HELLO SUNSHINEBrad Collins brings solar energy into the limelightPage 40
THE FIFTH DIMENSIONWhy energy effi ciency is the most important fuel sourcePage 34
PLUGGED INHow electric cars came back for a new ridePage 96
BLAST FROM THE PASTNuclear lessons help build AEP’s safety programPage 76
Boonor
Energy savior or elaborate smokescreen: why the concept of clean coal has divided the nation. Page 26
www.nextgenpe.com • Q3 2009
Cover.indd 1 19/6/09 15:52:33
Wind PoWer industry Chooses the Pi system
Why They Use The PI sysTem
the Pi system has become the industry standard for enterprise-wide visibility into operational and business data for wind power:
• 9 of the top 10 wind power producers in the North American wind power generation field already use the PI System. Next year it will be 100%.
• 17 of the top 20 wind producers worldwide use the PI System
• In the US market 20,000 MW’s out of a total of 22,803 MW’s are generated using the Pi system
Iberdrola, s.A.
“We have now successfully integrated OSIsoft’s software solution as a means of effectively managing the enormous amount of wind data that we process, as well as meeting the requirement to have a system with the capability of growing with us.”
Gustavo moreno GutierrezIberdrola CORe manager
enXco: Remote Assets, Varied Vendors - But a single solution
enXco Service Corporation’s Operations Control Center (oCC) uses the state of the art Pi system™ to operate and monitor over 2600 turbines, totaling 3.9 GW of power, from manufacturers such as Gamesa, GE, Mitsubishi, NEG Micon, REpower , Siemens, and Vestas. this nerC-compliant state-of-the-art facility allows enXco to manage re-mote assets from varied vendors with a myriad of legacy and modern it and turbine technologies.
EmpowEring BusinEss in rEal TimEPI INfRAStRUCtURE fOR thE ENtERPRISE
www.osisoft.com
Osisoft.indd 2 19/6/09 13:48:50
the Pi system from osisoft
VIsIBIlITy Of GeneRATIOn, TRAnsmIssIOn And dIsTRIBUTIOn AsseTs In ReAl TImefor more than 25 years, utility companies and manufacturers have trusted OSIsoft
and relied on the Pi system as a mission critical part of their enterprise-wide energy
and asset management strategy. More than 14,000 global customers rely on the PI
System. they use it to get visibility into their operations, boost performance, perform
enterprise and regulatory reporting, improve profitability and mitigate risks associated
with managing diverse generation, transmission and distribution asset portfolios.
the PI System, provides 24/7 real-time high resolution data, as well as actionable
events—the information one needs to deliver reliable energy at reasonable prices
while meeting corporate responsibilities for compliance reporting and energy
conservation. Because users of the PI System can see what is happening in real time,
they make better informed decisions based on real time date and events and report
substantial benefits:
enVIROnmenT, ReneWABle And COnseRVATIOn
• Users can measure and monitor energy and other resource consumption, conserve
energy, reduce carbon emissions and improve water quality
• Most owners/operators of wind generation assets leverage OSIsoft’s PI System to
accomplish this
POWeR GeneRATIOn
• the PI System enables a utility to optimize plant operations, reduce startup costs,
increase revenues
• Approximately 60%% of the average power generated daily in the USA is monitored
by Pi systems
TRAnsmIssIOn & dIsTRIBUTIOn
• An integrated view of the distribution grid from operations to end user enables
better utilization of assets and optimization of load balancing - a fundamental piece
of the smart grid
• 100% of the ISOs as well as 50% of the RtOs in the USA leverage the PI System
eneRGy effICIenCy
• Efficiency improvements and performance benchmarking reduce overall energy use
OSIsoft’s PI System is a critical foundation for successful implementation of power
generation applications. the PI System is a flexible, powerful and continually growing
family of applications and tools that gather, manipulate and make operational
information readily available to everyone who needs it—in the proper context for each
user and presented in an instantly understandable visual form.
…TO An enTIRe seRVICe AReA
PI sysTem CAn mOnITOR An eleCTRIC GRId’s sTATUs, fROm A sInGle TRAnsfORmeR...
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MSE_DPS.indd 1 19/6/09 13:23:09
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At MSE, we’re not in the habit oftalking much about ourselves. But ourclients talk about us plenty—and withgreat satisfaction.Each of our 200+ worldwide power
projects was completed in strict ac-cordance with the clients’ individualstandards, not ours.
And our reputation for efficiency isformidable as well, with MSE’s as-signments routinely completed up to50% faster than other firms’ compara-ble projects. From the most minor of EPC details,
to creating and implementing the mostambitious Smart Grid plans, MSE is
very likely the best power engineeringcompany that you’ve never heard of.And we’re determined to change allthat…starting now.To find out all the impressive details
of all the important work we do, justvisit msepower.com/utilities.
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MSE_DPS.indd 2 19/6/09 13:23:10
Wind and solar power are unpredictable. Rapid changes in output cause grid instability. The use of conventional carbon-based generation, such as gas and
diesel turbines, manages the instability today. But it won’t be able to support the aggressive goals outlined by state renewable portfolio mandates tomorrow.
Only fast-response solutions like Altairnano’s Energy Storage System, or
ALTI-ESS, can successfully mitigate renewables’ unpredictability. Responding within milliseconds to rapid shifts in renewable generation, the ALTI-ESS
releases or absorbs power from the electricity grid to avoid instability. If needed, the ALTI-ESS continues to release or absorb power until
conventional generation has suffi cient time to ramp.
The ALTI-ESS is a breakthrough in energy storage technology that enables utility-scale renewable integration and keeps the hope of a green future alive.
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Without energy storage, renewable integration isn’t so green.
Altairnano.indd 1 18/6/09 14:24:46
Wind and solar power are unpredictable. Rapid changes in output cause grid instability. The use of conventional carbon-based generation, such as gas and
diesel turbines, manages the instability today. But it won’t be able to support the aggressive goals outlined by state renewable portfolio mandates tomorrow.
Only fast-response solutions like Altairnano’s Energy Storage System, or
ALTI-ESS, can successfully mitigate renewables’ unpredictability. Responding within milliseconds to rapid shifts in renewable generation, the ALTI-ESS
releases or absorbs power from the electricity grid to avoid instability. If needed, the ALTI-ESS continues to release or absorb power until
conventional generation has suffi cient time to ramp.
The ALTI-ESS is a breakthrough in energy storage technology that enables utility-scale renewable integration and keeps the hope of a green future alive.
Download a complimentary whitepaper, “Mitigating the Unpredictable
and Rapid Changes of Renewable Generation,” at www.altairnano.com. Or call 888-218-4005 to learn how Altairnano can help you achieve
your renewable generation goals.
Without energy storage, renewable integration isn’t so green.
Altairnano.indd 2 18/6/09 14:24:46
Accenture.indd 1 19/6/09 13:52:01
Why has the concept of clean coalsparked such debate?
A rich seam ofdiscontent
Once upon a time, coal was king. It
heated our homes and energized our
factories, and the mines provided em-
ployment for thousands of people. It
literally powered our lives.
Then we became more aware of what we
were doing to our environment. We discovered
the dangers of emitting CO2, depleting the ozone
layer and increasing global warming. As we strove
to clean up our world, coal became the bad guy.
Now things are swinging around again.
Desperate to reduce our dependency on foreign
oil and make use of our still abundant reserves,
the Obama administration is once more looking
to coal for answers.
As part of his election platform, President
Obama pledged to deploy clean coal technolo-
gy. Energy Secretary Steven Chu, who had been
less than positive about coal before his nomina-
tion, was forced to backtrack, and now agrees
that clean coal is worth pursuing.
On the other side of the debate, environ-
mental groups claim that the big coal-burning
truth falls somewhere in the middle. No, we
should not single-mindedly pursue clean coal at
the expense of other renewable energy sources.
But neither can we afford to ignore it completely.
As our environmental situation worsens, we must
investigate every option available to us.
To keep abreast of this and the many other
relevant issues covered in this edition – including
how improving our energy efficiency could help
us beat both global warming and the recession,
the latest on plug-in hybrid vehicles, and the chal-
lenges of serving customers in remote regions –
visit our website at www.nextgenpe.com. We’ll be
sure to keep you on top of developments in the
great clean coal debate as well. n
Marie Shields Editor
utility companies are using the concept of clean
coal as a smokescreen to hide their own inaction
on environmental issues; that they are engaging
in a high-level – and expensive – PR campaign,
with a lack of investment in research to back up
their words.
It’s easy to see why companies whose in-
come depends on burning coal would feel
threatened by its potential disappearance. But
there is definitely money going into clean coal
research: at the DoE’s National Energy
Technology Laboratory, researchers are busy
chasing the goal of creating 90 percent CO2 cap-
ture with 99 percent permanence.
And in June, the federal government an-
nounced it was reviving FutureGen, the $1.6 bil-
lion initiative to create a coal-based power plant
that will use new technology to reduce green-
house gas emissions. The project had been
mothballed by the Bush administration, osten-
sibly due to cost overruns.
So will clean coal be our salvation or our
downfall? As with most contentious issues, the
Editor’s note7
“We believe there is [such athing as clean coal]. Webelieve the technology’s there.We believe that it’s scalable,and that’s exactly what weintend to do” Michael Morris,CEO, American Electric Power(Page 26)
“We refer to energy efficiency asthe fifth fuel. What we’re trying todo is change the paradigm thatexists within our industry” DougEsamann, SVP Strategy andPlanning, Duke Energy (Page 34)
“The massive deployment ofrenewable generationenvisioned by the Obamaadministration cannot occurwithout a renewed investmentin transmission infrastructure”Denise Bode, CEO, AWEA(Page 94)
ED NOTE:temp text 22/06/2009 10:33 Page 7
Numerex AD:euro 2/2/09 10:42 Page 16
76
Contents9
When the stars alignBrad Collins on why solarenergy’s time has finally come
40
26
34
COVER STORYThe carbon questionWhy we can’t agree on clean coal
Lessons learnedNuclear’s mistakes have becomethe backbone of AEP’s safetyprogram
Ramping up thefifth fuelHow Duke Energy ispouring everythinginto energy efficiency
CONTENTS:june09 19/06/2009 15:26 Page 9
SMART GRID
48 We built this cityMike Carlson on how Xcel Energy is pioneering
the Smart Grid City in Boulder
58 Opportunity knocksMarcus Torchia explains why this is the ideal
time for smart grid implementation
66 The cutting edgeWhy Austin Energy is at the forefront of smart
grid development
72 The truth about smart gridHassan Farhangi reveals its secrets
RENEWABLES
80 Store and deliverAEP’s Ali Nourai examines the challenges of
energy storage
88 Reliable sourcesPSE&G’s renewable strategies for a cleaner,
brighter future
94 Transmission propositionAWEA CEO Denise Bode offers the case for new
transmission infrastructure
96 Electric renaissanceWhy plug-in hybrid cars are on the rise again
100 Our nuclear futureDavid Hill stresses the importance of nuclear
power in becoming carbon-free
104 TeamworkHow Northwestern University is helping energy
and sustainability to work together
ROUNDTABLE DISCUSSION
52 Smart gridWith Sharon Allan of Accenture,Mae Squier-Dow of CURRENT Groupand Lee Ayers of OSIsoft, Inc.
66
96
48
P L A T I N U M S P O N S O R INDUSTRY INSIGHT
32 Thierry Perchet, HuntsmanAdvanced Materials85 Jeff Brunings, Altairnano86 Ron Potter, TeamQuest
EXECUTIVE INTERVIEW
38 Sharon Fortmeyer-Selan,SunGard Energy Solutions56 Philip Mezey, Itron92 Dana Zentz, Summit Power
Mike Carlson
Andres Carvallo
Electric renaissance
Contents10
CONTENTS:june09 22/06/2009 10:14 Page 10
106 Red, white and greenThe government’s role in making America
more energy efficient and environmentally re-
sponsible
CUSTOMER OPERATIONS
108 Keeping up appearances Val Jensen explains ComEd’s sociological ap-
proach to understanding customer behavior
114 Northern exposureThe challenges of serving customers in
Canada’s far north
ASK THE EXPERT
55 Dave Roberts, OSIsoft, Inc.64 Brian Deaver, CURRENT Group 103 Nancy Hartsoch, SolFocus, Inc.112 Patrick Carberry, Bottom LineImpact
108
88
114
118 Comment: G20120 Events122 European focus124 Travel: Germany126 In review128 Final word
IN THE BACK
German efficiency
G20
Reliable sourcesNorthern exposure
Keeping upappearances
Contents11
CONTENTS:june09 22/06/2009 10:40 Page 11
Chairman/Publisher SPENCER GREEN
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Editorial Director HARLAN DAVIS
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Editor MARIE SHIELDSManaging Editor BEN THOMPSON
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Deputy Editors MATTHEW BUTTELL, REBECCA GOOZEE, DIANA MILNE,
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CREDITS NGP+E7.indd 12 19/6/09 15:11:21
Wavecom AD:euro 2/2/09 10:47 Page 21
FrontlineTHE BRIEF14
CHINA’S GREENDREAM
cles, well in advance of the
Westernworld.
Rather than justmak-
inggreenproducts,
Chinawill nowbe
implementing them
inabid to reduce
itsnotoriousstatus
asamajorproducer
ofgreenhousegases.
ZhangXiaoqiang,Vice
ChairmanofChina’sNational
DevelopmentandReform
large carbon footprint.
However,making a large slice
of its economy green is not
necessarily a new strat-
egy for the country.
China alreadymanu-
facturesmost of the
world’s solar panels
andwind turbines
and is already techno-
logically ahead in produc-
ing innovative energy storage
batteries for plug-in hybrid vehi-
Will be invested inenvironmental
programs in thenext 10 years
$200billion
CHINAHASSTATED that its cabi-
netwill releasedetails very soonof
a ‘newenergy’program that is pre-
dicted to see it challengePresident
Obama for the title of global leader
in climate change.
The planwill be a long-term
commitment. It was reported in
both Chinese and international
media that $200 billion is due to
be invested during the next 10
years in environmental programs
aimed at reducing the country’s
In a bid to catch up withWestern environmental
attitudes, China haspledged to increase its
renewables program, withthe aim of matching
Europe by 2020.
UPFRONT NGP&E7:nov08 19/6/09 15:50 Page 14
FrontlineTHE BRIEF 15
technologies in theseareas,” said
theNationalDevelopmentand
ReformCommission’sChairman,
ZhangPing. “So the twocountries
canachievewin-win results
throughclosecooperation.”
Zhang said that in recent
years China and Japan have been
actively collaborating on energy
and environmental conservation.
The two Asian giants have estab-
lished an annual forumon the is-
sues.Many business-level
projects are signed via the plat-
form, according to Zhang.
TheUShasplacedcontinuous
pressureon theChinesegovern-
ment toactmore to cut its
CO2emissions.
However, following
themost recentUN
leadership roundup
toencourageprelimi-
nary climate change
talksbeforeCopenhagen
inDecember, theUShas
scaleddown itsdemandsonChina
andadvised that instead itwould
need tocommit toenergyefficien-
cy standardsbutwithout specific
targetfigures.
Only theworld’sdeveloped
superpowers, including theUS,will
bepressured toadhere towhat is
expected tobeaspecific targetof
80percentby2050.TheUS’previ-
ous refusal toenter theKyoto
agreement thatwas formed tocut
carbonemissionsmakes its recent
commitmentunder theObamaad-
ministrationa radicalu-turnonen-
vironmentalmatters.
The relationship between
China and the US regarding cli-
mate change is critical for setting
a blueprint for smaller, less-devel-
oped countries.Whether this is a
demonstration of an improve-
ment in international relations or
simply a race to become the
world’s greenest superpower re-
mains to be seen.
ment. “Collecting environmental
taxes from [polluting] companies
is one of the directions of China’s
tax system reform,” says Zhang
Lijun, Deputy Head of the
Environmental Protection
Ministry. “Several departments
are currently working together to
develop research on this issue,
andwhen the conditions are
right wewill launch an environ-
mental taxation system for pol-
luting companies.”
ZhanghasalsosaidChina
will rampup its investment to curb
rural pollution, asenvironmental
problems in thecountry's vast
countrysideare “increas-
inglyprominent.”
Pollution has
been aggravated
in rural areas
due to chemical
fertilizers, pesti-
cides and livestock
breeding, according to a
report published by the
Ministry of Environmental
Protection (MEP) on China’s en-
vironmental situation.
The increasing industrial and
miningwastes in thecountryside
arealso threatening thesafetyof
drinkingwater, the report said.
Zhangsaid thecentralgovern-
mentwouldspendonebillion
yuan thisyearonsubsidies forvil-
lages tosetuppollution treatment
facilities. Last year,500million
yuan fromcentral fundswasdi-
verted tonearly700 rural villages
whereover fourmillionpeople live.
JapanandChinaalsopledged
topromotecooperationonenergy
conservationandenvironmental
protectionduring their second
high-level economicdialogueheld
inTokyo in June.
“Chinaattachesgreat impor-
tance tosavingenergyandpro-
tectingecology,while Japanhas
broadexperienceandadvanced
Commissionwill hasannounced
thatChinawouldnowbeusing
windandsolarpower tohit a20
percent renewable targetby2020.
Thegoal forwindenergy is
100GWand thegoal for solar is 3
GW; thecountry is alsoplanning to
install 100millionenergy-efficient
lightbulbsduring2009.
The Chinese government
says it is also considering levying
taxes on polluting businesses in
a bid to improve the environ-
last year
yuan from centralfunds was diverted
to nearly 700villages
500 million
VITAL STATISTICS
China produces
of its power fromfossil fuels
80%
It produces
fromnuclearenergy
1.2%
China’s annualuse of geothermal
power is
8724GW/hr
It has
barrels of oilreserves
18billion
of wind energycapacity is installed
in the country
764MW
China’s commercialenergy use is
of oil equivalentper capita
904.93kg
A Miao village in ruralChina, where pollution
levels are rising
UPFRONT NGP&E7:nov08 22/6/09 09:08 Page 15
FrontlineIN MY VIEW16
Natural gas is playing and will continue to play an in-
creasingly important role in building a brighter future.
To meet growing energy needs and to mitigate the
growth of greenhouse gas emissions, wemust develop
and deliver greater supplies of natural gas to markets
worldwide.
Despite the current economic downturn, global energy
demand is expected to be about 35 percent higher in
the year 2030 than it is today. Much of this increase
will come from developing countries as growing popu-
lations seek higher standards of living. About 1.6 bil-
lion people worldwide still are without electricity, and
about 2.4 billion people continue to depend on basic,
carbon-intensive fuels such as charcoal.
Strengthening and enlarging the international mar-
ket for natural gas is essential to fulfilling its potential.
An international market for natural gas – enabled by
partnerships, spurred by technological innovation and
supported by sensible and stable public policy – is
more important than ever.
Wewill need advanced technologies that enable us to
achieve new economies of scale for liquefied natural
gas. And we will need stable, sensible policy frame-
works that encourage long-term investment.
In order to bring required new energy supplies to
market, our industry must commit to enormous, long-
term, capital-intensive and technologically sophisticat-
ed projects. The International Energy Agency estimates
that cumulative investment in global energy supply
and infrastructure needed to the year 2030 will exceed
$25 trillion.
Thanks to our solid partnership and combined ef-
forts,Qatar Petroleum and ExxonMobil have found in-
novative solutions to improve offshore production; the
processing, transportation and sale of LNG; domestic
gas supply; and petrochemical operations.
By increasing the availability and affordability of nat-
ural gas, we are diversifying the world’s energy portfo-
lio.We are strengthening global energy security. And
with increased natural gas production we are bringing
to market a cleaner-burning fuel source.
From a speech given in Qatar, March 2009
REX TILLERSON, Chairman andCEO, Exxon Mobil Corporation
UPFRONT NGP&E7:nov08 19/6/09 15:51 Page 16
FrontlineWHAT’S NEW 17
DETERMINED to green all aspects of society,
the federal government has launched a $4
billion plan to create environmentally friend-
ly public housing for America’s low-
income citizens.
Vice President Joe Biden
announced the green project
plans during a speech in
Denver, stating the scheme
will replace windows, insula-
tions and light bulbs in those
areas regarded to currently be a
carbon eyesore. The project is expected to
direct $50 million to those areas across the
country that have taken the worst blows of
the recession.
The project is also expected to increase
the number of those working in the ‘green
GREENER LIVING
ARCTIC POLLUTANTS
FAST FACT
Over the past25 years, the
average annu-al Arctic seaice area has
decreased by
5%
NOW
INDP
OWER
collar’ sector. Green collar champion Van
Jones announced that the investment into the
green housing would consume 40 percent of
the budget that was set aside for green
schemes in government buildings.
The economic stimulus package is
receiving green treatment in the roll-
out of the recovery plan, and
Obama’s strategy to create five
million new green collar jobs
will incorporate various
schemes for the target to be
reached.
Although a huge effort is being
made on behalf of the government, building
renovations will also be contributed to by
those receiving the environmental up-
grade. Homeowners will be able to choose
to become carbon friendly by simply ticking
an option box on their utility bills.
EARLY JUNE saw the convening of some of
the world’s most learned scientists at the
University of Hampshire to discuss key find-
ings from a study attempting to understand
‘short-lived’ airborne pollutants in the Arctic
and how they contribute to the dramatic
changes currently occurring in the climate-
sensitive region.
The study, named POLARCAT, was a
two-year campaign conducted to focus on
the transport of pollutants
into the Arctic
from the lower latitudes. One surprise
discovery was that large-scale agricultural
burning in Russia, Kazakhstan, China, the
US, Canada and the Ukraine is having a
much greater impact than previously
thought.
In addition to the primary problem of
soot, other short-lived pollutants include
ozone and methane. Although global warm-
ing is largely the result of excess accumula-
tion of carbon dioxide, the Arctic is highly
sensitive to short-lived pollutants. Forest
fires, agricultural burning, primitive cook-
stoves and diesel fuel are the primary
sources of black carbon; oil and gas activi-
ties and landfills are major sources of
methane.
IT IS FEARED that
the Obama adminis-
tration’s plans for
renewable energy
will be hindered by
the fact that the
powerful winds of
the Midwest are
dying out. The
Journal of
Geophysical
Research, due to be
released in August,
is expected to re-
port a slowdown in
wind speed that
began almost 30
years ago.
As the
American Midwest
is the world’s
largest producer of
wind power, this is
likely to have a cat-
astrophic effect on
Obama’s Plan for
America if the con-
clusions match the
predictions. The in-
vestment in wind tur-
bines for 2008was
approximately $17
billion. It is believed
the reduction inwind
speed is a result of
climate change.
TheUS governmenthas launcheda
plan tocreateenvi-ronmentalpublic
housing
$4 billion
UPFRONT NGP&E7:nov08 19/6/09 15:51 Page 17
FrontlineINTERNATIONAL NEWS18
CARIBBEAN GRID
ST.LUCIAELECTRICITYSERVICES
LIMITED(LUCELEC) isgearingup
todeploythefirst full-scalesmart
meteringsysteminthe
Caribbean.St.Luciahasone
powergenerationstationand
sevensubstationsthatservice the
entire islandand56,000 cus-
tomers.The island,616sq.km, in-
cludesamixof terrain, including
highmountains,denseforests,
low-lying landsandbeaches,cre-
atingachallengingenvironment
forwireless technology.LUCELEC
deployeda200meterpilotwhich
provedasuccesswithallmeters
communicatingreliablyonaregu-
larbasis toLUCELECoperations.
“LUCELEC’sobjectiveswith the
AMIdeploymentare toreduce
meter readingcostsand increase
operationalefficiency.This in-
cludesreducingsystemlosses
andimprovingourcustomerser-
vice,”saidGilroyPultie,
LUCELEC’smanagerof transmis-
sionanddistribution.
RACING GREEN
LAMBORGHINI’S chief execu-
tive, StephanWinkelmann, has
announced that the Italian
sports carmaker is to create a
greener versionof its notorious-
ly fast-poweredproducts. “We
haveanobjective to reduceCO2
emissions to thegreatest possi-
ble degree,” he explains, stating
the company is aiming tomake
itsmotors “more considerate of
the environment, in termsof
emissions and theuseof re-
sources.”
Thecompanyhasset targetsand
isplanning tocut35 percentof
thecarbonemissionsgenerated
by its carsby2015. Lamborghini’s
carscurrentlyemitmore than
three times theemissions froma
typical saloon,andsoamove to-
wardamorecarbon friendlyde-
sign isgreatlywelcomed.The
motor giant is further donning
its greenhatwith the installa-
tionof 17,000 squaremeters of
solar panels on the roof of its
main factory at Sant’Agata
BolognesenearBologna.
PLANE TAX
AWORLDWIDE CARBONTAX for
aviation travels is gathering
speed to becomea regulation for
the future. The policy has now
drawn support from the
Australian government, whohave
proposed that airlinesmust also
becomeaccountable for carbon
emissions, and a carbon reduc-
tion target to be set on all air-
lines. The issue of airline
emissions is due to be addressed
at the Copenhagen summit in
Decemberwith theUNexpected
to set targets andbe the overseer
of ensuring the targets to bemet.
The scheme is expected to run
similar to the carbon-trading
scheme currently operated byUS
utilities. Under a similar policy,
airlineswould be subject to set
an emission limit, and if adhered
to, given free carbon credits.
Environmental pressure group
Greenpeacewelcomed the pro-
posal, stating that unless such a
deal is struck, ships andplanes
are predicted to consumebe-
tween 50 and 80 percentof the
world’s carbon budget by 2050.
UPFRONT NGP&E7:nov08 22/6/09 09:11 Page 18
FrontlineINTERNATIONAL NEWS 19
CLEAN COAL
ACOALREVOLUTION isoccurring
across thepond.TheUKEnergy
AndClimateChangeSecretary,
EdMilliband,announced in June
that there is tobenomorebuild-
ingof coalplants in the region
unlessutilitiesadhere to thenew
regulationsof cleancoal, anda
portionof thecarbondioxide
emitted is capturedandstored
underground.
Headvisedthatthenewpolicy is
anattempttosolvethreechal-
lenges:ensuringsecurityof the
country’senergysupply, theneed
tomakesubstantialcuts ingreen-
housegasemissionandthe
growingglobalneedtobuilda
low-carboneconomy.TheUKpoli-
cymakesthecountrythefirst in
theworldtocommit itself totar-
getsandregulationsregarding
coalplantcarboncapture. Ithas
pledgedtocutcarbonemission
34percentby2020;anynewcoal
plantsthataretobebuiltmust
firstprovethatcarboncapture
andstoragetechnologyis inoper-
ationandon100percentoutput.
AIR CAR
THERE IS NOBETTER fuel than
emission-free fuel. French auto
engineer GuyNegre has invent-
ed a car that combats all those
previous problems of carbon
emissions and fuel dependency
– the ‘Airpod’ is powered by
compressed air. The car pro-
duces only a fraction of carbon
compared to that of standard
fuel guzzlingmotors, can travel
65mileswith only a one-minute
recharge and costs just under
$5000. The only drawback to
the air-poweredmotor is its
speed limitation of 30mph.
“Compared to electric cars, air-
powered cars cost a fraction of
the price to buy, they don't need
expensive batteries to be re-
placed every five years or so
and crucially they take only a
fraction of the time to
recharge,” explains Negre.
Negre recently signed a $50
million dollar deal with Indian
car giant Tata to license the
technology, and has also signed
multiple deals tomanufacture
the car in the US, Latin America
and Europe.
SMART CANADA
GEORGESMITHERMAN,the
MinisterofEnergyandInfrastructure
fortheCanadianprovinceofOntario,
joinedcityofBurlingtonMayorCam
JacksonandBurlingtonHydro
Electric Inc. intherecentofficial
launchofGridSmartCity.Theproject
bringstogetherawiderangeof
stakeholdersfromindustrytogov-
ernmenttoworktogethertopro-
motethegrowthofsmartgrids.The
newprogramwillshowcasehow
smartgrids integrateelectricitypro-
ductionanddeliveryandconsump-
tiontoproduceamoreefficient,
reliableandresponsivesystemthat
isbetter fortheenvironment.
GridSmartCitypartnerswillcollabo-
rateonsmartgridprojectsto illus-
tratenewtechnologies.These
projectswillhelptofuel thegrowth
of innovativegreenindustries.Smart
gridtechnologies,combinedwith
advancedcommunicationsandcom-
puteranalytics,willaidgreateruseof
renewablegreenenergysources
fromthesun,windanddevicessuch
aselectricvehicles.
UPFRONT NGP&E7:nov08 22/6/09 09:12 Page 19
NEW YORK ON TARGET
NEWYORK STATE Governor
David Paterson recently an-
nounced the clean energy goals
for the state. “By 2015, New
York will meet 45 percent of
its electricity needs through im-
proved energy efficiency and
clean renewable energy,” he
said. “We call this our
‘45 by 15’ program.
Now is the time for us
to change howNew
York uses energy. Now is the
time for New York to take an en-
ergetic step toward shaping
our future.”
Patersonsays this effort
will help rebuild thestate’s
economy,meet its energyneeds,
andprotect theenvironment.
CLIMATE COMPROMISE
LAWMAKERS in theDemocratic-
controlledHouseof
Representativessay theyhave
reachedacompromiseagree-
mentonabill aimedat combating
climate change.
CaliforniaRepresentative
HenryWaxman,whochairs the
HouseEnergyandCommerce
Committee, says theagreement
includesa17percent reduction in
greenhousegasemissionsbelow
2005 levelsby2020.Waxmanand
othershadsoughta20percent
cutwithin thesametime frame,but
facedstrongopposition fromlaw-
makers fromstates that relyheavily
oncoal-poweredplants.
Themeasurewouldalsoallo-
catea certainpercentageof free
pollutionpermits for certainbusi-
nesses.TheObamaadministration
and its allieswantbusinesses to
purchasepermits toemit green-
housegasses fromotherfirms that
use lessenergy, a systemknown
ascapand trade.
Source: voanews.com
SUNTECH BETS ON THE US
norealmarketyet, and investments
inup-and-comingcompanies like
NitolSolar,onwhich it just lost$25
million.
Buildingcapacity in theUSis
alsoarisk.With themarketsharply
downduetotherecession, there’s
currentlyaglutofpanels forsale, in-
cludingplenty fromSuntech. If the
marketdoesn’t recoverasquick-
lyasexpectednextyear,
thecompanycouldbe
leftholdingthebag. It
willalsohavetoen-
surethat itsproduc-
tion linesarehighly
automatedtooffset the
higher laborcosts,some-
thingEuropeancompanies like
SchottSolar,which justopenedits
own100megawatt facility inNew
Mexico,maybebetterat.
Butall told,Suntech is likely to
comeoutahead.Withunemploy-
ment rateshigh,statesandlocal
communitieswillbekeentooffer
Suntechbig incentives foraplant.
AndwithSuntechpanelsendingup
abitcheaper, rivals likeSunPower
andSharpcouldbediscomfitedby
themove.
INAREVERSALof theusualorder,
ChinesesolarcompanySuntech
hasannouncedplanstositesome
manufacturingoperationson
Americansoil. Itwill spendthenext
fewmonthsdetermininga location
fora factory,andpotentiallyhave it
inoperationwithinayear,produc-
ingpanels for the localmarket.
Suntech’smove is in-
creasingly typicalof
thesolar industry.
Withmargins
tightandcompe-
tition intense,
cuttingdownon
long-distanceship-
ping(andtheatten-
dantbreakagerate for
panels)canshaveoffenoughof the
price togivecompaniesanedge
over thecompetition.
Suntech is implementingan
increasinglyaggressivestrategy.
Despiteseeing its2008profits fall
to less than$100million, thecom-
pany recently repurchased$150
millionof its seniornotes. It isalso
making riskydevelopmentbets in
thin-filmsolarandbuilding-inte-
gratedproducts, forwhich there’s
FrontlineWHAT’S NEW20
In Q4 2008 of Power & Energy, LLOYD YATES, CEO of Progress EnergyCarolinas, emphasizes the importance of environmental stewardship andthe company’s commitment to energy storage in a service territoryplagued by natural disasters.
Go to www.nextgenpe.com to browse ‘Past issues’ and view the coverstory of the Q4 2008 issue, and read of Yates’ determination to lead autility of “environmental excellence”.
FROM THE VAULT
Suntech’s2008profit
fell to less than
$100million
UPFRONT NGP&E7:nov08 22/6/09 09:14 Page 20
RECANDSUMMITPOWERhave recently formeda
partnership todeveloputility-scalephotovoltaic
projects in theUSmarket.Thispartnershipwill
bringanexperiencedpowerprojectdeveloperand
financial backing togetherwitha trusted, fully inte-
gratedmanufacturerof high-performancesolar
modules.The joint venturewill focuson thedevel-
opmentof solar electricprojects inurbanenviron-
ments, deployinganurban infillmodel.These
projectswill deliver cost-effective, reliablepower
withminimal risk forutilities.
Summit Power Group is a leading full-scope,
value-added power project development firm.
Currently, Summit is leading the development of
over 2500megawatts of additional gas-fired,
SOLAR DEVELOPMENT PARTNERSHIP
NEW DEMAND RESPONSE THERMOSTAT
HONEYWELLRECENTLY intro-
ducedUtilityPRO,a touchscreen
programmable thermostatde-
signedspecifically forutility-
sponsoreddemand response
programs. Featuringasleekde-
signandsimple,user-friendly in-
terface, thenewthermostatwill
helputilitiesdriveprogrampartic-
ipation,giving themgreater con-
troloverpeakenergyuse.
Utilities alsowill be able to
improve communicationwith
customers through industry-
leading features like customized
textmessages.
“Fromtheclassic round ther-
mostat to today’sprogrammable
touchscreens,Honeywell is syn-
onymouswith temperaturecon-
trol andcomfort,” saidKevin
McDonough,GeneralManagerof
HoneywellUtilitySolutions.
“We’vecombined thisexpertise
withdecadesofdemandre-
sponseexperience tocreate the
UtilityPROthermostat.”
Thechallengewithexisting
demandresponsethermostats is
that theycanbedifficult forhome-
owners toprogramandoperate. In
addition, theydon’tallowutilities to
completely leveragethe linktocus-
tomers thetechnologyprovides.
UtilityPROaddresses these
concernsbyadding the latestde-
mandresponse features to
Honeywell’saward-winning,best-
sellingprogrammable thermostat.
WithUtilityPRO, homeowners
andbusinesses get a thermostat
that is simple to use and effective.
Its intuitive logic andmenu-driven
programming help usersmaxi-
mize energy savingswhilemain-
taining comfort.
Fromautility’sperspective,
the thermostatprovidesa load
control device thathaswide-
spreadcustomerappeal.
In addition,
UtilityPROhelps
improvecus-
tomer serviceby
allowingutilities
to communicate
directlywith
customers
throughcus-
tomized text
messages–an industryfirst.The
thermostat also canprovidecus-
tomerswithbillingdata, including
month-to-datechargesandyear-
over-yearusagecomparisons.
HoneywellUtilitySolutions,a
divisionofHoneywellBuilding
Solutions,has25yearsofexperi-
encedesigningand implementing
demandresponseprograms for
utilities.Thebusinesshas in-
stalledmore thanonemillion load
controldevices todate,which
makes itoneof the largest imple-
mentersof residentialdemandre-
sponse inNorthAmerica. It also
providessmartmetering,anden-
ergyandwaterefficiencysolu-
tions toutilities.
For more information, visitwww.honeywell.com/utility.
Total renewable net generation byenergy source and state
TOP TEN
32
54
1
87
109
6
Washington
California
Oregon
New York
Idaho
Alabama
Montana
Tennessee
Texas
Maine
84,510,483
71,962,775
39,679,286
29,941,296
11,932,329
11,136,248
10,660,546
8,559,249
8,480,231
8,245,783
UpfrontWHAT’S NEW 21
IGCC andwind projects. Please see www.sum-
mitpower.com for an experience and qualifica-
tions summary.
REC is the leadingvertically integratedplayer
in thesolar energy industry.RECSiliconandREC
Waferareamong theworld’s largestproducersof
polysiliconandwafers for solar applications.REC
Solar is a rapidlygrowingmanufacturerof solar
cells andmodulesand isengaging in solar systems
sales in selectedmarket-segments. In2008,REC
had revenuesof$1453million (NOK8,191million)
and$581million inEBITDA (NOK3,279million).
Approximately2400employeeswork inREC’s
worldwideorganization.
Please see www.recgroup.com for more information.
UPFRONT NGP&E7:nov08 19/6/09 15:56 Page 21
LOCATEDONTHECAMPUSof Iowa
StateUniversity, theinstitute isa
government-owned, contractor-
operatedresearchfacility. Ithosts
morethan250scientistsandengi-
neerswithin itsworkforceandsup-
pliesapproximately18percentof
thefederalsponsoredresearch
fundingawardedtoISU.
The laboratorywases-
tablished in1947by
theUSAtomic
Energy
Commissionasa resultof itsmethod-
ology forproducinghigh-purityurani-
ummetal for theManhattanProject.
Since then, the laboratory has
widened its areas of research to
reflect current interests of national
concern, such as energy re-
sources, high-speed computer de-
sign, environmental
cleanup and restoration,
and the synthesis and
study of new
materials.
FrontlinePROJECT FOCUS22
LOS ALAMOS NATIONAL LABORATORY
MANAGED BY LOS ALAMOS
NATIONAL SECURITY, the in-
stitution is one of the largest
laboratories in the world and
is also the largest employer in
northern New Mexico. It is one
of the two laboratories in the
US where the design of nu-
clear weapons is undertaken.
The laboratory in which
the Manhattan Project begun
duringWWII, its origins lie in
secrecy and it was initially
given the name
of Site Y. The
first nuclear
test was con-
ducted in
Alamogordo, New
Mexico in 1945, and some of
the weapons were later used In
the attacks on Hiroshima and
Nagasaki.
Since that time, Los
Alamos has also been responsi-
ble for the development of the
hydrogen bomb, as well as
other variants of nuclear
weapons. The institute has also
immersed itself into research
into medicine for humanitarian
causes – it is currently testing
three vaccines for AIDS.
AMES LABORATORYBACK TO THE LABTHE US DEPARTMENT of Energyresearches and develops its nationalscience interests through a systemof facilities and laboratories, whichit oversees. The NationalLaboratories and TechnologyCenters are federally funded butadministered and staffed by privatecorporations and universities. In thefirst of an ongoing series, Power &Energy examines the 17 nationallaboratories and the varying ways inwhich they impact the region’senergy usage.
