Carbon-Pros Analyst Blog

Advanced Metering Infrastructure (AMI) and Meter Data Management (MDM) handle the greatly increased volume and complexity of meter data. AMI supports all phases of the meter-data life cycle from acquisition to provisioning to providing customers with usage information. Instead of monthly readings, AMI provides periodic readings around the clock. AMI must meet stringent requirements for data latency, persistence, and scalability of energy consumption data. AMI functions span both the IT data center and grid operations and is an important enabler of the smart grid.

MDM applications support the loading, validation, editing, and estimation of meter data. Due to the very high volumes of data logged by smart meters (as often as 15 minute intervals), new MDM applications must achieve high levels of scalability. In the Austin Energy roll-out of 500,000 meters with 15 minute sampling, the annual storage requirement went up 10X to 200TB. This is roughly 400MB per meter per year. Pacific Gas & Electric is sampling twice per day and is adding storage to accommodate 170MB per meter per year.

Smart metering can aid utilities in optimizing revenue by providing alerts that detect idle usage and energy theft. Theft costs utilities about 1-3 percent of revenue or about $6 billion across the industry. Analytical functions can extract information from interval data and translate it into reports for trigger appropriate proactive actions. MDM may include functions such as:

• Connections to meter systems
• Meter data validation, estimation, and editing (VEE)
• Error handling
• Meter data access
• Meter inventory management
• Usage analytics
• Information delivery to customer portals

Sources:
meter data volumes: Smart Grid News
smart meter estimate: FERC Aug-09 report on Demand Response

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Google refers to its architecture as a three-layer stack, most of which was developed in-house. At the top of the stack are Google software services such as search, advertising, email, maps, and many others. In the middle of the stack is their distributed system architecture. This includes the Google File System (GFS), a distributed storage system (Bigtable), and a programming model (MapReduce) to support parallel processing.

At the bottom of the stack are the hardware and OS. Google operates hundreds of thousands of machines in 30-40 data centers. Each machine uses a standard AMD/Intel x86 chipset running a customized version of Linux. Each server has its own 12-volt battery to supply power in case the main power supply goes down.

Google does not say how many servers they operate but observers have estimated that the power required for a half-million servers ranges upwards of 20 megawatts and would cost in the neighborhood of $2 million per month in electricity charges. Google has an obsessive focus on energy efficiency. Fortunately, they have recently started to share some of their knowledge with the rest of the world.

If you wonder what this has to do with smart grid, it's simple. The smart grid needs to be architected for massive scalability with millions of devices including meters that transmit readings as often as every 15 minutes. This particular note will appear in the book as a sidebar relating to our discussion of enterprise application architectures.

Sources: High Scalability, Wikipedia, and CNET
http://highscalability.com/google-architecture
http://en.wikipedia.org/wiki/Google_platform
http://news.cnet.com/8301-1001_3-10209580-92.html

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• Generation portfolio management
• Multiple supply/demand scenarios
• Integration with demand response
• Integrated economic analysis with market pricing
• Decision support tools

Advanced capabilities such as these will be essential for managing the increased complexity of the smart grid's ability to integrate new ways for producing power and managing demand. It gives grid operators the forward-looking view required for making better decisions.

Sources: Areva ASPCON-09 paper by Cheung et al. 2009

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Compared with the renewable power potential of wind and solar, tidal and wave power is much less discussed. In parts of the seacoast with narrow channels and strong currents, tidal power has great potential. On open shorelines with major ocean swell, wave power has great potential. These marine technologies don't often make headlines because they are a decade behind wind and solar in basic research and pilot testing. But we are seeing some progress.

Nova Scotia Power and its technology partner OpenHydro recently unveiled a 1-MW tidal turbine. It will be deployed in the Bay of Fundy this fall as part of Nova Scotia’s tidal power test facility. The Open-Centre Turbine was manufactured in Ireland by OpenHydro. The turbine will rest directly on the ocean floor using a subsea gravity base fabricated in Dartmouth by Cherubini Metal Works.

The 33-foot turbine will be deployed in the Minas Passage of the Bay of Fundy. Testing will last up to two years. Operational data will be collected and shared by Nova Scotia Power and OpenHydro to determine the environmental performance and future feasibility of tidal power in the Bay of Fundy. The testing will focus on the robustness of the turbine in the harsh environment of the Bay of Fundy, close monitoring of the environmental impacts of the turbine, and its energy production capabilities.

The Bay of Fundy sits on the northeast Atlantic coast of North America between New Brunswick, Nova Scotia, and Maine. It is significant for having one of the highest vertical tidal ranges in the world. This project is a big step forward from previous projects and proposals which mainly involve building a dam to hold back part of the bay and extracting power from water flowing through the sluice gates (similar to conventional hydro). Dams can severely disrupt the marine ecosystem, trapping fish and marine mammals. The OpenHydo project, by contrast will sit directly on the seabed floor. If the project reduces interference with the marine ecosystem, and it holds up in the icy currents of Fundy, it could move tidal power technology from the pilot stage into broader production. 

Sources: OpenHydro and Wikipedia.

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DLR is best understood in comparison with static line ratings in which the capacity of a transmission line is determined based on worst-case assumptions of full sun, high air temperature, and no wind. Those factors reduce the capacity of a line because hotter lines are more likely to overheat when carry electricity at their rated capacity. If operators knew that clouds were blocking the sun, the weather was cool, and the wind was blowing, they could use the full capacity of the transmission line. It turns out that line tension is a robust predictor of the environmental factors affecting its capacity. The Valley Group produces the tension and environmental sensors along with the software to generate realtime capacity information for grid operators. The system uses data on average line temperature, sag, clearance, and a realtime rating-factor. The system interfaces with the operator's EMS/SCADA and is customized for the operator’s requirements.

Dynamic line ratings improve system reliability, as they allow operators to make fewer corrections in system dispatch, while providing advance warnings of impending thermal/capacity problems. They save money by fully utilizing transmission assets. Aivaliotis says that operators can transmit up to 30% more power over 90% of the time. This extra capacity can be used to manage delays in line construction and management of the network during major system disruptions. DLRs are an enabling technology for more effective use of renewable energy. For example, wind farm production is often limited by transmission constraints. Production is highest when the wind is blowing. That same wind increases the capacity of the transmission system. DLR is the key to unlocking its full capacity.

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With carbon cap-and-trade on the horizon, utilities are looking into options for reducing their dependence on carbon-intensive coal for baseload power. Yesterday, the North Carolina Utilities Commission approved Progress Energy's plan to build a new natural gas-fueled power plant to replace a coal-fired plant in 2013.

The plant will be almost At 950MWs, nearly the capacity of a nuclear power plant. It will use a high-efficiency combined-cycle technology and sit on the site of the retiring coal-fired plant. The new gas-fueled plant is expected to cost about $900 million and take two years to build. The plan also will involve the construction of a natural gas pipeline to the site. Progress Energy expects to announce a contract for the gas supply in the near future.

Progress Energy's plan contrasts with moving to next-generation nuclear plants for baseload power. The next generation of nuclear plants is expected to cost at least $6 billion each, take up to ten years to build, and provide about 1300MWs of capacity.

If analysts are correct that North America has at least 100 years of non-conventional natural gas reserves, this strategy makes a lot of sense. Natural gas plants emit about half the carbon-dioxide as coal plants. High efficiency combined-cycle designs such as this one emit about one-third the carbon of the older coal plants they will replace. We may need next-gen nuclear plants as a bridge to the future when renewables can provide baseload power, but this model suggests that natural gas can also provide part of that bridge. Diversity in the U.S. fuel mix makes sense as a hedge against future uncertainties.

Source: EnergyCentral, Progress Energy

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Smart grid architecture will develop as a composite of many system and subsystem architectures. This will allow for maximum flexibility during implementation and will simplify interfacing with other systems. It also supports evolution of smart grid as new applications and technologies become feasible.

To support the standards development process, the GridWise Architecture Council (GWAC) created an eight-layer model. The model illustrates the many levels of standards and technologies required to support end-to-end interoperability.

As you can see in the figure, end-to-end interoperability involves everything from the electrical connections at the bottom of the stack to the regulatory environment at the top. Levels 1-2 involve standard connections across the myriad of grid components and communication networks. Levels 3-4 insure that the meaning of data and information remains intact as it flows across different elements. Levels 5-6-7 deal with the business and organizational issues of interconnected systems. Level 8 points to the need for a regulatory environment that does not impede the interoperability of systems.

The GWAC Stack is a means to identify well-known interfaces. Unambiguous interfaces are essential to interoperability. This s demonstrated on the Internet which has a physical and data link layer that allows messages to cross any type of network (Ethernet, Wi-Fi, microwave, optical) and still be managed end-to-end by a common network layer. On the Internet, protocols such as TCP/IP handle the transport details making sure that data packets get to their destination correctly, while higher level protocols such as HTTP and XML structure the message so that it can be interpreted properly at each end of the network.

Source: GWAC Interoperability Context, March 2008
http://www.gridwiseac.org/pdfs/interopframework_v1_1.pdf 

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It took all week but I managed to get the full draft of part one of the book to reviewers. I think it turned out pretty good, but I'll know a lot more once the reviews come in. Good writing is based on good ideas followed by a lot of editing. Strong reviewers, accepting authors, and detail-oriented editors make a great team. Thanks to those of you who volunteered to review Part One: Energy meets IT and Telecom.

Part Two of the book will get into smart grid architectural details. If you have deep technical expertise and are interested in reading a draft of part two, let me know. It should be ready by mid-October.

With any luck, I'll start filling the pages of this blog again next week. Thanks for hanging in there. --JCB

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• switching power through fully automated substations
• re-routing power around bottlenecked lines
• detecting power outages
• proactively identifying outage risks
• automating three of four distribution substations
• automating four computer monitored power feeders
• monitoring 23 feeders for voltage irregularities

A grid monitoring system, installed by CURRENT Group has helped avert four power outages by alerting Xcel operators to transformers that were ready to fail. Not a bad start to Xcel's "grid optimization" efforts.

I live in Boulder and have applied to be a beta tester for Xcel's next phase of development which will include demand response programs, in-home displays, and other energy-saving devices. We'll see what happens. --JCB

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• the Eastern Interconnected System,
• the Western Interconnected System, and
• the Texas Interconnected System.

The Texas Interconnected System is not interconnected with the other two networks (except by certain direct current lines). The other two networks have limited interconnections to each other. Both the Western and the Texas Interconnect are linked with different parts of Mexico. The Eastern and Western Interconnects are completely integrated with most of Canada or have links to the Quebec Province power grid. Virtually all U.S. utilities are interconnected with at least one other utility by these three major grids. The exceptions are in Alaska and Hawaii. The bulk power system makes it possible for utilities to engage in wholesale (sales for resale) electric power trade. Wholesale trade has historically played an important role, allowing utilities to reduce power costs, increase power supply options, and improve reliability. Historically, most wholesale trade was between interconnected utilities within the continental United States. With open access and deregulation of wholesale markets cross-border trade has become more prominent in meeting domestic electricity requirements. U.S. international trade is mostly imports. Normally, most imports are from Canada, with a small portion coming from Mexico.

Source: Energy Information Administration (EIA)

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While most storage systems remain very expensive, pumped hydro and compressed air are cost-effective today. Pumped hydro is well established and makes hydroelectric power one of the most dispatchable of all fuel sources. With a storage option, hydroelectric production can be turned up or down in minutes (see post). Compressed air energy storage (CAES) is in an earlier stage of development but is starting to see commercial pilots and deployments. Both have limitations in terms of location. Hydro needs a vertical drop and plenty of land for the storage reservoir. Compressed air needs favorable geological strata deep underground (see post).

The smart grid will provide the communication and software solutions to make large-scale storage systems work. Their charge and discharge cycles need to be tightly managed to match charging with periods of excess power and to match discharging with optimal periods of demand. In a dynamic pricing environment, this is no easy task.

Utility-scale storage is a natural match for utility-scale renewable generation.

In the case of wind power, excess power generated when the wind is blowing (often at night, off-peak) can be used to charge any of these systems (CAES is illustrated above). An effective storage system can make wind dispatchable, greatly increasing its value to utilities. The combination of dynamic pricing and intermittent generation requires sophisticated modeling tools. To meet future needs, advanced wind forecast models are under development at the National Center for Atmospheric Research (NCAR).

Utility-scale storage systems promise to increase efficiency by better matching supply with demand. They will increase reliability by smoothing out power fluctuations. And they will increase stability by providing ride-through during short power disruptions.

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Pumped Hydroelectric Storage
Sources: Wikipedia, Tennessee Valley Authority (TVA)
http://www.tva.gov/power/pumpstorart.htm

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Like pumped hydro, CAES converts electricity into potential energy that can be drawn on when needed. During charging, off-peak, low-cost electricity is used to pump high-pressure air into an underground cavern such as a salt dome. The air is held under pressures between 1,000 and 1,500 pounds per square inch (PSI). By comparison, scuba tanks hold air at about 3,000 PSI. During discharging, plant operators bring air from the cavern back to the surface, where it is heated with natural gas, causing it to expand and rush through combustion turbines that power a generator. CAES in not solely a storage system. It is a hybrid technology that uses the compressed air to turbocharge a highly efficient natural gas turbine. The waste heat rate of a CAES plant is roughly half that of a traditional natural gas plant. The electricity created by the CAES generator can be delivered to customers at peak periods through the utility transmission and distribution network.

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The current strategy for matching supply with demand is to build a certain percentage of generating capacity using gas turbines that can quickly be turned up or down as needed. These plants are quite expensive given that they are not needed very often. The classic situation is the utility that spends $250 million for a plant that is used ten days a year for a hour or two each day. You can guess that a “peaker plant” such as this is very expensive per kilowatt-hour. When we amortize the plant's expense over 10-100 hours of operation per year, we are producing very expensive electricity.

Because almost all utilities in the US charge flat rates, those extremely expensive kWh's get averaged in with the low-cost baseload kWh's and consumers never experience the true cost of peak power. If that peak power is essential, then it is worth every dollar. However, when it is used to raise idle hot water tanks from 110 to 120 degrees on hot sunny afternoons, then it is a bad deal for consumers. If enough demand on those few superpeak days can be shifted to a few hours later in the day, then the entire cost of a $250M power plant can be avoided. Everybody wins with a more intelligent system.

Peaker plants usually make up part of the utility's “spinning reserve.” Just as banks are required to have a certain percentage of cash on hand to cover unexpectedly high withdrawals, utilities are required by law to have a certain percentage of spinning reserve capacity. The plant has to be “spinning” so the generators can be switched on instantly to provide power in case of unexpectedly high demand. Spinning reserve is even worse than an idle plant because it is burning fuel and emitting CO2. Think of having your car on the driveway with its engine running for several hours per day just in case you need a quick get-away. Luckily cars start up fast enough that we don't have to go through what utilities go through every afternoon.

Large capital investments with low utilization rarely make economic sense in a free market. GTM Research (2009) estimates that the capital cost necessary to build 1 MW of demand response capacity is roughly $240,000. This is a bargain compared to the approximately $400,000 (prorated) cost to build 1 MW of a natural gas plant. Analysts have estimated that reducing peak demand can save approximately 40GW of electricity and $3 billion dollars annually.

More intelligent management of peak demand requires both technology improvements to support demand response and regulatory change so that utilities can pass through their actual cost of generation based on time of day. This will allow the market function as it should by letting consumers decide whether they want to buy power during those periods when prices go to superpeak.

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Spinning reserve is the extra capacity that is immediately available by increasing the power output of generators that are already connected to the grid and synchronized. For most generators, this increase in power output is achieved by increasing the torque applied to the turbine.

Non-spinning or supplemental reserve is the extra capacity can be brought online very quickly. On the grid, this may include the power available on short notice from other system operators, or the power available by retracting capacity that is being exported to other systems, or the power available from shutting down non-essential loads under the utility's control.

Source: Wikipedia and others
http://en.wikipedia.org/wiki/Non-spinning_reserve

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The climate models from 15 years ago have proven relatively accurate in predicting trends in global temperatures. Almost every measure that was predicted in 1995 is in line with observed records today. Dr. Barron identified these areas as examples of the accuracy of those models:

• The stratosphere has cooled as predicted and the Earth's surface temperatures have increased as predicted.
• The “big three” of CO2, water vapor, and melting ice caps have changed in line with predictions. Water vapor has gone up, sea levels are rising, Arctic sea ice is retreating, land-based snow cover is in decline per the model, but sea ice is disappearing faster than predicted.
  
• Note that CO2 and other greenhouse gases (GHGs), the sun, and land cover change are referred to as "forcings" of the climate system. Water vapor and melting ice caps are responses to these forcings that can amplify them.  Relative to GHGs and land cover, the sun appears not to play as big of a role in transient climate change.  This is not to say that the sun is unimportant, just that changes in solar output cannot explain the long term trends in climate.
  

Besides confirming the models from 15 years ago, scientists have gone back 100 years with today's models and run them forward to today. The results have shown to accurately predict our 2009 environment with and without CO2 forcing.

Dr. Barron said that there are more than one million lines of code in current models, and that they cannot be tampered with, and cannot be gamed. Many different countries have independent models with significant differences yet all are predicting temperature increases within a reasonably narrow band. He said it is nearly inconceivable that worldwide results from different groups are getting similar results due to conspiracy or collusion.

In the United States, we are looking at an increase of at least 4-6 degrees Fahrenheit by the end of this century. Average increases could be as high as 6-12F worldwide. This will have a major impact on ecosystems. The pine beetle infestation in the Rocky Mountains is one example of the small changes taking place because winters are not as cold as in the past. Dr. Barton said that a Florida-like savanna grassland could grow all the way up into Virginia replacing much of the forest landscape in the Southeast. He concluded by saying that climate models are accurate in terms of the trend in global temperatures and getting better every year. Actual observations show that the Earth is warming much as predicted and where predictions are off, climate changes are accelerating faster than expected.

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Fort Collins has been a leader in many areas of sustainability but John said the city's wake-up call for electricity was its historical trendline showing a period of 44% population growth to be matched by 74% energy growth and more than 100% growth in peak electrical demand. Managing peak demand has a major impact on the average price of electricity. The city government knew those trendlines were not sustainable. They certainly didn't match up with Fort Collin's growing reputation as one of America's green cities. As a result, Fort Collins Utilities has recently added the objectives of energy efficiency (EE) and renewable energy (RE) to their historical policy objectives of reliability and low cost.

John said that he has personally looked at dozens of studies on potential savings from energy efficiency. They vary in small ways but always come to the same conclusions:

• EE is the lowest cost resource, bar none
• EE savings compound over time, so small savings add up
  
• EE programs never get the participation expected from economic models, so we cannot expect to achieve 100% of the theoretically possible benefits.
  

John shared his thoughts about some fundamental aspects of energy efficiency saying that:

• EE requires capital investment, you have to spend some money to save even more
  
• EE savings are fragmented into thousands of locations and millions of end-uses across the city
  
• EE has very low mind share across the general population
  
• EE is difficult to measure, if not impossible because we are always comparing our actual data with a projected scenario. The best we can do is make a good estimate. 

There is no "silver bullet" for energy efficiency. Instead, John said that we have to deal with "1000s of Silver BBs". Each small change (or BB) makes a tiny impact, that impact gets added to many other impacts, and each one compounds over time. By making small systemic changes, you can have a major impact over a period of years. 

