Germany installed September 980 megawatts of solar photovoltaics in September, up from 329 megawatts in August. That brings Germany's total PV installations to 6.22 gigawatts in 2012 so far.
This data comes from The German Federal Network Agency, The Bundesnetzagentur (or BNetzA).
According to Germany Energy Blog reporting on Germany's Renewable Energy Sources Act (EEG), the optimum annual PV deployment in Germany is between 2.5 gigawatts and 3.5 gigawatts. Exceeding that range results in a decrease in feed-in tariffs for new installations by 2.5 percent per month.
Germany has more than 30 gigawatts of cumulative installed solar. A recent GTM Stat of-the-Day showed that Germany installs PV on solar rooftops ten times faster than the U.S. (Compare this to U.S. totals from the recently released U.S. Solar Market Insight totals from GTM Research.)
Solar installations in the U.S. will total 3.2 gigawatts in 2012. That's a healthy 71 percent growth rate. "But the next couple of years are hard to call," according to Shayle Kann, VP of Research.
"We have a more sober assessment of 2013," said Kann, who sees close to 4 gigawatts in the coming year, but like everyone in the solar industry, is waiting to see the impact of the ITC grant sunset. The upside is that "it's hard to imagine a down year for 2013."
LightSail added Peter Thiel to its investor roster as the leader of the energy storage firm's $37.3 million round D. Bill Gates and Innovacorp et. al. joined this round, the first VC round post-Khosla Ventures' seeding.
In the words of Steve Crane, CEO and co-founder of the firm, "LightSail Energy is applying thermodynamics (the science of heat transfer and utilization) to solve the problems of today’s electrical grid. The lack of economical energy storage at megawatt-scale has limited the penetration of renewable energy generation, such as wind and solar, in many parts of the world. LightSail’s technology makes power available when it’s needed, not just when it’s available."
“The power grid needs cheap, reliable energy storage, but every single solution to date has been only incremental. Danielle Fong, Steve Crane, Ed Berlin and the rest of the LightSail team are taking a completely different approach that’s based on fundamental thermodynamics. They have the potential to totally disrupt the electricity industry’s assumptions with reliable grid-scale storage at a fraction of the cost of today’s battery technology. When deployed, LightSail’s technology would reduce the need for transmission line investment, peaker power plants, and make renewable energy practical and mainstream for the first time,” said Vinod Khosla, in a release.
Peter Thiel, an early investor in Facebook, has been less than enthusiastic about investing in cleantech but LightSail looks to have changed his mind. Thiel writes in a release, “For far too long, the clean tech industry has been driven by politicians and ideologues who trade people’s taxes for dreams,” said Peter Thiel. “But hype is not a sustainable energy source. While authentic energy breakthroughs are needed to overcome geological constraints, fraudulent companies have driven out the good. It’s time to find honest companies that can develop technologies that stand on real innovation instead of the backs of taxpayers. LightSail is run by engineers, not salespeople, and it promises to be one of the first true alternative energy storage companies.”
“This problem of large-scale energy storage has been around for a century or more,” Crane said in a earlier interview. “It apparently bedeviled Thomas Edison.” And, Crane added, “a lot of people a century later might agree with him.”
CAES stores mechanical energy rather than electrochemical energy, which is what the more familiar battery holds.
With CAES, an electricity-powered air compressor drives air into storage tanks and the compressed air can then be released on demand to generate electricity. “The problem,” Crane said, is “round-trip efficiency.” Previous CAES systems only return “an estimated 10 percent or 20 percent of the energy that you put in.”
The most economic form of energy storage at scale, Crane said, is pumped hydro, in which water is pumped uphill during off-peak hours and released during peak demand periods. “That will get you back about 70 percent to 75 percent of the power you put in, and it’s pretty cost-effective.” But that approach, he added, “requires a specialized geography that doesn’t exist everywhere.”
According to Crane, “multiple studies” from the Electric Power Research Institute, DOE labs and the EIA all show that “for large-scale applications, compressed air energy storage is going to be cheaper” than any alternative other than pumped hydro.
The reason is simple, he explained: air is “the cheapest thing there is.”
Compressed air can match pumped hydro’s “price point,” Crane said, “but not the efficiency.” Batteries can match “the efficiency, but not the price point.”
LightSail Energy, Crane said, “attacks the efficiency problem.”
To make CAES more efficient, Crane explained, the LightSail system captures and stores both the mechanical energy and the thermal energy used in compressing air.
To do this, a water mist is infused into the compression chamber as the air is compressed. Water can hold 3,300 times as much heat as the same volume of air, and as such, it is able to capture the heat generated by the process more effectively. Both potential energy in the form of pressurized air and the heated (and therefore higher-energy) water can be stored.
When the captured, pressurized air is released back through the system, the heated water is re-infused into it. That heated air can return more of the energy stored by the system than can other CAES processes.
Crane explained that LightSail’s technology uses two basic components: the compressor unit and the storage tanks.
The firm presently uses a prototype high-speed compressor adapted from an off-the-shelf oil field pipeline gas compressor “about the size of a room,” Crane said. Under controlled conditions, it has shown the potential “of delivering about 100 kilowatts of power.” Crane continued: “At 3,000 psi,” a kilowatt-hour requires a tank “of about 50 liters.”
The company has worked through many generations of spray nozzles and spray nozzle arrays to better infuse the mist, capture the heat of compression rapidly and efficiently, and return that thermal energy.
“By holding on to the heat,” Crane said, “you can take the system from 60 percent thermal efficiency to 90 percent thermal efficiency.” That can make CAES more economically efficient than older generations of the technology, which can lose a huge amount of energy -- perhaps as much as 80 percent -- in heat.
The LightSail team is working on the system’s round-trip efficiency, he said, but they have “consistently achieved over 90 percent thermodynamic efficiency.” This means, he explained, that 90 percent of the power used to drive the compressor’s piston now ends up stored.
The company will not ship its first product until 2013. “Somewhere between half a megawatt to a megawatt is the sweet spot,” Crane said of the planned initial capability. Over the course of several years, Crane expects to ramp up the total storage capability, though the logistics of very large-scale storage “are well beyond what we’re capable of now.”
