P&E US 7

THE FIFTH DIMENSION

HELLO SUNSHINE

Page 34

Page 40

BLAST FROM THE PAST

PLUGGED IN

Page 76

Page 96

Why energy efficiency is the most important fuel source

Nuclear lessons help build AEP’s safety program

Brad Collins brings solar energy into the limelight

How electric cars came back for a new ride

www.nextgenpe.com • Q3 2009

Boonor Energy savior or elaborate smokescreen: why the concept of clean coal has divided the nation.

Page 26

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Wind Power Industry Chooses the PI System

The PI System has become the industry standard for enterprise-wide visibility into operational and business data for wind power: • 9 of the top 10 wind power producers in the North American wind power generation field already use the PI System. Next year it will be 100%.

• 17 of the top 20 wind producers worldwide use the PI System • In the US market 20,000 MW’s out of a total of 22,803 MW’s are generated using the PI System

Why They Use the PI System Iberdrola, S.A. “We have now successfully integrated OSIsoft’s software solution as a means of effectively managing the enormous amount of wind data that we process, as well as meeting the requirement to have a system with the capability of growing with us.”

Gustavo Moreno Gutierrez Iberdrola CORE Manager

enXco: Remote Assets, Varied Vendors But a Single Solution enXco Service Corporation’s Operations Control Center (OCC) uses the state of the art PI System™ to operate and monitor over 2600 turbines, totaling 3.9 GW of power, from manufacturers such as Gamesa, GE, Mitsubishi, NEG Micon, REpower , Siemens, and Vestas.

This NERC-compliant state-of-the-art facility allows enXco to manage remote assets from varied vendors with a myriad of legacy and modern IT and turbine technologies.

Empowering Business in Real Time PI Infrastructure for the Enterprise

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The PI System from OSIsoft Visibility of Generation, Transmission and Distribution Assets in Real Time For more than 25 years, utility companies and manufacturers have trusted OSIsoft and relied on the PI System as a mission critical part of their enterprise-wide energy and asset management strategy. More than 14,000 global customers rely on the PI System. They use it to get visibility into their operations, boost performance, perform enterprise and regulatory reporting, improve profitability and mitigate risks associated with managing diverse generation, transmission and distribution asset portfolios.

The PI System, provides 24/7 real-time high resolution data, as well as actionable events—the information one needs to deliver reliable energy at reasonable prices while meeting corporate responsibilities for compliance reporting and energy conservation. Because users of the PI System can see what is happening in real time, they make better informed decisions based on real time date and events and report substantial benefits:

PI System can monitor an electric grid’s status, from a single transformer...

Environment, Renewable and Conservation • Users can measure and monitor energy and other resource consumption, conserve energy, reduce carbon emissions and improve water quality • Most owners/operators of wind generation assets leverage OSIsoft’s PI System to accomplish this Power Generation • The PI System enables a utility to optimize plant operations, reduce startup costs, increase revenues • Approximately 60%% of the average power generated daily in the USA is monitored

by PI Systems

…to a substation

Transmission & Distribution • An integrated view of the distribution grid from operations to end user enables better utilization of assets and optimization of load balancing - a fundamental piece of the smart grid • 100% of the ISOs as well as 50% of the RTOs in the USA leverage the PI System Energy Efficiency • Efficiency improvements and performance benchmarking reduce overall energy use OSIsoft’s PI System is a critical foundation for successful implementation of power generation applications. The PI System is a flexible, powerful and continually growing

…to an entire service area

family of applications and tools that gather, manipulate and make operational information readily available to everyone who needs it—in the proper context for each user and presented in an instantly understandable visual form.

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Without energy storage, renewable integration isn’t so green.

Wind and solar power are unpredictable. Rapid changes in output cause grid instability. The use of conventional carbon-based generation, such as gas and diesel turbines, manages the instability today. But it won’t be able to support the aggressive goals outlined by state renewable portfolio mandates tomorrow.

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ED NOTE:temp text 22/06/2009 10:33 Page 7

Editor’s note 7

A rich seam of discontent Why has the concept of clean coal sparked such debate?

O

nce upon a time, coal was king. It heated our homes and energized our factories, and the mines provided employment for thousands of people. It literally powered our lives.

Then we became more aware of what we were doing to our environment. We discovered the dangers of emitting CO2, depleting the ozone layer and increasing global warming. As we strove to clean up our world, coal became the bad guy.

Now things are swinging around again.

Desperate to reduce our dependency on foreign oil and make use of our still abundant reserves, the Obama administration is once more looking to coal for answers.

As part of his election platform, President Obama pledged to deploy clean coal technology. Energy Secretary Steven Chu, who had been less than positive about coal before his nomination, was forced to backtrack, and now agrees that clean coal is worth pursuing.

On the other side of the debate, environmental groups claim that the big coal-burning

“We believe there is [such a thing as clean coal]. We believe the technology’s there.

We believe that it’s scalable, and that’s exactly what we intend to do” Michael Morris, CEO, American Electric Power (Page 26)

utility companies are using the concept of clean coal as a smokescreen to hide their own inaction on environmental issues; that they are engaging in a high-level – and expensive – PR campaign, with a lack of investment in research to back up their words.

It’s easy to see why companies whose income depends on burning coal would feel threatened by its potential disappearance. But there is definitely money going into clean coal research: at the DoE’s National Energy Technology Laboratory, researchers are busy chasing the goal of creating 90 percent CO2 capture with 99 percent permanence.

And in June, the federal government announced it was reviving FutureGen, the $1.6 billion initiative to create a coal-based power plant that will use new technology to reduce greenhouse gas emissions. The project had been mothballed by the Bush administration, ostensibly due to cost overruns.

So will clean coal be our salvation or our downfall? As with most contentious issues, the

truth falls somewhere in the middle. No, we should not single-mindedly pursue clean coal at the expense of other renewable energy sources.

But neither can we afford to ignore it completely.

As our environmental situation worsens, we must investigate every option available to us.

To keep abreast of this and the many other relevant issues covered in this edition – including how improving our energy efficiency could help us beat both global warming and the recession, the latest on plug-in hybrid vehicles, and the challenges of serving customers in remote regions – visit our website at www.nextgenpe.com. We’ll be sure to keep you on top of developments in the great clean coal debate as well. n

“We refer to energy efficiency as the fifth fuel. What we’re trying to do is change the paradigm that exists within our industry” Doug Esamann, SVP Strategy and Planning, Duke Energy (Page 34)

“The massive deployment of renewable generation envisioned by the Obama administration cannot occur without a renewed investment in transmission infrastructure” Denise Bode, CEO, AWEA (Page 94)

Marie Shields Editor

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CONTENTS:june09 19/06/2009 15:26 Page 9

Contents 9

76 Lessons learned Nuclear’s mistakes have become the backbone of AEP’s safety program

COVER STORY

The carbon question Why we can’t agree on clean coal

34 Ramping up the fifth fuel How Duke Energy is pouring everything into energy efficiency

40 When the stars align Brad Collins on why solar energy’s time has finally come

26

CONTENTS:june09 22/06/2009 10:14 Page 10

Contents 10

Andres Carvallo

66 48

Mike Carlson

96

Electric renaissance

P L AT I N U M S P O N S O R

66 The cutting edge Why Austin Energy is at the forefront of smart grid development

72 The truth about smart grid Hassan Farhangi reveals its secrets

INDUSTRY INSIGHT 32 Thierry Perchet, Huntsman Advanced Materials 85 Jeff Brunings, Altairnano 86 Ron Potter, TeamQuest

SMART GRID

48 We built this city

RENEWABLES

Mike Carlson on how Xcel Energy is pioneering the Smart Grid City in Boulder

80 Store and deliver AEP’s Ali Nourai examines the challenges of energy storage

58 Opportunity knocks Marcus Torchia explains why this is the ideal time for smart grid implementation

ROUNDTABLE DISCUSSION 52 Smart grid With Sharon Allan of Accenture, Mae Squier-Dow of CURRENT Group and Lee Ayers of OSIsoft, Inc.

88 Reliable sources PSE&G’s renewable strategies for a cleaner, brighter future

EXECUTIVE INTERVIEW 38 Sharon Fortmeyer-Selan, SunGard Energy Solutions 56 Philip Mezey, Itron 92 Dana Zentz, Summit Power 100 Our nuclear future

94 Transmission proposition AWEA CEO Denise Bode offers the case for new transmission infrastructure

David Hill stresses the importance of nuclear power in becoming carbon-free

104 Teamwork 96 Electric renaissance Why plug-in hybrid cars are on the rise again

How Northwestern University is helping energy and sustainability to work together

CONTENTS:june09 22/06/2009 10:40 Page 11

Contents 11

ASK THE EXPERT

IN THE BACK

55 Dave Roberts, OSIsoft, Inc. 64 Brian Deaver, CURRENT Group 103 Nancy Hartsoch, SolFocus, Inc. 112 Patrick Carberry, Bottom Line Impact

106 Red, white and green The government’s role in making America more energy efficient and environmentally responsible G20

CUSTOMER OPERATIONS

108 Keeping up appearances Val Jensen explains ComEd’s sociological approach to understanding customer behavior

114 Northern exposure The challenges of serving customers in Canada’s far north

118 Comment: G20 120 Events 122 European focus 124 Travel: Germany 126 In review 128 Final word German efficiency

108

Keeping up appearances

88

Northern exposure

114

Reliable sources

Ritz Carlton, Marina Del Rey • California

13 – 15 October 2009

Chairman/Publisher SPENCER GREEN Director of Projects ADAM BURNS Editorial Director HARLAN DAVIS Worldwide Sales Director OLIVER SMART

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19/6/09 15:11:21

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2/2/09

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UPFRONT NGP&E7:nov08

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Frontline 14

CHINA’S GREEN DREAM In a bid to catch up with Western environmental attitudes, China has pledged to increase its renewables program, with the aim of matching Europe by 2020.

THE BRIEF

CHINA HAS STATED that its cabinet will release details very soon of a ‘new energy’ program that is predicted to see it challenge President Obama for the title of global leader in climate change.

The plan will be a long-term commitment. It was reported in both Chinese and international media that $200 billion is due to be invested during the next 10 years in environmental programs aimed at reducing the country’s

large carbon footprint. cles, well in advance of the However, making a large slice Western world. of its economy green is not Rather than just maknecessarily a new strating green products, egy for the country.

China will now be China already manuimplementing them factures most of the in a bid to reduce Will be invested in environmental world’s solar panels its notorious status programs in the and wind turbines as a major producer next 10 years and is already technoof greenhouse gases. logically ahead in producZhang Xiaoqiang, Vice ing innovative energy storage Chairman of China’s National batteries for plug-in hybrid vehiDevelopment and Reform

$200 billion

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Frontline THE BRIEF

15 technologies in these areas,” said ment. “Collecting environmental the National Development and taxes from [polluting] companies Reform Commission’s Chairman, is one of the directions of China’s Zhang Ping. “So the two countries tax system reform,” says Zhang can achieve win-win results Lijun, Deputy Head of the through close cooperation.”

Environmental Protection Zhang said that in recent Ministry. “Several departments years China and Japan have been are currently working together to actively collaborating on energy develop research on this issue, and environmental conservation. and when the conditions are The two Asian giants have estabright we will launch an environlished an annual forum on the ismental taxation system for polsues.

Many business-level luting companies.” projects are signed via the platZhang has also said China form, according to Zhang. will ramp up its investment to curb The US has placed continuous rural pollution, as environmental pressure on the Chinese governproblems in the country's vast ment to act more to cut its countryside are “increas2 emissions.

CO ingly prominent.” last year However, following Pollution has the most recent UN been aggravated yuan from central leadership roundup in rural areas funds was diverted to encourage prelimidue to chemical to nearly 700 nary climate change fertilizers, pestivillages talks before Copenhagen cides and livestock in December, the US has breeding, according to a scaled down its demands on China report published by the and advised that instead it would Ministry of Environmental need to commit to energy efficienProtection (MEP) on China’s ency standards but without specific vironmental situation. target figures.

The increasing industrial and Only the world’s developed mining wastes in the countryside superpowers, including the US, will are also threatening the safety of be pressured to adhere to what is drinking water, the report said. expected to be a specific target of Zhang said the central govern80 percent by 2050.

The US’ previment would spend one billion ous refusal to enter the Kyoto yuan this year on subsidies for vilagreement that was formed to cut lages to set up pollution treatment carbon emissions makes its recent facilities. Last year, 500 million commitment under the Obama adyuan from central funds was diministration a radical u-turn on enverted to nearly 700 rural villages vironmental matters. where over four million people live.

The relationship between Japan and China also pledged China and the US regarding clito promote cooperation on energy mate change is critical for setting conservation and environmental a blueprint for smaller, less-develprotection during their second oped countries.

Whether this is a high-level economic dialogue held demonstration of an improvein Tokyo in June. ment in international relations or “China attaches great imporsimply a race to become the tance to saving energy and proworld’s greenest superpower retecting ecology, while Japan has mains to be seen. broad experience and advanced

500 million

A Miao village in rural China, where pollution levels are rising

Commission will has announced that China would now be using wind and solar power to hit a 20 percent renewable target by 2020.

The goal for wind energy is 100 GW and the goal for solar is 3 GW; the country is also planning to install 100 million energy-efficient light bulbs during 2009.

The Chinese government says it is also considering levying taxes on polluting businesses in a bid to improve the environ-

VITAL STATISTICS China’s commercial energy use is

904.93 kg of oil equivalent per capita China produces

80% of its power from fossil fuels It produces

1.2% from nuclear energy China’s annual use of geothermal power is

8724 GW/hr It has

18 billion barrels of oil reserves

764 MW of wind energy capacity is installed in the country

UPFRONT NGP&E7:nov08

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Frontline 16 REX TILLERSON, Chairman and CEO, Exxon Mobil Corporation Natural gas is playing and will continue to play an increasingly important role in building a brighter future.

To meet growing energy needs and to mitigate the growth of greenhouse gas emissions, we must develop and deliver greater supplies of natural gas to markets worldwide.

Despite the current economic downturn, global energy demand is expected to be about 35 percent higher in the year 2030 than it is today. Much of this increase will come from developing countries as growing populations seek higher standards of living. About 1.6 billion people worldwide still are without electricity, and about 2.4 billion people continue to depend on basic, carbon-intensive fuels such as charcoal.

Strengthening and enlarging the international market for natural gas is essential to fulfilling its potential.

An international market for natural gas – enabled by partnerships, spurred by technological innovation and supported by sensible and stable public policy – is more important than ever.

We will need advanced technologies that enable us to achieve new economies of scale for liquefied natural gas. And we will need stable, sensible policy frameworks that encourage long-term investment.

In order to bring required new energy supplies to market, our industry must commit to enormous, longterm, capital-intensive and technologically sophisticated projects. The International Energy Agency estimates that cumulative investment in global energy supply and infrastructure needed to the year 2030 will exceed $25 trillion.

Thanks to our solid partnership and combined efforts, Qatar Petroleum and ExxonMobil have found innovative solutions to improve offshore production; the processing, transportation and sale of LNG; domestic gas supply; and petrochemical operations.

By increasing the availability and affordability of natural gas, we are diversifying the world’s energy portfolio. We are strengthening global energy security. And with increased natural gas production we are bringing to market a cleaner-burning fuel source.

From a speech given in Qatar, March 2009

IN MY VIEW

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Frontline

NO WIND POWER

WHAT’S NEW

IT IS FEARED that the Obama administration’s plans for renewable energy will be hindered by the fact that the powerful winds of the Midwest are dying out. The Journal of Geophysical Research, due to be released in August, is expected to report a slowdown in wind speed that began almost 30 years ago.

As the American Midwest is the world’s largest producer of wind power, this is likely to have a catastrophic effect on Obama’s Plan for America if the conclusions match the predictions. The investment in wind turbines for 2008 was approximately $17 billion. It is believed the reduction in wind speed is a result of climate change.

Over the past 25 years, the average annual Arctic sea ice area has decreased by

5% FAST FACT

17

ARCTIC POLLUTANTS EARLY JUNE saw the convening of some of the world’s most learned scientists at the University of Hampshire to discuss key findings from a study attempting to understand ‘short-lived’ airborne pollutants in the Arctic and how they contribute to the dramatic changes currently occurring in the climatesensitive region.

The study, named POLARCAT, was a two-year campaign conducted to focus on the transport of pollutants into the Arctic

from the lower latitudes. One surprise discovery was that large-scale agricultural burning in Russia, Kazakhstan, China, the US, Canada and the Ukraine is having a much greater impact than previously thought.

In addition to the primary problem of soot, other short-lived pollutants include ozone and methane. Although global warming is largely the result of excess accumulation of carbon dioxide, the Arctic is highly sensitive to short-lived pollutants. Forest fires, agricultural burning, primitive cookstoves and diesel fuel are the primary sources of black carbon; oil and gas activities and landfills are major sources of methane.

GREENER LIVING

collar’ sector. Green collar champion Van Jones announced that the investment into the DETERMINED to green all aspects of society, green housing would consume 40 percent of the budget that was set aside for green the federal government has launched a $4 billion plan to create environmentally friend- schemes in government buildings.

The economic stimulus package is ly public housing for America’s lowreceiving green treatment in the rollincome citizens.

The out of the recovery plan, and Vice President Joe Biden US government Obama’s strategy to create five announced the green project has launched a million new green collar jobs plans during a speech in will incorporate various Denver, stating the scheme plan to create envischemes for the target to be will replace windows, insularonmental public reached. tions and light bulbs in those housing Although a huge effort is being areas regarded to currently be a made on behalf of the government, building carbon eyesore. The project is expected to renovations will also be contributed to by direct $50 million to those areas across the those receiving the environmental upcountry that have taken the worst blows of grade. Homeowners will be able to choose the recession. to become carbon friendly by simply ticking The project is also expected to increase an option box on their utility bills. the number of those working in the ‘green

$4 billion

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Frontline 18

INTERNATIONAL NEWS

PLANE TAX

RACING GREEN

CARIBBEAN GRID

A WORLDWIDE CARBON TAX for aviation travels is gathering speed to become a regulation for the future. The policy has now drawn support from the Australian government, who have proposed that airlines must also become accountable for carbon emissions, and a carbon reduction target to be set on all airlines. The issue of airline emissions is due to be addressed at the Copenhagen summit in December with the UN expected to set targets and be the overseer of ensuring the targets to be met.

LAMBORGHINI’S chief executive, Stephan Winkelmann, has announced that the Italian sports car maker is to create a greener version of its notoriously fast-powered products. “We have an objective to reduce CO2 emissions to the greatest possible degree,” he explains, stating the company is aiming to make its motors “more considerate of the environment, in terms of emissions and the use of resources.”

ST. LUCIA ELECTRICITY SERVICES LIMITED (LUCELEC) is gearing up to deploy the first full-scale smart metering system in the Caribbean. St. Lucia has one power generation station and seven substations that service the entire island and 56,000 customers.The island, 616 sq. km, includes a mix of terrain, including high mountains, dense forests, low-lying lands and beaches, creating a challenging environment for wireless technology. LUCELEC deployed a 200 meter pilot which proved a success with all meters communicating reliably on a regular basis to LUCELEC operations.

The scheme is expected to run similar to the carbon-trading scheme currently operated by US utilities. Under a similar policy, airlines would be subject to set an emission limit, and if adhered to, given free carbon credits.

Environmental pressure group Greenpeace welcomed the proposal, stating that unless such a deal is struck, ships and planes are predicted to consume between 50 and 80 percent of the world’s carbon budget by 2050.

The company has set targets and is planning to cut 35 percent of the carbon emissions generated by its cars by 2015. Lamborghini’s cars currently emit more than three times the emissions from a typical saloon, and so a move toward a more carbon friendly design is greatly welcomed. The motor giant is further donning its green hat with the installation of 17,000 square meters of solar panels on the roof of its main factory at Sant’Agata Bolognese near Bologna.

“LUCELEC’s objectives with the AMI deployment are to reduce meter reading costs and increase operational efficiency.This includes reducing system losses and improving our customer service,” said Gilroy Pultie, LUCELEC’s manager of transmission and distribution.

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Frontline INTERNATIONAL NEWS

19

CLEAN COAL

SMART CANADA

AIR CAR

A COALREVOLUTION is occurring across the pond. The UK Energy And Climate Change Secretary, Ed Milliband, announced in June that there is to be no more building of coal plants in the region unless utilities adhere to the new regulations of clean coal, and a portion of the carbon dioxide emitted is captured and stored underground.

GEORGE SMITHERMAN, the Minister of Energy and Infrastructure for the Canadian province of Ontario, joined city of Burlington Mayor Cam Jackson and Burlington Hydro Electric Inc. in the recent official launch of GridSmartCity.The project brings together a wide range of stakeholders from industry to government to work together to promote the growth of smart grids.The new program will showcase how smart grids integrate electricity production and delivery and consumption to produce a more efficient, reliable and responsive system that is better for the environment.

THERE IS NO BETTER fuel than emission-free fuel. French auto engineer Guy Negre has invented a car that combats all those previous problems of carbon emissions and fuel dependency – the ‘Airpod’ is powered by compressed air. The car produces only a fraction of carbon compared to that of standard fuel guzzling motors, can travel 65 miles with only a one-minute recharge and costs just under $5000. The only drawback to the air-powered motor is its speed limitation of 30 mph.

“Compared to electric cars, airpowered cars cost a fraction of the price to buy, they don't need expensive batteries to be replaced every five years or so and crucially they take only a fraction of the time to recharge,” explains Negre.

He advised that the new policy is an attempt to solve three challenges: ensuring security of the country’s energy supply, the need to make substantial cuts in greenhouse gas emission and the growing global need to build a low-carbon economy.The UK policy makes the country the first in the world to commit itself to targets and regulations regarding coal plant carbon capture. It has pledged to cut carbon emission 34 percent by 2020; any new coal plants that are to be built must first prove that carbon capture and storage technology is in operation and on 100 percent output.

GridSmartCity partners will collaborate on smart grid projects to illustrate new technologies.These projects will help to fuel the growth of innovative green industries. Smart grid technologies, combined with advanced communications and computer analytics, will aid greater use of renewable green energy sources from the sun, wind and devices such as electric vehicles.

Negre recently signed a $50 million dollar deal with Indian car giant Tata to license the technology, and has also signed multiple deals to manufacture the car in the US, Latin America and Europe.

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Frontline 20

WHAT’S NEW

SUNTECH BETS ON THE US IN A REVERSALof the usual order, no real market yet, and investments Chinese solar company Suntech in up-and-coming companies like has announced plans to site some Nitol Solar, on which it just lost $25 manufacturing operations on million.

American soil. It will spend the next Building capacity in the US is few months determining a location also a risk.With the market sharply for a factory, and potentially have it down due to the recession, there’s in operation within a year, produccurrently a glut of panels for sale, ining panels for the local market. cluding plenty from Suntech. If the Suntech’s move is inmarket doesn’t recover as quickcreasingly typical of ly as expected next year, the solar industry. the company could be Suntech’s With margins left holding the bag. It 2008 profit tight and compewill also have to enfell to less than tition intense, cutting down on long-distance shipping (and the attendant breakage rate for panels) can shave off enough of the price to give companies an edge over the competition.

Suntech is implementing an increasingly aggressive strategy.

Despite seeing its 2008 profits fall to less than $100 million, the company recently repurchased $150 million of its senior notes. It is also making risky development bets in thin-film solar and building-integrated products, for which there’s

sure that its production lines are highly automated to offset the higher labor costs, something European companies like Schott Solar, which just opened its own 100 megawatt facility in New Mexico, may be better at.

But all told, Suntech is likely to come out ahead.With unemployment rates high, states and local communities will be keen to offer Suntech big incentives for a plant.

And with Suntech panels ending up a bit cheaper, rivals like SunPower and Sharp could be discomfited by the move.

$100 million

FROM THE VAULT In Q4 2008 of Power & Energy, LLOYD YATES, CEO of Progress Energy Carolinas, emphasizes the importance of environmental stewardship and the company’s commitment to energy storage in a service territory plagued by natural disasters.

Go to www.nextgenpe.com to browse ‘Past issues’ and view the cover story of the Q4 2008 issue, and read of Yates’ determination to lead a utility of “environmental excellence”.

NEW YORK ON TARGET

CLIMATE COMPROMISE LAWMAKERS in the Democraticcontrolled House of Representatives say they have reached a compromise agreement on a bill aimed at combating climate change.

California Representative Henry Waxman, who chairs the House Energy and Commerce Committee, says the agreement includes a 17 percent reduction in greenhouse gas emissions below 2005 levels by 2020. Waxman and others had sought a 20 percent

cut within the same time frame, but faced strong opposition from lawmakers from states that rely heavily on coal-powered plants.

The measure would also allocate a certain percentage of free pollution permits for certain businesses. The Obama administration and its allies want businesses to purchase permits to emit greenhouse gasses from other firms that use less energy, a system known as cap and trade.

Source: voanews.com

NEW YORK STATE Governor David Paterson recently announced the clean energy goals for the state. “By 2015, New York will meet 45 percent of

its electricity needs through improved energy efficiency and clean renewable energy,” he said. “We call this our ‘45 by 15’ program.

Now is the time for us to change how New York uses energy. Now is the time for New York to take an energetic step toward shaping our future.”

Paterson says this effort will help rebuild the state’s economy, meet its energy needs, and protect the environment.

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Upfront WHAT’S NEW

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NEW DEMAND RESPONSE THERMOSTAT

messages – an industry first. The thermostat also can provide cusHONEYWELL RECENTLY introowners to program and operate. In tomers with billing data, including duced UtilityPRO, a touchscreen addition, they don’t allow utilities to month-to-date charges and yearprogrammable thermostat decompletely leverage the link to cus- over-year usage comparisons. signed specifically for utilityHoneywell Utility Solutions, a tomers the technology provides. sponsored demand response division of Honeywell Building UtilityPRO addresses these programs. Featuring a sleek deSolutions, has 25 years of expericoncerns by adding the latest design and simple, user-friendly in- mand response features to ence designing and implementing terface, the new thermostat will demand response programs for Honeywell’s award-winning, besthelp utilities drive program partic- selling programmable thermostat. utilities. The business has inipation, giving them greater conWith UtilityPRO, homeowners stalled more than one million load trol over peak energy use. control devices to date, which and businesses get a thermostat Utilities also will be able to that is simple to use and effective. makes it one of the largest impleimprove communication with Its intuitive logic and menu-driven menters of residential demand recustomers through industrysponse in North America. It also programming help users maxileading features like customized mize energy savings while mainprovides smart metering, and entext messages. ergy and water efficiency solutaining comfort.

“From the classic round thertions to utilities.

From a utility’s perspective, mostat to today’s programmable the thermostat provides a load For more information, visit www.honeywell.com/utility. touchscreens, Honeywell is syncontrol device that has wideonymous with temperature conspread customer appeal. trol and comfort,” said Kevin In addition, McDonough, General Manager of UtilityPRO helps Honeywell Utility Solutions. improve cus“We’ve combined this expertise tomer service by with decades of demand reallowing utilities sponse experience to create the to communicate UtilityPRO thermostat.” directly with The challenge with existing customers demand response thermostats is through custhat they can be difficult for home- tomized text

SOLAR DEVELOPMENT PARTNERSHIP REC AND SUMMIT POWER have recently formed a partnership to develop utility-scale photovoltaic projects in the US market. This partnership will bring an experienced power project developer and financial backing together with a trusted, fully integrated manufacturer of high-performance solar modules. The joint venture will focus on the development of solar electric projects in urban environments, deploying an urban infill model. These projects will deliver cost-effective, reliable power with minimal risk for utilities.

Summit Power Group is a leading full-scope, value-added power project development firm.

Currently, Summit is leading the development of over 2500 megawatts of additional gas-fired,

IGCC and wind projects. Please see www.summitpower.com for an experience and qualifications summary.

REC is the leading vertically integrated player in the solar energy industry. REC Silicon and REC Wafer are among the world’s largest producers of polysilicon and wafers for solar applications. REC Solar is a rapidly growing manufacturer of solar cells and modules and is engaging in solar systems sales in selected market-segments. In 2008, REC had revenues of $1453 million (NOK 8,191 million) and $581 million in EBITDA (NOK 3,279 million).

Approximately 2400 employees work in REC’s worldwide organization.

Please see www.recgroup.com for more information.

TOP TEN

Total renewable net generation by energy source and state

1 2 3 4 5

6

7 8 9 10

Washington 84,510,483 California 71,962,775 Oregon 39,679,286 New York 29,941,296 Idaho 11,932,329 Alabama 11,136,248 Montana 10,660,546 Tennessee 8,559,249 Texas 8,480,231 Maine 8,245,783

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Frontline 22

PROJECT FOCUS

BACK TO THE LAB THE US DEPARTMENT of Energy researches and develops its national science interests through a system of facilities and laboratories, which it oversees. The National Laboratories and Technology Centers are federally funded but administered and staffed by private corporations and universities. In the first of an ongoing series, Power & Energy examines the 17 national laboratories and the varying ways in which they impact the region’s energy usage.

LOS ALAMOS NATIONAL LABORATORY MANAGED BY LOS ALAMOS NATIONAL SECURITY, the institution is one of the largest laboratories in the world and is also the largest employer in northern New Mexico. It is one of the two laboratories in the US where the design of nuclear weapons is undertaken.

The laboratory in which the Manhattan Project begun during WWII, its origins lie in secrecy and it was initially given the name of Site Y. The first nuclear test was conducted in Alamogordo, New

Mexico in 1945, and some of the weapons were later used In the attacks on Hiroshima and Nagasaki.

Since that time, Los Alamos has also been responsible for the development of the hydrogen bomb, as well as other variants of nuclear weapons. The institute has also immersed itself into research into medicine for humanitarian causes – it is currently testing three vaccines for AIDS.

AMES LABORATORY LOCATED ONTHE CAMPUS of Iowa State University, the institute is a government-owned, contractoroperated research facility. It hosts more than 250 scientists and engineers within its workforce and supplies approximately 18 percent of the federal sponsored research funding awarded to ISU. The laboratory was established in 1947 by the US Atomic Energy

Commission as a result of its methodology for producing high-purity uranium metal for the Manhattan Project.

Since then, the laboratory has widened its areas of research to reflect current interests of national concern, such as energy resources, high-speed computer design, environmental cleanup and restoration, and the synthesis and study of new materials.

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Frontline PROJECT FOCUS

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ARGONNE NATIONAL LABORATORY

FERMI NATIONAL ACCELERATOR LAB

THE INSTITUTE is one of the oldest that comprises the DOE’s 17 laboratories and is the largest in the size in the Midwest. Argonne currently has five main areas of research.

It undertakes basic scientific research in experimental and theoretical science in the physical, life and environmental sciences. It also builds and maintains scientific facilities for the use of scientists and it is also one of the main areas in which advanced study is done

LOCATED IN BATVIA, near Chicago, Fermi National Accelerator Laboratory (Fermilab) specializes in high-energy particle physics and is operated by the Fermi Research Alliance. In 2006, the lab won the Dolden Family Award from the Society of Women Engineers for women representing more than 40 percent of the workforce.

Its research is primarily focused on nuclear, specifically in the field of particle physics, and it’s announced the discovery of the top quark in 1995. In addition to high-energy collider physics, Fermilab is also responsible for researching a number of smaller

of energy technologies. It is developing solutions to environmental problems and promoting environmental stewardship, and finally it also focuses on contributing to national security. The lab undertakes work in the nuclear fuel cycle, biology, chemistry and systems analysis and modeling.

fixed target and neutrino experiments. A new particle was discovered on September 3 2008 at the DZero Experiment of Fermilab.

Fermilab is not just prominent in the scientific field, but also plays host to a number of cultural events, such as classical and contemporary music concerts and art exhibitions.

OAK RIDGE NATIONAL LABORATORY

ESTABLISHED IN 1943, the laboratory is a multi-program science and technology institute and is the largest of all 17 laboratories. Oak Ridge National Laboratory (ORNL) encompasses approximately 4300 staff and is a managed by a partnership between the University of Tennessee and UT-Battelle with a minimum funding of $1.4 billion annually.

Its research is focused into six major areas. Neutron science incorporates a neutron scattering project.

High-performance computing is another area; the laboratory provides the most powerful computing resources in the world.

ORNL also researches biological systems, a huge effort is fixated on understanding advanced materials. The lab is also a major research centre for the development of energy in various forms and for security.

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COMPANY INDEX

URGENT ACTION NEEDED SEVERALTOP GOVERNMENT climate change scientists recently released a new report warning that the effects of global warming will become more severe unless the Obama administration takes action quickly.

For years, scientists have talked about the threat of rising sea levels on remote tropical islands and melting ice in the polar regions. But a new report by the Global Climate Research Program makes the threat of global warming personal.

“Climate change is happening now and it’s happening in our own backyards, and it affects the kinds of things peo-

ple care about,” says Jane Lubchenco. Lubchenco is the head of the National Oceanic and Atmospheric Administration. She says the report presents scientific evidence that will inform policy making.

The report, compiled by more than 30 scientists at 13 government agencies, describes climate-related changes that are happening in the United States.

Tom Karl, was a principal author of the report.

“US average temperature has risen by 1.5 degrees Fahrenheit over the past 50 years,” he says. “We’ve had more rain coming in heavy downpours that can lead to flooding. Less winter precipitation is falling as snow, more as rain.”

The report, commissioned by the White House, uses climate models to project what will happen if action is not taken to reduce the carbon dioxide emissions that most scientists say cause global warming.

It predicts increasingly deadly heat waves, and higher incidents of asthma and diseases transmitted through the water and by Source: voanews.com insects and rodents.

COMPANY INDEX Q3 2009 Companies in this issue are indexed to the first page of the article in which each is mentioned.

