EPRI’s View on Emerging Technologies

Writing in the January issue of POWER magazine, Arshad Mansoor (Senior Vice President of Research and Development at the Electric Power Research Institute) authored an article entitled “Emerging Technologies Enable ‘No Regrets’ Energy Strategy” to provide a soup-to-nuts vision of the future technology landscape for the electric power industry.

I don’t know that it’s possible that any player in the challenging U.S. electricity sector can pursue a path that is truly “no-regrets”, and it’s not easy to cover the gamut of technology possibilities of such a complex industry in one relatively brief article.  However, Mansoor’s essay does at least provide some visibility on the broad technology trends of the future, and lays out a taxonomy to consider the panoply of technologies that electric utilities will be facing in the years to come.

Mansoor begins by singling out the three key drivers facing the industry that imply “unprecedented change in the industry over the next 10 to 20 years — more change than in the previous 100 years”:

  1. The availability of natural gas and its increasing role in power generation.
  2. The expanding role of renewable generation.
  3. Technology challenges to reducing carbon dioxide, mercury and other emissions.

As an implication of these three forces at work, Mansoor outlines three categories of technologies that collectively represent a “no-regrets” approach:

  1. Flexible resources and operations.  This spans a variety of technologies to enable both the power grid and power generating sources to better accommodate the inherent variability of demand and an increasingly variable supply base in an uncertain world.  The range of technologies include energy storage, demand response, advanced transmission (e.g., HVDC, FACTS), improved software (for planning, forecasting and operational management), and fossil/nuclear powerplant operational flexibility.
  2. Long-term operations.  This seems to be centered on a variety of robotic technologies to improve the ability for utilities to remotely and efficiently monitor asset conditions and anticipate failures before they happen.
  3. An interconnected and flexible delivery system.  This covers a swath of technologies for power distribution and utilization under the umbrellas of “smart energy”, “grid resilience”, and “consumer-focused technologies”.  Smart energy covers standardization of communications protocols among the various devices on the grid, while capitalizing on the trend towards “big data”.  Grid resilience acknowledges the increasing concerns about security from man-made and natural disasters, with technologies ranging from unmanned aerial vehicles for damage assessment to using plug-in electric vehicles as a power source in the event of emergencies.  Consumer technologies acknowledges the trend towards ubiquity of the always-connected customer (not to mention utility employee), envisioning apps on smartphones and tablets to modulate or activate just about anything on the grid — from specific equipment at a powerplant or a substation to a particular light fixture at a house.

Alas, I think there are some gaps in this overview.  As a primary example, after acknowledging the prospect of tightening environmental regulations, Mansoor barely mentions air or water pollution control technology opportunities that electric utilities may need to consider — and it’s not clear where in his three categories such technologies would even fit.

So, I view Mansoor’s article as a good first starting point in developing a holistic perspective on the future of the electricity sector and how new technologies will reshape it.

It will be interesting to see if the industry evolves as much and as quickly as Mansoor asserts.  As one electric utility executive said to me and some colleagues many years ago, “no major innovation has been widely adopted in this industry unless and until it was essentially required by regulators.”  His point was that utilities are mainly judged by reliability and cost — and new technologies usually (at first) represent risk and entail higher cost than the status quo.  So, why exactly would utilities adopt something new?

I would like to hear EPRI’s take on why it believes that the electricity industry will change more in the next few decades than over the past century, especially given the dire political and economic situation facing the U.S. and the associated regulatory stalemates that are likely.  Perhaps Mansoor or his colleagues can write a follow-up article to address this very important question.

Cap and Trade for Traffic

Great article today on a study suggesting that traffic congestion is created by the marginal driver, and more interesting, from the marginal driver from specific and predictable locations.  Maybe 1% of commuters leaving from specific neighborhoods have a big increase on traffic congestion and commute time for everyone. The link to the study is here.

We dealt with this in the demand response market for energy.  With regulators 10-15 years ago creating free markets enabling companies to sell a reduction of energy demand to the power companies instead of increase generation.

We dealt with this in the carbon, Renewable Energy Credit, and Acid rain sphere by creating cap and trade style mechanisms enabling the rest of the market to pay some marginal actors just enough for them to drop out first.

There are bars that change the price of beer based on demand.

The stock market handles real time demand pricing every day.

