California Governor Arnold Schwarzenegger signed AB2514 into official law this week, and it may change the face of the entire power industry if the details of that law spread to other regions in the U.S.
What makes this law so unique? It gets very close to mandating that utilities invest in energy storage systems to make connecting renewable power easier.
AB2514 requires that the California Public Utilities Commission (CPUC) “open a proceeding” by March 1, 2012 to discuss potential investor-owned utility (IOU) energy storage targets with a two-fold deadline---one set of targets achieved by December 31, 2015, and the second set by December 31, 2020.
There would be a similar set of requirements for public utilities, along with a plan for significant demand response activity.
"Energy storage improves the overall efficiency of our electric power system which will lower costs for consumers," said Assembly Member Nancy Skinner when the bill passed in June. "The Assembly's passage of AB 2514 is another step that advances California's clean energy economy and represents a great economic opportunity for the State."
"We applaud the Assembly's passage of this essential legislation, as well as Chairman Skinner and Attorney General Brown's leadership and commitment to moving it forward," said Janice Lin, Director of the California Energy Storage Alliance at the time of the bill’s passing. "This landmark bill puts California at the forefront of a growing global market that will spur economic development. Given major advances in energy storage, the industry is now ready to provide affordable, reliable products for California's utilities and consumers."
“California Governor Arnold Schwarzenegger just signed AB2514, an energy storage bill, into law this evening,” wrote Silent Power CEO Todd Headlee on the company’s blog. “The passage of this bill is a major step forward for reliable, clean and lower cost electric power for all Californians. Electricity storage will enable more clean, local renewable wind and solar power supported by clean storage. With storage, Californians will have clean power when and where they need it and with less need for new transmission lines.” (Silent Power, Inc. manufactures and markets distributed energy storage systems.)
CALMAC Corp., a company that manufactures energy storage equipment, released a statement after the signing by CEO Mark MacCracken.
“Energy storage is an excellent solution for making renewable energy sources more economically viable,” said MacCracken. “Energy storage is critical as we move toward the use of renewable resources and Energy Storage Bill AB 2514 is a step in the right direction for the future of our country’s energy needs. I commend the leaders in California that realized that solving our energy problems is not as simple as just putting solar on roofs and wind turbines on mountains, since solar and wind cannot be counted on to be there when you need them. I hope other states follow California’s lead.”
If the CPUC decides to create extensive energy storage targets, this bill could be a sign of things to come with other states in the area of renewable interconnections, but, of course, there is always the loophole: AB2514 only requires that the CPUC discuss the matter and set targets. There is no guarantee what those targets might be. And, in fact, they may decide that no targets are needed at all, to stick with the status quo.
But, AB2514 is certainly a promising start for the renewables camp to get a stronger foothold in the door of traditional energy. And, they are using the biggest stick they can find: the government.
Thursday, September 30, 2010
Friday, September 24, 2010
Meditations on solar max, Max Headroom and naughty little business case genies
Ralph Abbott is a hoot to talk to. I don’t know if you’ve ever encountered him at an industry conference. (He’ll be hanging out in the RW Beck booth chatting up passersby and handing out his business cards which proudly declare him the founder of Plexus Research.) If you do run into him, though, ask him about the three risks.
It’s like three wishes, only negative---from a potentially quite naughty little genie.
Not that Ralph is a negative guy. He’s certainly not. As noted, he’s a hoot. But, he does have three specific concerns about smart grid and communications. And they are quite valid.
His first concern: What about the sun, man?
I know. Seems like a hippie liberal issue, but it’s not, my friend. The sun impacts all. What he’s getting at is solar max. Solar max isn’t an ‘80s icon you don’t remember well because you’re still fondly recalling Max Headroom. No, in fact, solar max is short for solar maximum. It’s a measurement of solar variation. It’s about sun spots and, while it still sounds odd, that does impact things here on Earth like weather, surface magnetism and radiation.
What’s the bottomline here with solar max? Well, it impacts something much more directly than weather here: It can create odd havoc with communications. The scientific explanation involves refraction and ionized solar photons. But, the basics are: It gets all wiggy with radio frequency (RF).
Ralph noted that solar max is on a 17-year cycle with experts expecting it to peak between 2012 and 2014, which could cause issues with utilities’ RF use. Ralph’s question to the industry echoes more Dirty Harry than Max Headroom though: Are we feeling lucky?
In other words, are we just going to ignore solar max and hope it doesn’t cause massive issues, or does someone, somewhere have a plan?
I know. That’s only one risk and already you’re a bit concerned. Try to maintain your calmness.
His second concern: GPS.
