Natural Gas and Perfect Power

We are misusing natural gas in our power plants. Guided by strong emotions and the search for the quick fix, we are reducing the long term reliability and sustainability of our energy infrastructure. When well meant but bad decisions reduce the common good, we call it the tragedy of the commons. Technology and modern public interest groups let us recreate the tragedy of the commons on a larger scale.

Perfect Power is what Kurt Yeager and the Galvin Electricity Initiative call their version of the smart grid. Perfect Power assumes that the national power grid will not and cannot be made reliable enough for the digital world. Attempts to make the grid reliable cost a lot of money and waste a lot of power. Attempts to make the grid reliable interfere with the grid being the most efficient market place of energy possible, and able to accept innovation, diversity, and change. Perfect power reliability starts in the home and building, which must be responsible for their own reliability and quality. Groups of homes and buildings can band together in microgrids to enhance that reliability and provide each other with robustness. These microgrids can then buy from the grid when their needs and desires warrant, and when the prices are good. The grid, freed from the mandate to do what it cannot, will become easier and less expensive to operate.

Net Zero Energy and Distributed Generation are different perspectives on the perfect power vision. Buildings that are able to store, generate, recycle, and convert energy, can buy when they want, can sell when they can, and are reliable whatever the grid provides. Microgrids expand the options for energy storage, recycling and re-use even we add distributed generation. Distributed generation can get us past the restrictions of the regulated “natural monopoly” of power.

I have written before that I wanted my home heating system to see gas as well as electrical prices. Regular readers know that I recently installed a hybrid system that switches from heat pump to gas furnace based upon outdoor air temperature. This automatic cut-over is based on computed heat-pump efficiency. The cut-over should be based upon the current price of each energy source, factored by each system’s internal performance diagnostics.

At my annual Caroling Party, conversations naturally turned to the new purchase, who installed it, and was I satisfied. One party-goer was concerned that the high efficiency furnace was still producing greenhouse gases. I mused that even if the power company was better than the 95% condensing furnace, the local fuel did not suffer from the inefficiencies of converting heat to electricity, and of then transmitting it for many miles, and then converting it back to heat. Local efficiency numbers, from local energy use, are simpler and easier to understand.

Another guest, a long time gas company engineer, pointed out that natural gas has its own Demand-Response system. Demand-Response refers to the approaches and technology used by the electrical providers to manage peak capacity by seasonal, daily, and emergency communications with its customers. During periods of peak use, the pressure in the natural gas distribution system can drop to low levels. If it drops too far, pressure valves automatically shut off in homes and businesses. These brown-outs are much more expensive to recover from than electrical black-outs. Utility employees must turn off each gas meter before a local loop can be restored lest appliances with pilot lights become explosion hazards. Gas companies handles these low pressure incidents by calling large industrial customers and negotiating reduced use.

All of the same AMI/AMR conversations of the power grid apply naturally to natural gas distribution. The costs savings and efficiencies of automated cut-off of service can offer even greater benefits, when needed, to the gas company than they do to the electrical company. Gas distribution can benefit from dynamic pricing for capacity management just as does electrical distribution. If I had dynamic pricing, then I could factor it automatically, along with electrical pricing, into my home heating operations.

All of the concepts above apply to generation as well. Perfect power and E-tech will include conventional generation as well as exotic technologies such as gas-based fuel cells. Natural Gas will need many of the same service interfaces as electricity.

Stability and robustness in ecosystems comes from diversity of species. Stability and robustness of energy in the home and office will come best from diversity of energy sources, including those from outside the building as well as those generated internally. There are few sources of energy that are easy to transmit to each site of final use. We should not waste them all in central generation plants. We should use them to expand the robustness and diversity of energy in each building and in each microgrid.

Packing Peanuts and Corn Ethanol

It is hard to figure out the full cost of the government’s corn ethanol mania. Random observations during the holiday season suggest that they are still larger even than reported already. A full accounting, if it were possible, would sound a cautionary note as a new congress and a new administration consider how to stimulate new energy and E-Tech.

The most believable numbers suggest that the full production costs of corn ethanol use more oil-based energy then it replaces. These numbers are of course, in dispute as they include assumptions about fertilizer production and tractor driving and a twisted maze of hiddensubsidies. Holiday packing peanuts are part of the picture.

