Energy Efficiency 2.0 – A New Definition Underway in California

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:

  1. Articulate EE’s new role in terms of its increased value to economic, energy, and environmental security
  2. Structure transparency and build awareness through annual performance reporting on EE gains
  3. Revise state agency roles and processes to streamline policy and projects support
  4. Align EE regulatory rules and policies with state climate goals
  5. Improve customer-funded programs
  6. Investigate the state’s development and enforcement of codes and standards that can accelerate EE goals
  7. 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.

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What Energy Harvesting Means to Smart Grid and M2M Sectors

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.

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Will California’s Energy Policy Become the World’s Energy Policy?

California recently was ranked by the World Bank as number eight in world economies, ahead of Russia and Italy and just behind Brazil. Jerry Brown, re-elected as governor, delivered an inaugural address that included an energy policy in the form of three energy objectives for 2030. Given this state’s ability to make markets through its imposing economic and innovation strengths, here are my projections about what this energy policy will mean for California, electric utilities, Smart Grid vendors, and the world.

Energy objective 1: Increase electricity from renewable sources to 50%.

The state was well on its way to achieving the 2020 objective of integrating a 33% mix of renewables into its electricity sources. This new goal puts increased emphasis on energy storage to firm up even more intermittent renewables, so the state market will markedly expand for both utility-scale and distributed renewable generation and storage solutions. Distributed generation, particularly in the form of rooftop solar, will also be required to meet this objective. California utilities will seek regulatory approval to rent customer rooftops and operate solar generation assets on an aggregated scale, as long as these assets count towards their expected renewable investments. Vendors with distributed grid operations management solutions have a bright future in the state.

Energy objective 2: Reduce petroleum use in transportation by 50%. Don’t bank on a focus on technologies that improve miles per gallon in internal combustion engines. California’s strong support for carbon cap and trade markets and climate change initiatives put the emphasis on clean alternative fuels. Hydrogen technologies and fuel cell cars could be part of this strategy. However, the regulated electric utilities have a new leverage point to build EV programs and create new opportunities to explore transactive energy scenarios that firm intermittent renewables. PG&E recently announced a pilot program with BMW.   Municipalities will also look at greenhouse gas reduction goals through systemic transportation transformations. Community Choice Aggregation (CCA) initiatives and municipal utilities will adopt EVs for their flexibility in smart charging.

Energy objective 3: Double the efficiency of existing buildings and make heating fuels cleaner. California enacts new building energy efficiency standards every three years that typically apply to new buildings. It’s noteworthy that this energy objective highlighted existing building stock. Building energy efficiency retrofits have multiple benefits – local jobs in communities, and accrued savings from reduced energy bills for residential and business consumers. Since California is one of eleven states that decoupled both electricity and natural gas, regulated utilities won’t see negative impacts on their bottom lines. Expect innovations in programs that encourage energy efficiency retrofits for multi-family and rental properties and more PACE-like programs that focus on energy efficiency rather than generation. With regards, to cleaner heating fuels, most California homes use natural gas, which emits those bad greenhouse gases. However, look for most policy and investment activity in commercial buildings, which can benefit from combined heat and power (CHP) and even more energy-efficient combined cycle heat and power (CCHP) technologies to heat building spaces. The solutions here are much more mature than they are for residential, although this 2030 objective offers significant impetus to future Department of Energy Funding Opportunity Announcements.

The leader of the eighth largest world economy said, “How we achieve these goals and at what pace will take great thought and imagination mixed with pragmatic caution. It will require enormous innovation, research and investment. And we will need active collaboration at every stage with our scientists, engineers, entrepreneurs, businesses and officials at all levels.” The good news is that California has all the ingredients to make it happen, and what happens in California does not stay there.

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The Final Five Smart Grid Predictions – A Progress Report

I made ten predictions in January 2014 about Smart Grid and Smart City trends and changes that will occur between 2014 and 2020. Here is an update on the final five predictions. The first five were reviewed last week. You can review the full predictions here and here, and judge for yourself the quality of my crystal ball.

6.  Debates about the future of the social compact for electricity services and the socialization of electricity costs continue. The Reforming Energy Vision initiative includes the objective to “enable and facilitate” new business models for utilities, customers, and energy service companies. This is just the first state activity that will generate significant discussion about how to equitably balance distribution grid investments that accommodate and integrate more distributed energy resources (DER). Since it will take time to implement and then measure results from new business models, this debate is sure to continue for the next decade.

7.  EVs advance to 10% of the US car market. The current electric vehicle (EV) penetration in 2013 was just a bit over .5%. The falling costs of gasoline are putting additional pressure on EV manufacturers to reduce prices of zero emission vehicles to increase consumer adoption. However, utilities are now taking a more active role, as Edison Electric Institute members will start investing up to $50 million annually in EV service trucks and charging stations for consumers. The Department of Defense (DoD) is conducting pilots for vehicle to grid or V2G applications. Their first smart charging demonstration are exploring V2G performance, and they will also examine re-purposing used EV batteries for fixed energy storage.