Accenture 6, 48, 52, OBC Adica 69 Altairnano 4, 85 American Coalition for Clean Coal Electricity 26 American Electric Power 26, 66, 80 American Solar Energy Society 40 American Wind Energy Association 94 Bottom Line Impact 112, 113 British Columbia Institute of Technology 72 Center for American Progress 26 ComEd 108 Conergy AG 91 Control4 48 CURRENT Group 48, 52, 64, 65 Cyveillance 116 DTN/Meteorlogix 75 Duke Energy 34

Energy Storage and Power LLC 82 General Motors 96 GridPoint 48 Honda 96 Honeywell International 21, 60 Huntsman 32, 33 Hydro One 114 Idaho National Laboratory 26, 100 IDC 58 ISEN 104 Itron Inc. 56 Landis + Gyr 48 Lixar 48 Millennial Net 63 Meettheboss 127 MSE Power Systems, Inc. 2 NETL 26 Numerex Corp. 8 OSIsoft IFC, 52, 55

PSE&G 88 REC Group 21, 92, 93 Schweitzer Engineering Laboratories 48 Sensus 70 Sierra Club 26 SolFocus, Inc. 103 SunGard Energy Solutions 38, 39 Tantalus 47 TeamQuest Corporation 86, 87, IBC Toyota 96 Ventyx 48 Wavecome 13 World Coal Institute 104 Xcel Energy 48

DON’T MISS...

26 THE CARBON QUESTION Are we facing a coalfree future?

34 TIME FOR OPTIMISM Doug Esamann raises the bar on energy efficiency

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ENERGY DEVELOPMENTS An update on the energy use of EU countries

Ritz Carlton, Marina Del Rey • California

13 – 15 October 2009

Next Generation Utilities Summit The Next Generation Utilities Summit is a three-day critical information gathering of C-level technology executives from the utilities industry.

A Controlled, Professional & Focused Environment

The NGU Summit is an opportunity to debate, benchmark and learn from other industry leaders.

It is a C-level event reserved for 100 participants that includes expert workshops, facilitated roundtables, peer-to-peer networking, and coordinated technology meetings.

A Proven Format

This inspired and professional format has been used by over 100 CIOs and CTOs as a rewarding platform for discussion and learning.

“

Terrific opportunities to ‘Speed Date’ potential business partners in a cost effective, highly efficient format which is run very well.

”

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“

Excellent format, highly productive and informative with a great mix of current state and future state reality based research and experience.

”

Charlie Ward – IT Enterprise Architect, Duke Energy

Find Out More Contact NGU at 212 920 8181 Ext 347 www.ngusummit.com

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COVER STORY

The

carbon question Carbon sequestration and the concept of clean coal are not new ideas. So why are they suddenly arousing such polarized opinions?

Marie Shields investigates

o

n the face of it, clean coal seems like an ideal answer to our energy woes. Since a large part of our energy production still comes from coal and is likely to continue to do so for the foreseeable future, why not investigate ways of making it less harmful to the environment, and more efficient into the bargain? That way, we can lessen our dependence on foreign oil, help protect the planet and save money at the same time.

The clean coal concept does have friends in high places. As part of his election platform, President Barack Obama pledged to deploy clean coal technology, saying that, “Carbon capture and storage technologies hold enormous potential to reduce our greenhouse gas emissions as we power our economy with domestically produced and secure energy.”

Energy Secretary Steven Chu, who had been quoted several times in the run-up to his nomination as saying, “Coal is my worst nightmare,” was forced to backtrack during his confirmation hearing to calling coal merely, “A pretty bad dream.” He also went from being “not very optimistic” about the feasibility of clean coal, to seeing it as a “significant challenge.”

When asked in a subsequent interview if clean coal was feasible, his answer was, “Yes.” During the hearing, Chu also said, “There are . . . some people in the United States who feel perhaps we should turn off coal. But even if we do it, China and India will not. And so we are in a position to develop these technologies so that the world can capture carbon.”

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Investment In addition to giving the idea lip service, the government has also taken action. One example of this is FutureGen, a $950 million initiative launched in 2003. In its original incarnation, FutureGen was to create a coal-based power plant in the small Illinois town of Mattoon, which would have used new technology to reduce greenhouse gas emissions. But costs for the project spiraled, and it was mothballed by the Bush administration last year.

When the new government took over, it said that the project would be restructured. In March, Secretary Chu said that he intended to go forward with FutureGen “in some modified way.” Then in June, the government announced it was reviving the project, at the same time upping the price tag to $1.6 billion, with $600 million of that coming from a coalition of 20 big companies, and the remaining $1 billion from the $3.4 billion of stimulus package money conveniently allocated to clean coal technologies.

At the DoE’s National Energy Technology Laboratory, considerable effort is also going into investigating new coal technologies. The carbon sequestration program began here in 1997 with $100 million in funding appropriated by Congress. R&D funding for the program in the current fiscal year is $150 million. As Tom Sarkus, NETL’s Senior Manager and

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Technical Analyst, explains, this funding is spread across several areas.

“There’s a newer program that focuses specifically on carbon capture from the existing power plants, which includes a piece that looks, for example, at water issues related to that.

“There’s another program called the Clean Coal Power Initiative that funds large commercial-scale demonstration projects, which is being managed for the DoE by NETL. We’re currently evaluating applications for the third round of that program, which is focused exclusively on carbon capture and storage. Funding for that is appropriately $600 million.”

Opposition There’s obviously a lot of money being put into carbon capture and storage research, by the government at least. And yet clean coal’s opponents would claim this is no better than pouring money down the drain.

According to environmental groups and left-leaning think tanks, clean coal is nothing more than an elaborate smokescreen – a neat way of making consumers believe the big utility companies are doing something to combat climate change. This leaves the companies free to continue burning coal, which in its traditional form is universally acknowledged to be both dirty, and most politically incorrect of all, non-renewable.

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According to an investigation by 60 minutes, as quoted on the website of the liberal political policy think tank Center for American Progress, big coal companies talk a lot about investing in clean coal research, but don’t put their money where their mouths are. The CAP article accuses the American Coalition for Clean Coal Electricity (ACCCE), which it calls a front group for big utility companies, of spending large amounts of money on advertising the idea of clean coal, but very little on developing the technology to support it.

It says ACCCE is determined to convince Americans that clean coal is the solution to global warming, at the expense of other, renewable alternatives.

CAP representatives did not respond to P&E’s request for an interview.

Michael Morris, CEO of American Electric Power, an ACCCE member, in a recent interview with P&E’s sister media channel, MeettheBoss TV, was more forthcoming. When confronted with the idea that coal companies are engaged in very high level PR around clean coal and that the investment is not there to back up the words, he responded: “That may be true of a lot [of companies], but it surely isn’t true of American Electric Power. This project at Mountaineer has got a price tag of around $100 million, and we’re deeply invested in that. The ultimate expansion now to the first commercial scale will be on the order of $400 million, so we’re working with our checkbook rather than with our mouths.

During the same interview, Morris also pointed out that, “The carbon capture and storage project that we’re doing in West Virginia in our Mountaineer Station is essential to the ongoing debate of whether there is or isn’t such a thing as clean coal. We believe there is. We believe the technology’s there. We believe that it’s scalable, and that’s exactly what we intend to do. Internally we are focused on these are very important issues.

We need to continue to fund them as we go. And again, at the end of the day it will serve our customers, the communities where we do business and our shareholders as well.”

The project Morris is referring to is AEP’s Mountaineer Carbon Capture and Storage Project, which comes online later this year, with the aim of removing 100,000 and 300,000 tons of CO2.

Partnership Back at NETL, Tom Sarkus is more concerned with ensuring the longterm safety aspects of carbon sequestration than he is with the political storm surrounding it. One of his team’s objectives is to create 90 percent CO2 capture with 99 percent permanence. “We’ve defined that as meaning that there would be less than one percent leakage after 100 years,” he says. “And all to be achieved with no more than approximately a 10 per-

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HOW TO GET ELECTRICITY FROM COAL here are three technology platforms used to generate electricity from coal. The first is a traditional boiler, coupled up to a steam turbine and a generator. The second is fluidized bed combustion, which has a much higher level of fuel tolerance. It can utilize grades of fuel that would otherwise have to be sent to landfill or disposed of elsewhere.

The third is integrated gasification combined cycle (IGCC). There are currently about 30 IGCC plants worldwide. Fifteen of those operate on petroleum liquid and gaseous fuels. Of the remaining 15, nine of them operate on petroleum coke and six of them are designed to operate on coal: three in Europe, two in the United States and one in Japan.

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Steven Chu cent increase in the cost of electricity when you compare it to a non-sequestered system.

“We want to develop these technologies and mitigate concerns over climate change. But the last objective tells us we have to do this in a way that is at least cost competitive.”

In addition to its own internal research, NETL operates within seven government industry partnerships that span different geologic regions of the United States and Canada in order to characterize and develop carbon sequestration opportunities. Taken together, theses seven partnerships consist of more than 350 different organizations, including state-level government agencies, universities and private industry.

The member organizations include 40 states, three American Indian nations and four Canadian provinces. There are also nine foreign governments, not counting the United States and Canada, that are participating in the projects in these regional partnerships. Sarkus explains that international governments are involved because, “There’s a saying that all politics is local, and the geologists tell me that all geology is really local. While there is an aspect of that that’s true, there are also some things you can learn from observing and participating in projects in other regions or even in other countries.”

Despite NETL’s obvious commitment to making carbon sequestration work, there are still those who oppose clean coal on every front. The strongest opposition has come from environmental groups, particularly those belonging to the Beyond Coal Campaign, spearheaded by the Sierra Club. According to the Sierra Club’s website, the Beyond Coal Campaign is working to: “Stop the construction of dirty, new coal plants by educating investors and decision-makers about the economic and environmental risks of investing in new coal; retire old plants that are the worst contribu-

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tors to health-harming soot and smog pollution and replace them with clean energy solutions; and work with communities to protect our mountains, lands and waters by keeping our vast coal reserves in the ground.”

Debate P&E arranged to interview Bruce Nilles, Director of the Beyond Coal Campaign, but he could not be reached at the appointed time and did not respond to subsequent attempts to contact him. However, the Campaign’s stance on clean coal is plainly stated in the Sierra Club fact sheet, ‘The Dirty Truth About Coal: Why Yesterday’s Technology Should Not Be Part of Tomorrow’s Energy Future.’ “The coal industry knows it must change or it will be out of business – that is why it is pushing ‘clean’ coal,” it says. “But, coal as it exists today is anything but clean.

“The supposedly ‘clean coal’ technologies that have attracted the most attention in recent years are carbon capture and sequestration (CCS) and integrated gasification combined cycle (IGCC). As of now, CCS remains an unproven technology, and experts disagree as to how long it will take for this technology to be available for commercial and wide-scale use. IGCC unfortunately emits just as much global warming pollution as other coal plants.”

NETL’s Tom Sarkus becomes quite animated at the suggestion that we shouldn’t be spending money on investigating new ways of using coal instead of putting it into funding renewable energy sources.

“It’s missing the point,” he responds. “Long term we all recognize that we have to go toward other sources of energy such as renewables or even nuclear energy. But that’s very long term and may not happen for 50 or 100 years or more.

“In the meantime the issue is not either this or that, it’s not an either/or issue. All of the energy experts that I talk to generally come to a consensus that we need all of those forms of energy. We don’t have the luxury of not using one fuel source in favor of another.

“All of the credible analyses that I have seen say that in order to achieve any level of stabilization of CO2 in the atmosphere you need to pursue three approaches roughly in equal measure. The first is to start shifting towards less carbon intensive energy sources, not just renewables, but also sources such as nuclear energy.

“The second pathway is to become more aggressive in pursuing energy efficiency and energy conservation. And the third category is carbon capture and storage, in order to preserve fossil fuels as a viable option. The studies that I have seen generally agree that you cannot achieve climate stabilization with any one or any two of those approaches. You need to use all three, in roughly equal measure.”

Options Sarkus does have a point. Just because CCS is an ‘unproven’ technology is no reason not to pursue it. About IGCC, which the Sierra Club fact sheet describes as “as polluting as traditional coal plants,” Sarkus says, “Many people feel that IGCC, because it has a combined cycle power plant, is capable of achieving higher levels of thermal efficiency, and it also produces a gas stream that is more amenable and economical for CO2 capture and storage.”

The environmentalists’ biggest beef seems to be with the coal-burning utilities it accuses of muddying the waters by apparently promoting the concept of clean coal as if it exists today, and as if it will solve all of

our environmental problems on its own, when it’s obvious that it won’t.

It’s not surprising that companies whose main revenue comes from coal production and consumption should feel threatened by the idea that this income source could disappear. But this does not mean that we should refuse to investigate methods of burning coal in a cleaner, more efficient fashion.

It can be easy to let the debate obscure the real issues. The United States still has large, untapped coal reserves. We produce about 20 percent, or 1.1 billion tons, of the world's coal supply – second only to China – and coal generates about half of the electricity we use. It would be naïve in the extreme to suggest we can stop burning coal overnight. At the same time, our environmental situation is becoming increasingly desperate.

Perhaps clean coal, in its perfect form, does not yet exist, but neither does the technology to use renewable sources such as solar, wind and hydro to supply enough power to meet our growing energy needs. We need to pursue every avenue, and this includes developing ways to burn cleaner coal in the short term, especially if it buys us more time to develop renewable options.

The final word goes to Deputy Laboratory Director David Hill of the Idaho National Laboratory. “If we can solve the carbon sequestration problem,” he says, “particularly in the US where 50 percent of the electricity comes from coal and there are enormous coal reserves, that would be very, very important. I don’t believe we should ever strike an energy source from the list of potential options on political or other grounds. We don’t have that option left any more.” n

TYPES OF CARBON SEQUESTRATION Tom Sarkus outlines the carbon sequestration efforts currently under way at NETL errestrial sequestration refers to capturing CO2 with plants and with microorganisms that are generally present in soils. There’s definitely a place for that. If we can increase the carbon uptake of terrestrial sinks by just one percent over the next 50 years our estimate is that that could store an additional 12 billion tons of CO2.

Geologic sequestration is a larger portion of what we’re doing at NETL – injecting the CO2 into underground rock formations. It’s something that is happening now in other industries but you can draw some inferences by analogy. One of the options for geologic sequestration is enhanced oil recovery. Enhanced oil recovery using CO2 flooding is currently being used in the US, in some places on a fairly large scale.

Another kind of formation that we’re researching is saline formation because often the sedimentary rock formations that we want to target contain a brine formation far more commonly than they might contain petroleum, oil or natural gas.

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INDUSTRY INSIGHT

Leading innovation

across the energy value chain Meeting the challenges of the next era of energy and power generation. By Thierry Perchet

W

orld energy consumption is forecast to triple by 2050 – never has the need to find a new source of power and energy been greater. New materials science must also rise to the challenges of the new era of energy and power generation.

Likewise, the US is turning to wind energy, with an average growth of over 25 percent in the last two years. Since the start of modern wind energy technology, Huntsman has developed a range of adhesives for securing wind turbine blades. These include new generation nanotechnology materials based on truly submicron particles that can form bonds

“There is no single solution to the many challenges of future energy harvesting”

with dramatically improved fatigue resistance when compared to traditional solutions.

Solar heating and solar power, each with their own distinctive technologies, will also see a rapid increase in usage as we continue to seek alternative sources of energy. There will be a massive increase in solar power arrays to produce electricity from sunlight. In future, whole areas of roofing may have photovoltaic cells installed, producing a significant proportion of the energy for the building. Since 2002, the production of photovoltaic electricity has

Huntsman research and development teams in the US, Europe and China are looking at a range of creative and innovative solutions.

Recently the company won a major award for two new resin systems for graphite composite fuel cells for large-scale production of automotive and stationary power applications, which will be available in late 2009/2010.

These fuel cells have been developed in partnership with GrafTech International holdings as part of a Department of Energy sponsored program. Since the conversion of fuel to energy takes place via an electrochemical process, the process is much cleaner, quieter and up to three times more efficient than burning fuel.

Wind and sun In the area of wind energy, Huntsman predicts that the market will continue to grow extremely rapidly over the next few years. The European Union has already made the implementation of wind energy a high priority, with the aim of generating 20 percent of annual energy production from renewable sources by 2020.

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tion materials: Araldite HCEP, a hydrophobic epoxy resin for outdoor insulators, has gained market share from ceramic insulation because it enables the manufacturer to produce lighter weight insulators that are water repellent.

Insulators made of Araldite HCEP show better toughness, resulting in less damage, and they need less maintenance and provide high arc resistance.

Based on the market success of this new resin, Huntsman has developed a semi-flexible version: Araldite S-HCEP, which can be used as cost-effective housing material for composite insulators. It provides several technical advantages compared to liquid silicone rubber; for instance, it is resistant against bird and rodent attack. It has high tracking and erosion resistance and shows much less leakage of current in salt fog tests. It has currently been introduced into the worldwide T&D market.

Energy saving in lighting applications is another main trend in industry. Organic light emitting diodes (OLEDs) will become the next generation of lighting. OLEDs are large, paper-thin, flexible and lightweight devices, consuming 70 percent less energy compared to current light bulbs and providing new opportunities for design and architectural integration. Huntsman is developing the im-

Thierry Perchet is Global Energy Marketing Manager, Huntsman Advanced Materials.

He has over 25 years of experience in engineering and materials science in composites and adhesives, beginning with R&D and followed by sales and marketing.

Perchet is now responsible for all Huntsman global marketing activities in wind power and electricity management.

doubled every two years. This is an area of growth where Huntsman is actively working with partners in order to help to improve the efficiency and bring down the production costs of photovoltaic modules.

Transmission Power transmission and distribution is another segment to which Huntsman has contributed with several innovative insula-

portant encapsulation materials and barrier layers for these devices.

There is no single solution to the many challenges of future energy harvesting, but we can anticipate multiple solutions such as wind, wave, fuel cells and solar cells to see large scale commercialization on a global basis. It is certain that these new technologies will demand new materials – a challenge that we are prepared to meet.

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THE BIG INTERVIEW

A renewed sense of

optimism A changing trend of environmentally friendly attitudes is becoming a global phenomenon. As SVP of Strategy and Planning for Duke Energy, Doug Esamann is the man responsible for assigning those attitudes and determining risks, and as the rest of the world carefully watches the US energy industry attempt to take a leadership role, this is no easy task.

P

resident Obama’s pledge to become a world leader in climate change is certainly not anything new – Asia is already ahead of the US in its SUV and PHUV manufacturing, France has a huge nuclear fleet and nationwide smart metering is being formulated in the UK – and as each country begins to up the ante in energy efficiency, the US president is certainly adding extra challenges to his already extensive list.

Strategizing in the fast-paced, ever-changing energy industry requires vast amounts of meticulous planning and a small amount of risk taking. Energy institutes have been re“There are searching the growing risk of CO2 levels for many years, and 30 states or so as both private and public awareness has been steadily inthat have creasing, 2009 is the year for implementation. But as targets renewable continue to be set, both at a state and federal level, formuportfolio standards lating company strategy is critical to ensuring survival in the already in place” coming decades.

The thoughts and processes of Duke Energy have been formulated into a five-year plan, and Doug Esamann is the man responsible for that planning. “I have all the web forecasting and forward-looking projections of customer demand, as well as commodity price forecasting and coordinating the effort at the company to develop the strategic business plan, ” he explains.

The ‘fifth fuel’ Energy efficiency is the flagship of Duke Energy, who has named it their ‘fifth fuel’ concept. Increasing renewables is a major part of the company’s strategy, but as Esamann explains, the greatest strategy for saving energy isn’t in building renewable plants, but by wisely using the energy that is already being produced.

“The fifth fuel concept, is energy efficiency being a much more significant part of the resource mix. In the past, we consider the other four fuels being generated through burning coal, nuclear, gas power or renewable energy. These are the four ways in which you can actually generate electricity from those fuels.

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“What we refer to as the fifth fuel is energy efficiency and what we’re trying to do through that is to change the paradigm that exists with energy efficiency in our industry. We get return on investment from investing in power plants and that’s a good thing, but in the past, our returns on our energy efficiency programs are really not calculated in the same way. We get our money back, we get our cost back, and as a result many utility companies aren’t really positioned well from a return standpoint to invest in energy efficiency.”

Energy efficiency has been coined the ‘fifth fuel’ – placing it on a level playing field with all other sources at Duke. The initiative, ‘Save a watt’, is

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“We’ve done a lot of analysis on carbon and the implications for us, and how we want to manage carbon, and we’re certainly making efforts today to put us on a trajectory to reduce our carbon footprint.” an attempt to change the structure at the regulatory commissions so as to change the way in which energy is perceived.

“That has been a banner we’ve carried into the regulatory commissions at the various states and it’s very different than the way it’s been in the past, so it’s been a challenge to change that. The issues we’re dealing with today are in trying to change the regulatory paradigm that exists around energy efficiency,” he says.

Attitudes and trends towards energy efficiency are changing. Esamann notes the growing consciousness from Duke’s consumers regarding their environmental footprint, as well as a general understanding that energy prices are almost certain to rise.

“We’ve been in a long period of time where rates have been stable to actually declining on a real basis, and so we need to reinvest in our system,” he explains. “This will have an impact of potentially raising the cost of our product to customers and so that will drive a real desire, in addition to the environmental desires for customers to become more efficient, and we’re well positioned to do that.”

lated, and the company are developing wind fields and selling the output of wind farms to various utility operators and suppliers, due to the increase in renewable standards upon all utilities.

“There are 30 states or so that have renewable portfolio standards already in place, and so many utilities are looking for the most economic alternatives to meet those standards, and wind has been a very strong player in those marketplaces. The challenge for that wind business is that like many renewables, it’s very geography dependent, so most of the development tends to be in the areas where the wind is mapped out as the strongest, which tends to be Texas and the upper Midwest – where the best wind fields are.

So for us here in our regions, either in the Carolinas or in our Midwestern states, our wind footprints aren’t nearly as strong, but we saw an opportunity to get into the renewables business in a large way through acquisitions which created that pipeline of development for us that exists, and we’re excited as we see more pressure to develop more renewables for the United States,” says Esamann.

Hydroelectric Wind generation However, to ensure every watt is saved and efficiency maximized, Duke is also concentrating its efforts on renewable energy and is currently developing a number of wind power generation projects to add to those already operating. The wind generation business is commercial, rather than regu-

There is also a huge hydro capacity focus. Duke Energy is the second largest investor-owned hydroelectric operator in the US and uses its capabilities for the management of water resources. The company operates a dam in both North and South Carolina, which is used to create cooling lakes for its nuclear plants, as well as its coal plant. Energy generation such as

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this is worthless in times of drought, such as in 2007, and can change the way in which water is used.

“We’ve used the hydro a lot more as a way to ensure that we have correct lake levels and water levels for use of those lakes by the community, as well as for our own operations. So we haven’t put a premium on getting power from the hydro piece as much as we have in using it to manage the water resources that we have control of. At this point our expansion of that is really in very small chunks if at all, and so we really don’t see a significant opportunity to expand the hydro fleet that we have today.”

Esamann’s reason for limiting the importance of hydro within the fiveyear strategy is based upon his prediction that hydro is unlikely to have a large growth trajectory. He explains the challenges for hydro activity within the Pacific Northwest, such as fish and wildlife impacts; “I would expect it to be used more like how we’re using it, which is a way to help manage the water resources that are available to us in the communities that we’re in.”

Geographic challenges He remains realistic about the implementation of renewables and believes the federal targets of increasing renewable usage is unattainable, again pointing to the challenges of geographic dependency. “One of the issues we’ve always had as a company is that the regions we serve aren’t really that rich in renewable energy opportunities,” he says.

“The wind studies rate the quality of the wind area by geography, and if you look at the DOUG ESAMANN Southeast and the Midwestern United States where we serve our customers, it’s not a very rich environment for wind; likewise solar. You see many solar patterns in the Southwest and, to some extent, the far Southeast, so solar is a reasonable opportunity for us in the Southeast but not as good economically in the Midwestern region for us.

“We are subject to state mandates right now of renewable standards.

In North Carolina, we have to get to a three percent renewable standard by 2012. We don’t get to 12 percent in North Carolina from a required standpoint until 2018. And in Ohio, we have a standard that requires us to be at least one percent by 2012, and again we don’t get to a 12 percent requirement in Ohio until the 2020 timeframe and beyond. So that’s reflective more of how states are different in terms of their access to renewables.”

Esamann’s strategy to reach such standards is the reason why he is focusing on energy efficiency from a primarily business perspective, focusing on ROI. He hopes a fourth of the target can be met through energy efficiency initiatives – the acquisition of renewable energy certificates from places that are not delivery specific to Duke’s territory, with the other half from sources within the company’s own service territory – reiterating the challenge of geographic dependency.

He notes the limited access to renewable energy sources and the affects of this for Ohio. “The governors recognize that when they passed the legislation here they said, ‘Well, you can get some of it from elsewhere and just show us that you’ve bought the certificates and that you’re helping support

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renewable energy.’ Ohio is a little different. Ohio is really focused much more on ‘We want renewable energy in Ohio.’ And they have a fairly aggressive target long term which creates challenges in and of itself.”

“We’ve been in a long period of time where rates have been stable to actually declining on a real basis, and so we need to reinvest in our system” Esamann notes this as being the expense associated with renewables, as a pose to other alternatives, due to the circumstance of tax credits creating competition and increasing price, especially in particular areas where there is a lack of renewables, such as Ohio.

“For example, wind in Ohio is not a very highly rated environment for wind generation but you get less efficiency from the energy you get out for the investments that you make, and that makes it more expensive,” he noted. “So those things couple together to make it very challenging to try and meet some of the standards, and we work a lot on this. We work with lots of people. We put bids out in the marketplace to try to get developers to come in and it’s a pretty expensive proposition to implement all this as we sit here today and look at it.”

As the US continues its push towards a more self-sufficient state, with the advancement of technology, will it ever be possible for states to be completely independent of imports, or will those challenges be too great? Esamann thinks it’s possible, providing that the energy is sourced from the West Rockies and Texas.

Transmission Of course, there is the issue of transmission that underlines the geographic dependency challenges. Using solar and wind sources from the West is doable; it’s the transmission of it to the East that is the biggest challenge. Rather than bringing all that energy across land, Esamann predicts that more than likely the energy will remain in its current market, and instead renewable energy will be produced in the East that is geographically available.

“Our approach is in engaging our customers and essentially using distributed generation on customer premises as a way to distribute these resources throughout our system, and we think that makes a lot of sense. You have to get the right relationship and economic terms negotiated with your customers and in certain cases, most cases, you have to get regulatory commissions to allow you to do that and because it’s more expensive, some regulatory commissions aren’t always happy to approve those kinds of plans,” says Esamann.

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Smart grid In order to make efficient Duke’s own transmission infrastructure, the company has begun deployment of its smart grid project, using technology to capably deal with their customers more closely and respond to the real time information on the system. David Mohler, Chief Technology Officer at Duke, has been configuring what is technologically feasible for the last few years, and ran a number of pilot tests before compiling a business plan with which to begin rolling out a large-scale deployment.

“We really started to get excited about the possibilities that the smart grid brings. It’s not automated metering – that’s only a part of it; the real value of it is the ability to get access to a lot more information. We don’t necessarily want to handle a lot of information but we want to be able to use it to better manage our system, to be more proactive about seeing failures in the system and reacting to them before the failure actually happens.

“We want to get consumer usage information so that we can work with consumers and allow them to get access to different value-added services that help them manage their energy cost and usage. We’re all about selling more energy, selling more kilowatt-hours – we’re a volume business. But we see an opportunity in the future through smart grid to actually become much more active, working with customers in trying to manage their energy costs and their energy usage in a much more efficient way.”

Duke currently has approval in the state of Ohio and is moving ahead with full deployment, a plan consisting of three to four years and resulting in full smart grid implementation. In Indiana, deployment is in hearing stages, and following lengthy discussions, the outcome looks set to be more than positive. North and South Carolina is continuing forward but at a much slower pace, due to some of the technology previously placed in North Carolina. Esamann notes the automated meter reading that was initially installed as a cause for slowing up the development, and as a result is now working closely to deploy the project.

“We really feel that this is a great way to improve reliability, to give opportunities for customers to be more engaged with us in terms of managing their energy and as prices go up, as environmental consciousness and awareness continues with customers, they will be seeking out our help on these things,” he says.

The future looks promising for Duke Energy. Esamann explains that the next two to three years is heavily focused on tackling those environmental issues currently dominating utility targets and the world’s press. “We really want to keep the priority on getting energy efficiency – getting the regulatory regimes right, pushing out new programs to our customers.

“We see a huge demand on the part of our customers for new products and so we want to keep working that issue and finding success in rolling out those products. We’ve got a couple of states where we’re scaling full deployment with smart grid, and with the technology we now have, this is enabled with a lot more energy efficiency So those are real focal points for us,” he adds.

Making renewable energy a reality is the underlining of Esamann’s strategy, although this is no easy task. The work of renewable suppliers is challenged by the promise of tax equity investors to fund the projects partnered with utility companies. The current global recession

SAVE A WATT Duke Energy’s approach reflects a new way of thinking about energy efficiency. It recognizes energy efficiency as the ‘fifth fuel’ – complementing coal, nuclear, natural gas and renewable energy. These are all part of the overall portfolio for meeting customers’ growing need for electricity. The fifth fuel will help customers meet their energy needs with less electricity, lower costs and reduce environmental impact.

Five programs are proposed for residential customers and three are proposed for the large industrial and commercial segment.

Additionally, Duke is recommending five pilot programs before expanding to more customers: • Residential energy assessments – including mail-in and online analysis and onsite energy audits • Smart $aver – including incentives to install compact fluorescent light bulbs and high-efficiency home heating and cooling systems • Low income services – assistance in purchasing energy efficient equipment and home weatherization • Energy efficiency education program for schools – including incentives for students performing online energy audit of their home • Power manager – monthly credits in exchange for Duke to cycle home’s air conditioning during peak demand

adds to this difficulty of financing their products, and so Duke is embracing the opportunity to form new partnerships and support those suppliers in the renewable sphere.

“We also want to move forward with the carbon strategy,” says Esamann. “We’ve done a lot of analysis on carbon and the implications for us, and how we want to manage carbon, and we’re certainly making efforts today to put us on a trajectory to reduce our carbon footprint. But we want to keep working on a more robust strategy and part of that will be dependent upon seeing legislation and what gets included in there, as well as what things will count towards things like offsets and that type of stuff.

“We’ve also been working a lot on nuclear and bringing it closer to fruition.

We have a site and have been working through the nuclear process here at the NRC and trying to get our permits. We need to go through the regulatory process in our states. But two to three years from now, we’d like to be in construction mode on a nuclear plant, but we need to keep working and clearing hurdles to make that happen.

“If you lay on top of that we still want to educate customers and other folks about their energy usage and what they can do. Transparency is always helpful to enabling those things to happen,” Esamann concludes.

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EXECUTIVE INTERVIEW

Commodity STP: clearing, transparency, control What began as a banking crisis has changed the capital markets and shaken energy commodity markets as well. P&E asked Sharon Fortmeyer-Selan of SunGard Energy Solutions about the trends emerging from the crisis, and what tools can help to address them.

How is the global financial crisis impacting commodity transactions and what trends do you see emerging as a result of this?

Sharon Fortmeyer-Selan. Barely two years ago, we heralded the hedge funds and financial institutions for the liquidity they brought to commodity markets. The widespread financial crisis has dampened this liquidity as some participants retrenched or withdrew from commodities markets. More significantly, it has brought extreme volatility and fueled deep concern, some might even say fear, about counterparty risk.

These impacts are in turn giving rise to several key themes or trends. One trend is a significant shift of volumes of over-the-counter (OTC) trades to exchange-backed clearing or clearing houses. Another is a trend toward independent validation of positions and books which translates into an increased need for price and valuation transparency. A third trend is toward tighter internal controls and increased regulatory oversight.

How will the shift to cleared trades impact processes and systems?

SFS. Clearing requires a sufficient number of participants and liquidity to work. Nymex introduced its clearing platform and began offering OTC cleared products in 2002. Since then, the number of OTC products Nymex offers has grown to over 600. One element of achieving this is to develop standardized products and an efficient way to price and settle them. To handle the complexities of more exotic trades, we will need to implement new processes for price discovery and upgrade technology to support the unique characteristics of these trades.

Systems like SunGard’s Aligne that incorporate grid-technology, service-oriented architectures, configuration flexibility and scalable performance provide a platform for clearing OTC trades. Today’s ability to connect and settle directly with exchanges like Nymex and ICE and clearing houses will be complemented by the

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Sharon Fortmeyer-Selan is Senior Vice President, Marketing for SunGard Energy Solutions. She brings over 25 years of experience in software solutions marketing to her role. Fortmeyer-Selan has served as Chief Marketing Officer for several start-up software companies and held leadership positions in solutions marketing for Compaq, AT&T, and NCR specializing in transaction processing, business intelligence and emerging technologies.

ability to present an aggregated view of the data across transactions and operations for immediate decision-making.

What is the best way for businesses to achieve transparency and control?

SFS. Speed and accessibility of reliable, timely market data is a key success factor for commodity traders and other market participants.

Aggregating price, volume and other key transaction data from multiple sources including exchanges, pools, counterparties and partners and applying analytics against the results enables transparency. The automated capture of data from the exchange cleared transactions in conjunction with clearly defined processes for price discovery helps support the requirement for transparency. Increasingly available with low latency, this data enables more immediate decision-making.

Defining and documenting transaction processes from deal capture to expiration is a critical element of controls. Establishing the rules based on roles, risk tolerances, or other parameters, monitoring adherence to them, and setting alert thresholds is also key. Automating the associated process workflow strengthens and streamlines the controls.

