Navigant Research Blog

Eastern Approaches to Smart Grid Development

— November 20, 2014

Japan and South Korea have emerged as leaders in smart grid technology development and deployments.  On a recent trip to East Asia I noted some similarities and some marked differences between the two countries’ approaches and styles.

At Korean Smart Grid Week in Seoul, I spoke about global demand response (DR) trends.  The Expo hall for the conference was as big as any I’ve seen, including large players like Korean Electric Company (KEPCO), Samsung, and LG exhibiting enormous booths and showing off cutting-edge technologies.  There were also a plethora of smaller companies and startups displaying their innovations to challenge the status quo and create the next-generation electric grid.

Next, I traveled to Jeju Island, the so-called “Hawaii of Korea.”  I got to enjoy the palm trees and volcanic landscape only by bus as we traveled to the Smart Grid Information Center, where KEPCO laid out its vision of the grid of the (not too distant) future.

Then we caught a quick ferry ride to tiny Gapa Island, which is only about 1 square mile in size but has an immense amount of solar, wind, and energy storage packed into a microgrid test bed, complete with a state-of-the-art operation center.

All of the Above

Next I embarked for Tokyo.  Japan is undertaking an “all of the above” energy strategy after the Fukushima nuclear accident in 2011.  Restarting the country’s nuclear plants is still on the table, but Japanese companies and government agencies are also deregulating the retail electricity market and designing opportunities for renewables, energy efficiency, DR, and energy storage.

Both countries, and the companies within them, have a laser focus on energy storage as a key solution, which is not surprising given their level of technological advancement.  Grid-scale energy storage is still a few years away in the United States, but Japanese and South Korean vendors are intent on leapfrogging Western suppliers and exporting their expertise.

Hare and Tortoise

The two countries’ business cultures, however, are quite divergent.  South Korean companies tend to take an aggressive, American-style approach to forming a plan, executing on it, and tweaking it along the way.  For instance, the country opened its DR market in November after a relatively short design phase, and U.S. provider EnerNOC has already entered the fray.

Japan, on the other hand, has been studying DR for a few years and it will take a couple more years of pilot programs until the market is ready.  Japanese firms tend to take a much more measured approach to development, trying to perfect the model before setting it free.  In the long term, both methods may work; but in the short term, the real action is in South Korea.

These developments are outlined in the new Navigant Research report, Demand Response for Commercial & Industrial Markets.  The report was actually published while I was abroad, so it includes updates from the trip.

 

South Korea Draws an Ambitious Roadmap for Smart Grids and Smart Cities

— November 12, 2014

South Korea has ambitions to be a world leader in smart grid technology.  The smart grid test bed on Jeju Island has been the proving ground for the technologies, partnerships, and business models required to achieve this goal.  Led by Korea Electric Power Corporation (KEPCO), South Korea’s national power company, the Jeju Island demonstration project involved a wide range of South Korean and international partners.  The project ran from December 2009 until May 2013, had a total budget of around $240 million, and included two substations, four distribution lines, and 6,000 households.  The sub-projects included power grid upgrades, demand response, electric vehicles (EVs), renewable power integration, and new energy market models.

In this regard, Jeju Island mirrors many other smart grid pilots around the world looking at the integration of multiple technologies and new business models, particularly island community smart grid projects such those in Hawaii and Bornholm.

From Islands to Cities

South Korea is different in that the government has now laid out plans to move beyond its initial demonstration project into a wider series of trials and eventually a national rollout of smart grid technologies.  The next phase will involve a series of eight smart grid/smart community projects, to be run between 2015 and 2017.  More impressively, KEPCO has laid out plans to extend these projects into a series of municipal-scale smart grids by 2020.  The final stage of this grand scheme will see smart grid technologies deployed across the whole country by 2030.

The total budget for the pilot projects is $876 million, around $400 million of which will come from central and local governments and the rest from the private sector.  KEPCO alone is investing $155 million.  The government expects the private sector to take the lead in further development from 2018 onward.  As well as smart meters, an EV charging infrastructure, and energy storage, KEPCO is piloting a smart grid station that will provide sophisticated energy management and grid integration for commercial buildings, beginning with up to 220 KEPCO buildings.  It sees these smart grid stations as building blocks for community energy management systems and city-scale energy management.

Big City Vision

These are ambitious plans, and some of the Korean experts I spoke at Korea Smart Grid Week were skeptical about the ability of the government, KEPCO, and other stakeholders to meet the proposed timescales.  However, even if those timescales prove challenging, the vision and the roadmap are impressive.  I don’t know of any other country that has laid out a plan of this magnitude that would see smart grid technologies deployed across all of its major cities by 2020.  Such an achievement really would mark South Korea out as a world leader in both smart grid and smart city infrastructure.

 

Healthy Buildings Get a Boost in New Orleans

— November 10, 2014

With the release of LEED V4, the latest version of its green building rating system, the U.S. Green Building Council (USGBC) is addressing two major components of health: indoor air quality (IAQ) and material transparency.

The former is not a new concept in buildings.  According to Navigant Research’s report, Indoor Air Quality Monitoring and Management, global revenue associated with IAQ is expected to grow at a compound annual growth rate (CAGR) of close to 9% between 2013 and 2020.

