Between the Poles

Transactive energy is coming faster than we think

At Distributech 2016 Zarko Sumic, Distinguished Analyst at Gartner, predicted that by 2020, the largest energy company in the world (by market cap) will not own any network (grid) or generation assets.  By analogy with Uber it would simply manage information about energy sources and consumers.  2020 is not that far away.  MGM and other casinos have already smelled the coffee and opted to go off grid to buy their energy from whom they choose. The light at the end of the tunnel is looking increasingly like a train.

 

Yesterday at Distributech 2018 in San Antonio I attended a demonstration of transactive load management signals and systems by a number of folks involved in the California electric power sector that suggest transactive energy may be closer than we think.  The key question the session addressed was how the design and operation of transactive signals and systems can integrate supply- and demand-side markets in California.  The overarching goal is the development of new practices for widespread adoption of economics-driven transactive technologies and systems for an integrated electric grid.

 

In his talk in 2016 Zarko pointed out the extraordinary coincidence that Facebook (market cap $230b), Uber (est value $50 B), and Airbnb (est value $24 B) are the largest (or the second largest in the case of Airbnb) companies in their lines of business, but, significantly, none of them own content, cars or rooms.  Gartner calls this phenomenon the sharing economy.   A sharing economy uses IT to distribute, share and reuse excess capacity in goods and services. Information is the fuel and the digital platform is the engine.  The sharing economy operates in a market with customers and sellers and the value of the goods and services shared is determined by the network effect (Metcalfe's law) and increases as the square of the number of nodes (customers and sellers).  

 

Zarko saw an analogy with the electric power industry.  We are moving toward a world where energy flows are increasingly determined by market forces (referred to as transactive energy).   Based on the analogy with Facebook, Uber, and Airbnb Zarko predicted that by 2020, the largest energy company in the world (by market cap) will not own any network (grid) or generation assets.  It will simply manage information about energy sources and consumers.   There are no technical barriers to this vision and the only thing standing in the way at the moment is current regulation,

 

Over the past few years the New York Public Service Commission (NYPSC) has taken a major step toward a future of transactive energy. New York's "Reforming the Energy Vision" (REV) is moving the New York state electric utility industry toward a radical redefinition of utilities as we have known them over the past hundred years since Tesla and Edison created the electric power industry.  Based on the progress in changing regulation in New York, California, the UK, and other jurisdictions, transactive energy is coming at an accelerating pace and Zarko's vision is increasingly a real possibility.

U.S. grid reliability has not changed 2013-2016

At Utility University at Distributech 2018 Joseph Nichols, a Project Manager at Burns and McDonnell, made the interesting case that over the period 2013 to 2016 there was a trend of increasing failure spend but decreasing performance in the U.S. electric power industry.

SAIDI is a statistic that regulators require utilities to provide that measures the average amount of time a customer is out of service during a year. It is used as a measure of  utilities' performance.  Usually extraordinary natural events like hurricanes, tornadoes, and major natural events are excluded from the statistics.  Joseph Nichols showed a graph of the SAIDI performance (excluding major natural events) for all U.S. utilities from the U.S. Energy Information Administration (EIA) for 2013 to 2016.

What this graph reveals is that during a time of significant smart grid and distributed energy deployment, the average length of time that customers were without power has pretty much remained constant. (The statistics revealed a slight increase over the 2013-2016 period.) 

The good news revealed by the graph is that grid reliability has not dropped significantly with the transformation of the grid resulting from increasing distributed renewable energy, growing use of electric cars, the adoption of smart devices to monitor and manage voltage and other grid parameters, new consumer electronic devices, and the decentralization of the grid.  A paper written by the American Council on Renewable Energy (ACORE), entitled Energy Fact Check – The Impact of Renewables on Electricity Markets and Reliability, has argued that renewable energy sources have not eroded grid reliability.  Furthermore, the report argues that America’s biggest grid operators and reliability coordinators are reliably integrating large amounts of renewable energy today.  They have said that they are confident that they can integrate even more renewables without affecting grid reliability.

The not so good news is that the increased investment in smart devices such as self-healing networks, PMUs and reclosers, line voltage monitoring devices, smart meters and other smart grid technology has not improved grid reliability.

