What the heck is a smart grid anyway?

By Elisa Wood

August 27, 2009

You know the old adage, ‘Never talk about politics or religion in polite company’? I’m beginning to think we need to add a third restraint, one against debate over the meaning of smart grid.

Okay, it’s not exactly a dinnertime topic. But I’ve discovered in gatherings of energy nerds (I’m one), discussion can become fairly heated over what constitutes “smart grid.”

On the one side are the engineering purists who stick to what I believe was an early definition: automated two-way communication on the grid by way of digital technology. At some point this came to widely include a smart meter that lets your utility ‘talk’ to your house and your house talk back.

On the other extreme, are those that seem to use the term to describe any grid innovation, particularly green or energy efficient technologies. It doesn’t even have to be a new technology. Combined heat and power is sometimes included in the smart club and it is more than 100 years old. (But then, just because something is old, doesn’t mean it’s not smart.)

Sometimes solar panels are described as smart. (They become stupid on the rare occasion when they leak.) And demand response, probably rightly so, has secured its position as part of the wired Mensa club. Integrating wind energy into the transmission system is often cited as a reason we need a smart grid.

It seems important that the industry stop fumbling with this definition. As Jesse Berst said in an excellent article, published March 5, 2009, SmartGridNews.com: “Can you imagine if an automobile CEO began his bailout plea with “I don’t really know what an automobile is, but can I have $20 billion please?” Or if the CEO of CitiGroup began a speech with: “I don’t really know what a bank is, but…” http://www.smartgridnews.com/artman/publish/commentary/Why_the_Smart_Grid_Industry_Can_t_Talk_the_Talk_and_What_to_Do_About_It-530.html.

Here are a few definitions of smart grid that show the range of thinking. Please let me know what you think and post yours as well. Virtual table pounding acceptable; no name calling please!

*“A smart grid delivers electricity from suppliers to consumers using digital technology to save energy, reduce cost and increase reliability and transparency.” Wikipedia

*“In terms of transmission, a smart grid makes it easier to deliver alternative energy sources like wind and solar from rural installations to city centers.” Ariel Schwartz, http://www.inhabitat.com/2009/04/30/energy-101-what-is-a-smart-grid/

*“Smart grid is a transformation. Just as the Internet revolutionized communication; the smart grid will transform how we produce energy, how we transport energy, how we store energy and how we use energy.” GridWise Alliance

*“The Smart Grid isn’t a thing but rather a vision and to be complete, that vision must be expressed from various perspectives – its values, its characteristics, and the milestones for achieving it.” Joe Miller http://www.smartgridnews.com/artman/publish/commentary/What_Is_the_Smart_Grid-567.html

*“Smart grid is the new big thing in the world of green…” http://www.treehugger.com/files/2009/07/amsterdam-smart-grid-pilot-project-ibm-cisco.php

*“While many conversations about the Smart Grid center on communications and metering technologies, the actual definition of Smart Grid is much broader and encompasses grid infrastructure — the brawn as well as the brains.” American Superconductor.

*“Over the past twelve months, Smart Grid has matured from a marketing buzzword to an industry strategy, with everyone from electric utility providers, to consulting and solution firms, to our country’s executive and legislative leaders referencing it as a key strategy for any number of objectives. Experts seem to agree that the Smart Grid is past the tipping point; however, agreement on strategy doesn’t necessarily constitute an agreement on deployment tactics.” http://www.smartgridroadshow.com/2/

Visit Elisa Wood at http://www.realenergywriters.com/ and pick up her free Energy Efficiency Markets podcast and newsletter

Smart grid and stupid buildings: Can this marriage survive?

By Elisa Wood 

August 20, 2009 

Smart grid is still in its honeymoon phase. Hardly a day goes by without fanfare in the news about how it will reform building energy use. Maybe so. But for the marriage of smart grid and US buildings to work, someone’s got to change. Is the stupid building up to the task? 

“Wiring the Smart Grid for Energy Efficiency,” a white paper by Oregon-based Portland Energy Conservation Inc (PECI), brings us down to earth by pointing out how much transformation is required.  

