Greentech Media: Headlines
E.ON Moves Into Distributed Combined Heat and Power
E.ON’s recent announcement that it is developing small gas-fired CHP systems (less than 1 megawatt) for the retailer METRO is a significant one -- mainly because such activity in Europe by a large integrated utility has been a rarity for almost two decades, so rare as to almost be invisible.
Some regional and municipal utilities have developed such projects in a few countries, but the predominant players across Europe have been relatively small and specialized developers.
Indeed, one analyst quoted in the Wall Street Journal after the announcement indicated that E.ON’s timing is wrong, that it’s late in the game, that the smaller players have gotten there first. We’re not so sure. And, for us, that’s not the right question to be asking.
Delta-ee’s research indicates that the markets for gas-engine-based CHP -- both natural-gas-fired and biogas-fired -- in several European and non-European countries have plenty of untapped economic potential. That's the case even in Germany, the world leader in the development of such projects.
Overall, we believe that most of the key drivers for this scale of project are net positive for the period to 2015 to 2020. We project annual European deployment of around 1.5 gigawatts to 2.0 gigawatts of projects in the 0.4-megawatt to 5-megawatt size range by 2020, and up to 1.5 gigawatts in the 10-kilowatt to 400-kilowatt size range. That’s more than a doubling of today’s rates.
That is potentially very good news for the product manufacturers and developers. There are new engines coming into the market almost every month, especially in the smaller size ranges, including new ones like that being introduced by E.ON.
So the market looks likely to be there for E.ON, and the timing is not bad in our view. The main question is: can a company of this scale develop a nimble business with the right sales, marketing and after-sales service strategies to win new customers and build great relationships with them?
Only time will tell, but the commitment is clearly there. E.ON has already made steps into decentralized customer solutions in a few markets, including PV, district heat schemes and heat pumps.
This article is reposted with permission from Delta Energy and Environment.
Michael Brown leads Delta-ee’s work on markets for CHP (from 10 kWe to multi MWe systems) and home energy management systems.
Clean Energy Espionage Case Heads to China’s Supreme Court
There's a new legal development in the corporate espionage dispute between AMSC and the Chinese wind turbine supplier Sinovel.
China's Supreme People's Court said it will review two civil suits AMSC brought against Sinovel for stealing its proprietary software in 2011. (The employee who stole the software and sold it to Sinovel admitted guilt and was sentenced in Austria.)
One of the cases involves a cease-and-desist order, along with $6 million in damages. The other involves copyright and $200,000 in damages. These damages are small compared to the total $1.2 billion that AMSC is seeking through four lawsuits, an arbitration case and a trade secrets case.
Both of these civil suits have moved further up the courts as Sinovel fights the charges. They've finally landed in the highest court in China -- a big development for AMSC and a major milestone for ongoing international trade disputes between the U.S. and China.
"The outcome of this case will send a clear signal to companies about whether or not they can invest in China," said Melanie Hart, an expert on Chinese energy policy at the Center for American Progress, in an interview. Hart has monitored the AMSC case closely and has been talking with all parties involved.
As intellectual property theft soars in China, Communist Party leaders have said they want to do more to protect companies and encourage foreign investment. But Chinese leaders still haven't sent any strong signals about their willingness to act. The AMSC case could be their first chance to do so.
"Businesses have long been concerned about bringing their 'best and brightest' to China because of intellectual property theft. This case will show us whether things have improved, as Beijing claims," said Hart.
The saga over the theft of AMSC's intellectual property by a Chinese wind company has everything a gripping story should: espionage, money and politics.
In 2011, AMSC was riding high on the Chinese wind market, supported mostly by one of China's largest wind turbine suppliers, Sinovel. But in March of 2011, Sinovel abruptly stopped taking orders. With Sinovel representing nearly 70 percent of AMSC's business for components and electrical-control software, AMSC's stock tanked and wiped out more than 80 percent of the company's value by the fall of 2011.
AMSC soon realized that an employee had sold its proprietary voltage-control software to Sinovel, allowing the Chinese company to use a pirated version in its turbines. The employee eventually admitted to his corporate espionage and was sentenced to a year in prison.
But the case drags on in China, where Sinovel is extremely well connected in the Communist Party. One of the company's largest investors, New Horizon Capital, was co-founded by the son of China's former premier, Wen Jiabao.
Because Chinese judges report directly to the communist party, a ruling on the AMSC case will be a political signal as much as a legal one.
"There's no independent judiciary, so Chinese courts operate different ways depending on the politics," said Melanie Hart. "If a Chinese company is very connected, that makes it very tough to get a fair hearing. If you have party leaders who tell judges to decide this according to law, the court can rule fairly. It has a lot to do with politics."
