Author: abrahamwien18

You have checked all the boxes on your due diligence checklist; but have you assessed the Climate Risk of Your Real Property Investment?

Posted on June 21, 2019 by abrahamwien18

By Paul L. Jones, CPA, May 13, 2019

In his legal commentary posted on April 1, 2019, my colleague, Rick Jones, a partner with Dechert LLP, a leading law firm serving the Commercial Real Estate Debt Market, opened with “I’m finally writing about climate change… not because 97 out of 100 scientists are shouting at us incessantly about the need to do something, but because I am dead certain that there are real and fairly immediate risks associated with the public reaction to the perception or awareness (take your pick) of the climate change risk which will drive regulatory intrusion on both the state and federal level, will drive legislation and moreover, will inform market reaction to lenders, investors, developers and their properties because of their climate change posture or profile.”

The esteemed Mr. Jones continues: “Where do we start? We are already seeing some commercial real estate owners begin to adapt to regulatory change. Look at the fantastic engineering marvel which is the Hudson Yards, built 40 feet above sea level, with its storm management system and its fortress-like power system designed to survive a mega storm. That’s expensive. It was clearly purpose driven. We should ask what made them, a bunch of smart folks, put up the money. I guarantee it wasn’t frivolous. I would suggest to you that it’s a sign of things to come. More generally, we are also seeing more solar, more green building technology and more innovations in engineering and in general more willingness to pay real money to address environmental concerns.”

New York has a wet climate, and water – from hurricanes, flooding, storm surges and even blizzards – is one of its primary environmental challenges throughout the year. Of course, buildings in NYC also endure seismic activity, high heat loads in the summer, power outages, manmade disasters like those produced by terrorist attacks as well as high humidity and year-round precipitation.

On the Pacific coast, seismic considerations are a primary concern as well as danger from wildfires, flash floods, and drought.

For most of my career serving the real estate industry, I have primarily conducted due diligence and providing underwriting and financial feasibility analyses for buyers, investors, lenders and capital market participants.

We usually start with a checklist of due diligence and underwriting items which typically includes:

reviewing historical operating statements and related reports,
abstracting leases and tenant correspondence records,
getting a title abstract, checking the flood zone,
obtaining and reviewing a property condition assessment (PSA) and a Phase 1 environmental site assessment (ESA), and
evaluating all legal and contractual arrangements that may affect the income and expenses of the property.

But, if you are like most real estate investors, you have missed one item which affects all properties and portfolios: the risk resulting from climate change and sea level rise as well as man-made hazards: You still do not know how sustainable and resilient the income and future value from your investment is.

Beginning about five years ago, my clients started to ask questions regarding the potential effect of climate change and sea level rise on the sustainability and resiliency of the property.

It is important to note that the risk to real property assets – which are immovable by their nature – exists regardless of whether you believe humans have caused climate change, or not.

In fact, my client chose to divest of assets in Miami in order to buy assets in locales without the risk of sea level rise and our screening process involved an informal, yet substantive, assessment of the risk from climate change – no matter the location of the property.

In an article entitled “What does resilience mean for commercial real estate” by Ryan M. Colker published in the September/October issue of BOMA Magazine, he opens with the following observation:

“Around the world, the frequency, intensity and impacts of natural disasters are increasing. These events can significantly affect the social, economic and environmental functionality of communities. The ability of commercial buildings and the businesses they house to adequately prepare for such events and quickly return to full operations—a quality known as resilience—contributes significantly to a community’s ability to bounce back. In addition to the community-wide impacts, the state of individual buildings also can affect the long-term viability of the businesses that occupy those buildings.”

For a multi-family, commercial or industrial building, we at Emerald Skyline define building resilience as “the ability of the systems and structure to protect, maintain or restore the value of, functionality of, and income generated by a property after a damaging event or calamity – whether it is from a weather event or a man-made circumstance – within a pre-determined acceptable timeframe.

A widely-cited 2005 study by the Multi-hazard Mitigation Council (MMC) of the National Institute of Building Sciences “documented how every $1 spent on mitigation saves society an average of $4.

In a 2018 interim update report by the MMC found that costs and benefits of designing all new construction to exceed select provisions in the 2015 IBC and the IRC and the implementation of the 2015 International Wildland-Urban Interface Code (IWUIC) resulted in a national similar benefit of saving $4 in future losses for every $1 spent on additional, up-front construction costs.

In a report published last month (April 2019) by the Urban Land Institute (ULI) and underwritten by Heitman LLC (Heitman) entitled “Climate Risk and Real Estate Decision-making,” the authors note that:

“In 2017, the year Hurricanes Harvey and Maria hit the United States and storms battered northern and central Europe, insurers paid out a record $135 billion globally for damage caused by storms and natural disasters. This figure does not represent actual damages, which in the United States alone equaled $307 billion, according to National Oceanic and Atmospheric Administration estimates.”

In the Foreword, Ed Walter, Global CEO, ULI, and Maury Tognarelli, CEO, Heitman, highlight the need to address sustainability and resiliency:

“Failure to address and mitigate climate risks may result in increased exposure to loss as a result of assets suffering from reduced liquidity and lower income, which will negatively affect investment returns. At the same time, investors who arm themselves with more accurate data on the impact of climate risks could help differentiate themselves and benefit from investing in locations at the forefront of climate mitigation.”

And the industry – especially among institutional investors – is taking note. “Many leading investment managers and institutional investors are undertaking flood, resilience, and climate vulnerability scans of their portfolios. These mapping exercises seek to identify the impacts of physical climate risks on their properties, including sea-level rise, flooding, heavy rainfall, water stress, extreme heat, wildfire, and hurricanes. Potential impacts being considered range from physical access and business disruption for tenants to the effects that longer-term temperature increases or increased wear and tear on buildings could have on operating and capital expenditure requirements. The ultimate objective for the investment community is to understand how climate will affect asset liquidity and, as a result, returns, in terms of both income and capital growth.”