UPFRONT NGP&E7:nov08 19/6/09 15:56 Page 22
FrontlinePROJECT FOCUS 23
ARGONNE NATIONAL LABORATORY
THE INSTITUTE isoneof theoldest
that comprises theDOE’s 17 labora-
toriesand is the largest in thesize
in theMidwest.Argonnecurrently
hasfivemainareasof research.
It undertakesbasic scientific
research in experimental and theo-
retical science in thephysical, life
andenvironmental sciences. It
alsobuilds andmaintains
scientific facilities for
theuseof scientists
and it is alsoone
of themain
areas inwhich
advanced
study is done
of energy technologies. It is devel-
oping solutions to environmental
problemsandpromoting environ-
mental stewardship, andfinally it
also focuseson contributing tona-
tional security. The labundertakes
work in thenuclear fuel cycle, biol-
ogy, chemistry and systemsanaly-
sis andmodeling.
FERMI NATIONAL ACCELERATOR LAB
LOCATED INBATVIA, near
Chicago, FermiNational
Accelerator Laboratory (Fermilab)
specializes in high-energyparticle
physics and is operatedby the
Fermi Research Alliance. In 2006,
the labwon theDolden Family
Award from the Society of
WomenEngineers forwomen
representingmore than 40per-
cent of theworkforce.
Its research isprimarily fo-
cusedonnuclear,specifically in
thefieldofparticlephysics,and
it’sannouncedthediscoveryof
thetopquark in1995. Inaddition
tohigh-energycolliderphysics,
Fermilab is also responsible for
researchinganumberof smaller
fixed target andneutrinoexperi-
ments.Anewparticlewasdiscov-
eredonSeptember32008at the
DZeroExperimentof Fermilab.
Fermilab is not just prominent
in the scientific field, but alsoplays
host to anumber of cultural events,
suchas classical and contemporary
music concerts andart exhibitions.
OAK RIDGE NATIONAL LABORATORY
ESTABLISHED IN1943,
the laboratory is amulti-program
scienceand technology institute
and is the largestof all 17 labora-
tories.OakRidgeNational
Laboratory (ORNL)encompasses
approximately4300staff and is a
managedbyapartnershipbe-
tween theUniversityofTennessee
andUT-Battellewithaminimum
fundingof$1.4billionannually.
Its research is fo-
cused into sixmajor
areas. Neutron science
incorporates a neu-
tron scattering project.
High-performance com-
puting is another area; the labora-
tory provides themost powerful
computing resources in theworld.
ORNLalso researches biological
systems, a huge effort is fixated
onunderstanding advancedma-
terials. The lab is also amajor re-
search centre for the
development of energy in various
forms and for security.
UPFRONT NGP&E7:nov08 22/6/09 09:15 Page 23
Companies in this issue are indexed to the first page of the article in which each is mentioned.
Accenture 6, 48, 52, OBCAdica 69Altairnano 4, 85American Coalition for Clean CoalElectricity 26American Electric Power 26, 66, 80American Solar Energy Society 40AmericanWind Energy Association 94Bottom Line Impact 112, 113British Columbia Institute ofTechnology 72Center for American Progress 26ComEd 108Conergy AG 91Control4 48CURRENT Group 48, 52, 64, 65Cyveillance 116DTN/Meteorlogix 75Duke Energy 34
Energy Storage and Power LLC 82General Motors 96GridPoint 48Honda 96Honeywell International 21, 60Huntsman 32, 33Hydro One 114Idaho National Laboratory 26, 100IDC 58ISEN 104Itron Inc. 56Landis + Gyr 48Lixar 48Millennial Net 63Meettheboss 127MSE Power Systems, Inc. 2NETL 26Numerex Corp. 8OSIsoft IFC, 52, 55
PSE&G 88REC Group 21, 92, 93Schweitzer Engineering Laboratories 48Sensus 70Sierra Club 26SolFocus, Inc. 103SunGard Energy Solutions 38, 39Tantalus 47TeamQuest Corporation 86, 87, IBCToyota 96Ventyx 48Wavecome 13World Coal Institute 104Xcel Energy 48
SEVERALTOPGOVERNMENTclimate changescientists
recently releasedanewreportwarning that theeffectsof
globalwarmingwill becomemoresevereunless the
Obamaadministration takesactionquickly.
For years, scientistshave talkedabout the threatof
risingsea levelson remote tropical islandsandmelting
ice in thepolar regions.Butanewreportby theGlobal
ClimateResearchProgrammakes the threatof global
warmingpersonal.
“Climate change ishappeningnowand
it’shappening inourown
backyards, and it
affects thekinds
of thingspeo-
ple careabout,” says JaneLubchenco. Lubchenco is
theheadof theNationalOceanicandAtmospheric
Administration.Shesays the reportpresents scientif-
ic evidence thatwill informpolicymaking.
The report, compiledbymore than30scientists
at 13governmentagencies,describesclimate-related
changes that arehappening in theUnitedStates.
TomKarl,wasaprincipal authorof the report.
“USaverage temperaturehas risenby 1.5degrees
Fahrenheit over thepast50years,”hesays. “We’ve
hadmore rain coming inheavydownpours that can
lead toflooding. Lesswinterprecipitation is falling
as snow,moreas rain.”
The report, commissionedby theWhite
House,uses climatemodels toproject
whatwill happen if action isnot taken to
reduce thecarbondioxideemissions that
most scientists say causeglobalwarming.
It predicts increasinglydeadlyheatwaves,
andhigher incidentsof asthmaanddis-
eases transmitted through thewaterandby
insectsand rodents. Source: voanews.com
THECARBONQUESTIONAre we facing a coal-free future?
ENERGYDEVELOPMENTSAn update on the energyuse of EU countries
TIMEFOROPTIMISMDoug Esamann raisesthe bar on energyefficiency
DON’T MISS...
26
34
122
COMPANY INDEX Q3 2009
URGENT ACTION NEEDED
FrontlineCOMPANY INDEX24
UPFRONT NGP&E7:nov08 22/6/09 09:16 Page 24
Find Out MoreContact NGU at 212 920 8181 Ext 347www.ngusummit.com
A Controlled, Professional & Focused EnvironmentThe NGU Summit is an opportunity to debate, benchmark and learn from other industry leaders. It is a C-level event reserved for 100 participants that includes expert workshops, facilitated roundtables, peer-to-peer networking, and coordinated technology meetings.
A Proven FormatThis inspired and professional format has been used by over 100 CIOs and CTOs as a rewarding platform for discussion and learning.
The Next Generation Utilities Summit is a three-day critical information gathering of C-level technology executives from the utilities industry.
Next Generation Utilities Summit
Ritz Carlton, Marina Del Rey • California
13 – 15 October 2009
“Terrifi c opportunities to ‘Speed Date’ potential business partners in a cost effective, highly effi cient format which is run very well.”Rudiger Wolf – VP & CIO, Puget Energy
“Excellent format, highly productive and informative with a great mix of current state and future state reality based research and experience.”Charlie Ward – IT Enterprise Architect, Duke Energy
FP_NGUSummit_California_Oct-09.indd 25 19/6/09 15:28:32
on the face of it, clean coal seems like an ideal answer to our energy
woes. Since a large part of our energy production still comes from coal
and is likely to continue to do so for the foreseeable future, why not in-
vestigate ways of making it less harmful to the environment, and more
efficient into the bargain? That way, we can lessen our dependence on
foreign oil, help protect the planet and save money at the same time.
The clean coal concept does have friends in high places. As part of his election platform,
President Barack Obama pledged to deploy clean coal technology, saying that, “Carbon cap-
ture and storage technologies hold enormous potential to reduce our greenhouse gas emis-
sions as we power our economy with domestically produced and secure energy.”
Energy Secretary Steven Chu, who had been quoted several times in the run-up to his
nomination as saying, “Coal is my worst nightmare,” was forced to backtrack during his con-
firmation hearing to calling coal merely, “A pretty bad dream.” He also went from being “not
very optimistic” about the feasibility of clean coal, to seeing it as a “significant challenge.”
When asked in a subsequent interview if clean coal was feasible, his answer was, “Yes.”
During the hearing, Chu also said, “There are . . . some people in the United States who
feel perhaps we should turn off coal. But even if we do it, China and India will not. And so we
are in a position to develop these technologies so that the world can capture carbon.”
26 www.nextgenpe.com
COVER STORY
The
carbonquestion
Carbon sequestration and theconcept of clean coal are not newideas. So why are they suddenly
arousing such polarized opinions?Marie Shields investigates
COVER STORY v2:18oct 22/06/2009 10:16 Page 26
27www.nextgenpe.com?
COVER STORY v2:18oct 19/06/2009 15:27 Page 27
Technical Analyst, explains, this funding is spread across several areas.
“There’s a newer program that focuses specifically on carbon capture from
the existing power plants, which includes a piece that looks, for example,
at water issues related to that.
“There’s another program called the Clean Coal Power Initiative that
funds large commercial-scale demonstration projects, which is being man-
aged for the DoE by NETL. We’re currently evaluating applications for the
third round of that program, which is focused exclusively on carbon cap-
ture and storage. Funding for that is appropriately $600 million.”
OppositionThere’s obviously a lot of money being put into carbon capture and
storage research, by the government at least. And yet clean coal’s oppo-
nents would claim this is no better than pouring money down the drain.
According to environmental groups and left-leaning think tanks, clean coal
is nothing more than an elaborate smokescreen – a neat way of making
consumers believe the big utility companies are doing something to com-
bat climate change. This leaves the companies free to continue burning
coal, which in its traditional form is universally acknowledged to be both
dirty, and most politically incorrect of all, non-renewable.
InvestmentIn addition to giving the idea lip service, the government has also taken
action. One example of this is FutureGen, a $950 million initiative launched
in 2003. In its original incarnation, FutureGen was to create a coal-based
power plant in the small Illinois town of Mattoon, which would have used
new technology to reduce greenhouse gas emissions. But costs for the pro-
ject spiraled, and it was mothballed by the Bush administration last year.
When the new government took over, it said that the project would
be restructured. In March, Secretary Chu said that he intended to go for-
ward with FutureGen “in some modified way.” Then in June, the govern-
ment announced it was reviving the project, at the same time upping the
price tag to $1.6 billion, with $600 million of that coming from a coali-
tion of 20 big companies, and the remaining $1 billion from the $3.4 bil-
lion of stimulus package money conveniently allocated to clean coal
technologies.
At the DoE’s National Energy Technology Laboratory, considerable ef-
fort is also going into investigating new coal technologies. The carbon se-
questration program began here in 1997 with $100 million in funding
appropriated by Congress. R&D funding for the program in the current fis-
cal year is $150 million. As Tom Sarkus, NETL’s Senior Manager and
28 www.nextgenpe.com
COVER STORY v2:18oct 19/06/2009 15:28 Page 28
According to an investigation by 60 minutes, as quoted on the website
of the liberal political policy think tank Center for American Progress, big coal
companies talk a lot about investing in clean coal research, but don’t put their
money where their mouths are. The CAP article accuses the American
Coalition for Clean Coal Electricity (ACCCE), which it calls a front group for big
utility companies, of spending large amounts of money on advertising the
idea of clean coal, but very little on developing the technology to support it.
It says ACCCE is determined to convince Americans that clean coal is the so-
lution to global warming, at the expense of other, renewable alternatives.
CAP representatives did not respond to P&E’s request for an interview.
Michael Morris, CEO of American Electric Power, an ACCCE member, in a re-
cent interview with P&E’s sister media channel, MeettheBoss TV, was more
forthcoming. When confronted with the idea that coal companies are en-
gaged in very high level PR around clean coal and that the investment is
not there to back up the words, he responded: “That may be true of a lot
[of companies], but it surely isn’t true of American Electric Power. This pro-
ject at Mountaineer has got a price tag of around $100 million, and we’re
deeply invested in that. The ultimate expansion now to the first commer-
cial scale will be on the order of $400 million, so we’re working with our
checkbook rather than with our mouths.
During the same interview, Morris also pointed out that, “The carbon
capture and storage project that we’re doing in West Virginia in our
Mountaineer Station is essential to the ongoing debate of whether there
is or isn’t such a thing as clean coal. We believe there is. We believe the
technology’s there. We believe that it’s scalable, and that’s exactly what we
intend to do. Internally we are focused on these are very important issues.
We need to continue to fund them as we go. And again, at the end of the
day it will serve our customers, the communities where we do business and
our shareholders as well.”
The project Morris is referring to is AEP’s Mountaineer Carbon Capture
and Storage Project, which comes online later this year, with the aim of re-
moving 100,000 and 300,000 tons of CO2.
PartnershipBack at NETL, Tom Sarkus is more concerned with ensuring the long-
term safety aspects of carbon sequestration than he is with the political
storm surrounding it. One of his team’s objectives is to create 90 percent
CO2 capture with 99 percent permanence. “We’ve defined that as mean-
ing that there would be less than one percent leakage after 100 years,” he
says. “And all to be achieved with no more than approximately a 10 per-
29www.nextgenpe.com
COVER STORY v2:18oct 19/06/2009 15:28 Page 29
cent increase in the cost of electricity when you compare it to a non-se-
questered system.
“We want to develop these technologies and mitigate concerns over
climate change. But the last objective tells us we have to do this in a way
that is at least cost competitive.”
In addition to its own internal research, NETL operates within seven
government industry partnerships that span different geologic regions of
the United States and Canada in order to characterize and develop carbon
sequestration opportunities. Taken together, theses seven partnerships
consist of more than 350 different organizations, including state-level gov-
ernment agencies, universities and private industry.
The member organizations include 40 states, three American Indian
nations and four Canadian provinces. There are also nine foreign govern-
ments, not counting the United States and Canada, that are participating
in the projects in these regional partnerships. Sarkus explains that inter-
national governments are involved because, “There’s a saying that all pol-
itics is local, and the geologists tell me that all geology is really local. While
there is an aspect of that that’s true, there are also some things you can
learn from observing and participating in projects in other regions or even
in other countries.”
Despite NETL’s obvious commitment to making carbon sequestration
work, there are still those who oppose clean coal on every front. The
strongest opposition has come from environmental groups, particularly
those belonging to the Beyond Coal Campaign, spearheaded by the Sierra
Club. According to the Sierra Club’s website, the Beyond Coal Campaign is
working to: “Stop the construction of dirty, new coal plants by educating
investors and decision-makers about the economic and environmental
risks of investing in new coal; retire old plants that are the worst contribu-
30 www.nextgenpe.com
Steven Chu
There are three technology platforms used to
generate electricity from coal. The first is a
traditional boiler, coupled up to a steam turbine and
a generator. The second is fluidized bed combustion,
which has a much higher level of fuel tolerance. It can
utilize grades of fuel that would otherwise have to be sent
to landfill or disposed of elsewhere.
The third is integrated gasification combined cycle
(IGCC). There are currently about 30 IGCC plants
worldwide. Fifteen of those operate on petroleum liquid
and gaseous fuels. Of the remaining 15, nine of them
operate on petroleum coke and six of them are designed
to operate on coal: three in Europe, two in the United
States and one in Japan.
HOW TO GET ELECTRICITY FROM COAL
COVER STORY v2:18oct 19/06/2009 15:28 Page 30
tors to health-harming soot and smog pollution and replace them with
clean energy solutions; and work with communities to protect our moun-
tains, lands and waters by keeping our vast coal reserves in the ground.”
DebateP&E arranged to interview Bruce Nilles, Director of the Beyond Coal
Campaign, but he could not be reached at the appointed time and did not
respond to subsequent attempts to contact him. However, the Campaign’s
stance on clean coal is plainly stated in the Sierra Club fact sheet, ‘The Dirty
Truth About Coal: Why Yesterday’s Technology Should Not Be Part of
Tomorrow’s Energy Future.’ “The coal industry knows it must change or it
will be out of business – that is why it is pushing ‘clean’ coal,” it says. “But,
coal as it exists today is anything but clean.
“The supposedly ‘clean coal’ technologies that have attracted the most
attention in recent years are carbon capture and sequestration (CCS) and in-
tegrated gasification combined cycle (IGCC). As of now, CCS remains an un-
proven technology, and experts disagree as to how long it will take for this
technology to be available for commercial and wide-scale use. IGCC unfor-
tunately emits just as much global warming pollution as other coal plants.”
NETL’s Tom Sarkus becomes quite animated at the suggestion that we
shouldn’t be spending money on investigating new ways of using coal in-
stead of putting it into funding renewable energy sources.
“It’s missing the point,” he responds. “Long term we all recognize that
we have to go toward other sources of energy such as renewables or even
nuclear energy. But that’s very long term and may not happen for 50 or 100
years or more.
“In the meantime the issue is not either this or that, it’s not an either/or
issue. All of the energy experts that I talk to generally come to a consen-
sus that we need all of those forms of energy. We don’t have the luxury of
not using one fuel source in favor of another.
“All of the credible analyses that I have seen say that in order to
achieve any level of stabilization of CO2 in the atmosphere you need to pur-
sue three approaches roughly in equal measure. The first is to start shift-
ing towards less carbon intensive energy sources, not just renewables, but
also sources such as nuclear energy.
“The second pathway is to become more aggressive in pursuing en-
ergy efficiency and energy conservation. And the third category is carbon
capture and storage, in order to preserve fossil fuels as a viable option. The
studies that I have seen generally agree that you cannot achieve climate
stabilization with any one or any two of those approaches. You need to use
all three, in roughly equal measure.”
OptionsSarkus does have a point. Just because CCS is an ‘unproven’ technol-
ogy is no reason not to pursue it. About IGCC, which the Sierra Club fact
sheet describes as “as polluting as traditional coal plants,” Sarkus says,
“Many people feel that IGCC, because it has a combined cycle power plant,
is capable of achieving higher levels of thermal efficiency, and it also pro-
duces a gas stream that is more amenable and economical for CO2 cap-
ture and storage.”
The environmentalists’ biggest beef seems to be with the coal-burn-
ing utilities it accuses of muddying the waters by apparently promoting
the concept of clean coal as if it exists today, and as if it will solve all of
our environmental problems on its own, when it’s obvious that it won’t.
It’s not surprising that companies whose main revenue comes from coal
production and consumption should feel threatened by the idea that this
income source could disappear. But this does not mean that we should
refuse to investigate methods of burning coal in a cleaner, more efficient
fashion.
It can be easy to let the debate obscure the real issues. The United
States still has large, untapped coal reserves. We produce about 20 per-
cent, or 1.1 billion tons, of the world's coal supply – second only to China –
and coal generates about half of the electricity we use. It would be naïve
in the extreme to suggest we can stop burning coal overnight. At the same
time, our environmental situation is becoming increasingly desperate.
Perhaps clean coal, in its perfect form, does not yet exist, but neither
does the technology to use renewable sources such as solar, wind and
hydro to supply enough power to meet our growing energy needs. We need
to pursue every avenue, and this includes developing ways to burn clean-
er coal in the short term, especially if it buys us more time to develop re-
newable options.
The final word goes to Deputy Laboratory Director David Hill of the
Idaho National Laboratory. “If we can solve the carbon sequestration prob-
lem,” he says, “particularly in the US where 50 percent of the electricity
comes from coal and there are enormous coal reserves, that would be very,
very important. I don’t believe we should ever strike an energy source from
the list of potential options on political or other grounds. We don’t have that
option left any more.” n
31www.nextgenpe.com
Tom Sarkus outlines the carbonsequestration efforts currently underway at NETL
Terrestrial sequestration refers to capturing CO2 with
plants and with microorganisms that are generally
present in soils. There’s definitely a place for that. If
we can increase the carbon uptake of terrestrial sinks by
just one percent over the next 50 years our estimate is
that that could store an additional 12 billion tons of CO2.
Geologic sequestration is a larger portion of what
we’re doing at NETL – injecting the CO2 into underground
rock formations. It’s something that is happening now in
other industries but you can draw some inferences by
analogy. One of the options for geologic sequestration is
enhanced oil recovery. Enhanced oil recovery using CO2
flooding is currently being used in the US, in some places
on a fairly large scale.
Another kind of formation that we’re researching is
saline formation because often the sedimentary rock
formations that we want to target contain a brine
formation far more commonly than they might contain
petroleum, oil or natural gas.
TYPES OF CARBON SEQUESTRATION
COVER STORY v2:18oct 19/06/2009 15:28 Page 31
32 www.nextgenpe.com
World energy consumption is forecast
to triple by 2050 – never has the need
to fi nd a new source of power and
energy been greater. New materials science
must also rise to the challenges of the new era
of energy and power generation.
Huntsman research and development
teams in the US, Europe and China are looking
at a range of creative and innovative solutions.
Recently the company won a major award for
two new resin systems for graphite composite
fuel cells for large-scale production of auto-
motive and stationary power applications,
which will be available in late 2009/2010.
These fuel cells have been developed in
partnership with GrafTech International hold-
ings as part of a Department of Energy spon-
sored program. Since the conversion of fuel to
energy takes place via an electrochemical pro-
cess, the process is much cleaner, quieter and
up to three times more effi cient than burning
fuel.
Wind and sunIn the area of wind energy, Huntsman
predicts that the market will continue to grow
extremely rapidly over the next few years. The
European Union has already made the imple-
mentation of wind energy a high priority, with
the aim of generating 20 percent of annual
energy production from renewable sources
by 2020.
Likewise, the US is turning to wind energy,
with an average growth of over 25 percent in
the last two years. Since the start of modern
wind energy technology, Huntsman has
developed a range of adhesives for securing
wind turbine blades. These include new gen-
eration nanotechnology materials based on
truly submicron particles that can form bonds
with dramatically improved fatigue resistance
when compared to traditional solutions.
Solar heating and solar power, each with
their own distinctive technologies, will also
see a rapid increase in usage as we continue to
seek alternative sources of energy. There will
be a massive increase in solar power arrays
to produce electricity from sunlight. In future,
whole areas of roofi ng may have photovoltaic
cells installed, producing a signifi cant propor-
tion of the energy for the building. Since 2002,
the production of photovoltaic electricity has
doubled every two years. This is an area of
growth where Huntsman is actively working
with partners in order to help to improve the
effi ciency and bring down the production
costs of photovoltaic modules.
TransmissionPower transmission and distribution is
another segment to which Huntsman has
contributed with several innovative insula-
tion materials: Araldite HCEP, a hydrophobic
epoxy resin for outdoor insulators, has gained
market share from ceramic insulation because
it enables the manufacturer to produce lighter
weight insulators that are water repellent.
Insulators made of Araldite HCEP show better
toughness, resulting in less damage, and they
need less maintenance and provide high arc
resistance.
Based on the market success of this new
resin, Huntsman has developed a semi-fl exible
version: Araldite S-HCEP, which can be used as
cost-effective housing material for composite
insulators. It provides several technical ad-
vantages compared to liquid silicone rubber;
for instance, it is resistant against bird and
rodent attack. It has high tracking and erosion
resistance and shows much less leakage of
current in salt fog tests. It has currently been
introduced into the worldwide T&D market.
Energy saving in lighting applications is
another main trend in industry. Organic light
emitting diodes (OLEDs) will become the
next generation of lighting. OLEDs are large,
paper-thin, fl exible and lightweight devices,
consuming 70 percent less energy compared
to current light bulbs and providing new
opportunities for design and architectural
integration. Huntsman is developing the im-
portant encapsulation materials and barrier
layers for these devices.
There is no single solution to the many
challenges of future energy harvesting, but
we can anticipate multiple solutions such as
wind, wave, fuel cells and solar cells to see
large scale commercialization on a global
basis. It is certain that these new technologies
will demand new materials – a challenge that
we are prepared to meet.
INDUSTRY INSIGHT
Leading innovation across the energy value chainMeeting the challenges of the next era of energy and power generation. By Thierry Perchet
Thierry Perchet is Global Energy Marketing
Manager, Huntsman Advanced Materials.
He has over 25 years of experience in
engineering and materials science in
composites and adhesives, beginning with
R&D and followed by sales and marketing.
Perchet is now responsible for all Huntsman
global marketing activities in wind power
and electricity management.
“There is no single solution to the many challenges of future energy harvesting”
Huntsman.indd 32 19/6/09 15:41:40
Hunstman.indd 1 18/6/09 14:26:51
President Obama’s pledge to become a world leader in cli-
mate change is certainly not anything new – Asia is already
ahead of the US in its SUV and PHUV manufacturing, France
has a huge nuclear fleet and nationwide smart metering is
being formulated in the UK – and as each country begins to
up the ante in energy efficiency, the US president is certain-
ly adding extra challenges to his already extensive list.
Strategizing in the fast-paced, ever-changing energy in-
dustry requires vast amounts of meticulous planning and a
small amount of risk taking. Energy institutes have been re-
searching the growing risk of CO2 levels for many years, and
as both private and public awareness has been steadily in-
creasing, 2009 is the year for implementation. But as targets
continue to be set, both at a state and federal level, formu-
lating company strategy is critical to ensuring survival in the
coming decades.
The thoughts and processes of Duke Energy have been
formulated into a five-year plan, and Doug Esamann is the
man responsible for that planning. “I have all the web forecasting and for-
ward-looking projections of customer demand, as well as commodity price
forecasting and coordinating the effort at the company to develop the
strategic business plan, ” he explains.
The ‘fifth fuel’Energy efficiency is the flagship of Duke Energy, who has named it their
‘fifth fuel’ concept. Increasing renewables is a major part of the company’s
strategy, but as Esamann explains, the greatest strategy for saving energy
isn’t in building renewable plants, but by wisely using the energy that is al-
ready being produced.
“The fifth fuel concept, is energy efficiency being a much more signifi-
cant part of the resource mix. In the past, we consider the other four fuels
being generated through burning coal, nuclear, gas power or renewable en-
ergy. These are the four ways in which you can actually generate electrici-
ty from those fuels.
“What we refer to as the fifth fuel is energy efficiency and what we’re
trying to do through that is to change the paradigm that exists with energy
efficiency in our industry. We get return on investment from investing in
power plants and that’s a good thing, but in the past, our returns on our en-
ergy efficiency programs are really not calculated in the same way. We get
our money back, we get our cost back, and as a result many utility compa-
nies aren’t really positioned well from a return standpoint to invest in ener-
gy efficiency.”
Energy efficiency has been coined the ‘fifth fuel’ – placing it on a level
playing field with all other sources at Duke. The initiative, ‘Save a watt’, is
34 www.nextgenpe.com
A renewed sense of
THE BIG INTERVIEW
A changing trend of environmentally friendly attitudes is becoming a global phenomenon. AsSVP of Strategy and Planning for Duke Energy, Doug Esamann is the man responsible forassigning those attitudes and determining risks, and as the rest of the world carefully watchesthe US energy industry attempt to take a leadership role, this is no easy task.
optimism
“There are30 states or so
that haverenewable
portfolio standardsalready in place”
Esamann ed:18oct 22/6/09 11:01 Page 34
35www.nextgenpe.com
lated, and the company are developing wind fields and selling the output
ofwind farms to various utility operators and suppliers, due to the increase
in renewable standards upon all utilities.
“There are 30 states or so that have renewable portfolio standards al-
ready in place, and somany utilities are looking for themost economic alter-
natives tomeet those standards, andwind has been a very strong player in
thosemarketplaces.Thechallenge for thatwindbusiness is that likemanyre-
newables, it’s very geographydependent, somost of thedevelopment tends
tobe in theareaswhere thewind ismappedoutas thestrongest,which tends
tobeTexas and theupperMidwest –where thebestwind fields are.
So for us here in our regions, either in the Carolinas or in our
Midwestern states, ourwind footprints aren’t nearly as strong, butwe saw
an opportunity to get into the renewables business in a largeway through
acquisitionswhich created that pipeline of development for us that exists,
andwe’re excited aswe seemore pressure to developmore renewables for
the United States,” says Esamann.
HydroelectricThere is also a huge hydro capacity focus. Duke Energy is the second
largest investor-owned hydroelectric operator in the US and uses its capa-
bilities for the management of water resources. The company operates a
dam inbothNorth andSouthCarolina,which is used to create cooling lakes
for its nuclear plants, as well as its coal plant. Energy generation such as
an attempt to change the structure at the regulatory commissions so as to
change the way in which energy is perceived.
“That hasbeenabannerwe’ve carried into the regulatory commissions
at the various states and it’s very different than theway it’s been in thepast,
so it’s been a challenge to change that. The issueswe’re dealingwith today
are in trying to change the regulatory paradigm that exists around energy
efficiency,” he says.
Attitudes and trends towards energy efficiency are changing. Esamann
notes the growing consciousness from Duke’s consumers regarding their
environmental footprint, as well as a general understanding that energy
prices are almost certain to rise.
“We’ve been in a long period of time where rates have been stable to
actually declining on a real basis, and so we need to reinvest in our sys-
tem,” he explains. “This will have an impact of potentially raising the cost
of our product to customers and so that will drive a real desire, in addition
to the environmental desires for customers to becomemore efficient, and
we’re well positioned to do that.”
Wind generationHowever, to ensure everywatt is savedandefficiencymaximized, Duke
is also concentrating its efforts on renewable energy and is currently devel-
oping a number ofwind power generation projects to add to those already
operating. The wind generation business is commercial, rather than regu-
“We’ve done a lot of analysis on carbon and the implications for us, andhow we want to manage carbon, and we’re certainly making efforts today
to put us on a trajectory to reduce our carbon footprint.”
Esamann ed:18oct 19/6/09 15:30 Page 35
renewable energy.’Ohio is a little different. Ohio is really focusedmuchmore
on ‘Wewant renewableenergy inOhio.’And theyhavea fairly aggressive tar-
get long termwhich creates challenges in andof itself.”
Esamann notes this as being the expense as-
sociated with renewables, as a pose to other al-
ternatives, due to the circumstance of tax credits
creating competition and increasing price, espe-
cially in particular areas where there is a lack of
renewables, such as Ohio.
“For example, wind in Ohio is not a very
highly rated environment for wind generation but
you get less efficiency from the energy you get
out for the investments that you make, and that
makes it more expensive,” he noted. “So those
things couple together to make it very challeng-
ing to try and meet some of the standards, and
we work a lot on this. We work with lots of peo-
ple. We put bids out in the marketplace to try to
get developers to come in and it’s a pretty expen-
sive proposition to implement all this as we sit
here today and look at it.”
As the US continues its push towards amore
self-sufficient state, with the advancement of
technology, will it ever be possible for states to be completely indepen-
dent of imports, or will those challenges be too great? Esamann thinks
it’s possible, providing that the energy is sourced from theWest Rockies
and Texas.
TransmissionOf course, there is the issue of transmission that underlines the ge-
ographic dependency challenges. Using solar and wind sources from the
West is doable; it’s the transmission of it to the East that is the biggest
challenge. Rather than bringing all that energy across land, Esamann
predicts that more than likely the energy will remain in its current mar-
ket, and instead renewable energy will be produced in the East that is
geographically available.
“Our approach is in engaging our customers and essentially using dis-
tributed generation on customer premises as a way to distribute these re-
sources throughoutour system, andwe think thatmakesa lot of sense.You
have to get the right relationship and economic terms negotiatedwith your
customers and in certain cases,most cases, youhave toget regulatory com-
missions toallowyou todo that andbecause it’smoreexpensive, some reg-
ulatory commissions aren’t alwayshappy to approve thosekindsof plans,”
says Esamann.
this is worthless in times of drought, such as in 2007, and can change the
way in which water is used.
“We’ve used the hydro a lotmore as away to ensure thatwehave cor-
rect lake levels and water levels for use of those lakes by the communi-
ty, as well as for our own operations. So we haven’t put a premium on
getting power from the hydro piece as much as we have in using it to
manage the water resources that we have control of. At this point our ex-
pansion of that is really in very small chunks if at all, and so we really
don’t see a significant opportunity to expand the hydro fleet that we have
today.”
Esamann’s reason for limiting the importance of hydrowithin the five-
year strategy is based upon his prediction that hydro is unlikely to have a
large growth trajectory. He explains the challenges
for hydro activitywithin thePacificNorthwest, such
as fish andwildlife impacts; “Iwould expect it to be
used more like how we’re using it, which is a way
to helpmanage thewater resources that are avail-
able to us in the communities that we’re in.”
Geographic challengesHe remains realistic about the implementation
of renewables andbelieves the federal targets of in-
creasing renewable usage is unattainable, again
pointing to the challengesof geographic dependen-
cy. “One of the issues we’ve always had as a com-
pany is that the regionswe serve aren’t really that
rich in renewable energy opportunities,” he says.
“Thewind studies rate the quality of thewind
area by geography, and if you look at the
Southeast and the Midwestern United States
where we serve our customers, it’s not a very rich
environment forwind; likewise solar. You seemany
solar patterns in the Southwest and, to some extent, the far Southeast, so
solar is a reasonable opportunity for us in the Southeast but not as good
economically in the Midwestern region for us.
“We are subject to statemandates right nowof renewable standards.
InNorth Carolina, we have to get to a three percent renewable standard by
2012. We don’t get to 12 percent in North Carolina from a required stand-
point until 2018. And in Ohio, we have a standard that requires us to be at
least one percent by 2012, and again we don’t get to a 12 percent require-
ment inOhiountil the2020 timeframeandbeyond. So that’s reflectivemore
of how states are different in terms of their access to renewables.”
Esamann’s strategy to reach such standards is the reason why he is
focusing on energy efficiency from a primarily business perspective, fo-
cusing on ROI. He hopes a fourth of the target can be met through ener-
gy efficiency initiatives – the acquisition of renewable energy certificates
fromplaces that are not delivery specific to Duke’s territory, with the other
half from sources within the company’s own service territory – reiterating
the challenge of geographic dependency.
He notes the limited access to renewable energy sources and the af-
fectsof this forOhio.“Thegovernors recognize thatwhentheypassedthe leg-
islation here they said, ‘Well, you can get some of it from elsewhere and just
show us that you’ve bought the certificates and that you’re helping support
36 www.nextgenpe.com
“We’ve been in a long period of timewhere rates have been stable toactually declining on a real basis, andso we need to reinvest in our system”
DOUG ESAMANN
Esamann ed:18oct 19/6/09 15:31 Page 36
Smart gridIn order tomake efficient Duke’s own transmission infrastructure, the
company has begun deployment of its smart grid project, using technolo-
gy to capably deal with their customers more closely and respond to the
real time information on the system.DavidMohler, Chief Technology
Officer at Duke, has been configuring what is technologically
feasible for the last few years, and ran a number of pilot
testsbefore compilingabusinessplanwithwhich tobegin
rolling out a large-scale deployment.
“We really started toget excitedabout thepossibil-
ities that the smart grid brings. It’s not automated me-
tering – that’s only a part of it; the real value of it is the
ability to get access to a lot more information.We don’t
necessarily want to handle a lot of information but we
want to be able to use it to bettermanage our system, to be
more proactive about seeing failures in the system and reacting
to thembefore the failure actually happens.
“Wewant to get consumer usage information so thatwe canworkwith
consumers and allow them to get access to different value-added services
that help themmanage their energy cost and usage.We’re all about selling
moreenergy, sellingmorekilowatt-hours –we’re a volumebusiness.Butwe
seeanopportunity in the future throughsmart grid toactually becomemuch
more active,workingwith customers in trying tomanage their energy costs
and their energy usage in amuchmore efficient way.”
Duke currently has approval in the state of Ohio and is moving ahead
with full deployment, a plan consisting of three to four years and resulting
in full smart grid implementation. In Indiana, deployment is in hearing
stages, and following lengthydiscussions, theoutcome looks set tobemore
thanpositive.North andSouthCarolina is continuing forwardbut at amuch
slower pace, due to some of the technology previously placed in North
Carolina. Esamann notes the automatedmeter reading thatwas initially in-
stalled as a cause for slowing up the development, and as a result is now
working closely to deploy the project.
“We really feel that this is a great way to improve reliability, to give op-
portunities for customers tobemoreengagedwithus in termsofmanaging
their energy and as prices go up, as environmental consciousness and
awareness continues with customers, they will be seeking out our help on
these things,” he says.
The future lookspromising forDukeEnergy. Esamannexplains that the
next two to three years is heavily focused on tackling those environmental
issues currently dominating utility targets and theworld’s press. “We really
want to keep the priority on getting energy efficiency – getting the regulato-
ry regimes right, pushingout newprograms toour customers.
“Weseeahugedemandon thepart of our customers for newproducts
and so we want to keep working that issue and finding success in rolling
out those products. We’ve got a couple of states where we’re scaling full
deployment with smart grid, and with the technology we now have, this is
enabledwith a lotmore energy efficiency So those are real focal points for
us,” he adds.
Making renewable energy a reality is the underlining of Esamann’s
strategy, although this is no easy task. The work of renewable suppli-
ers is challenged by the promise of tax equity investors to fund the pro-
jects partnered with utility companies. The current global recession
adds to this difficulty of financing their products, and so Duke is em-
bracing the opportunity to form new partnerships and support those
suppliers in the renewable sphere.
“We also want to move forward with the carbon strategy,” says
Esamann. “We’ve done a lot of analysis on carbon and the implications for
us, andhowwewant tomanage carbon, andwe’re certainlymaking efforts
today to put us on a trajectory to reduce our carbon footprint. Butwewant
to keep working on a more robust strategy and part of that will be depen-
dent upon seeing legislation and what gets included in there, as well as
what things will count towards things like offsets and that type of stuff.
“We’vealsobeenworkinga lotonnuclearandbringing itcloser to fruition.
Wehaveasiteandhavebeenworking throughthenuclearprocesshereat the
NRC and trying to get our permits. We need to go through the regulatory
process in our states. But two to three years fromnow,we’d like to be in con-
structionmodeonanuclear plant, butweneed tokeepworkingand clearing
hurdles tomake that happen.
“If you lay on top of that we still want to educate customers and other
folks about their energy usage and what they can do. Transparency is al-
ways helpful to enabling those things to happen,” Esamann concludes. �
37www.nextgenpe.com
Duke Energy’s approach reflects a new way of thinking
about energy efficiency. It recognizes energy
efficiency as the ‘fifth fuel’ – complementing
coal, nuclear, natural gas and renewable
energy. These are all part of the overall
portfolio for meeting customers’ growing
need for electricity. The fifth fuel will help
customers meet their energy needs with
less electricity, lower costs and reduce
environmental impact.
Five programs are proposed for
residential customers and three are proposed
for the large industrial and commercial segment.
Additionally, Duke is recommending five pilot programs
before expanding to more customers:
• Residential energy assessments – including mail-in
and online analysis and onsite energy audits
• Smart $aver – including incentives to install compact
fluorescent light bulbs and high-efficiency home
heating and cooling systems
• Low income services – assistance in purchasing
energy efficient equipment and home weatherization
• Energy efficiency education program for schools –
including incentives for students performing online
energy audit of their home
• Power manager – monthly credits in exchange for Duke
to cycle home’s air conditioning during peak demand
SAVE A WATT
Esamann ed:18oct 19/6/09 15:31 Page 37
How is the global financial crisis impacting com-
modity transactions and what trends do you see
emerging as a result of this?