Why not for traffic?  Hammer congestion and air pollution.  Create localized markets where the transit or roads authority, like Caltrans, TexDOT, or the local air district, instead of spending my tax dollars only on new roads, infrastructure, or regulations, used cellphone apps to pay a few dollars to commuters who would drop out of the critical commute paths at the right times.  Perhaps credits on your toll road account?  The more who apply, the less each make? Compliance tracked against your cellphone GPS?  A thousand ways to address the myriad technical issues with payments, tracking, compliance, verification, and additionality.

Small investment, massive social, environmental and economic benefits.

San Diego’s Smart Grid

I have to admit:  it’s hard for me to be terribly enthusiastic about electric utilities.  I know a fair bit about them; by my count, I’ve served about ten utilities in various consulting roles during my career.

While generalizations are always dangerous, for the most part, I think it’s safe to say that electric utilities can be characterized as highly protective of the status quo.  Utility executives and employees are typically competent, and take their mission for “keeping the lights on” very seriously, but they tend to be averse to change — the opposite of visionary.

For those of us who are trying to forge a new and better future, who see the eventual emergence of new and more environmentally-friendly technologies as natural and unstoppable as water flowing downstream, utilities can be large boulders in the river.

So it was with some skepticism that I began reading a couple of recent articles about the technology deployment efforts of San Diego Gas & Electric (SDG&E), an operating unit of the utility holding company Sempra Energy (NYSE: SRE).

In August, Power presented its 2012 Smart Grid Award to SDG&E, largely for its smart grid deployment plan (SGDP), which (in its own words) “empowers customers, increases renewable generation, integrates plug-in electric vehicles (PEVs) and reduces greenhouse gas emissions while maintaining and improving system reliability, operational efficiency, security and customer privacy.”

With this plan, SDG&E is aiming to enable a “smart customer” that is able to make more choices and have more control over energy decisions, a “smart utility” that manages a host of ever-advancing supply- and demand-side resources and the grid that integrates the two, and a “smart market” for customers and energy suppliers that preserves power quality and reliability on the grid while increasing price transparency.

In a separate article in EnergyBiz, a Q&A with SDG&E’s President & COO Michael Niggli reveals how extensive the SGDP roll-out has already been in San Diego.  All customer meters — 1.4 million electric, 850,000 gas — have been upgraded.  18,000 rooftop solar units totaling 138 megawatts (3% of peak demand) have been installed.  1600 PEVs are driving around town and plugging-in at various charging stations, bringing new meaning to the phrase “San Diego chargers”.

On top of this, a host of other less-visible advancements — extensive deployment of updated SCADA systems, weather sensors, wireless communications infrastructure — are bringing the grid in San Diego out of the 20th Century to the 21st Century.

All of this will help SDG&E meet the goal of supplying 33% electricity of its electricity from renewable (mostly intermittent) sources while also accommodating potentially 200,000 PEVs by 2020 — which would be difficult if not impossible to achieve without advanced technologies such as those being deployed as part of the SGDP.

As impressive as this all is — and kudos to SDG&E for their accomplishments — it should be noted that San Diego citizens and California regulators were critical to this outcome.  SDG&E may have rolled out the SGDP effectively, but they may not have developed the plan at all unless there was strong push and pull from outside forces.

San Diego residents have been very proactive in installing new renewable and efficiency technologies in their homes, and have been actively seeking engagement with SDG&E on how to get the most benefit from them.  In Sacramento, California”s ambitious set of energy policies — a renewable portfolio standard (RPS), greenhouse gas reduction legislation (AB32), distributed generation goals, demand response mandates, and improved building and appliance efficiency standards — made it untenable for SDG&E to stand still with aging equipment based on decades-old technologies.

Lacking these external forces, I doubt that SDG&E would have made anywhere near as much progress in the smart grid and wouldn’t be far ahead of most other U.S. utilities, who do generally lack these forces.

The moral of the story is that electric utilities, as regulated companies, are reactive rather than proactive.  SDG&E should be applauded for being highly responsive, but let’s not confuse that with being visionary.  Indeed, it’s naive and maybe even unreasonable to expect utilities to be visionary.  All we, as cleantech advocates can do, to “get” utilities to “get it” is to ensure that there’s enough outside pressure for them to “get it”.

If more places across the U.S. were more like San Diego, the transition to the cleantech economy would probably be further along than it is.