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Category: Customer education

Heat pumps and district energy: Driving building decarbonization for a sustainable future

Posted on by Bella Pace

Industrial heat pumps are revolutionizing the way we heat buildings. With the ability to produce temperatures of up to 150C, these robust systems have become a sustainable solution for across the globe. As the demand for carbon-free heating increases, the shift away from fossil fuels is finally gaining momentum.

Vicinity is diving into the world of heat pumps

Vicinity is entering a new era of sustainability and installing heat pumps as a cutting-edge technology that provides a carbon-free heating solution to our customers and aligns with ambitious emissions reduction goals nationwide.

In April 2023, Vicinity announced our partnership with MAN Energy Solutions to develop low-temperature source heat pump systems for eSteam™ generation. These plans are already in motion as we look ahead to 2028, when Vicinity’s Kendall facility in Cambridge will be home to Massachusetts’s largest industrial-scale heat pump complex.

Drawing inspiration from heat pump successes in Europe, this venture will create ripples on a national scale and serve as a testament to Boston’s commitment to shaping a greener future. Powered by renewable electricity, Vicinity’s heat pump complex will safely and efficiently harvest energy from the Charles River, returning it at a lower temperature.

With the heating sector responsible for a staggering 30 to 40% of global CO2 emissions, the time to implement sustainable energy solutions is now. Vicinity’s sustainability plans mirror the examples set by cities like Glasgow, Scotland, and Drammen, Norway, where water-source heat pumps have already made their mark. The first water-source heat pump that emerged in Glasgow in 2021 is three times more efficient than natural gas boilers and allows the city to tap into the renewable power of the River Clyde, just as Vicinity will do in Cambridge with the Charles River.

How will Vicinity’s heat pump complex work?

Vicinity is transforming district energy in the cities we operate in by installing an industrial-scale heat complex. By 2028, this complex will be operational at our Kendall facility, and installation in other systems in cities like Philadelphia and Kansas City will follow.

This innovative heat pump will draw heat from nearby water sources to generate steam and improve the system’s efficiency. The technology functions similarly to an air conditioning system, only it accomplishes the reverse on a much grander scale. Ensuring that the river and its ecosystems remain unharmed, the river intake system lifts heat from the river and brings it into our facilities.

Since most of this heat is transported rather than generated, heat pumps are much more efficient than traditional heating methods such as natural gas boilers and heaters, resulting in lower operational costs for building owners.

So, how are our plans progressing? Today, we are engineering the first planned industrial-scale heat pump complex at our Kendall, MA facility, and preparing our facility for its installation. The heat pump will occupy a space of approximately 25,000 sq. ft., and it will circulate through 24.5 million – 49 million gallons of water from the Charles River each day, returning the water to the river at a lower temperature.

Early design of the industrial-scale heat pump Vicinity Energy is developing.

Our systems will also employ electric boilers and molten salt thermal battery storage to fully decarbonize our footprint. Leveraging our existing system of underground steam pipes, we will seamlessly provide our customers with carbon-free eSteam™. Our first electric boiler will enter service in Cambridge in 2024.

What are the benefits of heat pumps?

Vicinity’s plans to utilize innovative industrial-scale heat pumps at our facilities present several benefits to our community and customers.

  • Harnessing local resources: The industrial-scale heat pump complex at our Kendall facility will harness the untapped thermal energy from the Charles River, setting new standards for sustainable urban energy production.
  • Phased implementation: Vicinity is rolling out this technology in stages. Our 42MW electric boiler will be operational this fall, and we are planning to install the 32MW water-source heat pump complex in 2028.
  • Leveraging existing infrastructure: Utilizing our 26-miles of steam distribution infrastructure and high-voltage connection to the grid will minimize urban disruption while providing a clear path to net zero emissions.
  • Empowering building owners: By shifting energy and operations risk to Vicinity’s central facilities, we enable cost-effective compliance with performance standards, accelerating adoption and the energy transition.
  • Replicable model: Vicinity’s initiatives in Boston and Cambridge serve as a blueprint for urban decarbonization across the U.S., enabling rapid, large-scale implementation.
  • Immediate and scalable impact: Vicinity is rapidly decarbonizing urban building spaces, starting with 70 million square feet in Boston and Cambridge and expanding to decarbonize 250 million square feet of customer space nationwide. By acting swiftly, we maximize the time value of carbon reduction, amplifying our climate impact.

District energy systems are agile. By replacing fossil fuel infrastructure with industrial-scale technologies such as heat pumps, we can effectively decarbonize our communities without retrofitting or installing new electrical infrastructure in our customers’ buildings.

Summer readiness checklist

Posted on by Vicinity Energy
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As temperatures rise, it’s time to ensure HVAC systems are geared up for the summer heat to optimize building systems’ performance, conserve energy, and keep occupants comfortable and safe during heat waves, hurricanes, tornados, tropical cyclones, floods, or other extreme weather events.

