Sustainable Energy Portfolio Management in Support of … · Sustainable Energy Portfolio...

Sustainable Energy Portfolio Management in Support of the Smart Grid Concept

Dr. Bartosz Wojszczyk – Senior DirectorDr. Bartosz Wojszczyk – Senior DirectorBob Ulsuki, P.E. – Executive Advisor

Carl Wilkins – DirectorDr. John Enslin – Vice President

Quanta Technology

Grid-Interop 2008 Atlanta, Georgia

November 11-13, 2008

Grid-Interop 2008

Outline

Emerging Trends In Market, Energy And Technology Investments

Political Climate

Vision For Utilities Of The Future

Business Drivers

Sustainable Energy Technologies In Support Of “Smart

© 2008 Quanta Technology LLC

Sustainable Energy Technologies In Support Of “Smart Grid” Concept

Challenges Facing Utilities/Customers

Conclusions

Grid-Interop 2008

Driving Force: Market

Energy demand growth:

by 2025, we will need approx. 428 GW of new capacity,

by 2050, we will need approx. 25-30 TW/year of electric power,

Energy business value: 2007 – $6Trillion (10th of the world’s economic output)

Society mindset changing:

Growing interest in more environmentally friendly and more efficient energy sources (e.g. Wal-Mart: solar initiative; Google: renewable and plug-in hybrid incentives)


(e.g. Wal-Mart: solar initiative; Google: renewable and plug-in hybrid incentives)

Increasing customer expectation for uninterruptible power.

Clean Power Market:

Growing concerns over power plant pollutions, and how it will be ultimately regulated.

Growing interest in power generation diversity: fossil fuel vs. renewable,

Balance slowly shifting from central to local station generation plants (DER)

Grid-Interop 2008

Driving Force: Investments

• Changing trends in energy investments and initiatives in R&D and capital projects:

• E.g. Google, Nov 27, 2007: initiative RE>C (renewable energy cheaper than coal),

• E.g. GE Financial Services raised investing target from $4 billions to $6 billion up to 2010,

• Major buy-out groups and institutional investors are shifting toward


• Major buy-out groups and institutional investors are shifting toward energy generation assets with dependable long-term contractual commitments

• Governments and private investors have invested significant sums of R&D capital to support energy technologies.

Grid-Interop 2008

Driving Force: Investments

Global venture capital (VC) investment: renewable energy $140 billion in 2007, up 35% from 2006’s $86.5 billion

US VC investment: renewable energy $3.4 billion in 2007

Solar technology over $1 billion invested

Energy efficiency/“smart grid” sector $420 million

Industry Sector Q3 2008,VC Number of


Industry Sector Q3 2008,VC

FundingNumber of

Investments Solar $1,588 Million 26

Energy Efficiency/Distributed

Resources/"Smart Grid"$272 Million 14

Geothermal $216 Million 4Automotive/Transportation $193 Million 8

Water Technology $182 Million 10Ethanol/Biofuels $150 Million 8

Wind Energy $140 Million 8Batteries/Fuel Cells $49 Million 4

Carbon/Energy Storage $30 Million 3"Green" Building $29 Million 3

"Green" IT/Lighting $27 Million 4Others $11 Million 3Total $2,887 Million 95

Grid-Interop 2008

Driving Force: Legislation

The Emergency Economic Stabilization Act of 2008 (H.R. 1424)

Grants an 8-year extension of residential and business ITCs for solar, small-wind and geothermal systems.

Eliminates the $2,000 cap on solar residential ITC and allows a 30% residential energy tax credit for small-wind energy and geothermal heat pump property expenditures.

Eliminates the prohibition on utilities obtaining ITCs.

Authorizes $800Million for clean energy bonds and renewable energy


Authorizes $800Million for clean energy bonds and renewable energy generating facilities.

Gives “clean coal” tax benefits similar to renewable energy generation tax benefits.

Grants a 1-year extension of PTC for wind projects.

Grants a 2-year extension of PTC for solar, closed and open-loop biomass, geothermal and hydropower facilities

Creates a 2-year ITC for marine and hydrokinetic energy technologies (tidal, wave, current, ocean thermal).

Grid-Interop 2008

Major Changes to Energy Initiatives (Nov. 5, 2008)

Obama Policies:

Create 5 million new jobs by investing $150 billion over the next 10 years to build a clean energy future.

Within 10 years, save more oil than we currently import from the Middle East and Venezuela combined.

Put 1 million Plug-In Hybrid cars—cars that can get up to 150 miles per gallon—on the road by 2015.


miles per gallon—on the road by 2015.

Ensure that 10% of our electricity comes from renewable sources by 2012, and 25% by 2025.

Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions by 80%, by 2050.

Grid-Interop 2008

Other Voices ….