Sharon Fortmeyer-Selan. Barely two years ago,
weheralded the hedge funds and financial insti-
tutions for the liquidity they brought to com-
moditymarkets. Thewidespread financial crisis
has dampened this liquidity as some partici-
pants retrenchedorwithdrew fromcommodities
markets. More significantly, it has brought ex-
treme volatility and fueled deep concern, some
might even say fear, about counterparty risk.
These impacts are in turn giving rise to sev-
eral key themes or trends. One trend is a signif-
icant shift of volumes of over-the-counter (OTC)
trades to exchange-backed clearing or clearing
houses. Another is a trend toward independent
validationofpositionsandbookswhich translates
into an increased need for price and valuation
transparency. A third trend is toward tighter inter-
nal controls and increased regulatory oversight.
How will the shift to cleared trades impact
processes and systems?
SFS. Clearing requires a sufficient number of
participants and liquidity to work. Nymex intro-
duced its clearing platform and began offering
OTC cleared products in 2002. Since then, the
number of OTC products Nymex offers has
grown to over 600. One element of achieving
this is to develop standardized products and an
efficientway to price and settle them. Tohandle
the complexities of more exotic trades, we will
need to implement new processes for price dis-
covery and upgrade technology to support the
unique characteristics of these trades.
Systems like SunGard’s Aligne that incorpo-
rate grid-technology, service-oriented architec-
tures, configuration flexibility and scalable
performance provide a platform for clearingOTC
trades. Today’s ability to connect and settle di-
rectly with exchanges like Nymex and ICE and
clearing houses will be complemented by the
ability to present an aggregated viewof thedata
across transactions and operations for immedi-
ate decision-making.
What is the best way for businesses to achieve
transparency and control?
SFS. Speed and accessibility of reliable, timely
market data is a key success factor for commod-
ity traders and other market participants.
Aggregating price, volume and other key trans-
action data frommultiple sources including ex-
changes, pools, counterparties and partners
and applying analytics against the results en-
ables transparency. The automated capture of
data from the exchange cleared transactions in
conjunction with clearly defined processes for
price discovery helps support the requirement
for transparency. Increasingly availablewith low
latency, this data enablesmore immediate deci-
sion-making.
Defining and documenting transaction
processes from deal capture to expiration is a
critical element of controls. Establishing the
rules basedon roles, risk tolerances, or other pa-
rameters, monitoring adherence to them, and
setting alert thresholds is also key. Automating
the associated process workflow strengthens
and streamlines the controls.
Commodity STP: clearing, transparency, control
38 www.nextgenpe.com
What began as a banking crisis has changed the capital markets and shakenenergy commodity markets as well. P&E asked Sharon Fortmeyer-Selan ofSunGard Energy Solutions about the trends emerging from the crisis, and whattools can help to address them.
EXECUTIVE INTERVIEW
Sharon Fortmeyer-Selan is Senior Vice
President, Marketing for SunGard Energy
Solutions. She brings over 25 years of
experience in software solutions marketing
to her role. Fortmeyer-Selan has served as
Chief Marketing Officer for several start-up
software companies and held leadership
positions in solutions marketing for
Compaq, AT&T, and NCR specializing in
transaction processing, business
intelligence and emerging technologies.
How can technology help address these chal-
lenges?
SFS. Automating the flow of information from
the initial transaction initiation through to its exe-
cutionandexpirationhelps to remove thehuman
element of operational risk. This seamless infor-
mation flowprovidesstraight-throughprocessing
that may be facilitated by workflow automation
tools for greater accuracy and speed. Service-ori-
ented architectures with enterprise messaging
andbusinessprocessautomationare foundation-
al technologies to enable the transparency, con-
trols, and agility needed to navigate challenging
business environments.
Standardized contracts andprocesses, real-
time transactions, accurate market data and
configurable risk toolkits combine with direct
market and exchange clearing to help commod-
ity market participants rise above economic
challenges. SunGard’s Aligne provides an ad-
vanced set of risk assessment and riskmanage-
ment tools designed specifically for energy
traders, risk managers and credit officers, to
help them measure and manage a number of
key energy exposures. Aligne delivers these ca-
pabilities through one fully integrated solution
suite, deployed and supported by one collabo-
rative team of experts. �
SunGard Energy ed:18oct 22/6/09 10:23 Page 38
Physical Power Challenged?As a power market participant are you:
» Securing the best transaction terms available?» Accurately anticipating physical transmission capacity?» Meeting contractual obligations in physical markets?
SunGard’s power operations solutions compile, analyze, and manage high volumes of transactions and distribution information to help you gain the flexibility needed to respond to electricity market changes. Electricity providers, schedulers, suppliers and others working in the interconnected electricity grid also rely on SunGard’s solutions to help them manage the related fuels costs, logistics, and environmental regulations.
SunGard Solutions help over 200 major energy industry participants across North America and Europe, including utilities, power generation companies, energy traders and marketers, to more efficiently and profitably trade and market energy, process transactions, and manage risk.
For more information email us at [email protected], or call:
North America + 1 888 296 1906Europe: + 44 (0) 20 8081 2000India: + 91 20 6624 8000Asia/Pacific: + 65 6416 9790
solutions for energy
“Prices are escalating, transactions are occurring faster, data is being exchanged faster… We had to automate to keep ahead with the industry and one of our most crucial steps was to bring in SunGard’s Aligne Trading and Risk.” George Sladoje, CEO & Chairman North American Energy Credit and Clearing Corp (NECC)
©2009 SunGard.trademark information: sungard and the sungard logo are trademarks or registered trademarks of sungard Data systems inc. or its subsidiaries in the u.s. and other countries. All other trade names are trademarks or registered trademarks of their respective holders.
www.sungard.com/energy
SunGard.indd 1 18/6/09 14:29:36
40 www.nextgenpe.com
Brad Collins believes that two of the major challenges
we are currently facing across the world – global
warming and the recession – can be tackled with the
same weapon. The solution, he says, is the broad
deployment of energy effi ciency. “This is the low-
hanging fruit in terms of reduction of carbon, and the
replacement of energy sources with less carbon energy sources.
Almost exclusively we would endorse renewable energy technol-
ogy – including wind power, solar power, hydropower, wave power,
biomass and biofuels.”
It makes sense that Collins would say that. As Executive Director
of the American Solar Energy Society, he oversees 13,000 profession-
als in the science and research area of renewable energy technologies,
energy effi ciency and green buildings. In pursuit of its mission to help
transition the US to a sustainable energy future using a broad range
of renewable energy sources – not just the sun – the society provides
advice to everyone from members of the public to the new administra-
tion in Washington.
“Since before the election, with all of the presidential candi-
dates, and after the election as well with the transition team, we
have been providing some of the public documents that we have
prepared over the last several years that are policy related to this
mission,” Collins explains.
“We have documents that deal with the interconnection between
climate change and the solutions, which we consider to be broad de-
ployments of energy effi ciency and renewable energy technologies.
We provided the transition team with information about the breadth
and scope and forecast potential of green-collar jobs. And we con-
sider the largest threat currently facing the world population is global
climate change. The second largest threat is the economic downturn,
and the need to transition to a more sustainable economy.
“We are not necessarily the spokespeople or the people who are
advocating publicly for these policies, but when you look deeply into
their positions, what you discover is that they cite our work, or they
base their policy recommendations on work that we have accom-
plished over the last numbers of years.”
Going greenOne of the big questions currently circulating in the energy sector
relates to President Obama’s proposal to create fi ve million green-
collar jobs as part of his environment initiative. There are those who
have said that such a proposal is not feasible, but Collins disagrees.
“We would strongly endorse the potential that this is feasible,” he
says. “The stimulus package and the budget that President Obama re-
leased are moving precisely in the right direction, and that direction is to
create incentives for workforce development in the green collar arena.”
Collins goes on to describe a case in point. “One of the adminis-
tration’s goals is to increase weatherization: taking buildings that are
not as effi cient when they were constructed and bringing them up to a
higher energy standard. For example, this would involve the replace-
ment of windows, increasing insulation, preparing areas that have air
infi ltration for caulking and then caulking them, and putting in more
effi cient furnaces air-conditioning.
RENEWABLES
40 www.nextgenpe.com
When the stars align.indd 40 19/6/09 15:36:08
40 www.nextgenpe.com
Brad Collins believes that two of the major challenges
we are currently facing across the world – global
warming and the recession – can be tackled with the
same weapon. The solution, he says, is the broad
deployment of energy effi ciency. “This is the low-
hanging fruit in terms of reduction of carbon, and the
replacement of energy sources with less carbon energy sources.
Almost exclusively we would endorse renewable energy technol-
ogy – including wind power, solar power, hydropower, wave power,
biomass and biofuels.”
It makes sense that Collins would say that. As Executive Director
of the American Solar Energy Society, he oversees 13,000 profession-
als in the science and research area of renewable energy technologies,
energy effi ciency and green buildings. In pursuit of its mission to help
transition the US to a sustainable energy future using a broad range
of renewable energy sources – not just the sun – the society provides
advice to everyone from members of the public to the new administra-
tion in Washington.
“Since before the election, with all of the presidential candi-
dates, and after the election as well with the transition team, we
have been providing some of the public documents that we have
prepared over the last several years that are policy related to this
mission,” Collins explains.
“We have documents that deal with the interconnection between
climate change and the solutions, which we consider to be broad de-
ployments of energy effi ciency and renewable energy technologies.
We provided the transition team with information about the breadth
and scope and forecast potential of green-collar jobs. And we con-
sider the largest threat currently facing the world population is global
climate change. The second largest threat is the economic downturn,
and the need to transition to a more sustainable economy.
“We are not necessarily the spokespeople or the people who are
advocating publicly for these policies, but when you look deeply into
their positions, what you discover is that they cite our work, or they
base their policy recommendations on work that we have accom-
plished over the last numbers of years.”
Going greenOne of the big questions currently circulating in the energy sector
relates to President Obama’s proposal to create fi ve million green-
collar jobs as part of his environment initiative. There are those who
have said that such a proposal is not feasible, but Collins disagrees.
“We would strongly endorse the potential that this is feasible,” he
says. “The stimulus package and the budget that President Obama re-
leased are moving precisely in the right direction, and that direction is to
create incentives for workforce development in the green collar arena.”
Collins goes on to describe a case in point. “One of the adminis-
tration’s goals is to increase weatherization: taking buildings that are
not as effi cient when they were constructed and bringing them up to a
higher energy standard. For example, this would involve the replace-
ment of windows, increasing insulation, preparing areas that have air
infi ltration for caulking and then caulking them, and putting in more
effi cient furnaces air-conditioning.
40 www.nextgenpe.com
SPECIAL FEATURE
When the stars align.indd 40 22/6/09 09:22:43
41www.nextgenpe.com
When the stars alignBrad Collins on why the American Solar Energy Society’s time has finally come.
41www.nextgenpe.com
When the stars align.indd 41 19/6/09 15:36:15
42 www.nextgenpe.com
w
“Weatherization will create massive amounts of jobs. It will raise
the building stock performance in the United States, which will lower our
carbon footprint because it will use less energy. The time frame for how
long this energy effi ciency upgrade or weatherization will last is decades.
“Buildings tend to last 50-plus years. If you improve the perfor-
mance of a building built in, say, 1980, and it now has another 30 years
of expected life, you have 30 more years of lower carbon for that one
building than you would if you did nothing. You have also created an
employment opportunity that’s not outsourcable, and it’s an employ-
ment opportunity that generally exists in the urban centers of our
cities, where we have the highest unemployment.
“So it’s a whole variety of winning solutions all accomplished with
the same targeted goal: let’s create jobs in the weatherization indus-
try. Like many of the other stimulus package and budget targets that
have been proposed by the administration and signed into law, these
are going to help us solve those twin challenges – global warming and
a need to rejump or reboot the economy, but reboot the economy with
a new vision as to what we want it to look like. What we want it to look
like is more effi cient, more sustainable and preparing the workforce
for the 21st century.”
The society’s work has shown that there are currently nine million
people in the United States employed in the green-collar economy, cre-
ating revenue of more than $1 trillion in 2007. This is more than Exx-
onMobil, GM and Wal-Mart combined. But as Collins points out,
we have to be careful that we are comparing apples to apples.
“One of our biggest challenges was to become very explicit and
transparent in what we defi ne as a green-collar job, and fun-
damentally those are energy-effi ciency and renewable
energy jobs. Energy-effi ciency jobs are defi ned as
jobs that are in recycle/reuse/remanufacturing;
jobs that are in the energy services sector,
which would be weatherization; and jobs
that are producing or manufacturing prod-
ucts that are at least 30 percent more
effi cient than the standard.
“So an automobile that gets 30
percent better gas mileage than the
fl eet average is an energy-effi cient
automobile by our defi nition, and all
of the jobs related to that automobile are part of the green
economy. Likewise, if you have building windows, for instance,
that are 30 percent more effi cient than the standard window, then that
whole production process is a green-collar job.
“As the average effi ciencies improve, how many people in that
green-collar part of the economy and what companies qualify go up
too because the bar is raised.”
Single solutionThe society’s forecasts predict that if aggressive deployment
of tax-supported, job-creating incentives in the green-collar arena
becomes a national priority, then by 2030 the United States could
have more than 37 million people working in the green economy. This
would equal between 17 and 18 percent of the total employment of the
country, creating $4.5 trillion in annual revenue.
According to Collins, those statistics help support the notion that
the solution to our global warming challenge and to rebuilding our
economy are the same. He believes that now the challenge is to sup-
port those in public offi ce with data and well thought-out strategies
on how to get there.
“We’ve discovered from work we did on green-collar employ-
ment in various states that there are three necessary requirements
that must be in place in order to motivate the markets and create
the solution. The fi rst of these is to create a local market through, in
some cases, incentive programs. The market has to be outside the
manufacturers’ door. You can’t create a manufacturing entity in one
state and sell it easily 10 states away or overseas. To jumpstart the
green economy, you have to create a ready market in the same area.
“The second thing you have to do is put in place incentives for the es-
tablishment of the manufacturing distribution and servicing industries
for those technologies; whether it’s weatherization, recycling, deploy-
ment of solar on buildings or wind farms. You have to create the incen-
tives that are going to attract capital into that part of the economy.
“And third and foremost, the difference between suc-
cess and failure, comparing one state versus another, is
“For 55 years we’ve been waiting for the stars to align, and all of the sudden we
are scrambling to try to manage what the implications are for us to be proactive in
helping the country”
SoLAr HiStory tiMeLine
1905Albert Einstein publishes his paper on
the photoelectric effect, along with a
paper on his theory of relativity.
1954Photovoltaic technology is born in the United States when Daryl Chapin,
Calvin Fuller and Gerald Pearson develop the fi rst solar cell capable of
generating enough power from the sun to run everyday electrical equipment.
1964NASA launches the fi rst Nimbus
spacecraft—a satellite powered by a
470-watt photovoltaic array.
“And third and foremost, the difference between suc-
When the stars align.indd 42 22/6/09 09:22:58
43www.nextgenpe.com
w
executive leadership. The executive has to take a role in promot-
ing the vision of a new energy economy based upon renewable and
energy effi ciency. And what we see in the Obama administration is
clearly economy leadership.”
Collins is convinced that we already have some of the ingredients
in place to have a ready market here in the United States. He points
out that there is talk of a federal renewable portfolio standard, and
incentives are being put in place to attract and maintain and grow
businesses in the renewable, energy effi ciency sector. Combine this
with executive leadership from the President and from Congress on
moving swiftly toward a more sustainable energy economy, and it
seems the society’s time has fi nally come.
“In one sense, for 55 years we’ve been waiting for the stars to
align,” Collins says. “Then all of the sudden, lo and behold, we are
scrambling to try to manage the alignment of these stars and what
it means – what the implications are for us to be proactive in helping
the country to meet our mission and therefore to help us reduce atmo-
sphere carbon and to help us jumpstart our economy.
“It’s very gratifying, and more so to the member who comes to me
and says, ‘I’ve been in this society for 40 years and this is fi nally hap-
pening. And now that I’m 85 years old, we’ve got to make this happen,
and I want you to be even more aggressive tomorrow than you were
today.’ In other words, for the fi rst time we are able to respond to the
earnest interest of our long-standing members to be more and more
aggressive in our advocacy, and that’s great.”
new or old?There has been comment from quarters that many so-called green
jobs are not new jobs, but just existing jobs given a shiny new name –
taking jobs from one industry and group and moving them to another.
Collins says the answer to this criticism is complicated.
“There are two things need to be understood. One is in the green
economy, many of the jobs are not, per se, specifi cally green jobs. If you
have a manufacturing plant that builds wind machines, in that plant you
have people who are highly trained and have expertise in wind engineer-
ing and in the design and fabrication of fi berglass. But most of the jobs
in that factory are your accountant, your secretary, your truck driver,
your warehouse manager, your facilities manager, your attorney.
“These are jobs that could be in any industry. The fact that they
happen to be in the green economy is only an artifact of the fact that
the end product is a green product. But the job training and the job de-
scription is the same, whether you’re building widgets or windmills.
“And so, in a sense, you will have a lot of people transitioning out of
jobs in, for instance, the automobile glass manufacturing world into the
fl at plate solar collector manufacturing world because some of the skill
sets are identical. This means you’re going to have a transfer of employ-
ment from, quote, ‘the automobile industry’, into the green economy.”
Collins says the question of how many of these are new jobs is a
question of how fast we can grow the green economy in order to have ad-
ditional employment. He sees the green part of the economy expanding
over the next dozen years and some of the older parts of the US economy
shrinking, although the society does not have, nor does he believe anyone
has, a good set of data on how that balance is going to work out. It’s diffi -
cult to say whether at the end of the day there will be X number more jobs
now in the economy than there were when the transition began.”
“Our position is that we need to move in this direction regardless
of the pain and suffering that might be necessary in the transition,” he
1969A solar furnace is constructed in
Odeillo, France; it features an eight-
story parabolic mirror.
1981Paul MacCready builds the fi rst solar-powered
aircraft ‘The Solar Challenger’ and fl ies it from
France to England across the English Channel.
1982Australian Hans Tholstrup drives the fi rst solar-
powered car ‘The Quiet Achiever’ almost 2800
miles between Sydney and Perth in 20 days.
1990The solar-powered airplane Sunseeker
successfully flies across the US, piloted by
Eric Raymond.
When the stars align.indd 43 19/6/09 15:36:31
44 www.nextgenpe.com
“A case in point might be if a person wants to buy a house and
as part of their mortgage they want to put solar on that house. The
calculation that is normally used to allow them to qualify for the
principal, interest, taxes and insurance should also include utilities
because their utility bill, for the life of their house and for the life of
their mortgage, certainly, will be substantially less than that of the
house across the street.
“So the qualifi cation should be different because the calculation
incentive must be included – for instance, if the amount of their mort-
gage should be no greater than 32 percent of their take-home pay,
this is different if you don’t have to save the other 78 percent of your
take-home to pay enormous utility bills.”
Collins believes that you can have
creative fi nancing that takes into account
the long-term value of the establishment
of these technologies for the homeowner
or for the utility or for the business owner.
“That creative fi nancing should be an
honest evaluation of the reality of how
the purchase of this long-term power plant, that somebody’s putting
on their building, can help free up the market mechanisms which can
help drive this market in order to ramp up to 10 percent of our electric-
ity by 2012. It is doable. It is a very steep hill. It would be a very steep
hill even if there was no credit crisis.
“Here’s an example. At the beginning of World War II, the United
States did not build heavy trucks or jeeps. In Detroit, it took them
less than a year to take the manufacturing processes of the US auto
industry and revise it to produce nothing but heavy trucks, tanks and
jeeps. If you have as a national goal to do something, and it is a shared
vision of the country and it is a commitment that the public and private
sectors are willing to make, enormous changes can occur.
“We hope – desperately hope – that the driver for this sort of
change in this country comes not from increasingly dire projections
as to what’s happening to our climate, but from a more and more en-
lightened vision about the prudence of a solution of the deployment of
energy effi ciency and renewable energy. Then we’ll all be happy.”
reliabilityOne of the questions frequently raised about a greater dependence
on renewable sources of energy is reliability. According to Collins, this
is at one level the Holy Grail – the, ‘How can we be totally independent
emphasizes. “Because the threat of global warming is so enormous,
and jumpstarting of our economy is so critical, that this is a transition
that we must commit to.
“The challenge is going to be to manage it for the least amount of
pain – this is the challenge whenever there’s an economic transition.
There will be dislocations and there will be winners and losers in that
transition. It is our perspective that it’s the role of government to miti-
gate that to the best of its ability. In the context of massive govern-
ment spending, there is greater opportunity for that mitigation than if
this was done without it.
Sourcing renewablesPresident Obama’s plan also talks
about generating 10 percent of our electric-
ity from renewable sources by 2012, which
Collins believes is doable, although he
acknowledges that it will be an enormous
manufacturing challenge, made even more
diffi cult by the tight credit markets.
The state of the credit markets affects the ability of manufactur-
ers to ramp up their production scale to meet this sort of target – to go
to the fi nancial markets and say, ‘I need to borrow $2 billion to build
three plants. One will produce windmills, one’s going to produce solar
for houses, and one’s going to produce utility-scale solar plants.’
On the other end of that equation, Collins says, the purchasers of
those technologies also have diffi culty going to the fi nancial markets
and saying, ‘I want to borrow $500,000 because I want to put a mega-
watt of solar panels on top of my manufacturing building.’
“It is indeed doable, but there are some very serious challenges
that have to be overcome. Resolving the credit markets is one, prob-
ably fi rst and foremost. It will help free up the revenue needed in order
to upgrade the manufacturing quantity for these types of technolo-
gies and allow homeowners and the business owners to borrow the
money to purchase these technologies. This has to be understood
within the context of the purchaser of those technologies – their pay-
back is many, many years, but their cost is all upfront.
“Some of the ways that these targets can become more likely to occur
is if the leaders of this country can come up with reasonable solutions
to overcome that credit crisis. One of them, for instance, that we have
proposed for years, is that there be a special mortgage mechanism or bor-
rowing mechanism where the borrowing is used for green technology.
“57 percent of carbon reductions in the uS by 2030 will come from energy effi ciency, and 43 percent will come from renewables”
2004NASA’s solar-powered Mars Exploration Rover Mission.
Lands successfully on Mars on 4 January 2004 and has just
had its fourth birthday and continues to meet its objectives.
1999Construction is completed on 4 Times Square in New York. It has more
energy-effi cient features than any other commercial skyscraper and
includes building-integrated photovoltaic (BIPV) panels on the 37th
through the 43rd fl oors on the south- and west-facing facades to
produce part of the building’s power.
When the stars align.indd 44 19/6/09 15:36:36
45www.nextgenpe.com
“And if you have an area that has a need for heating, then gener-
ally when it’s cold, you can mitigate the need for the load by doing
even more energy effi ciency measures. For example, by installing
variable speed air handlers, more insulation, better windows, better
window coverings, better air lock systems and the like.”
It’s obviously a complicated mix of both reducing the demand
and applying the right renewable technology to meet the profi le of
the need. But Collins says that fundamental to all of this is the need
for storage, and the storage will come in terms of molten salts for util-
ity scale solar, where you heat up thermal oil to a high temperature,
about 600 or 800 degrees, and run it through a very large container
that heats up a salt that turns into a heat source.
As the piping goes through it, even if there’s no sunshine, it allows
enough energy to be put back in that oil that it can produce steam. You
have somewhere in the neighborhood of half an hour just in the piping
in a solar fi eld, so that if a cloud goes over a solar fi eld, it doesn’t lose
its energy, even if it has no storage.
“You can also pump air into caverns,” Collins explains, “and have
what is called pumped air storage, and later you can use that air to
turn a turbine to create electricity. You can use hydropower, when it’s
not used, to pump water back into a higher dam somewhere that you
can then recycle the water by having pumped storage.”
Smart loadIn Collins’ view, we have the ability to solve the base load chal-
lenge by using three measures: a smart transmission grid, storage
systems, and being smart about when we use electricity. If you need
to use electricity to wash and dry clothes, if you wash and dry clothes
at 10 o’clock at night when you don’t have the air-conditioning load
going on, it makes a lot of sense. And you need to have market signals
to change consumer behavior in order to help us become more energy
literate consumers.
“If everybody comes home from work and the fi rst thing they do
is turn up the air-conditioning, turn on the TV, run the dishwasher, get
of fossil fuel?’ question. He says the answer
is we can be there, although it would require
a number of interrelated uses of renewable
energy and the transmission of that energy.
For example, if the best wind resources
in the United States are in the Midwest, then
how do you get the energy from the middle
of the country to where the load centers or
the population are, which is on both coasts?
Collins’ answer is to have the commitment to
build a very robust green transmission system
that takes the wind power from the middle of
the country and move it to where it’s needed.
“And likewise, if the best resource for
utility-scale solar energy deployment is the
Southwest, how do you get that energy from
Arizona to Chicago, or from the Southwest to
New England or to New York? It all requires a
very smart green transmission system that is
able to manage the fl ows of energy from one part of the country where
the resource may be active at this hour to another part of the country
where the resource may be active next hour.
“It creates a smart grid with green transmission that’s able to antic-
ipate and transfer those green electrons from where they’re produced
to where they’re needed. It is very possible to do this using two things, a
very smart green transmission grid that is robust, that is intelligent, and
that is predictable, so that you know what the weather’s going to be an
hour from now for wind resources, for hydropower or for solar power.
“And then you have to deal with the whole issue of storage. Stor-
age is the key. In our existing energy distribution system, we have sev-
eral types of generation. We have what’s called base load generation
that runs 24 hours a day. This produces the same amount of electricity
all the time. It could be a coal plant or a nuclear plant, producing the
same amount of energy day in, day out.
“Then we have plants that are what we call peakers, and these are
turned on during the time of the day when you need more energy than
the base load produces. In the summer, it might be an air-conditioning
load. So at noon or thereabouts, the peakers turn on and provide this
extra energy to run all the air-conditioning for the next eight hours,
and then the peakers turn off and you go back to the base load. And
then you have standby spinning reserves that are used if you have
something that the base load and the peakers can’t accomplish.
“It’s a fairly complicated system. The solution, from our perspec-
tive, is to correlate the loads with the resource. In other words, if the
load is air-conditioning – you need air-conditioning when it is hot. And
when it’s hot, the sun is shining. In those areas where the load is going
to peak because of air-conditioning, you install a lot
of solar energy because they’re
going to be in parallel. The
load for the air-
conditioning
will follow the
sunshine.
Wind
Geothermal
Solar
Green trAnSMiSSion
to peak because of air-conditioning, you install a lot
of solar energy because they’re
going to be in parallel. The
load for the air-
proposed transmission of renewable energy
When the stars align.indd 45 19/6/09 15:36:39
46 www.nextgenpe.com
ready to run the laundry, you put this demand on the system and the
system has to turn on expensive and, in many cases, dirty plants in
order to meet that demand for electricity.
“But if you’re a smart consumer, when you get up in the morn-
ing, you plan out when things are going to happen, and what we will
see in the course of the next several years is cost signals becoming
large behavior modifiers for the public. This will come through a
system of smart grids, where your home will have a little device on
it that will tell you how much energy you’re using.
“We will become more and more energy literate as we become
more and more in tune with how our behaviors are affecting our util-
ity bills and our carbon footprints. In our business, it’s called the
Prius effect, where someone who drives a Prius, like I do, is always
conscious of how many miles per gallon they’re getting. It modifies
the way you drive. It’s an instant feedback. And so you don’t do
jackrabbit starts. You turn on the battery charger when you’re going
down long hills. You try to maximize your miles per gallon.
“The same is true when people purchase and install solar on their
houses. It was intuitive for years that people would first and foremost
work to make their home energy efficient before they would go out and
spend money to put solar electricity systems on their house. What’s
happened, in fact, is that many people have gone out and purchased
solar electric systems for their house. First they see how much energy
they’re producing, then they see how much energy they’re using. And
then they say, ‘I wonder if I could use less energy.’”
Collins says that the Prius effect has to be synonymous with
those who are energy producers in their own houses or their own
buildings. They take a closer look at their buildings and say, ‘What
if I replace my windows?’ Or they buy devices that calculate how
much energy their refrigerator, freezer or hot water heater is
using. They calculate the best next step they can take to reduce
the amount of energy they use.
It then becomes a self-fulfilling and supportive environment for
people to become more and more and more energy efficient in their
activities, and Collins emphasizes that if you multiply that by the
entire building stock, or by a large fraction of the building stock,
that’s how solar energy, renewable energy technologies and energy
efficiency can become a reliable source, because we’re doing the
most important part and that’s reducing our demand.
The society’s studies show that 57 percent of carbon reductions
in the United States by 2030 will come from energy efficiency, and
43 percent will come from renewables.
What Collins has found most fascinating is that we’ve always
thought that energy efficiency is the first step and deployment of
renewables is the second step. Instead, what the society has found
is that people are buying solar systems and then discovering what
the next step for them is to replace their air conditioners or buy only
Brad Collins on the green economy In terms of solving unemployment during the economic
recession, the opportunity for entrepreneurial businesses to
grow in a green economy is substantially greater than in tradi-
tional energy economies.
This is because the human resource fraction of the busi-
ness is greater in renewable energy than it is in oil and gas. Oil
and gas has a very high employment per dollar spent in the drill-
ing part of an operation – establishing the field part of an opera-
tion, determining if it’s an oil field or a natural gas field. But once
that’s been established, it runs with very few employees. The
interesting part of that, at least to me, is that if the goal of a gov-
ernment is more employment, this becomes a no-brainer. You
put your dollars into expanding utility-scale renewable energy
technologies as opposed to trying to build more coal plants or
more natural gas electric plants or producing oil.
Many states are resource exporters, meaning that they
take a resource from, for instance, the state of Colorado, and
much of the benefit of that operation inures to another state so
that the revenue goes to the home office, which isn’t necessar-
ily in the state of Colorado.
If you’re a government official, what you would say is, “If
I were to build wind farms in Colorado where we have a wind
manufacturing plant, not only is the employment and the related
tax revenue for that employment and the spending multiplier
for our economy related to employment here in Colorado and
will stay in Colorado, but the net corporate revenues stay in
Colorado and are used to help grow the economy.”
From a strictly fiscal view, you get a bigger bang for your
buck if you support the establishment of incentives and mar-
kets for renewable energy in your state than you do if you con-
tinue to support business as usual with such things as natural
gas development.
More opportunity
“you can also pump air into caverns and later you can use that air to turn a turbine to create electricity”
Energy Star appliances or replace their furnaces with ones that are
more efficient.
“They see the results and then they get the Prius effect. And the
beauty of all of that is the technologies continually advance, so as
they make these energy efficiency upgrades, they’re getting better
and better and better products each and every iteration.” n
When the stars align.indd 46 22/6/09 09:23:47
C
M
Y
CM
MY
CY
CMY
K
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Tantalus.indd 1 18/6/09 14:30:33
WE BUILT THIS CITY
Thanks to its Smart Grid City project in Boulder, Colo-
rado, Xcel Energy is helping to make the intelligent
power grid a reality. But before delving into the
specifi cs of the project, let’s go back to basics – the
meaning of the term ‘smart grid’ itself.
The more people you talk to about smart grid, the
more you realize how many different defi nitions there
are. Some people hang the defi nition solely on smart metering, while
others take a broad approach. Xcel Energy is one of the latter, as CIO
Mike Carlson explains: “There are all kinds of different defi nitions, but
the way we look at it is the horizontal integration of the entire energy
path from generation through consumption, with the use of advanced
Imagine if you could plan your electricity usage to take advantage of cheaper rates and increase effi ciency while using cleaner sources of energy. That dream is coming true in the Smart Grid City of Boulder, Colorado, thanks to Xcel Energy. Marie Shields gets the scoop from CIO Mike Carlson.
SMART GRID
48 www.nextgenpe.com
Carlson.indd 48 19/6/09 15:48:15
49www.nextgenpe.com
and because of the cost and complexity and time to deploy. This might
limit you from being able to go to the next iterative level of opportunity.”
Defi ning the possibilitiesHowever you defi ne it, smart grid seems certain to bring benefi ts
to both consumers and utilities. “Short-term you’re probably looking
at the smart grid giving benefi ts to the utility back-offi ce function,”
explains Carlson. “This is what we’re fi nding out in Boulder both in
terms of what’s possible and what’s feasible. These are things that
are very non-evident to our customers, such as a more effective use of
our resources, better dispatch of our crews, avoiding outages through
better monitoring and detection and extending our asset life because
we’re avoiding breakage.
“It will take some time for the data to prove this, but we believe
that by better managing and balancing the grid we will see reduced
line loss and improved effi ciencies in the way the system operates.
These are things that will manifest themselves in cost avoidance into
the future, and a couple of percent in cost avoidance can show up in
real dollars in savings to our customers.”
Carlson believes that one of smart grid’s big initial benefi ts is that
it’s fueling what he calls energy transparency to the customer. He says
that this is where smart meters will provide value: smart grid will be a
catalyst for driving energy information and transparency about energy
consumption to Xcel Energy’s customer base.
“Short term, I’m not a big fan of providing information just to say
it’s out there,” he emphasizes. “It will drive some education to our cus-
tomers about what their consumption is and why their consumption is
the way it is and what options they’ve got to start considering different
ways to better impact and improve that energy consumption profi le.
communication and control technologies to optimize energy produc-
tion, transport and consumption.”
Carlson is particularly insistent that the concepts of ‘smart grid’
and ‘smart meter’ are not synonymous: “We have held the belief for a
very long time that a smart meter is not a smart grid. It’s not the defi ni-
tion of a grid in its entirety; the meter is one component of it. A smart
meter does help the utility automate its billing and maybe some of its
analytics processes.
“But the meter is a secondary component of a smart grid. If we’ll
allow ourselves to look into the future, I think we should be questioning
whether a meter is part of the puzzle at all. That’s not to say that you
don’t have to measure your electric consumption in some way, shape
or form. But do you need a meter to do it? A meter is an archaic device
that at the end of the day only serves to measure. It can’t control. It
can provide information, albeit not by itself. We need to ask ourselves,
are there other, more effi cient, effective and less expensive ways to ac-
complish those tasks?”
Carlson says that if the industry is smart, it will build a grid with foun-
dation optionality that gives short-term benefi ts today, and the long-term
opportunity to naturally expand. From his point of view, there is a big risk
in building something that then has to be ripped out and built again.
“Once you make the investment you’re almost required to run the
course of that investment before you change it,” he explains. “The risk
of this is to not get so far ahead of ourselves that we miscalculate and
island an investment that can’t be leveraged to the next iterative expan-
sion point of smart grid.
“That probably describes one of my biggest concerns about the in-
vestment in AMI. It’s a huge cost that could become an island investment
fi ve years from now, because it can only provide X amount of capability,
SMART GRID CITY
Xcel Energy’s Smart Grid Consortium is working towards a future when the energy grid can predict its problems and strengths while optimizing
available resources. The Consortium has announced plans to build Smart Grid City, a community that combines traditional and emerging technology
to move the energy grid into the digital age. This next-generation grid will allow customers and utilities to collaboratively manage power generation,
delivery and energy consumption. Smart Grid City will boast a fully inter-connected energy system capable of managing the various parts of the grid
involved in producing power and delivering it to consumers.
Key components of Smart Grid City include:
• A dynamic system rich in information technology
• High-speed, real-time, two-way communications
• Sensors throughout the grid enabling rapid diagnosis and corrections
• Decision-making data and support for peak effi ciency
• Distributed generation technologies (such as wind turbines,
sol ar panel, and plug-in hybrid electric vehicles)
• Automated smart substations
• In-home energy control devices
• Automated home energy use
Carlson.indd 49 19/6/09 15:48:19
50 www.nextgenpe.com
At the time of interview, Michael Carlson was Vice President and
Chief Information Officer for Xcel Energy. He recently left Xcel to
take up an executive position with GridPoint.
Some will look solely at costs, while others will look at emissions or
environment – everybody’s got their drivers.
“I’m a big proponent of moving the system from load following to
load balancing or demand management, but I do acknowledge that it’s
going to be long term in its acceptance. Unfortunately, in the way people
look at it today, they take that as the energy company controlling when
and why they use electricity. And I would rather have it articulated that
the energy company is going to provide information and technology to
the customer so that they can participate in load management with us,
as opposed to just be the recipient of it.”
Smartening upSmart Grid City is billed on Xcel Energy’s website as “the nation’s
first fully integrated smart grid community,” which will apparently boast
“the largest and densest concentration of these emerging technologies
to date.”
Carlson says the development of Smart Grid City can be described
in two different ways. “Phase I was the targeted installation and enable-
ment of an entire system on two of our substations and about a third of
the city. We put all components in two substations, seven feeders, 15,000
customers, on the grid with advanced communication, broadband over
powerline monitoring and advanced meters. We did put 15,000 advanced
meters into Boulder so we could measure the incremental impact of them,
and then advanced in-home devices.
“Phase II then becomes finishing the rest of the city with advanced
communications capability, but spreading out those monitoring meters
and homes: instead of having a concentrated feeder and substation
you’ve 10 percent penetration. The reason we’re doing that is to compare
the benefits versus the cost of having everybody on an identical system,
as opposed to having a portion of the city on those advanced capabilities.
“Phase III in that model was described as the software integration of
all of the different points along the system from generation to consump-
tion and the software analytics and decision point controls that would be
put in against all that monitoring and capability.”
Carlson describes the alternative way of looking at it as phase I
being the establishment of infrastructure: communications, monitor-
ing, measurement and control. Phase II is customer engagement:
automated home response, information portals, demand response
programs. And phase III is the quantification and evaluation of the in-
vestment that was made.
The birth of an ideaIn 2003, Xcel Energy established a ‘Utility of the Future’ utility inno-
vations advisory board: a group of partners mandated to think outside
the box in conjunction with the utility, to come up with ways of applying
technology to enhance and improve its operations.
In September 2006, the company convened a group of about 45
people – regulators, public officials, industry consultants, energy man-
agers – to brainstorm what a better managed grid would look like. From
this arose what ultimately became Smart Grid City.
Why Boulder? Carlson says that as part of the planning process,
the partners began to recognize that the utility industry is very fond of
pilots. He explains that these are usually very small pilots, and while
they often produce an answer or prove or disprove the intent they were
designed for, they are so small that they either require a large number of
assumptions to be made around them, or result in a new set of questions
that requires a new pilot.
