Legend Power Blog

The Financial Post has been running a series the last few months called “Ontario’s Power Trip”. In the series, Parker Gallant, a retired Canadian banker, explores the finances and politics behind Ontario’s power sector. With power that’s already priced 65% higher than Quebec and Manitoba, it’s about time someone explored the problems with Ontario’s power.

Gallant says,

As a former banker, I have no direct expertise in the electrical sector. I was simply curious as to why my electricity bill in Ontario went up when my consumption went down. What I found as I researched is a bewildering story of a province whose electrical sector is in trouble. Ontario is a high-price energy province and, under current policy, it is poised for a further escalation in prices. In short, Ontario is pricing itself out of the market and will not have the ability to attract any manufacturers or service sector companies that require significant energy in their daily processing.

It appears that Gallant was first inspired to write the series after examining Hydro One’s annual report. In his post on February 24th, Ontario Power Risk he notes that the annual report (deemed not newsworthy by the press) shows that while the company is handling less electricity, both their costs and debt are rising. Gallant notes that this should alarm electricity consumers and Ontario taxpayers, predicting that “many more rate increases will follow.”

In his April 14th post, Ontario’s power trip: Priced out of the market, Gallant examines the regime behind Ontario’s power sector, calling it a “complex, unproductive, costly and expanding beehive of corporate and institutional activity that produces less and less electricity at ever rising cost.” With 6 institutions making up the power structure, including parts of old Ontario Hydro and government appointed groups, here’s the breakdown he provides:

1. Ontario Power Generation (OPG), which produces electricity.
2. Hydro One, which manages the province-wide transmission and distribution grid.
3. Independent Electricity System Operator (IESO), which manages the hourly power needs and also operates a trading and pricing system.
4. Ontario Electricity Financial Corporation (OEFC), which holds the stranded debt of the old Ontario Hydro and acts as a funding arm.
5. Ontario Energy Board (OEB) , which regulates electricity.
6. Ontario Power Authority (OPA), which acts as the government’s policy execution vehicle.

Gallant asks “What is this conglomeration of government-controlled agencies doing? One thing is clear. They are doing much less for a lot more money than they used to…The number story is simple: Less electricity, higher costs.”

And higher costs is right. Gallant notes in his May 11th post, Ontario’s Power Trip: The 20% hydro grab, that early in May Toronto Hydro told the National Post’s editorial board that rates will be increasing by about 20% and similar increases will effect all of Ontario. With this news, Gallant takes apart his power bill to see where the costs are coming from and what he can expect in the future. This is what he finds:

Under the regulated price plan (RPP) my bill (assuming I use 2480 kwhs over two months) will increase by $61 (up 20.5%) for two months’ worth of power. Under the TOU plan [beginning on May 1 Ontario consumers with Smart Meters will be under a new Time of Use (TOU) system], it will increase by $53 (up 17.9%). That means my electricity bill will jump $366 on an annual basis under the RPP and $318 under TOU.

In order to help Ontarians understand their electricity bills, Gallant created a useful chart that breaks down all of the complicated costs.

So what can you do?

Our solution to these price increases is an electronic tap changer, the Harmonizer-AVR. It regulates energy at your building’s power source to help your building conserve 6 – 10% of its energy.

See how Ikea saved 7% on electricity with the Harmonizer-AVR.

What are some other solutions?

Now when you install Legend Power’s smart transformer, the Electrical Harmonizer-AVR, in your building it will contribute up to 5 points to your LEED certification. Kyle Anders, a Sustainable Design Specialist, states:

5 points is a very noteworthy contribution in my experience, it is rare that a single product/technology can have this high of an impact.  I don’t have experience with evaluating other voltage optimization technologies, but since LEED emphasizes reductions in energy cost (rather than just energy), Legend has the advantage over many other energy savings technologies since it impacts electricity (the more expensive portion of a building’s energy use), compared to other technologies that may generate heating fuel savings but not electricity savings.

Read the full press release.

According to the U.S. Green Building Council (USGBC), LEED, which stands for Leadership in Energy & Environmental Design, is an internationally recognized certification system for green building. Originally developed by the U.S. Green Building Council, it certifies both residential and commercial buildings, providing third-party verification (through the Green Building Certification Institute) that a building is operating in the most sustainable way possible. 

As the Canada Green Building Council notes, LEED certification gives you recognition for your sustainability efforts and allows you to qualify for government funding incentives.

LEED measures a building’s performance in the following areas:

• Sustainable Sites – looks at where a building is built and its impact on the ecosystem.
• Water Efficiency – encourages smarter water use.
• Energy & Atmosphere – promotes efficient and clean energy use.
• Materials & Resources – encourages sustainable building products and materials.
• Indoor Environmental Quality – promotes improving indoor air quality and access to natural daylight.

