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Challenges Ahead

  • The long-term goal of net-zero emissions by 2050
  • The short-term target of a 40% reduction in emissions by 2030

Both targets are essential and need to be met; however, the short-term goal may be even more important from a technological perspective. Atmospheric carbon, the accumulation of emissions, appears to be growing in a j-curve while emissions are increasing instead of decreasing annually. The 2030 goal, if achieved, will reverse that trend and have a major impact on the total atmospheric carbon while the global community works toward a net-zero 2050.

Renewables Are Not an Immediate Catchall

A commonly touted solution to achieve both long- and near-term goals is the use of renewable energy as a catch-all to electrify everything. However, each of those solutions include secondary challenges, and considerable development and innovation will be required to meet them in the available time.

The growth rate for renewables may achieve 2050 targets, but we need cleaner energy immediately to meet the 2030 targets. Replacing coal-fired steam turbine generation, the largest single emission source, with combine cycle gas turbine generation will reduce emissions from generation by 75%. Though fossil fuel-based, this solution will have weight almost immediately.

On the consumer vehicles front, a transition to EVs will also support this short-term goal and smaller, more efficient vehicles, including e-bikes and e-scooters, need to be incented for short trips. In my community, the largest market for e-bikes has surprised everyone as it is the seniors with early rates of adoption looking to enjoy the outdoors with families.

Barriers to Electrification Exist

Electrifying everything will be difficult because the existing grid design was never intended to meet such diverse DER needs. Generac Grid Services is at the center of this challenge with its future grid vision. The electric grid today delivers less than 20% of total energy used, and parts of the grid are based on designs that were effective 100 years ago. For example, the distribution system that carries power from the last substation to customer homes and businesses was built to be and remains a one-way system. It was designed to deliver power to the customer, not to uptake power from consumers. While utilities have accepted some DER, the rapid adoption of DER is causing problems. When DER penetration is high on long distribution feeders, substation protection systems may not see faults as the fault current may be provided by the DER facilities. When this happens, a line fault may not be isolated and there have been occasions where such an event resulted in fires.

Renewable advocates dream of transferring wind and solar power across time zones. Still, the existing high-voltage transmission system requires enormous capacity in reactive power simply to charge these long lines. Renewable systems at present have almost no capacity to handle such an occurrence.

There are many barriers in the path ahead, but most can be solved through innovation and technology. A tactical transition to meet the 2030 target, that may include the use of some fossil fuel, will likely be essential. Concurrently, an overall strategy to get to net-zero emissions can be prepared and initiated.

Generac Grid Services has the people, skills and determination to make the transition work. While the company has been internally running innovation sessions for employees, the time may have come to extend this concept to include representatives from both utilities and electrical customers. Now is optimal to promote distributed innovation.

Generac Grid Services Selected as Leading Single-Vendor DERMS Provider

Generac Grid Services’ Concerto™ distributed energy resource (DER) orchestration platform continues its position as a leading virtual power plant (VPP) and Distributed Energy Resource Management System (DERMS) platform, having also received top marks in the previous DERMS Leaderboard release.

As part of the Leaderboard process, Guidehouse assesses several critical success factors in profiling, rating and ranking the world’s leading DERMS providers. In past years, we were named a market leader as Enbala. Now as Generac Grid Services — and a part of the Generac family of companies — we are bigger and stronger and able to achieve even higher scores on factors like market reach and staying power. No other vendor scored as high as Generac Grid Services when it comes to delivering a complete and total solution from a single provider.

This year’s report recognizes the Concerto platforms’ vast array of unique use cases and avenues to new customer types and business models. As a DERMS platform, Concerto is designed to evolve with utilities’ and other customers’ changing needs as more distributed resources interconnect to the grid and require rapid, precise interventions to improve reliability. As the only company providing a complete DERMS solution in a single platform, we remain a single point of contact for our customers’ optimization and other needs, streamlining integration with utility systems.

Additionally, the Guidehouse Leaderboard notes that Generac Grid Services provides customers with a wide array of solutions encompassing hardware, software and program enablement services. This means we can help utilities both identify existing DER devices and grow their future installed base; the company’s campaign to produce and integrate with Smart Grid Ready devices helps utility and customer-owned devices provision grid services from the moment they are installed and powered on.

Generac Grid Services is honored to have received such high scores in Guidehouse’s 2022 Leaderboard, and we look forward to growing and expanding our global customer base.