The results of the survey conducted in preparation of this report, the researchers found that industry participants continue to rely on insurance companies to cover potential losses from physical damage due to a natural disaster – but they astutely point out that insurance “does not protect investors from devaluation or a reduction in asset liquidity.” They categorize the climate risks either physical or transitional risks as follows:

“Physical risks are those capable of directly affecting buildings; they include extreme weather events, gradual sea-level rise, and changing weather patterns.

“Transition risks are those that result from a shift to a lower-carbon economy and using new, non-fossil-fuel sources of energy. These include regulatory changes, economic shifts, and the changing availability and price of resources.

“The location-specific physical threats posed by factors such as sea-level rise, hurricanes, wildfires and forest fires, heat stress, and water stress are among the most easily observable risks to real estate investment. They are a particular concern since many key markets for real estate investment are in areas exposed to the physical impacts of climate change.

These risks and their potential impact on real estate is summarized in the following table.

So far, according to the ULI report, “…most investment managers and investors for directly held assets currently use insurance as their primary means of protection against extreme weather and climate events.” However, “leading companies in the industry … are modifying existing decision-making and management processes to add climate and extreme weather-related factors to those being considered alongside other risks and opportunities.

The National Infrastructure Advisory Council (NIAC) in a 2009 repot characterized resilience as having four key features known as the “4-Rs”:

Robustness: the ability to maintain critical operations and functions in the face of crisis.
Resourcefulness: the ability to skillfully prepare for, respond to and manage a crisis or disruption as it unfolds.
Rapid recovery: the ability to return to and/or reconstitute normal operations as quickly and efficiently as possible after a disruption.
Redundancy, back-up resources to support the originals in case of failure that should also be considered when planning for resilience

From the Whole Building Design Guide, a program of the National Institute of Building Sciences (NIBS), understanding the relationship between Asset (Building) resilience and the community’s resilience requires an understanding of the distinctions and relationships between risk, resilience and sustainability as follows:

Risk is expressed as the relationship between a particular hazard or threat that may degrade, or worse, devastate, the building’s security, operations and functionality and the consequences that result from this degradation of performance.
Resilience is the ability of a building or asset to recover from, or adjust, easily to misfortune or change. The ability to prepare and plan for, absorb, recover from, or more successfully adapt to actual or potential adverse effects as reflected in the aforementioned Four Rs.
Sustainability of an asset is determined by its ability to meet the needs of the present while being able to maintain its functionality over time without not being harmful to the environment or depleting natural resources.

The following diagram created by Mohammed Ettouney and Sreenivas Alampalli in their books on Infrastructure Health in Civil Engineering, presented the relationship of threat, vulnerability and consequences to risk as follows:

Recognizing the need for sustainability and resiliency due diligence, Emerald Skyline Corporation has developed a Sustainability and Resiliency Assessment (SaRA Rating^©) Rating system to provide commercial real estate investors with a complete picture of the risk associated with a particular property or investment. The information not only helps investors and owners but also provides lenders, insurers and tenants with information relevant to their decisions.

SaRA Rating^© incorporates an assessment of the physical attributes of the property – including incorporation of information obtained from traditional due diligence procedures with additional procedures to determine the relative risk, resiliency and sustainability of the property over the investment horizon.

The physical review of the property is conducted in conjunction with the Phase I environmental site assessment and the property condition assessment and includes a review of the property’s resiliency features like hardened walls, raised electronic and network connections, secondary systems.

No building operates in a vacuum: Its resiliency, in particular, is directly connected to its location and is directly affected by the surrounding neighborhood, the community, and natural and man-made risks (hazards).

Based on a property-specific assessment including use of mapping services, our team of professionals evaluate a building’s resiliency and sustainability resulting in a rating from 1, not resilient or sustainable (High Risk) to a 5 (Highly Resilient). Our objective is to provide investors with the information they need to make prudent investment decisions that account for the physical, environmental and social risks to the cash flow stream and market value of the building.

At the conclusion of our procedures, we identify land and building improvements that would enhance a property’s resiliency and sustainability. The economics of each improvement or enhancement is assessed in a cost-benefit analysis.

We then evaluate the tradeoffs between performance of a building over its life-cycle and the cost of improving the building systems to ensure its sustainability and resiliency. Accordingly, we evaluate the total cost of ownership (TCO) by determining the capital cost of the property including any improvements plus the present value of the future expenses of operations, maintenance, utilities and the estimated cost to recover from a calamity.

Further, armed with the SaRA Rating^© and report, the stakeholders can incorporate current and prospective tenant/user demand for the space in the building given the cost of occupancy and resiliency as well as investor demand and potential pricing for the asset. A resilient and sustainable asset will combine low-cost operations due to sustainably-reduced energy and maintenance costs and managed insurance expenses while maximizing the net cash flow and long-term value of the property.

The objective of all due diligence – including and especially the assessment of all the risks of ownership – is to optimize the overall returns on the investment while quantifying and minimizing the risks and costs to achieve those goals – that is the purpose of Emerald Skyline’s Sustainability and Resiliency Assessment Rating^© system – your one-stop resource to measure and manage climate risk in the real estate industry.

For more information, contact Paul L. Jones, CPA, Phone: 786-468-9414; email: [email protected]

Israel Completes World‘s Largest Solar & Thermal Electric Facility

Posted on May 5, 2019May 5, 2019 by abrahamwien18

By David Lazarus
View the original article here.

The state-of-the-art thermal electric power plant in Israel’s Negev Desert is equipped with more than 50,000 computer-controlled heliostats that produce enough power for 150,000 homes, keeping 110,000 tons of CO2 emissions out of the air per year.

