Let's Get Macro on Microgrids
by: Tom Hochstatter, President
Texas’ power grid was back in the headlines this past week - and not the good kind of headlines either. It appears that the winter storms caused more damage than previously thought and as such quite a bit of generating capacity remains idled or in repair as we enter peak AC usage season.
So our friends at ERCOT asked us to kindly turn our thermostats way up during the day (78) and at night (82) and like many of us the response was a resounding [hotter than hell] no. Fix our grid problems ERCOT; we can’t be a pro-business state if we cannot keep citizens cool in the summer and run major corporation infrastructure too.
The Flare Ups
So while the Texas bureaucrats hash out our major grid problems, we, at Techson IP, are getting focused on innovators and entrepreneurs that have the desire and know-how to attack this problem (aka: opportunity) at the microgrid level. Firstly, I just finished reading a fantastic report by M.J. Bradley and Associates entitled: “Benchmarking Methane and Other GHG Emissions Of Oil & Natural Gas Production in the United States”. Report Link
“The findings of this new analysis will help inform investors aiming to differentiate between companies, provide valuable insights to natural gas purchasers, and will also inform regulators, lawmakers and even oil and gas company executives themselves as the EPA prepares to revise federal methane regulations this fall. The analysis uses data that companies have submitted to EPA in compliance with the Greenhouse Gas Reporting Program.”
This report outlines the largest oil and gas producers and their corresponding methane and other GHG (greenhouse gas) emissions by producing basin. And while it may appear to be a “bad news” report I interpret it as a report full of possibilities. It is true that methane, GHGs and other natural gas by-products of fossil fuel production are not great for our environment. However, what’s worse is that much of this by product is simply burned off at the well site or production facility as “flare gas” because it is not cost effective or geographically feasible to bring it to market. Federal and state governments have been allowing this level of emission for decades and it’s always stumped me why multi-billion dollar corporations in a multi-trillion industry could not find more efficient or innovative means to use these gas by-products.
Even Texas’ head of the oil and gas industry, Texas Railroad Commissioner (yes that is his title…), Wayne Christian commented in March: “We cannot continue to waste this much natural gas and allow the practice of flaring to tarnish the reputation of our state’s thriving energy sector to the general public and investors on Wall Street.” He’s right and we’re smarter than this.
Waste Heat to Microgrid
The innovators are now taking notice and creating mobile electricity generating solutions for use at those well sites or production facilities. The solutions use that extraneous flare gas that was previously going to waste to now power turbines that, in turn, drive generators and produce electricity. This electricity can be consumed on site to run the overall operations and/or pushed right back onto the grid to create a net positive consumer of local electricity.
Once that well site is no longer viable at producing the oil and gas or has exhausted its waste gas, the mobile generation units can be easily moved to the next viable well site and the process repeats. The equipment necessary to create economically viable waste heat to energy continues to drop in price making this idea more a “when” proposition versus an “if” proposition.
Microgrid to Gold Rush
Even more encouraging are the innovators that have already moved on beyond simply generating electricity for well site operations or the grid, they have added technology to maximize that electricity produced. Take for example, Upstream Data. I liken them to wildcatters of the initial oil and gas industry across Texas.
Upstream Data has created a self contained, mobile or distributed data center that relies on flare gas to power its equipment. In many cases that equipment is bitcoin or cryptocurrency mining computer operations that are then tied to the internet via satellite up links. Not only are they creating excess electricity from flare gas, they are maximizing that electricity and ultimately sharing their increased crypto profits with the well site owner. It’s a win/win especially while cryptocurrency mining continues to get a bad wrap for consuming so much “dirty energy”.
These particular solutions aren’t perfect as they still use fossil fuels to run, but they do use otherwise wasted energy that would just burn off into the atmosphere anyway. We have to agree that these are solid mid-term solution while we work on those promising net zero emission innovations and advancements that will can deliver base load, reliable alternative energy: geothermal, solar (+battery), and wind.
#microgrid
#wasteheat
#flaregas