Objective
Seeking to aid Flying Dog in improving its manufacturing efficiency and reduce, or cap the environmental impact of brewing, the team set out to achieve the following four objectives.
Lessons Learned
Impact
Though the project has recently concluded, both Flying Dog and the student team have come away with valuable knowledge and experience – not to mention thousands of dollars of cost savings.
Extracurricular projects, such as this and the OneEnergy Scholars program, are important to the development of future energy industry leaders. The George Washington University team is forever thankful for the opportunity Flying Dog Brewery has provided, and we look forward to working together in the future again.
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A Building Frenzy
It’s hard to reconcile the living contradiction that is China: a developing nation with world-class architecture and transportation infrastructure. To a newcomer, Beijing is unexpectedly modern. Progress is everywhere, plainly evident in the sleek, contemporary high rises that sprout like weeds out of the arid landscape. The urban wealth is similarly conspicuous, epitomized by the high-end cars that clog the city’s thoroughfares most hours of the day. (There are now 5 million cars in Beijing).
If Beijing is surprising in its modernity, Shanghai is shocking in its glamor. Straight out of a science fiction novel, Shanghai revels in futuristic, neon glory, its cosmopolitan spirit a result of centuries of international access afforded by its location on the East China Sea.
Our nighttime ride from the Shanghai airport to our downtown hotel was the highlight of my week. “How did they build that?” may have been the most used phrase during our 3-day visit to the sprawling city of 23 million people.
China’s two largest cities share a fascinating political and cultural rivalry that stretches back decades. Shanghai natives consider residents of Beijing, the seat of political power, to be uptight and bureaucratic. Beijingers view the residents of Shanghai, the financial capital, as shallow and materialistic. Despite any real and imagined differences, both cities confirm my suspicion that the United States’ infrastructure investments are woefully in arrears.
All Energy Sources Welcome
I took home a boatload of observations, facts, and figures from our meetings with Chinese government officials, cleantech entrepreneurs, and investors. My notes range from the ridiculous (“There aren’t nearly as many coffee shops in this country as our Seattle contingent would like” and, “I have never seen so many Seattleites in suits at one time”) to the truly enlightening (“The U.S. has nine cities with populations of greater than 1 million....China has 171”). This statistic floors me, and puts the Chinese energy industry into some perspective.
Despite having a land area similar to that of the United States, China is home to 1.3 billion people. China has done a remarkable job of elevating its citizens’ standard of living, reducing the poverty level from 85% in 1981 to 16% in 2005 according to the World Bank (poverty being defined as the number of people living on < $1.25/day). But, a voracious appetite for fossil fuels accompanies such modernization and urbanization. During the trip, I witnessed a scale of physical development truly immense. If I ever held any notion that China develops and deploys renewable energy technologies out of a sense of enlightenment, moral superiority, or environmental consideration, that notion vanished. China develops renewable resources out of fear and necessity, just as they expand coal and shale gas extraction domestically, pursue liquefied natural gas (LNG) resources in Australia and secure oil reserves in Africa.
Entrepreneurial Opportunities Abound
The pace of change in China has created seemingly limitless entrepreneurial opportunities, despite the restrictions imposed by a centrally controlled, authoritarian government. The need for clean energy, water and building technology (indeed, all technology) is vast and obvious. As we toured the country, I could almost feel the rush of entrepreneurs, investors and international technologies racing to get a seat at the table of the Chinese economic phenomenon. Twelve years ago, you could literally count private equity investors in China on one hand. Today, approximately 10,000 firms are registered as venture capitalists. If you find a way to short private equity firms in China, you might consider it.
Hope, Faith, or Despair?
For a few moments, a colleague and I fantasized about living and working in China at this unique moment in time. Then, we both realized that we could never subject our children to the country’s dreadful air quality. But China’s problems, and their impact on the rest of the world, extend well beyond smog.
I recall having a conversation, nearly a decade ago, with a friend and renewable energy expert about a weekend retreat he attended with other top scientific and environmental luminaries. He described a poignant scene in which, as these experts reviewed more and more scientific data, many of them begin to cry openly. They couldn’t help but conclude that we’re very unlikely to achieve the carbon reductions required to avoid catastrophe.
After visiting China, I can’t help but feel similarly. Yes, China has 287 smart grid projects currently underway. They are leading a PV cost reduction revolution and dominate the solar hot water industry. They are leading the globe in installed wind capacity. The list goes on. I witnessed China’s impressive investment in renewables, but I also saw smog-filled cities, polluted, anemic rivers, and mind-boggling traffic. More importantly, I know that despite unprecedented investments in clean energy projects, China has neither a commitment to, nor realistic prospects for, reducing carbon dioxide emissions anytime soon. The Chinese government, in its current five-year plan, pledges to reduce carbon intensity 17% by 2015 over 2010 levels. Reduced carbon emissions per unit of economic output are impressive, but we need actual reductions if we have any hope of forestalling a real climate crisis.
