Learn the language and sell your energy project's green benefits
Speak the language and sell your energy project's green benefits.
If you're having trouble getting your energy project approved, you might try selling it as a carbon emissions reduction measure. When this article hits your screen, I will be training energy managers in Kazakhstan (using Russian translators). It should be interesting and hopefully politically uneventful. My work in Kazakhstan is fundamentally about energy management, but my contract is one piece within a much larger objective labeled as a “climate change mitigation program.” This is a popular labeling approach, where carbon reduction is the basis on which the program is presented. But many of the implementation methods are primarily energy management tactics.
Knowing how to translate your energy projects into carbon-related deliverables can help you implement more projects. I can personally attest that this strategy has helped many energy management projects get approved all over the U.S. and abroad. Plus, you can get paid more in consulting fees if you calculate and report carbon emissions, and even more if you are certified.
Selling Energy Projects as Green
Many organizations feel the pressure to be greener as it has become a socially expected necessity for big brands, colleges, and governments. Your energy conservation projects have a direct and positive impact on an organization’s sustainability mission. This relationship is two-way, meaning that sustainability, marketing, and environmental program managers want you if they know how you can help them reach their goals. Thus, you need to know how to speak “GHG” (greenhouse gases) so that the environmental people will understand how your efforts can help them. In return, they may create projects for you (like my Kazakhstan contract mentioned earlier).
Reporting GHGs is not a difficult task, but to understand the requirements of this language, this article will show sample exam questions (with answers at the end) from the Carbon Reduction Manager Certification Exam, which is an established proxy for competence that has been taught all over the world since 2008.
Note the samples below are not the actual test questions, but similar in content and format. My objective is to show how you can take the extra step to translate your energy savings into green benefits. Many GHG calculations are simple and only require basic algebra. If you know the energy saved, you can multiply an emissions factor (for example, CO2 emissions per kWh) to estimate the emissions avoided. Emissions factors for fuels and even kWh by state can be found online in tables from the EPA as well as other organizations. As you get more advanced, you can deal with details like emissions equivalents and corporate GHG reporting. For now, let’s see what you can do. Good luck!PageBreak
Testing Your Knowledge
Remember – at the end of this article, step-by-step answers are provided that serve as a basic template if you want to replicate the calculations for your organization.
1. Assume your company is considering installing a solar PV panel on a carport that generates 1,000,000 kWh per year. If renewable energy credits (RECs) are trading for $8 per REC, what is the cumulative value of the RECs? (Assume you live in an area where you could sell the RECs, and ignore administrative/trading costs).
a. $ 800
b. $ 8,000,000
c. $ 0
d. $ 8,000
2. Consider a manufacturing process that requires 10,000 MMBtu per year and this energy is supplied by an old, oil-fired boiler (uses residual fuel oil #6) that is only 50% efficient. For energy savings, you retrofit to a natural gas-fired boiler that is 80% efficient. In addition to the dollar savings, your management team wants to know the CO2 emissions savings from the retrofit.
3. Assume your company is investigating the marketing benefits of switching its fleet from regular diesel fuel to biodiesel (B20). The fleet currently consumes 50,000 gallons of diesel fuel per year. What would be the carbon emissions savings that you could report?
4. You suddenly get promoted to manage energy projects in different states. Considering that emissions per kWh vary by state (due to different power plant fuel mixes), what are the CO2 emissions for a facility in Miami that uses 1,000,000 kWh per year?
5. Considering the options below, which is the most cost-effective choice to offset your carbon footprint?
a. Buy RECs from a windmill in Oklahoma at $10 per REC
b. Buy CERs (carbon credits) at $15/metric ton CO2ePageBreak
1. Answer = D. Because 1 REC = 1 MWh produced from a renewable source, the 1,000,000 kWh are only equivalent to 1,000 MWh and thus only 1,000 RECs. Thus, the cumulative value is:
