Viewing posts tagged: "Smart Grid"

Energy Storage Economics and the Smart Grid

Eric Wesoff: August 14, 2009, 1:00 PM

It has become cliche to refer to energy storage as the holy grail of renewable energy.  Actually, it's not energy storage that we need.  We have that.  What we need is cheap energy storage. 

"Most storage technology is expensive so we spend a lot of time trying to figure out the value."

Those are the words of EPRI's Dan Rastler who spoke on Wednesday night at the monthly Silicon Valley Photovoltaic Society meeting at PARC.

EPRI

Mr. Rastler is the Program Manager for Energy Storage at EPRI.
  
Founded in 1973, EPRI is an "independent" non-profit center for public interest energy and environmental research center that receives about $350 million in funding each year.  "Independent" is an approximate term in this case as EPRI's substantial budget comes in the most part from America's utilities.  And utility agendas don't always map exactly with the public good.  That said, it was an informative talk and Mr. Rastler did not seem too evil.

Smart Grid Defined

Rastler's talk looked at electric energy storage's role in the smart grid, defining the smart grid as "overlaying information control technology over the electric grid for efficiency and reliability,"  adding, "The buzzword is interoperability – how do you make everything connect across the entire domain from bulk generation to the customer?"

He made the distinction between smart grid on the utility side – where utilities are putting sensors and cameras on utility assets, "to where it really gets interesting"– the customer side where the smart grid can influence customer behavior.

Another important point he made was the need for scale – because anything less than 100 megawatts is not really important to a utility.

Industry Pain Points and Market Drivers

  • The biggest driver the electrical sector is facing is carbon.  "There is no single technology that is going to get us there."  It's going to take a portfolio of technologies – solar, de-carbonizing, EVs, wind, nuclear, etc.
  • Managing increased wind penetration – Texas could have 18 gigawatts of wind by 2015, California could have up to 12 gigawatts of wind by 2012.  The intermittency of renewables like wind and solar need bulk storage to buffer that unpredictability.
  • We are going to need $200 billion in transmission and $400 billion in distribution investment in T&D infrastructure over the next 15 years
  • Peak is only 400 hours a year – storage and information control can help manage the peak

Advanced Energy Storage Technology

Rastler is a fan of advanced lead acid batteries.  He pointed out a firm called Xtreme Power and declared that, "lead acid is going to re-emerge."  Xtreme Power builds a solid dry cell rated as a 1-megawatt four-hour system for $2 million.

He noted a few other storage technologies nearing commercialization or ready for deployment at reasonable price points:

  • A 400 megawatt-10hour CAES (Compressed Air Energy Storage) system
  • A 1 megawatt–seven hour NaS system as substation grid support  that costs $3,000 to $3,500 per kilowatt hour
  • A 500 kilowatt-four hour ZnBr flow battery system that is meant to be transportable to where the pain point is
  • "Lithium ion is getting to megawatt scale," he said citing a 1 megawatt-15 minute Li-ion system.  He adds, "There are as many different Li-ion chemistries as there are California wines."  There are currently early field trials by Altair Nano and A123 using Li-ion at utility scale.
  • Redox flow batteries with a number of different electrolyte species

Costs of Storage

According to Rastler, "We need to get below $300 per kilowatt hour installed all in."

CAES is below $100 per kilowatt hour (but does use a fuel source).

Cost of Li-ion ranges from $400 per kilowatt hour to $1,200 per kilowatt hour.

Final Words

Rastler finished in saying that we have to get the cost structure down significantly and we need a smart grid and storage-aware regulatory policy.

He concluded saying that storage is "really an advanced materials play."  The EPRI presentation can be downloaded here.

Top 12 Greenest Cities in the U.S.

Eric Wesoff: May 20, 2009, 10:22 AM

All politics are local. So is the progress in greentech.

Federal and state Renewable Portfolio Standards, federal loans and stimulus packages are vitally important programs.

But progress in greening our cities is going to come from local efforts as much as from on high. We take a quick look at some city-based green initiatives.

