Somewhere between the power plant and light switch, as much as 6 percent of U.S.-generated electric power disappears, lost in transmission as current pushes its way through power lines.
If a sizable part of those line losses could be recovered, the preserved energy would matter to consumers and to utilities that will have to find new ways to produce or conserve electricity under U.S. EPA’s proposed Clean Power Plan, which aims to reduce greenhouse gas emissions from power plants.
Advanced technologies to do that, and much more, are here or on the way, said Matt Rogers, a director of the McKinsey & Co. consulting firm who managed the Energy Department’s "smart grid" investment program in 2009-10.
Shrinking line losses — a long-known issue for the industry — can by handled by dynamic line rating devices, for example, which measure temperatures and other operating conditions on power lines. They help grid operators determine when favorable wind or weather will allow more power to be sent down a particular line without risking overheating.
"There are now a set of control technologies of various kinds that allow you to manage the grid network in a way that will significantly reduce those losses to the system," Rogers said in a recent interview with EnergyWire.
But that is only the start of the technology revolution that many experts expect will define the future grid. The applications include sensors and controls that can switch power flows away from congested power lines; analysis of floods of operational data measured in milliseconds on Internet cloud platforms; artificial intelligence software that will integrate rooftop solar power output with weather, energy storage and customer electricity consumption; and cybersecurity defenses using computer "machine learning" to recognize attack patterns and target.
"We’re just at the beginning of the applications," Rogers said. Debates about privacy issues and cybersecurity risks from smart grid deployments are also in their early chapters.
The potential of advanced technologies warrants their inclusion among the four building block strategies that EPA has presented to states for meeting the CPP targets, said James Connaughton, executive vice president of C3 Energy and former top environmental policy adviser in the second Bush administration.
"The EPA should consider adding a fifth building block," Connaughton urged the EPA, in a pitch for his company’s technology. The Redwood City, Calif., startup uses high-powered analysis of utility operating data through cloud computing to increase grid efficiency and reliability.
The potential impact of advanced grid technologies is massive, according to a 2011 study by EPRI, the Electric Power Research Institute. To fully deploy smart-grid technologies could cost $17 billion to $24 billion a year over the next 20 years, or between $338 billion and $476 billion in total. That works out to a monthly increase in electric customers’ bills averaged over the decade of $9 to $12, EPRI reported.
However, benefits could be much richer, between $1.3 trillion and $2 trillion over two decades from energy savings, more renewable energy and electric vehicles, and more economic growth due to cheaper electricity prices, EPRI said.
Smart grid technologies are essential to realizing the full potential of renewable generation, demand response and distributed energy investments, the EPRI report said. Together with these changes in generation and consumer applications, smart grid technologies could reduce power plant CO2 emissions from the electric power sector by 58 percent by 2030, compared with 2005 levels, EPRI said, acknowledging the difficulty in making such estimates.
How far and how fast this technology option actually develops is unknowable. Some of the technical challenges will tax the best minds in national laboratories, research universities and high-tech companies.
"I want to snap my fingers and say we need it tomorrow," said Thomas King Jr., director of sustainable electricity at the Energy Department’s Oak Ridge National Laboratory, describing the goals for ORNL’s high-priority grid technology research project with EPB, the utility in Chattanooga, Tenn.
"The pathway is to look at the analysis, test it in the lab and demonstrate in the field. We’re looking at years, not days," King said.
Winners and losers
Beyond the technology, Rogers said, are unresolved issues of how the investments in new technologies will be financed and recovered, and who gets the dollars saved by reduced electricity consumption.
When power can flow from consumers as well as to them, when utilities become service providers who are paid in part when customers don’t use electricity, the game has fundamentally changed. "That is a very different kind of economics than we’ve had for a century," Rogers said. "There are winners and losers from that, and who gets paid matters."
Despite the obstacles and questions, the possibilities have brought technology companies — from giants to startups — into the race, creating another force for change in an aging U.S. electrical system.
