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LCOE map produced by UT Austin

How Does Geography Figure Into the Full Cost of Electricity?

graphic link to the landing page for The Full Cost of Electricity

Not all power plants are the same. They certainly don’t cost the same to build or operate. But what if I told you that one number, dubbed the levelized cost of electricity (LCOE), puts it all into black and white for decision makers: This plant’s electricity is cheaper than that one’s, or it isn’t.

LCOE is the estimated amount of money that it takes for a particular power plant to produce a kilowatt-hour of electricity over its expected lifetime and is typically expressed as cents per kilowatt-hour or dollars per megawatt-hour.

LCOE makes it easy to decide which plant to build if you’re a utility or a governing agency. Except that LCOE misses a few important location-based factors, such as fuel delivery costs, construction costs, capacity factors, utility rates, financing terms, and other geographically distinct items that contribute to the cost of a kilowatt-hour.

Despite these shortcomings, LCOE has become the de facto standard for cost comparisons among the general public, policymakers, analysts, advocacy groups, and other stakeholders. One number is readily understood, easily bandied about, and even more easily compared to any other number.

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Photograph of Edison bulbs

Calculating the Full Cost of Electricity—Know Your History

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For decades, scale economies associated with large, centralized, electricity generation technologies encouraged vertical integration. It also drove down the cost of electricity, fostered universal access, and provided for reliable electric service delivered by a single utility in a given region. That practice gave us the now traditional, vertically integrated, electric utility model.

diagram of linear electricity flow from utility to consumer in traditional utility model
Illustration: UT Austin/IEEE Spectrum
This simple diagram depicts an example of the traditional one-way structure of the vertically integrated utility business model. Electricity flows one-way: from utility to consumer.

From its beginning, the U.S. electricity industry emerged as a function of technological advancements, economies of scale, effective financial and regulatory structures that fostered capital investment, and new electric-powered loads. Over the course of a century, there have been successive waves of change in generation, transmission, distribution, market design, and industry regulation. While we expect electricity to continue to be an essential public good, and large-scale, centrally generated electricity to continue to be essential, we also expect traditional utility business and regulatory models to experience enormous stress for three primary reasons.

First, consider the continued development of more cost-competitive and lower-emission centralized generation such as wind farms, utility-scale solar, and natural gas–fired combined-cycle power plants. Traditional thermal generation technologies such as coal and nuclear are being challenged by new generating technologies that are more efficient, flexible (ramping), and modular (scalable). These newer technologies also offer lower emissions, shorter development times (two years for a solar farm versus 10+ years for nuclear plant), and potentially little to no fuel costs (free wind and sun).

Add in advancements in distributed energy resources (DERs) such as photovoltaic (PV) generation and storage.

Last but not least, changes in load patterns from energy efficiency, demand response, and customer self-generation add stress to generating and delivery resources owned and operated by traditional utilities.

This last item—self-generation—is potentially the biggest threat, as it goes against both the traditional utility business model, as well as the competitive market structure as it exists today. The good news? There are are many new alternative combinations of markets, regulations, and technologies possible (illustrated below). The Full Cost of Electricity (FCe-) study coordinated by the Energy Institute at the University of Texas at Austin explores them in its myriad white papers. (IEEE Spectrum is posting blogs from the UT researchers and linking to the white papers as they are released.)

21st century electricity systems have the potential for multiple pathways for money and electricity flow back and forth between consumer and utility.
Illustration: UT Austin/IEEE Spectrum

The transition to a new electricity system structure can be complex. Like all transitions, it can introduce considerable uncertainty into an industry that has traditionally eschewed change, remained fairly stable, and clung to long-held incentives to be conservative so that it can meet its obligation to serve the public good.

These and other technological changes will continue to encourage the industry to adopt new technology and business models, spur policy makers to consider alternative regulatory and electricity market structures, and make electricity customers interested in pursuing self-generation that competes with traditional utilities in ways that may further destabilize the existing order.

The FCe-: History and Evolution of the U.S. Electricity Industry white paper [PDF] describes many of the most important, interrelated, and changing technoeconomic, finance, and policy factors that have affected the electric grid over the past century. If history is any guide, they will likely continue to influence the evolution of electric service and the grid this century.

David P. Tuttle is a research fellow at the University of Texas at Austin Energy Institute.

