electric grid

Quick Guide To Nanogrids and Minigrids

One of the ongoing issues with the transition to a new utility paradigm, for both consumers and providers, is the required change from a centralized to a distributed framework. Utilities are worried that consumers will abandon the power coming from a big power station far away in favor of the solar panel on their roofs, the tesla powerwall in their homes and the extra power from their neighbor. At the same time consumers are worried that the new forms of energy will cost them more than they currently pay and not everyone wants to ‘pay a premium to promote renewables’. Good news is that there is a transition opportunity that helps achieve the goals and desires of the consumer for safe (read as clean), reliable and stable power. They are called Nanogrids and Minigrids.

Nanogrids: are considered as discrete loads (the power drawn) that sometimes use direct current (DC) to reduce on energy losses that we normally see in long distance energy transmission. Navigant suggests a 5kW capacity for standalone systems and 100kW capacity if the system is tied to the current grid. Sidenote: think of kW as stock (energy in a tank) and kWh as flow (power used by your ac). The off-grid central Texas farm with its solar panels and its diesel generator on the back of the pickup truck is already operating as a nanogrid.  Why is it less disruptive to the the utility? Because nanogrids, at current scale, do not take too much off the plate of the utility enabling them make the adjustment in a more transitional way. Why is it good for consumers? The ability to manage your own generation, demand and usage using renewable energy is where we are all going so why not get there earlier than others. The fascinating thing is that in African countries, including the one where I was born, either through lack of infrastructure or depreciated assets this is already the case. I wrote about my fathers generation serving as their own Youtility with each home running a nanogrid unto itself with a generator combined with solar energy for power, a borehole dug in the back of the compound for water and gas tanks swapped out at the gas station for cooking gas. A nanogrid…

MiniGrid: So what do you get when you combine nanogrids? Doesn’t take too much of a leap in imagination to see what a minigrid is; in lay terms it is a modular collection of nanogrids. It is often a collection of demand nodes (buildings) all pulling from one or a few distributed energy sources (a solar array and some storage). The difference from the current microgrid or centralized utility structure is in the size. There will be wires required to connect the homes and commercial buildings, which is not the case in a nanogrid, but not at the range that the current grid covers. This structure of grid lends itself to the pay-as-you-go model of electricity usage that is prevalent in the developing countries where this is already in play. This is a model that can be borrowed for low-income areas of most of our fast changing cities, a model that starts to cater to the customization of service that the future utility (customer) will demand.

Nanogrids will play a big role in the smart and connected homes we will all live in in the future and consequently the minigrid system will heavily impact the smart city future that is upon us. It is quite ironic that is a grid system that we in the US will be borrowing from developing countries where the lack of infrastructure is forcing the fast adoption of these systems. The utility, in it’s current state, will play some role in this future.

What is required is for the utility to take their vast reserves of cash and infrastructure and decide which part of the value chain - infrastructure, technology or people - their strengths lie.

It is a decision that needs to be made soon.

3 Ways Blockchain is Fundamentally Changing The Power Industry

I attended a TED style energy conference about a week ago and the consensus was that the future utility is here regardless of how reluctant the industry is. With impending delivery of Tesla Powerwalls and continued reduction in solar panel prices (with science now able to facilitate solar power generation even in rainy conditions [PDF]) fundamental change is not just imminent, it is here.

I wrote a future utility post a year ago and in it I suggested a scenario where

'Sam is considered as a 'node' on the future electricity grid (with a card and a mobile app to measure how much energy she uses or produces)... Sam’s home is powered by a rooftop solar panel and has a neighbor, Jo (with his own + or -), who doesn’t drive, doesn’t own a solar panel but trades stocks for a living, using a lot more electricity than Sam by running servers at home. Some days Jo (conceptually) ‘gets’ electricity from Sam's 'home battery' or the Walgreens or the wind farm depending on whether Jo 'wants' renewable energy. Because Jo is another node on the grid'.