“We wanted to envelop the entire system in testing what we feel is a
very integrated solution,” Carlson says. “Just testing demand response
without testing load control, without having advanced communications,
we didn’t feel was a value-add. The other part of our vision is to establish
a continuous living, breathing environment that allows us to iteratively
test and validate benefits and opportunities.
“Under that guise of design, we then looked at where in our system
we had the physical attributes, the architectural designs and the mix of
customers we would need to carry out such a project – mature homeown-
ers, transient residents, college students, some amount of commercial
and industrial. Where did we have a mix of customer base? Where did
we have enough size that we could statistically validate our results? And
we came up with about eight different locations within the Xcel Energy
footprint. Then we went to the next level of engagement by the state, the
city and the customers’ willingness to participate.
“After all these criteria were evaluated and assessed, we worked
with our partners on where they felt they’d get the most benefit and
confidence of results, and we ended up in Boulder.”
Carlson.indd 50 19/6/09 15:48:19
51www.nextgenpe.com
Control4 and Lixar, supplying advanced thermostat, gateway controls
and meter reading.
Landis + Gyr provides the meter technology being leveraged in just
under half of the city, and Ventyx contributes two discrete components of
technology solution load dispatch analytics for generation planning and
integration of work management paths.
Carlson explains how the technology would work in a sample sce-
nario: “Say the transformer on Feeder 69 overheats. CURRENT Group
technology monitors that, and an alert comes back through the com-
munication bus, into analytics software from Accenture, which provides
the integration of all the software points. It’s identifi ed as a fi eld event
that needs a crew dispatched to it, which is then automatically dropped
into our work management system through Ventyx’s technology. This will
ultimately end up in a fi eld dispatch of a crew with a mobile terminal in
their truck. OSIsoft provides the technology layer of real-time data man-
agement for all these data fl ows.”
Set to run and runCarlson has mixed feelings about how long the project should
continue. “Smart grid is very analogous to the internet. If in 1990 you
had sat down and tried to design the internet for what it does in 2009,
you can imagine that it would never have occurred.
Smart grid has to have the same iteratively progres-
sive expansion.
“On the other hand, we have to put a box around
it so we can get conclusion and completion. For Smart
Grid City, we are targeting the end of the year to have
completed the build-out, assessed the capabilities
and fi nalized the business case to the point of defi n-
ing what our go-forward strategies are for smart grid
at Xcel Energy.
“On a variety of levels, we want to have an articu-
lated strategy for smart grid across our service territory.
We want to have a next steps design of what we need to
do and what our technology partners need to do. There
are three legs on the stool in this model: What can tech-
nology do? What are our customers wanting and willing
to do? And the third leg is, what does the regulator want to step up to?
“With the regulator, it’s a chicken and egg situation. We point a fi nger
at the regulators needing to facilitate this, and in the regulators’ defence,
without seeing what technology can do for them, they don’t want to step
out too far in front of the cart.
“So another key objective is having a plan for how we start to part-
ner with the regulators on examining different models for an electric
utility that has been operating for 75 years and fundamentally hasn’t
changed. Long term, what I expect to see out of smart grid over a three-
to fi ve-year range is the opportunity to remake the way electric services
are consumed and paid for in this country,” Carlson concludes, as he
laughingly explains that the chance to achieve such a big goal is why he
enjoys going to work.
Whatever route we end up taking toward a more energy effi cient
future, it seems that all roads lead to – or at least through – Smart
Grid City.
Show me the moneyOne of the questions with such a large, long-term project is: where
will the money come from? Carlson describes Smart Grid City as having
an at-risk funding model. “The reason we’re at-risk is we did not want the
culture of the industry model, meaning you can’t spend money without
the confi dence that that money is going to produce value, and hence you
then start to limit your focus of spend on things you know will work. Then
because you’re only exploring things that you know will work, you’re
passing up the opportunity to give a different view of the model.
“Because of that, we wanted to take the money out of the normal
regulated process and perform the study at risk to allow us to fail, I guess
is the best way to describe it. And as such, Xcel has taken the risk, along
with its partners, to fund Boulder in the validation of value that will come
back to the customer, ultimately, in the system.”
Carlson explains that because the cost of Boulder was more than
Xcel Energy was willing to put at risk, the company solicited partners for
at-kind investment. The result of this is that the majority of the project
is funded by Xcel Energy’s partners: CURRENT Group, Accenture, Grid-
Point, Ventyx, OSIsoft and Schweitzer Engineering Laboratories. All the
partners have contributed an investment of people, money, equipment
and technology into Boulder at risk of recovery. Carlson’s expectation
is that pieces of the program will demonstrate
themselves and be eligible for that recovery. He
adds, however, that, “The predication going in
was if everything fails, we’ve all got an invest-
ment that we’ll have to write off at the end of
the day.”
With so many companies involved, there
could be the potential for confl ict, but Carlson
praises the partners for their outstanding par-
ticipation and their willingness to share. “No
one company has a full solution – a smart grid
in a box,” he points out. “So the need to bring
this various expertise together is key.
“I’m not going to say that underneath
the covers it’s not a more diffi cult model to
manage, but I can’t say enough about all the
partners and their willingness to think outside the box – their ability to
put what would be traditional competitive concerns somewhat aside.
All of our partners have had to step up and swallow occasionally. But in
that process they’ve all recognized that there is quite a bit of benefi t for
them and their businesses. More benefi t than risk would be the way I’d
describe it.”
Each of the project’s partners provides a key component of the
technology needed to make the project a success. According to Carlson,
CURRENT Group is providing broadband over power lines for communica-
tions, along with a natural monitoring and control technology embedded
into the communications system. This provides grid monitoring and grid
control along with a high speed, low latency, high bandwidth communica-
tion backbone.
Schweitzer Engineering provides substation distribution control:
from switches and capacitor bank to advanced analytics. There are
several other partners on the customer home side, including GridPoint,
“Smart grid is very analogous
to the internet; it has to have the same iteratively
progressive expansion”
Carlson.indd 51 22/6/09 10:33:18
Various definitions of smart grid exist within the utilities sector. What is
your definition?
MaeSquier-Dow.A smart grid uses high-performance communications, ad-
vanced sensing and enterprise analysis to transform the existing electric
grid into a dynamic self-healing, self-optimizing distribution system.
Because critical grid events often require real-time recognition and re-
sponse, a smart grid solution uses IP-based, open standard, low latency
communications to measure real-time events – such as load and conges-
tion, system stability, equipment health, outages and demand response
events – and to link these events with the appropriate responses to improve
the efficiency and reliability of the entire distribution grid.
A fully functional smart grid employs widely distributed intelligent sen-
sors to collect and analyze data from throughout the distribution system.
The true situational awareness of a smart grid comes from extracting mean-
ingful information that the utility or its customers can act on, such as ac-
tionable intelligence, in the time frame necessary to achieve the desired re-
sult. As the smart grid develops, many of these actions will become further
automated enabling a more dynamic, self-adjusting grid.
SharonAllan.Based on Accenture’s involvement with several dozen smart
grid projects around the world, we have developed a definition that we use
as a basis for common understanding across our client base. Our point of
view is that a smart grid is one that leverages sensing, embedded process-
ing, digital communications and software to manage network-derived in-
formation, thus helping utilities to achieve high performance. A smart
grid is: observable (able to measure the states of all grid elements), con-
trollable (able to affect the state of any grid element), automated (able
to adapt and self-heal) and integrated (fully connected to utility process-
es and systems).
These capabilities support the three major business functions of the
transmission and distribution utility: power delivery, asset management
and customer experience enablement.
Lee Ayers. ‘Smart grid’ means modernizing transmission and distribution
grids to facilitate competition between providers; to enable use of vari-
able energy sources, especially renewables; to create automation and
monitoring capabilities for bulk transmission at transcontinental dis-
tances; and to enable market forces to drive energy conservation and
compliance.
The first step to a smart grid is being able to see the grid. It involves
collecting millions of data points in real time, and analyzing and display-
ing them so they become actionable rather than overwhelming. This re-
quires integrating generation, transmission, distribution and meter data
management into a single system. The typical utility has an asset infra-
structure to handle peak loads. Rather than load-following, a smart grid
boils down to load-shaping with a dynamic, two-way market play be-
tween utility and customer. Models not embracing dynamic market inter-
action with the customer, but improved automation (better outage
detection and CAIDI, SAIDI and SAIFI numbers) are not smart grid appli-
cations. The smart grid model is similar to what we see at an ISO – a fore-
cast; costs related to production and delivery of service; to these we add
customer preferences, environmental considerations, deferred capital ex-
penses and pricing.
What benefitswill the smart grid provide, both in the short and long term?
SA. Accenture believes the smart grid is a key component in the global
quest for carbon neutrality and a more reliable, secure energy future. In
the short term, the transformation to a bi-directional flow of data from in-
telligent devices capable of remote monitoring, near real-time data and
An intelligent future
52 www.nextgenpe.com
P&E talks to a panel of experts about the latest smart grid developments, and its real-lifeapplication in Boulder, Colorado.
Mae Squier-Dow is SVP of Business Solutions for
CURRENT Group. In this role, she is responsible for the
global promotion, development, delivery and support of
CURRENT’s smart grid solutions to utility customers
through its utilities solutions and professional services
groups. Prior to joining CURRENT Group, Squier-Dow
was the President of Network Services for One
Communications and the Chief Operating Officer of
Choice One Communications.
Sharon Allan is responsible for the North American
smart grid offering in Accenture’s utility transmission
and distribution practice. She has 25 years of executive
and management experience in the technology services
industry. Immediately prior to joining Accenture, Allan
was president of Elster Integrated Solutions, and she
has also held key positions at other technology and
sciences-based products companies.
Lee Ayers has 26 years of experience with an
emphasis on spatial and temporal systems. As an
Executive Consultant for OSIsoft, she acts as educator,
systems consultant, designer and industry expert for
utilities and vendors desiring to link real-time data
throughout the corporation. Her current focus is Xcel
Energy’s Smart Grid City.
THE PANEL
ROUNDTABLE
Roundtable:18oct 19/6/09 15:37 Page 52
optimized performance will help improve overall grid reliability and effi-
ciency. This, in turn, can reduce the number of customer minutes out as a
result of improvements in predicting or even avoiding potential outages.
In the long term, we believe there is compelling evidence to support
achievement of long-term benefits through reductions in residential
peak demand energy consumption by leveraging real-time pricing sig-
nals, working in combination with in-home energy management tech-
nologies. Additional reductions in peak demand can be expected
through integration of distributed generation technologies, which also
have the potential to lower carbon emissions. Another key benefit will
come through an enhanced customer experience as consumers receive
the information and tools they need to fully understand, monitor and au-
tomate their energy use.
LA. When businesses and consumers see
savings from energy efficiencies, they in-
clude energy cost into decisions. As market
forces level the load curve, this will reduce
the spinning reserve that utilities need to
keep on stand-by.
The smart grid can enable increased en-
ergy sustainability, reduced carbon intensi-
ty and encourage adoption of green energy
technologies; enable increased customer
satisfaction and customer participation in
the power delivery chain; increase effective
system capacity; bring difficult-to-quantify,
but nevertheless real strategic benefits to
Xcel Energy and other utilities/energy
providers; enable improved utility opera-
tional efficiency; support enhancement of
power quality, reliability and system perfor-
mance; and support advanced utility asset
management and system planning.
MS-D.While there are numerous benefits to a
smart grid, the threemost significant are opti-
mizing the distribution system by delivering only the power needed in the
most efficientmanner from the substation to the home, resulting in precise
dispatch of megawatts with precision and control on a persistent and crit-
ical peak basis; increased visibility to the use of renewable energy re-
sources, including the integrationof distributedgeneration into the existing
grid; and improvedoperations and reliability by automating the operations
of the electric distribution network andproviding critical information about
the condition of deployed assets.
Howdid you get involved in the Smart Grid City project in Boulder? What
technology is your company contributing?
LA. During design of Xcel Energy’s Smart Grid City it became obvious they
needed a robust, scalable,mission critical infrastructure for collecting, an-
alyzing and presenting data; Xcel Management contacted OSIsoft about
the PI System.
The PI System,with over 15,000 installs, provides utilities with a se-
cure, real-time enterprise infrastructure for smart grid operations. It
spans generation, transmission, distribution and meter data manage-
ment. Three decades of performance across millions of utility data
streams has fortified PI to meet the massive demands of smart grid ap-
plications – demand response, distributed
generation integration, renewable resource
management, advanced distribution moni-
toring and control.
UniqueatXcel,OSIsoft isdeliveringaPIop-
erational datamanagement system (PI-ODMS)
that blends validated AMI data with operating
53www.nextgenpe.com
SHARON ALLAN
LEE AYERS
“The goal is aseamless,end-to-end viewof the data –from generationto meter”
“Intelligent, actionableinformation will be the key tothe success of the energy gridof the future”
Roundtable:18oct 19/6/09 15:37 Page 53
will come frommaking the grid itself more effi-
cient, whichwill ultimately result in lower costs
for the utility and its consumers, andwill bene-
fit the environment through reduced green-
house gas emissions. High performance
communications and instantaneous response
will be increasingly critical as the grid becomes
more dynamic, more intermittent renewables
areused for generationandwidespreaddistrib-
uted energy sources such as residential and
commercial solar panels, wind sources and
plug-inhybrid vehiclesgainmarket acceptance.
Much like the internet, newapplicationswill be
developedwhichwill leverage the communica-
tions and sensing to further improve the way
electricity is generated, delivered and used.
SA. Our perspective is that there will be far
greater integration of information throughout
the power grid than there is today and that this
intelligent, actionable information will be the
key to the success of the energy grid of the fu-
ture. Like industries that have evolved from a
primarily non-communicative state to a highly
networked state, the smart grid will result in
more automated analytics and control as infor-
mation and communications infrastructure fa-
cilitates the ability to not only collect
information, but also to analyze and act upon
it. Some technologies that can be leveraged to
support the characteristics of amore intelligent
grid are available today. Others are emerging
and will be developed over time to provide
higher levels of functionality at a lower cost.
What’s important, in our view, is that utili-
ties on the road to a smarter grid approach their journey with a road map
that helps ensure that whatever technologies they select are compatible
and that the evolution to new systems canbe achieved efficiently and eco-
nomically. Intelligent network technologieswill require end-to-end integra-
tion and compatibility. Having a concise picture of technology andbusiness
requirements will reduce the risk of incompatibility or obsolescence.
LA. End-to-end visibility of the business will become the norm.
Inappropriate technologies for the oldmarketmodelmay be rebranded as
smart grid offerings but the hardened project approach will be seen for
what it is – a costly endeavor usually outdated by installation.
Utilities will take less of a project approach to integration and look at
how systems can be quickly integrated with standard product like PI. Less
project, more product will become standard.
Other innovationswill be in smart grid data centers; a critical infrastruc-
ture around data management for upwards of 100 million points; and en-
hanced substation metrics to serve as report cards for how efficiently the
smart grid is functioning. �
andnon-operatingdata, plusdata sources suchas
wind, forecastdata fordistributedenergy resources
and real-time calculations.
Thegoal is a seamless, end-to-end viewof the
data – fromgeneration tometer. Xcel Energy’s SGC
PI-ODMS server will handle onemillion points – all
expected inputs.
OSIsoft isdeliveringdynamic graphics for four
area substations and working with Accenture to
deliver ourMicrosoft SharePointWebParts, includ-
ing aMicrosoft Virtual EarthWebPart for distribu-
tion graphics andmetrics. All OSIsoft graphics and
deliverables use a common Information model
(CIM) hierarchy.
SA. Accenture has beenworkingwith Xcel Energy
on this project since the initial discussions began
over two and a half years ago concerning the pos-
sibilities for reducing carbon emissions and
achieving greater sustainability. Accenture is re-
sponsible for three key components of the Smart
Grid City project. One,we are the strategic advisor
and consulting chief engineer for the overall initia-
tive. Two,weare the systems integrator, providing
the smart grid management integration platform
usingour patent-pending intelligent network data
enterprise solution set, which includes the refer-
ence architecture, data transport and storage ar-
chitecture, end-user transactional analytics and
blueprint for smart grid development. Three, we
are providing expertise to helpwith themarketing
of the program to energy consumers in the city
and country of Boulder as well as to regulators
and other key stakeholders.
MS-D. Xcel Energy’s Smart Grid City in Boulder, Colorado utilizes the fully
integrated CURRENT OpenGrid platform that combines advanced sensing
technology, two-way low-latency IPcommunications,andenterpriseanalysis
software and related services. This provides location-specific, real-time data
about the status of the city’s electric grid. CURRENT’s sensors arewidely de-
ployed inBoulder and connectedby a variety of highperformance communi-
cation technologies including fiber, DSL, 3G wireless and broadband over
power line. Xcel Energy is already benefiting fromCURRENT’s systembypre-
venting customer affecting outages and reducing outage repair times. Field
crewshaveaccess to thesystemonportable computersandhavevisibility to
theperformanceofneighboringassetswhenresponding to troublecalls.Xcel
EnergyandCURRENTarepresently implementingCURRENT’s fully integrated
Volt/VAR control to improve the utility’s regulation of voltage and power fac-
tor,while optimizing systemefficiency from the reductionof lossesanderrat-
ic voltages associatedwith reactive current flow.
How do you believe the smart grid will develop in the future?
MS-D.We believe that ultimately the high value benefits of the smart grid
54 www.nextgenpe.com
MAE SQUIER-DOW
“The high valuebenefits of thesmart grid will
come frommaking the grid
itself moreefficient”
Roundtable:18oct 19/6/09 15:37 Page 54
55www.nextgenpe.com
Wind power is a great renew-
able resource – the fuel is
free; environmental impact
is low; projects deploy
quickly and harmonize with
agricultural land-use. They generate power,
local jobs and tax revenue. Enter solar power,
again a great renewable resourcewithminimal
environmental impact, quick-to-build projects,
no water consumption and its significant scal-
ability from residential rooftops to mega-mart
rooftop power plants.
These two do have onemajor impediment:
they are intermittent. This can causenightmares
for the utilities responsible for reliability, and for
keeping power flowing and balanced for every-
one connected to the grid.
The smart grid will enable greater exploita-
tion of such renewables, satisfying our political
will and best interests and shifting energy con-
sumption away from imports.
Time horizons play a major role in inte-
grating renewables. Multiple forecasting tech-
niques and service providers utilize long-term
data resources in combination with statistical
and numerical prediction models to estimate
the wind and solar resources at various time
horizons, including persistence, hour-ahead,
day-ahead and so on. Augmenting these pre-
diction models are offsite real-time observa-
tions frommet stations feeding real-time data
to the utility and the forecasting model(s).
Using this information, wind and solar farms
can send forecasted production data to the
host utility. Leveraging the smart-grid, the host
utility can push this information to the trans-
mission system operator, the local utility, and
industrial and residential consumers such as
Xcel’s SmartGrid City program.
This data flows from the fuel source (wind
and weather) through the generator, the high
voltage transmission grid, the local distribu-
tion grid, the smart meter and ultimately to the
user interface, such as the smart thermostat.
Using this information flow, the end-consumer
canmake informed decisions about when and
how they use power. The host utility also has
an option to intervene if consumer behavior is
non-responsive to price and or type-of-elec-
tricity signals. When the wind blows strongly
in Wyoming, it might be time to send a signal
to charge plug-in hybrid vehicles. Inversely, if
no wind is predicted for four hours, the utility
may request/force consumers to forestall or
turn down appliances, such as adjust the ther-
mostat by one degree or delay running the
pool pump.
This data flow is not one-way. The smart
grid-enabled utility has enhanced visibility and
control comingback from the industrial and con-
sumer level. An example ismicrogrids to enable
integration of large amounts of intermittent re-
sources, both inside and outside the microgrid.
(Amicrogrid is a collection of generation sources
and loads that can be isolated seamlessly and
bumplessly from themain grid and reconnected
as needed, while being controlled internally and
sometimes generating its own energy, including
from renewable resources.)
OSIsofthasarole in tying together renewable
energy, thesmartgrid,microgridsandconsumers:
OSIsoft makes the PI System. The PI System is a
real-time information infrastructure that ties to-
gether all sources and users of real-time data,
from themeteorological data at the front-end all
the way down to the smart-meter data manage-
mentsystemsat theconsumer level.Keyelements
of thePI Systemmake it uniquely qualified.
It is secure and reliable, as well as being
provenandscalable.PIdeliversahighlyavailable
infrastructure,withmultiple levelsof redundancy
and failover, architected to satisfy evolvingNERC
CIPStandards and security requirements.
Inaddition to itsglobalpartnershipswithkey
technology vendors, such asMicrosoft and SAP,
OSIsoft maintains key relationships with leading
global integrators such as IBM and Accenture
working in smart grid and renewables. Partner
ecosystem is therefore another key element.
The PI System is also rapid and has a sus-
tained creation of value. As a packaged product,
thePISystemisquick to install, deployand imme-
diately begins collecting data and delivering
value. It consolidates real-time data from across
the utility – met data, generator, transmission,
smart-meters,microgridsandsoon– intoaction-
able information.
The system is also sustainable and flexible.
One of the core values of PI is the ability for end-
users to configure the system to present mean-
ingful (to theuser) information to the right-userat
the right time.�
Renewables and the smart gridDave Roberts explains the need for the integration of large amounts ofintermittent resources.
Dave Roberts is the Group Director
Business Development of OSIsoft.
He joined OSIsoft as Director in May
2005. Today, as OSIsoft’s Director
for Business Development, he
manages OSIsoft’s various vertical
industries, including power,
transmission & distribution, oil &
gas, metals & mining, and other
process industries.
ASK THE EXPERT
OSIsoft ATE:18oct 19/6/09 15:32 Page 55
What software tools is Itron using to help utility companies reduce ener-
gy consumption and improve energy efficiency?
Philip Mezey.We are focused on a broad solution. Our offering begins
with data creation at the meter level, then collection systems that gath-
er information out of electricity, gas, and water meters, but the founda-
tional software that we offer in the meter data management space is a
tool called Itron Enterprise Edition. It’s responsible for storing and orga-
nizing all of the energy information that Itron technology gathers out in
the field, both residential and commercial industrial data. We then vali-
date, edit and estimate that information and then store it away and or-
ganize it in a way that makes it very, very accessible for other analytic
applications that come along.
We then wrap that whole package in a service-oriented architecture
that makes it possible not only for our analytic applications to get ac-
cess to the information, but also for third party ac-
cess to that same data. On top of that we provide
a number of customer portal and customer care
applications that allow consumers access to their
energy information so they’re able to understand
how and when they’re using energy and water,
which benefits consumers by allowing them to be
more responsible. When we all understand how
and when we’re using energy and water, there’s
potential to reduce usage directly.We also provide
applications that allow our utility customers to di-
rectly control load and to send signals to cus-
tomers when energy is particularly scarce, allowing end users to actually
curtail their overall energy use.
What technologies are used to collect meter data?
PM. Itron offers a wide range of products that are used for collecting ener-
gy information: everything from our existing set of handheld computers,
which the company has been building for the past 30 years; tomobile col-
lectors in which an operator drives around in a van; to fixed networks in
which radios are placed at the top of poles, so that it’s possible to col-
lect that information on a much more rapid basis. And that technique
of radio collection, radio frequency (RF) collection, is used for our ad-
vanced metering infrastructure (AMI) product called OpenWay, which
has a collection engine associated with it so that it’s possible to collect
energy information very rapidly. In other parts of the world power line
carrier technology is used whereby we’re collecting the data through
the power lines themselves, using a broad range of technologies and
software tools. Itron’s operations in North America collect around 80 to
56 www.nextgenpe.com
EXECUTIVE INTERVIEW
Using software to reduceenergy consumptionItron’s Philip Mezey examines the tools available to help utility companiesimprove their efficiency.
“The ability to collect informationhourly from customers gives the utilitya great deal of insight”
Itron EXEC INT:18oct 19/6/09 15:32 Page 56
90 percent of all of the commercial industrial electric information, and
at the residential level collect more than 50 percent of all of the residen-
tial data through its collection systems.
Why is it important for utility companies to manage data, and how can
this improve their reliability?
PM.Typically utility companies have collected consumption information
from the bulk of their customers once a month, and they have very lit-
tle information about what’s going on in their distribution network,
down to the customer level. By having the ability to collect information
hourly from customers, and even in some cases every 15 minutes, it
gives the utility a great deal of insight as to how and when customers
are using energy, as well as how their distribution network is perform-
ing. Among other things, they can identify areas of theft or diversion, or
other technical losses, making it possible for them to optimize the dis-
tribution network – there are tremendous opportunities for savings and
improvement there as well.
What is energy forecasting and what tools are you using to develop
and implement forecasting solutions?
PM. Forecasting tools allow utilities to understand what their energy
needs are going to be. Itron offers a suite of energy forecasting tools
that are used to forecast around 80 percent of the energy that flows
through independent system operators (ISOs) in North America. We
also have those tools deployed on a worldwide basis, allowing mar-
kets to function. When ISOs interact with wholesale markets, it gives
them and players in the market a better view of what’s going to be re-
quired for power purchases. Itron software has a wide variety of appli-
cations in the ISO market, providing better visibility and liquidity. Our
forecasting tools are also used at the market level in places like New
York’s ISO, which is doing day-ahead, hour-ahead and even 15-minute
power markets.
What load research services do you provide to electricity and gas
providers?
PM. Load research is the process of understanding market segments –
how to segment the utility market properly and how to understand the
usage patterns of those market segments so that better rate structures
can be designed to more fairly charge individual market segments.
Through the use of our forecasting and analytic tools, we’ve been able
to develop a next-generation load research tool that again allows our
customers to more effectively understand electricity and gas usage
profiles and segments, and to design better programs to serve those
customers.
What are the benefits of AMR readings for both customers and utility
companies?
PM. For automated meter reading (AMR) specifically, that data is col-
lected in a more accurate and timely fashion resulting in more accu-
rate billing with fewer customer complaints. The data is collected
remotely so that a meter reader does not need to enter the customer’s
property in order to access the meter itself, which is safer for the meter
reader and less disruptive to the customer, allowing data to be collect-
ed much more accurately. AMR is simply a much more cost-effective
way of reading meter data and therefore it lowers the utility’s overall
operational costs, which benefits the utility and ultimately the cus-
tomer.
How will the development of AMR contribute to AMI as a whole with-
in the next few years?
PM. As customers see the opportunities of automation – and by cus-
tomers, I mean our utility customers – and see how much money they
can save through better collection techniques, they’ll see the oppor-
tunity as they’ve seen with AMR in reducing their overall reading costs.
AMI essentially offers the same type of benefit as an automated meter
reading system, but allows the data to be collected much more fre-
quently and at a much greater degree of granularity. This means that
utilities can then provide customers with very accurate information
about how and when they’re using energy, and the utility also has a
better view, which is of tremendous operational value. AMI also, in ad-
dition to the standard AMR meter read, provides some very advanced
capabilities at the meter level allowing for home area networking, com-
munication into the home, the ability to remotely disconnect the meter
to support net metering, and a variety of other applications. �
57www.nextgenpe.com
Philip Mezey became Senior Vice President and COO for
Itron North America in April 2007. He has served as Group
Vice President and General Manager, then Senior Vice
President, for Itron’s Software Solutions group. Mezey
joined Itron in March 2003 as Managing Director of Software
Development, Energy Management Solutions Group.
Itron EXEC INT:18oct 19/6/09 15:32 Page 57
knocks
58 www.nextgenpe.com
SMART GRID
OPPORTUNITY
Torchia ed:18oct 19/6/09 15:40 Page 58
Smart gridmeans different things to different people, but
to Marcus Torchia, Research Manager, Intelligent Grid
Strategies at Energy Insights, the definition is simple.
“Smart grid is an electric transmission and distribution
network that uses information and communications tech-
nology to predict and adjust to network changes au-
tonomously,” he says. “The aim is to more efficiently
integrate operational and revenue-generating business processes; for ex-
ample, generation and trading.
“At the same time, it allows utilities to connectwith end-users and the
premise-based assets that allow for improved
management of electric usage and distributed
generation and the overall customer experience.
There’s a heavy emphasis on greater use of infor-
mation and communications technology in help-
ing operate the transmission system.”
There have been rumblings about the need
for a smart grid for a while, but just lately the
issue has really come to the fore. What’s behind
the sudden glare of the spotlight? Torchia ex-
plains that there have been a couple of key dri-
vers behind the general push to establish a smart
grid. “The first is that we need tomore efficiently
produce and consume electricity,” he explains.
“We currently have a pretty inefficient system,
which is based on an architecture that was built
between 60 and 70 years ago.
“The systemhas remained, for themost part,
untouched in terms of major developments. The
four pieces to it are generation, transmission, distribution and end use,
where the consumer, be it a business or an individual, uses the electricity.
That value chain will remain in place. But the way electricity is produced,
and theway it’s transmitted, distributed andconsumed is rather inefficient.
There are number of things within that value chain that can be improved
through theuseof information technology.
“Another aim is to reduce carbon emissions, becausemuchof our pro-
duction here in theUnitedStates is basedon coal-fired plants. So there’s a
push to include more renewables and offset the use of fossil-based fuels
for more renewable-based sources of energy.
“In addition to that, there’s the goal of reducing waste in general and
increasing efficiency. Every timeapower plant is running, if the power is not
used, it’s wasted, because we don’t store electricity – there’s not a practi-
calway yet to do that. There’s a gap in knowledgeand informationbetween
what is needed andwhat is consumed at any given time during the day.
“What thismeans is that utility companies have to overproduce to ac-
commodatepeakdemand.We’re getting better atmanaging that, butwe’re
not nearly as good aswe could be and information technology can help us
close that gap between overproduction and under-consumption.”
Another reason for the recent prominence of the smart grid is the new
administration inWashington.PresidentObamahasplacedastrongempha-
sis on implementing smart grid as part of his energy efficiency program. The
Department of Energy (DOE), which has oversight for the disbursement of
funds, recentlyannounced fundingof$4.3billion for smartgrid,which issplit
between$615million forpilotprojectsandR&D-focusedprojects,andtherest
going toactual smartgrid implementation.Grants forsmartgriddeployments
will range between $500,000 and $20million and those for monitoring de-
vicesbetween from$100,000 to$5million.
“This is a very opportunistic time for theObamaadministration to focus
onspending inastimulus package to stimulate
jobs,” Torchia says. “When I say ‘opportunis-
tic,’ I mean the stars have aligned for the
Obama administration in the sense that he’s
been talking about and is a proponent of
clean energy and ran on an election platform
that included the expansion of renewable en-
ergy sources.”
Torchia points out that moving in the di-
rection of greater use of renewables dovetails
nicely with the fact that the government needs
to get the economy moving again, to make
people feel that it is on top of the situation.
If people can be put towork in a new sector
of the economy, such as renewables, if those
lost jobs canbe replaced and themanufacturing
base reset to supply essential elements such as
solar panels and wind farms, then the govern-
ment cankill twobirdswith one stone.
There is also the issue of national security. As Torchia reminds us,
PresidentObamahasalsohadthisaspect inmindforsometime.“Hewassay-
ing,before theeconomiccrisisbegan, thatweneedtogetoffofoildependen-
cy. This is mainly targeted at automobiles, which account for themajority of
oil-based consumptionwhen it comes to energy.
“There’s a great exposure to the United States at a security level, at a
supply chain level, wherewe find ourselves seeking oil supplies fromover-
seas. Canada is actually our largest supplier of oil, but when we look be-
yond that, it mostly comes from the Middle East. Canada has only
surpassed them in the past seven or eight years.
“There isnota security threat in the traditional relationship thatwehave
withCanada.Butcertainly,with theMiddleEastandall thedisruption thatcan
occur there, there’s agreat risk that somethingawful couldhappenandbring
theeconomy toahalt. So there’s the security aspect of it.
“The environmental aspect of it is thatObamahimself, aswell asmany
of the people in this government, believe that a lot of the global warming
that has been taking place has been because of fossil fuels and carbon-
based fuels in general. And there’s a lot of scientific proof to support that.
You can argue up and down about where the carbon comes from, but it’s
59www.nextgenpe.com
Marcus Torchia tells P&E why this is the ideal time for the new government to promotethe implementation of a nationwide smart grid infrastructure.
MARCUS TORCHIA
Torchia ed:18oct 19/6/09 15:40 Page 59
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hard to argue against the fact that the atmosphere is warming. It’s recog-
nized as a global problem that, hopefully, the United States is starting to
take some steps to deal with.”
Those, then are the potential benefits of smart grid implementation
and an increased focus on renewables: a reduction in our dependency on
fossil fuels, a reduction in carbon emissions and a general movement to-
wards cleaner energy sources, both of which are long-term goals. In the im-
mediate term, Torchia believes smart grid will put people to work in helping
re-diversify and re-ignite our manufacturing base.
Smart metersThis is all very well, but how do we actually go about doing this? How
do we put in place the systems that will allow us to achieve these lofty
goals? Torchia explains that the current level of smart grid implementation
among US utility companies is still primarily focused on smart metering and
on automated metering infrastructure. “Utilities have been focusing on this
because they’re trying to reduce peak demand rather than trying to bring
in new sources of renewable energy,” he says.
“Over the past few years, it has become more and more difficult for a
utility to simply add new generation. Previously, utilities would go before a
public utilities commission or they would go before zoning boards and say,
‘We want to open up a new coal-fired power plant or diesel-generated plant
or gas-fired plant.’ It didn’t matter what it was; the way they overcame
greater demand was by simply producing more energy.
“As time has gone on, it’s proven much more difficult and much more
costly to get those approvals. It’s very, very difficult today for a utility to get ap-
proval foranewgenerationplant.Soasthepopulation increasesandasusage
increases, there are more electronic devices, houses have become oversized,
we’ve got ‘McMansions,’and the load on the grid has increased, but the capa-
bility to produce more energy has not been keeping pace with demand.
“So the utilities say, ‘What we need to do is somehow make the con-
sumption of electricity more efficient.’ They are doing that by going to the
end-user and putting in place technology and programs that are helping
shift peak demand and smooth that line of consumption.”
Companiescandothisbecausethere isaverypredictablepatternofelec-
tricity consumption in any given service territory based on time of day or day
of the week. Utility companies understand exactly when there’s going to be
peak demand and they adjust for that.
Torchia says that utilities are doing this through smart metering initia-
tives, by offering incentives to the consumers to shift their demand, and
through time-of-use programs that give incentives to consumers to change
their behavior. “For example, instead of running the air conditioner very
hard from noon to 4:00 pm when the sun is at its peak, utilities are giving
customers more incentive to not run it at that time. Maybe they’ll run it
more in the morning and not so much during the day and maybe the tem-
perature increases just a little bit, an extra degree or two. But it has a vast
impact on the actual load.
“When we look at the implementations going on out there, the vast
majority of them today are about smart metering. That’s not exclusive, but
that’s certainly the majority. For example, if we look at smart metering use,
on average, 41 percent of utilities in the United States are doing some form
of smart metering.
61www.nextgenpe.com
“By going to the end-user andputting in place technology andprograms that are helping shiftpeak demand and smooth thatline of consumption”
Torchia ed:18oct 19/6/09 15:41 Page 61
“There are three types of utilities: cooperatives, independently owned
utilities, andmunicipal. Around 53 percent of cooperatives have implement-
ed smartmetering. The independently owned utilities are at 40 percent. The
municipals are at 34percent. So thatweightedaverageof 41percent is for all
three segments of utility types.
“That 41 percent are starting widespread deployment. But typically it
takesbetween fourandsixyearsbeforeautilitymanages togetsmartmeters
into its entire service area. If they have amillion connections tomake, they’ll
doabout200,000ayear.Sobetween2007,whenmost implementationsstart-
ed, and2011,we’re seeing thevastmajority of deploymentof smartmetering
projects.”
Different strokesImplementingasmartmeteringsystemacrossacompany’sentireservice
area isadauntingprospect,whichrequiresaslightlydifferentprocess foreach
of the three typesof utility.
“Differentutilitieshavedifferentdrivers,”Torchiasays.“Ofcourse,allutil-
ities need toprovideagreat level of reliability in termsof electricity availabili-
ty, that’sagiven.But independentlyownedutilitiesareverymuchprofitdriven.
That’s not to say thatmunicipals and cooperatives are not, but they’re not as
directly tied toprofitability as the cooperatives and themunis.
“The pain that the independently owned utilities need to go through is
that theyhave togobeforeapublic utilities commission, andmunicipals and
cooperatives don’t. They need to go before a board and they have tomake a
rate case. Typically, if they get approval for it, what they get for that approval
is rate relief.
“Forexample, if an independentlyownedutilityneeds todoabillion-dol-
lar project to roll out awidespreaddeployment ofmeters, they go before the
board and say, ‘This is going to cost us a billion dollars andwewould like to
recover some, if not all, of that cost, through increases and rates to the con-
sumers themselves.’”
The considerations that different utilities go through have an impact in
termsof timeline. Independentlyownedutilitiescan’tmoveasquicklybecause
theyhave togothrougha longerprocess,andTorchiaexplains that it can take
as longasayear ormore for them toget thenecessary approval, by contrast,
municipals and cooperatives can, for themost part, act independently and
moveasquickly as theywant to, since for them it’s an internal process.
Eachutilitymustgo throughabusinesscase. “They lookat thecostsand
they look at the benefits,” Torchia explains. “They do some sort of analysis,
typically, to ask themselves, ‘Does this make sense for us?’ It changes from
utility to utility; there’s not oneapproach to it. The reason for this is that have
someutilities that are vertically integrated. They own everything fromgener-
ation assets all theway through to themeter.
“Thereareother typesofutilities thatown justdistributionandtransmis-
sionassets,andthey’reseparated fromgeneration.Thentherearesomecom-
panies who are just retailers. They aggregate suppliers’ generators and they
leasesome time toget the transmission.Theyuse the transmission linesasa
conduit. But they’re really purchasing fromgenerators.
“Thoseareverydifferent businessmodels. Depending on the business
model of the utility, they’re going to do a different analysis. The tools that
they’re using at a business level are analyses that any business would
use to determine if the project will be profitable or worthy of their time
and effort.”
Stability neededOne potential challenge in bringing in such extensive change could
be the possibility for disruption, but Torchia says this isn’t the case. “The
utilities are held at a very high level of reliability. It’s part of the their re-
sponsibility to the regulatory authorities that they provide as much as
they can a disruption-free upgrade or replacement of their infrastruc-
ture. So the chances of extensive disruption at this particular point are
pretty minimal. As part of the fundamental building block of planning,
they need to plan to keep reliability, to keep the grid up and running.
However they go about implementing changes to the infrastructure,
they’re going to go ahead and accommodate whatever it is those limita-
tionsmight be.
