Andy Zetlan, a consulting director at SGL Partners, is the guest author of this great article about consumers and lessons that utilities can learn from product and service providers in adjacent business sectors.
As we have seen in recent reports, investment in Smart Grid technologies continues to grow world-wide, with continued advances in the deployment of smart metering and analytics delivers benefits to utilities. Utilities are seeing levels of benefit in return for these investments, in the enhancement of grid operations, more accurate billing, correcting for lost revenues, and other material issues. Engaging consumers, however, continues to take a back seat in priority in many utility projects.
According to the Smart Grid Consumer Collaborative (SGCC) where I have previously served as a Board member,
“… Surveys illustrate that there is high consumer interest in electric utility energy programs. For example, three out of five respondents stated that they would likely participate in a critical peak rebate program. Additionally, one-fourth to almost half of consumers interviewed in the survey say they would be likely to participate in three other pricing programs – time-of-use, demand response and critical peak pricing plans – that were tested in the survey.”
The SGCC goes on to say that consumers really are interested in new pricing plans and service options, and understand that the technology might lead to improved reliability, reduced environmental impact, and lower costs. Lastly, the survey indicated that consumers prefer simple solutions that leave the consumer in charge of household energy management.
Are utilities ready for this? Some have taken good steps forward, but for the most part, utilities are still catching up to other industries in understanding how to support an “Internet of Things” approach to its consumers. Instead, consumers are turning to off-the-shelf solutions and competitive solutions to start down the road to self-determination around energy, but continue to be more disconnected from their utilities except to review their consumption and review possible rate approaches off-line.
Further, the existing solutions don’t yet meet the “simple” rule, although progress is being made. Future announcements from industry leaders such as Google and Apple suggest a new focus on this, and we would hope that utilities would understand and push towards a more integrated posture to make it a solution, and not just a new consumer product. We should understand that consumers also want the positive reinforcement of their actions in supporting the objectives of their investment thinking … that of contributing towards reliability improvement, environmental mitigation, and cost reduction.
There are solutions out there, but there is also confusion. Utilities aren’t always leading here, but catching up to other vendors (think Nest and others), and service providers (think ADT and Comcast) that are already gaining traction. Where will complete solutions come from that meet the need for simple and strong feedback that consumers understand? The answers are not clear yet, but the need most certainly is.
We’re featuring guest authors over the next few weeks. This article by Robert D. Cormia, a member of the Foothill College Engineering Faculty, talks about a new equation for energy intelligence – where ei = cm3 (for continuous monitoring, modeling, and management). Foothill College is located in Los Altos Hills, California, in the heart of Silicon Valley.
Foothill College has been engaged in a strategy that integrates building energy monitoring and management with enhanced distributed generation capabilities. It’s an important first step on a path that could lead to becoming a ‘managed energy grid’. Towards this end, Foothill College has developed a multi-tiered model that will integrate building energy sensors with building automation controls, measuring heat exchange of hydronics (heating and cooling from a central plant); a campus-wide energy management system; inverter output from 1.5 MW solar PV and 240 KW cogeneration (heat and power); an Energy Information System (EIS) that will monitor, model, and display the energy flows into buildings and from our onsite generation and utility feed; and finally the capability to synchronize energy generation and use, and or load shift (demand shift) in a utility business model called Integrated Demand Side Management (IDSM).
The logic and premise for this future energy system is based on a three-tiered stack. First, a smart energy campus begins with understanding when, where, and how energy is being used. This leads to a better understanding of basic building operation, i.e. are building systems operating correctly, and can we control buildings precisely enough to manage energy with occupancy and use?
The second tier of the smart energy stack is significant onsite energy production from 1.5 MW solar PV and 240 kW of cogeneration heat and power, which provides 45% of Foothill’s annual electrical demand and 50% – 100% of our peak power demand. At times this generation exceeds campus load, and Foothill exports electrical energy, which currently isn’t stored to offset energy at other demand peaks.