Okay, not all of GPS. Not your Mr. T-speaking TomTom alight on your car dashboard that gets you to the Kenny Rogers concert without getting lost on Oklahoma’s unlit, unmanned and unsigned back highways. That’s not the GPS Ralph is concerned with. He’s more concerned with GPS satellite timing signals, which would keep all your smart grid equipment on the same reliable beat, you might say.
But, as Ralph pointed out, GPS can be easily jammed with about $200 worth of over-the-counter parts and an ability to get within 150 feet of the equipment. So, like his concerns over solar max, he has some questions, like: What’s the risk of GPS jamming to utility operations? What’s the threat level, really, and what counter measures are we taking?
Hopefully, you’re not panicked yet. We’re on to risk number three, and, luckily, this risk doesn’t really make us fear the minor jammer or the almighty sun. Instead, this final risk revolves entirely around the almighty dollar.
His third concern: The business case for AMI.
How many articles have we all read---and, also, have I written---on proving a business case for AMI? I’ll estimate it topping Super Bowl ticket receipts from last year. Seems like millions, doesn’t it? But, Ralph wants to know if they are really getting to the heart of one specific area: using demand response as the ‘sweet spot” to get to goal on operational savings.
See, demand response is rather an amorphous term. It’s here. It’s there. It can mean different things to different folks (rather like the term “smart grid,” really).
Let’s say you need to prove your AMI business case and you know a few savvy facts. You know that five percent of your consumers will change their power use according to demand response ideals if you just tell them all about it, if you just give them good info. They are really that darn motivated.
But, you also know that if those consumers had in-home gadgets that let them visually see the information in real-time, that number would jump to 15 percent. So, you pencil in that number in your AMI business case, cuz that’s a delightful number, really. Helps all those other numbers look better. But, are you figuring in costs of those in-home devices, or are you saying to yourself, “Self, those consumers are gonna be just fine going to Radio Shack or some other fine establishment and buying their own devices and installing those devices themselves.”
This leaves the pay out for that in-home device in the pocket of the consumer, which is lovely for that AMI business case but perhaps not so practical in the real world. Because will that person really be excited about taking time out of their day and going down to the Shack and picking up that purchase and then going home and installing that thingamajig? And who do they call if the thingamajig doesn’t light up with all the bells and whistles the consumer expects?
One response Ralph got when he asked around about that question to a few utilities, “I don’t know who they call, but it ain’t us.”
So, if it ain’t us, who is it? And is this a magical view of consumers where they are all tech savvy, gung-ho and willing to pay for demand response benefits up front? What if that magical view is woefully inaccurate? How will taking on consumer-side technology, questions, installations, problems and follow-ups impact the business case for AMI?
Those are Ralph’s meditations these days. You’ll be able to read more about them in an upcoming issue of POWERGRID International magazine. If you can’t wait until then, track him down at the nearest conference and ask him to expand on these risks. It may be the most interesting meeting you have at that conference.
It’s like three wishes, only negative---from a potentially quite naughty little genie.
Not that Ralph is a negative guy. He’s certainly not. As noted, he’s a hoot. But, he does have three specific concerns about smart grid and communications. And they are quite valid.
His first concern: What about the sun, man?
I know. Seems like a hippie liberal issue, but it’s not, my friend. The sun impacts all. What he’s getting at is solar max. Solar max isn’t an ‘80s icon you don’t remember well because you’re still fondly recalling Max Headroom. No, in fact, solar max is short for solar maximum. It’s a measurement of solar variation. It’s about sun spots and, while it still sounds odd, that does impact things here on Earth like weather, surface magnetism and radiation.
What’s the bottomline here with solar max? Well, it impacts something much more directly than weather here: It can create odd havoc with communications. The scientific explanation involves refraction and ionized solar photons. But, the basics are: It gets all wiggy with radio frequency (RF).
Ralph noted that solar max is on a 17-year cycle with experts expecting it to peak between 2012 and 2014, which could cause issues with utilities’ RF use. Ralph’s question to the industry echoes more Dirty Harry than Max Headroom though: Are we feeling lucky?
In other words, are we just going to ignore solar max and hope it doesn’t cause massive issues, or does someone, somewhere have a plan?
I know. That’s only one risk and already you’re a bit concerned. Try to maintain your calmness.
His second concern: GPS.
Okay, not all of GPS. Not your Mr. T-speaking TomTom alight on your car dashboard that gets you to the Kenny Rogers concert without getting lost on Oklahoma’s unlit, unmanned and unsigned back highways. That’s not the GPS Ralph is concerned with. He’s more concerned with GPS satellite timing signals, which would keep all your smart grid equipment on the same reliable beat, you might say.
But, as Ralph pointed out, GPS can be easily jammed with about $200 worth of over-the-counter parts and an ability to get within 150 feet of the equipment. So, like his concerns over solar max, he has some questions, like: What’s the risk of GPS jamming to utility operations? What’s the threat level, really, and what counter measures are we taking?
