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You are here: Home / Archives for Green Energy

4 June 2021 By David McEwen

Getting Off Gas – Commercial Buildings

In the last post we looked at the many reasons Australia needs to kick its methane gas habit, including health, climate, cost and jobs concerns. In this one we drill into de-gassing commercial buildings. The latest version of the Green Building Council of Australia’s GreenStar rating tool denies its highest ratings to commercial office buildings that cannot demonstrate that they are “fossil fuel free.” That is, that they do not consume gas or other fossil fuels on premises, except for backup power generation. 

Photo by Logan Kirschner from Pexels

Major institutional property investors have already changed projects mid-construction to design-out gas and are reviewing their portfolios to determine the most cost effective pathways to replace gas plant in existing buildings.

Heating, hot water and cooking are the three main uses of gas in commercial buildings. 

Cooking Without Gas

Electrifying cooking is pretty straightforward once chefs are convinced of the benefits of induction cooking, with its instant heat, fine control, easy to clean surfaces, and efficiency. There are even commercial grade induction units suitable for wok cooking, with large concave elements to provide even heat. The spatial footprint for induction appliances is identical; it’s just a case of getting the power there (more on that in a moment).

Heating and Hot Water

Replacing boilers and other heating and hot water plant may be more difficult. Their electric equivalents, heat pumps, use the same principles as a reverse cycle air conditioning unit, and typically require outdoor and indoor units, potentially creating spatial and even structural challenges in terms of where they can be situated. Council authority approvals are often required if adding external plant due to visual and acoustic impacts to neighbours, unless it can be sited within an existing recessed external plant area. Some buildings use instantaneous gas units for water heating, which have a very small form factor; heat pump systems may require additional bulky and heavy tanks. Pipework may require re-routing.

Power Impacts

Then there’s electricity. A commercial building’s power bill has three main parts to it:

  • Consumption, charged on a per-kWh basis, often with time of day and/or aggregate consumption charges;
  • Maximum demand, charged based on the highest electricity demand in kW during the year; and
  • Fixed network and statutory charges.

When building plant is electrified, both consumption and maximum demand patterns will change. While the gas bill will fall, it’s critical to model the impact on electricity over the course of the year. If maximum demand increases, this will both increase those costs, but could also result in the building requiring a larger feed from the electricity distributor (if one is readily available given local network constraints – we’ve seen examples where the distributor has offered an upgrade providing the customer provides the capex to run new cabling from substations up to tens of kilometres away). Meanwhile, daily and seasonal consumption patterns and aggregate electricity supply will increase.

And it’s not just the supply to the building that might need to be upgraded. The capacity of the main switchboard, sub-mains cabling running to each floor, distribution boards serving the relevant plant rooms and kitchen areas all need to be reviewed and may require modification.

Fortunately, due to seasonal variability between major building energy uses, building electrification may be possible without increasing maximum demand, and can be cost effective in conjunction with normal plant replacement cycles. However, it requires careful modelling and effective design to ensure costs don’t go through the roof.

One Size Doesn’t Fit All

Whereas most vehicle designs are mass-manufactured and it is often possible to design an electrification  retrofit kit that can be rolled out at scale, every commercial building is unique given the original architects’ and engineers’ proclivities, plus differing block sizes and planning constraints. The arrangements and sizing of plant rooms, pipe and cable risers, and of course the various building systems (electrical, mechanical and plumbing) varies considerably from building to building. 

Unfortunately, there’s no “one size fits all” solution for removing methane gas uses, and it’s critical to use experienced engineers to ensure electrification upgrades are efficient, cost effective and reliable.  And when you’re playing with critical building systems, capable project management is also a must.

Filed Under: Clean Energy, Ecological Footprint Measurement, Green Energy Tagged With: fossil fuel free, natural gas

4 June 2021 By David McEwen

Getting Off Gas

Australia has a gas problem. Not the type that comes from eating too many beans, but the stuff that’s pumped out of the ground, into our homes and factories, and onto ships for export. I’m talking about fossil methane, known better by its marketing name, “natural gas”.

Photo by KWON JUNHO on Unsplash

Little Good About Gas

There is little good to say about fossil methane. 

Exposure to it is bad for our health. Gas stoves and other un-flued gas appliances in homes are a leading cause of childhood asthma, amongst other conditions. When gas is vented or leaks from pipes or appliances into the atmosphere (which modern measurement techniques are showing happens far more extensively than had been assumed) it acts as a potent greenhouse gas, heating the planet planet at 86 times (or more) the rate of carbon dioxide (which itself is emitted when methane is combusted).

Extracting methane is increasingly expensive and environmentally harmful. The days of cheap gas from sticking a well into Bass Strait are over, with those supplies dwindling over the next decade. As such, gas exploration companies have turned to unconventional methods such as Coal Seam and Shale Gas, with or without so-called fracking (in which a dangerous cocktail of chemicals is pumped deep into the ground to fracture the reservoirs). These processes are relatively expensive; involve drilling a patchwork of hundreds of wells interconnected with access roads (which destroy bushland, animal habitat and encroach on farmland); produce salt and other waste streams; can irrevocably compromise artesian water supplies and may contaminate streams and rivers.