The third tier of the stack is the analytics and visualization platform for understanding power flows throughout the day, and displaying energy use at a building and campus level. This Energy Information System (EIS), transcends the energy management and building automation software (EMS/BAS); with such a system, we would begin to model an enhanced generation capability of additional solar PV and battery storage, mainly used to generate and store electrical energy during the day, and release it in the early evening, where we often experience our greatest power demand. In order to leverage additional onsite generation, without swamping the outer distribution grid (called “backfeed”), the generation and release of energy must be carefully managed.
The EIS informs the campus energy manager about how energy generation assets, e.g. solar PV, cogen, and storage, can be combined with Automated Demand Response (ADR) to help the utility power grid better respond to large power demands, and/or shift the campus peak energy demand away from the utility¹s peak demand, which can also cause high time of use (ToU) charges. IDSM, or Integrated Demand Side Management, fits well with large distributed generation behind the meter, especially college campus distributed energy systems. In the utility model of the future, managed energy grids will participate in grid optimization, using a multilayered energy monitoring and management platform, and leveraging our new equation to deliver comprehensive and actionable Energy Intelligence.
Is it just me, or is the pace of technology innovation speeding up for you too? Acceleration is certainly evident in nanotechnology R&D. Back in December 2014 I wrote two blogs that updated my 2020 predictions first published in January 2014. Nanotechnology discoveries are now occurring on almost a weekly basis. Universities have been a hotbed of scientific discoveries in material sciences. Consider the recent news that graphene, a particularly interesting nanomaterial and photons. A photon is a unit of electromagnetic radiation that has energy but not an electrical charge. To the naked human eye, photons are sunshine. Research in Switzerland revealed that graphene can take one photon and make multiple electrons. This is what today’s solar panels do – convert photons into electrons. But graphene has a multiplier effect, with the potential to boost existing best case conversion rates from 32% to 60%.
While this announcement addresses research results, commercialization won’t be far behind, and we’ll soon be reading about new solar panels that leverage graphene materials to increase harvestability of solar potential. Other research advances focused on making solar harvesting materials more flexible. What do these research announcements mean? Here are three key points. Solar panels, like microprocessors, will shrink in size and increase in power. Second, areas that have marginal value for solar generation will get a second look as panels improve in their productivity and their flexibility to be adhered to non-traditional surfaces. Third, distributed energy resource (DER) momentum grows as a result as more rooftops, landscapes, and other building surfaces harvest solar energy and proliferate in distribution grids.Gr
Other nano research is concluding that a little stress can be a good thing for silicon crystals known as quantum dots. Around the time of the 1973 energy crisis, the popular saying was “small is beautiful”. In at least some research labs around the world, the new saying could be “small and stressed is beautiful”. One commercial application possibility focuses again on improving the energy harvestability of solar panels made from silicon. However, there’s also interest in how these nanocrystal reactions can increase the charge/discharge cycles of batteries, improve computer displays, and decrease power consumption.
Are investors paying attention? Graphene has been dubbed the “wonder material”, and big players like IBM and Samsung have been allocating money and resources into it. China has filed more patents involving graphene than any other country. One of the first commercial applications of graphene research is a light bulb that improves on the energy efficiency of LED bulb technologies. Once these new bulbs are available later this year, investors who have been hanging back will be looking for other commercialization opportunities.
From a Smart Grid perspective, graphene has exciting application potential in energy harvesting, energy storage, and even energy consumption, specifically reductions in waste heat. It’s a rapidly innovating area of materials science research that will be the foundation for disruptive technologies integrated into the electric grid. The dual impacts of these disruptors will be to increase the amount of electricity generated by DER assets and reduce electricity consumption as devices become more energy efficient. The speed at which R&D in graphene and other nanomaterials is advancing to commercialization may blast past my predictions of overall progress by 2020.
The California Public Utilities Commission released a draft document on energy efficiency (EE) titled California’s Existing Buildings Energy Efficiency Action Plan on March 10. The document is a “10 year roadmap to activate market forces and transform California’s existing residential, commercial, and public building stock into high performing and energy efficient buildings.” As previously noted here and here, what the 8th largest economy in the world does in its ambitious plans to improve building energy efficiency will have impacts far beyond its borders. This new document identifies policy directions that will have profound economic and environmental implications in California and beyond its borders.
