Amazon’s Echo Speaker: Your New Home Energy Management System?

by Bob Shively, Enerdynamics President and Lead Facilitator

In July of last year, we featured a blog post titled The Home of the Future, A Profit Center for Residents? It explored a future home in which a home energy management system (HEMS) connected to various home devices might automatically interact with electricity markets to lower energy costs or even turn the home into an energy profit center. At the end of the article we noted two developments necessary to further the home of the future: changes to the electric utility business model and growth of innovative service providers.

While utilities and regulators in a few jurisdictions are considering alternate business models and developing services, potential technology service providers are moving rapidly to create products that will attract consumers now. 

In our infographic of the future home, the resident is looking intently at a “home energy app” on her tablet. Thanks to innovation introduced to the market by Amazon’s Echo, I now think we made a mistake when designing this graphic. Rather than showing the resident looking at a tablet, we should have simply shown her speaking. Amazon’s Alexa personal assistant, accessed through the home Echo speaker, can already perform voice-activated functions such as adjusting thermostats and lighting levels, controlling switches, and querying security systems to see whether a window is open.

By providing open source code to software developers, Amazon claims that Alexa has thousands of “skills” to help in the home.[1] Home automation developers already include WeMo, Philips Hue, Samsung SmartThings, Wink, Insteon, Nest, and ecobee smart home devices.[2]

Whether it is Amazon or some other provider like Google or Apple, you may already have an early version of your future HEMS in your house. According to recent survey by icontrol Networks[3], key reasons for consumers to invest in smart home technology include security, energy cost savings, convenience, environmental benefits, and home entertainment.

Amazon has made it easy to get started because consumers can dip their toes in the water by simply buying a $180 speaker — and then can incrementally add more and more services as they wish. 

Utilities are beginning to notice the rapid technology development and may soon join in. One of the more forward utilities, Vermont-based Green Mountain Power, is offering a service called eHome. According to Green Mountain:

“eHome includes a home energy makeover that can include a heat pump hot water heater, heat pumps for heating and cooling, weatherization and LED lighting. It also includes innovative home automation controls to see energy use in real time and allow for control of thermostats, outlets, lights and heat pumps.”[4] 

With major technology companies such as Amazon and Google already fighting for your business[5] and utilities beginning to take notice, the “home of the future” may be available sooner than later.



Footnotes:

[1] See https://www.amazon.com/Amazon-Echo-Bluetooth-Speaker-with-WiFi-Alexa/dp/B00X4WHP5E

[2] See http://www.wired.com/2016/06/ amazon-echos-head-start- biggest-advantage/?mbid=nl_62416_p2 

[3] 2015 State of the Smart Home Report, https://www.icontrol.com/blog/2015-state-of-the-smart-home-report/

[4] See http://www.greenmountainpower.com/innovative/ehome/

[5] See Google Home vs. Amazon Echo, http://www.cnet.com/news/google-home-vs-amazon-echo/

 

Posted in Electricity | Tagged , , | Leave a comment

Gas Pipeline Safety Regulations Continue to be Strengthened

by Bob Shively, Enerdynamics President and Lead Instructor

“Safety is cited as the No. 1 concern among all sectors of the natural gas industry”[1]

gasexplosion_000

As we have often discussed in Energy Currents blog posts over the last two years, safety of natural gas pipelines and storage fields has become a critical issue for the industry. Significant recent incidents have exposed the risks associated with aging infrastructure and traditional operating procedures.

In response to congressional mandates and various industry safety recommendations, the federal agency responsible for regulating pipeline safety (the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration, commonly called PHMSA) recently proposed a new natural gas transmission rule.

The proposed new rule changes would extend to additional parts of the pipeline system and would expand rules associated with parts covered in existing rules. Changes include:

  • Extending rules to many gas gathering pipelines and to newly defined Moderate Concentration Areas (MCAs)
  • Applying pressure testing and maximum allowable operating pressure or MAOP verification to pre-1970 pipelines
  • Modifying pipeline repair criteria
  • Providing additional direction on evaluation of internal inspection results
  • Clarifying requirements for conduction risk assessments, including addressing seismic risk
  • Expanding mandatory data collection and integration requirements
  • Requiring additional post-construction quality inspections
  • Requiring new safety features for pipeline launchers and receivers used in internal pipeline inspections
  • Requiring a systematic approach to verifying MAOP and requiring operators to report when a pipe’s MAOP has been exceeded

The proposed new rules are out for public comment as I write this post and are expected to be implemented quickly. The result will be increasing time and money spent on pipeline safety but hopefully a corresponding reduction in pipeline incidents.