Major initiatives at Fort Collins Utilities include the following:

• Put EE programs in place and keep building on them
  
• Put green building codes into place including high-performance incentives to go beyond code
• Deploy an advanced meter infrastructure (AMI) for smart grid. With city budget approval, John believes they can deploy AMI in 18-24 months. AMI will then provide Fort Collins with a foundation for smart grid.
  

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We have been conditioned to think that flying is a major cause of greenhouse gas emissions. It's true that aviation accounts for 2% of human carbon emissions, more than 800 million metric tons annually. But most people don't realize that IT and telecom also produce about 2% of human carbon emissions. Unlike flying, IT/telecoms emissions are growing at 6% per year. Even though technology keeps getting more efficient, the rapid growth in the installed base exceeds the efficiency increases. So next time you hold off on a flight as part of your carbon reduction program, make sure you power-off your computer before leaving the office for the night. If you have any influence over your company''s IT shop, ask them how they are taking advantage of “cloud computing.” That's when the business runs some of its IT services using a remote data center connected to the Internet. The delivery of computer services over the internet on shared machines, enables computers to be run more efficiently with lower costs and lower carbon footprints.

Source: Economist, 2009
http://www.economist.com/research/articlesBySubject/displayStory.cfm?story_id=14297036&subjectID=348924&fsrc=nwl

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Standalone EMS applications are available off-the-shelf at various retailers. These EMS bypass the utility altogether. They connect to the service panel behind the meter, monitor electricity flows, and send data wirelessly to an IHD. Some go a step further by connecting to the LAN, using the broadband connection to support a web portal. Some also add water metering to the mix.

We focus on EMS' designed to use the grid overlay network to connect with the utility EMS and its demand response applications. The full value of residential EMS comes from the utility and consumer working together in ways that promote energy efficiency and allow the utility to shave peak demand by reducing nonessential loads. Residential housing consumes more than one-third of all electricity in the US. Within a typical home, HVAC, appliances, and lighting represent more than 80 percent of electricity use. Equipping these electrical loads with demand response controls saves money for homeowners and the utility. Since electric utilities may also be in the water and gas business, EMS' may provide water and gas monitoring and reporting through the same application.

All components of the EMS communicate through the home area network (HAN) operating wirelessly or through power lines. Depending on its design and functionality, the EMS may or may not interconnect with the home LAN. Below, we profile some of the residential applications that take advantage of the capabilities of the smart grid and the home area network.

Residential EMS Applications

In-Home Display (IHD). Knowledge is power. The flip side of the smart grid is the smart consumer. In-Home Displays (IHDs) let consumers make informed decisions about their home energy consumption. They help consumers reduce their energy bills and do good things for the environment.

IHDs are connected to a smart meter (with AMI) to access realtime energy data. This allows utility customers to track their energy usage on a realtime basis and for past periods such as days, months, and years. Formats range from digital text to graphical charts to colorful high/low efficiency indicators. These displays also accept energy control messages from the utility. Messages from the utility can cover energy pricing, demand response events, billing, and more.

The display itself can vary from a tiny screen on a smart thermostat to a larger countertop or wall-mounted unit. Most operate on batteries to make them fully portable. Some have remote controls to move around the house. They use push buttons and/or touch screens to display information and allow control of all functions tied to the EMS. A key success factor for these devices is offering a simple user interface and a stylish appearance. They also need to be inexpensive. Cost-control is important for the entire suite of EMS devices because utilities may need to purchase quantities that will scale into the millions.

Web Portal. Web portals are popular in the residential environment because they let consumers adjust their energy usage while away from home. This can be convenient when you've rushed off to work without turning off the lights or you've left for vacation and forgot to adjust the thermostat.

Using standardized internet protocols, web access also means smartphone access. The smartphone market now exceeds 100 million consumers in the US and is growing rapidly. More and more people are relying on their phone for basic web functionality. With some EMS products, the same portal is used on the PC and on the mobile phone. In more advanced designs, the EMS includes a mobile portal customized for its small screen size.

Smart Thermostat. US consumers spend about $2,000 per year on energy bills. Heating and cooling accounts for about half of total household energy consumption and about one-third of electricity consumption.

Smart thermostats often appear to be positioned at the center of residential EMS because of their potentially high impact on energy efficiency. Even though most US homes are heated with natural gas or other fossil fuels, about one-third are heated electrically. In these homes, heat consumes more than 50% of total household electricity. Most homes in the US are air conditioned with electrical power. Air conditioning consumes about 16% of total household electricity. It accounts for a significant percentage of peak demand on hot summer afternoons.

Most digital thermostats are programmable to provide night time set-backs, day-of-week scheduling, and vacation mode. That may be one definition of smart, but it is not what we are talking about. What we refer to as a smart thermostat is one that is connected to the smart grid through the utility's AMI network. It communicates across the network with the utility's demand response application. An example can illustrate.

On a hot summer afternoon with millions of homes air conditioned at 72 degrees, the local utility can run low on power. To avoid a brownout, it will be forced to buy the needed power at peak prices. Smart thermostats work with the utility's demand response (DR) application to accept electronic requests to reduce electrical demand. For example, the utility DR application might ask the thermostat to change its set-point from 72 degrees to 76 degrees. Yes, it gets a little warmer in the house after an hour, but this may be acceptable if it puts money back into the household budget. If grandma is visiting, she can override the DR signal right on the thermostat (or IHD) using its remote opt-out capability. Most demand response events last only a hour or so. The DR application will reset the thermostat to its original set-point as soon as the utility sees its peak demand safely dropping off.

(Smart) Hot Water. Resistance heating is a major user of residential electricity. You see resistance heating in toasters and electric stovetops when the heating elements get red hot. Devices such as electric ranges, ovens, hot-water heaters, and space heaters are part of the long list of resistance heating equipment. Compared to air, water stores a lot of energy. So heating water requires a lot of electricity. This makes electric hot water tanks and dishwashers major users of household users of electricity. Dishwashers preheat their water and heat up the air afterwords to dry the dishes.

Water heating presents a significant electrical load. It makes up almost ten percent of total residential electrical demand. When tied to the utility demand response application, the temperature for hot water heating appliances can be turned down for short periods. This keeps the heating element from turning on and sheds an important part of the utility's electrical load. Hot water tanks are ideal candidates for dispatchable demand response because in most cases, turning down the temperature a few degrees won't ever be noticed in the household. Smart hot water water tanks will be very high-efficiency and connected to the smart grid with a demand-response controller.

There are about 60 Million U.S. homes with electric hot water heaters, if just 10 percent are converted to high-efficiency models, it would save billions of kilowatt-hours annually. If they also have demand-response control, the cost savings will far greater to higher peak pricing.

Other (Smart) Appliances. Although there are a number of smart-plug products that can endow legacy appliances with the networking and monitoring abilities required for the smart grid, these don't provide the fine-tuned capabilities that can be offered when the controller is fully integrated into the appliance. A new generation of appliances will be coming out in 2010 and 2011 that are designed to work with smart grid applications.

GE and Whirlpool, for example, are planning a full line of appliances designed to be connected to the home EMS and the smart grid. These include refrigerators, washers, dryers, ranges, dishwashers, and microwaves. All of these appliances will report usage to the EMS and coordinate with utility DR applications.

For example, GE's demand-response refrigerator can make adjustments to its settings based on time-of-use (TOU) price signals from the utility. It can also reduce its consumption significantly by deciding when to run the defrost cycle. Refrigerators normally defrost themselves based on how often the door is opened and closed. They start the defrost cycle as its sensors indicate, whatever the time of day. Energy costs can be reduced by running the defrost cycle and making ice, in the middle of the night when electricity demand and prices are low. GE has said that these capabilities only add $10 to the cost of the appliance but cut electrical use by 20 percent. That's a small premium for the typical $1,000 refrigerator and results in a payback period under two years.

Smart Plugs. Since smart appliances are still more of a thing of the future, consumers need a way to make legacy appliances work with their EMS. Smart plugs are simple devices that insert between an electrical appliance and a standard wall outlet. They come in different sizes to handle small or large loads. These plugs measure and control whatever is plugged into them. At minimum, they report power usage to the EMS. At best they communicate with utility DR applications through the smart grid to help shed loads during peak periods. Essentially these plugs turn legacy appliances into smart appliances.

EV Charging and V2G Storage. With tight budgets, energy security, and climate mitigation on their mind, consumers are gravitating towards high-efficiency vehicles. If automotive analysts are correct, we will put tens of millions of plug-in hybrid electric vehicles (PHEVs) and electric vehicles (EVs) on the road in the next two decades. This makes the batteries in these vehicles potentially available for buffering peak electrical demand using vehicle-to-grid (V2G) storage. Most EVs will be charged at night and will store enough power to let the utilities draw on battery power during peak demand. A DOE study found that the idle capacity of today’s electric power grid could supply 70% of the energy needs of today’s cars and light trucks without adding to generation or transmission capacity—IF the vehicles are charged during off-peak times.” DOE estimates the potential benefits to include: 1) displacement of about half of U.S. net oil imports, 2) reduction in U.S. carbon emissions by about 25 percent, and 3) reductions in emissions of urban air pollutants of 40 percent to 90 percent.

These benefits won't be achieved unless EVs are supplied with smart charging stations to ensure that daily charging is done at night at the lowest cost power. A challenge will be the development of smart charging stations that balance the customer's need for driving range with the utility's desire to borrow power during peak periods. It may seem futuristic but by next year, Nissan's Leaf will have many of the components needed for connection to the smart grid. This car includes network connectivity so that drivers can use their smart phones to modify charging preferences, reset the air conditioning temperature, or ask Nissan to run remote diagnostics.

What difference can a car battery can make? A lot. There is a lot of power packed into electric cars. We're not talking about today's car batteries. By 2020, EV battery packs should be able to store 100kWh. That's enough juice to power the electrical needs of several of your neighbors' homes for 24 hours. Since the utilities will draw power only to cover peak demand, the power stored in one EV can go a long ways.

Distributed Generation. Distributed generation is the opposite of centralized generation via gigantic power plants. It implies generation of small amounts of power close to the point of use. It employs small-scale power generation technologies typically in the range of 3-10 kW for residential applications and up to 10,000 kW for commercial applications. The power generated is used to provide a supplement to the electric power from the grid. Distributed generation reduces the amount of electricity lost during transmission because the power is generated very near where it is used, usually in the same building. For the utility, this reduces the size and number of power lines that must be financed and constructed.

Distributed generation has experienced high costs in the past. Technology breakthroughs for wind, solar, and small gas turbines make these sources more cost competitive every year. Government subsidies help make up the difference. Well-intentioned consumers use solar and wind as part of their sustainability and carbon-reduction efforts. Although payback periods can exceed 10 years, they make economic sense for anyone committed to long-term energy reduction and long-term savings. Homeowners can essentially lock-in part of their energy costs for 20-30 years. A well-designed distributed generation system has low maintenance costs. Manufacturer warranties on solar panels typically run for 25 years.

Within the residential segment, grid-tied, roof-top solar PV is growing rapidly in sunny regions of the US. Small wind turbines are gaining ground on farms and ranches. Solar thermal is also popular, but is used to generate heat or hot water rather than electricity.

In grid-tied systems, utilities use a net meter to track surplus electricity not consumed by the home. The surplus power feeds into the grid distribution system where it is used by neighboring homeowners. Depending on contract terms with the utility, the net meter is set up so that the utility gives full retail price credits to the homeowner. A future point of contention will be whether utilities should pay for power based on TOU pricing. If so, it would give a big edge to solar PV since it generates at peak capacity during the day when the utility experiences intermediate and peak demand.

While the most common rooftop solar applications today use silicon-based PV panels. Thin-film technologies are rapidly catching up. They lower up-front investment costs but also offer lower efficiency (requiring more space on the rooftop). But costs for thin-film are dropping rapidly and efficiencies are going up. One advantage is that thin-film can be more easily integrated into roofing products. That allows it to be integral with the building architecture rather than just bolted on.

DOE analyses have shown that in a best case scenario, the US could see installed rooftop solar generation rising from about 2,000 MW in 2008 to almost 25,000 MW in 2015. Utilities will need smart grid technologies in the sensor network to make sure this electricity gets used as efficiently as possible. 

Posted by Carbon-Pros at 05:02 PM | Permalink | TrackBacks (0)

Commercial environments for energy management systems (EMS) are far more complex than residential environments. They are characterized by large scale, multiple tenants, diverse uses, and are often professionally managed by a full-time facilities staff.

Commercial EMS Applications

BMS' generally have a sophisticated user-interface that brings together its many functions and for control by security and facilities management. This may include an energy dashboard that bring together its energy control and usage functions. The most sophisticated systems will include diagnostic tools to alert facilities staff to potential problems.

BMS' can be configured to use (dynamic) time-of-use (TOU) pricing to shed non-critical loads to maximize energy savings during peak pricing periods. Some utilities give commercial customers TOU pricing if they have a smart meter installed. The utility may charge $0.11/kWh at peak, $0.07/kWh at intermediate, and $0.04/kWh during off-peak times. Shifting energy use into lower priced periods saves money for the customer and the utility.

Major suppliers of BMS include Siemens, Honeywell, Johnson Controls, and others. All of these companies are developing extensions to make their software compatible with the smart grid. Standardized communication paths and data protocols are needed to integrate systems within the building and to tie the building to the smart grid. These standards will be important for both utilities and commercial customers.

Heating Ventilating and Air Conditioning (HVAC) may be controlled by the BMS or by a demand-response subsystem supplied by the utility. Such controllers are complex because the building may be divided into many zones with different temperature thresholds. For example, mechanical rooms and store rooms will have different conditioning parameters than medical treatment rooms and general office space.

Lighting Control applications manage interior and exterior lighting which makes up a significant proportion of total electrical energy consumed. In homes and offices it represents 20 to 50 percent of the electrical load. Lighting represents a critical component of commercial energy use and is often controlled by standalone applications or through integration with the BMS.

Lighting control systems consist of computers, sensors, and controllers that operate the lighting in a building. There are applications in the residential space, but lighting control is much more important in commercial buildings because it is often the largest consumer of electricity. For some commercial buildings over 90 percent of lighting energy consumed may be unnecessary due to over-illumination. Lighting control interfaces (standalone or in the BMS) provide the ability to raise or lower lighting levels throughout the building. The major advantage in commercial applications is the ability to control all lights on all floors in all buildings from a single interface. In addition, lighting can be controlled automatically based on events such as time of day, day of week, room occupancy, and many other conditions.

An uninterruptible power supply (UPS) can provide short-term energy storage. A battery-based UPS provides emergency power that lasts anywhere from a few minutes to a few hours for small loads. A rotary UPS uses the inertia of a high-mass spinning flywheel to provide short-term ride-through in the event of power loss. The batteries and flywheels also act as a buffer against power spikes and sags. UPS' are commonly used to manage power quality by conditioning the line for highly sensitive electronic equipment.

Backup Power. Today, most commercial consumers see backup generators as their only viable means of “energy storage.” Backup generators are designed to start within seconds of a utility power outage. They supply power to the most important electrical circuits in the building. After utility power returns, the electrical load is automatically transferred back to the utility and the generator shuts off. Most commercial units run on diesel or natural gas. They are increasingly required by commercial building codes to support safety and security during power outages.

Backup generators cannot start instantly. This prevents them from providing realtime protection from momentary power loss. In some cases the UPS is designed to carry the load for just a few minutes until the backup generator can be turned on.

Vehicle-to-Grid (V2G) Storage. Major car manufacturers are developing electric vehicles (EVs) or plug-in hybrid electric vehicles (PHEVs) for launch in 2010-11. If analysts are correct, we will put tens of millions of PHEVs and EVs on the road in the next two decades. This makes the batteries in these vehicles potentially available for buffering peak electrical demand. EVs will be supplied with home-based smart charging stations that make sure that normal daily charging is done at night. In scenarios for commercial distributed generation, EVs will be topped off with power during the day by plugging them into solar panels in the company parking lot. These cars can charge themselves in the morning and then give some of the power back to the commercial building (or the utility) during the afternoon peak. Revenue sharing agreements between the employer (or building owners) and employees will be needed to equitably divide the benefits.

Thermal energy storage (not electrical) is the most cost-effective storage application based on current technology. In the future, V2G, hydrogen fuel cell generators, flywheels, and new battery systems show promise. In the smart grid, distributed energy storage represents another option for utilities to reduce peak demand by drawing on stored energy at critical points in time. Whatever its form, there is no doubt that distributed energy storage will grow in the future as new technologies are developed and commercialized.

Distributed Generation. Among commercial customers, distributed generation varies from putting up a token number of solar panels over the main entrance as a marketing ploy to investing hundreds of thousands of dollars in significant generating capacity.

As in the residential sector, rooftop solar PV is a common application. Commercial buildings often have large expanses of unshaded, flat roofs ideal for roof-mounted solar. Ground mounts can also be used where the land is spacious. Parking lots represent a great opportunity. Solar-PV can be combined with car-ports and parking garages to take advantage of the solar radiation that otherwise turns the parking lot into a heat island.

Southern California Edison (SCE) plans to install solar PV covering two square miles of existing commercial roofs with a total of 250 MW of capacity. Big-box stores such as Walmart and Kohl's are now generating a meaningful percentage of their electricity from solar and lowering their operating costs.

Rooftop wind is gaining attention among commercial customers but still faces questions about economic feasibility. Some new turbine designs are engineered for the gusty and turbulent conditions found on building rooftops. In partnership with MIT, the Boston Museum of Science put up several different rooftop wind turbines to compare their feasibility. Theoretically, these systems are well suited to the flat rooftops common on warehouses. The jury is still out on whether rooftop wind will be cost effective. Where land and wind are plentiful and high-rise towers are permitted, large commercial wind turbines can be installed. These are based on the same designs as used in utility-scale wind farms. Larger turbines are more cost-effective but they also require large initial investments and more specialized maintenance. For favorable sites, large wind turbine generation is less expensive than solar PV. In many cases, however, rooftop solar offers a better fit with commercial buildings.

Other technologies used for distributed generation include microhydro, bioenergy, fuel cells, gas microturbines, hydrogen, combined heat and power, and hybrid power systems. DOE's Distributed Energy Program website has the details.

I know that recent posts are getting long-winded, but we are laying a broad foundation for deeper analysis. Next we'll cover the residential side of smart grid energy management systems. With all the major applications identified, we'll be able to go deeper into the implications for privacy and security.

Posted by Carbon-Pros at 08:58 PM | Permalink | TrackBacks (0)

The complex distributed network to manage the smart grid involves grid optimization, automated transmission and distribution, and SCADA networks as part of the supply chain of bringing electric power to the consumer. Demand response systems and AMI networks enable new opportunities for peak energy shaving and shifting. Supporting systems include customer care and billing as well as mobile workforce management and asset management. New enterprise applications will require greater integration than in the past. Security will need to be improved to face new threats, both from external sources and from within the enterprise.

Below, we profile some of the utility enterprise applications that will need to be replaced or evolved to respond to the increasing level of sophistication of the grid.