According to the Department of Energy, buildings take 73% of the electricity consumption in the USA. Residential and commercial buildings that are retrofitted to consume less electricity and natural gas put more money into consumer pockets and improve the bottom lines for businesses. Those reductions become widely-distributed and persistent savings.
There are employment benefits as well. Approximately 61% of all construction projects are retrofit projects, and require onsite labor to complete them. That means local economies benefit from increased employment in skilled blue collar trades. But many EE retrofits also include high tech solutions that make buildings smart – sensors, wireless communications, and analytics software, with concomitant increases in sales and growth in the companies that provide these solutions.
The CPUC roadmap outlines five goals that include objectives, strategies, and partnering arrangements within each goal. A striking common characteristic is the transparency that the five goals strive to create about energy and water efficiency through the collection and management of data. Starting with benchmarking and disclosing building performance, which sets an invaluable data foundation, the other goals methodically leverage this performance data to provide new perspectives for decision-making. Increased access to and understanding of building performance data can lead to more informed actions regarding investments. This transparency also serves to promote awareness of the value of EE programs to all stakeholders, but perhaps most especially to utility customers, who may not be well-acquainted with the overall benefits of programs funded through their electricity rates.
Another positive aspect of this document is its broach approach to EE in buildings. Single family, multifamily, small to large commercial buildings and public buildings are identified and addressed. While there are common objectives of reducing energy and water use for all these buildings, the technologies, market structures, and financial approaches are uniquely different. There’s an urgent need for innovations in how EE programs for multifamily and many commercial buildings are financed that overcome split incentive challenges. While green leases and other similar measures help tackle these problems, much more “friction-less” processes and financial benefits to those investing the upfront capital for upgrades will be necessary to accelerate increased EE in the California building stock.
Encouraging the transparency of building data with regards to energy efficiency has another benefit. The barriers to technology innovations in materials sciences will be reduced because innovators and their funders will increasingly see that there are addressable markets for their solutions. But in the short run, the policy and capital innovations based on this roadmap for energy efficiency may for once leapfrog technology innovations.
What does energy efficiency mean to you? Does it mean replacing old light bulbs with energy-stingy LEDs? Is it a remodeling project that installs double or triple pane windows? Does it include upgrading appliances like air conditioners and refrigerators to take advantage of Energy Star ratings and utility rebate programs? It means all of those things, and in states like California that employ aggressive energy efficiency (EE) policies and standards from widget to building envelope, it’s been a successful strategy to reduce per capita energy consumption.
Earlier this year the governor of California announced an energy policy, although he didn’t call it that at the time. One of the goals is to double EE savings in existing buildings by 2030. To get there, breakthrough innovations in EE policies, technologies, and financing are required. In other words, its time upgrade from EE 1.0 to EE 2.0, with a very heavy emphasis on building retrofits.
The Next Generation of Energy Efficiency Project at Stanford University aims to define EE 2.0. Led by Dian Grueneich, former Commissioner of the California Public Utilities Commission and now a Senior Research Scholar at the Precourt Energy Efficiency Center and the Hoover Institution, the project will create a series of whitepapers to help mobilize actions that deliver Governor Brown’s “doubled down” objective.
The first White Paper, to be issued this spring, will discuss some of the steps Ms. Grueneich has identified to define an EE 2.0 framework:
- Articulate EE’s new role in terms of its increased value to economic, energy, and environmental security
- Structure transparency and build awareness through annual performance reporting on EE gains
- Revise state agency roles and processes to streamline policy and projects support
- Align EE regulatory rules and policies with state climate goals
- Improve customer-funded programs
- Investigate the state’s development and enforcement of codes and standards that can accelerate EE goals
- Identify and support innovations in technologies, policies, and financial products that contribute to EE savings
Technology innovations are abundant to retrofit existing buildings to higher EE savings. Much of that technology is relatively low tech too. Insulation and double pane windows aren’t rocket science. Of course, there’s exciting work in labs that will improve building envelope materials in the form of new paints as well as “smart” windows.
