Smart Grid
This section contains articles about smart grid technology. The smart grid is a digital electricity network that transports electricity between suppliers and consumers.
Smart Grid Trends to Watch for in 2012
Jan 23rd
Aging grid infrastructure, rising energy costs and demand, and new and pending government legislation are some of the factors motivating consumers and utilities alike to seek more energy efficient, sustainable solutions. Smart grid technologies are the key to addressing these challenges and bringing energy management to the masses.
2012 will prove to be another exciting year to watch the smart grid market evolve. Here are a few top trends to expect next year:
1) Distributed Automation takes center stage
Many utilities are preparing to leverage smart grid technologies to deliver improved reliability through increased automation. Distributed Automation (DA) is a key element to this strategy as it enables two-way communication with substations, power lines, intelligent devices, and other physical facilities. As a result, utilities are able to remotely monitor and control systems, automatically identify and isolate faults and quickly restore service.
DA is set to play a significant role in smart grid infrastructure. Two drivers of this trend are: the expected proliferation of plug-in electric vehicles (PEVs) and distributed energy resources (DER) such as renewables.
IDC predicts that there will be 120,000 PEVs sold in North America in 2012. Consequently, the rate of DA adoption will accelerate as utilities seek to provide power to meet the added load requirements from EVs, while simultaneously maintaining grid reliability and safety. Additionally, DA will be increasingly important as utilities seek to integrate distributed renewable generation resources into the grid.
Over the past 30+ years, DA has helped the utility industry realize cost savings and improve operational efficiency, reliability, and energy conservation, and its impact is projected to continue to grow in coming years (Pike Research forecasts that DA revenues will reach $10.4 billion by 2014, up from $2.7 billion in 2010).
2) Demand response becomes ubiquitous
By enabling energy users to adjust power consumption based on signals from the grid, demand response (DR) provides a more efficient and less expensive way to use energy.
In recent years, DR has evolved from an economic and reliability tool towards being an active energy management solution. Building owner participation in DR stands to result in significant environmental benefits and help utilities improve grid reliability while meeting increasing energy demand.
Legislation is also encouraging commercial buildings to participate in DR programs. For instance, the Federal Energy Regulatory Commission (FERC) recently issued ruling 745, which puts DR resources on par with traditional generation resources, enabling building owners to generate a revenue stream through DR participation. Additionally, the U.S. Green Building Council (USGBC) recently announced plans to release an updated LEED DR Pilot Credit which will establish guidelines anticipated to increase participation in automated DR programs.
On the residential front, the proliferation of smart meters and home automation systems in recent years has enabled residential DR participation. As an increasing number of homeowners hear about energy management programs from utilities, DR participation in the residential sector will continue to rise.
3) Cyber Security will continue to be an important focus
Along with the benefits associated with smart grid infrastructure, there are some security challenges that utilities need to consider. Security is clearly a priority – Pike Research estimates that utilities will invest $14 billion, between 2011 and 2018, in cyber security solutions to secure their infrastructure.
Security vendors will increasingly focus on industrial control system (ICS) security to better secure transmission systems, substation automation, and distribution automation. In the past, security vendors have placed a large focus on IT security functions, such as AMI security. In the coming years, we expect to see increased attention paid towards cyber security solutions which focus on securing control system segments.
4) Utilities will invest in analytics to extract value from big data
Sensors and other smart grid technologies are producing a vast amount of data which, if monitored and analyzed properly, can lead to key insights about energy usage patterns and ultimately result in economic and environmental benefits and improved grid stability. However, managing this data can be overwhelming. The ability to process and analyze data in real-time will be essential for the smart grid.
In 2012, utilities will begin to investigate analytics solutions, and we expect to see broad adoption by utilities over the next two to three years.
5) Utilities will reassess smart grid training, education and communication
The root philosophy behind the smart grid is that open communication between utilities and end-users will help change (for the better) the way we manage and consume energy. The bi-directional flow of information remains a new concept to many utilities; as a result, education and training of utility stakeholders and customers on the benefits is important. As illustrated by The Smart Grid Consumer Collaborative’s (SGCC) recent report on consumer engagement, over the next few years there will be an increased focus by organizations and utilities with consumer-facing smart grid programs on educating and communicating with consumers about smart grid strategies.