Huge grey pipe on supports winds its way between two parts of the Petra Nova carbon capture facility in Houston

New Projects Show Carbon Capture Is Not Dead

Carbon capture and storage (CCS) has had a hard time finding love. The technology is easy to dismiss because of its expense. It’s too green for those on one extreme, too tied to fossil fuels for others, and largely misunderstood by those in the middle.

The demise of the U.S. project FutureGen and then German energy producer Vattenfall’s decision to shut down its CCS operations in 2014 was a low point for CCS. But a rash of new projects are proving the technology is surviving and—depending on the policies of the incoming Trump administration—it may even be headed for a turning point.

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Liu et al./Science Advances

Flame Retardant in Lithium-ion Batteries Could Quench Fires

A powerful flame retardant added to lithium-ion batteries that only gets released when the devices get too hot could help keep them from catching on fire, a new study finds.

When lithium-ion batteries overheat, they can burn through clothing, burst into flames and even explode. Such "thermal runaways" have led some engineers to explore the creation of lithium-ion batteries with their own fire alarms or chemical additives that can prevent short circuits.

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Illustration of lightbulb with dollar sign filament

Calculating the Full Cost of Electricity—From Power Plant to Wall Socket

graphic link to the landing page for The Full Cost of Electricity

The Full Cost of Electricity is an interdisciplinary initiative of the Energy Institute of the University of Texas to identify and quantify the full-system cost of electric power generation and delivery—from the power plant to the wall socket. Its purpose is to inform public policy discourse with comprehensive, rigorous, and impartial analysis.

The generation of electric power and the infrastructure that delivers it is in the midst of dramatic and rapid change. Since 2000, declining renewable energy costs, stringent emissions standards, competitive electricity markets, and a host of technological innovations—coupled with low-priced natural gas
post-2008—have combined to change the landscape of an industry that has remained static for decades. Heightened awareness of newfound options available to consumers has injected yet another element into the policy debate surrounding these transformative changes, moving it beyond utility boardrooms and legislative hearing rooms to everyday living rooms.

The Full Cost of Electricity (FCe-) study employs a holistic approach to thoroughly examine the key factors affecting the total direct and indirect costs of generating and delivering electricity. As an interdisciplinary project, the FCe- synthesizes the expert analysis and different perspectives of faculty across the University of Texas at Austin campus, from engineering, economics, law, and policy.

In addition to producing authoritative white papers that provide comprehensive assessment and analysis of various electric power system options, the study team developed online calculators that allow policymakers and other stakeholders, including the public, to estimate the cost implications of potential policy actions. A framework of the research initiative, and a list of research participants and project sponsors are also available on the Energy Institute website.

To introduce the FCe- study and associated white papers to our EnergyWise audience, IEEE Spectrum is posting blogs from the team from now through April as each white paper is released and hosting all of this material on a special FCe- project page. Interactive calculators and other tools developed as part of the study will be linked so that readers can do their own calculations and add to the discussion. We hope the debate is lively over the coming months. 

Carey W. King is the assistant director and a research scientist at the University of Texas at Austin Energy Institute.

Disclaimer: All authors abide by the disclosure policies of the University of Texas at Austin. The University of Texas at Austin is committed to transparency and disclosure of all potential conflicts of interest.  All UT investigators involved with this research have filed their required financial disclosure forms with the university. Through this process the university has determined that there are neither conflicts of interest nor the appearance of such conflicts.

WattTime feeds EV chargers real-time intel on a power grid's ever-shifting carbon footprint

WattTime, the Tool That Tells You When to Charge Your EV to Keep It Green

Gavin McCormick’s attendance at an EcoHack in San Francisco ultimately sidetracked his doctoral studies at the University of California, Berkeley, but for a clean cause: software initiated at the 2013 event has transformed the budding economist’s nascent research into a potent tool for squeezing the cleanest performance out of power grids. Real-time algorithms from WattTime, the Berkeley-based nonprofit that McCormick cofounded and runs, are telling electric vehicle owners when to charge to minimize their carbon footprints and predicting which renewable power projects will deliver the biggest CO2 emissions reductions. 

WattTime tracks swings in carbon dioxide emissions as a grid’s power supply mix shifts from minute to minute. Its intelligence, explains McCormick, comes from mining two datasets. The first is power market data. Algorithms trained on that data enable WattTime to predict what power plant will ramp up to meet new electrical demand at any moment in 106 markets across the United States. 