Although Sinovel is well connected, the AMSC case is one that the Obama administration has talked about with top Chinese officials. And there may also be new political pressures to rule fairly on the case as China and the U.S. reportedly work on settling ongoing trade disputes over solar manufacturing.
"In a U.S. court system, this would be a clear and easy win for AMSC," said Hart. "Chinese leaders are now very aware of this case. But if you can't win in a Chinese court with this much of a smoking gun, that sends a bad message to companies."
Political influence is guaranteed in the Chinese courts, said Hart. At issue is what kind of political influence Communist Party leaders will exercise given international pressures over intellectual property rights and clean energy trade.
AT&T Launches the Cellular Smart Grid as a Service
AT&T already has a ton of business in the utility sector, providing everything from workforce connectivity to the backhaul networks that help connect millions of smart meters and other grid devices in the field. But to date, AT&T and its telecommunications coequals, such as Verizon and Sprint, haven’t made the leap from smart grid ICT solutions providers to actually putting together smart grid projects themselves.
This week, AT&T announced that it’s taking on that central role for the first time, in a project with Duck River Electric Membership Corp., a 71,000-customer rural cooperative utility in Tennessee. Under the terms of contract, AT&T will integrate cellular-connected smart meters from Itron, meter data management software from ElectSolve and volt/VAR optimization and distribution grid controls from S&C Electric, and will then manage the entire affair for the utility.
Consider it the first stab by AT&T at becoming a smart grid project integrator and service guarantor for the thousands of U.S. utilities that want to outsource their smart grid integration and operations tasks. Whether it’s known as “smart grid as a service” or goes by the name of a hosted or cloud-based smart grid platform, the idea is to open smart grid investments and benefits to the mass of utilities that either can’t afford or can’t justify doing all the heavy IT lifting on their own.
While large investor-owned utilities (IOUs) account for the majority of U.S. power customers and smart grid deployments to date, that leaves a lot of mid-sized investor-owned utilities, as well as the 2,000 or so municipal utilities and 900 or so electrical cooperatives in the country, as targets for smart grid service offerings like these.
A Different Approach to Smart Grid as a Service
In fact, AT&T is a bit late to the smart-grid-as-a-service party. General Electric, SAIC, Silver Spring Networks, Aclara, and Calico Energy, as well as many other smart grid players and partnerships, are aiming at the same market, with some in the market for years now.
So far, the concept has seen only limited uptake, however, with only a handful of municipal and co-op utilities signing up as customers. Part of that is no doubt due to the poor economy and other factors, as well as the newness of the concept itself.
But then again, these companies, while big and important in the smart grid, don’t play quite the same role as AT&T does for the utility enterprise, Ed Davalos, director of product management for AT&T’s smart grid wireless business, said in a Thursday interview.
In other words, while a smart grid vendor might start with an offering to install and operate gear in the field, and then contract the communications out to different vendors, “We’re putting together an offering that starts with wireless transport,” and then adding a host of smart grid solutions, he said.
While AT&T and its partners are working via reseller agreements today, “we envision more permanent types of relationships” with specific technology vendors coming later this year, he said. That could include systems integrators to fill specific smart grid gaps, a role that AT&T and ElectSolve are filling for Duck River, but could include big players like IBM or Wipro for larger projects, he said.
In terms of the smart grid, “We aren’t a systems integrator; we’re a solutions integrator,” he said. But AT&T will also draw on the expertise of its own mobility services and solutions business, which helps customers with “solutions that are out of scope of what AT&T sells today,” he said.
The Cellular Network as Smart Grid Platform?
AT&T has already connected individual smart meters via its cellular network. In fact, it linked up the first such mass-scale residential AMI deployment in the United States in 2009 with Texas-New Mexico Power and SmartSynch, the company that Itron bought in 2012 to get into the cellular smart meter game.
But that project was strictly smart metering, whereas Duck River is asking AT&T to connect a host of smart grid systems, Davalos said. That’s also a bit of a first for U.S. utilities, which have mainly relied on buying and running their own communications systems for their smart grid efforts.
There are many reasons for that, including investor-owned utilities’ preference for capital spending, which can be recovered in rate increases, over operations spending on things like smart grid services, which has no such guaranteed return.
But the main barrier to cellular smart grid connectivity had been the high prices that carriers were charging for the service. In the past five years or so, those prices have dropped from $5 to $10 per smart grid device to “fifty cents per megabyte per month,” Davalos said, making it harder for utilities to justify building their own redundant network.
