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IEDA Industrial Energy Programs Iowa EDGE and CHP Policy Academy April 23, 2013 1.

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Presentation on theme: "IEDA Industrial Energy Programs Iowa EDGE and CHP Policy Academy April 23, 2013 1."— Presentation transcript:

1 IEDA Industrial Energy Programs Iowa EDGE and CHP Policy Academy April 23,

2 Agenda  IEDA Energy Team and Focus Areas  Why Industrial Energy and Water Use in Iowa Matters  EDGE Industrial Recognition Program  Combined Heat and Power Initiative 2

3 Iowa State Energy Office 3  Housed at the Iowa Economic Development Authority  Formerly the Iowa Office of Energy Independence  Small Team- 7 team members  Focus Areas  Energy Efficiency (Public and private sectors)  Renewable Energy  Biomass and Biofuels  Public policy

4 IOWA EDGE 4

5 Industrial Energy Use 5

6 Industrial Energy Use Trend 6

7 Energy Consumption by Sector 7

8 Case for Energy Efficiency  Keep money in local economy  In Iowa, for each $1 million invested in energy efficiency:  25 job years created  $1.50 of additional disposable income per $1 invested  Improve economic competitiveness  Meet environmental goals 8

9 9 Case for Energy Efficiency

10 A New Approach to Energy Assistance PASTFUTURE Intent:Save energyCareer development Audience:Engineer/facilitiesMulti-disciplinary Focus: Boiler roomBusiness needs Product:ProjectsBusiness solutions Dynamic:Program PUSHProgram PULL Perception:DistractionOpportunity Source: Christopher Russell, ACEEE 10

11 EDGE Focus on Energy Management  Enhance an industry’s energy management approach through the following:  Evolve from PROJECTS to SOLUTIONS, from EPISODES to RELATIONSHIPS  Groom proactive leadership so that energy management can grow at member organizations  MONETIZE energy outcomes to harvest income from waste 11

12 EDGE Program Objectives  Create a highly visible recognition program that recognizes industries that have undertaken significant energy efficiency initiatives to reduce energy and water usage.  Make significant progress in reducing energy and water consumption and greenhouse gases by bringing process efficiencies to Iowa’s industrial and manufacturing plants and encouraging forward-thinking design for new industrial construction. 12

13 EDGE Program Outcomes  Recognize the energy and water efficiency achievements of industrial organizations through an ongoing goal setting and utility tracking process  Increased coordination with state and federal energy resources  Through efficiency gains, improve business competitiveness to retain and create jobs in Iowa 13

14 EDGE Advisory Committee  Iowa Association of Municipal Utilities  Office of Consumer Advocate  Department of Natural Resources, Pollution Prevention Services  MidAmerican Energy  Alliant Energy  Other members such as Black Hills Energy, Iowa Energy Center, Iowa Assessment Center etc. 14

15 Company Selection Process  Market to companies with total utility bills of $500,000 or more per year (Some flexibility built-in)  Target energy reduction of 2% or higher per year  Companies should commit to establish or maintain green team/energy team  Diverse geographic & industry profile 15

16 IEDA’s EDGE Assistance  Technical Assistance  Energy Management 101  Green Team/Leadership  Baselining Energy & Water  Federal Energy Efficiency Programs & Resources  Resources for Energy& Water Audits  Financial Assistance  State and Federal financing options  Utility financial assistance- rebates, custom incentives  3 rd party financial assistance  Project Implementation Support  One-on-one assistance  Case studies- development and dissemination  Hold peer networking events 16

17 EDGE Financial and Technical Support Team  EPA Region 7  Pollution Prevention Grant  EPA Better Plants Challenge  Department of Energy 17

18 EDGE Timeline and Milestones  Q1 & Q2 (2013)  Recruit 10 companies  Hold kick-off event  Begin baselining and goal setting process  Q3 (2013)  Companies begin work towards goals  Q1 (2014)  Recruit 10 more companies  Orientation for second set of companies  Q3 (2014)  Recognition event for 10 original members  Q  Document results and close EPA grant  Webinars/workshops and peer networking (ongoing, schedule TBD)  Ongoing cycle of goals and recognition for all participants 18

19 1 st Workshop Upcoming  Title: Energy Management Workshop  Time: April 11, 10 a.m. to 3:30 p.m.  Location: Iowa Association of Municipal Utilities  Invited Speakers:  Bruce Bremer, Former Toyota Corporate Energy Manager, EPA ENERGY STAR consultant  Brad Runda, Corporate Energy Manager, Saint Gobain  Joanne Howard, Energy and Climate Strategy Manager, Deere & Company  Open and free to industrial representatives. 19

20 Contact 20 Shelly Peterson, Iowa EDGE Project Manager

21 NGA’s CHP Policy Academy 21

22 Background The Policy Academy on Enhancing Industry Through Energy Efficiency and Combined Heat and Power focused on hosting senior-level policy advisors to identify cost-effective strategies, design new policies, programs and other measures, structure financing and funding options, and explore outreach, education and training techniques. 22