Hopefully, you’re not panicked yet. We’re on to risk number three, and, luckily, this risk doesn’t really make us fear the minor jammer or the almighty sun. Instead, this final risk revolves entirely around the almighty dollar.
His third concern: The business case for AMI.
How many articles have we all read---and, also, have I written---on proving a business case for AMI? I’ll estimate it topping Super Bowl ticket receipts from last year. Seems like millions, doesn’t it? But, Ralph wants to know if they are really getting to the heart of one specific area: using demand response as the ‘sweet spot” to get to goal on operational savings.
See, demand response is rather an amorphous term. It’s here. It’s there. It can mean different things to different folks (rather like the term “smart grid,” really).
Let’s say you need to prove your AMI business case and you know a few savvy facts. You know that five percent of your consumers will change their power use according to demand response ideals if you just tell them all about it, if you just give them good info. They are really that darn motivated.
But, you also know that if those consumers had in-home gadgets that let them visually see the information in real-time, that number would jump to 15 percent. So, you pencil in that number in your AMI business case, cuz that’s a delightful number, really. Helps all those other numbers look better. But, are you figuring in costs of those in-home devices, or are you saying to yourself, “Self, those consumers are gonna be just fine going to Radio Shack or some other fine establishment and buying their own devices and installing those devices themselves.”
This leaves the pay out for that in-home device in the pocket of the consumer, which is lovely for that AMI business case but perhaps not so practical in the real world. Because will that person really be excited about taking time out of their day and going down to the Shack and picking up that purchase and then going home and installing that thingamajig? And who do they call if the thingamajig doesn’t light up with all the bells and whistles the consumer expects?
One response Ralph got when he asked around about that question to a few utilities, “I don’t know who they call, but it ain’t us.”
So, if it ain’t us, who is it? And is this a magical view of consumers where they are all tech savvy, gung-ho and willing to pay for demand response benefits up front? What if that magical view is woefully inaccurate? How will taking on consumer-side technology, questions, installations, problems and follow-ups impact the business case for AMI?
Those are Ralph’s meditations these days. You’ll be able to read more about them in an upcoming issue of POWERGRID International magazine. If you can’t wait until then, track him down at the nearest conference and ask him to expand on these risks. It may be the most interesting meeting you have at that conference.
Thursday, September 16, 2010
More from my Autovation notes: Ben Koch
Ben Koch, managing director in the corporate finance division of SWS Group, joined Austin Energy’s Mele at Autovation’s opening keynote session at the Austin Convention Center on September13. While he didn’t talk as much about communication as she did (see previous blog on Autovation by clicking here), Koch did mirror the executives at Itron and Cisco and discuss collaboration.
“We’re all on this road to a true end-to-end smart grid together,” he told the audience.
While Koch noted that there have been—and still are—obstacles on the road, the path is getting smoother and the industry is making progress.
“The smart grid has persevered,” Koch said, despite challenging economic conditions, complex integration issues, consumer skepticism, regulatory pressures and evolving standards.
While Koch admitted that financing is still an issue, he pointed to the Obama stimulus money for smart grid as being “on the right path” and noted that third party private investors are stepping up, offering nearly $500 million for smart grid products this year alone.
“On the private side, [companies] believe in smart grid opportunities,” he stated.
In the end, that investor faith in the smart grid was the one idea Koch really hoped every audience member would take away from his speech at Autovation.
“Investors are following [the smart grid] closely. They are willing to put capital to work,” he added.
Koch added that the smart grid market has a number of positives that investors look for, including growing market opportunities (1.3 billion electric meters around the world, for example), unique technology solutions and scalable business models.
While the gray area of emerging-but-not-definitive standards and significant consumer issues still remain, Koch doesn’t see those as impossible mountains to climb.
He said, “There will always be challenges in a market this size, but they will be overcome. It’s a great time to be in the [smart grid] market.”
“We’re all on this road to a true end-to-end smart grid together,” he told the audience.
While Koch noted that there have been—and still are—obstacles on the road, the path is getting smoother and the industry is making progress.
“The smart grid has persevered,” Koch said, despite challenging economic conditions, complex integration issues, consumer skepticism, regulatory pressures and evolving standards.
While Koch admitted that financing is still an issue, he pointed to the Obama stimulus money for smart grid as being “on the right path” and noted that third party private investors are stepping up, offering nearly $500 million for smart grid products this year alone.
“On the private side, [companies] believe in smart grid opportunities,” he stated.
In the end, that investor faith in the smart grid was the one idea Koch really hoped every audience member would take away from his speech at Autovation.
“Investors are following [the smart grid] closely. They are willing to put capital to work,” he added.