On one end are Microsoft, IBM, ABB, Oracle and some of their peers. On the other, there are such firms as Smart Wires of Oakland, Calif.; AutoGrid Systems in Redwood Shores, Calif.; C3 Energy in Redwood City; and Opower in Arlington, Va. Some emphasize software strategies; others hardware. Some in the field are competitors and others, partners.
McKinsey estimated in a 2010 report that consumers could be saving $59 billion a year by 2019 from power management programs that shifted their electricity consumption away from peak times of day when wholesale power is most expensive, and from other power conservation strategies that reduce the need for new power plants.
An additional $63 billion in annual savings could be gained from advanced technologies for the grid, led by systems that more closely regulate voltages on power lines, reducing the overall energy that the lines carry. Advanced meters can save $9 billion, principally by eliminating the need for meter readers and as many service calls, McKinsey said.
A top research initiative at EPRI, the Integrated Grid project, seeks to pin down the costs and benefits.
C3 Energy, founded by billionaire entrepreneur Tom Siebel, aims at analyzing massive operating data from utilities and customers in the cloud to achieve efficiencies.
It is developing a menu of analytical programs that work either at the generator and grid operator level or at the consumer’s domain, including optimizing voltages on the power line network, detecting grid faults, integrating solar panels and batteries, load forecasting, and stopping meter tampering and power theft.
One of C3’s programs looks precisely at voltages, the pressure from generators that moves power to customers. The program can adjust the system to make sure the lines are operating within a tighter voltage band.
"Simplistically speaking, the power utility would over-power a line to ensure the voltage at the end customer’s home wouldn’t fall below a certain level," said Ed Abbo, C3 president and chief technology officer. "Until recently, when they started to roll out smart meters, they didn’t have a voltage reading at the customer end." Now voltages are read every 15 minutes.
The program can also analyze utility customers’ consumption of electricity, and if the data is detailed enough, sampled down to one-minute intervals, C3 can profile whether large appliances are being used inefficiently, allowing the utility and customers to address the issues.
"There are ways to use smart meter data and other characteristics to position energy efficiency services and products that matter to consumers," he said.
"If you can operate the grid more reliably, there are benefits in terms of capital expenditure reductions and operating expense reductions," Abbo added. Close analysis of the performance of costly grid equipment can sharpen predictions of when they are likely to fail, so they can be replaced before that happens, he said.
Benefits beyond climate
The business case for some of the initial advanced grid technologies projects is not about climate.
C3 Energy was hired last year to supply BGE, the Baltimore utility owned by Exelon Corp., with two systems to detect fraud and equipment failures in the 2 million advanced electric and gas meters BGE installed in its territory.
The first step required loading two years of data from the smart meters — 35 billion rows of numbers — into C3 Energy’s Internet cloud-based platform. This provided the foundation for the analysis, examining, for example, whether power deliveries to individual meters were going to paying customers. The analytics turned up 14,000 likely fraud cases, permitting BGE to capture $2.8 million in savings in the first six months, BGE said. The analysis also identified problems with 400,000 meters that had failed or were not operating properly, and the two programs exceeded BGE’s revenue target for the project by a wide margin, the utility said.
The power of this processing, with all of its potential for energy savings and efficiency, still represents a culture shock for a conservative industry whose engineers have their own version of Hippocrates’ rule — first, do no harm.
"This is not an industry that has required this kind of computing power in order to operate," Rogers said. "This industry operates with a remarkable degree of reliability, with actually quite limited software on top of it. It used to be we would check a meter once a month. Now we’re checking it every six minutes." The grid has become a vastly more complicated place than it was a decade ago, he said.
"All we really had to monitor in real time was check every 15 minutes [on power] coming out of the power plant, and the system would balance quite effectively," he added. Now vast advances in computer processing speeds makes it possible to measure grid conditions in seconds and milliseconds, using that "big data" to manage generation output and power flows much more finely.
"We are just now building the software for that," Rogers said.
Correction: An earlier version of this article listed the EPRI as the Energy Power Research Institute; it is the Electric Power Research Institute.