By Jon T. Brock, President Desert Sky Group, LLC

May 4, 2010

Many have compared the smart grid to the Internet, claiming that what we are doing is building an “energy Internet” of sorts.  With that in mind, some also claim that we are building this “energy Internet” differently by service territory, which makes it difficult if not impossible to optimize asset performance on a holistic scale.  If that is the case, then why don’t we take a step back and look at this on a country or even continent basis as opposed to city, state, regional basis?    

I recently had the good fortune to interview a smart grid luminary, Mike Davis, Associate Lab Director, Energy & Environment for the Pacific Northwest National Laboratory (PNNL) on issues related to the smart grid, differences by global geography, and ideas on how to improve a smart grid implementation for success.  Mike will be joining myself and three other industry luminaries at the Smart Grid Road Show (www.smartgridroadshow.com) to be held May 11-12, 2010 in Cincinnati, Ohio to discuss in more detail smart grid experiences and future looks.  For now, I trust you enjoy this interview with Mike.

JB:  Let me start with the first question.  Please share with our readers the background of PNNL and its role in the smart grid world.

MD:  Pacific Northwest National Laboratory is an US Department of Energy (DOE) government research laboratory run by Battelle Memorial Institute and is located in Eastern Washington.  At the laboratory we are home to over 4,700 scientists, engineers and support staff dedicated to delivering breakthrough science and technology to meet today's key national needs.  I am responsible for running the laboratory’s Energy and Environmental Directorate that is comprised of approximately 1200 staff and scientists with an annual investment stream of over $300 million in funding surrounding PNNL’s energy and environmental mission.  Our foray into what the world now knows as “Smart Grid” is an interesting one and for PNNL goes back a long way.  Here in the Pacific Northwest there has been an interesting energy model in that the Bonneville Power Administration (BPA) has been moving power over long distances for a long time.  To do that efficiently, BPA needed to know what was going on regionally as well as needing the “ability to see” circumstances at the southern end of the Pacific intertie, if you will.  So beyond “seeing” inside the regional territory they needed a larger view beyond local service territories in order to understand capabilities surrounding both supply and demand.  Coincident with that, ten or fifteen years ago, some of our scientists and engineers supported  BPA to develop new high performance monitoring systems  to “see” and “status ” the Northwest’s energy infrastructure system over a wide  area  in support of major  transmission lines moving power from the Northwest into California.  As we fast forward to today’s “Smart Grid” developments, we are building knowledge in terms of what's going on across the Northwest energy system at a greater level than if you were just trying to manage a single service territory.  This is a fundamental shift in thinking; revolutionary in fact when we think about a ‘bigger view’ or a ‘more real time view’ or even a ‘bi-directional view’ of energy by way of consumers or net generation sending signals from the demand side back to the supply side.  These are shifts that our infrastructure was not designed to handle but hold great potential if we can successfully deploy these new  “Smart Grid” technologies and functionalities.

So, when I arrived at PNNL, we had several researchers that were well into “wide aware intelligent knowing and viewing”.  This capability and the insight it could provide for all parties concerned with grid planning, operation and even regulation, seemed to me to be key to the future of the utility industry.  But, neither the laboratory nor industry had a platform to do the work or realize the benefit of this type of “viewing”.  With “Smart Grid” now coined, we can use terms such as sensing, monitoring, measuring and/or validating energy flows throughout our transmission and distribution system (our electric infrastructure) and with these new capabilities, actually see our electric infrastructure operating in near real time.    However, to place the maturity level of these capabilities  on an ‘adoption curve’,  today many utilities still rely on customers to call the call center to tell them their power is out.  It’s really unimaginable.  So in terms of adoption curves, we are very early in, even now. 

JB: So PNNL was an early developer in this space.  What is your definition of smart grid?

As noted above, PNNL was very early into knowing and experimenting with “SmartGrid”.  So, what is smart grid to PNNL after our decades’ long journey in this space?  It’s the intelligent infrastructure that enables real-time multi-directional sensing, monitoring, measurement and, ultimately operational control  to deliver all the things that matter to us – reliability, ubiquitous communication (without cyber security compromise), safe, optimal and most efficient energy delivery, “best source” generation enabled without undue shock and volatility to the system that includes new generational forms, and enabled consumers who can manage demand and net generation that can give back into a system that MUST STAY IN BALANCE.  Balance with signals and power flowing from both supply and demand sides  is very different than balance we have been maintaining in a one way supply to demand world.  This is a big shift. 

JB: Being in so early with so many resources focused on energy infrastructure understanding and scientific breakthrough through sensing, monitoring and visualization of the infrastructure – is this where the EIOC came from – the Energy Infrastructure Operations Center at PNNL?  And, how do you see this type of resource being utilized on behalf of the nation surrounding energy transformation?

