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Pct Solution For Emerging Energy Markets
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Pct Solution For Emerging Energy Markets

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The first quarter of 2009 has ushered in a new era for the alternate energy market in the US. This has resulted in a visible increase in interest on alternate energy technologies. Most would think the …

The first quarter of 2009 has ushered in a new era for the alternate energy market in the US. This has resulted in a visible increase in interest on alternate energy technologies. Most would think the attention to alternate energy has come just in time, especially with the rise in fossil fuel prices, stringent environmental regulations, and significant changes in preferences among consumers.

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  • 1. The PCT Solution for Emerging Energy Markets: Solar, Wind, and Other Alternate Energy Executive Summary The rst quarter of 2009 has ushered in a new era for the alternate energy market in the US. This has resulted in a visible increase in interest on alternate energy technologies. Most would think the attention to alternate energy has come just in time, especially with the rise in fossil fuel prices, stringent environmental regulations, and signi cant changes in preferences among consumers. This whitepaper acknowledges the changing perception of the country towards alternate energy; looks at the advantages of renewable energy, and also discusses the hurdles in the way. It also describes regulations that have been used to promote green energy generation in the United States. Price has always been a compelling determinate of a company’s choice of energy. This whitepaper, however, argues that although power generated from fossil fuel may seem cheaper in the short term and the investment in infrastructure related to renewable energy may seem expensive during installation, the total-cost-of-ownership is much lower and the infrastructure soon begins to pay for itself due to the low input costs. This whitepaper presents compelling arguments that energy e cient technology is not just possible and desirable, it will soon be mandatory from a regulatory point of view. The whitepaper then reviews the unique role of Paci c Crest Transformers in the emerging energy markets of solar, wind and alternate energy. Copyright © Paci c Crest Transformers Inc. 2007-2009 www.paci ccresttrans.com Alternate Energy 01
  • 2. Introduction The United States is currently at a critical juncture. On one hand is the growing demand for power; and on the other is the need to drastically cut down on carbon and greenhouse gas (GHG) emissions. While there has been growing interest in promoting the use of renewable energy for a number of years in the United States, the market share of non-hydro renewable energy sources in electricity production has remained an abysmal 2 per cent for over a decade. Thus, what one sees is a vast, untapped potential for the alternate energy market. (For details regarding the Role of Renewable Energy in the United States Energy Supply (2007) refer to gure 1.1) What could change the low market share of renewable energy in the United States is the national Renewable Green Power Generation Portfolio Standard (RPS). The RPS sets a target percentage Technologies of renewable energy generation to be reached by a certain Solar photovoltaics year. Interestingly, the US has set itself on a target of Solar thermal 10 per cent RPS by 2012 and 25 per cent by 2025. This is, Geothermal of course, a tall order and will require much planning, Wind investment and a detailed implementation blueprint. However, towards making the RPS of 25% a reality, funds Biomass to the tune of millions of dollars have been allocated from the recent economic stimulus package. Presently, the use of fossil fuels is the prime method by which electricity is generated in the US. It is also third largest source of GHG emissions. This is a matter of growing concern. The Role of Renewable Energy in the United States Energy Supply (2007) Source: http://tonto.eia.doe.gov/energy_in_brief/renewable_energy.cfm Fig 1.1: The Role of Renewable Energy in the United States Energy Supply (2007) Copyright © Paci c Crest Transformers Inc. 2007-2009 www.paci ccresttrans.com Alternate Energy 02