First, the bill. Smart meters alone will cost about $35 billion to install in 140 million U.S. homes and small businesses. Estimates are that nationwide, we’ll need to spend $400 billion to $900 billion to create a truly smart grid. Sure, forecasts Indicate smart grid will more than pay for itself. But where does the upfront capital come from? 

Second, many of our buildings wouldn’t know what to do with a smart meter. Their control systems are not up to the task. This could spell trouble if the systems are not improved before smart devices are installed. “Imagine if a building was called upon to reduce load, and while all the controls were in place to raise the temperature setpoint throughout the building to 76°F, this action results in four offices overheating to 83°F due to the need for air distribution system maintenance and sensor calibration,” the PECI paper says. 

Third, how do we achieve “true interoperability of communications,” or rather, get the smart grid and stupid building to talk? This will require development of a common language, still in the works. “In residential applications, grid-aware appliances will become widespread only if they are easy to install. For example, a washing machine that receives a price signal from the electric grid and correspondingly makes decisions about whether to operate should be able to be installed by a homeowner or by a contractor without expensive set-up costs. This kind of plug-and-play operation requires that the appliance automatically operates with the utility’s communications network as well as any home energy monitoring system.” 

Automation will be crucial. Or at the least, data display must be understandable and compelling. The report points out that consumers already suffer from information overload, so are unlikely to take the time to respond to price signals without strong incentive. Worse, consumers might treat energy savings like “a fad diet rather than a lifestyle change,” making it difficult for our society to achieve lasting energy savings.

We’ve yet to come up with the “killer application” to make smart grid a mass-market product, like what email did for the Internet. Further, we’re entering this new terrain with a lack of experienced building performance engineers.

The report does not say smart grid won’t live up to its promise of achieving dramatic energy savings. Quite the contrary. Smart grid may be one of the most brilliant ideas of our time. But we must proceed soberly.

The white paper is available at http://peci.org/About/smartgrid_whitepaper_final_071709.pdf.

Visit Elisa Wood at http://www.realenergywriters.com/ and pick up her free Energy Efficiency Markets podcast and newsletter

Smart grid: How big is big?

By Elisa Wood

July 23, 2009

A Cisco executive attracted some eye rolling after commenting that smart grid could be “even bigger than the Internet.” http://www.cisco.com/web/strategy/energy/smart_grid_solutions.html

But the statement isn’t farfetched when you think about what smart grid encompasses: a convergence of three industry giants: information technology, telecommunications and the electric grid, the world’s biggest machine.

A report this week by Greentech Media made clear just how large an empire this triumvirate can create — and what it will mean to our society if it succeeds and if it fails.

The smart grid – which will cost an estimated $165 billion to build – may constitute the largest single information technology investment to reduce carbon dioxide emissions, according to “The Smart Grid in 2010: Market Segments, Applications and Industry Players” by David Leeds. http://www.greentechmedia.com/

It also represents one of the biggest business opportunities of the century, says the report. How big is big?  “When you consider that the U.S. electric utility sector, with its annual revenues of roughly $300 billion, is 30% larger than the automobile industry and twice as large as the telecommunications industry, and then bring to mind the craze of dotcom investments and telecom merger & acquisition which occurred in the mid to late 1990s, a reasonable picture starts to emerge of what can be expected of in terms of smart grid investments and M&A in the next five to 10 years,” says the report.

Keep an eye on demand response because it’s likely the first smart grid “killer ap” to capture market penetration, even before smart meters, says Greentech Media. “The demand response market is now being referred to as a gold mine and industry analysts have called for this market to quadruple over the next five years,” says the report. The successful public offerings of demand response leaders, Comverge and EnerNoc, underscore the market’s maturity, according to the report. But what if society loses interest in smart grid? (It would not be the first time we’ve abandoned promising energy innovations.)

Without smart grid, forget about green energy, says the report. Renewables “will remain niche,” “a non-starter.” We need the smart grid to facilitate and integrate renewable energy because of its variable nature. After all, solar, wind and electric cars are nothing new. Photovoltaics have been around since the 1950s and wind and electric cars since the turn of the century. Smart grid offers to take them from “novelty to norm,” says the report. Green energy is “battle ready;” what it needs is smart grid infrastructure to support its introduction on a mass scale.

