Navigant Research Blog

All’s Quiet on the DR Front, but a Storm Is Brewing

— October 7, 2015

Another ho-hum summer for demand response (DR) has concluded as September comes to a close. The last two summers have been light in regards to the need to activate DR resources for most of North America. The East Coast had a second consecutive relatively mild season, with no true heat waves until September. Even Texas, which saw record heat this summer, did not require a large amount of DR to support its grid through peaks. The lone exception is drought-stricken California, which needs all the help it can get to meet its energy and water needs.

This reality lies in stark contrast to the summers of 2012 and 2013, when the weather was hot, new peak load records were hit, and DR was utilized multiple times in markets across the United States. The past couple of years have gained notoriety for needing DR in the winter due to the polar vortex of 2014 and for ever constraining natural gas pipelines as the amount of gas-fired generation grows. It appears that the expansion of energy efficiency programs and solar photovoltaic installations have permanently lowered peak load growth in many regions, diminishing the need for peak support but potentially raising new needs to firm up new load shapes.

This lull just may be the calm before the upcoming storm, however. There was no lack of activity in the court system regarding DR this summer as the actual DR resources sat idly by. One small issue that surprisingly arose was the U.S. Environmental Protection Agency’s (EPA) Reciprocating Internal Combustion Engine National Emission Standards for Hazardous Air Pollutants (known as RICE NESHAP). In 2013, the EPA issued a rule that allowed backup diesel generators to participate in emergency DR programs for up to 100 hours per year. Some states and generator groups appealed this ruling (for different reasons), and in May 2015, the U.S. Court of Appeals threw out the EPA’s rule and told the agency to go back to the drawing board. The EPA has been granted a stay, so its existing rule can remain in place until it comes up with a new one, but the situation has created uncertainty for the 20% or so of DR that utilizes diesel generation.

However, the real fireworks will come on October 14, when the U.S. Supreme Court hears arguments on the case regarding the Federal Energy Regulatory Commission’s (FERC) Order 745 on DR compensation. The two issues at stake are whether DR should get compensated the same as generators in the wholesale energy markets, and, more significantly, whether DR should be allowed to participate in wholesale markets at all. FERC, EnerNOC, and a plethora of state agencies and other DR providers will line up on one side of the aisle, while generators and hardcore economists line up on the other. This could be the heaviest hitting we see until Super Bowl 50 next year.

It’s not too often that someone covering something as esoteric as DR gets to go to the Supreme Court, so I can’t pass up the chance. I will be reporting and live tweeting from the hearing (@BfeldmanEnergy) as much as is allowed and access provides. It promises to be the most riveting courtroom drama since Tom Brady’s hearing against the NFL in the Deflategate saga. I promise not to draw any unflattering courtroom sketches of FERC chairman Norman Bay or anyone else involved.


High Focus on Low Wind Turbines

— October 5, 2015

Wind turbines with taller towers and larger rotors designed for efficient power generation in areas of low-speed wind have taken over the industry over the past few years with no sign of slowing. At this year’s HUSUM Wind 2015 wind conference and exhibition in Germany, four new low wind speed models were unveiled to the market by four top wind turbine original equipment manufacturers (OEMs). These turbines are targeted toward the Northern European wind market where low wind speeds and space constraints favor these designs, but they are growing more popular. The system specs show the industry is continuing to innovate and push the boundaries for onshore wind turbines.

Denmark’s Vestas unveiled the largest rotor variant of its 3 MW platform—its new V136-3.45 designed for low wind International Electrotechnical Commission (IEC) class IIIA sites. Following now-typical naming conventions in the industry, the 136 denotes rotor diameter in meters, and the 3.45 represents the turbine’s rated megawatt capacity. The 66.7 m blades are Vestas’ largest yet for onshore turbines, and are the latest in a series of blades released in recent years that follow the company’s switch to structural shell designs after decades of using a central spar design. As with long blades from other vendors, preimpregnated carbon fiber plays a key role in achieving strength and length with manageable weight. The blades also have a slim design that is augmented with aerofoils, vortex generators, and serrated trailing edges (which appears to be a newly revoked patent previously owned by Siemens).

Also notable is the use of the Vestas’ large diameter steel tower (LDST), a tower design that is detailed in Navigant Research’s Supply Chain Assessment 2014 – Wind Energy report. Put simply, the tower design vertically splits the largest bottom tower section into three shell sections that are bolted together at the wind plant site. This allows for a wide enough base (6.5 m) to support hub heights of 132 m and 149 m.

Germany’s Senvion also unveiled a new IEC IIIA low wind turbine, the 3.4M140, which features a 140 m rotor using 68 m carbon-infused blades and hub heights of 110 m and 130 m. This is an uprated design from the company’s current 3.2 MW, 122 m rotor offering. Notably, the doubly fed induction generation drivetrain moves to full power conversion on the new model from partial conversion on the existing 3.2 MW units. Senvion achieves its tall hub heights using a hybrid approach that combines lower sections of prestressed concrete with standard tubular upper sections. Navigant Research has detailed recent hybrid tower designs, which are the most common approach used to reach high hub heights.

Uprating the drivetrain is German company Nordex’s approach to its new low wind turbine, the N131-3.3MW. This turbine retains the existing 131 m rotor and carbon-infused 65.5 m blades used on the company’s current N131-3.0 offering, but uprates the power output with changes in gearbox torque, generator, and power converter (retaining DFIG with partial conversion). The N131-3.3MW is also designed for remarkably tall hub heights of 134 m and 164 m by use of hybrid concrete and steel towers.