WattTime turns that ‘marginal’ power supply prediction into an estimate of ‘marginal’ carbon impact by plumbing an underused database from EPA’s Air Markets Program. That database contains hourly records of pollution and fuel consumption for every U.S. power plant. “It’s been around for about 40 years and no one was paying attention to it,” says McCormick.

The resulting estimate of CO2 per kilowatt-hour can be strikingly different from a grid’s average emissions intensity—the most commonly used metric for evaluating power consumption. A grid delivering 90 percent nuclear or renewable power, for example, will have very low average emissions. But WattTime can spot when such a grid is ramping up a carbon-spewing coal plant to meet additional demand, and thus has very high marginal intensity.

WattTime is partnering with manufacturers to empower consumers to make cleaner choices. For example, a line of EV chargers from San Carlos, Calif.–based Electric Motor Werks communicates with WattTime when a car is plugged into the charger and then schedules charging to deliver the greenest fill possible.

eMotorWerks claims its JuiceBox Green can cut CO2 emissions by up to 60 percent relative to conventional EV chargers. In fact, analysis by WattTime suggests that chargers designed to optimize for price, rather than emissions, can actually increase carbon emissions (see graph).

Canadian smart thermostat provider Energate, meanwhile, is looping in WattTime’s intelligence to time electric heating and air conditioning for minimum carbon emissions. A pilot of the devices is underway in Chicago. Two more partnerships are in place and “many others are kicking the tires” says McCormick, including energy storage system firm Advanced Microgrid Solutions.

These devices turn the tables on power supply, enabling consumers to essentially game the grid and help keep the highest carbon power sources from ramping up—or even from turning on in the first place. WattTime guarantees at least a 5 percent reduction in emissions. But McCormick says it can deliver up to a 100 percent reduction in some locations such as Hawaii, where curtailed solar power is often the marginal power supply.

WattTime’s next big play is targeting the installation of clean energy. Their algorithms can predict where deploying solar and wind farms to regions are likely to displace the dirtiest fossil fuelled power plants.

WattTime is already providing such advice to corporations investing in renewable power, via the Rocky Mountain Institute, a Boulder, Colo.–based energy think tank. However, McCormick says dramatically shifting investment trends will require an overhaul of carbon accounting schemes, which mostly certify carbon reductions based on grid averages. 

Within six months they hope to achieve a first breakthrough, gaining acceptance for marginal intensity accounting by the Greenhouse Gas Protocol—the leading global carbon accounting standard. McCormick says their petition is, like his nonprofit’s mission, about leveraging marginal emissions data to drive cleaner use of electricity, rather than advancing their proprietary system: “We want them to accept anyone with technology like ours.”

Sacramento Eco Fitness cyclers pedal on SportsArt's ECO-POWR spinning bikes

Are Stationary Bikes that Generate Electricity Making a Comeback?

On 18 December, a new gym opened in downtown Sacramento, California. When its members attend a cycling class, they’ll be riding on expensive exercise bikes that generate electricity, help reduce carbon dioxide emissions, and maybe give them some motivation for pedaling harder.

The Sacramento Eco Fitness gym estimates that it will recover the approximately US $26,000 price tag for its 15 eco-cycles in one year.

Yet in a 2011 IEEE Spectrum feature, mechanical engineering consultant Tom Gibson estimated that a human can only generate about 50 to 150 watts of electricity during an hour of cycling—hardly enough to power a gym. He concluded that electricity-generating bikes were a “marketing gimmick” and that it would take “decades” for gyms to recuperate the initial investment.

Eco Fitness founder José Aviña sees things a little bit differently. “We want [our members] to be proud of the hard work they put in every time they show up to cycle,” he writes in an email.

The 15 electricity-generating bikes come from SportsArt, which began operations in Taiwan in 1978.

The ECO-POWR SportsArt bikes look similar to traditional bikes, but something changes when you plug them into a 120V wall outlet and start cycling. First, an internal generator produces low-voltage AC from the pedaling motion. The voltage is then boosted to a higher level and converted to DC. Then it’s converted to a 60-hertz AC waveform and filtered. Any surplus electricity left after powering the bike—about 74 percent of it—can go back to the power grid.

The extra tech does come at a price: SportsArt bikes can be more expensive than some traditional models. The SportsArt ECO-POWR cycles and elliptical machines range between $2,795 and $7,395 list before bulk discounts, according to a commercial pricing sheet from SportsArt. The G510 spinning bikes that Eco Fitness uses cost about $1,700 each ($2,795 list), but Aviña says he could have gotten the competing Sole Up-Right Cycle on sale for $1,299 (regular $1,799) before sales tax with free shipping.