Whether buildings use district chilled water or operate onsite chillers and cooling towers, regularly reviewing and implementing this guide ensures proactive building readiness for summer temperatures, helps maximize equipment lifespan, and improves overall energy efficiency.

Print out this summer preparedness checklist and review it every spring to prepare staff and equipment for the coming warm temperatures. Please note that the steps will vary depending on the equipment present onsite.

Contact your account manager to explore partnering with Vicinity’s operations and maintenance experts to assist with summer readiness, equipment upgrades, or preventative maintenance programs.

Vicinity leverages best practices at its central facilities to provide a smooth transition into the summer season. These protocols ensure safe, reliable, and consistent operation to prevent service disruptions for customers who leverage chilled water or steam for cooling purposes. Vicinity’s interconnected energy facilities offer 99.99% uptime energy delivery with resiliency through redundant power and fuel sources.

Vicinity’s summer preparedness includes extensive cooling tower and chiller inspection and cleaning at Vicinity’s central facilities that produce chilled water, including basin cleaning, sterilization to prevent bacteria growth, and oil inspections on gearboxes and fan belts. Vicinity also performs eddy current testing to detect leaks on chiller tubes and inspects refrigerant and oil samples. Mid-season, Vicinity performs additional maintenance to ensure smooth operation of the central facilities before scorching weather conditions, hurricanes, tornadoes, tropical cyclones, floods, or other extreme summer weather events. Each day, Vicinity monitors atmospheric pressure, humidity, and temperature to anticipate and meet customer buildings’ energy demands, and confirms redundancies are in place to minimize any disruptions to steam or chilled water service.

By taking these proactive steps, Vicinity delivers reliable customer service year-round and reduces the maintenance needed onsite at customers’ buildings. 

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eSteam™: a cost-effective, carbon-free thermal energy solution to decarbonize your commercial building

Posted on by Vicinity Energy
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Commercial buildings represent the highest source of carbon emissions in major cities, making them one of the most important targets in urban decarbonization. eSteam™ is a unique solution that can address this challenge head-on and inexpensively decarbonize healthcare, life sciences, universities and commercial buildings with ease.

Accelerate decarbonization with eSteam™

Vicinity’s renewable thermal energy product will help you accelerate the decarbonization of your building and our communities. Our solution is turn-key. 

eSteam™ reduces the need for you to invest in new onsite energy infrastructure to meet your sustainability goals. By connecting to the district energy system, you eliminate the need to make significant investments to decarbonize your building’s thermal energy load—we’re doing that for you. Vicinity will leverage and build upon existing infrastructure, including our existing network of steam pipes, electric substations, and transmission lines, and deploy the capital needed to rapidly reduce our carbon emissions.

For our cities, Vicinity’s eSteam™ provides a way to cleanly heat and cool urban buildings—reducing the need for natural gas boilers that create unregulated gas stacks and unmonitored carbon emissions—improving overall air quality in neighborhoods.

eSteam™ is the first renewable, carbon-free thermal energy product in the United States, offering maximum flexibility and superior environmental benefits.

eSteam™ benefits:

  • Carbon-free – eSteam™ is carbon-free, so you can meet your sustainability goals and avoid looming carbon taxes.
  • Total flexibility – You nominate how much eSteam™ you want annually and select the renewable electricity source to generate your eSteam™ based on your budget and sustainability objectives.
  • Affordability – eSteam™ is the most cost-effective, affordable option to green your building compared to alternatives, like electric boilers in your building. Vicinity’s access to transmission level rates gives district energy an economic advantage over onsite equipment.
  • Avoid carbon fees and fines – Many cities in the U.S. have implemented or are considering laws that will lower greenhouse gas emissions in buildings. Oftentimes, these policies will carry hefty fines for non-compliance. eSteam™ is carbon- free, giving you peace of mind that your building will be green, without costing you more green.
  • Maximum reliability and resiliency – Join the many customers who choose Vicinity’s district energy heating and cooling products for maximum reliability and resiliency.
  • Low capital investments – To access the benefits of eSteam™, you don’t need to invest in costly capital projects and you can avoid expensive building retrofits. Decarbonize your thermal energy footprint by simply connecting to Vicinity’s district energy network.
  • Certifications – Gain potential points for LEED® and ENERGY STAR® certifications to demonstrate your buildings’ commitment to sustainability.
 

how esteam works diagramCustomers benefit from carbon-free eSteam™ generated with renewable electricity.

How eSteam™ works

By installing electric boilers at our central facilities and procuring renewable power from the grid, we can offer carbon-free steam to meet your buildings’ thermal energy needs. Vicinity can purchase renewable power on your behalf—such as wind, solar and hydro—at transmission level rates, allowing us to keep your costs down.

