The Edge of Tomorrow: Realities Forcing Utilities to Learn, Change, Repeat

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By Rod Walton, Senior Editor

October 1, 2017

Utilities could not avoid the grid edge if they wanted to now. The challenge for them is finding the right space there without tripping over it.

Exponential growth in renewable energy adoption by customers and ever improving sensor and communication technologies are all down the line and growing in clout every day. These force utilities to engage closer to both sides of the meter more than ever, while venders keep developing better technologies to keep it all humming, steady and regulated. Inverters, synchrophasers and every other cutting-edge “er” you can think of will put the grid’s center of gravity closer to the distribution endpoints rather than the traditional transmission, substation and generation vortices.

Yet the journey should come with warning signs such as “Failure to capture value is possible” and “Customers may exit here” and, last but not least, “Taking this road could strand you.” The potentially dangerous curves are out there.

“This new energy economy being driven by distributed generation has created new problems for grid operators, which include two-way power flows on one-way devices, voltage control, frequency control and the need for adaptive protection schemes,” said David Chiesa, senior director of business development for S&C Electric Co. “The new grid economy will require service providers and equipment that can flourish in this new paradigm.”

S&C Electric, much like fellow industry leaders such as GE and AutoGrid, is adapting itself to become both innovator and mechanic on this new road. They see automation and flexibility as the key drivers, whether it’s in voltage control, regulation or connected devices playing both consumer and traffic cop over this two-way flow of energy. Demand response, efficiency and load smoothing efforts also need to be supported.

Many grid-edge proponents believe that machine learning and flexibility-oriented control software will ultimately govern all of these potentially chaotic flow conditions.

“This is an important topic in the grid space; as the grid gets increasingly complex, the notion of centralized power generation will evolve over time into something more hierarchical,” said Steven Martin, who came over from decades in the software industry to become chief digital officer for the Energy Connections business at GE Power. “The grid over time will look a lot more like the internet than what it is today, instead of a one-way directional flow.”

GE sees machine learning as the new frontier with the grid shifting away from its current “physics-based” model of energy management, Martin added. Machines aren’t naturally intuitive and won’t be as flexible early on but, over time, they will remember patterns and fluctuations in energy flow and react accordingly and immediately. That’s what machines do.

“It will offer more degrees of freedom,” he said. “It will deal with constraints on a real-time basis (such as spikes in electricity use). Machine learning will respond to that in near real-time. And over time it will get smarter in dealing with that.”

Sounds plausible in theory and Martin is confident how it will work in practice. Yet uncertainty remains over what automation and flexibility on the grid’s edge will look like in reality once deployed widely.

AutoGrid is focused on flexibility management throughout the grid’s edge and, like GE, S&C and others, sees abundant possibilities in information flow from the advanced metering infrastructure (AMI) and Internet of Things (IoT) capabilities already out there. Tying all the data together and using what you need most to make decisions is key.

Connecting to AMI and sensors offers greater visibility and granularity to what’s happening at the grid’s edge. It will help grid operators to better plan and respond with the desired sense of immediacy.

And yet change throws you curves when and where you least expect them. Right now, the California Independent System Operator (CAISO) has girded itself to handle the rooftop solar explosion going on, but is less prepared for all the electric vehicles (EV) going into driveways and plugging into garage electrical outlets.

“All of a sudden, cost-effective EVs are hitting the market and there’s now more rapid adoption in an uncontrolled manner” than what utilities predicted, said Kyle Garton, principal products manager for AutoGrid.

A lot of these new EV owners haven’t installed charging stations, which utilities can quantify and monetize. Instead, they are simply charging at home, which utilities can monetize but cannot control on a predictable level.

“They didn’t see it coming. Everyone is shifting gears and figuring out what to do about this,” Garton said.

Vendors and utilities can work together to find value in the margins at the grid’s edge, he noted. An uptick in new technologies can provide possibilities in such opportunities as frequency regulation and load response by non-traditional methods. Utilities will need flexibility management and response tools to achieve this. Some already are doing it.

“FPL (Florida Power & Light) has one of the biggest flexibility management programs out there,” Garton said. “They’ve seen the advantages of that.”

Decentralized energy sources are at the center of this new paradigm in power generation. Solar and wind power are only expanding in the future. You cannot put that genie back in the bottle, but you can have tools to control or even limit as much as needed. Fault interrupters, reclosers, switchgear and control systems are products offered by S&C and others to help make utilities adaptive in the new responsive grid.

“S&C recognized in the 1990s that the composition of the grid would be changing from a transmission driven paradigm to a distribution paradigm,” S&C’s Chiesa said. “Almost all of the product and service development we have done since then has been focused on that changing nature of the distribution system.”

Third-party observers also are focusing on the potential pluses and minuses of business at the grid’s edge. A report by the World Economic Forum, done in collaboration with consultants Bain & Co., concludes that assets closer to the customer than the utility are the new way forward. They warned, however, this direction is fraught with potential dead ends for the unprepared.

“There is great risk for value destruction if the system fails to efficiently capture the value of distributed energy resources, which could leave generation or network assets stranded and see customers defect from the grid,” the WEF report reads. “This risk represents one more reason to identify and take the right actions that will accelerate and make the transition cost effective.”

Predictive tools and machine learning are working in tandem on things like planning scenarios for day ahead capacity markets. They can gain more clout in microeconomic ways with peak shaving, using the data from smart meters and sensors all the way down to the single consumer. This also can work the other way when dealing with too much generation.

“An area I’m excited to work on at GE is building models to help consumers and entities take advantage of excess power,” Martin said. “There are certain points in California where grid is actually at a negative (cost for energy). There is opportunity there. You can start to cool off a building an extra two degrees or charge a vehicle or turn on the pool pump.”

AutoGrid’s Garton painted the mental picture of the grid as fractals that expand as you get farther out from the edge. Zoom out from the home to the feeder to the substation to the balancing region to the ISO. Regardless of the points along the way, there are edge-type technologies that can offer value. ISOs need to offer load flexibility on peak days, while total voltage regulation can prove worthwhile down to the feeder level.

In fact, grid edge technologies-same as energy efficiency-can be considered generation sources in the overall mix of things. A kilowatt hour (kWh) saved is a kWh earned, right? This can prove hugely valuable if it helps a utility ultimately avoid construction costs on new generation.

“There’s a big shift really,” Garton said. “Instead of relying on a gas peaker (to respond to sudden demand spikes or cloudy days) you can rely on grid edge technologies to provide that power. CAISO uses the term non-generator resource. They are creating some new categories. They’re not the same as traditional generation but could provide those resources.”

It takes only flexibility and tools to stretch it to that point. Someday it won’t be the edge, but perhaps the new center holding it all together with traditional generation, renewables, microgrids, demand response and efficiency tools.

“If we continue to do business based off an old paradigm, then our business would be doomed to fail,” said Chiesa. “The reality of the new energy economy is indisputable. Therefore, anyone who wants to be a player in the new economy needs to adapt or be prepared to exit the market.”

That’s enough to make any utility planner feel edgy.

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