“They’re not going towholesale rip somethingout, shut down the grid,
and then once they get a chance to put it back in place, they’ll turn the grid
up. They just can’t do that. They can’t do it from a regulatory perspective.
They can’t do it even fromabusiness perspective. Everyminute that they’re
down, they’re losingmoney.
“So there’s a great incentive from a revenue and profitability perspec-
tive. There’s also a great incentive in terms of complying with regulations
that they have uninterrupted service. I don’t foresee that there will be
any problems, certainly none that are obvious at this particular point.
Also, it’s important to keep in mind that a meter can go down, but it
doesn’t change the actual core grid. In other words, the electricity is still
being transmitted, even though the ability to talk to that meter gets in-
terrupted. The actual supply of electricity, for themost part, is going to re-
main stable.”
Someanalysts believe that the grants recentley announcedby theDoE
will favor municipals and cooperatives and not independently owned util-
ities, but Torchia does not agree. “The reasonpeople are saying this is that
most independently ownedutilities are runningprojects that are in thehigh
hundreds ofmillions of dollars, so a limit of $20million for an independent-
ly owned utility is pretty small.
“They’re saying that the contribution for the IOUs is relatively small, so
it disfavors them in favor of themunicipals and the cooperatives.While that
may be true, I think the reason behind it might be a practical one: the
Obama administration has said very clearly that the point of having the
stimulus in the first place is to create jobs.
“Thepublic utilities commissions, the regulatory authorities, they rule
on independently owned utility projects. They do not have authority over
themunicipals and the cooperatives. So for all practical purposes, the way
I see it is that the Obama administration with these low thresholdsmight
be, by default, favoring the cooperatives and the munis, but the reason
why they’re doing that, in my opinion, is to speed deployments, as op-
posed to having to run through the PUCs. I’m not seeing that they’re
going out of their way to not support the IOUs. They’re trying to get
faster deployments out there.”
Torchia is happy to see that smart grid implementation is progressing
across the country, with several large cities also getting in on the act. “We’re
definitelyseeingmorecities implementingsmartgridatacitywide level.There
are a number of themout there: Smart Grid City, is in Boulder, Colorado; and
there’sone inAustin,Texas, andnowMiami.Thereareanumberof cities that
are participating in trying to accelerate adoption holistically. It’s an excellent
trendoverall. It’s a very promising trend inmyopinion.” �
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The application of intelligent moni-
toring and control does not widely
extend beyond the substation, so
utilities presently rely on engineering
models and local controls to regulate voltage
and power factor. As a result of these pres-
ent methods of regulating voltage and power
factor, the typical distribution system does
not dynamically adjust to minimize losses or
optimize delivered voltage levels to custom-
ers. System Optimization creates a dynamic
distribution grid capable of optimizing on
energy efficiency, environmental or opera-
tional targets.
To deliver System Optimization to utili-
ties, CURRENT installs intelligent sensors at
strategic locations on distribution feeders
that are connected by a high-speed, low-
latency communications network. These
sensors provide real-time information to
analytical software where it is combined with
geospatial, asset, SCADA and other opera-
tional data from capacitor banks, substations
and other distribution devices to determine
the correct actions to regulate voltage and
VAR levels dynamically throughout the day.
This enables utilities to flatten and lower
delivered voltage levels, while reducing line
losses.
Like many other industries, the chal-
lenges facing the electric utility industry will
require an evolution to a more self-healing,
self-optimizing grid. The lack of real time
monitoring and dynamic adjustments pre-
vents utilities from optimizing the amount of
power necessary on the system as it fluctu-
ates during the day. While historically this
has not mattered, in a carbon constrained
world, excess power requirements result in
excess carbon emissions and higher costs.
To address these concerns, System Optimi-
zation offers dynamic control of voltage and
reduces technical losses, enabling utilities
to serve their customers more efficiently
per kilowatt-hour generated, and lowering
the total generation and associated carbon
emissions. In addition, dynamic control of
the distribution grid can facilitate intermit-
tent renewable integration, as well as help
improve generation dispatch and transmis-
sion operations.
The result is a unique method of driving
more value from a smart grid by enabling
automated control of voltage and VAR flow
throughout the distribution system capable
of reducing the overall electricity needed to
service utility customers by up to five percent.
This is particularly helpful for utilities in states
that have energy efficiency, carbon reduction,
power factor or peak load requirements.
System Optimization can be installed on
a substation-by-substation basis and typi-
cally has a payback within a couple of years.
This solution is applicable to the entire distri-
bution system, which makes the savings pro-
vided easier to achieve than other efficiency
and control technologies. It represents a
low-cost, high-value energy efficiency solu-
tion that does not directly impact consumers
or require a change in their behavior. Utilities
can base the optimization upon minimiz-
ing losses, optimizing voltage, integrating
renewables, minimizing the environmental
impact or any combination thereof. System
Optimization can also be utilized as a virtu-
ally dispatchable generation resource be-
cause the load reduction can be measured
and verified in real-time.
However, it is important to note that
System Optimization requires high-speed,
low latency communication. By definition,
a smart grid is an advanced system that
incorporates widely distributed intelligent
sensors and employs real-time communica-
tions to sense and correct inefficiencies and
disturbances automatically on the electric
distribution system. In transitioning the dis-
tribution network to a dynamic self-healing,
self-optimizing grid with real-time feedback
control, information from sensors and points
of control (such as line capacitors, voltage
regulators and substation load tap changers)
must be provided to the analytical applica-
tions, and optimization decisions must be
made and controls must be initiated.
To get this level of control on a large scale
requires intelligent sensors that continually
pre-process measurements and only com-
municate relevant information using high
speed, low-latency communications systems
that move this information to the centralized
analytical applications and a highly scalable
analytical software platform. This informa-
tion is then combined with data from other
utility systems to initiate intelligent control
decisions – all within a few minutes or less
depending on the applications. n
ASK THE EXPERT
Dynamic distributionBrian Deaver analyses the role of System Optimization and how can it help utilities improve distribution efficiency and control.
Brian Deaver is Vice President of Product Management for
CURRENT Group, a leading provider of smart grid solutions. Deaver
spent 20 years with Baltimore Gas & Electric, and among his
accomplishments, he has led BGE’s award-winning Distribution and
Substation Automation projects. Deaver earned his BSEE from the
University of Maryland.
“System Optimization creates a dynamic
distribution grid capable of optimizing on energy
efficiency, environmental or operational targets”
Current_ATE.indd 64 22/6/09 09:17:29
CURRENT OpenGrid™ — Delivering Real Smart Grid Results Today• Modular and scalable with multiple options for sensing and low latency communications• Standards based management and integration of devices, communications and back-office applications• Advanced Smart Grid applications covering all of the distribution system as well as the customer premise
SYSTEM OPTIMIZATION Optimize power flow, reduce system losses, integrate renewables and reduce CO2 based on real-time grid conditions
dISTrIbuTION MANAgEMENTActionable grid intelligence enables, condition based maintenance, better planning, operational efficiencies and improved reliability
SENSINg & COMMuNICATIONSIntelligent sensing integrated with a variety of open IP, real-time communications solutions provide the distributed analysis necessary for a Smart Grid
OpenGridTM
www.currentgroup.com 866.427.0602
CURRENT NGPE 4-21-09.indd 1 6/4/09 3:11:21 PMCurrent.indd 1 18/6/09 14:32:20
66 www.nextgenpe.com
THE CUTTING EDGE
Power & Energy catches up with Austin Energy’s Andres Carvallo to get the lowdown on the technology involved in building the smart grid, and what it really means for consumers.
Smart grid seems to be the phrase on everyone’s lips. Presi-
dent Obama’s commitment to establishing a new federal in-
frastructure seems to have everyone buzzing around smart
grid, smart meters and the environmental consequences,
and Austin Energy CIO Andres Carvallo is no exception.
“I’m in charge of the technology division, planning, development
and operations across the company,” explains Carvallo. “I’ve been
here six-and-a-half years and we have been driving a transformation
since then.”
Carvallo’s passion for smart grid began in 2006, during which he
was often found giving talks and formulating company strategy to
incorporate the innovative technology. “We have been working on it
since then and our Smart Grid 2.0 will go live in August of this year.
We’re currently managing 200,000 devices real time, and by the end
of July we’ll be managing half-a-million devices and we’ll have full cov-
erage of 440 square miles and a million consumers.”
Education Keeping consumers informed of the development of smart grid
technology is a primary focus of all utilities attempting a successful
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August, and a vast array of technology is needed to ensure this hap-
pens effectively. Along with hardware and software, communications
technology is highly important, with the company using fiber for the
back end and wireless technology for the last mile.
Crucially important to customer education and streamlining the
system has been the replacing of typical meters to smart meters. “We
have deployed sensors across the infrastructure to monitor all kinds
of things, from detection of faults to temperature to all kinds of har-
monics, as well as the different elements of the infrastructure,” says
Carvallo.
“All those devices are feeding information into a meter data man-
agement in a distribution management system, and those systems are
all communicating. In the case of the meter data management system
it’s communicating with the billing system, it’s communicating with
the conservation and marketing engines, it’s communicating with the
distribution management system, and the distribution management
system is interacting with the devices that it manages real time, and
then it’s integrated into our SCADA system.”
Austin Energy is at the forefront of new generation development,
having operated the first fuel cell in Texas. For many years the compa-
ny has been a big proponent of distributed generation and has been
innovative in the technologies it uses. The fuel cell operated for five
years as a tester and was decommissioned
last year.
“It was plugged into the grid for about
five years and it was a way for us to test the
viability of that technology as another solu-
tion versus central power plant generation.
We have a big appliance around distributed
generation as part of our effort on Smart
Grid 2.0,” he says.
RenewablesAs the country gears up for a federal
push on renewables, having already set the
blueprint for forward-thinking innovation,
great things are expected of Austin Energy.
In April of this year, the National Renewable
roll out of the system, and for Austin Energy the same is true. As one of
the main goals included in the program, education of all its stakehold-
ers – employees, regulators and large industrial customers, as well as
its commercial and residential customers – is vital to ensure smooth
implementation of the grid. Carvallo introduced the ‘Change your
generation’ software game, in a bid to transform the way in which
consumers use energy.
“We’ve done a very good job of putting together the game as a
day-in-the-life scenario. The tool is all about filling the gap of future
generation needed by Austin Energy, and there are some parameters
and limitations around how one goes about doing that. You’ve got to
think about availability, capacity and all the issues with time and cost
and carbon footprint and so on. When you look at the game and play
with the game, you can decide then to submit your solution to us. We
are hoping to get a significant number of cases. The game has been
played quite a bit: we’re expecting that between now and the end of
the year, we’ll probably get 50,000 or 100,000 recommendations,” he
explains.
“The game has been used by a lot of people to talk about the
issues of carbon and green energy and the portfolio mix of electric
utility,” he continues. “By only that measure it’s already been a suc-
cess. It’s a companion to a program that we have around a public par-
ticipation process where we are engaging our customers in an open
way – if you had a voice on the amount of energy usage, how would
you go about participating?
“The participation process has been going on for a while now. It
started in the fall of last year and we have been sharing with our cus-
tomers all our challenges and all the inner details of our business, and
also the goals that we have.
We have had 12 town hall
meetings and we have had all
kinds of surveys online. We’ve
reviewed in detail all aspects
of the business – from energy
efficiency to carbon offsets to
cost – and we have created a
very sophisticated handbook
that we give to customers. It’s
been very successful.”
TechnologyAustin’s smart grid system
is anticipated to go live in
“We have been sharing with our customers all our challenges and all the inner details of our business, and also the goals that we have and it’s
been very successful”
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megawatts over the last 25 years and having national goals is a
good thing. Obviously, part of the challenge with national goals is
that some places have an easier journey towards certain goals than
others and not all places are created equal. Some places are heavy
duty hydro, like the west coast versus the east coast, which pre-
dominantly produces coal. So if you have goals with carbon or goals
with effi ciency or goals with renewables, they can now be optimized
and be aggressive nationwide. The west and the south coast could
do better,” he says.
Austin Energy is certainly standing out as one of the big players,
and as Obama continues in his quest to give renewables a perma-
nent seat at the energy table, Carvallo is most defi nitely one man
championing the cause.
Energy Laboratory, part of the DOE, issued a press release high-
lighting the top 10 sellers of green energy. Unsurprisingly, Austin
Energy was ranked number one. As the biggest seller of absolute
megawatts of green power, Austin Energy has surpassed all other
electric utilities for seven years. Wind and other renewable energy
sources currently represent 11 percent of the company’s portfolio,
with a goal of achieving 30 percent by 2020.
“We have chosen to build a solar PV power plant across 300
acres. It’s 30 megawatts and will be the largest of its kind in the US
to date. It’ll go live in 2010 and is expected to power 5000 homes.
Earlier this year we also announced the creation of a deal to operate
a biomass plant, generating 100 megawatts which will also go live in
about a year and a half, and again that solar plant and the biomass
plant are steps towards reaching that 30 percent mix. So our total
output as an electric utility is 2700 megawatts and we are hoping
that one-third of those 2700 megawatts will come from renewable
energy by 2020.”
President Obama’s Plan for America is setting targets of 10 per-
cent of energy to be sourced from renewables by 2012, and it has
become common for utility companies to set their own individual
target of 30 percent. Austin Energy is no different. Carvallo tells me
that they have had this target for almost four years, prior to Obama
and his energy reformation proposals.
“We’re also focusing on energy effi ciency; we have a target
of reaching 700 megawatts of saved energy by 2020. We did 600
Austin Energy is planning to set aside 300 acres,
located just outside of Weberville, Travis County,
to build one of the world’s largest solar power
facilities. Through a partnership with Gemini Solar
Development Co., Austin would be the exclusive client and
pay $10 million a year for 25 years for the power generated.
The plant is due to open in 2010 and predicted to
produce enough energy annually to power up to 5000
homes.
However, there is some dispute as to whether this would
raise the monthly electricity bill of an average homeowner,
and there is also concern from some of Austin’s largest
manufacturers as to the cost of their bills.
SIGHTS ON SOLAR
Andres Carvallo is Chief
Information Offi cer at
Austin Energy, where
he is responsible for the
technology vision, planning,
development and operations
across the enterprise. Prior
to Austin Energy, he held
senior executive titles at
large companies such Philips
Electronics, Digital Equipment
Corporation and Borland.
“Obviously part of the challenge with national goals is that some places have an easier journey
towards certain goals than others and not all places are created
equal”
Carvallo.indd 68 19/6/09 15:40:41
Adica.indd 1 18/6/09 14:21:41
Sensus Ad:euro 2/2/09 10:44 Page IFC1
Sensus Ad:euro 2/2/09 10:44 Page 1
With the hype aroiund smart grid rolling out
of control, almost every utility is focusing
its efforts on smart metering and customer
operations, but what does it all really mean?
The defi nition itself seems susceptible to
change between each utility, and as for
smart grid, that’s one concept that seems to
be lacking any sort of unifi ed formulation.
Defi nition“We look at the intelligent grid, or smart grid, as a collection of
concepts, technologies and solutions that are designed to enable an
electrical power grid to be self-healing, self-monitoring and self-regu-
lating”, says Hassan Farhangi, Director of GAIT at the British Columbia
Institute of Technology in Vancouver, British Columbia, Canada. “This
resides on a convergence task form of information technologies, com-
munication technologies and power systems.
“That platform is what provides the electrical utilities with the
ability to put a layer of intelligence on top of what they have today,
transforming it from a one-way unintelligent centralized network into
In order to tear down the facade surrounding smart grid, P&E caught up with Hassan Farhangi, one man with a clear idea of what it all means.
THE TRUTH ABOUT SMART GRID
a network that is two-way, a network that is distributed, ad hoc and
adaptive, and enables utilities to do the main response and to integrate
a variety of different sources, of energy to their energy and so on.
“Academia is trying to understand what a smart grid is, and in that
you also see the kind of evolutionary past that everyone is talking
about from the existing grid to the next grid.”
BCIT is one of the largest academic institutions in British Colum-
bia, encompassing more than 60,000 students over seven different
campuses. The research into smart grid has been conducted for more
than 20 years –primarily focusing on information, organization tech-
nologies and expert systems.
“As an institution, it has done a lot of research in different areas of
energy,” explains Farhangi. “When we started looking at their issues
and the problems that utilities were confronted with, we realized that
we could bring a level of understanding, research and solution devel-
opment for our utilities that would be important to them, to their busi-
ness and to where they are heading.”
The emergence of smart grid was an effect of growing environmen-
tal concerns; as local governments began implementing green energy
plans for utilities to adhere to, Farhangi’s team realized the importance
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SMART GRID
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real – it is not just a bench in a lab that is far from reality. This is a real
setting and the minute you build confi dence on the validity and the
correctness of technology or the approach then you can take it over
and run it, or deploy it in your actual distribution network.”
Farhangi and his team began operating the micro-grid almost two
years ago, beginning many of the approaches initially in a lab environ-
ment. Following their research, they then applied to the government of
British Columbia for funding, receiving an astonishing $2.7 million for
a two-year project. The fi rst phase of the project began in 2008, and so
it is still a relatively new development.
He explains the fi rst phase as being the basic development of the
infrastructure.
“Although on the campus we’ve had a variety of different com-
ponents we need to put networking technologies and computation
BRITISH COLUMBIA ENERGY PLAN
The new BC Energy Plan: A Vision for Clean Energy
Leadership is a combination of aggressive targets for
zero net greenhouse gas emissions, new investments
in innovation, and an ambitious target to acquire 50
percent of BC Hydro’s incremental resource needs
through conservation by 2020.
Environmental leadership:
• All new electricity projects developed in BC will have
zero net greenhouse gas emissions.
• Existing thermal generation power plants will reach
zero net greenhouse gas emissions by 2016.
• Zero greenhouse gas emissions from coal-fi red
electricity generation.
Energy conservation and effi ciency:
• An ambitious target to acquire 50 percent of BC
Hydro’s incremental resource needs through
conservation by 2020.
• New energy effi ciency standards will be determined
and implemented for buildings by 2010.
Investing in innovation:
• The new $25 million innovative clean energy fund
will encourage the development of clean energy
and energy effi cient technologies in the electricity,
alternative energy, transportation and oil and gas
sectors.
• The new BC Bioenergy Strategy will take advantage
of BC’s abundant sources of renewable energy, such
as beetle-killed timber, wood wastes and agricultural
residues.
of research on which to build these strategies. He describes British Co-
lumbia’s energy plan as being “one of the most advanced energy plans
in the country,” paving the way for a brand new era in which electricity
is generated around the grid.
BC HydroBC Hydro, the main electric utility in British Columbia, has begun
moving towards a grid in which they can allow for co-generation, a true
21st century method of energy delivery. The grid allows independent
power producers to individually generate electricity and then send it
on to the grid, combining the various sources of energy.
“The grid mandated BC Hydro to provide up to 50 percent of the
incremental load on the system by 2012 through conservation, so a
massive conservation effort has been mandated by the government.
BC Hydro then started looking around to incorporate different tech-
nologies and different solutions and looking for help, which we offered
to them. One of the primary drivers for that being that like very many
other utilities across the world, BC Hydro is quite cautious in terms of
introducing new technologies into its critical infrastructure. It needs to
have an environment in which it can develop these solutions in a near
real setting, test it, qualify it, validate it and then introduce it into its
infrastructure. BCIT’s campus is a perfect setting for that.
“We have a large campus, more than 60 buildings, including all kind
of load profi les – industrial and residential loads. We have dormitories
on the campus, as well as offi ces and classrooms, and at the same
time we do have a variety of different co-generation capabilities on the
campus. So we realized that we could actually turn around and make
this campus into an intelligent micro-grid, enabling utilities to utilize
this infrastructure as a sandbox, to develop solutions in partnership
and in collaboration with our researchers, qualify those technologies
before eroding it into their distribution system,” says Farhangi.
Micro-intelligent gridThe micro-intelligent grid, Farhangi explains, is achieved by look-
ing at an environment in which a variety of different technologies can
be tested. For the smart grid network topology, this is done in terms of
three different components: HAN, a home area network that holds a
variety of loads, appliances and terminology, as well as LAN and WAN.
“LAN, local area network, is a collection of smart meters that
work collaboratively in a network; WAN is a wide area network, which
is a network of substations” Farhangi says. “An intelligent micro-grid
enables the utilities to simulate each of these components either
individually or as an end-to-end integrated solution, and experiment
with a variety of different solutions.”
Farhangi gives an example of load shedding, and explains this is
achievable through using an intelligent micro-grid. Through installing
load control devices and networking them in a HAN, information can
be captured from a collection of smart meters, and then be aggregated
and communicated with the end servers.
“The beauty of this infrastructure is that it allows you to experi-
ment with different topologies,” he continues. “You can validate those
topologies in an environment that is not threatening and one that is
fully controlled. You have full visibility over everything you do, and it is
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74 www.nextgenpe.com
and we can take those, engineer them and commercialize them,”
says Farhangi.
Global operationsThe operations are conducted on a global scale. The BCIT Tech
Center operates the first micro-grid in Canada, with participants from
around North America. Farhangi notes IBM and GE as their US par-
ticipants, whilst also noting BC and Canadian companies, as well as
Schneider, a European company. But how will this translate to a global
grid, and will President Obama’s hope of a more efficient grid stretch
across international borders?
“What we are hearing from our counterparts in the US and else-
where, and what we’ve also seen in terms of the developments that are
happening at the moment, is that the smart grid is not a solution or an
approach that is going to come about overnight,” he explains.
“Smart grid is going to go through an almost evolutionary path
and the developments are going to be primarily incremental. We are
dealing with such critical infrastructure that it is almost unthinkable
for any jurisdiction across the globe to try and meddle with it without
being concerned about the criticality of the services that such infra-
structure is providing.
“What we see happening is that the existing electrical grids that
we have across the globe are going through a process of improvement.
We are going to start adding different levels of intelligence, starting
from the distribution side of the network and working our way up the
chain towards the generation part of the network, adding layers of dis-
tributed command, control and intelligence to the network.
“The dominant approach that a lot of utilities across North America
are looking at is that the smart grid of the future is going to be at the in-
tegration of intelligent micro-grids. There will be a tendency of moving
towards encouraging larger neighborhoods or larger customers to set
up their own micro-grids, introduce a level of distributed generation
of electricity, and turn their micro-grids into fully visible self-heating
intelligent micro-grids.
“While they’re doing that they can start looking at integrating all
of these intelligent micro-grids into a much larger intelligence system
that would be our future smart grid. So the smart grid of the future
would be an evolution of the existing infrastructure that we have,”
he explains.
Farhagi’s definition of smart grid sounds promising – with con-
tinued research efforts and further unveiling of the two-year project,
2010 is set to be an exciting year for his team. n
technologies on top of the existing components, and experiment with
all kind of provisioning methods for termination points, and integrate
the sources of energies or cogents that we have on the campus. So the
first phase is getting the infrastructure in place.
“The second phase would then look at the resiliency, the liability
and the scalability of the solutions that we’ve put implemented. We try
and scale up our solution in terms of data collection issues, protocols,
and the distributed command and control strategy and try to make
sure that we achieve the kind of standards and efficiencies that are
required for the micro-grid. The third phase would be primarily com-
mercialization.”
Farhangi and his team are working with a variety of different
technology providers and utilities on the campus. Together they roll
out their solutions, integrate their own technologies and create the
solutions that are needed by the utilities. “We are hoping that in the
third phase we would have a number of mature solutions that are
validated, that are reliable, that are secure and that are scalable,
Hassan Farhangi is Director for Advanced Information
Technology at the British Columbia Institute of
Technology, Vancouver, British Columbia, Canada.
“The smart grid of the future is going to be at the integration of
intelligent micro-grids”
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Mike Heyeck tells Natalie Brandweiner how previous mistakes help ensure the safety of the nation’s largest transmission system.
FEATURE
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Since the origin of nuclear fi ssion in the
1930s, many attempts have been made
to endorse nuclear as a primary source
of energy: Eisenhower’s infamous
‘Atoms for Peace’ speech in 1953 and
the US navy’s eagerness to develop
nuclear power demonstrate America’s
willingness to use this source of energy.
That is, until the 1986 Chernobyl disas-
ter and a general movement against nuclear power stopped
short the building of power plants.
As crude oil supplies continue to decline and technology
for safer waste disposal increases, the new administration in
Washington has begun re-embracing nuclear, and American
Electric Power (AEP) is cleverly devising a strategy to incor-
porate the power’s previous faults. As SVP of Transmission,
Mike Heyeck explains how nuclear energy is being used as a
platform upon which to build the company’s safety guidelines.
“Our safety program is very integrated and actually ad-
dresses the areas of human performance based upon the
model from the nuclear industry, which has been a leader
in this. We’ve adopted that from the nuclear industry to ad-
dress safety, as well as reducing operational errors.”
AEP is currently the largest transmission system in the US
and as the fi rst utility company to create an interstate trans-
mission system, it has set the bar on safety standards. The
utility operates 39,000 miles of transmission lines, including
more than 2100 miles of 765-kilovolt extra high voltage.
“We’ve been a leader in transmission, not only in tech-
nology but also in some areas of safety. We are one of the
pioneers in live-line maintenance: developing methods for
doing so in a safe way, and we also benchmark very well with
our safety statistics in the industry,” says Heyeck. “Being
geographically dispersed, we still have a local supervision
presence and rely heavily on local supervisors to help imple-
ment and execute the safety aspects of our business.”
Modeled on Eisenhower’s interstate highway network,
AEP’s nationwide transmission system began in 2006 in an
attempt to eliminate the transmission bottlenecks believed
to be dominating the current power infrastructure, particu-
larly within the eastern grid. The plan is to build a transmis-
sion line that spans the 550 miles between West Virginia and
New Jersey, improving transfer capability by approximately
5000 megawatts and reducing transmission line losses by
approximately 280 megawatts.
President Obama’s call for 10 percent of electricity to
be sourced from renewables by 2012 will inevitably require
a change in the current operations of the electric grid. If re-
newables are to increase, the transference of wind and solar
energy from the east coast to the west is going to need a more
effi cient operation to ensure the energy being used does not
create a loss. It certainly seems that AEP is already well aware
of this, and is seizing the gap in the interstate market.
“Energy effi ciency is the cheapest
resource we can get for our
energy future”
Lessons learned
Heyeck.indd 77 19/6/09 16:17:23
78 www.nextgenpe.com
Interstate transmissionSince 2006 AEP has expanded its interstate project to
become many, using new technologies in a bid to create
the most efficient transmission system in the US. “We’re
using conductor configurations and metals that are lower
loss and therefore more efficient in transmitting power. In
fact, the efficiency is well over 99 percent, and we have
line losses of less than one percent if we use our new
design,” says Heyeck.
However, being the first to set the standard, par-
ticularly in safety, does not come without its challenges,
Heyeck notes. “One challenge when you have a large
workforce is implementing any new practice in a consis-
tent manner, but we’ve been very successful in doing that.
Again, learning from the nuclear industry, we have a large
body of knowledge to leverage in order to a program such
as human performance.”
AEP intends to reduce new generation by facilitating the
optimal economic dispatch of existing generation assets.
Heyeck believes the current state of the transmission to be
“a hodgepodge grid with a lot of constraints,” and that this
is largely the problem facing the US energy sector.
“The system cannot reach the most economic genera-
tion; in some cases there are pockets of uneconomic gen-
eration that has to run. If you build a robust grid without
constraints, you can reach the lowest cost generation, or if
you desire to access renewable generation, transmission
is the enabler to do that.”
To expand its interstate transmission system, AEP is
working in partnership with the American Wind Energy
Association to develop a conceptual grid that is capable
of connecting 300,000 to 400,000 megawatts of wind
generation across the US.
“Most of our wind potential on land is in the midsec-
tion of the country, and most of our people are along the
coastlines. Connecting that wind requires a grid that is
nationwide. Through the partnership, not only are you
able to do that but you also have a new grid that enhances
economic dispatch, and as a result we could save at least
“If you build a nationwide grid, it’s more efficient –
you have a greater reach of supply resources, and you’re able to reduce supply need”
PartnershIP
aeP and Duke energy have formed a
joint venture to build and own new electric
transmission assets. The equal partners
are looking to build 240 miles of extra-high
voltage, 765-kilovolt, transmission lines,
linking Greentown Station with Rockport
Station, across Indiana.
Operating a 765-kilovolt transmission
line provides both economic and
environmental benefits to both parties. The
line requires less land to carry more power
than lower voltage lines, and would also
cost less than half as much to build.
Heyeck.indd 78 19/6/09 15:50:38
79www.nextgenpe.com
straints of wind developers themselves. So, the goal is achievable.
“The only debate would be whether it’s achievable by the 2012
target. When you’re rising from one to two percent wind and solar
energy production to 10 percent, that does require an extraordinary
amount of transmission being built, as well as wind farms and solar
installations.
“However, many gains could be made with energy efficiency with
federal help on the standards for appliances and so on. But energy
efficiency is, as some say, the cheapest resource we can get for our
energy future.”
As for bringing back nuclear as a reliable renewable source, Heyeck
explains that although there are advantages to learning from our previ-
ous mistakes, reinstallation is not necessarily an easy process.
“Transmission ought to be neutral to what the fuel source is,
whether it’s renewable or nuclear, but nuclear’s going to take some
time. Not just because of the permitting process, but also because of
the cost uncertainty.” n
20,000 megawatts in supply because of reduction of
constraints and greater efficiencies. In other words, if
you build a nationwide grid, it’s more efficient – you
have a greater reach of supply resources, and you’re
able to reduce supply need.
“We have a number of ongoing projects. One of them
emanates from West Virginia into Maryland, and we’re
going to file an application to site that transmission
line in the next month or two. Another project is in the
middle west of the country, in Oklahoma and Kansas,
where we are in the process of getting permission from
the state planning authorities to build those lines. We
have an order from the regulators in Texas to build
around one billion dollars of transmission connecting
West Texas wind to load centers, and we’re beginning
the siting process for those lines,” says Heyeck.
Obama’s proposalThe new administration is heavily focusing on
bringing transition to a new digital electricity grid
through a series of smart grid features, such as smart
meters, distributed generations and demand response.
With AEP already installing an interstate system,
Heyeck explains that if they as one utility company can
successfully instigate such a system, there is no need
for federal involvement to establish it.
“We need to be clear when we talk about a ‘federal
grid’. We, at AEP, do not believe that you need federal
dollars to build an interstate transmission grid. Private
investment can be attracted to build transmission.
What we need is help with the impediments – a siting
process for interstate transmission lines. We would like
that to be under a federal authority.
The second impediment is allocating costs for
those facilities. We believe costs should be broadly
allocated based on energy usage. Once you get those
impediments removed, you do not need federal stimu-
lus dollars to build transmission as private investment will be at-
tracted,” he explains.
However, Heyeck does not think the sameof all the stipulations
regarded in the energy plan, and explains how if energy is affectively
coordinated, the federal targets for renewables can be achieved.
“In the US, there’s very little penetration of wind and solar
energy, although we do now have more nameplate capacity than
Germany, which is the second highest penetration of wind sources.
But, if you include hydro capability in the US already, we’re some-
where in the neighborhood of less than 10 percent.
“When the Obama Administration talks about 10 percent, they
are talking about wind, solar, geothermal and biomass. Hydro cer-
tainly ought to be in the mix because we do have a good amount of
hydro generation in this country – more than five percent. The im-
pediments to achieving this 10 percent renewable goal are building
the transmission fast enough, and the financial and economic con-
Michael Heyeck is Senior Vice President,Transmission for American Electric
Power. He was previously Vice President, Transmission Asset Management. Prior
to that, he held a leadership position in Corporate Planning and Budgeting for
corporate budgeting and economic forecasting and has held various engineering
and leadership positions in Transmission Planning and Transmission Operations.
He joined AEP in 1976.
Heyeck.indd 79 19/6/09 16:23:12
What kind of market size do you see for a community storage
approach for load management?
Ali Nourai. One way of measuring the trend is to look at con-
ferences. In energy storage, as far as the conferences are con-
cerned, a few years ago you could barely fi nd one to go to. Now
you get too many invitations. Two years ago, we had under 100
people coming to the Electricity Storage Association’s annual
meeting on energy storage. This year we had 300 and we ran
out of everything.
Another indication of the growth in this fi eld is that a year
or a year and a half ago, we had to go to some effort to reach
congressmen and congresswomen and talk to them about
energy storage. Now members of the ESA are routinely getting
invitations to go to congressional briefi ngs and talk to them
about energy storage.
An interesting change we’ve noticed in energy storage is
that up until about fi ve months ago, smart grid had its buzz-
words and energy storage was doing its own thing. Now these
two groups are talking together. There is conference after con-
ference about how energy storage is at the heart of smart grid.
A lot of changes have happened. A lot of waking up has
happened. One level where this is very, very clear is at the
congressional level. I talked to a congressman just the other
day, and there is another congressional briefi ng coming up.
We keep being invited to these things – we were just dreaming
about that a year ago.
The biggest barriers to deployment of energy storage
were regulatory and legislative. Those people are waking up.
In Texas, we are putting four megawatts of energy storage. We
were blocked by legislative rules that you cannot own storage
because storage is generation. After six months of talking, the
Store and deliverBulk storage vs community energy storage vs compressed air storage: what are the benefi ts and drawbacks of each? Ali Nourai, Manager of Distributed Energy Resources for American Electric Power, helps P&E fi ll in the blanks.
80 www.nextgenpe.com
ENERGY STORAGE
nourai.indd 80 19/6/09 15:52:32
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rules changed. Now we have the approval of the Public Utility Commis-
sion to go ahead and do that. So a lot is happening and these are the
indicators that determine the market.
When will AEP and other utilities include the community energy stor-
age concept in their planning and commercial deployment?
AN. When we started with the NaS battery in 2005, we went after that
as an R&D project and installed it. It was operational in 2006. In 2007,
our planning people ordered six more megawatts and our transmission
ordered another four megawatts. They did that on their own. In other
words, they bought into it. Once the storage is functional, they see the
value – they pick it up. Planning departments have picked it up. When
you look at other utilities, a lot of them look at the storage as an R&D
thing. Just put it in the lab and see what happens.
What AEP did was say, “We’ll go right to the field. We’ll put it on
the real circuit serving real people.” And we saw the results. Planning
bought into it within a year because planning goes in a yearly cycle.
From this experience we say that once it’s on the ground and people see
that, it just goes by the cycle of the planning.
Another factor to consider is when it comes to big storage like a
substation, it takes a lot of high-level management decision-making
to go into a multimillion-dollar project to start one. With community
energy storage, you can start it with as little as $56,000. It doesn’t
need a high-level management decision to get started, which means
we expect a lot faster and broader acceptance of community energy
storage once the first one is installed and operating, and the results
are shown, which is going to be the case next summer.
AEP has gone after a proposal in the State of Michigan. If we win
that proposal – and we expect to win – that will be one megawatt in
Michigan of community energy storage. That one megawatt will be in-
stalled next March. As soon as it’s available, we’ll start talking about it
and share the results.
How do centralized fast response energy storage and decentralized
fast response storage coexist?
AN. In terms of frequency regulation, for the time being it would primar-
ily be done at substation level – it needs a few years to establish itself
to that point. Altairnano has a trailer of batteries that will be operational
and be leaders in the next two or three years. Community energy storage
may pick up sooner, because it is not the little box run locally.
A control hub isn’t a substation. The control hub sees a minimum of
one megawatt, so for all practical purposes it can do the same thing as a
substation battery. The only difference is that substation batteries exist
today. AEP has about seven megawatts running right now, and we’ll
have 11 megawatts before the end of the year, and lithium ion-based
ones are just being added. So they’re just about a year or two years
ahead of distributed energy storage, but once distributed is in place,
there is no difference.
Whichever storage you have, you’ll use it for that purpose. One of
the key things AEP is trying to promote is that energy storage is very,
very cost effective if, and only if, we learn how to have multiple benefits
on each installation. This is the way to go. That means I’m not going to
put one kind of storage and say, “This is only for backup,” and put in
another storage and say, “This is only for frequency regulation.” Storage
is too expensive for that.
Whatever storage we put down, we try to use it as many ways as
we can. We’re going to use it for frequency regulation. We’re going to
use it for backup. We’re going to use it for deferred capital, for all of the
above, for as many uses as we can – our intelligence allows us to do
this because it takes some thinking to have multiple use and multiple
functions, and we are going through that exercise. With that kind of
thinking to justify storage, I don’t see any reason
to say that I’m not going to use this storage for
frequency regulation just because I don’t like it.
I have to.
This is the most efficient way of doing things,
especially with the high cost. If you look at what
AEP is doing, the first storage we put in was capital
deferral only. The one we put in 2008 was capital
deferral and islanding, which is backup power at
the substation level. What we’re going to do with
community energy storage is all of them plus fre-
quency regulation. We have a frequency regula-
tion project going on to be able to learn how to do
it. Learning how to do multiples takes some time,
but that is the target. Any storage we put down,
we’re going to try to use it for at least two or three
different benefits, including frequency regulation.
“One of the key things AEP is trying to promote is that energy
storage is very, very cost effective if, and
only if, we learn how to have multiple benefits
on each installation”
COmPrEssEd Air EnErgy stOrAgE
Compressed air energy storage refers to the
compression of air to be used later as energy source.
At utility scale, it can be stored during periods of low
energy demand (off-peak), for use in meeting periods of
higher demand (peak load). Alternatively it can be used
to power tools, or even vehicles.
nourai.indd 81 22/6/09 09:50:49
Air
GT Air
Vent Air
COMPRESSOR
Compressed Air
Storage
Intercoolers
EXPANDER
Exhaust
RECUPERATOR
MOTOE
Fuel
GAS TURBINE
SECOND GENERATION COMPRESSED AIR ENERGY STORAGE (“CAES2”) TECHNOLOGIES ARE PATENTED BY DR. NAKHAMKIN AND LICENSED BY ES&P.
ES&P PARTICIPATES IN ALL STAGES OF CAES2 PROJECTS EXECUTION FROM CONCEPTUAL
ENGINEERING AND OPTIMIZATION TO DELIVERY OF PLANTS ON TURNKEY BASIS.
ES&P IS THE ONLY
COMPANY THAT
WAS INVOLVED
IN ALL STAGES OF
EXECUTION OF THE
110 MW CAES
PROJECT- THE ONLY
CAES PROJECT IN
THE US.
