Greentech Media has just wrapped up its 2018 Grid Edge Innovation Summit, our annual conference on the latest developments in distributed energy, grid integration and the future of utilities.
This week’s two-day conference covered a wide range of topics on the grid edge, from keeping track of the advances in utility distribution grid awareness and customer connectivity, to exploring the future potential of distributed intelligence, machine learning and blockchain technologies.
It also gave us a chance to catch up on some of the latest work on microgrids, virtual power plants (VPPs), distributed energy resource management systems (DERMS), and other instances of distributed energy resource (DER)-grid integration, as well as catch some news on future investments and projects.
Here’s a quick overview of some of the highlights of the conference, both on- and off-stage. Squared members have access to the video recordings of many of the panel sessions under discussion, and we’ve provided links for those interested in hearing more from the speakers themselves.
Breaking down the energy blockchain hype vs. reality
Blockchain stood out on the agenda at this year’s conference. GTM Research grid edge analyst and resident blockchain expert Colleen Metelitsa was careful to lay out the caveats facing would-be energy blockchain players in her Thursday panel. The answer, by the way, is probably best summed up as “maybe, but not yet.”
Metelitsa’s panel included three players in distributed solar, each representing a different stage of embracing blockchain as a useful tool for their business. Chris Moris, head of Sunrun’s Advanced Product Team, said the big residential solar installer-owner hasn’t yet put blockchain to use, although it’s looking at applications for tracking the rising amount of installations that come with batteries.
Sunverge Energy, the California startup that works with utilities to install and manage solar-battery-control systems in customers’ homes and businesses, is further along in the blockchain exploration, said Stina Brock, senior director of global utility and grid solutions. As part of its project with Ontario, Canada-based utility Alectra, Sunverge is working with IBM’s Hyperledger Fabric blockchain-as-a-service offering to manage the tokens being traded between DERs in the utility’s Powerhouse pilot project.
This is a private, not a public, blockchain, Brock noted. That's an important distinction between systems that run within a company’s or government agency’s boundaries and those open to the Internet at large. It also uses a “proof of authority,” rather than a “proof of work” process to validate participants. In other words, it’s not burning mountains of electricity to do complex equations to prove its bona fides, as cryptocurrency Bitcoin requires.
Australian solar monitoring leader Solar Analytics has had more opportunities to employ blockchain, given the country’s competitive energy market structure, company co-founder and CEO Stefan Jarnason noted. That’s allowed it to move beyond the “distributed ledger” functions like tracking RECs or other forms of traded credits, and into more open “transactive energy” applications, with direct peer-to-peer trading of self-generated and stored solar energy.
Why distributed ledgers will come before transactive energy
But as Greentech Media chairman Scott Clavenna heard in his Wednesday panel on "distributed intelligence," utilities and DER providers are still leery of propositions that would link blockchain-based energy trading systems to the actual operation of DERs and utility grids.
As Sonja Glavaski, a program director with the U.S. Department of Energy’s ARPA-E program, noted in conversation with Clavenna, “blockchain is primarily intended as a peer-to-peer financial transaction tool or a security tool. How do you merge that with the physical constraints that we have in the distribution system?”
ARPA-E’s Network Optimized Distributed Energy Systems (NODES) program, which has provided about $60 million to advance the integration of DERs with bulk power generation, is working on multiple projects that could make use of technologies that share some of blockchain’s most useful characteristics, Glavaski noted.
For example, she noted her visit earlier this week to the Stone Edge Farms winery microgrid in Sonoma, California, a National Renewable Energy Laboratory (NREL) partner, which autonomously rode through the wildfires that devastated California wine country last October. Even though the winery staff had to evacuate, the Internet connection remained undamaged, allowing them to remotely monitor and, to an extent, control the system via tablet and smartphone.
Blockchain could find uses in these contexts, as well as in peer-to-peer energy trading, which is another area of exploration for NODES, Glavaski said. But “we can’t separate financial transactions from the reality of the physics of the system. That’s where I think some work needs to be done.”