Indeed, cellular connectivity is part of the future plans of pretty much every smart meter vendor (Silver Spring Networks, Elster, Aclara, et al.) out there, representing a big shift from the unlicensed spectrum wireless mesh technologies those companies have used to network the vast majority of the smart meters deployed in the U.S. so far.
At the same time, the advance from 3G to 4G LTE technology is enabling a lot of smart grid functions that cellular couldn’t necessarily perform reliably in the past. That includes various network traffic prioritization, VPN tunneling and cybersecurity features, Davalos said, as well as low-latency connectivity for fast-reacting grid control devices, which could help in integrating S&C’s volt/VAR equipment in the case of Duck River.
AT&T certainly wants to replicate this model with other co-op and municipal utilities, Davalos said. But it’s also supporting big utilities in broadening their smart grid ICT integration plans to include cellular, he noted. For example, last year, AT&T bought the spectrum that San Diego Gas & Electric was planning to use for a private, WiMAX-based smart grid network, but it’s working with the utility to support many of the same solutions it had originally planned to run itself, he said.
Beyond falling prices, however, it’s taken a lot of hard work on the part of telco providers like AT&T, Verizon and Sprint in the U.S., Deutsche Telekom in Europe, and NTT in Japan to get utilities to sign on to expanding their reliance on networks they don’t own. It makes sense for a deep-pocketed, well-connected partner like AT&T to take on the risk of properly deploying and managing smart grid systems, if it can help it land new customers and lower the barriers of entry for utilities. No doubt we’ll see more smart grid-focused telecommunications providers announce similar projects and partnerships aimed at the same opportunity.
Podcast: Understanding America’s Seismic Energy Shift
America is undergoing a seismic shift in energy. We are now producing more oil than at any time since the early 1990s; we are awash in natural gas, which is helping push coal out of the market; and we have doubled renewable electricity in the last four years.
Coupled with dire climate challenges and a shifting geopolitical landscape, there's a lot of change underway in energy. But this era isn't necessarily unique, explains Michael Levi, a senior fellow at the Council on Foreign Relations. In this week's podcast, we'll discuss the realities of America's current energy transition -- and how it compares to previous eras of uncertainty.
Our weekly podcasts let you hear from industry experts, GTM research analysts, editors, reporters and other special guests. Don't forget to subscribe to this podcast on iTunes to get automatic downloads whenever we post a new show. You can also subscribe to our RSS feed here.
Power in the Desert: Ivanpah on the Verge
The giant Ivanpah solar thermal project in the Mojave Desert is now 92 percent complete, developers said this week. The 377-megawatt project consists of three 459-foot-tall towers encircled by arrays of garage-door-sized mirror sets. Those computer-controlled heliostats -- 153,990 out of 173,500 of which are now in place -- will reflect the sun onto the receiving towers, heating water to create steam that will drive turbines that produce electricity.
The government-backed project has drawn criticism from some environmentalists, most notably for its impact on a fragile endangered desert tortoise habitat and, more recently, for dust problems linked to the development. But others view it as a remarkable step forward in the search for clean, sustainable energy. Click on the photos below, all taken in early April and provided by developer BrightSource Energy, and see what you think.
Grid-Scale Energy Storage on the Cusp of True Market Entry
There is a lot to report from this week's Energy Storage Association meeting, and the approximately 400 engineers, developers, researchers, and utility experts it attracted to Santa Clara, California. This is the kickoff article in a series of energy storage articles. GTM's Jeff St. John attended and has already written about energy storage pioneer AES' integration software and a related move to standardization and plug-and-play batteries from software vendor 1Energy.
I've attended this event over the years. Grid-scale energy storage, which is this event's focus, is still a developing market, and the exhibition floor reveals a market and supply chain still very much in formation.
But, despite the early stage of this industry and its players, I would suggest that the energy storage industry took a noticeable step forward this year. Instead of technical papers on electrolytes, anodes, and hysteresis, the panels and hallway chatter were dominated by:
- Lessons learned from energy storage pilots and initial commercial deployments
- Integrating energy storage with solar and wind and connecting to the grid
- The necessity for big data analytics to effectively shave peak and smooth renewable generation
- The need for standards, modeling, software integration and cybersecurity awareness
Confronting these issues, rather than running a technology love-fest, is indicative of an industry coming to grips with its place in the energy ecosystem.
It's been slow going, but the pilot programs are yielding information. Equipment crews at vendors and utilities are gaining experience at deploying substation-sited storage, co-locating with renewables, as well as in domains such as community energy storage and residential energy storage. Regulators at the state and federal levels are listening. And the case studies are starting to show some actual monetizable value from energy storage.