What we did at PNNL was take the talent of folks who had been doing this for so long in the Pacific Northwest and partnered that with what we knew about climate, then combined that with what we knew about energy infrastructure operating systems and the supporting technologies to enable all that and built a platform that to a utility looks like their control center but in fact is a “real-time wide area view” of US electric infrastructure across much of the United States.  With this platform, we utilize phasor data in concert with industry standard software tools to test new smart grid concepts as we observe the grid in near real time dynamic operation.  This platform is what we call our Electric Infrastructure Operations Center (EIOC).  Here we are able to show industry stakeholders, policy makers, members of Congress and other leaders, a data driven dynamic view of US electric infrastructure, not previously available to them.  We can now show folks through visualization techniques, ”traditional views” of the system, such as  the status of devices, substations, generators, etc. and then show them  a  dynamic view of the larger system  including power flows.   When we  show folks real time or very close to real time power  flows, they can not only visualize electric  infrastructure in such a way that they get a whole lot more information out of the system, but they can also see new business models that are not so far out of reach.  Within the EIOC we're taking energy infrastructure data to knowledge in a way that a utility can't.  Most utilities do not have a spare control center that they can run experiments in.  They have to see their own model and data, and the models produce information and eventually that enables planning and rate cases and more all within that utility’s defined parameters.  At a national laboratory we are not limited by these parameters; we can do this in real time way faster than any utility can because we are not bound by the constraints of a utility business model or their current sensing technology, but at the same time, we are reflecting their actual infrastructure and operating dynamics.    This approach demonstrates some of the important  power behind new public private partnerships in this space and the power of knowledge coming out of ARRA funding as long as we all continue to ask – what are we learning and what knowledge is being extracted from these  experiments/projects in the field?  The laboratory complex can greatly strengthen and shorten learning cycles and also assist in the R&D lift ahead of us all as we beneficially transform US electric infrastructure, business models and consumption patterns of our citizens and businesses.

JB:  So, what big “ah-has” are you seeing through the EIOC?  What can it teach us?

We have demonstrated out of this platform that we can actually dispatch demand response programs and demand management programs over the internet without using current utility assets and reduce demand as well as consumption.  We believe you can actually control demand, you can aggregate demand to the point of dispatch-ability so that it is a real asset and dispatch it back against the supply side, all in ways that are acceptable and valuable to the end user.  Now, we are beginning to think that you can actually look at supply and demand in near real time and use demand assets just like you would supply assets to be much more productive, thus realize much better asset utilization across everything that touches an electron. 

JB:  I have two questions based on that.  One, you mentioned the phasor data.  Would you be able to pull in phasor data in a non-smart-grid world, or did smart grid enable some of that?  Or is the phasor data that you are pulling already in existence, you just had to identify those and get access to them?

MD:  Already in existence.  It was one of the early uses of computers and high performance digital devices in the power system.  BPA and a few western utilities began implementing these networks in the late 80’s / early 90’s.  I think some of the early work here at PNNL linked this early phasor work with energy efficiency experience and deep understanding of how buildings systems use energy to begin evaluating the ability of smart end use control to improve grid reliability and performance.  What it actually came out of was the whole effort to enable better asset utilization with additional functionalities.  Some of those additional functionalities are just better data and faster rates and synchro-phasors have been part of that long before we popularized the concept of smart grid.

JB:  And I do see some of those synchro-phasors in the stimulus money.  It appears they are going to put more of them around.

MD:  Well, that is fully consistent and maybe in a small way an outcome of some the white papers and thought leadership that we have produced. PNNL has been substantially engaged in the national phasor activities with DOE and leading utilities.   We've been navigating this space for some time, and if you really want to understand transmission at the interconnection scale, you must be able to see well beyond individual service territories in near real time.  Grid operators engaged in wide-area reliability activities will be better able to aggregate the phasor deployments as they become larger and more widely distributed and placed.  We will support these activities as they unfold.  We are very happy to see this happening because I candidly believe that for a couple of hundred million dollars you can have a phasor network across North America that gives us asset utilization on transmission like we've never had before. 

JB:  I heard you mention on the demand side a lot of smaller devices making up a large amount of load.  I know that group contains the electrical appliances.  How about electrical vehicles?  Do you have anything going on in that area?

MD:  We've looked at that at an initial level and based on current installed capacity, we believe there is enough capacity to handle about 70% of our light duty vehicles based on the current characteristics in terms of energy it takes to move the current fleet, not necessarily new lighter or smarter cars, but 70% of the automotive power that it would take to support the current light duty fleet.  That could be done by filling valleys off peak across the U.S. on a state by state or region basis.  If we took this approach, there would still be an improvement in emissions, even though you burn more coal, these plants are more efficient in aggregate than the corresponding conventional vehicles.  You have to manage the charging, absolutely, but the energy demands of 70% of the light duty fleet are in fact available to us.  We have reports out on that.

JB:  You mentioned the Northwest and even some national activities.  What geographies do you play in globally?  Does PNNL play in the global energy picture?