2. To determine the savings, we need to compare the emissions before and after the retrofit.
Look up the CO2 emission factor for residual fuel oil #6:
CO2: 75.1 kg of CO2 emissions per MMBtu (from emissions tables)
Before the retrofit, if the boiler is only 50% efficient, then the fuel supplied to the boiler will be more than the 10,000 MMBtu needed for the process. Thus, the fuel input will be 10,000/.5 = 20,000 MMBtu. So, if we are burning 20,000 MMBtu of fuel, the emissions would be:
= (20,000 MMBTU)( 75.1 kg/MMBtu)
= 1,502,000 kg of CO2 emissions, which we should convert to metric tons:
= (1,502,000 kg) (1 metric ton/1,000 kg)
= 1,502 metric tons of CO2 emissions
After the retrofit, we are using a different fuel, so we must look up the CO2 emission factor for natural gas:
CO2: 53.02 kg/MMBtu (from emissions tables)
After the retrofit, the new boiler is 80% efficient and the fuel input will be 10,000/.8 = 12,500 MMBtu. So, if we are consuming 12,500 MMBtu of fuel, the emissions would be:
= (12,500 MMBTU)( 53.02 kg/MMBtu)
= 662,750 kg of CO2 Emissions, which we should convert to metric tons:
= (662,750 kg) (1 metric ton/1,000 kg)
= 662.75 metric tons of CO2 emissions
The CO2 emissions savings would be:
= 1,502 – 662.75
= 839.25 metric tons of CO2 emissions
3. To determine the savings, we need to compare the emissions before and after the retrofit to B20, which by volume is 20% pure biogenic origin and 80% regular fossil fuel diesel.
Look up the CO2 emission factor for regular diesel:
CO2: 10.21 kg of CO2 emissions per gallon of regular diesel fuel (from emissions tables)
Before the retrofit, if we are consuming 50,000 gallons, then the CO2 emissions are
= (50,000 gallons)(10.21 kg/gallon)
= 510,500 kg of CO2 emissions, which we should convert to metric tons:
= (510,500 kg of CO2 emissions) (1 metric ton/1,000 kg)
= 510.5 metric tons of CO2 emissions
After the retrofit, we would only be consuming about 80% of the previous volume of fossil fuel diesel, and the remaining 20% would be biogenic content (which is reported separately from fossil fuel emissions). Therefore, the fossil-fuel diesel emissions would be:
= (50,000 gallons)(10.21 kg/gallon) (.8)
= 408,400 kg of CO2 emissions, which we should convert to metric tons:
= (408,400 kg of CO2 emissions) (1 metric ton/1,000 kg)
= 408.4 metric tons of CO2 emissions
The fossil fuel emissions savings would be:
510.5 – 408.4
= 102.1 metric tons of CO2 emissions
Note that you would report the biogenic CO2 emissions separately, and they would be calculated as follows:
Look up the CO2 emission factor for B100 fuel (100% pure biogenic material):
CO2: 9.45 kg of CO2 emissions per gallon of B100 fuel (from emissions tables)
After the retrofit, 20% of the fuel volume will be “pure” biogenic (B100), so the biogenic CO2 emissions would be:
= (50,000 gallons)(9.45 kg/gallon)(.2)
= 94,500 kg of Biogenic CO2 emissions, which we should convert to metric tons:
= (94,500 kg of Biogenic CO2 emissions) (1 metric ton/1,000 kg)
= 94.5 metric tons of Biogenic CO2 emissions
4. Look up the CO2 emission factor for Florida:
CO2: 1,176.61 lbs/MWh (from emissions tables)
If we are consuming 1,000,000 kWh, then that is 1,000 MWh, and the CO2 emissions are
= (1,000 MWh)(1,176.61 lbs/MWh)
= 1,176,610 lbs of CO2 emissions, which we should convert to metric tons:
= (1,176,610 lbs) (1 metric ton/2,204.62 lbs)
= 533.7 metric tons of CO2 Emissions
5. To compare the economics, we need to get the options expressed in terms of $/mt of CO2e. To do that, we must convert the RECs into $/mt. Look up the CO2 emission factor for Oklahoma (for a quick comparison, we can ignore the impact of the methane and nitrous oxide trace gases as they are a miniscule contribution to the CO2e emissions value):
CO2: 1,599.02 lbs/MWh (from emissions tables)
Because 1 REC = 1 MWh produced from a renewable source, then that means that 1 MWh would not have been produced from the OK grid, thereby saving 1,599.02 lbs CO2, which we can convert to metric tons by dividing by 2,204.62 lbs/mt, which yields 0.7253 metric tons.
Thus, the value of the OK REC in terms of metric tons of CO2:
= ($10/REC)(1 RECs/0.7253 metric tons)
= $13.787 per metric ton of CO2
Therefore, the Answer is B. On a cost per metric ton basis, the RECs would be less expensive than buying the CERs.
Eric A. Woodroof, Ph.D., is the Chairman of the Board for the Certified Carbon Reduction Manager (CRM) program and he has been a board member of the Certified Energy Manager (CEM) Program since 1999. His clients include government agencies, airports, utilities, cities, universities and foreign governments. Private clients include IBM, Pepsi, GM, Verizon, Hertz, Visteon, JP Morgan-Chase, and Lockheed Martin.