Utility Enterprise Applications

Grid Optimization refers to the set of applications that automate the grid's sensor and control network. These typically include Transmission, Substation, and Distribution Automation along with the SCADA network. Together these applications provide the grid operations center with a realtime view of where the power is flowing, at what voltages, where the bottlenecks are building, and which lines are getting overheated (and therefore in danger of sagging into nearby trees). They know where power is needed and where an excess is being generated from rooftop solar systems. For example, Distribution Management Systems (DMS) can detect an electrical fault, determine its location, and open the nearest available switches to isolate the problem segment from the rest of the line. After further validation, these applications can automatically close switches to restore power to the undamaged parts of the line. This so called “grid optimization” lets the utility:

• respond to peak demand loads more efficiently
• identify outages more precisely
• restore power more quickly
• switch generation to cost-effective and low-carbon fuels
• re-route energy to avoid bottlenecks and unnecessary strain
• eliminate “truck rolls” with automated disconnects, reconnects, and troubleshooting

Supervisory Control And Data Acquisition (SCADA) generally refers to the computer systems for monitoring the flow of power across the grid. Today most utilities use SCADA to monitor their largest assets such as power plants and substations. Demands on SCADA will grow exponentially as the size of the sensor network increases. In the future, potentially millions of sensors and controllers will be deployed. In a smart grid, SCADA evolves beyond monitoring to include control functions. Automation of controls are necessary to provide the smart grid with self-healing capabilities. Functions include:

• Sensor data acquisition
• Real-time analytics
• Remote control of grid devices

Outage Management System (OMS) applications help utilities improve public safety, shorten restoration time, and reduce the costs of outages. This area may integrate several functions including trouble management, outage analysis, operations dispatch, crew management, and safety documentation. OMS functionality may be standalone or be absorbed into other grid optimization applications. Functions may include:

• Real-time monitoring
• Asset status
• Outage alerts
• Dispatch notification

• Handling multiple types of DR programs
• Remote control of customer premise devices on the HAN
• Verification of load reductions
• Communicate with customer care systems

Advanced Metering Infrastructure (AMI) and Meter Data Management (MDM) handle the greatly increased volume and complexity of meter data. Instead of monthly readings, AMI provides periodic readings around the clock. MDM applications support the loading, validation, editing, and estimation of meter data. Due to the very high volumes of data logged by smart meters, new MDM applications must achieve high levels of scalability. MDM may include functions such as:

• Connections to meter systems
• Meter data validation
• Error handling
• Estimations
• Meter data access
• Meter inventory management

Load Profiling and Settlement applications are used to settle energy purchases and sales across wholesale electricity markets. They may include functions such as:

• Validating meter data
• Making the necessary interval data calculations
• Automating information flows across applications
• Automate market settlements

• Enrollment in multiple products including multiple DR programs
• Billing for multiple products
• Transaction records and history
• Analytical tools
• General support for engaging with customers

Mobile Workforce Management (MWM) applications help ensure that field service delivery and maintenance are conducted in the most efficient way. Customer service representatives (CSRs), dispatchers, and technicians must be in sync with one another at all times. They need access to realtime status information to keep customers informed as appropriate. MWM applications manage information about service availability and automate field operations via dispatch, scheduling, and routing. Functions may include:

• Dispatch routing
• Automated field operations
• Operating expense management
• Embedded real-time scheduling
  

Enterprise Asset Management (EAM) applications provide real-time, enterprise-wide visibility into the status and location of grid assets. Geographic Information Systems (GIS) capabilities are often included to support locational awareness. Utilities have a massive investments in plant and equipment. Preventive and efficient maintenance can make a big difference to operations, in terms of productivity and expense control. EAM may include features such as:

• Real-time asset visibility and availability
• Maintenance scheduling
• Cost-tracking
• Capital asset management
• Warranty recovery
• GIS locators and tracking

As can be seen, utility IT data centers and grid operations grow in sophistication and complexity as intelligence is distributed throughout the grid. Enterprise applications will need to be carefully secured from attacks as will other components of the grid. Stay tuned for more discussion of security issues.

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In contrast to the legacy grid, the smart grid will be dominated by an “overlay” of two-way digital networks. Some elements are already in existence, but not on the scale envisioned in the smart grid. These new networks will be constructed using a broad array of technologies including fiber optics, hybrid-fiber coax, twisted pair, broadband over power line (BPL), and wireless technology such as WiMAX, Wi-Fi, ZigBee, and 3G cellular (see smart grid communication discussion).

There is a lot at stake. The smart grid can help us achieve nationally important goals such as energy security, climate mitigation, and technology leadership. But at the same time, the smart grid must help protect:

• Electricity flows (business continuity and society in general)
• Physical security of grid (electronic disruption of surveillance systems)
• Quality of service (voltage fluctuations, brownouts, etc.)
• Integrity of AMI and grid overlay networks (intrusion protection)
• Personal information (customer privacy)
• Financial flows (fraudulent meter and generation data)

There are many layers in a smart grid network. Each layer will employ a set of technologies chosen for their cost effectiveness considering factors such as functionality, reliability, security, and longevity. For this discussion, we consider several of the layers in a smart grid communication network. We have marked the HAN-AMI connection as layer 1. It may be tightly connected with layer 2, the neighborhood area network (NAN) which connects a number of meters to a data collection/aggregation point. Meter aggregation-to-backhaul is labeled as layer 3. And other networks include #4, the sensor network for transmission and distribution and #5, the backhaul network connecting the other networks with the utility operations center.

Smart Grid Communication Network

Network topologies will vary from utility to utility. In the design of smart grid networks, tradeoffs must and will be made. Urban implementations dictate different technology choices than rural implementations. The AMI layer requires different choices than the backhaul network. Every network layer and every technology represents a potential avenue for attack. Here are some of the major areas of vulnerability:

Legacy grid communications – The legacy grid already uses many different communication paths and protocols to connect utility operation centers with system operators such as ISOs and RTOs. Paths range from public networks such as plain old telephony and the Internet to private networks such as dedicated fiber links and leased microwave connections. A wide variety of data transfer protocols are used. Most existing protocols have some form of vulnerability or another. Some (but not all) of these vulnerabilities are in the process of being mitigated.

AMI security – Advanced meter infrastructure and its network of smart meters provides a foundation for smart grid (layers 1 & 2). With approximately 340 million meters in North America, AMI will represent a large part of the grid-overlay network. Research firm Parks Associates estimates that 8.3M smart meters have been installed in US homes, about 6% penetration. They project rapid growth to 13.6 million smart meters by 2010 and 33 million by 2011. AMI will be composed of many different networks; most of which will not be directly connected to one another. Meters are important not just for their massive numbers, but because they are at the outer edge of the utility's network and must be accessible for ongoing maintenance and operations. Once a meter is compromised it can be used to attack other parts of the network. 

Wireless networks  – Wireless is the preferred communication strategy for HAN and AMI because it offers ubiquitous and inexpensive connectivity. Mesh topologies add to its reliability by offering multi-path connections between in-home devices, meters, and data aggregation points. This applies to layers 1 & 2, and potentially to layer 3. Many of the protocols under consideration are still in the early stages of development. Without more extensive testing, we cannot know whether the manufacturers will implement the meter and AMI network in the most secure way. In the rush to market, it is reasonable to assume that short-cuts will be taken during development and testing.

Substations – Transmission and distribution substations contain many power control devices such as circuit breakers, transformers, capacitors, and monitoring devices. According to the US DOE, most transmission substations (81%) and distribution substations (57%) already have some form of automation (layer 4). Potential consequences of successful substation cyber attacks include the destruction of generators, power outages, and grid instability. The smart grid increases the level of automation in substations. Increasing the number of electronic control elements increases the potential vulnerabilities.

Sensor networks – Because grid optimization is an important part of the smart grid business case, the size of the sensor will grow rapidly. The new sensors will enhance the situational awareness of the grid and enable operators to react to power anomalies more quickly. The data collected by these sensors will be used to optimize control of the grid both within a utility and across the national grid. These sensors will help make the grid self-healing but the sensor network itself opens up an additional line of attack. Increasing the scope and scale of the sensor network (further expanding layer 4) increases the number of potential vulnerabilities.

Utility operations centers – The operations center is often ignored in discussions of smart grid security, but it is one of the most important elements of the network. Vulnerabilities can exist in the utility enterprise firewall, its enterprise applications, and/or its operator authentication and training systems. This makes the ops center vulnerable to a top-down attack from an intruder or to an insider-attack from a disgruntled employee. With the ops center having full control over every network element and every power system element, security will be paramount. For major utilities, this is already true today. However, the scale and complexity of enterprise software and data will grow with the smart grid. This further increases the utility's need for a strong electronic security force.

The risk of successful attack is difficult to assess because every part of the smart grid is in motion. The grid itself is in a constant state of evolution and will be for the foreseeable future. There is an ongoing dynamic between new attack methods and the development of new defenses. This can be seen in everyday life on the internet and regular updates to virus databases.

Resistance to attack is one of the defining characteristics of the smart grid vision. There must be a coordinated and ongoing effort to secure the smart grid as it is developed and deployed. This challenge is being taken seriously. NIST, DOE, EPRI, and major utilities are taking the lead. One piece of the puzzle is setting technical standards for different elements of grid security so that manufacturers can produce interoperable equipment. Bringing all these moving parts together will be no easy task. Stay tuned for more coverage.

Reference: http://www.inl.gov/scada/publications/d/securing_the_smart_grid_current_issues.pdf

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Electric power plants vary greatly. Their distinguishing characteristics include capacity, fuel, number of generating units, and generation flexibility. They are designed and operated to meet a specific part of the utility's load profile, generally categorized as base, intermediate, and peak. 

• A baseload generating unit satisfies all or part of the minimum or "base load" of electrical customer demand and, as a consequence, produces electricity at a relatively constant rate. These units run continuously 24x7 except for outages due to maintenance. Baseload units are generally the largest and most efficient, however, they do not have the flexibility to quickly turn their output up or down as demand changes. In the US, coal and nuclear are commonly used for baseload generation. Run-of-the-river hydro is used where available.
  

• A peakload generating unit is used to meet requirements during the periods of highest demand for electricity. These plants are the most flexible since their output can be quickly turned up or down to meet changes in customer demand. Their drawback is their higher operating costs. As a result, they are used only when needed. In the US, natural gas is commonly used for peakload generation. Stored hydro is also used where available.
  

• Intermediate-load generating units have characteristics that fall in between the other two. They are used during the transition between baseload and peak load demand.

Sources: Enertyr and EIA, 2009

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Instead of superheated water, hydroelectric generators use the pressure from gravity pulling water through a pipe to turn blades in a turbine. The turbine spins a generator to produce electricity. Stored water is released from reservoirs created by dams in a "falling water" hydro system. Alternatively, the force of a river current can be used to turn a turbine in "run-of-the-river" systems.

Coal, gas, and nuclear are the "big three" fuels in US electricity generation. Together they are used to generate about 90% of our electricity. Hydro is a respectable fourth. Renewables, especially wind, are the fastest growing sources of electricity, but they are dwarfed by the big three.  

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In my last post, I mentioned that we are collaborating with Securosis to take a detailed look at end-to-end security across the smart grid. I told you they were really good and that I was excited about the collaboration. Now that I have a few minutes to spare I can tell you why.

Rich and I go way back. I was a professor at the University of Colorado for eleven years through 1998. As a teacher, good students come and go. On the Boulder campus, I was lucky to have a lot of great students in my information technology classes. Many have gone on to build great high-tech companies.

Every few years, however, you get someone in class who is so talented and so much fun that you don't want to let them go. That's how I feel about Rich. He's got world-class talent, high integrity, and he's too much fun to let go. Over the past dozen years Rich and I have collaborated to produce online training for O'Reilly, start a successful e-commerce business, build a client-base in Europe, and rock the establishment at Gartner. And we had a blast working together on each project. Needless to say, I am thrilled to have Rich's firm as our research partner on grid security. As you read Securosis' work in the weeks ahead you'll see why. Below you can read the blurb Rich wanted me to post, but now you know the story behind our collaboration.

Securosis is an information security research and advisory firm dedicated to transparency, objectivity, and quality. It was founded in 2007 by Rich Mogull, who was Research Vice President at Gartner. Securosis works with some of the biggest (and smallest) companies in the security industry, providing users, vendors, and investors with clear, pragmatic advice on improving security without breaking the budget.

In upcoming posts Rich and I will lay out our research agenda and outline our report(s). Please read Rich's kick-off post at the Securosis blog. But do me a favor and skip the first few paragraphs. ;-)

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Electricity is fundamental to modern life. It fuels our government, the military, our hospitals, businesses, and homes. In the future it may power significant parts of our transportation fleet. Glancing at the figure, it's hard to imagine social continuity without a reliable supply of electricity.

Concern about grid security is nothing new. There has long been a danger from terrorists blowing up key substations and taking out large blocks of electricity consumers. The US federal government admits that the legacy grid is also susceptible to electronic attacks from cyberspace. In 2009, reports surfaced that unidentified assailants had infiltrated the U.S. electrical grid and left behind programs that could be used to disrupt the system.

The vulnerability of the grid represents a threat to national security and business continuity. Maintaining electrical service in the event of a crisis is crucial. Major military bases can isolate themselves from the grid and run off their own private generators and microgrids. But even the military would experience disruptions from civilian supply breakdowns in the event of regional blackouts. Businesses are the lifeblood of the economy and need to be able to continue operations. The economic impact of a grid failure can be enormous. The economic losses attributed to the 2003 blackout were at least $10 billion.

Given its reliance on digital networks, there is concern that smart grid will be even more vulnerable to cyber attack. Massive power outages caused by a cyber attack, could disrupt the economy, camouflage a military attack, or spread fear and panic. Bruce Willis' movie Die Hard 4 brought the specter of grid hijacking to the mass Hollywood audience. When designed properly, nothing like the movie will ever happen.

The Energy Independence and Security Act of 2007 directs federal agencies to support the modernization of the grid, including cyber security. The Department of Homeland Security (DHS) works with the utility industry to identify and minimize grid vulnerabilities. They are also working to ensure that security is built into the smart grid as it develops. The top-level regulator, Federal Energy Regulatory Commission (FERC), coordinates work across agencies. The Department of Energy (DOE) specifically requires all smart grid projects funded with stimulus dollars to include privacy and security measures in their proposals. The Electric Power Research Institute (EPRI) is working with the National Institute for Standards and Technology (NIST) to set standards for smart grid development. Together, they are responsible for leading the effort to establish electronic security standards.

AMI ties together the meters on the smart grid for a given utility and a given service territory. One of the things that makes a new digital meters “smart” is the ability to transmit and receive information from its (private) digital network connection. The network connection is used to read the meter remotely. In older designs, utility meter readers would drive down the street with a digital receiver automatically recording data from each meter. In the smart grid, these readings will be sent upstream through the grid's digital overlay network for permanent recording at the utility operation center. Data capture, transmission, and recording leads to concerns about privacy.

Privacy. Smart Grid technology potentially lets your utility know who, what, when, where, how much electrical stuff you are doing inside your home. Instead of simply logging a running total for electricity usage, smart meters will log data with a date, time, and usage every 15 to 60 minutes. They will also collect power quality data such as voltage, phase, and frequency. They can also gather detailed operating information from networked thermostats, smart appliances, vehicle chargers, and anything else on the home area network.

This is all for the good. The utility can use this information to help its customers reduce their energy use and save money. Appliance manufacturers will be able to remotely diagnose problems so they can send a repair professional with the right parts. Medical device manufacturers will do the same. Over time, the scope and scale of organizations wanting access to meter data will grow (think law enforcement, public safety, social services, insurance companies, etc.). But where there is light, there is dark. And it's the bad guys we worry about.

Smart grid surveillance will be a concern to consumers wishing to maintain a high degree of privacy. But it should be a concern to anyone who might not want the bad guys to know when they are away from home. Access to meter data gives potential burglars an electronic profile of daily activities otherwise hidden inside the home. The bad guys would be able to “case the joint” remotely. In competitive electricity markets, competing utilities could try to get this data for industrial espionage to attract and retain the most profitable customers. Just as the Internet enabled new threats such as identity-theft, the future will bring new ways to exploit meter data.

Security. Going beyond privacy, the current generation of smart meters have much more functionality than old ones. Burglars, terrorists, and others with political agendas could use unauthorized access to AMI command and control systems to disrupt the delivery of services, create blackouts, disrupt load balancing commands, or create fear and panic. Crackers may be interested in breaking into command and control systems for personal satisfaction and/or bragging rights.

Some utilities will use the meter network connection to connect and disconnect electrical service. It's a money-saving extension to meter reading. This leads to speculation about the potential for “drive-by blackouts” in which a vehicle-mounted device could break into a wireless meter network and send commands to shut-off service. Since the meter network is localized at the neighborhood level, these would be relatively small-scale problems. If the attackers were to break into the network at the utility operations center, disconnect commands could (theoretically) be issued system-wide. Even still, electricity distribution is highly decentralized across thousands of utilities. So an attack on one utility will not necessarily take out other utilities.

With proper security in place, smart meter deployments and grid optimization should make the grid stronger and more resilient. Much of the grid is already automated but with older technology that may not be able to withstand new types of electronic threats. The smart grid's advanced capabilities will allow utilities to anticipate problems and mitigate its effects on the system. It will support broad use of distributed generation and storage. These will give some customers the capability to operate in island mode, isolating themselves from the public grid.

There is a lot of work to do in the area of grid security and privacy. It is crucial to confront and solve problems during the development phase. It won't be easy, but given that we successfully run our government, the military, our hospitals, and businesses on computer and communications technology, we have the intelligence and the technology to surmount similar challenges on the smart grid.

Stay tuned for continuing in-depth analysis of grid security. Carbon-Pros is pleased to announce that we are partnering with Securosis for in-depth security research on the smart grid. These guys are good! This is an exciting collaboration, details will be announced soon. Meanwhile check out their blog at securosis.com/blog.

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Electric power is the rate at which electricity does work. This is measured at a single point in time so it has no time dimension. The unit of measure for electric power is a watt (W). Watts are usually billed in blocks of a thousand known as a kilowatt (kW). The maximum amount of electric power that a piece of equipment can accommodate is the capacity of that equipment. Power plants are rated based on their maximum capacity, usually in megawatts (MW) or gigawatts (GW).

Electric energy is the amount of work that can be done by electricity. The unit of measure for electric energy is a watthour (Wh) with billing usually in blocks of one thousand known as a kilowatthour (kWh = 1,000 Wh). Electric energy is measured over a period of time and therefore has both energy and time dimensions. The amount of electric energy produced or used during a specified period of time by a piece of electrical equipment is referred to as generation or consumption. Larger units of work can be expressed as megawatthours (MWh = 1,000 kWh) or gigawatthours (GWh = 1,000 MWh). A large-scale unit of work used by national reporting agencies is terawatt-year (TWyr).

Energy units can be converted from one type of energy to another. For example, the energy in electric power can be converted to the energy in heat. Utilities usually bill natural gas consumption in therms. A therm is a unit of heat equal to 100,000 British thermal units (BTU). It is approximately the energy equivalent of burning 100 cubic feet of natural gas. National reporting agencies often report total energy consumption in quadrillions of BTUs or quads.

Posted by Carbon-Pros at 06:00 AM | Permalink | TrackBacks (0)

Telecommunications technology is advancing so rapidly that there is considerable FUD factor (fear, uncertainty, and doubt) in the idea of locking in your communications strategy for 20 years. So the Telco says to the Utilityco: no worries, just outsource your grid communications to us!