MD:  We do to some extent in China.  Some of our team is currently working with Chinese grid companies.  They are building a national network that we're talking about.  They are using phasor technology to be able to manage their entire transmission infrastructure.  The advantage they have is that they are using our technology but they don't have to deal with mismatches between state and federal regulation.  They don't have to deal with 3,200 different service territories.  They have essentially one decision maker, their own government.  Basically, that lets them take our technology and simply move it into the market place at a much higher rate without all of the barriers and delays associated with whether it is federal or state regulation, and whether it is whose electron or the color of that electron.  They can simply say, “We know we need loads of electricity, and we know we're going to have a large system to deliver, and let's build it.”  So, they are deploying, at least in the transmission level, our technology faster than we are. 

JB:  Fascinating.  So does PNNL help them with the learnings from the synchro-phasors and the control center?

MD:  Yes, consistent with open literature and findings, our engineers exchange views on data acquisition and visualization tools via forums like IEEE and utility organizations.

JB:  You may have answered this in the first question indirectly.  What areas or what part of the smart grid does PNNL play in?  The areas I've listed here are policy, generation, transmission, distribution, and the consumer.

MD:  I think it's really probably more so in transmission, the consumer, and distribution.  You know Battelle, which operates PNNL, is part of a team that recently won the Northwest Smart Grid Demonstration Program, which is $178 million demonstration.  It is built around BPA plus twelve other utilities, including various key vendors.  What we really did as a region in that demonstration was design experiments, if you will, around all the various smart grid functionalities across utilities and across five states.  The data from which will flow back through our EIOC. The objective is to find out what the real value proposition is and what the real business case is for all these various functionalities as they are deployed into these utility service territories.  So we think as a team, we have the right experiments ready to deploy and test over the next five years.    What will come out is knowledge that will be transparent and publicly available in terms of how these experiments performed and the real value delivered.   The first year and a half of these projects are installation, and then the next two and half to three years will be measurement, monitoring, and validation.

JB:  From your perspective, what are the main objectives of a smart grid?

MD:  For me, it's the ability to deliver affordable, clean, and reliable electricity.  The assets have to be utilized on a system wide basis, not just a service territory basis.  The assets also have to include the demand side even though the utilities don't own those.  The assets that consume electricity can be just as important as the assets that produce and deliver electricity.  So broadly speaking, it’s realizing asset utilization far superior than anything this industry has known before in the context of ever increasing demands for low carbon electricity. 

JB:  So what you are saying is it should cross boundaries from ISO to ISO?

MD:  Yes.  Another way to think about it is where would we be if we were trying to develop 3,200 different internets?  Because we have roughly 3,200 different electricity service territories, how can you come up with anything close to asset optimization when the whole system was built on a service territory basis and a return on invested capital?  In the future, we might do better if we operated on a return on asset performance and could actually include both supply and demand assets.  A return on invested capital was a great way to build the system, but that may not be the best way to optimize assets over the long term now that we are trying to build a network out of the whole thing. 

JB:  That's right.  With that in mind, let me shift to a negative question.  What are we doing wrong in rolling out the smart grid right now?

MD:  Well, I guess it's not so much about what we are doing wrong, but maybe we are not realizing the full challenge.  We're focused a great deal on technology, but I think the challenge is actually lesser in the technology space and more in the policy and business model space.  You hear the term all the time “the low hanging fruit”, or “fruit on the ground”.  Then the question becomes, why is that the case?  In fact, there is more technology out there than the market place is picking up so what is the real incentive for developing new technology?  Your time line if you are in the private sector trying to develop new technology is a killer.  I think the technology pickup is very slow because given our business models and regulatory structure; we're still trying to optimize service territories, rather than the entire system.

JB:  Yes, we're still focused on home.

MD:  Yes, we're primarily focused on the supply side of each service territory.  The reality is that each service territory has a geographic boundary, a regulatory boundary, and a balance sheet boundary.  These boundaries all dramatically constrain system wide improvements.

JB:  So, do you believe that is a similar challenge globally.  I've heard you say earlier that is not an issue in China, because they have one service territory. 

MD:  Right, while China does have more than just one service territory, they can act as if they have only one service territory.  They can bypass our local, state and regional policy, regulatory and business model constraints and say we're going to build a national grid based on the national benefit.  We took similar action when we built our interstate highway system and our global internet.

JB:  I won't ask if we should nationalize transmission.  I'll save that for the conference.

MD:  I'm not going to say we should nationalize transmission.  I'm going to say if the desired result is to have a national grid then we probably need to change our approach, or certainly our willingness in terms of how we cooperate to produce it.  Now, we could cooperate and bend if we chose to, but our tendencies are to hold on to our service territories, our traditional legalistic approaches to managing or avoiding change and our current business models.  I may well be in the minority, but I believe that until we effectively change our current business models, building the electric infrastructure best suited for our future is going to be a slow go.