Coupled with other technologies like industrial-scale heat pumps and thermal storage, our goal is to offer you the most affordable, flexible thermal energy product that lowers carbon footprints, improves air quality and meets sustainability goals.

Vicinity’s eSteam™ is the first renewable, carbon-free thermal energy product in the United States, offering you maximum flexibility and superior environmental benefits.

Lock in with eSteam™ today to decarbonize your buildings and avoid looming carbon fees. To learn more about eSteam™ email our energy experts at info@vicinityenergy.us.

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Recommended preventative maintenance

Posted on by Vicinity Energy
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Vicinity’s comprehensive maintenance services are offered year-round—during peak usage or before system turn-ons—to optimize steam efficiency, reliability, and cost savings.

Improve the operating performance of steam systems by taking preventive steps to avoid energy losses. Customers who have leveraged Vicinity’s preventive maintenance program have experienced the following benefits:

  • Conserved energy and reduced energy costs by improving system performance and eliminating inefficiencies.
  • Improved reliability by identifying problem areas that could cause unscheduled system outages.
  • Optimized capital expenditure and operating expenses by maximizing system efficiency and strategically planning for infrastructure investments with an identified budget for equipment repair or replacement.
  • Improved operating procedures by reviewing, refining, and documenting preventative maintenance best practices.
We partner with each of our customers to customize recurring service agreements for the summer and winter seasons, tailoring the maintenance services below to their specific needs. Reach out to your Account Manager today to understand the preventative maintenance services offered in your district.

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Steam traps

  • Service description: Survey building, locate, identify, tag, and test steam trap performance.
  • Maintenance value: Ensure steam traps function correctly and prevent issues that can lead to energy waste, equipment damage, and safety hazards.

Pressure Regulating Valves (PRVs)

  • Service description: Identify valves’ make, model, size, and serial number. Test pilot valve for leaks, clean orifices, check diaphragm plates, test the gauging, and set to desired system pressure.
  • Maintenance value: Prevent system over-pressurization and relief valves from releasing steam into the atmosphere. Failed PRVs may improperly cycle open and close, both oversupplying and then starving the downstream equipment of steam.

Strainers

  • Service description: Inspect screens and clean out debris, evaluate source of debris, and troubleshoot. Ensure blow-down valves are functioning properly to flush trapped material.
  • Maintenance value: Reduce rust and pipe scale damage to valves and pumps. Ensure heat transfer surfaces are kept free of efficiency reducing deposits.

Heat exchangers

  • Service description: Perform water chemistry testing, determine if leaks exist, measure tube thickness, repair or plug tubes as needed, and perform preventative maintenance, such as hydrolasing or cleaning as needed.
  • Maintenance value: Recover efficiency losses, optimize operation of the exchangers, and reduce energy consumption.

Steam pipe

  • Service description: Inspect steam piping. Check for leaking joints, watermarks on insulation, and corrosion.
  • Maintenance value: Deliver safe and reliable steam into the building while reducing potential for steam emissions into the building.

Condensate return line

  • Service description: Inspect for leaks and corrosion. Check condensate pump seals for leaks. Check vent pipes for vapor emissions.
  • Maintenance value: Avoid condensate water spills, ensure proper evacuation of condensate from system lines, and identify the presence of leaking steam traps in the system.

Mechanical room hot water loop

  • Service description: Inspect all piping, inlet/outlet temperatures, and pressures on heat exchangers and mechanical pumps.
  • Maintenance value: Confirm adequate operation of key energy transfer equipment, such as heat exchangers, which supply building heat, hot water, or other process loads.

Seasonal and maintenance shutdowns/turn-ons

  • Service description: Manage closure and opening of Vicinity’s main service valve for seasonal system curtailment or start of use. Shutdowns require draining of systems while turn-ons require both draining of systems and operating pressure checks.
  • Maintenance value: Ensure safe and confined operation of Vicinity’s main service valve for shutdowns/turn-ons related to seasonal changes and maintenance activities. Reduce radiant energy losses, condensate accumulation in system piping, and mechanical room air space temperature. Prevent pipes from rotting and prepare systems to be dormant for an extended period by draining the systems for shutdowns.
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Emergency winter weather preparedness checklist

Posted on by Vicinity Energy
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Melt away the challenges of winter weather. Prevent costly equipment damage and disruptions to daily operations by proactively preparing for winter weather conditions.

To enhance preparedness, we encourage you to utilize our emergency winter weather preparedness checklist. Regularly reviewing and implementing this guide ensures proactive building readiness for winter conditions. It safeguards against potential freeze-ups in steam and sprinkler systems, mitigates the risk of roof collapses due to heavy snowfall, and protects against potential flooding during extremely cold temperatures. These risks present safety concerns and entail substantial financial and time investments in repairs, with the possible consequence of building shutdowns.