San Jose, Calif. considers itself the capital of Silicon Valley, and wants to be the global center of greentech innovation. The city and its Mayor, Chuck Reed, have initiated one of the nation's most aggressive green initiatives – the Green Vision program with a 15-year goal that includes:

1. Creating 25,000 cleantech jobs

2. Reducing per capita energy use by 50 percent

3. Receiving 100 percent of its electrical power from clean renewable sources

4. Building or retrofitting 50 million square feet of green buildings

5. Diverting 100 percent of waste from landfills

6. Recycling or reusing 100 percent of its wastewater (100 million gallons per day)

7. Ensuring that 100 percent of its public fleet vehicles run on alternative fuels

8. Planting 100,000 new trees

9. Replacing 100 percent of its streetlights with smart, zero emission lighting

San Jose calls itself the capital of Silicon Valley but Palo Alto, Calif. could arguably assume the mantle of its' heart (against the protestations of Mountain View and Menlo Park). Palo Alto is the home of Stanford University, Packard's garage (of Hewlett Packard fame), Facebook, and a lot of Venture Capital firms. Steve Jobs of Apple and Sergey Brin of Google call it home.

Palo Alto can also lay claim to be one of the nation's greenest cities.

In June 2008, Palo Alto adopted mandatory green-building requirements for residential and commercial development -- one of the most stringent green building ordinances in the nation.

New buildings and remodels in Palo Alto must meet standards developed by the U.S. Green Building Council or the Build It Green organization. Expect some public pushback since the green requirements can add from $2,000 to $10,000 to the cost of a home and 2 percent to 5 percent to the cost of a commercial project, according to a city report.

Palo Alto also has

  • A climate protection plan addressing CO2 emissions and water
  • A program for less-toxic pest control
  • Proposed stringent ordinances on construction and demolition debris, a major source of landfill material, waste, and toxics.
  • The "greenest" congressional office. Anna Eshoo, a high-powered Congressperson, recently unveiled the very first congressional office in the nation to go maximum green. Eshoo's office has installed a 1.6 kilowatts photovoltaic system and 100 percent of the electricity used by the office is obtained from renewable sources. The office has made profound green modifications to its' lighting, water, heating, cooling, materials, waste stream and the transit habits of its' employees.

Palo Alto has some competition from its neighbor/rival across the Bay – the Republic of Berkeley, Calif. 

Late last year, Berkeley's city council approved a program to provide city-backed loans to property owners who install photovoltaic systems. The loans, which could total up to $20,000 each, would be paid off over 20 years as part of the owners' property-tax bills. This type of program goes a long way to remove the biggest obstacle to solar installations – the large upfront cost.

If this program succeeds, it could be expanded to finance other energy-efficiency efforts such as installing double-glazed windows or thermal insulation.

How about tiny Greensburg, Kan.? After being decimated by an F-5 tornado that leveled the city and left few homes standing, the survivors launched a plan to resurrect their town as the greenest city in America. All public buildings are to conform to LEED platinum standards.

Now, two years after the disaster, Greensburg's new homes are almost 50 percent more energy-efficient due to energy-saving windows, improved insulation, efficient heating, etc.

The people of Greensburg are pioneering the greening of a municipality, in one of the reddest states, no less.

Gainesville, Fla. is the first U.S. city with Feed-in-Tariffs.

In the first such program in the country, The Gainesville City Commission has approved a solar feed-in tariff for residential and business customers served by the Gainesville Regional Utilities in Florida. Wrote Ucilia Wang:

"Under the program, owners of solar energy systems would sell the electricity to the utilities at $0.32 per kilowatt-hour under a 20-year contract. The rate, which is higher than the price for conventional power, will remain for the first two years of the program. ... The program is modeled after the successful one in Germany, which has become the largest solar market in the world."

Other cities with claims on "the greenest" include:

Austin, Texas: Austin Energy, the city's municipally owned utility, plans to grow the renewables' portion of Austin's energy portfolio to 30 percent by 2020 and to build solar power's share to 100MW by 2020.

Boulder, Colo.: The city has resolved to become a zero-waste community.

Burlington, Vt.: More than one-third of energy used in the city comes from renewable resources, an impressive figure for the frosty Northeast.

Madison, Wis.: A bike-friendly city with an extensive recycling program that claims more than 90 percent participation.

New York City: High-density populations like NYC use fewer resources per capita. New Yorkers use of public transport dwarfs that of any other city.

Portland, Ore.: Portland is bike friendly, has set an urban growth limit to protect 25 million acres of open space, and recycles more than half of the city's trash.

San Francisco: More than half the city's residents use public or alternative transportation to get to work.

