Energy and the Microsoft ROC

Yesterday I had the pleasure of a tour by Darrell Smith, Director of Microsoft Facilities & Energy, of the Redmond Operations Center (ROC). Facilities & Energy provides internal support; it is not a product line. The ROC applies Big Data to the operations of buildings on Microsoft’s home campus. In concept, the ROC is much like the Enterprise Building Management System (EBMS) at the University of North Carolina that I have written of. The results at Microsoft, though, are much more successful.

Darrell avoided the trap that we fell into at UNC, the trap that says that until the in-house enterprise system can control all the systems, it is a failure. In the Redmond Operations Center, Microsoft concentrated first on data mining and operational improvement. By Darrell’s definition, his system will be mature when it does control as well, and may never reach that level of maturity. In the meantime, he is finding wins every day by applying analytics to improve operations.

The center produces two kinds of analytics, alerts and reports. Each of them is focused on finding ways that Microsoft is wasting money every day, and fixing them.

Everybody who works with building systems is aware of the alarm spam that traditional systems send out. Turning off is an Alarm. Turing on is an Alarm, Catching on Fire is an alarm. Build alarms are events with almost no meaning. The Redmond system reads the low level protocols and harvests state information and alarms. The system also gathers other factors from a number of sources, including essential weather information.

To generate Alerts at the ROC, building engineers instead describe patterns. The system gathers a mass of information from each system and air handler tracked. The in-house engineers create queries that identify such issues as short cycling, or incomplete closing of dampers, which they name Faults. The engineer carefully examines the operation a single air handler, or a single building to find a problem. This problem is then described by means of a query that brings back this problem and similar faults in other buildings. For each fault, a cost is assigned by the system based on the size of the system, how much energy it uses, the system’s operating schedule, etc.

In the ROC, all active faults can be seen by building or by system, and can be sorted by cost or criticality. Generally, expensive ones are fixed first. Each work order is tagged with the cost that is being avoided by a timely fix.

Because Microsoft has a learning culture, this process reduces energy use even in the buildings not yet accessible to the ROC. Building mechanics fix problems early in monitored buildings and can see results. They share what they have learned with others in buildings not yet monitored, and the underlying faults are fixed in them, too.

Reports, as I understand them, look for more inchoate patterns. A report can describe many attributes of system or group of similar systems. Reports reveal operational outliers, i.e., the air handler that runs all night, or the system whose damper opens unexpectedly. A newly trained mechanical engineer may take a day or two to define a report. Once defined, it can be run again and again, including for other systems and for other buildings.

Think for a moment of the most powerful thing you have done with a spreadsheet pivot table. Now consider applying that task and that visualization to raw operating data from your buildings every day, and using the results to generate work orders. This is what the Facilities and Energy group has done in the Redmond Operations Center. They find real problems in operation and configuration of building systems every day, price them, and fix them. That is enough, even without control.

Microsoft is doing other things with their own facilities operations which I may write about later. But today, I am marveling at the data-based operation of facilities.

CFLs and the Housing Collapse

Last week, I was discussing some new research from Wake Forest University with my favorite real estate agent. Physics professor David Carroll has developed a new technology for unbreakable lights. From popular accounts, the technology has some similarities to OLED, but is longer lasting and less expensive. A coating on a film of plastic glows. The film can be wound to produce more light. The result is a light-weight and hard to break plastic bulb that produces little heat and a lot of light while using very little energy. The inventor claims that he can produce lamps in any color. Production is likely to start in 2013.

The conversation veered, as it often does when I speak with her about technology. Real estate agents have a practicality about houses and the motivations of people who inhabit them, almost as a veteran nurse has a practicality about the human body. It may be new, but neither the real estate agent nor the nurse is ever really surprised. In either case, the follow on questions can be surprising and practical.

The agent is showing a house that has not yet been repossessed in a mortgage foreclosure, what she calls a pre-repo. She has worked with many repos and pre-repos over the last few years. The paper work required for a repo can be immense. Pre-repo’s, which are quick sales to avoid repossession, can be as bad. Sometimes one department of a bank refuses to provide the language demanded by another department in the same bank. Few chances are missed to make a difficult situation harder.

But back to lights and the agent. She observed that they might make it easier to move the difficult homes…

The agent observed that most of the pre-repos and repos had switched out all their bulbs for compact fluorescent lamps (CFLs). These lamps produce a grim bluish light that makes a house hard to sell. As a seller’s agent, one of the first things to do is to change the lamps back to incandescent, to produce a welcoming look that is not “so depressing”. People buy houses because when they feel they and their family will be happy in that house. It’s often a visceral decision. People do not feel they will be happy and healthy when they look around at a house lit only by CFLs. It is much happier to imagine a happy life in a home lit by incandescent lamps.

The agent then observed that there may be a link between mortgage foreclosures and CFL lights. Many people fight to maintain their houses, even when they owe far more than the current worth of the house. Perhaps the dim blue light helps to depress families that inhabit homes lit only by CFLs. Perhaps one is more likely give up when facing depressing lighting every day. She posited whole families, affected by something akin to seasonal affective disorder (SAD), giving up on their homes. I find it hard to contradict someone whose livelihood depends on careful observation of people and how they interact with their homes.

