Navigant Research Blog

EV Makers and Utilities Unite to Realize V2G Potential

— August 7, 2014

The first major trial using electric vehicles (EVs) across the United States to strengthen the grid is about to begin.  For the first time, multiple utilities and car companies are cooperating in a deployment of vehicle-to-grid (V2G) technologies coordinated by the Electric Power Research Institute (EPRI).

Announced at the Plug-In 2014 conference in San Jose, California, on July 29, the Open Grid Integration Platform will use grid standards for utilities to communicate with a newly created central server that will relay the information to vehicles in many states.  Sumitomo Electric developed the platform, which enables automakers to relay information to vehicles using telematics systems or any communications pathway of their choosing, according to Sunil Chhaya, the innovator and technology leader for energy and transportation at EPRI.  The pilot project relies on smart grid standards (OpenADR and SEP2) to push V2G to become viable nationally; previously, trials required custom hardware and software that was specific to a utility and EV charging station.

Smartphones + Cars + the Grid

V2G applications, including demand response, frequency regulation, and voltage regulation, modulate the power flowing to (and, in some cases, from) EVs to enable grid operators to match power supply and demand.  Phase 1 of the project will test demand response; future phases will trial regulation services.  According to Navigant Research’s report, Vehicle to Grid Technologies, by 2022, demand response programs will be able to control nearly 640 MW of load from EVs.

The project will include cars from eight automakers (Honda, BMW Group, Chrysler, Ford, GM, Mercedes-Benz, Mitsubishi Motors, and Toyota) and involves 15 utilities and grid operators, including major utilities like Duke Energy, Southern Company, Southern California Edison, and Pacific Gas and Electric.

If this technology is commercialized, automakers are expected to integrate grid communications into mobile phone applications so that EV drivers will know when their vehicles are participating in a grid service event.

No Fees, Yet

While there are many ways that information can be shared between the grid and EVs, Watson Collins, the manager of business development at Northeast Utilities, said in an interview at Plug-In that the extensive project will determine whether this method is “the best, lowest-cost way.”

Collins said the trial will not include payments to the participants who will primarily be utility employees, but a commercial program would provide incentives for participation.  Each utility’s public utilities commission (PUC) would have to approve any V2G compensation system.

Automakers could charge fees for the use of their communications platforms in V2G services.  This test platform does not require the participation of EV supply equipment or EV service companies, which, if implemented nationally, could cut them out from future V2G revenue streams.

Chhaya added that utilities will benefit, as they will be able to target potential stress on feeders or transformers caused by EV power consumption.  Utilities will be able to see which houses the EVs are drawing power from to determine how much load is coming from the car versus the residence.  This will enable utilities to “use a scalpel instead of a butcher knife” to detect and manage EV load in specific geographic locations.

 

Coming to the Motor City: A Smarter Grid

— July 13, 2014

The smart grid in Detroit is about to get smarter – and so are utility industry executives exploring options for real-time grid data and analytics.  Distribution grid sensor developer Tollgrade Communications recently announced a $300,000 project to deploy its LightHouse sensors and predictive grid analytics solution across DTE Energy’s Detroit network.  The companies aim to demonstrate how outages can be prevented.

The 3-year program was selected as a Commitment to Action project by the Clinton Global Initiative (CGI) at the recent CGI event in Denver, where Tollgrade CEO Ed Kennedy took to the stage with former president Bill Clinton to discuss the project.  Tollgrade, Kennedy said, will make public quarterly reports on the project, beginning in 1Q 2015, identifying best practices and sharing detailed performance statistics.

Cheaper Than Building a Substation

With 2.1 million customers and 2,600 feeder circuits, DTE Energy has already begun piloting the system around Detroit, and Tollgrade says that it hopes to prevent 500,000 outage minutes over the next 3 years.  Because of the heavy concentration of auto manufacturing in the Detroit area, those saved minutes should translate into substantial economic benefits.  The system will leverage several communications protocols, including DTE’s advanced metering infrastructure communications network, reducing the startup cost and improving the return on investment.