According to USGBC, Building’s are rated out of a possible 100 points, with the potential for 10 bonus points. Certification requires 40+ points, Silver is 50+ points, Gold+ is 60 points and Platinum requires 80+ points.

LEED Rating Systems include:

• New Construction
• Existing Buildings: Operations & Maintenance
• Commercial Interiors
• Core & Shell
• Schools
• Retail
• Healthcare
• Homes
• Neighborhood Development

The first step to LEED certification is registering your building or project. To register in the US, visit LEED Online. Canada has adapted USGBC’s rating system to work within it’s own climate and building regulations. To register in Canada, visit Canada Green Building Council.

Commercial energy efficiency measures generally gain wide-spread adoption through utilities — either with their use of the technology or with their approval.

But how do utilities filter through all of the products and options available to decide on what energy efficiency measures to support? What do utility managers want to see when they’re considering new technologies?

In our experience at Legend Power, utilities look for technology that is proven to save energy and that won’t cause problems on the power grid (harmonics, poor power factor etc.). They also look at the cost effectiveness of the technology when making their decisions.

The following items help show a product is proven and won’t cause problems to the grid:

• UL approval. This may be costly but well worth the investment.
• Case studies & pilot projects with third party verification of energy savings.
• Well researched whitepapers.
• Patience. Many utilities often move slow and businesses like to move fast. It is possible to push a utility to move quickly, but a delicate approach is needed.

The key is that the technology must be able to be implemented by the customer. In terms of demand-side management (DSM) the utility may provide incentive funds that can be used to encourage or speed up adoption of DSM technology. It is important that the customer is able to implement the technology — if they can’t, then it doesn’t qualify as DSM.

The other key point is Measurement & Verification. Many utilities have to answer to a government body and have conservation targets to achieve, so the ability to verify the savings achieved is very valuable.

What are your experiences with utilities? Are they similar to ours or do they differ?

Photo Credit: http://www.flickr.com/photos/seattlemunicipalarchives/ / CC BY 2.0

A couple of weeks ago we looked at BOMA Toronto’s Conservation and Demand Management (CDM) Program and the incentive funding available through BOMA for the Toronto area. This week, we’ll look at incentive funding in British Columbia through the Public Sector Energy Conservation Agreement (PSECA).

PSECA is a project between BC Hydro and the Province to fund public sector building retrofits. The purpose is to significantly reduce energy consumption across more htan 6,500 public sector buildings.The project will invest $200 million in new technology, energy innovation and retrofits.

By 2020, the project is aiming for a 20% reduction in public sector energy consumption or a net savings of 342 gigawatt hours of electricity annually. This is enough to power 34,200 homes.

According to the original press release, PSECA includes:

• Provincial investments in energy efficiency upgrades and retrofits in government buildings.
• Implementation of energy conservation projects across the public sector, and promotion of technology innovation at public sector buildings.
• An employee engagement component to encourage government employees to be energy conservation leaders at work and at home.

Goals

Reduce electricity consumption in existing provincial buildings by 5% by 2011, 14% by 2016, and 20% by 2020.

Eligible Building Types

• Provincial government office buildings
• Crown corporations
• Schools, universities, and colleges
• Hospitals
• Social housing

Duration

The agreement is in effect from 2008 through 2020.

________

To register with the PSECA Funding Program contact PSECA Administration.

To apply for funding opportunities with PSECA, you must have an established BCeID account. Download the instructions for registering with BCeID (PDF).

Suppose your CEO calls tomorrow and asks, “What are we doing about power consumption?” What will you say?

Reducing consumption by turning off computer monitors and equipment requires lifestyle changes to be adopted through the entire organization. These are easy choices to make but they are hard to implement and substantial return on investment is not assured.

Proven, existing efficiency technologies — in everything from lighting to climate control and voltage regulation — can unlock the untapped reserves of efficiency gains buried in many non-residential buildings. Plus government incentive programs remove the barriers to implementation by making the up-front costs and payback periods affordable.

In high-cost energy states such as California, the state government has allocated $3.1 billion for energy incentives for the next three years. New York State also passed legislation at the end of 2009 to make loans available for businesses that want to improve their energy efficiency.

Each state’s programs require different application processes for commercial and institutional buildings and industrial facilities, which means that despite the availability of funding, many building owners and facility managers leave this money on the table, in part because they overestimate the cost of saving energy and forfeit researching their energy saving options.

So when the CEO comes calling, consider whether you are being overbilled for your energy and review the options and funding.