Given the past problems with BPL and the expense of optical cable, wireless is attractive for avoiding the expense of adding relays and/or stringing new cable. Last week, we reviewed ZigBee as the emerging standard for short-range, wireless networks in the home and for aggregating data across the meters in a neighborhood. Here, we review the use of 3G cellular networks for wireless smart grid connectivity.

Third-generation (3G) cellular networks carry high-speed data as well as voice. They give your smartphone the ability to do email and surf the web. 3G is a collection of communication technologies including GSM EDGE, UMTS, HSPA, and CDMA2000 (details on Wiki). 3G supports data rates up to 14.4 megabits for downlink and 5.8 megabits for uplink. You'll never see these speeds on your smartphone, those speeds apply to stationary devices such as will be used on the grid. The two largest wireless carriers in the US use different versions of 3G. AT&T uses UMTS and Verizon Wireless uses CDMA2000. As you know from switching cell phone providers, their gear is not interoperable. Standards groups are already working on the next-generation (4G) which uses an all-IP infrastructure and achieves gigabit speeds

Smart grid deployments use the cellular network for machine-to-machine communication (M2M). This market it heating up. Verizon Wireless and Qualcomm have formed a joint venture to provide M2M wireless services to a wide range of markets including medical monitoring, consumer electronics, and utilities.

One approach is to embed tiny cell phone SIM cards into the meters. The meter uses the SIM card to communicate with software applications on the network and at the utility operations center. In some architectures, groups of meters will communicate via powerline with one meter acting as a router and using its SIM card to send data from the group to the utility backhaul network. Another approach is to use short-range wireless to aggregate a group of meters and put the cellular connection on the meter aggregator. The strength of cellular is the ability to install a connection anywhere it is needed on the grid. This could be at the meter, aggregator, substation, or anywhere in between. The architecture will vary for urban and rural environments.

3G cellular networks may be the fastest way for utilities to deploy a digital network. Major wireless carriers can connect grid assets such as meters, breakers, transformers and substations directly to the utility operations center. This minimizes up-front deployment costs and turns over network maintenance to the carrier who can do it cost-effectively. That said, the tilities are accustomed to financing infrastructure on 40-year life cycles. They know that in the long-run, it may be cheaper to build and own their own network. Cellular may prove too expensive to become the dominant solution but it will certainly be valuable for some utilities in some parts of their network. And if the wireless carriers drop their rates low enough, they could become major players.

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Wi-Fi has a lot going for it, but is still searching for a clear role in the smart grid. It is too expensive and power-hungry for many types of meters, sensors, and switches but it lacks the range to serve as a general-purpose backhaul network (with the exception high-density urban areas). Wi-Fi falls short of ZigBee inside the home and it falls short of WiMAX across the neighborhood. Different companies are working on solving both of these problems.

SkyPilot, makes a turbo-charged version of Wi-Fi that promises a range of up to 10 miles. That might remind you of WiMAX. Indeed, SkyPilot takes standard Wi-Fi chips and makes them look like WiMAX in terms of range and capacity. This development potentially puts Wi-Fi into the meter aggregation, backhaul part of the network. If Wi-Fi proves reliable in this role, it could be less expensive than cellular or WiMAX.

Trilliant supplies radio communications cards that go into meters and software for utilities to run these networks. Trilliant recently purchased SkyPilot. Trilliant said the acquisition complements its short-range technology (based on Zigbee) to link meter collection points.

Tropos places 1-2 Wi-Fi routers per square mile (less dense than a municipal Wi-Fi network). The Wi-Fi devices sit between the meter and the utility operations center. Tropos' equipment works with smart-meters from Itron, Elster and Echelon.

Cisco has been building municipal Wi-Fi networks since 2005 and plans to incorporate energy management features into Wi-Fi access points and other devices. They will certainly look at outdoor Wi-Fi networks as an adjacent market opportunity.

Duke Energy, the giant utility, has said it is planning to use Wi-Fi in its suite of communication technologies but they have not announced the details.

Wi-Fi is also being positioned to challenge ZigBee in the home-area-network (HAN). GainSpan, with funding from Intel, is producing a low-power Wi-Fi system-on-chip. It targets applications such as energy management and building automation using battery powered devices. This is right on top of ZigBee's space.

For now, Wi-Fi will retain its current role as the leading technology for wireless LANs. It remains a dark-horse within the smart grid communications landscape. We'll keep an eye on it, as this race is far from over.

Posted by Carbon-Pros at 06:00 AM | Permalink | Comments (1) | TrackBacks (0)

ZigBee is a registered trademark of the ZigBee Alliance, the industry association and standards body which guides definition of the protocols and promotes applications. For example, it publishes technical application profiles to assist suppliers in creating interoperable products. To give you and idea of the range of ZigBee applications, current profiles include:

• Home Automation
• ZigBee Smart Energy
• Commercial Building Automation
• Telecommunication Applications
• Personal, Home, and Hospital Care

ZigBee operates in the ISM radio bands of 915MHz in the US, 868MHz in Europe, and 2.4 GHz in most jurisdictions worldwide. New designs placing all functionality on one chip reduce ZigBee's footprint and increase its reliability. The cost of this system-on-chip (SoC) is expected to fall to a few dollars at volume.

ZigBee's role in the smart grid will be to power the home area network (HAN) and related networks for commercial and industrial buildings. In the residential sector, this includes in-home displays, thermostats, plugs, appliances, electric vehicle chargers, and utility meter(s). ZigBee will also support home automation, home health monitoring, and security systems but those applications should not be confused with smart grid applications.

The ZigBee Smart Energy Profile defines the standard behaviors of smart grid devices. Utilities could potentially use it as their primary standard for AMI-HAN communication. Tendril Networks, GridPoint, Itron, and many other smart grid suppliers employ ZigBee in their customer premise equipment. Due to its broad scope, ZigBee could become the defacto global standard for sensor and control networks.

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WiMAX supports long range connections, covering 10s of kilometers, similar to a cell phone tower. It uses licensed or unlicensed spectrum to deliver point-to-point connections. IEEE 802.16 standards define mobile and fixed access. Typical speeds are on the order of 1-3 megabits. WiMAX is an emerging technology. Unit costs are in the 100's of dollars.

Wi-Fi supports short range connections, covering 10s of meters. It uses unlicensed spectrum to provide access to a local area network (LAN), typically covering a home, small office, or a public space. It is based on IEEE 802.11 standards. Wi-Fi is often used to access a private network, which is usually connected to the Internet. Typical speeds are on the order of 10-100 megabits. Wi-Fi is ubiquitous and is embedded in desktop computers, laptops, printers, smartphones, gaming devices, and others. Unit costs are in the 10's of dollars.

ZigBee also supports short-range connections, covering 10s of meters. It is based on IEEE 802.15 standards and engineered for use in low-bandwidth applications where cost, battery life, and security are at a premium. ZigBee targets large-scale, low cost deployments such as monitoring and control. Connection speeds are in the range of 10 to 250 kilobits. Batteries can last for years. Unit costs are a few dollars.

If you think of WiMAX connections as similar to cell phones, then Wi-Fi connections are similar to cordless phones, and ZigBee connections are similar to digital watches with wireless heart rate monitors. 

Wi-Fi and WiMAX trade-off range versus speed. Wi-Fi and ZigBee trade-off cost and power consumption versus speed. All three can be successfully combined to take advantage of their complementary strengths. For example, ZigBee can be used to provide local access to tiny devices such as thermostats and light switches. Wi-Fi can be used to provide local access bandwidth-hungry devices such as laptops and home entertainment systems. WiMAX can connect with both and be used to provide long range backhaul capabilities. Together, they form a three-tier wireless wide-area-network. Since the smart grid is designed for sense and control applications, ZigBee and WiMAX make a good combination for utilities. WiMAX eliminates the need for intermediate collection points since it can go directly into the home. Wi-Fi will also be operating within many customer premises, but it will not necessarily interconnect with the ZigBee network unless the utility has specific applications that require it.

There is more to the smart grid connection puzzle than meets the eye. Stay tuned.

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You may have never heard of Worldwide Interoperability for Microwave Access, but you probably have heard of WiMAX. This promising technology might be the solution for providing broadband wireless access over the troublesome “last mile” to the home and office. This technology for broadband wireless access is based on IEEE 802.16 standards. The strength of WiMAX is best understood by comparing it with more mature technologies such as WiFi and 3G cell networks. WiFi, for example, works at high speed but only at short range. It delivers megabit speeds while you are near the access point, but it fails as you move 10 to 20 meters away. 3G cellular networks such as GSM, UMTS, and HSPA work at lower speeds but at much longer range. They are used with smart phones and engineered to emphasize mobility over speed. The chart at the right shows WiMAX falling into a sweet spot between WiFi and the 3G technologies. Given its unique combination of range and speed, WiMAX has promise for many applications:

• Connecting WiFi hotspots to the Internet
• Wireless alternative to cable and DSL for broadband Internet access
• Providing portable connectivity to mobile devices
• Rapid recovery of communication following natural disasters
• Connecting data from meters and home area networks on the smart grid

WiMAX can either operate at higher bitrates (20+ megabits) or over longer distances (20+ miles) but not both. Most WiMAX networks run between 1-3 Mbps. WiMAX has built-in algorithms for reducing contention problems, especially for distant network nodes and during peak traffic periods. Like most wireless systems, available bandwidth is shared between users in a given radio sector, so performance deteriorates with the number of connections in a sector.

The technology has some history and momentum. The WiMAX Forum is the industry association promoting the adoption of WiMAX compatible products and services. One of their major roles is to certify device interoperability across suppliers. Grid Net, backed by GE, is focused on using WiMAX to connect smart meters to utility back offices. GE produces a WiMAX smart meter. Intel produces chips and is a major supporter of the standard.

Even if adopted widely, WiMAX will be deployed alongside other communication technologies. Here is one scenario. Inside the home, ZigBee and/or WiFi appliances connect to a base station and from there to a WiMAX smart meter. The meter connects with a neighborhood WiMAX node. The neighborhood node collects electricity usage from many consumers and relays it to the utility backhaul network for long-distance transport.

Going wireless the last mile offers many advantages. It eliminates the speed bottleneck of broadband powerline (BPL), it can be simpler to install, and it provides a future-proof connection to support utility application bandwidth requirements for decades into the future.

Right now, most utilities are deploying low-bandwidth wireless for the last mile, since its hundred-kilobit speeds are sufficient for today's energy management applications. But as more complex applications are brought online, and as smart meters scale into the tens of millions, extra bandwidth will be required. Grid optimization, for example, requires very fast response times to react to real-time grid sensors and to make instantaneous decisions for routing power across the distribution network.

The catch for utilities is that WiMAX remains a technology of the future, even if it's the near future. Developmental issues include still evolving standards, too few technology suppliers, and limited network deployments. Utilities don't necessarily require widespread national deployment because they can set up their own private network. Lack of national deployments, however, does not inspire confidence.

WiMAX could solve a very important piece of the smart grid communication puzzle. In WiMAX, utilities are exposed to the risks of early adoption. But they can also reward themselves by future-proofing the troublesome last-mile. That's a risk/reward that cuts both ways.

Posted by Carbon-Pros at 06:00 AM | Permalink | TrackBacks (0)

Some of the major telephone companies are rebuilding their copper networks with fiber to the home (FTTH). Telcos justify the investment as a way to retain telephone customers, attract and retain internet customers, and sell new services such as high-definition video on demand. The telcos aging infrastructure based on twisted-pair copper wire is no match for their future bandwidth requirements.

Here are the fiber deployments (FTTH) in North America as of 1Q2009 (source FTTH Council):

• 15.2 million homes passed
• 4.4 million homes connected (~3.3M by telcos, mostly Verizon)
• 2.7 million homes receive video over fiber
• connections growing at 1.5 million homes per year
• “take rate” is an impressive 32%
• annual growth rate is 52%

By contrast, BPL is used in about 5,000 homes. Clearly fiber optics has succeeded in the competitive market where BPL has not. 

Fiber can be used as the backhaul network for BPL. In that case, fiber is brought to a location near each electrical transformer, which blocks BPL signals. If the fiber is close enough, a single device can be used to bridge directly to the customer's electrical service. This potentially makes gigabit speeds available at every AC outlet in the home (or office) using the soon to be available G.hn.

G.hn is the next generation standard for legacy-wire home networking. It achieves gigabit per second sppeds and operates over existing wires for telephone, cable TV and electrical power. This new technology specifies the physical layer for the connection. It contains optimization algorithms that maximize performance when operating over each type of wire. Analysts believe that G.hn-compliant chips will be available during 2010 with equipment available before 2011.

While it will be expensive for utilities to install any type of dedicated line, at least fiber optics poses no bandwidth limitations for the foreseeable future. It is future proof. FTTH will be difficult to cost-justify solely for smart grid applications because most smart grid applications do not currently require high bandwidth. Yet, with utilities accustomed to building infrastructure with 50-year life cycles, fiber fits with their long-range strategic thrust to “build once and build well.” At least in urban areas, you can count on the more farsighted utilities to use fiber as part of their grid overlay.

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Current data are revealing (courtesy of Pew Internet). As of 2009, US homes connect to the Internet in the following ways:

• Cable – 41% (46 million households)
• DSL – 33% (37M households)
• Sat/fixed wireless – 17% (19M households)
• BPL is used in about 5,000 households. That's about zero percent.

BPL has failed to achieve meaningful penetration for a number of reasons. First, power lines are inherently noisy. Devices such as switches, relays, transistors, and rectifiers create disturbances on the line. Some devices add harmonics. PLC must be engineered to work around these signaling disruptions. Second, PLC signals cannot readily pass through transformers because they act as line filters, blocking high-frequency signals. Repeaters are needed to bypass every transformer. These often consist of three stages, a filter in series with a protection stage, and a coupler. Third, PLC signals do not propagate long distances necessitating even more repeaters on runs greater than one mile. Fourth, the initial costs for PLC are high and the maintenance costs are uncertain. The cost-benefit is questionable when considering its moderate (mid-band) data transfer speeds. Fourth, PLC can interfere with ham-radio signals and has been confronted with legal challenges from the ham-radio community. Finally, utilities may not have the risk tolerance to compete with telcos. Most operate as regulated monopolies so they tend to become shy when they move outside the regulatory guarantees that insure their profitability.

Even with these obstacles, there is little doubt that PLC/BPL will play a role in the smart grid. It might play a supporting role, however, in combination with other technologies. For example, BPL can be combined with wireless by hanging WiFi (or cellular) access points on utility poles. In Boulder's Smart Grid City, Xcel Energy uses BPL in combination with short-range radio links. BPL carries data from meters, thermostats, and renewable-energy systems. Signals flow along the power lines for about a half-mile before being shunted to a fiber-optic (or cellular) backhaul network.

In the future, BPL will also be used in combination with WiMAX (long-range broadband) networks. So even on the power-line itself, communication is not a simple matter. No one knows for sure which communication technologies will dominate the smart grid. Most utilities will only have one chance to get it right. Stay tuned for more.

Posted by Carbon-Pros at 08:34 AM | Permalink | TrackBacks (0)

• http://www.gridweek.com/2009/default.asp
• Major event, don't miss it.

Smart Grid News (SGN)

• http://www.smartgridnews.com/
• Industry news, supplier and product evaluation, company background, well-staffed and written. Want product details and benchmarks? SGN has it. Want the latest news? Register with SGN.
• Noteworthy: SGN's Product Scorecard

Green Tech Media (GTM)

• http://www.greentechmedia.com/channel/gridtech/
• Well organized coverage of smart grid technologies including T&D, AMI, HAN, Storage, and applications. Want relevant news and research? GTM has it.
• Noteworthy: Hacking the Grid

GTM Research

• http://www.gtmresearch.com/
• Financial and market analyses, sector forecasts, emerging (clean tech) market reports, renewable energy coverage. Offers both free and paid reports. Very insightful.
• Noteworthy: The Smart Grid in 2010 (145 pages)

Green Biz

• http://www.greenbiz.com/browse/energy-climate
• Covers the business of energy and climate (among others). A general resource connecting smart grid with business sustainability issues. Looking for broad non-technical coverage? GreenBiz is your place.
• Noteworthy: State of Green Business

Clean Edge

• http://www.cleanedge.com/
• Broad market and company coverage including smart grid, energy efficiency, renewables, and low carbon-transportation. Want to hear the investors perspective? Visit CleanEdge.
• Noteworthy: Clean Energy Trends 2009 (links to in-depth PDF)

Electric Power Research Institute (EPRI)

• http://my.epri.com/
• Industry trade organization performing R&D for the electricity sector. A wealth of research on all aspects of the electrical supply chain. Need to understand the utilities perspective? This is the place.
• Noteworthy: The Green Grid
  
• and Demand Response and Energy Efficiency

National Electrical Manufacturer Association (NEMA)

• http://www.nema.org/gov/energy/smartgrid/
• Industry trade association for suppliers to the electricity value chain. Since the smart grid requires so many new products, smart grid is a hot topic at NEMA. Need the suppliers perspective? Visit NEMA.
• Noteworthy: Levels of Intelligence on the Smart Grid (overview, deep dive also available)

Federal Energy Regulatory Commission (FERC)

• http://www.ferc.gov/
• Want to wade into the details of the US regulatory environment? This site provides the final word.
• Noteworthy: FERC's Smart Grid Coverage

US Department of Energy (DOE)

• http://www.oe.energy.gov/smartgrid.htm
• Funding ($$$$), research, data, forecasts, publications, and tutorials. A gold mine with too many resources to mention. Spend time on the DOEs website.
• Noteworthy: DOE's Smart Grid Introduction

Energy Information Administration (EIA)

• http://www.eia.doe.gov/
• Covers all forms of energy with forecasts and data. Primarily US coverage but has some international data. Want data? And more data? EIA has it.
• Noteworthy: Electric Power Industry Overview
•  and Electric Power Industry Companies (comprehensive list)

International Energy Agency (IEA)

• http://www.iea.org/
• Like the US-based EIA, this covers all forms of energy with forecasts and data. Want international data? IEA has it.
• Noteworthy: World Energy Outlook

National Renewable Energy Laboratory (NREL)

• http://www.nrel.gov/eis/
• NREL covers much more than renewables. Coverage includes electric infrastructure systems research, distributed generation, and electricity reliability. They offer reports, data, and software models.
• Noteworthy: Energy Management and Grid Support Applications

• http://www.nist.gov/smartgrid/
• Coordinates development of standards and protocols to achieve interoperability of smart grid devices.
• Noteworthy: Smart Grid Standards (overview)
• and NIST/EPRI Standards Roadmap (270 pages)

Interested in smart grid security and privacy?
Start with these articles and reports.