SECOND GENERATION CAES2 PRIME FEATURES:
• Provides Load Management of Renewable Energy and Optimization of Smart Grid
• Totally Green Energy Storage Cycle with ~ 90% Efficiency
• Scalable from 15 MW to 430 MW
• Total energy delivered with Heat Rate Less than 3,800 Btu/kWh
• Bottoming Cycle Green Power is ~ 150-200% of CT Capacity
• Above- and Below-Ground Compressed Air Storage
• Less Expensive than Combined Cycle (CC) Power Plant
CONTACTS:
ROY DANIEL (Chief Operating Officer)
DR. MICHAEL NAKHAMKIN (Chief Technology
Officer)
MNakhamkin@energystorageandpower
MAIN OFFICE NUMBER: 908-393-7177
www.EnergyStorageAndPower.com
infoEnergyStorageAndPower.com
ES&P.indd 1 19/6/09 14:26:01
83www.nextgenpe.com
Utilities are struggling to quantify the return on investment for
energy storage, specifically energy storage devices supporting good
stability, because standard economic models don’t exist for energy
storage. How can utilities and storage providers overcome this chal-
lenge?
AN. That is a very interesting challenge and AEP has developed its
own model. We hired an external provider to develop the financial
model because internally people found it hard to imagine we could
do so many things in storage. The key answer to that question when it
comes to justification is multiple benefits on each application. If you
say, “I’m going to put in storage just to handle wind,” it’s not justifi-
able. It’s too expensive.
If you say, “I have a solar system here. I’m going to put in a battery
just to buffer, to handle when the cloud comes in,” it’s difficult to justify
that. What we try to do with the community energy storage, it has a DC
input. That means if a customer has solar, we’ll take it. If a customer
has wind, we’ll take it. At the same time, we do provide backup power
– we level out the load of the substation and defer capital. We’re doing
frequency regulation which is the only way we can justify it.
AEP has a two-tier approach towards cost and economics. One is
multiple use. The other one is that community energy storage does not
have any chemistry. It could be any storage. It’s a platform to take ad-
vantage of the synergy of electric transportation. We are going after the
market size to help us. We believe that in a few years, once the electric
cars start to roll on the roads, and especially being able to use a used
electric car battery, we can master the economics, but without the elec-
tric transportation, without multiple benefits, no way. It won’t happen
for years to come.
What’s on the horizon in terms of the wide-scale deployment of bulk
electric storage technologies?
AN. We started in the 1980s as a leader in bulk storage. We put a lot of
that there. The problem is it did not spread as fast as we wanted it to
for several reasons. Number one, there’s not enough competition, and
it takes a long time before competition comes to life. If we want to put in
another substation battery in the next two months, for example, we have
no choice but to use an NaS battery. And because there’s not enough
competition; the price is high. The price went up instead of down.
The second problem is if another utility wants to do it, they have to
put in some good money to get started. These are the two disadvantag-
es in bulk storage the way it is formatted today. That is why we designed
this new bulk storage called community energy storage. It appears not
to be bulk, but the control is designed to be at least one megawatt. We
tried to solve the challenge of the bulk storage through the system for
those two reasons I mentioned.
One, there’s no competition in bulk. There’s too much competition
on electric transportation. Everybody in the world is trying to come up
with a car battery. The second issue is it’s difficult to justify the next
project. With little boxes, you’ll gradually phase it in. You don’t have to
justify it all in one year.
There is one thing I see in bulk that I don’t see in CES. Utilities have
their temporary transformers on trailers or wheels. When disaster hits,
they move these transformers around the system. We need batteries on
wheels for disasters. You cannot unplug the battery from the backyard
of people and move them around.
You may say that with electric cars you can just send a signal out on
the radio: “Hey, people, we need your cars plugged in at such and such
nas bAttEry
A sodium-sulfur (NaS) battery is a type of battery
constructed from sodium (Na) and sulfur (S). This type
of battery has a high energy density, high efficiency
of charge/discharge (89-92%) and long cycle life, and
is fabricated from inexpensive materials. Because of
the operating temperatures of 300 to 350 °C and the
highly corrosive nature of the sodium polysulfides, such
cells are primarily suitable for large-scale non-mobile
applications such as grid energy storage.
Terminal
Electrical insulation
Sodium chamber
Metal insert
Sodium electrode
Solid electrolyte
Sulfur electrode
Cell container
Sodium sulfur battery schematic
nourai.indd 83 22/6/09 09:35:43
84 www.nextgenpe.com
battery on it. Once batteries hit 100 megawatts in one place, or more
or less in one place, or controlled collectively in one place, which in
my opinion is a matter of a few years, it will be difficult to justify com-
pressed air, which is a special site that
needs gas, that needs a power plant,
that needs crew to run it, and the effi-
ciency is not that exciting compared to
electricity. The efficiency of an electric
transportation battery today is 90 plus
percent. The efficiency of compressed
air is far below that. But yes, if some-
body needs 100 megawatts of storage
six months from now, compressed air is
the solution.
The reason AEP jumped ahead
and put money into storage is we see
the strategic value. The amount of
customer-owned and operated gen-
eration connected to the AEP system is
doubling every year. We cannot let it go
without a storage buffer and pretty soon we will lose control of our
generation because these guys all of a sudden will have 20 percent
or 30 percent of our generation and they generate whenever they feel
like it or whenever the sun is shining. We cannot run a business like
that. We have to have a buffer. That strategic value is what got AEP
to get started. When it comes to economics, it’s very difficult to put a
dollar figure in front of it. n
hour because of an emergency.” Maybe we can do it that way; I don’t
know. The transformers on wheels are ideal for emergencies, and they
can beat community energy storage in their transportability, so quick
transportability is one of the features of
bulk that is not quite there with community
energy storage.
How does compressed air storage work
and what are its advantages?
AN. There are two types of compressed air.
For the type that does exist today, there’s
only one plant in Germany and one plant
in the US. This is a gas-burning power
plant that on the side takes advantage of
compressing the air in a cavern. This is
more than just storage. It’s a power plant.
It needs fuel and it needs staff. It needs a
crew to run. If you look at it on a cost per
unit of stored energy overall, it’s one of the
least expensive and one of the best, but
the one drawback is that there’s a power plant next to it.
The other thing is you cannot just put it anywhere you want. There
are quite a few sites where we could do it but it has to happen to be the
place you also need it. All these things negative aside, if somebody
asked me, “I have a wind farm and I need storage and I need to install
it within the next six months. What should I do?” I would tell them
go to compressed air. That’s the only solution. But given time, I don’t
think how it can compete with batteries.
Once the batteries hit the 100-megawatt level, compressed air
will be seriously challenged because batteries of 100 megawatts and
above don’t have the issues that compressed air has. The largest
wind farm that I’m aware of with batteries running at this point is a
52-megawatt wind farm in Japan and has about a 30 megawatt NaS
Ali Nourai is Manager of Distributed Energy Resources
for American Electric Power and Chairman of the
Electricity Storage Association.
“the amount of customer-owned and operated generation connected to the AEP
system is doubling every year”
nourai.indd 84 22/6/09 09:35:45
85www.nextgenpe.com
Energy storage isn’t just about stor-
age capacity. It’s about power. And
a new breed of fast response, high-
power energy storage systems,
like those introduced by energy and power
management company Altairnano, is helping
solve some tough challenges.
Take the renewable portfolio standards
for example. twenty-nine states, including
the District of Columbia, have adopted ag-
gressive mandates for integrating renewable
generation. Illinois, Minnesota, Nevada, Ohio
and Oregon, each with relatively low levels
of renewable generation, are all shooting to
have 25 percent renewable integration with
the grid by 2025.
Those are aggressive goals, especially
when considering that renewable generation
currently represents a little more than two
percent of total US electricity generation.
As the penetration of wind and solar gen-
eration deepens, energy storage systems like
the Altairnano Energy Storage System (ALTI-
ESS) will be needed to help stabilize the elec-
tric grid and mitigate the unpredictability
associated with renewable generation.
In the US today, the relatively small
amount of non-dispatchable energy in a bal-
ancing area rarely has significant impact on
system operations. This is because the natu-
ral variability of the load is still greater than
the uncertainty of utility-connected renew-
able energy resources. But this is changing,
and it’s changing fast.
In fact, FERC recently announced a
$500,000 study to determine whether the
existing US power grid can handle the ad-
dition of substantial amounts of renewable
resources by 2012. Results are expected to
be released in late 2009. And the California
Independent System Operator (CAISO) an-
ticipates by 2012 regulation capacity could
increase by 250 MW for up regulation and up
to 500 MW for down regulation for a total of
750 MW.
Of all renewable generation resources,
wind and photovoltaic solar are most likely
to contribute to grid instability. In a report
published in April 2009, NERC predicted
“at higher levels of variable generation, the
operation and characteristics of the [system]
can be significantly altered.” The study cites
the potential for wind generation to increase
ramping requirements of conventional gen-
eration as much as 45 percent to maintain
grid stability.
Utility-scale PV systems have experi-
enced substantial ramps, as well. According
to the NERC study, PV systems may experi-
ence variations in output of +/- 50 percent
in a 30 to 90 second timeframe and +/- 70
percent in a five to 10 minute time frame.
The problem with conventional gen-
eration is that it can not dispatch in the time
required to respond to sudden variations in
renewable generation output. Ramp rates for
diesel engines require up to three minutes
Renewable storageJeff Brunings explains the challenges of mitigating the unpredictable and rapid changes of renewable generation.
for achieving full power. Gas engines require
up to seven minutes. Industrial gas turbines
may take up to 20 minutes. The ALTI-ESS
achieves full power in milliseconds.
Based on advanced lithium-titanate
technologies, ALTI-ESS responds to these
fluctuations by releasing or absorbing power
from the electricity grid. This helps improve
equipment and capacity utilization, strength-
en operational efficiencies and reduce carbon
emissions. Current solutions in commercial
operation include a 1 MW/250 kWh system at
the PJM Interconnection, which runs nearly
continuous operation throughout the day for
The AES Corporation.
The ALTI-ESS features a power module
and power control system module. The power
module has a 1 MW lithium titanate battery
stack and a battery management system.
Power modules can be added for multiple MW
configurations. The power control system
module features necessary electronics to
convert from DC to AC and communications
software required for receiving and respond-
ing to grid signals, including PLC, SCADA,
and data service unit.
Additionally, the ALTI-ESS is transport-
able, scalable to multi-megawatt configu-
rations, achieves greater than 90 percent
roundtrip efficiency and has an expected
calendar life exceeding 20 years. A basic
configuration is a 1 MW/250kWh system,
but it’s capable of supplying different
power and energy requirements depending
on system.
As states move toward achieving renew-
able portfolio standards no one knows the
increased costs utilities will incur for manag-
ing grid stability. No one really knows the
full mega-watt potential for fast response,
energy storage systems, either. But, if Cali-
fornia is any indication, with an anticipated
increase of 750 MW total regulation capacity
required by 2012, both the cost and opportu-
nity are significant. n
Jeff Brunings serves as director, strategic
marketing for Altairnano, a leading provider
of energy storage systems for clean, efficient
power and energy management.
INDUSTRY INSIGHT
Alternano.indd 85 19/6/09 15:39:55
86 www.nextgenpe.com
As grids become more intelligent, they
have to be supported by even more so-
phisticated IT systems. That demands
platforms that can ramp up and ramp down
rapidly according to the dictates of market
forces.
In such a world, IT tends to suffer from
two major challenges – under-provisioning
and over-provisioning. Both can be solved
via automated capacity planning and perfor-
mance management software that contains
enough fl exibility to accurately predict traffi c
patterns and growth trends while being able
to detect unexpected peaks and troughs and
make the necessary adjustments.
Right-sizing capacityCapacity planning makes it possible to
know if the current infrastructure is adequate
to cope with the addition of new applications
or a greatly increased traffi c volume. If more
resources are called for, capacity planning
highlights how much extra equipment needs
to be deployed. And with so much top man-
agement attention on smart grid initiatives,
such automated tools enable IT to load up ex-
isting systems with greater workloads with-
out causing a bottleneck. Thus it becomes
possible to maximize the ability of systems
to respond to market volatility.
Capacity planning also reaps big rewards
by revealing what IT assets are already in
place. There is hardly an energy company in
the nation that can honestly say it knows the
location and role of every server in its midst.
By conducting such an inventory automati-
cally, capacity planning software permits
optimization of what is currently in place. In
many cases, this action reveals large pockets
of unharnessed resources that can be cor-
ralled to cope with ongoing expansion.
Performance managementWhile capacity planning could be char-
acterized as a crystal ball, performance man-
agement is the troubleshooter. Despite the
most meticulous planning, unforeseen cir-
cumstances sometimes result. Whether due
to massive spikes in demand, a local blackout
or the impact of uncontrolled application roll
out, IT departments must occasionally deal
with performance degradation. The challenge
is to quickly isolate the source so the proper
remedial actions can be executed. With the
right tools in place, energy companies can
stay one step ahead of trouble.
It is advisable, for instance, to always
monitor metrics concerning the utilization of
processing power, memory and the network.
Thus when an issue shows up, it is relatively
easy to drill down into the affected area to
discover the application, server or business
unit responsible.
This directly correlates to the bottom
line. Instead of throwing more servers, more
disk capacity, more bandwidth or more pow-
erful processors at the issue, performance
management often reveals specifi c areas of
bottleneck that can be reorganized for opti-
mum throughput and availability.
Ongoing process Once conducted, capacity plans should
be repeated annually to take into account
growth rates and changes in the environ-
ment. Further, in an organization that has to
deal with huge traffi c volumes or rapidly fl uc-
tuating loads, interim capacity plans should
be done at least every three months. Ad-hoc
reports should also be carried out to verify
all is well and to investigate unusual occur-
rences or to follow up on unusual patterns.
This should be carried out in tandem with
ongoing performance management to detect
and prevent bottlenecks from materially af-
fecting system performance.
Further, in an era of smart meters and
smart grids, it is essential that ongoing
initiatives to add more intelligence to the
energy infrastructure are backed up by
IT tools that provide enough flexibility to
cope with rapid change and enough pre-
diction about future trends to prevent
system bottlenecks. It is only a matter of
time before we begin to see news stories
about state-of-the-art energy infrastruc-
ture being constrained due to inadequate
or overloaded IT resources. The way to
avoid this fate is to include proven capac-
ity planning and performance management
techniques and technologies as part of any
smart grid implementation.
INDUSTRY INSIGHT
SMART GRID DEMANDS SMARTER ITBy Ron Potter
Ron Potter is IT best practice
manager at TeamQuest, and has been
involved in IT for 30 years, working in a
number of industries including gaming,
banking, IT service and healthcare.
Prior to TeamQuest, he was involved
with a multi-year IT improvement
initiative at a major healthcare
company that embraced ITIL.
For more information please visit www.teamquest.com
“It is essential that ongoing initiatives to add more
intelligence to the energy infrastructure are backed up by IT tools that provide
enough fl exibility to cope with rapid change”
Teamquest.indd 86 19/6/09 15:43:05
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The recent Administration’s commitment to increased usage of
renewable energy sources has certainly made easier the strate-
gies of those companies already implementing energy effi cient
programs. As VP of Renewable and Energy Solutions for PSE&G,
Alfredo Matos is one man committed to raising the profi le of energy ef-
fi ciency and serving its ever-growing ‘green’ customer base.
Obama’s energy strategy has stated a goal of ensuring 10 percent
of America’s electricity comes from renewable sources by 2012, setting
the precedent for energy usage now, and in the future. But Matos has
been one step ahead –
formulating renewable
strategies since being
named VP in January
2008, and ensuring the
consistency of these
with the overall corpo-
rate strategy.
Across the corpora-
tion, PSEG’s family of companies are committed to renewable energy,
be it Matos’ arena within PSE&G or its sister company PSE&G Global,
which is currently implementing a program of wind turbines. “That
project is being done outside of the regulated utility and they were
successful in placing a bid with the state in order to command with the
partner that they have to operate offshore turbines,” says Matos.
Matos’ concentration focuses on strategy making for energy
efficiency, within the utility’s proposal, including its phenomenal
$190 million investment plan, which is currently seeking approval
from the Board of Public Utility. “We anticipate that this will happen
soon and we’ll invest that money over an 18-24 month period. That
was in response to a call from our governor for the utilities to come
up with a stimulus package that provided and created jobs within
New Jersey, as well as providing the energy efficiency measures to
our customers.
“It contains several
programs within that
filing. Many of those pro-
grams are already being
implemented within the
smaller program that
we started back in Janu-
ary: we simply took the
program, enhanced it
and scaled it up in order to come up with $190 million to be spent
over the next 18 months. It’s an innovative program where it looks
at providing homes at residential customers with an energy audit,
and then it follows up with implementing the various measures
that the audit says one should do in order to become much more
energy efficient, such as placing insulation, caulking and so on.
That’s on the residential side.
“Nuclear does have an important role in the overall energy infrastructure here in New Jersey and in the US”
he recent Administration’s commitment to increased usage of
renewable energy sources has certainly made easier the strate-
gies of those companies already implementing energy effi cient
programs. As VP of Renewable and Energy Solutions for PSE&G,
Alfredo Matos is one man committed to raising the profi le of energy ef-
fi ciency and serving its ever-growing ‘green’ customer base.
Matos’ concentration focuses on strategy making for energy
efficiency, within the utility’s proposal, including its phenomenal
$190 million investment plan, which is currently seeking approval
from the Board of Public Utility. “We anticipate that this will happen
soon and we’ll invest that money over an 18-24 month period. That
was in response to a call from our governor for the utilities to come
RELIABLE SOURCES
RENEWABLES
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89www.nextgenpe.com
the benefi t of our hard to reach customer base. Solar, for the longest
time, has been implemented in more wealthy areas, but if we provide
gas and electric to everyone, we believe that as an energy company
we should also be providing solar and energy effi ciency measures to
everyone,” says Matos.
Green collar The implementation of such strategies promises an increase
in the amount of required workers to carry out these changes –
from creating and constructing the solar poles, to the installation
of individual customer grids. Obama’s statistical commitment to
renewable sources is firmly
backed up with the creation of a
new workforce – a deployment of
five million ‘green collar’ work-
ers, through an investment of
$100 billion dollars, to install
clean energy, and with PSE&G’s
renewable strategy, the utility
certainly is one of those across
America endorsing the new Ad-
ministration’s goals.
“It takes a real commitment
on the part of the American
people, as well as businesses
and utilities, to play an impor-
tant role in achieving those tar-
gets. The utilities industry is in the business of energy and we are
regulated just like everywhere else in the world, but regulators,
utilities and customers need to work together to recognize that
the utility plays an extremely important part in providing solar and
energy efficiency measures, whilst still being fair to the utility’s
shareholders. In doing this we can reach those targets of creating
jobs as an initial byproduct of this effort. The longer term would be
to improve the economy and become more energy independent.”
In PSE&G’s deployed state of New Jersey, there is a 30 percent
target of supply to be sourced from renewable energy by 2020, with
“We have similar programs for small businesses, hospitals and
warehouses – we’re trying to cover the various segments within our
customer base in order to provide them with an avenue to become
much more energy efficient, essentially by buying down the invest-
ments or the costs they would normally make. Utility would then
make those investments in those homes and businesses, in order
for those customers to recognize or realize the energy savings.
That’s a very high level view of the energy efficiency filing,” he
explains.
Solar strategiesAnother aspect of the Janu-
ary program is a focus on solar
energy sources, with a com-
mitment to providing complete
consumer-wide access. The
current filing sitting in front of
the board is a proposal for $773
million over five years, which
will install those solar systems
owned by the utility on its utility
poles and on schools throughout
its service territory, as well as
municipal buildings. It also plans
to provide solar resources for its
low-income housing that typically would not enjoy the advantages
of solar energy along with installing solar farms on certain proper-
ties that the utility owns.
“We call it ‘Solar for All’, because we fi rmly believe that through
this approach we will be placing solar for all of our customers. The
best example of this would be the pole attached solar which goes
into every neighborhood, and power which that solar panel is gen-
erating will be directly connected to the customer’s grid, going into
their homes.
“So it truly is a solar project for all. It has various segments for
Alfredo Matos joined
PSEG in 1981 and was
named Vice President of
Renewables and Energy
Solutions of Public Service
Electric and Gas Company
(PSE&G), in January 2008.
Prior to this, Matos had
been VP of Distribution
Operations and EHS of
PSEG Global since 2004.
the benefi t of our hard to reach customer base. Solar, for the longest
time, has been implemented in more wealthy areas, but if we provide
gas and electric to everyone, we believe that as an energy company
we should also be providing solar and energy effi ciency measures to
everyone,” says Matos.
Green collar The implementation of such strategies promises an increase
in the amount of required workers to carry out these changes –
“We have similar programs for small businesses, hospitals and
warehouses – we’re trying to cover the various segments within our
customer base in order to provide them with an avenue to become
much more energy efficient, essentially by buying down the invest-
ments or the costs they would normally make. Utility would then
make those investments in those homes and businesses, in order
for those customers to recognize or realize the energy savings. RELIABLE SOURCES
AlMatos.indd 89 22/6/09 09:15:20
90 www.nextgenpe.com
Attempting to seize the opportunities that nuclear brings, PSEG
is currently looking at the viability of building a new nuclear plant
at the site of its Hope Creek and Salem units, and as far as Matos is
concerned, the utility’s consumers are very excited for nuclear.
“We haven’t seen any negative feedback. It seems to be pretty
quiet. People seem to recognize that nuclear does play an im-
portant, clean role. For the most part people have learned more
about nuclear over the years, and over the past 25 years nuclear
has worked well. People are more accustomed to it than they were
before.”
Matos’ strategies for PSEG’s renewable
future seem promising. “The key is to quickly
implement those strategies that we’ve laid out
over the past 12 months, so that the custom-
ers can see and touch those strategies and
make them real , instead of something that’s
hypothetical or theoretical.
“We’re now doing that here in New Jersey
with some of our programs whereby we’re
going into people’s homes and doing the
audits, we’re doing some of the energy measures and once we get
the solar approved we’ll start installing those on the top of our util-
ity poles. When people see them, they’ll see that it’s technology
that does work, so implementation over the next 12 months of the
strategies we’ve laid out is important. That will breed additional
success.” n
two percent of this target being solar. Matos explains that despite
this being only 1800 megawatts, a very small amount of the total
energy consumed in the state, it is a huge stepping stone for the
future of renewables.
“It’s an enabling initiative that will show the world that this
type of technology is something that is very much achievable, that
we can implement it. It has positive qualities, such as job creation
and helping the economy, and also contributes to a reduction in
foreign sources of energy.”
InfrastructureHowever, before utility companies or its consumers can dream
of a 100 percent renewable empowered world, there is still the old
infrastructure to consider. Ranked as number one in the nation for
reliability, PSEG is keen to ensure that the amalgamation of the old
with the new does not disrupt its dependable energy delivery.
“As we move towards a new 21st century infrastructure, there
will have to be a continuation of investments in our systems to
maintain the level of reliability that PSEG is noted for. As we con-
tinue to put distributed systems throughout our territory, it’s going
to require additional smart grid and more intelligent communica-
tions.
“Also as we start introducing plug-in vehicles, this is going to
alter and change the way utilities have done things on a go-forward
basis. A plug-in vehicle will take energy from the grid, but will also
give energy to the grid if that area requires it. So metering technol-
ogy is extremely important and smart grid again plays a vital role
in this view of the utility of the future,” notes Matos.
Renewables does not simply stop after wind, hydro and solar,
however. As utilities are becoming increasingly aware of the ben-
efits of nuclear power, and consumers become educated on the
validity of nuclear as a safe energy source that can be deliverable
to their homes, nuclear is re-emerging as a viable, clean source
of energy, and PSEG are certainly keen to include it within their
strategy.
“We have a three-prong approach of energy efficiency, renew-
ables and nuclear being the third leg of that three-legged chair.
Nuclear plays an important role. I consider it to be green and the
technologies have obviously improved over the past 20 years since
the last plant was built. There are good examples around the world
of where current nuclear has occurred and nuclear does have an
important role in the overall energy infrastructure here in New
Jersey and in the States,” Matos says.
“Regulators, utilities and customers need to work together to recognize that the utility plays an extremely important
part in providing solar and energy efficiency measures”
Hope Creek Generating Station is a 1220 megawatt
nuclear power plant located in Lower Alloways Creek,
NJ, adjacent to the Salem Nuclear Generating Station.
PSEG originally proposed the plant in the early 1970s and
received a construction permit in November of 1974.
The Salem Generating Station consists of two nuclear
generation reactors with 2304 total megawatts of electrical
capacity located in Lower Alloways Creek, NJ. It sits
next to the Hope Creek Generating Station, also owned
and operated by PSEG. Salem Unit 1 began producing
electricity in December 1976.
PSEG’S nuclEar PlantS
AlMatos.indd 90 19/6/09 15:39:22
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years of
Conergy.indd 1 18/6/09 14:23:55
92 www.nextgenpe.com
Explain what this new partnership between
REC and Summit Power is about.
Dana Zentz. We are very excited about team-
ing up to promote solar as a resource for US
utilities. REC is a major global player in the
solar industry that possesses the most ver-
tically integrated value chain. As a result it
is able to systematically reduce costs across
all of REC’s business lines – silicon, wafers,
cells and modules. The REC-Summit Power
partnership combines this with Summit
Power’s extensive development experience
– in total 6000 MW of traditional and renew-
able energy technology – giving the partner-
ship powerful capabilities in responding to
utilities’ needs as they want to go solar.
Why is now the time for utilities to go solar?
DZ. During the last six to nine months in
particular, a confl uence of events is push-
ing solar energy to the forefront. Utilities
increasingly face hurdles to the implemen-
tation of non-renewable energy sources,
as well as calls from both governments and
customers to promote renewable energy.
At the same time, the costs of solar
energy are coming down at an accelerated
rate. The solar industry has, over the last
three to four years, also reached a greater
level of maturity, which means both greater
technology performance and lower execution
risks. All of these things make now a great
time to go solar.
How are solar costs coming down?
DZ. Since the demand for renewable energy
is here to stay, the challenge for solar
is to become as cost-effective as other
clean energy choices. This is happening
already as the price and performance of
PV modules rapidly improve. Indeed, PV is
already in the cost range of conventional
generation options in many instances. It
also is notable that as much as 50 per-
cent of solar system costs can arise from
Balance-of-System (BOS) components,
which we are focused on driving down sig-
nif icantly through replicating and scaling
proven solutions. Finally, Summit has pio-
neered a low-cost project-f inancing model
for wind development that can lower costs
further.
What do you think utilities want to see in a
solar resource?
DZ. In addition to lower costs, utilities cer-
tainly want to see reliability and minimized
project execution risk. For this, utilities
need experienced project development
professionals that understand the utility
business model and focus on scalability and
standardization. Our team, which has devel-
oped 6000 MW of generation projects in the
US using traditional and renewable genera-
tion technology, is very close to fi nalizing
development of a standardized reference PV
power plant, which can be replicated quickly
and cost effectively.
We also intend to employ an ‘urban
infi ll’ strategy for project siting, which will
move power generation to relatively small
sites close to loads and thereby increase
reliability benefi ts to utilities while minimiz-
ing transmission costs and development
risks associated with massive central sta-
tion power projects. This approach has clear
environmental as well as cost reduction
advantages.
Lastly, utilities need load-matched
resources. Solar can provide a more predict-
able and peak load shaped generation profi le
than wind, for example.
What are your prospects for long-term
growth?
DZ. We are optimistic. The 80 percent growth
in demand we saw in 2008 can only continue
to result in the dropping of market prices and
structural changes in the industry as com-
petition intensifi es. We are confi dent to suc-
ceed through our REC-Summit partnership,
and we have already received very promising
feedback from utilities with which we have
discussed project opportunities.
REC and Summit Power recently partnered to develop utility-scale photovoltaic projects in the US market. Dana Zentz joins us to discuss their ambitions for providing solar systems to utilities.
For more information contact us at 1.877.687.7786 or atwww.summitpower.com/solar.
Dana Zentz is Vice President of Summit Power and has over 25
years of active involvement in the energy industry. He founded and
managed Inland Energy Consulting, Inc. Inland Energy assisted
utilities, independent power producers and energy merchant
fi rms with strategic and commercial matters related to power and
natural gas supplies and energy project management. He leads
marketing efforts for the REC-Summit partnership to western US
utilities.
Solar partnership
EXECUTIVE INTERVIEW
REC.indd 92 19/6/09 15:42:47
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M
Y
CM
MY
CY
CMY
K
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Current.indd 1 18/6/09 14:29:09
94 www.nextgenpe.com
The massive deployment of renewable generation envisioned by
the Obama Administration cannot occur without a renewed invest-
ment in our country’s transmission infrastructure. The US Depart-
ment of Energy (DOE) has identifi ed transmission limitations as the
greatest obstacle to realizing the enormous economic, environmen-
tal and energy security benefi ts of obtaining at least 20 percent of
our electricity from the wind. Currently, almost 300,000 megawatts
(MW) of wind projects, more than enough to meet 20 percent of our
electricity needs, are waiting in line to connect to the grid because
there is not enough transmission capacity to carry the electricity
they would produce.
To promote the expansion of renewable energy, the transmis-
sion grid should be built to link areas with vast potential to generate
clean electricity to the areas that have signifi cant demand for electric
power. ‘Green Power Superhighways’ is a term used to describe the
power lines that would be carrying electricity from remote to populat-
ed areas. While different build-out plans can be envisioned for green
power superhighways, the key to any cost-effective plan is the use
of high-voltage transmission lines in place of the low-voltage lines
common in the US today.
Effi ciencyOutdated policies – not technical or economic barriers – are the
chief factors impeding the construction of green power superhighways.
However, some grid operational reforms could make better use of our
infrastructure. The present patchwork transmission system makes it
very diffi cult to move large amounts of renewable power around the
country. A solution is to use the existing grid more effi ciently through
technology and new operating protocols. This is not a replacement for
green power superhighways, but undertaking a set of reforms would
allow more wind and solar energy to be integrated with the grid at lower
cost. Increased effi ciency would provide greater fl exibility for changes
in electricity supply and demand, and would improve economic perfor-
mance of the grid even without renewable energy.
Building a new transmission infrastructure will save consumers
money. A robust transmission grid will give consumers access to
lower-cost electricity. On a severely constrained transmission grid, as
now exists in many parts of the United States, consumers are forced
to rely on local power plants even though plants in other regions can
produce power more effi ciently and at a lower cost. The effect of this
squeeze goes beyond fi nancial hardship for residential consumers:
businesses pass higher electricity costs on to their customers, and
electricity-intensive industries have a strong incentive to relocate
to regions with lower electricity costs, taking jobs with them. New
transmission infrastructure would increase competition in wholesale
power markets. Just as consumers in a region with a single retailer and
without high-quality roads to other regions would be at the mercy of
the prices charged by that retailer, a weak grid makes it possible for
The United States is home to vast quantities of clean
energy resources – wind, solar, geothermal and hydro-
power. Yet it lacks a modern interstate transmission
grid to deliver carbon-free electricity to customers
in highly populated areas of the country. The Obama
Administration has called for a national energy policy
that calls for the United States to double the produc-
tion of renewable energy in three years and to obtain 25 percent of
its electricity from renewable resources by 2025. Achieving this
objective will require a cohesive effort from local, state and federal
offi cials – including Congress – and signifi cant new investment in our
transmission infrastructure. But it is necessary.
TRANSMISSION PROPOSITIONAmerican Wind Energy Association CEO Denise Bode offers the case for new transmission infrastructure.
RENEWABLES
94 www.nextgenpe.com
Transmission proposition.indd 94 22/6/09 09:29:52
95www.nextgenpe.com
power generation owners in constrained sections of the grid to raise
prices beyond what they would be in a competitive market.
Recovering costStudies have consistently found that the costs of transmission in-
vestments needed to integrate wind power and other renewables are
significantly outweighed by these consumer savings. For example, ac-
cording to a recent study, a $50-60 billion investment to significantly
reduce congestion and integrate 240 gigawatts (GW) of wind in the
Eastern US would reduce electricity costs by enough to fully offset the
cost of the investment; Meanwhile, according to studies by the Elec-
tric Reliability Council of Texas (ERCOT), the benefits of an investment
in new transmission infrastructure for renewables in Texas would
grow to be larger than the costs of the investment in less than three
years; and, according to a recent analysis by Charles River Associates,
International, an investment in a high-voltage transmission overlay to
access wind resources in Kansas, Oklahoma, and Texas would provide
economic savings of around $1 billion per year, more than twice the
$400-500 million annual cost of the transmission investment.
Although the benefits of transmission easily exceed its costs,
few private firms have stepped forward to invest in transmission in-
frastructure. Why? Because the benefits are not adequately reflected
in the incentive structure offered to transmission investors. In other
words, the existing regulatory structure often gives companies little
or no economic incentive to invest in transmission that will make
consumers and society as a whole better off. State regulators, who
in many areas have primary jurisdiction over what transmission gets
built and who pays for it, are often required to weigh only the benefits
that will accrue to residents of that state, thus ignoring a major por-
tion of the benefits of a new system that also serves other states.
Most state regulators have little authority or incentive to require
ratepayers to help pay for an interstate network. Another major
obstacle is that regulators in a single state can effectively veto a
multi-state transmission network by refusing to grant the permits
needed if they feel that their state would not receive an adequate
share of the benefits.
ReformThese regulatory barriers to new transmission can and must be
overcome if we are to undertake a major investment in a new trans-
mission infrastructure. Federal legislation is needed to provide new
mission statements, adequate resources and specific timelines for
action for federal agencies, such as DOE, the Federal Energy Regu-
latory Commission (FERC) and federal lands agencies. In particular,
reform is needed in three broad areas.
The first step in building green power superhighways is to develop
a comprehensive plan. This requires both the Western Interconnec-
tion and the Eastern Interconnection to develop regional transmission
plans that identify where new or expanded transmission capacity is
necessary to connect renewable energy resources to the grid and,
ultimately, to load centers.
Facilities identified in the interconnection-wide plan as necessary
for the development of green power superhighways should be eligible
for broad, regional cost allocation. Specifically, FERC should allocate,
based on electricity usage, the capital and operating costs of these
transmission lines across all load-serving entities on an interconnec-
tion-wide basis. In regulatory terms, the “determination of need”
would be made in the regional plan, approved by FERC.
In addition to regional planning and cost allocation, substantial
reform of the transmission siting process is required to meet national
renewable energy goals. The most effective model is the siting author-
ity that was given to FERC over interstate natural gas pipelines. For
green power superhighways, the extra-high-voltage facilities defined
in the regional plans would be subject to FERC approval and permit-
ting. Separate siting approval at the state level would not be required.
FERC would act as the lead agency for purposes of coordinating all ap-
plicable federal authorizations and environmental reviews with other
affected agencies.
The road forward Modernizing America’s outdated transmission infrastructure
will not be easy. It will require bold, forward-looking action from
leaders who recognize that addressing America’s economic, energy
and climate challenges must be a top priority in the coming years. All
three require new, innovative ways of thinking about energy policy at
the local, state and federal level. And all three will require a modern
transmission system that is able to deliver clean, abundant renewable
energy to homes and businesses efficiently and reliably. These are
challenges that we can and must address now. n
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96 www.nextgenpe.com
Among President Obama’s plans for a cleaner, green-
er America, quietly tucked away behind renewable
increases and carbon decreases, is the plan to
transform the US transportation structure. With an
estimated number of 700 million cars on the road
globally, producing 2.8 billion tons of carbon diox-
ide, the new administration is in a desperate bid to
dramatically change the way Americans travel. Obama’s launch of
the Plan for America upon his election displayed his commitment to
ELECTRIC RENAISSANCE
reducing the number of emissions produced by America’s notorious
SUVs. As oil prices continue to rise across the globe, the US is just
one of many countries attempting to make themselves more self suf-
fi cient through increased use of renewables, and cutting down on the
amount of imports that make it so dependent on its volatile relations
with the Middle East.
Whether it’s due to unpredictable international politics or a genu-
ine desire to save the planet and reduce the amount of carbon dioxide
emitted in the US, Obama is now attempting to conceptualize plug-in
hybrid cars (PHUVs) as a realistic form of transport for all Americans,
not just a fancy spend for the rich.
The targets for the initiative are to see one million PHUVs operat-
ing on US roads by 2015, with a number of ‘green’ consequences to
Why plug-in hybrid cars are on the rise again. By Natalie Brandweiner
HYBRID VEHICLES
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97www.nextgenpe.com
Electric vehicles gradually died out glob-
ally, although minor usage in Europe
and the US occasionally graced the in-
dustry with a slight nod; for example,
with the General Motors’ ‘Electrovair’
in 1966 and ‘Electrovette’ in 1976.
It has only been during the past
decade that the concept of electric-
powered cars has steadily returned,
infl uenced by the desire to cut usage
of imported oil. In response to the
California Air Resources Board’s
mandate on electric car usage,
major American car manufactur-
ers developed electric vehicles
(EVs), but understanding the
limited market for them, refused
to properly promote them, re-
sulting in the withdrawal of EVs
from the market.
That is, until now. Growing
awareness of the deteriorat-
ing global climate has seen a
rise in membership for lobbying groups campaign-
ing for climate change, from both the American public
and from leading businesses.
Plan for AmericaWith pressure on to meet Obama’s demands, major US carmakers
are now gearing themselves up to unleash their new and improved
lines of EVs. During a speech in March, Obama unveiled a plan to
increase public interest in EVs through
tax incentives. By encouraging people
to trade in old cars for newer, more
fuel-effi cient vehicles, Obama is also
hoping to increase car sales and rescue
Detroit’s car industry, following a $17.4
billion bailout by the administration in
December 2008.
Obama has pointed out that such
fl eet modernization programs, which
provide a generous credit to consumers
who turn in old, less fuel-effi cient cars
and purchase cleaner cars, have been
successful in boosting auto sales in a
number of European countries.
Having already attempted to solve
the economic and power generation
crisis with a commitment to creating
a new ‘green collar’ jobs industry, he seems to be extending his
method into the automotive industry. In a bid to revive the US car
industry with an “unending fl ow of tax dollars”, Obama and his ad-
ministration appear to be hoping that an investment in EVs will both
GENERAL MOTORSIn a partnership with Segway,
General Motors unveiled in April its
prototype two-seat electric scooter,
named Puma – Personal Urban
Mobility and Accessibility. The vehicle
can hit up to 35mph in the city
before needing to be recharged. GM
has not yet begun mass producing
the vehicle, instead describing it as
a demonstration to show the world
what it can do in terms of green
technology. As the pendulum for public
support of EVs has only begun to
lightly swing, it casts doubt as to
whether Obama is truly confi dent of
his plug-in proposals.
Electric vehicles gradually died out glob-
ally, although minor usage in Europe
and the US occasionally graced the in-
dustry with a slight nod; for example,
with the General Motors’ ‘Electrovair’
in 1966 and ‘Electrovette’ in 1976.