A notable facet of this century’s world economy has been the entry of the poorest of the poor into the world economy. We have seen this in reports of cell phones in rural India and cell-phone banking in Africa. Driven by Corn Ethanol, food costs around the world skyrocketed. Worried about feeding their families, third world famers retreated from market crops and returned to subsistence farming. As the first world economies stumble, and consumers reduce their purchases, the emerging economies, now cash poor, cannot buy. The world economy, like our crops, has been made more brittle and one-dimensional.

Some problems may be masked as political rather than non-economic costs. There were riots in Mexico, where staple tortillas were priced out of reach. The resulting growing desperation may have recruited more to the drug armies fighting it out with Federales and the police, so much reported this last year. If so, this problem may outlast the short-term corn prices.

Every year at Christmas, I receive boxes from my large family spread across the country. Many of these boxes are professionally packed by the package stores, placed in branded boxes, and packed in commodity supplies. For the last few years, these boxes have been filled with biodegradable packing peanuts, made from expanded corn starch. This year, every such box was filled with plastic peanuts. Corn Ethanol has apparently been a boon to the petrochemical plastic peanut industry, as it priced competitors out of the market.

Christmas is always a time in which the family purchases more pre-made food. Whether for a convenient meal for the family re-gathered or for a special side dish or desert to augment a holiday meal, or even for a quick meal grabbed to allow time for holiday errands, I have performed my annual longitudinal survey of the food containers in local use. For the last few years, these containers have been increasingly made of a corn starch-based polymer that degrades in a host compost pile. This year they were once again, as they were five years ago, plastic.

I hope we will learn from this that good intentions are not enough. I hope that we will learn from this that one-dimensional approaches to sustainability may be less sustainable than their predecessors.

I hope that as we re-make energy markets, we eschew the hubris of central planning.

I hope we have the self discipline to resist the easy answer. We need better markets, and less central planning. This is too important to make the same mistakes again.

To Market, To Market to Buy a Fat Watt

There is a strong tug of war, not only in the buildings to grid (B2G) arena, but in all others, about whether GridWise is about controlling gizmos or about interactions between economic agents. One is paving interstates along the old cow-paths, and one is laying out a city. When you lay out a city, you never know what markets and neighborhoods will actually develop.

Those who have worked long in utilities or in building systems have a deep impulse toward the perfecting old models of control rather than laying out the market rules for transacted energy. Like a dog to his vomit, even those that see the potential from new markets return instead to deep process interactions to better support the old model of hierarchical control. This is not a failure of morality or imagination, it just is. The effort today is to tug, often against great resistance, the traditional players in the power industry in the [to me] correct direction. And at that, many of the players in that industry don’t even show up to be tugged at events such as Grid-Interop.

This tendency lies in all sectors of energy use, including in buildings. One of the largest building shows (AHR) (Heating & Refrigeration) of the year is in Chicago the third week in January. Because so many of the installers and designers of this equipment make their annual purchasing decisions at the AHR show, the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) holds one of its semiannual meetings in conjunction with AHR each year. ASRAE is the designated domain expert for the promulgation of HVAC standards in the US, a mission that ranges from best practices in grounding equipment to ventilation standards for health to involvement in many green initiatives. As a point of reference, Legionnaire’s disease threw down a gauntlet to ASHRAE analogous to what the Cleveland Outage did to EPRI.

The problem, though, is that this show and these participants are similar in many ways, to those who show up at Utility events. Many of the absolute best are the best at the wrong thing, at the old way. This is the challenge and the opportunity. Some of them are looking for something new. Some of them are just hoping not to miss the next wave. Some will become conservative from the anticipated downturn in building starts. Some will be scared enough to try something new. There are side meetings during AHR that will wave the flag for show attendees.

Structurally, there is a problem in trying to build new markets through AHR. HVAC guys typically sell to the Facilities guys. These have support rather than strategic roles in their respective companies. It is hard for them to do anything other than minimize drag on ongoing business activities. I would like to reach further...perhaps to The Green Grid (Data Center guys) who understand a strong relationship between costs / reliability / capacity business environment....

We are currently looking at Wednesday afternoon, to pull in exhibitors whose responsibilities are done Wednesday morning. There are also a variety of talks during the week I will be at which touch on the same themes, but from the perspective of the building systems integrator...(http://www.ahrexpo.com/showinfo/)

But come March—it is not scheduled yet–and NIST will hold another meeting in Chicago. We hope that this meeting will bring in technical staff from the great commodities markets. I shut my eyes when I saw a careful list of “price and bidding models”—developed by EPRI and IEEE and ASHRAE and.... To me, we have a commodity whose price varies cyclically, and whose future cost is affected by anticipated weather. Sounds like soybeans or orange juice. Except the season is 24 hours. I want daily energy bidding to look more like a commodities exchange.