For all of smart grid’s benefits, it still faces uncertainty: If we build it will they come? Smart grid is premised on the idea that if consumers receive real-time information about their electricity usage, they will consume power more judiciously. That requires “re-imagining and re-engineering” our relationship with energy. “Changing North American consumption habits, especially those related to energy, which historically has been “dirt cheap,” cannot be assumed to be an easy assignment,” Greentech Media warns.

So whether the smart grid becomes an enormous business opportunity or an enormous bust may rest largely with human mindset. The question becomes not, how big is smart grid, but how big will we allow it to be.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

The one energy efficiency report to read

By Elisa Wood

May 14, 2009

Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission, raised a lot of eyebrows recently when he suggested that the US may no longer need to build conventional power plants – that efficiency and renewable energy might meet our needs.

He has since clarified his position, saying much will depend on how we think about energy, its use in the system, and market response.

Still, critics say he overestimates green technologies. Are they right? Reading over the most recent report by the American Council for an Energy-Efficient Economy gives one pause about underestimating technology.

We know that semiconductors have given us computers, cell phones, the Internet – they’ve changed the way we live and work. But often semiconductors are thought of as the source of energy gluttony. We are all plugged in much more than we were 20 years ago.

Steve Nadel, ACEEE director, calls this “the high tech energy paradox,” in his introduction to the report. “Analysts tend to pay more attention to the energy-consuming characteristics of semiconductor devices than to their broader, economy-wide, energy-saving capacity.”

Turns out that in making life easier for us, semiconductors also have been taking a lot of strain off our power system. ACEEE looked at how we might have accomplished tasks without the semi-conductor and found it would have taken a lot more energy.

“Computers and servers show us that it can be easier to make decisions, and that it is easier to move electrons than it is to physically move people and goods,” says the report.

In fact, technologies that use semiconductors saved us 775 billion kWh in 2006 alone. Without semiconductors we would have used 20 percent more power that year. Or put more strikingly, had it not been for semiconductors, we would have built 184 additional, large power plants.

The report goes on to extrapolate that the semiconductor industry is likely to lead to even greater savings in the future.

Semiconductors could support an economy in 2020 that is 35 percent larger than today, but uses seven percent less electricity. By 2030 the economy could be 70 percent larger and use 11 percent less power. What does this mean in practical terms? About $1.7 billion in electricity savings, a lot less carbon dioxide and many more jobs, says the report.

Such startling projections make Wellinghoff’s statement seem less dramatic.

Here I’m in danger of sounding like a sales pitch on the jacket of a paperback. But if you read only one energy efficiency report this year, make it this one: “Semiconductor Technologies: the Potential to Revolutionize U.S. Energy Productivity. http://www.aceee.org/press/e094pr.htm. It is an eye opener.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

Who gets the EE stimulus money?

By Elisa Wood

February 19, 2009

The ink is dry on President Obama’s signature to the federal stimulus bill and word is out that energy efficiency receives more than $20 billion. How will homeowners and businesses benefit?

Two sources offer an excellent break-down on the incentives: the Alliance to Save Energy and the Office of Energy Efficiency and Renewable Energy, a unit of the US Department of Energy. EERE goes so far as to give the page numbers in the bill that address certain incentives.

Here is a snap shot of where some of the energy efficiency funds will go.

Housing & Buildings

• $5 billion for low-income weatherization assistance, plus an expansion of people who are eligible. An increase in the funding level to $6,500 per home.
• About $4.75 billion to Housing and Urban Development for public, low-income and Native American housing
• Tax credit for existing homes extended and increased to 30 percent of cost, up to $1,500 for 2009 and 2010
• About $8.9 billion for federal buildings, including $4.5 billion for green buildings and $3.6 billion for Department of Defense energy efficiency initiatives

Appliances

• $300 million for the Energy Star Program and for matching grants to states that offer rebates to consumers for buying Energy Star appliances.

