eBay OKed for wholesale electricity sales

As customer-sited electric generation becomes increasingly economic, major companies outside the energy sector are entering electricity markets.  Federal regulators this month granted eBay Inc.'s request for authorization to sell electricity at wholesale.  What does this mean?

U.S. wholesale electricity markets are generally regulated by the Federal Energy Regulatory Commission.  Most sellers in those markets are regulated as public utilities - but in recent years, the category of "utilities" has expanded beyond the traditional vertically-integrated utility serving retail customers with electricity.  The growth in this sector has come largely from end-users of electricity who have developed on-site generation to meet their needs - and to sell excess power into wholesale markets.  Recent big-name entries into the wholesale electricity market include Google Inc. and Wal-Mart Stores Inc. - and now eBay.

On September 5, 2013, the Commission granted eBay market-based rate authority.  This approval enables eBay to sell electric energy, capacity, and other products.  As described in the Commission's order, eBay plans to own and operate a 6 megawatt fuel cell generation facility located at its data center in South Jordan, Utah.  In a June 21 filing, eBay described plans to install five natural gas-fueled "Bloom Box" units at the data center to provide power to run the facility. 

eBay's plans bear some resemblance to the fuel cell system Apple developed at its data center in Maiden, North Carolina.  Data centers consume significant amounts of energy, both for processing and for cooling.  In many cases, on-site generation projects offer data centers a way to cut costs while improving their reliability and their environmental footprint.

Maximizing the cost-effectiveness of a distributed generation project requires it to be sized appropriately for the load to be served.  In some applications, there may be little to no excess power available for sale at wholesale to the grid, while other on-site generation projects may be capable of exporting significant amounts of energy to the grid.  With its market-based rate authorization in hand, eBay stands ready to enter the wholesale market with any excess power its Utah fuel cells produce.

Biogas at Apple's NC data center

Continuing to look at Apple's plans for energy supply at its data center in Maiden, North Carolina:

This spring a series of filings by Apple to the Federal Energy Regulatory Commission gave the public some insight into Apple's planned electric generation facilities at the Maiden data center, home to Apple's iCloud service.  (See Tuesday's blog entry for a look at its solar photovoltaic project, and Wednesday's entry for its fuel cell project.)

Fuel cells convert fuels into electricity through a chemical process that does not rely on combustion.  According to one of Apple's filings with FERC, Apple plans to use biogas to power its fuel cells:

The Systems will be fueled with biogas that will be transported via a natural gas pipeline system.  To be injected into the natural gas pipeline system and qualify as pipeline-grade gas, biogas must meet strict heat content and quality requirements.  Consequently, raw biogas must be upgraded (i.e., cleaned and separated to remove components such as hydrogen sulfide, chlorine, and sulfur and to increase methane content) prior to being injected into a pipeline.  Once injected into the pipeline system, it comingles with conventional natural gas and is indistinguishable from conventional natural gas in terms of safety and burning quality.  The biogas, having been upgraded/cleaned to pipeline-quality and then injected into the natural gas pipeline system displaces a comparable quantity of conventional natural gas.
The volume and heat content of the biogas will be measured at a utility-grade meter at the point of injection.  The biogas will then enter the natural gas pipeline infrastructure that has an established balancing measurement system regulated by the Federal Energy Regulatory Commission (Commission).  The biogas will be nominated for the Facility in accordance with the pipeline’s posted business practices and relevant Commission requirements.  Not only the contract and purchase of biogas, but also the nomination process demonstrates compliance with 18 C.F.R. § 292.204 (b).  A utility-grade meter at the Facility will measure actual gas consumption by the Facility.  A revenue-grade meter will measure electricity generated by the Facility.

Furthermore, because the biogas can be upgraded to flow in a pipeline system and nominated for a particular facility, it allows for flexibility in the location of the generating unit.  This flexibility will provide for increased efficiency (operational and maintenance), enhanced reliability, and improved land use. These benefits were recognized by the North Carolina Utilities Commission (“NCUC”).  The NCUC ruled that biogas fuel, which is derived from a renewable energy resource, cleaned to pipeline quality, injected into the pipeline system and nominated for an electric generation facility within the state of North Carolina, is a renewable energy resource known as “Directed Biogas” (NCUC Order Issued March 21, 2012, in docket SP 100, Sub 29). 