The sensors will be placed along troublesome feeders as well as outside substations where older infrastructure increases the likelihood of outages.  Combined with the predictive analytics solution, the sensors cost just a few thousand dollars per location and could help DTE Energy avoid or defer replacing a million-dollar substation.  Both investors and regulators are sure to like those stats.

Predicting Change

Predictive grid analytics has been a hot topic in the industry for the last few years, but only recently have the prices of solutions and sensors fallen to a level where utilities can justify the cost to deploy them widely throughout the distribution network.  Navigant Research expects the market for distribution grid sensor equipment to grow from less than $400 million worldwide today to 4 times that amount by 2023.  (Detailed analysis of distribution grid sensors can be found in Navigant Research’s report, Asset Management and Condition Monitoring.)

Since its first meeting in 2011, CGI America participants have made more than 400 commitments valued at nearly $16 billion when fully funded and implemented.  The Modern Grid was one of 10 working groups this year; others include efforts in Sustainable Buildings and Infrastructure for Cities and States.

Another CGI Commitment to Action grant announced last week will fund a market-based, fixed-price funding program for solar and renewable technologies.  The Feed-Out Program from Demeter Power will support solar-powered carports with electric vehicle charging stations at a net-negative cost to the customer.  In other words, eligible businesses pay a fixed monthly fee to Demeter Power (lower than their previous monthly electricity bill) and their employees and customers enjoy free car charging while parked there.  Demeter will own and maintain the infrastructure.

The program will initially make financing available to commercial properties located in Northern California communities participating in the California FIRST property assessed clean energy (PACE) Program, which is offered through the California Statewide Community Development Authority.  Interested participants must register with Demeter Power Group to participate in the program, which is expected to launch in the first quarter of 2015.

 

To Win, Utilities Must Play Offense as well as Defense

— July 10, 2014

Since I’m originally from the Netherlands and spent several years living in Brazil, the semifinal results of this week’s World Cup soccer (or football, as we Europeans call it) matches have been disappointing, to say the least.  One thing that’s clear from the tournament ‑ one of the most exciting World Cups in my memory, by the way ‑ is that to succeed at this level, teams must play well on both ends of the field: offense and defense.  The Netherlands squad, the Orange, played superb defense on Argentinean superstar Lionel Messi, but failed to muster a goal in 120 minutes of regular and extra time and lost on penalty kicks.  As for Brazil, it played neither offense nor defense.

The same is true for utilities in today’s rapidly transforming power sector.  Playing defense – by sticking with established ways of operating and traditional forms of customer service – is no longer enough to succeed.  Utilities must also play offense; they must proactively develop new capabilities and innovative business models to thrive in a world of proliferating distributed energy resources (DER), greater customer choice, and rising competition from new players.

A Shifting Landscape

Widespread coal plant retirements, stiff renewable portfolio standards in many U.S. states, and the spread of renewable generation are all irrevocably changing the mix of generation assets while increasing the need for load balancing and frequency regulation on the grid.  Navigant forecasts that cumulative solar capacity in the United States will reach nearly 70,000 MW – 60% of it distributed – by the end of 2020.

At the same time, the U.S. Environmental Protection Agency’s (EPA’s) proposed limits on CO2 emissions from existing power plants will drive further changes in the generation landscape.  These limits will bring new natural gas capacity online, put upward pressure on wholesale electricity prices, and make demand response and energy efficiency programs key parts of the answer.

(Source: Navigant Consulting)

Today’s centralized, one-way power system is quickly evolving into an energy cloud in which DER support multiple inputs and users, energy and information flows two ways across the system, and market structures and transactions grow more complex.  The energy cloud is more flexible, dynamic, and resilient than the traditional power grid, but it also brings new challenges to a power sector that until recently has changed little in its fundamental structure for almost a century.