Technology

• $4.5 billion for smart grid projects
• Up to $2.3 billion allotted for a 30 percent investment tax credit given to those who manufacture renewable energy, energy storage, energy conservation, efficient transmission, and carbon capture and sequestration items.

Transportation

• $400 million to encourage the use of plug-in hybrids
• $17.7 billion for public transportation and rail
• $2 billion for the manufacture of advanced batteries

Other

• $3.1 billion for state energy programs and $3.2 billion in block grants for local governments
• $500 million to prepare workers for jobs in renewable energy and energy efficiency
• $9.75 billion for public safety and other government services, including renovation to “green” schools

Further details are available at http://ase.org/content/article/detail/5388 and http://apps1.eere.energy.gov/news/enn.cfm

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

Googlifying the electric grid

By Elisa Wood

February 12, 2009

If you showed Alexander Graham Bell cell phone towers, he’d be stumped. But if you let Thomas Edison tinker with our electricity grid, he’d know just what to do — not because of his genius, but because electric transmission has changed little since Edison’s day. Telephone technology advanced; electricity did not. So says the Department of Energy. http://www.oe.energy.gov/1165.htm

Thus, we are now playing catch-up and pursuing a new, smart grid. This means we will incorporate digital technology which, among other things, allows for two-way communication. The grid will speak to us and we will speak back through our actions. The average householder will know the price of power as it constantly changes throughout the day, and based on the information, choose when to buy it.

The implications to society are huge. Like the Internet, which democratized information retrieval, the smart grid opens doors for new control by the common folk, in this case over energy management, now the domain of remote utilities and grid operators. Collectively, we will determine what kind of energy the nation uses and when. In a sense, we all become energy policymakers through our purchasing choices.

So it’s no surprise that Google, whose goal is to “organize the world’s information and make it universally accessible and useful” announced this week that it will step in and help with the smartening. Google is not an energy company, but it understands how to make information retrieval user friendly – and this will be crucial to the success of the smart grid. http://googleblog.blogspot.com/2009/02/power-to-people.html

John Petersen, chairman of the environmental studies program at Oberlin College, understands this need for simplicity in communicating energy concepts, as he shows in his creation of the Energy Orb. In today’s Energy Efficiency Markets podcast (www.realenergywriters.com), Petersen discusses Oberlin’s trial and error in getting students interested in managing their energy use. Initially, the college set up a website that monitored dorm energy use with colorful charts and graphs. But Petersen quickly realized it was too “techno-geeky.”

So taking a page from Ambient’s Stock Orb, a ball that glows different colors to show stock market activity, Petersen developed the Energy Orb. The glowing balls are placed in dorms, so students can pass by and see the buildings power consumption in real time. Red means high consumption, green is low. There is no need to get online and analyze charts. The Orb reveals the immediate truth. Dorms compete against each other to maximize efficiency by watching what their orbs say.

The Energy Orb is just one way we can googlify energy information management. Many other pilot projects are in the works that simplify information retrieval and encourage people to conserve. We’d like to use this space – and our weekly podcast – to feature some of these smart grid experiments. We invite you to submit them for consideration to realenergywriters@comcast.net

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

Energy Efficiency Markets chooses its favorites of 2008

By Reid Smith
January 8, 2009

We appreciate the entries submitted for Energy Efficiency Markets’ first annual ‘best of’ contest. It is difficult to select winners in an industry that is burgeoning with innovation. We hope you find our selections as intriguing as we did. Please continue to email us (realenergywriters@comcast.net) about interesting projects – we’d like to highlight them periodically in our weekly newsletter:

1. Best appliance: Energy orb

Remember the mood rings we wore as kids? The stone changed color depending on how we felt. Here is a variation on the theme: an orb that signals the energy mood of a building, glowing angry red when energy use is high and green when consumption is low. A kind of smart meter, this crystal ball helped Oberlin College students cut back by 56% on energy use in their dorms. What’s interesting is that the kids don’t pay energy bills – still they responded to the magic ball. http://features.csmonitor.com/innovation/2008/12/18/power-meters-help-homeowners-track-and-cut-their-energy-use/