Although it is still early to focus on consumer adoption and education, we will start to see players in the smart grid industry and regulators aim to turn consumers into smart grid advocates through enhanced communication campaigns.
2012 will be a transitional year for the smart grid market as smart grid technologies and solutions increasingly become seen as a key to addressing our country’s energy challenges. Through the smart grid, utilities and consumers will be able to work together to manage energy more efficiently, resulting in improved energy efficiency and lower costs. Although there is still work to be done, 2012 will be an exciting year to watch as these trends unfold and we work towards making the smart grid a reality.
Written by Donald Rickey, Senior Vice President, Energy Business, Schneider Electric
Landis+Gyr Acquires Smart Meter Company Ecologic Analytics
Jan 11th
Landis+Gyr acquires smart meter company Ecologic Analytics
Landis+Gyr, a global provider of integrated energy management products, has acquired the 100% stake in Ecologic Analytics, which is the most experienced meter data management provider in North America. The acquisition will enable Landis+Gyr to offer global utilities the software and meter data management products.
Ecologic Analytics’ is a global leader in MDM software, which transforms advanced metering infrastructure data into accurate, timely and actionable information for electric, natural gas and water utilities. Ecologic Analytics will continue its operations from Bloomington, Minnesota, and the company’s President Craig Norman will report to Richard Mora, Landis+Gyr President and CEO for The Americas.
HyperSolar team ups with Suncentrix to test renewable natural gas process at Salton Sea
HyperSolar Inc. will team up with Suncentrix LLC to explore the potential of deploying its breakthrough technology to produce renewable hydrogen and natural gas using water and solar power technology at the Salton Sea in California.
The Salton Sea offers large volumes of two of the most important commodities, sunlight and organic rich water, according to HyperSolar CEO Tim Young. These commodities are required by the company to produce renewable hydrogen and natural gas.
ClearEdge Power agrees to deliver 50-MW of clean energy to Güssing Renewable Energy
ClearEdge Power has signed a multi-phase $500 million agreement to deliver 50-MW of clean distributed energy generation to Güssing Renewable Energy GmbH. In the first phase of the agreement, ClearEdge Power will install 8.5 MW of fuel cell systems in Austria over the next 36 months. Under the agreement, Güssing Renewable Energy has agreed to sell, install and service ClearEdge systems in Austria. The agreement builds on Güssing Renewable Energy’s participation in the recent ClearEdge Power series E financing round.
SOLON installs solar system at University of Arizona
SOLON Corp. has installed a 10-kW pilot project of the SOLquick commercial rooftop solution at University of Arizona’s Biosphere 2, a unique ecological research and teaching facility. The SOLquick system is installed on the roof of the Biosphere 2’s conference center and will provide clean energy to help power the facility. SOLON and the Biosphere team will develop a solar learning center based on the system, which SOLON will continue to monitor for one year, to continue training, time trials and research, and to ensure all design functions are met.
Addressing Volatile Energy Costs through Supply and Demand
Dec 20th
Energy is playing a larger role in business profitability than ever before – and it’s growing more complex by the day as sourcing options get more difficult, and energy costs continue to be highly volatile. During the past five years alone, natural gas has ranged from $8.12/Mmbtu to $3.31/Mmbtu while crude oil has moved from $58.80/barrel to more than $100/barrel. As conditions change in energy and sustainability markets across the globe, windows of opportunity to tap new energy sources are continually opening and closing, and keeping track of these moving parts can be a time-consuming and data-heavy venture.
Traditionally, energy, efficiency, reliability, procurement and sustainability initiatives have been addressed by installation of more efficient operational assets, such as lighting, HVAC and building control software. However, with today’s perpetually rising energy costs, along with outside influences from consumers to Wall Street, and sustainability reporting requirements, companies are considering additional innovative ways to expand on the capabilities of operational assets by managing costs through smarter energy management on both the supply and demand sides.