This Facility is in keeping with the stated reasons for the implementation of the Public Utility Regulatory Policies Act of 1978 (PURPA), specifically the increased conservation of electric energy, increased efficiency in the use of facility and resources by electric utilities, and the conservation of natural gas.  In the case of this Facility, the use of biogas, which displaces conventional natural gas, to generate electricity will reduce greenhouse gas emissions and smog forming pollutants while also diversifying the fuel used to generate electricity.  The Systems that make up this Facility consume less fuel and produce less CO2 than other technologies.  Each System emits less than 0.07 lbs/MW-hr of NOx , negligible SOx, less than 0.10 lbs/MW-hr of CO and less than 0.02 lbs/MW-hr of VOC.  Additionally, the Systems require very little water, with an average usage of approximately 0.00001 gallons/kWh. The low carbon footprint, de minimus criteria pollutants, small land use and negligible water use, make this Facility a prime example of an initiative that furthers the Commission’s stated goal of increasing renewable energy and investing in environmentally beneficial technologies.

Apple's Maiden, NC fuel cell project

Following on yesterday's look at Apple's planned solar photovoltaic system for its Maiden, North Carolina data center, here's a look at the fuel cell project Apple is also planning the Maiden facility.

A public filing Apple made last month to the Federal Energy Regulatory Commission describes the Maiden data center's proposed fuel cell system.  The filing represents Apple's self-certification that the fuel cell project meets the standards of the Public Utility Regulatory Policies Act (PURPA) of 1978 as a "qualifying facility", setting the facility up for incentives that could include the right to require Duke Energy Carolinas to buy its output.

Apple's fuel cell self-certification filing, docketed by FERC as QF12-327, describes the project:

The Facility will consist of 24 fuel cell systems (“Systems”) using a patented solid oxide fuel cell technology to generate electricity.  A single fuel cell consists of an anode, a cathode and an electrolyte placed between the two electrodes.  As fuel flows in through the anode side and an oxidant comes in over the cathode, a reaction is triggered that causes electrons to move into the fuel cell’s circuit, producing electricity.

Each System consists of thousands of fuel cells stacked together.  Multiple stacks are aggregated together into a "power module", and then multiple power modules, along with a common fuel input and electrical output are assembled as a complete system.  Each System is approximately the size of a standard parking space and will produce approximately 200 kW of power.  The Systems have a modular design that allows the simultaneous use of multiple Systems in order to achieve the desired electric generation output.  Each 200 kW (AC) System is comprised of six individual direct current (DC) power-producing modules and one input/output module for fuel intake and electricity output.  Each of the six individual DC power producing modules is feeding electricity to the input/output module which converts the DC power into the systems AC power output.  The combination of six DC modules and one input/output module comprise a 200 kW (AC) all-electric System.  Each System has a net baseload generating capacity of 200 kW (AC).  The total generating capacity of the Facility will be approximately 4.8 MW (AC).

The "patented solid oxide fuel cell technology to generate electricity" in this description is reported to be Bloom Energy's Bloom box technology.

Tomorrow, a look at the innovative fuel Apple proposes to use to power these fuel cells.

Apple's Maiden NC solar project

As Apple continues to develop a data center to handle its iCloud service, some details are emerging about the energy infrastructure to be built at the Maiden, North Carolina facility.  Two public filings Apple made last month to the Federal Energy Regulatory Commission describe the Maiden data center's solar photovoltaic and fuel cell systems.

Under federal law, certain efficient or renewable electricity generation facilities can certify themselves as "qualifying facilities" or QFs.  The Public Utility Regulatory Policies Act (PURPA) of 1978 required monopolistic electric utilities to buy power from QFs, as long as that cost was less than the utility's own "avoided cost".  Generally, a utility's avoided cost is the cost of the power the utility would have procured from a source other than the QF in question.  This policy was intended to improve the efficiency of the nation's fleet of electric generation, as lower-cost QFs displaced more expensive traditional utility generation.