23 Process  Iowa Utilities Board (IUB) and Iowa Economic Development Authority (IEDA) submitted a joint application to the National Governors Association.  Iowa was selected along with four additional states including Illinois, Arkansas, and Alabama. Tennessee was later added on to the Policy Academy.  Two national convening in Portland, OR, and Philadelphia, PA 23

24 Goals  Compile and share information  Increase understanding of potential CHP market  Identify and address potential policy options. 24

25 Major Activities Undertaken  Literature review and research on existing CHP and potential of CHP in Iowa  Stakeholder meetings  Survey on challenges and barriers related to CHP  Site-visits to ADM plant in Des Moines as well as to the Des Moines Wastewater Reclamation Facility  Compilation of the final report and memo to the Governor and National Governors Association (ongoing) 25

26 List of Stakeholders Ag Processing, Inc. Iowa Association of Electric Cooperatives Alliance PipelineIowa Association of Municipal Utilities Archers-Daniels-Midland Company Iowa Department of Natural Resources – Air Quality Bureau Brown Engineering CompanyIowa Environmental Council City of Des Moines WRA Wastewater Reclamation Facility Iowa Office of Consumer Advocate Environmental Law and Policy CenterIowa Utility Association International Paper CompanyLarge Energy Group International Paper CompanyRoquette America Inc. Interstate Power and Light Company 26

27 CHP Survey  Goal  Seek feedback on factors affecting CHP installation and operations from CHP stakeholders.  Two similar surveys were sent to:  Existing CHP Facilities and those interested in CHP  Surveys were sent and completed electronically. Some paper responses were received.  Survey Components  Background Information on CHP(size, # of FTEs, fuel source, years of operation)  Brief Description of CHP System  CHP Installations and Barriers  Qualitative Response  Contact Information 27

28 Sample Survey 28

29 Survey 1: Existing CHP  DOE database lists 34 sites in Iowa (590 MW installed CHP capacity)  Survey sent out to 22 entities  15 entities responded  Some CHP facilities seem to have gone out of operation  Information gathering for small CHP facilities was difficult 29

30 Barriers: Existing CHP Note: Arranged by most common to least common response 30

31 Qualitative Responses- Existing CHP  Environmental Regulations & Permitting requirements  Regulatory requirements are based on peak load and not actual operating conditions which create stricter requirements.  No incentives offered by regulated utilities that encourage or promote CHP in Iowa.  Air regulators do not account for CHP’s reduced net air emissions.  Interconnection with utilities is a challenge as some of the requirements can be significant.  Environmental regulations are constantly changing.  Site already meets maximum emission limits even with technological controls. 31

32 Qualitative Responses- Existing CHP  Financing  Hard to raise capital for new construction of CHP. It’s easier to get appropriation funds for utility expense. Upfront expense and the nature of investment makes CHP projects difficult.  Difficult to provide economic justification.  Organizations are reluctant to spend the upfront money for a feasibility study.  Establishing partnerships, for feedstock materials, thermal loads, etc. can help make a CHP project cost-effective.  Tax credits are not an incentive to a public entity. 32

33 Qualitative Responses-Existing CHP  Power purchase agreement  Preference would be to sell energy at retail rates.  Give incentives for those who use renewable fuel as a fuel source for CHP.  CHP operations become “electrical power generators” according to state definitions and this is not a role a company wants to play.  Purchase price rates vary considerably across the state and project by project.  Operation of CHP  Operation of CHP is not a core business function.  Time consuming and difficult.  Learning curve is high. 33

34 Survey 2: Interested in CHP  Sent to over 60 contacts of vendors, consultants, industrial energy provided by Midwest Clean Energy Application Center  Iowa Association of Municipal Utilities, Iowa Association of Electric Cooperatives, and Large Energy User organization sent the survey to their contacts  7 completed surveys, 7 replies of no history with CHP  All but one are private sector entities 34

35 Barriers: Interested in CHP 35  Arranged by most common to least common response

36 Qualitative Responses- No Existing CHP  The spark spread between electric costs and natural gas costs needs to widen a bit more to make CHP financially attractive.  Financing and return on investment is a challenge therefore Incentives such as grants should be made available.  EPA regulations and working with utilities are big challenges.  Natural gas price volatility is a challenge.  High cost of natural gas pipeline tap and pipeline capacity limitations limit new CHP.  No information or experience on CHP. 36

37 Next Steps  Memo to the Governor on the next steps on the CHP Policy Academy  IEDA will plan to hold three webinars in May on the following topics:  Small scale CHP systems and its applicability  Boiler MACT rules and CHP as an option  The CHP Final Report will be released to the stakeholders  Possible topics that may be explored further relate to information sharing, permitting and financing as well as utility topics. 37

38 Questions/Comments Contact Paritosh Kasotia, Team Leader


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