How can technology help address these challenges?

SFS. Automating the flow of information from the initial transaction initiation through to its execution and expiration helps to remove the human element of operational risk. This seamless information flow provides straight-through processing that may be facilitated by workflow automation tools for greater accuracy and speed. Service-oriented architectures with enterprise messaging and business process automation are foundational technologies to enable the transparency, controls, and agility needed to navigate challenging business environments.

Standardized contracts and processes, realtime transactions, accurate market data and configurable risk toolkits combine with direct market and exchange clearing to help commodity market participants rise above economic challenges. SunGard’s Aligne provides an advanced set of risk assessment and risk management tools designed specifically for energy traders, risk managers and credit officers, to help them measure and manage a number of key energy exposures. Aligne delivers these capabilities through one fully integrated solution suite, deployed and supported by one collaborative team of experts.

“Prices are escalating, transactions are occurring faster, data is being exchanged faster… We had to automate to keep ahead with the industry and one of our most crucial steps was to bring in SunGard’s Aligne Trading and Risk.”

George Sladoje, CEO & Chairman North American Energy Credit and Clearing Corp (NECC)

solutions for energy

Physical Power Challenged?

As a power market participant are you: » Securing the best transaction terms available? » Accurately anticipating physical transmission capacity? » Meeting contractual obligations in physical markets?

SunGard’s power operations solutions compile, analyze, and manage high volumes of transactions and distribution information to help you gain the flexibility needed to respond to electricity market changes.

Electricity providers, schedulers, suppliers and others working in the interconnected electricity grid also rely on SunGard’s solutions to help them manage the related fuels costs, logistics, and environmental regulations.

SunGard Solutions help over 200 major energy industry participants across North America and Europe, including utilities, power generation companies, energy traders and marketers, to more efficiently and profitably trade and market energy, process transactions, and manage risk.

For more information email us at energy-marketing@sungard.com, or call: North America + 1 888 296 1906 Europe: + 44 (0) 20 8081 2000 India: + 91 20 6624 8000 Asia/Pacific: + 65 6416 9790

©2009 SunGard.

www.sungard.com/energy

trademark information: sungard and the sungard logo are trademarks or registered trademarks of sungard Data systems inc. or its subsidiaries in the u.s. and other countries. All other trade names are trademarks or registered trademarks of their respective holders.

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RENEWABLES

B

rad Collins believes that two of the major challenges we are currently facing across the world – global warming and the recession – can be tackled with the same weapon. The solution, he says, is the broad deployment of energy efficiency. “This is the lowhanging fruit in terms of reduction of carbon, and the replacement of energy sources with less carbon energy sources.

Almost exclusively we would endorse renewable energy technology – including wind power, solar power, hydropower, wave power, biomass and biofuels.”

It makes sense that Collins would say that. As Executive Director of the American Solar Energy Society, he oversees 13,000 professionals in the science and research area of renewable energy technologies, energy efficiency and green buildings. In pursuit of its mission to help transition the US to a sustainable energy future using a broad range of renewable energy sources – not just the sun – the society provides advice to everyone from members of the public to the new administration in Washington.

“Since before the election, with all of the presidential candidates, and after the election as well with the transition team, we have been providing some of the public documents that we have prepared over the last several years that are policy related to this mission,” Collins explains.

“We have documents that deal with the interconnection between climate change and the solutions, which we consider to be broad deployments of energy efficiency and renewable energy technologies.

We provided the transition team with information about the breadth and scope and forecast potential of green-collar jobs. And we consider the largest threat currently facing the world population is global climate change. The second largest threat is the economic downturn, and the need to transition to a more sustainable economy.

“We are not necessarily the spokespeople or the people who are advocating publicly for these policies, but when you look deeply into their positions, what you discover is that they cite our work, or they base their policy recommendations on work that we have accomplished over the last numbers of years.”

Going green One of the big questions currently circulating in the energy sector relates to President Obama’s proposal to create fi ve million greencollar jobs as part of his environment initiative. There are those who have said that such a proposal is not feasible, but Collins disagrees.

“We would strongly endorse the potential that this is feasible,” he says. “The stimulus package and the budget that President Obama released are moving precisely in the right direction, and that direction is to create incentives for workforce development in the green collar arena.”

Collins goes on to describe a case in point. “One of the administration’s goals is to increase weatherization: taking buildings that are not as efficient when they were constructed and bringing them up to a higher energy standard. For example, this would involve the replacement of windows, increasing insulation, preparing areas that have air infiltration for caulking and then caulking them, and putting in more efficient furnaces air-conditioning.

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SPECIAL FEATURE

B

rad Collins believes that two of the major challenges we are currently facing across the world – global warming and the recession – can be tackled with the same weapon. The solution, he says, is the broad deployment of energy efficiency. “This is the lowhanging fruit in terms of reduction of carbon, and the replacement of energy sources with less carbon energy sources.

Almost exclusively we would endorse renewable energy technology – including wind power, solar power, hydropower, wave power, biomass and biofuels.”

It makes sense that Collins would say that. As Executive Director of the American Solar Energy Society, he oversees 13,000 professionals in the science and research area of renewable energy technologies, energy efficiency and green buildings. In pursuit of its mission to help transition the US to a sustainable energy future using a broad range of renewable energy sources – not just the sun – the society provides advice to everyone from members of the public to the new administration in Washington.

“Since before the election, with all of the presidential candidates, and after the election as well with the transition team, we have been providing some of the public documents that we have prepared over the last several years that are policy related to this mission,” Collins explains.

“We have documents that deal with the interconnection between climate change and the solutions, which we consider to be broad deployments of energy efficiency and renewable energy technologies.

We provided the transition team with information about the breadth and scope and forecast potential of green-collar jobs. And we consider the largest threat currently facing the world population is global climate change. The second largest threat is the economic downturn, and the need to transition to a more sustainable economy.

“We are not necessarily the spokespeople or the people who are advocating publicly for these policies, but when you look deeply into their positions, what you discover is that they cite our work, or they base their policy recommendations on work that we have accomplished over the last numbers of years.”

Going green One of the big questions currently circulating in the energy sector relates to President Obama’s proposal to create fi ve million greencollar jobs as part of his environment initiative. There are those who have said that such a proposal is not feasible, but Collins disagrees.

“We would strongly endorse the potential that this is feasible,” he says. “The stimulus package and the budget that President Obama released are moving precisely in the right direction, and that direction is to create incentives for workforce development in the green collar arena.”

Collins goes on to describe a case in point. “One of the administration’s goals is to increase weatherization: taking buildings that are not as efficient when they were constructed and bringing them up to a higher energy standard. For example, this would involve the replacement of windows, increasing insulation, preparing areas that have air infiltration for caulking and then caulking them, and putting in more efficient furnaces air-conditioning.

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When the

stars align

Brad Collins on why the American Solar Energy Society’s time has finally come.

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“Weatherization will create massive amounts of jobs. It will raise the building stock performance in the United States, which will lower our carbon footprint because it will use less energy. The time frame for how long this energy efficiency upgrade or weatherization will last is decades.

“Buildings tend to last 50-plus years. If you improve the performance of a building built in, say, 1980, and it now has another 30 years of expected life, you have 30 more years of lower carbon for that one building than you would if you did nothing. You have also created an employment opportunity that’s not outsourcable, and it’s an employment opportunity that generally exists in the urban centers of our cities, where we have the highest unemployment.

“So it’s a whole variety of winning solutions all accomplished with the same targeted goal: let’s create jobs in the weatherization industry. Like many of the other stimulus package and budget targets that have been proposed by the administration and signed into law, these are going to help us solve those twin challenges – global warming and a need to rejump or reboot the economy, but reboot the economy with a new vision as to what we want it to look like. What we want it to look like is more efficient, more sustainable and preparing the workforce for the 21st century.”

The society’s work has shown that there are currently nine million people in the United States employed in the green-collar economy, creating revenue of more than $1 trillion in 2007. This is more than ExxonMobil, GM and Wal-Mart combined. But as Collins points out, we have to be careful that we are comparing apples to apples.

“One of our biggest challenges was to become very explicit and transparent in what we define as a green-collar job, and fundamentally those are energy-efficiency and renewable energy jobs. Energy-efficiency jobs are defined as jobs that are in recycle/reuse/remanufacturing; jobs that are in the energy services sector, which would be weatherization; and jobs that are producing or manufacturing products that are at least 30 percent more efficient than the standard.

“So an automobile that gets 30 percent better gas mileage than the fleet average is an energy-efficient automobile by our definition, and all of the jobs related to that automobile are part of the green economy. Likewise, if you have building windows, for instance, w

SoLAr HiStory tiMeLine 1905 Albert Einstein publishes his paper on the photoelectric effect, along with a paper on his theory of relativity.

that are 30 percent more efficient than the standard window, then that whole production process is a green-collar job.

“As the average efficiencies improve, how many people in that green-collar part of the economy and what companies qualify go up too because the bar is raised.”

“For 55 years we’ve been waiting for the stars to align, and all of the sudden we are scrambling to try to manage what the implications are for us to be proactive in helping the country” Single solution The society’s forecasts predict that if aggressive deployment of tax-supported, job-creating incentives in the green-collar arena becomes a national priority, then by 2030 the United States could have more than 37 million people working in the green economy. This would equal between 17 and 18 percent of the total employment of the country, creating $4.5 trillion in annual revenue.

According to Collins, those statistics help support the notion that the solution to our global warming challenge and to rebuilding our economy are the same. He believes that now the challenge is to support those in public office with data and well thought-out strategies on how to get there.

“We’ve discovered from work we did on green-collar employment in various states that there are three necessary requirements that must be in place in order to motivate the markets and create the solution. The first of these is to create a local market through, in some cases, incentive programs. The market has to be outside the manufacturers’ door. You can’t create a manufacturing entity in one state and sell it easily 10 states away or overseas. To jumpstart the green economy, you have to create a ready market in the same area.

“The second thing you have to do is put in place incentives for the establishment of the manufacturing distribution and servicing industries for those technologies; whether it’s weatherization, recycling, deployment of solar on buildings or wind farms. You have to create the incentives that are going to attract capital into that part of the economy.

“And third and foremost, the difference between success and failure, comparing one state versus another, is

1964 NASA launches the first Nimbus spacecraft—a satellite powered by a 470-watt photovoltaic array.

1954 Photovoltaic technology is born in the United States when Daryl Chapin, Calvin Fuller and Gerald Pearson develop the first solar cell capable of generating enough power from the sun to run everyday electrical equipment.

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today.’ In other words, for the first time we are able to respond to the earnest interest of our long-standing members to be more and more aggressive in our advocacy, and that’s great.”

new or old?

executive leadership. The executive has to take a role in promoting the vision of a new energy economy based upon renewable and energy efficiency. And what we see in the Obama administration is clearly economy leadership.”

Collins is convinced that we already have some of the ingredients in place to have a ready market here in the United States. He points out that there is talk of a federal renewable portfolio standard, and incentives are being put in place to attract and maintain and grow businesses in the renewable, energy efficiency sector. Combine this with executive leadership from the President and from Congress on moving swiftly toward a more sustainable energy economy, and it seems the society’s time has finally come.

“In one sense, for 55 years we’ve been waiting for the stars to align,” Collins says. “Then all of the sudden, lo and behold, we are scrambling to try to manage the alignment of these stars and what it means – what the implications are for us to be proactive in helping the country to meet our mission and therefore to help us reduce atmosphere carbon and to help us jumpstart our economy.

“It’s very gratifying, and more so to the member who comes to me and says, ‘I’ve been in this society for 40 years and this is finally happening. And now that I’m 85 years old, we’ve got to make this happen, and I want you to be even more aggressive tomorrow than you were

1969 A solar furnace is constructed in Odeillo, France; it features an eightstory parabolic mirror.

There has been comment from quarters that many so-called green jobs are not new jobs, but just existing jobs given a shiny new name – taking jobs from one industry and group and moving them to another.

Collins says the answer to this criticism is complicated.

“There are two things need to be understood. One is in the green economy, many of the jobs are not, per se, specifically green jobs. If you have a manufacturing plant that builds wind machines, in that plant you have people who are highly trained and have expertise in wind engineering and in the design and fabrication of fiberglass. But most of the jobs in that factory are your accountant, your secretary, your truck driver, your warehouse manager, your facilities manager, your attorney.

“These are jobs that could be in any industry. The fact that they happen to be in the green economy is only an artifact of the fact that the end product is a green product. But the job training and the job description is the same, whether you’re building widgets or windmills.

“And so, in a sense, you will have a lot of people transitioning out of jobs in, for instance, the automobile glass manufacturing world into the flat plate solar collector manufacturing world because some of the skill sets are identical. This means you’re going to have a transfer of employment from, quote, ‘the automobile industry’, into the green economy.”

Collins says the question of how many of these are new jobs is a question of how fast we can grow the green economy in order to have additional employment. He sees the green part of the economy expanding over the next dozen years and some of the older parts of the US economy shrinking, although the society does not have, nor does he believe anyone has, a good set of data on how that balance is going to work out. It’s difficult to say whether at the end of the day there will be X number more jobs now in the economy than there were when the transition began.”

“Our position is that we need to move in this direction regardless of the pain and suffering that might be necessary in the transition,” he

1982 1981

1990

Australian Hans Tholstrup the first solarPaul MacCready builds thedrives first solar-powered powered car ‘The Achiever’ almost aircraft ‘The SolarQuiet Challenger’ and flies it2800 from miles between Sydney and the Perth in 20 Channel. days.

France to England across English

The solar-powered airplane Sunseeker successfully flies across the US, piloted by Eric Raymond.

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“A case in point might be if a person wants to buy a house and as part of their mortgage they want to put solar on that house. The calculation that is normally used to allow them to qualify for the principal, interest, taxes and insurance should also include utilities because their utility bill, for the life of their house and for the life of their mortgage, certainly, will be substantially less than that of the house across the street.

“So the qualification should be different because the calculation incentive must be included – for instance, if the amount of their mortgage should be no greater than 32 percent of their take-home pay, this is different if you don’t have to save the other 78 percent of your Sourcing renewables take-home to pay enormous utility bills.”

President Obama’s plan also talks Collins believes that you can have “57 percent of carbon reductions about generating 10 percent of our electriccreative financing that takes into account ity from renewable sources by 2012, which in the uS by 2030 will come from the long-term value of the establishment Collins believes is doable, although he energy efficiency, and 43 percent of these technologies for the homeowner acknowledges that it will be an enormous will come from renewables” or for the utility or for the business owner. manufacturing challenge, made even more “That creative financing should be an difficult by the tight credit markets. honest evaluation of the reality of how The state of the credit markets affects the ability of manufacturthe purchase of this long-term power plant, that somebody’s putting ers to ramp up their production scale to meet this sort of target – to go on their building, can help free up the market mechanisms which can to the financial markets and say, ‘I need to borrow $2 billion to build help drive this market in order to ramp up to 10 percent of our electricthree plants. One will produce windmills, one’s going to produce solar ity by 2012. It is doable. It is a very steep hill. It would be a very steep for houses, and one’s going to produce utility-scale solar plants.’ hill even if there was no credit crisis.

On the other end of that equation, Collins says, the purchasers of “Here’s an example. At the beginning of World War II, the United those technologies also have difficulty going to the financial markets States did not build heavy trucks or jeeps. In Detroit, it took them and saying, ‘I want to borrow $500,000 because I want to put a megaless than a year to take the manufacturing processes of the US auto watt of solar panels on top of my manufacturing building.’ industry and revise it to produce nothing but heavy trucks, tanks and “It is indeed doable, but there are some very serious challenges jeeps. If you have as a national goal to do something, and it is a shared that have to be overcome. Resolving the credit markets is one, probvision of the country and it is a commitment that the public and private ably first and foremost. It will help free up the revenue needed in order sectors are willing to make, enormous changes can occur. to upgrade the manufacturing quantity for these types of technolo“We hope – desperately hope – that the driver for this sort of gies and allow homeowners and the business owners to borrow the change in this country comes not from increasingly dire projections money to purchase these technologies. This has to be understood as to what’s happening to our climate, but from a more and more enwithin the context of the purchaser of those technologies – their paylightened vision about the prudence of a solution of the deployment of back is many, many years, but their cost is all upfront. energy efficiency and renewable energy. Then we’ll all be happy.”

“Some of the ways that these targets can become more likely to occur is if the leaders of this country can come up with reasonable solutions reliability to overcome that credit crisis. One of them, for instance, that we have One of the questions frequently raised about a greater dependence proposed for years, is that there be a special mortgage mechanism or boron renewable sources of energy is reliability. According to Collins, this rowing mechanism where the borrowing is used for green technology. is at one level the Holy Grail – the, ‘How can we be totally independent

emphasizes. “Because the threat of global warming is so enormous, and jumpstarting of our economy is so critical, that this is a transition that we must commit to.

“The challenge is going to be to manage it for the least amount of pain – this is the challenge whenever there’s an economic transition.

There will be dislocations and there will be winners and losers in that transition. It is our perspective that it’s the role of government to mitigate that to the best of its ability. In the context of massive government spending, there is greater opportunity for that mitigation than if this was done without it.

1999 Construction is completed on 4 Times Square in New York. It has more energy-efficient features than any other commercial skyscraper and includes building-integrated photovoltaic (BIPV) panels on the 37th through the 43rd floors on the south- and west-facing facades to produce part of the building’s power.

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2004 NASA’s solar-powered Mars Exploration Rover Mission.

Lands successfully on Mars on 4 January 2004 and has just had its fourth birthday and continues to meet its objectives.

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Green trAnSMiSSion of fossil fuel?’ question. He says the answer is we can be there, although it would require a number of interrelated uses of renewable energy and the transmission of that energy.

For example, if the best wind resources in the United States are in the Midwest, then how do you get the energy from the middle of the country to where the load centers or the population are, which is on both coasts?

Collins’ answer is to have the commitment to build a very robust green transmission system Wind that takes the wind power from the middle of the country and move it to where it’s needed.

Solar “And likewise, if the best resource for utility-scale solar energy deployment is the Southwest, how do you get that energy from Geothermal proposed transmission of renewable energy Arizona to Chicago, or from the Southwest to New England or to New York? It all requires a very smart green transmission system that is able to manage the flows of energy from one part of the country where “And if you have an area that has a need for heating, then generthe resource may be active at this hour to another part of the country ally when it’s cold, you can mitigate the need for the load by doing where the resource may be active next hour. even more energy efficiency measures. For example, by installing “It creates a smart grid with green transmission that’s able to anticvariable speed air handlers, more insulation, better windows, better ipate and transfer those green electrons from where they’re produced window coverings, better air lock systems and the like.” to where they’re needed. It is very possible to do this using two things, a It’s obviously a complicated mix of both reducing the demand very smart green transmission grid that is robust, that is intelligent, and and applying the right renewable technology to meet the profile of that is predictable, so that you know what the weather’s going to be an the need. But Collins says that fundamental to all of this is the need hour from now for wind resources, for hydropower or for solar power. for storage, and the storage will come in terms of molten salts for util“And then you have to deal with the whole issue of storage. Stority scale solar, where you heat up thermal oil to a high temperature, age is the key. In our existing energy distribution system, we have sevabout 600 or 800 degrees, and run it through a very large container eral types of generation. We have what’s called base load generation that heats up a salt that turns into a heat source. that runs 24 hours a day. This produces the same amount of electricity As the piping goes through it, even if there’s no sunshine, it allows all the time. It could be a coal plant or a nuclear plant, producing the enough energy to be put back in that oil that it can produce steam. You same amount of energy day in, day out. have somewhere in the neighborhood of half an hour just in the piping “Then we have plants that are what we call peakers, and these are in a solar field, so that if a cloud goes over a solar field, it doesn’t lose turned on during the time of the day when you need more energy than its energy, even if it has no storage. the base load produces. In the summer, it might be an air-conditioning “You can also pump air into caverns,” Collins explains, “and have load. So at noon or thereabouts, the peakers turn on and provide this what is called pumped air storage, and later you can use that air to extra energy to run all the air-conditioning for the next eight hours, turn a turbine to create electricity. You can use hydropower, when it’s and then the peakers turn off and you go back to the base load. And not used, to pump water back into a higher dam somewhere that you then you have standby spinning reserves that are used if you have can then recycle the water by having pumped storage.” something that the base load and the peakers can’t accomplish.

“It’s a fairly complicated system. The solution, from our perspecSmart load tive, is to correlate the loads with the resource. In other words, if the In Collins’ view, we have the ability to solve the base load chalload is air-conditioning – you need air-conditioning when it is hot. And lenge by using three measures: a smart transmission grid, storage when it’s hot, the sun is shining. In those areas where the load is going systems, and being smart about when we use electricity. If you need to peak because of air-conditioning, you install a lot to use electricity to wash and dry clothes, if you wash and dry clothes of solar energy because they’re at 10 o’clock at night when you don’t have the air-conditioning load going to be in parallel. The going on, it makes a lot of sense. And you need to have market signals load for the airto change consumer behavior in order to help us become more energy conditioning literate consumers. will follow the “If everybody comes home from work and the first thing they do sunshine. is turn up the air-conditioning, turn on the TV, run the dishwasher, get

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ready to run the laundry, you put this demand on the system and the system has to turn on expensive and, in many cases, dirty plants in order to meet that demand for electricity.

“But if you’re a smart consumer, when you get up in the morning, you plan out when things are going to happen, and what we will see in the course of the next several years is cost signals becoming large behavior modifiers for the public. This will come through a system of smart grids, where your home will have a little device on it that will tell you how much energy you’re using.

“We will become more and more energy literate as we become more and more in tune with how our behaviors are affecting our utility bills and our carbon footprints. In our business, it’s called the Prius effect, where someone who drives a Prius, like I do, is always conscious of how many miles per gallon they’re getting. It modifies the way you drive. It’s an instant feedback. And so you don’t do jackrabbit starts. You turn on the battery charger when you’re going down long hills. You try to maximize your miles per gallon.

“You can also pump air into caverns and later you can use that air to turn a turbine to create electricity” “The same is true when people purchase and install solar on their houses. It was intuitive for years that people would first and foremost work to make their home energy efficient before they would go out and spend money to put solar electricity systems on their house. What’s happened, in fact, is that many people have gone out and purchased solar electric systems for their house. First they see how much energy they’re producing, then they see how much energy they’re using. And then they say, ‘I wonder if I could use less energy.’”

Collins says that the Prius effect has to be synonymous with those who are energy producers in their own houses or their own buildings. They take a closer look at their buildings and say, ‘What if I replace my windows?’ Or they buy devices that calculate how much energy their refrigerator, freezer or hot water heater is using. They calculate the best next step they can take to reduce the amount of energy they use.

It then becomes a self-fulfilling and supportive environment for people to become more and more and more energy efficient in their activities, and Collins emphasizes that if you multiply that by the entire building stock, or by a large fraction of the building stock, that’s how solar energy, renewable energy technologies and energy efficiency can become a reliable source, because we’re doing the most important part and that’s reducing our demand.

The society’s studies show that 57 percent of carbon reductions in the United States by 2030 will come from energy efficiency, and 43 percent will come from renewables.

What Collins has found most fascinating is that we’ve always thought that energy efficiency is the first step and deployment of renewables is the second step. Instead, what the society has found is that people are buying solar systems and then discovering what the next step for them is to replace their air conditioners or buy only

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More opportunity Brad Collins on the green economy In terms of solving unemployment during the economic recession, the opportunity for entrepreneurial businesses to grow in a green economy is substantially greater than in traditional energy economies.

This is because the human resource fraction of the business is greater in renewable energy than it is in oil and gas. Oil and gas has a very high employment per dollar spent in the drilling part of an operation – establishing the field part of an operation, determining if it’s an oil field or a natural gas field. But once that’s been established, it runs with very few employees. The interesting part of that, at least to me, is that if the goal of a government is more employment, this becomes a no-brainer. You put your dollars into expanding utility-scale renewable energy technologies as opposed to trying to build more coal plants or more natural gas electric plants or producing oil.

Many states are resource exporters, meaning that they take a resource from, for instance, the state of Colorado, and much of the benefit of that operation inures to another state so that the revenue goes to the home office, which isn’t necessarily in the state of Colorado.

If you’re a government official, what you would say is, “If I were to build wind farms in Colorado where we have a wind manufacturing plant, not only is the employment and the related tax revenue for that employment and the spending multiplier for our economy related to employment here in Colorado and will stay in Colorado, but the net corporate revenues stay in Colorado and are used to help grow the economy.”

From a strictly fiscal view, you get a bigger bang for your buck if you support the establishment of incentives and markets for renewable energy in your state than you do if you continue to support business as usual with such things as natural gas development.

Energy Star appliances or replace their furnaces with ones that are more efficient.

“They see the results and then they get the Prius effect. And the beauty of all of that is the technologies continually advance, so as they make these energy efficiency upgrades, they’re getting better and better and better products each and every iteration.” n

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SMART GRID

WE BUILT THIS CITY Imagine if you could plan your electricity usage to take advantage of cheaper rates and increase efficiency while using cleaner sources of energy.

That dream is coming true in the Smart Grid City of Boulder, Colorado, thanks to Xcel Energy. Marie Shields gets the scoop from CIO Mike Carlson.

T

hanks to its Smart Grid City project in Boulder, Colorado, Xcel Energy is helping to make the intelligent power grid a reality. But before delving into the specifics of the project, let’s go back to basics – the meaning of the term ‘smart grid’ itself.

The more people you talk to about smart grid, the more you realize how many different definitions there are. Some people hang the definition solely on smart metering, while others take a broad approach. Xcel Energy is one of the latter, as CIO Mike Carlson explains: “There are all kinds of different definitions, but the way we look at it is the horizontal integration of the entire energy path from generation through consumption, with the use of advanced

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communication and control technologies to optimize energy production, transport and consumption.”

Carlson is particularly insistent that the concepts of ‘smart grid’ and ‘smart meter’ are not synonymous: “We have held the belief for a very long time that a smart meter is not a smart grid. It’s not the definition of a grid in its entirety; the meter is one component of it. A smart meter does help the utility automate its billing and maybe some of its analytics processes.

“But the meter is a secondary component of a smart grid. If we’ll allow ourselves to look into the future, I think we should be questioning whether a meter is part of the puzzle at all. That’s not to say that you don’t have to measure your electric consumption in some way, shape or form. But do you need a meter to do it? A meter is an archaic device that at the end of the day only serves to measure. It can’t control. It can provide information, albeit not by itself. We need to ask ourselves, are there other, more efficient, effective and less expensive ways to accomplish those tasks?”

Carlson says that if the industry is smart, it will build a grid with foundation optionality that gives short-term benefits today, and the long-term opportunity to naturally expand. From his point of view, there is a big risk in building something that then has to be ripped out and built again.

“Once you make the investment you’re almost required to run the course of that investment before you change it,” he explains. “The risk of this is to not get so far ahead of ourselves that we miscalculate and island an investment that can’t be leveraged to the next iterative expansion point of smart grid.

“That probably describes one of my biggest concerns about the investment in AMI. It’s a huge cost that could become an island investment five years from now, because it can only provide X amount of capability,

and because of the cost and complexity and time to deploy. This might limit you from being able to go to the next iterative level of opportunity.”

Defining the possibilities However you define it, smart grid seems certain to bring benefits to both consumers and utilities. “Short-term you’re probably looking at the smart grid giving benefits to the utility back-office function,” explains Carlson. “This is what we’re finding out in Boulder both in terms of what’s possible and what’s feasible. These are things that are very non-evident to our customers, such as a more effective use of our resources, better dispatch of our crews, avoiding outages through better monitoring and detection and extending our asset life because we’re avoiding breakage.

“It will take some time for the data to prove this, but we believe that by better managing and balancing the grid we will see reduced line loss and improved efficiencies in the way the system operates.

These are things that will manifest themselves in cost avoidance into the future, and a couple of percent in cost avoidance can show up in real dollars in savings to our customers.”

Carlson believes that one of smart grid’s big initial benefits is that it’s fueling what he calls energy transparency to the customer. He says that this is where smart meters will provide value: smart grid will be a catalyst for driving energy information and transparency about energy consumption to Xcel Energy’s customer base.

“Short term, I’m not a big fan of providing information just to say it’s out there,” he emphasizes. “It will drive some education to our customers about what their consumption is and why their consumption is the way it is and what options they’ve got to start considering different ways to better impact and improve that energy consumption profile.

SMART GRID CITY Xcel Energy’s Smart Grid Consortium is working towards a future when the energy grid can predict its problems and strengths while optimizing available resources. The Consortium has announced plans to build Smart Grid City, a community that combines traditional and emerging technology to move the energy grid into the digital age. This next-generation grid will allow customers and utilities to collaboratively manage power generation, delivery and energy consumption. Smart Grid City will boast a fully inter-connected energy system capable of managing the various parts of the grid involved in producing power and delivering it to consumers.

Key components of Smart Grid City include: • A dynamic system rich in information technology • High-speed, real-time, two-way communications • Sensors throughout the grid enabling rapid diagnosis and corrections • Decision-making data and support for peak efficiency • Distributed generation technologies (such as wind turbines, solar panel, and plug-in hybrid electric vehicles) • Automated smart substations • In-home energy control devices • Automated home energy use

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meters into Boulder so we could measure the incremental impact of them, and then advanced in-home devices.

“Phase II then becomes finishing the rest of the city with advanced communications capability, but spreading out those monitoring meters and homes: instead of having a concentrated feeder and substation you’ve 10 percent penetration. The reason we’re doing that is to compare the benefits versus the cost of having everybody on an identical system, as opposed to having a portion of the city on those advanced capabilities.

“Phase III in that model was described as the software integration of all of the different points along the system from generation to consumption and the software analytics and decision point controls that would be put in against all that monitoring and capability.”

Carlson describes the alternative way of looking at it as phase I being the establishment of infrastructure: communications, monitoring, measurement and control. Phase II is customer engagement: automated home response, information portals, demand response programs. And phase III is the quantification and evaluation of the investment that was made.

The birth of an idea

At the time of interview, Michael Carlson was Vice President and Chief Information Officer for Xcel Energy. He recently left Xcel to take up an executive position with GridPoint.

Some will look solely at costs, while others will look at emissions or environment – everybody’s got their drivers.

“I’m a big proponent of moving the system from load following to load balancing or demand management, but I do acknowledge that it’s going to be long term in its acceptance. Unfortunately, in the way people look at it today, they take that as the energy company controlling when and why they use electricity. And I would rather have it articulated that the energy company is going to provide information and technology to the customer so that they can participate in load management with us, as opposed to just be the recipient of it.”

Smartening up Smart Grid City is billed on Xcel Energy’s website as “the nation’s first fully integrated smart grid community,” which will apparently boast “the largest and densest concentration of these emerging technologies to date.”

Carlson says the development of Smart Grid City can be described in two different ways. “Phase I was the targeted installation and enablement of an entire system on two of our substations and about a third of the city. We put all components in two substations, seven feeders, 15,000 customers, on the grid with advanced communication, broadband over powerline monitoring and advanced meters. We did put 15,000 advanced

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In 2003, Xcel Energy established a ‘Utility of the Future’ utility innovations advisory board: a group of partners mandated to think outside the box in conjunction with the utility, to come up with ways of applying technology to enhance and improve its operations.

In September 2006, the company convened a group of about 45 people – regulators, public officials, industry consultants, energy managers – to brainstorm what a better managed grid would look like. From this arose what ultimately became Smart Grid City.

Why Boulder? Carlson says that as part of the planning process, the partners began to recognize that the utility industry is very fond of pilots. He explains that these are usually very small pilots, and while they often produce an answer or prove or disprove the intent they were designed for, they are so small that they either require a large number of assumptions to be made around them, or result in a new set of questions that requires a new pilot.

“We wanted to envelop the entire system in testing what we feel is a very integrated solution,” Carlson says. “Just testing demand response without testing load control, without having advanced communications, we didn’t feel was a value-add. The other part of our vision is to establish a continuous living, breathing environment that allows us to iteratively test and validate benefits and opportunities.

“Under that guise of design, we then looked at where in our system we had the physical attributes, the architectural designs and the mix of customers we would need to carry out such a project – mature homeowners, transient residents, college students, some amount of commercial and industrial. Where did we have a mix of customer base? Where did we have enough size that we could statistically validate our results? And we came up with about eight different locations within the Xcel Energy footprint. Then we went to the next level of engagement by the state, the city and the customers’ willingness to participate.

“After all these criteria were evaluated and assessed, we worked with our partners on where they felt they’d get the most benefit and confidence of results, and we ended up in Boulder.”

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Show me the money One of the questions with such a large, long-term project is: where will the money come from? Carlson describes Smart Grid City as having an at-risk funding model. “The reason we’re at-risk is we did not want the culture of the industry model, meaning you can’t spend money without the confidence that that money is going to produce value, and hence you then start to limit your focus of spend on things you know will work. Then because you’re only exploring things that you know will work, you’re passing up the opportunity to give a different view of the model.

“Because of that, we wanted to take the money out of the normal regulated process and perform the study at risk to allow us to fail, I guess is the best way to describe it. And as such, Xcel has taken the risk, along with its partners, to fund Boulder in the validation of value that will come back to the customer, ultimately, in the system.”

Carlson explains that because the cost of Boulder was more than Xcel Energy was willing to put at risk, the company solicited partners for at-kind investment. The result of this is that the majority of the project is funded by Xcel Energy’s partners: CURRENT Group, Accenture, GridPoint, Ventyx, OSIsoft and Schweitzer Engineering Laboratories. All the partners have contributed an investment of people, money, equipment and technology into Boulder at risk of recovery. Carlson’s expectation is that pieces of the program will demonstrate themselves and be eligible for that recovery. He adds, however, that, “The predication going in was if everything fails, we’ve all got an investment that we’ll have to write off at the end of the day.”