He decided to purchase the SportsArt ECO-POWR bikes because they include an app that tracks how many watts a cycler generates. The app lets cyclers compare their gym’s wattage output to the output from other gyms in Europe, Asia, and Canada.

He thinks this knowledge will drive gym members to compete and work harder. And in terms of cost—he thinks there are several things that will let the gym get its money back.

He admits that yes, membership fees are higher. Eco Fitness costs at least $80 per month, and he says that while it’s cheaper than nearby boutique gyms that charge $150 or more, big-box gyms as close as 2.5 kilometers away have “much lower” membership costs.

But he still thinks the electricity from the bikes would go a long way towards the gym’s sustainability strategy, because for safety the city of Sacramento would require a permit for installing solar panels and there is limited roof space even if panels were approved.

The facility will offer three 45-minute cycle classes a day for 12 people. He estimates each class would produce a surplus between 400 and 800 watts during that period as long as everybody puts in similar effort. That would be almost enough to cover the coffee machine, two LED TVs, and two laptops.

He says that besides a 24-hour streelight outside the building, the gym keeps its electricity usage low. The building has a skylight: which reduces the need for artificial light. It isn’t open 24 hours, and staff members unplug tech and exercise machines when they’re not in use. During winter or summer months the gym would need to use AC or a heat lamp, but the gym could offset these needs with solar panels in the future.

SportsArt vice president Ivo Grossi says the company targets mid-size boutique gyms because they can are willing to test innovations. Big chains—such as Crunch or Life Time—wouldn’t go for a product like the SportsArt bikes yet. “We’ll get there,” he says.

Grossi says that the bikes are in the same range as products by Life Fitness, Matrix Cardio, and Precor—the “cost is the same” as a “top-notch” commercial bike. SportsArt does this by sacrificing a 6 to 8 point margin on gross profits.

BeachFit, a small chain in the United Kingdom, has three facilities with SportsArt ECO-POWR bikes. The gyms are analyzing the exact energy effects of the SportsArt bikes, but owner Paul Crane says energy bills have gone down and membership has increased—particularly among 20-30 year olds—since the newest facility opened in Lancing, West Sussex in June 2015.

The BeachFit gyms have a membership fee of about £30-35 ($40-$45) per month. They are encouraging members to sign up by offering an incentive: for every 500 watts of electricity a member contributes they get a 5 percent discount on the membership fee, up to 20 percent off.

“At the moment, the energy produced is small,” Crane says, “but it’s making a difference.”

Greg Kremer, a mechanical engineer at Ohio University who works on human-powered vehicles, writes that although there have been some technological advancements in efficiency, output electricity is always limited by human input, the bike’s power requirements, and any energy losses of the power-generating equipment. He also writes that “utilization rates of exercise equipment vary over time of day and season, but are much lower on average than most people would like to admit.”

“If you want to save energy and get exercise,” he writes, “ride a bike or walk to work or school—you get the exercise, and the energy use is directly avoided. [That’s] real savings.”

A view of Ascension Island from a GoPro attached to a UAV

Drones Take to the Skies to Screen for Methane Emissions

When you think of greenhouse gas emissions, you might be thinking of carbon dioxide—but methane is another significant contributor to warming that’s on the rise. Sources include large grassfires, leaking natural gas wells, natural wetland processes, belching cows, or even farting termites. But the relative contribution of each of these sources to Africa’s methane mix has been hard to track. And that’s important data to have, because the tropics account for 40 percent of global emissions. Last month, researchers report in Geophysical Research Letters, that a drone on a remote tropical island may solve that mystery.

The magic of Ascension Island, located in the middle of the South Atlantic, is the way the air flows, says Rebecca Brownlow, an atmospheric science Ph.D. student at Royal Holloway, University of London. Above about 1.6 kilometers from sea level, the air is coming straight from southeast Africa. Below it is the South Atlantic’s mix. Subtracting that from the African air gives a good sense of how much methane is generated in Africa. And the best means of making those measurements is with a high-flying drone.

“There was no other way to take these samples and to make these measurements,” says Rick Thomas, an atmospheric scientist at the University of Birmingham in the United Kingdom. Existing methane ground monitoring stations in Africa can’t discern region-wide effects, because they can’t tell how methane would end up mixing in the atmosphere.