2. Most innovative public policy: Connecticut

Connecticut tends toward gutsy moves when it comes to energy policy. The state is embracing innovation to reduce its electric rates, which hover around the second or third highest in the nation. We like Connecticut’s energy efficiency certificate or “white tag” trading program, which takes a page from the successful renewable energy certificate market now in several states. Companies, colleges, hospitals, factories and others earn the tags or credits for their energy reductions. They then sell credits to utilities or others who need them to meet state energy efficiency mandates. http://www.incisivemedia.com/energyrisk/Environmental_Risk/PDFs/Spring2008/7_EnvRisk_EnergyEfficiency.pdf

3. ESCO: CMC Energy Services

The health of any industry depends on truth in advertising. If the efficiency industry overstates what it can achieve, consumers will quickly lose faith. That is why we like the honesty in CMC Energy Services’ Home Energy Tune-uP®. The company calls it a pay-as-you-save residential energy audit program; it identifies the group of improvements in the home that will truly pay for themselves when financed. The whole house audit takes into account how various improvements interact and change your payback. If you install insulation, and you also get a new heat pump, less scrupulous auditors will calculate insulation savings based on your old, inefficient heat pump. That overstates your savings. CMC adjusts its audit to take into account the new heat pump. Consumers get a realistic picture. CMC also uses home inspectors to do the audits, rather than contractors who may have a natural conflict of interest. http://www.hometuneup.com/

4. Demand-response: Energy Curtailment Specialists

The DR market has several emerging players that deserve credit for growing use of the resource. We had a hard time deciding who to choose. We finally selected Energy Curtailment Specialists because of its intelligently packaged “Power Pay.” See http://www.ecsgrid.com for the company’s plain-talk pitch, one that avoids most of the jargon peculiar to demand response programs. FAO Schwarz and the Hyatt Regency are among recent converts to the program.

5. Transportation: Google

Google made a product that is so popular its name has become a commonly used verb. Now the company turns its attention to greening the world. Among other things, Google has a fleet of plug-in hybrid electric vehicles (PHEV) at its Mountain View headquarters for employee use. Following a seven-week experiment, Google announced some impressive performance from its fleet. The PHEVs averaged as much as 93 MPG average across all trips, and 115 MPG on city trips. http://www.google.org/recharge/. Will we eventually “PHEV” instead of drive?

6. Green building and construction: Pairing of green energy and efficiency

Here we honor not so much a company but a concept: the efforts by renewable energy companies to get customers to pursue all cost-effective efficiency before buying green energy. For example, California-based3Degrees, which markets renewable energy certificates (RECs) and carbon offsets, starts by analyzing a building’s carbon footprint. If it finds strong efficiency potential, 3Degress contracts with a third party to take on the project. http://www.3degreesinc.com. Chevron Energy Services offers a good example of successfully pairing solar and efficiency at three campuses of Contra Costa Community College. The $35.2 million Northern California project includes a 3.2-MW solar power generation system, efficient lighting and energy management systems, efficient heating, ventilation and air-conditioning, and high-voltage electrical system replacements. http://www.chevron.com/News/Press/release/?id=2008-01-31

Visit Reid Smith at www.realenergywriters.com and pick up his free Energy Efficiency Markets podcast and newsletter.

Electricity use falls because of efficiency

By Elisa Wood

October 30, 2008

Electricity sales can gauge the national economic health. An ailing economy uses less electricity because is produces fewer goods and services. Sometimes, however, electricity sales fall for a good reason – efficiency.

Such is the case in the United States, according to a recent statistics released by the North American Electric Reliability Corporation (NERC). The organization annually assesses how well the grid is likely to perform over the next several years.

The 300-page report has a lot to say, but this headline jumped out at us: Demand Response Projected to Offset Nearly 80% of U.S. Peak Demand Growth in 2016; Significant Growth in Energy Efficiency Projected.