How it Works
Supply – Simply put, intel about energy supply costs and regulatory landscape can help companies buy energy in a smarter way. In a deregulated market, purchasing energy at the best price can be a complex endeavor. It’s not enough just to issue a Request for Proposal (RFP) and choose what may appear to be the lowest price. To get the highest value for each energy dollar, it pays to take a more strategic approach to energy procurement, taking into consideration market dynamics, rate and data analysis, supplier and utility negotiations, budget concerns, risk strategy, market intelligence, contract terms and more. Focusing on these areas, an organization can take a proactive approach to buying energy, which ultimately will better control costs.
Demand – As discussed in a previous article addressing demand response (DR) programs authored by Schneider Electric’s Donald Rickey, smart grid technologies have evolved to allow a bidirectional flow of information regarding energy use and demand between end users and the electric utility. Over the past several years, demand response, or the ability for energy consumers to manage energy consumption in response to supply conditions, has evolved from a reliability tool used in peak emergencies to a solution for actively managing energy use. For example, energy pricing fluctuates throughout the course of a day, based on the demand the grid is experiencing. As a result, participants in demand response programs can monitor these costs and run energy-intensive business operations during times when costs are the lowest.
Traditionally, the operating model for energy supply and demand activities has always been conducted in a siloed manner, resulting in fragmented decisions regarding energy resources within an enterprise. In connecting the supply and demand pieces of the energy puzzle together, organizations can now be equipped with an end-to-end, holistic approach to overall energy procurement. This method not only allows comprehensive visibility into energy prices (along with the ability to better procure and manage costs associated with water, gas, electricity, steam and power), but also provides cost savings that can be redirected from energy bills to the business – positively impacting the bottom line.
How to Implement an Integrated Energy Model in Your Organization
Creating a model for effective energy management begins and ends with a comprehensive energy management lifecycle strategy that aligns with the goals of the organization and allows users to optimize energy purchase and use over time. When creating an integrated supply and demand energy management model, the following steps should serve as a guide:
1) Measure Current Energy Use: Get access to water, gas, electric, steam and other associated energy invoices to evaluate what is being spent today. In addition, consider an energy audit and use metering technology to gather information about how the organization is using energy. All information gathered through this process will provide valuable data and insight into the areas that need to improve to achieve lower energy costs.
2) Define a Strategy: With better visibility into the organization’s energy spendings, the next step is to create a comprehensive plan to meet and align with the company’s overall energy goals, risk appetite and budget.
3) Evaluate Partners: Seek out an energy management partner to implement a cost-effective solution to achieve the integrated supply and demand energy strategy.
4) Control Energy Use: Monitor operations to ensure reliability, uptime, power quality and billing accuracy.
5) Train Internally and Externally: It is important to make sure the people that are using the energy supply and demand systems – internally and externally – are properly trained on any new software, hardware or management tools. Without proper knowledge of how to utilize these technologies, the system may not operate at its full potential.
6) Continue to Optimize Performance: Utilize support services and reporting software to ensure that the organization is continuously achieving optimum energy cost and consumption now and in the future.
The Future of Integrated Supply and Demand
In the future, we will see integrated supply and demand models continue to evolve as more technology is introduced to the marketplace. In the short term, advances in handheld device applications will allow facility managers, company stakeholders and even CEOs to tap into crucial information regarding energy procurement and the company’s carbon footprint anytime, anywhere. The smart grid will also evolve to better include these devices, including mobile phones, to ensure that customers are making the smartest decisions about their energy use and procurement at any given time.
However, one thing is certain – in the future, energy prices will continue to rise, and organizations that do not choose to implement an energy supply and demand strategy will be making a decision that could potentially cost them valuable budget resources that could be applied to benefit other areas of their business.
Written by James Potach, senior vice president, Energy Solutions, Schneider Electric; Potach is responsible for energy management and procurement, power management and performance contracting.