In April, Apple submitted two filings to FERC certifying its planned Maiden solar and fuel cell systems as QFs.  These documents provide additional insight into Apple's plans.

In its solar photovoltaic project self-certification, docketed by FERC as QF12-328, Apple described the project:

Each of the photovoltaic installations will consist of multiple 435-watt photovoltaic modules on ground-mounted single-axis tracking systems. The current design includes 57,360 435-watt modules. The modules will be connected in series strings of 10 to achieve the appropriate DC voltage. The modules will track the sun by rotating about a north-south axis. At the current time, we expect 14 photovoltaic installations will make up the solar farm: ten 1.50 MW installations and four 1.25 MW installations. The final number of installations and modules will depend on detailed design considerations in consultation with the utility, the photovoltaic system provider, and local permitting authorities. Each installation will be connected to two 750 kW or two 625 kW inverters. Inverters will convert the DC current produced by the systems to AC current. A step up transformer is installed between the inverter outputs and the point of connection to Duke's distribution system. Each installation has a dedicated transformer. The photovoltaic installations will be installed in a phased manner, whereby the installations will be interconnected as they are completed.

Check out tomorrow's blog entry for a look at Apple's biogas fuel cell facility.

April 12, 2011 - Google invests in Ivanpah solar

Google has committed $168 million in funding for what might be the world's largest solar project, proposed for construction in California's Mojave Desert.

Water spills over a dam near a paper mill on a river in Maine.

This story ties together several threads that run through this blog.  In February 2010, I wrote about the 392 MW Ivanpah solar project, and how it benefited from $1.6 billion in Department of Energy loan guarantees (the same program now at risk of being cut from the federal budget).  If built as proposed by developer Bright Source Energy, the large solar thermal project would the world's largest solar complex, featuring up to three thermal generation units.  Coincidentally (or not), that same day I followed up on an earlier look at Google's nascent interest in energy markets after it obtained market-based rate authority from the Federal Energy Regulatory Commission.

In the ensuing months, Google has emerged as a sophisticated player in the energy world - investing in underwater transmission infrastructure to connect regions and support ocean energy projects, buying power directly from a wind project, investing in fuel cell research and development, and promoting real-time electricity pricing and programs.  Now, Google can add an investment in utility-scale solar thermal projects to its portfolio.

Meanwhile, the fate of DOE's loan program remains uncertain; reports suggest that the energy portion of the budget is still being finalized, with a vote possible as early as Thursday.

2/24/10: some news from Maine

Maine roundup for today

The announced closure of the Bumble Bee sardine cannery in Prospect Harbor continues to be troubling. 128 jobs to be lost. Governor Baldacci says the state will help find a new business, and could designate the cannery as a Pine Tree Zone, allowing the new owner to be exempt from 80% percent of its employee tax withholding for the next 10 years.

Tissue manufacturer Lincoln Paper and Tissue forecasts 2010 as a moderately successful period of no major investments or substantial new hiring. LP&T's CEO Keith Van Scotter has considered switching the fuel for its steam boilers from No. 2 heating oil to natural gas, but can't do so without help from state or federal government.

Landfill gas to energy: the City of Old Town, University of Maine, and Casella Waste Management have requested $3 million in federal stimulus funding to construct a 6-mile gas pipeline allowing gas from the Juniper Ridge Landfill (operated by Casella on behalf of the state) to flow to the steam plant at the university. Phase I consists of building the pipeline and upgrading the steam plant, and would significantly reduce carbon dioxide emissions. Phase II involves building an electricity generating facility connected to the landfill by a second pipeline. These plans are tied into the nascent Maine Green Energy Alliance, an entity owned by Casella that aims to generate electricity and sell it directly to participating municipalities like Old Town. Landfill gas remains somewhat contentious, with some opposing the project on environmental and fiscal policy grounds.

Maine does have experience with the Pine Tree Landfill in Hampden, also operated (and owned) by Casella. The $10 million Pine Tree Landfill gas project commenced operation in 2008, and is projected to produce enough methane gas to power up to 3,000 homes for 15 years or more. In 2009 a similar project was launched at the Crossroads Landfill in Norridgewock.

