President's Message 3rd Quarter 2017

By Robert Thornton posted 08-15-2017 00:00

  

One outcome of the United States federal government’s decision to withdraw from the Paris climate agreement is a resurgence of efforts by cities and states to step up their investments in more energy-efficient and sustainable solutions. Compared to our elected officials in Washington, mayors and governors operate closer to their constituents and are often called on to mobilize resources during extreme weather events. Former New York City Mayor Michael Bloomberg believes that the trend toward cleaner, more resilient energy will continue even without meaningful support from the federal government "through strong action by local leaders, businesses, and investors, who remain committed to fulfilling the Paris Agreement."

 

IDEA believes that district energy systems will need to play a pivotal role in the energy future of cities and that our industry is well-positioned to support the objectives of local government leaders. This belief was recently on display at IDEA2017: “Sustaining Our Success,” our 108th Annual Conference and Trade Show in Scottsdale, Ariz. Our keynote speaker, Brian Deese, formerly senior advisor to President Obama and a lead negotiator for the U.S. in the U.N. climate agreement, offered an excellent address with an optimistic view for our industry, urging IDEA members to engage at the local level to promote investment. (Please visit IDEA’s YouTube page to hear a portion of his remarks.)

 

In addition, industry leaders from 10 countries plus the European Union converged at IDEA2017 to sign a global collaboration agreement. Citing the ongoing mission of the United Nations Environment Programme (UNEP) District Energy in Cities Initiative, representatives from Canada, China, Colombia, Denmark, European Union/Germany, Japan, Singapore, United Arab Emirates, United Kingdom and the United States jointly authorized a memorandum of understanding (MOU) that calls for enhanced industry collaboration and coordination on efforts to educate, inform and advocate for more favorable policies with government leaders and regulatory agencies through sharing relevant legislation, policy initiatives and industry research that supports investment in district energy for cities, communities and campuses. (For more on the collaboration agreement, visit http://tinyurl. com/y9mhnqwu.)

 

Another aspect of the MOU calls for sharing our members’ considerable technical strength for more open exchange and collaboration on development of industry guidelines to enhance market awareness of technical, regulatory, environmental, financial, operational and efficiency best practices. For example, regarding what members from the respective countries bring to the table, Germany offers excellent and thorough technical guidelines for the construction, operation and optimization of district heating networks. Singapore has developed progressive zoning policies to enable district cooling deployment. Dubai has deployed highly advanced district cooling metering, monitoring and customer integration protocols as well as clever water resource management strategies. Denmark offers decades of community energy planning and is leading the way in decarbonizing cities through sustainable district energy. The U.S. is emerging as a technology and policy innovator in district energy/CHP/ microgrids to enhance economic and grid resiliency. Other signatory countries offer other complementary strengths. Collectively, sharing these industry best practices should facilitate and accelerate industry expansion in cities, communities and campuses.

 

IDEA aims to serve as a global industry catalyst to lead this convergence, utilizing – among other tools – our new website to foster easier communication and exchange. The updated format of www.districtenergy.org, unveiled at IDEA2017, is designed to enable easier access to and among our members. Through IDEAConnect, members will have the ability to update their profiles, interact easily and help each other solve problems. As an iteration of our popular IDEA Forums, the site will provide both access to business partner resources and the ability to focus on specific topic areas of interest, like distribution systems, operations and safety, talent management and business development.

 

Through our continued involvement in the UNEP District Energy in Cities Initiative, IDEA is working across borders to assist developing economies with technical and business case resources to better evaluate and develop district cooling systems, with strong support from Dubai-based Empower Energy Solutions. Much of today’s global urbanization is occurring in warmer or subtropical climates where electricity grids are already strained to the maximum. Shifting the air-conditioning load from inefficient and costly standard air conditioners to aggregated district chilled-water networks will benefit both the end user and the regional economy. As evidenced by the NRG district cooling system in Phoenix (our host for IDEA2017), the deployment of large-scale ice thermal storage has substantially reduced peak electric demand while delivering highly reliable and cost-effective cooling for a fast-growing urban center.

 

Developing new or expanding district energy infrastructure is not a simple endeavor and requires both strategic capital and effective market analysis. As cities seek to attract private capital investment, it will be important to better understand the respective roles of public-sector leaders and industry technology providers. IDEA, under the leadership of Laxmi Rao, with the support of the International Energy Agency, recently released a compendium on district energy development guidance intended to assist city sustainability and economic development directors with awareness of best practices. Strategies that “de-risk” infrastructure development, utilizing both carrots and sticks, have been implemented in places like London, Copenhagen, Vancouver and Seoul, and they can be instructive to communities that are in the early stages of deployment.

 

Recently, an indicator of a healthy industry has been an active acquisition market, exemplified by substantial investments made by Engie, Enwave and NRG Energy in the Middle East and North America. Engie, formerly GDF Suez, recently acquired a substantial share of Tabreed, one of the early and largest district cooling providers in the Gulf region, and entered into a longterm concession agreement with The Ohio State University that may represent a new approach to campus asset management and capitalization. Enwave continues to add to its impressive portfolio of systems in Canada and the U.S., aggregating and integrating platforms to enhance asset value to stakeholders and communities alike. NRG Energy recently broke ground on a brand-new district energy system in downtown Pittsburgh and is supporting the vision of Mayor Bill Peduto for a substantial paradigm shift to cleaner, more distributed energy systems. IDEA will be bringing our 110th Annual Conference to downtown Pittsburgh in 2019, and we are excited to be supporting the strong public-private partnership emerging in the Steel City.

 

National politics notwithstanding, all is not lost on the federal front. Recently the U.S. Senate released an 891-page energy bill that contains multiple references to combined heat and power, microgrids and renewal of energy infrastructure, including an approved authorization of an appropriation of $200 million per year for the years 2018-2027. We are a long way from resolution and passage of an energy bill, but it is encouraging to see IDEA-suggested provisions and recommendations reflected in the bill’s language. In July, IDEA participated in the Sustainable Energy Expo in Washington, D.C., and we have arranged a series of meetings with congressional offices to share our findings on the critical energy infrastructure inventory, totaling over 80 district energy/CHP/microgrid projects in 24 states with an aggregate value of $4.175 billion. Our plan is to make the case that energy infrastructure projects that enhance resiliency, strengthen local economies and generate good jobs merit consideration in a federal infrastructure initiative. Our challenge will be to catalyze bipartisan support and identify reasonable financing schemes. We will be reporting on our progress with the infrastructure bill and Senate energy bill S.1460 as it progresses. Please stay tuned.

 

Over the next 12 months, IDEA has an ambitious program calendar planned with the Microgrid 2017 conference in Boston, Mass., Nov. 6-8, 2017; CampusEnergy2018, “Sharing Solutions, Sustaining Our Future,” March 5-9, 2018, in Baltimore, Md., hosted by Johns Hopkins University; and IDEA2018, “Local Solutions, Global Impact,” in Vancouver, B.C., hosted in part by the University of British Columbia. I have often said that Vancouver is one of the most naturally beautiful cities in North America, and I hope you will make plans to attend and extend your visit to the magnificent Pacific Northwest. Recent IDEA conferences have been substantially oversubscribed with abstract submittals for speaking slots, and we have consistently sold out our exhibit space. So, I urge you to sign up early. We look forward to working with our members to advance our agenda promoting “local solutions with global impact.”  


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