Yang Bai, technical lead for Enterprise Energy Services at Nest, the smart thermostat vendor now fully incorporated into Google’s home automation hardware unit, noted that his group has looked at recent developments with blockchain, but hasn’t taken any efforts yet to go beyond that.
As Metelitsa noted, most of the $324 million raised by energy blockchain startups in the past year has come in the form of initial coin offerings of cryptocurrency, while a majority are planning to offer transactive energy business models that aren’t yet possible to implement in most markets. Many energy industry old hands I spoke to at the conference pooh-poohed the focus on blockchain, given these realities.
Still, it was gratifying to hear one old hand — Byron Washum, the retired chief of U.C. San Diego’s model microgrid system — express his views on the topic. He’s been skeptical of the blockchain hype of the past few years, he said. But he noted in an off-stage interview that a project announced this week between Silicon Valley Power and Australian energy blockchain startup Power Ledger, to create “digital tokens” of EV charging transactions, is the “first credible” application of the technology he’s seen to date.
The big opportunity in utility analytics: data cleansing
Data was another big topic at this year’s conference. GTM Research has broken down the utility data analytics market into various segments, both based on its purpose (customer-facing, grid-facing, or market-facing) and on investment centered on particular utility deployments, such as advanced metering infrastructure (AMI).
But as Cassie Bowe, associate vice president at utility-backed investment fund Energy Impact Partners, noted in a Wednesday panel, the category of “data cleansing” might deserve a category of its own — along with money for startups that can improve on the process.
In her discussion of the increasing trend of utilities building their own data science teams — a topic that came up in several panels this week — Bowe noted that “a huge, if not the main, function of an internal team is to prepare, cleanse and integrate the data. You can use different tools for that, but you’re likely going to need a team internally to do that.”
GTM Research grid edge chief Ben Kellison has long noted that data cleansing is the elephant in the room when it comes to utility projects, particularly those that require a high level of fidelity, like distribution grid applications. Bowe noted that utilities involved in EIP’s coalition have “estimated that up to 80 percent of any data analytics project is spent on that cleansing and integration.”
To EIP, this indicates a problem in search of an innovative solution, she said. “We actually just invested in a company that we haven’t announced yet that does a lot of the cleansing of the data, which I think will go a long way for utilities.”
Christophe Defert, vice president of Centrica Innovations Ventures, noted that his company’s data cleansing efforts were forced by the European Union’s new GDRP data privacy and security rules.
“We ended up creating our own technology” to handle that internal process, which was merged with Centrica’s broader imperatives to increase and retain its customer base. Centrica was so pleased with the product that was adapted as a service to others, through a bolt-on acquisition of a company called Rockit Astra, now rebranded IO-Tahoe, he noted.
PingThings mines synchrophasor data; Pxise moves grid orchestration to microgrids
One of the more interesting energy data applications I learned about at this week’s conference came from Jerry Schuman, chief technology officer of PingThings. The El Segundo, California-based startup, a spinout of an incubator established by Frost Data Capital and GE Software, last got GTM coverage in 2015 when it added to its $1 million in financing from GE Ventures.
PingThings is focused on pulling data from the synchrophasor devices installed in the thousands with post-2008 financial crisis federal stimulus dollars, and turning it into actionable intelligence on geomagnetic disturbances, predictive asset maintenance, and other key items of concern to transmission operators.
But first, it had to overcome the inertia that had overtaken efforts to use synchrophasor data since their installation, Schuman said. These devices pull in massive amounts of data at speeds even faster than the grid’s 60 cycles per second, but many of the data analytics efforts he saw in the space were limited to data that had lost much of its granularity in the process of being collected and warehoused, to as low as one-second intervals.