For more discussion on pipeline safety, see the following resources:

For a detailed discussion on principles associated with gas pipeline safety, read the full version of this article that recently appeared in our Q2 2016 edition of Energy Insider.


Footnote:

[1] “Pipeline Safety: Top Concern for All Segments of Natural Gas Industry,” Christina McKenna, Enerdynamics Energy Currents Blog, November 6, 2014

Posted in Natural Gas | Tagged , , , | Leave a comment

Electric Vehicles May Be Key to Utilities’ Load Growth

by Bob Shively, Enerdynamics President and Lead Instructor

Just over a year ago, penetration of electric vehicles was miniscule compared to the more EV Norway w creditthan 226 million registered vehicles in the U.S. But, as we noted in our Q1 2015 issue of Energy Insider, change was happening through various initiatives by car manufacturers, electric utilities, and new integrated solutions that combine smart homes and EVs. Given the speed at which technology can develop and the significant impacts that EVs could have on our industry, it’s worth looking at developments in EV growth in the last year.

Ownership of EVs, including Plug-in Hybrids (PHEVs), has continued its growth. The U.S. still leads the world in number of EVs, though not in percentage of cars that are EVs, where Norway with over 25% holds the lead.

EV growth v2

numberofevsasof4-16_001

     source: hybridcars.com

Key factors preventing more sales in the U.S. include the price tag and the specter of running out of charge due to low range. EV manufacturers have been working on these issues and, in 2016, numerous announcements have been made about coming models with over 100 miles of range at a price less than $40,000.

EVs range and price.png

    source: hybridcars.com

Some manufacturers also have continued their efforts to package EVs with other green home innovations. Ford continues its work on MyEnergiLifestyleTM (although it’s currently focused on the Chinese market[1]), and Tesla recently offered to buy SolarCity to create a “highly-integrated, sustainable energy company.”[2]

A recent paper by the Rocky Mountain Institute titled Electric Vehicles as a Distributed Energy Resource[3] suggests that if utilities take a proactive approach to EV implementation – an approach focused on properly-sited charging stations and rate design price signals – the result will be significant benefits for ratepayers and shareholders. Utilities must develop rates or incentives that place charging stations at optimal locations on the grid and encourage charging during low-cost hours when system supply is high relative to demand. In some regions this may become mid-day with large amounts of solar power flooding the grid; in others it may be at night when wind power or unneeded traditional baseload generation is available.  

Believing projections about major technology shifts is dangerous business, but at least one respected organization, Bloomberg New Energy Finance, has projected that by 2022 EVs will cost the same as gasoline-powered cars[4]. If so, utilities that develop forward-thinking EV offerings now may soon benefit from a new source of load that will rekindle the past days of robust load growth.


Footnotes:

[1] Ford partners with Trina Solar to launch myenergi-lifestyle in China, Vincent Shaw, pv magazine, May 29, 2015, http://www.pv-magazine.com/news/details/beitrag/ford-partners-with-trina-solar-to-launch-myenergi-lifestyle-in-china_100019621/#axzz4CXcXOYt5

[2] Solar plus storage: With SolarCity deal, Tesla aims to speed clean energy transition, Gavin Bade, UtilityDive.com, June 22, 2016, http://www.utilitydive.com/news/solarcity-tesla-deal-/421370/

[3] See http://www.rmi.org/evs_as_ders

[4] Here’s How Electric Cars Will Cause the Next Oil Crisis, Tom Randall, Bloomberg.com, February 25, 2016, http://www.bloomberg.com/features/2016-ev-oil-crisis/

 

 

Posted in Electricity | Tagged , , , , | Leave a comment

Renewables Require System Operators and Designers to Rapidly Respond to Changing Load Curves

by Bob Shively, Enerdynamics President and Lead Instructor

“From the decline of coal power to the rise of energy storage, big changes are taking hold in the industry…changes are taking hold faster than many expected. The electric sector is no longer simply anticipating a revolution – depending on where you are, it is embroiled in one today”[1]