An April 2011 Sandia Labs cost estimate, according to Crane, put the “present-worth cost of ten-year operation in year one” of a CAES system with 4 hours to 8 hours of storage capacity at $1,470 per kilowatt. The study also found that batteries are $2,000 per kilowatt and up at that scale. “They all conclude that compressed air energy storage is the cheapest type of large-scale storage,” Crane said, “with the possible exception of pumped hydro.”
For short-duration, fifteen-minute to one-hour electricity storage, Crane's advice is to “buy a lithium-ion battery. It’s probably more cost-effective.”
At four hours and up, however, the benefits of CAES “become more and more obvious” because “it’s easy to add capacity. You just add more storage tanks. The air is free.” And, he added, “the containers to store compressed air are cheap compared to adding storage capacity to any other technology.”
The one problem with CAES, Crane admitted, is efficiency. “That’s the bet. If we can keep the price advantage while solving the round-trip efficiency [issue], we have an unbeatable approach.”
With the 30 percent Federal Business Energy Investment Tax Credit (ITC) set to expire at the end of 2016, GTM Research has begun to assess the state of the U.S. solar market in a world with fewer incentives. In determining the potential for solar deployment, we are looking for a scenario where solar becomes cost-effective even without subsidies. We believe the first tipping point in the distributed generation market will be when developers can offer customers a PPA at less than retail prices. And if the PPA has an escalator, it should be less than historical increases in retail rates. One way to measure this point in time is to compare the levelized cost of energy (LCOE), a measure of the total generation cost in dollars per kilowatt-hour, over the lifetime of a PV system, to retail electricity prices. By looking at energy cost, as opposed to capital cost, we are able to assess the competitiveness of solar versus traditional generation.
Two weeks ago GTM Research published a preliminary study of the U.S. commercial market following the step down of the ITC to 10 percent in 2017. Our ever-thoughtful readership raised a number of good questions, so we have revised the model. The conversation also brought up a discussion worth repeating.
There are four main cost components of an LCOE calculation: 1.) capital cost, 2.) fixed operation and maintenance (O&M) cost, 3.) variable O&M cost, and 4.) fuel cost. Upon undertaking our initial evaluation of the U.S. solar market in a post-ITC world, we calculated a nominal LCOE, not taking into account the impacts of inflation over the 25-year life of the system. We assumed a nominal interest rate when calculating capital cost and compared our LCOE model output to retail grid prices at the time of installation. This presents a problem: we essentially assumed that the rate of electricity stays constant over the lifetime of the system, when in reality it tends to increases annually by at least the rate of inflation, and often more. As pointed out by reader Bob Wallace, this analysis does not capture the entire avoided cost of a PV system and overlooks future savings if you believe that retail prices will continue to rise in the future.
To account for this, our analysis could be adjusted in one of two ways: 1.) we could calculate an expected average retail electricity cost for the lifetime of the system and compare to nominal LCOE, or 2.) we could calculate a real LCOE and compare it to grid price at the time of installation. Per the suggestion of GTM Research alum Travis Bradford, we chose to update our model to represent a real levelized cost while leaving retail rates the same. Specifically, we incorporated a conservative 2 percent discount rate into the calculation.
Our updated model assumptions for a commercial system in 2017 are as follows:
Source: GTM Research
WACC was adjusted down for inflation to come up with a real discount rate. Additionally, our 2017 installed cost assumptions have been revised downward based on additional data inclusion.
The goal of this analysis is to determine in which markets developers can offer a PPA to customers at less than retail prices, with an escalator equal to inflation. To that end, we compare the real LCOE for commercial installations to representative state grid prices (selecting a representative utility in each state), increasing annually at the rate of inflation.
Source: GTM Research
Source: GTM Research
After the ITC is stepped down to 10 percent in 2017, a comparison of real LCOE to retail grid prices reveals solar generation costs below those of traditional energy in sixteen of the twenty state markets analyzed. If nominal LCOE is used, we see price convergence in only thirteen states.
By updating our analysis to correct for inflation over the 25-year system lifetime, we are better able to evaluate the future cost savings potential of solar generation. As anticipated, the quantity of state markets where solar PV will be an economically viable option for commercial customers increases when utilizing real instead of nominal LCOE.
Now we throw it back to the savvy GTM readers: Is real LCOE the right calculation? Are we right in our assumption of the first tipping point for demand? As always, comments are welcome as we continue to build on this early analysis.
Special thanks to Scott Macmurdo for sharing his analysis on the effects of a real discount rate in LCOE calculations.
For more information on GTM Research’s U.S. solar market analysis, contact email@example.com.
With traditional European markets fading (or at least trying to fade, in Germany’s case), developers and manufacturers are scouring the globe for prospects in new and emerging markets. While many developers are turning to more obvious growth markets such as Japan or India, some more ambitious developers are turning to an often-overlooked bastion of solar hope: Romania. GTM Research provided a deep dive into the booming Japanese solar market earlier this year, and will be releasing reports covering the Latin American and Middle East/ North African solar markets later this year, but will focus on the growth prospects of the Romanian PV market in this market highlight.
Romania has nearly identical irradiance levels as Germany, a fact that may surprise many in the PV world.
Figure 1: Solar Irradiation Map
While Romania is relatively new to the renewable energy scene, there have been impressive developments in the market of late. These developments have been driven primarily by policies put in place to promote EU emission-cutting goals. For example, in 2009, less than 15 megawatts of wind capacity was connected to the grid, but due to an aggressive renewable energy law passed in April of 2009, nearly $2 billion has been invested to develop over 1 gigawatt of new wind in the past three years. There haven’t been many major solar installations to date, mainly due to a lack of proper support and policy clarity, but after an emergency order adjusting the renewable energy law in 2011 (which was ratified in April of 2012), the solar market in Romania has exploded.
Solar installations qualify for six “Green Credits” per megawatt-hour of electricity produced. These green credits operate as a renewable energy credit, similar to systems in New Jersey and Massachusetts. The current floor for these green credits is $34.7 per megawatt-hour and the current roof is $70.7 per megawatt-hour, meaning that each solar system will receive a funding of an incentive of at least $20.8 per megawatt-hour produced for fifteen years. For large systems, this is nearly twice the incentive available in Germany.