It has only been during the past
decade that the concept of electric-
powered cars has steadily returned,
infl uenced by the desire to cut usage
of imported oil. In response to the
California Air Resources Board’s
mandate on electric car usage,
major American car manufactur-
ers developed electric vehicles
(EVs), but understanding the
limited market for them, refused
to properly promote them, re-
sulting in the withdrawal of EVs
rise in membership for lobbying groups campaign-
technology. As the pendulum for public technology. As the pendulum for public
whether Obama is truly confi dent of whether Obama is truly confi dent of
Obama’s target for the initiative
is to see 1,000,000
PHUVs operating on US roads by
2015
derive from this aim. However, Obama’s proposal, which he claims is
based on environmental concerns, is hardly a revolutionary invention.
An electric eraDesigns of electric cars date back
almost two centuries: in 1835, Scots-
man Robert Anderson invented the
fi rst crude electronic carriage, which
failed due to the inability to recharge
the battery. The concept of electric
transport was formulated mainly in
Europe; the US didn’t begin such a
program until 1897, when Electric Car-
riage built a fl eet of NYC taxis.
The electric era reached its peak
in the early 20th century with an
excited upper class buying into the
novelty of ‘city cars’. The arrival of the
Detroit Electric in 1912, and the belief
that electric cars were the easiest and
cleanest for women, saw them outsell-
ing gasoline-powered vehicles for a short period of time.
However, the lack of transistor-based electronic technology
meant that the golden era of electric cars ended almost before it had
begun, as America became prosperous in other sources of energy.
Plug in-obama.indd 97 19/6/09 15:53:19
98 www.nextgenpe.com
boost his target of one million PHUVs on the road by 2015 and save
the market.
In March, Obama endorsed his proposal with a tour of the Edison
electric car plant in California and declared a 2.4 billion program
would be used to develop plug-in hybrids.
“We can remain one of the world’s leading importers of foreign
oil, or we can make the investments that will allow us to become the
world’s leading exporter of renewable energy. We can let climate
change continue to go unchecked, or we can help stem it,” he said.
He has pledged an investment of $15 billion dollars a year for re-
search on green energy and transportation, in an effort to understand
more about EVs and meet those long-term goals of carbon reduction
promised in his Plan for America.
“The problem is not a lack of technology – you’re producing the
technology right here – the problem is, for decades we’ve avoided
what we must do as a nation to turn challenge into opportunity,”
Obama said at the time.
He certainly seems to be setting a trend. Across the pond, UK
Chancellor Alistair Darling unveiled the 2009 UK budget on April
22, in which he committed his support for research into EVs. The UK
government announced a £250 ($366) plan with a similar strategy
of incentive – although the British version is without tax – providing
consumers with £5000 ($7327) each to buy low-carbon or electric
cars from 2011. It seems as though the trend is catching on.
However, despite these gallant efforts, it remains to be seen if
Obama can put his money where his mouth is, and even if he does
stand by his word, is this really the most energy effi cient plan, and
will it be able to fi t in with the current infrastructure?
The major component needed to make effi cient use of electricity
is storage: using storage effectively is crucial to providing seamless
TOYOTAToyota is on its way to emerging as the new EV manufacturing super power,
well ahead of schedule. Their Toyota Prius hybrid, known as a DIY plug-in
hybrid, operates on a mixture of both petrol and nickel-metal battery, and a
few hundred Americans have begun testing the car to see
if it is not only benefi cial to the environment, but also benefi cial to the
driver’s pocket.
There are now six Prius dealerships across the US that are converting
the original Toyota model to the plug-in technology, following a rise in interest
after oil prices jumped to $4 a gallon in mid-2008. However, at a cost of
$10,900 for conversion to a hybrid plug-in, it remains to be seen if this is an
accurate indicator of current trends, or whether EVs still remain a novelty
unlikely to enter the lower-class market.
TESLAFollowing an original
partnership with utility
company PG&E in
2007, Tesla Motors
is committed to the
production of an EV.
The motor company
is now taking orders
for the Model S, an
electric family sedan that can travel up
to 300 miles per charge. The Model S is rechargeable
from 120V, 240V or 480V outlets, with the latter
taking only 45 minutes to charge. The real asset of
the Model S is not its chargeability, however great
Tesla have emphasized it, but on its ability to become
the fi rst car to ride the highway. Its capabilities of
reaching a speed of 0-60 mph in 3.9 seconds certainly
seem to leave all the previous connotations of the slow-
but-steady electric car at the starting line. However,
with an estimated price tag of $49,900, this is in no
doubt still a toy for the rich to play with.
partnership with utility
electric family sedan that can travel up
the original Toyota model to the plug-in technology, following a rise in interest the original Toyota model to the plug-in technology, following a rise in interest
$10,900 for conversion to a hybrid plug-in, it remains to be seen if this is an $10,900 for conversion to a hybrid plug-in, it remains to be seen if this is an
Plug in-obama.indd 98 19/6/09 15:53:25
99www.nextgenpe.com
energy transmission to a battery, fuel cells create electricity through
a chemical reaction between hydrogen and oxygen, with water being
the only by-product.
The advantages hydrogen fuel cells have over EVs combats the
problem that notoriously dissuades so many from investing into
one: mileage. Obama’s plan is to
have vehicles that can get up to 150
miles per gallon, but Honda’s latest
fuel cell car, the FCX Clarity, has the
ability to travel 380 miles before
needing to be charged, taking only
three to four minutes when it does
need charging. With 12 hydrogen
stations nationwide and a plan to
build more for commercial use, it
seems likely that hydrogen fuel cell
vehicles may overtake EVs as the
people’s choice in Japan.
Before any decisions can be
made as to which model of EV to
promote or how to even fuel the
battery cell, the new administration
must persuade the public that the
idea makes sense. With the func-
tion of these cars dependent on the
national grid, changes in the grid’s
infrastructure are also needed to
cope with the huge potential demand. But more so than any other
challenges, Obama now faces the greater task of conceptualizing
EVs as the norm, and convincing traditionally big-car loving Ameri-
cans that a battery-operated car is not a glorifi ed
golf buggy.
FORDAs electric utility company with the largest EV fl eet, Southern
California Edison is partnering with Ford Motor Company to complete
the link between powering the vehicle and the electric grid. Both CEOs,
Alan Mulally and John Bryson, have advised that the partnership is
an attempt to make progress on energy security and climate change
with a solution that consumers can tangibly use to produce energy
conservation results.
Ford is due to produce a fl eet of Escape Hybrid SUVs that will be
engineered by its team to become fully PHEV capable, although it is yet to
name its battery partner. However, the fl eet will only be the fi rst of its
kind, and as a demonstration fl eet, this initial version is unlikely to result
into the fi nal model.
supply during peak hours of demand. There is already much promise
and speculation over the arrival of EVs, but integrating them into the
national grid is not going to be easy, or successful, without clever
manipulation of distributed power storage.
The numbers of EVs are expected to rise gradually, and currently
fewer than 50 million garages are
suited to store and charge the cars
overnight, so it seems unlikely that
this will translate into all 50 million
being on the grid at the same time.
Even so, charging the cars is likely to
place great strain on the existing grid,
which was not originally built with the
servicing of plug-in hybrids in mind.
The major US manufacturers are pre-
dicting to have their EVs on the road
by 2012, and if the grid system doesn’t
evolve at a similar rate, there is sure to
be an increasing gap between supply
and demand, again highlighting the
importance of energy storage.
It follows that it is not only elec-
tric car models that need developing,
but also our already fragile electric-
ity grid. It has also been a noted that
there is a huge timing issue involved:
with the EVs needing most energy for
the commute to or from work at the tail end of peak usage hours,
most of the battery capacity that is provided by these vehicles is
going to be unavailable when it is needed.
One alternative to the problems posed by lithium-ion batteries
found in EVs is Japan’s answer: hydrogen fuel cell cars. Rather than
kind, and as a demonstration fl eet, this initial version is unlikely to result kind, and as a demonstration fl eet, this initial version is unlikely to result
“It is not only electric car
models that need developing, but also our already fragile
electricity grid”
Plug in-obama.indd 99 19/6/09 15:53:29
Our nuclear FUTURE
Emphasis on renewable energy is increasing and as other viable energy sources are explored, nuclear energy has emerged once again as a solution. David Hill of Idaho National Laboratory tells Power & Energy of the importance of nuclear in helping us to become carbon-free.
Only a third of total energy consumption in the US is ac-
counted for by the electricity used by individual house-
holds. There are many who champion nuclear power as a
carbon-free energy source and a way of reducing the CO2
produced by electricity generation, but what about the other two-
thirds of the total?
Idaho National Laboratory’s David Hill’s main venture is taking
nuclear energy beyond electricity, in an attempt to create a more
effi cient means of energy usage across the board. “If you consider
nuclear energy just as a source of heat – in particular, high tempera-
ture heat – you can apply that to conversion of biomass, or other
forms of carbon bearing materials, to convert them into liquid fuels
in a much more advantageous way,” Hill explains.
“In taking biomass or coal and converting it into a liquid fuel –
and in the case of coal it is through a process called Fischer Tropsch,
a German method of retrieving diesel from coal – it requires a lot
of energy, and that energy is usually provided by burning coal or
gas, or something which emits CO2. If you can substitute nuclear
produced heat for that, you can lower or remove the carbon dioxide
in the production of the liquid fuel.
Carbon-free “So if you start from coal, you can end up with any long chain
hydrocarbon; you’ve still got diesel fuel, but you’ve done it in an es-
sentially carbon free way. If you start with biomass, then you reduce
the carbon dioxide effect of the whole process and have the liquid
fuel produced in a much lower, although not carbon free, way,” he
says.
Hill and his team are taking advantage of the carbon-free prop-
erties of nuclear, and producing electricity, or any other form of
non-carbon produced heat, to create transportation fuels – another
third of total energy usage. The industry sector accounts for the fi nal
portion, directly using energy within refi neries or chemical process-
ing plants.
Burning natural gas usually derives this energy, Hill explains.
“Again, if you have a high temperature reactor, you can substitute
100 www.nextgenpe.com
RENEWABLES
Hill.indd 100 19/6/09 15:41:21
101www.nextgenpe.com
and Congress, or the public, can turn to for
well founded, factual information about
what nuclear energy can and can’t do and
what its limitations are. We can identify
problems that need to be solved, and set
about solving them. Nuclear energy can be
such a political subject, so we try and avoid
that and just focus on the scientifi c facts
and in the engineering demonstrations of
what’s possible.”
Nuclear has always been a political
issue, and the reputation it gained in the
past was the cause of the slow phase out
of nuclear research. Hill advises that in no
way do they criticize the decisions or situa-
tions that may have taken place previously,
they are simply attempting to change at-
titudes towards nuclear.
One of the problems prominent in nuclear’s past was waste man-
agement. Hill explains that this is still very much an issue here in the
US, and across the world. “We are depending again on government
funding on waste in the sense of spent nuclear fuel – how to store it,
how to ship it, different processing schemes, different waste forms,
robust wastes forms for actinides or other vision products in the
context of the US program.”
that heat directly in, and thereby
reduce the carbon footprint of the
processes.
“Another factor in this is many of
these processes require either hydro-
gen or oxygen. So you can either use
the heat directly, or in conjunction with
hydrogen and oxygen, which also can
be produced beginning with nuclear
energy through high temperature elec-
trolysis, for example.”
INL is one of the 17 larger national
labs located around the country, and
is designated as the nation’s leading
laboratory for nuclear energy research.
Most of the labs were created in the
post-war environment to expand on the
discovery of fi ssion and research into
atomic energy, and even for the development of nuclear weapons.
As development progressed and nuclear energy became a com-
mercial business, the labs broadened their horizons and became
science labs and the focus on nuclear was lost, as all labs special-
izing in nuclear were slowly phased out. Then a few years ago the
government announced its intent to take parts of two existing orga-
nizations in Idaho and merge them, creating the Idaho National Lab,
which was made the center for nuclear energy research, develop-
ment and demonstration.
“We’ve been operating like that for over four years now,” says
Hill. “It’s important because it provides a focal point for nuclear
energy research in the US rather than thinking of it as a distributed
activity. There are many reasons why Idaho was chosen for it, but
the primary reason is because of the history of the place – we have
many of the research nuclear facilities that are still operating in the
US. Not all of them, but many, and that concentration of research
facilities makes it a logical place to do this work.
“The site itself began in 1949 as the National Reactor Testing
Station when the US was developing nuclear energy. This is the
place where the government chose to test its reactors.”
Toeing the lineINL is funded by the government, like all other federal institu-
tions, and therefore must steer its research to coincide what the US
as a whole wants to achieve, as well as the politics of the country.
“The way we work to achieve that is by doing world class research,
and the majority of our work goes to nuclear energy in some form or
another – nuclear reactor development, waste management, looking
at fuels development, processing and so on,” he explains.
“We try to do it without advocacy. In the past, we’ve found that
institutions have evolved their own thoughts of what the right path
forward was and it evolved into advocating particular systems. We
seek to be the place where knowledge is brought together, because
other labs don’t conduct nuclear work, and where the government
David Hill is the Deputy Laboratory Director for Idaho National Laboratory.
In 2009, the Idaho National Laboratory celebrates its 60th anniversary.
Naval proving groundThe area was fi rst used by the US government in the 1940s to test
artillery. In 1949, the newly formed Atomic Energy Commission
established the National Reactor Testing Station. In the 1970s, the
site was designated a national laboratory.
First peaceful use of nuclear powerIn 1951, one of the most signifi cant 20th century events took place
nearby – the fi rst usable amounts of electricity were generated by
nuclear power.
Dawn of the nuclear navyThe technology for the world’s fi rst nuclear-powered submarine
was pioneered in Idaho. From 1953 to 1994, thousands of sailors
trained here using full-scale submarine prototype reactors.
Largest concentration of reactorsMore than 50 nuclear reactors have been built and operated at INL –
the largest concentration of reactors in the world.
INL HISTORY
Hill.indd 101 19/6/09 15:41:24
Personal predictionIn regards to America’s future needs, Hill’s personal opinion is
that nuclear energy will play a very large role. “I believe that the
energy problem is suffi ciently severe, and I’ve believed my whole
life that the solution is the famous answer to the multi-choice ques-
tion, all of the above.
“We have to develop every form of energy source in a way that
it is environmentally and socially responsible. And then the public,
either directly or through the electric representatives, decide on
what energy they’re willing to pay for in the country. Nuclear rep-
resents about 20 percent of the US’s electricity, and any sustain-
able quantitative model of how the we proceed to limit our carbon
dioxide emissions starts from the premise that that fraction will
almost certainly be retained, if not expanded, because it’s here –
it’s today. You can build reactors and they are essentially carbon
free.
“Overall, I expect nuclear to hold itself as a fraction of the US
electricity supply, maybe increase, depending on what the econo-
my does. I expect over a slightly longer run, the medium term, for
nuclear energy to be seen in a broader context than just electricity.
How that will work out in the US and around the world becomes
increasingly uncertain. But it’ll have a strong
role – it’s inevitable because of the merits it
brings, which is carbon free electricity suit-
able for base load application, and it can be
combined with other sources down the road,”
he explains.
“There are limitations, mostly of industrial
infrastructure: a lack of welders, for example,
or a lack of the ability to manufacture large
vessels, and simply the time it takes to build a
nuclear plant will inherently limit the amount
that nuclear can contribute in the short term.
But that, in my opinion, is not a reason not to
pursue it aggressively. The best nuclear plant
is the one you started last year, not the one
you’re thinking about now. Just because it
takes a long time should not be a reason not
to start.”
Accelerating technological breakthroughs
• Promotes licensing of new nuclear
plants and researches an advanced
nuclear fuel cycle.
• $242 million for Nuclear Power 2010,
an industry cost-shared effort to
bring new nuclear plant technologies
to market and demonstrate
streamlined regulatory processes.
• $302 million focuses the Advanced
Fuel Cycle Initiative on innovative
transmutation and separations
research and development.
Advancing nuclear waste management
• Clean up the environmental legacy of
the Cold War.
• $5.5 billion to protect public health
and safety by cleaning up nuclear
research and weapons production
sites.
• Finish cleanup projects at Sandia
National Laboratory and Argonne
National Laboratory in 2009.
Continuing essential engineering design
• $495 million to continue development
of the nuclear waste repository
and support defense of the license
application while under Nuclear
Regulatory Commission review.
• The Administration will work with the
Congress to provide a stable source
of funding for the repository
• Establish a budget-neutral
mechanism for the Department
to receive appropriations equal to
annual Nuclear Waste Fund receipts
from utilities.
US FISCAL BUDGET 2009: MONEY FOR NUCLEAR
102 www.nextgenpe.com
“The best nuclear plant is the one you started last year, not the one you’re
thinking about now”
In operation since 1949, INL is a science-based, applied engineering national
laboratory dedicated to supporting the DOE’s missions in nuclear and energy
research, science and national defense.
Mission
Ensure the nation’s
energy security with safe,
competitive and sustainable
energy systems and unique
national and homeland
security capabilities.
Vision
By 2015, INL will be the
pre-eminent nuclear energy
laboratory with synergistic,
world-class, multi-program
capabilities and partner-
ships.
Safety
The health and safety of
every employee, both on and
off-the-job, is critical to our
mission, and we demon-
strate world-leading safety
behavior, safety perfor-
mance and environmental
stewardship.
ABOUT INL
Hill.indd 102 19/6/09 15:41:26
103www.nextgenpe.com
pacity, incorporating different concentrator
technologies, which are becoming available
in the market. It is a commercial power plant
providing energy to the local community, as
well as a research site for the implementation
of the technology. ISFOC has become a world-
recognized reference in CPV.
“Our ISFOC project has been critical in
moving CPV forward at industrial scale,” ex-
plains Dr. Pedro Banda, Director General of
ISFOC. “After a year of deployment, we have
no doubt that CPV is the most promising
energy resource for the future.”
SolFocus was the first company to in-
stall its CPV technology in the project and
has had 0.5 MW on site for a year. After
nearly a year, energy output has been above
projected levels.
“We chose SolFocus’ CPV arrays as part
of the ISFOC project because we believed
their non-imaging optical design would pro-
vide efficient and reliable systems,” says Dr.
Banda. “We had confidence that they would
be able to meet not just the design chal-
lenges, but the manufacturing challenges for
volume deployment as well; we could not be
more pleased with the results.”
While Puertollano, Spain has a good solar
resource, the energy generation capability
of this type of power plant in a high solar re-
source region such as the southwest US will be
exceptional. CPV systems are being deployed
in numerous places around the world and have
the potential to deliver hundreds of megawatts
of electricity in the near future. n
The challenge that has been facing
solar for over a decade in its drive
to become a mainstream renew-
able technology has been cost.
The most important element in
determining the levelized cost of energy is
the efficiency of the panels; in other words,
the amount of sunlight that can be converted
to electricity. The second important element
is manufacturability of technology. If new
technologies are going to become mainstream
energy sources, they must be designed for
low-cost, high-volume manufacturability.
Concentrator photovoltaic (CPV) systems
are the newest entrant into the commercial
solar market. CPV technology has just moved
into commercialization, yet already these
systems are proving their ability to provide
the lowest cost solar energy and the highest
energy harvesting capability in the high solar
resource regions of the world.
CPV systems convert light energy into elec-
trical energy the same way that conventional
photovoltaic technology does. The difference
with concentrator PV is the addition of an opti-
cal system that focuses a large area of sunlight
onto each cell. Also, the cells used in CPV sys-
tems are different from silicon PV cells, and are
capable of converting very large amounts of
sunlight into energy at high efficiency, which
allows the optical systems to be used. With
high concentration systems such as SolFocus’
SF-1100S, a multi-junction cell of 1 cm squared
is illuminated by the sun, magnified 650 times.
The result is that the cell, per unit of energy,
costs dramatically less than that of conven-
tional photovoltaic technologies.
Even with advances in traditional silicon PV
where today you can find best-in-class panels
with 19 percent efficiency (average of 15 per-
cent), CPV panels have reached efficiency levels
above 25 percent, with significant headroom
for accelerating improvements in efficiency in
the near future. These CPV panels are mounted
on dual-axis trackers, which keep the panels in
direct alignment with the sun. The combination
of high-performance optics, high-efficiency
cells and precise tracking allows CPV systems
to deliver advantages not available with other
solar technology approaches. CPV technology
also provides environmental sustainability.
Land use is optimized, there is no permanent
shadowing, no water is consumed in the pro-
duction of electricity and systems are highly
recyclable, with a small carbon footprint.
CPV case studyThe first true case study in CPV technol-
ogy was established last year by The Insti-
tute of Concentration Photovoltaic Systems
(ISFOC) in Puertollano, Spain – a public-
private partnership promoted by the Castilla
La Mancha government and the Universidad
Politécnica de Madrid. Within this project,
ISFOC is executing 3 MW of power plant ca-
Efficient technologyNancy Hartsoch explains how concentrator photovoltics systems bring high-energy yield and low energy cost.
Nancy Hartsoch is the Vice
President of Marketing for
SolFocus, Inc. Prior to joining the
company she was CEO of Pacific
Technology Group and COO/VP of
Acer Labs USA. In 2008 Hartsoch
was instrumental in forming
the CPV Consortium, a global
industry organization for which she
currently is the Chairperson.
ASK THE EXPERT
“CPV panels have reached efficiency levels above
25 percent, with significant headroom for
accelerating improvements in efficiency”
SolFocus.indd 103 22/6/09 10:46:08
TeamworkHow Northwestern University is helping energy andsustainability to work together.
SUSTAINABILITY
One of the fundamental human
needs is the energy required to
power society. The issue of energy
in the 21st century has germinated
a great deal of attention, economic
thoughtandplanning,governmentpolicyand in-
ternationalstrife.Energysecurity feeds thenight-
mares throughout society and government. The
rapid increase inenergyneeds forecasted for the
next50years isproblematic, and the rise inener-
gy’s cost is bringing about inflation in the devel-
opedworld andhardship in developingnations.
Northwestern is tackling the twin issues of
energy and sustainability – encompassing glob-
al issues such as energy, water, materials, food
and waste – by consolidating the university’s
existing strengths and fostering new efforts in
these areas. The Initiative for Sustainability and
Energy at Northwestern (ISEN)was announced
in October.
Strategy“Underlying the challenge of sustainability
and energy is one issue that universities unique-
ly cansolve: todevelop the fundamental scientif-
ic understanding to provide sustainable (and at
reasonablecost)energyrequiredbyallpeopleon
earth. Gaining and disseminating this under-
standing is the core of the ISEN mission,” said
PresidentHenryS. Bienen.
“ISEN is an umbrella organization designed
to create, advance and communicate new sci-
ence, technologyandpolicy forsustainabilityand
energy. Itsparticular focus isonsustainableener-
gy supply, demand and use,” saysMark Ratner,
ISEN’s co-directorwithDavidDunand.
Ratner citesRalphCicerone,Presidentof the
NationalAcademyofScience,who, inhis remarks
to that group’s 2008 Annual Meeting, listed five
points addressing how scientists and engineers
couldhelpsolve theproblemofsustainabilityand
energy. They are to perform research relevant to
energy supplies andusage; to formulate andan-
alyzeopinions fordecisionmakers; to inform the
public about research and policy options; to ad-
vise and help government officials and business
leaders; and to develop scientific and engineer-
inghuman resources.
“While ISEN’s program takes on this
Cicerone challenge, ISEN’smost important goal
is to integrate the university’s efforts in energy,
sustainability and outreach,” Ratner says.
CenterPiece ED:18oct 19/6/09 15:27 Page 104
“We do not limit ISEN to scientists and engineers alone,” adds
Dunand. “We draw on the intellectual and programmatic capabilities of
all of Northwestern’s schools and centers to provide a new integrated
direction for the University, focusing on the many aspects of the chal-
lenge of sustainability and energy.” ISEN directs that focus on the sup-
ply, demand, conservation, storage, transmission and optimization of
energy; the policy, programs, economics, management, metrics, edu-
cation and outreach of sustainability; and disseminates this informa-
tion by reaching out through public information, web site, teaching,
lectures and consulting.
“ISEN will catalyze and conduct research and education, the two fun-
damental products of the university through supporting and drawing to-
gether the capabilities that Northwestern already has,” says Ratner. “We
sponsor anddevelop new capabilities for addressing the issues of sustain-
ability and energy.” ISEN provides funds for stipends of postdoctoral fel-
lows andundergraduate students, aswell as graduate fellowships through
a cluster funded by the graduate school. The initiative also organizes con-
ferences at Northwestern on the issues of energy and sustainability.
HistoryNorthwestern has a substantial history in the areaof sustainability and
energy. Charles David Keeling, the scientist who first alerted the world to
the dangers of carbon dioxide and temperature change, was a
Northwestern graduate (PhD, chemistry, 1954). The Keeling Curve is still
used tomeasure theprogressivebuildupof carbondioxide, themain green-
house gas driving climate change, in the atmosphere. Northwestern’s ef-
forts in areas such as catalysis and new materials have long provided
abilities toproduceanduseenergymore efficiently, andevenaddress some
parts of the sustainability problem.
“ISEN focuses on the two major strengths that universities can con-
tribute: ideas and teaching,” says JayWalsh, Vice President for Research.
“Northwestern’s strong culture of interdisciplinarity across our schools
gives ISEN a breadth of vision that few research universities canmatch.”
Argonne National Laboratory is ISEN’s primary research partner.
Northwestern and Argonne in collaboration are developing an integrated
research platform in this area. The partnership with Argonne will encour-
age the partnership andpromotion of other energy activities, including the
Argonne-Northwestern Solar Energy Research Center (ANSER), the Center
for Energy Efficient Transportation (CEET) and the Institute for Sustainable
Practices (ISP), aswell as variousNUcenters on catalysis, nanoscience and
technology, and transportation.
Working through ISEN,Northwestern faculty partnerswith people and
capabilities within the university with industry and government, interna-
tional organizations, other educational institutions and informationanded-
ucation resources, including television stations, elementary schools,
churches and libraries. ISEN isworking to establish corporatepartnerships,
as well as reaching out to the larger
community, partly for identifying
funding opportunities, but mostly for
increasing awareness and building
Northwestern’s programs in energy
and sustainability.
Educational goalsISEN’s first step educationally is
to develop four campus-wide under-
graduate and graduate courses on
global issues related to energy and
sustainability. The first of thesewill be
offered in Spring 2009. Among ISEN’s
longer-term educational goals is the
establishment of an energy minor
across several schools and to create a
five-year master’s degree program in
energy studies. The initiative plans to
offer a summer program, including in-
ternships, for students from K-12
through post-graduate education.
“It’s our students as much as our researchers who are driving us to
seek solutions in the areas of energy and sustainability,” says McCormick
Dean Julio Ottino, who initiated the planning nearly three years ago with
Tobin Marks which resulted in ISEN. “They realize they will need this edu-
cation and experience to become the workforce of the future.”
In order to seed and support these activities, ISEN is working with
Northwestern’s administration to raise funds locally and globally. “We
are helping people both within and outside the university to teach and
to learn, and to address and solve the problems of energy and sustain-
ability,” says Ratner. “Through ISEN, we hope to transform the area of
energy and sustainability from a challenge to an accomplishment for all
the people of the planet.” �
105www.nextgenpe.com
For more information about ISEN, view the ISEN web site at www.ISEN.northwestern.edu, a one-stopsource for information and sustainability at Northwestern.
© Northwestern University Office for Research. Reprinted with permission from CenterPiece Fall 2008.
Mark Ratner and David Dunand
CenterPiece ED:18oct 19/6/09 15:28 Page 105
106 www.nextgenpe.com
Contrary to just a decade ago, there is virtually unani-
mous agreement in the scientifi c community that human
activities are a primary cause of climate change. Man-
made causes, such as operating power plants and motor
vehicles, have increased the concentration of greenhouse
gases in the atmosphere, resulting in global warming. Eleven of the
past 12 years have been the hottest since 1850 and 2006 was the
warmest on record. Sea levels are rising, and Category 4 and 5 hur-
ricanes are becoming more frequent around the globe. Mitigating the
negative effects of climate change will require comprehensive plan-
ning and aggressive, cooperative action worldwide.
Although this is a global problem, the United States must take the
lead in remedying a wide range of adverse climate impacts, because
our nation is the largest consumer of energy in the world. In 2020,
US energy consumption is projected to grow by 23 percent, and in
2025, the Energy Information Administration projects that worldwide
energy use will grow by 57 percent. There is no way to avoid it, the
Federal government must harness its energy use to reverse the global
warming trend, before it is too late.
We should take the view that the challenge before us is an
opportunity for positive change. By taking meaningful steps to ad-
dress climate change, we can simultaneously tackle our nation’s
increasing energy needs and reduce our dependence on foreign oil.
New laws and regulations promoting increased energy effi ciency
and alternative energy sources across various sectors will result in
lower carbon emissions and reduce America’s dependence on fossil
fuels.
It is logical that Federal government buildings are a good place to
start when implementing alternative sources of energy, because the
Federal government is the largest consumer of energy in the world.
In fact, the Federal government owns 333,000 buildings worldwide,
comprising just over 2.5 billion square feet. In the United States, the
asset count is 293,651 buildings comprising approximately 2.4 billion
square feet of space. Worldwide, the Federal government leases ap-
proximately 57,000 buildings, comprising 557 million square feet of
space. In the US, the Federal government leases 23,000 buildings,
just under 291.2 million square feet of space.
A systematic policy of ‘greening’ Federal buildings, or integrat-
ing construction practices that signifi cantly reduce the environmental
footprint of a building in comparison to standard practices, will result
in a reduction of our net environmental impact. However, without
signifi cant transformation of building construction and operations,
adverse impacts on the environment will increase with population
growth and changes in other demographic and economic factors.
Red, white and green
The federal government has a major role to play in making America more energy effi cient and environmentally responsible, says Rep. James L. Oberstar, Chairman of the House Committee on Transportation and Infrastructure.
ENERGY EFFICIENCY
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The American Recovery and Reinvestment Act of 2009 (P.L. 111-5),
which was signed into law on February 17, 2009, makes an historic
investment in promoting energy efficiency. The law provides $6 bil-
lion to upgrade and improve energy efficiency in GSA’s inventory of
Federal buildings, including the construction of border stations on
the northern and southern borders of the US. The goal is to save tax-
payers $2 billion every year by modernizing more than 75 percent of
Federal building space. The Recovery Act also invests $4.2 billion in
energy efficiency and modernizing projects at Department of Defense
facilities, including military medical facilities and Army barracks.
Although some features of ‘greening,’ such as high-efficiency ap-
pliances and lighting, can be more expensive and design costs may be
higher, the operational cost savings will eventually recoup any initially
higher investment. Green initiatives and energy efficient repair and al-
teration projects for Federal buildings will save money on energy costs
long term. However, making Federal buildings more energy efficient not
only saves taxpayer money in lower energy bills, it also creates jobs
and increases the value of the Federal inventory. The Associated Gen-
eral Contractors of America testified before the T&I Committee that $1
billion in nonresidential construction creates or sustains 28,500 jobs.
Further, deteriorating conditions of Federal buildings have caused the
GSA, which provides facilities for approximately 60 Federal agencies,
to abandon Federally-owned facilities for leased space. GSA’s annual
lease bill, which is paid by American taxpayers, is approximately $4
billion every year. Repairing, altering and upgrading Federally-owned
facilities makes good fiscal sense all around.
The Federal government is also studying the installation of plant-
ings on rooftops, called ‘green roofs,’ on new Federally constructed
buildings. Although this practice is more common in Europe than in
the United States, it has several benefits, including increasing roof
longevity and reducing the need for heating and cooling by acting as
an insulating barrier.
The scientific evidence is crystal clear – Planet Earth is warming.
But climate change, as well as America’s corollary need for greater
energy independence, is not just an environmental issue – it’s a na-
tional security issue, an economic issue, an humanitarian issue. It’s
an issue we cannot afford to ignore any longer. n
I have advocated that the Federal government play a central role
in supporting and stimulating applied research in alternative energy
systems for nearly 30 years. In fact, in 1977, I introduced legislation
calling for accelerated procurement of photovoltaic solar electric
systems (PV), which convert solar energy into electricity, in new and
existing Federal facilities. That provision was incorporated into a com-
prehensive national energy bill, the National Energy Conservation
Policy Act (PL 95-619). Unfortunately, the PV provision in the law was
not funded, so we have no way of knowing how effective it would have
been and how much progress our nation could have made in reducing
our dependence on foreign fossil fuels.
When I became Chairman of the Committee on Transportation
and Infrastructure in 2007, one of the first pieces of legislation that
my Committee passed directed the General Services Administration
(GSA) to install a PV system at the Department of Energy’s (DOE)
headquarters. DOE’s overarching mission is to advance the country’s
national, economic, and energy security and to promote scientific
and technological innovation. Consequently, it is only appropriate
that DOE headquarters serve as a model for the entire nation to save
energy by utilizing cutting-edge photovoltaic technology.
The photovoltaic system is an important energy technology that
is environmentally sensitive and contributes to the nation’s energy se-
curity. Because it generates electricity from sunlight, PV produces no
air pollution or hazardous waste. It doesn’t require liquid or gaseous
fuels to be transported or combusted. Because its energy source,
sunlight, is free and abundant, PV systems can guarantee access to
electric power year round, and they are virtually maintenance free.
This is just one opportunity where the Federal Government can make
a dent in global warming.
In addition to installing
and implementing alternative
energy sources, we can cur-
tail energy use through such
means as energy-efficient
appliances, lighting and
weatherization. The Energy In-
dependence and Security Act
of 2007 (P.L. 110-140), which
passed in 2007, set the bar
higher by requiring that each
Federal agency reduce energy
consumption from 20 percent
(relative to 2003 levels) to 30
percent by 2015. The require-
ments are more stringent
for new construction and major alterations by requiring them to
reach a 65 percent reduction of energy usage by 2015, and zero-
net energy use by 2030. Agencies will be evaluated twice a year
on performance of their energy and water management. The law
also accelerates the use of energy efficient lighting in buildings
leased by the GSA and reduces negative impacts on the environ-
ment throughout the lifecycle of the building, including air and
water pollution.
“We should take the view that the challenge before us is an opportunity for positive change”
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108 www.nextgenpe.com
In an interview with Power & Energy, ComEd’s Vice President of Marketing and Environmental Programs, Val Jensen, explains the future of customer relationships and how the company has adopted a sociological approach to understanding its customers’ behavior.
Keeping up appearances
Exelon’s goal is to reduce more than 15 million metric tons of green-
house gas emissions by 2020. What is ComEd’s strategy to partici-
pate in this target?
Val Jensen. The Commonwealth Edison energy efficiency portfolio
represents a fairly significant wedge in the overall Exelon carbon
reduction goal, so our responsibility is to be able to execute on the
customer programs to ensure that those carbon reductions are real-
ized. It’s not a set of reductions that the company is claiming for its
own account, but it is part of the overall strategy to help our
customers reduce their carbon footprint. The energy ef-
ficiency programs represent approximately a quarter
of the total Exelon carbon wedge, and so we play
a relatively important part, along with our
sister company, PECO, in Philadelphia.
We offer a broad portfolio of
energy efficiency programs con-
sistent with what you will tend to see
across the US from utilities. We’ve tried
to bundle all of these programs under the
moniker Smart Ideas, and our ultimate intent
is to simply offer a range of prescriptive and
customized solutions, whatever the customer’s
energy management needs might be.
But in the short term, we break our port-
folio into two pieces. One is the commercial
industrial offering and under that offering we
have four principal program elements. The first is
a set of what we call ‘prescriptive incentive programs’,
so we will offer fixed financial incentives for a wide range
of standard commercial industrial technology – motors, light-
ing, refrigeration systems and so on.
CUSTOMER FOCUS
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109www.nextgenpe.com
We also
offer a custom
rebate element, so
for any energy effi ciency
project, as we can establish that
it is cost effective, we will provide a
customized incentive which is based on the
energy savings. We are also offering a building
retro-commissioning program where we will fund a
building professional to go into an existing building and
help the building managers tune up existing energy systems
to achieve their specifi ed performance. Finally, we’ve just begun to
offer a commercial industrial new construction program where we
provide design assistance and some design incentives to try and
encourage customers to design and build buildings that exceed the
building codes.
On the residential side, we have a number of programs.
One is the ubiquitous compact fl uorescent light bulb buy-
down program. We work with a variety of manufacturers
and retailers to buy down the cost of CFLs at retail and
that program is the single largest program in terms of
energy savings that we have in the portfolio, which
is consistent with every other utility.
Secondly, we have a program to collect and
recycle second refrigerators. We also have
a direct installation program for all electric
multifamily buildings, so we send crews into
these buildings and go through each unit
and do the low-cost, no-cost energy ef-
fi ciency measures.
We have also just begun a resi-
dential central air conditioning pro-
gram that has a couple of different
elements, including incentives for
the purchase of new, very high effi -
ciency units, and we also subsidize
an advanced air conditioner diag-
nostic and tune-up program. We put
switches on people’s central air conditioners and in exchange
for either $20 or $40 per summer season, we are able to control the
customer’s air conditioner on really hot or high-demand days.
We also offer a residential real time electricity-pricing program,
which is still the only program of its kind in the country. For custom-
ers who wish to join the program, we put them on a tariff that fl ows
through the wholesale hourly market price and allows customers to
make their own decisions about how to alter their load shape to try
and benefi t from that price profi le.
How are your residential customers reacting to these programs? Is
ComEd playing a role in in educating them in terms of energy effi -
ciency?
VJ. That’s the critical issue for us, and it’s extremely diffi cult for us,
at least early in the program, to feel like we’re accomplishing that
broader market transformation objective to get customers to think
differently about energy use. We have a service territory of 3.8 mil-
lion customers in one of the most expensive and dense media mar-
kets in the country, so it’s very diffi cult to reach individual residential
customers without spending a lot of money. The strategy that we’ve
taken early on is a more direct marketing approach where we try and
“Keeping up with the Joneses is a pretty powerful
behavioral motivator”
Jenesen.indd 109 19/6/09 15:51:28
110 www.nextgenpe.com
Overall, the customer satisfaction with that program is very high
and when we do customer surveys we find that that program in par-
ticular is the one that most intrigues customers. On the other hand,
it’s been very, very hard to recruit customers into that program, which
is an interesting phenomenon and hard to understand why. Our cus-
tomer acquisition cost is very high for that real time pricing program,
yet at the same time, everyone says they like the idea of it.
There is one other program that we’re about ready to launch that is
pretty exciting and actually quite pedestrian in its concept. We’re going
to be providing a home energy report to a set of 50,000 customers on
a quarterly basis which compares that customer’s energy consump-
tion to an average neighbor, and
also to the best neighbor in terms of
how much energy they use. This is
all calibrated to like customers – so
same type of housing, same square
footage – who generally display the
same demographic characteristics.