Print out this emergency winter weather preparedness checklist and review it every winter to prepare staff and equipment.

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Vicinity has rigorous cold weather protocols to ensure safe, reliable, and consistent operation of its facilities to prevent service disruptions. Our interconnected energy facilities offer 99.99% uptime energy delivery through multiple power supplies, backup generation, and several water and fuel sources in case of interruptions to other utilities. 


Vicinity’s winter weather protocol includes:

  • A comprehensive cold weather plan that entails pre-season preparation, pre-storm planning, weekly winter weather readiness checks, and post-season assessment.
  • Identification, monitoring, and prioritization of components, systems, and other areas of vulnerability at our facilities which may experience freezing problems, pose safety risks, prevent the delivery of fuel or water, or result in other cold weather operational issues.
  • Validation that critical equipment is operational through function testing.
  • Implementing ongoing walk-downs throughout the season to ensure heat tracing is functional, sufficient pipe insulation is in place, and opportunities for continuous improvement are identified.
  • Strict compliance with North American Electric Reliability Corporation (NERC) – Emergency Operations (EOP).
  • Annual training with specific checklists related to freeze protection panel alarms, troubleshooting and repair of freeze protection circuitry, identification of facility areas susceptible to winter conditions, review of special inspections or rounds implemented during severe weather, and fuel switching procedures.
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Heating reimagined: industrial-scale heat pumps for building decarbonization

Posted on by Vicinity Energy
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Revolutionizing the way we heat buildings by integrating industrial-scale heat pumps to produce carbon-free eSteam™

Industrial-scale heat pumps are revolutionizing the energy industry. With the ability to produce temperatures of up to 150C, these powerful systems have become a sustainable solution across the globe. As the demand for carbon-free heating increases, the shift away from fossil fuels is finally gaining momentum.

Vicinity is transforming district energy with plans to install an industrial-scale heat complex. This innovative heat pump complex will draw heat from nearby water sources to generate steam and improve the system’s efficiency. Ensuring that the river and its ecosystems remain unharmed, the river intake system lifts heat from the river and brings it into our facilities.

Key facts

  • The proposed Cambridge heat pump will have a steam export capacity of 35MW (thermal)
  • The heat pump will occupy a space of approximately 25,000 sq ft. +/-
  • The heat pump will circulate through 24.5 million to 49 million gallons of water from the Charles River daily

How heat pumps work

  1. The heat pump compressor, powered by electricity from renewable resources compresses natural refrigerant to pressures upwards of 1,000 psig.
  2. The heated refrigerant is conducted to a heat exchanger for low-pressure steam generation.
  3. The low-pressure steam is transferred to a multi-stage steam compressor, which increases
    steam pressure from 5 psig to 220 psig, the required pressure for distribution into the district energy system.
  4. After generating steam, the refrigerant is routed to a feedwater pre-heating heat exchanger and is condensed.
  5. The liquified refrigerant is then expanded through an expansion valving arrangement. The expansion reduces the refrigerant pressure, gasifies the refrigerant, and sharply reduces the refrigerant temperature to less than 30 degrees Fahrenheit.
  6. The cold, gaseous refrigerant is conducted to a river water heat exchanger to collect energy from the river water. The river water heat exchanger heats the gaseous refrigerant several degrees Fahrenheit while cooling the river water several degrees Fahrenheit. The cooled, gaseous refrigerant is conducted back to the heat pump compressor for reuse in the heat pump cycle.
 

How Vicinity is using heat pumps

Industrial-scale heat pumps will be installed in cities around the country where Vicinity’s facilities are located near water sources and already employ water intake systems. These heat pumps will extract heat from adjacent water sources, like the Charles and Schuylkill Rivers, to generate steam and improve the system’s overall efficiency.

Across all of our operations, heat pumps will be used with electric boilers and thermal storage technologies to fully decarbonize our operations.

This first planned heat pump complex in Cambridge will be powered by renewable electricity to efficiently harvest energy from the Charles River and return the water to a lower temperature.

Early design of the industrial-scale heat pump Vicinity Energy is developing in partnership with MAN Energy Solutions.

Why industrial heat pumps are important for Vicinity, our customers, and the environment

The global energy transition can only succeed with decarbonizing heat. Why? Heating in buildings is responsible for four gigatons (Gt) of CO2 emissions annually—10% of global emissions, according to the International Energy Agency (IEA). The heating sector accounts for 30-40% of CO2 emissions globally.

Water-source heat pumps are a proven solution to fossil- fuel-driven heating because they can efficiently harness the renewable power of water sources.

