by Jeff St. John
March 09, 2018

With all the coverage this week of the Trump Administration’s tariffs on aluminum and steel, as well as the ongoing effects of the tariffs on imported solar panels and equipment, it’s good to now that trade in technology to enable distributed energy and grid edge control is flowing freely from the U.S. and abroad. 

One example of note is a deal announced last month between the government of Indian province Andhra Pradesh and Silicon Valley startup AutoGrid, featuring the marriage of smart grid and Internet of Things (IoT) and the reality of farming pumps and household air conditioners. 

The state-owned Andhra Pradesh Southern Power Distribution Company provides over 28 terawatt-hours of electricity per year to nearly 11 million customers, and considers itself one of the more progressive utilities in the country. And yet, like many of India’s largely state-run utilities, it suffers from big inefficiencies and technical and non-technical losses, and ran at a net deficit of Rs. 3,400 crores per year (about $500 million) on annual revenues of nearly Rs. 14,900 crores (about $2.3 billion) last year. 

AutoGrid’s customers include U.S. utilities National Grid, Sacramento Municipal Utility District (SMUD), Oklahoma Gas & Electric, Austin Energy, Florida Power & Light, and Hawaiian Electric, most of them using the company’s data analytics and machine learning for demand-side management. In Andhra Pradesh, it’s planning to tap agricultural pump-sets, residential and commercial ACs and industrial units, with a projected potential benefit of Rs. 1000 Cr per year ($150 million) when deployed at scale. 

Some of the applications combine data from devices outside of the utility sphere. The agricultural pump-sets, for example, use soil moisture data to alter their run cycles, which are otherwise controlled to run during times of cheap surplus power and lay idle when the grid is under stress. Its air conditioner remote cycling program will include mobile and online connectivity for customers to monitor their homes when they’re away, for “convenience and peace of mind.”

World Bank and Indian government figures estimate the country’s demand-side management potential savings at 180 billion kilowatt-hours per year, or about $25 billion, and about 60 gigawatt-hours of avoided generation capacity investment, or approximately $60 billion, AutoGrid noted. But the kind of technology it’s proposing with Andhra Pradesh is “yet to be widely adopted due to a broad set of limitations,” the press release states.

Nearly half of the country lacks grid power, and those that do suffer from significant outages and inefficiency of service. Utilities, in turn, face high levels of energy theft, sometimes approaching 40 percent of total sales in the worst cases. 

India’s grid is being upgraded as part of the central government’s Restructured Accelerated Power Development and Reform Programme, which is directing roughly $10 billion over the coming years to grid modernization. After early stumbles and cost overruns, the program was redesigned to require utilities to collect data to prove the business cases for deployments before moving forward. 

While most of the country’s utilties are vertically integrated, the capital city of Delhi is a deregulated market, where Indian industrial giant Tata owns the largest distribution utility. Tata has hired Honeywell to enable demand response for hundreds of buildings served by Tata Power Delhi Distribution, and this week announced a memorandum of understanding with French utility EDF to modernize its distribution grid and support sustainability goals.

Australia, the testing ground of solar-battery virtual power plants 

Australia, one of the world’s largest markets for rooftop solar, has been hit with statewide blackouts in recent years, and has become a fast-growing market for energy storage -- as well as concerted efforts by the country’s utilities to get into the game. 

Tesla CEO Elon Musk jumped into the blackout debate last summer, betting the company acould build 100 megawatts of energy storage in South Australia within 100 days or it would cost the government nothing. Musk met that challenge late last year, ultimately turning to Samsung to supply the batteries. A recent analysis shows that the battery has been charging at night with cheap off-peak wind power and discharging in the afternoons when demand peaks, just as intended, with plenty of juice left over for frequency regulation. 

Last month, the government of South Australia awarded Tesla another big battery deal, this one behind the meter. Over the next five yeas, Tesla will install solar panels and batteries in nearly 50,000 South Australian homes, for free. Each Powerwall battery will provide backup power in case of emergencies, but they'll mainly be doing the same kind of grid balancing that its grid-scale battery is doing, while reducing customers bills by a projected 30 percent. 

The cost of roughly $800 million will be financed by investors and through electricity sales, along with $2 million grant and a $30 million loan from the government to get the initial stage, a trial at 1,100 public housing rental units in South Australia, up and running. 

Free batteries may overcome the obstacles that seem to have brought Australia’s first big behind-the-meter virtual power plant to a halt. Last year, California-based startup Sunverge landed a deal with utility AGL to deploy up to 1,000 of its 6.4-kilowatt, 11.8-kilowatt-hour Sunverge Solar Integration System for a residential virtual pilot plant project, at an incentive-backed price of storage unit for AUD $3,499 ($2,687). 

But AGL suspended installations of the Sunverge systems in August, after only about 250 had been installed and 700 sold. As of late last year, only about 250 of the batteries had been deployed, as it told customers it was rethinking its approach to its virtual power plant. In February, AGL reported it had written off its investment into the Sunverge project, and would consider participation in the South Australian-Tesla project. 

A South American outlook for smart grid, smart meters 

South America is a land of contrasts, with soaring mountains, steaming jungles, great plains and an increasingly urbanized population living in cities that encompass luxury apartment compounds with their own generators, and favelas where electricity is paid by the kilowatt-hour via transactions at corner grocery stores. 

Smart grid investment by South America’s mostly state-run utilities has surged and sagged with the shifts in the economic fortunes of the region. Starting around 2012 Brazil started to open up to U.S. and European contenders like Itron, Silver Spring, Elster and Landis+Gyr -- albeit with domestic manufacturers providing the meters themselves. Distribution and transmission grid sensors, substation automation, fault location, isolation and restoration (FLIR) systems, and other grid projects were announced. 

But the past few years have been economically challenging ones for South America, which has slowed investment in power infrastructure. Brazil, the continent’s primary market, is just emerging from a two-year recession and remains in political turmoil. 

But the Northeast Group, a smart infrastructure intelligence firm, is predicting that the continent is on an economic upswing, one that could unlock the massive potential for investments across the energy and grid spectrum. Over the course of the next decade, the research firm predicts $20.1 billion in smart grid infrastructure investment, ranging from smart meters to energy storage. 

Northeast Grouip named a host of companies active in South America, including ABB, Aclara, General Electric, Honeywell, Iskraemeco, Itron, Kamstrup, Landis+Gyr, Schneider Electric, S&C Electric, SEL, Sensus, Siemens and Trilliant. Preventing electricity theft is the key business driver for most utilities -- Brazil loses about $6.5 billion per year due to electricity theft and other non-technical losses, Northeast Group president Ben Gardner noted in a statement. 

GTM Research has its own projections for the Latin American smart meter market, which includes Mexico and Central America. According to data from the GTM Research Grid Edge Data Hub, AMI installations are expected to grow from about 2.5 million today to more than 16 million by 2022, largely driven by investments in Colombia, Mexico and Brazil. 

FIGURE: AMI Installations in Latin America

Source: GTM Research