There’s been some interesting be-
havioral economics research that
suggests that simply by providing
this comparison of your consump-
tion to your neighbor’s consumption
you can drive changes on the order of
three to five percent in overall energy
consumption, just through a form of
peer pressure. We’re among a hand-
ful of utilities in the US that are start-
ing to pilot this program.
In addition to providing this
comparative information on a quar-
terly basis, we couple that with spe-
cific energy saving tips given who
the customer is, so if the customer’s
performing poorly relative to their
neighbors, we give them the whole
slew of energy efficiency options.
If they’re doing better than their
neighbors, we give them some tips
for how they might do even better
than they currently are, and so we’re
hoping that this provides the vehicle
for reaching customers with our message in a fairly simple way that
can motivate behavioral change.
There has been some interesting research that compared a couple
of tactics: telling customers how much money they could save, telling
them how green they would be if they took a particular action, tell-
ing them they would be more energy efficient if they took a particular
action and telling them how they compare to their neighbors. The only
thing that motivated these customers in this pilot study was the com-
parison to their neighbors, which was fascinating to us, and it went to
the extent of actually putting a little smiley face or frownie face on the
information that was sent to the customers, which the research found
get information out to our customers to get them to act on specific
energy efficiency incentives, such as the lighting program or the re-
frigeration program. We do have a limited advertising budget that
we’re using to try and start to build awareness among our customers
of what we offer and what their general energy efficiency opportuni-
ties are, but it’s very difficult for us to work in the mass market in this
area because it’s so large and expensive, so we’re continuing to look
for solutions that would help us get more traction there.
We run a summer ad campaign designed to spark customer in-
terest and awareness in some of our basic residential programs. We
similarly conduct limited advertising for specific energy efficiency
programs to try and boost our uptake on
those programs. We offer bill stuffers to
our customers on a fairly regular basis,
some of which are targeted at specific
energy efficiency opportunities and some
of which are designed to simply build
customer awareness of energy efficiency
opportunities generally. Then certainly
like everybody else in the world, we have
a website which is intended not only to
convey information about our programs,
but to offer customers a wide variety of
tools and tips should they be so inclined
to take charge of their energy consump-
tion. So in terms of customer outreach
and education, we’re not particularly
innovative or successful yet, but we are
just entering the second year of our large
program portfolio implementation. We
still have a way to go and are certainly
hoping we can get a little bit more cre-
ative and effective.
Do you think initiatives such as the real-
time response program attract new cus-
tomers who are more energy efficiency
conscious?
VJ. It’s an interesting phenomenon. We
get both ends of the spectrum. We have
a group of customers on that particular
real time pricing program who are very
energy aware and like the challenge of being able to try and beat the
price, and so they’ve become very creative in how they manage their
energy use.
On the other end of the spectrum is another set of customers who
are attracted to the program by the implied promise of being able to
save money on their energy bill. These customers tend not to be as
sophisticated, and they have an expectation that they can simply save
money by doing nothing, which is sometimes the case but not often,
and so we find those customers will tend to be more dissatisfied with
the program because they’re not really buying into the change and
behavior that is necessary.
Val Jensen is Vice President of Marketing and
Environmental Programs. He joined ComEd after eight years
at ICF Consulting, where he served as senior vice president.
Prior to this, Jensen worked for the US Department of
Energy from 1994 to 1999.
Jenesen.indd 110 19/6/09 15:51:29
111www.nextgenpe.com
world, we’re embarking on an implementation of smart grid technol-
ogy and in particular smart metering systems. We have a pilot project
that we now have in front of our regulator for approval that will involve
140,000 customers in our service territory, and we believe we’ve
designed the most comprehensive study of consumer behavior with
respect to the smart meters that anyone has put together.
We’ve designed 24 specific experiments to test how different
combinations of behind-the-meter technology, rate structures and
education will resonate with customers and our objective is two-fold.
One, to see which of these combinations elicits the largest response
in terms of demand reduction, but we are also trying to figure out
what the combination of those things that resonates most with the
customer may be – which product makes the most sense, which is the
most likely to be used and embraced by customers and so on – and
we’re very excited about that. We see this not so much as a standard
utility technology project, but as a project in customer-centric product
design where our ultimate objective is to figure out how we can create
some additional value for customers, as opposed to just throwing
boxes on houses.
The second thing we’re doing, which is related to that, is a
relatively small pilot program with a set of low-income customers
in Chicago. Operating a smart grid and having the ability to retrieve
this real-time data depends on a customer being technologically so-
phisticated, having a broadband connection and so on. A lot of our
customers are not in that position, so we’ve designed a pilot program
to place relatively simple devices in up to 300 homes that will show
at any given time how much is being consumed and how much the
customer has spent that month. We’re also simultaneously provid-
ing a home energy audit and some focused but simple instructions
on how customers can manage their energy costs. Again, these are
quite low-income customers, and our objective is to evaluate that if
by providing a customer contemporaneous information on how much
they’re spending, relative to what their budget might be, we can influ-
ence their level of energy consumption.
Our ultimate objective is two-fold. One is to give some tools to
these low-income customers in this new technological age that will
allow them to benefit as much as their more well-to-do neighbors, but
the second idea is if we can get people to focus on how much they’re
spending at any time, we think they’ll be able to better manage their
bill, and the hypothesis is that they will be less likely to fall into ar-
rears and defaults, and less likely to be subject to disconnection. That
pilot is just rolling out, but from my perspective, that’s one of the most
important things because it’s an investigation into how we can deliver
these promised benefits of the smart grid to a segment of our popula-
tion that typically is left behind in such arenas. n
to be motivating. Some of the early pilots that have been done to test
this concept with utilities have found that customers react very badly
to the frownie face, but very much like the smiley face; it sounds very
elementary, but in fact the keeping up with the Joneses is a pretty
powerful behavioral motivator.
Do you think the media surrounding Obama’s Plan for America is
having an impact and starting to change the way your residential
customers are operating?
VJ. I think it is. The Administration, as well as a number of global lead-
ers, is talking about the importance of climate change which is finally
starting to penetrate this mass media consciousness. Our customers
haven’t yet completely figured it out, but they understand that energy
usage is changing and they know they want to be on the right side of it,
and they’re starting to now look for more information about this. So it
clearly has had important impact, but it will take a lot more than that to
get customers to really understand this on more than a superficial level.
Do you think saving money is the only real motivator?
VJ. I don’t and that’s why this behavioral pilot program that we’re un-
dertaking is so interesting because we’re not providing anybody with
any money on our end, and the customers are not motivated so much
by saving money as they are by the attitude of not wanting to look
worse than their neighbors. Business customers, to a much greater
extent, are motivated by money, but that doesn’t seem to be the right
motivator for all of our customers. We have to get much more sophis-
ticated in segmenting them and figuring out what messages motivate.
Some are motivated entirely by environmental concerns and their
neighbors, some by money and some by other forms of moral beliefs
about stewardship. It’s been part of our struggle over the past 20
years where previously we tried one message for everyone, and we
know that doesn’t work.
How are you setting yourself apart from other utilities energy-saving
programs?
VJ. Most of the utilities in the US, as part of their energy efficiency
portfolio, rely on compact fluorescent light bulbs for anywhere be-
tween 30 and 50 percent of the overall portfolio savings. There is
federal legislation which by 2012 will set the consumer lighting stan-
dard essentially at the level of a CFL, which means that by promoting
CFL through a utility program we’re not saving any energy as it would
become compulsory for customers to buy these anyway. So we’re
going to lose 30 to 50 percent of our energy efficiency portfolio due to
the standard, and we need to find other low-cost ways to save energy.
By exploring these behavioral methods we’re realizing cost-effective
solutions to energy savings, and so we’re both interested from a con-
ceptual basis in seeing how people respond, but we’re also looking for
that silver bullet that gives us energy savings that is sustainable and
low cost at the same time.
What are your future plans, both short and long term?
VJ. We have two things that we’re very excited about and they both
fall on the behavioral side of the ledger. Like many utilities across the
“A number of global leaders are talking about the importance of climate change
which is finally starting to penetrate this mass media consciousness”
Jenesen.indd 111 22/6/09 09:39:57
The combination of the poor economy and
the push to get customers to conserve
has severely restricted the ability of utili-
ties to increase their revenues. In our recent sur-
vey and conversationswith our utility clients,we
found that most utilities are under pressure to
find ways to enhance their bottom line without
increasing their top line.
One of the swiftest ways to improve prof-
itability without increasing revenue or slash-
ing budgets is to reduce your bad debt
expense. Based on actual results and analysis
at over 100 utilities, a typical utility can ex-
pect, in less than three months, to reduce this
year’s write-off by 10-20 percent. How much
top line revenue would you have to produce to
get this much bottom line impact?
Geographic mobility statistics indicate 14
percent of the population and 33 percent of
apartment dwellersmoveevery year; 60percent
of movers relocate within the same county, 80
percent within the same state. The implications
of these findings illustrate that the majority of
the people initiating and terminating service are
coming from and going to a location still in your
service territory. If you can properly identify all
the responsible parties on an account, then
there is a greater likelihood that you can turn
their write-off into a current receivable on an ac-
tive account. Because a utility has more tools
and leverage, it ismuch easier and faster to col-
lect on an active account than an inactive one.
Skip tracingAlmost every utility is already successfully
skip tracing andperformingbalance transfers on
a regular basis with very positive results. The key
is to recognize that you can improve upon your
current processes and that there is still an abun-
danceof lost revenueavailable tocollect.Because
youalreadyutilize theseprocesseseveryday, very
little has to change. Skip tracingmore efficiently
andeffectivelyand transferringbalancesmore in-
telligently, will allow you to quickly reduce your
write-off.Whenyouenhanceyour customer iden-
tification on the front end, you can also perma-
nently reduce yourwrite-off going forward.
To fully leveragethisbestpracticesprocess,a
utilityneedsto identify,match, transferandcollect.
To identify, use your CIS system to capture
and store asmany identifying attributes on your
customers as you can – such as full name, SSN,
DL#, birth date, phone numbers, email address
andemployer. Identify all responsible parties, in-
cluding spouses and roommates.Verify and up-
date these identifying attributes regularly.
Matching involves finding active customers
who also have write-off balances. Use all the
identifying attributes available for all responsi-
ble parties to match written off accounts to an
active account. You should look at all relation-
ships between the accounts, including the non-
obvious ones. Utilities should recognize that
most ofwhat is found is probably not fraudor in-
tent to hide. It is name changes, misspellings,
transposed digits and data entry errors.
Transferring is moving the written off bal-
ance to an active account taking into account all
your rules and regulations (for example, you can
not transfer balances across state lines, statutes
of limitation on old balances and so on). You
should only transfer balances you can reason-
ably expect to collect.
Once thebalancehasbeen transferred, nor-
mal collection procedures will apply. Our analy-
sis shows that most utilities collect between
80-95 percent of transferred balances.
With the understanding that there is lost
revenue slipping through the cracks, a reviewof
your current processes can pay big dividends
and have a real bottom line impact. There are
simple things you can do to recover more lost
revenue and there are experts who can help. �
The bottom line
112 www.nextgenpe.com
Patrick Carberry explains how to quickly enhance yourbottom line without revenue growth.
Patrick Carberry is Co-Founder
and President of Bottom Line
Impact. Mr. Carberry has spent
the last 20 years consulting with
over 125 utilities. He is the
architect of the Automated
Revenue Miner that has recently
assisted utilities with the
identification and recovery of over
$50,000,000 of lost revenue.
ASK THE EXPERT
• One of the swiftest ways to
improve the bottom line is to
reduce your bad debt expense.
• A significant portion of your
write-off is right under your nose
and is very collectable.
• A typical utility can expect, in less
than three months, to reduce this
year’s bad debt by 10-20 percent.
“Utilities are under pressure to find ways to enhancetheir bottom line without increasing their top line”
The bottom line impact ATE:18oct 22/6/09 10:31 Page 112
We Just Identified $75,000,000.00
in Lost Revenue For Utilities!
Our Clients Are VERY Excited
For more information, see this month’s issue of Ask the Expert on the opposite page or contact
www.blicorp.com | [email protected]: 412-441-1083
BottomLine.indd 1 19/6/09 14:00:38
114 www.nextgenpe.com
Coordinating its customers is no easy task for Hydro One.
As a large Canadian province, Ontario incorporates a wide
spread of both urban and rural areas, and must adapt itself
to the issues facing the different groups of customers.
SVP of Customer Operations Myles D’Arcey explains that
it is the demographic shift that determines what group its customers
fi t into. For example, Windsor is a region heavily impacted by forest
products, so customers within the area are heavily impacted by the pri-
mary industry, to which Hydro One must respond to accordingly with
programs that are suitable and fi t this group of customers’ needs.
ChallengesD’Arcey is also President and CEO of Hydro One Remote Communi-
ties, and in this role he faces challenges very different from those of
large utilities in big cities. “Part of the issue for us there is that these
communities are fl y-in, and there are a lot of them,” he says. “They’re
not easily accessible, and they’re First Nation communities. Fourteen
of the 18 that we serve are at or below the poverty level. A lot of people
rely on social assistance to sustain their day-to-day lives and they’re
diesel communities – it’s a high cost which is heavily subsidized by the
people of Ontario.”
NORTHERNEXPOSURE
Hydro One’s understanding of its customers’ needs extends far beyond simply providing them with an energy supply. Myles D’Arcey tells Power & Energy of the company’s responsibility for instilling a sense of community within its service territories.
CUSTOMER OPERATIONS
114 www.nextgenpe.com
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D’Arcey has fi rsthand experience of remote
communities, traveling to them himself in order
to achieve a greater sense of understanding of
his customers and know how to provide to them
with the energy that they need. He explains how
a number of the company’s senior executives vis-
ited these communities last year; most of them
had never been further north than Highway 7,
which runs along Toronto’s northern boundary
As he explains, “Unless you’ve had an oppor-
tunity to see it fi rsthand, to meet with the people
and understand their issues, it’s hard to put it into
a white paper. We had the opportunity to meet
with the chiefs’ council in the local communities,
and it was a great opportunity for them to share
with us what their goals and aspirations were too.
“Many equate it to going into what they’ve
seen in pictures of a third world country, so it’s
a very different lifestyle, very impoverished. But
there’s still a lot of pride within the community. They want to succeed;
they want to fi nd ways in which to be successful.
We try to work with them and build upon that, and look for op-
portunities in which we can generate win-win types of scenarios.”
RelationshipsHe explains that having one-to-one meetings with local people
makes all the difference in their relationship
with those who service the community. The
challenges for those providing the services are
numerous, due to the disparities in the commu-
nities. But a sense of community spirit lies at the
heart of Hydro One’s focus. Many of the compa-
ny’s community programs, such as Community
Citizenship and Powerplay, are not even related
to electricity, but their aim instead is simply to
build up the relationship of the communities.
“We provide electricity to 1.3 million custom-
ers in the province of Ontario, predominately rural
Ontario, so we have a presence in these communities where our staff
live and work,” explains D’Arcey. “From our perspective, it’s an oppor-
tunity to help the community that we service. The focus with Powerplay,
for example, is linked back into the fact that for most rural Ontario com-
munities, the local arena or community center is the focal point.
“It’s an opportunity to upgrade, modernize or get new equipment
that the community relies upon for entertainment or sporting events.
We live and work in those communities and it’s just giving a little
something back.
“The other part that goes along with the citizenship program is the
stewardship of assets. We defi nitely feel that we’ve been entrusted
with these assets, and it’s up to us to make sure that we operate them
safely and effi ciently on behalf of the people of Ontario,” he says.
Hydro One has committed itself to its customers from the outset
– its strategic objective is to, “Satisfy our customers with affordable,
reliable and clean power.” Community is key, but
as a utility, providing a reliable source of energy
is its primary role. Providing energy to dispersed
customers to ensure a constant and reliable
source of energy is not as easy as it sounds, and
certainly not when this is joined with a commit-
ment to ensuring that the energy that is delivered
is as environmentally sourced as possible.
In May, it was announced that Hydro One
customers across Ontario had achieved annual
energy savings of more than 400 million kilo-
watt hours – a huge saving that speaks volumes
for the company’s success.
D’Arcey advises that the savings are due to a
combination of programs currently being imple-
mented by Hydro One. “One is directly related
back into the conservation demand manage-
ment plans that were put in place by the local
distribution companies in conjunction with the
Ontario Power Authority,” he says. “Those are everything from fridge
roundup programs distribution of compact fl uorescents, rebates on
timers and switches, dimmer switches and so on, all of which can
reduce the overall consumption from individuals.
“From my perspective, the key is making those programs available
to your customers and giving the customers a choice to have access
to them or creating an incentive for them to look at them or making
it easier for them to take advantage of it. We
support a number of those – the OPA funds the
programs, the distribution companies put them
together, and we work with the programs we be-
lieve to be conducive. We then provide access to
our customers to all of those programs.
“In Canada, there are federal programs and
provincial programs, and there are also the ones
that are provided to by the local distribution
companies. We’ve put together a group we call
our Green Team, and if customers require indi-
vidual assistance with that, we’ll help them walk
through it and navigate some of that. There are a myriad of opportuni-
ties out there for customers to take advantage of programs, but they
may not necessarily always be aware of which ones are applicable to
their particular situation,” he says.
Hydro One remains sensitive to its customers’ needs. For those
low-income customers who face diffi culties paying their electricity
bills and who may be in arrears, the company induces a number of op-
tions to alleviate the stress. “The fi rst part is just communication, so
that’s making sure that people are aware of what their bill is and where
they stand, so that they can take effective steps,” D’Arcey explains.
“We provide them with different options for payment programs so
that they can help to manage the bill. If they get behind we do try to work
with them to set up a payment plan. We also provide programs for those
on low incomes, which helps us to provide customers access to funding
from social programs to help offset some of their energy costs.”
14 of the18 remote communities
Hydro One serves are at or below the
poverty level
Myles D’Arcey is SVP Customer
Operations at Hydro One, and
President and CEO of Hydro One
Remote Communities, which offers
generation and distribution services
in Ontario’s far north.
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The gathering of 20 of the world’s greatest and
most powerful leaders, or so proclaimed, to agree
on the direction of the $1.1 trillion dollar stimulus
package certainly appears to be a washout for
those championing environmental concerns. If
the discussion of the world’s high carbon econo-
my was ever a priority of the G20 leaders, they most definitely
managed to sell themselves short.
Statements by UK Prime Minister, Gordon Brown, at the
summit regarding climate change were vague and non-commit-
tal – lacking any sort of qualitative data or measurable targets,
for which he could be held accountable. He made sure to make
several references in support of low-carbon economic growth
though, and pledged his commitment to tackling climate change,
but none of these have in any way satisfied the thousands of
protestors and environmental groups wanting change.
Peering through the façade, it is clear that Brown’s stance
was nothing more than a nod to those gathered on the streets
of London, attempting to make known their environmental
concerns. His statement of commitment to climate change
bears more resemblance to an afterthought rather than a
detailed proposal: “In mobilizing the world’s economies to
fight back against recession we are resolved to [...] promote
low-carbon growth and to create the green jobs on which our
future prosperity depends.”
Protestor group Climate Camp believes world leaders view
carbon-trading policies as nothing more than moneymaking
attractions for the creation of get more bureaucrat-serving
markets. They propose that a change in attitude will produce
the sort of policies environmental campaigners are wanting:
for solutions to be based on a moral imperative, rather than a
business opportunity.
Instead of seizing the misfortunes of the global recession
and using a very rare chance to reshape even the smallest piece
of the economic structure, and this time actually factoring envi-
ronmental concerns into the political equation, the G20 summit
118COMMENTG20Natalie Brandweiner explains why a gathering of the world’s leaders amounts to nothing more than corporate handshakes and shirked responsibilities.
President Obama’s address at the G20 Summit
comment back.indd 118 22/6/09 09:41:37
was not much more than an exercise of
bureaucratic smiles and a showcase of
fi rst-lady fashion shoots.
The G20 communique shows the
leaders to make only a minute reference
to climate change and does not refer to
any responsibility to be apportioned to
any leaders. It appears that the world’s
leaders are too busy papering over
the cracks of the recession to lend a
thought to environmental concerns.
Even the UK government’s former
climate change advisor, Lord Stern, criti-
cized the summit leaders for not seizing
the opportunity for change. He argued
that the recession has created the per-
fect sphere in which great reform can be
made to the way in which the economy
currently operates, creating an inter-
changing set of economic and climate changing policies.
As he explains, “This is an opportunity to have a green
recovery that lays the foundations of growth for the next two
to three decades.”
Obama’s New Energy for America plan is committed to
ensuring 10 percent of electricity to come from renewable
sources by 2012, and while simultaneously repairing the dam-
aged economy by creating fi ve million new ‘green collar’ jobs.
But, if he does not produce the funds to support these plans, it
will be unlikely that any changes will be made.
The sweeping aside of environmental concerns at the
G20 summit certainly brings into question Obama’s commit-
ment to carbon reduction on his home turf. In the same plan,
the Administration have claimed a stance of reducing green
house gas emissions by 80 percent, but more importantly
Obama and Biden are attempting to make the US a leader on
climate change.
In a feeble attempt to appease the public cries for climate
change, Brown and his political companions insisted that en-
vironmental issues are all set to be addressed in the United
Nations Climate Change Conference in Copenhagen in Decem-
ber, when the UN hopes
a number of agreements
will be made to replace
the Kyoto agreement.
“We are committed
to [...] working together
to seek agreement on a
post-2012 climate change
regime at the UN confer-
ence in Copenhagen in
December,” says Brown,
displaying a lack of seri-
ous commitment to any
concrete statistics.
But whether Copenhagen will actu-
ally produce climate-changing policies
remains to be seen. Going on the lead-
ers’ past attitude to environmental
issues, the conference looks only to be
another platform in which to pay lip ser-
vice to those placing pressure on global
governments. It seems contradictory
that the thousands of miles in air travel
for each of the leaders and their too-
many-people-deep entourages, along
with the energy needed to facilitate the
conference, is sure to create a carbon
footprint itself worthy of environmental
campaigner demonstrations.
But is this derogatory attitude that’s
portioned to environmental concerns
true of not only political leaders, but also
of those major players responsible for
delivering the energy and privately funding the transmission? Is
carbon reduction simply a business venture of the utilities indus-
try to attract more consumers through shiny, ‘greener’ policies?
It seems that if the foundations of a carbon-shaped busi-
ness enterprise begins with the leaders themselves, then the
industry is destined to follow suit. It can be argued that moral-
ity of these ‘green’ policies is irrelevant, providing that carbon
emissions are decreasing, energy is sourced from renewables;
and energy usage is made more effi cient. But, if fat cats chasing
dollar signs formulate the ideology behind these policies, long
term sustainability for a fi nite world is certain to be jeopardized
by short-term gains.
Policies fuelled by money, rather than concerns for the
planet, are likely to be short-term and without a substantial
basis. It is questionable that if campaigners did not place pres-
sure on those in power, and if world leaders and utility provid-
ers did not see the potential revenue intakes from a new vertical
of business, a change in energy usage would not be high on the
agenda of those in power.
It seems that Brown and his companions are reluctant to put
their governmental budgets where their non-committal policies
are regarding climate change, and it remains to be seen if Copen-
hagen will actually achieve anything in terms of climate change
action, or whether if, once again, restoring the banks of the West
will bleed dry the limited funds of global tax incomes.
“It appears that the world’s leaders are too busy papering over the cracks of the recession to lend a thought to environmental concerns”
119www.nextgenpe.com
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120 www.nextgenpe.com
120UPCOMING
International eventsA roundup of upcoming utility and environment workshops and conferences around the world.
CEE ENERGY 2009Sep. 24, 2009
Hotel Ramada Istanbul Old City, Istanbul, Turkey
http://www.cee-energy.easteurolink.co.uk/Upcoming.html
3RD ANNUAL CUSTOMER EXPERIENCE AND RELATIONSHIP MANAGEMENT FOR UTILITIESSep. 21, 2009
Prague, Czech Republic
RENEXPO 2009Sep. 24-27, 2009
Augsburg, Germany
http://www.renexpo.de
ENERSOLAR+ THE INTERNATIONAL SOLAR ENERGY EXHIBITIONNov. 25-28, 2009
Rho (Milan), Italy
http://www.enersolarplus.com
HYDRO 2009Oct. 26-28, 2009
Lyon, France
http://www.hydropower-dams.com
EVENTS ED P120-121.indd 120 22/6/09 10:00:54
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THE BUSINESS OF PLUGGING IN – ELECTRIC VEHICLE CONFERENCEOct. 19, 2009
Motor City Hotel & Conference Center,
Detroit, MI, US
http://www.pev2009.com
POWER-GEN ASIA
Oct. 7-9, 2009
Bangkok, Thailand
WATERPOWER XVIJul. 27-30, 2009
Spokane, WA, US
http://www.waterpowerconference.com
ESSENTIALS OF UTILITY FINANCEJul. 23, 2009
Washington Marriott, Washington, DC, US
http://www.snlcenter.com/euf
CLEAN ENERGY EXPO ASIA 2009
Nov. 18-20, 2009
Singapore, Malaysia
http://www.cleanenergyexpoasia.com
EVENTS ED P120-121.indd 121 22/6/09 10:01:02
122 www.nextgenpe.com
122EUROPEAN FOCUSEU energy developmentsAhead of the UN Climate Change Conference in December, Power & Energy assesses what the US can learn from European countries and their attitude towards energy usage.
NorwayOil and gas has predominantly been Norway’s source of energy, fol-
lowing the discovery of the North Sea oil in Norwegian waters in the
late 1960s, but this has led to disagreements regarding exploration and
growing international concern over global warming, resulting in Nor-
way’s energy usage receiving meticulous attention. To follow the
trend, Norway’s electricity generation is almost entirely from
hydroelectric power plants, and was the fi rst country to gen-
erate electricity commercially using seabed tidal power.
way’s energy usage receiving meticulous attention. To follow the
trend, Norway’s electricity generation is almost entirely from
hydroelectric power plants, and was the fi rst country to gen-
BelgiumFormally known as the Kingdom of Belgium, the country
produces over half of its electricity through nuclear energy.
Since 2007, it has focused heavily on the use of renewable ener-
gies, and there are currently more than 200 onshore wind turbines
throughout the region. However, the principal sources of primary
energy for conventional power production are low-grade coal and by-
products of the oil industry, making the country heavily dependent on
imports of crude oil; it exports refi ned oil products.
Formally known as the Kingdom of Belgium, the country
produces over half of its electricity through nuclear energy.
Since 2007, it has focused heavily on the use of renewable ener-
Formally known as the Kingdom of Belgium, the country
produces over half of its electricity through nuclear energy.
EU Energy.indd 122 22/6/09 09:28:54
123www.nextgenpe.com
FranceSince 2002, the country’s main electricity generation, as powered
by Électricité de France (EDF) is sourced from nuclear power from
the country’s 59 nuclear power plants. It is the world’s largest net
exporter of electric power and exports 18 percent of its total pro-
duction. It is predicted that in 2009 and 2010,
France will be a key driver in solar, partly
due to an expected decline in the price of
solar panels and also due to the subsidies
introduced in 2006.
UKThe British Government is another European nation that committed them-
selves to energy standards according to the Kyoto protocol. In March 2007,
the government published a Climate Change bill requiring a mandatory
cut of 60 percent in the UK’s CO2 emissions by 2050. Due to its large
coal and gas reserves, the UK was largely self-suffi cient until the early
2000s, but due to the need for greener energy, it is now reliant on
imports. It is feared that this may cause a future ‘energy gap’ as the
remaining coal plants close due to stricter CO2 standards.
GermanyAs one of the world’s largest consumers of electric-
ity per year, government policy is now emphasizing
the importance of conservation and development of
renewable sources, such as solar, wind, biomass and
geothermal. However, the main source of energy still
remains as coal and in a bid to curb emissions, the gov-
ernment has set a goal to meet half the country’s energy demands
from alternative energy by 2050. With its status as the world’s
largest operator of wind generation, hitting those targets certainly
looks to be an achievable goal.
geothermal. However, the main source of energy still
cut of 60 percent in the UK’s CO2 emissions by 2050. Due to its large
coal and gas reserves, the UK was largely self-suffi cient until the early
2000s, but due to the need for greener energy, it is now reliant on
imports. It is feared that this may cause a future ‘energy gap’ as the
remaining coal plants close due to stricter CO2 standards.
EU Energy.indd 123 19/6/09 15:44:03
124 www.nextgenpe.com
Located in Central Europe,
Germany holds 82 mil-
lion inhabitants and is
the largest populated
state within the European
Union. A country known
for its environmental consciousness,
it is committed to the Kyoto protocol
and other green treaties to support low
emission standards, recycling and the
use of renewable energy. The Govern-
ment strongly endorses such environ-
mental principles with a large number
of emission reducing initiatives, and
as a result, the overall emissions of the
country are falling.
Since 1990, Germany has reduced
its greenhouse gas emissions to almost
20 percent, and has nearly achieved the
124TRAVEL FEATURE
German effi ciencyA champion of greener, cleaner fuel, Germany is the leader in Europe’s renewable race.
targets outlined in the Kyoto protocol of a
21 percent reduction by 2012. The country
claimed second place in the global Cli-
mate Change Performance Index in 2008,
which it has done through an increase in
energy and resource effi ciency, whilst
simultaneously developing renewable
energies and raw material– making both
the supply and demand requirements
upon energy in the state more green.
However, fossil fuels still remain as
the backbone of the energy infrastruc-
ture; petroleum takes a 36 percent share
in the overall energy intake, followed
closely by natural gas and coal. Nuclear
power is gradually being phased out fol-
lowing a ‘nuclear consensus’ between
the government and electric utilities in
2002.
ENERGY STATISTICS
Coal production
28,018,000 tons
Electric power consumption
579,979,000,000 kWh
Nuclear electricity generation
162.3 terawatt-hours
Oil imports
2,600,000 barrels per day
Stats taken from http://www.nationmaster.com/country/
gm-germany/ene-energy
A photovoltaic power plant on a fi eld in Hergershausen.
Travel back.indd 124 19/6/09 16:27:06
125www.nextgenpe.com
GREEN CITY GUIDE: BERLIN
The capital city, Berlin holds a population
of 3.4 million, and as the centre of
the Berlin-Brandenburg metropolitan
area, is leading the way with green
initiatives. When traveling through the
city, cars must meet strict emission
standards, which are proposed to
become even more stringent in 2010.
Only cars displaying green badges will
be permitted in these central areas.
Berlin’s public transport system, Berliner
Verkehrsbetriebe, or BVG as it’s known,
is highly effi cient.
For a green stay when in Berlin,
head to Martim Hotel Berlin and Maritim
proArte Hotel. The Maritim Hotel chain
has extensive policies focusing on the
environment and energy conservation,
ensuring all heating is done on energy friendly natural gas or district heating. In certain places, the hotels produce their own
energy via thermal power stations or solar collectors.
The seat of the German Parliament, the Bundestag, is located in Berlin. A synthesis of pre and post-war architecture, the
historic dome most recently went green, and now runs completely on renewable energy from wind, water and solar sources.
GREEN CITY GUIDE: FREIBURG IM BREISGAU
A stronghold for the German Green Party, Freiburg has been implementing and
extending carbon-reducing initiatives since the early 1970s. Cycle lanes have
been established, the city’s train network improved and the entire city centre
turned into a pedestrian zone. In 1991, a fl at-rate Regional Environment Card
was launched, offering unlimited use of public transport in the city.
Freiburg is mostly recognized as being Germany’s ‘Solar City’, following its
heavy investments in renewables. Currently, almost fi ve percent of the city’s
electricity comes from sustainable energy sources, with the city on track to
reach a fi gure of 10 percent by 2010.
The Bundestag
Germany has
pledged that
almost a third
of its energy
will come
from green
sources by
2020. At a press
conference
in Berlin on
February 12,
Matthias Machnig,
a senior offi cial in Germany’s
Environment Ministry, advised
that the state will generate
30 percent of energy from
renewables, maintaining its
position as head of the EU in
renewable sources.
This new target places it
on schedule for reaching its
long-term aim of supplying
half of its energy demand with
wind, sun and other sources of
natural energy by 2050.
GREEN FOCUS
Travel back.indd 125 19/6/09 15:54:17
126 www.nextgenpe.com
126IN REVIEWOn the shelfPower & Energy takes a look at the resourcefulness of the latest offerings of renewables-related books.
Renewable Energy: Sustainable Energy Concepts for the Futureby Roland Wengenmayr and Thomas Bührke
Written by science journalists, the book shapes his creative thinking into formulative chapters, documenting
20 major categories of those sustainable concepts currently being used. The information is aided with a
combination of pictures and diagrams, and offers solid solutions for energy conservation.
POWER & ENERGY SAYS: A more formative account and critical overview of the recent technologies for the
energy conscious public.
Energy Systems and Sustainabilityby Godfrey Boyle
As the emphasis on renewables increases globally, a new section of society is attempting to understand
the need for change in energy systems. Senior lecturer in the UK’s Department of Design & Innovation
(DDI), Godfrey Boyle gives informative information for this new class of the true forms of renewables.
POWER & ENERGY SAYS: A practical guide for those wanting to know more about renewables, without
needing a BSc to understand. Great reference tool of energy systems and generation technologies.
Sustainable Energy – Without the hot air by David MacKay
With all the talk currently surrounding sustainability, sometimes only the facts will do. David MacKay
sets out the quantitative results of energy usage – for heating, electricity, food, transport and so on –
per individual, per day. He also reviews the actuality of energy usage, bleakly concluding that we use
about ten times our plausible local resources. He then proposes a menu of sensible solutions to rectify
these problems.
POWER & ENERGY SAYS: A well written account and some well proposed ideas displaying the need for major
change through major actions.
book review.indd 126 22/6/09 09:42:30
200,000 Challenges 100,000 ExecutivesOne Community
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If your network isn’t focused on your business, change it.
MeettheBoss.com membership reads like an industry who’s who. CEOs, CIOs and other senior executives from leading organizations are just two clicks away.
But there’s more. Weekly interviews with industry leaders are webcast on the site’s dedicated channels. These are combined with live, moderated discussion groups, video conferencing, IM and secure e-mail in one easy-to-use app that’s dedicated to business.
New York 8:50 a.m.John is upgrading some core business functions. He wants to know how to ensure a smooth transition, so he video calls…
London 1:50 p.m.Paul, who has seen the benefi ts of an upgrade and is now sharing project management tips with…
Dubai 4:50 p.m.Georgina, the turnaround expert who’s moving on to a new project in Japan, where…
Tokyo 9:50 p.m.Ringo has the local knowledge. But he’s also planning for tomorrow, and that’s all about core business...
MeettheBoss.com is simple, intuitive, unintrusive and secure. It’s also free to use. Membership restrictions apply.
MTB AD (Full page B2B Mag).indd 127 19/6/09 16:25:03
128 www.nextgenpe.com
128Final wordCorn beefis ethanol really the answer to america’s fuel worries? Huw Thomas takes issue.
let me be clear: I’m a card-carrying tree-hugger. I
religiously recycle each scrap of suitable material,
conserve every drop of water and compost my kitchen
waste, albeit with limited success. Given all this,
it might be expected that I would be a big supporter of corn
ethanol, which makes up the bulk of biofuel in the US. After
all, ethanol is naturally produced from raw materials that grow
straight out of the ground with no messy drilling required. As
they grow, crops absorb the CO2 that is produced when they
are burned. We reduce our dependence on foreign oil and sup-
port our economy by ‘buying American’. What’s not to like?
However, once you look more closely at corn ethanol, its
environmental credentials begin to appear a little shaky. Refin-
ing ethanol is not some bucolic activity where a ruddy-faced
farmer squeezes the juice out of ears of corn. Rather it is a labor-
intensive – and energy-intensive – industrial process. Nitrogen
fertilizer is produced using natural gas, while many pesticides
and herbicides are derived from oil. In addition to that, the ma-
chinery used on farms and in transportation gulps down diesel,
further tarnishing ethanol’s claim to green status.
According to the National Renewable Energy Laboratory,
it takes around one British Thermal Unit (BTU) of fossil fuel
to produce 1.3 BTU of usable bio-energy. That exchange rate
doesn’t seem particularly impressive or sustainable, yet there
are those who dispute even this level of efficiency. Research
by David Pimentel of Cornell University suggests that it takes
roughly 1.3 gallons of oil to produce a single gallon of ethanol.
Even ethanol’s characterization as a cleaner fuel than existing
fossil sources is decidedly unstable. Burning ethanol actually
produces more smog than burning oil, a fact conceded by the
EPA in the Third Circuit Court of Appeals in 1995.
But even disregarding corn ethanol’s environmental bona
fides, the deciding factor in the success or failure of any product
comes down to dollars and cents. This reality makes ethanol’s
longevity even more perplexing. It takes 450 pounds of corn to
fill an SUV, so producing enough ethanol to replace the oil we
currently use would require 95 percent of available farmland to
be turned over to corn cultivation. Ethanol might be able to cure
us of our addiction to foreign oil, but only by replacing it with an
addiction to foreign food.
In fact the only people who seem likely to profit from the
proposed plan to increase corn ethanol usage to 15 million gal-
lons a year by 2015 are the corn farmers and ethanol producers.
Subsidies and tariffs discourage the import of cheaper ethanol
from places like Brazil. This keeps prices high and pumps cash
into the coffers of big agribusinesses who are the key indus-
trial players in the big farm states. Given the disproportionate
political influence of these states and the healthy streams of
lobbyist cash flowing from them, don’t expect the denizens of
Washington to change things too soon.
The single-minded boosting of ethanol actually works to
the detriment of developing a truly sustainable and affordable
alternative to oil. There are a number of options currently being
explored, including hydrogen, hybrid electric vehicles and even
ethanol made from non-food crops. The premature coronation
of corn ethanol as the de facto winner in the alternative fuel
race prevents serious investment in other approaches that
might yet yield significant results.
For the average eco-warrior it’s a deeply frustrating situ-
ation. We seem to be on the verge of trading one expensive,
polluting and unsustainable source of energy for another with
many of the same attributes. Cutting out the special interests
and approaching corn ethanol along more realistic lines is a
choice that needs to be made without delay. Corn may well be
part of the recipe for future energy, but until some other ingre-
dients are incorporated it is going to leave a pretty sour taste. n
Final word.indd 128 19/6/09 15:33:35
TeamQuest.indd 1 19/6/09 15:05:05
Accenture.indd 1 19/6/09 13:52:01
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