DER in Your Territory: Stand Ready to Support Grid Reliability

For the utility grid to support growing electricity demand, we’ll need to harness the collective capacity of the distributed energy resource (DER) installed base. Fortunately, many home appliances are becoming DERs by virtue of their control over energy-consuming devices behind the meter—you may better know these DERs as “smart” devices.

The penetration of “smart” technologies has not yet reached parity with more standard models; however, growing consumer demands for a smart home environment responsive to both occupants’ needs and external factors are moving some communicating, wi-fi enabled, or otherwise intelligent technologies past the “early adopter” phase. If you don’t believe me, just give your email inbox a scan for the promotional emails from manufacturers, big box stores and your favorite online marketplace.

Moving beyond inbox anecdotes:

  • 17% of home solar installations included battery storage in 2021. This number is expected to grow to 25% in the next couple of years, with greater penetration in states like California.
  • Previously “dumb” devices like water heaters now come in grid-interactive models, signaling manufacturers’ desires to build customer relationships and boost satisfaction.

The installed base exists today to make significant improvements to grid reliability and customer-sited resiliency.

…But Customers Don’t (Yet) Have “Grid Services” in Mind

While those of us in the energy industry may buy our appliances with grid services or flexible capacity in mind, we know this is not the case for most customers. Instead, smart device purchases are typically made to manage energy for increased bill savings, meet individual sustainability goals, improve home resiliency in the face of an outage or — still — serve as another gadget to build out the smart home further.

The reality is that today customers aren’t yet coming to their utility in droves, asking how to stack value on their DER devices by participating in grid services programs. Given this, it’s also hard for utilities to understand the existing installed base of smart devices, and it’s sometimes hard for manufacturers to track where their products have ended up through extended distribution networks. However, with the right solution mix, these utilities and their partners are beginning to surmount these challenges.

DER device owners must be incentivized to provide capacity or other services to the grid to improve stability and sustainability for all.
DER device owners must be incentivized to provide capacity or other services to the grid to improve stability and sustainability for all.

Generac Equipped to Engage the Installed Base

Generac has the most extensive installed base of residential backup power solutions in the United States. Additionally, Generac provides customers with clean energy technologies through the PWRcell and accompanying product suite. The company’s recent acquisition of ecobee inc., among other DER device providers, has supported Generac’s purpose to “lead the evolution to more resilient, efficient and sustainable energy solutions.”

Along with its suite of backup power products, Generac has an engaged network of more than 10,000 dealers. Dealers provide customized energy technology solutions to their customers, expanding and capturing information related to the device installed base with customer permission.

Adding to the recipe for success, Generac Grid Services can monetize assets already in the field by enabling them to provide grid services through utility programs or open markets, where allowed. And Generac Grid Services remains partner agnostic, enabling utilities and other customers to leverage a broad portfolio of devices while supporting residential customer choice.

Enbala (now Generac Grid Services) founder Malcolm Metcalfe routinely states that with the right distribution system optimization, the current grid infrastructure can deliver significantly more capacity. From hardware solutions to grow the installed base, to awareness of devices already in the field and existing grid operator relationships, Generac Grid Services is uniquely positioned to create high-value opportunities for stakeholders along entire value chain. As a member of the Generac Grid Services team, I can’t wait to see what new projects 2022 brings.

Climate Action Through Carbon Markets

As a follow-up to the Paris Agreement in 2015 which set out ambitions to limit global warming to 1.5°C, nations and global businesses convened in Glasgow last month for the 26th Conference of the Parties (COP26). The resulting Glasgow Pact set out a rulebook to operationalize some of the pledges and targets announced in Paris. A key highlight of the outcomes surrounded Article 6 of the Paris Agreement, paving the way for the development of a global carbon market.

Global carbon markets are not new; trading of carbon emissions and credits have been ongoing for decades. What’s been missing were stringent accounting rules on how to calculate those emissions that are traded. Current carbon markets are exposed to considerable price variability and uncertainty. There is no standardized verification criteria and therefore no certainty when purchasing carbon credits. The Paris Rulebook addresses some of these issues, including the issue of double counting of carbon credits. This is expected to provide more transparency and reliability through authorized “exports’”of offsets.

Like me, you may be asking “what’s the deal with Article 6?” Why is carbon trading getting all this attention when real, tangible reductions in emissions are needed to avoid disaster? The answer is cost. According to the Environmental Defense Fund, employing global emissions trading to meet Paris Agreement pledges could reduce total mitigation costs by up to 79 percent. Reinvesting these cost savings into greater emissions reductions would nearly double the cumulative emissions reductions from 2020-2035.