In 2021, approximately 10% percent of the global demand for space heating was satisfied by heat pumps. In some countries such as Norway, Sweden, and Finland, heat pumps are the most widely used heating source and have already begun integrating with district energy systems. The district system in Glasgow will leverage heat pumps to extract cold water from the adjacent River Clyde. This will cover over 80% of building heat demand and will deliver immediate carbon reductions of 50%.

By installing industrial-scale heat pumps at our central facilities, Vicinity is one step closer to instantly decarbonizing millions of square feet of building space for the good of our customers, communities, and the cities we operate. The impact of this plan is substantial: by 2035, Vicinity’s investments at our Kendall, MA facility will reduce the carbon intensity of our steam by 50%, the equivalent of 400,000 tons.

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How district energy is helping commercial buildings meet Boston’s BERDO 2.0 requirements

Posted on by Scott McBurney

Like many cities nationwide, Boston has set aggressive climate goals to curb the harmful effects of climate change. Boston aims to be carbon-neutral by 2050, meaning the City will only be able to release as much carbon as the environment can safely absorb.

But how does the City plan to make this happen?

In large part, carbon neutrality will come from decarbonizing the energy-intensive buildings that operate in Boston: commercial offices, hospitals, colleges and universities, and many others.

The Building Emissions Reductions and Disclosure Ordinance (BERDO), originally enacted in 2013, required large Boston buildings to report and disclose their emissions.

In 2021, however, the amended ordinance — BERDO 2.0 — was unanimously passed by the Boston City Council and signed into law, officially moving the ordinance beyond reporting and setting enforceable emissions standards for buildings. In 2023, BERDO 2.0 policies and procedures were finalized.

Crucially, the ordinance aims to eliminate the 70% of greenhouse gas emissions that commercial buildings contribute to the City of Boston.

What BERDO 2.0 means for Boston building owners and developers

The 2021 amendment to BERDO gives the City of Boston authority to set emissions standards for large existing buildings. The emissions thresholds will decrease to reach net zero by 2050.

BERDO 2.0 states enforceable minimum building emissions performance standards, measured in kilograms of carbon dioxide equivalent per square foot per year. These emissions standards differ by building use but will begin to apply in 2025 for already-covered buildings and in 2030 for newly-covered buildings. Based on 2022 emissions reporting, several hundred buildings in Boston are projected to exceed their emissions limit in 2025.

BERDO 2.0 also imposes changes in enforcement penalties. The amended ordinance introduced fines for failing to meet the performance standard and inaccurate reporting.

BERDO 2.0 does not just apply to commercial buildings, but also applies to the following:

  • Non-residential buildings that are 20,000 square feet or larger.
  • Residential buildings that have 15 or more units.
  • Any parcel with multiple buildings that sum to at least 20,000 square feet or 15 units.

In addition, the amended ordinance proposes potential ways buildings can achieve their required emissions reductions, including on-site energy efficiency or renewable energy measures, fuel switching, and clean electricity purchasing options like Renewable Energy Portfolio Standard (RPS) Class I eligible Renewable Energy Certificates (RECs) generated by non-CO2e emitting sources, and Power Purchase Agreements (PPAs) with non-CO2e emitting renewable sources.

To find out whether they are over the emissions limit and get an estimated emission reduction forecast, buildings can use the City of Boston’s BERDO emissions calculator. 

How district energy meets BERDO 2.0 requirements

Our team of experts at Vicinity is prepared to help building owners and developers in Boston meet the aggressive emissions reduction requirements posed by BERDO 2.0 and avoid paying alternative compliance payments.

Our clean energy future plan outlines our roadmap to reaching net zero carbon emissions across all our operations by 2050 or sooner. Central to our decarbonization plan is the innovative eSteam™ product.

To generate eSteam™, Vicinity will import carbon-free electrons through co-located substations to power electric boilers, coupled with industrial-scale heat pumps and thermal storage, to deliver electrified, carbon-free steam, known as eSteam™, for heating, cooling, sterilization, humidification, and other thermal energy needs.

Building upon success stories in European countries like Norway, Finland, and Sweden, Vicinity is electrifying our district energy systems. Our approach is based on our ability to:

  • Leverage established technologies such as industrial-scale electric boilers, heat pumps, and thermal storage to convert electricity into steam;
  • ​Capitalize on the flexibility of our existing assets that connect to the electric transmission system today​;
  • Take advantage of the future economics of renewable electricity to introduce green electrons to our fuel mix;
  • And utilize the agility of fuel-agnostic district energy to decarbonize, easily “flipping the switch” to greener fuels​.

By electrifying our central facilities, all our customers can access carbon-free eSteam™ to meet building performance standards and avoid costly building modifications.

Our team is actively working towards our goal of net zero. In November 2022, we kicked off our electrification plans by deconstructing a steam turbine at our Kendall facility. We are installing an electric boiler in its place, which will enter service in 2024.

