Sempa Power can swing both ways

There’s an interesting little company in Vancouver called Sempa Power that’s been sharing a little secret with governments, business and industry: sometimes it’s okay to use electricity for heating. A shocking statement, eh? I mean, with the exception of heat pump technology, electricity has generally been vilified as a source of heating.

Sempa sees it a different way. It has developed software that does an up-to-the-minute analysis of natural gas, propane, oil and electricity rates and can switch a customer between electricity and fossil fuels whenever the rate is lowest. This requires putting in electric boilers at a customer’s site, but Sempa argues that the savings from its “hybrid heating” system offer a payback of just three years. This is because natural gas tends to be cheaper than electricity during the day but more expensive at night, particularly as jurisdictions move to time-of-use electricity rates that offer off-peak discounts. It also turns out that nighttime electricity is cleaner than using natural gas in jurisdictions that rely on nuclear and hydroelectric generation for baseload power, and which have a lot of nighttime wind generation. So Sempa customers, in addition to saving, can also lower their environmental footprint. Hotels like it. Sempa has installed its system in several hotels already, including in Whistler — the site of the 2010 winter Olympics. The system is also in a hockey arena in Manitoba.

What Sempa is doing is not rocket science, but it does highlight the benefit of thinking more holistically about how we use energy. Too often we pit grid power versus natural gas, without thinking that one is better some times and the other is better other times. Not only does a hybrid system get you savings and, in most cases, reduced emissions, but it also gives you a backup in case one of the two fails.

7 thoughts on “Sempa Power can swing both ways”

  1. I’m not opposed to the overall idea, but fear a bit of greenwashing. Take the concept of “hydroelectric baseload”. Hydroelectricity is an energy source with built-in storage and the ability to quickly react to energy demands. This makes it a valued resource that other areas pay quite a bit for during peak times. However, it also means that any energy you use at night won’t be available for someone to use the next day. Except at rare nights of heavy rain when the generators have to work at capacity to relieve pressure on a dam, extra night time usage still effectively means someone will have to burn more coal somewhere.

    For more on this, see my “Where does the power go?” comment on the heat-from-lighting topic two posts ago.

    -Matt the Engineer

  2. Relatively few utilities have a lot of hydro storage. Ontario has little, and at night, meeting the load reduction is a challenge. They generally use whatever hydro storage can be used to store at night but that still requires them to reduce load at large coal fired plants. They waste energy by reducing output a night at Niagara Falls – when they could in fact be generating much more… They claim that over 80% of the time – coal is at the margin and that is why. Cycling coal plants as they must do to meet night load reductions is both costly and inefficient. Ontario exports electricity at night to achieve the match – and most nights, Quebec buys power from them at very low prices (less than 2-3 cents/kWh – which is $5-8/gJ of delivered heat.) At exactly the same time (at night), Ontario is buying and burning natural gas – which delivers heat at a cost of about $12/gJ or more. On a few nights in the past, the surplus has been a real challenge and the electricity price has dropped to zero!

    It makes little sense to export electricity at what I suspect is below cost, yet burn gas at the same time. Ontario citizens have spent a lot of money to reduce GHG and they should capture what they can at home before selling it at less than cost.

    Your previous post on California was interesting. Seattle does indeed have a hydro system that has worked well for them – and there is also good storage on the Skagit – but almost nothing at Boundary. I suspect that what Seattle has done in the past is similar to what BC Hydro did – and it makes both good sense and good money. They purchase from California at night – when they have the same problem as Ontario – cant deal with the surplus. Both BC and Seattle have storage, so they can power their loads at night from California and store the water.. Next day, when California is in desparate need for power, to meet their peak load, they have surplus to sell – at a much higher price. There was a big lawsuit over this. This does help others to meet peak – but as for GHG I am not at all sure that it does anything. BC Hydro, at the time was a net buyer and they were buying at night and selling a little less during the day – and still making money – a lot of money. The energy that they were selling back was in essence the same energy that they purchased the previous night – and that was apparently thermally generated. Storage does not wash away the GHG emissions…

    So in my view, the use of electricity, particularly renewable energy, to offset the use of fossil fuel will always make sense…

  3. I strongly agree with you in terms of cost. This plan makes a lot of sense as far as using cheap electricity versus expensive natural gas at night. This will continue to be true unless good carbon pricing comes into effect (and even then you’ll have an advantage). But I think you’re missing a few points when it comes to carbon.