The "behind the meter" energy storage firms such as Stem, Demand Energy, and Silent Power are beginning to post their compelling case studies. We'll be profiling those firms, as well as SolarCity, Isentropic Energy, Beacon Power and many others in the coming days. Stay tuned; there's a lot to cover.
In the meantime, here are a few stray observations:
- Solar is interested in storage; First Solar and SunPower technologists were in attendance.
- I did not see a single VC investor at the event. And I couldn't find one on the attendee list, either. Are VCs done with energy storage? Vinod Khosla did not show.
- Darrell Hayslip was named the next Chair of ESA. Hayslip headed the development of the the 36-megawatt storage system for Xtreme Power at the Duke Notrees Windpower project.
- The two largest installers of on-grid residential and consumer energy storage in California are not pure-play energy storage firms. Who are they?
Microgrids: A Utility’s Best Friend or Worst Enemy?
Defenders of the electric grid status quo have long argued that always-on baseload power generators like coal and nuclear plants are essential, and that variable renewables like wind and solar will remain bit players in power generation.
They argue this for several reasons: The grid isn’t designed to accommodate them. They’re too expensive. Or they aren’t reliable enough, so they require 100% backup from conventional power plants at all times. An essay by former utility CEO Charles Bayless in the September 2010 issue of the Edison Electric Institute’s Electric Perspectives magazine details the utility view of these issues nicely.
But one by one, those arguments are being knocked down.
A recent data roundup by renewable energy industry analyst Paul Gipe shows that variable renewables are meeting much larger percentages of grid power than previously thought possible in some European countries. Wind provided nearly 20 percent of Portugal’s power and 30 percent of Denmark’s in 2012. Wind and solar combined contributed more than 18 percent of Spain’s power and 11 percent of Germany’s in 2011. (More recent data shows that renewables now provide about 25 percent of Germany’s total grid power, and as much as 50 percent of its peak power.) A study by German engineers found that its grid can handle up to a 40 percent share of renewable power without needing much storage or baseload power for backup.
The price argument is falling too, with various banks and researchers forecasting that solar will be cost-competitive in much of the world by 2020.
Now the reliability and stability arguments, which were the main focus of Bayless’ essay referenced above, may be about to lose their potency too, as large facilities and small communities start looking to microgrids to supply a level of service that utilities have been unable to provide.
A microgrid is simply an independent power grid that is able to balance generation and consumption within itself -- just like the big grid does, only on a much smaller scale. It could be as small as an offshore oil rig, or as large as a military base or a small town. It might use storage to buffer renewable generation, or it might simply fire up a fuel-burning generator.
Some microgrids are replacing expensive and polluting fuels like diesel and kerosene in places that have never had access to reliable grid power, like Africa, India, Brazil, and Haiti. Others, like the ones at Fort Bliss, Texas and the Food and Drug Administration’s White Oak research facility in Maryland, are being built where grid power is available, but where the cost or risk of an outage is high enough to justify the expense of being able to “island” from the main grid and be self-reliant.
Several university microgrids have served as critical disaster recovery havens in the aftermath of natural disasters, including a 13.4-megawatt system at New York University-Washington Square Park, a 3.6-megawatt system at Utica College in New York, a 1-megawatt system at Tohoku Fukushi University in Japan, and a 37-megawatt microgrid at Cornell University in Ithaca, New York. The Cornell system is powered by a dual-fuel combined heat and power (CHP) plant that can burn natural gas or diesel, plus a 1-megawatt hydropower generator and a small solar installation.
Microgrids are big-ticket items, but for those who can afford them, they seem to be reasonable investments. The $71 million White Oak project is expected to save the FDA about $11 million a year. The return on the roughly $60 million Cornell University project [PDF] is expected to be “consistent with the long-term rate of return of the endowment and in the range of 8 percent to 10 percent.” For a military base, of course, being self-reliant is “priceless.”
Despite the new buzz about microgrids, the market is just getting started. Microgrid expert Peter Asmus of Pike Research has identified 405 projects in the pipeline globally, and he expects deployment to rise from $10 billion in 2013 to more than $40 billion annually by 2020.
In addition to universities and military bases, islands are natural microgrid candidates because they’re typically dependent on expensive liquid fuels to run their generators. At the recent Pathways to 100% Renewables Conference, Asmus noted that as of 2011, solar is cheaper than diesel for any island, and mentioned two islands that are now pursuing the microgrid strategy. El Hierro, a Spanish Canary Island off the coast of Africa, has become the world's first 100 percent renewable energy island by replacing its diesel generators with a microgrid powered by an 11.5-megawatt wind farm, 11.3 megawatts of pumped hydro storage, and solar PV and solar thermal systems. And Graciosa Island, off the coast of Portugal, expects to have a microgrid on-line by the end of 2013, with 65 percent of its supply provided by renewables.