In April 2023, we took another crucial step in our clean energy future plans by announcing our partnership with MAN Energy Solutions to develop low-temperature source heat pump systems for steam generation. Currently, we are designing the heat pump complex, which will occupy a space of approximately 25,000 sq. ft. and will circulate through 24.5 million to 49 million gallons of water from the Charles River each day, returning the water to the river at a lower temperature and ensuring that the river and its ecosystems remain unharmed.

Meeting BERDO 2.0 requirements with eSteam™

eSteam™ is carbon-free and recognized in the BERDO 2.0 regulations. This thermal product offers a straightforward solution for commercial landlords and developers trying to meet the ordinance’s carbon-reduction goals.

Vicinity’s eSteam™ is recognized as emissions-free by BERDO 2.0 regulations, providing customers with a compliant and cost-effective solution.

The Vicinity team assists customers in Boston with BERDO 2.0 reporting energy usage through Energy Star Portfolio Manager, one of the three reporting requirements set by BERDO 2.0.

Our team sends energy usage data and an annual energy summary to customers every month, making their reporting process more efficient and accurate.

Carbon reduction acts in Boston and beyond

While Boston is undoubtedly leading the country by reimagining the energy industry, many other cities around the U.S. are planning to enact ordinances similar to BERDO 2.0.

The City of Baltimore, for example, is currently in the implementation stages of the Climate Solutions Now Act, or SB 528. The act proposes a greenhouse gas reduction goal of 60% by 2031, with net zero carbon emissions by 2045.

Vicinity’s district energy systems are uniquely poised to help building owners and developers in Boston, Cambridge, Baltimore, Philadelphia, and more to meet building performance standards today and in the future.

 

Market update: natural gas outlook winter 2024

Posted on by Rohan Sinha

As we continue into the winter season, Vicinity’s team has been evaluating weather patterns and predictions for the natural gas market to prepare our customers for potential price fluctuations.

After peaking in December 2023, the El Niño pattern continues, and February 2024 weather forecasts indicate above-average temperatures in the Northeast and Midwest, induced cooling in the South, and higher precipitation in the Pacific, which experts predict may continue into the remainder of the winter season.

The natural gas markets have reset to similar levels as 2021, before the geopolitical events in 2022 drove prices above average.

By the numbers: what we know and what we can expect

Prior to January 2024’s well freeze-offs, the U.S. lower 48 saw strong natural gas production, primarily due to efficiencies in the Permian Basin of the U.S. that have provided ample supply to the market, mitigating demand risk. However, due to colder weather in the Permian basin in recent weeks, natural gas production has fallen.

Currently, natural gas storage levels are 4% above 2023 levels and 5% above the 5-year average. Europe’s storage facilities were 80% full through the first half of January 2024, slowing European demand for LNG and suppressing pricing.

Colder weather conditions in January 2024 have contributed to well freeze-offs in the Permian natural gas basin, impacting output and potentially providing more upside risk to pricing. However, the January 2024 futures contract settlement was less than levels at this time last year.

Key electrification progress

The adverse effects of natural gas far outweigh the benefits of continuing to invest in this unsustainable fuel source.

In 2023, the U.S. saw an estimated 1.9% decrease in carbon emissions, as measured in research done by the Rhodium Group. Throughout the year, emissions remained below pre-pandemic levels and dropped to 17.2% below 2005 levels.

While this decrease is substantial, an even greater emissions reduction is necessary to limit climate change. In 2023, Earth’s average land and ocean surface temperature was 2.12 degrees F above the 20th century, making it the highest global temperature among all years recorded since 1850, according to the U.S. National Oceanic and Atmospheric Administration.

The undeniable climate crisis drives Vicinity’s progress towards transitioning away from fossil fuels and eliminating carbon emissions from our operations. By electrifying our operations nationwide, we will be able to offer an affordable, carbon-free path for building owners to meet sustainability goals and join us in limiting climate change.

Our first electric boiler has been delivered to our Kendall facility in Cambridge, Massachusetts, and it will enter service in 2024, immediately allowing our customers to harness carbon-free energy and decarbonize their buildings.

The industrial-scale heat pump complex we are developing in partnership with MAN Energy Solutions is undergoing engineering and will enter service in 2026. These milestones demonstrate our commitment and progress towards a net zero carbon future.

How district energy meets the Federal Building Performance Standard

Posted on by Matt O'Malley

The Biden Administration announced the first-ever Federal Building Performance Standard (BPS), which aims to cut energy use and electrify equipment and appliances in 30% of Federally owned building space by 2030.

This announcement paves the way for Federal buildings to adopt cleaner, more energy-efficient technologies. This transition to green energy is critical to achieving President Biden’s net-zero emissions goal across all Federal buildings by 2045.

