A Business Case for Going Green
Looking into the near future, I see low energy prices. As of today, energy prices are remarkably low in fact. They have dropped so much that companies, whose sole business model is setting an example of how sustainability is achievable, are losing money at a rapid pace thus making the outlook for the Green Industry quite bleak.
What is the Green Industry you ask? It was a term coined by the United States Green Building Council to certify buildings that are built to perform at optimal levels both in terms of construction and energy consumption. This plays directly into carbon reduction from decreased emissions. These types of projects are referred to as Leadership in Energy and Environmental Design or LEED. There is often a premium that is paid for a building to obtain a LEED certification, which is then subject to maintaining the building certification status with follow up commissioning to verify that the building performance hasn’t lagged from the original design. The premium for this service can be in the range of five figures with little guarantee of a return on investment.
Energy Star is another certification that functions on a slightly different level focusing solely on building performance based on energy consumption with a heavy emphasis on mechanical engineering and project savings. Both of LEED and Energy Star certifications are useful in their own ways, but often times include relatively new concepts that may not be perceived as safe investments.
The Green Industry relies on sustainable construction practices and clean energy technologies for overall success. More often than not, the Green Industry at its core is met with serious adversity. This adversity hinders the advancement of an entire industry that fundamentally wants to help people consume less and save more. The clean energy tech that needs to be incorporated for these projects to make sense is not usually an easy pitch to investors for a number of reasons.
Take solar power or wind for example. I like solar power because it’s a very practical and abundant resource. I believe there is a great market in wind generation also, but the fact remains that the performance of these technologies is sporadic.
Solar power is great during peak hours of electrical demand, typically in the afternoon, but occupancy during those hours can be very low. Another difficulty is when clouds come over head. This can immediately effect solar generation having a tremendous impact on the output. It would make sense to cover high rise buildings with solar panels to decrease heat gain, while improving building performance. The problem there is roof space in the city is often to small for solar to make sense.
Wind power meets barriers because of the nature of the technology. It’s difficult to deploy on a small scale because of local municipalities and the hindrance of neighboring views. Not to mention the first cost. One important question concerning wind power is when it’s most useful? From a business perspective, during times of high electrical demand to reduce the load on the grid and reap the rewards of off-peak electrical costs. Sounds great in theory, but the highest peak demand is during the afternoon hours of summer months when wind blows the least.
Energy Storage seems to be the holy grail of clean energy. Without out it, the industry continues to sputter. Energy storage could solve most of clean energy’s problems yet it’s almost impossible to get a CEO to sign off on a multi-million dollar project that won’t pay for itself.
Historically, and I’m talking within the past ten years, lithium is the go to resource to create batteries for clean energy. However interesting and useful lithium may seem, it also has major drawbacks including availability of raw material – there is a finite amount in the world, lifecycle, possible environmental hazards, weight, safety hazards in regard to building codes, and mostly first cost. Lithium batteries are a very expensive solution to fixing clean energy’s drawbacks. The more I research energy storage the more it makes sense, but if people are charging thousands of dollars per kilowatt then the market will never take it seriously.
Sodium Ion (salt water) batteries are promising. They’ve only been on the market for a few years, but their price points are a fraction of lithium. They are also lighter, have a decent warranty, and can store over 6 hours of useful energy.
If programs like demand response begin to spread then energy storage will make total sense. That way even if clean energy resources aren’t available, business owners could charge the batteries during off peak hours, to reduce grid demand during “events”.
Events are a term used by Demand Response companies to describe a time of peak usage where they need to cut consumption in order to reduce the strain on the grid. Demand Response companies offer investment opportunities for customers who are willing to shed loads during