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RE: Innovative Strategies for Electric Utilities



Since utilities have been de-regulated in many States - the concept of selling a service is not new - infact customer satisfaction is a big metric!
 
Over the years as an electric utility P2' er I have made the following observations about this sector:
 
Most standard P2 programs focus on hazardous/toxic solid waste - most utilities produce little hazardous/toxic waste.   They do produce large amounts on solid waste (coal combustion by-products).   These are non-hazardous and can often be used as a substitute for raw materials.  Most notably, certain fly-ash can be used as a substitute for Portland Cement - use of this material is responsible for significant C02 being prevented in cement kilns - sounds like P2 to me.   
 
Most utilities have significant air emissions - and the standard approach has been to control them only if required.   Controls usually take the constituents that are released to the air and entrain them into a solid waste (i.e. the coal combustion byproducts, SCR catalysts, etc).   Utilities are driven to take this approach due to prescriptive BACT requirements and lack of regulatory flexibility.  Confirmed by EPA's June 2002 comments on New Source Review (NSR) submitted to the administration "the NSR rule has resulted in lost capacity and efficiency at existing power plants, refineries, and other industrial plants"
 
If the demand for steam generated electricity maintains the status quo, the prevention of air emissions from these existing electric generation stations can only come from product substitution (i.e. cleaner fuels) or improving the combustion efficiency (i.e. heat rate) .
 
 
The Bottom line is this:  As long as customers want cheap electricity, utilities will continue to burn coal (it is the cheapest fuel available and when fuel can eat up about 80% of a facility's operating budget - this is where utilities look to cut costs).  Also one must note that the efficiency of the steam combustion process is physically limited by the Rankine Cycle not the fuel that is burned (The typical conversion rates from BTUs to electricity is 35%).   Combined cycle gas turbines may get a higher efficiency rating (50%) as they use the excess heat from the gas turbine to make steam to turn a steam turbine. 
 
I recommend promoting "green tag" programs for consummers as a starting point - after all the utilities in deregulated markets will follow the market trend.   If customers were to become more aware of the environmental consequences of purchasing electricity generated from coal vs wind, there may be more of a shift in the market.
 
Also if the end-users of electricity were to receive credits/allowances instead ogf the utilities, customers would be finacially rewarded for purchasing green energy.  The coal-burners would need to buy the emission allowances from the end-user instead of another utility.
 
As far as P2 at an existing coal plants - we must realize the combustion efficiency is the key - make more electricity with the same amount of fuel/make the same amount of electricity with less coal.    If us P2-ers were to measure the sucsess of a utility on a pound of waste per Kw of electricity produced we would start to see how much utilities are actually preventing.   Truth is, electric utilities have been getting cleaner due to P2; however, the amount prevented does not usually result in lower emissions when looked at on a pounds of waste per year basis.    When a facility does improve combustion efficiency at a coal plant, the most likley scenerio is that on a pound per Kw basis there will be a decrease; however when looked at on a pounds per year the amount will either stay the same or increase.   The increase comes from the fact that the facility can increase its capacity and make/sell more cheap electricity fro the same amount of fuel - this leads to greater profits.   But dont forget that by improving efficiency, the facility may have prevented a significant amount of emissions that would have occured if the facility had made the same amount of Kw and the additional Kw was made up from another coal fired-unit. 
 
 
Mark L Johnson, REM.
Senior Environmental Coordinator
Lower Colorado River Authority
Email: mark.johnson@lcra.org
Phone (512) 473- 3200 ext 2868
Fax: (512) 473-3579
Fax (512) 473-3579


>>> Gary Miller <gmiller@wmrc.uiuc.edu> 07/25/02 07:59AM >>>
Thomas,

You make an excellent point.  Perhaps we need to "sell" electric utilities
on the concept that they are providing a service - not just a
commodity.  With a service approach the less materials (in this case
electricity) required by the customer the more money the vendor makes.  The
vender's focus changes to producing less commodities through improvements
in transmission and end use efficiency.  Some chemical suppliers are taking
this approach now.  It seems to me that this concept could work with any
commodity including electricity.  I have greatly oversimplified this
concept and what it would take to make such a paradigm shift in this
particular industry.  You would have to find just the right innovative
mindset in order for a utility to adopt such a radical approach.  Some good
articles have appeared in P2 Review on the topic of innovative supplier
contracts or chemical management systems.  The automotive industry has been
adopting this approach.