8.  Resiliency measures also become part of the definition of a smart building. There are a number of federal, state, and non-governmental initiatives that address resiliency, and some critical infrastructure definitions include selected buildings. The National Institute of Standards and Technology (NIST) is developing standards guidance for community disaster resilience, but this is focused on building materials and codes. Microgrids, DER and Zero Net energy codes and technologies can bridge the gap in existing resiliency initiatives for buildings. Microgrids are already in production as resources to maintain power to critical infrastructure during emergencies – one of the goals of the Borrego Springs microgrid.

9.  Nanotechnologies help propel solar harvesting efficiencies past the 50% mark, and by 2020 research scientists are aiming for 75% harvest efficiencies. The number of patents filed for innovations in nanotechnology using graphene have tripled in the past 10 years. The research pipeline contains single molecule thick sheets of graphene and molybdenum that can potentially provide 1000 times more power per weight unit of material than current commercially available solar cells. The fabrication of flexible solar panels is on the horizon, which can be wrapped around curved or uneven surfaces or reduced in scale, expand the possibilities for where solar can be deployed.

10.  There’s sufficient electricity production from renewable energy sources that we no longer talk about “renewables.” American grid-connected wind turbines have a combined capacity of 60,000 MW, projected to double by 2020. Solar is enjoying explosive growth. Energy storage solutions will “firm up” the intermittency of wind and solar and thus eliminate the last objections to reliance on renewables. It will just be a cheap and clean source of electricity without the price volatility of fossil fuels.

These final five predictions are well on their way to realization too, although the prediction about nanotechnology advances is admittedly a stretch goal. You’ll note that energy storage has a significant influence on the advancement of some of these predictions.  We’ll keep tracking these predictions and bring you periodic updates.

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Great Progress on Smart Grid and Smart City Predictions for 2020

How much can change in a year? When it comes to Smart Grid and Smart City topics, the answer is quite simply – a lot can change. Here’s progress report on my ten predictions about Smart Grid and Smart Cities activity by 2020. The first five are featured this week. You can review the complete predictions here and here, and judge for yourself the quality of my crystal ball.

  1. California hits and exceeds its RPS objective of 33% renewable sources of electricity by 2020 – the most ambitious of all states with this calendar deadline. As of October 2014, the state’s three investor-owned utilities (IOUs) obtained 22.7% of their electricity from renewables, and are on track to meet the 2016 25% milestone. The California Public Utilities Commission (CPUC) projects that solar alone will contribute 42% of the state’s total renewables generation. The state has about 245,000 rooftop solar PV installed now, and by 2017 the aggregated generation from these systems will approach 3,000 MW.
  2. Grid resiliency strategies take priority for investor-owned, municipal, and rural utilities. The Electric Power Research Institute (EPRI) has a number of initiatives in grid resiliency, and their clients are utilities. Governmental, commercial and residential interests build microgrids that are capable of delivering a limited degree of building self-sufficiency in energy. NYSERDA announced the first in the nation NY Prize, a $40 million competition to build microgrids and other local energy grids. New Jersey launched the Energy Resilience Bank – the first public infrastructure bank in the country focused on DER for energy resiliency. This bank is capitalized with $200 million for projects that harden critical infrastructure. Utility support for microgrids is growing as utilities like Con Ed see that the Reforming Energy Vision initiative presents an opportunity to redefine utility business models to accommodate new microgrid product and service offerings.
  3. As utilities consider grid hardening, cities redefine what being a smart city really means. Smart cities aren’t smart if their critical infrastructure relies on fragile transmission or distribution grids. Definitions abound for smart cities, but the lack of consistent standardized frameworks are serious obstacles to development of smart cities. For some states, notably New York, Connecticut, and New Jersey, (states hammered by Superstorm Sandy among other weather events) a city is smart if it upgrades critical infrastructure and deploys distributed energy resources and microgrids for select community buildings and systems.
  4. Consumer intermediation threats abound for utilities. Investor guidance reports released earlier this year pointed out a number of threats to the existing regulated utility business model, and noted the potential for confrontations between tech giants (notably Google and Apple) and utilities in value-added services (specifically energy management services) to consumers. Consumers are becoming increasingly savvy about solar generation, and companies like Solar City and Sungevity have capitalized on these trends to make it easy for consumers to build relationships with non-traditional energy companies.
  5. Standards that define how to integrate or grid-tie microgrids and other standalone generation and energy storage assets for bi-directional electricity flows to utility distribution grids are globally adopted. The existing IEEE 1547 standard currently used for DER such as solar PV requires that these assets must be de-energized if they are tied to the grid and it loses power. While necessary as a safety measure, it defeats the purpose of microgrids remaining up to power critical infrastructure or meaningfully contribute power back to the grid. The Smart Grid Interoperability Panel (SGIP) started Priority Action Plan (PAP) 24 for microgrid operational interfaces. This PAP focuses on information models and interoperability and consistency of signals used by microgrid controllers. Another group called PAP 25 will encourage standards that harmonize financial data, as well as forming a new group focused on Transactive Energy. These are all critical steps to develop the standards that will govern bi-directional electricity and realize the full promise of the Smart Grid, as well as power smart cities.