  • 3. The New Plan for Renewable Energy in the US The critical situation in the US energy market is, prompting the government to take some visionary decisions on energy. The recent stimulus package has resulted in some interesting timeframes: Doubling this nation’s supply of renewable energy in the next three years from 7% to 14% Laying down thousands of miles of power lines that can carry new energy to cities and towns across this country Legislation for a market-based cap on carbon pollution Investing fteen billion dollars a year for 10 years to develop technologies like wind, solar, biofuels, clean coal, and more fuel-e cient cars and trucks Making homes and buildings more e cient with the potential to save billions of dollars on energy bills Advantages of Using Renewable Energy Geothermal, solar and wind resources are plentiful across the country and yet go unexploited. Some of the advantages of tapping into this reliable and plentiful supply are:- Fewer burdens on the environment Renewable energy technologies like solar photovoltaics, solar thermal, geothermal, wind and biomass impose fewer burdens on the environment than emissions from fossil fuel combustion. Declining costs with increasing demand If the demand for renewable energy increases, it will set o a chain of events that will bring down its cost of production, making it cost e cient to produce power from renewable energy sources. Reduced dependence on imported fossil fuel Since renewable energy is available domestically, renewable energy resources are viewed as a much more secure option than imported fossil fuels. Generation of new jobs The growth of the renewable energy industry will result in the creation of a whole new set of jobs both directly - like in design, installation, servicing - and indirectly, through the supply of raw materials, transportation equipment and professional services. Copyright © Paci c Crest Transformers Inc. 2007-2009 www.paci ccresttrans.com Alternate Energy 03
  • 4. Initially, the infrastructure investment may cause the cost of switching over to renewable energy seem high, but within a short time, this cost can be recovered with the low cost at which the electricity is generated. Hurdles to the Extensive Use of Renewable Energy Electricity 1. Renewable energy is capital-intensive and expensive: Renewable energy power generation plants are usually more expensive to build and to operate than coal and natural gas plants. 2. Renewable resources are often geographically remote: The best renewable resources are often available in remote areas, thus building transmission lines to deliver power to large metropolitan areas can turn out to be expensive. 3. Uncertainty about interconnections with the electric grid: Variability in availability, for example the intermittency of wind and sunlight is frequently viewed as a major barrier to economic viability. Regulations that Promote the Use of Renewable Energy Electricity While companies struggle with the decision of when and how they should introduce renewable energy into their units, the Government has gone ahead and implemented numerous regulations that make renewable energy an attractive or even an imperative option, depending on which side the company is on. The Federal Public Utility Regulatory Policies Act (PURPA) of 1978 has played a signi cant role in encouraging the shift from conventional energy to renewable. This statute speci es that utilities have to purchase power from nonutility producers at prices that represent the ‘avoided cost’ that utilities would otherwise have had to pay to produce power using conventional resources such as petroleum; state regulators calculate these avoided-cost prices. Tax Reform Act of 1986, under this Act both solar photovoltaics and wind power bene t from investment tax credits. Wind power has been accorded a depreciation life of ve years—much shorter than the depreciation life of conventional power supply investments. The Environmental Protection Agency (EPA) has determined that 61 billion kWH of electricity is wasted each year in transformer losses. This nding led the Energy Act 1992 to mandate the Department of Energy (DOE) to work closely with the National Electrical Manufacturing Association (NEMA). NEMA recommended transformer e ciency levels in 1996 – and launched standard TP-1-1996. Copyright © Paci c Crest Transformers Inc. 2007-2009 www.paci ccresttrans.com Alternate Energy 04
  • 5. Public Law 109-58, 2005 Energy Act came about because the guidelines for reduced energy consumption did not reduce wasted transformer loss as expected. Energy E cient Transformers: One Real Solution As energy costs continue to rise and power availability becomes uncertain, the necessity of utilizing energy-e cient products of all types is becoming universally recognized. Additionally, the globally competitive business environment is causing businesses to cut costs in order to remain competitive. Of particular interest are distribution transformers that are the largest loss-making components in electrical networks that remain energized, consuming energy 24 hours a day. In a typical grid, electric transformer loss contributes to about 40-50% of the total transmission and distribution loss. In the United States, the Environmental Protection Agency (EPA) estimates that on a conservative estimate 61 billion kWh annually can be attributed to transformer losses. These losses cost end-users $3 to $4 billion. An energy-e cient transformer is therefore an important means to reduce transmission and distribution loss. Energy saving transformers can save the equivalent of more than 70 million tons of CO2 emissions. The sharply increasing costs of electrical energy are forcing electrical supply authorities to recognize the critical importance of the cost of electrical losses. Electrical utilities are increasingly required to operate