Buying Electricity and Natural Gas for a BIG User Joan Kowal Energy Manager, UMCP March 6, 2012 Sustainable Tuesdays Speaker Series Retail Electric Competition The Electric Utility Industry The electric utility industry consists of three functions needed to deliver power to customer loads: – Generation – Transmission – Distribution It consists of many entities. Most notable are: – – – – Generators (Fossil, Nuclear, and Renewable) Regional Transmission Organizations (PJM) Distribution Companies (PEPCO, BGE) Load Serving Entities or Suppliers (Constellation, Washington Gas Energy Services, Pepco Energy Services) – Government Regulators (FERC, PSC) – End-users (UMD, homeowners, retail stores) Typical Electrical System Electric Supply at UMCP The electric needs on campus are met through: – On-site production from a natural gas, combined heat and power plant – Purchased energy delivered at the Mowatt substation (building located by Architecture.) Campus Electric Consumption 300,000 Other Purchased Electric, 23,147 250,000 200,000 MWH Produced Electric, 127,356 150,000 100,000 Campus Purchased Electric, 105,655 50,000 0 2006 2007 2008 2009 2010 2011 UMD Combined Heat and Power Plant • 27.5 MW natural gas, CHP plant installed at the College Park Campus – Doubled steam efficiency from 35% to nearly 70% – Energy Star award for 2005 – Annual CO2 reductions of 53,000 tons – Also produces chilled water for air conditioning using steam in summer Auxiliary Boilers How System Works: Make Up Water 2 Heat Recovery Steam Generators Exhaust Heat 6250 F Fuel Gas or Oil 625 PSI Steam Back Pressure Steam Turbine Steam Driven Chillers on Campus 125 PSI Steam Electric Power 5MW Electric Power 2 Combustion Turbines 22 MW and Generators 70% of Condensate Returns to CHP Heating Steam Chilled Water Energy Procurement Electricity – Supplier – WGES – Distribution Company – PEPCO – Contract Structure (main campus) • Block and Index • Fixed Supplier Fee • All other costs are a pass-through – Term is 3 years with two, 1 year options Electric Contract (cont’d) Block and Index Contract – Advantages • Reduces risk premiums from supplier • Allows UMD to reduce costs by reducing load in high priced hours • Allows rate to more closely reflect market over term of contract in lieu of locking in fixed-price for entire term on one day – Disadvantages • Reduced price certainty Electricity Procurement Block and Indexed July Monthly Blocks vs July Daily Weekday Usage 14.00 Buying in the hourly market 12.00 Selling in the hourly market 10.00 MW 8.00 6.00 4.00 2.00 0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Hour of the Day (ending) July Block volumes purchased 16 17 July 1st actual usage 18 19 20 21 22 23 24 Natural Gas Procurement Supplier – Pepco Energy Services/WGES Distribution Company – Washington Gas Light Contract Structure – Fixed Price for small accounts – Block and Index contract for CHP supply – Large account is interruptible; oil used as back-up fuel Natural Gas Procurement Block and Indexed June Natural Gas Use vs Block Purchase 64,000 Usage Buying in the Daily Market at Index 63,000 Block Purchase 62,000 61,000 Therms 60,000 Selling in the Daily Market 59,000 58,000 57,000 56,000 55,000 54,000 53,000 06/01/11 06/06/11 06/11/11 06/16/11 06/21/11 06/26/11 MD Renewable Energy State has a renewable portfolio standard (RPS) that requires electric suppliers to meet certain standards: – In 2012, 6.5% from Tier 1 renewable sources (including at least .1% from solar); and 2.5% from Tier 2 resources – In 2022, 20% from Tier 1 renewable sources (including at least 2% from solar); and 0% from Tier 2 resources RPS Definitions – Tier I (1) solar energy including PV and solar hot water heating; (2) wind; (3) qualifying biomass; (4) methane from the anaerobic decomposition of organic materials in a landfill or wastewater treatment plant; (5) geothermal; (6) ocean, including energy from waves, tides, currents, and thermal differences; (7) a fuel cell that produces electricity from a Tier 1 renewable source under item (3) or (4) of this subsection; (8) a small hydroelectric power plant of less than 30 megawatts (9) poultry litter-to-energy (10) waste-to-energy; and (11) refuse derived fuel. RPS Definitions – Tier II Hydroelectric power other than pump storage generation On-site Renewable Energy Solar hot water heating system installed at Ellicott Dining Hall and to be included at the University House Solar photovoltaic at Cole Field House – 5.25 kW Installation of geothermal heat pumps at the new Shuttle Facility; two renovated Sorority Houses; and new University House Project Sunburst DOE American Recovery and Reinvestment Act of 2009 funds allocated to Renewable Energy in MD UMCP was awarded a grant of $1000/kW of installed solar capacity Competitive solicitation awarded to WGES and Standard Solar for a 630kW installation at Severn Commercial Operation June, 2011 Estimated output of 792 MWh annually Aerial View of Severn with 2,300 Solar Panels Off-Site Renewable Energy Executed three long term power purchase agreements (PPAs) – Two land based wind with total capacity of 65 MW – One solar project with capacity of 13MW Aggregation of University System of Maryland Institutions with state and local agencies Buying Off-Site Renewables • Bundled RECs through PPAs • • • Long term commitment to buy power and RECs If buyer doesn’t buy RECs, power cannot be counted as renewable energy Unbundled RECs • Green attributes associated with power generation Bundled RECs through PPAs Load Serving Entity Electricity and RECs bundled together Unbundled RECs Can claim renewable energy 1 MWh REC 1 MWh Elect. 1 MWh Elect. Electricity and RECs sold separately Can’t claim renewable energy Renewable PPA Contracts – Project Roth Rock Phase II Pinnacle Project Constellation’s Mount St. Mary’s Solar Project WGES’ Severn Solar Installation Total Nameplate Capacity (expected annual MWh) 10 MW – (30,605) 55 MW – (174,542) 13MW – (22,291) 630kW (792) UMCP’s Share % of Annual Electricity Use 10% 1.53% 10% 9% 10% 100% On-line Date Technology Location Land-based wind Land-based wind MD – Garrett County WV - Mineral County 1% Solar MD Emmitsburg 6/12 0.40% Solar Severn 6/11 11.77% 8/11 1/12 References eia.doe.gov/ www.ferc.gov/ www.eei.org/ www.energy.state.md.us/