Siemens Agrees to Acquire eMeter to Boost Smart Grid Offering
Dec 6th
Siemens agrees to acquire eMeter to boost smart grid offering
Siemens Industry Inc. has agreed to acquire San Mateo, California-based eMeter Corp. Subject to necessary approvals and customary closing conditions, Siemens will acquire all of the stock of eMeter. The deal is expected to close in December 2011.
eMeter will be part of the Smart Grid Division of the Siemens Infrastructure & Cities Sector, which is housed within Siemens Industry in theUnited States. eMeter will become a global business segment and center of competence for Meter Data Management (MDM), and will continue to operate from itsSan Mateoheadquarters as part of the Smart Grid Division.
J.P. Morgan served as financial advisor to eMeter in connection with the transaction.
Heliatek sets new world record for organic solar cells with 9.8% cell efficiency
Once again, Heliatek GmbH has set a new world record for organic solar cells after Fraunhofer ISE CalLab certified a cell efficiency of 9.8% for a 1.1 cm² tandem cell manufactured with a low temperature deposition process. The new record makes the third time in a row that Heliatek has set a world record for efficiency in the field of organic photovoltaic and demonstrates its continuous technology leadership in organic solar.
Previously, Heliatek GmbH set a world record for efficiency of 8.3% for an active surface of 1.1 cm2. The record-breaking cell construction will gradually be integrated into the company’s manufacturing process after the scheduled start of production in the second half of 2012.
PowerStream selects Carmanah to build 350-kW solar rooftop system in Ontario
Carmanah Technologies Corp. has received a contract from PowerStream Inc. to supply and install a 350-kW rooftop solar photovoltaic system for the Thornhill Community Centre in Markham, Ontario. The solar system, valued at about C$2 million, began construction in October 2011.
Carmanah Technologies will provide engineering, procurement and construction services. The project is scheduled to be operational in early 2012.
IBM Installs First Solar Array for High-Voltage Data Centers, Industrial Use in India
Nov 4th
IBM installs first solar array for high-voltage data centers, industrial use in India
IBM is rolling out the first solar-power array designed specifically to run high-voltage data centers, integrating AC- and DC-based servers, water-cooled computing systems and related electronics.
The new solar array covers more than 6,000 square-feet of rooftop of IBM’s India Software Lab in Bangalore. The solar array will provide a 50-kW supply of electricity for up to 330 days a year, for an average of five hours a day. By employing unique high-voltage DC power conditioning methods – and reducing AC-DC conversion losses – the new IBM solution can cut energy consumption of data centers by about 10 percent and tailors solar technology for wider use in industrial IT and electronics installations.
Siemens Energy opens wind power distribution center in, Kansas
Siemens Energy has opened a new wind power distribution facility in Wichita, Kansas. The 73,000-square-foot warehouse, with seven acres of outside storage, will provide procurement, kitting, storage, refurbishment and distribution for the tooling needed to erect and install wind turbines throughout the Americas region.
In addition, the center will provide storage, repair and distribution for all new unit transport framing and hardware used to move towers, nacelles and blades throughout the region. The Wichita facility will provide support and distribution services for wind projects throughout the United States and locally in Kansas.
First Solar expands production capacity in Germany
First Solar has invested $200 million to increase its production capacity in Germany. The new plant expansion doubles the company’s production capacity in Germany to 500 MW annually.
Germany Trade & Invest provided free of charge investor consulting services to assist the company’s German market entry.
American DG Energy installs 375-kW clean energy system at Doral Arrowwood
American DG Energy Inc. has installed a 375-kW combined heat and power system at Doral Arrowwood Hotel and Conference Center in Rye Brook, New York. The clean energy project is expected to generate about $10 million in total revenue for the company.
Under an agreement, American DG Energy produces clean energy in the form of electricity, space heat, domestic hot water and pool heat at Doral Arrowwood and sells it to the resort at a price lower than the local energy utility. The system is owned and operated by American DG Energy.
Keeping the Lights On: Data Overload and its Impact on the Storage in the Smart Grid
Oct 3rd
Information is the lifeline of a businesses’ sustainability. With a rapidly changing business climate, evolution of technology, new policies and regulation as well as the emergence of new competitors, energy and utility firms are turning to data to create new business models – a model that incorporates past, current and future predictions. Not too long ago, the process of aggregating raw data was fairly logical and straightforward, however today, it is complex, costly and time consuming. As the growth of unstructured data continues to escalate, so too are the pressures for CIOs to gain better insight, confidently predict outcomes and take actions that stand out amongst a crowded marketplace.