And these costs are significant. According to energy expert Daniel Yergin, the current energy transition will be much more challenging than the energy transitions of the past in order to successfully mitigate and adapt to climate change. Previous transitions — from wood to coal or from coal to oil — have been additive, i.e., “one source atop another.” However, this transition should be an almost complete switch from the energy basis of today’s $86 trillion world economy, which gets 80 percent of its energy from hydrocarbons.

The financial strains of climate action and the energy transition are felt significantly by developed countries and even more so by developing nations, where major climate events are even more pronounced and mingled in with the recovery from COVID-19, improving health, reducing poverty and maintaining social stability. “[The] energy transition itself is multidimensional” and must take “into account the different realities of various economies and accommodate various pathways to net zero,” says Nigeria’s Vice President, Yemi Osinbajo.

Global carbon market trading volumes reached over $1B in 2021. Wood Mackenzie believes this will continue to increase significantly, with high price variability in the near term. In the medium term, as national markets determine how they will interact with the global pricing mechanisms set out in Glasgow, variability of standards and quality will result, creating a price wedge between high-quality credits and low-quality credits. With demand for high-quality credits increasing, as pledged companies and countries aim to meet their ambitions with solid and trustworthy credits, variability will lead to a steady increase in value, while simultaneously reducing the volume of carbon credits available for trading (and meeting the main objective of reducing carbon being emitted).

“By definition [COP] is an exercise in diplomacy” says Helen Bertelli, president and co-founder of Women in Climate Tech, “it sets expectations that it alone cannot meet.” Most political leaders lack the ability to enforce change on private industry; however, private industry and private capital are going to be key and will play a critical role in doing the work if we are to meet the targets set out.

Taking a historic example for comparison, Corporate Average Fuel Efficiency standards were enacted in 1975, to which Henry Ford II acknowledged “the law requiring greater fuel efficiency in motor vehicle usages has moved us faster towards conservation goals than competitive, free-market forces would have done.” Indeed, similar sentiment is shared by current-day enterprises. In 2019 Shell announced a Path to Net Zero Emissions by 2070, then revised its roadmap to meet Net Zero Emissions by 2050 in Spring 2021. To this, a Dutch court imposed stricter mid-term carbon emission reductions for Shell, its suppliers and customer — by 45 percent by the end of 2030 compared to 2019 levels. Experts speculate that these restrictions will result in Shell’s divestiture, through sale of assets to smaller, less scalable operations that may potentially result in overall net-positive emissions. However, the point still stands; set targets and regulations with consistent and accurate monitoring will ensure a healthy and lucrative global carbon market, with real emission reductions in the long term.

Next steps require improvements in national carbon markets. With the development of a regulatory framework on FERC Order 2222 on its way, and the US Securities and Exchange Commission preparing Climate Disclosure criteria, there is an opportunity for the Energy Transition in the United States to lead the charge in global carbon market standards and climate change cost mitigations.

Eversource is Illustrating the Versatility of DERMS Solutions

Utilities, governments and major corporations alike are committing to 100% clean energy goals in the coming decades. Utilities will need to lean on smart software platforms, such as a distributed energy resources management systems (DERMS), to keep grids that are increasingly dependent upon variable renewables, such as wind and solar, in balance.

These highly sophisticated platforms enable greater control and interoperability across heterogeneous grid elements. The value of DER assets can only be fully realized if they are integrated at customer sites and brought into a grid network to create shared value. At Guidehouse Insights, we use the term Energy Cloud to describe this transition.

Why Now Is Better Than Later
A Guidehouse Insights white paper published in 2020, DERMS: Fact Versus Fiction, debunked several myths about DERs and DERMS. The perception that a utility does not need a DERMS until it has a problem with too many DER assets is among the most important of these myths to counter.

Since geography and policy shape DER growth, utilities that do not yet see major grid impacts wonder why they need DERMS. The answer rests on the premise that this is a journey with many entry points and the end goal of reaching enterprise DERMS. Rather than rushing to a solution once a problem occurs, it is better for utilities to modernize their grid infrastructure early without adding exponential risk to the project.

Equally important to this end state is the starting point. It is vital for an electric utility to select a set of services to begin its DERMS journey. Take the case of Eversource, New England’s largest energy delivery company, which provides electricity and natural gas to approximately 4 million customers in three states: Connecticut, Massachusetts and New Hampshire. The utility has set a goal of having its operations be carbon neutral by 2030.