As for material transparency, addressing the environmental impacts of chemicals and materials in buildings – and their corresponding health effects – could be a game changer.  By partnering with UL Environment, USGBC will make available Environmental Product Declarations (EPDs) for equipment and materials used in buildings, making transparent what chemicals are near and around people in buildings.

And not a moment too soon.  At the Greenbuild conference in New Orleans, Professor Andrew Whelton of Purdue University presented his findings that polyethylene pipes used for water conveyance in green buildings have been leaching chemicals into the drinking water – above minimum standard levels.  Plastic pipes are used in green building construction because they use less embedded energy in their production and transportation, relative to traditional metal piping.  The direct health implications are not clear from Professor Whelton’s findings, but they certainly provide evidence that the chemical makeup and leaching potential are components worth tracking in buildings that are supposedly environmentally friendly.

Better Buildings = Better Business

Another point of the building-health connection was released in a report by the World Green Business Council, a partner organization to USGBC.   The report, Health, Wellbeing and Productivity in Offices, starts with the overarching premise that the most expensive part of any building is its inhabitants, accounting for up to 90% of operating expenses (it’s not clear if this estimate holds true throughout the developing and the developed regions of the world).  The report analyzes the associated health implications of building siting, design, and operations on qualitative and qualitative metrics like occupant health outcomes, well-being, and perceived benefits, as well as organizational and corporate financial outcomes.  For example, an office environment that forces employees to walk around can improve their overall health, reducing absenteeism and physical complaints.  Another example: a 2011 article in the journal Indoor Air indicated that relative to standard temperature baselines in an office, employees were 4% and 6% less productive at cooler and warmer temperatures, respectively.

Greenbuild also hosted Acting U.S. Surgeon General Rear Admiral Boris D. Lushniak. Rear Admiral Lushniak challenged the audience to design preventive healthcare into the built environment, making healthy buildings the default, rather than a specialty.  He also advocated for a “Blue Movement” focusing on human health, like the Green Movement addresses sustainability and environmentalism.  Rear Admiral Lushniak ushered the concept of integrating health into building design, function, and operations for the green building community with passion.

 

What “Sustainable Buildings” Really Means

— November 4, 2014

Employing sustainable technologies and models for new and existing buildings is the central challenge of the construction and energy management industries today.  Often, simply defining “sustainability” can be in and of itself a challenge.  The goal is to transform buildings from static pillars of energy use to dynamic environments promoting long-term, low impact solutions to the challenges of high-carbon energy, droughts, and risks associated with climate change.

At the Vision 2020 Sustainability Summit, held as a precursor to the Greenbuild conference in New Orleans, the role of technology in driving this shift was a primary topic.  At the Summit, at least, the definition was clear.  Sustainability was presented as a series of long- and short-term initiatives that will help accelerate the transformation.

In a series of discussions of applied sustainability, the Summit speakers presented a number of innovations and solutions already in design or in the field today.  Starting with the basics, Doug Bennett, conservation manager with the Southern Nevada Water Authority, described water conservation in practice in the desert state.  As people continue to relocate to the drought-afflicted Western states, Bennett pointed out, most residential water is now used for landscaping, not inside the house.  A new frame of mind is needed, he suggested, to ensure that resources will be available in the next decade.  For example, just because fountains and lawns use reclaimed water, that doesn’t mean that the water is “free.”  Reclaimed water is still water and can be viewed as part of the potable water cycle, with admittedly different attributes.

Not Just Sinks

Most of the event was focused on buildings and their potential to be more than the blunt end-use energy sinks they are today.  Steven Winter, founder and president of Steven Winter Associates, talked about how the building stock of the near future is in development now.  It takes time for a construction project to be put in place, and if aspirational goals are to be incorporated, there are plenty of contemporary projects in progress that can address efficient and sustainable design, construction, and implementation.

New financial mechanisms, such Enlighted’s Global Energy Optimization (GEO) financing for capital matchmaking for LED retrofits, are starting to tap the great potential for efficiency savings in existing buildings.  (See Navigant Research’s report, Energy Efficiency Retrofits for Commercial and Public Buildings, for a detailed examination of the drivers and challenges of retrofits in existing buildings.)  Winter also advocates the use of more carrots and sticks for sustainable building operations.  The use of publicly available city-based benchmarking is one such approach; open disclosure by entities like GRESB and Green Building Information Gateway is another.

Every Bit Matters

Paul Torcellini of National Renewable Energy Laboratory (NREL), an early leader in zero energy buildings, emphasizes that every decision in a building’s design, construction, and operation has some energy impact.  That simple realization is frequently overlooked.  One major challenge facing existing and new buildings, including high-performing buildings, is the need to train personnel to ensure that complex system operations (with lofty goals) of a building can be easily carried out.

The other speakers at Vision 2020 made it clear that in order for the ambitious goals of a sustainable, low-carbon, low-energy future to be reached, innovation in materials, processes, and technology must be put into place now.  And the building stock of the future will mostly be the building stock of the present – so investment and attention are needed to get that stock performing optimally.

 

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