Another factor that has pushed up domestic gas prices was the granting of rights to extract, liquefy and export fossil methane as LNG. Traditionally Australians paid less than international markets for our gas. Not anymore. That has reduced the competitiveness of Australian manufacturers (many of which have traditionally relied on cheap gas for process and high heat applications or as a feedstock) and pushed up energy prices for householders. The gas industry itself is far from critical to Australia’s economy. Being capital intensive, it sustains fewer jobs than just one of the major banks, even allowing for the LNG export market, and has been very effective at claiming substantial subsidies while minimising its taxes and royalties.

Electricity generated using gas is now significantly more expensive than renewable power, even allowing for the costs of batteries or other forms of storage (that provide continuity for variable solar and wind generation sources). Renewables and storage projects (including longer form storage such as pumped hydro) have pushed down wholesale electricity costs over the last few years are now being deployed at significant scale: more than what is necessary to accommodate forthcoming coal plant closures.

And with the International Energy Agency – once a bastion of the fossil fuel industry – now advising that in order to limit warming to no more than 1.5oC and meet the objective of the Paris Climate Accord, no new coal, oil or gas developments can be made. No mines or wells. No new power plants. No new industrial uses. Many of Australia’s major trading partners are starting to take climate action very seriously so it is likely that, as has already happened with coal, the market for our LNG will rapidly peak and decline.

De-Gassing is Already Underway

As such, it’s high time Australia commenced a transition away from gas. How can this be done? 

Of the gas extracted in Australia, nearly three quarters is exported. Domestically, gas is used in four main areas [1]: 

  • 30% (and declining) is used for electricity production
  • 28% in manufacturing and non-LNG mining
  • 27% in conjunction with the production of export LNG.
  • 15% in residential and commercial buildings.

The good news is that domestic gas use is in decline. The Australian Competition and Consumer Commission  (ACCC) noted in 2021 that the Australian Energy Market Operator (AEMO) “has lowered its demand forecast by 77 PJ per year on average,” – about 6.7% of ex-LNG domestic demand [2]. Why? Because gas has become relatively expensive as producers have pegged prices to international markets and cheap conventional supplies have depleted. As a result it is being used less in electricity production as it is supplanted by cheaper renewables (which are increasingly firmed with grid scale batteries or other forms of dispatchable storage). 

High gas prices have also forced some manufacturing offshore, and there are opportunities to electrify process heating uses of methane. Green hydrogen (renewably produced, zero emissions) may in future provide an alternative to methane for high heat and some feedstock uses, but it is likely to remain uncompetitive in the medium term unless a carbon price was to be reintroduced.

In buildings, it is already more cost effective to fully-electrify new builds, and is often economical to switch plant or appliances to electric alternatives at their end of life.  We’ll look at this in more detail in a future post.

[1] Derived from https://www.energy.gov.au/sites/default/files/Australian%20Energy%20Statistics%202020%20Energy%20Update%20Report_0.pdf , Figure 2.3

[2] https://www.accc.gov.au/system/files/Gas%20Inquiry%20-%20January%202021%20interim%20report_1.pdf, p29

Filed Under: Clean Energy, Green Energy

9 November 2016 By David McEwen

Ratified Paris, Now What?

paris-ratified-blogpost-2

Now that major economies have begun to ratify the Paris Climate Accord, countries need to deliver on their pledges. But how? And what will this mean for businesses?

In part one of this article we identified that businesses would inevitably bear the brunt of country-level reductions to greenhouse gas emissions. In this blog we drill into what businesses should do to prepare.

While governments are initially targeting the low hanging fruit of the few dozen or hundred companies that produce the bulk of their counties’ emissions (think coal fired power stations and steel makers, for example), even this may affect many organisations’ cost bases as input prices for power and other affected items rise, unless you’ve already insulated your company by purchasing renewable energy.

Regulated efficiency initiatives to reduce energy consumption and emissions are also gaining pace, benefitting firms whose buildings, manufacturing processes and products are already highly efficient. Innovation in energy and emissions efficiency will become a key point of difference for makers of a wide range of products and services.

Emerging categories such as electric cars (charged from renewable sources) and autonomous vehicles (which eventually could reduce the total number of vehicles and radically reduce congestion inefficiencies, as well as being programmed to drive as efficiently as possible) take efficiency initiatives into the realm of disruptive technologies. Companies will need to think years and sometimes decades ahead when designing product innovations to ensure they are not left behind by technological upstarts.

