The grid of the future today

November 21, 2013

How smart gird and energy storage technologies are transforming the electrical power system

Written by Tyler Hamilton, Editor-In-Chief

It went largely unnoticed, but this past spring a major milestone was achieved that would prove the disruptive potential of smart grid and energy storage technologies.

A project called eV2g, established in 2011 as a joint venture between the University of Delaware and New Jersey-based power utility NRG Energy, sold electricity into the regional power grid through the wholesale marketplace.

That alone is no big deal, until you realize the electricity eV2g is selling comes from a fleet of several dozen electric vehicles (EVs), most of them BMW all-electric Mini Es. Researchers at the university have developed software that knows when each vehicle is plugged in. That software can intelligently switch the vehicles from charge mode into feed mode, meaning the vehicles collectively reverse the flow of electricity so that it moves from their battery packs back into the grid.

The eV2g venture is believed to be the first to aggregate the power from vehicle battery packs and earn revenue by selling it on the spot market when needed. The potential to aggregate hundreds, even thousands of vehicles this way has caught the attention of the U.S. Department of Defense and the U.S. Postal Service, both of which are expected to have more electric vehicles in their fleets over time.

Denise Wilson, executive vice-president at NRG, described the importance of the moment. “This demonstrates that EVs can provide both mobility and stationary power while helping making the grid more resilient and ultimately generating revenue for electric vehicle owners.”

Turning electric vehicles into virtual power plants is just one reason to feel optimistic about what is broadly termed the smart grid. The smart grid is about moving megabytes to more efficiently move megawatts, using a combination of computing and communications technologies to manage and automate the two-way flow of electricity. The result is a fast-adapting and ultimately more reliable electrical grid.

The technologies caught under this umbrella include: equipment and devices that can interact with the grid and control power loads, automatically adjusting operation in response to price signals; sensors that monitor the performance of the grid in real time; software that analyzes the flood of data that all those devices and sensors are collecting, helping grid operators run the system more efficiently and reliably; and energy storage technologies controlled by software that helps balance supply and demand on the grid and smooth out the variability associated with renewables such as wind and solar power.

Of course, on the edge of all of this are web tools and mobile apps that let both residential and business customers monitor their own power consumption and make smarter decisions – tied to price signals or market incentives – about when to use and not use electricity.

It’s difficult to quantify exactly what the costs and benefits of a smart grid truly are, as it largely depends on how one defines it. Is the smart grid a destination or a journey with no end? Still, many have tried. The Electric Power Research Institute, for example, estimated in 2011 that making the U.S. grid “smart” would cost up to US$476 billion but could bring more than $2 trillion in benefits. It figured benefit-to-cost ratios could range between 2.8:1 and 6:1.

A comprehensive report released in October by the non-profit Smart Grid Consumer Collaborative (SGCC) broke down the anticipated benefits – both economic and environmental – to a consumer level. It estimated that a “fully deployed” smart grid would bring direct benefits to the average consumer of up to $102 annually. It would also increase grid reliability by 25 per cent, boost consumer choice, and reduce carbon-dioxide equivalent emissions by 600 pounds per person (roughly equal to driving 750 miles in a vehicle with average mileage).

“There is a strong business case for advancing our electric grid,” said SGCC executive director Patty Durand.

In the early days of the Internet, that business case was likely underestimated. Who could have imagined 25 years ago that Google and Facebook would have emerged with such worldwide impact, let alone have a market value greater than General Electric and General Motors. Applications like crowdfunding, citizen science and peer-to-peer car sharing simply didn’t exist, nor did concepts like “cloud computing” and the “Internet of things.”

Decades from now, will the smart grid and energy storage start-ups of today have a similar impact?

Who to Watch

Every year around this time Corporate Knights has worked with market intelligence firm Cleantech Group to identify companies that are leading in the area of clean technology. On its own, however, Cleantech Group has come out annually with its much-anticipated Cleantech 100 list, which highlights companies around the world most likely to make a significant market impact over the next five to 10 years.

The list draws from a pool of nearly 6,000 nominated companies across 60 countries that are subject to a high-level screen by the Cleantech Group. The result is a short list of 300 companies, which are reviewed by a 90-member expert panel to help create the final list of 100.

As part of our cleantech coverage this year, Corporate Knights has decided to shine a light on the 16 smart grid and energy storage companies that made it onto this fall’s Cleantech 100 list. These are companies most likely to tap into the potential these technologies represent.

Smart Grid

The eight smart grid companies that made it into the Top 100, five of them based in the United States, make different contributions to the vision of an intelligent electricity system.

It’s somewhat telling that the only two to have attracted investment from large corporations – Trilliant and On-Ramp Wireless, both from California – offer ways to wirelessly collect data and tie together the disparate components of the smart grid. General Electric and ABB are invested in Trilliant; GE and Enbridge have stakes in On-Ramp.