European OEMs weren’t the only players showcasing new low wind offerings at HUSUM. U.S.-based General Electric (GE)—which has grown minor market share in Germany—unveiled a 3.2 MW turbine with a 130 m rotor turbine designed for IEC IIIA wind speeds. GE’s largest offering presently in the low wind category is its 2.75-120 model, so this is a notable uptick that brings the company closer in line with its European competitors. Hub heights for the 3.2 MW turbine will range from 85 m to 155 m, with the higher-end options employing GE’s unique space frame design, which features a bolted lattice tower covered in fabric.


Digital Strategies Help Bridge the Bike Infrastructure Gap

— October 5, 2015

The number of Americans switching from cars to bikes for their commute of choice is increasing at a rapid rate—up 62% between 2000–2013, according to U.S. Census data—and is challenging cities to develop solutions that can address the safety and convenience needs for this new set of commuters. Cyclists in San Francisco and the Netherlands have famously demonstrated the need for separate infrastructure and rules, causing large traffic jams as a form of protest. However, developing bike infrastructure can be prohibitively expensive for cities burdened by transportation department regulations, and as some cities have experienced, reducing lanes in order to allocate more space for bikers can be extremely unpopular among citizens.

In recent years, new, more cost-effective and data-based approaches to planning and managing bike infrastructure have emerged. Cities like New York and Chicago are proving that improved data collection has the ability to inform where and how cities can strategically develop bike lanes (based on the number and location of bikers at any given time during the day) and also better enable cyclists to pass through not so bike-friendly areas through better integration with public transportation.

Motivate, formerly Alta Bicycle Share, is a for-profit organization based out of New York City that manages bike-share systems in New York, Washington, D.C., and Chicago. The company has struggled financially in recent years, and in its (so far successful) attempt to turn itself around, Motivate has developed a technology-based approach to engaging with members. This involves pulling together information on road and air conditions, public transportation schedules to optimize internal operations and development, and trip planning for members that includes other forms of public transport.

In Portland, Oregon, Open Bike Initiative and Knock Software have also recognized the need for improving open access to data in order to support bike travel. Knock Software is currently developing two projects to support the city’s efforts to be more bike friendly. The first is a low-cost sensor network that monitors and analyzes bicycle traffic and car traffic trends to provide planning insights for the city. The second uses this same data, paired with other sources such as weather data and road conditions, to help bikers plan and optimize their travel via an app called Ride. Similar to Google’s Waze for drivers, Ride provides information on routes and weather and allows members to give feedback on their commute.

Technology-based approaches have the benefit of improving safety and convenience and can result in much more strategic—and less expensive—transportation planning for cities. While cities like Portland, San Francisco, and New York have been open and supportive of their cycling populations, other cities where bike commuting is still just emerging have not quite figured out how to support this demographic in a low-cost manner—and something as simple as a smart phone app could be an easy first step.


Pool of Innovators in Microgrid Space Is Diverse, Often Incomparable

— October 5, 2015

Navigant Research’s recently published Navigant Research Leaderboard Report: Microgrid Controls is our first ranking of companies active in the microgrid market. The hardest part of this examination of innovators in this space was leaving so many market movers out, due to the focus on microgrid controls offered up by either developers or system integrators.

What if we were to turn the general assumption for the Navigant Leaderboard format on its head? In other words, why not create an apples-to-oranges listing? I am going to go out on a limb and highlight three companies not included in the Navigant Leaderboard report, but that deserve special mention due to their near-term impacts on the overall global microgrid market, regardless of what their role is. I have previously highlighted two companies, a utility (Commonwealth Edison) and an energy storage and smart grid innovator (S&C Electric) that were not included in the Leaderboard. Both were disqualified for inclusion because the ranking excluded utilities and vendors that primarily focus on energy storage integration.

Here are three other companies not included in the Leaderboard that I would like to highlight, for reasons explained below:

  • Energizing Company: Based in the Los Angeles area, Energizing Company is poised to announce one of the largest grid-connected microgrids in the world. The company sees its role as akin to a movie producer. (Well, what do you expect from a company based near Hollywood?) It doesn’t offer a controls platform and, though a private developer, sees utilities as its primary clients. It seeks to sponsor microgrids utilizing public-private partnerships. The company has fully embraced the concept of utility distribution microgrids with a plan for a microgrid to encompass an entire municipal utility’s service territory, optimized with smart grid technologies. It helps that the community this microgrid will serve is allegedly one of the smartest communities in the world (and I am not talking about IQ, but embedded infrastructure intelligence).
  • PowerStream: Ontario’s second-largest municipal utility, PowerStream, was the first utility in North America to announce a microgrid offering under a business model it refers to as DBOOME—design, build, operate, maintain, and energize. Perhaps the company’s most forward-looking project straddles what Navigant Research would identify as either a series of nanogrids or decentralized virtual power plants. Working with Sunverge—another company Navigant Research views as a microgrid leader—PowerStream will aggregate solar PV and lithium ion battery systems installed in residences in order to provide bidirectional value for customer and utility alike. The utility requires each customer to pony up some of their own money in return for long-term savings and exchanges of bidirectional energy services that serve both residence and utility grid.
  • Win Inertia: Among energy storage vendors active in the marketplace, Win Inertia is one of the most creative. Based in Spain, the company’s project portfolio highlights fascinating applications for hybrid battery solutions, including both alternating current and direct current (AC and DC) systems for electric vehicle (EV) charging, railways, harbors, buildings, islands or renewable integration for, of course, microgrids. Win Inertia has enjoyed 100% revenue growth since its inception and boasts a portfolio of over 15 microgrid-related projects either in operation or under development.

At last count, Navigant Research has profiled more than 50 active companies in the microgrid market, with none of them capturing more than 10% of the total market revenue. This is the status of the market today: there is no clear leader. The three companies profiled on this blog highlight the fact that innovation is coming from a variety of market players, each focused on a different part of the value chain.

Will one company emerge as the clear market leader? Only time will tell.


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