 

There’s been real progress for the first five predictions and they are well on their way to realization by 2020. Next week I will review progress on the final five predictions.

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Duck Season…Rabbit Season…

This week, the Smart Grid Library features a guest writer, Chris Kotting, a colleague with SGL Partners, the consulting group of the Smart Grid Library.  

I just took a look, and I haven’t blogged since the first week of this year. Egad! That was one short-lived New Year’s resolution! Now, here I am writing a blog entry, and it won’t even see the light of day on my blog.  I’m “guest-blogging” while my buddy Christine goes gallivanting around Europe.

To borrow a line from Warren Zevon “Poor, poor, pitiful me...” (Yes, I know that Linda Ronstadt made the song famous, but Warren wrote it for pity’s sake, so let’s give credit where credit is due.)

Anyway, while I’m feeling sorry for myself (in the future tense, since I’m writing this while Christine is still in the States) I see that the Solar industry is facing some nasty integration issues, some of which relate to Net Metering.

Now I’ve talked about Net Metering before, and I’m not a big fan of it. It is intended to be a simple way of paying residential customers for their solar (or sometimes other) generation, while at the same time providing an incentive for that generation. It creates too good an incentive, in my opinion.

To recap my issues with Net Metering:

  • Net metering pays a retail customer the same amount for each kWh that they sell back into the grid (from their rooftop solar unit, for example) that the customer pays per kWh for power that they take from the grid. It seems simple and equitable, until you look into the details.
  • The market value of the power that the customer produces may be wildly different from the market value of the power they take, and of course neither relates to the cost of producing that power.
  • That difference between the value of “sold” kWh and “bought” kWh is going to generally be pretty consistent, since when a PV unit makes power, and when a residential customer takes power (a) don’t tend to be the same time, and (b) tend to be pretty consistent day-to-day.
  • Therefore, on energy, the customer either wildly overpays, or wildly underpays.
  • In addition, that kWh rate includes load-balancing, frequency regulation, and a host of other ancillary services that a “prosumer” is still using, even as a producer of power, but they aren’t paying for. In fact, they are getting paid for it. (This is more of an issue where the price for power doesn’t disaggregate Transmission and Distribution services. However, even in states where the services are disaggregated, the use of the net metering model assumes that consumer generation somehow offsets the cost of ancillary services.)

That’s just a capsule summary, and it misses a lot of the details, but you get the idea. To my mind, the worst thing about this scenario is that it leads to customer-owned rooftop solar being installed where it isn’t really economic because the inherent subsidies mask the real economic costs. It may even lead to situations where solar is not being installed where it genuinely makes economic sense, because the inherent subsidies also mask the real economic benefits.

Similarly, it leads to customer-owned solar being operated inefficiently, at least as far as the efficiency of the grid is concerned, because solar generation under a net metering model is a “non-dispatchable” supplier. Whether the grid needs the power at that time or not, it has to take it and find a use for it.

But what does this have to do with the problem of grid integration of large quantities of renewables? This paragraph from the article points out the connection:

“The largest integration challenge that emerges,” E3 found, “is overgeneration.” That is when must-run generation (non-dispatchable renewables, combined-heat-and-power, nuclear generation, run-of-river hydro and thermal generation needed for grid stability) is greater than energy demand.”

Anyone familiar with renewable energy, particularly solar, is familiar with the “duck chart” which shows the need for generation to dispatch differently to accommodate solar energy. The biggest challenge is at the “neck” of the “duck” when a significant amount of generation has to come online in a short period of time to meet the demand that is placed on the grid when solar resources drop their output. (Utility folks refer to this as “ramp rate”, how fast generation has to “ramp up” to meet the load placed on it.) The lower the “back” of the duck, the more of a problem bringing enough generation online in time becomes (the higher the “ramp rate”.)

As I just mentioned, net metering generation is non-dispatchable. The more non-dispatchable generation you have to deal with, the steeper the neck becomes. One diagram shown in the executive summary of the report shows that at a 40% renewables level, power taken under net metering is more than half of the overgeneration problem. Under those conditions, the “duck diagram” gets positively swaybacked so that, in the study, the ramp rate in one scenario approaches twice what happens currently.

So, what can be done about it? Is there no way to solve the integration problem? Of course there are ways to resolve it, but that discussion will get picked up next week, back over on my blog.

After all, they say that the best way to make a resolution stick is to make it public.

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