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Oracle Utilities, Smart Grids and vehicle to grid

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I was talking to Guerry Waters, the VP Industry Strategy in the Oracle Utilities Global Business Unit the other day.

Guerry was telling me about Oracle Utilities’ background and how they came about as the result of Oracle’s acquisition of SPL back in Nov 2006 and Lodestar in 2007.

We got onto the subject of Demand Response (surprise, surprise!) and I raised my concerns about utilities being too command and control. When I said that for DR to really take off consumers need to be in control of their devices Guerry said:

The idea of automatic control of your Demand Response in the home is very intriguing but very much on the edge now, so what we are doing is we are working with a number of companies, like Tendril, that provides Home Area Networks (HANs) and control of devices in the home, where there can be parameters set from signals that are being passed to the HAN about price…. and bring that down to the HAN and let the HAN respond according to parameters that have been set by the consumer themselves…. and give the consumer opt-out capabilities from that.

Guerry went on to describe scenarios where your Home Area Network can contact you via SMS, for instance if you are away from home to alert you that your HAN is about to respond to a DR signal and do you want to overide or not!

Guerry did say that there are very few utilities thinking this far out but the fact that there are any is hugely heartening!

Our conversation went on to discussing vehicle to grid technologies and it was super to see that Oracle are thinking about the challenges to be overcome and ways to roll out the technologies required to make this a reality.

With both SAP and Oracle rolling out enabling technologies in this space, the Electricity 2.0 vision is quickly becoming a reality.

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Maximizing Wind and Solar Energy: Live Webinar Nov. 5!

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The Energy Collective

The Energy Collective


This coming Wednesday, Nov 5th, sees the second installment in the Energy Collective‘s Fall Webinar Series!

Up next:
Wind and Solar Come of Age: Making Renewables Full Partners in Our Energy Future – Wednesday, November 5 @ 1 PM Eastern / 10 AM Pacific, Featuring Scott Sklar of The Stella Group and Tom Raftery of GreenMonk (that’s me!).

Scale, advances in technology, and the rising cost of fossil fuels mean wind turbines and solar panels are no longer novelties. But getting the most out of solar and wind involves more than new installations. In this Webinar, we’ll examine the challenges and opportunities associated with integrating peak-load, distributed power sources in our base-load-expectant society with an electrical infrastructure built for centralized generation. More info here.

And, don’t forget the final Webinar in the Series:
Decarbonization and Nuclear Power? – Thursday, November 13th @ 11 a.m. Eastern/8 a.m. Pacific, Featuring Duke Energy CEO Jim Rogers, Dan Yurman of Fuel Cycle Week and Ashton Poole of Morgan Stanley’s Global Power and Utility Group

This controversial energy source appears to promise massive benefits, but also presents some serious obstacles. Our panelists will explore the possibility of a nuclear future in America, discussing the costs of adding new nuclear plants, the potential impact of carbon pricing, and whether NIMBY politics and regulatory barriers can be overcome. More info here

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Smart Grid demo at the SAP for Utilities Conference

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I attended the SAP for Utilities conference last week in San Antonio and was pleasantly surprised to find that many of the Utilities attending were thinking about rolling out Smart Grids or were already running pilot Smart Grids. There were even a couple who were well underway with their Smart Grid rollout project.

Demand Response was being discussed extensively and was cited by most as one of the principal advantages of Smart Grids.

Smart Grids and Demand Response are topics we have covered extensively here on GreenMonk.net and they are core to the Electricity 2.0 talk I gave in Berlin at the Web 2.0 Expo. The importance of Smart Grids and Demand Response cannot be overstated when it comes to energy efficiencies and energy demand management.

SAP are working closely with utilities through the Lighthouse Council, to ensure that whenever a utility wants to go from a traditional grid to a smart grid infrastructure, SAP will have the necessary software pieces in place for them (Enterprise Asset Management, Customer Relationship Management, and the newer Energy Capital Management).

In the video above, Russell Boyer demonstrates a Smart Grid in action. In this use case, Russell acts as the utility call center for a customer who is moving out and wants their power disconnected. The Smart Grid allows the agent to take a meter reading, and shut off power to the meter remotely. This isn’t the best demonstration of the potential of Smart Grids but it was the first time I saw Smart Grid technologies live in action and I have to admit to being wow’d by it.

[Disclosure – SAP covered my expenses for attending this conference]

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Electricity 2.0: Using the Lessons of the Web to Improve Our Energy Networks – the video!

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Many people have been asking me if there is a video of the presentation I gave at this year’s O’Reilly Web 2.0 Expo available anywhere.

I asked the organisers but they said they hadn’t recorded it.

Then my good friend Andrea Vascellari came to the rescue. I knew he had attended the presentation but I was unaware that he recorded it.

