In my letter to the editor published Oct. 9 (“Bringing efficiency to the energy equation”), I pointed out that a key finding of the McKinley study in the United States was that a program offering 50 per cent rebates, funded by an electricity rate increase of only four per cent, gives a 24 per cent reduction in customers’ electricity bills.
Many American jurisdictions spent 10 times more than we do to help their customers save energy, and thereby avoid expensive new generation expenses, at only one third the cost.
My next letter, published Oct. 31, showed we have more potential here for efficiency savings than in the U.S. if we use efficient heating plus others sources of efficiency.
Potential reductions of 45 per cent of our total production were identified, most being in the presently inefficient heating sector.
Potential savings were four times the 885 gigawatt energy production of Holyrood for the year 2011.
It is necessary to quantify the saving and cost effectiveness for the customer and the power companies of the efficient heating systems. There are three types.
Type 1, earth or water source, is the most efficient, using 75 per cent less electricity and is effectively used in large government and commercial buildings. For residential homes, it has limited use.
It is expensive, with an installed cost about $4,000 per 1,000 watts of heat.
Type 2, air source ducted, generally cannot fully heat during very cold conditions and needs backup electric heaters. They are about 35 per cent less efficient than type 1 and provide little offset against the system peak demand reduction. The installed cost is about $2,000 per 1,000 watts of heat, and problematic for older houses, because of the need to install ducts.
Type 3, air source mini-split variable speed, reduces electricity by 50 to 80 per cent, about 67 per cent on average for our climate, and can provide full heat under cold conditions without backup electric heaters. They give excellent peak demand reductions, 50 per cent at
-15C, 60 per cent reduction with modest oversizing.
This nearly matches the cold weather performance of type 1, and some models operate down to -25C. At an installed cost of about $1,500 per 1,000 watts of heat (at -15C), they are the most cost-effective. Across the country, shipments rose 46 per cent in 2011 over the year 2010. They also cool and dehumidify in summer.
Installations in Newfoundland often use a central heater to serve 70 per cent of the heating load. More complete coverage would have two or three heaters on the main level and one or two in the basement. Inverter technology and other advances has increased reliability and life expectancy can be 20 to 25 years, with compressor warranties from seven to 10 years. Installed cost for an average house would be $8,000.
High efficiency stand-alone hot water heaters save about 60 per cent on energy use and cost about $1,800 installed.
An average electric heated house consumes 15,000 kWh per year, with heat 69 per cent of the total, and each contributes 5.2 kw towards the system peak demand.
Type 3 heaters reduce average household demand of about 55 per cent, 2.86 kw each.
For Newfoundland Power’s 151,000 residential electric heat customers (a portion of the total) this would mean a 432 megawatt system reduction.
Hot water consumes 11 per cent of domestic energy, 792 kWh on average.
Efficient hot water tanks saves another 30 MW on the system peak demand, for a total of 462 MW, or almost equal to the full peak 490 MW maximum capacity of Holyrood, and 1.5 times the full 300 MW allocation of Muskrat Falls power for the island.
The energy savings of 5,619 kWh for heat and hot water per house (for 151,000 houses) is 848 gWh system saving, 96 per cent of the full production (885 gWh) of Holyrood last year. Allowing a 20 per cent “rebound effect,” it would be 77 per cent of Holyrood production in 2011. Assuming 13,000 residential conversions per year, 40 MW system demand reduction per year would reduce Holyrood to zero production in 12 years, achieving 98 per cent green energy. An eight per cent surcharge on rates (0.9 cents per kWh) for residential and commercial would generate about $52 million per year.
This would allow for a 40 per cent rebate to 13,000 customers, where the installed cost for the heating is $8,000 and for hot water is $1,800. The cost for 151,000 units would be $1.5 billion.
With conversion for commercial, all residential and other efficiency options, demand reductions well exceeds Holyrood’s capability and can give total energy savings well exceeding our forecast needs to the year 2030.
Efficient space heating would save 32 per cent on the overall residential bill, and that’s a conservative estimate. An average power bill of $200 per month, with an eight per cent surcharge and 32 per cent saving gives a net $53 per month reduction. A $300 per month present bill would see a reduction of $80 per month.
Even with the surcharge, this is a 26 per cent saving. Efficient hot water would save another five per cent ($11 to $16 per month), for a total of about 31 per cent. This is 29 per cent more than the typical American efficiency saving of 24 per cent.
These savings would allow the customer payback in 7.5 years, not including interest costs, and net savings of over $11,000 over the life of the equipment. For 151,000 residential conversions, it represents $120 million annual customer savings, and over $100 million in oil expenses savings for Newfoundland Hydro.
Efficiency savings from heating, hot water and all other efficiency options is massive, very cost effective and can be staged and ramped up to offset thermal generation.
It can achieve the additional energy needs up to the year 2030 and satisfy peak demand requirements.
These savings are self-financing with a surcharge and consumer savings on power bills. Wind energy, according to Manitoba Hydro's latest report, is reliable, up to 10 per cent of our generation. This amount of extra wind allows wind to triple from 54 to 162 MW at a cost of about $240 million. The extra 77 MW of small hydro costs $398 million.
The island wind and hydro together are $638 million. Efficiency would be the major cost-effective source and, in combination with small hydro and wind, would be the least-cost option by far. It would carry our power needs to 2041 or longer, and achieve 98 per cent green energy. Any retail electricity price increases would be more than offset by customer energy savings. Staged wind and small hydro additions, concurrent with efficiency savings, could reduce Holyrood production to zero in seven to eight years.
Even without an efficiency rebate program, customer conversions to these efficient systems have compelling economics and presents a serious risk to the load growth forecast. By assuming that efficiency has reached a saturation point, Nalcor and Manitoba Hydro International’s error is a serious risk in forecasting island power needs, and may lead to a serious financial burden for our province.
Winston Adams lives in Logy Bay. He has a B.Eng. (electrical) and experience in
generation and distribution and heating systems. He is not a member of the
Professional Engineers and Geoscientists Newfoundland and Labrador.