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Why Smart Grids are good!

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I have made no secret of the fact that I am a big fan of Smart Grids and Demand Response programs (properly rolled out, of course!). I have also spoken at various international conferences propounding the benefits of Smart Grids and Demand Response for quite a while now.

You can imagine my disappointment then when I read an article entitled Outsmarting the Smart Grid which was strongly anti-Smart Grids, on The EnergyCollective site by William Tucker, a pro-nuclear writer.

William sets a facetious tone for the article in his opening paragraph:

The latest delusion about energy is the “smart grid.” This bright new technological miracle will once again help us overcome the realities of physics and allow us to live in a world run on wind and sunshine.

The genesis for Mr Tucker’s displeasure appears to be the above GE ad informing people of the benefits of Smart Grids.

He says

It’s fitting that the girl is standing in front of a clothes dryer because that and washing dishes are the only examples anyone has ever been able to come up with about how residential users are going to “redistribute” their energy consumption.

What else can they do? Are they going to wait until after midnight to watch prime-time television? Are they going to heat up dinner at 4 a.m.? Are they going to turn on lights at sunrise instead of sunset? And how about air conditioning, that most voracious consumer of electricity?

Again with the unhelpful sarcasm.

While it is true that not all loads in the home are movable – I use the example that I am highly unlikely to get up at 3am to cook my dinner just because energy is cheaper – there are more than just the dish washer and the dryer. Mr Tucker neglects to mention here air conditioning (though he does mention it elsewhere in his post so he is aware of it). Nor does he mention heating water in an immersion, refrigeration, PHEVs or storage heaters for example – all very movable residential loads. Of course, he neglects to mention industrial scale demand response altogether!

Mr Tucker then re-defines the Smart Grid to suit his argument

the underlying presumption of the smart grid is that it will somehow help us conserve significant amounts of energy

Uh, no it isn’t. The presumption of the Smart Grid is that it will more closely align demand with supply, thereby stabilising the grid and facilitating the further penetration of renewables onto it, thereby lowering our carbon footprint. The Smart 2020 report (7mb pdf) estimates that Smart Grids will reduce CO2 by 2.03 GtCO2e by 2020.

Mr Tucker seems hell-bent though on criticising Smart Grids for not reducing consumption quoting from the Electric Power Research Institute (EPRI) “The Green Grid,” study published last June

its most optimistic prediction was that by 2030 we could reduce electrical consumption by 7 to 11 percent below what is now being projected. That’s not an absolute reduction in consumption but only a slowing of its anticipated rise. Second, as the study concludes, “shift[ing] load from on-peak to off-peak periods may not necessarily save energy.” It will only save money. And when you make electricity cheaper, people may consumer more of it.

What Mr Tucker is again conveniently forgetting is that electrical consumption is not the problem, per se. The problem occurs when that energy is generated using coal, oil or some other non-renewable form.

In fact, there are times when we have too much electricity and you are increasingly seeing wind farms curtailed as a result of this phenomenon. Instead of curtailing wind energy when we have an excess, what we should be doing is demand stimulation – stimulating people to increase their demand at this time of excess supply. This can be achieved by dropping the price of electricity to 0 or even making it negatively priced and making that information available via Demand Response programs rolled out over Smart Grids.

Mr Tucker concludes by once more poking fun at the GE ad

In that light, it’s worth going back to that last little GE vignette where the girl says, “It’s sunny in Arizona.” She is standing at a window looking at a waxing half moon about three hours above the horizon. If she’s in the Midwest, that means the sun has already set in Arizona. If she’s on the East Coast, then it’s about to go down. She’d better get to bed because in another twenty minutes the lights, refrigerator, television, computers and everything else are going to turn off.

Meeting pointless pedantry with more pointless pedantry, the girl is looking at a street light, not a waxing moon.

Mr Tucker’s main argument is that Smart Grids won’t necessarily reduce consumption so we shouldn’t bother with them.

Energy is very abstract, no-one really cares how much they use. What they do care about is the utility bill at the end of the month and increasingly, the carbon footprint of that consumption. If I consume 10 TeraWatt hours in my home daily (not possibly obviously!), as long as it has a negligible carbon footprint, so what?

What Smart Grids and intelligent Demand Response programs will do is, massage the demand for electricity so that it lines up with the supply. This stabilises the grid for the ISO (the grid operator) allowing them to add even more variable generation sources (i.e. renewables) to the system lowering costs and carbon footprints. Win, win.

The discussion continues in the comments where Mr Tucker rails against Demand Response

Now that I think about it, here’s what’s going to happen if the utility can cut off 1/6th of its air conditioning load on a rotating basis. If people know this – which they will – they’re just going to run their air conditioning a little higher while it’s on in order to compensate for the 1/6th of the time it’s off. It’s like the low-flush toilets that you have to flush twice to do the job.

However, for once he has a valid point!

This is why when you roll out Demand Response programs, you put the control directly in the hands of the consumer. The top-down, command and control utility attitude of “we’ll turn off your aircon when it suits us” will only turn people against Demand Response.

Instead, you roll out home area networks and home energy portals where people decide themselves how they want their devices to respond to pricing signals. You’d be able to program your dishwasher to wash the dishes when electricity at 6c/KWh or 6am, which ever came sooner, for example. If you put the washer on at 8pm, for the most part, as long as the dishes are washed by 7am the following morning, you don’t care when it happens.

Similarly with your immersion, if it selectively heats the water when electricity drops below either a set price or a set temperature, as long as you have enough hot water, you are happy.

Obviously any home energy portal like this would allow the home owner full control over all the devices in the house because they belong to the home owner, not the utility!

Long term, what I want to see happen is, I want utilities to publish their generation mix (% coal, % natural gas, % oil, % hydro, % chg, % wind, etc.), as well their prices, in realtime. That way I should be able not only to control my devices but also have the ability to select the Greenest utility supplier dynamically at any time – now that’s a Smart Grid well worth having.

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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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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.