Many large companies in the solar sector are starting to take notice, and people are rushing to take advantage of the current incentive scheme before the government cuts back. Romania’s largest PV project is the 2-megawatt system developed by Romanian developer Fomco Solar Systems Srl (using Chinese-made ZNShine modules). Table 2 shows a select number of the projects that have been announced in the month of October alone. These projects demonstrate the level of international attention being drawn to Romania right now, with developers from Korean and Chinese firms to Portuguese and Spanish firms.
Table 1: Selected October Project Announcements
Hareon Solar Technology: 122 megawatts
Aion Renewables: 80 megawatts
CEED & ePD: 48 megawatts
Samsung Group: 45 megawatts
EDP (total of four): 38 megawatts
Espero: 20 megawatts
Source: GTM Research
It is important to note that most of the recently announced projects have not signed a PPA with a utility, but given the generous financial support available, the developers will certainly be able to offer aggressive PPA rates. However, according to the Romanian PV Industry Association (RPIA) and the Romanian grid-operator Transelectrica, over 520 megawatts of projects have been approved for grid connection and an additional 1,200 megawatts have applied for grid connection contracts. Under a business-as-usual scenario (assuming the government doesn’t take action to slow development), GTM Research expects roughly 50 megawatts of capacity to come on-line in 2012, and an additional 320 megawatts of capacity to come on-line in 2013, from a previous level of less than 5 megawatts in 2011.
GTM Research analyst Andrew Krulewitz says that “this smells a lot like the Czech Republic. I think that the government will overcommit itself financially, and will likely have to ratchet back its commitments in the not-too-distant future.” (Andrew recently covered the boom-bust cycle in the Czech Republic.)
It is unlikely that the Romanian government will be able to afford a sustained gigawatt-scale market, and it is likely that the government will scale back the program in the near future despite promises not to reduce Green Credit levels before 2014. In fact, the government is already discussing reducing the number of green credits per megawatt-hour of electricity from solar from six to four. However, we could be wrong, and Romania could indeed be truly committed to developing a strong downstream industry.
In a broader context, we have seen similar developments occur time and time again. Poorly managed programs in Ontario, Spain, Italy, and the Czech Republic have led to booms followed by a bust or market uncertainty. These scale-backs can lead to industry fallout and bankruptcies. Each time, we at GTM Research wonder, “How do we not learn from the past?”
SCIenergy is a building energy efficiency startup with a lot to prove. It’s raised about $50 million to date to tackle the building energy efficiency sector -- first as San Francisco-based software provider Scientific Conservation, then as a software-plus-services company after its 2011 acquisition of Atlanta-based engineering firm Servidyne, and finally as a software, services and financing player with its March acquisition of Dallas-based Transcend Equity.
The idea was to combine high-tech building analytics, hands-on energy services and financing tools in a triple play of sorts for the building energy efficiency market. But despite landing a long list of showcase pilot customers, the startup has struggled over the past eighteen months or so. Last year, it underwent a public legal battle with the startup’s original founder, John Pitcher, and other executives after they left to join rival efficiency startup Serious Energy (the parties settled in March).
Then, in May, SCIenergy replaced CEO Russ McMeekin with Steve Gossett Jr., the CEO of Transcend. McMeekin’s departure came amidst layoffs and reports of problems with the company’s core software products in the field. All of that had put a good deal of pressure on SCIenergy to grow its list of customers -- and not just pilot customers, but paying customers, as Gossett put it in May.
Last week, SCIenergy delivered on that pledge, naming three big property management firms – Shorenstein, Lend Lease and LBA Realty -- as new customers. Each new partner is installing SCIenergy’s core software products, including its SCIwatch building energy analytics engine and its SCItrack building dashboard system, in at least two buildings each, Gossett said in a Friday interview.
SCIenergy also announced that it has reached 150 million square feet of property under management amongst its existing customers, up from about 15 million square feet two years ago.
That’s a pretty hefty figure, as compared to, say, SkyFoundry’s 125 million square feet of building space under analysis, or EnerNOC’s 200 million square feet of customer real estate under energy efficiency management, to name two competitors in the field.
Of course, measuring by the square foot ignores all kinds of important distinctions in the ways these different companies bring their technology and expertise to market. Big demand response company EnerNOC, for example, offers a network operations center and engineering staff with its efficiency projects. Small startup SkyFoundry, by contrast, licenses its software to third parties that use it to support a variety of efficiency projects.
SCIenergy’s situation is even more complex, because it offers both software and services. On the services side, Servidyne competes against a host of regional energy services companies, as well as international players like Honeywell, Johnson Controls, Siemens, Schneider Electric, and the like. On the software side, those exact same companies could use SCIenergy’s software to improve their service offerings, Gossett noted.
SCIenergy has tested its software with such property owners as Boeing, Neiman Marcus, Apple, Google and NASA, and General Electric and Intel are both partners and investors. Competitors on the startup side include the likes of Viridity Energy, BuildingIQ and others with building energy dashboards and analytics. SCIenergy is also deploying a third software platform, called SCItendant, that links building staff to the energy intelligence coming from the startup's other software platforms via web interfaces and mobile devices, Gossett said.
In the meantime, IT giants like IBM and Cisco are enhancing their building energy efficiency offerings, while energy services giants like Honeywell, Johnson Controls, Schneider Electric and Emerson have been rolling out their own IT platforms to tie their building equipment together into more intelligent building management systems.
In the meantime, SCIenergy’s efficiency project financing business, built on Transcend’s managed energy services agreement (MESA) model, continues to work with big partner Mitsui on lining up customers, Gossett said. That includes a Chicago-area project backed by $9 million in federal funds, as well as ongoing development of a second-phase fund with undisclosed partners, he said.
On Friday, November 2, Best Buy and Cree announced the Insignia family, a pair of dimmable Edison A-19 LED bulbs, at the 40-watt and 60-watt incandescent replacement points. The bulbs will have immediate, and exclusive, availability at over 1,000 Best Buy stores.
Edison replacement LED announcements are dime-a-dozen these days, too numerous to list here. However, the present announcement represents transitions by a pair of major holdouts.
Standout LED device/chip maker Cree has never shipped an Edison replacement bulb. Cree, like many of its competitors, aggressively moved into lighting fixtures in the last eighteen months, even going so far as to acquire Ruud Lighting. But the Durham, NC company has concentrated on a variety of downlight markets. Nationwide electronic retailer Best Buy has never sold an LED bulb or fixture in its brick-and-mortar stores, although OEM LED lights available in its online store.
