A Pearl Reborn
by Naimish Patel
Consumer-led disruptions are unstoppable.
We have seen them at work in the Internet. We are seeing them at work in healthcare — personalized medicine is fueling innovation in genomics and proteomics, creating new direct-to-consumer markets, and new technology leaders in the process. We are seeing the same in energy — the beginning of a global renaissance in energy services and grid infrastructure.
I founded Gridco Systems in 2010 on this simple thesis, focused on providing the essential building blocks of the Agile Grid. I am lucky to have a truly stellar team with me, one not only with deep and diverse expertise, but with the passion and perseverance necessary to catalyze change. This is the first of a series of blogs focused on the most salient aspects of the historic transformation unfolding before us, accented with our personal experiences along the journey.
Since the Pearl Street power station in Manhattan first went online in 1882, the electric grid has become pervasive in its reach, essential to the sustainable growth of our economy and national security, and a services platform that we have become intimately reliant on yet often take for granted. This is all a testament to the work of the numerous utilities responsible for maintaining and operating the grid. Today, however, these utilities are facing a changing environment that not only poses a wide variety of challenges, but also creates opportunities for innovation.
Disruption Arising from Consumption Shifts
Much as the telephony system experienced a transformation in the 1990s catalyzed by customer adoption of computing and demand for Internet services, so too are we seeing the beginning of a customer-led evolution of the electric grid.
Consumers of power are increasingly also becoming producers, through adoption of rooftop solar or small-scale wind power, requiring the distribution grid to accommodate two-way power flow for the first time, violating one of the basic assumptions underlying the entire distribution system architecture. This is not just a theoretical issue — requests for grid interconnection of commercial-scale solar projects are increasingly backlogged in areas with high solar penetration because of the system capacity and power quality implications of distributed generation. Naturally, this interconnect bottleneck is of significant concern to solar developers (and their clients) experiencing delays in project implementation and income.
Similarly, though electric vehicles create new demand for power, they also require utilities to invest in load-control measures that avert overloading existing infrastructure while still providing vehicle owners the predictability they need for their daily commutes. Often overlooked is the high degree of geographic correlation in the adoption of EVs and rooftop solar, compounding both the magnitude and immediacy of the system reliability issues utilities must contend with. Indeed, it is not only reliability but also resiliency that are increasingly valued, particularly amongst customers in areas prone to severe weather events (remember Sandy?).
On the other hand, of potential help are customers interested in energy efficiency, demand management, and home automation, providing new resources that utilities can harness for systemic benefit while offering additional means for consumers to monetize their investments. Of course, this further blurs the nature of the utility-customer relationship.
Fundamentally, these trends are indicative of the increasing diversification of consumer demand for electric power. Since the Public Utility Holding Company Act took affect in 1935, the distribution of electric power in the US has been subject to a state-by-state regulatory compact oriented to incentivizing widespread electrification — the focus being on safe and reliable physical connectivity (note the similarity to telecom regulation from 1936 to 1996). Now that most consumers are connected, the question of regulatory importance is:
How can capacity be efficiently leveraged to deliver differentiated services to customers with new demands while minimizing economic disruption to those with basic demands?
In the face of all these challenges, utilities must continue to deliver on their fundamental mission of supplying safe, reliable, and affordable electric power, while introducing system flexibility in order to be adaptive to a more dynamic demand/supply environment. Emerging at this intersection of requirements is a historic opportunity for regulators, utilities and technology suppliers to jointly innovate, summoning in a new and exciting era for the power sector.
The Distribution System Takes Center Stage
Not surprisingly, given the aforementioned trends that are occurring at the edge of the grid where customers connect, the electric grid’s distribution system is on the frontline of change. Historically, investment in the distribution system has targeted upgrades of wires, poles and transformers — what is termed grid reinforcement. While continued investments in basic grid capacity are necessary, efficient utilization of such capacity is increasingly important, making it possible to alleviate bottlenecks and keep customer rates low, while still assuring reliable delivery of power under rapidly changing conditions.
Much as the internet is based on devices that actively and dynamically manage the flow of information across fiber optic and copper wires, the electric grid will increasingly require devices that actively and dynamically manage the flow of power, all under the control of a reliable, secure, and scalable grid operating system. Fortunately, the technology building blocks needed to provide these functions are available, and at the cost, efficiency, and reliability metrics expected by electric utilities.
Advancements in power electronics technology borrowed from hybrid and electric vehicle drives, wind converters, and solar inverters can be leveraged to provide dynamic regulation and routing of power flows at utility scale while alleviating the grid’s historical reliance on failure-prone electro-mechanical devices. Ruggedized distributed computing platforms coupled with advanced networking techniques borrowed from the telecom sector, enable an emerging grid operating system to securely and scalably manage both utility and customer-owned assets alike.
These core functions make the grid not just smart, but Agile; it is brains and brawn in combination or smarts in conjunction with action that underlies Agility. Most importantly, Agility, when applied properly, is systemically more cost effective than upgrading capacity with bigger ‘dumb’ pipes.
As I stated earlier, we are at the beginning of a global renaissance in energy services and grid infrastructure. It won’t be easy — there will be institutional barriers, technical hurdles, and perhaps even political headwinds, but there will also be the unanticipated successes that are the seeds of industry change — the grains of sand that grow into pearls.
The world is our oyster.