PingThings has been able to demonstrate its ability to ingest and analyze the raw, real-time synchrophasor data into a “sandbox” environment for data scientists, as shown in tests with partners like Arizona utility Salt River Project and Virginia’s Dominion Energy and published with the pertaining industry group, the North American SynchroPhasor Initiative (NASPI). Some early applications have yielded hypothetical returns on investment of 30-50x on an initial $5 million implementation, he said — synchrophasor data is about the best data out there.
This week’s conference also provided an update on Pxise, the startup nurtured by Sempra Energy to bring technology developed at UC San Diego to in-the-field applications. Pxise uses a “two-by-two decoupled controls” approach to automating the real-time balancing of different DER assets, such as solar and wind inverters, batteries and responsive loads, to both direct variable generation and loads to smooth out fluctuations in, and to stabilize voltage, frequency and phase-angle problems that can occur with high renewable penetrations.
Sempra has put the technology to test in wind and solar projects, including its initial demonstration in a Hawaiian wind farm, said Lee Krevat, the director of new ventures at Sempra Renewables who's also director at Pxise. “We’ve been lucky in that our unregulated side has a lot of wind and solar farms, a lot of batteries, so we’re able to test” the technology “without having to go outside of the company," he said.
Last week, Pxise got a role in a smaller-scale project, as part of a group receiving $5 million in California Energy Commission grants to manage a Santa Rosa, Calif. microgrid featuring 2,600 square feet of solar PV and 2 megawatt-hours of lithium-ion batteries.
The DER opportunity at grid scale: waiting for FERC Order 841
Many of this week’s panels focused on DER-grid integration, both in terms of the welter of challenges utilities face in adapting their business to managing this task on a lifecycle basis, to the real-world efforts beyond utilities that are establishing DER aggregations as facts on the ground.
To date, the opportunity for utilities and third-party providers to work together on making money from DER integration have been limited to certain states. Meanwhile, the opportunities for DERs to interact with wholesale grid markets has been constrained by the gap between the two, and the lack of regulations
Federal Energy Regulatory Commission (FERC) Order 841, passed in February, is set to change all that — for energy storage systems at first, but potentially for a much broader set of DERs down the road. By year’s end, the country’s grid operators must respond to FERC’s order with proposals for tariffs and regulations to allow energy storage to participate in their markets at sizes as small as 100 kilowatts, including those interconnected to the distribution grid.
This is a devilishly complicated task, given the lack of any models for how ISOs and RTOs can get visibility and dispatch certainty out of assets that aren’t connected to their transmission grids. But it’s going to “open the floodgates for storage participation” once the rules are in place, GTM Research energy storage chief Ravi Manghani noted.
Allen Schurr, chief commercial officer of Enchanted Rock, noted that the Texas-based natural gas-based microgrid developer is closely watching developments on Order 841 implementation in different grid operator jurisdictions. While the company has grown its Texas portfolio of natural gas generator-backed, grid-integrated microgrids to about 300 megawatts to date, it hasn’t yet announced anything outside of the state. Order 841 would well change that.
Sunverge’s Stina Brock agreed that “we’re really excited about FERC 84. That will allow the markets for these kinds of DERs to participate in ways that aren’t just kind of shoehorned into demand response.” Of course, “the processes and tools to allow the wholesale market to access these tools on the grid edge just aren’t there” today, she said. Thus, her company’s interest in blockchain.
Another supporter of Order 841 is former FERC chairman Jon Wellinghoff, who helped craft major DER-supporting policies during his tenure at the agency. Wellinghoff spoke at this week’s panel as CEO and founder of Grid Policy Inc., a group working with emerging DER integration technology providers.
Wellinghoff has long been a champion of creating “independent system operators for the distribution system,” as he put it in a Thursday discussion. But to date, regulators haven’t taken up this vision.
In New York, for example, where Wellinghoff joined with the Clean Coalition to pitch the IDSO concept, the state’s Reforming the Energy Vision (REV) initiative eventually went with tapping existing utilities to fill that foundational role, albeit under completely different, to-be-determined market structures.