• Hacking the Grid (overview)
• Thee Dangers of Meter Data (overview)
• Smart Grid Security Requirements (overview)
• AMI System Security Requirements (115 pages)
• White House Cyberspace Policy Review (76 pages)

Posted by Carbon-Pros at 06:00 AM | Permalink | TrackBacks (0)

I don't often post articles from other sources, but this one appearing in the Washington Post, and written by John Doerr (Kleiner Perkins) and Jeff Immelt (GE) is worth repeating. These two business gurus make a compelling case that the US needs to step up its leadership in green technology. Here are their recommendations:

• Send a long-term signal that low-carbon energy is valuable. We must put a price on carbon and a cap on carbon emissions. No long-term signal means no serious innovation at scale, which means fewer American success stories.
• Get the rules of the road right for utilities. We must make our utilities a driving force for repowering America, driving efficiency through incentives, a renewable electricity standard and a national unified smart grid.
• Set energy standards that grow steadily stronger. America should strive to have the most efficient buildings, cars and appliances in the world. The savings will land in the pockets of U.S. consumers and businesses.
• Get serious about funding research, development and deployment, at scale. The federal government currently spends only $2.5 billion on clean-energy R&D a year -- 0.25 percent of our annual energy bill. Sen. Jeff Bingaman's Clean Energy Deployment Administration is a good idea that would be fast and flexible. But more such programs are needed.
• Fulfill President Obama's commitment to "become the world's leading exporter of renewable energy." We need a robust trade policy that seeks to open markets abroad -- including the Chinese market -- for U.S. clean-energy products through new trade agreements. Such policies unleash American competitiveness disciplined by market forces. This is widely endorsed by U.S. companies that compete internationally and by the broad-based President's Economic Recovery Advisory Board.

The article can be found at The Washington Post. Highly recommended reading.

p.s. On Monday Aug 10, we will publish a set of "starter resources" for professionals interested in delving deeper into smart grid technologies. Have a great weekend!

Posted by Carbon-Pros at 04:41 PM | Permalink | TrackBacks (0)

eTec as been selected for a grant of nearly $100 million to deploy the charging infrastructure for 1000s of EVs. This will be the largest EV pilot project announced to date. eTech brings its smart charging technology to the project. Nissan USA will match the DOE grant by providing 1000 vehicles. The Nissan Leaf is a 100% electric vehicle, not a hybrid (see post on low-carbon transportation).

Infrastructure testing will take place in five states including Arizona (eTec's HQ) Tennessee (Nissan USA's HQ), California (with its Clean Cars law), Oregon (a dark green state), and Washington (both green and high-tech). All are logical choices, with state governments ready to support this project and boost local business participation. The cities involved are likely to include Phoenix and Tucson (AZ), San Diego (CA), Portland, Eugene, Salem, and Corvallis (OR), Seattle (WA), Nashville, Knoxville and Chattanooga (TN). 

Here are some of the key features that make this project important:

• Large-scale footprint spread across fives states and 1000s of state-of-the-art EVs.
• Build-out of 2,500 charging stations in the selected markets.
• Deployment of 12,500 Level 2 (220V) and 250 Level 3 (fast-charge) charging systems.
• Field testing EVs in diverse topographic and climatic conditions.
• Tests the effectiveness of charge infrastructure in the real world.
• Experiments with revenue systems for commercial and public charge infrastructure.

Let's face it, if EVs are to become mainstream we need to jump start our charging infrastructure. We will track this project with great interest.

Posted by Carbon-Pros at 06:00 AM | Permalink | TrackBacks (0)

Stage four of smart grid, smart home begs a question about the reality of low-carbon transportation. There are more skeptics about electric vehicles (EVs) than about climate change. Despite this, I strongly believe that we entering a decade-long transition towards low-carbon vehicles. EVs in particular will be cleaner, quieter, and fun to drive. The technology-base for EVs will mature rapidly. They will be less expensive to operate and in time they will be less expensive to purchase. As a side-benefit, they will boost energy security and mitigate climate change. Right now, hybrid electric vehicles (HEVs) such as the Prius, Insight, and Focus represent the industry standard. That standard will evolve rapidly over the next 18 months. The next generation of vehicles represents a quantum leap in automotive engineering.

Today's HEVs recycle power from regenerative braking to charge a conventional battery pack. During stop-and-go traffic the batteries are engaged to increase fuel efficiency. The electric motor serves as a booster to the primary drivetrain powered by a conventional gasoline engine. By contrast, PHEVs and EVs will draw power from the grid and enable the vehicle to squeeze more miles out of each gallon of gas, *if* they use any at gas at all. These vehicles will have larger, more powerful battery packs using nickel-metal hydride and lithium-ion technology.

Among the majors, some manufacturers are taking an evolutionary approach, others are taking a revolutionary leap. Future power-train design will be different than today. Only time will tell which designs become dominant. Here are three examples representing a range of thinking about the future of low-carbon transportation:

• Toyota is taking the evolutionary path. The 2010 Toyota Prius is a plug-in hybrid electric vehicle (PHEV) based on the popular Prius design. Like current model, the plug-in version uses its 1.8 liter internal combustion engine as the primary drive. It has a nickel-metal hydride battery pack to store a few kWh of power from the grid (details). The gasoline engine provides 98HP while the electric motor provides 34HP. The electric motor serves as a booster to the gasoline engine, kicking in during stop-and-go traffic, on up-hills, and in reverse. The electric boost improves the Prius' gas mileage in the city, making it comparable to its highway mileage. This increases gas mileage to 50MPG (from 46MPG for non-plug-in models with 1.5kWh batteries). Due to a design favoring the gasoline engine, the Prius-10 may only have an electric range of 12-18 miles. The 3rd generation Prius is an important step forward but it remains a gasoline-based vehicle. Of the advanced designs, it is a sure bet to hit the market in 2010. Of the three cars discussed, this is the one you can order right now.
  

• General Motors is reversing Toyota's logic. The Chevy Volt is a PHEV with much more powerful batteries. The Volt uses the electric motor as its primary drive. Its small internal combustion engine serves as an on-board charging station to extend the driving range of its 16kWh lithium-ion batteries (details). With a battery-electric range of 40 miles most trips will be made on 100% electricity. For longer trips, the gas engine will kick in, adding a few hundred miles to the driving range. The Volt represents a step into the future because it is based on a battery-electric drive train. If successful, it positions GM with a platform that provides extended driving range today and can evolve into a 100% electric car in the future.
  

• Nissan is taking the revolutionary road. The Nissan Leaf is not a hybrid. It eliminates the internal combustion engine and gas tank. The Leaf is a 100% EV with an expected range of 100 miles. Its all-electric design makes the car mechanically simpler, 100s of pounds lighter, and less expensive. Nissan betting that its lithium-ion battery technology will provide a market-leading range of 100 miles (details). Just as important, they are developing a smart charging system to recharge the batteries in 15 minutes, about the same time as it takes to fill-up with a tank of gas. The battery packs 24kWh of energy storage with a maximum output of 90kW. That's enough juice to power an average US home all day long. Nissan is betting that battery technology will progress rapidly over the next few years and that mass-production will drive battery prices down. In the Leaf, Nissan is leapfrogging its competitors into the future of low-carbon transportation.
  

Let's hope that all three of these vehicles (and their competitors) stay on track for release next year. In addition to the three profiled above, Ford, Chrysler, Mercedes Smart, and dozens of small companies will hit the market by 2011. More low-carbon choices for consumers mean more ways to gain energy security and more ways to to mitigate climate change. As automotive history gets rewritten over the next decade, 2010 will go down as a very important year.

Posted by Carbon-Pros at 07:00 AM | Permalink | TrackBacks (0)

Stage four represents the long-term view. Yesterday we covered stage three, utility-scale power storage systems. Today, we cover two additional advanced components of the smart grid: 1) using electric vehicles (EVs) as part of the grid's storage infrastructure and 2) supporting energy trading markets with real-time pricing.

Globally, every major car manufacturer is developing EVs or plug-in hybrid electric vehicles (PHEVs). Next year Nissan, will bring to market an EV named "Leaf." Nissan estimates that 10% of all vehicles will be electric by 2020. Germany aims to have a million plug-ins by that time. If automotive analysts are correct, we will put tens of millions of PHEVs and EVs on the road in the next two decades. This makes the batteries in these vehicles potentially available for buffering peak electrical demand. Most EVs will be charged at night and will store enough power to let the utilities draw on battery power during peak demand.

A challenge will be the development of smart charging stations that balance the customer's need for driving range with the utility's desire to borrow power during peak periods. It may seem futuristic but in less than 18 months, Nissan's Leaf will have many of the components needed for connection to the smart grid. The car includes network connectivity so that drivers can use their smart phones to modify charging preferences, reset the air conditioning temperature, or ask Nissan to run remote diagnostics. Ideally, EVs will be topped off with power during the day, say by plugging them into solar panels in a parking lot. Theoretically, these cars can charge themselves in the morning and then sell some of the power to the utility during its afternoon peak. If you are wondering what difference a car battery can make, you may not realize the power packed into electric cars. We're not talking about today's car batteries. By 2020, EV battery packs could store 100kWh. That's enough juice to power the electrical needs of several of your neighbors' homes for 24 hours. Since the utilities will draw only to cover peak demand, the power stored in one EV can go a long ways.

The final elements in smart grid stage four are real-time pricing and energy trading. With pervasive high-speed digital communications in place and real-time pricing available, localized energy supply and demand imbalances will become more transparent. Real-time pricing includes an advanced form of demand response where consumers can "program" their electrical loads to take advantage of such things as the low cost electricity available during a wind storm. In initial testing, consumers see real-time pricing as too complicated. They more readily adapt to time-of-day pricing with the general understanding that power is cheaper at night than during the day. Energy trading markets would allow all participants, including the consumer, who may own distributed generating assets, to sell power to the highest bidder. Such markets are admittedly far off. They are impossible in our current regulatory scheme. But consider that market forces will push electricity towards a much more efficient system. Open source supply and demand will reveal many inefficiencies. The opportunity to profit will lure capital towards whatever means and methods cost effectively eliminate these inefficiencies.

Stage four is almost two decades into the future, i.e. the 2025-2030 timeframe. At this point the grid may appear to be growing into a “big brother” phenomena with tentacles reaching deep into our personal lives. Keep in mind that none of the demand-side efficiency programs will be forced on consumers. Consumers will opt-in or opt-out of these programs based on their relative merits. Utilities who effectively market the smart grid's energy-saving features will find many customers willing to accept the incentives offered and become a partner with their utility.

My own household is already in the early stages of this transition. We generate about 90% of the electricity we consume. We fully expect to become a net-producer of electricity by 2010. We will achieve that without giving up our modern lifestyle and its many conveniences. As many pioneers have done before us, we have educated ourselves and become smart electrical consumers. The smart grid will make us even more so. More important, it will enable the mass market of 100M households to do the same while requiring very little of their time or attention.

Posted by Carbon-Pros at 06:00 AM | Permalink | TrackBacks (0)

A microgrid is a small version of the electrical grid. It is usually privately owned and operated for the benefit of a large commercial or industrial customer (or group of customers). You can think of “the grid” as a collection of generation, transmission, and distribution assets. The generation assets are power plants converting coal, nuclear, natural gas, hydro, or wind into electricity. The transmission assets are high voltage, high power lines that carry electricity from a power plant to a substation near the population (or demand) center. The distribution assets are power lines that carry lower voltage electricity from substations to neighborhoods and homes. These are the local lines running on what some folks call “telephone poles.”

A microgrid is a much smaller version of the grid containing generation, distribution, and various load centers. The generation assets are essentially small-scale power plants known as “distributed generation.” These could be anything from diesel generators to solar PV or wind turbines. Smart microgrids employ many of the same technologies as the smart grid. They have a digital network overlay complete with monitors and a control center for operations. They include both grid optimization and demand response functions.

The microgrid is connected to the “grid” in a way that presents its electrical load to the utility as though it is one controllable load. Monitors and switches at the grid-interconnect allow it to be quickly disconnected and run as a self-sufficient electrical “island.” The microgrid operator may have an agreement to supply electricity to the utility during peak periods or whenever it has excess capacity. The surplus power can be stored if storage assets are attached. Some microgrids are designed to produce cheap power (e.g. for an industrial complex), some are designed to produce high quality power (e.g. for a computer chip fabricator), and some are designed for secure power (e.g. a military base).

The Department of Defense has signed GE for its $2M smart microgrid project at its Twentynine Palms Marine Corps base in California. Like most military bases, Twentynine Palms generates enough power to cover critical needs. It has a solar plant as well as a fuel cell installation. It will be connected to the regional grid through a GE microgrid controller. The GE product will support grid optimization and connection to the base's grid control center. The Twentynine Palms base is huge, almost the size of Rhode Island. This will be the largest microgrid project to date. Click on the image for details on GE's website.

Posted by Carbon-Pros at 07:47 AM | Permalink | TrackBacks (0)

Even though I am traveling this week, I wanted to keep the blog moving. A couple of weeks ago, I covered the Arizona Community Power Solar Program. In response to that post, Bob Monet, a solar industry advocate, reminded me about a similar but different approach being taken in Brighton Colorado (north of Denver). The project is a cooperative solar farm dubbed Sol Partners. Here is an an excerpt from the June 15, 2009 issue of High Country News:

Last month, a new type of farm sprouted in Brighton, Colo. United Power, the rural electric cooperative that serves the town and a large swath of communities and agricultural lands on the state's northern Front Range, unveiled what's been touted as the nation's first cooperative solar farm. Customers can "rent" one or more of the 48 panels in the 10-kilowatt array for $1,050 apiece, for a 25-year period. In return, United Power credits their monthly utility bills for the power their panels generate. Other electric co-ops see this project as a possible prototype: a way to distribute local renewable energy without forcing customers to pay for the equipment or its installation. "People can even come visit their solar panels," says Troy Whitmore, United Power's director of external affairs. "And the sky's the limit as to how many modules we can have, depending on demand."

Program details:

• 25 year lease contract
• $1,050 investment per 210 watt panel
• Panels are located on United Power's property
• Receive credit on electric bill for energy generated by your panel(s)
• Monitor the farm's production via United Power's website

This is exciting because it allows all electric customers invest in solar. The customer need not own a house suitable for placement of solar panels. Many urban and rural locations have unavoidable shading that makes solar impractical. It also means that renters can invest as little as $1000 and start generating solar energy. Let's face it, homeowners with south-facing roofs are not the only people interested in reducing their carbon footprint through distributed generation. The advantage of this program over the purchase of general carbon offsets is the local, hands-on nature of the investment. Customers know their money is being plowed right back into the community. They know their investment will be managed in a sustainable way. Kudos to United Power for pioneering yet another approach for distributed solar.

Posted by Carbon-Pros at 11:43 AM | Permalink | TrackBacks (0)

The communication question revolves primarily around that part of the grid downstream from substations. Most substations are connected by some type of backhaul network which may not bear any resemblance to what will be be used to tie meters together into a “neighborhood area network.” Several criteria must be factored into the decision including reliability, scalability, bandwidth, latency, evolvability, and cost.

One key decision point is between wireline and wireless communications. Wireless is attractive as a way to avoid the expense of stringing new wires. But wireless technologies have drawbacks too. Below are three different wireless technologies attracting interest from the utilities:

RF Mesh – These wireless “radio frequency” networks allow each node on the network to communicate with any other node within range. This increases flexibility and reliability. If a node or a link goes down, it can be bypassed by the neighboring nodes. This improves the fault tolerance of the entire network. And since we're talking about our electrical grid, fault tolerance is a key requirement. Another key requirement is scalability due to the myriad of devices involved (e.g. sensors, meters, thermostats, displays, appliances, and various load plugs). We are talking about tens of millions of nodes. As a peer-to-peer network like the Internet, RF mesh is scalable. PG&E is using RF mesh in their 5 million meter deployment in California. This technology has gained more traction in the US than any other approach. This is the key technology for innovative startups such as Silver Spring and Trilliant.

Cellular 3G – This is the option to outsource your network to public wireless carriers such as AT&T and Verizon. This approach minimizes high up-front deployment costs and turns over network maintenance to the wireless carrier who presumably know how to do it cost-effectively. If the big carriers move into this business full-force, you can count on cellular to be one of the winning long-term solutions. The key part of the previous sentence is “one of the winning solutions.” Cellular may prove too expensive to become the dominant solution but it will be valuable for some utilities in some parts of their network. SmartSynch, for example, is betting that this will be the most cost-effective and scalable solution for many utilities. Given the conservative nature of utilities, they may be right.

WiMax – This is the “holy grail” of communications because it is wireless, long-range, high bandwidth, and low latency. It's everything we need. There's only one problem. It does not exist on the scale needed and no one can be sure that it will rolled out on any particular time table. Even though it is further out on the tech radar, WiMax is an appealing option that adds a FUD-factor to decisions around more mature technologies. Utilities may want to keep their options open, but they certainly can't bet on large-scale deployment of WiMax within a defined timeframe. WiMax uses licensed spectrum which will make it more expensive than the unlicensed frequencies used by RF mesh networks. Despite the negatives, the fact that General Electric is offering a WiMax solution for grid optimization makes it all the more intriguing. Startups such as Grid Net are betting on WiMax.

There are more wireless options including WiFi, optical laser, satellite, and numerous radio bands. There are many wireline options including: power line carrier, broadband over power line (BPL), fiber optics, and DSL (phone line).

Every utility has to deal with a mix of urban and rural deployments. Most have some legacy deployments and other internal technical constraints. Most utilities will end up using a mix of technologies including both wired and wireless. We will look at the wired options in a future post. Stay tuned.

btw, Jim is traveling through Friday, so this week's posts may not come out on the usual daily schedule.

Posted by Carbon-Pros at 07:14 PM | Permalink | TrackBacks (0)

• Increase in demand

  • Extreme temperature
  • Day and time of week
  • Industrial process load being brought on

• Decrease in supply

  • Generation capacity
  • Outage at power plant
  • Availability of market-rate electricity
  • Availability of transmission capacity

One example of a demand response program to deal with super peak is the Kilowatcher Program at Colorado Springs Utilities. All utilities have programs to deal with super peak. They can contract for power on the open market, they can call on customers to reduce demand, or they can fire up peaking power plants. A lot of effort goes into managing super peaks. Nobody wants a brownout where electrical demand exceeds the supply, line voltage drops, and electrical devices burn out. Generating and buying power at peak periods is expensive. Anything a utility can do to reduce peak periods in general, and super peaks in particular, is money in the bank.

Posted by Carbon-Pros at 06:21 AM | Permalink | TrackBacks (0)

Research firm Parks Associates estimates that 8.3M smart meters have been installed in US homes, about 6% penetration. That's almost double the penetration of one year ago. Smart meters are capable of two-way digital communications. They are crucial because they provide the foundation for widespread deployment of the smart grid. Parks' projects rapid growth with 13.6M smart meters by 2010 and 33M by 2011. This hypergrowth explains the large number of smart-grid startups and the recent entrance of the tech giants. To give you an idea of the momentum behind smart grid deployment, we profile some of major projects in the US. We start with the first proof-of-concept project on the Olympic Peninsula. Some of these projects are full end-to-end smart grid deployments, others are smart meter projects which incorporate demand-response functionality for reducing peak electrical demand.

Olympic Peninsula GridWise – In 2007-08, Pacific Northwestern National Lab (PNNL) conducted a one-year demonstration project with many partners including IBM and Whirlpool. This was one of the earliest field experiments in the US. It included dynamic pricing, real-time EMS, and homeowner tools for managing energy consumption. Consumers responded by adjusting their behavior to save an average of 10% on their electric bills. Peak demand went down by 15% on average for the year and in some cases went down by 50%. The overall energy savings was 20%. If scaled up nationally, the results would provide savings of $70B over 20 years, putting the $4.5B federal stimulus investment into perspective.