Open source geospatial application reduces copper cable theft by 70%

A highlight of the SA Geotech conference in Johannesburg was a presentation by Ryno Goosen of Suritec Geospatial.  Ryno, who was awarded the Best Paper prize at SA Geotec, gave a fascinating presentation about how he developed an open source GIS solution to fight copper cable theft.

In Canada copper cable theft costs the Canadian electricity sector an estimated $40 million annually.  In South Africa in 2014 there were 72,533 reported incidents of copper cable theft resulting in 10,736 arrests.  Copper theft incidents in the U.S. have tripled in the last 5 years.

Goosen Goosen's solution architecture was based on open source geospatial software.  He chose open source for several reasons.  First and foremost, it enabled massive scalability by providing an elastic IT infrastructure.  Secondly it provided open interoperability with other open source software as well as proprietary systems. He also emphasized the importance of using software that was "battle-tested" in both military and commercial environments. 

His solution architecture was built on Cesium, GeoServer, Boundless Desktop/QGIS, Protobuf, Cassandra, WildFly, Solr and GeoTrellis.  Using this solution he was able to combine data from different sources including ground patrol and remote sensors.  By analyzing this data geographically and temporally he was able to determine spatial and temporal patterns of copper cable theft.  This enabled optimum deployment of resources.  The results were impressive.  Over a 30-month period cable theft was reduced by 69%.

The success of Goosen's shows that open source GIS software has become a viable alternative for building complex and highly scalable solution-oriented architectures.  He also suggested that it levels the playing field for small to medium size enterprises by providing them with similar intelligence capabilities to their larger counterparts.

Department of Energy: Increased renewable power generation does not compromise grid reliability

On April 14, 2017 Secretary of Energy Rick Perry issued a memorandum directing preparation of a study to examine whether the retirement of many baseload plants (mostly coal-fired) are premature and whether their retirement reduces grid resilience. The Secretary directed the Department of Energy to conduct a rigorous analysis to answer these questions.  The final report is expected in a few weeks, but a draft has been obtained by Reuters.

Major drivers of retirement: High natural gas availability and low electricity demand

Based on an extensive review of the electric power system evolution and events over the past thirty years and analysis of DOE and other data sources using basic supply and demand principles, a preliminary draft of the study concluded that many baseload retirements are not premature because they are consistent with observed market forces, primarily low natural gas prices and lower than expected electricity demand.   Environmental regulations, state policies and competition with renewables are minor factors that have exacerbated and accelerated these trends. Since 2002 most baseload power plant retirements were victims of over capacity and relatively high operating costs that often reflect the age of the plants. The first tranche of fossil fuel retirements occurred before the explosive growth of renewable generation over the past five years.

Costly environmental regulations and subsidized renewable generation have exacerbated and accelerated baseload plant retirements, but these factors played minor roles compared to the long-standing drop in electricity demand relative to expectations and years of low electricity prices driven by high natural gas availability. While coal and nuclear power used to provide the bulk of U.S. electricity, wholesale electricity prices have closely tracked natural gas prices for the past 15 years beginning about the time that shale gas and oil entered the scene. Low natural gas prices and the fact that new, high efficiency natural gas generation and the pipelines required to provide fuel could be built rapidly helped grow natural gas plants relative to coal and nuclear.  Renewables didn't cause retirements - baseload retirements due to age, inefficiency, and inability to compete began appearing in the early 2000s well before any significant levels of wind and solar generation - but competition with renewables has exacerbated the problem.

Impact on grid reliability

Numerous technical studies for most regions of the nation indicate that significantly higher levels of renewable energy can be integrated without compromising system reliability.                

Region	Minimum level of renewable energy penetration (energy generated, not energy capacity)
New England	24%
PJM (Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia)	30%
Midwest	25%
ERCOT
California	50%
Eastern US	30%
Western US	33% (wind and solar), 40% (all renewables)
Hawaii	100%
National	50%

The study outlines four principal ways to maintain and enhance bulk power system reliability: technology, rules and standards, business practices and last and most expensively, using high levels of transmission and generation.