Case Study: Eversource
“We are using an incremental and evolving approach to DERMS,” says Michael Goldman, director of energy efficiency regulatory, planning and evaluation for Eversource. The company is incorporating DERMS, first within energy efficiency, to enhance its broad suite of behind-the-meter energy efficiency programs parallel to its grid modernization initiatives. Goldman continues, “One doesn’t need to do full-scale SCADA integration with DERMS to realize initial benefits, such as those associated with system-level peak load reductions. The platform is already creating value for our customers.”

The utility’s ConnectedSolutions program, developed by Eversource Energy and the subject of a new case study sponsored by digital platform provider Enbala, has rapidly scaled up since 2019 and set the bar high for demand management programs in the Northeast. Enrollment in the program in 2020 surpassed goals by more than 60 MW, reaching 170 MW across all customer types approved for targeted dispatch in addition to the storage capacity approved for daily peak shaving.

Eversource’s portfolio is significant for the large demand reductions that can be achieved and for the diversity of customers and assets enrolled: more than 600 commercial and industrial customers using a range of curtailment strategies and more than 33,000 residential devices, including Wi-Fi thermostats, EV chargers, residential battery storage and Wi-Fi-connected air conditioning units.

The ConnectedSolutions track record and trajectory, averaging over 180 MW in reduced load per event, are emerging as a model for what is possible for diverse, customer-owned DER assets serving as flexible assets for a utility. This evolutionary approach to DERMS allows for offers to the full range of utility customer types all under one Energy Cloud umbrella. Eversource is one example of a utility engaged in its own journey to increase value for itself and customers with a DERMS. Each utility is different, but they all share a need for new digital platforms to reach clean energy goals.

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Reliability & Resiliency: The Reality is – We Need Both.

n the utility world, the term “resiliency” is offered daily as the goal. “Keep the power grid resilient.” Distributed energy resources (DERs) play a critical role in achieving these targets in two complementary ways. At the risk of sounding pedantic, we need to address reliability at the grid level and resiliency at the end customer site.

That is to say:

  1. Reliability is the act of keeping the grid stable and the lights on. DERs support grid reliability by providing operators with forecasts and telemetry so that grid operators can make proactive, targeted decisions on how to dispatch front-of-the-meter and aggregated behind-the-meter solutions during periods of grid strain.
  2. Resiliency is the act of getting customers, and the broader electricity grid, back online as soon as possible and with minimal disruption. DERs can support this by providing backup generation, supporting black start capability and maintaining uninterrupted power flows at the site. In addition, DER-based resiliency solutions give repair crews more time to respond without compromising customer satisfaction.

Integrated reliability and resiliency then serve as the more complete solution for maintaining both power flows and customer satisfaction, but achieving such a solution on a mass scale requires monitoring, optimization and control capable of capturing that the value across numerous asset types and their associated vendors.

DER hardware and software combinations are proving critical tools in maintaining reliability and resiliency in the case of unavoidable outages. Several major use cases being applied around the North American continent include:

  • The mitigation of wildfire risk by increasing system hosting capacity via strategic management of DERs in real time. Grid operators can make specified locational targets at high-risk feeders and thereby keep customers powered up in the case of a necessary outage (such as the public safety power shutoffs in California).
  • Non-wires alternatives (NWAs) are becoming more commonplace as a growing number of regulators encourage or require utilities to look for opportunities to defer or omit costly poles and wires upgrades while maintaining grid reliability. Through localized generation, battery storage and traditional demand-side management programs, not only can NWAs support the achievement of clean energy targets, but they can also provide customers in specific grid locations with resiliency-supporting hardware.
  • Defense against severe weather requires the use of DER management systems (DERMS) and distributed hardware solutions by taking inbound telemetry flows from hardware to keep control room operators aware of real-time field conditions. Targeted software interventions can help promote grid stability and when an outage occurs, pinpoint the customers who may have lost grid power and, where available, are relying on their own backup systems.

Together, reliability and resiliency allow utilities to strengthen their support of commercial, industrial and residential customers. Utilities today are sometimes offering these integrated solutions as Resiliency as a Service to their customers; however, financing options, incentives for program participation and specific event triggers may vary depending on grid operator need. The nexus of hardware and software solutions tackling both reliability and resiliency will very likely be be one of the major driving forces of DER and DER orchestration growth as severe weather intensifies.


Challenging Times

I showed a small area, powered by an electric utility (20% of total energy), natural gas (25% of local energy) and petroleum products (45% of total energy). The electric utility had capability to increase its energy delivered by about 25% in the next decade, and the students were asked to show how to minimize the emissions in that timeframe. They were free to add solar thermal or solar PV capacity to the system.