In any case, she faces homes that people do not want to buy. Re-lamping is often the easiest and least expensive way to prepare a house to show better. An inexpensive choice that provides a nicer quality of light would aid her to stage a house for quick sale. Incandescent bulbs are fragile, and do not take well to riding around in the car every day. With unbreakable bulbs, she could keep a case in the back of the car, and be ready to stage a house in very little time.

I don’t claim that installing CFLs leads to foreclosures—but It seems a plausible contributor. I am fascinated by the notion that better unbreakable lights may help the real estate market get moving again.

Must retail energy users be mere price takers?

A significant wedge between those seeking to maintain the current regulated prices accompanied by DR and those looking to move to transactive energy for a self-regulating grid is the notion that retail customers are all mere price takers. A price taker watches the market and either buys or does not buy; he takes the prices the market offers. Some see that this “lack of power” can only be addressed by regulating the prices offered. This leads back to today’s model.

Committed positions break this model. A retail customer who commits to buying this much power at this rate for a given time period in the future establishes a committed position. With a committed position, if the customer needs more power at any time than the commitment, then the customer must make up the difference at the spots rates. If the customer needs less power than the commitment, he can only sell back the difference at spots rates, and then only if he finds a buyer. With this assumption of position risk, the customer also gains the ability to interact fully with the market.

In today’s regulated markets, the greatest value of energy storage is as a forward hedge by the energy supplier. The entity that stores the energy on premises cannot make up the economic value required by the storage. This storage is of value as a hedge for the retailer, not as an asset for the customer. This economic imbalance reduces the value of other distributed energy assets, such as distributed generation, as well. By limiting the value of energy storage to only the hedge value for the supplier, distributed energy assets are always undervalued.

Committed forward positions change this equation. A committed forward position in power is a contract that the buyer will purchase this energy whether or not he uses it, and that the supplier will provide the power no matter the market conditions at the time contracted for delivery. (Let’s leave aside for now the issues of true emergencies, liquidated damages, etc.)

When the market allows committed positions, the buyer is rewarded for better understanding his own energy needs. A buyer who is able to plan his energy use could package a series of positions, and take bids from the suppliers. These bids can be considered in the larger context of the business, such as labor planning or the needs of seasonal manufacture. A committed forward position then provides the buyer with choice while limiting risk in price and availability.

Committed purchases enable the buyer to take full advantage of his own distributed energy resources. Energy storage becomes a way to manage purchasing commitments, sometimes using excess energy in the commitment, sometime shaving peak use to stay within the commitment. Distributed generation is managed locally, where the knowledge if value, process, and commitments is greater.

Committed purchases of power move the retail energy buyer beyond the role of a mere price taker, to that of a full market participant. This devolves considerable autonomy to the end nodes of the grid. This increases the rewards of investing in distributed energy resources for those customers that value power surety and economic arbitrage. Because such investments are made by single sites, they will help us move to normal, innovative markets in energy technology.

Farewell, old friend

The changing of the seasons is a time to look back as well as forward. This fall, I am looking back on a friend of 14 years.

My dog has been in the ground for moew than a month, now, next to two other old friends. Some critters have recently become interested. The excavations of the critters made it easier to plant a nice stand of spring bulbs over my friend. Their excavations never got deep enough to reach their goal. Still, last week I sowed the ground with a lot of cayenne pepper to discourage them.

Rusty was so incontinent for his last six months, that unless the weather was severe, he had to sleep outside. He was excited to go outside, but concerned about me that I was unable to let him in. He wondered why, but there it was. Last week, fall weather arrived. With the old house cooling, there were creaks and I kept looking up to see him on the porch, or waking up to let him in.

The best gifts a dog gives you are ones that you don't appreciate at the time. All of those dawns I would never have seen, except for the &^** early morning sanitary walks. Those early morning wake-ups I cursed led to a productive three hours of technical writing.

Since my shoulder was re-built, I have had a series of small triumphs, of the "first time that…since the shoulder repair." I remember me delight the first time that I could rest my arm on the window of the car on a Spring day while driving. I remember the first time could get a spice from the shelf above the stove using that hand. Each time there is some pain, followed by joy, a clarion that alerts me to something that I have gotten back. They come less often now. Last month I was digging in the yard, feeling grim. It had been a long day, and here was one other task, a bad surprise although long anticipated. My left shoulder began to hurt. Somehow heat jumps up, and my my mind says "ahh yes, the first time you've dug a shallow grave at dusk since the shoulder repair."

As I finished, I could hear the band playing at the general store up the valley. Bats circled overhead in the gathering dusk, attracted by the bugs, that were attracted to my sweat. I wrapped him in the last of the colorful sheets, well worn, from when my children were young. When I finished my work, I pulled a chair from the porch, and sat beside the mound. I don't drink Scotch, generally, but I got a glass of the really good one that my son gave to me for Christmas, added a splash of water to make the aromas bloom, and sat beside him one last time. The music drifted over. The summer insects sang their evening song. The bats flitted here and there.

One last gift, doing something I did not want to do, one last bit of joy from the old dog.