• Technology advancements now enable wind plants to provide a full spectrum of balancing services. For example, Xcel Energy requires turbines to be on automatic generation control, which allows computerized control system to directly control wind generation output.
• FERC, NERC, and the RTOs and ISOs have undertaken several initiatives to use rules, standards, and grid codes to modify requirements for both interconnectioning renewables and legacy power plants to improve reliability.
• Bonneville Power Administration provides an example of how to integrate wind energy effectively using operational and business practices rather than bringing on more generation reserves. BPA dealt with the reliability risk by limiting the amount of transmission available to the wind fleet (control and curtailment), charging for using hydropower to balance wind generation, and setting a penalty rate to encourage accurate wind generation scheduling.

Carbon capture and sequestration is still a key strategy to meet climate goals

The world's global coal-fired power generation plants provides around 40% of the world’s electricity. This fleet is the youngest it has been for decades, with more than 500 GW added since 2010, mostly in emerging economies. To simply shut these new and in many cases highly efficient plants down to meet climate goals would be a political, social and economic challenge. According to the IEA retrofitting these plants with carbon capture and sequestration (CCS) will need to be a key strategy in many regions.

There are now 17 large-scale CCS projects operating around the world, with at least one more due to be commissioned this year. China has just announced construction of its first large-scale CCS project in the coal-chemicals sector and with seven further projects under early development.  The Petra Nova project in Texas was delivered on time and on budget earlier this year.  Petra Nova is the second, and much larger, project to retrofit post-combustion CCS technology to an existing coal-fired power station, with costs reportedly around 20% lower than the world-first effort at Boundary Dam in Canada. On the other hand work on the most ambitious carbon capture and storage (CCS) plant in the world at the Kemper County Energy Facility in MIssissippi has been suspended. It turned out that the rapid scale up of a new integrated gasification combined cycle (IGCC) technology from pilot to a 585 MW plant proved to be far more complex and challenging than anticipated.

Identifying and tracking power outages worldwide through social media

Normally when customers experience loss of power, the utility does not know about it until customers call the utility to report the problem.  With the advent of social media such as Twitter, Facebook and others, there is another way - if customers tweet to a friend "hey, I just lost power" or "looks like the entire neighbourhood is without power" these tweets can be detected and the utility notified virtually instantly when an outage occurs including location and extent.

UtiliSocial is a cloud-based system from DataCapable that mines social media and then generates map visualizations using a GIS.  UtiliSocial combs social media channels for specific terms and topics related to power utilities, such as power outages, smart grid, and renewables. When someone communicates via social media about any of these topics, utility staff get real time notifications including the location of the tweets.  The data is presented on a mapping dashboard, showing the time and location of the each tweet found.  UtiliSocial can also display context -  maps of demographics, consumer behavior statistics, weather patterns and sensor reports. Data Capable has been providing this service to utility customers such as Seattle City Light.

And now DataCapable provides a service that shows outages worldwide.  It provides utility customers with a real-time layer of global power outages including all outage events over the past three hours (which is configurable).

Open source blockchain development to enable transactive energy

The world is rapidly developing the technology that allows energy flows to be  determined by market forces.  There is little doubt that transactive energy is in the future of electric power in North America, which already has continental grids, and in the EU with the development of the EU's supergrid. 

The Rocky Mountain Institute and Grid Singularity (a blockchain technology developer) have created the Energy Web Foundation (EWF), a non-profit organization whose mission is to further the development of transactive energy by accelerating the commercial deployment of blockchain technology in the energy sector.  Initial supporters are Centrica plc, Elia, Engie, Royal Dutch Shell plc, Sempra Energy, SP Group, Statoil ASA, Stedin, Technical Works Ludwigshafen AG (TWL), and Tokyo Electric Power Co (Tepco) who have provided a first round of funding of $2.5 million.

Blockchain is a decentralized, distributed database for managing transactions.  Blockchains provide a global infrastructure untethered from the stability or permission of governments and institutions.  It is the technology underlying Bitcoin.   Nasdaq and other financial institutions including banks have been experimenting with and developing applications based on blockchain technology. Nasdaq has opened its blockchain services framework to more than 100 of its market operator clients around the world.  Earlier this year Nasdaq demonstrated a blockchain service that lets solar power generators sell energy certificates. 