 Since the widespread advent of air conditioning in the U.S., the electric industry has had fairly predictable shapes to load curves. While system operators and T&D design engineers had uncertainty about year-to-year load growth, the shapes of the curves was predictable. Typical curves looked like the following for a large operating region:

summer load curve 2winter load curve 2

Predictable shapes allowed system operators to consistently plan for load variability given weather forecasts. Similar curve shapes applied to the specific load on many distribution circuits serving residential and commercial loads giving transmission and distribution engineers a predictable pattern of demand to design for.

But as penetrations of renewables increase, system operators and engineers must design for new criteria – loads minus renewable output. On the system level this tells operators how much traditional generation must be available and/or operating at any given point in the day. At the distribution circuit level, it tells engineers what power flows they must design the circuit to reliably carry. As you might imagine, net load curves are fundamentally changing. At the system level, the shape of the curve has changed to a curve that looks somewhat like the back of a duck, hence that is called the “duck curve”:

Duck curve

The above graph showing expected net loads in the California ISO (CAISO) systems demonstrates just how quickly things are changing. By 2020, mid-day net loads are expected to have dropped from 20,000 MW to 12,000 MW during high solar hours. 

When net loads are observed on specific circuits with high penetration of solar, results are even more dramatic. Here are net loads on a representative circuit in Hawaii:

average transformer load

Note that for certain high solar hours the circuit has negative net load, which means that power is back loading into the distribution substation and back into the transmission line. In other hours, the circuit has a net load greater than 5 MW. In Hawaii, with rapidly growing solar installations, this curve has been referred to as the Loch Ness Monster since loads “disappear under the water” and are not visible to the system.

In an earlier blog post, we explored how the island of Kauai is dealing with this issue. As the above load curves show, system operators and system engineers around the country will need to learn from areas like Hawaii and California that have high early penetrations of renewable energy and prepare themselves for load curve changes when significant amounts of renewables come to their systems. 


Footnotes:

[1] From “The Top 10 Trends Transforming the Electric Power Sector,” Utility Dive, September 17, 2015

Posted in Electricity, Renewables | Leave a comment

Economics, Not Policy Mandates, Drive the Growth of Renewables

by Bob Shively, Enerdynamics President and Lead Instructor

“For the windpower purchasing agreements we’re looking at about $2m a year [in] savings, averaged over the term of the contract.”
– Rob Threkhold, Global Manager for Renewable Energy at GM[1]

“When we’re buying wind at $25, it’s a hedge against natural gas.”
– Ben Fowke, CEO, Xcel Energy[2]

Renewable energy has become the fastest growing source of capacity and output in the crossword puzzle with green termsU.S. In the last decade renewables output has shown an average annual growth rate of 32%[3]. In 2015, 67 % of new capacity was made up of wind and solar[4].

Certainly some of this is driven by policy mandates including renewable portfolio standards. But more and more, growth of renewables is being driven purely by cost considerations. The result is that utilities and retail providers are buying renewable power simply because it is the low-cost source of supply, and many large corporations are contracting for long-term renewables supplies as a means of hedging against future increases in the cost of electricity.

 One way of measuring the cost of new supply sources is to look at the levelized cost. This methodology takes various factors including variable operating and maintenance costs, fixed operating and maintenance costs, forecasted fuel costs, capital costs and assumed capacity factors to determine the average overall $/MWh cost of generating electricity over the life of a source of generation. For this discussion, we will use an analysis by Lazard[5], which is updated annually. The numbers below show the estimated levelized cost for various technologies as of November 2015.

Unsubsidized midrange cost

Note: Costs do not include integration costs for variable resources (which Lazard suggests may cost an additional $2 to 10/MWh) nor carbon emissions costs, which depending on future regulatory and market developments, may range from $0 to 40/MWh for coal and $0 to $20/MWh for gas combined-cycle (many planners assume a future carbon cost in the range of $20/MWh for coal and $10/MWh for gas combined-cycle). Natural gas and coal generation is sensitive to future changes in fuel prices, and this analysis assumes a coal price of $2/MMBtu and a gas price of $3.50/MMBtu.