He published the video above this afternoon so for all those who were interested, here you go…

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Electricity 2.0 – Using The Lessons Of the Web To Improve Our Energy Networks

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Electricity 2.0 – Using The Lessons Of the Web To Improve Our Energy Networks

View SlideShare presentation or Upload your own. (tags: web2expoeu08 w2eb)

I spoke today at the O’Reilly Web 2.0 Expo in Berlin and the title of my talk was:
Electricity 2.0 – Using The Lessons Of the Web To Improve Our Energy Networks

The talk was about demand response, smart grids, renewables etc. and it received extremely positive feedback so I thought I’d share the slide deck here for anyone who may be interested.

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Is micro (home) generation of electricity good for the environment?

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Home solar
Photo Credit benefit of hindsight

Microgeneration, the generation of electricity by home owners, is becoming increasingly common, especially with the cost of energy going up and the cost of wind turbines and photovoltaic panels for the home falling.

The majority of people deploying these solutions are doing so to 1) lower their home energy bills and 2) to help the environment.

What if I told you that often installing microgeneration equipment does not help the environment?

Bear with me while I try to explain. This is complex, counter-intuitive and I am not the world’s best communicator!

Grid operators have problems integrating renewable energy sources onto the grid right now because they are a variable source of supply. Couple that with the variability of demand and your grid starts to become increasingly unstable.

By far the most economic renewable energy source currently is wind but wind energy’s supply curve is often almost completely out of phase with demand (wind blows stronger at night when there is least demand for energy).

The more renewables that are brought onto the grid, the greater an issue this becomes with grid operators having to shut down production from wind farms in times of oversupply! Bear in mind also that there has to be enough generation capacity from non-wind sources (oil, gas, coal, nuclear, etc.) to pick up the slack on days when the wind doesn’t blow.

In times of oversupply from renewables, it would be far preferable to be ramping up consumption of energy using moveable loads, rather than shutting down production from renewables.

Now consider the home-owner who has deployed their own wind turbine. At times when the wind is blowing this home-owner is generating power thereby reducing their demand just when there is an oversupply on the grid! And if they have a net metering agreement with their utility, they further exacerbate the problem by pumping extra electricity into the grid, just when it isn’t required!

Conversely, on calm days, when extra energy is most needed, micro-generation contributes nothing.

There are two main problems:
1. There are no economic energy storage technologies currently available – though this situation is evolving rapidly with the ramping up of investment into battery research by the transportation industry in particular and
2. Real-time pricing data for electricity generation are not exposed to the consumer – if they were, and automated demand response mechanisms were put in place, you would see a radical shift in the energy consumption curve (people would consume energy when it was cheaper – i.e. when it is abundant).

If these two nuts were cracked i.e. economic energy storage mechanisms were available and real-time pricing data were exposed, micro-generators could generate energy when the wind blows, store it and then profitably sell it back to the grid when demand increases, or the wind drops.

For now though, while microgeneration may be beneficial in reducing your energy bills, it is of no benefit to the environment.

Note that I didn’t address CHP in this post because I was trying to keep things simple! CHP can be beneficial, as can any microgeneration, if the production of energy increases in line with the price of electricity.

As the price of electricity goes up, so too does its carbon footprint. If you consume electricity when it is cheap, you are facilitating the greater penetration of renewables onto the grid. If, as a micro-generator, you can produce clean power when electricity is expensive, then you are helping the environment.

UPDATE: Just to clarify, I fundamentally believe microgeneration is a good thing. However, given the current antiquated state of the grid in many countries, the disconnect between generation and demand profiles for wind particularly, and the lack of decent energy storage technologies, the environmental benefits of microgeneration are far from straightforward. This will change as energy storage options improve and demand response mechanisms and smart grids are deployed.

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Why don’t we already have a real time market for electricity?

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Supply and Demand
Photo Credit whatnot

If Demand Response is such a good idea and will help get more renewables onto the grid, why isn’t it being embraced by the grid management companies?

Most grid management companies have been in business for decades managing a grid in which the supply is manageable and the demand is variable but reasonably predictable – typically daily demand is “this day last year +2.5%”!

Now grid management companies are faced with a situation where an increasing percentage of their supply is coming from variable sources (i.e. wind) – if the wind blows more than anticipated, too much electricity is generated and if it blows less than anticipated, the converse is true. This totally messes up their planning and consequently grid management companies hate wind, and think of it as unpredictable, negative demand!

Instead of having such a negative attitude to renewables and shutting them down in favour of fossil fuels they should be asking how can we facilitate the greater penetration of clean renewable energy sources onto the grid.