IKEA, for example, saved 7% of its annual energy consumption and saw a 50 kilowatt reduction in peak demand after installing Legend Power’s voltage regulation device in it’s Richmond, BC, facility. The electronic tap changer regulates incoming voltage and reduces energy consumption and costs, extends the life of equipment and does not require workflow changes.

Lighting retrofits, and the replacement of air conditioning sytems, industrial motors and other devices that consume electricity are other commonplace solutions covered by incentive programs.

To give you an idea of what is available, the following chart lists the states with the most expensive energy costs, the number of incentive programs that are available, and the state budget for energy efficiency projects.

To save money, reduce greenhouse gas emissions, and conserve power, find the incentive programs in your area:

The Database of State Incentives for Renewables and Efficiency lists all of the incentive programs in the US, by state.

The US Department of Energy explains each state’s energy incentive programs.

An explanation of inefficiencies in the power grid.

http://www.flickr.com/photos/badcomputer/ / CC BY-SA 2.0

The Building Owners and Managers Association (BOMA) is a commercial energy conservation success story. By working to promote the commercial real estate industry through leadership and advocacy, BOMA is having significant impact on commercial energy conservation, particularly through it’s two programs — BOMA CDM and BOMA BESt.

BOMA CDM

BOMA Toronto’s Conservation and Demand Management (CDM) Program is a $60 million incentive funding program to encourage building owners and tenants in the Toronto area (416 Area Code) to take on commercial energy conservation projects in their buildings.  The program offers incentives for annual energy savings, in kilowatt hours (kWh), and peak summer demand reductions, in kilowatts (kW), and reducing tons of cooling (for geothermal projects). Up to $5,500 is initially available to individual projects and the program ensures that the cash incentives are easily accessible – they promise that after the Project Completion Report is finalized you’ll receive your incentive payment within 30 business days.

Target
Large commercial buildings with 25,000 square feet or greater.

Eligible Building Types

• Offices
• Hotels
• Retail Stores
• Mixed Use
• Industrial Buildings
• Warehouses
• Private Institutions

Duration
4 years, ending December 31, 2010

Incentive Level
$800 per kilowatt of on-peak demand savings or $0.10 per kilowatt-hour annual consumption savings for non-lighting projects; $400 per kilowatt of on-peak demand savings or $0.05 per kilowatt-hour annual consumption savings for lighting projects; $250 per cooling ton (for ground source cooling projects).

Incentive Cap
Incentive payment limited to 40% of total Eligible Costs.

According to this recent press release,

The CDM Program currently involves over 383 projects, with energy savings equaling the consumption of 26,300 Ontario homes, eliminating 31,000 tonnes of emissions and creating approximately 1,700 Ontario jobs. This represents more than $105 million in capital investment.

For more information, visit the BOMA CDM Website. To apply for incentive funding, fill out the Application Form.

BOMA BESt

BOMA’s Building Environmental Standards (BESt) program is a national environmental standards certification program. BOMA BESt has four levels of building certification and provides building managers with an environmental management tool, recommendations for areas of improvement and an online assessment tool.

Last week’s press release stated that,

the average BOMA certified building consumes roughly 11 per cent less energy than it did a decade ago. Some BOMA buildings have adopted aggressive energy management strategies and undertaken building retrofits to reduce their energy use by as much as 30 per cent.

For information, including application costs, visit the BOMA BESt website.

Cool Globes: Save Power with Energy Efficiency

Tomorrow is Earth Day and people around the world are promoting environmental awareness and encouraging community action. According to the Earth Day Network, more than 1 billion people participate in Earth Day activities, making it the largest secular civic event in the world.

Here are 4 reasons why you should celebrate Earth Day:

The Clean Energy Revolution is Coming

Obama’s attention right now is on energy reform. Last week, he urged business heads to push Congress in support of climate and energy bill. He told the group the climate bill – which would cap global warming emissions – is good for business and that members of Congress need to hear that.

Next on the Obama administration’s agenda is developing a clean energy and climate bill, a bill which, according to Dan Lashof in the Huffington Post, will add “2 million clean energy jobs, cut pollution by 2 billion tons, and save 2 trillion dollars worth of oil imports.” To push Obama to move ahead, Senators John Kerry, Lindsey Graham, and Joe Lieberman are expected to release a bipartisan proposal on April 26th.