With so many companies involved, there could be the potential for conflict, but Carlson praises the partners for their outstanding participation and their willingness to share. “No one company has a full solution – a smart grid in a box,” he points out. “So the need to bring this various expertise together is key.

“I’m not going to say that underneath the covers it’s not a more difficult model to manage, but I can’t say enough about all the partners and their willingness to think outside the box – their ability to put what would be traditional competitive concerns somewhat aside.

All of our partners have had to step up and swallow occasionally. But in that process they’ve all recognized that there is quite a bit of benefit for them and their businesses. More benefit than risk would be the way I’d describe it.”

Each of the project’s partners provides a key component of the technology needed to make the project a success. According to Carlson, CURRENT Group is providing broadband over power lines for communications, along with a natural monitoring and control technology embedded into the communications system. This provides grid monitoring and grid control along with a high speed, low latency, high bandwidth communication backbone.

Schweitzer Engineering provides substation distribution control: from switches and capacitor bank to advanced analytics. There are several other partners on the customer home side, including GridPoint,

Control4 and Lixar, supplying advanced thermostat, gateway controls and meter reading.

Landis + Gyr provides the meter technology being leveraged in just under half of the city, and Ventyx contributes two discrete components of technology solution load dispatch analytics for generation planning and integration of work management paths.

Carlson explains how the technology would work in a sample scenario: “Say the transformer on Feeder 69 overheats. CURRENT Group technology monitors that, and an alert comes back through the communication bus, into analytics software from Accenture, which provides the integration of all the software points. It’s identified as a field event that needs a crew dispatched to it, which is then automatically dropped into our work management system through Ventyx’s technology. This will ultimately end up in a field dispatch of a crew with a mobile terminal in their truck. OSIsoft provides the technology layer of real-time data management for all these data flows.”

Set to run and run Carlson has mixed feelings about how long the project should continue. “Smart grid is very analogous to the internet. If in 1990 you had sat down and tried to design the internet for what it does in 2009, you can imagine that it would never have occurred.

Smart grid has to have the same iteratively progressive expansion.

“On the other hand, we have to put a box around it so we can get conclusion and completion. For Smart Grid City, we are targeting the end of the year to have completed the build-out, assessed the capabilities and finalized the business case to the point of defining what our go-forward strategies are for smart grid at Xcel Energy.

“On a variety of levels, we want to have an articulated strategy for smart grid across our service territory.

We want to have a next steps design of what we need to do and what our technology partners need to do. There are three legs on the stool in this model: What can technology do? What are our customers wanting and willing to do? And the third leg is, what does the regulator want to step up to?

“With the regulator, it’s a chicken and egg situation. We point a finger at the regulators needing to facilitate this, and in the regulators’ defence, without seeing what technology can do for them, they don’t want to step out too far in front of the cart.

“So another key objective is having a plan for how we start to partner with the regulators on examining different models for an electric utility that has been operating for 75 years and fundamentally hasn’t changed. Long term, what I expect to see out of smart grid over a threeto five-year range is the opportunity to remake the way electric services are consumed and paid for in this country,” Carlson concludes, as he laughingly explains that the chance to achieve such a big goal is why he enjoys going to work.

Whatever route we end up taking toward a more energy efficient future, it seems that all roads lead to – or at least through – Smart Grid City. 

“Smart grid is very analogous to the internet; it has to have the same iteratively progressive expansion”

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ROUNDTABLE

An intelligent future P&E talks to a panel of experts about the latest smart grid developments, and its real-life application in Boulder, Colorado.

THE PANEL Mae Squier-Dow is SVP of Business Solutions for CURRENT Group. In this role, she is responsible for the global promotion, development, delivery and support of CURRENT’s smart grid solutions to utility customers through its utilities solutions and professional services groups. Prior to joining CURRENT Group, Squier-Dow was the President of Network Services for One Communications and the Chief Operating Officer of Choice One Communications.

Sharon Allan is responsible for the North American smart grid offering in Accenture’s utility transmission and distribution practice. She has 25 years of executive and management experience in the technology services industry. Immediately prior to joining Accenture, Allan was president of Elster Integrated Solutions, and she has also held key positions at other technology and sciences-based products companies.

Lee Ayers has 26 years of experience with an emphasis on spatial and temporal systems. As an Executive Consultant for OSIsoft, she acts as educator, systems consultant, designer and industry expert for utilities and vendors desiring to link real-time data throughout the corporation. Her current focus is Xcel Energy’s Smart Grid City.

Various definitions of smart grid exist within the utilities sector. What is your definition?

Mae Squier-Dow. A smart grid uses high-performance communications, advanced sensing and enterprise analysis to transform the existing electric grid into a dynamic self-healing, self-optimizing distribution system.

Because critical grid events often require real-time recognition and response, a smart grid solution uses IP-based, open standard, low latency communications to measure real-time events – such as load and congestion, system stability, equipment health, outages and demand response events – and to link these events with the appropriate responses to improve the efficiency and reliability of the entire distribution grid.

A fully functional smart grid employs widely distributed intelligent sensors to collect and analyze data from throughout the distribution system.

The true situational awareness of a smart grid comes from extracting mean-

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ingful information that the utility or its customers can act on, such as actionable intelligence, in the time frame necessary to achieve the desired result. As the smart grid develops, many of these actions will become further automated enabling a more dynamic, self-adjusting grid.

Sharon Allan. Based on Accenture’s involvement with several dozen smart grid projects around the world, we have developed a definition that we use as a basis for common understanding across our client base. Our point of view is that a smart grid is one that leverages sensing, embedded processing, digital communications and software to manage network-derived information, thus helping utilities to achieve high performance. A smart grid is: observable (able to measure the states of all grid elements), controllable (able to affect the state of any grid element), automated (able to adapt and self-heal) and integrated (fully connected to utility processes and systems).

These capabilities support the three major business functions of the transmission and distribution utility: power delivery, asset management and customer experience enablement.

Lee Ayers. ‘Smart grid’ means modernizing transmission and distribution grids to facilitate competition between providers; to enable use of variable energy sources, especially renewables; to create automation and monitoring capabilities for bulk transmission at transcontinental distances; and to enable market forces to drive energy conservation and compliance.

The first step to a smart grid is being able to see the grid. It involves collecting millions of data points in real time, and analyzing and displaying them so they become actionable rather than overwhelming. This requires integrating generation, transmission, distribution and meter data management into a single system. The typical utility has an asset infrastructure to handle peak loads. Rather than load-following, a smart grid boils down to load-shaping with a dynamic, two-way market play between utility and customer. Models not embracing dynamic market interaction with the customer, but improved automation (better outage detection and CAIDI, SAIDI and SAIFI numbers) are not smart grid applications. The smart grid model is similar to what we see at an ISO – a forecast; costs related to production and delivery of service; to these we add customer preferences, environmental considerations, deferred capital expenses and pricing.

What benefits will the smart grid provide, both in the short and long term?

SA. Accenture believes the smart grid is a key component in the global quest for carbon neutrality and a more reliable, secure energy future. In the short term, the transformation to a bi-directional flow of data from intelligent devices capable of remote monitoring, near real-time data and

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“Intelligent, actionable information will be the key to the success of the energy grid of the future”

SHARON ALLAN optimized performance will help improve overall grid reliability and efficiency. This, in turn, can reduce the number of customer minutes out as a result of improvements in predicting or even avoiding potential outages.

In the long term, we believe there is compelling evidence to support achievement of long-term benefits through reductions in residential peak demand energy consumption by leveraging real-time pricing signals, working in combination with in-home energy management technologies. Additional reductions in peak demand can be expected through integration of distributed generation technologies, which also have the potential to lower carbon emissions. Another key benefit will come through an enhanced customer experience as consumers receive the information and tools they need to fully understand, monitor and automate their energy use.

LA. When businesses and consumers see savings from energy efficiencies, they include energy cost into decisions. As market forces level the load curve, this will reduce the spinning reserve that utilities need to keep on stand-by.

The smart grid can enable increased energy sustainability, reduced carbon intensity and encourage adoption of green energy technologies; enable increased customer satisfaction and customer participation in the power delivery chain; increase effective system capacity; bring difficult-to-quantify, but nevertheless real strategic benefits to Xcel Energy and other utilities/energy providers; enable improved utility operational efficiency; support enhancement of power quality, reliability and system performance; and support advanced utility asset management and system planning.

MS-D. While there are numerous benefits to a smart grid, the three most significant are opti-

mizing the distribution system by delivering only the power needed in the most efficient manner from the substation to the home, resulting in precise dispatch of megawatts with precision and control on a persistent and critical peak basis; increased visibility to the use of renewable energy resources, including the integration of distributed generation into the existing grid; and improved operations and reliability by automating the operations of the electric distribution network and providing critical information about the condition of deployed assets.

How did you get involved in the Smart Grid City project in Boulder? What technology is your company contributing?

LA. During design of Xcel Energy’s Smart Grid City it became obvious they needed a robust, scalable, mission critical infrastructure for collecting, analyzing and presenting data; Xcel Management contacted OSIsoft about the PI System.

The PI System, with over 15,000 installs, provides utilities with a secure, real-time enterprise infrastructure for smart grid operations. It spans generation, transmission, distribution and meter data management. Three decades of performance across millions of utility data streams has fortified PI to meet the massive demands of smart grid applications – demand response, distributed generation integration, renewable resource management, advanced distribution monitoring and control.

Unique at Xcel, OSIsoft is delivering a PI operational data management system (PI-ODMS) that blends validated AMI data with operating

“The goal is a seamless, end-to-end view of the data – from generation to meter” LEE AYERS

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and non-operating data, plus data sources such as wind, forecast data for distributed energy resources and real-time calculations.

The goal is a seamless, end-to-end view of the data – from generation to meter. Xcel Energy’s SGC PI-ODMS server will handle one million points – all expected inputs.

OSIsoft is delivering dynamic graphics for four area substations and working with Accenture to deliver our Microsoft SharePoint WebParts, including a Microsoft Virtual Earth WebPart for distribution graphics and metrics. All OSIsoft graphics and deliverables use a common Information model (CIM) hierarchy.

SA. Accenture has been working with Xcel Energy on this project since the initial discussions began over two and a half years ago concerning the possibilities for reducing carbon emissions and achieving greater sustainability. Accenture is responsible for three key components of the Smart Grid City project. One, we are the strategic advisor and consulting chief engineer for the overall initiative. Two, we are the systems integrator, providing the smart grid management integration platform using our patent-pending intelligent network data enterprise solution set, which includes the reference architecture, data transport and storage architecture, end-user transactional analytics and blueprint for smart grid development. Three, we are providing expertise to help with the marketing of the program to energy consumers in the city and country of Boulder as well as to regulators and other key stakeholders.

will come from making the grid itself more efficient, which will ultimately result in lower costs for the utility and its consumers, and will benefit the environment through reduced greenhouse gas emissions. High performance communications and instantaneous response will be increasingly critical as the grid becomes more dynamic, more intermittent renewables are used for generation and widespread distributed energy sources such as residential and commercial solar panels, wind sources and plug-in hybrid vehicles gain market acceptance.

Much like the internet, new applications will be developed which will leverage the communications and sensing to further improve the way electricity is generated, delivered and used.

MAE SQUIER-DOW

“The high value benefits of the smart grid will come from making the grid itself more efficient”

MS-D. Xcel Energy’s Smart Grid City in Boulder, Colorado utilizes the fully integrated CURRENT OpenGrid platform that combines advanced sensing technology, two-way low-latency IP communications, and enterprise analysis software and related services. This provides location-specific, real-time data about the status of the city’s electric grid. CURRENT’s sensors are widely deployed in Boulder and connected by a variety of high performance communication technologies including fiber, DSL, 3G wireless and broadband over power line. Xcel Energy is already benefiting from CURRENT’s system by preventing customer affecting outages and reducing outage repair times. Field crews have access to the system on portable computers and have visibility to the performance of neighboring assets when responding to trouble calls. Xcel Energy and CURRENT are presently implementing CURRENT’s fully integrated Volt/VAR control to improve the utility’s regulation of voltage and power factor, while optimizing system efficiency from the reduction of losses and erratic voltages associated with reactive current flow.

How do you believe the smart grid will develop in the future?

MS-D. We believe that ultimately the high value benefits of the smart grid

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SA. Our perspective is that there will be far greater integration of information throughout the power grid than there is today and that this intelligent, actionable information will be the key to the success of the energy grid of the future. Like industries that have evolved from a primarily non-communicative state to a highly networked state, the smart grid will result in more automated analytics and control as information and communications infrastructure facilitates the ability to not only collect information, but also to analyze and act upon it. Some technologies that can be leveraged to support the characteristics of a more intelligent grid are available today. Others are emerging and will be developed over time to provide higher levels of functionality at a lower cost.

What’s important, in our view, is that utilities on the road to a smarter grid approach their journey with a road map that helps ensure that whatever technologies they select are compatible and that the evolution to new systems can be achieved efficiently and economically. Intelligent network technologies will require end-to-end integration and compatibility. Having a concise picture of technology and business requirements will reduce the risk of incompatibility or obsolescence.

LA. End-to-end visibility of the business will become the norm.

Inappropriate technologies for the old market model may be rebranded as smart grid offerings but the hardened project approach will be seen for what it is – a costly endeavor usually outdated by installation.

Utilities will take less of a project approach to integration and look at how systems can be quickly integrated with standard product like PI. Less project, more product will become standard.

Other innovations will be in smart grid data centers; a critical infrastructure around data management for upwards of 100 million points; and enhanced substation metrics to serve as report cards for how efficiently the smart grid is functioning.

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ASK THE EXPERT

Renewables and the smart grid Dave Roberts explains the need for the integration of large amounts of intermittent resources.

W

ind power is a great renewable resource – the fuel is free; environmental impact is low; projects deploy quickly and harmonize with agricultural land-use. They generate power, local jobs and tax revenue. Enter solar power, again a great renewable resource with minimal environmental impact, quick-to-build projects, no water consumption and its significant scalability from residential rooftops to mega-mart rooftop power plants.

These two do have one major impediment: they are intermittent. This can cause nightmares for the utilities responsible for reliability, and for keeping power flowing and balanced for everyone connected to the grid.

The smart grid will enable greater exploitation of such renewables, satisfying our political will and best interests and shifting energy consumption away from imports.

Time horizons play a major role in integrating renewables. Multiple forecasting techniques and service providers utilize long-term data resources in combination with statistical and numerical prediction models to estimate the wind and solar resources at various time horizons, including persistence, hour-ahead, day-ahead and so on. Augmenting these prediction models are offsite real-time observations from met stations feeding real-time data to the utility and the forecasting model(s).

Using this information, wind and solar farms can send forecasted production data to the host utility. Leveraging the smart-grid, the host utility can push this information to the transmission system operator, the local utility, and industrial and residential consumers such as Xcel’s SmartGrid City program.

This data flows from the fuel source (wind and weather) through the generator, the high voltage transmission grid, the local distribution grid, the smart meter and ultimately to the user interface, such as the smart thermostat.

Using this information flow, the end-consumer

Dave Roberts is the Group Director Business Development of OSIsoft.

He joined OSIsoft as Director in May 2005. Today, as OSIsoft’s Director for Business Development, he manages OSIsoft’s various vertical industries, including power, transmission & distribution, oil & gas, metals & mining, and other process industries.

can make informed decisions about when and how they use power. The host utility also has an option to intervene if consumer behavior is non-responsive to price and or type-of-electricity signals. When the wind blows strongly in Wyoming, it might be time to send a signal to charge plug-in hybrid vehicles. Inversely, if no wind is predicted for four hours, the utility may request/force consumers to forestall or turn down appliances, such as adjust the thermostat by one degree or delay running the pool pump.

This data flow is not one-way. The smart grid-enabled utility has enhanced visibility and control coming back from the industrial and consumer level. An example is microgrids to enable integration of large amounts of intermittent resources, both inside and outside the microgrid.

(A microgrid is a collection of generation sources and loads that can be isolated seamlessly and bumplessly from the main grid and reconnected as needed, while being controlled internally and sometimes generating its own energy, including from renewable resources.)

OSIsoft has a role in tying together renewable energy, the smart grid, microgrids and consumers: OSIsoft makes the PI System. The PI System is a real-time information infrastructure that ties together all sources and users of real-time data, from the meteorological data at the front-end all the way down to the smart-meter data management systems at the consumer level. Key elements of the PI System make it uniquely qualified.

It is secure and reliable, as well as being proven and scalable. PI delivers a highly available infrastructure, with multiple levels of redundancy and failover, architected to satisfy evolving NERC CIP Standards and security requirements.

In addition to its global partnerships with key technology vendors, such as Microsoft and SAP, OSIsoft maintains key relationships with leading global integrators such as IBM and Accenture working in smart grid and renewables. Partner ecosystem is therefore another key element.

The PI System is also rapid and has a sustained creation of value. As a packaged product, the PI System is quick to install, deploy and immediately begins collecting data and delivering value. It consolidates real-time data from across the utility – met data, generator, transmission, smart-meters, microgrids and so on – into actionable information.

The system is also sustainable and flexible.

One of the core values of PI is the ability for endusers to configure the system to present meaningful (to the user) information to the right-user at the right time.

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EXECUTIVE INTERVIEW

Using software to reduce energy consumption Itron’s Philip Mezey examines the tools available to help utility companies improve their efficiency.

What software tools is Itron using to help utility companies reduce energy consumption and improve energy efficiency?

Philip Mezey. We are focused on a broad solution. Our offering begins with data creation at the meter level, then collection systems that gather information out of electricity, gas, and water meters, but the foundational software that we offer in the meter data management space is a tool called Itron Enterprise Edition. It’s responsible for storing and organizing all of the energy information that Itron technology gathers out in the field, both residential and commercial industrial data. We then validate, edit and estimate that information and then store it away and organize it in a way that makes it very, very accessible for other analytic applications that come along.

We then wrap that whole package in a service-oriented architecture that makes it possible not only for our analytic applications to get access to the information, but also for third party access to that same data. On top of that we provide a number of customer portal and customer care applications that allow consumers access to their energy information so they’re able to understand how and when they’re using energy and water, which benefits consumers by allowing them to be more responsible. When we all understand how and when we’re using energy and water, there’s potential to reduce usage directly. We also provide applications that allow our utility customers to directly control load and to send signals to customers when energy is particularly scarce, allowing end users to actually curtail their overall energy use.

“The ability to collect information hourly from customers gives the utility a great deal of insight”

What technologies are used to collect meter data?

PM. Itron offers a wide range of products that are used for collecting energy information: everything from our existing set of handheld computers, which the company has been building for the past 30 years; to mobile collectors in which an operator drives around in a van; to fixed networks in which radios are placed at the top of poles, so that it’s possible to collect that information on a much more rapid basis. And that technique of radio collection, radio frequency (RF) collection, is used for our advanced metering infrastructure (AMI) product called OpenWay, which has a collection engine associated with it so that it’s possible to collect energy information very rapidly. In other parts of the world power line carrier technology is used whereby we’re collecting the data through the power lines themselves, using a broad range of technologies and software tools. Itron’s operations in North America collect around 80 to

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90 percent of all of the commercial industrial electric information, and at the residential level collect more than 50 percent of all of the residential data through its collection systems.

Why is it important for utility companies to manage data, and how can this improve their reliability?

PM.Typically utility companies have collected consumption information from the bulk of their customers once a month, and they have very little information about what’s going on in their distribution network, down to the customer level. By having the ability to collect information hourly from customers, and even in some cases every 15 minutes, it gives the utility a great deal of insight as to how and when customers are using energy, as well as how their distribution network is performing. Among other things, they can identify areas of theft or diversion, or other technical losses, making it possible for them to optimize the distribution network – there are tremendous opportunities for savings and improvement there as well.

What is energy forecasting and what tools are you using to develop and implement forecasting solutions?

PM. Forecasting tools allow utilities to understand what their energy

needs are going to be. Itron offers a suite of energy forecasting tools that are used to forecast around 80 percent of the energy that flows through independent system operators (ISOs) in North America. We also have those tools deployed on a worldwide basis, allowing markets to function. When ISOs interact with wholesale markets, it gives them and players in the market a better view of what’s going to be required for power purchases. Itron software has a wide variety of applications in the ISO market, providing better visibility and liquidity. Our forecasting tools are also used at the market level in places like New York’s ISO, which is doing day-ahead, hour-ahead and even 15-minute power markets.

What load research services do you provide to electricity and gas providers?

PM. Load research is the process of understanding market segments – how to segment the utility market properly and how to understand the usage patterns of those market segments so that better rate structures can be designed to more fairly charge individual market segments.

Through the use of our forecasting and analytic tools, we’ve been able to develop a next-generation load research tool that again allows our customers to more effectively understand electricity and gas usage profiles and segments, and to design better programs to serve those customers.

What are the benefits of AMR readings for both customers and utility companies?

PM. For automated meter reading (AMR) specifically, that data is collected in a more accurate and timely fashion resulting in more accurate billing with fewer customer complaints. The data is collected remotely so that a meter reader does not need to enter the customer’s property in order to access the meter itself, which is safer for the meter reader and less disruptive to the customer, allowing data to be collected much more accurately. AMR is simply a much more cost-effective way of reading meter data and therefore it lowers the utility’s overall operational costs, which benefits the utility and ultimately the customer.

Philip Mezey became Senior Vice President and COO for Itron North America in April 2007. He has served as Group Vice President and General Manager, then Senior Vice President, for Itron’s Software Solutions group. Mezey joined Itron in March 2003 as Managing Director of Software Development, Energy Management Solutions Group.

How will the development of AMR contribute to AMI as a whole within the next few years?

PM. As customers see the opportunities of automation – and by customers, I mean our utility customers – and see how much money they can save through better collection techniques, they’ll see the opportunity as they’ve seen with AMR in reducing their overall reading costs.

AMI essentially offers the same type of benefit as an automated meter reading system, but allows the data to be collected much more frequently and at a much greater degree of granularity. This means that utilities can then provide customers with very accurate information about how and when they’re using energy, and the utility also has a better view, which is of tremendous operational value. AMI also, in addition to the standard AMR meter read, provides some very advanced capabilities at the meter level allowing for home area networking, communication into the home, the ability to remotely disconnect the meter to support net metering, and a variety of other applications.

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SMART GRID

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Marcus Torchia tells P&E why this is the ideal time for the new government to promote the implementation of a nationwide smart grid infrastructure.

S

mart grid means different things to different people, but to Marcus Torchia, Research Manager, Intelligent Grid Strategies at Energy Insights, the definition is simple.

“Smart grid is an electric transmission and distribution network that uses information and communications technology to predict and adjust to network changes autonomously,” he says. “The aim is to more efficiently integrate operational and revenue-generating business processes; for example, generation and trading.

“At the same time, it allows utilities to connect with end-users and the premise-based assets that allow for improved management of electric usage and distributed generation and the overall customer experience.

There’s a heavy emphasis on greater use of information and communications technology in helping operate the transmission system.”

There have been rumblings about the need for a smart grid for a while, but just lately the issue has really come to the fore. What’s behind the sudden glare of the spotlight? Torchia explains that there have been a couple of key drivers behind the general push to establish a smart grid. “The first is that we need to more efficiently produce and consume electricity,” he explains.

“We currently have a pretty inefficient system, which is based on an architecture that was built between 60 and 70 years ago.

MARCUS TORCHIA “The system has remained, for the most part, untouched in terms of major developments. The four pieces to it are generation, transmission, distribution and end use, where the consumer, be it a business or an individual, uses the electricity.

That value chain will remain in place. But the way electricity is produced, and the way it’s transmitted, distributed and consumed is rather inefficient.

There are number of things within that value chain that can be improved through the use of information technology.

“Another aim is to reduce carbon emissions, because much of our production here in the United States is based on coal-fired plants. So there’s a push to include more renewables and offset the use of fossil-based fuels for more renewable-based sources of energy.

“In addition to that, there’s the goal of reducing waste in general and increasing efficiency. Every time a power plant is running, if the power is not used, it’s wasted, because we don’t store electricity – there’s not a practical way yet to do that. There’s a gap in knowledge and information between what is needed and what is consumed at any given time during the day.

“What this means is that utility companies have to overproduce to accommodate peak demand. We’re getting better at managing that, but we’re not nearly as good as we could be and information technology can help us close that gap between overproduction and under-consumption.”

Another reason for the recent prominence of the smart grid is the new administration in Washington. President Obama has placed a strong emphasis on implementing smart grid as part of his energy efficiency program. The Department of Energy (DOE), which has oversight for the disbursement of funds, recently announced funding of $4.3 billion for smart grid, which is split between $615 million for pilot projects and R&D-focused projects, and the rest going to actual smart grid implementation. Grants for smart grid deployments will range between $500,000 and $20 million and those for monitoring devices between from $100,000 to $5 million.

“This is a very opportunistic time for the Obama administration to focus on spending in a stimulus package to stimulate jobs,” Torchia says. “When I say ‘opportunistic,’ I mean the stars have aligned for the Obama administration in the sense that he’s been talking about and is a proponent of clean energy and ran on an election platform that included the expansion of renewable energy sources.”

Torchia points out that moving in the direction of greater use of renewables dovetails nicely with the fact that the government needs to get the economy moving again, to make people feel that it is on top of the situation.

If people can be put to work in a new sector of the economy, such as renewables, if those lost jobs can be replaced and the manufacturing base reset to supply essential elements such as solar panels and wind farms, then the government can kill two birds with one stone.

There is also the issue of national security. As Torchia reminds us, President Obama has also had this aspect in mind for some time. “He was saying, before the economic crisis began, that we need to get off of oil dependency. This is mainly targeted at automobiles, which account for the majority of oil-based consumption when it comes to energy.

“There’s a great exposure to the United States at a security level, at a supply chain level, where we find ourselves seeking oil supplies from overseas. Canada is actually our largest supplier of oil, but when we look beyond that, it mostly comes from the Middle East. Canada has only surpassed them in the past seven or eight years.

“There is not a security threat in the traditional relationship that we have with Canada. But certainly, with the Middle East and all the disruption that can occur there, there’s a great risk that something awful could happen and bring the economy to a halt. So there’s the security aspect of it.

“The environmental aspect of it is that Obama himself, as well as many of the people in this government, believe that a lot of the global warming that has been taking place has been because of fossil fuels and carbonbased fuels in general. And there’s a lot of scientific proof to support that.

You can argue up and down about where the carbon comes from, but it’s

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smart touch

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hard to argue against the fact that the atmosphere is warming. It’s recognized as a global problem that, hopefully, the United States is starting to take some steps to deal with.”

Those, then are the potential benefits of smart grid implementation and an increased focus on renewables: a reduction in our dependency on fossil fuels, a reduction in carbon emissions and a general movement towards cleaner energy sources, both of which are long-term goals. In the immediate term, Torchia believes smart grid will put people to work in helping re-diversify and re-ignite our manufacturing base.

Smart meters This is all very well, but how do we actually go about doing this? How do we put in place the systems that will allow us to achieve these lofty goals? Torchia explains that the current level of smart grid implementation among US utility companies is still primarily focused on smart metering and on automated metering infrastructure. “Utilities have been focusing on this because they’re trying to reduce peak demand rather than trying to bring in new sources of renewable energy,” he says.

“Over the past few years, it has become more and more difficult for a utility to simply add new generation. Previously, utilities would go before a public utilities commission or they would go before zoning boards and say, ‘We want to open up a new coal-fired power plant or diesel-generated plant or gas-fired plant.’ It didn’t matter what it was; the way they overcame greater demand was by simply producing more energy.

“As time has gone on, it’s proven much more difficult and much more costly to get those approvals. It’s very, very difficult today for a utility to get ap-

proval for a new generation plant. So as the population increases and as usage increases, there are more electronic devices, houses have become oversized, we’ve got ‘McMansions,’and the load on the grid has increased, but the capability to produce more energy has not been keeping pace with demand.

“So the utilities say, ‘What we need to do is somehow make the consumption of electricity more efficient.’ They are doing that by going to the end-user and putting in place technology and programs that are helping shift peak demand and smooth that line of consumption.”

Companies can do this because there is a very predictable pattern of electricity consumption in any given service territory based on time of day or day of the week. Utility companies understand exactly when there’s going to be peak demand and they adjust for that.

Torchia says that utilities are doing this through smart metering initiatives, by offering incentives to the consumers to shift their demand, and through time-of-use programs that give incentives to consumers to change their behavior. “For example, instead of running the air conditioner very hard from noon to 4:00 pm when the sun is at its peak, utilities are giving customers more incentive to not run it at that time. Maybe they’ll run it more in the morning and not so much during the day and maybe the temperature increases just a little bit, an extra degree or two. But it has a vast impact on the actual load.

“When we look at the implementations going on out there, the vast majority of them today are about smart metering. That’s not exclusive, but that’s certainly the majority. For example, if we look at smart metering use, on average, 41 percent of utilities in the United States are doing some form of smart metering.

“By going to the end-user and putting in place technology and programs that are helping shift peak demand and smooth that line of consumption”

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“There are three types of utilities: cooperatives, independently owned utilities, and municipal. Around 53 percent of cooperatives have implemented smart metering. The independently owned utilities are at 40 percent. The municipals are at 34 percent. So that weighted average of 41 percent is for all three segments of utility types.

“That 41 percent are starting widespread deployment. But typically it takes between four and six years before a utility manages to get smart meters into its entire service area. If they have a million connections to make, they’ll do about 200,000 a year. So between 2007, when most implementations started, and 2011, we’re seeing the vast majority of deployment of smart metering projects.”

Different strokes Implementing a smart metering system across a company’s entire service area is a daunting prospect, which requires a slightly different process for each of the three types of utility.

“Different utilities have different drivers,” Torchia says. “Of course, all utilities need to provide a great level of reliability in terms of electricity availability, that’s a given. But independently owned utilities are very much profit driven.

That’s not to say that municipals and cooperatives are not, but they’re not as directly tied to profitability as the cooperatives and the munis.

“The pain that the independently owned utilities need to go through is that they have to go before a public utilities commission, and municipals and cooperatives don’t. They need to go before a board and they have to make a rate case. Typically, if they get approval for it, what they get for that approval is rate relief.

“For example, if an independently owned utility needs to do a billion-dollar project to roll out a widespread deployment of meters, they go before the board and say, ‘This is going to cost us a billion dollars and we would like to recover some, if not all, of that cost, through increases and rates to the consumers themselves.’”

The considerations that different utilities go through have an impact in terms of timeline. Independently owned utilities can’t move as quickly because they have to go through a longer process, and Torchia explains that it can take as long as a year or more for them to get the necessary approval, by contrast, municipals and cooperatives can, for the most part, act independently and move as quickly as they want to, since for them it’s an internal process.

Each utility must go through a business case. “They look at the costs and they look at the benefits,” Torchia explains. “They do some sort of analysis, typically, to ask themselves, ‘Does this make sense for us?’ It changes from utility to utility; there’s not one approach to it. The reason for this is that have some utilities that are vertically integrated. They own everything from generation assets all the way through to the meter.

“There are other types of utilities that own just distribution and transmission assets, and they’re separated from generation. Then there are some companies who are just retailers. They aggregate suppliers’ generators and they lease some time to get the transmission. They use the transmission lines as a conduit. But they’re really purchasing from generators.

“Those are very different business models. Depending on the business model of the utility, they’re going to do a different analysis. The tools that they’re using at a business level are analyses that any business would use to determine if the project will be profitable or worthy of their time and effort.”

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Stability needed One potential challenge in bringing in such extensive change could be the possibility for disruption, but Torchia says this isn’t the case. “The utilities are held at a very high level of reliability. It’s part of the their responsibility to the regulatory authorities that they provide as much as they can a disruption-free upgrade or replacement of their infrastructure. So the chances of extensive disruption at this particular point are pretty minimal. As part of the fundamental building block of planning, they need to plan to keep reliability, to keep the grid up and running.

However they go about implementing changes to the infrastructure, they’re going to go ahead and accommodate whatever it is those limitations might be.

“They’re not going to wholesale rip something out, shut down the grid, and then once they get a chance to put it back in place, they’ll turn the grid up. They just can’t do that. They can’t do it from a regulatory perspective.

They can’t do it even from a business perspective. Every minute that they’re down, they’re losing money.

“So there’s a great incentive from a revenue and profitability perspective. There’s also a great incentive in terms of complying with regulations that they have uninterrupted service. I don’t foresee that there will be any problems, certainly none that are obvious at this particular point.

Also, it’s important to keep in mind that a meter can go down, but it doesn’t change the actual core grid. In other words, the electricity is still being transmitted, even though the ability to talk to that meter gets interrupted. The actual supply of electricity, for the most part, is going to remain stable.”

Some analysts believe that the grants recentley announced by the DoE will favor municipals and cooperatives and not independently owned utilities, but Torchia does not agree. “The reason people are saying this is that most independently owned utilities are running projects that are in the high hundreds of millions of dollars, so a limit of $20 million for an independently owned utility is pretty small.

“They’re saying that the contribution for the IOUs is relatively small, so it disfavors them in favor of the municipals and the cooperatives. While that may be true, I think the reason behind it might be a practical one: the Obama administration has said very clearly that the point of having the stimulus in the first place is to create jobs.

“The public utilities commissions, the regulatory authorities, they rule on independently owned utility projects. They do not have authority over the municipals and the cooperatives. So for all practical purposes, the way I see it is that the Obama administration with these low thresholds might be, by default, favoring the cooperatives and the munis, but the reason why they’re doing that, in my opinion, is to speed deployments, as opposed to having to run through the PUCs. I’m not seeing that they’re going out of their way to not support the IOUs. They’re trying to get faster deployments out there.”