Performance and pricing are fairly aggressive, at 450 lumens/9 watts/$13.99 for the 40-watt replacement, and 800 lumens/13 watts/$16.99 for the 60-watt replacement.
The Insignia bulb has a novel mechanical design. It is shaped like the original Edison bulb from top to bottom, with long, discretely shallow, clumps of side fins running right up through the light emitting zones. Transparent slots between the fins emit light. According to Cree Product Marketing Manager Paul Scheidt, this allows the bulb to radiate in all directions almost as well as an incandescent. “We didn’t want yet another bulb that throws most of its light upwards,” he stated, adding, “We also wanted something that looked and handled more like the traditional light bulb, rather than a squashed pumpkin or necklace of fins.”
Cree is supplying “state-of-the-art” LEDs, according to Mr. Scheidt. This probably implies a good Color Rendering Index (CRI), among other things. However, the design and manufacturing contribution of the company is a little unclear. The Insignia bulb is stated to have been designed “in partnership with Twin Cities [Minneapolis-St. Paul --- Ed.] inventor, Dave Carrol.”
While a late entry in a crowded field, the Insignia boasts intriguing design, impeccable LED credentials, and a major sales channel. A Cree-Best Buy pairing could be a significant force if it extends to other products over time.
And Cree (Nasdaq: CREE) has proven to be a player not to dismiss. In the last year, the company has shown up naysayers with aggressively cost-reduced LED announcements such as the XMP family. In early 2012, short-sellers of the stock were pummelled with a rise from the low-$20s range to the mid-$30s. The stock has gyrated recently, but in the last week has climbed rapidly back toward historical highs.
Opower has its public face: the behaviorally fine-tuned, decision-tree-optimized home energy reports that it mails, emails, SMSs and web-hosts for about 75 utilities, and 15 million or so utility residential customers, across the globe.
But the Arlington, Va.-based startup has also invested pretty heavily in the back-end software and analytics that create all those customer energy web pages, accountant billing reports, utility executive dashboards and the like.
In fact, Ogi Kavazovic, Opower’s vice president of marketing and strategy, says that analytics is one of the company’s “core competencies,” developed in-house as part of the startup’s software-as-a-service platform. But like the utility industry at large, Opower has had to grow to meet the big data demands of the smart grid -- and that has led Opower to develop a new software platform, built on open-source big data tool Apache Hadoop, that is set to launch in the next two weeks or so, Kavazovic said in a Thursday interview.
While he provided few specifics, he did say that the new platform would support mobile phones and other customer-connectivity features, as well as smart thermostats and other in-home devices. Opower has demonstrated capabilities like these with smart thermostat partner Honeywell, but the two have remained mum on when they might bring their combined technologies to market.
More importantly, however, the new platform will expand Opower’s big data capabilities dramatically, Kavazovic said. “We had a huge, huge push on the back end -- we basically rewrote our code base, to be able to scale with the AMI data from across tens of millions of homes,” he said.
Opower analyzes existing home energy data, incoming smart meter data, consumer behavior data, weather data and lots of other disparate pieces of information. Then it simplifies the complex variables involved to present homeowners with a few choice efficiency tips, utility rebate offers, and other suggestions.
As smart meters come on-line, the amount and frequency of data coming into a system like that increases dramatically, Kavazovic said. Opower set up its cloud-based Hadoop computing environment in November 2011, and in June announced a partnership with Cloudera, a Hadoop software and services provider that helps manage Opower’s platform for crunching lots of unstructured data sets.
That in turn allows Opower to do all kinds of analytics it might not otherwise be able to handle at a reasonable cost or in a reasonable time, he said. One example is Opower’s ability to compare thousands of different homes’ smart meter reads to find tiny fluctuations that indicate certain homes are over-heating or over-cooling at certain thermostat set-points, he said.
Hadoop is at the core of the big data platforms of internet giants like Google and Facebook, but it’s far less common in the utility industry. Still, some smart grid systems, like phasor measurement units (PMUs) that require capturing 60 data points-per-second in perfect synchronization, require the kind of big data management capabilities it provides -- the federal Tennessee Valley Authority is building its PMU data platform on Hadoop. Recently unstealthed startup AutoGrid is also using the open-source tool to build its unstructured data platform for the smart grid.
There’s little doubt that the smart grid’s big data needs are growing. Opower, which has raised about $65 million to date, now has about 15 million homes under contract to 75 utilities, with big names including Pacific Gas & Electric, Pepco, Baltimore Gas & Electric, FirstEnergy, National Grid and Consumers Energy.
The startup has also been moving into overseas markets, with U.K. customer First Utility in 2011, with Canadian customer Nova Scotia Energy in June, and most recently with a 1.5 million-home project for EnergyAustralia. The U.K. and Australia have deregulated energy markets, where retail utilities compete to attract and retain customers. That can make high-tech tools that can connect them to their customers -- including Opower’s hosted web portals and customer management tools -- a marketing tool as well as an efficiency tool.
On the international front, Opower is also working with two other utilities in two other as-yet-unannounced countries, Kavazovic said. While he wouldn’t name the customers, he did say that one of them was in a country where English wasn’t the primary language, and that one of them has about 30 million customers across its nation’s service area -- though he added that Opower was only in pilot project status with the latter utility.
Competitors to Opower include Boulder, Colo.-based Tendril, which has more than 30 utility pilot customers and a few full-scale rollouts promised, and Aclara, whose customer web portal now runs at about 20 utilities across the U.S. Silver Spring Networks provides analytics to its utility customers, and Efficiency 2.0, a startup that provides millions of utility customers a web portal to win coupons and other prizes for energy efficiency, was bought by C3 earlier this month.
In the long run, Kavazovic said, Opower sees itself as the manager of a utility’s customer outreach program. After all, it’s already running web portals branded under utility logos that are viewed by millions of customers, as well as supporting integration to the rest of a utility’s enterprise IT system, from customer service to rate-case planning.
Indeed, a few of Opower’s utility customers are already asking the startup for application programming interfaces (APIs) to allow them to tap the analytical output from its platform, Kavazovic said. While it hasn’t made its pure analytics available to utilities that aren’t already customers yet, it’s planning to roll out a robust set of APIs for the industry at large some time next year, he added.