The problems began when they started to look at the efficiency of the various uses of energy, whereupon problems and constraints began to appear. The car that most people used was about 20-25% efficient, so it became an immediate target, but to convert all cars to EVs left no remaining electricity to offset the use of natural gas.

The students then added solar, but because 75% of solar energy came in summer and 75% of natural gas use was in winter, there was a costly and uneconomic storage issue. In addition, the use of heat pumps that worked well in spring, summer and fall needed inefficient auxiliary capacity during the cold winter days. It was very clear that this would be a challenging issue to address.

To help make things a little easier, it was allowed that the electric grid (in Canada) was based on hydro generation with large capacity storage behind existing dams, so solar energy generated in summer could at least be partially stored by the electric utility. But this storage was limited based on the ability to displace only local loads to reduce the electric consumption during summer and was nowhere near enough to offset the gas use in winter.

The discussion exposed what was eye opening for me. We are hearing a lot about the use of hydrogen as a fuel and a storage concept, and to date, I have been concerned that many of the proposed solutions have poor return efficiency that would make them uneconomic. But this case presented a different situation. The excess solar in summer could be converted to hydrogen and blended with the use of natural gas to reduce the carbon emissions, and this in turn would utilize a significant increase in solar electricity production that could not be stored by the hydro utility. In fact, it reduced the carbon emissions from natural gas use for much of the year.

The entire exercise made it very clear that we are faced with a dramatic need to be “out of the box” thinkers. The students that I met seemed to have the idea that they could simply add solar or wind capacity, and that would solve everything. They thought little about the role of the utility in providing the reliability required. And this led to another discussion.

Electric utilities have worked for more than 100 years on a simple principle — that they will meet customer demand where and when it is needed. Many utilities have done outstanding work in optimizing their systems, including generation, transmission and, in some cases, sub-transmission. But in most cases, the loads are allowed to do as they wish. Turn on the switch, and the light comes on. Start a compressor, and it cools the building. The utility mandate remains firmly in place — “meet customer demand.” This concept is going to need to change dramatically.

The first foray in this direction started some time ago. Some enterprising companies realized that they could reduce customer loads at a price far below what it would cost the utility to start and run peaker generation, and demand response programs came to life. Other concepts have made demand management a part of the overall control process.

BUT the real opportunity still lies ahead. Full optimization of the grid is going to be essential. Electricity delivery losses in the US are currently about $19B annually, and this is an area that has been largely untouched. Furthermore, as electric loads increase, losses, which increase with the square of the current, may explode. There are opportunities ahead that will increase the delivery capacity of our distribution systems, while controlling and minimizing losses. The management of many loads will need to be an ongoing part of this optimization. While lights may still go on when one turns on the switch, there will be many opportunities to delay or tweak air conditioning, water heating, EV charging and many other devices or opportunities to manage local voltages. It is apparent that customers are going to need to be a major part of this solution, and this in itself may bring some real opportunities, both for the utilities and the customers.

Enbala has a history of innovation, control and a deep understanding of the issues surrounding the power system. There is a bright future for our smart people to be the next generation of “out of the box” thinkers.

North American Demand Response Season Starts Strong with Head Wave

Our thoughts are with those in the extreme heat, and we know that describing rising temperatures — coupled with wildfires and severe weather — as “disruptive” is an understatement. However, high temperatures point to the need for distributed energy resource (DER) orchestration to keep the grid stable and to help keep utility customers as comfortable as possible.

Concerto orchestrates DERs across entire utility grids and at a localized level, as needed. It provides control room operators, energy retailers and large C&I customers with the ability to monitor, control and optimize devices connected to and communicating with the utility’s network. Beyond demand response, Concerto leverages a variety of DER types to provide numerous grid services, from market operations to distribution optimization. A perhaps over-simplification of its ability, Concerto solutions ultimately work to increase the grid’s hosting capacity, which can provide it with an extra layer of protection during extreme temperatures.

North American demand response programs use it to curtail load or discharge generation capacity from behind-the-meter devices that have opted in to control programs during periods of grid strain, including the extreme temperatures faced at the start of the summer 2021 season.

Concerto’s all-call and non-all-call (capacity-based) demand response functionalities boost grid reliability – keeping the power on and keeping customers cool (and happy).