Pecan Street Project - The municipal utility Austin Energy (Texas) already has version 1.0 of its smart grid up and running. Key components include 400K smart meters, 86K smart thermostats, and more than 2K grid sensors. Version 2.0, dubbed the Pecan Street Project will integrate renewable power generation, energy storage systems, smart appliances, electric vehicle charging, and home portals. Austin Energy is opening up its grid for entrepreneurs and researchers. The city of Austin Texas will be the laboratory. They have attracted a long list of partners including Applied Materials, Cisco, Dell, Freescale, GE, GridPoint, IBM, Intel, Microsoft, Oracle, and SEMATECH.

Boulder Smart Grid City – Xcel's Boulder Colorado project is one of the most advanced in the country. The grid overlay is a dedicated fiber optic network. Xcel is using the project as a test bed for many new technologies. Xcel estimates that it will cost $100 million to connect 45,000 customers to its Boulder network. Xcel has an extensive list of partners who also invested in the project. These include Accenture (project management), Current (monitoring), GridPoint (software platform), OSIsoft (data and asset management), SEL (sensing and control), SmartSynch (smart meters), and Ventyx (utility application software). See our previous post on Smart Grid City.

PG&E Smart Meter Program - The California utility is deploying 5.3M smart electric meters by mid-2012. This is the foundation for their smart grid project. PG&E uses programmable solid-state meter technology with secure wireless communication between the meter and the utility. Meters are provided by GE and Landis+Gyr. P&E's communication partner is Silver Spring Networks. The utility used Aclara for communications in the first phase of meter deployment. They will use ZigBee to communicate between smart meters and in-home devices. The estimated cost for up to 10 million gas and electric meters is $2.2B.

Posted by Carbon-Pros at 06:21 PM | Permalink | Comments (1) | TrackBacks (0)

In this installment of our smart grid ecosystem, we begin our look at the startups and focused players. In part 5, we placed the giant tech companies into the ecosystem. That was the easy part. The giants cover a lot of territory, there are few of them, and they have well known competencies. The startups, by contrast, are all over the map. True to their DNA, entrepreneurs come up with new ideas and run with them. They expand as niches open up, as capital and talent allow. They don't follow a predictable pattern. Nor do they acknowledge established industry and sector boundaries. Entrepreneurs are boundary spanners. So consider the chart below a work-in progress, a rough approximation. There are more exceptions than rules.

If you are not familiar with the smart grid, we suggest that you review our July 2 post illustrating the major companies competing for space in the smart grid.

We'll discuss this chart in several more posts coming up. We will take a look at the partnerships that are forming (and in some cases de-forming). Meanwhile, if you have suggestions for clarifying our model, please let us know. We'd love to simplify it, but then again, that's not necessarily how innovation drives new technology and new markets.

Posted by Carbon-Pros at 06:44 AM | Permalink | TrackBacks (0)

The companies placed on the first chart below are primarily from the technology space. The companies placed on the second chart are primarily from the power systems/industrial space. The latter group includes industrial giants such as GE, ABB, Areva, and Siemens. These Goliath's are major suppliers to the legacy grid. Each of them manufactures and markets a full range of new and legacy technologies for the utility industry. They know more about the legacy grid than anyone on the planet, but their expertise thins when it comes to IP networks, scalable real-time databases, and enterprise-class software. The tech and industrial giants need each other. 

Across the board, those companies that already compete in their core business will continue to do so on the smart grid. This is a land-grab and the giants play the game better than anyone. Natural competitors include:

• Google vs. Microsoft (software giants)
• GE vs. Siemens (industrial giants)
• Verizon vs. AT&T (wireless giants)
• Cisco vs. small innovators such Silver Spring (e.g. Goliath vs. David)
• IBM vs. Oracle (Oracle has announced it will go end-to-end)

At the other end of the spectrum are the natural collaborators. These are companies that come to the smart grid with complementary strengths. They may come from different industries or from different technologies. Prominent examples include:

• IBM & GE
• Intel and IBM or Microsoft
• Intel and the industrial giants
• Cisco & IBM & GE (three Goliath's that could work together)
• Google & Oracle & GE (possibly three more)
  

In between are dozens of companies with overlapping competences. Examples of partially competitive overlaps include:

• IBM & Google or Microsoft
• IBM & Oracle
• Cisco & Silver Spring or Trilliant

 This market is moving very fast. All the big players want to expand their reach. For example:

• Cicso would like to cover all the major networking components by itself
• Oracle has announced an end-to-end solution, though it's not clear if anybody believes them
• IBM wants to get into industrial solutions such as grid-connected storage smack in the middle of GE and Siemens turf
• Some of the tech giants want to extend into the industrial space and vice versa.
  
• Metering/AMI players want to extend through the networking space and into utility enterprise apps.

When you add 100 small innovators into the competitive mix, it leaves utility executives scratching their heads about which technologies and companies will survive the next five years. When in doubt (and they are), the utilities will move very slowly. That pacing difference will set up some interesting dynamics for the tech giants. Next week, we'll look at the smaller innovators. Stay tuned. 

See related posts on the smart grid. 

Posted by Carbon-Pros at 07:53 AM | Permalink | TrackBacks (0)

Continuing from part 3, giant companies (both tech and industrial) are jumping into the smart grid business. Since the opportunity is too big for any one company, an ecosystem of partners and competitors is starting to emerge. Battle lines are drawn clearly in some areas and not at all in others. To convey the size and scope of the opportunity, we have sketched out the landscape in the chart below. Sketch is the operative word, because the smart grid has too many dimensions to capture on one chart. We'll start with this chart and develop it further in upcoming posts.

The upper half of the chart represents the software applications of the smart grid. The lower half represents the facilities and networks that transport data about electrical supply and demand. The left side of the chart represents the domain of the utilities and generators, whereas the right side represents the residential and commercial customers. This gives us four quadrants labeled Enterprise Apps (software to run the utilities), EMS (energy management systems for use by customers), the HAN (the home area network, usually wireless, to connect all the devices in a home or building), and "Grid overlay" (the new digital network that will overlay the legacy grid for monitoring and control).

If you read clockwise from the upper left, we can walk through a flow of requests and responses and monitoring and control. For example, the utilities use Enterprise Apps such as Demand Response systems to balance electrical supply and demand. At 1 PM on a hot summer day, they know the peak load is coming. They send out a signal to cut back on non-essential power use. Back at the customer's site, the consumer (or facilities manager) uses their own EMS (Energy Management System) to set their preferences, possibly overriding the utilities' request. The actual communication between applications takes place down at the network level (lower half of chart). In the consumer's home or building, devices are connected to one another through the HAN (home area network) to coordinate signaling. For example the smart thermostat might let the utility turn down the air conditioning because no one is home, but the smart fridge might override the smae signal because it's full of fresh cold beer from the local microbrew. Connected to the house or building, the AMI (advanced metering infrastructure) picks up these signals and monitors the flow of electricity as it's being adjusted by the above systems. The AMI is logging real-time power consumption so that prices can be set higher during peak periods when the utilities' generation costs are higher. The network signals continue through the Grid overlay in a clockwise direction feeding back to the utilities' Enterprise Apps including billing which is part of BOSS. They also feed back into Demand Response thus showing the utilities how much power is needed from which generators and which transmission lines so the power can flow where it's needed.

In tomorrow's post, we will overlay the tech giants. You'll see they are literally all over the map. Soon after, we will add in the smaller, more focused players. Stay tuned.

See related posts on the smart grid.

Posted by Carbon-Pros at 06:54 AM | Permalink | Comments (1) | TrackBacks (0)

Yes. Nuclear is the big issue that divides proponents of climate mitigation. Supporting a low-carbon future, nuclear plants offer baseload power with very low operational emissions. Baseload plants are crucial because they provide power around the clock 24x7, i.e. when the wind is not blowing and the sun is not shining. Coal, hydro, and geothermal are the other types of baseload plants. Most hydro is already developed, geothermal will help but not on a large enough scale, and coal is a carbon nightmare. As I have studied the nuclear question my position has shifted more than once. There is no good answer but we can't rewind the clock.

One of the challenges in mitigating climate change is that "time is of the essence." CO2 stays in the atmosphere for 100 years. Almost all of the CO2 we have emitted during industrial revolution is still in the atmosphere. Since annual emissions are still increasing, we can't wait another 20 years for future solutions such as “clean” coal, “low-carbon” biofuels, "large-scale" hydrogen fuel cells, and “baseload” wind and solar. We need to stop the increase of global CO2 emissions before 2020 and then reduce it by 50-85% below 2000 levels. The things we do in the next 10 years will have the greatest impact.

Nuclear is here now. It works and it is relatively safe. In fifty years of operation, no one has been killed by a nuclear power plant accident in the US. The damage at Three Mile Island was contained to the reactor itself. Chernobyl is not comparable since that plant lacked the basic safety features used everywhere outside Russia (their reactor was built inside the equivalent of a tin shed). The US already generates 20% of its electricity from nuclear, Japan generates 35%, and France generates 80%.

Solar and wind won't be capable of baseload operations until two key problems are solved. We need to implement the smart grid on a massive scale. For the first time, this will give utilities the ability to accurately monitor and manage customer electrical loads. We also need large-scale energy storage solutions such as flow batteries, fuel cells, and compressed air. This will buffer some of intermittency of wind and solar. Someday the combination of smart grid with large-scale storage will turn wind and solar into baseload power. Nuclear can get us to that “someday” without tipping the planet toward an ecological brown-out. Nuclear plants last 60 or more years. Uranium is not a renewable resource, it could run out in 100 years. Known reserves are enough to fuel a new generation of reactors that could be swapped out for renewables 50 years from now. 

Meanwhile the dark-side of nuclear continues to be storage. Yucca Mountain is dead in the water. By default, on-site “dry cask storage” is moving from an interim to a long-term solution. This method could last a century or more and eliminates the need to move radioactive waste across the highways. A reasonable objective is to use this century to build fuel-reprocessing facilities to minimize the volume of spent-fuel. In parallel, we can develop a permanent storage solution. With additional nuclear capabilities in place, we can retire coal plants and buy time for renewables.

Recent scientific evidence shows that our climate is changing faster than predicted. Since next generation of nuclear plants could take 10 years to come online, we need to get moving sooner than later. The faster we mitigate, the less chance our grandchildren will see a planetary ecological disaster. Since policy objectives include both energy security and carbon mitigation, moving nuclear forward with a few pilot projects gives us the option to build more nuclear in the future. In 2008, Japan opened 8 new nuclear plants. They are working on wind and solar too but they are moving on all low-carbon fronts. New reactor designs are safer and more efficient. Building the next generation of nuclear plants can give society a 50-year lead time to develop the technologies needed for a sustainable low-carbon future. We can't rewind the clock on the industrial revolution, but we can buy some time. Nuclear is not popular, it's not without problems, but it is a realistic part of the solution. 

Posted by Carbon-Pros at 08:12 AM | Permalink | Comments (1) | TrackBacks (0)

Arizona Public Service (APS) is the largest electric utility in Arizona, serving nearly a million customers. APS has launched a pilot project to install, own, operate, and maintain solar panels on customer rooftops at no upfront cost to qualified customers.

• Eligible customers must be served by a specific part of the APS distribution system (the Sandvig 4 feeder).

• The customer's home must meet technical requirements such as roof direction, building age, and structural integrity.

• An on-site assessment of the home will verify engineering and eligibility requirements.

• Customers will sign an easement, allowing APS access for installation and maintenance.

• After installation is complete the customer will be eligible to receive a reduced rate for the power generated on their rooftop.

Community Power programs are based on the same concept as Energy Service Companies (ESCOs) where an independent company “rents” rooftop space on commercial buildings, installs a renewable energy system, and sells the power back to the building owner (see Wiki). ESCOs typically split their profits with the building owner through revenue sharing agreements. Due to the capital-intensive nature of renewable energy investments, this approach to energy service provisioning will play a larger role in our future.

Even as renewable energy costs decline, new systems still require a large upfront investment. Let's face it, most people don't have the needed $10,000-$15,000 to prepay their electric bill for 30 years. Credit markets remain tight and few loans are available. The homeowners who do have cash might not have the optimal south-facing pitch.

Projects such as APS' will put distributed solar on the best rooftops in the most grid-accessible parts of the community. This helps utilities meet regulatory mandates. For example, Arizona’s Renewable Portfolio Standard (RPS) requires that 30 percent of its renewable energy be generated from distributed sources. Utilities are well positioned to make these long-term investments. Power plants, for example, can be amortized over 50 years. Plus utilities have access to the necessary capital and expertise. These projects won't solve all our problems, but they provide invaluable support for developing the renewable energy industry and educating consumers. The costs are reasonable when spread across the rate base. It's hard to see a downside for Community Solar projects. They are win-win-win: good for the homeowner, good for the community, good for the environment.

Posted by Carbon-Pros at 06:12 AM | Permalink | Comments (2) | TrackBacks (0)

Continuing our discussion of the smart grid ecosystem...

The smart grid has been called the “energy Internet” so it makes sense that giant tech companies are rolling out products and services. The enterprise IT companies, in particular, are ramping up their investments. IBM has been focused on utilities consulting and software for several years. They offer enterprise software with extensive systems integration and IT support. Some of IBMs solutions are purpose-built for the grid, but many are just reconfigured from its extensive portfolio of enterprise applications. You can count on Cisco to get involved in every application of IP networks. The smart grid is no exception. Cisco will work with utilities on home area networking (HAN), backhaul services, network security, and network operations. Microsoft is naturally focused on software. A late mover, it recently jumped in with a software suite now in field trials. Coming out of the web, Google is experimenting with a web-based solution which it offers free to partner utilities (and their customers). Google sees a major play in all the data that will be generated. As in their primary market, they will go head-to-head with Microsoft, courting utilities and their customers. Oracle is focused on utility data management and operations integration around their database, middleware, applications and back-end technology infrastructure. Most of the majors are also making investments in the smaller players. And last to mention here, Intel is developing microprocessors for embedding into transmission and distribution equipment.

The other tech giants are not (yet) as deeply involved but they won't sit on the sidelines and let this market develop for long. Consumer electronics (CE) competencies revolve around the digital home and creating stylish, easy to use products. The growth of the smart grid will depend heavily on consumer acceptance and the CE companies know the consumer better than anyone. With the smart grid's requirement for digital networks spanning the continent, telecoms giants such as Verizon are offering 3G wireless networking services to the utilities so they don't have to build their own networks from the ground up. They will also offer consumer solutions based on their cell-phone platforms. In Boulder's smart city, Xcel built out it's own fiber optic network, but that won't be the norm.

Each one of these companies brings its core competencies into the utility industry. Each one is building large partner networks. This opportunity wide and deep, no single company can provide all the solutions. The utilities industry is America's largest, almost double the size of the telecoms industry. Electric utilities control more than $600B in assets with $260B in annual revenue. There are more than a billion meters worldwide with more than 100M in the US. Upgrading so many meters, homes, and network assets is an opportunity on the scale of the internet. Next week, we'll discuss some of the smaller, innovative players in this space.

See related posts on the smart grid.

Posted by Carbon-Pros at 07:21 AM | Permalink | Comments (1) | TrackBacks (0)

The world is moving from a fossil-fuel economy to an electricity economy based on nuclear and renewables (see previous post). There are  major obstacles to overcome including rapid technology change, a fragmented regulatory landscape, and the conservative nature of utilities. The grid will collect information about energy use and display it for the consumer and their utilities. Consumers win if they use the information to save money. Utilities win by providing opt-in incentives for shaving peak loads and avoiding the cost of new power plants at $500M to $1B each, with nuclear at $10B. The home energy management system (EMS) might appear to take center stage, but it's just one element in the digital home (see Smart Grid News). You can view the full-size map.

If the smart grid represents the future of electricity, then it also represents the future of home technology. Consider that the digital home already includes a combination of broadband, PCs and Macs, iPods, smart cell phones, digital televisions, media centers, game players, music controllers, and more. Consider that these devices are becoming more interoperable year-by-year. Smart phones are becoming as capable as PCs, iPods run home stereo systems, digital televisions record and playback TV on demand with recordings controlled from PCs or smart phones, media controllers connect to computer downloads, etc. Yet the potential of all these devices has not been realized. Synergies have not been achieved.

Both the digital home and smart grid will be based on open standards which embrace and extend those that power the web today. In a mere 15 years, the web has completely redefined the global landscape of communication and business technology. In the next 15 years, the smart grid (in concert with the digital home) will again redefine our technology experience. This won't be restricted to residential digital homes, it will grow even faster in commercial buildings. Together they use almost 70% of US electricity. The focus in commercial buildings will center on building automation and energy management.

With the emphasis on digital networking and standardized technologies, tech giants are being sucked in like steel to a magnet. The grid is pulling in top companies from information technology, consumer electronics, telecoms, and the web. Not to mention the industrial giants such as GE and Seimens. In upcoming posts we will profile the giants and work our way down to the focused players who are making the needed technological breakthroughs. I don't believe this is hype. Capital is pouring in, standards are being set, and infrastructure is being deployed. I've written about the city-wide project in Boulder, CO. More projects are starting up every quarter. Sure, it's going to take longer than everyone wants. But look at what happened in 15 years of commercial internet development. Tech change builds on itself and accelerates over time. Therefore the 15 years of internet-time could easily shrink to 10 years. And these next 5 years will set the stage for the next 50. Fasten your tech seat-belts. We live in interesting times.

See related posts on the smart grid.

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I'm a big fan of appropriate technology. In May, I switched my cell phone service to AT&T just so I could get an iPhone. In less than two months, it's become an indispensable part of everyday life. I knew I would like the device. It's very easy to use. I expected to be more productive given the wealth of applications. My biggest surprise is that the iPhone is on the way to replacing so many other devices. Here's my list:

• Watch/time/compass/altitude functions (replaces a $400 Suunto Wristtop Computer, AKA my watch)
• GPS for tracking workouts (replaces my $200 Garmin Forerunner that needed a factory repair)
• GPS for the car (replaces a $150 Garmin Nuvi I was planning to buy)
• City maps (replaces paper in most cases, and my $100 Garmin Mapsource City Navigator software)
• Email, web, business news, and “cloud” services (replaces a $500 NetBook I was planning to buy)
• Business news reader (replaces paper subscriptions to WSJ, NYT, and the Economist)
• Voice recorder for notes and interviews (replaces a $50 dedicated device)
• Music, podcasts, audio books (replaces need for a second iPod)
• Remote control for iTunes broadcast through my PC (replaces a $50 dedicated controller)
• Photos/slideshows (replaces need to make photo prints to show friends and family)
• Camera/videocam (replaces my camera for indoor and casual use)
  
• Language translation (potentially replaces dedicated device)
• Spelling/thesaurus (potentially replaces dedicated device)
• Calendar, address book, to-do list, calculator, scientific calculator, carbon calculator, and flashlight

In the 4Rs of “reduce, reuse, recycle, and replenish,” there is a reason REDUCE is listed first. When we reduce our use of a product, we save money and reduce our impact on the planet. In this case, my $300 phone is supplanting about $1,500 of specialized gear. It's also helping me be more productive and lightening my travel bags. The iPhone has significantly reduced my need to buy specialized electronic devices. This is a very good thing. Score one for appropriate technology. --JCB

*Does not replace my ruggedized GPS for backcountry travel
*Does not replace my waterproof camera for outdoor adventuring
*Does not include heart rate monitor (yet)

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There is a lot of money pouring into development of the smart grid. The federal stimulus package set aside $4.5 billion for starters. That's not bad for seed money. Private money is also pouring in because investors believe this is the "next big thing." However the architecture develops, the smart grid will be tied together using a digital network running open standards. These standards will overlap heavily with those running the internet. All the tech giants are jumping into the smart grid at some level or another. It makes perfect sense. They have the capital and the digital pedigree. The scale and scope of this problem-set is so large that each one has a variety of partners. Partners range from big utilities, to tiny start-ups, to legacy grid suppliers. There are direct competitors in opposing camps (e.g. Microsoft vs. Google), as well as companies placing bets across competing technologies to increase their chances of winning market share (e.g. Cisco and IBM). It's reminiscent of the early days of the commercial internet when new giants were born and others consolidated their power. We're posting our "ecosystem map" for reference in an upcoming discussion. If you receive our blog posts by email, visit carbon-pros.com to view the full-size map. Stay tuned.