Many states and cities around the U.S. are enacting similar fossil fuel bans for existing and new buildings. In Boston, for example, Mayor Michelle Wu recently announced that she intends to file legislation that allows for a ban on the use of fossil fuels for new developments and renovations in Boston.

In Maryland, the Climate Solutions Now Act of 2022 sets a statewide greenhouse gas (GHG) reduction goal of 60% by 2031 and net-zero by 2045. The legislation also includes building performance standards like reporting direct emissions from heating starting in 2025 and achieving a 20% reduction in direct emissions by 2030.

Philadelphia’s Climate Action Playbook outlines strategies to achieve a 50% reduction in emissions from the built environment by 2030. Kansas City outlined key goals for achieving carbon neutrality in municipal operations by 2030 and carbon neutrality citywide by 2040.

Biden’s aggressive Federal standard is poised to reduce emissions for a massive swath of U.S. buildings: the U.S. General Services Administration (GSA) owns and leases more than 371 million square feet of space in 8,600 buildings in more than 2,200 communities.

So, what is the impact of this effort? The U.S. Department of Energy estimates that over the next 30 years, this new standard would reduce Federal building carbon emissions by 1.86 million metric tons and methane emissions by 22.8 thousand tons.

What does the new Building Performance Standard mean for Federal buildings?

The Federal BPS requires Federal buildings to phase out on-site fossil fuels for end-uses such as heating buildings or producing hot water.

Buildings must eliminate 30% of Scope 1 emissions, defined as “direct GHG emissions from sources that are owned or controlled by the Federal agency,” by 2030.

Scope 1 emissions are also defined as emissions primarily associated with the following:

  • Fuel combustion for owned or on-site generation of electricity, heat, cooling, or steam
  • Fuel combustion for agency-controlled mobile sources
  • Intentional or unintentional GHG releases, i.e., fugitive emissions
  • Manufacturing, industrial, and laboratory processes energy

According to the rule, approximately one-third of Federal building-related greenhouse gas emissions are Scope 1 emissions generated from on-site fossil fuel combustion, commonly powered by natural gas-fired equipment.

The rule also defines Scope 2 emissions as “Indirect GHG emissions resulting from the generation of electricity, heat, or steam purchased by a Federal agency.”

In short, Federal buildings currently using on-site natural gas boilers will be required to switch to an alternative option, like connecting to a utility-scale district energy system or installing their own electrification equipment, such as heat pumps.

How can federal buildings meet this 30% reduction requirement by 2030?

The primary pathway to achieve this goal is to electrify all appliances and equipment used for processes like space heating and domestic or service water heating. However, the rule also highlights another option, one that already exists and doesn’t require any upgrades or retrofits to buildings: connecting to district energy.

What does the Federal BPS mean for buildings connected to district energy systems?

The over 600 district systems operating throughout the U.S. power college campuses, commercial buildings, and cities using efficient, reliable, clean steam.

Biden’s standard makes an important distinction for buildings receiving electricity, hot or chilled water, or steam via district energy.

If the district system is agency-owned, the building must include the direct Scope 1 emissions from the district system in determining whether the agency can help the building meet the BPS goal.

However, utility-owned district systems, like Vicinity Energy’s, are categorized as indirect, Scope 2 emissions, and not part of the new Federal BPS.

Federal buildings currently connected to Vicinity’s systems can instantly meet the requirements set by the new standard, and buildings connected in the future can also meet these requirements while benefitting from the efficient, sustainable, and reliable service district energy provides.

Vicinity Energy’s systems will help buildings meet mandates like BERDO 2.0 in Boston, BEUDO in Cambridge, and now the new Federal BPS; however, our systems are moving beyond these requirements as we are taking steps to electrify our operations and decarbonize the cities we serve.

Our progressive climate action plan will allow us to reach net-zero carbon emissions ahead of our 2050 commitment by electrifying all of our central facilities and instantly decarbonizing the buildings we serve. With a combination of  proven technologies such as water-source heat pumps, electric boilers, and molten salt thermal storage, we can offer our customers eSteam™, the nation’s first-ever carbon-free energy product powered by renewable energy sources like solar, wind, and hydro power.

In November of 2022, Boston Mayor Michelle Wu, along with Vicinity’s customers and partners, celebrated a significant step forward in these plans to electrify with the deconstruction of a steam turbine at our Kendall Green Energy Facility in Cambridge, Massachusetts.

An electric boiler is taking its place and will enter service in 2024 to begin powering Boston and Cambridge-based buildings, like those owned by innovative customers such as IQHQ, with carbon-free eSteam™.

While we commemorated this exciting step in Boston and Cambridge, our other locations in Philadelphia, Baltimore, Kansas City, and more will undergo similar electrification processes in the coming years.

Market update: natural gas outlook 2023

Posted on by Rohan Sinha

Last year saw drastic changes in the natural gas market, from the ongoing war in Ukraine to record high energy prices to fluctuating natural gas inventories.