Canadians Are Leading Commercial Energy Conservation

Canadian Companies are providing some of the world’s leading commercial energy conservation solutions. As mentioned in an earlier post, companies doing interesting things include:

• Pulse™ Energy, has software that collects, analyzes and communicates real-time energy intelligence for building operators and management, enabling savings of 5-25% with improved operating efficiency.
• PowerKure™, an integrated modular system that is custom engineered for each facility to effectively and economically optimize power quality, providing guaranteed energy savings, through reductions in power demand and power consumption. (KVA/KW and KWH)
• REGEN Energy provides commercial, industrial, institutional, and multi-unit residential facilities with the ability to reduce their electrical demand charges by at least 25-30%.
• Fifth Light offers advanced Lighting Solutions that conserve energy, improve lighting quality and simplify facility management while generating an attractive return on investment.

Smart Grid Technologies are Within Grasp

Worldwide adoption of smart grid technologies is growing and if you need proof, just look at China. Monday was the grand opening of Yangzhou’s state-of-the-art Smart Grid Demonstration Center. The center is meant to serve as a model for smart grid adoption throughout China.

Cool Globes are at Science World

Cool Globes: Hot Ideas for a Cooler Planet, is a public art exhibition designed to raise awareness of solutions to climate change. With globes ranging from “Green Your Screens” to “Cool Urban Roofs” to “Tidal Energy”, they are meant to remind us of the many ways in which we can contribute to solving global warming.

Cool Globes grew out of a commitment at the Clinton Global Initiative in 2005, and was incorporated as a non-profit organization in 2006.  Since that time, Cool Globes premiered in Chicago and went on tour across the country from Washington DC to San Francisco, San Diego, Sundance, Los Angeles and Houston.  In the fall of 2009, Cool Globes opened the first international exhibit in Copenhagen. We currently have globes on display at Science World in Vancouver, and are planning exhibits in Geneva and Marseilles.  It is our hope that the millions of people who have experienced the exhibit, leave with a vast array of solutions to climate change, and with one clear message….we can solve this.

For more reasons to celebrate, watch this video:

Do you associate smart meters with higher energy bills? Would you if you were charged more for energy during peak hours?

A Wall Street Journal article written by Rebecca Smith, entitled “What Utilities Have Learned From Smart-Meter Tests…”, explores the opportunities that smart meters are missing out on.

Smith says that because smart meters send readings on electricity usage to utilities throughout the day, they make it possible for utilities to charge more for power when demand is highest (in the afternoon) and less when usage falls off (at night). But, according to Smith, utilities are hesitant to charge customers for extra energy use. They fear that if customers associate smart meters with higher bills, this will have a negative effect on how the technology is perceived.

Smart meters are expected to represent 1/3 of US electric meters in the next 5 years.

By making variable pricing plans possible, smart meters are expected to play a big role in getting customers to reduce their peak-hour energy consumption, a key goal of utility executives and policy makers. Electricity grids are sized to meet the maximum electricity need, so a drop in peak demand would let utilities operate with fewer expensive power plants, meaning they could provide electricity at a lower cost and with less pollution.

Utilities have run dozens of pilot tests of digital meters and found that people cut power consumption the most when faced with higher peak-hour rates. But utility executives and regulators have been reluctant to implement rate plans that penalize people for too much energy use, fearing that if customers associate smart meters with higher bills, they will stall the technology’s advance just as it is gaining traction.

…So, many utilities are trying an approach that is less controversial, but also less effective: offering rebates to customers who conserve energy in key periods of the day.

The article continues on to say that utilities are also finding that commercial customers are unable to cut their power usage. Last summer, Connecticut Light & Power Co., a subsidiary of Northeast Utilities Service Co., gave new meters to 3,000 residential and business customers. Commercial customers, faced with peak-hour pricing, cut their demand 7%—far last than residential customers who cut their peak use by 16-23%.

Jessica Brahaney Cain, director of CL&P’s smart-grid planning, said that this shows that many commercial customers don’t have the option of cutting usage during times of peak demand. “A restaurant has to use its ovens,” she says. “A dentist has to use his drills.”

How effective are smart meters if utilities don’t take advantage of the opportunities that they present? Should commercial facilities be charged more for energy during peak hours? If not, what other options are available?

At Legend Power we are noticing an interesting shift in attitudes about energy efficiency. Instead of choosing energy efficiency for environmental reasons only, companies are now talking about the financial benefits of doing so.

In fact, newspapers are now covering this angle more easily given the industry data available that reinforces the financial sense of going green. The Wall Street Journal reported on January 6 that, according to a new study from venture capital firm Good Energies Inc., half of non-residential buildings will be green by 2015.

In particular, WSJ is referring to results released in November 2009 by Gregory Kats, managing director of Good Energies. The results of Kats’ two-year independently funded study are available in a book called Greening Our Built World.

