What does being ‘green’ mean to the electrical industry?

‘Being green’ is a catch-phrase everyone seems to use these days. But it means different things to different people, depending on what’s important to them. ‘Earth Hour’ involves turning off lights to highlight electricity wastage; the automotive industry wants to curb the amount of pollution from cars on the road; while the waste industry wants us to recycle more and put less into landfill. But what does it mostly mean to the electrical industry?

In researching what being ‘green’ means to the electrical industry, I spoke to several electrical professionals to find out what key areas they believe are impacting our industry’s contribution to a ‘greener’ planet.

Peter Garrett, Managing Director of automation integrator CTI:

I believe that the government’s planned tax breaks for green buildings have the potential to influence the rate at which energy efficiency is adopted in buildings.

For building owners to make any real use of the proposed tax breaks, they would have to take a 1- to 2-star-rated building and upgrade it to 4+ stars. That’s not just a matter of upgrading light bulbs - it may involve an entirely new lighting system, co/tri-generation or even wholesale structural changes to the building. This comes at significant cost to building owners, so the proposed tax may have limited potential here.

But from the electrical industry’s perspective, it’s a great opportunity to add value to clients. A 1- to 2-star-rated building typically has ageing and inefficient electrical infrastructure, so consultants and contractors can offer to give it a ‘shot in the arm’ to bring it up to speed with new technologies that deliver energy efficiency - things like intelligent lighting and HVAC systems, BMS and co/tri-generation. These technologies are being deployed in new buildings, where the monitoring and control of services is converging. Why install three cables and three switches to one location to do three different things when one switch and cable will do it all? It’s much like the convergence of voice, data and video we saw a while ago. From my experience, convergent systems can save around 15% of the overall cost to upgrade services.

Ravi Singh, Marketing Manager Energy Efficiency, Schneider Electric:

Australia needs to embrace a holistic approach to energy efficiency across all segments. A 25% energy reduction in industrial plants has the potential to save 7% of the world’s electricity.

Simply introducing mandatory reporting of energy use and greenhouse gas (GHG) emission through NGER, EEO, CBD programs or regulating MEPS solves only part of the energy-efficiency equation. And the use of low-consumption products and knowing your overall energy consumption/carbon footprint alone isn’t enough. Studies have shown that up to 12% per year is lost without regulation and control systems and up to 8% of energy savings is lost without monitoring and maintenance programs.

Energy-efficiency improvements require a life cycle approach. At Schneider Electric, we recommend a four-step approach to electrical industry professionals to effect energy efficiencies:

1. Measure;
2. Fix the basics;
3. Optimise through automation; and
4. Monitor, maintain and improve.

Stace Tzamtzidis, General Manager, Energy Efficiency, Clipsal Australia:

Commercial buildings have rapidly adopted Green Star and NABERS as a basis to improve the energy-efficiency and environmental attributes of buildings. In comparison, industry accounts for 33% of energy consumption in Australia, yet there’s no uniform standard or code of practice to help drive energy efficiency in existing plants.

The reasons behind this could include lack of incentive to implement energy-efficiency measures, traditionally lower energy costs in Australia compared to other OECD countries and electricity subsidies.

Although the NABERS Rating or Green Star scheme probably wouldn’t be applicable for factories because they’re all different, some general principles can be applied to factory design and machine selection that can ultimately lead to greater savings. More specifically, there are several key areas that require attention and where electrical contractors can capitalise on the opportunity:

• A centrally monitored WAGES system can encompass water, air, gas and electrical services within the premises. Metering provides a wealth of information including how energy is used, energy losses and identifying opportunities to save energy and reduce running costs.
• Motors account for over 60% of electricity usage and should be selected for their intended application. Oversized motors use more energy and cost more to operate. Besides motor capacity, look at motor efficiency. High-quality motors are more efficient and often the extra cost is worth it. For existing motors, variable speed drives are the answer, where energy efficiencies of 30+% are typical.
• Energy-intensive industries are often associated with poor quality power factor, which means generators must produce more electricity than otherwise required. When a plant pays its energy costs in units of kVA and not kW, pain is felt at both ends, and it’s in the interest of the plant to achieve a higher power factor.
• Australia’s fascination with high-bay lighting has resulted in inflexible lighting solutions in plants. Being slow to turn on and come to colour, these types of lamps often end up running continuously. More flexible options like fluorescent high-bays can be switched rapidly, produce more even light and are cheaper to maintain and service.
• It’s common to hear escaping air ‘hissing’ when walking through a factory. Energy losses due to air leaks are one of the greatest costs to industry. The lack of metering, poor maintenance and faulty seals all contribute to such losses. Metering can be used to address leaks early and raise an alarm for preventative maintenance.

Steve Dunne, Consultant Manager, Schneider Electric:

One of the biggest challenges currently facing industry is a lack of knowledge about where they’re using energy. Although many organisations meter to some degree, there’s little submetering to identify where the biggest energy loads are being consumed. Additionally, many perceive in-depth metering systems as costly.

Cost-effective solutions are, however, possible. Tapping into a factory’s SCADA system to collect data from meters, for example, can provide a relatively inexpensive metering system when it’s combined with a ‘historian’ system that aggregates and reports on the data.

From our experience, the failure to shed non-productive loads is one of the major causes of energy inefficiency in factories. For example, if the kiln of an industrial system suddenly stops working, conveyer belts and fans often keep running even though the entire system is not in use. If a factory runs its meters through a SCADA system, this issue can be tackled efficiently, as plant managers can easily identify any downtime and cut out the associated energy wastage.

Alfredo Diez-Hochleitner, Manager of ABB’s Global Solar Centre of Competence in Spain:

Speaking at the inaugural Solar Power Australia conference in Melbourne in February, I emphasised the financial attractiveness of solar energy to investors.