Bangor Daily News editorial yesterday lauding Eastern Maine Electric Cooperative (EMEC) for its customer-oriented culture and low prices, noting that the customer-owned utility cut power prices by 10% last year. The editorial is careful not to bash investor-owned utilities, but hints that their profit-to-shareholder motives may result in worse rates or service than customers can get from coops like EMEC.


Elsewhere:

Bloom boxes unveiled. Lots of buzz still, relatively few details. We have learned that commercial-scale units cost $700,000 to $800,000, and that five Bloom Energy Servers deployed by EBay last July produce electricity to power space for 2,000 to 3,000 employees and cut eBay's power bill by $100,000 so far. Interestingly, EBay uses natural gas as the fuel, but plans to convert to landfill gas soon.

Iberdrola anticipates profit growth over the next three years.

The Senate continues to wrestle with the carbon bill, with carbon pricing remaining as the sticking point. Cap and trade? Cap and dividend? Carrot and stick?

2/22/10

As expected, the federal Surface Transportation Board has received the Montreal, Maine & Atlantic Railway's notice of intent to abandon 233 miles of track in Maine, from Madawaska to Millinocket. Even though this line serves about 20 industrial freight customers, the Railway says it has been losing $4 million to $5 million a year through operating the lines because freight revenue has fallen. The typical freight shipped on the line includes lumber, plywood, logs and wood chips have fallen, all of which are in low demand given the slump in the housing market. If the rail is abandoned, it could cost 750 jobs as increased transportation costs would lead the region's manufacturers to scale back production.

Iran is choosing sites for uranium enrichment plants, claiming it wants civil nuclear power, not weapons.

Distributed generation gets a policy boost, with a finding that widely-adopted rooftop solar might be easier to develop than utility-scale solar arrays, due to the challenges of siting larger projects.

Much buzz today over Bloom boxes, distributed fuel cell arrays about to be announced. Bloom Energy, which raised $400 million in venture capital, holds a press conference on Wednesday at which it is expected to unveil its products. Interestingly, Google already has a 400 kW array in beta-testing operation.

Speaking of Google, FERC granted Google's market-based rate authorization. As someone who works with FERC's market-based rate structure, having filed a number of petitions myself, it is interesting to me to see how the media reports this: as enabling Google to purchase low-cost power. Surely we all want to purchase low-cost power -- what would it take to enable us all to purchase power at market-based rates? Most people would qualify -- no market power, etc.

Some question whether Energy Star really means much for appliance efficiency.

The administration's pro-nuclear news of last week continues to resonate, as Texas evaluates whether proposed new reactors there will receive similar government support.

Six Maine school and university oil-to-wood heating projects will receive more than $3.2 million in federal Recovery Act funds managed by the Maine Forest Service. The Presque Isle office of the University of Maine Cooperative Extension was awarded $16,575 for installation of a pellet boiler to replace the current oil boiler, displacing 1,850 gallons of fuel oil. (The existing boiler is around 10 years old -- are we incenting inefficient replacement of newer equipment while older, less efficient facilities remain?) Overall this project costs an estimated $40,169, with the remainder of the project funded by the Maine Economic Improvement Fund. Regional School Unit 29 in Houlton was awarded $750,000 for conversion of an oil boiler to a wood chip boiler at Houlton High School, displacing 65,000 gallons of the 85,000 gallons of fuel oil used annually by the district. The district uses about 85,000 gallons of oil a year, according to the superintendent. Here, the district will keep its oil boiler, but will rely on the new boiler for heating. Other winners are Oxford Hills High School, the Greenville School Department, Phillips Middle School and Poland Middle-High School. Maine Forest Service Director Alec Giffen said the six projects collectively “will annually avoid the burning of almost 263,000 gallons of oil, recirculate $600,000 in fuel dollars in the Maine economy, and avoid more than 5 million pounds of emissions from fossil fuels.”

More Maine stimulus: EECBG grants to central Maine communities.