There are some attributes relevant to commodities. Soybeans are different from juice is different from pork bellies. I assume there is now a futures market in organic orange juice. Energy is a commodity, even though it has some attributes (quality, carbon, location). I began wondering, can we get advice from the CBOT (Chicago Board of Trade) or the Merc (Chicago Mercantile Exchange) about the data structures and interaction patterns they use? Or is NASDAQ, with its widely distributed network of dealers, a better model?

These groups areas certainly understand Demand / Response in a market. They understand bidding and futures markets. They understand every kind of hedge I can imagine and some others as well. In other words, if I have a personal agent sitting on my electric meter acting as my personal day trader, can I get him one of those nifty yellow coats....

So who might participate? People who understand big multi-party bidding systems, and the information standards they run on. Auditors who know what transaction information needs to be kept for instantly executing electronic bids. Anyone else who has an area of expertise near these rawest of markets. Their knowledge is what will unlock e-tech by creating the markets of transacted energy.

An Evolutionary Composite Services Framework for Energy

Future energy systems must not only support interoperability on operational, e-commerce, and security levels, but they must do so against a background of innovation. New technologies will arrive from innovators who are not traditional energy participants; it must be easy for these innovators to introduce their products and easy to integrate these products into the intelligent grid.

New business models, especially support for distributed generation and the hybrid technologies such as the zero net energy building, will demand new interfaces. These business models require symmetry, with each participant both a buyer and a seller of energy. Cost effective local energy storage will create new interaction patterns that we cannot know until we create the incentives that encourage market adoption. One thing is certain, the interface between the intelligent grid and buildings and industry will be different tomorrow, than it is today, and different still in another year.

Electric cars will have a significant position in our society far before we have worked out the market mechanics. The market mechanisms will extend beyond the simplistic “all cars will charge only in the middle of the night” to support on-demand rapid charging and selling stored energy back to the local home, business, or utility. The final market must support social scenarios such as holiday travel and new businesses such as the renewable energy parking deck. Again, we will face rapidly evolving interfaces for the near future.

We can most easily meet these challenges by creating a composite framework that supports diversity. These services will support the different types of business interactions surrounding the intelligent grid. These include but are not limited to:

• E-Commerce services to define the two-way buying and selling of power
• Capability and Capacity services to negotiate how much power is available at what quality irrespective of the underlying technology.
• Weather and similar services provide situation awareness to buildings and grid operators. Weather is critical to predicting energy consumption as well as to predicting renewable energy generation capacity. Situation is awareness is just as important to building and industry participants in new energy as it is to central generation and transmission facilities.
• Tariff and Regulatory interfaces, whether for long transmission, or for carbon negotiations, will guide energy markets beyond mere electrons.
• Security Services to control operations and protect privacy.
• Safety Services to provide situation awareness to linesman responding in emergency and other scenarios.
• Operations Services, supporting either third party operation of site-based generation capacity, or site-generation as a forward deployed utility asset.

Each of these seven interfaces will evolve over time. A user of one service may care little about another. As services become the basis for system-to-system interactions, keeping each service separate simplifies interaction patterns so each can evolve rapidly.

Rapid evolution and deployment are critical to new energy plans, particularly if we are to meet ambitious goals for more renewable energy, more distributed generation, and more electric cars. E-commerce and Security services can be based upon existing IT standards. Operational Services, where appropriate, can be based upon existing standards for substation operations. Weather services can be developed in different venues through the work, perhaps, of NOAA (the National Oceanic and Atmospheric Administration). Composite services will speed the development and deployment of the smart grid.

Composite services will also disconnect the different business processes from changes in other areas. Each business process is concerned with only a single service on its partners. As that service definition evolves over time, newer system will need to interoperate with version-based diversity within domain, rather than in all domains.

Energy systems are big infrastructure. Big infrastructure lasts for a long time and touches many things. Scale introduces diversity if installation. Innovation introduces diversity of interaction. Long life introduces diversity of versions. An Evolutionary Composite Services Framework provides the best platform for providing function and performance despite these three sources of diversity.