The Ashalim solar and thermal electric power plant in Israel’s Negev Desert is up and running. The state-of-the-art facility is equipped with more than 50,000 computer-controlled heliostats or mirrors, which can track the sun in two dimensions and reflect the sunlight onto a boiler placed on top of a tower measuring 240 m-high (787.4 ft). That’s higher than some of the tallest sky scrapers in the world and by far the tallest solar tower ever built.

How does it work? All those tens of thousands of mirrors are hooked up to a computer operated tracking system so that they all move precisely with the orbit of the earth around the sun throughout the day and direct the heat from the sunlight to a spot on the boiler on top of the tower to within 0.0015499969 of an inch. The super hot water in the boiler produces superheated steam, which is then conveyed through pipes down below with enough pressure to spin a steam turbine-generator at astronomical speeds needed to produce electricity. The solar run generator can put out 300 megawatts of clean electricity every day, or enough to power about 150,000 homes.

Ashalim construction in 2016 – BrightSource Energy website

Another feature of the Ashalim project is the use of solar thermal technology that can store energy for use at night in order to provide consistent and reliable output of electricity. This is one of the largest renewable energy projects in the world. The facility covers an area of over 3 sq. km (2 sq. miles).

Israel’s climate is ideal for solar power, particularly in the Negev which enjoys more than 300 sunny days a year. Israel has been home to many solar technology breakthroughs, but the government has been slow in getting away from using fossil fuels for power. But that is definitely starting to change with a goal getting 10 percent of its energy needs from renewable sources by 2020 with the new solar project. Once the project is proven fully successful, Israel plans to move ahead rapidly towards renewable energy sources.

Together with the recent discovery of huge deposits of natural gas along Israel’s Mediterranean Coast, the Ashalim plant will contribute to Israel’s security by reducing dependence on fossil fuel imports. It will also keep us safe by keeping 110,000 tons of CO2 emissions per year out of the air we breathe.

Solar Energy Isn’t Just for Electricity

Posted on May 5, 2019 by abrahamwien18

It can also provide carbon-free heat for a wide variety of industrial processes

By Steven Moss
View the original article here.

Part of the Miraah soler thermal project in Oman. Credit: GlassPoint Solar

The industrial processes that underpin our global economy—manufacturing, fuel and chemical production, mining—are enormously complex and diverse. But they share one key input: they, as well as many others, require heat, and lots of it, which takes staggering amounts of fuel to produce. Heat and steam generation is critical to the global economy, but it’s also an overlooked and growing source of greenhouse gas (GHG) emissions.

The good news is that innovative solar technologies can produce steam at industrial scale—reducing emissions and, increasingly, cutting costs. And given the current climate outlook, it’s urgent that industry adopt these new technologies.

Despite enormous progress around the world to ramp up renewables and increase energy efficiency, global GHG emissions reached an all-time highin 2018. In a report released in January, the Rhodium Group found that even though renewable energy installations soared and coal plants shut down, carbon emissions in the U.S. rose sharply last year. Emissions from industry shot up 5.7 percent—more than in any other sector, including transportation and power generation. The authors of the Rhodium Group study concluded that despite increased efforts from policymakers and the business to tackle emissions, “the industrial sector is still almost entirely ignored.”

This must change, at the global level. Worldwide industry is responsible for a quarter of total emissions. And while those from transportation and residential segments are trending down, the International Energy Agency (IEA) projects that industrial emissions will grow some 24 percent by 2050.

As people around the world continue to transition from living off the land to moving to cities and buying and consuming more things, industrial activity will continue to increase—and the need to reduce corresponding emissions will become all the more urgent.

Credit: GlassPoint Solar

This brings us back to heat. Industry is the largest consumer of energy, and a surprising 74 percent of industrial energy is in the form of heat, mostly process steam. Solar steam—making the sun’s heat work for industry—is a largely unexplored but promising avenue for reducing emissions.

While photovoltaic (PV) panels that convert sunlight into electricity are more common, thermal solutions are what’s needed to meet industry’s growing demand for heat. In a solar thermal system, mirrors focus sunlight to intensify its heat and produce steam at the high temperatures needed for industry. Another key advantage is the ability to store the heat using simple, proven thermal energy storage in order to deliver steam 24 hours a day, just like a conventional fossil fuel plant. With the right technology, solar thermal can be a reliable, efficient and low-cost energy source for industrial steam generation.

So-called “enclosed trough technology” uses sunshine to produce zero-carbon steam. Credit: GlassPoint Solar.

For example, renewable process heat provider Sunvapor is partneringwith Horizon Nut to build a 50-kilowatt solar thermal installation at a pistachio processing facility in the Central Valley of California. The companies are working to expand solar steam production for food industry processes, such as pasteurization, drying and roasting.

In Oman and California, GlassPoint Solar is operating and developing some of the world’s largest solar projects for industry. GlassPoint’s greenhouse-enclosed mirrors track the sun throughout the day, focusing heat on pipes containing water. The concentrated sunlight boils the water to generate steam, which is used by Oman’s largest oil producer to extract oil from the ground. The capacity of GlassPoint’s Miraah plant, which can currently deliver 660 metric tons of steam every day, will top 1 gigawatt of solar thermal energy when completed. This same technology is also being deployed in California to reduce emissions from one of the country’s largest and oldest operating oilfields.

Meanwhile, to meet the needs of extremely high-temperature (800-1,000degreesC) industrial processes, the European Union is developing SOLPART, a research project to develop solar thermal energy that can be used to produce cement, lime and gypsum.

While fossil fuels remain the dominant source of heat for industry across all sectors and regions, industry is beginning to explore cleaner alternatives—and in some cases, industry is leveraging solar steam on a significant scale. As technology advances, more and more companies will find that switching to solar steam can simultaneously reduce costs and emissions, improving business operations while shrinking its carbon footprint.

When it comes to mitigating climate change, most attention has been directed to the things we see, buy, or use on a daily basis—the cars we drive, the food we eat, the power plants that keep our lights on. But behind all these activities is process heat, an emissions source that has been largely ignored.