The amount of data generated by the Smart Grid is astounding. For example, smart metering inevitably increases the amount of meter data utilities must handle – generating on average 50 bytes of data per hourly read. Additionally a synchrophasor- a phasor measurement unit that tracks electrical waves across the power grid to monitor the health of the system- takes readings sixty times a second. This adds up to four-hundred ninety-four megabytes a day, one-hundred seventy-six gigabytes of data a year per synchrophaser. Today there are a number of devices in addition to smart meters being used in the energy and utilities industry to collect data, including line default detectors, sagometers which generate 12 readings per hour at 50 bytes per read and storage devices such as batteries that produce 100 byte reads per hour. Together, these devices create an astronomical amount of data.
With the abundance of information, utilities have to find new ways to cost-effectively and securely store, archive and retrieve a virtual explosion of new information. Additionally, aging physical infrastructures and IT assets are no longer sufficient to cope with the accelerated exponential growth of data. Smart Grids use sensors, smart meters, digital controls and analytic tools to automatically monitor and control two-way energy flow. This data can be used to shift electric load to avoid power outages and locate troubled components instantly; it also empowers consumers to make better decisions by providing information about their energy consumption. Additionally, smart grid technology allows energy and utility companies to understand power demand in real time so they can improve delivery during peak hours. The data also enables utilities to integrate distributed generation such as renewable energy assets into their power generation portfolio.
As with most technology advancements – the next generation Smart Grid brings with it more data as well as more ability and need to analyze this data. So without the appropriate data storage and management infrastructure, utilities are unable to reap the benefits that Smart Grid offers. Therefore, organizations must implement an infrastructure that provides efficient, automated management and retention of information. This will provide personnel with constant, reliable access to data whereever and whenever it is needed to improve overall business operations and customer relations.
Information availability is instrumental in keeping operations up and running and customer service levels at a premium point. In the energy sector, continuous and reliable access to information ensures that personnel can access data at any given point – whether it’s during an outage, or simply when they receive a consumer inquiry regarding billing and new service setup and relocation disconnect. Many utility companies are investing in technologies that provide automated performance management, application integration, and migration of data in order to meet the ever changing business requirements of managing a Smart Grid. Performance, capacity and reliability are also mandatory for utilities as without a constant stream of energy, countries could be gravely impacted with thousands of businesses and millions of consumers paying the consequences.
As the amount of data grows with the “Smarter” Grid, the need for analytics increases dramatically. Analytics will allow utilities to better predict energy usage, prevent failures, reduce outages, analyze customer response to pricing events, ensure grid reliability and security and efficiently manage generation and grid infrastructure assets.
Utilities are also perplexed by data retention issues, what Smart Grid data to keep, what to archive, how long to archive the data, which data should be used for analytics, and which data needs to be maintained to meet security, data privacy and legal requirements. All of this calls for a rigorous understanding of the importance of each piece of data to Smart Grid business processes. In addition, security, data privacy and legal requirements are constantly increasing. Failure to meet data security, privacy and legal retention requirements can lead to costly fines. That said, keeping massive quantities of data for long periods of time also comes at a cost. With the right data retention policies and technologies that support and enable those policies, utilities can store and manage their data more effectively. Data storage technologies that are key for this type of enablement are virtualization, data de-duplication, multi-tiered archiving, and data encryption.
The Smart Grid cannot function at the highest performance and capacity without a manageable data storage solution. Utilities are sourcing customized, highly available technologies that deliver the scalability and performance to meet today’s and tomorrow’s energy demands. The solution then is to find a host of data storage and management systems that provide automated performance management, virtualization, encryption, analytics, and deduplication that are designed to provide utilities with inexpensive, efficient ways to store and extract intelligence from massive amounts of data.
Written by Mozhi Habibi is a member of the Global Energy & Utilities Strategy & Solutions team, responsible for leading IBM’s energy and utility solutions strategy worldwide. IBM is celebrating its centennial anniversary this year.