Utilities’ foremost task is to keep the electricity flowing, a challenge as more customers crank up the AC or move their electricity demand to offices and community centers where they can stay cool during periods of extreme heat. To help keep the lights on, grid operators in North America can rely on demand response events, which adjust HVAC set points, reduce large commercial and industrial process loads or call on customer-sited generation to reduce the strain that may otherwise threaten the grid’s reliability. Demand response programs typically compensate customers for any impacts the event might have had while helping to spare all with an outage or other disruptions; in some cases, the ?customer won’t even notice an event is taking place.

High electricity demand leads to high electricity prices, meaning demand response can help utilities and their customers save.

Economics 101 teaches us that higher demand results in a higher price, and while that’s true for energy prices generally, customers continue to seek to lower their utility bills. Demand response programs can then stack the value offered by Concerto in several ways.

  1. Traditional demand response programs can help utilities avoid turning on costly generation (“peaker plants”) to meet demand during periods of grid strain. Thus, calling a demand response event can help to reduce a utility’s cost-to-serve.
  2. Customers on time-of-use or other time-varying rates may also see a heatwave reflected in their utility bills. A growing number of residential and commercial and industrial customers are subject to “peak pricing,” or other prices correlated to the wholesale cost of electricity. In these instances, by curbing demand – often automatically – during a heat-spurred demand response event, customers can help to reduce their monthly electricity charges.<./li>

    Keeping the lights on (and air conditioning, where applicable) and earning incentives for supporting grid reliability tends to lead to a happy, engaged utility customer base. Satisfied and engaged customers can result in higher Net Promoter or J.D. Power scores, which benefit the utility. Further, the value of demand response in a heatwave mirrors its value as a wildfire mitigation tool and during severe weather events year-round. As we look to the summer season ahead, by engaging and optimizing customer-sited DER effectively, we can all work to create a more reliable electricity grid.

IEA’S Roadmap to 2050: Net Zero or Bust

The International Energy Agency (IEA) identified that the number of countries which have pledged to achieve net‐zero emissions has grown rapidly over the last year and now covers around 70 %of global emissions of CO2. However, the changes required to reach net‐zero emissions globally are poorly understood. As a result, IEA published its “Achieving Net Zero by 2050: A Roadmap for the Global Energy Sector.” They identified that, despite all the hype, if all announced national net-zero pledges are achieved in full and on time, whether or not they are currently underpinned by specific policies, goal acquisition will still fall well short of what is necessary to reach global net‐zero emissions by 2050.

With that said, a practical roadmap to net zero is very ambitious. IEA believes success looks like electricity accounting for almost 50% of total energy consumption in 2050, with almost 90% of electricity generation coming from renewable sources, of which wind and solar PV together account for nearly 70%. This will mean that electricity system flexibility —needed to balance wind and solar with evolving demand patterns — quadruples by 2050 with major increases in all sources of flexibility: batteries, demand response and low‐carbon flexible power plants, supported by smarter and more digital electricity networks.

The IEA has identified interim achievements to ensure we’re on the right path to net zero by 2050. This includes the fall of global energy‐related and industrial process CO2 emissions by nearly 40% between 2020 and 2030. There will need to be a 75% reduction in methane emissions from fossil fuel use by 2030, while providing universal access to sustainable energy. The world economy in 2030 is some 40% larger than today but uses 7% less energy; around 55% of the cumulative emissions reductions in the pathway are linked to consumer choices such as purchasing an EV, retrofitting a house with energy efficient technologies or installing a heat pump.

As a result, IEA believes governments must lead the planning and incentivizing energy efficiency, fuel switching and massive infrastructure investments. This includes smart transmission and distribution grids, with annual investment expanding from $260B today to $820B in 2030. The roadmap shows pairing battery storage systems with solar PV and wind to improve power system flexibility, and maintaining electricity security becoming commonplace in the late 2020s. Here at Enbala, we are already seeing a lot of the world’s most progressive utilities starting to move the dial on their energy mix, using software solutions like our ConcertoÔ platform to replace retiring coal and gas plants with renewables, storage and demand flexibility.

The IEA sees EV ridership rising from around 1 million today to 40 million in 2030, requiring annual investment of almost $90B in 2030. EVs provide grid operators both a new challenge and an opportunity; annual battery production for EVs leaps from 160 GWh today to 6,600 GWh in 2030. Having the ability to consume excess renewable generation and provide additional peaking capacity through advances in V2G technology will make EVs essential grid resources.