A panel is a commodity because the buyer can buy more than one brand for an installation, like a semiconductor memory chip. A processor is not a commodity because it requires code conformity; it has a stickiness.
You don’t have that stickiness with panels. I can buy Suntech (NYSE:STP) panels for the project today, and tomorrow I can buy panels from a different company and there is not a lot of technical adjustment. The choice comes to bankability and getting the project financed.
What we are seeing is like the memory market years ago when we had hundreds of players and today we have less than a dozen. The memory market went through boom and bust and in every bust you lost a percentage of suppliers. We will see the same thing in panel suppliers.
It is a good thing for the market because there is not a lot of R&D. If you have a module company with a billion dollars in revenue, it probably has less than 100 people in R&D. If you have a billion-dollar semiconductor company, you probably have 700 or 800 engineers working on R&D.
That explains why there is not much innovation in modules. As consolidation happens and there are fewer module manufacturers in the market, they can afford more R&D and drive innovation.
Andrew Tang has moved from SCIenergy to AutoGrid Systems, a smart grid analytics software firm, as VP of Business Development and Strategy. Prior to SCIenergy, Tang was PG&E's Director of Customer Energy Products. AutoGrid, which just raised $9 million, is about unstructured data-crunching. As Jeff St. John writes, "The smart grid presents an interesting problem for the world of big data, and particularly the field of unstructured data. Where traditional data management requires its data to be formalized and regimented, unstructured data systems take their data as-is, and then make sense of it."
On-Ramp Wireless, a maker of wireless communications for energy automation and M2M, announced Kevin Hell as new CEO. Hell was CEO of DivX and SVP at Palm.
FirstFuel Software, a building energy analytics startup, named Jim Borr, formerly with Tendril, as VP of Sales, and Raman Sud as SVP of Engineering.
An advance look at the National Solar Jobs Census 2012 from the The Solar Foundation:
- Initial results have the solar industry employing 119,016 Americans across 50 states, up 13.2 percent from last year.
- Census participants cited federal solar policy such as the solar ITC and the continued decline of solar module pricing as the most important factors driving solar job growth -- along with state RPS policy and the rise of third-party solar ownership.
- Solar job growth outpaced the overall U.S. economy, which grew by by 2.3 percent (according to the Bureau of Labor Statistics) during the same period.
For the past three days, I have been dealing with power outages at my home and at the homes of my three children. While there is much being written about smart grid and hurricanes, let me offer some personal experiences that make me think more about what technology can, and should, do in times of natural disaster.
A close friend of ours had a home in Mystic Island, New Jersey, on the waterfront about fifteen miles from Atlantic City. Needless to say, her home is totally devastated from the effects of Hurricane Sandy.
We were able to access the remnants on midday Tuesday, only to find gas appliances (range and dryer) ripped from walls, with strong odor of gas. Luckily, I was able to find the gas meter and shut-off valve and quickly stopped what could have been an even greater disaster. Fortunately, there was not power in the area at the time, so electrical sparks inside the home were not an issue, but others in the neighborhood were running gas-powered generators and other potential sources that could have easily ignited.
Late last night, as we were salvaging some personal belongings, electrical power was restored to this area. Had we not made this trip to the site on Tuesday and turned off the gas and the circuit breaker, the wet wiring and exposed wiring would have been spelled even greater damage for my friend and others in the neighborhood.
As we struggled with all of the emotions of the past few days, I also reflected on safety, health, and environment during this disaster. As I write this blog post, I wonder about all of the other fires that happened in impacted areas, and think about the fact that if two-way wireless communications to electric meters and gas meters both had remote shut-offs, it might have saved others the agony of total loss of property and life.
Ron Chebra is Vice President, Management & Operations Consulting, DNV KEMA Energy & Sustainability.
In this article, we look at how the issue of curtailment is putting the brakes on the China wind market in some areas, and how the Chinese are responding.
For the Chinese wind industry as a whole, 2012 appears to be another year combining elements of the best of times and the worst of times. China surpassed 50 gigawatts of grid-connected wind capacity and is on its way to add a record amount of new wind capacity, increasing the total installed capacity by roughly 18 gigawatts, representing a 40 percent growth rate. In 2011, China surpassed Germany and the U.S. to become the largest wind country by nameplate capacity and is set to become the world’s largest wind energy generator sometime soon. China also currently supplies roughly one-fourth of all the wind energy injected into the grid worldwide.
Yet the sector faces some immense challenges, from ongoing problems with grid connection, ever-growing amounts of curtailed wind generation, new restrictions from State Grid on who can connect, and, perhaps most importantly, uncertainty about whether policymakers will do as they have done in the past to ensure the sector continues its rapid growth.
As recently as two years ago, it was already becoming apparent that China’s wind industry would quickly mature, and that policy would have to shift toward more rational allocation of capital toward projects with the largest potential to supply needed energy at low cost. The latest results from the third quarter of 2012 show that this rationalization is still some ways off: curtailment is still a huge problem, and industry profits are in a nosedive.
Developments shaping the China wind market in the past quarter of 2012 include:
- In the third quarter of 2012, China added an estimated 2.9 gigawatts of new wind capacity, including both connected and unconnected capacity.
- Total China wind capacity reached an estimated 71 gigawatts of nameplate wind capacity at the end of the quarter.
- China is on track to add a further 9 gigawatts in the fourth quarter and reach 80 gigawatts of total capacity.
The installed wind capacity in China rapidly increased from almost no capacity in 2006 to over 66 gigawatts as of the first half of 2012. In the process, China became the world leader in wind power development, installing approximately 35 percent of global capacity. From 2006 to the first half of 2012, China’s installed wind capacity grew 25-fold, while the installed wind capacity in the rest of the world expanded by a factor of 2.6.
The rapid growth of China’s wind industry has been, and will continue to be, concentrated in several wind power bases in Northern and Western China. Inner Mongolia currently dominates within China, with over twice the installed capacity of the next highest province, Hebei. Over the next three years, the installed capacity in Inner Mongolia and China’s other leading provinces is expected to rise by two-thirds when considering just projects currently in the pipeline. This is despite that fact that significant wind power curtailment problems have already emerged in these early growth regions.