In the coming years, the demand for electricity will increase significantly as transportation goes more electric (electric and plug-in electric cars, bikes, trucks, etc.) and as heating moves more to electricity. This will add demand to the grid system but this increased demand is eminently movable – for the most part you don’t care if your car re-charges at 7pm or 4am as long as it is re-charged when you want to leave for work at 8am. Similarly with heating, if you use storage heaters (and they will become more common) you don’t care when they suck in the heat as long as they heat the house the following day.

If you can move the demand to a time when traditionally the requirement for electricity was low, you can deliver it over the same infrastructure, thereby selling significantly more electricity without having to massively upgrade the network.

The upshot of this is that an increasing movable demand (the ability to time shift consumption) should be a strong business case for a real-time electricity market. Let demand be guided by supply (as indicated by price). With a real time market for electricity you need never shut down wind farms in favour of fossil fuels, you sell more electricity and you enable a greater penetration of renewables onto the grid. Win, win, win.

Why hasn’t this happened already? Ask your local grid management company.

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Demand response – how to get more wind energy onto the grid

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Wind Energy Curtailment

I read a fascinating article in the New York Times yesterday about how the electricity grid in New York can’t always cope with the amount of electricity being produced by the Maple Ridge wind farm and so from time to time the wind farm has to shut down production!

This problem is not unique to New York according to the article:

That is a symptom of a broad national problem. Expansive dreams about renewable energy, like Al Gore’s hope of replacing all fossil fuels in a decade, are bumping up against the reality of a power grid that cannot handle the new demands.

The dirty secret of clean energy is that while generating it is getting easier, moving it to market is not.

This is a problem for the owners/operators of Maple Ridge and similar facilities – how do you get a return on investment if the grid operators can shut you down at a moment’s notice? In fact, how do you get investment in the first place if your income is completely controlled by another company?

Nor is this just an American problem, I heard reports this morning that in the last few days, for the first time ever, Eirgrid (the Irish transmission service operator – grid management company) had curtailed production from Irish wind farms. I contacted Eirgrid’s customer services department and confirmed that this had in fact happened and I will be receiving more information from Eirgrid about this early next week.

Ireland is currently sourcing an average 9% of its energy requirements from wind but has committed to moving to a 33% average from renewables by 2020. If the grid is having difficulties taking in wind energy at 9%, how do they hope to get anywhere near 33%?

Even more insane is the fact that if you are a wind energy producer in Ireland, you have to sign a contract allowing Eirgrid to shut you down up to 17% of the time. Yes, you read that right – at a time when countries are trying to reduce their carbon footprint to comply with Kyoto, the Irish grid operator is dissuading investment in wind energy projects by inserting curtailment clauses and now by going the full hog and shutting down wind farms!

Have Eirgrid not heard of Kyoto? Or CO2 emissions? Or the obvious solution to problems like over capacity from wind – demand response?

The problem Eirgrid have is not an over-supply of energy from wind. It is an over-supply of wind energy when demand for electricity is low (6am on a warm summer weekend morning, for example).

With a proper demand response mechanism in place, if too much electricity is being created by wind, instead of shutting down wind farms and risking future investment in renewables, you simply reduce the price of electricity to the market to stimulate an increase in demand!

The market gets cheaper electricity, from clean sources, investors are less wary of investing in wind so more wind farms are financed, the government stands a better chance of reaching its 33% from renewables by its 2020 target and Eirgrid get a more stable grid (as well as helping the govt reach its target) – win, win, win,win, and win!

Nor is this issue limited to Ireland and the US. Any countries hoping to increase the penetration of renewable (variable) energy supplies will need to initiate a demand response mechanism to manage the demand, thereby stabilising the system and allowing for even greater uptake of renewable energy.

You can be sure I will be putting this to Bill Vogel, CEO of Trilliant, when I am talking to him next week.

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A giant distributed battery for the country?

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Toyota Prius plug-in
Photo Credit geognerd

Having just taken delivery today of my Toyota Prius and having just read the Rocky Mountain Institute’s (RMI) fabulous report on Vehicle to Grid possibilities, I decided it was time to address a post to this topic.

First off, what is vehicle to grid? Vehicle to Grid (or V2G) is the idea that plug-in hybrid vehicles (PHEVs) could be used to help stabilise electrical grids by consuming power when there is an excess of electricity, and selling electricity back to the grid when electricity is scarce.

The supply of electricity is variable. All the moreso as the concentration of renewable sources added to grid increases. When this variability of supply is combined with the constant variability of demand the result is an extremely unstable grid and the occasional resultant power outage. This instability increases with the addition of more renewable sources (wind and solar).