Has anybody come up with a way to promote this approach with utilities in
the U.S.?

Gary Miller



At 12:44 PM 7/24/2002 -0500, Thomas Vinson wrote:
>It is a very interesting discussion.  It has moved to an area that I have
>had on my mind for a number of years...how do we "sell" electric utilities
>on P2?
>
>The Electric Utilities is an area I have always wanted to address.  With
>so many sectors we have applied P2 principles and seen enormous benefit to
>the environment and the economy.
>
>But like the proverbial salesman who can't get his foot in the door I seem
>to be at a loss with Electric Utilities.
>
>Mark and LCRA are very open to change; in fact I have a great deal of
>respect for LCRA's innovative mindset.
>
>In every other sector I have seen resistance to P2 change, but there is
>also some acknowledgement that P2 is a good idea. It is simply a matter of
>convincing them that the approach is feasible (sort of along the five
>factors that Gary Miller mentioned.)
>
>But with this sector I seem to be missing something.  There seems to be
>some key factor that I am not addressing.  Discussions on P2 are ussually
>met with indifference and all my usual strategies seem ineffective.
>
>I think I see the barriers:
>
>1. Source reduction is nearly impossible.  This process is simple.  Burn
>stuff, convert it to electricity.  Without changing that paradigm it is
>hard to offer solutions.  LCRA found some options that involved using
>fuzzy logic (this is a math term not an assessment) to set a plants
>operating conditions at optimal working conditions.  But so far I have
>seen no interest from other utilities.
>
>2. Source reduction from a use standpoint is economically detrimental to
>the utility company. Programs to reduce generation (like those discussed
>by Burton) of electricity are not in the better interests of the
>sector.  After all, they get more revenue as electric use increases.  I
>once heard a city manager lamenting the cool summer because it was cutting
>into his budget.  Energy conservation was the furtherest thing from his mind.
>
>3. The politics are intense.  If you offer a solution to a metal finishing
>shop you affect at most a couple hundred people. But offer a change at a
>utility and you are talking about millions of people.  Energy issues tend
>to be highly charged.
>
>4. Environmental department not integrated?  Perhaps Mark can offer some
>insight on this.  When talking with other sectors I get the impression
>that the environmental departments are ussually integrated into their
>business.  But sometimes I get the feeling electric utilites have
>segregated environmental departments.  Is this the case?  If so, what is
>the motivation for a utility to integrate it.
>
>So does this group have sector specific ideas about how to approach this
>sector?
>
>It seems to me there is enormous opportunity here to help the environment
>and save money if we could just get some momentum.
>
>I think Burts discussion of strategies gets to the heart of the
>issue.  While we may get good results with the "you will save M O N E Y!"
>pitch, we are probably not at 100% effectiveness.
>
>So, I put it to the group.  How do we practically implement the other
>areas Burt mentioned, and specifically how would this approach work for
>utilities.
>
>Tomas Vinson
>www.srwm.org
>
>Fax: 512/239-3165
>Phone: 512/239-3182
>
>Engineering Specialist
>TNRCC - Pollution Prevention
>MC112
>PO Box 13087
>Austin, Tx 78711-3087
>tvinson@tnrcc.state.tx.us
>
>
>Disclaimer:  Regulatory guidance  e-mails are provided to quickly get you
>an answer to legal requirements.  They are not a substitute for compliance
>with the regulation, but guidance based on the best information available
>to the staff of TNRCC at the time.
>
>
> >>> <jlmartinezp@repsolypf.com> 07/22/02 01:40AM >>>
>Very interesting discussion
>
>I am writing form Europe. Here, we have a an internal law called IPPC
>(Integrated Pollution Prevention and Control); the idea was to