See related posts on the smart grid. 

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• Energy efficiency – The smart grid includes digital tools for managing demand. We've not had these before on a widespread basis. We're talking about an array of monitoring and control tools for utilities, residential customers, and commercial consumers. Demand-response tools help shave (or shift) peak electrical loads. With comprehensive data available, the smart grid supports variable pricing, incentives for load shifting, sub-metering, smart appliances, and household energy dashboards. When the right incentives are provided, consumers will reduce their energy use. Reduced energy use means fewer carbon emissions (climate mitigation) and fewer imported fuels such as liquid natural gas (LNG) and the remaining oil-fired plants (energy security).
  
  
• Renewable energy – The smart grid also includes digital tools for managing supply. This allows utilities to make greater use of renewable and distributed energy sources. Because wind and solar power fluctuate unexpectedly, the legacy grid can only accommodate a small share of renewables. Even when wind or solar is available, utilities are required to have spinning reserves based on more stable sources such as coal, nuclear, and natural gas. A coal plant produces CO2 whether we are using the power or not. Greater integration of renewables will radically reduce carbon emissions (climate mitigation). Nuclear will also support renewables, but let's cover that in a different post.
  
  
• Low-carbon Transportation - Biofuels will play a supporting role. Clearly we can grow fuel inside the US. But biofuels can't play a major role because they won't radically reduce carbon emissions. In the long run, electric vehicles (EVs) will play the major role because they allow substitution of imported oil for renewable sources of electricity. EVs and renewables go together. EVs make no sense if they are running on coal power. With the smart grid more renewables will come online and some of that will power our transportation fleet. For example, the smart grid will let utilities delay the full charge of a EV until excess power is available such as after midnight or when the wind is blowing. So the smart grid supports EVs in a major way (energy security + climate mitigation).

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Some of our largest high-tech firms are adopting broad sustainability programs. Here is a list of some of our biggest IT companies along with a link to their latest efforts. If you scan through a few of the reports, you'll see  everything from energy-efficient server farms to low-powered microprocessor chips. Energy Star 5.0 is a hot topic since energy consumption represents around 80% of the carbon footprint of most IT equipment. You'll see high-level applications for carbon accounting and mico-level apps for monitoring electricity in the smart grid. There are hundreds of programs involved in corporate social responsibility and environmental protection. There are major continuing efforts to reduce waste and recycle what's left. There is a lot of talk about innovation driving future product road maps. Innovation is crucial. It is the only way we can move forward in a sustainable way. Every one of these companies needs to improve on their current efforts. That said, it is good to see the industry paying attention to sustainability and taking constructive steps in the right direction.

IBM Sustainable Solutions

http://www.ibm.com/ibm/green/index5.shtml

HP Eco Solutions

http://www.hp.com/hpinfo/globalcitizenship/environment/index.html

Cisco Environment

http://www.cisco.com/web/about/citizenship/environment/

Intel Eco Smart

http://www.intel.com/technology/ecotech/

Microsoft Environment

http://www.microsoft.com/environment/

Dell Earth

http://content.dell.com/us/en/corp/about-dell-earth.aspx

Oracle Environment

http://www.oracle.com/corporate/community/environment/

Accenture Environment

http://www.accenture.com/Global/About_Accenture/Company_Overview/Corporate_Citizenship/Environment/

CAP Gemini Environment

http://www.capgemini.com/about/corporateresponsibility/environment/

SAP Sustainability

http://www.sap.com/solutions/sustainability/

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Global Reporting Initiative provides a set of voluntary guidelines, definitions, indicators, and templates to help standardize sustainability reporting across industries and nations. GRI is applicable to organizations of all types and sizes. You define your own reporting boundary and determine which of the 100+ measures to include. Indicators are divided into core performance and “additional” to indicate their relative applicability. Templates are provided for major industry sectors and smaller enterprises (SMEs). GRI has thousands of members; the framework can seem complicated but it's the closest we have to a global standard. GRI's core performance indicators support TBL (triple-bottom line) reporting. GRI uses six categories because societal impacts are divided into community, product responsibility, labor practices, and human rights. FYI, here is our summary of GRI's top-level performance indicators.

Economic

• Financial performance

• Wages and direct economic impacts

• Indirect economic impacts

Environmental

• Materials

• Energy

• Water

• Biodiversity

• Emissions, effluents, waste

• Products and services

• Transportation

• Fines and sanctions

• Overall

Societal

• Society
  

• Community and civic contributions

• Corruption

• Public policy

• Anti-competitive behavior, fines, and sanctions

• Labor practices

• Employment and labor/management practices

• Health and safety

• Training and education

• Diversity and equal opportunity

• Product Responsibility

• Customer health and safety

• Product and service labeling

• Marketing communication and customer privacy

• Human rights

• Procurement practices

• Non-discrimination and union support

• Child and compulsory labor

• Security practices and indigenous rights

Posted by Carbon-Pros at 07:22 AM | Permalink | TrackBacks (0)

Managing and reporting on the 3Ps of profits, people, and the planet is also called managing the triple-bottom line (TBL). In the age of sustainability, managing your TBL is a critical-success factor. First suggested by John Elkington in 1994, TBL is an expansion of traditional accounting to cover your company's impact on society and the environment. The concept has grown in popularity over the past decade. Andy Savitz' book, The Triple Bottom Line, is an excellent overview and contains many good examples. You can think of TBL as a “balanced scorecard” for sustainability reporting. If you already use a balanced scorecard for internal performance then it can be adapted for sustainability. Measures on the financial side can be the same as your traditional reporting with a few extensions. They include revenue, expenses, profit, taxes paid, jobs created and the like. Measures of social performance vary widely but might cover direct and indirect community impacts, human rights policies, labor practices, charitable donations, matching contributions, employee community service hours, and product responsibility initiatives. Measures of environmental performance vary depending on your industry. In the services sector, environmental measures include carbon-related metrics such as overall footprint, carbon per employee, per customer served, and/or per dollar revenue. Additional measures include overall energy usage, green energy offsets, airline miles traveled, employee commute miles, paper and office materials usage, recycling programs, and carbon offsets purchased. In the industrial sector, additional measures cover smokestack metrics, water quality testing, and waste generation. It's a good idea to measure and report your use of "sustainable alternatives" such as web conferencing instead of airline miles and electronic billing and reporting instead of printing and mailing. All measures can be annualized and compared on a year-over-year basis. They can be benchmarked against global and industry norms. For comprehensive reporting, the GRI provides a set detailed of guidelines and a global site for posting sustainability reports.

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US energy security and climate mitigation are overlapping but different issues. Whereas climate mitigation deals with reducing the carbon intensity of the entire US economy, energy security deals with reducing oil imports from the Middle East. We have a variety of paths to reduce carbon emissions but we don't have any near-term options for getting off oil imports. Solutions such as plug-in hybrid electric vehicles (PHEVs), electric vehicles (EVs), and hydrogen fuel cells are too far out into the future. With 250M cars on the road, we can't change the transportation mix fast enough. This is gnarly problem; innovation is badly needed. Recently, Robert Burgelman and Andy Grove asked their students at Stanford to solve the energy security problem (McKinsey). Their premise was that waiting 20 years for PHEVs to dominate the highway was unacceptable. So what else can be done? The class came up with an interesting idea: Spend $10 billion to retrofit part of the existing transportation fleet with hybrid-drive technology. That's right, take conventional cars and trucks and convert them to hybrids. They suggested a goal of retrofitting 1M vehicles within three years (at $10,000 per vehicle). This won't solve the energy security problem but it will accelerate development of the required technologies. With government funding in the lead, private money will quickly follow. If successful, the program would rapidly accelerate domestic battery development. With the battery problem solved at least partially inside US borders, PHEVs and EVs would penetrate the market more rapidly. That in turn will help transform the US auto industry. And the increased electric demand will help accelerate the transformation of public utilities. Put in the context of our energy security problem, $10B is not a lot of money.* As a side-effect, climate mitigation gets a boost by switching transportation to electric, while at the same time switching electric to renewable sources feeding through a smart grid. The power of innovation keeps us optimistic. On the one hand the twin problems of energy security and climate mitigation seem insoluble. But when we put bright minds together and ask them to solve the insolvable; we can generate very interesting solutions.

* Compare this $10B investment with the $100B annual spending by the US military protecting Middle East shipping channels and the $700B we paid Saudi Arabia for oil imports during the two years 2007-08.

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A company incorporating sustainability puts emphasis on achieving long-term positive results for all stakeholders. The broader term “stakeholders” is preferred because it includes everyone and everything impacted by your company. This means shareholders AND employees, customers, suppliers, governments, society, and the environment. A focus on sustainability therefore requires measurement and goal-based performance reviews in each of the three dimensions of sustainability: financial, social, and environmental. While some of the impacts on employees, customers, and suppliers are covered in your financial reporting; they only capture part of the story. Measuring impacts on society and the environment typically require new measures to answer questions such as:

• What is your company's impact on the local, regional and national population? Support for  education? Charitable contributions? Civic partnerships? Community service?
  
• What is your impact on the environment including air quality, water quality, land use, and waste production?
• Does your company comply with all applicable labor and environmental laws? in what areas do you exceed legal and regulatory standards?
  
• What are your weakest areas of social and environmental performance?
  
• What programs are in place for continuous improvement? What are your specific improvement goals?
  

It's crucial to recognize that sustainability does not ignore profitability. An unprofitable company is unsustainable. But a profitable company that mistreats citizens and pollutes the atmosphere won't be profitable for long. Managing and reporting on the 3Ps of profits, people, and the planet is also called managing your triple-bottom line (TBL). In the age of sustainability, managing your TBL is a critical-success factor.

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Business sustainability can be defined as “achieving long-term financial success while measurably improving both society and the environment.” Common to all definitions of sustainability is measuring company results in three crucial areas: financial, societal, and environmental. These are the three pillars of sustainability. To grow sustainably, a company must replenish its sources of capital and remedy its impacts on society and the environment. A sustainable business does not run out of capital. Nor does it harm the communities and the environment in which it operates. By operating within the within the carrying capacity of its supporting systems (financial, societal, and environmental), it can operate indefinitely. Speaking more generally, the World Commission on Environment and Development defines sustainability as: "[meeting] the needs of the present without compromising the ability of future generations to meet their own needs.” (Wiki) Business sustainability comes up more and more in boardrooms and executive suites around the world. When directors and executives talk about sustainability, they reach beyond traditional financial metrics to measure impacts on all stakeholders. Sustainability does not ignore profitability. An unprofitable company is unsustainable. If sustainability consultants seem to focus primarily on the societal and environmental issues, that's because they are the less understood elements we need to integrate into management thought and action.

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We are fortunate to work in Colorado in a community that supports carbon reduction through energy efficiency, renewable energy, and smart grid technology. Yesterday, Rebecca Johnson from the University of Colorado, and Craig Eicher from Xcel Energy gave us an update on the the roll-out of the smart grid in Boulder. Xcel Energy, the Minneapolis-based, investor-owned utility, has been deploying smart grid infrastructure since April 2008. To date, Xcel has laid more than 200 miles of fiber-optic cable. They are ready to deploy broadband-over-power-line (BPL) communications to 40,000 households. Xcel has installed 10,000 devices on the network with real-time monitoring and are ramping up for broad deployment in 2010. Xcel and its partners will use this pilot project as a test-bed to experiment with various demand-response tools including variable pricing, incentives for load shifting, sub-metering, smart appliances, and household energy dashboards. No one really knows how consumers will change their behavior when given real-time information about their energy consumption and costs. The few studies with real data have found that consumers reduce energy use an average of 10% just by having information readily available. This may be an early-adopter effect that won't prove true for the mainstream, but most people like to save money so we will likely see energy savings just from the information feed. More important, smart grid technologies give the utility flexibility to more pro-actively manage both supply and demand. This supports the integration of renewable and distributed energy sources since wind and solar production can fluctuate unexpectedly. Integration of renewables will help reduce carbon emissions. Utilities are required to have ‘spinning’ reserve capacity of approximately 7% of anticipated load. Spinning reserve is generation that is synchronized to the system and is available to come online within minutes should demand spike, equipment fail, or wind power decrease unexpectedly. In other words, they have a regulatory requirement to overbuild. As customers, we are required to pay for that spare capacity just so we don't run out of power for a few minutes on a hot afternoon. The demand-side management tools on the smart grid give Xcel the ability to reduce its peak load. They could shut off a percentage of central air conditioners for five minutes at a time, or they could temporarily lower the temperature setting on electric hot water heaters on a hot afternoon, or they could delay the full charge of a plug-in hybrid until after midnight. This won't be an invasion of privacy. It will apply to customers who give permission and join the program. The smart grid represents the future of electricity. There are hundreds of unknowns. Therein lies the importance of city-wide pilots such the Boulder project. Soon, Xcel and its partners will be able to test the thousands of interconnections required and experiment with a wide range of technologies and incentive packages. The lessons learned will be invaluable for mass-deployment. The federal stimulus package set aside $4.5 billion for smart grid projects. That's a lot of money, but we have even more at stake considering the twin goals of energy security and carbon mitigation. Smart grid projects will pay for themselves over time. The US DOE estimates that modernizing the national electrical grid could save between 46 and 117 billion dollars over the next 20 years. It's good to see us moving on this important front.

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The term “smart grid” refers to a set of related technologies based on common technical standards. It's not one specific technology but rather it's made up of many components (Wiki), most of which do not exist in the legacy transmission-distribution system. Key components include:

• Two-way digital communication network – this runs alongside existing power lines to provide detailed information about operations including the status of millions of components along with dynamic data about supply and demand.
  
• Real-time monitors – to be installed at generating plants, transmission and distribution lines, and substations to report operational status and to respond to changing conditions.
• Smart meters – to do more than just track lump-sum monthly usage; they also track usage by time of day and day of week, they automatically report outages and can monitor usage on multiple circuits.
• Home automation network – this lets the smart meter transmit control information to major load centers (such as air conditioners and plug-in hybrids) and major appliances.
• Smart appliances and thermostats – these must adhere to the same technical standards so they can receive signals requesting temporary load reductions or informing them that electrical costs are at peak levels.

It's the combination of all these (and more) that we refer to as the smart grid. It's always difficult to change existing infrastructure on a mass-scale, and the grid is truly a mass-scale infrastructure. 

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In the renewable energy industry, solar photovoltaic (PV) and wind get most of the press, and rightly so. Solar PV is best known as a small-scale distributed power source for use on rooftops. For example, we have a 5.25KW array on our roof and through net metering it generates about 90% of our electricity. Wind is best known as a utility-scale centralized power source. Our local utility, Xcel Energy, owns or purchases 3 GW of wind capacity. As of YE2008, the US leads the world with more than 25 GW of installed wind generators. Wind is cheap enough to be competitive with natural gas, whereas solar PV is still too pricey for mainstream utilities (Hawaii excepted). Utility-scale wind is estimated to cost $0.056/kWh, compared with coal and gas at $0.052/kWh (Wiki). Solar PV averages $0.25/kWh but costs are falling rapidly. At utility-scale, Concentrated Solar Power (CSP) is cheaper at $0.10-.15/kWh, but still too expensive for widespread use. Solar economics are expected to reach parity with wind, gas, and coal by 2015 to 2020 (Wiki). Long-term cost projections heavily favor wind and solar over fossil fuels and other renewable sources. For starters, they are abundant sources of energy available everywhere on the planet. Global development of solar and wind will go a long ways toward stabilizing national energy security interests. Solar and wind have the advantage of zero “fuel costs” during their operating life whereas the price of coal and gas is subject to volatility and rising over the long-term. On the down side, the majority of costs for renewables are paid up front when the plant is built. The global credit crunch has slowed but not stopped the growth of roof-top solar and the construction of new wind farms. Another obstacle is the lack of cost-effective storage solutions to smooth out power production. Wind turbines can spike from zero to several hundred megawatts in fifteen minutes. That's not helpful when it happens when demand is going down in the evening. Major advantages will accrue to solar and wind when the US market sets a price for carbon. This is likely in 2010 driven by cap-and-trade legislation and agreements coming out of the Copenhagen Climate Conference. With a market price for carbon, coal plants will see their long-term operating costs go up; as will natural gas plants. While utility-scale CSP has promise over the long-run, solar PV is viable in many markets today. It is a great choice for distributed power solutions in sunny regions. With utilities embracing centralized wind and home and business owners embracing distributed solar, these two technologies are increasingly important to our energy and climate security.

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Most of us think of solar thermal as a renewable source of domestic hot water. A lesser known application of solar thermal is for utility-scale power plants. The technology is called Concentrated Solar Power (CSP). Heat from the sun is concentrated by mirrors or lenses to obtain higher temperatures than can be achieved through flat-plat collectors. Concentration reduces the plant's environmental and economic footprint per kWh generated. At utility scale, CSP has major advantages over solar photovoltaic (PV). For starters, the costs are lower ($0.10-.15/kWh) compared with solar PV ($0.25/kWh). Plant performance is also better matched to a utility’s electrical load. Like PV, CSP works best when outside temperatures are hottest and demand is greatest. Better than PV, the heat can be stored and used for generation in the evening when demand is still high but the sun is no longer available. This reduces intermittency, one of the drawbacks of renewable energy sources. Perhaps most important, a CSP plant uses a turbine to generate electricity from heat. When the sun is not shining, natural-gas boilers can be used to heat the fluid and spin the turbine. This combination of CSP supplemented with natural gas promises to be as reliable as a standard fossil-fuel power plant but with minimal carbon emissions. (Economist). Several technologies are in operation today. The two most common designs are parabolic troughs and power towers (Wiki). Parabolic troughs use a curved trough to reflect solar radiation onto a pipe containing the working fluid. Power towers use mirrors to focus the sun's energy on a central tower giving it the advantage of higher temperature and more efficient generation and storage. CSP technology is advancing rapidly. NREL estimates that by 2020 the cost of producing electricity from CSP will drop to $0.054-.0621/kWh putting it on par with wind. Capacity factors will range from 50% to 70%, much better than solar PV and wind.