T. Boone Pickens: Building wind facilities in the corridor that stretches from theTexas panhandle

to North Dakota could produce 20% of the electricity for the UnitedStates at a cost of $1 trillion. It would take another $200 billion to build the capacity to transmit that energy to cities and towns. That's a lot of money, but it'sa one-time cost. And compared to the $700 billion we spend on foreign oil every year, it's a bargain.


Al Gore: The United States added enough wind power in 2007 alone to provide

electricity to more than a million homes. Texas is the fastest-growing wind power state and about 15% of the country has excellent wind, especially the Great Plains. Today's efficient wind turbines are sleek and powerful, and can be taller than the Statue of Liberty with blades longer than the wings of a Boeing 737. When connected together through a national grid, wind power could provide at least one-third of our total electricity needs.

Grid-Interop 2008

Vision for the Utility of Tomorrow: Smart Grid

20th Century Grid 21st Century Grid

Electromechanical, Solid State Digital/Microprocessor

One-way and local two-way communication Global/integrated two-way communication

Limited energy storage implementation High energy storage penetration

Built for centralized generation Integrated distributed generation, renewables, supports EV or hybrids

Local/limited protection, monitoring and control systems (prone to failures & blackouts)

WAMPAC, adaptive protection and intentional islanding


systems (prone to failures & blackouts) intentional islanding

"Blind“/few sensors Self-monitoring/high visibility/many sensors

Manual restoration Semi-automated, "self-healing"

Scheduled equipment maintenance Condition-, performance-based maintenance

Limited control over power flow Pervasive control system & state estimators

Estimated reliability Predictive reliability

Few customer choices, limited price information Many customer choices, full and real-time

price information – RTP, CPP, etc.

Grid-Interop 2008

Business Drivers: New Business Environment

Sustainable Energy

Resources& PHEVs

GreenhouseGases

AgingWorkforce

OperationalEfficiency


RELIABILITY & QUALITY OF SUPPLY

SupplyReliability

PowerQuality

& PHEVs

DemandResponse

AgingInfrastructure

Condition-, Performance-Based Maintenance

Grid-Interop 2008

“Smart Grid” and Sustainable Energy

Sustainable energy generation should be part of “Smart Grid” concept for electric utilities:

Utilities, and consumers will accrue added value through wide deployment of “new” energy generation technologies to achieve improved reliability, reduced O&M costs, avoidance of new capacity, and increased customer satisfaction.


Applied to Sustainable Energy Generation by leveraging advanced communication, monitoring and control infrastructure and technologies

Not a set of shrink-wrapped solutions; the set and scope are unique to each utility/customer, in the context of traditional generation

Grid-Interop 2008

Translated into Requirements

Better visibility to the utility system and end-user

Synergy and common business objectives between IPP and Utility

Advanced local and wide-area intelligence control of the system

Communications infrastructure (e.g., Peer-to-Peer)

Ability to communicate/interoperate devices


Condition-, performance-based maintenance

Optimal utilization of existing infrastructure capacity

DG, storage & renewable forming micro-grids

PQ and voltage regulation concern

Grid-Interop 2008

Sustainable Energy Technologies in Support of “Smart Grid” Concept

Current and continuously improving renewable energy technologies in support of the “smart grid” concept include:

Cadmium Telluride, Copper Indium Gallium Selenide (CIGS) and Amorphous Silicon (a-Si) Thin-film

Multi-junction Photovoltaic (PV)

Concentrating Solar PV (CSPV)

Building integrated PV (BIPV)


Building integrated PV (BIPV)

Distributed small-wind turbines

Small 1-5 MW industrial biogas turbines (~ 40% efficiency)

Recuperated small biogas turbines (34-43% efficiency)

Microbial fuel cells

Power Chips (up to 70% efficiency)

Various wave, tidal and run-of-river technologies

Grid-Interop 2008


Financial constraints:

Many “green/smart grid ” technologies are still relatively expensive

Difficulties in financing, bonding and insuring large projects

Slow-moving customers and utility industry:


Slow-moving customers and utility industry:

Risk-averse mentality

Evolving technologies

Uncertain life-span of new technologies (relatively short performance record)

Power and data interfaces and interconnections for “Smart Grid” need improvement

Grid-Interop 2008


Flexible and cost-effective energy storage systems should be developed and integrated into the “smart grid”

Data management needs to be focused on integrating different technologies in a plug-and-play fashion

Standards and regulations should be tightened since


Standards and regulations should be tightened since they are the key driving force in limiting interconnection problems

Utility acceptance and revenue generation from “smart grid” options are paramount

Grid-Interop 2008

Conclusions

“Big changes in the energy system, especially when implemented quickly, come with numerous

uncertainties…” the impact of which might not be fully understood.

Energy Information Administration

© 2008 Quanta Technology LLC Grid-Interop 2008

Thank You


Bartosz Wojszczyk, Ph.D. Quanta Technology

Phone: 919.619.5981E-mail: [email protected]

Grid-Interop 2008

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