Now we must turn our attention to industry—the sleeping giant of climate action. Process heat is an overlooked opportunity to slash GHG emissions, and solar technologies operating at the scale needed by industry are currently available. It’s time to embrace them and stop industrial heat from heating up our planet.

How IoT Plays A Role In Developing Sustainable Transportation

Posted on March 25, 2019 by abrahamwien18

By Megan Nichols
View the original article here.

The Internet of Things is transforming the modern world in manifold ways. It’s making our homes smarter, our stores more connected and informed, our vehicles more powerful, and our equipment — especially the industrial variety — more capable.

“IoT” is a blanket term that refers to the entire network of connected devices, from smartphones to household appliances. IoT devices have the ability to connect with local or public networks to transmit, receive and process data streams. This means that, as a society, we can collect a lot more information about how our devices are operating. It also means we can interface with them remotely to do things like open a garage door or turn on a light from hundreds of feet or even miles away.

This technology offers a variety of benefits, including more efficient use of resources and improved sustainability practices. That’s especially true of the transportation sector and modern travel.

Airports and Air Travel

The IoT provides an added layer of convenience for customers and better sustainability for parent companies.

For customers, the technology can be used to improve their travel experience. Miami International Airport, for example, relies on connected smartphone applications to provide real-time information to passengers about campus events and locations, baggage claim info, boarding instructions and more.

As for airports themselves, the technology can help eliminate excess waste produced as a result of high energy use. Smart bulbs and connected light fixtures, for instance, can turn off lights in empty areas of the campus. Efficient thermostats can better regulate and coordinate air temperatures within the facility — not just for keeping people more comfortable, but also to use less power in the process.

Logistics and Public Transportation

Whether you’re talking about buses, above-ground trams, or high-speed trains, the logistics involved are incredible. A transport company must consider how much room they have, how many people have booked a trip, what’s changed — such as who’s canceled or joined — and even how much luggage or storage space is available.

But it doesn’t stop there. Vehicles need fuel, supplies, and maintenance — and they’re all directly tied to a strict and comprehensive schedule. Like you see with flights, if a bus or other transport is late, it affects the entire day’s schedule.

IoT technology can help with this by providing more nuanced and real-time details about the goings-on within a facility or transport. This provides much more oversight for transportation managers and planners, if not automating the entire field outright.

GPS modules can be used to track each transport with up-to-date stats like speed, fuel levels and arrival times. Bluetooth beacons can be used to deliver local information to customers’ phones and devices, with real-time alerts about delays or on-time schedules.

There’s incredible potential here, and the industry is definitely starting to catch on.

Smart Roads

As you’d expect, smart and connected roads can help manage traffic patterns, accident response, and other related problems. Imagine receiving traffic updates on your phone directly from the very road beneath your vehicle’s tires. Highways and street surfaces can be outfitted with advanced sensors to collect usage information, which is then fed into a municipality’s traffic infrastructure. The system would be connected to traffic lights, security cameras, smart roads and much more.

It’s essentially a comprehensive modern and smart traffic management system. Sensors could pick up the impact of an accident, for example, and report that information to a remote agency or even take action via the network. As a result, nearby drivers are informed of the crash, traffic lights are changed to reflect the issue, and vehicles are rerouted until the area is cleaned up.

The technology can also be used for public road services like tollway, bridge and tunnel management — and even parking meters in urban areas.

Smarter Parking

Imagine pulling up to a parking meter, paying your fee on a mobile app, and then exiting your vehicle to be on your way. Upon your return, you simply hop in your car, tell the meter you’re leaving and away you go. The system registers the open space and alerts other drivers nearby looking for a space. As a result, the nearby roadways remain clear and less congested.

In urban areas and bustling cities, parking can be a real problem for the entire community. It can cause traffic disruptions and delays, accidents, and even dangerous scenarios — like when a vehicle is parked in front of a fire hydrant or unauthorized area.

Disney’s new parking garages in Disney Springs, Orlando, are a great example of how parking is getting smarter. Each parking row has a series of lights that turn red or green depending on whether or not space is available. As the end of each row is a digital display that shows the number of open spaces. It’s all updated in real-time so drivers can find a space quickly without driving around aimlessly. The system can also be used to locate vehicles for guests who are lost.

Supply Chain Management

In addition to self-driving transport vehicles and fleets, various other forms of transport in the supply chain are being outfitted with IoT technologies. This includes shipping trucks, containers, boats and ships, planes and more.

This provides a great deal of insight for management crews about travel times and external factors such as traffic or weather events. As with public transport, technology can be used to make more efficient use of resources like fuel as well as cut down on overall waste. More importantly, it can be used to identify new routes, transport solutions and even operational improvements.

Smart, Connected Technologies Are the Future

In the consumer market, IoT devices can help homeowners use their power supply more efficiently by cutting down on consumption, making better use of it in general and offering several new functions. Smart thermostats, for example, can auto-regulate heating and cooling in the home to make the space more comfortable and also eliminate excess use of electricity.

The same thing is happening in transportation, only on a much greater level. When an entire public transport operation is outfitted with more efficient vehicles and fuel-measuring sensors, for instance, the impact is much larger.

This shows that IoT and related connected technologies are not just a fad confined to modern-day operations — they are absolutely going to shape the future of the world. Backed by powerful data and insights, the organizations of tomorrow will be more efficient, more sustainable and much less impactful on the environment.

Solar farms in space could be renewable energy’s next frontier

Posted on March 25, 2019March 25, 2019 by abrahamwien18

Space-based solar power is seen as a uniquely reliable source of renewable energy. NASA / Artemis Innovation Management Solutions LLC

China wants to put a solar power station in orbit by 2050 and is building a test facility to find the best way to send power to the ground.

By Denise Chow and Alyssa Newcomb
View the original article here.