Early on summer mornings (2am to 6am) is the typical trough of demand for electricity. As more and more wind farms are added to the grid, if there is a steady wind blowing at this time, there is a very real possibility that the amount of energy being supplied by wind farms will exceed the demand! With an excess of demand over supply the price for electricity will go extremely low or even negative to stimulate demand. At this time, if there are a large number of PHEVs connected to the grid, they can pull down the excess power and store it. In other words, they start to act like a giant distributed battery bank for the country.

The following day, if there is little wind and the temperature is high (not unusual in summer) the supply of electricity will be low and the demand for power will be high as people turn on their air conditioning units. With low supply and high demand, electricity will now be quite expensive. At this time, it would make economic sense for PHEV owners to sell the electricity stored in their vehicles back to the grid.

Furthermore, as the RMI report put it:

Utilities sell a disproportional amount of their power on hot summer afternoons. At night, business plummets. For the utility, that means their expensive generation and transmission equipment stands idle. “Night-charging” vehicles, therefore, could be a lucrative twist on the business of selling electrons.

The National Renewable Energy Laboratory recently estimated that if half the nation’s light vehicles were ordinary plug-in hybrids they would represent a night-charging market of 230 gigawatts. That’s good news for the U.S. wind industry. In many areas, wind tends to blow harder at night, creating more energy when the vehicles would be charging.

All this requires the implementation of smart grids by utilities. These grids will be able to signal the cost of electricity (reflecting the supply and demand) in real-time and devices (vehicles, air-conditioning units, diesel generators, refrigeration plants) will respond to the price fluctuations accordingly so that when electricity is expensive, the demand will drop and supply will be stimulated to increase.

Smart grid trials are already taking place with Enel in Italy having rolled out a smart grid to 27.2m Italian residences! In the US, Austin Energy has been working on building its smart grid since 2003 while Xcel Energy announced its plans to build the first fully integrated “Smart Grid City” in the nation in Boulder, Colorado.

To get this vision to become a reality, consumers will have to be incentivised to buy PHEVs. This might be done by governments, or by utilities who contract with the vehicle owner to subsidise the price of the car, for the use of the battery when needed!

Governments could help push this forward by mandating that all government owned vehicles be PHEVs (though the police might want a derogation until there are high performance PHEVs!).

Car manufacturers also need to produce PHEVs! Toyota will bring the first plug-in Prius to market in 2009 and Renault Nissan have committed to producing electric vehicles for Israel and Denmark. With oil now at $140 per barrel and not looking likely to drop significantly in the coming years, the number of people looking to buy PHEVs will only trend upwards.

Then there are the environmental benefits of large fleets of cars not emitting CO2 for large portions of their journeys. And the resultant grid stability would enable greater penetration of wind power, producing (typically) more power overnight, just when PHEVs would normally be recharging.

What about you? If you could by a plug-in hybrid which would help stabilise the grid, increase the penetration of renewables, and allow you to sell power back to the grid, would you?

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Introducing the NegaWatt!

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Feather in the sky
Photo Credit Sarey*

Yes, you read the title correctly and no, NegaWatt is not one of my normal typos!

What then is a NegaWatt? A NegaWatt, is a MegaWatt of electricity that you don’t use! Huh?

Think of it like this, suppose a utility company has 100MW to supply.
Now let’s say their typical demand is 90MW.
If a potential customer contacts them looking for 20MW, they have a problem.

They can either try to build new generation of 20MW (expensive) or, try to get their existing customers to reduce their demand by 20MW. The reduced demand is typically done through efficiencies and the required reduction, when achieved, is 20 NegaWatts – 20 MW of virtually generated electricity.

Now, take the concept of a NegaWatt a little further. If you could ‘generate’ a lot of NegaWatts it should be possible to sell these demand side units back to the utilities. They are just as useful to the utilities for meeting demand as actual MegaWatts. More useful when demand for electricity is high and supply is low.

This is not some fictional futurescape. It is actually happening now to a limited extent in some parts of the US and will be rolled out far more widely in the coming years as energy markets and smart grids become more sophisticated.

How might someone create NegaWatts? Well, have a look at some of the posts we have written here about Energy Demand Management for some ideas.

A lot of the work in this area currently is looking at things like changing settings on thermostats (think aircon, refrigeration and water heating), bringing diesel generators online, and time-shifting of consumption (think storage heaters and pre-cooling buildings early in the day when demand is lower).

Companies like Comverge, EnerNoc and Echelon are making devices and systems that let consumer monitor and adjust their electricity use in real time.

This is a whole new market which is about to open up. There are massive opportunities there for people to write software to manage this, to build the hardware to do this, and to aggregate NegaWatts for sale to utility companies.

This all feeds back into the read/write grid we have discussed here previously. With the rise of the NegaWatt, electricity becomes a far more two-way tradeable commodity and the implications for the uptake of renewables on the grid are enormous.