That scenario is closer than I projected all because of Blockchain. As I share in my ebook Managing Technological Change In The Utility Industry I see 3 areas of fundamental change

  1. Consumer data management: The ledger function that the Blockchain provides will allow 3rd party technology and service providers to safely interact with the end consumer in a relationship that up until now didn't exist; the utility acted as the gatekeeper of consumer data preventing access to the services that we now take for granted in other industries for example the ability to get contracts based on your customized usage profile.
  2. Retail trading between consumers: the contract between the utility and you is for the utility to generate and deliver electricity to the your home. Smart contracts, enabled by blockchain, will enable a solar panel and Powerwall owner to sell electricity to their neighbors, effectively cutting out the utility. It's already being piloted in NY and will be an area of huge impact. Yes, the future is now.
  3. Utility security: data transmission, and consequently data security, at the scale the utility has never known is currently at the top of industry concerns. Secure data transmission, using the blockchain and its public/private key cryptography and cryptographic signatures (amongst other cryptographic techniques), takes away the pain of the utility CIO. 

The industry is not prepared for these changes and in some cases is actively resisting it. Blockchain as an infrastructure platform is not a fad, even if Bitcoin may be, and Goldman Sachs is spending heavily to disrupt itself [PDF].

As Nobel prize winning physicist Max Planck suggested 'a new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents finally die'. Time for the industry to wake up.

How Will Utilities Handle COP21, Tax Credit Extensions and other disruptors?

What's going on?

President Obama recently announced he will not be supporting the Keystone Pipeline project. As an energy consumer this is probably not the most high profile news you’ve heard relating to the energy industry in the last few weeks. A lot of talk has been about the hard to monitor (or even enforce) COP21 Agreement, a great step that will require a lot of hard work.  Some other pieces of energy news that that you might have missed in the last few months

None of these got on your radar? Well the utilities are paying attention to all the changes happening and you should too.

See, you the consumer are at the center of all this change. It all boils down to one thing; how you consume energy. This is because how you use energy fundamentally affects or is affected by 

  1. The utility business model: You pay money for the energy you use but the energy is now coming from different sources (some renewable) and your usage no longer follows the old profile. Will the utility still continue to send you a bill that you pay once a month?
  2. Policy: are time of use prices right and should we all bear the cost of renewables coming on the grid? And the one change that’s already affecting how you do everything else in your life...
  3. Technology: The mobile phone has changed your expectations from your service providers and also (again) changed your energy usage behavior (87% of us now watch TV with a second device on) . Which cheaper products will come after the early adopter products like the Nest thermostat, Solarcity panels and smart meters? 

Yes. These are all related and have YOU at the center. If you think this is confusing imagine how utilities, that haven't changed since Thomas Edison, feel? It's all chaos and as Robbie Wright, VP Innovation at Direct Energy said at ETS@Chicago in July 2015 

‘We’re undergoing massive disruption, whether we know it or not, in the energy space and it’s delicious and chaotic.' 

How to make sense of all this chaos? I'll be moderating a panel at ETS16 which will be looking at "Transforming the Chaos". The idea is to bring utility leaders finding scalable revenue generation amidst chaos, and exploiting new ways to solve these problems. The expectation is that the conversation will be about you and I as the center of this chaotic industry. This was not the case at an industry conference I attended a few weeks ago; it felt like everyone was happy to pretend things aren't changing at a rapid pace. My hope is that ETS will be about you the consumer as a partner in this transition by bringing great minds, institutions and doers from the utility industry to the table to discuss and debate what happens next.

What is required to survive?

Smart thermostats and appliances, solar panels, and electric vehicles that are now beyond just being a good idea, are they worth investing in? Impact of new mandates handed down from conferences in Paris? What happens when solar hits grid parity in a few years? Or are we already there? What about energy storage in the form of Tesla's Powerwall? Impending reality or marketing ploy? What if oil prices stay low and continue to negatively impact renewable adoption? What does this mean for utilities? What does it say about the industry when one of the few utility CEOs who tried to transition to the renewable future gets fired for his troubles? 