So we can see that even without subsidies, wind power comes in as the low-cost source of electricity. And utility-scale solar is in the ballpark of cost effectiveness with coal and nuclear but doesn’t have the environmental issues associated with coal and nuclear[6] nor the high capital requirements to build a nuclear plant. 

At the end of 2015, the U.S. Congress reauthorized Investment Tax Credits (ITC) for solar power and Production Tax Credits (PTC) for wind power[7]. Let’s take a look at what the levelized costs looks like with these in place:

Midrange cost w tax subsidies

Note: It should be noted that the assumptions used to generate these costs are not exactly synonymous with the final bill passed by Congress, but are close to what was approved.

Now it is entirely clear why utilities are increasingly choosing renewable power as a source of new capacity and why corporate energy buyers are choosing to enter into long-term purchase power agreements for renewables power. Even without renewable portfolios or a carbon price, such transactions simply make economic sense. Given the numbers, we can expect renewable power to continue its rapid growth rate, and all energy market participants must plan future strategies assuming that renewable power is here to stay.


Footnotes:

[1] U.S. Companies Spearhead Renewable Energy Drive, FT.com, May 12, 2016: http://www.ft.com/cms/s/0/e230d280-15e2-11e6-b197-a4af20d5575e.html#axzz4AvAxqg7Y

[2] Wind Power Now Cheaper then Natural Gas Xcel CEO Says, Bloomberg, October 23, 2015 http://www.bloomberg.com/news/articles/2015-10-23/wind-energy-cheaper-than-natural-gas-for-xcel-ceo-fowke-says

[3] See http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_1_1

[4] See http://www.eia.gov/todayinenergy/detail.cfm?id=25492

[5] Available at https://www.lazard.com/media/2390/lazards-levelized-cost-of-energy-analysis-90.pdf

[6] Nuclear is sometimes opposed by environmental groups for reasons associated with lack of a disposal site for long-lived nuclear waste and for the risks of radioactive releases. Other environmental groups support nuclear power since it provides zero carbon energy.

[7] See summary here: http://www.eia.gov/todayinenergy/detail.cfm?id=26492

Posted in Electricity, Renewables | Tagged , , , , | Leave a comment

Do You Know Where Your Energy Facilities Are?

by Bob Shively, Enerdynamics President and Lead Facilitator

Ever read about a gas leak and wondered if there is a gas storage field near you? Or where the closest power plant is? Or maybe you heard about a major storm on the news and wondered what energy facilities lay in its path? There’s a great free tool on the Energy Information Administration website that allows you to quickly and easily answer such questions.

To access this tool, go to http://www.eia.gov/state/maps.cfm. You will see something that looks like this:mapping graphic 1

Let’s say I wanted to see what energy facilities are located near Enerdynamics’ offices in Laporte, Colorado. I can use the interactive menu in the upper right and corner and start exploring what facilities are nearby.

First let’s take a look at natural gas facilities. I know there are lots of gas pipeline and processing facilities in our region, but I want to see specifically where they are located. Finding out is simple.

I use the menu to select only the gas facilities I am interested in. To do so, I open the Layers/Legend section, and click the red X that says Remove All to clear the menu. Then I click the boxes next to Natural Gas Processing Plant, Natural Gas Inter/Intrastate Pipeline, and Natural Gas Underground Storage. Now the map shows all processing plants, all high-pressure pipelines, and all underground storage facilities.mapping graphic 2

Also, I want to see this down to the street level, so I use the Basemaps menu section to select Street.

mapping graphic 3

Then I enter our address into the Find Address menu, and here I see a map that makes me think there is nothing in my area:

mapping graphic 4

But this isn’t true, because the mapping system only shows certain facilities if the map is above the scale of 1:1,000,000. So I zoom out a little and find that while there are not facilities right in Laporte, there are numerous gas pipelines to the north and east, gas processing facilities around Greeley, and underground storage in the area of Fort Morgan.

mapping graphic 5


An important SAFETY WARNING: This map only shows high-pressure pipelines and is not showing distribution facilities. So don’t think you can go digging in Laporte without worrying about hitting a gas line!