The IEA roadmap will require immense investments and still has space for the adoption of new technologies. All this while the global economy is expected to double through to 2050, and the global population increases by 2 billion. I’ll say it again, it’s ambitious. The IEA suggests energy or environment ministries alone cannot carry out the policy actions needed to reach net zero by 2050; the successful roll out requires breaking down silos and integrating energy into discussions surrounding finance, labor, taxation, transport and industry. The commitment is there, but more needs to be done. It’s all about the follow through; the financial sector is contributing to the change through Environmental Social and Governance (ESG) investments, enterprise procurement processes devote a chunk of evaluation criteria towards a suppliers sustainability initiatives and goals. A potential dark side to the growth in battery storage and EVs involves the pollution and land degradation associated with mining of metals, manufacturing and disposal of these technologies. The most successful suppliers will be those with transparency and accountability across the lifecycle of the technology.

Our collective global community must stay accountable, improving and course-correcting at record speed. If I wasn’t witness to the COVID-19 pandemic these past 18 months, I wouldn’t think this kind of change was possible; bureaucracies work too slow for fast change. But the world stepped up — we made quick changes and some serious sacrifices, identifying tragic inequalities and broken systems along the way. We’re persevering, and the challenge of net zero by 2050 will only be achieved with this same agile, collective cooperation.

Climate — An Action Plan Optimized for Minimum Pain

Climate change is everyone’s problem, and careful thought and planning are needed to reduce fossil fuel emissions with minimal impact on our quality of life and cost of living.

We are inefficient in our use of energy. A few examples stand out. Overall, some 32% of the primary energy that we start with is used effectively. Automobiles powered by gasoline or diesel fuel are generally less than 25% efficient. Even new technology is not all that efficient. A solar panel that makes electricity is less than 25% efficient, while a solar collector that makes hot water may be more than 80% efficient. If the goal is to reduce fossil fuel that is used for heating, it is difficult to comprehend why anyone would make electricity to be used for heat at 25% efficiency when the solar hot water collector can do the same job and deliver almost four times the energy from a collector that is the same size.

We have reached a state where fast response to reduce emissions will be essential to meet the established targets, and if ever there was a need to seek the “low hanging fruit,” this is it.

For example, consider transportation. At a commercial level, we are beginning to see electric buses and trains. Automobiles are in the hands of individuals. An Internal Combustion Engine (ICE) powered car is about 20-25% efficient, while a Battery Electric Vehicle (BEV) is more than 70% efficient.

Supplying energy for a fleet that is converted to EVs may be a big challenge. Energy for transportation in the U.Ss supply of liquid petroleum is equal to almost three times the total generated electricity on the U.S. grid. Of the total petroleum liquids consumed, 75% is used for transportation, and the balance is used almost entirely by industry. Personal vehicles consume almost 60% of the total transportation portion, and they would use 133% of the TOTAL electricity generated in the U.S. if the efficiency was equal to BEVs. Fortunately, electric cars seem to use about 1/5 of the energy used by an ICE-powered car, so the increase in electricity use may be reasonable, provided it can be controlled to charge vehicles during off-peak periods when surplus capacity is available.

Most people driving battery electric vehicles are expected to charge their cars at home because the cost is less. These vehicles get most of their energy at night. Apartment buildings are installing systems that throttle the charge rate to share capacity among many vehicles. This will avoid or defer the need to upgrade the electric supply to the building, but it may limit the amount of charge any single vehicle will receive overnight. People returning from a long trip with a low battery may be encouraged to utilize a DC fast charger to charge the battery to a reasonable level and then plug it in when they get home.

However, the DC fast chargers that are appearing may become a problem if there are too many in use at any one time. Some of these will charge a car at up to 250 kW. When charging a car, one of these chargers could use as much power as 25 homes, all running clothes dryers and a stove at the same time.

There also appears to be interest in the application of hydrogen. Hydrogen can be made from surplus renewable electricity at about 75% efficiency, but there are significant added costs and energy needed for compression and storage. Hydrogen fuel cell-powered cars can provide transportation and have an advantage that they can travel longer distances than the BEV vehicles, but the efficiency is less than about 40%. However, a hydrogen-powered vehicle can charge rapidly at a charging station, and the hydrogen put into the vehicle can be made over a long period of low demand on the electric grid, so there may be some benefits to the use of hydrogen, albeit at a much higher cost per mile than the BEV.

We are facing unprecedented changes. The challenge and opportunity for users are to find a path that will use less energy and cost less while allowing us to maintain a high quality of life. On the other side, there are some real opportunities for companies that can provide demand management, as these changes will require smart systems that can provide electrical energy to charge cars or to make hydrogen without impairing the ability of the grid to meet the recognized needs of customers.

The conversion of our ground transportation systems may well become the critical factor in our objective of meeting lower emission targets.