Electric Cars Hit The East Coast Grid
Oct 3rd
Northeast and mid-Atlantic grid operator PJM Interconnect on Monday welcomed a new project to promote technology that can use battery power from electric vehicles to smooth peaks and troughs in grid demand.
Vehicle to grid technology, or V2G, has been developed over more than a decade by University of Delaware professor Willett Kempton, and has been shown through several prototype electric cars to be an effective way of providing a significant untapped source of energy to the national grid.
University officials on Monday signed an agreement with utility operator NRG Energy to commercialize the technology.
We are on the cusp of an electric vehicle revolution…Consumers get paid for the power they don’t need.
Transmission networks such as PJM will have an increasing need for stable power input as they become increasingly reliant on fluctuating renewable energy sources such as wind and solar.
PJM has been involved in discussions with UD and is enthusiastic about the technology which has the potential to smooth power supply, said spokesman Ray Dotter.
“Energy storage in vehicles can be an effective way of providing this service,” Dotter said. “If there are agreements to do that, they could be pretty significant.”
V2G will be promoted initially for use in fleets, and has the potential to be a significant source of power that is currently untapped, officials said.
‘Staggering’ Statistics
“The energy storage inherent in automobiles is staggering,” said David Weir, director of UD’s Office of Economic Innovation and Partnerships. “If all the automobiles in the US were electrified, it would be enough to power the entire US for half a day.”
The technology allows electric vehicle owners — when their cars are parked — to communicate with the grid, and regulate the flow of power into or out of their batteries, depending on whether they are depleted, or whether they have excess power that can be used by the grid to meet spikes in demand.
The technology enables EV owners to sell electric storage services from their parked cars to help stabilize the grid. Since the average car is parked for 23 hours a day, the plan has enormous potential as electric vehicles become more widely adopted, Kempton said.
The company, called eV2g, will pay participating EV owners for making their vehicles available, and will collect payment from the grid operator for the power generated from each parked vehicle.
Links To The Past And Future
The new company was officially launched outside Newark’s former Chrysler plant, a facility that once made Sherman tanks for the Second World War, and is now part of the university’s science and technology campus.
Denise Wilson, President of NRG’s Alternative Energy Services, predicted the partnership will help develop significant new sources of power supply and transportation at a time when the US is seeking to reduce both its greenhouse gas emissions and its dependence on foreign oil.
“We are on the cusp of an electric vehicle revolution,” she said. “Consumers get paid for the power they don’t need. What is it going to take to make this the mainstream?”
Wilson declined to specify the size of NRG’s investment in the project. The company is also seeking to build the Bluewater wind farm off the Delaware coast at Rehoboth Beach, in what could be the first of its kind in the US.
Written By Jon Hurdle.
Source: http://energy.aol.com/2011/09/27/electric-cars-hit-the-east-coast-grid/
Competition Heats Up in Demand Response – Who Will Prevail?
Sep 1st
The year 2011 has been good for the grid management strategy known as Demand Response. This summer validated its importance as a grid resource as heat waves triggered record-level load shedding dispatches in the Northeast and Texas. July 22nd alone witnessed PJM Interconnection and New York ISO shedding 2,300 megawatts and 1,743 megawatts, respectively. Demand Response prevented rolling blackouts in Texas on August 4th as the Electric Reliability Council of Texas (ERCOT) called on 1,150 megawatts of responsive reserves. The potential earnings from participating in Demand Response also took a major step forward this year with Ruling 745 issued by the Federal Energy Regulatory Commission (FERC). Ruling 745 codified Locational Marginal Pricing, requiring wholesale market operators to pay the same price for demand response capacity as they would pay for capacity from other generating assets. Even the U.S. Green Building Council played its part to advance the market by incorporating Demand Response into its LEED rating system, thereby creating a much needed incentive for commercial office building participation.
The current leaders in the demand aggregation space – EnerNOC and Comverge – have done yeoman’s service in helping Demand Response evolve into a grid imperative. EnerNOC has secured over 10,700 commercial, industrial and institutional sites and has aggregated over 6,650 megawatts of capacity available for dispatch. Comverge, its business weighted more heavily towards the residential market, has aggregated over 3,778 megawatts of capacity available for dispatch. Both companies pulled significant weight in resolving this summer’s grid events.