A new threat, or a new business model?
Microgrids represent another aspect of a theme I have been exploring at Greentech Media: the transformation of utilities (see “Can the Utility Industry Survive the Energy Transition?” and “Adapt or Die?”). Like distributed generation, microgrids present both an opportunity and a threat to the way utilities do business.
“While utilities have shown institutional biases against the entire concept of microgrids for decades, extreme weather events and the growing recognition of microgrids as potential sources of demand response resources are building engineering and cultural support for these systems in a variety of settings,” Asmus said in April.
Utilities may be more friendly to what Asmus calls “virtual power plants” (VPPs). VPPs may or may not have generation or storage capacity, so they cannot island, but they do have software to remotely and automatically dispatch and optimize generation, demand response, and storage in a single, secure web-connected system.
VPPs and microgrids could become valuable partners for utilities by relieving overstressed and congested points on the grid, reducing the need for building new generation and transmission capacity, and making it easier to manage voltages at grid extremities. Integrating VPPs, microgrids, and more renewable power into the grid requires more advanced grid management software, but it can squeeze a lot more utility out of both conventional and renewable generators, which is cost-efficient.
On the other hand, if deployed at scale with storage capacity, microgrids could reduce the need for large amounts of baseload overcapacity sitting idle just in case it’s suddenly needed. Instead of needing to suddenly ramp up 1,000 megawatts of power to compensate for an outage elsewhere in the grid, a network of microgrids could simultaneously reduce demand and export power to the grid in a distributed fashion, while maintaining the required frequency and voltage parameters.
In other words, microgrids could meet both the reliability and stability criteria that Bayless argues can only be met by baseload generators. This would cut into the generation and the distribution revenue streams that are critical to the calcified utility business model, as well as the profit associated with constructing large capital projects.
“When we propose a microgrid, we consider four business case scenarios,” Steve Pullins, CEO of Tennessee-based Horizon Energy, a microgrid design and development company, told Fortnightly magazine. “We consider maximum savings, maximum renewables, grid independence, and maximum diversity. The difference in cost between the maximum savings and grid independence scenarios isn’t very large.”
With the virtues of favorable economics and self-reliance at their backs, microgrids seem poised to gain market share and become a competitive threat that utilities can neither bury nor ignore. Pullins sees 24,000 sites in the United States as potential prospects, with perhaps 300 microgrids being built by the end of 2015.
But utilities will have to consider carefully how best to address that threat. If they try to foist their stranded asset and network maintenance costs on a declining user base, it could prove counterproductive by pushing more consumers to consider microgrids.
As Pullins observed, “This isn’t microgrids challenging the regulatory model; it’s customers challenging that model. Utilities shouldn’t have misplaced aggression against microgrids.”
Instead, utilities should actively encourage microgrid development and seek to integrate it into their business models as a low-cost way of ensuring reliability, grid stability, capacity, and energy. Instead of delivering as much power as possible at the lowest possible cost, they should refocus on delivering the service levels customers want, with appropriate dynamic pricing mechanisms.
Ultimately, the transformation to distributed generation and grid management will require regulatory reform as well, so that groups of businesses and residents can create microgrids. In that, too, the utilities will need to be active and supportive participants.
Chris Nelder is an energy analyst and consultant who has written about energy and investing for more than a decade. He is the author of two books (Profit from the Peak and Investing in Renewable Energy) and hundreds of articles, and has been published by Scientific American, Slate, the Harvard Business Review blog, Financial Times Alphaville, Quartz, the Economist Intelligence Unit, and many other publications.
In Seattle, Librarians Are Energy Sippers and Police Are Energy Guzzlers
New York City got a surprise last year after an energy disclosure report showed that some of its 80-year-old buildings were outperforming LEED-rated buildings. The report illustrated why energy benchmarking laws can be effective tools to help municipalities and building owners target how they take action. Sometimes the target is not what was initially expected.
Seattle is the latest city to issue data on its buildings. Officials just logged data on 94 of Seattle's municipal buildings, including City Hall, libraries, police stations and the 62-story Municipal Tower. While not earth-shattering in its conclusions, the report showed some interesting variations in how municipal facilities are operating.
One of the more interesting facts from the report: Seattle's libraries are 42 percent more efficient than the average U.S. library. And the city's downtown central library uses 50 percent less energy than the nationwide average.
The city's police stations and fire stations are a different story. The report shows that Seattle's fire stations use 10 percent more energy than the U.S. average, and that police stations are using almost double the energy that an average police station does.