Eventually, regulations will extend to a broader range of GHG-producing compounds, including the fluorinated gases used in TV screens and the HFCs that have replaced CFCs as a refrigerant and propellent in spray cans. This will spark innovation in the design of products or processes that currently rely on such compounds, as well as services or products to ensure that their use is tightly controlled and doesn’t lead to them escaping into the atmosphere, either during or following the product’s lifecycle.

While the Australian government is currently clinging to its Direct Action, “pay the polluter to pollute less” policy, inevitably that will need to give way to a “polluter pays” mechanism.

Meanwhile, governments will push the burden of achieving GHG targets onto future administrations, which will compound the level of rapid transformation that businesses will be forced to deliver as the Paris commitment deadline approaches. And there is a clear expectation from the United Nations that many countries’ commitments will need to be strengthened in coming years in order to limit warming to the agreed target of 1.5 to 2 degrees Celsius.

Companies that take the lead today will be well positioned when this crunch comes.

Call Adaptive Capability today to develop the strategy for your business.

 

Image Credit: blindholm / BigStock

Filed Under: Clean Energy, Climate Change Mitigation, Green Energy, Transportation, Uncategorized

10 July 2014 By David McEwen

Grim times ahead for Australia’s largest industry

Coal Loader

Business has been booming in the mining sector – until now. Here’s why investing in all the wrong places is setting Australia on the economic back foot.

Australia’s economy has effectively ridden through the last six years of economic uncertainty on the back of the mining boom. But as the world moves towards cleaner energy sources, remaining ‘open for business’ as the world’s quarry is putting Australia on an unsustainable path at odds with the evolving demands of many developed and developing economies.

The fast facts

  • Mining is Australia’s largest industry by revenue – combining direct mining activities and the associated mining services industry, the sector accounts for nearly 20 per cent of Australia’s $1.5 trillion GDP.
  • Australia’s growth is too dependent on mining – the Australian Bureau of Statistics notes that 80 per cent of GDP growth in the March 2014 quarter was contributed by an 8.6 per cent surge in mining output, though this was in part due to a relatively benign storm season.
  • The sector is almost half dirty energy – Fossil fuel extraction accounts for around 45 per cent of the mining industry’s output, the remainder being comprised of iron ore, other metals and minerals. The majority of coal, oil and gas output is shipped abroad, accounting for about 20 per cent of Australia’s exports.
  • Mining creates fewer jobs than you think – while it’s one of the nation’s most lucrative industries, the fossil fuel mining sector only employs about 80,000 people, well under 1 per cent of the Australian labour force. Which perhaps is just as well.

Yes, there will continue to be a market for fossil fuels decades to come. But despite massive expansion of coal-based power generation in China and India, there are signs that the growth spurt is coming to an end and demand may quickly waver.

Busting some renewable energy misconceptions

Historically renewable energy sources have been significantly more costly to operate – but there have been a number of game changing developments in clean energy sources around the world that Australia will move too late to cash in on when demand for fossil fuels dries up.

Building a new wind farm recently reached life cycle cost parity with a coal fired power plant of equivalent output, and large-scale solar technology is expected to become just as cost effective in the next couple of years.

There is huge investment in battery storage technologies, meaning it will be increasingly feasible for wind and solar plants to continue supplying the grid when winds are light or the sun isn’t shining.

And growth in renewable energy investment continues to accelerate even as the world’s appetite for coal is waning, driven by the early warning signs of climate change.

A recent report from the Association for Sustainable and Responsible Investment in Asia predicts that Chinese thermal coal demand could peak by 2020 and then start to decline. Despite building hundreds of new coal fired power plants in the last decade, China is one of the world’s biggest investors in renewable energy and its people, who currently suffer from chronic air pollution, are clamoring for a move towards cleaner energy and industry.

Australia is set for a hard landing

Meanwhile, Australia is still investing massively in the very things its largest trading partner is actively seeking to rid itself of: fossil fuel extraction and the associated infrastructure, including the controversial expansion of the Abbot Point coal terminal in the middle of the world heritage-listed Great Barrier Reef. These are investments with a multi-decade economic life.

Australia’s government seems intent on ignoring the warning signs – both economic, social and climatic – and continuing to support a toxic and archaic industry. The recent Federal Budget affirmed that it is simultaneously hell bent on destroying Australia’s renewables sector, right at a time when investment and incentives should be switched out of fossil fuels and into clean energy.

Loss of the fossil fuel mining sector would be a drop in the ocean in terms of job losses though more significant in terms of company tax receipts. But rather than plan proactively for this inevitable and essential transition, Australia seems intent on setting itself up for a very hard landing.

Whether directly, indirectly or passively through misdirected government action, all sectors face a level of risk from climate change and other global environmental issues.

Talk to Adaptive Capability today about safe guarding your business’ future.

Filed Under: Australia Mining Sector, Australian Government Climate, China Sustainable Energy, Clean Energy, Climate Change Adaptation, Climate Change Mitigation, Coal Mining China, Federal Budget, Green Energy, Mining Boom

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