Torchia is happy to see that smart grid implementation is progressing across the country, with several large cities also getting in on the act. “We’re definitely seeing more cities implementing smart grid at a citywide level.There are a number of them out there: Smart Grid City, is in Boulder, Colorado; and there’s one in Austin, Texas, and now Miami. There are a number of cities that are participating in trying to accelerate adoption holistically. It’s an excellent trend overall. It’s a very promising trend in my opinion.”

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ASK THE EXPERT

Dynamic distribution Brian Deaver analyses the role of System Optimization and how can it help utilities improve distribution efficiency and control.

Brian Deaver is Vice President of Product Management for CURRENT Group, a leading provider of smart grid solutions. Deaver spent 20 years with Baltimore Gas & Electric, and among his accomplishments, he has led BGE’s award-winning Distribution and Substation Automation projects. Deaver earned his BSEE from the University of Maryland.

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he application of intelligent monitoring and control does not widely extend beyond the substation, so utilities presently rely on engineering models and local controls to regulate voltage and power factor. As a result of these present methods of regulating voltage and power factor, the typical distribution system does not dynamically adjust to minimize losses or optimize delivered voltage levels to customers. System Optimization creates a dynamic distribution grid capable of optimizing on energy efficiency, environmental or operational targets.

To deliver System Optimization to utilities, CURRENT installs intelligent sensors at strategic locations on distribution feeders that are connected by a high-speed, lowlatency communications network. These sensors provide real-time information to analytical software where it is combined with geospatial, asset, SCADA and other operational data from capacitor banks, substations and other distribution devices to determine the correct actions to regulate voltage and VAR levels dynamically throughout the day.

This enables utilities to flatten and lower delivered voltage levels, while reducing line losses.

Like many other industries, the challenges facing the electric utility industry will require an evolution to a more self-healing, self-optimizing grid. The lack of real time monitoring and dynamic adjustments prevents utilities from optimizing the amount of power necessary on the system as it fluctu-

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ates during the day. While historically this has not mattered, in a carbon constrained world, excess power requirements result in excess carbon emissions and higher costs.

To address these concerns, System Optimization offers dynamic control of voltage and reduces technical losses, enabling utilities to serve their customers more efficiently per kilowatt-hour generated, and lowering the total generation and associated carbon emissions. In addition, dynamic control of the distribution grid can facilitate intermittent renewable integration, as well as help improve generation dispatch and transmission operations.

The result is a unique method of driving more value from a smart grid by enabling automated control of voltage and VAR flow throughout the distribution system capable of reducing the overall electricity needed to service utility customers by up to five percent.

This is particularly helpful for utilities in states that have energy efficiency, carbon reduction, power factor or peak load requirements.

System Optimization can be installed on a substation-by-substation basis and typically has a payback within a couple of years.

This solution is applicable to the entire distribution system, which makes the savings provided easier to achieve than other efficiency and control technologies. It represents a low-cost, high-value energy efficiency solution that does not directly impact consumers or require a change in their behavior. Utilities can base the optimization upon minimizing losses, optimizing voltage, integrating

renewables, minimizing the environmental impact or any combination thereof. System Optimization can also be utilized as a virtually dispatchable generation resource because the load reduction can be measured and verified in real-time.

However, it is important to note that System Optimization requires high-speed, low latency communication. By definition, a smart grid is an advanced system that incorporates widely distributed intelligent sensors and employs real-time communications to sense and correct inefficiencies and disturbances automatically on the electric distribution system. In transitioning the distribution network to a dynamic self-healing, self-optimizing grid with real-time feedback

“System Optimization creates a dynamic distribution grid capable of optimizing on energy efficiency, environmental or operational targets” control, information from sensors and points of control (such as line capacitors, voltage regulators and substation load tap changers) must be provided to the analytical applications, and optimization decisions must be made and controls must be initiated.

To get this level of control on a large scale requires intelligent sensors that continually pre-process measurements and only communicate relevant information using high speed, low-latency communications systems that move this information to the centralized analytical applications and a highly scalable analytical software platform. This information is then combined with data from other utility systems to initiate intelligent control decisions – all within a few minutes or less depending on the applications. n

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CURRENT OpenGrid™ — Delivering Real Smart Grid Results Today • Modular and scalable with multiple options for sensing and low latency communications • Standards based management and integration of devices, communications and back-office applications • Advanced Smart Grid applications covering all of the distribution system as well as the customer premise

OpenGridTM

dISTrIbuTION MANAgEMENT

Actionable grid intelligence enables, condition based maintenance, better planning, operational efficiencies and improved reliability

SYSTEM OPTIMIZATION

Optimize power flow, reduce system losses, integrate renewables and reduce CO2 based on real-time grid conditions

SENSINg & COMMuNICATIONS

Intelligent sensing integrated with a variety of open IP, real-time communications solutions provide the distributed analysis necessary for a Smart Grid

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THE CUTTING EDGE Power & Energy catches up with Austin Energy’s Andres Carvallo to get the lowdown on the technology involved in building the smart grid, and what it really means for consumers.

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mart grid seems to be the phrase on everyone’s lips. President Obama’s commitment to establishing a new federal infrastructure seems to have everyone buzzing around smart grid, smart meters and the environmental consequences, and Austin Energy CIO Andres Carvallo is no exception.

“I’m in charge of the technology division, planning, development and operations across the company,” explains Carvallo. “I’ve been here six-and-a-half years and we have been driving a transformation since then.”

Carvallo’s passion for smart grid began in 2006, during which he was often found giving talks and formulating company strategy to incorporate the innovative technology. “We have been working on it since then and our Smart Grid 2.0 will go live in August of this year.

We’re currently managing 200,000 devices real time, and by the end of July we’ll be managing half-a-million devices and we’ll have full coverage of 440 square miles and a million consumers.”

Education Keeping consumers informed of the development of smart grid technology is a primary focus of all utilities attempting a successful

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roll out of the system, and for Austin Energy the same is true. As one of the main goals included in the program, education of all its stakeholders – employees, regulators and large industrial customers, as well as its commercial and residential customers – is vital to ensure smooth implementation of the grid. Carvallo introduced the ‘Change your generation’ software game, in a bid to transform the way in which consumers use energy.

“We have been sharing with our customers all our challenges and all the inner details of our business, and also the goals that we have and it’s been very successful” “We’ve done a very good job of putting together the game as a day-in-the-life scenario. The tool is all about filling the gap of future generation needed by Austin Energy, and there are some parameters and limitations around how one goes about doing that. You’ve got to think about availability, capacity and all the issues with time and cost and carbon footprint and so on. When you look at the game and play with the game, you can decide then to submit your solution to us. We are hoping to get a significant number of cases. The game has been played quite a bit: we’re expecting that between now and the end of the year, we’ll probably get 50,000 or 100,000 recommendations,” he explains.

“The game has been used by a lot of people to talk about the issues of carbon and green energy and the portfolio mix of electric utility,” he continues. “By only that measure it’s already been a success. It’s a companion to a program that we have around a public participation process where we are engaging our customers in an open way – if you had a voice on the amount of energy usage, how would you go about participating?

“The participation process has been going on for a while now. It started in the fall of last year and we have been sharing with our customers all our challenges and all the inner details of our business, and also the goals that we have.

We have had 12 town hall meetings and we have had all kinds of surveys online. We’ve reviewed in detail all aspects of the business – from energy efficiency to carbon offsets to cost – and we have created a very sophisticated handbook that we give to customers. It’s been very successful.”

August, and a vast array of technology is needed to ensure this happens effectively. Along with hardware and software, communications technology is highly important, with the company using fiber for the back end and wireless technology for the last mile.

Crucially important to customer education and streamlining the system has been the replacing of typical meters to smart meters. “We have deployed sensors across the infrastructure to monitor all kinds of things, from detection of faults to temperature to all kinds of harmonics, as well as the different elements of the infrastructure,” says Carvallo.

“All those devices are feeding information into a meter data management in a distribution management system, and those systems are all communicating. In the case of the meter data management system it’s communicating with the billing system, it’s communicating with the conservation and marketing engines, it’s communicating with the distribution management system, and the distribution management system is interacting with the devices that it manages real time, and then it’s integrated into our SCADA system.”

Austin Energy is at the forefront of new generation development, having operated the first fuel cell in Texas. For many years the company has been a big proponent of distributed generation and has been innovative in the technologies it uses. The fuel cell operated for five years as a tester and was decommissioned last year.

“It was plugged into the grid for about five years and it was a way for us to test the viability of that technology as another solution versus central power plant generation.

We have a big appliance around distributed generation as part of our effort on Smart Grid 2.0,” he says.

Renewables As the country gears up for a federal push on renewables, having already set the blueprint for forward-thinking innovation, great things are expected of Austin Energy.

In April of this year, the National Renewable

Technology Austin’s smart grid system is anticipated to go live in

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“Obviously part of the challenge with national goals is that some places have an easier journey towards certain goals than others and not all places are created equal” Energy Laboratory, part of the DOE, issued a press release highlighting the top 10 sellers of green energy. Unsurprisingly, Austin Energy was ranked number one. As the biggest seller of absolute megawatts of green power, Austin Energy has surpassed all other electric utilities for seven years. Wind and other renewable energy sources currently represent 11 percent of the company’s portfolio, with a goal of achieving 30 percent by 2020.

“We have chosen to build a solar PV power plant across 300 acres. It’s 30 megawatts and will be the largest of its kind in the US to date. It’ll go live in 2010 and is expected to power 5000 homes.

Earlier this year we also announced the creation of a deal to operate a biomass plant, generating 100 megawatts which will also go live in about a year and a half, and again that solar plant and the biomass plant are steps towards reaching that 30 percent mix. So our total output as an electric utility is 2700 megawatts and we are hoping that one-third of those 2700 megawatts will come from renewable energy by 2020.”

President Obama’s Plan for America is setting targets of 10 percent of energy to be sourced from renewables by 2012, and it has become common for utility companies to set their own individual target of 30 percent. Austin Energy is no different. Carvallo tells me that they have had this target for almost four years, prior to Obama and his energy reformation proposals.

“We’re also focusing on energy efficiency; we have a target of reaching 700 megawatts of saved energy by 2020. We did 600

megawatts over the last 25 years and having national goals is a good thing. Obviously, part of the challenge with national goals is that some places have an easier journey towards certain goals than others and not all places are created equal. Some places are heavy duty hydro, like the west coast versus the east coast, which predominantly produces coal. So if you have goals with carbon or goals with efficiency or goals with renewables, they can now be optimized and be aggressive nationwide. The west and the south coast could do better,” he says.

Austin Energy is certainly standing out as one of the big players, and as Obama continues in his quest to give renewables a permanent seat at the energy table, Carvallo is most definitely one man championing the cause.

Andres Carvallo is Chief Information Officer at Austin Energy, where he is responsible for the technology vision, planning, development and operations across the enterprise. Prior to Austin Energy, he held senior executive titles at large companies such Philips Electronics, Digital Equipment Corporation and Borland.

SIGHTS ON SOLAR

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ustin Energy is planning to set aside 300 acres, located just outside of Weberville, Travis County, to build one of the world’s largest solar power facilities. Through a partnership with Gemini Solar Development Co., Austin would be the exclusive client and pay $10 million a year for 25 years for the power generated.

The plant is due to open in 2010 and predicted to produce enough energy annually to power up to 5000 homes.

However, there is some dispute as to whether this would raise the monthly electricity bill of an average homeowner, and there is also concern from some of Austin’s largest manufacturers as to the cost of their bills.

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SMART GRID In order to tear down the facade surrounding smart grid, P&E caught up with Hassan Farhangi, one man with a clear idea of what it all means.

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ith the hype aroiund smart grid rolling out of control, almost every utility is focusing its efforts on smart metering and customer operations, but what does it all really mean?

The definition itself seems susceptible to change between each utility, and as for smart grid, that’s one concept that seems to be lacking any sort of unified formulation.

Definition “We look at the intelligent grid, or smart grid, as a collection of concepts, technologies and solutions that are designed to enable an electrical power grid to be self-healing, self-monitoring and self-regulating”, says Hassan Farhangi, Director of GAIT at the British Columbia Institute of Technology in Vancouver, British Columbia, Canada. “This resides on a convergence task form of information technologies, communication technologies and power systems.

“That platform is what provides the electrical utilities with the ability to put a layer of intelligence on top of what they have today, transforming it from a one-way unintelligent centralized network into

a network that is two-way, a network that is distributed, ad hoc and adaptive, and enables utilities to do the main response and to integrate a variety of different sources, of energy to their energy and so on.

“Academia is trying to understand what a smart grid is, and in that you also see the kind of evolutionary past that everyone is talking about from the existing grid to the next grid.”

BCIT is one of the largest academic institutions in British Columbia, encompassing more than 60,000 students over seven different campuses. The research into smart grid has been conducted for more than 20 years –primarily focusing on information, organization technologies and expert systems.

“As an institution, it has done a lot of research in different areas of energy,” explains Farhangi. “When we started looking at their issues and the problems that utilities were confronted with, we realized that we could bring a level of understanding, research and solution development for our utilities that would be important to them, to their business and to where they are heading.”

The emergence of smart grid was an effect of growing environmental concerns; as local governments began implementing green energy plans for utilities to adhere to, Farhangi’s team realized the importance

THE TRUTH ABOUT SMART GRID

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of research on which to build these strategies. He describes British Columbia’s energy plan as being “one of the most advanced energy plans in the country,” paving the way for a brand new era in which electricity is generated around the grid.

BC Hydro BC Hydro, the main electric utility in British Columbia, has begun moving towards a grid in which they can allow for co-generation, a true 21st century method of energy delivery. The grid allows independent power producers to individually generate electricity and then send it on to the grid, combining the various sources of energy.

“The grid mandated BC Hydro to provide up to 50 percent of the incremental load on the system by 2012 through conservation, so a massive conservation effort has been mandated by the government.

BC Hydro then started looking around to incorporate different technologies and different solutions and looking for help, which we offered to them. One of the primary drivers for that being that like very many other utilities across the world, BC Hydro is quite cautious in terms of introducing new technologies into its critical infrastructure. It needs to have an environment in which it can develop these solutions in a near real setting, test it, qualify it, validate it and then introduce it into its infrastructure. BCIT’s campus is a perfect setting for that.

“We have a large campus, more than 60 buildings, including all kind of load profiles – industrial and residential loads. We have dormitories on the campus, as well as offices and classrooms, and at the same time we do have a variety of different co-generation capabilities on the campus. So we realized that we could actually turn around and make this campus into an intelligent micro-grid, enabling utilities to utilize this infrastructure as a sandbox, to develop solutions in partnership and in collaboration with our researchers, qualify those technologies before eroding it into their distribution system,” says Farhangi.

Micro-intelligent grid The micro-intelligent grid, Farhangi explains, is achieved by looking at an environment in which a variety of different technologies can be tested. For the smart grid network topology, this is done in terms of three different components: HAN, a home area network that holds a variety of loads, appliances and terminology, as well as LAN and WAN. “LAN, local area network, is a collection of smart meters that work collaboratively in a network; WAN is a wide area network, which is a network of substations” Farhangi says. “An intelligent micro-grid enables the utilities to simulate each of these components either individually or as an end-to-end integrated solution, and experiment with a variety of different solutions.”

Farhangi gives an example of load shedding, and explains this is achievable through using an intelligent micro-grid. Through installing load control devices and networking them in a HAN, information can be captured from a collection of smart meters, and then be aggregated and communicated with the end servers.

“The beauty of this infrastructure is that it allows you to experiment with different topologies,” he continues. “You can validate those topologies in an environment that is not threatening and one that is fully controlled. You have full visibility over everything you do, and it is

BRITISH COLUMBIA ENERGY PLAN The new BC Energy Plan: A Vision for Clean Energy Leadership is a combination of aggressive targets for zero net greenhouse gas emissions, new investments in innovation, and an ambitious target to acquire 50 percent of BC Hydro’s incremental resource needs through conservation by 2020.

Environmental leadership: • All new electricity projects developed in BC will have zero net greenhouse gas emissions.

• Existing thermal generation power plants will reach zero net greenhouse gas emissions by 2016.

• Zero greenhouse gas emissions from coal-fired electricity generation.

Energy conservation and efficiency: • An ambitious target to acquire 50 percent of BC Hydro’s incremental resource needs through conservation by 2020.

• New energy efficiency standards will be determined and implemented for buildings by 2010.

Investing in innovation: • The new $25 million innovative clean energy fund will encourage the development of clean energy and energy efficient technologies in the electricity, alternative energy, transportation and oil and gas sectors.

• The new BC Bioenergy Strategy will take advantage of BC’s abundant sources of renewable energy, such as beetle-killed timber, wood wastes and agricultural residues.

real – it is not just a bench in a lab that is far from reality. This is a real setting and the minute you build confidence on the validity and the correctness of technology or the approach then you can take it over and run it, or deploy it in your actual distribution network.”

Farhangi and his team began operating the micro-grid almost two years ago, beginning many of the approaches initially in a lab environment. Following their research, they then applied to the government of British Columbia for funding, receiving an astonishing $2.7 million for a two-year project. The first phase of the project began in 2008, and so it is still a relatively new development.

He explains the first phase as being the basic development of the infrastructure.

“Although on the campus we’ve had a variety of different components we need to put networking technologies and computation

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and we can take those, engineer them and commercialize them,” says Farhangi.

Global operations The operations are conducted on a global scale. The BCIT Tech Center operates the first micro-grid in Canada, with participants from around North America. Farhangi notes IBM and GE as their US participants, whilst also noting BC and Canadian companies, as well as Schneider, a European company. But how will this translate to a global grid, and will President Obama’s hope of a more efficient grid stretch across international borders?

“What we are hearing from our counterparts in the US and elsewhere, and what we’ve also seen in terms of the developments that are happening at the moment, is that the smart grid is not a solution or an approach that is going to come about overnight,” he explains.

“The smart grid of the future is going to be at the integration of intelligent micro-grids”

Hassan Farhangi is Director for Advanced Information Technology at the British Columbia Institute of Technology, Vancouver, British Columbia, Canada.

technologies on top of the existing components, and experiment with all kind of provisioning methods for termination points, and integrate the sources of energies or cogents that we have on the campus. So the first phase is getting the infrastructure in place.

“The second phase would then look at the resiliency, the liability and the scalability of the solutions that we’ve put implemented. We try and scale up our solution in terms of data collection issues, protocols, and the distributed command and control strategy and try to make sure that we achieve the kind of standards and efficiencies that are required for the micro-grid. The third phase would be primarily commercialization.”

Farhangi and his team are working with a variety of different technology providers and utilities on the campus. Together they roll out their solutions, integrate their own technologies and create the solutions that are needed by the utilities. “We are hoping that in the third phase we would have a number of mature solutions that are validated, that are reliable, that are secure and that are scalable,

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“Smart grid is going to go through an almost evolutionary path and the developments are going to be primarily incremental. We are dealing with such critical infrastructure that it is almost unthinkable for any jurisdiction across the globe to try and meddle with it without being concerned about the criticality of the services that such infrastructure is providing.

“What we see happening is that the existing electrical grids that we have across the globe are going through a process of improvement.

We are going to start adding different levels of intelligence, starting from the distribution side of the network and working our way up the chain towards the generation part of the network, adding layers of distributed command, control and intelligence to the network.

“The dominant approach that a lot of utilities across North America are looking at is that the smart grid of the future is going to be at the integration of intelligent micro-grids. There will be a tendency of moving towards encouraging larger neighborhoods or larger customers to set up their own micro-grids, introduce a level of distributed generation of electricity, and turn their micro-grids into fully visible self-heating intelligent micro-grids.

“While they’re doing that they can start looking at integrating all of these intelligent micro-grids into a much larger intelligence system that would be our future smart grid. So the smart grid of the future would be an evolution of the existing infrastructure that we have,” he explains.

Farhagi’s definition of smart grid sounds promising – with continued research efforts and further unveiling of the two-year project, 2010 is set to be an exciting year for his team. n

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FEATURE

Mike Heyeck tells Natalie Brandweiner how previous mistakes help ensure the safety of the nation’s largest transmission system.

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“Energy efficiency is the cheapest resource we can get for our energy future”

S

ince the origin of nuclear fission in the 1930s, many attempts have been made to endorse nuclear as a primary source of energy: Eisenhower’s infamous ‘Atoms for Peace’ speech in 1953 and the US navy’s eagerness to develop nuclear power demonstrate America’s willingness to use this source of energy.

That is, until the 1986 Chernobyl disaster and a general movement against nuclear power stopped short the building of power plants.

As crude oil supplies continue to decline and technology for safer waste disposal increases, the new administration in Washington has begun re-embracing nuclear, and American Electric Power (AEP) is cleverly devising a strategy to incorporate the power’s previous faults. As SVP of Transmission, Mike Heyeck explains how nuclear energy is being used as a platform upon which to build the company’s safety guidelines.

“Our safety program is very integrated and actually addresses the areas of human performance based upon the model from the nuclear industry, which has been a leader in this. We’ve adopted that from the nuclear industry to address safety, as well as reducing operational errors.”

AEP is currently the largest transmission system in the US and as the first utility company to create an interstate transmission system, it has set the bar on safety standards. The utility operates 39,000 miles of transmission lines, including more than 2100 miles of 765-kilovolt extra high voltage.

“We’ve been a leader in transmission, not only in technology but also in some areas of safety. We are one of the pioneers in live-line maintenance: developing methods for doing so in a safe way, and we also benchmark very well with our safety statistics in the industry,” says Heyeck. “Being geographically dispersed, we still have a local supervision presence and rely heavily on local supervisors to help implement and execute the safety aspects of our business.”

Modeled on Eisenhower’s interstate highway network, AEP’s nationwide transmission system began in 2006 in an attempt to eliminate the transmission bottlenecks believed to be dominating the current power infrastructure, particularly within the eastern grid. The plan is to build a transmission line that spans the 550 miles between West Virginia and New Jersey, improving transfer capability by approximately 5000 megawatts and reducing transmission line losses by approximately 280 megawatts.

President Obama’s call for 10 percent of electricity to be sourced from renewables by 2012 will inevitably require a change in the current operations of the electric grid. If renewables are to increase, the transference of wind and solar energy from the east coast to the west is going to need a more efficient operation to ensure the energy being used does not create a loss. It certainly seems that AEP is already well aware of this, and is seizing the gap in the interstate market.

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Partnership

Interstate transmission Since 2006 AEP has expanded its interstate project to become many, using new technologies in a bid to create the most efficient transmission system in the US. “We’re using conductor configurations and metals that are lower loss and therefore more efficient in transmitting power. In fact, the efficiency is well over 99 percent, and we have line losses of less than one percent if we use our new design,” says Heyeck.

However, being the first to set the standard, particularly in safety, does not come without its challenges, Heyeck notes. “One challenge when you have a large workforce is implementing any new practice in a consistent manner, but we’ve been very successful in doing that.

Again, learning from the nuclear industry, we have a large body of knowledge to leverage in order to a program such as human performance.”

AEP intends to reduce new generation by facilitating the optimal economic dispatch of existing generation assets.

Heyeck believes the current state of the transmission to be “a hodgepodge grid with a lot of constraints,” and that this is largely the problem facing the US energy sector.

“The system cannot reach the most economic generation; in some cases there are pockets of uneconomic generation that has to run. If you build a robust grid without constraints, you can reach the lowest cost generation, or if you desire to access renewable generation, transmission is the enabler to do that.”

“If you build a nationwide grid, it’s more efficient – you have a greater reach of supply resources, and you’re able to reduce supply need” AEP and Duke Energy have formed a joint venture to build and own new electric transmission assets. The equal partners are looking to build 240 miles of extra-high voltage, 765-kilovolt, transmission lines, linking Greentown Station with Rockport Station, across Indiana.

Operating a 765-kilovolt transmission line provides both economic and environmental benefits to both parties. The line requires less land to carry more power than lower voltage lines, and would also cost less than half as much to build.

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To expand its interstate transmission system, AEP is working in partnership with the American Wind Energy Association to develop a conceptual grid that is capable of connecting 300,000 to 400,000 megawatts of wind generation across the US. “Most of our wind potential on land is in the midsection of the country, and most of our people are along the coastlines. Connecting that wind requires a grid that is nationwide. Through the partnership, not only are you able to do that but you also have a new grid that enhances economic dispatch, and as a result we could save at least

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20,000 megawatts in supply because of reduction of constraints and greater efficiencies. In other words, if you build a nationwide grid, it’s more efficient – you have a greater reach of supply resources, and you’re able to reduce supply need.

“We have a number of ongoing projects. One of them emanates from West Virginia into Maryland, and we’re going to file an application to site that transmission line in the next month or two. Another project is in the middle west of the country, in Oklahoma and Kansas, where we are in the process of getting permission from the state planning authorities to build those lines. We have an order from the regulators in Texas to build around one billion dollars of transmission connecting West Texas wind to load centers, and we’re beginning the siting process for those lines,” says Heyeck.

Obama’s proposal The new administration is heavily focusing on bringing transition to a new digital electricity grid through a series of smart grid features, such as smart meters, distributed generations and demand response.

With AEP already installing an interstate system, Heyeck explains that if they as one utility company can successfully instigate such a system, there is no need for federal involvement to establish it.

“We need to be clear when we talk about a ‘federal grid’. We, at AEP, do not believe that you need federal Michael Heyeck is Senior Vice President,Transmission for American Electric dollars to build an interstate transmission grid. Private Power. He was previously Vice President, Transmission Asset Management. Prior investment can be attracted to build transmission. to that, he held a leadership position in Corporate Planning and Budgeting for What we need is help with the impediments – a siting corporate budgeting and economic forecasting and has held various engineering process for interstate transmission lines. We would like and leadership positions in Transmission Planning and Transmission Operations. that to be under a federal authority.

He joined AEP in 1976.

The second impediment is allocating costs for those facilities. We believe costs should be broadly allocated based on energy usage. Once you get those straints of wind developers themselves. So, the goal is achievable. impediments removed, you do not need federal stimu“The only debate would be whether it’s achievable by the 2012 lus dollars to build transmission as private investment will be attarget. When you’re rising from one to two percent wind and solar tracted,” he explains. energy production to 10 percent, that does require an extraordinary However, Heyeck does not think the sameof all the stipulations amount of transmission being built, as well as wind farms and solar regarded in the energy plan, and explains how if energy is affectively installations. coordinated, the federal targets for renewables can be achieved.

“However, many gains could be made with energy efficiency with “In the US, there’s very little penetration of wind and solar federal help on the standards for appliances and so on. But energy energy, although we do now have more nameplate capacity than efficiency is, as some say, the cheapest resource we can get for our Germany, which is the second highest penetration of wind sources. energy future.”

But, if you include hydro capability in the US already, we’re someAs for bringing back nuclear as a reliable renewable source, Heyeck where in the neighborhood of less than 10 percent. explains that although there are advantages to learning from our previ“When the Obama Administration talks about 10 percent, they ous mistakes, reinstallation is not necessarily an easy process. are talking about wind, solar, geothermal and biomass. Hydro cer“Transmission ought to be neutral to what the fuel source is, tainly ought to be in the mix because we do have a good amount of whether it’s renewable or nuclear, but nuclear’s going to take some hydro generation in this country – more than five percent. The imtime. Not just because of the permitting process, but also because of pediments to achieving this 10 percent renewable goal are building the cost uncertainty.” n the transmission fast enough, and the financial and economic con-

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ENERGY STORAGE

Store and

deliver Bulk storage vs community energy storage vs compressed air storage: what are the benefits and drawbacks of each? Ali Nourai, Manager of Distributed Energy Resources for American Electric Power, helps P&E fill in the blanks.

What kind of market size do you see for a community storage approach for load management?

Ali Nourai. One way of measuring the trend is to look at conferences. In energy storage, as far as the conferences are concerned, a few years ago you could barely find one to go to. Now you get too many invitations. Two years ago, we had under 100 people coming to the Electricity Storage Association’s annual meeting on energy storage. This year we had 300 and we ran out of everything.

Another indication of the growth in this field is that a year or a year and a half ago, we had to go to some effort to reach congressmen and congresswomen and talk to them about energy storage. Now members of the ESA are routinely getting invitations to go to congressional briefings and talk to them about energy storage.

An interesting change we’ve noticed in energy storage is that up until about five months ago, smart grid had its buzzwords and energy storage was doing its own thing. Now these two groups are talking together. There is conference after conference about how energy storage is at the heart of smart grid.

A lot of changes have happened. A lot of waking up has happened. One level where this is very, very clear is at the congressional level. I talked to a congressman just the other day, and there is another congressional briefing coming up.

We keep being invited to these things – we were just dreaming about that a year ago.

The biggest barriers to deployment of energy storage were regulatory and legislative. Those people are waking up.

In Texas, we are putting four megawatts of energy storage. We were blocked by legislative rules that you cannot own storage because storage is generation. After six months of talking, the

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rules changed. Now we have the approval of the Public Utility Commission to go ahead and do that. So a lot is happening and these are the indicators that determine the market.

When will AEP and other utilities include the community energy storage concept in their planning and commercial deployment?

AN. When we started with the NaS battery in 2005, we went after that as an R&D project and installed it. It was operational in 2006. In 2007, our planning people ordered six more megawatts and our transmission ordered another four megawatts. They did that on their own. In other words, they bought into it. Once the storage is functional, they see the value – they pick it up. Planning departments have picked it up. When you look at other utilities, a lot of them look at the storage as an R&D thing. Just put it in the lab and see what happens.

What AEP did was say, “We’ll go right to the field. We’ll put it on the real circuit serving real people.” And we saw the results. Planning bought into it within a year because planning goes in a yearly cycle.

From this experience we say that once it’s on the ground and people see that, it just goes by the cycle of the planning.

Another factor to consider is when it comes to big storage like a substation, it takes a lot of high-level management decision-making to go into a multimillion-dollar project to start one. With community energy storage, you can start it with as little as $56,000. It doesn’t need a high-level management decision to get started, which means we expect a lot faster and broader acceptance of community energy storage once the first one is installed and operating, and the results are shown, which is going to be the case next summer.

AEP has gone after a proposal in the State of Michigan. If we win that proposal – and we expect to win – that will be one megawatt in Michigan of community energy storage. That one megawatt will be installed next March. As soon as it’s available, we’ll start talking about it and share the results.

How do centralized fast response energy storage and decentralized fast response storage coexist?

Compressed air energy storage Compressed air energy storage refers to the compression of air to be used later as energy source.

At utility scale, it can be stored during periods of low energy demand (off-peak), for use in meeting periods of higher demand (peak load). Alternatively it can be used to power tools, or even vehicles.

AN. In terms of frequency regulation, for the time being it would primarily be done at substation level – it needs a few years to establish itself to that point. Altairnano has a trailer of batteries that will be operational and be leaders in the next two or three years. Community energy storage may pick up sooner, because it is not the little box run locally.

A control hub isn’t a substation. The control hub sees a minimum of one megawatt, so for all practical purposes it can do the same thing as a substation battery. The only difference is that substation batteries exist today. AEP has about seven megawatts running right now, and we’ll have 11 megawatts before the end of the year, and lithium ion-based ones are just being added. So they’re just about a year or two years ahead of distributed energy storage, but once distributed is in place, there is no difference.

Whichever storage you have, you’ll use it for that purpose. One of the key things AEP is trying to promote is that energy storage is very, very cost effective if, and only if, we learn how to have multiple benefits on each installation. This is the way to go. That means I’m not going to put one kind of storage and say, “This is only for backup,” and put in another storage and say, “This is only for frequency regulation.” Storage is too expensive for that.

Whatever storage we put down, we try to use it as many ways as we can. We’re going to use it for frequency regulation. We’re going to use it for backup. We’re going to use it for deferred capital, for all of the above, for as many uses as we can – our intelligence allows us to do this because it takes some thinking to have multiple use and multiple functions, and we are going through that exercise. With that kind of thinking to justify storage, I don’t see any reason to say that I’m not going to use this storage for frequency regulation just because I don’t like it.

I have to.

This is the most efficient way of doing things, especially with the high cost. If you look at what AEP is doing, the first storage we put in was capital deferral only. The one we put in 2008 was capital deferral and islanding, which is backup power at the substation level. What we’re going to do with community energy storage is all of them plus frequency regulation. We have a frequency regulation project going on to be able to learn how to do it. Learning how to do multiples takes some time, but that is the target. Any storage we put down, we’re going to try to use it for at least two or three different benefits, including frequency regulation.

“One of the key things AEP is trying to promote is that energy storage is very, very cost effective if, and only if, we learn how to have multiple benefits on each installation”

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SECOND GENERATION COMPRESSED AIR ENERGY STORAGE (“CAES2”) TECHNOLOGIES ARE PATENTED BY DR. NAKHAMKIN AND LICENSED BY ES&P.

ES&P PARTICIPATES IN ALL STAGES OF CAES2 PROJECTS EXECUTION FROM CONCEPTUAL ENGINEERING AND OPTIMIZATION TO DELIVERY OF PLANTS ON TURNKEY BASIS. SECOND GENERATION CAES2 PRIME FEATURES: • Provides Load Management of Renewable Energy and Optimization of Smart Grid • Totally Green Energy Storage Cycle with ~ 90% Efficiency • Scalable from 15 MW to 430 MW • Total energy delivered with Heat Rate Less than 3,800 Btu/kWh • Bottoming Cycle Green Power is ~ 150-200% of CT Capacity • Above- and Below-Ground Compressed Air Storage • Less Expensive than Combined Cycle (CC) Power Plant Vent Air

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110 MW CAES PROJECT- THE ONLY CAES PROJECT IN THE US.

