FIGURE 9. Capital cost of combined photovoltaic solar and lithium-ion battery storage systems
Source: Lazard, Levelized Cost of Storage Analysis, Version 4.0, November 2018 ( https://tinyurl.com/ybw4n6fx).
electricity and thermal energy with low
emissions and ensures resiliency for a
future that will very likely involve more,
and more severe weather events. Chilled-water and low-temperature hot water district systems provide flexibility to evolve
the production mix to include a wide range
of local low-carbon sources such as data
center waste heat, sewer heat recovery,
deep water cooling and bioenergy sources
like biomass, liquid biofuels or biogas.
My column from the Fourth Quarter 2010
issue of this magazine (“Why energy policy will get you into hot water”) describes
the pivotal role that low-temperature hot
water district heating can play.
A diversified and flexible design
that incorporates thermal and electric
infrastructure is the best way to future-proof the energy infrastructure for a
campus or business. This will provide an
optimal path to a zero-carbon energy
system while ensuring reliable and resilient energy service.
Mark Spurr is legislative
director of IDEA and is
principal of FVB Energy
Inc., a consulting firm
specializing in sustain-
able energy infrastruc-
ture with offices in the
U.S., Canada and Europe. FVB services
include feasibility studies, engineering,
financial analysis, utility rate design, due
diligence assessments, and energy infra-
structure and carbon reduction master
planning. Spurr has worked extensively on
local, state and federal policies and regula-
tions relating to district energy and com-
bined heat and power. He may be reached
a terrible track record in predicting the
future. I have been around long enough
to see how many energy infrastructure
design decisions have played out. Some
have turned out poorly because they
locked into a design that would have
been great if the long-term projections
had been right, but they hit the rocks
because the future turned out differently.
Other decisions, like converting from
steam to hot water district heating in St.
Paul over 35 years ago, were based on
natural gas price projections that turned
out to be wildly wrong, but yet the decision turned out to be brilliant.
Why was the decision to build the
St. Paul hot water system a smart move
even if the projections were wrong? It
was built in an era of rapidly rising natural gas prices and low costs for coal. The
(then) District Heating Development Co.
inherited coal-fired capacity from the old
steam system it supplanted. But once the
hot water thermal infrastructure was built,
it provided flexibility to evolve – to shift
from coal to CHP fueled with urban waste
wood, develop a district cooling system
and integrate absorption cooling and
chilled-water thermal energy storage.
Engineers and executives tend to
have an inordinate faith in numbers and
often fail to appreciate the fact that we
have yet to invent a functioning crystal
ball. In making long-term decisions,
the wise person will recognize this and
appreciate the value of flexibility.
GOING ALL-ELECTRIC MEANS PLACING A
HUGE BET THAT POWER GRID EMISSIONS
WILL BE COST-EFFECTIVELY REDUCED AND
THAT THE GRID WILL BE RESILIENT.
Energy system designers should
design for flexibility to evolve the infrastructure to optimize reliability, resiliency, emissions and costs in response to
changing prices, technologies, weather
and loads. Going all-electric means placing a huge bet that power grid emissions
will be significantly reduced in a way
that is cost-effective and reliable and
that power transmission and distribution
systems will be resilient despite ample
evidence to the contrary.
Combined heat and power integrated
with district energy provides dispatchable
1 NERC is the electric reliability organization for North America, subject to oversight
by the U. S. Federal Energy Regulatory Commission and governmental authorities in
Canada. Each NERC region listed in eGRID represents one of 10 regional portions
of the North American electricity transmission grid: eight in the contiguous U. S.
plus Alaska and Hawaii (which are not part of the formal NERC regions but are
considered so in eGRID).
2 Jacobson, M.Z., et al. “100% clean and renewable wind, water, and sunlight (WWS)
all-sector energy roadmaps for the 50 United States,” Energy & Environmental
Science, (2015) 8: 2093-2117 ( https://tinyurl.com/yac7xjpm).
3 Clack, Christopher T. M., et al. “Evaluation of a proposal for reliable low-cost grid
power with 100% wind, water, and solar,” Proceedings of the National Academy of
Sciences of the United States of America, June 27, 2017, 114 ( 26) 6722-6727
4 U.S. Energy Information Administration, Annual Energy Outlook 2018 (https://www.
$1,000 $2,000 $3,000 $4,000 $5,000 $6,000
Commercial & industrial
Capital cost ($/k W)