As the green enery revolution accelerates, solar farms have become a familiar sight across the nation and around the world. But China is taking solar power to a whole new level. The nation has announced plans to put a solar power station in orbit by 2050, a feat that would make it the first nation to harness the sun’s energy in space and beam it to Earth.

Since the sun always shines in space, space-based solar power is seen as a uniquely reliable source of renewable energy.

“You don’t have to deal with the day and night cycle, and you don’t have to deal with clouds or seasons, so you end up having eight to nine times more power available to you,” said Ali Hajimiri, a professor of electrical engineering at the California Institute of Technology and director of the university’s Space Solar Power Project.

Of course, developing the hardware needed to capture and transmit the solar power, and launching the system into space, will be difficult and costly. But China is moving forward: The nation is building a test facility in the southwestern city of Chongqing to determine the best way to transmit solar power from orbit to the ground, the China Daily reported.

REVISITING AN OLD IDEA

The idea of using space-based solar power as a reliable source of renewable energy isn’t new. It emerged in the 1970s, but research stalled largely because the technological demands were

thought to be too complex. But with advances in wireless transmission and improvements in the design and efficiency of photovoltaic cells, that seems to be changing.

“We’re seeing a bit of a resurgence now, and it’s probably because the ability to make this happen is there, thanks to new technologies,” said John Mankins, a physicist who spearheaded NASA efforts in the field in the 1990s before the space agency abandoned the research.

Population growth may be another factor driving the renewed interest in space-based solar power, according to Mankins. With the world population expected to swell to 9 billion by 2050, experts say it could become a key way to meet global energy demands — particularly in Japan, northern Europe and other parts of the world that aren’t especially sunny.

“If you look at the next 50 years, the demand for energy is stupendous,” he said. “If you can harvest sunlight up where the sun is always shining and deliver it with essentially no interruptions to Earth — and you can do all that at an affordable price — you win.”

MAKING IT A REALITY

Details of China’s plans have not been made public, but Mankins says one way to harness solar power in space would be to launch tens of thousands of “solar satellites” that would link up to form an enormous cone-shaped structure that orbits about 22,000 miles above Earth.

The swarming satellites would be covered with the photovoltaic panels needed to convert sunlight into electricity, which would be converted into microwaves and beamed wirelessly to

ground-based receivers — giant wire nets measuring up to four miles across. These could be installed over lakes or across deserts or farmland.

Mankins estimates that such a solar facility could generate a steady flow of 2,000 gigawatts of power. The largest terrestrial solar farms generate only about 1.8 gigawatts.

If that sounds promising, experts caution that there are still plenty of hurdles that must be overcome — including finding a way to reduce the weight of the solar panels.

“State-of-the-art photovoltaics are now maybe 30 percent efficient,” said Terry Gdoutos, a Caltech scientist who works with Hajimiri on the space-based solar research “The biggest challenge is bringing the mass down without sacrificing efficiency.”

For its part, the Caltech team recently built a pair of ultralight photovoltaic tile prototypes and showed that they can collect and wirelessly transmit 10 gigahertz of power. Gdoutos said the prototypes successfully performed all the functions that real solar satellites would need to do in space, and that he and his colleagues are now exploring ways to further reduce the weight of the tiles.

THE ROAD AHEAD

China hasn’t revealed how much it’s spending to develop its solar power stations. Mankins said that even a small-scale test to demonstrate the various technologies would likely cost at least $150 million, adding that the swarming solar satellites he envisions would cost about $10 billion apiece.

Despite its exorbitant price tag, Mankins remains a staunch advocate of space-based solar power.

“Ground-based solar is a wonderful thing, and we’ll always have ground-based solar,” he said. “For a lot of locations, rooftop solar is fabulous, but a lot of the world is not like Arizona. Millions of people live where large, ground-based solar arrays are not economical.”

Mankins hailed recent developments in the field and said he is keen to follow China’s new initiative. “The interest from China has been really striking,” he said. “Fifteen years ago, they were completely nonexistent in this community. Now, they are taking a strong leadership position.”

The Price of Large-Scale Solar Keeps Dropping

Posted on February 4, 2019February 4, 2019 by abrahamwien18

JOHN ROGERS, SENIOR ENERGY ANALYST, CLEAN ENERGY | SEPTEMBER 13, 2018, 11:49 AM EST
View the original article here.

The latest annual report on large-scale solar in the U.S. shows that prices continue to drop. Solar keeps becoming more irresistible.

The report, from Lawrence Berkeley National Laboratory (LBNL) and the US Department of Energy’s Solar Energy Technologies Office, is the sixth annual release about the progress of “utility-scale” solar. For these purposes, they generally define “utility-scale” as at least 5 megawatts (three orders of magnitude larger than a typical residential rooftop solar system). And “solar” means mostly photovoltaic (PV), not concentrating solar power (CSP), since PV is where most of the action is these days.

Here’s what the spread of large-scale solar looks like:

In all, 33 states had solar in the 5-MW-and-up range in 2017—four more than had it at the end of 2016. [For a cool look at how that map has changed over time, 2010 to 2017, check out this LBNL graphic on PV additions.]

Watch for falling prices

Fueling—and being fueled by—that growth are the reductions in costs for large-scale projects. Here’s a look at power purchase agreements (PPAs), long-term agreements for selling/buying power from particular projects, over the last dozen years:

And here’s a zoom-in on the last few years, broken out by region:

While those graphs show single, “levelized” prices, PPAs are long-term agreements, and what happens over the terms of the agreements is worth considering. One of the great things about solar and other fuel-free electricity options is that developers can have a really good long-term perspective on future costs: no fuel = no fuel-induced cost variability. That means they can offer steady prices out as far as the customer eye can see.

And, says LBNL, solar developers have indeed done that:

Roughly two-thirds of the contracts in the PPA sample feature pricing that does not escalate in nominal dollars over the life of the contract—which means that pricing actually declines over time in real dollar terms.