A lot of unanswered questions (which will be discussed at the conference) but some things are obviously required to weather this chaos

  1. A willingness to transform: utilities will have to overhaul business models (and look to other methods of making money). The industry will have to redefine standards, regulations and policy. Investments will have to be made with an eye on the long term (and not just on the current stock price or on lobbying against renewables).
  2. Emergence of the 'new': Investment is required in a new class of leaders and technologies from within and without the industry. The time for lip service is over.
  3. Recognize convergence of trends: As it was in the telecomms industry, where we moved from centralized assets and uninformed consumers to distributed assets and prosumers, so will it be in the energy industry. Mobile as an enabler for the consumer and the workforce, analytics for managing the assets and their utilization and system design changes are all coming together to ensure things will not stay the same.
  4. The role of the consumer (aka humans): humanizing energy and energy service delivery through purposeful storytelling based on a thorough understanding consumer context (something now enabled by insights from data). This is counter to how the utility has always engaged. To stay that way is to ensure extinction.

This whole dynamic currently fuels the national economy and due to the critical nature of the energy industry there is a massive opportunity here and it will require change. To survive the incumbents must change. Chaotic times ahead... 

Exciting times ahead...

The Future Utility

Meet Samantha

  • Samantha lives in Chicago and owns an electric car. One of those fancy ones. We'll say she owns a Tesla.
  • Sam is considered as a 'node' on the future electricity grid (with a card and a mobile app to measure how much energy she uses or produces). 
  • Her energy consumption (from anywhere) is considered a - on the grid. 
  • When Sam puts power on the grid it's considered a + on the grid. 
  • Sam’s home is powered by a rooftop solar panel. 
  • She also owns a home battery manufactured by Tesla and financed through Solarcity.
  • 40 miles from Sam’s home is a nuclear power plant. Sometimes she 'gets' her power from the nuclear plant. Sometimes she just 'gets' the power from her home battery.
  • Sam’s local Walgreens also has solar panels on it’s roof and puts some power on the grid. Another energy conscious company, Whole Foods, is one block away They’ve also also commissioned some solar panels.
  • There also happens to be a wind farm 25 miles from Sam’s home 
  • And a coal plant 43 miles from Sam’s office.
  • Sam's electric car charge comes from plugging in at home/work/Walgreens and because of Power-over-ethernet functionality Sam's usage can be 'read' in the form of her 'energy IP address'.
  • All of Sam’s production and consumption from any one of these points is measured by a ‘minisculemeter’ (phrase coined by me for an energy measuring sensor the size of a coin), every minisculemeter in Sam's home or on Sam's appliances is ascribed to Sam's account/card
  • Even when Sam charges her laptop at the Starbucks, while she's working, her 'account' is adjusted accordingly (debited). 
  • Sam moves to Arizona to be with the love of her life and she maintains the same account, all she has to do is change her address...
  • And, just like her credit score, any move to a more energy efficient home or purchase of a home energy management device will register as a plus or minus on her 'score.
  • Sam also has a neighbor, Jo (with his own + or -), who doesn’t drive, doesn’t own a solar panel but trades stocks for a living, using a lot more electricity than Sam running his servers at home. Some days Jo (conceptually) ‘gets’ electricity from Sam's 'home battery' or the Walgreens or the nuclear plant or the wind farm depending on whether Jo 'wants' renewable energy. Because Jo is a node on the grid...

The entity in the middle of these transactions

  1. measuring how much is used or produced,
  2. ensuring that all the Sam’s and the Jo’s do not use more electricity than all the solar panels and generating plants can produce (all through software and these minisculemeters) and
  3. making sure the payments are made and collected correctly
  4. using a simple and very customer friendly interface 

is the utility of the future. Allowing Sam to do the things she needs to do to live a normal regular existence. That's all we really ask of our utility...

What's interesting about this is that this distributed, or more aptly termed local, structure is very similar to the first 'grid' when, in 1882, Edison flipped the switch on a few steam generators powering 1200 bulbs in Lower Manhattan. Very rapidly the grid grew to what we know it to be today; a very complex non-adaptive system. But with new technology and increasing customer expectations of what service looks like the grid is shifting to the example I gave above. It's the nature of complex systems to revert to their simplest form.

Welcome to the Future Utility. It's really just the 'first grid' with fancy devices on the end...