eastern Washington. Significant research into the environmental impacts of any kind of energy production must be done and documented thoroughly, with as much scientific data as can be found. Objectivism is essential for all involved, but equally important is the act of inclusion and real listening as issues are raised from the beginning. Without integrated design procedures that include shareholder input at appropriate points, projects can fail miserably and in a very costly way for all.

5. Contractors are a key (or even the key) to success or failure of a community scale energy project. It can be difficult to find local contractors with the proper qualifications and skills to do a project at this scale. Getting a utility-scale contractor on the job may be costly, and using a residential-scale installer can prove to be a mistake as well. Community power is a complex mix of large and small scale power, with the associated risks and issues of both. Contractors (and installers) must be ready and able to provide certifications, proof of prior similar scale installations, city/state/county licenses, and proper insurance and liability coverage before they should be given the bid. Bidding for contractors can be an exceedingly long and painful process.

6. Single point of momentum: If a project is promoted and championed solely by a small group or worse, a single entity, its success is less assured than if the project is taken up by a large proportion of the entire community. Although these projects certainly require someone (or some group) with passion and commitment to initially organize and gather enthusiasm, it's incumbent upon that individual or group to bring the whole community together and create the momentum and collective drive to bring that project to fruition. "Going it alone" can be extremely inefficient and costly in the end. Many forces must be gathered and many resources must be applied to overcome the natural inertia that stands in front of any community project. Should the sole instigator of the project burn out, lose their nerve, become hospitalized or worse, the entire project could fail.

7. Long term ownership and maintenance: Solar modules are often warrantied for decades. Some modules have a 25 year warranty. This means that quite often the community that bought the modules are not the ones who will be fixing them later on. People move, families grow, weather patterns change, political leverage shifts back and forth. Without a properly set-up maintenance and repair schedule, modules that are installed this year can become liabilities five years later. If your community opts for biofuel production, generators require regular ongoing maintenance and repair. Wind projects require very skilled maintenance and upkeep. Overlooking the complex care required to keep your generation equipment in top shape can be disastrous.

8. Job creation over-estimation: With certain installations such as solar and wind generation, there is an initial spike of job creation and employment. However, since both of these technologies require relatively low maintenance, the ongoing employment profile will certainly suffer. Solar modules typically last for 20-25 years with very little upkeep required. It's unlikely that these installations will provide stable long-term employment for a single community. Biodigesters and micro-hydro generators can require more maintenance due to more moving parts that can wear out with time and use.

9. Over-estimation of reduction in carbon footprint due to ignored or overlooked total end to end carbon footprint analysis. It takes energy to create energy production devices. Paybacks of both money and energy savings are typically not short-term.

10. High Initial Cost and complication: perhaps the biggest weakness in community energy adoption. It simply costs more money than folks can often afford. While there are benefits to diversified risks, the truth is that renewable community power generation is costly to install. It often requires multiple sources of money that can be time consuming and hair-pulling often ensues. Federal grants, angel investment, private capital, public works funds, utility investment, tax-equity financing, bank loans, carbon credits, PPA's, REC's, and credit status can all come into play within a single generator installation. Poor planning again can complicate or even eliminate long term payback scenarios. This is one important reason why many grand community energy dreams are dashed in short order.

11. This one is sticky: Policy hold-ups on multiple levels. Utilities and city/county/state/federal governments haven't fully embraced community-scale power generation yet. There are still many entities that consider community based energy independence to be a nuisance, or worse, a danger to the smooth delivery of power. It has taken much effort to get the powers that be to allow net-metering, and it will likely take that same effort to allow community energy production and subsequent metering to become feasible. Washington state is currently slogging through their own laws on the subject, while CA, OR, NY, MA, and NJ have bills/laws pending as well.

OPPORTUNITIES

Energy science and engineering professionals are steadily building a wide array of power generating possibilities for community scale energy installations.

1. First, Second and Third generation biofuels and biomass schema are getting much more attention in the R&D world. Although we still have plenty of fossil fuel sources for combustion energy production out there, substantial investment is being steadily pumped into biomass and waste-to-fuel innovation.

2. Solar modules are becoming cheaper and more widely available. Thin film solar is being deployed across the globe. Efficiencies of modules are regularly being improved. On-module inverters are further reducing losses.

3. Improvements in reducing line losses and inverter conversion losses (from DC to AC) are being made on a regular basis.

4. Battery and other storage technologies are improving rapidly, with air-compression, gravity-water generation, liquid salt storage, water cracking and hydrogen storage, thermal mass storage, and others.

5. Co-generation (heat and power) facilities are coming online all around the world. Efficient transfer of heat waste and subsequent delivery to local homes is rapidly becoming a baseline implementation.

6. Improved building codes are making passive-house designs more prevalent, making it increasingly easier to save energy without taking drastic and potentially costly retrofit actions. Energy efficient communities are cheaper to power.

7. Wind-based generators are being re-designed and improved for smaller wind speed capture using lower tower designs. While small scale wind is still somewhat costly on a dollar per watt basis, constant design improvement is increasingly paying off in higher efficiencies.

8. Micro-hydro generators are becoming more commonplace. Small streams, irrigation canals, and even roof water and storm water runoff generation is increasingly more feasible as motors become more efficient and reliable under smaller water volume and speed profiles. New technologies and engineering designs are also making micro-hydro substantially less harmful to the water environments (and their habitat) that they are installed into.