Imagine that: cheaper over time. Trying that with a natural gas power plant would be a good way to end up on the losing side of the contract—or to never get the project financed in the first place.

Here’s what that fuel-free solar steadiness can get you over time, in real terms:

What’s behind the PPA prices

So where might those PPA price trends be coming from? Here are some of the factors to consider:

Equipment costs. Solar equipment costs less than it used to—a lot less. PPAs are expressed in cost per unit of electricity (dollars per megawatt-hour, or MWh, say), but solar panels are sold based on cost per unit of capacity ($ per watt). And that particular measure for project prices as a whole also shows impressive progress. Prices dropped 15% just from 2016 to 2017, and were down 60% from 2010 levels.

The federal investment tax credit (30%) is a factor in how cheap solar is, and has helped propel the incredible increases in scale that have helped bring down costs. But since that ITC has been in the picture over that whole period, it’s not directly a factor in the price drop.

Project economies of scale. Bigger projects should be cheaper, right? Surprisingly, LBNL’s analysis suggests that, even if projects are getting larger (which isn’t clear from the data), economies of scale aren’t a big factor, once you get above a certain size. Permitting and other challenges at the larger scale, they suggest, “may outweigh any benefits from economies of scale in terms of the effect on the PPA price.”

Solar resource. Having more of the solar happen in sunnier places would explain the price drop—more sun means more electrons per solar panel—but sunnier climes are not where large-scale solar’s growth has taken it. While a lot of the growth has been in California and the Southwest, LBNL says, “large-scale PV projects have been increasingly deployed in less-sunny areas as well.” In fact:

In 2017, for the first time in the history of the U.S. market, the rest of the country (outside of California and the Southwest) accounted for the lion’s share—70%—of all new utility-scale PV capacity additions.

The Southeast, though late to the solar party, has embraced it in a big way, and accounted for 40% of new large-scale solar in 2017. Texas solar was another 17%.

But Idaho and Oregon were also notable, and Michigan was one of the four new states (along with Mississippi, Missouri, and Oklahoma) in the large-scale solar club. (And, as a former resident of the great state of Michigan, I can attest that the skies aren’t always blue there—even if it actually has more solar power ability than you might think.)

Capacity factors. More sun isn’t the only way to get more electrons. Projects these days are increasingly likely to use solar trackers, which let the solar panels tilt face the sun directly over the course of the day; 80% of the new capacity in 2017 used tracking, says LBNL. Thanks to those trackers, capacity factors themselves have remained steady in recent years even with the growth in less-sunny locales.

What to watch for

This report looks at large-scale solar’s progress through the early part of 2018. But here are a few things to consider as we travel through the rest of 2018, and beyond:

The Trump solar tariffs, which could be expected to raise costs for solar developers, wouldn’t have kicked in in time to show up in this analysis (though anticipation of presidential action did stir things up even before the tariff hammer came down). Whether that signal will clearly show in later data will depend on how much solar product got into the U.S. ahead of the tariffs. Some changes in China’s solar policies are likely to depress panel prices, too.
The wholesale value of large-scale solar declines as more solar comes online in a given region (a lot of solar in the middle of the day means each MWh isn’t worth as much). That’s mostly an issue only in California at this point, but something to watch as other states get up to high levels of solar penetration.
The investment tax credit, because of a 2015 extension and some favorable IRS guidance, will be available to most projects that get installed by 2023 (even with a scheduled phase-down). Even then it’ll drop down to 10% for large-scale projects, not go away completely.
Then there’s energy storage. While the new report doesn’t focus on the solar+storage approach, that second graphic above handily points out the contracts that include batteries. And the authors note that adding batteries doesn’t knock things completely out of whack (“The incremental cost of storage does not seem prohibitive.”).

And, if my math is correct, having 33 states with large-scale solar leaves 17 without. So another thing to watch is who’s next, and where else growth will happen.

Many of the missing states are in the Great Plains, where the wind resource means customers have another fabulous renewable energy option to draw on. But solar makes a great complement to wind. And the wind-related tax credit is phasing out more quickly than the solar ITC, meaning the relative economics will shift in solar’s favor.

Meanwhile, play around with the visualizations connected with the new release (available at the bottom of the report’s landing page), on solar capacity, generation, prices, and more, and revel in solar’s progress.

Large-scale solar is an increasingly important piece of how we’re decarbonizing our economy, and the information in this new report is a solid testament to that piece of the clean energy revolution.

Eggshells May Power The Renewable Energy Revolution

Posted on February 4, 2019 by abrahamwien18

View the original article here.

Ready for some happy news among all the gloom surrounding government shutdowns, border security, and malfeasance in high places? Here’s something that may put a smile on your face. According to researchers in Western Australia, eggshells may be the key to abundant, inexpensive energy storage.

Dr Manickam Minakshi and his colleagues began experimenting with eggshells in 2017 using eggs purchased at the local supermarket. “Eggshells have a high level of calcium carbonate, which can act as a form of replenishing energy,” he tells the Canberra Times.

“What’s interesting is that the egg membrane around the yolk allowed us to cook it at a high temperature, crush it into powder and bake it at 500 degrees Celsius with the chemical still present.The final baking process changes the chemical composition from calcium carbonate to calcium oxide and allows it to become a conduit for electricity.

For Dr Minakshi’s team, this represents a first step towards work on an alternative battery to store energy from renewable energies such as solar panels and wind turbines. “Renewable energy resources are intermittent as they depend on the weather,” he says. “When we have an excess, we need a battery to store it. Ground egg shells serve as the electrode to store this.” Before being heated, the eggshell is a positive electrode but when heated it changes to be a negative electrode, he explains.

Dr Minakshi says he hopes his research will attract the attention of renewable energy companies. Assuming further tests prove the validity of his preliminary results, abundant and affordable materials like eggshells have the potential to provide energy storage from items that would otherwise be little more than bio-waste.

