LEED for the Electricity Industry? New PEER Rating System Measures Sustainability for Power Grids

Line/Shape/Space Ι Nov. 9, 2015

Since it launched in 2000, the U.S. Green Building Council’s (USGBC) LEED green building rating system has created the market for green buildings, with more than 13.8 billion square feet of building space now LEED certified. With LEED as guidance, architects and their clients reduce their buildings’ impact on the environment by implementing such strategies as connecting their projects to public transportation nodes, finding ways to reduce water use, and perhaps, most importantly, reducing energy usage and subsequent carbon emissions.

But just how sustainable is the power actually being fed into these high-performance LEED Platinum buildings? Does it come from a smoke-belching coal-fired plant, or from a serene field of acres of solar panels? The answers vary dramatically, but until now, there hasn’t been much of a way to evaluate this question. Enter PEER.

What is the PEER rating system? PEER (Performance Excellence in Electricity Renewal) is a Green Business Certification Inc. (GBCI) sustainability rating system for power grids. Like LEED with buildings, PEER aims to change the power-grid industry not through regulatory changes, but with voluntary market differentiation through third-party certification. And there’s loads of room for improvement. PEER estimates that half the cost of electricity is lost through inefficient delivery methods, heat and emissions, and converting fuel to electricity.

Most fundamentally, PEER gives electricity utilities a baseline to measure their performance. “If you don’t measure this stuff at a detailed level, you have no basis for improvement,” says Michael Overturf, CEO of ZF Energy Development, which is working on a PEER project.

Who is administering PEER? PEER grew out of former Motorola CEO Bob Galvin’s Galvin Electricity Initiative, a nonprofit founded in the wake of the Northeastern blackout of 2003, meant to make the nation’s power supply more reliable, secure, and efficient. This work continued with the Perfect Power Institute, founded in 2011 and helmed by John Kelly. Kelly led the Institute’s partnership with GBCI in 2014. As with LEED, USGBC will develop PEER, while its sister organization, GBCI, will certify projects.

Who uses PEER? Currently, PEER is applicable to three types of projects: city projects (like municipal utilities), campus projects (like universities), and supply projects (power grids that deliver energy to a large industrial facility).

How does PEER work? PEER is divided into four categories:

1. Reliability and resiliency. This category measures how dependable, safe, and resilient the system’s power is; it also considers power quality.
2. Energy efficiency and environment. This is a rewards-system category to consume fewer resources.
3. Operational effectiveness. It helps with ancillary efficiency measures not associated with the energy being produced for transmission.
4. Customer contribution. This category looks at consumer-level innovations like in-home smart metering, with the intention of giving customers more actionable data so they can use less—or better—power.

In PEER, there are mandatory prerequisites and optional points that are achieved through a mix of performance-based and more prescriptive metrics. Unlike LEED, which has four levels of certification, projects evaluated by PEER are simply certified (if they achieve the minimum number of required points) or not. Like LEED, and the wider green building industry, PEER is designed to be performance based, measuring actual energy outcomes. For example, PEER gives points for how much nitrogen oxides (NOx) and sulfur dioxide (SO2) emissions are reduced via solar panels or any other method, but it doesn’t give points for simply including solar panels.

Kelly hopes PEER will become a tool used to break monolithic power grids down into smaller grids that are refined and customized according to their specific energy resources. A coastal city, for example, is well suited to offshore wind turbines that power the central business district, but inland suburbs lacking sufficient wind will have to rely on solar PV and more traditional energy sources. With PEER, utilities have a standard to evaluate strengths and weaknesses and formulate the best approach.

This level of local customization is key, and a world away from how power grids operate today. One metaphor Kelly uses is state versus city government. “What if states had no city government?” he says. “That’s how we operate our grid: big investor-owned utilities with no local representation. PEER is really trying to help utilities realize that they could partner with their cities to divide their system into [microgrids]. A utilities territory could be 100 microgrids.”

If PEER is widely adopted, it’s likely that power grids will be managed in smaller increments and sell less energy. Which begs the question . . .

How do power utilities feel about a system that means customers need fewer of their products and demand higher reliability? The answer depends on whether a utility generates power or just transmits it. Power generators might not like it, but utilities that just transmit power are more likely to be on board, especially if they’re publicly owned. In Naperville, Illinois, the municipal-owned utility (and PEER project) presents energy and reliability savings measures as doing the right thing for residents, says deputy director Olga Geynisman.

Kelly sees PEER as a tool for enabling grid operators to increase profits, lower rates, and improve performance to support local long-term economic development. If a community invests in a better power grid with PEER, it will become a more attractive place to live and for businesses to settle in, raising the tax base and growing the population, thus increasing demand for electricity.

The EPB (Electronic Power Board, another PEER project) utility in Chattanooga, Tennessee purchases all of its power from the government-run Tennessee Valley Authority, which includes 15 percent hydroelectric and renewable energy. Increasing this amount means making each building it powers more sustainable—before even considering the traditional roles of architecture and design.

“We don’t think our value is in the kilowatt hours we sell,” says David Wade, chief operating officer of EPB. “We think our value is what kind of service we bring to our community.”

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