On the morning of August 12th, PSFK will host a PSFK SALON designed to Fuel Imagination with the support of Syfy. There will be a number of inspirational talks by key creative minds, and a panel discussion about trends and ideas in Detroit and beyond.
Two of our speakers will be Milan Stevanovich and Jeremy Eckhous of Advanced Energy Group, who will be talking about their work in “creating sustainable and renewable economic realities for urban areas.”
Can you talk about Advanced Energy Group, and how it came about?
“The Advanced Energy Group began forming last year (2009) kind of organically. We began to form around a nucleus of geo-thermal ground source heat, starting with Hardin Geothermal as the foundation. Jim Hardin had for years been developing the concept of a “geo-utility” – a way of creating a local, community-owned, and renewable energy source that had as its foundation geo-thermal ground source heat. All of the components of AEG started coming together late last year as we added the companies and expertise that would enable Jim Hardin’s vision of a community owned geo-utility. We are essentially a consortium of companies that work both independently on outside projects, but also are able to join forces to become a much larger player when the opportunity presents itself.
Currently AEG has the ability to identify the opportunities for renewable energy programs working with counties, cities, and municipalities. We generally monitor legislation and state and federal programs that promote renewable and alternative energy programs, especially geothermal and solar thermal. We also monitor and compile intelligence on sources of funding that come from the feds and are administered by the states, for example the recent ARRA funding passed along to the states. As I mentioned, Hardin Geothermal’s design and engineering expertise enables us to approach potential municipal and larger commercial clients for city-wide projects that are much larger than our nearest competitors often can handle. In addition to the funding and engineering expertise, AEG also has extensive sales and marketing expertise that enables us to work with cities and municipalities to provide knowledge to elected leaders and decision makers and to the general population. This helps us to really lay out the benefits of a geo-utility to the greater community at large. Rounding out the group is a unique implementation team – “boots on the ground” that provide civil engineering, technical project management, architectural design, engineering expertise, vocational training expertise and workforce integration, program documentation and much more.
AEG is ready to take any larger, municipal renewable energy project from opportunity identification, through securing of funding, program design, architecture, all the way to training and workforce implementation and program reporting – all within the same group.”
Tell us a little bit about about your talk, which explores “hybrid geo-utilities, impact on energy expenditures, and the long-term benefits for cities.”
“I first should probably dissect those three things and then combine them to help illustrate what we are getting at. A hybrid geo-utility refers to the technological and financial and social compact that is formed using our strategy. The “hybrid” component of “hybrid geo-utility” refers to a energy agnostic viewpoint. Energy optimization – the savings of energy through insulation, weatherization, more efficient systems, e.g., HVAC, lighting, process energy in the case of manufacturing, and even changing the culture of using energy are the starting point. Anyway to reduce energy consumption is a good thing. We then move on to look at the most efficient renewable energy alternatives. Geothermal ground source is the most efficient energy source (the DOE agrees on this point) that is available, and it is, in the long term the least expensive to operate. After that we look at complimentary technologies, like passive solar thermal where they make sense, and other alternative energy solutions like wind turbines and photovoltaic solar. These systems working together can net a tremendous savings, as much as 90% when used together.
The impact on energy expenditures is enormous. As I said above, up to 90% savings when all the optimization and alternative energy solutions are working together.
The geo utility is a unique solution that depends on a community deciding to invest in the alternative energy solutions, and to essentially use the savings generated by lower cost alternatives to pay off the initial investment in those solutions. This is achieved through a power purchase agreement (PPA) which is contract to offer energy to a designated area within the community. A portion of the savings is passed along to the community, a portion of the savings is used to pay down the capital investment, and remainder is returned to the geo utility operator in the form of profits. As is often the case, the geo utility is often a public/private partnership that generates profits, pays taxes, and contributes to the community in the form of higher property taxes and higher property values.
The long term benefits for the community are incalculable. The way energy dollars flow within a community can be utterly changed. Expenditures for fossil fuels can be reduced 50% to 80%. For instance, Lucas County Ohio spends approximately $2.6 Billion on energy every year. If $1 Billion could be reinvested in the community, rather than exporting those dollars in the form of fossil fuels, that is a strong incentive to support the geoutility. It works incrementally, too , each year the savings can pay down that debt, support new energy alternatives investment, and return savings directly to the participating members in the community.
It also changes the way a community views itself and its future. It becomes attractive to many forms of investment, becomes a source of pride for the residents and businesses in the community. It also becomes a crucible for many other energy alternatives, lifestyles changes, architectural investment. Last, it can be a starting point, a point of departure, for the DOE and EPA and a lightning rod for investment, a model for new programs and investment.”
What’s inspiring you – in your work at Advanced Energy Group, any local examples and anything further afield?
“We are trying to tell the story of economic salvation for communities and the stakeholders who live in them. The money is hiding in plain sight – in the form of dirty, non-renewable fuels and the dedicated infrastructure that supports them. We can generate a fair number of jobs, generate incremental tax revenues, reverse (non productive) energy expenditures and free up those monies for any number of other things. In the meantime create incremental property tax revenues, and drive property values in distressed areas.
One other thing we are doing is helping to make viable dwellings and buildings that are not viable due to their high cost to heat and cool – and that is a big factor in historic preservation and in regenerating neighborhoods that have been written off.
This is not rocket science, or some get-rich-quick scheme – it takes time and patience and orchestration of a huge number of details before the investment comes back to the community and any potential investors.”
Thanks Milan and Jeremy!
thumbnail photo of Detroit by JSFauxtaugraphy