It’s difficult to see how China, and the world’s other major polluting nations, can combat climate change without significant, unforeseen technical, social, and political breakthroughs. Despite my dire assessment, I still feel compelled to work to accelerate the adoption of renewable energy technology in hopes of avoiding disaster for my children. We have no other choice. I saw this spirit in China, too, and I hold out hope that, together, we’ll innovate out of this terrible predicament.
]]>REI: Sustainability is integrated everywhere, though it's mainly focused in Government Affairs and Product Sustainability.
COSTCO: Sustainability is deep in our DNA. We are committed to providing tremendous value and extraordinary efficiencies. It is this mindset of doing the right thing that also embraces sustainability.
TARGET: Sustainability started in property development, then moved to legal, and now it resides in the marketing pyramid because it is becoming more integral to our brand.
COSTCO: We are focused on maximizing efficiencies and economies. When we look at our property development, for example, we’re thinking of how to make the most out of urban redevelopment or brownfield redevelopment. Making use of sites like in this way exemplifies our company values.
REI: In merchandising, we’re focused on sales, in-stocks, and turns. Our first priority is the customer.
TARGET: We are always looking for ways to drive people into the stores. Also, how effective are our advertising and our promotions? We want to get bodies in the store, then deepen guest engagement and build loyalty.
REI: Retail is always changing, but recently the talk is focused on the “millennials”. This is the leading-edge customer group. They’re turning 32 next year—they’re not teenagers anymore. Marketing to this group is going to be about conversations and engagement rather than blasting messages at them. If you’re not acting responsibly where sustainability is concerned, your brand is going to be highlighted negatively in that conversation.
TARGET: In a company the size of a Target, you’re going to need a few champions in several different areas. Clearly it helps to make it a key company initiative.
REI: It’s always about making choices—picking this not that. If you can’t find any champions, there’s probably a bigger issue anyway. The goal should be figuring out which issues really matter and going after those.
COSTCO: The initiative has to be less altruistic, and more practical. There has to be a demonstrated value. It’s easy to get passionate about something when things make sense
TARGET: As we just talked about, we have a few primary things that are on our mind at any given time. Sometimes people approach you with a new idea and assume you’re right there with them. Before we tackle the idea, set it up for me. To engage me fast, connect it to what I’m already doing and explain the benefit.
REI: It’s okay to treat me like an idiot, because I kind of am on this subject! Boil it down to 5th grade level, and then start the conversation. REI is in the business of selling stuff and it bothers me when people talk about getting rid of all packaging because it’s wasteful. I’m all for minimizing it, and being smart with the materials, but our goods have to be packaged in something!
COSTCO: On my side of the design and development, sustainable initiatives play a huge part. Costco was involved in these initiatives before they were fashionable.
Some of my frustrations are with certifying things we’re already doing. We’re careful about how we source our building materials, how we monitor for sanitary sewer, et cetera. However, the need or the requirement to pay extraordinary fees to certify these drives me crazy. Why should I pay $250,000 for a little glass plaque?
]]>There are nine electronic REC tracking systems in the U.S. which exist to provide the most transparent assurance that RECs are based on actual metered electric production at renewable energy projects, and that RECs are not double counted. [The tracking systems are: WREGIS; M-RETS; Texas REC; PJM-EIS; NEPOOL GIS; MI-RECS; NC-RETS; North American Renewable Registry (NARR); and NVTREC.
These tracking systems are essentially “bank accounts” for RECs, and generally all work in the same way: Renewable energy projects register with the system by providing basic information such as their size, location, owner name, and resource type (e.g. wind, solar, biomass). As the projects operate, a qualified reporting entity reports to the tracking system the actual metered electric generation by the project. The tracking system then creates and issues RECs – each with a unique serial number – to the project’s tracking system account. After the RECs are issued, they can either be transferred to another entity’s account – for example a REC purchaser or aggregator. Or the RECs can be transferred to a retirement account, meaning the RECs have been used for a purpose and can no longer be transferred or used for another purpose. For example, utilities retire RECs to demonstrate compliance with renewable portfolio laws. REC providers like OneEnergy Renewables retire RECs to fulfill retail REC deliveries to our customers.
In essence, the REC tracking systems provide a means to follow a REC from its creation, through intermediary purchasers, to its retirement. The systems are not financial trading platforms – they exist only to provide a delivery mechanism and for tracking REC ownership and use.