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When you compare the output of varying technologies such as wind, solar, and nuclear, always consider the capacity factor. A power plant's "capacity factor" is the percentage of actual power output compared with its theoretical output if it were continuously running at maximum capacity. Because all plants need to shut down for periodic maintenance, and because they often run below maximum capacity, power plants do operate at 100% capacity on a daily basis. For example, we have a 5.25KW solar PV array installed on our rooftop but it only produces maximum power for a few hours on bright sunny days. If the system ran continuously at maximum, it would produce 3,780kWh per month (5250 watts x 30 days x 24 hours/day = 3,780,000 watt/hours). That would be awesome because we would be selling power to all the homes on our block. We monitor our roof-top production and find that it averages about 500kWh per month due to clouds, snow, and DC-AC conversion losses. Running the numbers (500/3780) shows that our PV system has a capacity factor of 13%. This sounds low but is not out of line for our four-season location. Here are some rough measures of capacity factor for conventional and renewable sources of electricity (Wiki).

• Nuclear power 92%
• Base load coal plant 70-90%
• Thermal solar power tower 73%
• Geothermal plant 73%
• Combined cycle gas plant 60%
• Wind farms 20-40%
• Solar PV in Arizona 19%

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My colleague, Bob Monnet, posed a great question this morning. In his newly released book, The Age of Carbon, Eric Roston gives a 300-page answer. Please buy Eric's book for the real answer. That said, let's look at a few interesting aspects of this super-atom which is essential to life.

• Carbon (C) was born from the earliest stars, “shortly” after the big bang. The creation of C from primal atomic elements was surprising due to the near-zero odds of the required three-way atomic collisions.
• By the time Earth was born (4.5 billion years ago) C was a big part its composition. Life as we know it, is built on carbon-based molecules. Amino acids feature C at their center and DNA is mostly C.
• The Earth's carbon cycle began “shortly” after the planet was born. It involves the flow of C through land surfaces and sediments, through terrestrial plants and animals, through oceans and marine life, and through the atmosphere (BioCycle).
• In the atmosphere, the combination of carbon and oxygen (CO2) protects us from extremes of hot and cold. Its steady-state concentration at 280ppm has been the cradle for human development.
• Today, we measure an ever-increasing concentration of CO2 in the atmosphere. Our "industrial revolution" has helped grow CO2 concentration to 380ppm.
• Due to the greenhouse-effect, the higher the concentration of CO2, the more heat is trapped, and the warmer the planet.
• In the past 100 years, we have warmed the planet by three-quarters of one degree Celsius. That might not sound like much, but scientists say that two degrees Celsius may be a tipping point where many of Earth's natural cycles could change. Six degrees could lead to mass extinction (Mark Lynas).
• Carbon takes on widely divergent forms. Pure carbon ranges from graphite to diamonds. Graphite is soft and black whereas diamonds are hard and clear.
• Most of us consume a steady volume of carbohydrates to maintain our health and energy levels.
  
• All of the fossil fuels we use to power the economy are hydrocarbons. The vast majority of plastics are also composed of C and hydrogen.
• Running a business consumes a lot of energy. Most of it is generated by burning fossil fuels. Combustion of fossil fuel releases into the atmosphere CO2 that was previously locked inside the Earth's crust. It therefore adds to the atmospheric concentration and contributes to climate change (sources from human activity).

Business sustainability is a broad concept and C plays a growing role. A key question is asking how much C does your company produce? Reducing carbon emissions has become a key element of corporate social responsibility. Carbon legislation is now under consideration by governments around the world. Measuring and reducing carbon emissions therefore, is moving from the domain of social responsibility into the domain of legal and regulatory compliance.

Posted by Carbon-Pros at 04:17 PM | Permalink | TrackBacks (0)

*The major sources of GHGs due to human activity are:

• Burning of fossil fuels and deforestation (carbon dioxide)
• Livestock manure and land-use changes (methane)
• CFCs and halons in refrigeration, fire suppression, and manufacturing
• Agricultural activities, including the use of fertilizers

*The major sources of CO₂ from fossil fuel combustion are:

• Solid fuels such as coal: 35%
• Liquid fuels such as gasoline: 36%
• Gaseous fuels such as natural gas: 20%
• Global shipping and air transport: 4%
• Cement production: 3%

*Excerpted from Wikipedia.

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As a business owner and executive, you should view climate change primarily in business terms. Whether you believe the science or not is irrelevant. What is relevant is that markets are changing, and changing rapidly. The legal and regulatory environment has already changed in most developed countries, and here in the US it will change rapidly over the next two years. These changes are the first wave of a long term trend. One the certainties we face is the creation of a market and/or regulatory price for carbon. Carbon pricing affects the cost of energy and will have ripple effects up and down the value chain. This has strategic implications such as affecting your operational costs, your product investment decisions, and the value of your assets. Mid-2009, we are operating in a recessionary cycle that has temporarily reduced the cost of oil and many energy-intensive products. Virtually all energy experts say that oil prices will rise steeply once the economy starts to grow. Adding the incremental cost of carbon to the rising price of energy will steepen the cost curve and magnify the impact on business. In the same time frame, increasingly disruptive weather patterns heighten the need to review operational security. And not just for companies with facilities on the seacoast. Virtually all companies can benefit from reviewing their insurance coverage, emergency back-up power, data storage and recovery procedures, and business continuity plan. If you are a climate skeptic, fine. But don't base your business decisions solely on personal views. Otherwise, you may not be fulfilling your fiduciary responsibly to stakeholders. If you are running a public company, Sarbanes-Oxley section 302 requires disclosure of all material risks. Does climate change pose a material risk? Maybe not. But the risks vary by company, by industry, and by geographic location. More and more businesses think climate change represents a material risk and are making carbon- and climate-related disclosures. Understanding the risks requires a systematic assessment of your company's exposure to carbon pricing and to disruptive weather patterns. A high-level assessment is not as difficult as it sounds; the 80-20 rule applies. It does, however, require management time and attention. Waiting to assess your exposure is not recommended. Conduct an assessment, then you'll have a sound basis for making business decisions about climate change. An excellent primer is Climate Change: What's your business strategy?

Posted by Carbon-Pros at 07:00 AM | Permalink | TrackBacks (0)

On the Green Printer Blog, I came across the Harris Interactive survey of North American office workers citing their top ten environmental pet peeves:

1. Mindless printing resulting in increased waste (40%)
2. Leaving lights on (37%)
3. Lack of recycling bins (33%)
4. Excessive air conditioning in summer and heat in winter (29%)
5. Excessive use of paper products, like cups, plates, etc. (27%)
6. Coworkers not recycling (27%)
7. Coworkers not printing double-sided when they can (24%)
8. Too many cover sheets when faxing or printing (24%)
9. Having to store paper copies of existing, electronic files (24%)
10. Leaving computer on and not powering down when going home (23%)

That's not a bad list for all of us to keep in mind. Most of us have experienced these things at one time or another. By being aware and making small changes, YOU CAN HELP. The little things add up to make a BIG difference.

Posted by Carbon-Pros at 08:50 AM | Permalink | TrackBacks (0)

Transportation makes up a significant portion of the carbon footprint of every company and every employee (about about 22% globally, see IPCC). Making carbon-aware transportation choices can reduce your footprint and have a positive impact on your bottom line. For individual companies, the transportation footprint includes inbound and outbound shipping, business travel, and employee commuting. Carbon emissions from travel are directly related the mode of transport, the efficiency of fuel consumption, and the distance traveled. Assuming two persons in a mid-sized car, trains can be twice as efficient per passenger-mile than cars, and over short-distances cars can be twice as efficient than planes. Actual results vary because a single person driving a large SUV is less efficient than flying in a peak-loaded airplane. And because landing and take-off reduce airplane efficiency, trips shorter than 500 miles favor a car, whereas longer distances favor a plane. Peak-load buses and ferries are less efficient than trains but more efficient than cars. Peak-load is important because off-hour and rural buses (with few passengers on board) can be less efficient than a small car. Employee commuting via bus can be highly carbon-efficient since typical work hours coincide with peak-period travel. Ferries are a special case because fuel efficiencies vary all over the map. Slow moving ferries are much more efficient than high-speed ferries due to the tremendous drag involved. High-speed ferries can exceed plane travel in terms of carbon emissions per passenger-mile. We all know that car efficiencies vary greatly. Per 100 miles driven, hybrids and small cars emit about 50 pounds of CO2, mid-sized cars emit about 80 pounds, and SUVs and pickups emit about 120 pounds (EarthTrends). Van-pools and big SUVs are more carbon-efficient than small cars if fewer miles are driven and/or more passengers are on-board. In summary, trains and buses are usually less environmentally damaging than cars and planes but the best choice depends entirely on the circumstances. Living close to work, car-pooling, cycling, and telecommuting can radically reduce emissions from employee commuting. Phone, web, and video-conferencing can radically reduce emissions from business travel. Fuel-efficient fleets, ground-transport options, and reduced packaging can reduce emissions from shipping. Obviously, carbon-efficiency is only one part of business decision making about transportation. Time-to-market, employee efficiency, and customer requirements are usually more important. That said, the savings from reducing transportation requirements and making smart transport choices go directly to your bottom-line.

Posted by Carbon-Pros at 10:24 AM | Permalink | TrackBacks (0)

Business sustainability is being discussed more often in boardrooms and executive suites around the world. When executives talk about sustainability, they talk about going beyond financial metrics to measure company impacts on all stakeholders, not just shareholders. Shareholders (owners) are rightly focused on financial metrics. All too often, however, they are biased towards short-term metrics, e.g. the rolling 30-day average share price. Shareholder focus on the short-term values of public companies can give private companies the advantage of patience and persistence in achieving their strategic vision. In both the public and private sectors, it takes a talented CEO to balance short- and long-term financial objectives. A company incorporating sustainability puts considerable emphasis on achieving long term financial objectives but also puts emphasis on their impact on all stakeholders. “Stakeholders” include everyone and everything impacted by the company. This means employees, suppliers, customers, society, and the environment. A focus on business sustainability therefore requires measurement and goal-based performance reviews in all these areas. While the impacts on employees, suppliers, and customers may fit conveniently within the sphere of financial metrics; society and the environment typically require a new set of metrics. What is your company's impact on the local, regional and national population? What is your impact on the environment including air quality, water quality, land use, and waste production? Does your company comply with all applicable labor and environmental laws? We hope so. But sustainability goes beyond compliance to evaluate your company's impact on people and the planet. Sustainability does not ignore profitability. It covers profits, people, and the planet. An unprofitable company is unsustainable. But a profitable company that mistreats citizens and pollutes the atmosphere won't be profitable for long. Managing and reporting on the 3Ps of profits, people, and the planet is also called managing the triple-bottom line (TBL). In the age of sustainability, managing your TBL will be a critical-success factor in all business endeavors.

Posted by Carbon-Pros at 07:32 AM | Permalink | TrackBacks (0)

As business owners and managers, we should include energy modeling in our toolbox for making cost-effective sustainability decisions. Yesterday I attended a workshop on energy modeling organized by BGBG and presented by Roger Hedrick of Architectural Energy Corporation. The topic might put some people to sleep, but energy modeling is an increasingly important business tool. Essentially, an “energy model” takes the design of a building through a 24x7 computer simulation of energy loads, demands, and performance. It gives us a way to predict the relative effects of different design decisions on building energy performance. Essentially it supports “what-if” analyses by owners, managers, and designers. This is crucial in new designs and major renovations. For example, an energy model lets you understand the trade-offs of investing incremental funds in new windows vs. wall insulation vs. exterior green-wall shading. The need for energy modeling is no different than GM's need to put the Chevy Volt through wind-tunnel testing to minimize its drag coefficient. The need for performance simulation is increasing across all areas of business decision making. As the software and underlying data improve, you will see energy modeling employed across a broad range of applications including all new construction, all major renovations, and in the operation and maintenance of large facilities. In different forms, energy modeling will also show up in transportation management and supply chain management.

Posted by Carbon-Pros at 09:56 AM | Permalink | TrackBacks (0)

Can you believe it? Solar seems to be perceived as the fix for all our problems. Intuitively, it feels right. A lot of people think so, governments, media, corporations, countries, utilities, voters, and your neighbor. Solar has never been lower in cost. Rebates, tax credits, and tax waivers take us back to late-70's Carter-era incentives and better. The motivation for solar is tremendous, whether it's in your heart and you want to directly reduce your carbon footprint, or you think solar is geeky-cool and sexy, or maybe you just like the idea of investing $5-10,000 now to have 20-30 years of free electricity, immune from energy shocks and utility rate increases. The last six months have seen the cost of solar drop precipitously. Here are some of the reasons why the momentum for solar is as big and hot as the sun:

• The national Wall Street bailout included an extension to the federal tax credit (30%)
• Colorado's statewide vote on renewable energy led to rebates from the state's largest utilities
• The governor's office partners with smaller utilities to support rebates in areas not covered by the RPS
• The State passed a state sales tax waiver for solar purchases
• As of 2008, Boulder County requires a very high standard of energy efficiency in new construction, all but requiring solar for large homes and office buildings
  
• Boulder County offers financing for residential and commercial solar installations through through a 2009 bond issue
  
• United Power Rural Elecric Association (REA) customers can "buy" solar panels for about $1000 each and enjoy the financial and environmental benefits without hassle; the utility will use the money to locate and maintain a field of solar panels for their customers
• The Federal government keeps sweetening its incentives for the commercial market: allowing 50% 1st year depreciation, accelerated depreciation schedule, and a 30% tax grant
• Payback periods are declining rapidly and are well below ten years in many cases
• Carbon cap and trade legislation will further stimulate the commercial market
• National security concerns and terrorist threats are driving interest in US energy security
• The US military is investing in solar for both battlefield operations (think desert sun) and domestic use
• The LOHAS, sustainability, and “buy local” movements fit perfectly with distributed energy generation (think rooftop solar)
• The idea of being independent from the utility grid appeals to the rebellious child in many
• The data on climate change are getting worse, scientists are telling us that atmospheric temperatures are accelerating faster than anticipated

There's a lot more, but I am way over my alloted space! --Bob Monnet, Boulder CO, Flatiron Solar

Posted by Guest at 08:53 AM | Permalink | TrackBacks (0)

Running a tight ship (think business efficiency) has paid off in the past and it will pay off even more when carbon is factored into your business results. Carbon, in the form of greenhouse gases, costs all businesses money. But not as a line-item in the accounting system. Up until now, carbon has gone unaccounted for by most businesses. It's invisible, it's not taxed, and yet comes as a byproduct of many business activities. With the EPA officially listing carbon emissions as a “form of pollution endangering public health,” we need to start thinking of carbon in business terms. Currently, the cost of carbon is an intangible. Depending on your industry, carbon emissions may affect your brand-value (especially in the consumer segment), customer loyalty (repeat sales), employee engagement (productivity), retention (cost of HR), supply chain compliance (long-term sales) and risk exposure. FASB is developing accounting guidelines for long-term business risks such as those related to carbon emissions and climate change but they are a work-in-progress. In the future, carbon caps and taxes will be priced into the cost of energy, transportation, and other carbon-intensive business purchases. These added costs will show up in our accounting systems. Fortunately, as we tighten budgets for these line-items, the cost of carbon AND our overall costs will go down.

Posted by Carbon-Pros at 05:13 PM | Permalink | Comments (1) | TrackBacks (0)

One of the projects I took on during my sabbatical was a low density condo complex in northern Michigan (theBirchesCondos.com). It's by no means a LEED accredited project, but we got a lot of the details right. The project is located in a retirement community surrounded by lakes, golf courses, and open space. Our site plan emphasized open space over developed land with 15 acres developed and 22 acres untouched and permanently protected. The duplex design has a common wall to increase energy efficiency while still giving the feeling of a stand-alone home. The building envelope is tight and most of the units face south. The walls are insulated to R-24 with better than R-36 in the ceiling. We used low-E glass with fixed and casement openings, minimizing air infiltration. Every unit included a 90% efficiency gas furnace with central air conditioning, programmable thermostats, 100% Energy Star appliances, fully insulated and drywalled garages with insulated overhead doors. Perhaps most important, we used local builders who gave us great craftsmanship and tightened up the project at every step. We added many so-called “green features” at standard construction costs. We absolutely had to keep the costs down since we were targeting the $200K market for 2-4 bedroom condos. The residents absolutely love their homes. Even in the tough Michigan market, the condos are still selling. This project proved to me that if you start with a good design and get the details right, you can build a green product at or below standard construction costs. --JCB

Posted by Carbon-Pros at 09:56 AM | Permalink | TrackBacks (0)

In measuring carbon emissions, we typically begin by defining a relevant scope, boundary, and base year. Since business value chains are complex and overlapping, it can be difficult to draw the lines. For companies covered under federal legislation, the law will define the scope. For others, the scope will subject to management judgment given the objectives of the carbon inventory. We generally start by including all direct emissions by the business and any related organizations it controls. Direct emissions include all internal operations but exclude all emissions from suppliers and customers. While direct emissions give you a starting point, they often fail to provide a fair assessment of the businesses' impact on carbon released into the atmosphere. In the old days of vertical integration where all functions were performed internally, counting direct emissions would have been sufficient. In the current era built around specialization and core-competencies, many formerly core activities are now accomplished through suppliers, thus we typically count indirect emissions. For example, if a company uses computers, paper, and toner in its operations, the carbon footprint of these materials is typically counted even though provided by outside suppliers. If the company retains a janitorial service that uses toxic cleaners with high levels of offgassing, these “emissions” should be counted even though provided by your supply chain. In the carbon inventory for a service business, we typically count the following direct and indirect sources:

• Energy services: heating, cooling, electricity, gas, propane, oil, etc.
• Transport fleet: company cars, trucks, etc.
• Business travel: auto mileage, airline miles, rail miles, etc.
• Products/services consumed: office supplies, furniture, janitorial, etc.
• Fugitive emissions from wastewater, trash, and landfill.
• Employee commute method, distance, and frequency.
• With additional components from the supply chain depending on the situation.

Once sources are identified and data are collected, we enter the details into a tracking system, calculate carbon emissions, and privately report the results. The fun begins with benchmarking, analysis, and making ongoing carbon reductions. This helps the environment, saves you money, and strengthens your position in the marketplace.

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The concentration of carbon dioxide in the atmosphere has always “mattered” to planet Earth. And the human release of CO2 has mattered since the dawn of the industrial revolution. Unfortunately, nobody realized until recently that CO2 levels were getting out of control. Over the past decade, the science of global warming has become more established and better understood. Most scientists now agree that human activities are the root cause of skyrocketing levels of atmospheric carbon dioxide. More than a decade ago, the big industrialists (e.g. 3M, Dow, DuPont, and others) began reducing their carbon footprint when “air pollution” was federally monitored and eventually capped. GHG emissions were reduced as a byproduct of increased production efficiencies and decreased waste. Big companies found that becoming more efficient (releasing fewer pollutants and fewer GHGs) actually saved them $100s of millions of dollars. Today, the convergence of several factors has heightened awareness of carbon: 1) developed nations are feeling global pressure to take coordinated action, 2) governments and businesses are facing growing public opinion that they must take action soon, 3) European businesses began facing new carbon caps as of 2008, and 4) US businesses will likely see federal carbon regulation as early as 2009. In a cap and trade system, some businesses will be forced to live within a carbon cap, with the cap declining over time. Even if they are not subject to the cap, businesses within the supply chain of a capped company may be forced to make CO2 reductions. Other businesses are moving ahead of the market by cutting their carbon footprint before their hand is forced by the government or a major customer. They want the flexibility to to make cost-effective carbon reductions on their own terms. Sill other businesses see carbon as a unknown business risk and are measuring their footprint to assess that risk. And finally some businesses are measuring and reducing their footprint because they believe it's the right thing to do.

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