Blockchain technology has the potential to play a significant and potentially game-changing role in the energy sector by providing the financial infrastructure for transactive energy. Blockchain technology could provide the transactional infrastructure enabling millions of energy generators (for ex, rooftop solar PV) and energy consumers (HVAC systems, water heaters, electric vehicles) to transact with each other. Blockchain also provides higher levels of cybersecurity.  Grid Singularity with its partner Parity Technologies is leading the development of an open-source, energy-specific blockchain infrastructure that will be maintained by EWF and supporting affiliates.

Do natural gas-fired power plants contribute less greenhouse warming than coal ?

Emissions Associated with Electric Power Production

Methane represents 9.9 % of U.S. greenhouse gas emissions and is at least 20 more times more potent in warming the atmosphere than carbon dioxide.

It has been asserted that natural gas power plants, which are responsible for 21% of power generation in the US, produce 50% less emissions than coal-fired plants. However, in the past the amount of methane gas that is lost (vented or leaked) during production, distribution and in plants has not been included in the calculation. Now a new study suggests that methane emissions from power plants and refineries may be much larger than current estimates.

A recent EPA analysis doubled its previous estimates for the amount of methane gas that leaks from pipes and is vented from gas wells, which significantly changes the emissions picture.  Methane (CH₄) levels from hydraulic fracturing of shale gas were found to be 9,000 times higher than previously reported.  Based on the new numbers, the median gas-powered plant in the United States is estimated to be 40 % cleaner than coal-fired plants, according to calculations ProPublica has made. In addition about half of the 1,600 gas-fired power plants in the US operate relatively inefficiently. In the past these plants were estimated to be 32 % cleaner than coal, but with the revised EPA estimates, these ~800 inefficient plants are estimated to produce 25 percent less emissions than coal.

But there is another issue.  Methane is one of the more potent greenhouse gases for global warming, but it is not clear just how much more potent methane is than CO₂.  The EPA has estimated a factor of  21 times compared to carbon dioxide. But Robert Howarth, an environmental biology professor at Cornell University, has suggested that it is actually 72 times as powerful as carbon dioxide in terms of its warming potential.  This is critical, because if the climate effect of methane from natural gas is 72 rather than 21 times that of carbon dioxide from burning coal, natural gas may even turn out to be worse than coal in terms of global warming.  Howarth has suggested that the type of shale gas drilling taking place in Texas, New York and Pennsylvania generates particularly high emissions of methane and could be as dirty as coal.

New estimates of methane emissions from power plants

Now a new study reports on overflights of power plants and refineries and finds that methane emissions are much larger than current estimates.  Power plants and oil refineries are large consumers of natural gas. The EPA has collected data contributed by operators and estimated the methane (CH4) emissions from these plants, but there is high uncertainty in these estimated. In this study an airborne chemistry lab was used to estimate the methane emissions from three gas-fired power plants and three oil refineries. The average methane emission rates were larger than than the operator-reported estimates by 21 to 120 times for the power plants and by 11 to 90 times for the refineries. By looking at the pattern of methane emissions compared to carbon dioxide (CO2) and water vapour, the researchers were able to determine that the methane emissions were primarily from non-combustion processes suggesting leaks and venting as the sources. Scaling these result to the national level suggests that methane emissions from these types of facilities are 4.4 to 42 times larger than current estimates. The results indicate that gas-fired power plants and oil refineries could contribute significantly to U.S. methane emissions. The estimated contribution of 0.61 teragrams of methane annually (Tg CH4/yr) is significant, representing about 2% of total U.S. annual emissions of methane of about 30 Tg CH4/yr.

A recently published study has assessed the spatial distribution of anthropogenic methane sources in the United States by combining comprehensive atmospheric methane observations, extensive spatial datasets, and a high-resolution atmospheric transport model. Based on the results of this analysis the authors conclude that the EPA underestimates methane emissions nationally by a factor of about 1.5.  Generally the study found that methane emissions due to the animal husbandry and fossil fuel industries have larger greenhouse gas impacts than indicated by existing inventories.

One of the motivations from switching from coal to natural gas for these types of facilities is that natural gas delivers the same amount of energy but with significantly reduced emissions. But that does not take into account leaks and other processes releasing methane during production, distribution and within plants.  These latest results further reduce the advantage of gas-fired over coal-fired power production.