REC tracking systems were principally created to provide a transparent and accurate way for regulators (such as state public utility commissions) to verify utility compliance with state renewable portfolio requirements. The systems simultaneously can provide the same type of “compliance-grade” transparency and accuracy to the voluntary green power market.
In the vast majority of states with renewable portfolio laws (about 29 states in all), state law requires that utilities and power marketers use the applicable REC tracking system when demonstrating compliance with the law.
Each is managed by a different entity, but in generally they are run by independent grid operators such as PJM; grid reliability organizations such as the Western Electric Coordinating Council; or regulators such as the Texas Public Utility Commission.
No. Many RECs change hands solely via “attestations,” especially projects in the southeast and southern Midwest (Oklahoma, Kansas, and Missouri). Attestations are generally two or three page forms which identify the project, the REC seller and recipient, and the gross quantity of RECs being transferred. The attestations also include a list of statements that the transferor agrees to, for example that the transferor has not used or sold the RECs more than once.
No. Green-e Energy certified REC sellers can source RECs either from projects that are tracked, or from projects that deliver RECs via attestations.
Absolutely. RECs in tracking systems are compliance grade, providing an auditable trace of each REC’s history back to the generator. Each REC in a tracking system has its own serial number generated by the system, allowing OneEnergy Renewables to identify the exact RECs retired on our customers’ behalf. In addition, there has been a “second set of eyes” on the actual reported electric generation from the project, which must equal the number of RECs issued to the project’s tracking system account. In some cases, the tracking system will require additional information from the project owner if the amount of generation reported in for the project appears to be unusually high. The project owner and the qualified reporting entity both have enforceable contractual relationships with the tracking system to ensure compliance with the system’s rules.
Conversely, RECs outside of tracking systems do not have an equally traceable history. The owners of these projects simply self-report the gross quantity of RECs being transferred from each month or quarter of project generation. In most cases the project owner will not have any contractual relationship with a certification entity like Green-e that might allow the certifier to audit the generator. While the likelihood of fraudulent or erroneous REC quantities is likely small, REC tracking systems erase any doubts about whether RECs are based on actual generation, and whether the RECs are double-counted or double-claimed.
]]>"We are honored to join REMA, which plays such an important role in protecting and enhancing the right of electric customers to choose renewable energy," said Bill Eddie, President of OneEnergy Renewables. "Energy markets are complex, and depend upon sound policy-making for environmental integrity, consumer protection, and promotion of competition," continued Eddie. "These are values we share with REMA."
Formed in 2008, REMA represents the collective interests of both for-profit and nonprofit organizations that sell or promote renewable energy products including renewable technology, renewable electricity, and renewable energy certificates (RECs), to individuals, companies and institutions throughout North America. REMA's recent policy outreach has included promoting voluntary renewable energy purchases in California's cap and trade program, coordinating key Senate offices as they lobbied the CFTC to save REC trading from burdensome regulatory requirements, providing guidance on federal greenhouse gas accounting, revising green power credits within the U.S. Green Building Council's LEED program, and marketing recommendations to the WindMade Label Program.
"Project developers like OneEnergy Renewables move the industry forward by connecting institutions that are serious about renewable energy to new project opportunities, with the end result being more green projects in the ground," said Josh Lieberman, REMA General Manager. "We welcome OneEnergy Renewables' support and the expertise they will bring to our promotion and advancement of green power products, services, and markets."
For more information on REMA, its membership and outreach, visit www.renewablemarketers.org/
]]>A renewable energy certificate (REC) is created when one megawatt-hour (MWh) of renewable electricity is fed into the power grid. A REC represents the positive environmental benefits associated with renewable energy generation. Renewable energy facilities generate electrons that are no different from the electrons generated by coal or nuclear. The benefits of renewable energy stem from the environmentally-friendly way in which these electrons are generated. RECs simply represent these quantifiable environmental benefits and allow the holder legitimate legal claim to them.
RECs have economic value and can be bought and sold, which allows anyone in any part of the country to support green energy regardless of local supply. When you buy a REC, you are not consuming renewable energy directly. To do so would require you either to put a renewable energy generator on-site (like a solar panel on your roof) or to build power lines direct from a project to your house or business (usually this isn't possible). RECs were developed to remove these barriers so that consumers could directly support renewable energy projects. Since the holder of a REC is paying the premium for renewable energy fed onto the power grid, the holder can take credit for the environmental benefits associated with the renewable energy produced.
Without RECs, renewable energy projects would not be financially viable and developers would stop building them. A REC purchase signals to project developers and landowners that consumers value the environmental benefits of clean energy, and they are willing to pay for them. That signal supports existing projects, and encourages additional clean energy development.
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