    Let’s take your quote “They generally use whatever hydro storage can be used to store at night but that still requires them to reduce load at large coal fired plants.” This is exactly what works well in our current system. It’s not the best deal for Ontario, but it’s good for our planet. This energy is never wasted, it’s just used to reduce (cheap) coal power. But coal is an enemy to mankind – it’s the highest emitter of CO2. When you switch from (low CO2) natural gas at night to an electric boiler, somewhere else they’re using that much energy to run a coal plant a little more. The overall effect is to use coal to heat your house.

    Only at the rare times when energy is actually wasted in dams – using spill gates at the same time as you aren’t running your generators at full capacity – would you be saving any carbon using this method (as the generators would be used a bit more during these times).

    In short, our continent has a limited amount of renewable energy – and that energy will be used to capacity whether or not you install an electric boiler. Claiming that switching to an electric boiler is “green” can’t be done without ignoring this basic fact.

    -Matt the Engineer

  4. Great points – but not quite perfect… Most coal plants cannot be shut down at night – because they take more than a day to start or stop – they will run 24/7 whether we like it or not. In Ontario, the output of Niagara is reduced to about half at night – and the operating rules there allow them to gererate as much as they can at night. They do have a little storage behind a wier – but for the most part – the extra water goes over the falls – wasted every night. In Alberta, they appear to shut down windmills at night because that is the only type of generation that can be shut down and started the next day. Nuclear plants generally must run 7/24 and when the coal fired plants in Ontario are eliminated, they will use big gas turbines to meet peak loads. By increasing night loads, and therefore reducing the difference between peak and valley, the need for the gas turbines can be significantly reduced – and then the balance will be from hydro and nuclear – with ZERO marginal GHG emissions.

    You can look at the wholesale price of electricity and in most locations in North America. It drops most nights to about the maintenance cost of a run of river hydro plant – so you can guess what is dropping off line.

    I absolutely agree with you that coal is bad, as it is, because without carbon sequestration, it puts about 3.5 times the carbon into the air that a coal fire creating the same energy would do.

    However, as we slowly move away from coal, as Ontario is doing, the need to reduce the difference between peak and valley is the next big issue – and managing the off peak without large hydro storage becomes a huge issue. It will become increasingly important to try to improve load factor – both by reducing peaks and filling the valleys. Coincidentally, this technique also reduces the overall % line loss – which is another issue of interest these days.

    What is really needed to make this all work is a better grid – connecting locations with storage, to those with mostly thermally generated power. In Canada, BC, Manitoba, and Quebec have large amounts of hydro storage – and most other provinces (except Newfoundland) use steam turbines. A heavy tie line connecting these together would allow the provinces with storage to share with other locations, and the result would be less GHG. The existing north south ties have done wonders from an economic point of view, and could contribute to the GHG issue as well – but sadly, our GHG performance is measured as a country and we are in pretty poor shape. We need all the help that we can get.

    Is Mat the Engineer – the Google Matt??

  5. (Not a google Matt – I’m a mechanical engineer in Seattle)

    Thanks for the wonderfully detailed comments. If they are spilling water at night, then the electric boilers could save carbon. I’m just surprised it worked out this way. Our continent has an unsettling number of coal plants, each with the capacity to significantly throttle down. Since their maintence costs would be more than hydro – plus they have to add fuel costs – it would seem profitable to sell power to coal-plant areas even with fairly high transmission losses. But, if there isn’t enough transmission capacity for this then that’s the end of the discussion (excpt to agree that more transmission would definately make sense).

  6. There is a good chance that the business model for this firm may not last too long.
    I believe withing 5 years electric tariffs for daytime/nighttime may be about the same; reason: electric vehicle overnight charging. Models are being developed that will automatically shift vehicle charging to overnight hours.

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