As we reported in our last natural gas outlook, the team at Vicinity is constantly monitoring the state of the fuel markets. United States natural gas spot prices saw lower prices throughout the country during the first two months of 2023, as mild weather patterns brought overall gas use to a five-year low of 110.65 Bcf/d for the two-month period.

U.S. temperatures averaged 42.8°F between January and February this winter, the third-highest average in the last 17 years. At the start of the winter season, the mild weather caused gas prices to reduce significantly, reaching pre-COVID-19 levels with the winter November 2023 through March 2024 time period now trading at an almost 38% decrease compared to highs seen for the corresponding months in 2022.

In this market update, we want to update you on what drove this price reduction, the state of global and domestic gas storage today, and predictions for the rest of the year. 

By the numbers: what we know and what we can expect

The start of this winter was very mild: this year saw the seventh warmest January on record in North America, leading to lower-than-expected natural gas consumption. In January 2023, the Henry Hub spot price of natural gas averaged $3.27 per MMBtu, down $2/MMBtu from December 2022.  

This shift led the U.S. Energy Information Administration (EIA) to forecast a Henry Hub spot price of $3.00/MMBtu for 2023. As the EIA noted, the largest decline in consumption was related to residential and commercial demand. Natural gas prices remain volatile; extreme weather events and cold temperatures could still pressure prices through March 2023.

An additional factor that could influence natural gas demand in the U.S. is the Freeport LNG export facility coming back online. The 3-train LNG export plant resumed partial operations in February 2023 and received confirmation from regulators on March 8, 2023 that the site has been cleared to resume its full capacity of 2.2 billion cubic feet per day. This incremental LNG Export capacity will create additional demand for natural gas. 

In June 2022, a fire at Freeport LNG’s natural gas plant in South Texas caused a full 8-month shutdown of the facility, leading to a decrease in U.S. liquefied natural gas (LNG) export capacity. During the shutdown, the U.S. reduced its LNG exports by 2.2 BCF/day.

After the partial restart of the plant, LNG demand grew as gas flows to all seven of the big U.S. LNG export plants rose to 13.5 bcf/d in March, up 5.5% from 12.8 bcf/d in February. The top destination for U.S. LNG cargoes are countries in Europe who have decreased delivered pipeline gas supply from Russia.

As a result of the milder weather patterns, steady production (97.5 BCF/d for the two-month period), and the Freeport LNG outage, gas storage inventories now stand at 2.1 TCF, which is a 22% surplus to the 5-year average for the same period. Even more notable is the surplus to year-ago storage levels which is now 32%.

Chart showing 5 year maximum and minimum underground gas storage

Natural gas and climate change

This winter’s record-low and high temperatures and subsequent natural gas demand fluctuations have sparked conversations on the many impacts of climate change.  

As the Natural Resources Defense Council (NRDC) explains, global warming occurs when greenhouse gases like CO2 collect in the atmosphere and absorb sunlight and solar radiation that have bounced off the earth’s surface. These pollutants, which remain in the atmosphere for many years, trap the heat and cause the planet to get hotter in the long term. 

In this way, global warming may contribute to more extreme winter weather. As water vapor is trapped in our atmosphere later and later in the year, the resulting precipitation leads to heavier snowfall when temperatures eventually drop.

We are already seeing the impact of global warming with warmer-than-normal winters and extreme heat in the summer months. In fact, since 1896, average winter temperatures across the continental U.S. have increased by nearly 3°F. Spring temperatures have increased by about 2°F, while summer and fall temperatures have increased by about 1.5°F.

How can Vicinity help?

The transition away from fossil fuels to renewable energy sources is leading the charge for the most energy-intensive industries around the world.

Heating, electricity, and energy transportation are consistently the single highest contributor to global carbon emissions. In 2020, it was reported that 76% of global carbon emissions came from the energy sector.

To reduce this staggering amount of carbon emissions, it is essential to transition to renewable energy sources and move away from fossil fuel use.

Here at Vicinity Energy, we are working with our customers, communities, and local government to decarbonize our operations across the country and do our part to reduce the impact of the energy sector on the earth’s warming atmosphere. 

Vicinity is currently in the process of electrifying its operations to offer an affordable, carbon-free path for the commercial buildings we serve. Our first electric boiler will enter service in 2024, immediately allowing our customers to harness carbon-free energy and decarbonize their buildings.

Looking ahead

With the many fluctuations in the natural gas market that we’ve seen this year, it’s clear that the benefits of investing in renewables far outweigh those of continuing to utilize natural gas to power our communities.  

Now is the time to fuel the transition to an entirely clean energy future and seize every opportunity to encourage the building of green infrastructure and invest in carbon-free energy sources.

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