But at this sweet spot on Ascension Island, called the trade wind inversion, drones can do the job. Scientists have tried several technologies to go above the trade wind inversion. Satellites are not accurate enough to identify the sources of methane, balloons are too time-consuming, towers are too short, and airplane flights are too expensive, the researchers say.

Drones have already been deployed to monitor methane from landfills in the UK as well as gas leaks in the United States. But the tropics are understudied, Brownlow says.

The researchers built their own drone for the Ascension Island job. They made the air-frame from carbon-fiber tubing and loaded it with a 32,000 milliampere-hour, 6-cell Lithium polymer battery. The drone carried a Tedlar plastic bag and a pump to capture and store atmospheric gases. Although CO2 can escape the bag, methane molecules are too large to leak out, Thomas says.

After launch, a computer guided the drone during its climb—as high as 2,700 meters—to get above the trade wind inversion. Ground controllers knew it had reached the inversion when the temperature went up and humidity dropped. They then signaled the drone to start pumping air into the bag.

The drone collected one or two samples at different altitudes, four to five times a day for about 20 minutes. The researchers swapped out batteries in-between flights.

Besides being atmospherically ideal for methane measurements, another advantage to Ascension was that its remoteness made it much easier to get clearance from authorities to fly at high altitudes than in a densely populated or high-air-traffic area, says Thomas. The drone only flew when there were no other flights that could interfere; the island’s government helped coordinate emergency services and logistics (such as closing a road), and the team always communicated with air traffic control.

Still, controlling for external factors when the drone was out of sight was difficult. “There’s a step change in the complexity of dealing with a platform when you can’t see it,” he says.

When the drone returned with the samples, the researchers analyzed the carbon atoms inside with a mass spectrometer. Different methane sources emit methane containing different carbon isotopes, so the researchers expected that during Africa’s peak biomass-burning season, the ratio of isotopes would indicate a clear signal of grass-fire burning.

Oddly, the ratios of carbon isotopes suggested that none of the methane sources—whether fossil fuels, swamps, or cow flatulence—was an overwhelming contributor. Thomas says this lack of distinguishability simply signifies the need for additional measurements.

Damien Maher, a biogeochemist at Southern Cross University in Lismore, New South Wales, Australia, characterizes greenhouse gas emissions. He was not involved in the study, but writes in an email that it’s important to characterize the greenhouse gas sources in order to correctly target emission reductions.

He writes that several groups are working on using drones. The technology still requires collecting samples and measuring with high-precision instruments on the ground; there are no sensors for measuring methane concentrations and the carbon isotope ratios small enough and lightweight enough to mount on a drone.

In the future, Thomas hopes to make longer term measurements and to add more automation to the drone.

Photo of a Lego model of the Danish island of Bornholm

How a New Middleman Might Help Balance Electricity Grids

A few years ago almost two thousand bold households on the Danish island of Bornholm joined a surge pricing experiment run by their electricity utility. It was supposed to empower the utility and consumers with a simple, direct market (“The Smartest, Greenest Grid,” IEEE Spectrum, April 2013).

The EU-funded project, called EcoGrid, won widespread buy-in from residents, who could also earn small payoffs when they reduced demand.  Yet researchers reported last year that they could reduce demand by only 1.2 percent of peak load, despite early predictions of up to 20-percent reductions for so-called virtual power plants. The market model was missing something.

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Smoke pouring from smokestacks

ARPA-E Under Trump

Since the surprise victory of Donald J. Trump on 8 November, the future of United States’ leadership in the emerging clean energy industry has been a subject of speculation. As a climate change doubter and outspoken advocate of the coal and oil industries, the president-elect’s energy policies will undoubtedly represent a bold departure from those of the Obama administration—the most clean-energy-friendly presidency in history. But just what the new president-elect’s energy policies may be and how and when they come into force remains unclear today.

One of the Obama administration’s chief instruments for supporting advances in clean energy has been the Department of Energy’s tech incubator, the Advanced Projects Research Agency-Energy (ARPA-E). As a recent overview report notes, since 2009 ARPA-E has provided $1.3 billion in funding to more than 475 projects in next-generation batteries, grid operations, power electronics, and clean energy. These projects have to date resulted in 36 new companies, and $1.25 billion in publicly-reported, follow-on funding from the private sector. Yet the mandate and perhaps even continued existence of ARPA-E under President Trump is still an open question.

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