Dealing With Curtailment
Curtailment remains one of the largest issues overhanging the future growth of wind power in China. There are several ways of looking at the issue of curtailment. The first is to examine historical data on curtailment, which is available from the China Electricity Council (CEC) data. Unsurprisingly, curtailment is centered on more rural provinces with larger wind capacity such as Inner Mongolia and Gansu province. However, the trend is to see curtailment expanding to other regions of the country, essentially following the latest areas of wind industry growth.
Another way to look at curtailment is to consider forecasts of future wind capacity additions by province compared to expected peak demand in those provinces. The ratio between wind capacity and peak demand would suggest that curtailment will worsen in areas already suffering from the problem, while continuing to expand to new areas.
A third, more comprehensive way to examine curtailment is to analyze projected wind capacity and peak demand when compared to projected additions of transmission and natural gas generation capacity. Without going into detail, while new transmission capacity will reach areas of high containment after 2014, it appears that it will fall considerably short of addressing the curtailment problem. Similarly, China’s natural gas infrastructure lags other countries, and natural gas power additions nationwide will be far lower than the projected increase in wind capacity.
Figure 1: Wind Generation Curtailed, 2009-2011 and Percent of Provincial Total Wind Generation Curtailed, 2009-2011
Source: SERC, Azure International
In 2011, China’s provincial curtailment rates generally worsened. According to China Wind Energy Association, about 15 terawatt-hours of wind power generation was curtailed, representing 16.9 percent of China's wind generation -- implying an economic loss of RMB 5 billion, based on current tariffs. Based on the above data, from 2009 to 2011, the total wind power curtailment in North, Northeast and Northwest China was about 21,700 gigawatt-hours. The curtailed wind power resulted in a RMB 11.6 billion economic loss, which is equivalent to 6.77 million tons of coal, equivalent to 13.4 million tons CO2 emissions.
Figure 2: Curtailed Wind Generation and Curtailment Percent by Province, 2011
In 2011, curtailment of wind power was most severe in North, Northeast and Northwest China, reaching a combined total of 12,300 gigawatt-hours and accounting for 16 percent of the total generated wind power. The curtailed wind power resulted in a RMB 6.6 billion economic loss, which is equivalent to 3.84 million tons of coal or 7.6 million tons of CO2 emissions.
FIGURE 3: Wind Forecast by Province in 2015 (Top 15 Provinces), in gigawatts
Source: Azure International
An overview of our forecast wind capacity by province -- which in this case we have restricted solely to additions currently in our probability-weighted development pipeline -- suggests that curtailment will continue to be a problem for some years to come. All of the top wind provinces will see a higher ratio of wind capacity to peak demand, with six provinces marking a 20% jump in this ratio and another two seeing a greater than 10% increase. (Although the ratio is worst in Hainan Island, the province is small in terms of demand and connected to the much larger Guangdong province.) In particular, China’s Northeast and West regions appear particularly likely to experience increasing problems in terms of wind oversupply. Several of these provinces, such as those in China’s Northeast, are also far from existing natural gas infrastructure. Natural gas generation capacity can more quickly respond to changes in local intermittent renewable energy production, and hence can alleviate curtailment.
Looking to the Future
While China’s wind deployment continues to face these challenges, China’s renewable energy sector continues to build on it’s recent growth. On one hand, China’s renewable energy companies face the same problems of oversupply and problematic finances seen elsewhere. On the other, China’s policies in support of wind and solar will keep these sectors expanding at a rapid pace, unlike elsewhere in the world. China has quickly moved from being a bit player on the world renewable stage in 2006 to being the world’s largest market for many renewable energy technologies, especially wind. China now leads the world in terms of installed wind capacity, and clearly remains a relative bright spot for equipment and component sales. With the U.S. wind industry falling off its own version of the fiscal cliff while Europe struggles to reconcile older feed-in tariffs with new austerity measures, it seems clear that China will retain its new-found lead in renewable energy over the near term.
The implications of this simple truth are immense. They include:
• China will remain the largest market for wind equipment and components, including those supplied by foreign manufacturers.
• Chinese energy companies and renewable manufacturers will continue to grow rapidly and expand worldwide.
• Chinese companies will accelerate their bids for overseas assets, including renewable energy plants like wind and solar farms, as well as technology players. Chinese go-abroad moves will include rescuing financially hobbled companies like MiaSolé or taking stakes in more solid but still cash-strapped industry leaders.
Azure International and GTM Research will be discussing the China Wind market in greater detail on our upcoming webinar, November 14th at 12:00pm. To register, please click here.
Building utility-scale PV solar projects is getting tougher. Greentech Media’s U.S. Solar Market Insight conference concluded with a discussion between experienced developers about the challenges and opportunities.
Moderator and GTM Research Senior Analyst Shyam Mehta asked them to first review the last year.
“In summer of last year, the IOUs issued RFPs, the first in over two years,” 8minutenergy CEO Martin Hermann recalled. “More than 70,000 megawatts of applications were submitted. They shortlisted about 2,500 megawatts.”
The ISO queue has dropped from 80,000 megawatts to 50,000 megawatts and utilities are “looking very diligently to see if there are any show stoppers” before signing contracts. In this “tough competition for PPAs,” Hermann said, developers are “monetizing or cancelling their portfolios.”
In three years, explained SunEdison (NYSE:WFR) General Manager Attila Toth, the U.S. solar market will be 50 percent distributed generation and 50 percent utility scale projects. But about 85 percent of the 3.5 gigawatts to 3.8 gigawatts of utility projects “is already spoken for, in the queues and has company’s names written on it. There is a very limited opportunity in the utility segment.”
“It is time to focus our energies toward distributed generation,” Toth said. It is “a very hard market to scale in,” he said. But with rising retail rates, falling costs, and the rush for projects before the federal investment tax credit drops from 30 percent to 10 percent in 2016, “there will be a surge there.”
“A lot of the larger developers went into the small generation interconnection queue,” said Lincoln Renewable Energy COO Dan Foley. “But 10- and 20-megawatt projects are not getting through any faster and transactional costs really hurt small projects.”
“What hurt the industry in the last year is slow load growth because of slow economic growth and low natural gas prices,” objected EDF (EPA:EDF) Renewable Energy VP Kristina Peterson. “A friend calls the 10- to 20-megawatt deals the 'doable renewables,'” she added. “You are right on the transaction costs. But if you have a few of those and a few big ones, you have enough economies of scale in procurement.”