Photovoltaics (PV) is proven technology, respected by financiers all over the world. Its high reliability is crucial to securing funding from banks that always seek a level of confidence that the project they’re funding can deliver the expected return on their investment. PV panels typically carry 20-year warranties, driven largely by financiers who want a known financial performance level over the life of the installation. Banks are very confident when funding solar projects, because of their relatively low investment risk. PV panels are also known to reduce in cost over time, so banks expect to have to make lower capital investments over time in deploying new installations, but with a known and relatively constant revenue stream. They also warm to government initiatives for solar energy. This ensures that the right regulatory, business and consumer framework exists for significant investment into solar energy.

Andrew Cross, National Service Manager, O’Donnell Griffin:

The recent Federal Government decision to cut funds from its Solar Flagships program and other renewable energy projects highlights the commercial industry’s need for greater certainty relating to large-scale PV investments.

For the solar industry to continue developing as a serious power generator, it needs long-term commitment. The cuts have shown how reliant the industry is on government funding.

The good news is that, following the initial $685 million proposed in cuts to the program, the government has announced a softening of cuts to $585 million, after lobbying by the renewable energy industry and the Australian Greens.

The Solar Flagships program is a key component of the government’s $5.1 billion Clean Energy Initiative to assist the development of commercial solar technologies. It aims to provide the foundation for grid-connected solar power to play a significant role in Australia’s future electricity supply.

It appears the impact of the recent funding cuts will have a short-term effect on the ongoing evolution of the high-capacity renewable power generation market, while the long-term prospects still remain high.

At the domestic level, the solar market is booming. O’Donnell Griffin has installed 10,000 domestic rooftop panels nationally on behalf of Origin Energy and, despite the multiplier scheme being wound back, this market sector should remain strong.

The huge take-up of domestic solar systems in Australia has been extraordinary, and in two years it has become a mainstream form of power generation. Commercial solar power generation, on the other hand, is still very limited. We need to encourage a similar transformation.

However, for momentum to be retained in the commercial marketplace, investors need long-term certainty regarding carbon emissions pricing mechanisms before they commit to research and investment. The recent announcement by the government of a future carbon price should demonstrate to business leaders that there will likely be some form of tax on carbon emissions. Armed with this information, large-scale power generators are in a better position to make long-term decisions on expanding Australia’s long overdue power generation capacity.

I believe the large-scale solar PV market will take off. As the government’s carbon emissions policies become more transparent, and the costs of solar technologies decrease, we should see energy producers utilising one of Australia’s greatest natural resources - sunshine.

Cesare Tizi, Gentrack - energy utility software development firm:

The success of Australia’s smart-grid deployment hinges on consumer acceptance. As smart-grid fervour sweeps the globe, the ANZ region’s time as ‘stalwarts of energy retail innovation’ may be ending.

In the US, small-scale smart-meter pilots have been quickly replaced by mass-scale rollouts and more cost-reflective price tariffs. But many of these accelerated rollouts have become case studies in what not to do. In a classic example of ‘putting the cart before the horse’, smart meters were deployed, rates raised and peak pricing introduced with little real consumer education. Few in-house displays or tools were provided, so consumers could neither see nor understand the new implications of their consumption until their next, much higher, bill arrived.

The result is an increasingly litigious customer base, which may be awkward for utilities but financially crippling for retailers operating in competitive energy markets.

A recent IDC Energy Insights review found that in general, US utilities’ preparations for the customer-facing component of the smart grid are woefully inadequate. Seemingly focused on building the smart-grid infrastructure, most aren’t adequately investing in customer education or customer-service strategies.

Locally, electricity retailers are experiencing backlash to perceived utility profiteering from smart meters. In Victoria, where smart-metering deployment was trailblazed, a moratorium on time-of-use tariffs has been called while the impact of the new pricing on already disadvantaged households is better understood.

The lesson from the pioneers is clear. Concerns around affordability, privacy and data security need to be tackled up front if we are to overcome consumer mistrust of this new technology. Ultimately, smart-grid success will depend on the willingness and ability of consumers to participate.

Both retailers and distributors have incentives to get it right. But making such tariffs simple enough for customers to understand and compel them to change their behaviour will be challenging.

In New Zealand, the main players recently came together in an unprecedented move to thrash out what these tariffs should look like, bypassing their US counterparts in collectively agreeing that putting the right IT systems in place first will help create a manageable smart grid.

And while most energy retailers have already evaluated meter data-management platforms, network companies are now realising that they may soon need to make the switch to smart grid-ready platforms.

Indeed, a few progressive New Zealand-based distributors did grasp early on the potential of the smart grid to underpin more targeted demand-response programs. In parallel with smart-meter deployment, they developed a vision for the type of back-office systems they would need to get the most from their hardware investment. As a result, these companies’ billing and CRM systems will not only let them handle the volume of data anticipated and the smart-tariffs required in the future, but also enable them to put customers firmly at the centre of their smart-grid strategies.

Opting to install such platforms before all requirements are known does carry an element of risk. And with smart-grid technology evolving so quickly, the industry knows that setting local standards in concrete now could reduce any future potential to access global developments and cost-of-scale advantages.

Interfaces to new market data hubs, in-home displays, energy management tools, smart appliances and even new metering technologies may have to be developed and redeveloped as the market matures and standards stabilise.

Fortunately, no one has to place their bets just yet. Many utilities have opted for highly configurable and open platforms based on SOA principles, acutely aware that the future success of smart grids will involve continued investment in open technologies. Ultimately, it will be only through ease of integration between back-end smart software/hardware platforms and smart metering and communication technologies that an acceptable return on investment for all stakeholders will be delivered.