 

Now suppose I wanted to find out more about the closest processing plant north of Greeley. I simply click on the icon on the map and see detailed plant information:

mapping graphic 6

Similarly, if I am interested in electric facilities, I can see all the power plants and transmission lines above 345 kV:

mapping graphic 7

And I can get plant-specific information:

mapping graphic 8

Although we won’t discuss it in detail here, a similar tool located at http://www.eia.gov/special/disruptions/ allows you to see what facilities are in the path of coming weather events:

mapping graphic 9

 

 

 

 

 

 

Posted in Electricity, Energy Training, Natural Gas | Tagged , , , | Leave a comment

Will Federal Government Enable Large Transmission Projects?

by Bob Shively, Enerdynamics President and Lead Facilitator

As our nation’s generation mix continues to evolve from one based on thermal fossil fuel baseload units to one based more on variable renewable generation and natural gas turbines, the role of transmission must also evolve. To the extent that the mix includes increasing distributed resources, then the role of transmission may not be a critical issue.

Distributed PV chart                     Source: NERC 2015 Long-Term Reliability Assessment, p. 20

 

But at least to date, the majority of renewable generation has taken the form of utility-scale projects.

Utility scale vs distributed

Since renewable projects are located where renewable resources are most plentiful, new projects are often built in regions without much existing transmission and therefore require significant upgrades to deliver the power to load centers. A perfect example of this is the proposed 3,800 MW Power Company of Wyoming wind project that, if built as planned, will be the largest wind farm in North America. To make the project feasible, construction of the $3 billion, 725-mile TransWest Express transmission line connecting the farm to the grid in southern Nevada via Colorado and Utah will be required.

Wind resources and transmission lines.pngSource: NREL.gov[1]

Additionally, system operators are increasing depending on interregional power flows to manage the variable output provided by wind and solar resources. This is perhaps best demonstrated by the ongoing growth of the Energy Imbalance Market in the western United States, but is also demonstrated by the ability of MISO to absorb growing renewable generation across its footprint.

Market areas maps.png

The difficulty with needing more transmission is that transmission projects are difficult to build because, unlike natural gas pipelines, siting approval for electric transmission has traditionally been the legal purview of the states. This means that a line like TransWest must individually obtain approval from multiple states. This can be difficult because while a project may benefit numerous states, it may provide little to no benefits to one state that the line must pass through. The opposition of just one state has frequently been sufficient to sink proposed transmission projects.

To address difficulties in building transmission projects, the federal government has taken steps to move beyond sole state decision making. Congress in the 2005 Energy Policy Act authorized FERC to issue permits in certain situations where the states refused, but subsequent court decisions prevented this provision from being used. In 2011 FERC issued Order 1000, which required transmission planning to be done on a regional basis, but FERC does not have the ability to compel states to allow transmission to be built.

Finally, project developers working on the Plains and Eastern Clean Line, a $2 billion, 705-mile transmission project designed to bring wind power to the southeast figured out another angle. The project received approval from the states of Texas, Oklahoma, and Tennessee, but was stymied by the Arkansas Public Service Commission that stated that state law in Arkansas only allowed it to approve utility-owned transmission, not lines owned by independent transmission companies.

Plains and Eastern Clean LineSource: Cleanlineenergy.com

The project developers then turned to a separate provision of the 2005 Energy Policy Act that allows the Southwest Area Power Administration and/or the Western Area Power Administration to participate in transmission projects in states in which the agencies operate. With the participation of the federal agencies, state approval is no longer required[2] .

Of course, the state of Arkansas is not happy with the federal government stepping in, and it is attempting to change federal legislation. But, at least for now, there is an example of federal jurisdiction being used to construct multi-state transmission. More such federal efforts may be required if the U.S. is to build out the transmission “super-highway” envisioned by some renewable proponents. The fight over who has rights to approve transmission projects will significantly impact how our nation’s electric infrastructure develops going forward.


 

Footnotes:

[1] http://www.nrel.gov/electricity/transmission/transmission_planning.html

[2] See http://energy.gov/sites/prod/files/2016/03/f30/Summary%20of%20Findings%20Plains%20%20Eastern%20Clean%20Line%20Project%203-25-2016%20FINAL.pdf, p. 2 for further explanation

 

Posted in Electricity | Tagged , , , | Leave a comment