"What else might drive utility-scale PV solar growth?" Mehta asked.
“Two-thirds of the country is in drought,” Foley said. “Where are you going to find 5,000 gallons of water per minute to run a combined cycle gas plant? You’re not.”
In projects below twenty megawatts, Hermann said, “some developers market projects that barely are projects, just documents they try to sell. Others are very professional. Above twenty megawatts, all we do is greenfield, because of transmission interconnections and getting the right location and being sure of entitlement.”
“There is disconnect,” Foley said, “between what smaller developers think projects are worth and what they are actually worth. Our preference is greenfield because we like to know where the bodies are buried. But it is such a low cost to acquire some of these projects that you can’t really pass them up.”
Because the wind industry’s production tax credit has not been extended, Toth noted, “tax equity investors that understand how to underwrite large wind assets and don’t understand how to underwrite solar assets are looking toward solar and looking for scalable platforms.” That, he said, “is a big opportunity for solar.”
In Texas, Foley said, merchant wind projects were built without PPAs by independent power producers “backed with bank hedge funds. Solar is not there but it is close. If it keeps on trending that way and gas goes up, you will see merchant hedges.”
“For merchant to be a reality in solar,” Toth said, “costs need to come down to around $1.50 per watt, gas needs to go up to about $6 per BTU, and we need to get about a $20 per megawatt-hour credit for capacity, to compete with $0.06 or $0.07 wholesale power.”
“We look at solar projects as selling electricity,” explained Hermann. That starts with the interconnection. Before last summer’s California solicitation, he said, his company “picked projects near those substations that would have transmission capacity.” As a result, he said, his company “captured more than a third of the projects that were shortlisted.”
What about financing from panel manufacturers attempting to revitalize their sales? Mehta asked.
“We welcome low-cost capital,” Toth said. “If that comes with some strings attached, we are open to discussing that.”
Mehta said GTM Research foresees utility-scale PV installation numbers for the next three years being strong because of projects in the existing pipeline. But will new project announcements fall off a cliff?
The California projects that will be built by 2016 “are somewhere in the ISO queue,” Hermann said. “There are enough to meet the 33 percent by 2020 requirement and to replace contracts that default.” But, he added, “I would expect a project with good transmission capacity and low cost values to acquire a PPA. The rest will dissolve.”
“If you don’t have the project in PJM’s queue or the Midwest ISO’s queue or Cal ISO’s queue, it is too late,” Foley said. But there are a lot of other places. ERCOT is a wonderful place to develop. If you want to build in 2016, you can probably find something in 2015 and it will work fine.”
Most of the smart meters deployed around the world today are being used for little more than collecting power billing data -- in other words, they’re remote-control cash registers. But smart meters can also help utilities find nested power outages, predict which transformers are about to fail, monitor power quality to identify unexpected grid balancing problems, to name a few options.
Indeed, we’re seeing those kinds of systems turned on today, in bits and pieces. But with the first wave of AMI deployments now going through their paces and being subjected to regulator scrutiny, we can expect another wave of smart meter data management (MDM) to take off, as utilities strive to get every last benefit out of their investment.
This evolving MDM market was the focus of a Wednesday webinar hosted by GTM Research and eMeter, entitled “Beyond Meter-to-Cash: AMI for Improving Distribution Operations.” As GTM Research smart grid analyst Zach Pollock noted, the tens of millions of smart meters now deployed across the world constitute the single biggest source of distribution grid data out there, if utilities can put it to use.
Larsh Johnson, eMeter CTO, laid out the laundry list of projects that can use well-managed smart meters, broken down by category: outage ID and restoration and protective/preventative maintenance on the reliability side, volt/VAR optimization and conservation voltage reduction (CVR) support, and voltage sag/swell monitoring on the power quality side, and connection model validation, line loss reduction targeting, asset management, and capacity modeling among the list of service and planning functions.
“Most of these programs aren’t about doing one thing and saying [you're] done,” Johnson noted. “They’re about continuous improvement.” Indeed, eMeter manages its MDM for its long list of clients, and offers a cloud-hosted version via its partnership with Verizon.
MDM can also support business cases for pinpoint smart grid projects, like temporary extra sensors on a transformer or feeder line that the meter data indicates is close to failing, Johnson noted. In fact, using smart meter data to prove the comparative values of a bewildering choice of smart grid investment options is one way that smart meters can help pay for themselves, if in a roundabout way.
At the same time, state utility regulators around the country are demanding that utilities prove out the customer benefits of their smart meter investments, Chris King, eMeter chief regulatory officer, noted. Simply measuring the impact of smart meters on grid operations and customer bills requires some sophisticated data management. Applying the data to improve ongoing operations and connecting customers to efficiency or demand response programs is another level of complexity.
King highlighted the case of Commonwealth Edison, the Chicago-area utility that has agreed to a state law requiring it to deliver specific benefits from its smart grid plan or face penalties. Achieving goals like a 50 percent reduction in power outages, a 90 percent reduction in estimated billing and a $30 million, 45-percent drop in uncollectible bills will likely require a full-scale meter data management project in its own right.
Itron, Aclara, Oracle, eMeter (acquired by Siemens last year) and Ecologic Analytics (acquired by Toshiba’s Landis+Gyr earlier this year) are the five companies that dominate the U.S. smart meter MDM market. The companies have also partnered with AMI vendors like Echelon, Elster, Silver Spring Networks, General Electric, and one another -- Itron and Aclara, for instance, sell their MDM and AMI products together or separately.
At the same time, we’re seeing a host of partnerships emerge to link smart meter data to the wider world of smart grid systems. Telvent, the Spanish grid IT company bought by Schneider Electric last year, recently launched its own MDM, built specifically to provide near real-time data to grid operators and other utility users. Dominion, the parent company of electric utilities in Virginia and North Carolina, has teamed up with Lockheed Martin on the Dominion Edge AMI-backed volt/VAR optimization platform that now counts Silver Spring and Elster as partners.
AlertMe is already working in its home base of the U.K. with customer and strategic partner British Gas. Earlier in the year, the company jumped across the pond in a partnership with home improvement giant Lowe’s.
On Thursday, AlertMe announced its fourth large partner in as many countries: Essent, the largest energy company in the Netherlands, with more than two million electricity and gas customers.
