Magazine

Power up

Energy sources and providers continue to change, going from wood-burning fires and coal to natural gas, solar, and more. It's not your grandma's fireplace anymore, and W. P. Carey alumni are charging the evolution.

By Melissa Crytzer Fry

2018-03-06

Energy providers diversify how they do business

Until the late 1800s, the crackle and pop of wood-burning fires warmed icy fingers and toes, providing a renewable energy source in early American homes. Around the same time, water mills sprung up, bringing with them industrial growth. Coal replaced wood and further spurred commerce and industry into the late 19th century. With steam engines and steamboats chugging about, human travel expanded. Coal became the backbone of electric power generation. The world expanded. Fast forward to the era of petroleum. More expansion. Then natural gas. Nuclear. Hydroelectric. Solar. Biofuel. Hydrothermal.

It's no surprise that today's energy sources and providers continue to evolve. Globally, attitudes and perceptions about energy efficiency prevail. Some believe a new industrial revolution — powered by clean energy — is underway.

The voices of many

"Consumer concerns are largely driving changes in the energy industry," says Tom Brittain (BS Finance '93, MBA '95), an energy trader with Portland General Electric (PGE). A 2016 Pew Research Center survey shows just how passionate Americans are about green energy options: 89 percent of U.S. adults favor the expansion of solar panel farms, and 83 percent favor wind turbine expansion. Gallup's environment poll in March of 2016 also indicated that 73 percent of Americans prefer an emphasis on alternative energy.

Businesses are looking to incorporate sustainable power and practices into their operations as well, with lending institutions backing them along the way. JPMorgan Chase's goal through 2025 is to provide $200 billion in clean energy financing in an effort to help companies invest in renewable energy and other clean, advanced technologies.

Source of support

Locally, businesses and industrial customers are seeking energy advice and education directly from their power providers. Wayne Dobberpuhl (MBA '87) is the program manager for Arizona Public Service (APS) Solutions for Business. A leading provider of electricity, APS operates on a 47-percent carbon-free platform, including power from nine grid-scale solar plants.

Dobberpuhl, formerly a design engineer for the APS fossils plant and nuclear-generating station, arranges and conducts energy training classes for a range of customers: government sectors, public schools, barbershops, restaurants, large resorts.

Course topics cover everything from basic energy theory and lighting to load management and thermal energy storage. Working closely with the local chapter of the Association of Energy Engineers, APS's business-centric program also offers Certified Energy Manager designations for those who pass a four-hour exam after completing a semester-long course.

"We build up the energy IQ of energy professionals, facility managers, and contractors throughout the state of Arizona," Dobberpuhl says. "We also work closely with trade allies — engineers and suppliers who work for our customers in lighting and heating, ventilation, and air conditioning — to be sure they understand how to specify and use energy."

It's been paying off. Since 2006, the 2,000-plus annual participants have received more than $2.4 billion in energy savings — through Solutions for Business rebate offerings, technical assistance, and energy-efficiency guidance. The program has consistently met its annual energy savings goals each year since program inception.

Sustainable focus

At Salt River Project (SRP) in Phoenix and the surrounding area, the water and electric provider emphasizes hydropower as one sustainable power source. John Blevins (MBA '04) is the company's operations and maintenance manager for hydro generation.

A mechanical engineer, he is no stranger to energy conservation and management. Before moving into SRP's hydro operations, he worked with commercial and industrial customers to lower peak energy demands and implement conservation technologies.

Today he manages the operations and maintenance of seven dams in Arizona on the Salt and Verde rivers and another along the Mogollon Rim. Five of the dams have hydropower plants. We capture energy stored in water during the elevation drop as it passes through the dam. The high-pressure water from upper reservoirs turns turbines to generate electric power.

The combined output of SRP's hydropower is 382 megawatts; a mall or hospital, in comparison, uses a connected capacity of three to five megawatts.

SRP also utilizes sustainable pump-back storage, using the generator as a motor and reversing the spin of the turbine to pump water from a lower to a higher reservoir during off-peak hours, when grid power is cheap and abundant. The stored water is available to once again run through our turbines to generate more electricity during peak energy demands, says Blevins. Pump-back storage is a proven and sustainable means to harness energy for future use.

Alumni are quick to point out that sustainability isn't limited only to ecological concerns. Oftentimes green solutions and operational efficiencies work hand in hand. Consider supply chain, a topic close to Justin Burnett (MBA '07), vice president of materials management and warehousing at BP.