“You can buy them at a 12-pack from Coles for $4 or pick them up from the food court,” he says. “What’s even more important is that you can use the eggshells that are thrown into landfills. This brings in the potential to reduce the amount of bio-waste we produce.”

The research in the laboratory will continue to determine how much electricity the eggshell powder can store and for how long. Minakshi even has plans to test free range eggshells to see if they have better conductive properties, although why that would be is not clear. Perhaps free range chickens have higher levels of self esteem which lead to chemical changes in their eggs.

If anyone can peck out the answers, it is Dr. Manakshi, who may or may not have watched the adventures of Henry Cabot Henhouse III — a/k/a Super Chicken — as a boy. (There is a slight possibility I am not treating this topic with the seriousness is deserves.)

Warren Buffet’s MidAmerican Energy puts in Iowa’s latest big battery project

Posted on February 4, 2019 by abrahamwien18

Grand Ridge, an existing Invenergy project that combines wind power and energy storage, in Illinois. Image: Invenergy.

View the original article here.
The US state of Iowa got its first grid-scale solar-plus-storage system at the beginning of this year, and this has already been followed by the completion of another, larger battery project in the US state this week.

Energy-Storage.news reported last week on the completion of a solar PV system at Maharishi University of Management equipped not only with solar trackers but also with a 1.05MWh flow battery.

This week, project developer Invenergy said a four month “construction sprint” had been successfully undertaken and the company has begun commercial operations of a 1MW / 4MWh lithium iron phosphate battery energy storage system.

Located at a substation in Knoxville, Iowa, the project has been executed for utility MidAmerican Energy, one of billionaire investor Warren Buffet’s companies as a subsidiary of Berkshire Hathaway Energy. MidAmerican serves just under 800,000 electricity customers.

In a November press release, MidAmerican’s VP of resource development said the utility-scale storage system would teach lessons about “how best to use an energy storage system, and how it can serve our customers in the future,” adding that the primary purpose of the system will be to help manage peak loads on the utility’s network.

“Energy storage has the potential to allow us to retain energy when customer demand is low and release it during peak usage times. That would give us new options to manage peak loads, enhance overall reliability and help keep electric costs low and affordable for our customers,” Mike Fehr of MidAmerican Energy said.

The utility highlighted four of the main benefits of energy storage that it will explore through the application of the lithium system: flattening and managing peaks in electricity demand through storing off-peak energy for later use, reducing the required run times and capacities of natural gas peaker plants with energy storage, enhancing the value and usefulness of renewable energy through smoothing the output of solar farms before it enters the grid and improving power quality and extending the life of transformers and other grid infrastructure.

“Energy storage is still in the development stages and the economic feasibility on a larger scale is being assessed as well; however, prices are trending downward,” Mike Fehr said.

“MidAmerican Energy wants first-hand experience with the technology so we’re positioned to quickly and efficiently add it to our system in ways that benefit our customers when the price is right.”

For Invenergy, which already owns and operates four other large-scale battery systems it developed, this has been its first project as an EPC (engineering, procurement and construction) partner.

“We are excited by the new opportunities for battery storage that we are seeing around the country. We are grateful for partners like MidAmerican Energy who are seeking innovative ways to deliver value to their customers and are proud to have provided them with this solution in such a short time,” Invenergy senior VP Kris Zadlo said.

C-PACE Flips The Script On Energy Efficiency For Multi-Tenant Commercial Properties

Posted on December 14, 2018 by abrahamwien18

By Counterpointe Energy Solutions
You can view the original article here.

Historically, making energy efficiency improvements to buildings has been uneconomic for owners of commercial real estate. There are structural reasons why leased commercial properties have traditionally lagged all other properties types in terms of energy efficiency. The results? Billions of dollars of inefficiencies, hurting the environment as well as most companies bottom lines. “Energy use in buildings is a $400bn to $500bn a year problem,” according to Stephen Selkowitz of the Lawrence Berkeley National Laboratory. Worse, tenants are inhabiting buildings with outdated infrastructure for seemingly no reason. These problems are well-understood, and the solutions are readily available, so what is holding commercial properties back?

THE SPLIT INCENTIVE

Common types of commercial leases, such as triple net or modified gross leases, make tenants responsible for energy bills. As a result, the benefits of any reductions in operating costs from energy efficiency upgrades accrue to tenants. As great as that is for the tenant, it leaves the property owner holding the bag and bearing the total cost of those capital improvements. So not surprisingly, property owners have virtually no reason to invest in improvements. They utilize equity for no return. This conundrum is known as “the split incentive”. Given this raw deal, it is no wonder that property owners have been reluctant to engage in energy efficiency projects.

PACE IS THE SOLUTION

Enter Commercial Property Assessed Clean Energy (C-PACE), an innovative financing option that can be used to finance 100% of renewable energy, energy efficiency and resiliency improvements to commercial properties. PACE financing also covers all development and soft costs, so there are no out-of-pocket expenses for the property owner. C-PACE solves the split incentive problem and uses the commercial lease structure to the owner’s advantage. Since it is an assessment, not a loan, C-PACE payments are paid with property taxes. And in most triple net and modified gross leases, tenants pay their share of property taxes. So now, the tenant who benefits from the upgrade is also responsible for repayment – thereby solving the split incentive problem.
For property owners, C-PACE is a definite win. They get to upgrade their assets, with no out-of-pocket expenses. The improved properties have lower energy bills, resulting in lower operating expenditures and higher valuations. The properties can also be marketed as “green”, allowing owners to take advantage of any rent premiums for environmentally friendly buildings, as well as better cap rates upon sale

Recently upgraded buildings are also an added selling point when attracting new tenants and buyers. For example, the World Green Building Council reported in 2016 that greener retail buildings correlate with happier customers and higher revenues for stores. When it comes time to find new tenants or renegotiate terms of a lease, property owners will benefit handily from having made a C-PACE assessment.