Enbala Can Green the Energy System Today

I also fear technology’s risk of generating moral hazards; just because we are learning how to capture, sequester, and use some carbon dioxide does not mean we can otherwise continue to emit it recklessly. Joining the Enbala team, however, I do recognize we have the tools at our disposal to reduce the economic and environmental costs to power our society.

Enbala’s Concerto™ software platform, combined with distributed energy resources (DER), creates a balanced, sustainable energy future. I joined this company because I believe that such a future isn’t far away, and if we put our hearts and minds into transforming the energy system, we can green it today.

Challenging Supply-Chain Perceptions

The barriers we face in reducing carbon dioxide and clean, distributed renewables are not null but largely influenced by outdated perceptions all along the supply chain. Take the following for example:

  • Centralized fossil-fuel generation is the only means of meeting our current energy demand. It’s true that, in its current state, the grid is not equipped to handle widespread, two-way power flows and increased capacity (resulting from increased electrification). However, 2019 marked the first year in which the growth of new distributed energy resource (DER) capacity outpaced that of new centralized generation. When managed intelligently, DER put forth numerous attractive propositions to utilities and their end customers. Said plainly, the installation DER behind the meter (BTM) can reduce reliance on the grid and thus reliance on centralized generation.
  • Energy service provision damages assets and thus should violate warranties. A hindrance in electric vehicle (EV) battery provision of advanced services to the grid is the fear that using a DER outside of its core competency will harm the asset. To date, many vehicle-to-grid energy solutions void EV battery warranties. The reality is that with the proper control mechanisms, the EV battery or other DER will provide services only within safe parameters. Factors contributing to the health of batteries specifically include a given asset’s temperature and the levels at which it charges or discharges. Utilizing DER control platforms like Enbala’s Concerto that optimize around manufacturer or customer specifications mitigates risks of damage to DERs and allows them to support grid transformation while meeting their core functionality.
  • The use of BTM assets will lead to customer discomfort. While it is true that individuals may notice an increase in set point on their thermostat during a hot summer’s demand response event, it should be noted that many who opted in to a program knowingly will not mind. And, where concerns of customer fatigue for the repeat engagement of DERs are genuine, utilities should harness the growing ecosystem of DERs capable of providing grid services to avoid such circumstances. For example, discharging a home battery within customer-set parameters or temporarily disconnecting an efficient, well-insulated water heater should both go unnoticed by the customer. Ideal engagement of DERs in greening the energy grid should be automated and viewed by the customer as a feel-good opportunity to earn incentives.

Sustainable Grid Technology Already Exists

I joined Enbala because, as hinted above, I believe the technology to combat outdated perceptions related to energy management already exists; Concerto is a great example. Concerto provides enterprise DER orchestration, given its ability to switch between a virtual power plant (VPP) platform and a DER management system (DERMS) instantaneously. The platform operates within customer and manufacturer-defined constraints and can optimize both real and reactive power across a growing, diverse and complex ecosystem of DER vendors.

Practically, this means that Enbala can increase the hosting capacity of a distribution system. Enbala gives grid operators insight into real-time grid status influenced by DERs and foresight into future conditions. This means that control room operators, energy traders and utility program managers are just some of the personas able to reduce grid strain while simultaneously reducing cost-to-serve. Concerto’s transactive optimizer takes the guesswork out of asset control by utilizing machine learning to engage the right DER at the right time. This automation ensures continued customer comfort, protected assets and minimized risks of system downtime. Today, Enbala simplifies the process for grid operators to green their networks and serve their customers at the lowest economic and environmental costs.

2021: Do We Dare Offer Some Predictions?

We see light at the end of what has been a very long tunnel — driven by a clean energy-friendly administration in the U.S., a much-anticipated COVID vaccine, a renewed commitment to reducing carbon emissions and a strong focus on keeping the lights on, no matter what.

In our newest piece of thought leadership, Enbala CEO Bud Vos writes about the future of clean energy and distributed energy resources — 2021 style. The piece focuses on how carbon reduction goals — along with interrelated factors associated with pandemic recovery, shifting energy customer priorities, changing regulatory and policy dynamics, and technology innovation — will drive seven important developments.

  1. Greater EV adoption
  2. Growth of solar
  3. A move from C&I demand response (DR) to residential distributed energy resources (DERs)
  4. An increase in DER and clean energy technology spending
  5. Growing reliance on flexibility
  6. Removal of DER regulatory and policy barriers
  7. A strong need for distributed energy control

We invite you to read the full white paper and to share it with your colleagues.

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