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CONTACTS: ROY DANIEL (Chief Operating Officer)

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Utilities are struggling to quantify the return on investment for energy storage, specifically energy storage devices supporting good stability, because standard economic models don’t exist for energy storage. How can utilities and storage providers overcome this challenge?

AN. That is a very interesting challenge and AEP has developed its own model. We hired an external provider to develop the financial model because internally people found it hard to imagine we could do so many things in storage. The key answer to that question when it comes to justification is multiple benefits on each application. If you say, “I’m going to put in storage just to handle wind,” it’s not justifiable. It’s too expensive.

If you say, “I have a solar system here. I’m going to put in a battery just to buffer, to handle when the cloud comes in,” it’s difficult to justify that. What we try to do with the community energy storage, it has a DC input. That means if a customer has solar, we’ll take it. If a customer has wind, we’ll take it. At the same time, we do provide backup power – we level out the load of the substation and defer capital. We’re doing frequency regulation which is the only way we can justify it.

AEP has a two-tier approach towards cost and economics. One is multiple use. The other one is that community energy storage does not have any chemistry. It could be any storage. It’s a platform to take advantage of the synergy of electric transportation. We are going after the market size to help us. We believe that in a few years, once the electric cars start to roll on the roads, and especially being able to use a used electric car battery, we can master the economics, but without the electric transportation, without multiple benefits, no way. It won’t happen for years to come.

What’s on the horizon in terms of the wide-scale deployment of bulk electric storage technologies?

AN. We started in the 1980s as a leader in bulk storage. We put a lot of that there. The problem is it did not spread as fast as we wanted it to for several reasons. Number one, there’s not enough competition, and it takes a long time before competition comes to life. If we want to put in another substation battery in the next two months, for example, we have

no choice but to use an NaS battery. And because there’s not enough competition; the price is high. The price went up instead of down.

The second problem is if another utility wants to do it, they have to put in some good money to get started. These are the two disadvantages in bulk storage the way it is formatted today. That is why we designed this new bulk storage called community energy storage. It appears not to be bulk, but the control is designed to be at least one megawatt. We tried to solve the challenge of the bulk storage through the system for those two reasons I mentioned.

One, there’s no competition in bulk. There’s too much competition on electric transportation. Everybody in the world is trying to come up with a car battery. The second issue is it’s difficult to justify the next project. With little boxes, you’ll gradually phase it in. You don’t have to justify it all in one year.

There is one thing I see in bulk that I don’t see in CES. Utilities have their temporary transformers on trailers or wheels. When disaster hits, they move these transformers around the system. We need batteries on wheels for disasters. You cannot unplug the battery from the backyard of people and move them around.

You may say that with electric cars you can just send a signal out on the radio: “Hey, people, we need your cars plugged in at such and such

NaS battery Terminal Electrical insulation

Sodium chamber

Metal insert Sodium electrode Solid electrolyte Sulfur electrode Cell container

Sodium sulfur battery schematic A sodium-sulfur (NaS) battery is a type of battery constructed from sodium (Na) and sulfur (S). This type of battery has a high energy density, high efficiency of charge/discharge (89-92%) and long cycle life, and is fabricated from inexpensive materials. Because of the operating temperatures of 300 to 350 °C and the highly corrosive nature of the sodium polysulfides, such cells are primarily suitable for large-scale non-mobile applications such as grid energy storage.

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hour because of an emergency.” Maybe we can do it that way; I don’t know. The transformers on wheels are ideal for emergencies, and they can beat community energy storage in their transportability, so quick transportability is one of the features of bulk that is not quite there with community energy storage.

battery on it. Once batteries hit 100 megawatts in one place, or more or less in one place, or controlled collectively in one place, which in my opinion is a matter of a few years, it will be difficult to justify compressed air, which is a special site that needs gas, that needs a power plant, that needs crew to run it, and the efficiency is not that exciting compared to electricity. The efficiency of an electric transportation battery today is 90 plus percent. The efficiency of compressed air is far below that. But yes, if somebody needs 100 megawatts of storage six months from now, compressed air is the solution.

The reason AEP jumped ahead and put money into storage is we see the strategic value. The amount of customer-owned and operated generation connected to the AEP system is doubling every year. We cannot let it go without a storage buffer and pretty soon we will lose control of our generation because these guys all of a sudden will have 20 percent or 30 percent of our generation and they generate whenever they feel like it or whenever the sun is shining. We cannot run a business like that. We have to have a buffer. That strategic value is what got AEP to get started. When it comes to economics, it’s very difficult to put a dollar figure in front of it. n

“The amount of customer-owned and operated generation connected to the AEP system is doubling every year”

How does compressed air storage work and what are its advantages?

AN. There are two types of compressed air.

For the type that does exist today, there’s only one plant in Germany and one plant in the US. This is a gas-burning power plant that on the side takes advantage of compressing the air in a cavern. This is more than just storage. It’s a power plant.

It needs fuel and it needs staff. It needs a crew to run. If you look at it on a cost per unit of stored energy overall, it’s one of the least expensive and one of the best, but the one drawback is that there’s a power plant next to it.

The other thing is you cannot just put it anywhere you want. There are quite a few sites where we could do it but it has to happen to be the place you also need it. All these things negative aside, if somebody asked me, “I have a wind farm and I need storage and I need to install it within the next six months. What should I do?” I would tell them go to compressed air. That’s the only solution. But given time, I don’t think how it can compete with batteries.

Once the batteries hit the 100-megawatt level, compressed air will be seriously challenged because batteries of 100 megawatts and above don’t have the issues that compressed air has. The largest wind farm that I’m aware of with batteries running at this point is a 52-megawatt wind farm in Japan and has about a 30 megawatt NaS

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Ali Nourai is Manager of Distributed Energy Resources for American Electric Power and Chairman of the Electricity Storage Association.

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INDUSTRY INSIGHT

Renewable storage Jeff Brunings explains the challenges of mitigating the unpredictable and rapid changes of renewable generation.

E

nergy storage isn’t just about storage capacity. It’s about power. And a new breed of fast response, highpower energy storage systems, like those introduced by energy and power management company Altairnano, is helping solve some tough challenges.

Take the renewable portfolio standards for example. twenty-nine states, including the District of Columbia, have adopted aggressive mandates for integrating renewable generation. Illinois, Minnesota, Nevada, Ohio and Oregon, each with relatively low levels of renewable generation, are all shooting to have 25 percent renewable integration with the grid by 2025.

Those are aggressive goals, especially when considering that renewable generation currently represents a little more than two percent of total US electricity generation.

As the penetration of wind and solar generation deepens, energy storage systems like the Altairnano Energy Storage System (ALTIESS) will be needed to help stabilize the electric grid and mitigate the unpredictability associated with renewable generation.

In the US today, the relatively small amount of non-dispatchable energy in a balancing area rarely has significant impact on system operations. This is because the natural variability of the load is still greater than the uncertainty of utility-connected renewable energy resources. But this is changing, and it’s changing fast.

In fact, FERC recently announced a $500,000 study to determine whether the existing US power grid can handle the addition of substantial amounts of renewable resources by 2012. Results are expected to be released in late 2009. And the California Independent System Operator (CAISO) anticipates by 2012 regulation capacity could increase by 250 MW for up regulation and up to 500 MW for down regulation for a total of 750 MW.

Of all renewable generation resources, wind and photovoltaic solar are most likely to contribute to grid instability. In a report published in April 2009, NERC predicted “at higher levels of variable generation, the operation and characteristics of the [system] can be significantly altered.” The study cites the potential for wind generation to increase ramping requirements of conventional generation as much as 45 percent to maintain grid stability.

Utility-scale PV systems have experienced substantial ramps, as well. According

Jeff Brunings serves as director, strategic marketing for Altairnano, a leading provider of energy storage systems for clean, efficient power and energy management.

to the NERC study, PV systems may experience variations in output of +/- 50 percent in a 30 to 90 second timeframe and +/- 70 percent in a five to 10 minute time frame.

The problem with conventional generation is that it can not dispatch in the time required to respond to sudden variations in renewable generation output. Ramp rates for diesel engines require up to three minutes

for achieving full power. Gas engines require up to seven minutes. Industrial gas turbines may take up to 20 minutes. The ALTI-ESS achieves full power in milliseconds.

Based on advanced lithium-titanate technologies, ALTI-ESS responds to these fluctuations by releasing or absorbing power from the electricity grid. This helps improve equipment and capacity utilization, strengthen operational efficiencies and reduce carbon emissions. Current solutions in commercial operation include a 1 MW/250 kWh system at the PJM Interconnection, which runs nearly continuous operation throughout the day for The AES Corporation.

The ALTI-ESS features a power module and power control system module. The power module has a 1 MW lithium titanate battery stack and a battery management system.

Power modules can be added for multiple MW configurations. The power control system module features necessary electronics to convert from DC to AC and communications software required for receiving and responding to grid signals, including PLC, SCADA, and data service unit.

Additionally, the ALTI-ESS is transportable, scalable to multi-megawatt configurations, achieves greater than 90 percent roundtrip efficiency and has an expected calendar life exceeding 20 years. A basic configuration is a 1 MW/250kWh system, but it’s capable of supplying different power and energy requirements depending on system.

As states move toward achieving renewable portfolio standards no one knows the increased costs utilities will incur for managing grid stability. No one really knows the full mega-watt potential for fast response, energy storage systems, either. But, if California is any indication, with an anticipated increase of 750 MW total regulation capacity required by 2012, both the cost and opportunity are significant. n

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INDUSTRY INSIGHT

SMART GRID DEMANDS SMARTER IT

By Ron Potter

A

s grids become more intelligent, they have to be supported by even more sophisticated IT systems. That demands platforms that can ramp up and ramp down rapidly according to the dictates of market forces.

In such a world, IT tends to suffer from two major challenges – under-provisioning and over-provisioning. Both can be solved via automated capacity planning and perfor-

“It is essential that ongoing initiatives to add more intelligence to the energy infrastructure are backed up by IT tools that provide enough flexibility to cope with rapid change” mance management software that contains enough flexibility to accurately predict traffic patterns and growth trends while being able to detect unexpected peaks and troughs and make the necessary adjustments.

Right-sizing capacity Capacity planning makes it possible to know if the current infrastructure is adequate to cope with the addition of new applications or a greatly increased traffic volume. If more resources are called for, capacity planning highlights how much extra equipment needs to be deployed. And with so much top management attention on smart grid initiatives, such automated tools enable IT to load up existing systems with greater workloads without causing a bottleneck. Thus it becomes possible to maximize the ability of systems to respond to market volatility.

Capacity planning also reaps big rewards

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by revealing what IT assets are already in place. There is hardly an energy company in the nation that can honestly say it knows the location and role of every server in its midst.

By conducting such an inventory automatically, capacity planning software permits optimization of what is currently in place. In many cases, this action reveals large pockets of unharnessed resources that can be corralled to cope with ongoing expansion.

Performance management While capacity planning could be characterized as a crystal ball, performance management is the troubleshooter. Despite the most meticulous planning, unforeseen circumstances sometimes result. Whether due to massive spikes in demand, a local blackout or the impact of uncontrolled application roll out, IT departments must occasionally deal with performance degradation. The challenge is to quickly isolate the source so the proper remedial actions can be executed. With the right tools in place, energy companies can stay one step ahead of trouble.

It is advisable, for instance, to always monitor metrics concerning the utilization of processing power, memory and the network.

Thus when an issue shows up, it is relatively easy to drill down into the affected area to discover the application, server or business unit responsible.

This directly correlates to the bottom line. Instead of throwing more servers, more disk capacity, more bandwidth or more powerful processors at the issue, performance management often reveals specific areas of bottleneck that can be reorganized for optimum throughput and availability.

Ongoing process Once conducted, capacity plans should be repeated annually to take into account growth rates and changes in the environment. Further, in an organization that has to deal with huge traffic volumes or rapidly fluc-

tuating loads, interim capacity plans should be done at least every three months. Ad-hoc reports should also be carried out to verify all is well and to investigate unusual occurrences or to follow up on unusual patterns.

This should be carried out in tandem with ongoing performance management to detect and prevent bottlenecks from materially affecting system performance.

Further, in an era of smart meters and smart grids, it is essential that ongoing initiatives to add more intelligence to the energy infrastructure are backed up by IT tools that provide enough flexibility to cope with rapid change and enough prediction about future trends to prevent system bottlenecks. It is only a matter of time before we begin to see news stories about state-of-the-art energy infrastructure being constrained due to inadequate or overloaded IT resources. The way to avoid this fate is to include proven capacity planning and performance management techniques and technologies as part of any smart grid implementation. 

Ron Potter is IT best practice manager at TeamQuest, and has been involved in IT for 30 years, working in a number of industries including gaming, banking, IT service and healthcare.

Prior to TeamQuest, he was involved with a multi-year IT improvement initiative at a major healthcare company that embraced ITIL. For more information please visit www.teamquest.com

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RENEWABLES

S E C R U O S E L B A I REL

T

he recent Administration’s commitment to increased usage of renewable energy sources has certainly made easier the strategies of those companies already implementing energy efficient programs. As VP of Renewable and Energy Solutions for PSE&G, Alfredo Matos is one man committed to raising the profile of energy efficiency and serving its ever-growing ‘green’ customer base.

Obama’s energy strategy has stated a goal of ensuring 10 percent of America’s electricity comes from renewable sources by 2012, setting the precedent for energy usage now, and in the future. But Matos has been one step ahead – formulating renewable strategies since being named VP in January 2008, and ensuring the consistency of these with the overall corporate strategy.

Across the corporation, PSEG’s family of companies are committed to renewable energy, be it Matos’ arena within PSE&G or its sister company PSE&G Global, which is currently implementing a program of wind turbines. “That project is being done outside of the regulated utility and they were successful in placing a bid with the state in order to command with the partner that they have to operate offshore turbines,” says Matos.

Matos’ concentration focuses on strategy making for energy efficiency, within the utility’s proposal, including its phenomenal $190 million investment plan, which is currently seeking approval from the Board of Public Utility. “We anticipate that this will happen soon and we’ll invest that money over an 18-24 month period. That was in response to a call from our governor for the utilities to come up with a stimulus package that provided and created jobs within New Jersey, as well as providing the energy efficiency measures to our customers.

“It contains several programs within that filing. Many of those programs are already being implemented within the smaller program that we started back in January: we simply took the program, enhanced it and scaled it up in order to come up with $190 million to be spent over the next 18 months. It’s an innovative program where it looks at providing homes at residential customers with an energy audit, and then it follows up with implementing the various measures that the audit says one should do in order to become much more energy efficient, such as placing insulation, caulking and so on.

That’s on the residential side.

“Nuclear does have an important role in the overall energy infrastructure here in New Jersey and in the US”

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“We have similar programs for small businesses, hospitals and warehouses – we’re trying to cover the various segments within our customer base in order to provide them with an avenue to become much more energy efficient, essentially by buying down the investments or the costs they would normally make. Utility would then make those investments in those homes and businesses, in order for those customers to recognize or realize the energy savings.

That’s a very high level view of the energy efficiency filing,” he explains.

Solar strategies Another aspect of the January program is a focus on solar energy sources, with a commitment to providing complete consumer-wide access.

The current filing sitting in front of the board is a proposal for $773 million over five years, which will install those solar systems owned by the utility on its utility poles and on schools throughout its service territory, as well as municipal buildings. It also plans to provide solar resources for its low-income housing that typically would not enjoy the advantages of solar energy along with installing solar farms on certain properties that the utility owns.

“We call it ‘Solar for All’, because we firmly believe that through this approach we will be placing solar for all of our customers. The best example of this would be the pole attached solar which goes into every neighborhood, and power which that solar panel is generating will be directly connected to the customer’s grid, going into their homes.

“So it truly is a solar project for all. It has various segments for

the benefi t of our hard to reach customer base. Solar, for the longest time, has been implemented in more wealthy areas, but if we provide gas and electric to everyone, we believe that as an energy company we should also be providing solar and energy efficiency measures to everyone,” says Matos.

Green collar The implementation of such strategies promises an increase in the amount of required workers to carry out these changes – from creating and constructing the solar poles, to the installation of individual customer grids. Obama’s statistical commitment to renewable sources is firmly backed up with the creation of a new workforce – a deployment of five million ‘green collar’ workAlfredo Matos joined ers, through an investment of PSEG in 1981 and was $100 billion dollars, to install named Vice President of clean energy, and with PSE&G’s Renewables and Energy renewable strategy, the utility Solutions of Public Service certainly is one of those across Electric and Gas Company America endorsing the new Ad(PSE&G), in January 2008. ministration’s goals.

Prior to this, Matos had “It takes a real commitment been VP of Distribution on the part of the American Operations and EHS of people, as well as businesses PSEG Global since 2004. and utilities, to play an important role in achieving those targets. The utilities industry is in the business of energy and we are regulated just like everywhere else in the world, but regulators, utilities and customers need to work together to recognize that the utility plays an extremely important part in providing solar and energy efficiency measures, whilst still being fair to the utility’s shareholders. In doing this we can reach those targets of creating jobs as an initial byproduct of this effort. The longer term would be to improve the economy and become more energy independent.”

In PSE&G’s deployed state of New Jersey, there is a 30 percent target of supply to be sourced from renewable energy by 2020, with

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two percent of this target being solar. Matos explains that despite this being only 1800 megawatts, a very small amount of the total energy consumed in the state, it is a huge stepping stone for the future of renewables.

“It’s an enabling initiative that will show the world that this type of technology is something that is very much achievable, that we can implement it. It has positive qualities, such as job creation and helping the economy, and also contributes to a reduction in foreign sources of energy.”

Attempting to seize the opportunities that nuclear brings, PSEG is currently looking at the viability of building a new nuclear plant at the site of its Hope Creek and Salem units, and as far as Matos is concerned, the utility’s consumers are very excited for nuclear.

“We haven’t seen any negative feedback. It seems to be pretty quiet. People seem to recognize that nuclear does play an important, clean role. For the most part people have learned more about nuclear over the years, and over the past 25 years nuclear has worked well. People are more accustomed to it than they were before.”

Matos’ strategies for PSEG’s renewable future seem promising. “The key is to quickly implement those strategies that we’ve laid out over the past 12 months, so that the customers can see and touch those strategies and make them real , instead of something that’s hypothetical or theoretical.

“We’re now doing that here in New Jersey with some of our programs whereby we’re going into people’s homes and doing the audits, we’re doing some of the energy measures and once we get the solar approved we’ll start installing those on the top of our utility poles. When people see them, they’ll see that it’s technology that does work, so implementation over the next 12 months of the strategies we’ve laid out is important. That will breed additional success.” n

“Regulators, utilities and customers need to work together to recognize that the utility plays an extremely important part in providing solar and energy efficiency measures” Infrastructure However, before utility companies or its consumers can dream of a 100 percent renewable empowered world, there is still the old infrastructure to consider. Ranked as number one in the nation for reliability, PSEG is keen to ensure that the amalgamation of the old with the new does not disrupt its dependable energy delivery.

“As we move towards a new 21st century infrastructure, there will have to be a continuation of investments in our systems to maintain the level of reliability that PSEG is noted for. As we continue to put distributed systems throughout our territory, it’s going to require additional smart grid and more intelligent communications.

“Also as we start introducing plug-in vehicles, this is going to alter and change the way utilities have done things on a go-forward basis. A plug-in vehicle will take energy from the grid, but will also give energy to the grid if that area requires it. So metering technology is extremely important and smart grid again plays a vital role in this view of the utility of the future,” notes Matos.

Renewables does not simply stop after wind, hydro and solar, however. As utilities are becoming increasingly aware of the benefits of nuclear power, and consumers become educated on the validity of nuclear as a safe energy source that can be deliverable to their homes, nuclear is re-emerging as a viable, clean source of energy, and PSEG are certainly keen to include it within their strategy.

“We have a three-prong approach of energy efficiency, renewables and nuclear being the third leg of that three-legged chair.

Nuclear plays an important role. I consider it to be green and the technologies have obviously improved over the past 20 years since the last plant was built. There are good examples around the world of where current nuclear has occurred and nuclear does have an important role in the overall energy infrastructure here in New Jersey and in the States,” Matos says.

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PSEG’s nuclear plants

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ope Creek Generating Station is a 1220 megawatt nuclear power plant located in Lower Alloways Creek, NJ, adjacent to the Salem Nuclear Generating Station.

PSEG originally proposed the plant in the early 1970s and received a construction permit in November of 1974.

The Salem Generating Station consists of two nuclear generation reactors with 2304 total megawatts of electrical capacity located in Lower Alloways Creek, NJ. It sits next to the Hope Creek Generating Station, also owned and operated by PSEG. Salem Unit 1 began producing electricity in December 1976.

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19/6/09 15:39:22

Powering a cleaner planet, empowering sustained profitability

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Conergy

Local expertise backed by a global leader.

Conergy teams provide turn-key solar energy solutions and unparalleled client focus to meet a continuum of renewable energy objectives. We have the resources to provide multiple solutions to maximize customers’ return on investment while meeting their current—and future—energy needs. Our global reach and years of experience bring confidence to partners that we’re in the renewable energy business for good—the collective good.

Where we are, there’s energy.

In more than 15 countries on 5 continents, Conergy is driving innovation and market creation in the realm of renewable energy. Nearly 1 in every 10 of the world’s solar energy systems has been supplied, installed or developed by Conergy. Over the past decade, we have deployed over 1 gigawatt of renewable energy around the world, 400 megawatts of which is within Conergy’s major projects portfolio. It’s no wonder we say: Our world is full of energy.

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EXECUTIVE INTERVIEW

Solar partnership REC and Summit Power recently partnered to develop utility-scale photovoltaic projects in the US market. Dana Zentz joins us to discuss their ambitions for providing solar systems to utilities.

Explain what this new partnership between REC and Summit Power is about.

Dana Zentz. We are very excited about teaming up to promote solar as a resource for US utilities. REC is a major global player in the solar industry that possesses the most vertically integrated value chain. As a result it is able to systematically reduce costs across all of REC’s business lines – silicon, wafers, cells and modules. The REC-Summit Power partnership combines this with Summit Power’s extensive development experience – in total 6000 MW of traditional and renewable energy technology – giving the partnership powerful capabilities in responding to utilities’ needs as they want to go solar.

Why is now the time for utilities to go solar?

DZ. During the last six to nine months in particular, a confluence of events is pushing solar energy to the forefront. Utilities increasingly face hurdles to the implementation of non-renewable energy sources, as well as calls from both governments and customers to promote renewable energy.

At the same time, the costs of solar energy are coming down at an accelerated rate. The solar industry has, over the last three to four years, also reached a greater

level of maturity, which means both greater technology performance and lower execution risks. All of these things make now a great time to go solar.

How are solar costs coming down?

DZ. Since the demand for renewable energy is here to stay, the challenge for solar is to become as cost-effective as other clean energy choices. This is happening already as the price and performance of PV modules rapidly improve. Indeed, PV is already in the cost range of conventional generation options in many instances. It also is notable that as much as 50 percent of solar system costs can arise from Balance-of-System (BOS) components, which we are focused on driving down significantly through replicating and scaling proven solutions. Finally, Summit has pioneered a low-cost project-financing model for wind development that can lower costs further.

What do you think utilities want to see in a solar resource?

DZ. In addition to lower costs, utilities certainly want to see reliability and minimized project execution risk. For this, utilities

Dana Zentz is Vice President of Summit Power and has over 25 years of active involvement in the energy industry. He founded and managed Inland Energy Consulting, Inc. Inland Energy assisted utilities, independent power producers and energy merchant firms with strategic and commercial matters related to power and natural gas supplies and energy project management. He leads marketing efforts for the REC-Summit partnership to western US utilities.

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need experienced project development professionals that understand the utility business model and focus on scalability and standardization. Our team, which has developed 6000 MW of generation projects in the US using traditional and renewable generation technology, is very close to finalizing development of a standardized reference PV power plant, which can be replicated quickly and cost effectively.

We also intend to employ an ‘urban infill’ strategy for project siting, which will move power generation to relatively small sites close to loads and thereby increase reliability benefi ts to utilities while minimizing transmission costs and development risks associated with massive central station power projects. This approach has clear environmental as well as cost reduction advantages.

Lastly, utilities need load-matched resources. Solar can provide a more predictable and peak load shaped generation profile than wind, for example.

What are your prospects for long-term growth?

DZ. We are optimistic. The 80 percent growth in demand we saw in 2008 can only continue to result in the dropping of market prices and structural changes in the industry as competition intensifies. We are confident to succeed through our REC-Summit partnership, and we have already received very promising feedback from utilities with which we have discussed project opportunities.

For more information contact us at 1.877.687.7786 or at www.summitpower.com/solar.

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RENEWABLES

TRANSMISSION PROPOSITION American Wind Energy Association CEO Denise Bode offers the case for new transmission infrastructure.

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he United States is home to vast quantities of clean energy resources – wind, solar, geothermal and hydropower. Yet it lacks a modern interstate transmission grid to deliver carbon-free electricity to customers in highly populated areas of the country. The Obama Administration has called for a national energy policy that calls for the United States to double the production of renewable energy in three years and to obtain 25 percent of its electricity from renewable resources by 2025. Achieving this objective will require a cohesive effort from local, state and federal officials – including Congress – and significant new investment in our transmission infrastructure. But it is necessary.

The massive deployment of renewable generation envisioned by the Obama Administration cannot occur without a renewed investment in our country’s transmission infrastructure. The US Department of Energy (DOE) has identified transmission limitations as the greatest obstacle to realizing the enormous economic, environmental and energy security benefi ts of obtaining at least 20 percent of our electricity from the wind. Currently, almost 300,000 megawatts (MW) of wind projects, more than enough to meet 20 percent of our electricity needs, are waiting in line to connect to the grid because there is not enough transmission capacity to carry the electricity they would produce.

To promote the expansion of renewable energy, the transmission grid should be built to link areas with vast potential to generate clean electricity to the areas that have significant demand for electric power. ‘Green Power Superhighways’ is a term used to describe the power lines that would be carrying electricity from remote to populated areas. While different build-out plans can be envisioned for green power superhighways, the key to any cost-effective plan is the use of high-voltage transmission lines in place of the low-voltage lines common in the US today.

Efficiency Outdated policies – not technical or economic barriers – are the chief factors impeding the construction of green power superhighways.

However, some grid operational reforms could make better use of our infrastructure. The present patchwork transmission system makes it very difficult to move large amounts of renewable power around the country. A solution is to use the existing grid more efficiently through technology and new operating protocols. This is not a replacement for green power superhighways, but undertaking a set of reforms would allow more wind and solar energy to be integrated with the grid at lower cost. Increased efficiency would provide greater flexibility for changes in electricity supply and demand, and would improve economic performance of the grid even without renewable energy.

Building a new transmission infrastructure will save consumers money. A robust transmission grid will give consumers access to lower-cost electricity. On a severely constrained transmission grid, as now exists in many parts of the United States, consumers are forced to rely on local power plants even though plants in other regions can produce power more efficiently and at a lower cost. The effect of this squeeze goes beyond financial hardship for residential consumers: businesses pass higher electricity costs on to their customers, and electricity-intensive industries have a strong incentive to relocate to regions with lower electricity costs, taking jobs with them. New transmission infrastructure would increase competition in wholesale power markets. Just as consumers in a region with a single retailer and without high-quality roads to other regions would be at the mercy of the prices charged by that retailer, a weak grid makes it possible for

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in many areas have primary jurisdiction over what transmission gets built and who pays for it, are often required to weigh only the benefits that will accrue to residents of that state, thus ignoring a major portion of the benefits of a new system that also serves other states.

Most state regulators have little authority or incentive to require ratepayers to help pay for an interstate network. Another major obstacle is that regulators in a single state can effectively veto a multi-state transmission network by refusing to grant the permits needed if they feel that their state would not receive an adequate share of the benefits.

Reform

power generation owners in constrained sections of the grid to raise prices beyond what they would be in a competitive market.

Recovering cost Studies have consistently found that the costs of transmission investments needed to integrate wind power and other renewables are significantly outweighed by these consumer savings. For example, according to a recent study, a $50-60 billion investment to significantly reduce congestion and integrate 240 gigawatts (GW) of wind in the Eastern US would reduce electricity costs by enough to fully offset the cost of the investment; Meanwhile, according to studies by the Electric Reliability Council of Texas (ERCOT), the benefits of an investment in new transmission infrastructure for renewables in Texas would grow to be larger than the costs of the investment in less than three years; and, according to a recent analysis by Charles River Associates, International, an investment in a high-voltage transmission overlay to access wind resources in Kansas, Oklahoma, and Texas would provide economic savings of around $1 billion per year, more than twice the $400-500 million annual cost of the transmission investment.

Although the benefits of transmission easily exceed its costs, few private firms have stepped forward to invest in transmission infrastructure. Why? Because the benefits are not adequately reflected in the incentive structure offered to transmission investors. In other words, the existing regulatory structure often gives companies little or no economic incentive to invest in transmission that will make consumers and society as a whole better off. State regulators, who

These regulatory barriers to new transmission can and must be overcome if we are to undertake a major investment in a new transmission infrastructure. Federal legislation is needed to provide new mission statements, adequate resources and specific timelines for action for federal agencies, such as DOE, the Federal Energy Regulatory Commission (FERC) and federal lands agencies. In particular, reform is needed in three broad areas.

The first step in building green power superhighways is to develop a comprehensive plan. This requires both the Western Interconnection and the Eastern Interconnection to develop regional transmission plans that identify where new or expanded transmission capacity is necessary to connect renewable energy resources to the grid and, ultimately, to load centers.

Facilities identified in the interconnection-wide plan as necessary for the development of green power superhighways should be eligible for broad, regional cost allocation. Specifically, FERC should allocate, based on electricity usage, the capital and operating costs of these transmission lines across all load-serving entities on an interconnection-wide basis. In regulatory terms, the “determination of need” would be made in the regional plan, approved by FERC. In addition to regional planning and cost allocation, substantial reform of the transmission siting process is required to meet national renewable energy goals. The most effective model is the siting authority that was given to FERC over interstate natural gas pipelines. For green power superhighways, the extra-high-voltage facilities defined in the regional plans would be subject to FERC approval and permitting. Separate siting approval at the state level would not be required.

FERC would act as the lead agency for purposes of coordinating all applicable federal authorizations and environmental reviews with other affected agencies.

The road forward Modernizing America’s outdated transmission infrastructure will not be easy. It will require bold, forward-looking action from leaders who recognize that addressing America’s economic, energy and climate challenges must be a top priority in the coming years. All three require new, innovative ways of thinking about energy policy at the local, state and federal level. And all three will require a modern transmission system that is able to deliver clean, abundant renewable energy to homes and businesses efficiently and reliably. These are challenges that we can and must address now. n

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HYBRID VEHICLES

ELECTRIC RENAISSANCE Why plug-in hybrid cars are on the rise again. By Natalie Brandweiner

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mong President Obama’s plans for a cleaner, greener America, quietly tucked away behind renewable increases and carbon decreases, is the plan to transform the US transportation structure. With an estimated number of 700 million cars on the road globally, producing 2.8 billion tons of carbon dioxide, the new administration is in a desperate bid to dramatically change the way Americans travel. Obama’s launch of the Plan for America upon his election displayed his commitment to

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reducing the number of emissions produced by America’s notorious SUVs. As oil prices continue to rise across the globe, the US is just one of many countries attempting to make themselves more self sufficient through increased use of renewables, and cutting down on the amount of imports that make it so dependent on its volatile relations with the Middle East.

Whether it’s due to unpredictable international politics or a genuine desire to save the planet and reduce the amount of carbon dioxide emitted in the US, Obama is now attempting to conceptualize plug-in hybrid cars (PHUVs) as a realistic form of transport for all Americans, not just a fancy spend for the rich.

The targets for the initiative are to see one million PHUVs operating on US roads by 2015, with a number of ‘green’ consequences to

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Electric vehicles gradually died out globally, although minor usage in Europe and the US occasionally graced the industry with a slight nod; for example, with the General Motors’ ‘Electrovair’ in 1966 and ‘Electrovette’ in 1976.

It has only been during the past decade that the concept of electricpowered cars has steadily returned, influenced by the desire to cut usage of imported oil. In response to the California Air Resources Board’s mandate on electric car usage, major American car manufacturers developed electric vehicles (EVs), but understanding the limited market for them, refused to properly promote them, resulting in the withdrawal of EVs from the market.

That is, until now. Growing awareness of the deteriorating global climate has seen a rise in membership for lobbying groups campaigning for climate change, from both the American public and from leading businesses.

GENERAL MOTORS In a partnership with Segway, General Motors unveiled in April its prototype two-seat electric scooter, named Puma – Personal Urban Mobility and Accessibility. The vehicle can hit up to 35mph in the city before needing to be recharged. GM has not yet begun mass producing the vehicle, instead describing it as a demonstration to show the world what it can do in terms of green technology. As the pendulum for public support of EVs has only begun to lightly swing, it casts doubt as to whether Obama is truly confident of his plug-in proposals.

Plan for America derive from this aim. However, Obama’s proposal, which he claims is based on environmental concerns, is hardly a revolutionary invention.

An electric era

With pressure on to meet Obama’s demands, major US carmakers are now gearing themselves up to unleash their new and improved lines of EVs. During a speech in March, Obama unveiled a plan to increase public interest in EVs through tax incentives. By encouraging people to trade in old cars for newer, more fuel-efficient vehicles, Obama is also hoping to increase car sales and rescue Detroit’s car industry, following a $17.4 billion bailout by the administration in December 2008.

Obama has pointed out that such fleet modernization programs, which provide a generous credit to consumers who turn in old, less fuel-efficient cars and purchase cleaner cars, have been successful in boosting auto sales in a number of European countries.