There is a huge need for robust communications that meet the requirements of the electricity system. Collecting data from the many pieces of the grid – the smart meter on a building to the neighbourhood transformer and substation, all the way to distributed sources of generation – means having a reliable way to transmit that data from thousands of “nodes” spread across a large area.

Last year about 92 million of these nodes were connected, according to Navigant Research. That number is expected to rise to 125 million a year by 2020, and new wireless technologies “are showing greater potential for smart grid applications over the long run.” It’s simply not practical to connect all of these devices through physical wires.

One use of wireless technology is to remotely control hundreds of different power loads at the same time as part of so-called demand response programs that pay electricity users to not consume electricity when asked. One company on the Cleantech 100 offering an innovative demand response service is Toronto-based Enbala Power, which can rapidly turn large power loads such as pumps and refrigeration units on and off to help keep the grid in balance. The company is also capable of managing the variability of wind and solar systems by controlling those same loads, which is a cleaner alternative to firing up a natural gas-fired plant.

“A lot of what’s driving the smart grid is the integration of renewables,” says Bruce Orloff, the smart grid leader for IBM Canada. Another major trend is around analytics, adds Orloff, pointing out that the more smart devices and sensors become part of the electricity system, the more data there is for utilities to manage. “It’s a thousand-fold what they are used to getting,” he says. “They know the data is there, they’re just overwhelmed. From that perspective, understanding the big data out there and leveraging it to get better insight is key.”

It’s an area that IBM is focused on, but there are newer companies emerging to capture that opportunity, including two on the Cleantech 100. For example, AutoGrid, based in Redwood Shores, California, offers utilities a way to make sense of what it calls the “energy data deluge” coming from smart meters, lighting and air conditioning systems, power outlets and any other power load. Space-Time Insight of San Mateo, California, on the other hand, takes that data deluge and turns it into real-time visual displays that are easy to understand and act on.

“It’s a big challenge for utilities,” says Orloff. “So having good access to data that’s then turned into actionable information, and being able to predict and optimize how that impacts the grid, is really important.”

Energy Storage

Electricity is often generated when it’s not needed and in high demand when there’s not enough of it. To effectively manage this tug-of-war between supply and demand, especially as we add more renewables to the power mix, energy storage is expected to become increasingly important as a technology for the smart grid.

That storage can take many forms. Conventional pumped hydro storage – that is, pumping and storing water behind a reservoir and releasing it when needed – will be complemented over time by a combination of compressed-air storage, batteries, ultracapacitors, flywheels, thermal and hydrogen storage technologies. New innovative storage models are also expected, including the eV2g approach to aggregating storage capacity in electric vehicles using smart grid software.

One estimate, by Toronto-based research firm ClearSky Advisors, is that non-conventional energy storage will represent more than a quarter of U.S. grid storage by 2022. An example of what’s to come is the Laurel Mountain facility in West Virginia constructed by global power company AES. There, visitors will find 98 megawatts of wind generation paired with 64 megawatts of energy storage based on lithium-ion batteries. Overall, AES now has more than 100 megawatts of battery storage in service in the United States, allowing it to dispatch the renewable power it generates more efficiently and effectively.

The eight emerging energy storage companies on the Cleantech 100 cover a broad range of technologies likely to have an important impact over the next 10 years. One of the more closely watched is Newark, California-based Envia Systems, which counts General Motors as a major investor and says it has developed a battery based on lithium-ion chemistry that could power a vehicle for up to 300 miles on a single charge. Slowly, the “range anxiety” associated with electric vehicles is fading.

Most on the list, however, are focused on supplying energy storage as a support for the grid, either to help smooth out the bumpy output of renewables such as wind or solar, or to provide regulation services that keep the overall system in balance.

Ambri of Cambridge, Massachusetts, aims to do that with a liquid-metal battery technology it has developed. Pittsburgh, Pennsylvania-based Aquion Energy has a “saltwater battery” it claims can do the job affordably. Australia’s Ecoult, meanwhile, is doing it with a new generation of lead-acid batteries.

Other technologies that made the cut include a novel hydrogen storage product by Hydrexia of Australia, high-performance ultracapacitors designed by Ioxus of Oneonta, New York, and an approach to storing energy as heat developed by U.K.-based Isentropic.

Despite the promise of these companies and their respective technologies, the jury is still out on which ones will emerge as clear market leaders over the coming years.

“We still await a company that proves out sustained market performance,” according to the Cleantech 100 report. “Until then, it is probably fair to say that the storage category may have a greater tendency to contain some hot, but sometimes over-hyped, start-ups.”

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