A first blush assessment would suggest that EnerNOC and Comverge (and, to a lesser extent, Servidyne and privately-held Energy Curtailment Specialists) are well positioned to capitalize on the maturing opportunity in Demand Response. A closer look, however, suggests that these companies risk falling prey to the first-mover curse; i.e., having their pioneering efforts usurped by larger competitors who have been patiently waiting, observing and learning until the time to strike was ripe.
Speculation about the long-term viability of these demand aggregators is not new. An early theory was that EnerNOC, Comverge and the other demand aggregators would ultimately be dis-intermediated by the utilities. The thought was that the utilities would tire of paying a “middleman” for something they were positioned to do themselves. The acquisition of CPower, an early Demand Response player, in 2010 by Constellation Energy lent credence to this theory. However, it is hard to envision this acquisition being a harbinger of utility-driven market consolidation. After all, utilities are hampered by restrictive tariff structures, have limited expertise working “behind the meter”, and maintain organizational cultures that historically haven’t been entrepreneurial and market-driven.
On the other hand, the recent competitive moves by the large building efficiency service providers are significantly more threatening. In the past 18 months, Johnson Controls, Inc. (JCI) completed a $32.3 million deal for Energy Connect (July 2011), Siemens acquired Site Controls (October 2010) and Honeywell acquired Akuacom (May 2010).
All three of these acquired companies provide technologies that will enable the building automation systems of their respective acquirers to connect and communicate with the grid. JCI states that Energy Connect’s GridConnect platform combines the power of building automation with easy-to-implement demand response technology. Siemens touts Site Controls’ SureGrid Intelligent Load Management Platform as being able to convert thousands of commercial and industrial buildings into virtual power plants where real-time software replaces new carbon-based generation plants. And Honeywell describes the Akuacom Demand Response Automation Server as providing utilities and independent systems operators (ISOs) two-way communication with Honeywell’s energy management systems to enable automated Demand Response.
All three have already been putting their acquisition theses to work. Siemens announced in June that it is leveraging the SureGrid platform to be one of the first participants in the Demand Response Wholesale Market Pilot in San Diego Gas & Electric’s service territory. Honeywell is coupling the Akuacom technology to build an Open ADR-based system with Southern California Edison, funded in part by its $11.4 million grant from the Department of Energy. And JCI and EnergyConnect are working with utility West Penn Power to deliver Act 129 Peak Load Reduction in Pennsylvania.
Interestingly, review of the SEC filings of both EnerNOC and Comverge suggests that both companies seem to be more concerned with competition from advanced metering companies than from the large building efficiency service providers. Although the Echelons, Itrons and Toshibas of the world are threats, there are multiple reasons why the building efficiency players are equally, if not, more formidable: (1) they enjoy large installed bases of customers already using their building automation systems and energy management services; (2) they have strong reputations and brand equity built by years of working “behind the meter”; (3) they maintain “boots on the ground” with large sales and service fleets; (4) they can bundle design, engineering, construction, maintenance, M&V, and automation with Demand Response; and (5) they can leverage their strong balance sheets to provide the financial assurances necessary to enter into utility contracts and participate in open market bidding.
The threats to their core businesses clearly are not lost on EnerNOC and Comverge. Both companies have moved aggressively to build a greater diversity of service offerings around energy efficiency and energy management. Both companies have also moved into overseas markets to try to insulate themselves from the growing domestic competition. The challenge will be moving fast enough before the new entrants eat their lunch. For example, EnerNOC reported that in 2010 about 94 percent of its revenue came from Demand Response and, of that, 63 percent was from PJM. In recognition of this concentration, EnerNOC cites that it will target reducing Demand Response revenues to 80% of total revenues by 2013 and lessening its reliance on PJM to 50 percent of those revenues. Unfortunately, these still represent very large concentrations that are vulnerable to competitive threat.