Having already attempted to solve the economic and power generation crisis with a commitment to creating a new ‘green collar’ jobs industry, he seems to be extending his method into the automotive industry. In a bid to revive the US car industry with an “unending flow of tax dollars”, Obama and his administration appear to be hoping that an investment in EVs will both

Obama’s target for the initiative is to see

Designs of electric cars date back almost two centuries: in 1835, Scotsman Robert Anderson invented the first crude electronic carriage, which failed due to the inability to recharge the battery. The concept of electric transport was formulated mainly in Europe; the US didn’t begin such a program until 1897, when Electric Carriage built a fleet of NYC taxis.

The electric era reached its peak in the early 20th century with an excited upper class buying into the novelty of ‘city cars’. The arrival of the Detroit Electric in 1912, and the belief that electric cars were the easiest and cleanest for women, saw them outselling gasoline-powered vehicles for a short period of time.

However, the lack of transistor-based electronic technology meant that the golden era of electric cars ended almost before it had begun, as America became prosperous in other sources of energy.

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TOYOTA Toyota is on its way to emerging as the new EV manufacturing super power, well ahead of schedule. Their Toyota Prius hybrid, known as a DIY plug-in hybrid, operates on a mixture of both petrol and nickel-metal battery, and a few hundred Americans have begun testing the car to see if it is not only beneficial to the environment, but also beneficial to the driver’s pocket.

There are now six Prius dealerships across the US that are converting the original Toyota model to the plug-in technology, following a rise in interest after oil prices jumped to $4 a gallon in mid-2008. However, at a cost of $10,900 for conversion to a hybrid plug-in, it remains to be seen if this is an accurate indicator of current trends, or whether EVs still remain a novelty unlikely to enter the lower-class market.

TESLA Following an original partnership with utility company PG&E in 2007, Tesla Motors is committed to the production of an EV. The motor company is now taking orders for the Model S, an electric family sedan that can travel up to 300 miles per charge. The Model S is rechargeable from 120V, 240V or 480V outlets, with the latter taking only 45 minutes to charge. The real asset of the Model S is not its chargeability, however great Tesla have emphasized it, but on its ability to become the first car to ride the highway. Its capabilities of reaching a speed of 0-60 mph in 3.9 seconds certainly seem to leave all the previous connotations of the slowbut-steady electric car at the starting line. However, with an estimated price tag of $49,900, this is in no doubt still a toy for the rich to play with.

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boost his target of one million PHUVs on the road by 2015 and save the market.

In March, Obama endorsed his proposal with a tour of the Edison electric car plant in California and declared a 2.4 billion program would be used to develop plug-in hybrids.

“We can remain one of the world’s leading importers of foreign oil, or we can make the investments that will allow us to become the world’s leading exporter of renewable energy. We can let climate change continue to go unchecked, or we can help stem it,” he said.

He has pledged an investment of $15 billion dollars a year for research on green energy and transportation, in an effort to understand more about EVs and meet those long-term goals of carbon reduction promised in his Plan for America.

“The problem is not a lack of technology – you’re producing the technology right here – the problem is, for decades we’ve avoided what we must do as a nation to turn challenge into opportunity,” Obama said at the time.

He certainly seems to be setting a trend. Across the pond, UK Chancellor Alistair Darling unveiled the 2009 UK budget on April 22, in which he committed his support for research into EVs. The UK government announced a £250 ($366) plan with a similar strategy of incentive – although the British version is without tax – providing consumers with £5000 ($7327) each to buy low-carbon or electric cars from 2011. It seems as though the trend is catching on.

However, despite these gallant efforts, it remains to be seen if Obama can put his money where his mouth is, and even if he does stand by his word, is this really the most energy efficient plan, and will it be able to fit in with the current infrastructure?

The major component needed to make efficient use of electricity is storage: using storage effectively is crucial to providing seamless

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supply during peak hours of demand. There is already much promise and speculation over the arrival of EVs, but integrating them into the national grid is not going to be easy, or successful, without clever manipulation of distributed power storage.

The numbers of EVs are expected to rise gradually, and currently fewer than 50 million garages are suited to store and charge the cars overnight, so it seems unlikely that this will translate into all 50 million being on the grid at the same time.

Even so, charging the cars is likely to place great strain on the existing grid, which was not originally built with the servicing of plug-in hybrids in mind.

The major US manufacturers are predicting to have their EVs on the road by 2012, and if the grid system doesn’t evolve at a similar rate, there is sure to be an increasing gap between supply and demand, again highlighting the importance of energy storage.

It follows that it is not only electric car models that need developing, but also our already fragile electricity grid. It has also been a noted that there is a huge timing issue involved: with the EVs needing most energy for the commute to or from work at the tail end of peak usage hours, most of the battery capacity that is provided by these vehicles is going to be unavailable when it is needed.

One alternative to the problems posed by lithium-ion batteries found in EVs is Japan’s answer: hydrogen fuel cell cars. Rather than

energy transmission to a battery, fuel cells create electricity through a chemical reaction between hydrogen and oxygen, with water being the only by-product.

The advantages hydrogen fuel cells have over EVs combats the problem that notoriously dissuades so many from investing into one: mileage. Obama’s plan is to have vehicles that can get up to 150 miles per gallon, but Honda’s latest fuel cell car, the FCX Clarity, has the ability to travel 380 miles before needing to be charged, taking only three to four minutes when it does need charging. With 12 hydrogen stations nationwide and a plan to build more for commercial use, it seems likely that hydrogen fuel cell vehicles may overtake EVs as the people’s choice in Japan.

Before any decisions can be made as to which model of EV to promote or how to even fuel the battery cell, the new administration must persuade the public that the idea makes sense. With the function of these cars dependent on the national grid, changes in the grid’s infrastructure are also needed to cope with the huge potential demand. But more so than any other challenges, Obama now faces the greater task of conceptualizing EVs as the norm, and convincing traditionally big-car loving Americans that a battery-operated car is not a glorified golf buggy. 

“It is not only electric car models that need developing, but also our already fragile electricity grid”

FORD As electric utility company with the largest EV fleet, Southern California Edison is partnering with Ford Motor Company to complete the link between powering the vehicle and the electric grid. Both CEOs, Alan Mulally and John Bryson, have advised that the partnership is an attempt to make progress on energy security and climate change with a solution that consumers can tangibly use to produce energy conservation results.

Ford is due to produce a fleet of Escape Hybrid SUVs that will be engineered by its team to become fully PHEV capable, although it is yet to name its battery partner. However, the fleet will only be the first of its kind, and as a demonstration fleet, this initial version is unlikely to result into the final model.

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RENEWABLES

Emphasis on renewable energy is increasing and as other viable energy sources are explored, nuclear energy has emerged once again as a solution. David Hill of Idaho National Laboratory tells Power & Energy of the importance of nuclear in helping us to become carbon-free.

Our O nuclear FUTURE

nly a third of total energy consumption in the US is accounted for by the electricity used by individual households. There are many who champion nuclear power as a carbon-free energy source and a way of reducing the CO2 produced by electricity generation, but what about the other twothirds of the total?

Idaho National Laboratory’s David Hill’s main venture is taking nuclear energy beyond electricity, in an attempt to create a more efficient means of energy usage across the board. “If you consider nuclear energy just as a source of heat – in particular, high temperature heat – you can apply that to conversion of biomass, or other forms of carbon bearing materials, to convert them into liquid fuels in a much more advantageous way,” Hill explains.

“In taking biomass or coal and converting it into a liquid fuel – and in the case of coal it is through a process called Fischer Tropsch, a German method of retrieving diesel from coal – it requires a lot of energy, and that energy is usually provided by burning coal or gas, or something which emits CO2. If you can substitute nuclear produced heat for that, you can lower or remove the carbon dioxide in the production of the liquid fuel.

Carbon-free “So if you start from coal, you can end up with any long chain hydrocarbon; you’ve still got diesel fuel, but you’ve done it in an essentially carbon free way. If you start with biomass, then you reduce the carbon dioxide effect of the whole process and have the liquid fuel produced in a much lower, although not carbon free, way,” he says.

Hill and his team are taking advantage of the carbon-free properties of nuclear, and producing electricity, or any other form of non-carbon produced heat, to create transportation fuels – another third of total energy usage. The industry sector accounts for the final portion, directly using energy within refineries or chemical processing plants.

Burning natural gas usually derives this energy, Hill explains.

“Again, if you have a high temperature reactor, you can substitute

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that heat directly in, and thereby and Congress, or the public, can turn to for reduce the carbon footprint of the well founded, factual information about processes. what nuclear energy can and can’t do and “Another factor in this is many of what its limitations are. We can identify these processes require either hydroproblems that need to be solved, and set gen or oxygen. So you can either use about solving them. Nuclear energy can be the heat directly, or in conjunction with such a political subject, so we try and avoid hydrogen and oxygen, which also can that and just focus on the scientific facts be produced beginning with nuclear and in the engineering demonstrations of energy through high temperature elecwhat’s possible.” trolysis, for example.”

Nuclear has always been a political INL is one of the 17 larger national issue, and the reputation it gained in the labs located around the country, and past was the cause of the slow phase out is designated as the nation’s leading of nuclear research. Hill advises that in no laboratory for nuclear energy research. way do they criticize the decisions or situaMost of the labs were created in the tions that may have taken place previously, David Hill is the Deputy Laboratory Director for Idaho National Laboratory. post-war environment to expand on the they are simply attempting to change atdiscovery of fission and research into titudes towards nuclear. atomic energy, and even for the development of nuclear weapons.

One of the problems prominent in nuclear’s past was waste manAs development progressed and nuclear energy became a comagement. Hill explains that this is still very much an issue here in the mercial business, the labs broadened their horizons and became US, and across the world. “We are depending again on government science labs and the focus on nuclear was lost, as all labs specialfunding on waste in the sense of spent nuclear fuel – how to store it, izing in nuclear were slowly phased out. Then a few years ago the how to ship it, different processing schemes, different waste forms, government announced its intent to take parts of two existing orgarobust wastes forms for actinides or other vision products in the nizations in Idaho and merge them, creating the Idaho National Lab, context of the US program.” which was made the center for nuclear energy research, development and demonstration.

“We’ve been operating like that for over four years now,” says INL HISTORY Hill. “It’s important because it provides a focal point for nuclear energy research in the US rather than thinking of it as a distributed In 2009, the Idaho National Laboratory activity. There are many reasons why Idaho was chosen for it, but celebrates its 60th anniversary. the primary reason is because of the history of the place – we have many of the research nuclear facilities that are still operating in the Naval proving ground US. Not all of them, but many, and that concentration of research The area was first used by the US government in the 1940s to test facilities makes it a logical place to do this work. artillery. In 1949, the newly formed Atomic Energy Commission “The site itself began in 1949 as the National Reactor Testing established the National Reactor Testing Station. In the 1970s, the Station when the US was developing nuclear energy. This is the site was designated a national laboratory. place where the government chose to test its reactors.”

Toeing the line INL is funded by the government, like all other federal institutions, and therefore must steer its research to coincide what the US as a whole wants to achieve, as well as the politics of the country.

“The way we work to achieve that is by doing world class research, and the majority of our work goes to nuclear energy in some form or another – nuclear reactor development, waste management, looking at fuels development, processing and so on,” he explains.

“We try to do it without advocacy. In the past, we’ve found that institutions have evolved their own thoughts of what the right path forward was and it evolved into advocating particular systems. We seek to be the place where knowledge is brought together, because other labs don’t conduct nuclear work, and where the government

First peaceful use of nuclear power In 1951, one of the most significant 20th century events took place nearby – the first usable amounts of electricity were generated by nuclear power.

Dawn of the nuclear navy The technology for the world’s first nuclear-powered submarine was pioneered in Idaho. From 1953 to 1994, thousands of sailors trained here using full-scale submarine prototype reactors.

Largest concentration of reactors More than 50 nuclear reactors have been built and operated at INL – the largest concentration of reactors in the world.

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Personal prediction In regards to America’s future needs, Hill’s personal opinion is that nuclear energy will play a very large role. “I believe that the energy problem is sufficiently severe, and I’ve believed my whole life that the solution is the famous answer to the multi-choice question, all of the above.

“We have to develop every form of energy source in a way that it is environmentally and socially responsible. And then the public, either directly or through the electric representatives, decide on what energy they’re willing to pay for in the country. Nuclear represents about 20 percent of the US’s electricity, and any sustainable quantitative model of how the we proceed to limit our carbon dioxide emissions starts from the premise that that fraction will almost certainly be retained, if not expanded, because it’s here –

“The best nuclear plant is the one you started last year, not the one you’re thinking about now”

it’s today. You can build reactors and they are essentially carbon free.

“Overall, I expect nuclear to hold itself as a fraction of the US electricity supply, maybe increase, depending on what the economy does. I expect over a slightly longer run, the medium term, for nuclear energy to be seen in a broader context than just electricity.

How that will work out in the US and around the world becomes increasingly uncertain. But it’ll have a strong role – it’s inevitable because of the merits it ABOUT INL brings, which is carbon free electricity suitable for base load application, and it can be In operation since 1949, INL is a science-based, applied engineering national combined with other sources down the road,” laboratory dedicated to supporting the DOE’s missions in nuclear and energy he explains. research, science and national defense.

“There are limitations, mostly of industrial infrastructure: a lack of welders, for example, Mission Vision Safety or a lack of the ability to manufacture large Ensure the nation’s By 2015, INL will be the The health and safety of vessels, and simply the time it takes to build a energy security with safe, pre-eminent nuclear energy every employee, both on and nuclear plant will inherently limit the amount competitive and sustainable laboratory with synergistic, off-the-job, is critical to our that nuclear can contribute in the short term. energy systems and unique world-class, multi-program mission, and we demonBut that, in my opinion, is not a reason not to national and homeland capabilities and partnerstrate world-leading safety pursue it aggressively. The best nuclear plant security capabilities. ships. behavior, safety perforis the one you started last year, not the one mance and environmental you’re thinking about now. Just because it stewardship. takes a long time should not be a reason not to start.” 

US FISCAL BUDGET 2009: MONEY FOR NUCLEAR Accelerating technological breakthroughs • Promotes licensing of new nuclear plants and researches an advanced nuclear fuel cycle.

• $242 million for Nuclear Power 2010, an industry cost-shared effort to bring new nuclear plant technologies to market and demonstrate streamlined regulatory processes.

• $302 million focuses the Advanced Fuel Cycle Initiative on innovative transmutation and separations research and development.

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Advancing nuclear waste management

Continuing essential engineering design

• Clean up the environmental legacy of the Cold War. • $5.5 billion to protect public health and safety by cleaning up nuclear research and weapons production sites.

• Finish cleanup projects at Sandia National Laboratory and Argonne National Laboratory in 2009.

• $495 million to continue development of the nuclear waste repository and support defense of the license application while under Nuclear Regulatory Commission review.

• The Administration will work with the Congress to provide a stable source of funding for the repository • Establish a budget-neutral mechanism for the Department to receive appropriations equal to annual Nuclear Waste Fund receipts from utilities.

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ASK THE EXPERT

Efficient technology Nancy Hartsoch explains how concentrator photovoltics systems bring high-energy yield and low energy cost.

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he challenge that has been facing solar for over a decade in its drive to become a mainstream renewable technology has been cost.

The most important element in determining the levelized cost of energy is the efficiency of the panels; in other words, the amount of sunlight that can be converted to electricity. The second important element is manufacturability of technology. If new technologies are going to become mainstream energy sources, they must be designed for low-cost, high-volume manufacturability.

Concentrator photovoltaic (CPV) systems are the newest entrant into the commercial solar market. CPV technology has just moved into commercialization, yet already these systems are proving their ability to provide the lowest cost solar energy and the highest energy harvesting capability in the high solar resource regions of the world.

CPV systems convert light energy into electrical energy the same way that conventional photovoltaic technology does. The difference with concentrator PV is the addition of an optical system that focuses a large area of sunlight onto each cell. Also, the cells used in CPV systems are different from silicon PV cells, and are capable of converting very large amounts of sunlight into energy at high efficiency, which allows the optical systems to be used. With high concentration systems such as SolFocus’ SF-1100S, a multi-junction cell of 1 cm squared is illuminated by the sun, magnified 650 times.

The result is that the cell, per unit of energy, costs dramatically less than that of conventional photovoltaic technologies.

Even with advances in traditional silicon PV where today you can find best-in-class panels with 19 percent efficiency (average of 15 percent), CPV panels have reached efficiency levels above 25 percent, with significant headroom for accelerating improvements in efficiency in the near future. These CPV panels are mounted on dual-axis trackers, which keep the panels in direct alignment with the sun. The combination of high-performance optics, high-efficiency

cells and precise tracking allows CPV systems to deliver advantages not available with other solar technology approaches. CPV technology also provides environmental sustainability.

Land use is optimized, there is no permanent shadowing, no water is consumed in the production of electricity and systems are highly recyclable, with a small carbon footprint.

pacity, incorporating different concentrator technologies, which are becoming available in the market. It is a commercial power plant providing energy to the local community, as well as a research site for the implementation of the technology. ISFOC has become a worldrecognized reference in CPV.

CPV case study

“CPV panels have reached efficiency levels above 25 percent, with significant headroom for accelerating improvements in efficiency”

The first true case study in CPV technology was established last year by The Institute of Concentration Photovoltaic Systems (ISFOC) in Puertollano, Spain – a publicprivate partnership promoted by the Castilla La Mancha government and the Universidad Politécnica de Madrid. Within this project, ISFOC is executing 3 MW of power plant ca-

Nancy Hartsoch is the Vice President of Marketing for SolFocus, Inc. Prior to joining the company she was CEO of Pacific Technology Group and COO/VP of Acer Labs USA. In 2008 Hartsoch was instrumental in forming the CPV Consortium, a global industry organization for which she currently is the Chairperson.

“Our ISFOC project has been critical in moving CPV forward at industrial scale,” explains Dr. Pedro Banda, Director General of ISFOC. “After a year of deployment, we have no doubt that CPV is the most promising energy resource for the future.”

SolFocus was the first company to install its CPV technology in the project and has had 0.5 MW on site for a year. After nearly a year, energy output has been above projected levels.

“We chose SolFocus’ CPV arrays as part of the ISFOC project because we believed their non-imaging optical design would provide efficient and reliable systems,” says Dr. Banda. “We had confidence that they would be able to meet not just the design challenges, but the manufacturing challenges for volume deployment as well; we could not be more pleased with the results.”

While Puertollano, Spain has a good solar resource, the energy generation capability of this type of power plant in a high solar resource region such as the southwest US will be exceptional. CPV systems are being deployed in numerous places around the world and have the potential to deliver hundreds of megawatts of electricity in the near future. n

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SUSTAINABILITY

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ne of the fundamental human needs is the energy required to power society. The issue of energy in the 21st century has germinated a great deal of attention, economic thought and planning, government policy and international strife. Energy security feeds the nightmares throughout society and government. The rapid increase in energy needs forecasted for the next 50 years is problematic, and the rise in energy’s cost is bringing about inflation in the developed world and hardship in developing nations.

Northwestern is tackling the twin issues of energy and sustainability – encompassing global issues such as energy, water, materials, food and waste – by consolidating the university’s existing strengths and fostering new efforts in these areas. The Initiative for Sustainability and Energy at Northwestern (ISEN) was announced in October.

Teamwork

How Northwestern University is helping energy and sustainability to work together.

Strategy “Underlying the challenge of sustainability and energy is one issue that universities uniquely can solve: to develop the fundamental scientific understanding to provide sustainable (and at reasonable cost) energy required by all people on earth. Gaining and disseminating this understanding is the core of the ISEN mission,” said President Henry S. Bienen.

“ISEN is an umbrella organization designed to create, advance and communicate new science, technology and policy for sustainability and energy. Its particular focus is on sustainable energy supply, demand and use,” says Mark Ratner, ISEN’s co-director with David Dunand.

Ratner cites Ralph Cicerone, President of the National Academy of Science, who, in his remarks to that group’s 2008 Annual Meeting, listed five points addressing how scientists and engineers could help solve the problem of sustainability and energy. They are to perform research relevant to energy supplies and usage; to formulate and analyze opinions for decision makers; to inform the public about research and policy options; to advise and help government officials and business leaders; and to develop scientific and engineering human resources.

“While ISEN’s program takes on this Cicerone challenge, ISEN’s most important goal is to integrate the university’s efforts in energy, sustainability and outreach,” Ratner says.

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“We do not limit ISEN to scientists and engineers alone,” adds Dunand. “We draw on the intellectual and programmatic capabilities of all of Northwestern’s schools and centers to provide a new integrated direction for the University, focusing on the many aspects of the challenge of sustainability and energy.” ISEN directs that focus on the supply, demand, conservation, storage, transmission and optimization of energy; the policy, programs, economics, management, metrics, education and outreach of sustainability; and disseminates this information by reaching out through public information, web site, teaching, lectures and consulting.

“ISEN will catalyze and conduct research and education, the two fundamental products of the university through supporting and drawing together the capabilities that Northwestern already has,” says Ratner. “We sponsor and develop new capabilities for addressing the issues of sustainability and energy.” ISEN provides funds for stipends of postdoctoral fel-

“Northwestern’s strong culture of interdisciplinarity across our schools gives ISEN a breadth of vision that few research universities can match.”

Argonne National Laboratory is ISEN’s primary research partner.

Northwestern and Argonne in collaboration are developing an integrated research platform in this area. The partnership with Argonne will encourage the partnership and promotion of other energy activities, including the Argonne-Northwestern Solar Energy Research Center (ANSER), the Center for Energy Efficient Transportation (CEET) and the Institute for Sustainable Practices (ISP), as well as various NU centers on catalysis, nanoscience and technology, and transportation.

Working through ISEN, Northwestern faculty partners with people and capabilities within the university with industry and government, international organizations, other educational institutions and information and education resources, including television stations, elementary schools, churches and libraries. ISEN is working to establish corporate partnerships, as well as reaching out to the larger community, partly for identifying funding opportunities, but mostly for increasing awareness and building Northwestern’s programs in energy and sustainability.

Educational goals

Mark Ratner and David Dunand

lows and undergraduate students, as well as graduate fellowships through a cluster funded by the graduate school. The initiative also organizes conferences at Northwestern on the issues of energy and sustainability.

History Northwestern has a substantial history in the area of sustainability and energy. Charles David Keeling, the scientist who first alerted the world to the dangers of carbon dioxide and temperature change, was a Northwestern graduate (PhD, chemistry, 1954). The Keeling Curve is still used to measure the progressive buildup of carbon dioxide, the main greenhouse gas driving climate change, in the atmosphere. Northwestern’s efforts in areas such as catalysis and new materials have long provided abilities to produce and use energy more efficiently, and even address some parts of the sustainability problem.

“ISEN focuses on the two major strengths that universities can contribute: ideas and teaching,” says Jay Walsh, Vice President for Research.

ISEN’s first step educationally is to develop four campus-wide undergraduate and graduate courses on global issues related to energy and sustainability. The first of these will be offered in Spring 2009. Among ISEN’s longer-term educational goals is the establishment of an energy minor across several schools and to create a five-year master’s degree program in energy studies. The initiative plans to offer a summer program, including internships, for students from K-12 through post-graduate education.

“It’s our students as much as our researchers who are driving us to seek solutions in the areas of energy and sustainability,” says McCormick Dean Julio Ottino, who initiated the planning nearly three years ago with Tobin Marks which resulted in ISEN. “They realize they will need this education and experience to become the workforce of the future.”

In order to seed and support these activities, ISEN is working with Northwestern’s administration to raise funds locally and globally. “We are helping people both within and outside the university to teach and to learn, and to address and solve the problems of energy and sustainability,” says Ratner. “Through ISEN, we hope to transform the area of energy and sustainability from a challenge to an accomplishment for all the people of the planet.”

For more information about ISEN, view the ISEN web site at www.ISEN.northwestern.edu, a one-stop source for information and sustainability at Northwestern. © Northwestern University Office for Research. Reprinted with permission from CenterPiece Fall 2008.

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ENERGY EFFICIENCY

Red, white and

green The federal government has a major role to play in making America more energy efficient and environmentally responsible, says Rep. James L. Oberstar, Chairman of the House Committee on Transportation and Infrastructure.

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ontrary to just a decade ago, there is virtually unanimous agreement in the scientific community that human activities are a primary cause of climate change. Manmade causes, such as operating power plants and motor vehicles, have increased the concentration of greenhouse gases in the atmosphere, resulting in global warming. Eleven of the past 12 years have been the hottest since 1850 and 2006 was the warmest on record. Sea levels are rising, and Category 4 and 5 hurricanes are becoming more frequent around the globe. Mitigating the negative effects of climate change will require comprehensive planning and aggressive, cooperative action worldwide.

Although this is a global problem, the United States must take the lead in remedying a wide range of adverse climate impacts, because our nation is the largest consumer of energy in the world. In 2020, US energy consumption is projected to grow by 23 percent, and in 2025, the Energy Information Administration projects that worldwide energy use will grow by 57 percent. There is no way to avoid it, the Federal government must harness its energy use to reverse the global warming trend, before it is too late.

We should take the view that the challenge before us is an opportunity for positive change. By taking meaningful steps to address climate change, we can simultaneously tackle our nation’s

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increasing energy needs and reduce our dependence on foreign oil.

New laws and regulations promoting increased energy effi ciency and alternative energy sources across various sectors will result in lower carbon emissions and reduce America’s dependence on fossil fuels.

It is logical that Federal government buildings are a good place to start when implementing alternative sources of energy, because the Federal government is the largest consumer of energy in the world.

In fact, the Federal government owns 333,000 buildings worldwide, comprising just over 2.5 billion square feet. In the United States, the asset count is 293,651 buildings comprising approximately 2.4 billion square feet of space. Worldwide, the Federal government leases approximately 57,000 buildings, comprising 557 million square feet of space. In the US, the Federal government leases 23,000 buildings, just under 291.2 million square feet of space.

A systematic policy of ‘greening’ Federal buildings, or integrating construction practices that significantly reduce the environmental footprint of a building in comparison to standard practices, will result in a reduction of our net environmental impact. However, without significant transformation of building construction and operations, adverse impacts on the environment will increase with population growth and changes in other demographic and economic factors.

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I have advocated that the Federal government play a central role in supporting and stimulating applied research in alternative energy systems for nearly 30 years. In fact, in 1977, I introduced legislation calling for accelerated procurement of photovoltaic solar electric systems (PV), which convert solar energy into electricity, in new and existing Federal facilities. That provision was incorporated into a comprehensive national energy bill, the National Energy Conservation Policy Act (PL 95-619). Unfortunately, the PV provision in the law was not funded, so we have no way of knowing how effective it would have been and how much progress our nation could have made in reducing our dependence on foreign fossil fuels.

When I became Chairman of the Committee on Transportation and Infrastructure in 2007, one of the first pieces of legislation that my Committee passed directed the General Services Administration (GSA) to install a PV system at the Department of Energy’s (DOE) headquarters. DOE’s overarching mission is to advance the country’s national, economic, and energy security and to promote scientific and technological innovation. Consequently, it is only appropriate that DOE headquarters serve as a model for the entire nation to save energy by utilizing cutting-edge photovoltaic technology.

The photovoltaic system is an important energy technology that is environmentally sensitive and contributes to the nation’s energy security. Because it generates electricity from sunlight, PV produces no air pollution or hazardous waste. It doesn’t require liquid or gaseous fuels to be transported or combusted. Because its energy source, sunlight, is free and abundant, PV systems can guarantee access to electric power year round, and they are virtually maintenance free.

This is just one opportunity where the Federal Government can make a dent in global warming.

In addition to installing and implementing alternative energy sources, we can curtail energy use through such means as energy-efficient appliances, lighting and weatherization. The Energy Independence and Security Act of 2007 (P.L. 110-140), which passed in 2007, set the bar higher by requiring that each Federal agency reduce energy consumption from 20 percent (relative to 2003 levels) to 30 percent by 2015. The requirements are more stringent for new construction and major alterations by requiring them to reach a 65 percent reduction of energy usage by 2015, and zeronet energy use by 2030. Agencies will be evaluated twice a year on performance of their energy and water management. The law also accelerates the use of energy efficient lighting in buildings leased by the GSA and reduces negative impacts on the environment throughout the lifecycle of the building, including air and water pollution.

The American Recovery and Reinvestment Act of 2009 (P.L. 111-5), which was signed into law on February 17, 2009, makes an historic investment in promoting energy efficiency. The law provides $6 billion to upgrade and improve energy efficiency in GSA’s inventory of Federal buildings, including the construction of border stations on the northern and southern borders of the US. The goal is to save taxpayers $2 billion every year by modernizing more than 75 percent of Federal building space. The Recovery Act also invests $4.2 billion in energy efficiency and modernizing projects at Department of Defense facilities, including military medical facilities and Army barracks.

Although some features of ‘greening,’ such as high-efficiency appliances and lighting, can be more expensive and design costs may be higher, the operational cost savings will eventually recoup any initially higher investment. Green initiatives and energy efficient repair and alteration projects for Federal buildings will save money on energy costs long term. However, making Federal buildings more energy efficient not only saves taxpayer money in lower energy bills, it also creates jobs and increases the value of the Federal inventory. The Associated General Contractors of America testified before the T&I Committee that $1 billion in nonresidential construction creates or sustains 28,500 jobs.

Further, deteriorating conditions of Federal buildings have caused the GSA, which provides facilities for approximately 60 Federal agencies, to abandon Federally-owned facilities for leased space. GSA’s annual lease bill, which is paid by American taxpayers, is approximately $4 billion every year. Repairing, altering and upgrading Federally-owned facilities makes good fiscal sense all around.

The Federal government is also studying the installation of plantings on rooftops, called ‘green roofs,’ on new Federally constructed buildings. Although this practice is more common in Europe than in

“We should take the view that the challenge before us is an opportunity for positive change”

the United States, it has several benefits, including increasing roof longevity and reducing the need for heating and cooling by acting as an insulating barrier.

The scientific evidence is crystal clear – Planet Earth is warming.

But climate change, as well as America’s corollary need for greater energy independence, is not just an environmental issue – it’s a national security issue, an economic issue, an humanitarian issue. It’s an issue we cannot afford to ignore any longer. n

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CUSTOMER FOCUS

In an interview with Power & Energy, ComEd’s Vice President of Marketing and Environmental Programs, Val Jensen, explains the future of customer relationships and how the company has adopted a sociological approach to understanding its customers’ behavior.

Exelon’s goal is to reduce more than 15 million metric tons of greenhouse gas emissions by 2020. What is ComEd’s strategy to participate in this target?

Val Jensen. The Commonwealth Edison energy efficiency portfolio represents a fairly significant wedge in the overall Exelon carbon reduction goal, so our responsibility is to be able to execute on the customer programs to ensure that those carbon reductions are realized. It’s not a set of reductions that the company is claiming for its own account, but it is part of the overall strategy to help our customers reduce their carbon footprint. The energy efficiency programs represent approximately a quarter of the total Exelon carbon wedge, and so we play a relatively important part, along with our sister company, PECO, in Philadelphia.

We offer a broad portfolio of energy efficiency programs consistent with what you will tend to see across the US from utilities. We’ve tried to bundle all of these programs under the moniker Smart Ideas, and our ultimate intent is to simply offer a range of prescriptive and customized solutions, whatever the customer’s energy management needs might be.

But in the short term, we break our portfolio into two pieces. One is the commercial industrial offering and under that offering we have four principal program elements. The first is a set of what we call ‘prescriptive incentive programs’, so we will offer fixed financial incentives for a wide range of standard commercial industrial technology – motors, lighting, refrigeration systems and so on.

Keeping up

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On the residential side, we have a number of programs.

One is the ubiquitous compact fluorescent light bulb buydown program. We work with a variety of manufacturers and retailers to buy down the cost of CFLs at retail and that program is the single largest program in terms of energy savings that we have in the portfolio, which is consistent with every other utility.

Secondly, we have a program to collect and recycle second refrigerators. We also have a direct installation program for all electric multifamily buildings, so we send crews into these buildings and go through each unit and do the low-cost, no-cost energy efficiency measures.

We have also just begun a residential central air conditioning program that has a couple of different elements, including incentives for the purchase of new, very high efficiency units, and we also subsidize an advanced air conditioner diagnostic and tune-up program. We put

“Keeping up with the Joneses is a pretty powerful behavioral motivator”

We also offer a custom rebate element, so for any energy efficiency project, as we can establish that it is cost effective, we will provide a customized incentive which is based on the energy savings. We are also offering a building retro-commissioning program where we will fund a building professional to go into an existing building and help the building managers tune up existing energy systems to achieve their specified performance. Finally, we’ve just begun to offer a commercial industrial new construction program where we provide design assistance and some design incentives to try and encourage customers to design and build buildings that exceed the building codes.

switches on people’s central air conditioners and in exchange for either $20 or $40 per summer season, we are able to control the customer’s air conditioner on really hot or high-demand days.

We also offer a residential real time electricity-pricing program, which is still the only program of its kind in the country. For customers who wish to join the program, we put them on a tariff that flows through the wholesale hourly market price and allows customers to make their own decisions about how to alter their load shape to try and benefit from that price profile.

How are your residential customers reacting to these programs? Is ComEd playing a role in in educating them in terms of energy efficiency?