Overall, however, many of the city's buildings are performing quite well. The Seattle Municipal Tower, a downtown office building hosting more than 3,000 people, uses 40 percent less energy than similar-sized buildings in the U.S. The entire downtown campus, which features the Municipal Tower, City Hall, the Justice Center and the central library, is also performing better than the national average.
Here's a breakdown of how all the facilities being tracked compare to the national average:
This is the first time that Seattle's building energy consumption has been made public. The city's 2010 benchmarking law requires private building owners to disclose energy data with tenants and during real estate transactions. More than 90 percent of building owners with facilities more than 50,000 square feet in size are reporting their consumption so far. And starting in April, buildings with 20,000 square feet or more are now required to report energy consumption to the city.
Seattle is one of a number of cities that now require building owners to disclose energy use. Austin, Boston, the District of Columbia, Minneapolis, New York, Philadelphia and San Francisco have all passed similar benchmarking laws.
Seattle's mayor has set a target to reduce energy use in municipal buildings by 20 percent over the next seven years. Since 30 percent of the city's buildings were constructed before 1980 and there will be very few new large buildings through 2050, Seattle's focus will be on retrofitting existing building stock. This report gives the city a much better understanding of which facilities to retrofit.
And if Seattle's mayor wants to enforce his 20 percent target, he now knows one major culprit to target: the police.
Plug-and-Play Grid Batteries Thanks to 1Energy’s Software
Why do batteries for the grid cost so much more, on a per-kilowatt-hour basis, than batteries for laptops, or even for electric vehicles? It’s not the cost of the battery technologies themselves, or even necessarily what grid customers are demanding from them.
Instead, it’s that today’s grid-scale battery projects are almost all designed, built and operated as standalone projects, with mostly proprietary and sometimes single-source technologies. If automakers and computer companies tried to build products that way, they’d go out of business. What’s more, the mass market for reliable, standardized, battery-powered laptops would have never developed (the jury is still out on the mass market for EVs).
David Kaplan, CEO of Seattle-based startup 1Energy, believes that software can unlock the same kind of scale and interoperability opportunities for grid-scale batteries -- at least, in terms that battery makers and their utility customers can relate to.
“We envision a future when there are various storage sockets, if you will...and battery manufacturers can sell energy storage in the same way a transformer manufacturer would sell catalog products to the utility today,” Kaplan said at Wednesday’s Electricity Storage Association (ESA) annual conference in Santa Clara, Calif.
Founded in 2011, the internally funded startup signed up public utility Snohomish PUD as a test customer last year, along with French grid giant Alstom. This week, it added inverter maker Parker-Hannifin to its list of partners. The project underway isn’t that big -- it consists of one substation, with a set of batteries from yet-to-be announced suppliers, aimed at providing an eventual 1 megawatt of storage.
But underlying it is a software platform designed to add five, ten, or twenty more substations, or to add new batteries to each in different combinations, as the need arises, Kaplan said. 1Energy will provide software and system engineering to the project, as well as lead selection of future partners for batteries, inverters and other components. While 1Energy’s list of battery and power systems partners is still small today, the firm is in talks with different vendors, as well as participating in the various standards bodies (IEEE, IEC, etc.) involved, he said.
As for creating the interconnections between these future standardized storage systems, utility SCADA systems and back-office platforms, and to third parties like energy traders and demand response aggregators, “There’s room for a software supplier to tie it all together,” Kaplan said.
From V2G to MESA
A former Microsoft software developer who helped build SQL Server, Access, and the company's internet services platform, Kaplan brings an interesting perspective to the grid-battery nexus. In 2006, he started V2Green, which built software to manage the charging and discharging of EV batteries based on power pricing, owner preferences and grid requirements. V2Green tested its software with partners like Seattle City Light and Xcel Energy before it was acquired in 2008 by GridPoint, the well-funded startup that has since bought several other startups, only to let their technology languish without any visible growth.
While his relationship with GridPoint ended in a lawsuit, the acquisition did give Kaplan the financial wherewithal to pursue other green interests for a while, Kaplan told me Wednesday. That included spending time working as a grid technologist for Snohomish PUD, where he turned his attention to the battery-grid connection.
That work led to 1Energy, as well as the idea for its Modular Energy Storage Architecture (MESA), which is being tested in the Snohomish PUD project. In simple terms, MESA installs software at each energy storage endpoint, integrates with utility grid operations systems such as SCADA and DMS, and manages the combination of the two via a cloud-based platform, he said.