A study by Robert W. Howarth, Renee Santoro, and Anthony Ingraffea has concluded that the emissions of methane from shale gas wells are between 30% and 100% more than methane emissions from conventional natural gas wells.  The study estimates that between 3.6% to 7.9% of the methane from shale-gas production escapes to the atmosphere in venting and leaks over the lifetime of a well.

As a result the study found that the greenhouse gas (GHG) footprint for shale gas is greater than that for conventional gas or oil. When compared to coal, which is responsible for nearly 50% of electric power generation in the US,  the GHG footprint of shale gas is estimated to be 20% to 100% greater than coal over a 20 year period.  Over a 100 years, the study concludes that the GHG impact of shale gas is comparable to coal.

New era for big transmission lines in the U.S.

Big transmission lines have not been built in the U.S. for decades.  Now there are multiple projects all driven by bringing renewable energy from remote locations to market.  At the CG/LA Global Infrastructure Leadership Forum today two companies presented on major transmission projects that managed to overcome the regulatory and societal hurdles that are the major challenges for new transmission lines.  On average in the U.S. infrastructure projects require 9.5 years to get the required permitting. These projects include have been fully permitted after 8 years or less partly because of their innovative solution to people's reaction to unsightly transmission towers.

The first project (Champlain Hudson Power Express) is a 1,000 MW high voltage direct current (HVDC) line over 333 miles from Quebec to New York City.  Quebec power is nearly 100% hydro and this power will help both the State of New York and the City of New York reach their clean energy objectives.  In addition as the Indian Point nuclear power plant is scheduled to be shutdown, this power line from Quebec will cover about half of the power that will be lost with the Indian Point shutdown.  The innovative feature of this power line is that it is entirely underground, or to put it more accurately, underground and underwater.  It's route is across Lake Champlain and down the Hudson River.  This has made it much easier to acquire the required right of way and complete permitting because one of the biggest issues with transmission lines is the visibility of pylons and lines.  

A second project (New England Clean Power Link)has taken the same approach to bring a 1,000 MW buried HVDC to Vermont.  This line is 154 miles long, is completely underwater and underground and is fully permitted.  This has been in development only since 2013 and is scheduled to be in service by 2020.  That is remarkably fast for a transmission line in the U.S.

The third project is one of several being developed by Clean Line. This is the Plains and Eastern Clean LIne Line linking wind generation in the Texas panhandle to Arkansas and Tennessee.  This is a HVDC line HVDC line delivering 500 MW to Arkansas and 3,500 MW to western Tennessee. This is a traditional above ground transmission line which made getting all the stakeholders on side was more challenging than for undergound lines. Clean Line credits its communications department, which held thousands of meeting with stakeholders, for its success in completing the permitting in only 8 years.  It is expected that construction on this line will begin by the end of the year.  This remarkable project won two awards at the CG/LA conference including Strategic Project of the Year.

Siting uses geotechnology intensively.  In both cases the project people had to be willing and able to optimize the routing based on stakeholder input.  For example, one stakeholder wanted the line to pass along his southern property boundary instead of the northern boundary.  Micro siting and the ability to change the route on a moment's notice requires accessible, precision locating and the ability to show stakeholders exactly where the line would go.  Geospatial technology was essential to all three of these projects.

Regulators encourage utilities to invest in cloud-based software

Utilities have in general not been IT innovators.  But the accelerating adoption of smart-grid technologies by utilities is resulting is driving the need for greater IT awareness and skills in the electric power industry.   Large utilities have the requisite IT skills in house.  Small utilities typically don't and outsource their IT development or adopt SaaS solutions.   Medium-sized utilities fall in between.  Now regulators appear to be ready to provide financial encouragement to push utilities to improve their IT capacity.  Cloud-based computing is perceived by regulators as providing a way to future-proof IT investment in the rapidly changing smart grid world. 

At Distributech 2017 Oracle released the results of a survey of utility industry regulators.  Oracle Utilities and Zpryme surveyed 76 utility regulatory staff and commissioners in the U.S.  What they found was that more than three quarters of the respondents believe that regulators should play some role in determining whether utilities use the cloud. 69% of U.S. regulators support capitalizing cloud-based software, which is a way to use accounting to encourage utilities to invest in cloud-based software.  A third of the regulators have a specific and comprehensive strategy for utility cloud investment.  The most significant benefit of cloud computing the respondents identified was improved flexibility.