>have  something like PPAct but  being a bit more flexible. We are trying
>to combine  making a trade off between Prevention and Control of the Pollution
>
>I think we, process, design or environmental engineers,  should be able to
>think about a trade off between  PP or Pollution Control following a case
>by case procedure.  Does Pollution Prevention pay? The answer should be
>yes, but applying  concepts like best available technologies not
>entailing  excessive costs.
>I remember a paper form Bob Pojasek titled: "For PP be descriptive not
>prescriptive" so let us  select scrubbers when necessary  or let us select
>any source reduction measure when available at economic good conditions
>
>I agree that we should avoid to transfer pollutants from  air to land (for
>example) but this is not always technical  or economical feasible.
>I am studying  petroleum refineries cases and believe me that  it is
>harder to  decide when  to apply Pollution prevention or pollution control
>measures that go to your PP recipe book and select one of them
>
>Jose-Luis Martinez
>
>
>
>  -----Mensaje original-----
>De:     Snyder, Mark [mailto:mark.snyder@moea.state.mn.us]
>Enviado el:     viernes 19 de julio de 2002 20:53
>Para:   nppr@great-lakes.net; p2tech@great-lakes.net;
>scott.butner@pnl.gov; 'Mark Johnson'
>Asunto: RE: Innovative Strategies for Electric Utilities
>
>
>This certainly sounds like a good step forward for cleaner air in Texas,
>but after reading the press release, I'm left with some questions.  Is
>this project to install scrubbers an example of pollution prevention or is
>it an example of more stringent pollution control?  Given that scrubbers
>have been around for a number of years and have been required for a number
>of facilities in different areas, what exactly makes this permit
>innovative?  Or is there something I'm missing from the press release?
>
>Mark Snyder
>Pollution Prevention Specialist
>Minnesota Office of Environmental Assistance
>mark.snyder@moea.state.mn.us
>
> > ----------
> > From:         Mark Johnson[SMTP:Mark.Johnson@lcra.org]
> > Sent:         Friday, July 19, 2002 12:02 PM
> > To:   nppr@great-lakes.net; p2tech@great-lakes.net; scott.butner@pnl.gov
> > Subject:      Innovative Strategies for Electric Utilities
> >
> > A shameless plug for my organization Lower Colorado River Authority
> (LCRA) and the Texas Natural resource Conservation Commission (TNRCC) and
> EPA Region 6!
> >
> > We recently submitted an application for a Flexible Air Permit to the
> TNRCC for our 1,500 MW coal fired power plant in La Grange Texas.   The
> innovative air permit will allow our facility to implement many P2
> projects that would have not been possible without the Flex Permit (most
> of these P2 projects would have triggered NSR).   The Flex permit will be
> put in motion over the next 10 years.
> >
> > This innovative permit strategy can be followed by most other utilities
> if the states are able to provide the flexibility.  It can provide some
> near term benefits and long term reductions without waiting for CAA
> reforms or implemntation of the Bush Clear Skies initiative.
> >
> > For more details please visit this link
> > http://www.lcra.org/about/news/2002/07/plan.html
> >
> >
> > Mark L Johnson, REM.
> > Senior Environmental Coordinator
> > Lower Colorado River Authority
> > Email: mark.johnson@lcra.org
> > Phone (512) 473- 3200 ext 2868
> > Fax: (512) 473-3579
> > Fax (512) 473-3579
> >
> >
>
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*******************************************************************
Gary D. Miller, Ph. D.
Assistant Director
Illinois Waste Management and Research Center
Department of Natural Resources
One East Hazelwood Drive
Champaign, IL  61820
www.wmrc.uiuc.edu/
www.pneac.org
www.glrppr.org
www.p2rx.org
www.elsevier.nl/locate/issn/0959-6526

217/333-8942 phone
217/333-8944 fax
gmiller@wmrc.uiuc.edu
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