Koch added that the smart grid market has a number of positives that investors look for, including growing market opportunities (1.3 billion electric meters around the world, for example), unique technology solutions and scalable business models.
While the gray area of emerging-but-not-definitive standards and significant consumer issues still remain, Koch doesn’t see those as impossible mountains to climb.
He said, “There will always be challenges in a market this size, but they will be overcome. It’s a great time to be in the [smart grid] market.”
Monday, September 13, 2010
Live from Autovation: It's all about communication
It seems the buzz words at Utilimetrics' Autovation conference in Austin this week center around communication: communication in its techy automation form, communication with customers, and communication between vendors.
The communication fest began during the opening keynote this morning. Austin Energy's Cheryl Mele, the COO, talked about the utility's extensive program to exchange those regular old, outdated meters for smarter, sharper ones. And, even with that program, it was all about information distribution.
"One of the most important things we did during this exchange process was communicate."
And communicate they certainly did: flyers, press releases, post cards, door hangers, even a dedicated customer call center to answer all the questions about the meter exchange process.
Communication with customers was also on the minds of David Elve and Matt Zafuto with Sensus when I stopped by their booth on the Autovation exhibit floor today. Elve was discussing the importance of managing customer expectations and Zafuto agreed that being in the customer business is part of being in the automation business these days.
"Utilities don't react with customers very well, and traditionally they haven't had to," Zafuto pointed out. Comparing the current state of smart grid development as the "awkward toddler phase," Elve and Zafuto noted that utilities have the tech available to them, but now they need the technique, the flexibility to change plans as feedback from customers and other partners changes the needs of the smart grid---two-way communication both technologically and socially.
Itron and Cisco discussed the need for partnership communication as they expanded on their original announcement on the partnership subject during a press conference at Autovation.
Philip Mezey, senior vice president and chief operating officer for Itron North America, noted that a lack of trust and problematic scalability has created a push back against current smart grid advances but that he hopes this collaboration between his company and Cisco will announce a new state of affairs in the industry, one of communication and collaboration between vendors.
Paul De Martini, chief technology officer and vice president of strategy for the smart grid business unit at Cisco, added that it is "time for the industry to move out of the embryonic stage and start real deployment," which would include a standards-based approach with better communication and more vendor partnerships. This would allow for "creativity and innovation" in the smart grid marketplace, according to De Martini.
Tuesday, September 7, 2010
Love's labour's found
Shakespeare's Love's Labour's Lost is a comedy about the details of courtly love; it's both a commentary on how much work that love can be and, ironically, how little work that love can be. That's where all that "labour" comes in. Here in America, we drop that extra u and talk about "labor" when it comes to work and the workforce---and one area of the American workforce where labor hasn't been too significantly lost is power.
The production and distribution of power is still a labor-intensive effort from the mining of fuels like coal to the maintenance of equipment like pole-top transformers. Men and women are still steadily and directly in the mix of electricity.
In many vital American industries---logging is a good example---technology has overtaken the labor force. These days, with the right equipment, a single "driver" of a good logging machine can do what used to take a force of strong men weeks to complete.
In power, however, the growth of technology has often meant a growth in workers, rather than a serious cut in workforce. When meters helped separate costs and flow of residences, someone had to be on hand to read those meters. When lines began to be hooked together into grids, someone had to be around to do the connections---and to watch the traffic on those connections.
While it is true that smart meters and smart grid technology may translate into less of a need for meter readers, it remains true that skilled labor will always be an important and vital part of the power equation. Electricity doesn't flow without the right people making it happen. As we all return from a long weekend to celebrate labor in America, that's definitely a positively charged thought to keep in mind: That powerful labor of love is important to America, and the importance of the labor required in that effort should never be forgotten.
The production and distribution of power is still a labor-intensive effort from the mining of fuels like coal to the maintenance of equipment like pole-top transformers. Men and women are still steadily and directly in the mix of electricity.
In many vital American industries---logging is a good example---technology has overtaken the labor force. These days, with the right equipment, a single "driver" of a good logging machine can do what used to take a force of strong men weeks to complete.
In power, however, the growth of technology has often meant a growth in workers, rather than a serious cut in workforce. When meters helped separate costs and flow of residences, someone had to be on hand to read those meters. When lines began to be hooked together into grids, someone had to be around to do the connections---and to watch the traffic on those connections.
While it is true that smart meters and smart grid technology may translate into less of a need for meter readers, it remains true that skilled labor will always be an important and vital part of the power equation. Electricity doesn't flow without the right people making it happen. As we all return from a long weekend to celebrate labor in America, that's definitely a positively charged thought to keep in mind: That powerful labor of love is important to America, and the importance of the labor required in that effort should never be forgotten.
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