Please forgive the slightly California-centric selection in this list. Feel free to comment and let us know your choice for greenest city.

Smart Grid Finance Rundown: VCs and Congress Rock the Grid

Eric Wesoff: May 5, 2009, 8:30 AM

In 2004, the term “Smart Grid” didn’t really exist – despite the Demand Response successes of now-public firms like Comverge and EnerNoc. 

Fast forward five years and we’ve seen hundreds of millions of dollars of VC investment flow into a wide range of smart grid startups, essentially creating a new market and ecosystem from power generators to home networks. This year has gotten off to a slow investment start but that will change in the coming quarters.

Smart grid technology, investment, and infrastructure must emerge if the states are to meet their ambitious Renewable Portfolio Standards.

But beware. As Stephen Lee, the Senior Technology Executive for Power Delivery and Utilization at EPRI, the Electric Power Research Institute warns: Smart grid players must avoid the hype. “We are at the peak of the smart grid hype cycle. When Obama and Biden talk about the smart grid you know it’s being hyped,” Lee said.

 

2008 and 2009 Smart Grid M&A

In today’s difficult business environment we expect to see lots more M&A activity and consolidation.

 

VC Investment in the Smart Grid

Soaring energy costs, an aging electricity grid, national security concerns and government regulation are creating a boom in smart utility meters and the semiconductors that go into them.

Most smart grid investments don’t require hundreds of millions of dollars to create a factory. VCs look at the smart grid market as a capital efficient alternative to the capital-intensive wave of green investments of late.  Additionally the technology of the smart grid – wireless communications, mesh networks, semiconductor integration, and software – is a familiar vernacular to the VC community.

Look for big players like Intel, IBM, Cisco and Oracle to begin vying for a slice of the smart grid pie either through investment or acquisition.

What follows is a detailed list of smart grid VC investments since the first quarter of 2008.

 

Q4 2008 VC Investment in DR and Smart Grid

Smart metering in the U.S. currently has a low penetration, with ~6 percent of households having installed the technology in 2006. This is set to increase rapidly over the next few years with some forecasts for smart meter penetration to reach close to 90 percent of households by 2012.

 

Silver Spring’s $15 million investment comes on top of a $75 million Round D raised in October. In a good economy, Silver Spring would be a natural IPO candidate. Even in this economy -- Silver Spring could be the IPO that quenches the IPO drought later this year.

With large-scale contracts with utilities including Pacific Gas & Electric Co. (5 million customers), Florida Power & Light (4.5 million customers) and Pepco Holdings (1.9 million customers), Silver Spring is set to install its devices in millions of meters over the coming years.

Silver Spring’s competitors include smart meter vendors that provide networking and communications themselves – Itron, GE, Landis+Gyr, Sensus and Elster – as well as rival networking providers such as Aclara, Trilliant, Eka Systems and SmartSynch.

Shifting gears away from venture capital in smart grid, here’s a bit of info on legislation in smart grid. 

As testament to the policy shift in energy, today we have federal politicians with the will to advance a bill with “smart grid” in the title.

H.R. 1774, the Smart Grid Advancement Act looks to reduce peak demand and increase the deployment of smart grid technologies.

The bill incorporates smart grid features into labeling so consumers have the information to purchase smart grid capable products.  And the bill takes steps to reduce peak electricity demand. The Smart Grid Advancement Act directs states and load-serving entities to identify peak demand reduction goals based on an aggressive effort to adopt smart grid technologies.  Studies show that when implemented on a large scale, demand response could reduce electric costs by as much as $15 billion annually.

Final Word

The only way we can reach aggressive Renewable Portfolio Standards and exploit energy storage, distributed generation, PHEVs, demand response, and smart meters is through an integrated and intelligent grid.

But the entity we call a “Smart Grid” is more of a theoretical construct than a true engineering problem. In a perfect world we could build from scratch, a self-aware, self-healing, sensor-laden, robust and secure mesh network that allowed dynamic forward pricing to inform customer and utility energy usage and choices.

But in the real world – we are attempting to overlay intelligence on an antiquated legacy network that has many masters and many flaws.  Utilities tend not to move quickly and are slow to innovate. Legislation is slow and imperfect and standards often compete. 

Nevertheless, there is momentum in this field and VC funded startups like Silver Spring and Fortune 500 firms like IBM and Intel are starting to drag the utilities and the grid into the 21st century.

 

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