their networks more e ciently and to reduce the total real running costs of the equipment. While a part of the answer of energy e ciency is in making distribution transformers e cient; and thankfully, manufacturers have the technical know-how to o er a better cost e ective, low loss, energy e cient transformer; another part of the answer lies in generating power using alternate technologies. Re-Looking at Price Why Cheaper Transformers May Not Really be Cost E ective in the Long Run For years, electric utilities have been evaluating transformers for losses. However, one of the key determinants for the purchase of a transformer is the initial cost. In fact 95% of buying decisions are based solely on initial costs. The high initial cost for setting up alternate energy infrastructure has e ectively hampered its growth; but is it really expensive? an understanding of operations costs reveal just the opposite. Copyright © Paci c Crest Transformers Inc. 2007-2009 www.paci ccresttrans.com Alternate Energy 05
  • 6. What is noticed is that the total operating cost of the transformer, over its entire life is rarely taken into consideration. Transformers typically can be expected to operate 30-40 years or more, so buying a unit based solely on its initial cost is both uneconomical and unwise. Transformer life-cycle cost or total owning cost takes into account not only the initial cost of the transformer but also the cost to operate and maintain the transformer over its life. This requires that the total owning cost be calculated over the life span of the transformer. With this method, it is now possible to calculate the real economic choice between competing models. The total-cost-of-ownership method not only includes the value of purchase price and future losses but also allows the user to adjust for tax rates, cost of borrowing money, di erent energy rates, and more. Since the operating cost of a transformer over its life may be many times its initial price, the only fair comparison with competing models must take operating costs into account. Buying based on life cycle cost would save literally hundreds of thousands of dollars in operating losses over the installed life for transformers in a typical facility. A more e cient transformer and the infrastructure cost of transmission lines can pay for itself many times over during its 25-year lifespan, if the energy being transmitted is from a renewable source, precisely because of the low input costs. Paci c Crest Transformers: Role in the Emerging Alternate Energy Markets Paci c Crest Transformers (PCT) has over 90 years of experience in transformer manufacture. Additionally, it has been manufacturing, energy e cient, environmentally friendly transformers since the 1980s, much before ‘green energy’ became a ‘fashion’. PCTs years of deep domain experience and R&D in innovative design allows it to manufacture premium custom built, robust transformers for global requirements. While liquid- lled transformers that use mineral oil for insulation have a ected the environment and heightened the re risks of wind turbines, PCT’s standard design is far less prone to failure - and much safer as well. PCT transformers are poised to play a key role in the alternative power markets as energy-e cient custom-built transformers can help to step up or step down voltage to sub-transmission and transmission voltage levels. PCT also provides custom-built grounding transformers for wind farms. These transformers are located at the 34,500 volt “collector”. These grounding transformers are designed and custom built by PCT. Additionally, when given the harmonic content for an installation, PCT designs transformers to e ectively handle harmonic distortion. Properly constructed transformers are very reliable and e cient; PCT’s transformers are designed to eliminate hot spots in the insulation system thereby increasing the life of the product. Copyright © Paci c Crest Transformers Inc. 2007-2009 www.paci ccresttrans.com Alternate Energy 06
  • 7. PCT’s standard design incorporates round coil, cruciform core construction which is far superior to rectangular coil, formed core construction which is largely used by its competitors. PCT can produce transformers with environmentally friendly vegetable-based insulating uid which has a much higher ash point and is totally biodegradable. PCT transformers are designed and tested to operate well below the maximum thermal limit for which the paper insulation is rated. Conclusion While the need for energy cannot be compromised, the debate on technologies that can be used to generate it continues to rage. Companies presently have a choice to either depend on increasingly unreliable fossil fuel or display their corporate social responsibility to the communities they live in and adopt the sustainable option of alternate energy. Initially the change to an environmentally friendly form of energy may seem a daunting task but in the long run it is the most sustainable option - and it can actually be cheaper. Copyright © Paci c Crest Transformers Inc. 2007-2009 www.paci ccresttrans.com Alternate Energy 07