How will this all play out? Our point of view is that the large building efficiency service providers will prevail in the Demand Response market. We predict that Comverge, with a depressed market capitalization currently around $50 million, will be acquired – perhaps by Schneider Electric. EnerNOC, with a current market capitalization around $270 million, may be too big of a bite for a strategic acquirer. However, there is no doubt that EnerNOC will face stiff competitive headwinds in Demand Response and may ultimately move away from the capacity markets to morph into a cloud-based information and analytics company providing energy intelligence to its customers under a subscription model. Let’s see what the next year brings!
Written by Erik G. Birkerts and Thomas G. Knight. Birkerts and Knight are the Founding Partners of Evergreen Growth Advisors, a boutique growth strategy advisory firm serving clients in the Clean Energy industry.
Plugging Electric Vehicles into the Smart Grid
Sep 1st
Today, electric vehicles (EVs) are starting to play an important role in our country’s transition towards a cleaner energy future. The primary advantage of EVs is the ability to replace petroleum fuel-based engines with highly efficient electric motors – offering consumers clean energy alternatives, including plug-in electric vehicles.
With vehicles like the Nissan LEAF and Chevy Volt creating mass markets for EVs in the United States, nearly every major automotive manufacturer has announced plans to deliver an EV model within the next three years. Federal funding is spurring investment in EV technology and pilot projects to initiate the roll-out of EV charging infrastructure. Equally as important, large corporations are committing to EV conversion for their fleets and employee base; such as FedEx Express which recently announced plans to double its fleet of fuel efficient vehicles. Also industry analysts project anywhere from 600,000 to 1.2 million EVs on road in the U.S. by 2015. Considering these factors, widespread adoption seems imminent…
But is there a missing link?
Building the EV charging infrastructure is the first step in encouraging mass adoption of EVs.
This year, electric vehicle charging stations within residential, commercial, and fleet applications are being installed in tens of thousands of locations across the country and this is just the start. Pike Research forecasts that 4.7 million electric vehicle charge points will be installed worldwide with an estimated 974,000 charge points to be installed in the U.S. from 2010 to 2015.
Installations of “Level 2” charging stations are the most ubiquitous. A Level 2 charger requires 240V/40A circuit similar to that of an electric clothes dryer or central air conditioner and will top off an EV battery in a few hours. What is often referred to as Level 3, now called “DC Fast Charging” can charge 80 percent of an EV battery in less than one half an hour and requires a 480V/120A circuit. With these power levels you can begin to see the challenges ahead for utilities as mass deployment of EV charging stations is a key driver for mass adoption of EVs.
So what does that mean for the grid?
As charging infrastructure is put into use and EV adoption spikes, another critical component to the success of EVs will be achieved by tapping into the smart grid.
The expansion of EVs plugging in to the electric grid will continue to add increased load to the grid. However, despite the increased need for electricity, according to Pike Research, the added demand of EVs will have minimal impact on grid reliability. This is a result of the smart grid and smart EV charging solutions, which will enable utilities and end users to handle this surge in demand through more intelligent energy management.
Smart grid enabled EV charging infrastructure will mitigate the stress of added load from EVs by providing more open communication between end users and utilities, enabling both to get better control over intelligent energy management when it comes to charging EVs.
A user could opt to participate in a load management program through their utility, which would allow the utility to temporarily switch off EV charging based on peak demand, shedding the load within certain parameters of the program. In the future, tying vehicle-to-grid (V2G) has a great potential of solving some of the fundamental grid energy storage problems that exist today, and further enabling utilities and consumers to mitigate load constraints.
This is a critical time in the development of the technology for EVs and charging infrastructure. Smart grid enabled EV charging infrastructure and the intelligent energy management practices it enables will play an integral role in driving adoption of EVs and easing their transition onto our electrical grid.
Additionally, partnerships across industries, consumers and policy makers will also be a key aspect in advancing EV adoption by establishing consensus for a standardization roadmap that supports the safe mass deployment of EVs. Through initiatives such as the American National Standards Institute (ANSI)’s Electric Vehicles Standards Panel (EVSP), as a community, we can collaborate on the development of EV solutions that are effective, efficient, safe and economically beneficial for the U.S.
Written by Donald Rickey, Senior Vice President, Energy Business, Schneider Electric
Loading ...
Recent Comments