The pre-eminent challenges to creating the Next Generation of EE are in policy (including agency governance) and finance. Compare an EE investment in insulation upgrades to an investment in solar panels. Both have upfront acquisition costs with a promise of energy bill reductions enjoyed in the future. Homeowners have a range of options that include use of PACE programs to finance solar investments or partnering with firms that handle the upfront acquisition and installation costs and share in the production and tax benefits. Insulation upgrades lack the same diversity of financial programs and partnership options. As Ms. Grueneich described at a recent session, “in energy efficiency thousands of different decisions made every day by individuals, organizations, and governments. We have to use our policies and the private market to set up similar models to solar that make efficiency easy and attractive, for both consumers and providers alike.”
Ms. Grueneich noted that EE 1.0 consists of “mostly single ‘widgets’ and low uptake by consumers and businesses.“ But there’s pent-up demand and new technologies that EE 1.0 doesn’t address. How many more decisions about energy efficiency could be made if only policies and financial instruments better supported them? The Next Generation of Energy Efficiency Project just may provide that answer.
New terms and jargon sometimes appear over time. “Sustainable” is one example. From a shorthand description of smart, long term practices applied to fisheries and agriculture to thoughtful consumption embedded into modern society, it has achieved jargon status.
The term, and its conceptual basis is now migrating into electronic component power technologies and designs. Self-sustainable operation means that whatever the device or function, it is self-powered, and that has extraordinary possibilities for the Smart Grid and M2M sectors. Just a few short years ago, embedded sensing and communications functions in devices created insurmountable engineering challenges in terms of how to power those devices. No matter how cleverly chip manufacturers reduce energy consumption – there’s still a requirement for some energy. That energy source was either a wired connection to the grid, or batteries. There have been advances in battery technologies at both the micro scale to utility scale, but without an ability to recharge batteries, there is a lifecycle limitation that culminates in battery or device replacement. That limitation in turn impacts the potential of innovative M2M applications in Smart Grid, Smart Infrastructure, and verticals like health.
There’s new research underway that can unlock the potentials for the Smart Grid and M2M sectors. It builds on energy harvesting research, but has the objective of completely eliminating the need for a wired power delivery or battery replacements in devices. The best phrase to describe this growing field of research is energy self-sufficiency. Energy self-sufficiency will be a term used with increasing frequency in the Smart Grid and M2M sectors.
There are a number of promising sources of energy that can be used to deliver energy self-sufficiency such as solar, piezoelectric (kinetic forms like vibration), and thermal energy. There are pros and cons to each of them, and they are already deployed in chipsets – sometimes in combination for power provisioning. But electromagnetic waves can be harvested too – a concept first proposed by Nikola Tesla and Heinrich Hertz over a century ago.
There’s no shortage of ambient wireless or radio frequency (RF) activity around those of us living in developed economies. In fact, we’re practically marinating in electromagnetic waves. Interesting energy self-sufficiency research includes both near-field and far-field applications that harvest TV, cellular, and Wi-Fi signals. Other research continues to build knowledge on optimal operation modes for power-up, sleep, and active states of energy self-sufficient devices.
These technologies may not add up to powering devices like smart phones completely without grid connection, but they may extend the time between needed connections to grids. But more importantly for the Smart Grid and M2M sectors, these technologies may power sensor platforms in a broad range of applications and increase the energy harvesting potential of solar panels that can also perform as hybrid RF harvesters. It’s an intriguing expansion of the green revolution in electronics.
For utilities, this can have significant impacts on projections for future grid-delivered power and in opportunities to apply more “standalone” sensing and control mechanisms into operations. That second impact also translates into new possibilities for Smart Infrastructure applications – particularly where water grids are concerned. Without a doubt, energy self-sufficiency in sensing and communications devices should have communications service providers and M2M application providers cheering as conventional technology constraints decrease and their market opportunities grow.