According to the Wall Street Journal:

Kats and his partners interviewed 100 architects working on 170 green non-residential buildings, mostly located throughout the U.S. He also obtained information from the USGBC, the American Institute of Architects, the American Public Health Association, the National Association of Realtors, BOMA International, the Federation of American Scientists, the Real Estate Roundtable, the National Association of State Energy Officials, Enterprise Community Partners and the World Green Building Council.

The interesting shift in attitude here is that “Green Buildings”–buildings that use fewer resources to build and to sustain—are commonly thought to be too expensive to attract builders and buyers. But the costs are not as high as expected.

Kats’ study provides detailed findings on the costs and financial benefits of building green. According to the study, green buildings cost roughly 2% more to build than conventional buildings—far less than previously assumed—and provide a wide range of financial, health and social benefits. In addition, green buildings reduce energy use by an average of 33%, resulting in significant cost savings.

The study provides a large enough, detailed enough body of data to say that green building is very cost-effective and “it reduces risk in a number of areas including health, exposure to energy and water prices and obsolescence,” says Kats.

In addition for real estate investors, energy efficiency measures, whether introduced at the building stage or in retrofits, enhance real estate portfolios

A new report, “Energy Efficiency in Real Estate Portfolios: Opportunities for Investors” (PDF), was commissioned by Ceres and authored by the responsible investment group of the investment consulting business Mercer.

The report draws on key industry and academic research on building efficiency’s economic impacts. It also shows that “proven, existing efficiency technologies — in everything from lighting to climate control and more — can unlock the untapped reserves of efficiency gains buried in many real estate holdings” (Source: GreenerBuildings, December 24, 2009)

Those gains would be a boon to real estate investors’ bottom lines—both direct property owners like large pension funds and smaller investors who primarily hold real estate securities.

So whether it’s making a new building less power-hungry or conserving energy in an existing building, both efforts combat climate change and leverage efficiency to achieve cost and risk reductions.

For more information, see our case studies from industry leaders showing the positive impacts of voltage optimization on power and electrical costs.

Read Case Studies

• IKEA Richmond Saves 7% on Electricity
• Honda Canada reduces power costs by 6%
• Science World’s Energy Conservation Efforts Reduce in Electricity Costs by 8.5%

The Legend Power Harmonizer has received the 2005 Canadian Energy Efficiency Grand Prix Award and been recognized under the Energy Star Partner program.

Having worked at Legend Power for nearly one year, I have used this phrase hundreds of times, “Legend Power’s energy conservation technology helps reduce greenhouse gas emissions.” And it is true that we can help reduce greenhouse gas emissions, but I am beginning to think that many people are unaware of what a greenhouse gas really is. We all seem to agree that these mystery gases are bad and that they need to be reduced, but I suspect that most people do not really understand what greenhouse gas is.  Realizing that I don’t know nearly enough about this topic as I should, I did some digging around online and found some interesting information.

Greenhouse Gases, often abbreviated as GHG, are gases that are trapped in the earth’s atmosphere, and they allow the sun’s radiation (heat) to enter the atmosphere but not to escape.  These trapped gases in the atmosphere cause the Earth’s temperature to rise, which has the potential to dramatically change our climate for the worse.

The most abundant GHG in our atmosphere are:

•    Water Vapor
•    Carbon dioxide
•    Methane
•    Nitrous Oxide

The most popular greenhouse gas amongst the crowd is carbon dioxide, which is where the term carbon emissions originates.  Although not all greenhouse gases are carbon based, the term carbon emissions has quickly become synonymous with greenhouses gas emissions.

Greenhouse gases are as old as the earth and prior to the industrial revolution they were perfectly harmless – just the very act of breathing (we exhale carbon dioxide) creates a greenhouse gas, and I am not about to stop breathing to save the planet.

The earth has the ability to convert GHG into nontoxic gases such as oxygen, but the amount of GHG that can be converted into oxygen is limited. In addition, the problem is exacerbated by our reliance on fossil fuels, which need to be ignited to create energy, and which result in excessive creation of greenhouses gases.

Whenever we use electricity, we help put greenhouse gases into the air. Greenhouse gases are traditionally measured in tons; every 5 MWh of electricity consumed in Ontario creates one ton of greenhouses gases. In Ontario coal is burned to generate electricity, which creates greenhouse gases.

Using electricity is not wrong. We just have to be smart about it because continuing to release large amounts of GHG into the atmosphere is a dangerous option.  Thankfully many business are beginning to realize that saving energy is a good financial and environmental decision. And there are many Canadian companies with innovative solutions to electrical energy consumption, who can help companies reduced GHG emissions.