Tenants also benefit from C-PACE. Most C-PACE programs require energy efficiency improvements to have a savings-to-investment ratio greater than one. This means that tenants should be able to make each C-PACE repayment with only the funds they have saved from lower energy bills – and still have cash left over that they can pocket. Tenants additionally get to inhabit improved buildings with brand new HVAC, windows, chillers, and other features.

The community likewise benefits from the environmental impact of C-PACE. Energy efficiency reduces the emissions of greenhouse gases, minimizing smog and asthma-inducing particles and diminishes the need for environmentally disruptive fossil fuel extraction methods.
Energy efficiency has long been a difficult investment for owners of commercial real estate. C-PACE flips this script – energy efficiency projects are now not only a good idea but are a slam dunk for commercial property owners.

PACE for Nonprofit-owned Buildings: Cutting Energy Costs to Serve Communities

Posted on December 14, 2018 by abrahamwien18

By Bracken Hendricks
You can view the original article here.

Every day nonprofit community-based institutions work hard to raise money and deliver mission-driven programs and services. Whether providing affordable housing for the homeless, assisting at-risk youth in gaining job skills in public charter schools, or ministering to the conscience of a community in houses of worship, these institutions regularly push their internal capacity and strain their budgets just to advance a public mission of service.

When choosing to install new energy saving technology like more efficient lighting or boilers, or upgrading to renewable energy with solar panels, the choice too often comes down to a trade-off between using scarce capital resources to either upgrade their physical plant or carry out their mission.

Financing building improvements using Property Assessed Clean Energy (PACE) can enable nonprofits to overcome these upfront cost barriers and easily access capital that is paid for over time through savings on utility bills. PACE offers low interest rates, long terms to minimize payments, and a solid value proposition for mission driven organizations. That’s a good deal not only for the community, but for local clean energy businesses, the regional economy, and our shared environment.

Today, PACE programs in Washington DC and New York State can provide important lessons to help other communities around the nation access these benefits from what we call “Civic PACE”. Both Energize NY and Urban Ingenuity are finding that the nonprofit sector is a huge opportunity for clean energy sector growth. Considered part of the commercial building stock, most nonprofits have underinvested in energy related improvements.

These community-based organizations often have constrained budgets, substantial deferred maintenance challenges, and very large unmet capital investment needs. Nonprofits are typically underserved in debt markets because they have unusual forms of credit or cash flows, making PACE an ideal mechanism to finance building upgrades because it attaches to the land record of the property not the credit of the borrower. For this reason, nonprofit properties frequently have low debt levels, further simplifying PACE underwriting by reducing the need for lender consent to establish a special PACE tax assessment.

Although PACE is a powerful tool for nonprofit institutions, it has not been widely available or accessible to these critical community-based institutions… until now. The cost of capital can be a major factor for institutions that low priced debt. In order to serve this important market, it is essential to structure creative financing solutions that bring down pricing for nonprofits.

With support from the U.S. Department of Energy’s Sunshot Initiative, The Solar Foundation, Urban Ingenuity, and Clean Energy Solutions Inc. (CESI) are working with program administrators across the country to open up the nonprofit market beyond Washington DC. Through outreach and collaboration, the team is working to demonstrate the viability of using PACE with HUD-assisted multifamily housing, the value of PACE-secured PPAs for non-profit solar projects, tax-exempt bond financing considerations, and other creative credit enhancements. The team is finding opportunities to build this market to use PACE financing to expand deployment of solar energy and energy efficiency projects for nonprofit organizations, working closely with houses of worship and local Public Housing Authorities in Washington DC, New York, and many other communities around the country to make low-cost, long-dated debt and appropriate equity available for PACE projects.

For example, in the District of Columbia, Urban Ingenuity is currently structuring credit enhancements and tax-exempt PACE capital to bring down interest rates. They are currently closing a tax-exempt PACE note at less than 4% for 20 year debt, representing perhaps the first tax-exempt PACE financing, and demonstrating a new potential opportunity for PACE investment.

In New York, Energize NY has used Qualified Energy Conservation Bonds (QECBs) to bring down the cost of clean energy upgrades to under 3% for 20 year funds, as well as offering direct property owner support to help overcome the capacity gap that is a common barrier to upgrades in this sector. In addition, New Market Tax Credits (NMTC) and other forms of innovative, low-cost capital are available to credit-enhance PACE notes.

Nonprofit owned buildings are not currently well served by solar tax equity markets; these markets are not always transparent for consumers, and the pricing and structure is traditionally designed to benefit the investor and developer, instead of maximizing the flow of resources to advance a non-profit’s mission. The PACE-secured PPA, on the other hand, reduces credit risk, drives transparency in solar markets, and presents improved pricing and terms for customers. DC PACE has proven a “pre-paid PPA” approach, and Energize NY is close to closing three PPA’s with non-profits and others unable to take advantage of federal tax credits.

More broadly, NY State is addressing the challenges facing non-profits and Low and Moderate Income (LMI) housing by supporting Energize NY PACE financing as well as through the State’s energy agency (NYSERDA) and a range of utility initiatives. These efforts combine to form a compelling package that can include direct project support, financing with long-terms and low interest rates, and energy upgrade standards that encourage improvements which provide significant financial gain to LMI housing and other non-profit customers.

The energy burden is disproportionately high for almost all nonprofits and especially for affordable housing owners who struggle with balancing operating needs and serving their mission. Reducing energy costs and consumption make good financial sense for these property owners, and accessing upfront capital to pay for needed project level investments, paid for over time with utility savings, is one key piece of the solution. Now, with PACE, which can be enhanced through QECBs or other tools and paired with direct incentives, nonprofits can access the capital they desperately need to improve their property while saving money to advance their mission, foster public welfare and a higher quality of life while giving back to communities in ways that extend well beyond greening the environment and protecting global climate.