At the energy storage endpoint, MESA collects voltage, current, temperature and other standard data from the battery, inverter and other components, he said. But the architecture should also allow extensibility and customization, to give “any vendor the ability to sell value-added portions of the interface that are unique to their equipment,” he said.
On the utility side, MESA incorporates all the different energy storage endpoints into a series of operating modes, such as load firming, peak shaving, load following, economic dispatch and the like, he said. Again, the underlying architecture is meant to support upgrades and customization for individual utilities, he said.
“One of the key things you want is the notion of an energy brick,” Kaplan noted -- a generic energy storage unit (ESU) that, regardless of its internal chemistry or operating characteristics, presents itself to the utility as a clear set of capabilities, costs, tradeoffs, probabilities and the like. Storage systems are just one of many means utilities have to choose from to solve various problems, he noted.
Getting to that point is a complicated affair, however. “You need a series of defined interfaces that are specific to the ESU, or energy brick, specific to the power conversion components, and ancillary services that can talk to other automation points in the system,” he said. “These interfaces need to address the physical, electric, and communications capacities of connecting these various components.”
Software for Grid Storage Heats Up
1Energy isn’t the first to target the software side of grid storage, of course. To start with, every modern battery and inverter comes with its own software on board, which utilities can tap for supervision and control. Battery makers like A123, General Electric, Johnson Controls, Saft, LG, Panasonic, NGK, Samsung, Xtreme Power and others have built from there to add more sophisticated interfaces and controls aimed at meeting grid needs. In fact, startup Xtreme Power is selling off its battery factory in hopes of making battery management software its specialty.
Grid giants like GE, Siemens, S&C, ABB and Schneider Electric are all involved in battery energy storage, though they’re coming at it from different angles, and working with different partners -- GE is using Xtreme’s software to support its Durathon sodium-metal batteries, for example. Other players in the space include BYD, the Chinese automaker and solar panel manufacturer, which has also built one of the world’s biggest battery storage projects in China.
Many of these projects could support a more modular approach to energy storage. Greensmith is providing its battery-agnostic energy storage management software for utilities including San Diego Gas & Electric, Hawaii Electric and Southern Co., to name one example, and S&C Electric has built an energy storage product line, built around other vendors’ batteries, that scales from cargo-container-sized utility substation units to refrigerator-sized community energy storage units.
Software also helps tie energy storage into the IT platforms that run the grid’s energy markets. AES Energy Storage, which has deployed 120 megawatts of grid battery-based storage projects around the world, recently unveiled its internal Storage Operating System (sOS) software that includes market modules that match batteries to the specific programs and economic incentives available across Texas, New York, New England and the mid-Atlantic region. (AES said that it built its own software because it couldn’t find what it wanted in the marketplace.)
Grid-scale storage can also be building-scale storage, by the way. We’ve got a host of startups (Stem and GELI are two notable ones) working on software to optimize on-site energy storage systems to avoid peak demand charges, meet demand response calls, or keep the lights on during emergencies -- or, perhaps, all three at different times. Linking batteries with rooftop solar panels is also a growing trend.
Just how a startup like 1Energy fits into this equation is hard to predict. Certainly it has set its sights on a lofty goal. As Dan Rastler of the Electric Power Research Institute noted in a Q&A after Kaplan’s presentation, the industry as a whole is slowly moving from proprietary to standards-based technologies, leaving 1Energy with the challenge of scaling to meet that growth.
“I think the biggest [challenge] we see is that nobody’s tried it before,” Kaplan said in response. The Snohomish PUD project is set to start next year, and represents the first chance for the company to test the software’s capabilities, leaving it very early indeed in the race to become the operating system of grid energy storage everywhere. At the same time, the industry has been talking about this problem for years, so maybe 1Energy is right on time.
US Offshore Wind Fact Sheet
There are thirteen U.S. offshore wind projects in ten states on the Atlantic, Pacific, Great Lakes and Gulf of Mexico coasts, representing 5,100-plus megawatts. None of the projects have started construction.
Here's an update on the status of those projects:
- Cape Wind: The fully permitted 468-megawatt project is planned for construction in Massachusetts’ Nantucket Sound by the end of 2013. It has PPAs for 77.5 percent of its nameplate capacity and the state is investing in port facilities.
- Block Island: Deepwater Wind’s 30-megawatt pilot project off Rhode Island’s Block Island has a PPA for 100 percent of its output and is now going through the permitting and approvals process. Construction could begin by the end of 2013.
- Wind Energy Center: Deepwater Wind’s proposed 1,000-megawatt project, twenty miles out to sea between Massachusetts and Rhode Island, has a lease application pending with the Department of the Interior's Bureau of Ocean Energy Management (BOEM).