Lead or Lose

Facing declining revenue as customers consume less and produce more of their own power, utilities are faced with large investments to build new transmission capacity, upgrade distribution systems, and invest in new DER businesses.  Given these challenges, utilities must be adept at playing offense and defense.  An updated defensive strategy will entail:

  • Engaging with customers and regulators to understand customer choices vis-a-vis price and reliability
  • Improving customer service and grid reliability at the lowest prices possible
  • Finding equitable ways to charge net metering customers for transmission and distribution services
  • Developing utility-owned renewable assets to appeal to environmentally conscious customers

Playing offense is even more important.  Utilities must:

  • Create new revenue streams through the development of new business models, products, and services
  • Transform their organizations and culture in order to fully integrate sales, customer service, and operations
  • Upgrade the grid and operations to facilitate the integration of DER

These objectives can only be accomplished by implementing new business models that include developing, owning, and operating DER such as rooftop solar, customer-sited storage, and home energy management systems; providing third-party financing for DER; and offering new products and services focused on energy efficiency and demand response.

There is no going back to the old ways of doing business.  Utilities must lead – by playing both offense and defense – or they run the risk of being out of the competition.

 

Virtual Power Plants Harness the Power of the Energy Cloud

— May 29, 2014

Among the elements of the emerging energy cloud – i.e., the assembly of dynamic networks that can enhance the efficient allocation of distributed energy resources (DER) benefits across a broad customer base – virtual power plants (VPPs) are among the most powerful and flexible.  Enabling power providers to take advantage of economies of scale through aggregation and optimization, VPPs maximize the value of electrons flowing across the system.  Schneider Electric, which is among the long list of companies exploring the VPP opportunity, , likes to use the analogy of Amazon when discussing VPPs: while the store may be virtual, the assets delivered, whether books or CDs or electricity, are real.

The primary goal of a VPP is to achieve the greatest possible profit for asset owners while at the same time maintaining the proper balance of the electricity grid.

Navigant Research’s new analysis, which tracks spending on software networking products and services for VPPs, forecasts that the market will grow from just over $1 billion in annual revenue in 2014 to more than $5.3 billion by 2023.

Total VPP Vendor Annual Revenues, Base Scenario, World Markets: 2014-2023

 

(Source: Navigant Research)

Unifying the Cloud

Vendors such as Ventyx, a subsidiary of ABB, now offer asset performance software for managing assets, operations as well as smart grid analytics as a cloud-based software-as-a-service (SaaS) – the ultimate virtualization of our energy services.  Today, virtually every major regional power grid in the United States relies on Ventyx’s software analytics to manage complexity at the transmission level.  Yet the company is moving away from customized software solutions to a more standardized, unified smart grid architecture that reaches down to the retail customer level.

In May, Ventyx announced that it will roll out some of its product offerings via Microsoft’s Azure cloud platform.  Asset Health, the predictive analytics component of Ventyx Asset Performance Management, is already available as SaaS on the Ventyx website.  It’s offered under a single quarterly subscription fee, delivered via Azure and accessed from the customer premises using the Internet.  Its cloud-based demand response management system service, developed in collaboration with Deutsche Telekom, has also been commercialized at the T-City project in Friedrichshafen, Germany.  Additional Ventyx Asset Performance Management applications will be available in the cloud over the coming months.

This move is significant for the growth of VPPs because it will enable electric utilities and power generation companies to invest in smart grid functionality without costly investments in IT infrastructure, workforce, and ongoing maintenance.  According to Ventyx, the cloud model is also highly configurable, highly secure, and highly scalable.

Navigant Research’s webinar, “The Energy Cloud,” will explore VPPs and other elements of this emerging distributed architecture, on June 3rd at 2 p.m. ET.  Click here to register.

Taylor Embury contributed to this blog.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Electric Vehicles, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Smart Grid Practice, Smart Transportation Practice, Smart Transportation Program, Utility Innovations

By Author


{"userID":"","pageName":"Conferences & Events","path":"\/tag\/conferences-events","date":"11\/1\/2014"}