9. For larger municipal installations, wave power has received a fair amount of R&D investment and may be coming on-line in the near future. While smaller scale installations remain cost-prohibitive, wave power is becoming more attractive as designs are improved and environmental impacts are increasingly mitigated.

10. Fuel cells and hydrogen-based generators are coming down in price and up in availability.

11. Plug-in hybrid vehicles could potentially create a steady resource of battery-backup power, depending on adoption levels.

12. Community energy policies are receiving increasingly positive press and attention. While some policies have been setbacks, most are trending toward creating a more viable regime for community energy development. New policies are currently being drawn up to allow Washington State citizens to create viable investment opportunities in community solar, geothermal, and wind projects.

13. World innovation and competition in the renewable energy field leads to increased efficiencies in motors, conductors, designs, and overall energy technology improvements. In particular although people might consider China as a "threat" in this analysis, I prefer to categorize China's recent decision to greatly increase its investment in renewable energy technology as an opportunity to bring our local, regional, and national innovation game to the highest levels possible.


THREATS

It would be irresponsible to ignore the potential threats to a community energy project. Here then, are a few of the major issues that could sink even the best project:

1. I think ignorance of present day (and historic) energy and climate reality is the biggest threat to community energy production and subsequent independence. If we remain unaware of our effect on climate change (local, regional and global), we will not act with enough resolve. If we ignore the weather/energy disasters of Katrina and Haiti and their impact on populations, we will not act with enough resolve. If we ignore the current fragility of the national, regional, and local power grids as well as the instability of fossil--based energy production, we will not act with enough resolve.

2. Cheap fuel remains a huge barrier to ROI in the renewable energy sector, including the community and municipal scales. In the Pacific Northwest, we have some of the cheapest fuel and energy costs in the country (and the world). With the abundance (current!) of hydro power from our dams, we tend to ignore the direct relationship of energy cost supply to energy consumption demand. When gas prices went above $3.00/gallon, we bought proportionately more energy efficient engines and vehicles. When it went back down, we went back to more energy-consumptive behaviors. Cheap fuel is incredibly expensive...

3. One-size-fits-all thinking is a huge threat. By over-simplifying energy production realities, we tend to rely on single-source energy production, especially on a regional scale. When communities rely on a single source for employment, we have seen some disastrous results. From boom-and-bust oil towns in the Southwest to the relatively recent employment collapses in Detroit and Pennsylvania, we must be ever-vigilant in our quest to provide a healthy mix of employment, food varieties, business opportunities, and energy production for our neighborhoods, towns, municipalities and regions.

4. Over-reliance on single-resource energy is also correlated to an over-reliance on particular raw material resources. As the global computer memory (RAM) reliance on single sources of production created a dangerous scarcity during the Kobe, Japan earthquake disaster, so can a reliance upon silicon-based solar panels (for instance) become a potentially crippling posture for a local community. If we don't have redundant and varied sources of power, we'll be again subject to the same power supply fragility that we were trying to insulate ourselves from in the first place!

5. Likewise, having no backup system in place can make all our renewable energy investments a huge waste of money and energy. If we put an expensive and complex solar PV system of some sort in a local community center, for instance, and we fail to create a fail-safe battery or back up power regime, we'll have perhaps done our community a worse turn than had we not done anything at all. Again, over-reliance on any one source of power creates unnecessary vulnerabilities. Purchasing a system that does not include an inverter that can switch from grid-tied power production to battery backup or even direct power is often much cheaper, but also much more fragile and unreliable.

6. Lack of wise planning is a huge threat to community energy installation adoption. It's not just bad for the community itself, bad planning hurts other communities that are considering renewable energy production and energy security measures. Bad planning gives NIMBY-driven naysayers and fear-based citizenry even more ammunition to fight community scale energy production. It's essential to bring all the stakeholders together, skeptics and adherents alike, to get commitment and long term buy-in on community energy. It's a community, after all, and everyone in that community needs to at least be given a chance to have their voice heard on matters of such importance. Poor planning and project management can be costly on a number of levels. The great thing is that you can turn this threat into an asset with wise long term planning.


In conclusion, I think that we can take heart in the fact that community energy is increasingly becoming more viable, less expensive, less politically unfeasible, and even income-producing. The truth, however, is that although it seems to be a "no brainer" to a large percentage of folks, it's by no means a "slam dunk" as this SWOT analysis attempts to show. Science and logic must be applied with the same rigor as emotion and desire. While many of us from all walks of life think it's a good idea to empower communities with their own energy production, the path to project completion is often quite complicated and confusing. If you are aware of the issues and complexity that you will likely encounter on that path, you and your community will be far better prepared to tackle and eventually overcome them. Given the current state of national and global energy volatility, however, community energy production is a path well-worth embarking upon for many communities.

3 comments:

Aaron Campbell {∞} said...

can you make this briefer?

Travis said...

Hi Aaron. I just stumbled upon your blog. This post is a great summary of the major issues in community energy. I run a community energy blog for communities in B.C. (Canada)
Not looking for shameless self-promotion just thought I'd let you know that someone is reading and enjoying your content. Hope you don't mind if I send some traffic your way... as soon as I get some of my own!

Dann said...

Hey travis ...if your looking to pick up traffic its best to plug your website! lol I am a community energy project manager here in ontario canada looking for as much info as i can possibly soak up in order to build projects that are more viable then before. Plugging a website is essential every chance you can get! here's one close to me www.serg.ca ...cheers! and good luck on any and all future projects.

dann