- Hywind Maine Pilot Project: Statoil (STO)’s 12-megawatt pilot project will place four floating 3-megawatt turbines in 400-foot-deep Gulf of Maine waters 13.8 miles off the state’s coast. It has been approved by the Maine Public Utilities Commission and BOEM, and has a grant from the Department of Energy (DOE).
- Aqua Ventus: The University of Maine’s 12-megawatt pilot project will place two floating 6-megawatt turbines in the Gulf of Maine three miles off the coast of Maine’s Monhegan Island. It is supported by a DOE grant.
- Atlantic City Wind Farm: Fishermen’s Energy’s 25-megawatt pilot project located 2.8 miles off the coast of Atlantic City has all necessary state and federal permits and a DOE grant. It does not yet have a PPA, but New Jersey has an Ocean Renewable Energy Credit (OREC) system in place that is strong enough to support 1,100 megawatts of offshore wind. Construction will begin when financing is completed.
- Mid-Atlantic Wind Park: The NRG Energy-owned lease for a 300-megawatt to 450-megawatt project 13.2 miles off Delaware’s Rehoboth Beach had a 200-megawatt PPA, but it was canceled in 2011, and NRG is looking for investors or a buyer.
- Long Island-New York City Offshore Wind Project: The 350-megawatt to 700-megawatt project would be thirteen miles off the Long Island coast and co-funded by the Long Island Power Authority, Con Edison, and the New York Power Authority. It has an application pending with BOEM.
- Virginia Offshore Wind Technology Advancement: The Dominion Virginia Power-funded pilot project will install two 6-megawatt turbines 22 miles off Virginia Beach. It has a DOE grant.
- Icebreaker: The privately held Lake Erie Energy Development Corporation (LEEDCo)-funded, 27-megawatt pilot project will have nine 3-megawatt turbines seven miles into Cleveland Bay, in sight of the city’s shoreline. LEEDCo has a DOE grant and a lease-option from the State of Ohio, and just began installing its data-gathering tower.
- Gulf Offshore Wind: The Baryonyx Corporation, run by veterans of Europe’s wind energy industry, will build an 18-megawatt pilot project four to five miles off Texas’ Port Isabel in the Gulf of Mexico, with five 6-megawatt turbines.
- Rio Grande (North & South) Project: The Baryonyx Corporation also has development leases from the Texas General Land Office for a 2,000-megawatt to 2,400-megawatt project five to ten miles off Texas’ South Padre Island.
- WindFloat Pacific Demonstration Project: Principle Power plans a 30-megawatt pilot project for its floating turbines ten to fifteen miles off Coos Bay on the Oregon coast. It will start with three 6-megawatt turbines and is supported by a DOE grant.
- Atlantic Wind Connection: The 7,000-megawatt-capacity backbone transmission system for offshore wind projects will run from New Jersey to Virginia. It will be built by Trans-Elect, the Atlantic Grid Development coalition that includes Google, Inc. It has been cleared by BOEM, and New Jersey just announced a port facility renovation to streamline its construction.
Three of the thirteen projects have power purchase agreements in place:
- Cape Wind in Massachusetts (National Grid and NStar, 363 megawatts of 468 megawatts)
- Deepwater Wind in Rhode Island (National Grid, 30 megawatts)
- Statoil in Maine (Central Main Power Co., 12 megawatts)
Value of offshore wind:
- It provides high capacity-factor renewable energy adjacent to huge population centers.
- Its highest productivity is at peak demand periods.
The U.S. lags behind Europe and Asia:
- Europe: Europe has built 55 offshore wind projects in ten countries with 1,662 turbines and an installed nameplate capacity of 4,995 megawatts. There are fourteen projects just completed or under construction, which will bring Europe’s total to 8.3 gigawatts. It has set long-term goals of 40 gigawatts by 2020 and 150 gigawatts by 2030.
- Asia: China and Japan have operational projects with a combined estimated installed capacity of 544 megawatts. China completed a 150-megawatt project in late 2012. Japan’s offshore wind target is 8 gigawatts by 2030. China’s is 5 gigawatts by 2015 and 30 gigawatts by 2020. South Korea is targeting 600 megawatts by 2016 and 2.5 gigawatts by 2019. Taiwan has a goal of 3 gigawatts installed or under construction by 2020. Its government just approved three projects totaling 300-plus megawatts.
U.S. offshore wind costs:
- A U.S. utility-scale offshore project will likely have an average of 100 3-megawatt to 6-megawatt turbines and a nameplate generation capability of 300 megawatts to 600 megawatts. It will be built at an estimated cost of $1.5 billion to $3 billion.