Burnett's team is responsible for pickup, transport, storage, and preservation of BP's upstream materials in the crude oil market, ranging from drill pipes, flanges, fittings, and valves down to gaskets and batteries. He has worked to standardize warehouse operations across the company's more than 100 storage locations extending from Alaska, Brazil, and the North Sea to Azerbaijan, Turkey, and Indonesia. We looked at capability within our teams — what materials each warehouse had, what was in the system, what was coming inbound, what we would receive next year — and we analyzed and digitized that information so we could really manage our materials for BP on a global scale.

Over three years, Burnett's team significantly optimized inventory, reducing its upstream holding by 37 percent. That excess inventory was cash that had come out of the business and was just sitting on the ground and not being used. The freed-up capital is just one way improved supply chain efficiencies can lead to reduced waste. More operational cash can mean more dollars for project investment, and research and development in clean energy and renewable technologies.

There's another often-overlooked side to sustainability, adds Alexis Adamson (BS Supply Chain Management/BA Psychology '08), procurement and supply chain lead at BP in Houston. "Human rights are considered part of the global definition of sustainability," Adamson says. "Including access to water, food, education, land, and homes."

Strategy, analysis, adaptability

When technological advances led to the shale oil revolution, allowing for greater and more efficient extraction, crude oil prices plummeted. BP is responding with a diversified strategy that brings even more natural gas, and also renewables, into their energy mix. "Energy companies have to be agile and must learn how to adapt to the new energy environment," Adamson says.

Perhaps no one understands the need for agility, analysis, and strategy more than Brittain. He's a real-time energy trader, responsible minute-by-minute for ensuring PGE's power supply meets demand for its more than 800,000 customers.

"The biggest worry in my field is having an energy emergency," Brittain says. "You don't want to be the one to announce a blackout and have to choose who will be without power."

He is continually taking into account predicted energy demand, efficiencies at various plants, checking the weather's impact on hydro, solar and wind production, and assessing the energy market — who is buying high, who is selling low?

"My decisions are based on what our pre-scheduled trading group did — if they set us up short, we could have to buy energy from other providers during the day. If they set us up long, we could sell." Brittain says PGE's adaptation to an energy imbalance market (EIM) has created greater efficiencies and helped stabilize the lack of predictability that comes with renewables: Will the sun produce solar power today? Is ice melt creating more hydropower? Are the wind turbines moving?

EIMs are wholesale energy markets managed by independent third parties. Large groups of energy providers who are members can buy and sell energy in real time through the EIM's data platform, which automatically analyzes pricing and energy-production information and dispatches the lowest-cost electricity resource available. "EIMs are where the market is headed," Brittain says.

Power ahead

Energy companies continue to comply with evolving government regulations, and they're staying abreast of climate policy. Most of all, however, they're listening. Burnett says, "At BP, we ask ourselves, how do we continue to improve customers' living standards as we provide heat, light, and mobility — but do so in a more responsible way for the future?"

Portland General Electric operates 40 percent carbon-free, with a goal of 70 percent by 2040. In just two years, the company's remaining coal plant will cease operations, 20 years ahead of end-of-life. In Oregon, PGE also partnered with other electric utilities, environmental groups, clean energy partners and consumer advocates to pass Senate Bill 1547, which calls for a significant increase in PGE's renewable power.

BP supports the energy transition with investments in natural gas projects globally. Its recent $200 million investment in solar, and a wind-energy business that produces enough power for 400,000 homes, illustrate that commitment.

SRP collaborates with customers, Arizona universities, and other public and private entities to develop sustainable energy technologies and conservation programs. Since 2005, it reduced its carbon emissions by 23 percent (with a renewed goal of 33-percent reduction by 2035). Also, SRP is partnering with several entities to support sustainable forest restoration on the Salt and Verde river watersheds.

APS has helped more than 300 schools go solar, and proposes to fund an electric school bus pilot program, as well as a multifamily and commercial electric vehicle charging station infrastructure to help reduce road emissions.

"I think our nation's paradigm of fossil fuels being the only cost-effective energy option has waned," Blevins says. "We now have a broader understanding of how sustainable energy will make us successful over time." And with only four percent of the globe currently fueled by renewables, opportunities abound for innovative new technologies that will add to the mix.

BP is already producing engine-cleaning gasoline that allows a tank of fuel to last longer by improving efficiency. It has partnered with Fulcrum BioEnergy to create low-carbon jet fuel from household waste and is working to decrease carbon emissions in its petrochemical manufacturing.

Renewable gas from landfills and farms is being refined as an energy source. Artificial intelligence technologies, 3-D printing capabilities, and drones are being studied for their implications in the energy market. Indeed, it's not your grandmother's wood-burning hearth anymore. New renewables are on the horizon.

Read the full W. P. Carey spring 2018 magazine »