Electricity Companies

Trends in Utilities Part 3: You’ll need Customers for a Virtual Power Plant

What do Smart Homes, Smart Cities, Microgrids, the Internet of Things, New York’s REV docket, Demand Response, Big Data, and Transactive Energy have in common? All are required for the Virtual Power Plants of the (near) future. In turn, “VPP’s” are a statement that utilities, their commissions, and other stakeholders have charted a course that involves the energy consumer in a far deeper and more interactive way. The days of passive energy use interrupted only by a monthly bill are ending.

Who asked for this? You did; all of us did. In a polarized society, what we have in common is the electric grid. Want solar? Afraid of nukes? Concerned about emissions? Fracking? Major Storms? All those and more impact our grid planning in ways that are not necessarily compatible. Since we’re all connected to the grid, one person’s passion is another’s extra cost. Just like a balloon. Pressing the top will add pressure to the rest, potentially with a catastrophic result.

The well known issue of California’s “Duck Curve” (you can google it) is very instructive. California’s aggressive renewable standard and incentives led to a massive installation of rooftop solar. When San Onofre went offline, solar is one of the things that saved the day. However, solar is not a base load power source; it disappears at night, and rapidly. This requires spinning up traditional generation within a few minutes. It’s hard on equipment, and it has a ghastly impact on emissions. From a social point of view, solar subsidies, net metering, and other financial constructs mean costs are shared by customers who do not have solar. This can burden lower income patrons, add to the costs of goods and services, and require regulators and legislators to perform their imitation of King Solomon. The challenge is compounded by a grid designed to be one way and utterly forgettable.

This is not to criticize solar but to illustrate the complexity of changing a one trillion dollar all pervasive system designed and built over 120 years and shaped by policies dating back to the 1920’s…But change we must to build a bright future for the generations to come. So how does the opening list of elements get us there?

Some are technologies, others represent policies. All exist in some form today, often in pilots; but all should contribute to a wonderful optimism. We have real solutions in real pilots being evaluated by real regulators and real management. What we lack is any real sense of customer involvement; or if there is, it tends to concentrate on a personal passion, say renewable energy. For the most part, how electricity happens is a source of great disinterest.

I give several talks during the year. Most are to groups closely allied with the electric utility industry. It’s hard to say anything that surprises those audiences, but be prepared for aggressive skepticism. Outside the industry, there have been various civic groups, professionals (architects, engineers, attorneys, government employees) and trade conferences of other major industries (building managers, distribution companies, retailers, manufacturers, and the like). Despite the different focus, two reactions unify them.

First, no one believes, is prepared, or is planning for the impacts of the “utility of the future”. It just isn’t believable. Second, they all want to know if the grid is in imminent danger of catastrophic failure due to cyber terrorism. These are related reactions. All industries, industry segments, and our own lives are subject to insane rates of change. Just to cope, we focus narrowly on “Getting Things Done” not mindful of that blow from left field that will knock us off course. Our life experiences define our reactions. We just do not see the very different world that populates others’ perspectives, and that will be the major industry barrier. Fortunately, there are more forums for interaction between regulators, industry, and other stakeholders; and they are beginning to share and agree. We just need to broaden the audience, not so different than the process that took us from Ma Bell to ComcATTVer-MobiSprint…or something.

Schneider Electric DistribuTECH

Distributech 2015 will be full of solutions. You should see as many as you can, especially the ones outside your own experiences. This show should be the start of silo demolition to make way for wide area integration. Active Demand Management will meet Flexible Supply at the control room, the substation, the microgrid, our homes, and our places of business. More than any previous show, this year’s Distributech will be about integration, data, management, and flexibility. Let’s not forget to bring our customers along for the ride. Chances are good we will need them for these Virtual Power Plants. They will want a good reason to play.

Read also Trens in Utilities Part 1 and Part 2 blog posts.

 


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