VJ. That’s the critical issue for us, and it’s extremely difficult for us, at least early in the program, to feel like we’re accomplishing that broader market transformation objective to get customers to think differently about energy use. We have a service territory of 3.8 million customers in one of the most expensive and dense media markets in the country, so it’s very difficult to reach individual residential customers without spending a lot of money. The strategy that we’ve taken early on is a more direct marketing approach where we try and

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get information out to our customers to get them to act on specific energy efficiency incentives, such as the lighting program or the refrigeration program. We do have a limited advertising budget that we’re using to try and start to build awareness among our customers of what we offer and what their general energy efficiency opportunities are, but it’s very difficult for us to work in the mass market in this area because it’s so large and expensive, so we’re continuing to look for solutions that would help us get more traction there.

We run a summer ad campaign designed to spark customer interest and awareness in some of our basic residential programs. We similarly conduct limited advertising for specific energy efficiency programs to try and boost our uptake on those programs. We offer bill stuffers to our customers on a fairly regular basis, some of which are targeted at specific energy efficiency opportunities and some of which are designed to simply build customer awareness of energy efficiency opportunities generally. Then certainly like everybody else in the world, we have a website which is intended not only to convey information about our programs, but to offer customers a wide variety of tools and tips should they be so inclined to take charge of their energy consumption. So in terms of customer outreach and education, we’re not particularly innovative or successful yet, but we are just entering the second year of our large program portfolio implementation. We still have a way to go and are certainly hoping we can get a little bit more creative and effective.

Overall, the customer satisfaction with that program is very high and when we do customer surveys we find that that program in particular is the one that most intrigues customers. On the other hand, it’s been very, very hard to recruit customers into that program, which is an interesting phenomenon and hard to understand why. Our customer acquisition cost is very high for that real time pricing program, yet at the same time, everyone says they like the idea of it.

There is one other program that we’re about ready to launch that is pretty exciting and actually quite pedestrian in its concept. We’re going to be providing a home energy report to a set of 50,000 customers on a quarterly basis which compares that customer’s energy consumption to an average neighbor, and also to the best neighbor in terms of how much energy they use. This is all calibrated to like customers – so same type of housing, same square footage – who generally display the same demographic characteristics.

There’s been some interesting behavioral economics research that suggests that simply by providing this comparison of your consumption to your neighbor’s consumption you can drive changes on the order of three to five percent in overall energy consumption, just through a form of peer pressure. We’re among a handful of utilities in the US that are starting to pilot this program.

In addition to providing this comparative information on a quarterly basis, we couple that with specific energy saving tips given who the customer is, so if the customer’s Do you think initiatives such as the realperforming poorly relative to their Val Jensen is Vice President of Marketing and time response program attract new cusneighbors, we give them the whole Environmental Programs. He joined ComEd after eight years tomers who are more energy efficiency slew of energy efficiency options. at ICF Consulting, where he served as senior vice president. conscious?

If they’re doing better than their Prior to this, Jensen worked for the US Department of VJ. It’s an interesting phenomenon. We neighbors, we give them some tips Energy from 1994 to 1999. get both ends of the spectrum. We have for how they might do even better a group of customers on that particular than they currently are, and so we’re real time pricing program who are very hoping that this provides the vehicle energy aware and like the challenge of being able to try and beat the for reaching customers with our message in a fairly simple way that price, and so they’ve become very creative in how they manage their can motivate behavioral change. energy use.

There has been some interesting research that compared a couple On the other end of the spectrum is another set of customers who of tactics: telling customers how much money they could save, telling are attracted to the program by the implied promise of being able to them how green they would be if they took a particular action, tellsave money on their energy bill. These customers tend not to be as ing them they would be more energy efficient if they took a particular sophisticated, and they have an expectation that they can simply save action and telling them how they compare to their neighbors. The only money by doing nothing, which is sometimes the case but not often, thing that motivated these customers in this pilot study was the comand so we find those customers will tend to be more dissatisfied with parison to their neighbors, which was fascinating to us, and it went to the program because they’re not really buying into the change and the extent of actually putting a little smiley face or frownie face on the behavior that is necessary. information that was sent to the customers, which the research found

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to be motivating. Some of the early pilots that have been done to test this concept with utilities have found that customers react very badly to the frownie face, but very much like the smiley face; it sounds very elementary, but in fact the keeping up with the Joneses is a pretty powerful behavioral motivator.

Do you think the media surrounding Obama’s Plan for America is having an impact and starting to change the way your residential customers are operating?

VJ. I think it is. The Administration, as well as a number of global leaders, is talking about the importance of climate change which is finally starting to penetrate this mass media consciousness. Our customers haven’t yet completely figured it out, but they understand that energy usage is changing and they know they want to be on the right side of it, and they’re starting to now look for more information about this. So it clearly has had important impact, but it will take a lot more than that to get customers to really understand this on more than a superficial level.

Do you think saving money is the only real motivator?

VJ. I don’t and that’s why this behavioral pilot program that we’re undertaking is so interesting because we’re not providing anybody with any money on our end, and the customers are not motivated so much by saving money as they are by the attitude of not wanting to look worse than their neighbors. Business customers, to a much greater extent, are motivated by money, but that doesn’t seem to be the right motivator for all of our customers. We have to get much more sophisticated in segmenting them and figuring out what messages motivate.

Some are motivated entirely by environmental concerns and their neighbors, some by money and some by other forms of moral beliefs about stewardship. It’s been part of our struggle over the past 20 years where previously we tried one message for everyone, and we know that doesn’t work.

How are you setting yourself apart from other utilities energy-saving programs?

VJ. Most of the utilities in the US, as part of their energy efficiency portfolio, rely on compact fluorescent light bulbs for anywhere between 30 and 50 percent of the overall portfolio savings. There is federal legislation which by 2012 will set the consumer lighting standard essentially at the level of a CFL, which means that by promoting CFL through a utility program we’re not saving any energy as it would become compulsory for customers to buy these anyway. So we’re going to lose 30 to 50 percent of our energy efficiency portfolio due to the standard, and we need to find other low-cost ways to save energy.

By exploring these behavioral methods we’re realizing cost-effective solutions to energy savings, and so we’re both interested from a conceptual basis in seeing how people respond, but we’re also looking for that silver bullet that gives us energy savings that is sustainable and low cost at the same time.

What are your future plans, both short and long term?

VJ. We have two things that we’re very excited about and they both fall on the behavioral side of the ledger. Like many utilities across the

world, we’re embarking on an implementation of smart grid technology and in particular smart metering systems. We have a pilot project that we now have in front of our regulator for approval that will involve 140,000 customers in our service territory, and we believe we’ve designed the most comprehensive study of consumer behavior with respect to the smart meters that anyone has put together.

We’ve designed 24 specific experiments to test how different combinations of behind-the-meter technology, rate structures and education will resonate with customers and our objective is two-fold.

One, to see which of these combinations elicits the largest response in terms of demand reduction, but we are also trying to figure out what the combination of those things that resonates most with the customer may be – which product makes the most sense, which is the most likely to be used and embraced by customers and so on – and we’re very excited about that. We see this not so much as a standard utility technology project, but as a project in customer-centric product design where our ultimate objective is to figure out how we can create some additional value for customers, as opposed to just throwing boxes on houses.

“A number of global leaders are talking

about the importance of climate change which is finally starting to penetrate this mass media consciousness” The second thing we’re doing, which is related to that, is a relatively small pilot program with a set of low-income customers in Chicago. Operating a smart grid and having the ability to retrieve this real-time data depends on a customer being technologically sophisticated, having a broadband connection and so on. A lot of our customers are not in that position, so we’ve designed a pilot program to place relatively simple devices in up to 300 homes that will show at any given time how much is being consumed and how much the customer has spent that month. We’re also simultaneously providing a home energy audit and some focused but simple instructions on how customers can manage their energy costs. Again, these are quite low-income customers, and our objective is to evaluate that if by providing a customer contemporaneous information on how much they’re spending, relative to what their budget might be, we can influence their level of energy consumption.

Our ultimate objective is two-fold. One is to give some tools to these low-income customers in this new technological age that will allow them to benefit as much as their more well-to-do neighbors, but the second idea is if we can get people to focus on how much they’re spending at any time, we think they’ll be able to better manage their bill, and the hypothesis is that they will be less likely to fall into arrears and defaults, and less likely to be subject to disconnection. That pilot is just rolling out, but from my perspective, that’s one of the most important things because it’s an investigation into how we can deliver these promised benefits of the smart grid to a segment of our population that typically is left behind in such arenas. n

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ASK THE EXPERT

The bottom line Patrick Carberry explains how to quickly enhance your bottom line without revenue growth.

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he combination of the poor economy and the push to get customers to conserve has severely restricted the ability of utilities to increase their revenues. In our recent survey and conversations with our utility clients, we found that most utilities are under pressure to find ways to enhance their bottom line without increasing their top line.

One of the swiftest ways to improve profitability without increasing revenue or slashing budgets is to reduce your bad debt expense. Based on actual results and analysis at over 100 utilities, a typical utility can expect, in less than three months, to reduce this year’s write-off by 10-20 percent. How much top line revenue would you have to produce to get this much bottom line impact?

service territory. If you can properly identify all the responsible parties on an account, then there is a greater likelihood that you can turn their write-off into a current receivable on an active account. Because a utility has more tools and leverage, it is much easier and faster to collect on an active account than an inactive one.

Skip tracing Almost every utility is already successfully skip tracing and performing balance transfers on a regular basis with very positive results. The key is to recognize that you can improve upon your current processes and that there is still an abundance of lost revenue available to collect. Because you already utilize these processes everyday, very little has to change. Skip tracing more efficiently

“Utilities are under pressure to find ways to enhance their bottom line without increasing their top line” Geographic mobility statistics indicate 14 percent of the population and 33 percent of apartment dwellers move every year; 60 percent of movers relocate within the same county, 80 percent within the same state. The implications of these findings illustrate that the majority of the people initiating and terminating service are coming from and going to a location still in your

• One of the swiftest ways to improve the bottom line is to reduce your bad debt expense.

• A significant portion of your write-off is right under your nose and is very collectable.

• A typical utility can expect, in less than three months, to reduce this year’s bad debt by 10-20 percent.

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and effectively and transferring balances more intelligently, will allow you to quickly reduce your write-off. When you enhance your customer identification on the front end, you can also permanently reduce your write-off going forward.

To fully leverage this best practices process, a utility needs to identify, match, transfer and collect.

To identify, use your CIS system to capture and store as many identifying attributes on your customers as you can – such as full name, SSN, DL#, birth date, phone numbers, email address and employer. Identify all responsible parties, including spouses and roommates. Verify and update these identifying attributes regularly.

Matching involves finding active customers who also have write-off balances. Use all the identifying attributes available for all responsible parties to match written off accounts to an active account. You should look at all relationships between the accounts, including the nonobvious ones. Utilities should recognize that most of what is found is probably not fraud or in-

Patrick Carberry is Co-Founder and President of Bottom Line Impact. Mr. Carberry has spent the last 20 years consulting with over 125 utilities. He is the architect of the Automated Revenue Miner that has recently assisted utilities with the identification and recovery of over $50,000,000 of lost revenue.

tent to hide. It is name changes, misspellings, transposed digits and data entry errors.

Transferring is moving the written off balance to an active account taking into account all your rules and regulations (for example, you can not transfer balances across state lines, statutes of limitation on old balances and so on). You should only transfer balances you can reasonably expect to collect.

Once the balance has been transferred, normal collection procedures will apply. Our analysis shows that most utilities collect between 80-95 percent of transferred balances.

With the understanding that there is lost revenue slipping through the cracks, a review of your current processes can pay big dividends and have a real bottom line impact. There are simple things you can do to recover more lost revenue and there are experts who can help.

We Just Identified

$75,000,000.00 in Lost Revenue For Utilities!

Our Clients Are VERY Excited For more information, see this month’s issue of Ask the Expert on the opposite page or contact

www.blicorp.com | info@blicorp.com Tel: 412-441-1083

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CUSTOMER OPERATIONS

NORTHERN

EXPOSURE Hydro One’s understanding of its customers’ needs extends far beyond simply providing them with an energy supply. Myles D’Arcey tells Power & Energy of the company’s responsibility for instilling a sense of community within its service territories.

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oordinating its customers is no easy task for Hydro One. As a large Canadian province, Ontario incorporates a wide spread of both urban and rural areas, and must adapt itself to the issues facing the different groups of customers.

SVP of Customer Operations Myles D’Arcey explains that it is the demographic shift that determines what group its customers fit into. For example, Windsor is a region heavily impacted by forest products, so customers within the area are heavily impacted by the primary industry, to which Hydro One must respond to accordingly with programs that are suitable and fit this group of customers’ needs.

Challenges D’Arcey is also President and CEO of Hydro One Remote Communities, and in this role he faces challenges very different from those of large utilities in big cities. “Part of the issue for us there is that these communities are fly-in, and there are a lot of them,” he says. “They’re not easily accessible, and they’re First Nation communities. Fourteen of the 18 that we serve are at or below the poverty level. A lot of people rely on social assistance to sustain their day-to-day lives and they’re diesel communities – it’s a high cost which is heavily subsidized by the people of Ontario.”

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D’Arcey has firsthand experience of remote reliable and clean power.” Community is key, but communities, traveling to them himself in order as a utility, providing a reliable source of energy to achieve a greater sense of understanding of is its primary role. Providing energy to dispersed his customers and know how to provide to them customers to ensure a constant and reliable with the energy that they need. He explains how source of energy is not as easy as it sounds, and a number of the company’s senior executives viscertainly not when this is joined with a commitited these communities last year; most of them ment to ensuring that the energy that is delivered had never been further north than Highway 7, is as environmentally sourced as possible. which runs along Toronto’s northern boundary In May, it was announced that Hydro One As he explains, “Unless you’ve had an opporcustomers across Ontario had achieved annual tunity to see it firsthand, to meet with the people energy savings of more than 400 million kiloand understand their issues, it’s hard to put it into watt hours – a huge saving that speaks volumes Myles D’Arcey is SVP Customer a white paper. We had the opportunity to meet for the company’s success.

Operations at Hydro One, and with the chiefs’ council in the local communities, D’Arcey advises that the savings are due to a President and CEO of Hydro One and it was a great opportunity for them to share combination of programs currently being impleRemote Communities, which offers with us what their goals and aspirations were too. mented by Hydro One. “One is directly related generation and distribution services “Many equate it to going into what they’ve back into the conservation demand managein Ontario’s far north. seen in pictures of a third world country, so it’s ment plans that were put in place by the local a very different lifestyle, very impoverished. But distribution companies in conjunction with the there’s still a lot of pride within the community. They want to succeed; Ontario Power Authority,” he says. “Those are everything from fridge they want to find ways in which to be successful. roundup programs distribution of compact fluorescents, rebates on We try to work with them and build upon that, and look for optimers and switches, dimmer switches and so on, all of which can portunities in which we can generate win-win types of scenarios.” reduce the overall consumption from individuals.

Relationships He explains that having one-to-one meetings with local people makes all the difference in their relationship with those who service the community. The challenges for those providing the services are numerous, due to the disparities in the communities. But a sense of community spirit lies at the heart of Hydro One’s focus. Many of the company’s community programs, such as Community Citizenship and Powerplay, are not even related to electricity, but their aim instead is simply to build up the relationship of the communities.

“We provide electricity to 1.3 million customers in the province of Ontario, predominately rural Ontario, so we have a presence in these communities where our staff live and work,” explains D’Arcey. “From our perspective, it’s an opportunity to help the community that we service. The focus with Powerplay, for example, is linked back into the fact that for most rural Ontario communities, the local arena or community center is the focal point.

“It’s an opportunity to upgrade, modernize or get new equipment that the community relies upon for entertainment or sporting events.

We live and work in those communities and it’s just giving a little something back.

“The other part that goes along with the citizenship program is the stewardship of assets. We definitely feel that we’ve been entrusted with these assets, and it’s up to us to make sure that we operate them safely and efficiently on behalf of the people of Ontario,” he says.

Hydro One has committed itself to its customers from the outset – its strategic objective is to, “Satisfy our customers with affordable,

“From my perspective, the key is making those programs available to your customers and giving the customers a choice to have access to them or creating an incentive for them to look at them or making it easier for them to take advantage of it. We support a number of those – the OPA funds the programs, the distribution companies put them together, and we work with the programs we believe to be conducive. We then provide access to our customers to all of those programs.

“In Canada, there are federal programs and provincial programs, and there are also the ones that are provided to by the local distribution companies. We’ve put together a group we call our Green Team, and if customers require individual assistance with that, we’ll help them walk through it and navigate some of that. There are a myriad of opportunities out there for customers to take advantage of programs, but they may not necessarily always be aware of which ones are applicable to their particular situation,” he says.

Hydro One remains sensitive to its customers’ needs. For those low-income customers who face difficulties paying their electricity bills and who may be in arrears, the company induces a number of options to alleviate the stress. “The first part is just communication, so that’s making sure that people are aware of what their bill is and where they stand, so that they can take effective steps,” D’Arcey explains.

“We provide them with different options for payment programs so that they can help to manage the bill. If they get behind we do try to work with them to set up a payment plan. We also provide programs for those on low incomes, which helps us to provide customers access to funding from social programs to help offset some of their energy costs.” 

14 of the18

remote communities

Hydro One serves are at or below the poverty level

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COMMENT

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G20 Natalie Brandweiner explains why a gathering of the world’s leaders amounts to nothing more than corporate handshakes and shirked responsibilities.

President Obama’s address at the G20 Summit

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he gathering of 20 of the world’s greatest and most powerful leaders, or so proclaimed, to agree on the direction of the $1.1 trillion dollar stimulus package certainly appears to be a washout for those championing environmental concerns. If the discussion of the world’s high carbon economy was ever a priority of the G20 leaders, they most definitely managed to sell themselves short.

Statements by UK Prime Minister, Gordon Brown, at the summit regarding climate change were vague and non-committal – lacking any sort of qualitative data or measurable targets, for which he could be held accountable. He made sure to make several references in support of low-carbon economic growth though, and pledged his commitment to tackling climate change, but none of these have in any way satisfied the thousands of protestors and environmental groups wanting change.

Peering through the façade, it is clear that Brown’s stance was nothing more than a nod to those gathered on the streets

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of London, attempting to make known their environmental concerns. His statement of commitment to climate change bears more resemblance to an afterthought rather than a detailed proposal: “In mobilizing the world’s economies to fight back against recession we are resolved to [...] promote low-carbon growth and to create the green jobs on which our future prosperity depends.”

Protestor group Climate Camp believes world leaders view carbon-trading policies as nothing more than moneymaking attractions for the creation of get more bureaucrat-serving markets. They propose that a change in attitude will produce the sort of policies environmental campaigners are wanting: for solutions to be based on a moral imperative, rather than a business opportunity.

Instead of seizing the misfortunes of the global recession and using a very rare chance to reshape even the smallest piece of the economic structure, and this time actually factoring environmental concerns into the political equation, the G20 summit

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was not much more than an exercise of bureaucratic smiles and a showcase of first-lady fashion shoots.

The G20 communique shows the leaders to make only a minute reference to climate change and does not refer to any responsibility to be apportioned to any leaders. It appears that the world’s leaders are too busy papering over the cracks of the recession to lend a thought to environmental concerns.

Even the UK government’s former climate change advisor, Lord Stern, criticized the summit leaders for not seizing the opportunity for change. He argued that the recession has created the perfect sphere in which great reform can be made to the way in which the economy currently operates, creating an interchanging set of economic and climate changing policies.

As he explains, “This is an opportunity to have a green recovery that lays the foundations of growth for the next two to three decades.”

Obama’s New Energy for America plan is committed to ensuring 10 percent of electricity to come from renewable sources by 2012, and while simultaneously repairing the damaged economy by creating five million new ‘green collar’ jobs.

But, if he does not produce the funds to support these plans, it will be unlikely that any changes will be made.

The sweeping aside of environmental concerns at the G20 summit certainly brings into question Obama’s commitment to carbon reduction on his home turf. In the same plan, the Administration have claimed a stance of reducing green house gas emissions by 80 percent, but more importantly Obama and Biden are attempting to make the US a leader on climate change.

In a feeble attempt to appease the public cries for climate change, Brown and his political companions insisted that environmental issues are all set to be addressed in the United Nations Climate Change Conference in Copenhagen in December, when the UN hopes a number of agreements will be made to replace the Kyoto agreement.

“We are committed to [...] working together to seek agreement on a post-2012 climate change regime at the UN conference in Copenhagen in December,” says Brown, displaying a lack of serious commitment to any concrete statistics.

But whether Copenhagen will actually produce climate-changing policies remains to be seen. Going on the leaders’ past attitude to environmental issues, the conference looks only to be another platform in which to pay lip service to those placing pressure on global governments. It seems contradictory that the thousands of miles in air travel for each of the leaders and their toomany-people-deep entourages, along with the energy needed to facilitate the conference, is sure to create a carbon footprint itself worthy of environmental campaigner demonstrations.

But is this derogatory attitude that’s portioned to environmental concerns true of not only political leaders, but also of those major players responsible for delivering the energy and privately funding the transmission? Is carbon reduction simply a business venture of the utilities industry to attract more consumers through shiny, ‘greener’ policies?

It seems that if the foundations of a carbon-shaped business enterprise begins with the leaders themselves, then the industry is destined to follow suit. It can be argued that morality of these ‘green’ policies is irrelevant, providing that carbon

“It appears that the world’s leaders are too busy papering over the cracks of the recession to lend a thought to environmental concerns” emissions are decreasing, energy is sourced from renewables; and energy usage is made more efficient. But, if fat cats chasing dollar signs formulate the ideology behind these policies, long term sustainability for a finite world is certain to be jeopardized by short-term gains.

Policies fuelled by money, rather than concerns for the planet, are likely to be short-term and without a substantial basis. It is questionable that if campaigners did not place pressure on those in power, and if world leaders and utility providers did not see the potential revenue intakes from a new vertical of business, a change in energy usage would not be high on the agenda of those in power.

It seems that Brown and his companions are reluctant to put their governmental budgets where their non-committal policies are regarding climate change, and it remains to be seen if Copenhagen will actually achieve anything in terms of climate change action, or whether if, once again, restoring the banks of the West will bleed dry the limited funds of global tax incomes. 

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UPCOMING

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International events A roundup of upcoming utility and environment workshops and conferences around the world.

RENEXPO 2009 HYDRO 2009 Oct. 26-28, 2009 Lyon, France http://www.hydropower-dams.com

Sep. 24-27, 2009 Augsburg, Germany http://www.renexpo.de

3RD ANNUAL CUSTOMER EXPERIENCE AND RELATIONSHIP MANAGEMENT FOR UTILITIES Sep. 21, 2009 Prague, Czech Republic

CEE ENERGY 2009 ENERSOLAR+ THE INTERNATIONAL SOLAR ENERGY EXHIBITION Nov. 25-28, 2009 Rho (Milan), Italy http://www.enersolarplus.com

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Sep. 24, 2009 Hotel Ramada Istanbul Old City, Istanbul, Turkey http://www.cee-energy.easteurolink.co.uk/Upcoming.html

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THE BUSINESS OF PLUGGING IN – ELECTRIC VEHICLE CONFERENCE Oct. 19, 2009 Motor City Hotel & Conference Center, Detroit, MI, US http://www.pev2009.com POWER-GEN ASIA Oct. 7-9, 2009 Bangkok, Thailand

WATERPOWER XVI Jul. 27-30, 2009 Spokane, WA, US http://www.waterpowerconference.com

ESSENTIALS OF UTILITY FINANCE Jul. 23, 2009 Washington Marriott, Washington, DC, US http://www.snlcenter.com/euf

CLEAN ENERGY EXPO ASIA 2009 Nov. 18-20, 2009 Singapore, Malaysia http://www.cleanenergyexpoasia.com

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EUROPEAN FOCUS

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EU energy developments Ahead of the UN Climate Change Conference in December, Power & Energy assesses what the US can learn from European countries and their attitude towards energy usage.

Norway Oil and gas has predominantly been Norway’s source of energy, following the discovery of the North Sea oil in Norwegian waters in the late 1960s, but this has led to disagreements regarding exploration and growing international concern over global warming, resulting in Norway’s energy usage receiving meticulous attention. To follow the trend, Norway’s electricity generation is almost entirely from hydroelectric power plants, and was the first country to generate electricity commercially using seabed tidal power.

Belgium Formally known as the Kingdom of Belgium, the country produces over half of its electricity through nuclear energy.

Since 2007, it has focused heavily on the use of renewable energies, and there are currently more than 200 onshore wind turbines throughout the region. However, the principal sources of primary energy for conventional power production are low-grade coal and byproducts of the oil industry, making the country heavily dependent on imports of crude oil; it exports refined oil products.

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France Since 2002, the country’s main electricity generation, as powered by Électricité de France (EDF) is sourced from nuclear power from the country’s 59 nuclear power plants. It is the world’s largest net exporter of electric power and exports 18 percent of its total production. It is predicted that in 2009 and 2010, France will be a key driver in solar, partly due to an expected decline in the price of solar panels and also due to the subsidies introduced in 2006.

Germany As one of the world’s largest consumers of electricity per year, government policy is now emphasizing the importance of conservation and development of renewable sources, such as solar, wind, biomass and geothermal. However, the main source of energy still remains as coal and in a bid to curb emissions, the government has set a goal to meet half the country’s energy demands from alternative energy by 2050. With its status as the world’s largest operator of wind generation, hitting those targets certainly looks to be an achievable goal.

UK The British Government is another European nation that committed themselves to energy standards according to the Kyoto protocol. In March 2007, the government published a Climate Change bill requiring a mandatory cut of 60 percent in the UK’s CO2 emissions by 2050. Due to its large coal and gas reserves, the UK was largely self-sufficient until the early 2000s, but due to the need for greener energy, it is now reliant on imports. It is feared that this may cause a future ‘energy gap’ as the remaining coal plants close due to stricter CO2 standards.

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TRAVEL FEATURE

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German efficiency A champion of greener, cleaner fuel, Germany is the leader in Europe’s renewable race.

ocated in Central Europe, Germany holds 82 million inhabitants and is the largest populated state within the European Union. A country known for its environmental consciousness, it is committed to the Kyoto protocol and other green treaties to support low emission standards, recycling and the use of renewable energy. The Government strongly endorses such environmental principles with a large number of emission reducing initiatives, and as a result, the overall emissions of the country are falling.

Since 1990, Germany has reduced its greenhouse gas emissions to almost 20 percent, and has nearly achieved the

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A photovoltaic power plant on a field in Hergershausen.

targets outlined in the Kyoto protocol of a 21 percent reduction by 2012. The country claimed second place in the global Climate Change Performance Index in 2008, which it has done through an increase in energy and resource efficiency, whilst simultaneously developing renewable energies and raw material– making both the supply and demand requirements upon energy in the state more green.

However, fossil fuels still remain as the backbone of the energy infrastructure; petroleum takes a 36 percent share in the overall energy intake, followed closely by natural gas and coal. Nuclear power is gradually being phased out following a ‘nuclear consensus’ between the government and electric utilities in 2002. 

ENERGY STATISTICS Coal production

28,018,000 tons Electric power consumption

579,979,000,000 kWh Nuclear electricity generation

162.3 terawatt-hours Oil imports

2,600,000 barrels per day Stats taken from http://www.nationmaster.com/country/ gm-germany/ene-energy

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GREEN CITY GUIDE: FREIBURG IM BREISGAU A stronghold for the German Green Party, Freiburg has been implementing and extending carbon-reducing initiatives since the early 1970s. Cycle lanes have been established, the city’s train network improved and the entire city centre turned into a pedestrian zone. In 1991, a flat-rate Regional Environment Card was launched, offering unlimited use of public transport in the city.

Freiburg is mostly recognized as being Germany’s ‘Solar City’, following its heavy investments in renewables. Currently, almost five percent of the city’s electricity comes from sustainable energy sources, with the city on track to reach a figure of 10 percent by 2010.

GREEN CITY GUIDE: BERLIN

GREEN FOCUS Germany has pledged that almost a third of its energy will come from green sources by 2020. At a press conference in Berlin on February 12, Matthias Machnig, a senior official in Germany’s Environment Ministry, advised that the state will generate 30 percent of energy from renewables, maintaining its position as head of the EU in renewable sources.

This new target places it on schedule for reaching its long-term aim of supplying half of its energy demand with wind, sun and other sources of natural energy by 2050.

The Bundestag

The capital city, Berlin holds a population of 3.4 million, and as the centre of the Berlin-Brandenburg metropolitan area, is leading the way with green initiatives. When traveling through the city, cars must meet strict emission standards, which are proposed to become even more stringent in 2010.

Only cars displaying green badges will be permitted in these central areas.

Berlin’s public transport system, Berliner Verkehrsbetriebe, or BVG as it’s known, is highly efficient.

For a green stay when in Berlin, head to Martim Hotel Berlin and Maritim proArte Hotel. The Maritim Hotel chain has extensive policies focusing on the environment and energy conservation, ensuring all heating is done on energy friendly natural gas or district heating. In certain places, the hotels produce their own energy via thermal power stations or solar collectors.

The seat of the German Parliament, the Bundestag, is located in Berlin. A synthesis of pre and post-war architecture, the historic dome most recently went green, and now runs completely on renewable energy from wind, water and solar sources.

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IN REVIEW On the shelf Power & Energy takes a look at the resourcefulness of the latest offerings of renewables-related books.

Energy Systems and Sustainability

by Godfrey Boyle

As the emphasis on renewables increases globally, a new section of society is attempting to understand the need for change in energy systems. Senior lecturer in the UK’s Department of Design & Innovation (DDI), Godfrey Boyle gives informative information for this new class of the true forms of renewables.

POWER & ENERGY SAYS: A practical guide for those wanting to know more about renewables, without needing a BSc to understand. Great reference tool of energy systems and generation technologies.

Sustainable Energy – Without the hot air

by David MacKay With all the talk currently surrounding sustainability, sometimes only the facts will do. David MacKay sets out the quantitative results of energy usage – for heating, electricity, food, transport and so on – per individual, per day. He also reviews the actuality of energy usage, bleakly concluding that we use about ten times our plausible local resources. He then proposes a menu of sensible solutions to rectify these problems.

POWER & ENERGY SAYS: A well written account and some well proposed ideas displaying the need for major change through major actions.

Renewable Energy: Sustainable Energy Concepts for the Future

by Roland Wengenmayr and Thomas Bührke Written by science journalists, the book shapes his creative thinking into formulative chapters, documenting 20 major categories of those sustainable concepts currently being used. The information is aided with a combination of pictures and diagrams, and offers solid solutions for energy conservation.

POWER & ENERGY SAYS: A more formative account and critical overview of the recent technologies for the energy conscious public.

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Final word

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Corn beef Is ethanol really the answer to America’s fuel worries? Huw Thomas takes issue.

et me be clear: I’m a card-carrying tree-hugger. I religiously recycle each scrap of suitable material, conserve every drop of water and compost my kitchen waste, albeit with limited success. Given all this, it might be expected that I would be a big supporter of corn ethanol, which makes up the bulk of biofuel in the US. After all, ethanol is naturally produced from raw materials that grow straight out of the ground with no messy drilling required. As they grow, crops absorb the CO2 that is produced when they are burned. We reduce our dependence on foreign oil and support our economy by ‘buying American’. What’s not to like?

However, once you look more closely at corn ethanol, its environmental credentials begin to appear a little shaky. Refining ethanol is not some bucolic activity where a ruddy-faced farmer squeezes the juice out of ears of corn. Rather it is a laborintensive – and energy-intensive – industrial process. Nitrogen fertilizer is produced using natural gas, while many pesticides and herbicides are derived from oil. In addition to that, the machinery used on farms and in transportation gulps down diesel, further tarnishing ethanol’s claim to green status.

According to the National Renewable Energy Laboratory, it takes around one British Thermal Unit (BTU) of fossil fuel to produce 1.3 BTU of usable bio-energy. That exchange rate doesn’t seem particularly impressive or sustainable, yet there are those who dispute even this level of efficiency. Research

by David Pimentel of Cornell University suggests that it takes roughly 1.3 gallons of oil to produce a single gallon of ethanol.

Even ethanol’s characterization as a cleaner fuel than existing fossil sources is decidedly unstable. Burning ethanol actually produces more smog than burning oil, a fact conceded by the EPA in the Third Circuit Court of Appeals in 1995.

But even disregarding corn ethanol’s environmental bona fides, the deciding factor in the success or failure of any product

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comes down to dollars and cents. This reality makes ethanol’s longevity even more perplexing. It takes 450 pounds of corn to fill an SUV, so producing enough ethanol to replace the oil we currently use would require 95 percent of available farmland to be turned over to corn cultivation. Ethanol might be able to cure us of our addiction to foreign oil, but only by replacing it with an addiction to foreign food.

In fact the only people who seem likely to profit from the proposed plan to increase corn ethanol usage to 15 million gallons a year by 2015 are the corn farmers and ethanol producers.

Subsidies and tariffs discourage the import of cheaper ethanol from places like Brazil. This keeps prices high and pumps cash into the coffers of big agribusinesses who are the key industrial players in the big farm states. Given the disproportionate political influence of these states and the healthy streams of lobbyist cash flowing from them, don’t expect the denizens of Washington to change things too soon.

The single-minded boosting of ethanol actually works to the detriment of developing a truly sustainable and affordable alternative to oil. There are a number of options currently being explored, including hydrogen, hybrid electric vehicles and even ethanol made from non-food crops. The premature coronation of corn ethanol as the de facto winner in the alternative fuel race prevents serious investment in other approaches that might yet yield significant results.

For the average eco-warrior it’s a deeply frustrating situation. We seem to be on the verge of trading one expensive, polluting and unsustainable source of energy for another with many of the same attributes. Cutting out the special interests and approaching corn ethanol along more realistic lines is a choice that needs to be made without delay. Corn may well be part of the recipe for future energy, but until some other ingredients are incorporated it is going to leave a pretty sour taste. n

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