NERC forecasts that North America will offset 34,000 MW through demand response – a kind of efficiency program where customers are paid to reduce energy use when the grid is under strain. In addition, conventional energy efficiency programs are expected to cut electricity use by 11,000 MW. As a result, total electric demand will drop 3.3%, NERC said.

Demand response will become “a critical resource” to help us keep the lights on over the next ten years, according to the report. Our economy is becoming increasingly electrified, but we are unwilling to build more energy infrastructure. “Many coal plants have been deferred or cancelled, nuclear plants are becoming more and more expensive, and transmission lines increasingly difficult to site,” NERC said. Demand response will help bridge the gap between our electricity needs and our power resources.

Further, demand response is a good “dance partner” for wind energy, a resource that NERC forecasts will grow 750% by 2017. Wind farms offer a clean source of energy. But they only create electricity when the wind blows. Demand response can serve as wind’s partner during these times, reducing energy use to make up for the loss and averting a greater ramp-up of fossil fuel generators.

Our demand for electricity will still grow over the next several years, as our use of computers, cell phones and other electronic devices increases — but not as much as we had thought. Last year, NERC forecasted a 17.7% growth in summer peak demand; this year it puts the figure at 16.6%. The organization attributes much of the change to efficiency. We’ve figured out how to do more with less, a good economic move.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

Toasting Pop-Tarts cheap: How electricity may solve our energy woes

By Elisa Wood

October 23, 2008

We tend to talk about electricity in terms of its problems — it degrades the environment, costs too much and messes up scenic views. But the Manhattan Institute’s Peter Huber takes a different stand in his new report “The Million-Volt Answer to Oil.”

Huber says electric power may be the cheap, efficient resource we seek to give America energy independence. He divides energy into two camps: electric power and transportation fuel. Our energy woes stem from our dependence on oil for transportation. To get over $4 per gallon gas, he says, we need to connect our transportation fleet and home heating systems to cheap 4 cents/kWh electricity.

“We spend roughly half as much on electricity—about $350 billion a year—as we’re currently spending on $100-a-barrel oil, and electrically powered systems do more, faster and better, than oil-fired alternatives,” he says in the report.

Huber’s theory opens the door wide for use of plug-in hybrid cars and electric heat pumps. “If we could deliver electricity straight to electric motors connected to our wheels, it would deliver miles at a price that most current car engines could match only on gasoline priced under a dollar a gallon. Delivered to our homes at off-peak prices, electrical heat would cost homeowners a lot less than $4-a-gallon heating oil,” he says.

Of course, electricity doesn’t cost 4/kWh cents everywhere. Some places it is 19 cents/kWh. And no matter where you live, the price goes up and down dramatically all day, depending on how many customers use power at any given time. When the East Coast is winding down its work day and its electricity prices fall, the West Coast is still going full tilt and its electricity prices rise. The trick is to transmit the cheap power quickly from place to place, and keep it rolling over four time zones by building a new and sophisticated high-voltage transmission backbone that can handle such movement.

“A kilowatt-hour of electricity toasts as many Pop-Tarts in Palo Alto as it does in Poughkeepsie; an efficient, integrated market with cheap, long-distance transmission available would charge everyone the same price for toasting them,” he says.

The technology exists, and it is not terribly pricey, to create such a transmission system. Huber estimates that building a 21,000-mile grid to network all major sources electricity, and push wind power from the Midwest to the coasts, would add roughly 0.3 cents/kWh to the current 9-cent/kWh average retail price of electricity.

He points out that a single 765-kV transmission line can move “almost 1 percent (4 GW) of the total average power generation of the entire United States, or 0.5 percent of the power that Americans collectively consume during the most power-hungry minute of the year.”

With such a transmission system in place, developers could build power plants and wind farms in rural expanses, rather than the crowded coasts where people object to the intrusion on their space.

Last, he points out that very few US power plants now use imported oil as a fuel, and instead use domestic sources, increasingly renewable. “With electricity, America controls its own destiny,” he says.

As Huber tells it, electricity is not part of the energy problem, but is the overlooked solution.

See the report at http://www.manhattan-institute.org/html/eper_03.htm.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.