Essent has just launched E-Insight, a cloud-based smart energy service to the deregulated energy market in the Netherlands. The program will give customers an AlertMe home hub, two smart plugs and access to the platform to monitor and remotely control any devices that are connected to the plugs. The web portal will also allow customers to compare their own appliances with new appliances on the market and calculate savings for upgrades.
“The AlertMe platform enables Essent to introduce smart services in a modular way, so we can keep them simple,” Ivor Kusters, program manger for smart energy at Essent, said in a statement. “Customers expect easy-to-use services that show immediate relevance.”
Like Lowe’s, Essent is a retailer that chose AlertMe because of its scalable platform that can add on smart energy services in coming years. Unlike other utilities, Essent will not be offering the service in exchange for customers enrolling in a demand response program. There will, however, be a small monthly fee for the service.
Not only will Essent be offering E-Insight to its own customers, but it will also be available to non-customers, said Jody Haskayne, spokesperson for AlertMe. Essent also operates in Belgium and is part of RWE Group, one of the largest utility groups in Europe.
Because regulated utilities are often required to move slower and pilot projects to death, deregulated, competitive markets like the U.K., Australia, Texas and the Netherlands will become increasingly important for companies that have already seen home area networking grow slower than some had expected.
AlertMe is competing with a bevy of home energy and home controls companies in every region, including Opower, Onzo, EnergyHub, EcoFactor, Energate and many more. Earlier this year, Tendril announced it was working with Essent to create something like an apps store for energy using smart meter data.
At every turn, there are competitors. AlertMe is also working with Deutsche Telekom, Germany’s largest telecommunications company. But it hardly alone in courting telecoms. Motorola and Verizon both have home automation offerings, while EcoFactor is partnered with Comcast in the U.S. and iControl is working with Time Warner Cable.
AlertMe has raised about $49 million to date. The company is backed by Good Energies, Index Ventures, Chrysalix, SET Venture Partners,VantagePoint Capital Partners and British Gas.
When Ardo UK switched its cold storage facility to Digital Lumens Intelligent Lighting System, the food company reduced its lighting-related energy cost by 97 percent at the warehouse.
But for those savings to be sustained, even more can be done.
Digital Lumens just launched LightRules Monitor, a new application that sits on top of its platform and delivers ongoing analysis of the lighting system performance and recommendations about how to further optimize settings.
“This is the first step to a complete service offering,” said Tom Pincince, president and CEO of Digital Lumens. He noted that increased savings can come from fine-tuning daylight harvesting values or by understanding patterns in shifts of the day or seasonality. “We’re providing a level of diagnostic service and using the knowledge of our system to continuously optimize the settings.”
For Digital Lumens, this is just the first of many apps to come, said Pincince. Even though installing LEDs can save significant amounts of energy, people will still override settings, or lights can still be left on when no one is in the room. “We’re seeing opportunities over time to make sure things don’t go off commission,” said Pincince.
For the first year, Digital Lumens customers can get LightRules Monitor at no charge, but it will eventually be offered as a layered service. The additional measurement and verification capability will allow some customers to invest in the LED system as a lighting-as-a-service program, rather than an outright capital upgrade.
Eventually, the LED system and sensors could also offer other energy savings. Large customers may have building management systems, but Pincince said that for many of Digital Lumens’ customers, the system is the first intelligent thing that has been installed in the building.
Costs for LEDs have dropped considerably, but LEDs will continue to be a premium product over legacy technologies. That has meant companies like Digital Lumens need to sell the lights, as well as all of the advantages that come along with them. “There’s a tremendous amount of data tied to lighting,” he said -- and companies will need to leverage that to stay competitive.
Earlier this year, Redwood Systems, which offers lighting networks, opened its platform for applications. Rather than lighting controls, however, most of the early apps were around occupancy sensors.
The U.S. General Services Administration is currently looking at the advantages of LEDs versus LEDs with controls using Cree and Daintree technology. If the nation’s largest landlord and tenant decides that controls and sensors pay off, it could accelerate the proliferation of lighting apps even more.
“The responsibility of the lighting market is to find way for customers to overcome the [price] premium,” said Pincince. “That comes with rapid payback and innovative business models.”
The term meter data management (MDM) covers a lot of ground in the smart grid space. We’re talking everything from simple databases to record and bill customers based on digital meter reads, to complex platforms that link outage detection, power quality measurement, verification and estimation analytics and all other sorts of utility functions into smoothly working systems.
At least, that’s the theory. But to get all that different software working together, MDM platforms have to tackle the key challenge of data flow. Most of the world’s advanced metering infrastructure (AMI) networks feed back data in 15-minute or hourly increments, but they’re also capable of faster communication for emergency functions. At the same time, no network is perfect, and every AMI deployment has to deal with dropped or delayed data, whether due to software glitches or fallen tree limbs and other real-world disruptions, both as they happens and in truing up the ledgers before sending out the bills every month.
That makes for a data analytics challenge that, if not truly real-time, at least falls under the utility catch-all category of “near real-time” -- a term of art for the level of capability today’s AMI systems can support.
Now we’ve got a new MDM offering from Telvent, the big smart grid IT company bought by Schneider Electric for $2 billion in 2010. Called Conductor, it is purpose-built to analyze data as it streams from the smart grid, as well as to automate the flow of that data to disparate systems that serve the utility enterprise.
Telvent landed its first customer for Conductor last week, when Ontario, Canada utility Entegrus announced it would use the platform for its 50,000-customer smart meter deployment. But the company is also in discussions with other utility customers interested in trying it out, Nnamdi Agbakwu, Telvent meter data systems product manager, said in a Wednesday interview.
Conductor does all the fundamental meter-to-cash and verification, editing and estimation (VEE) work of the MDM, Agbakwu said. But it’s also built to link up to grid operations systems -- such as Telvent and Schneider’s array of distribution grid management products -- to provide a faster, more data-rich view of ongoing grid status, he said.
On the low-voltage distribution grid network -- the part of the grid that’s now mostly blind to grid operators — “We have that meter data available and capturable now,” he said. “If we throw some analytics at it, we can provide real-time operational insight for utilities.”
Telvent isn’t the first to link smart meters to distribution grid management (DMS) or distribution automation (DA) systems. AMI vendors like Echelon, Elster, Silver Spring Networks, Itron, Landis+Gyr and Sensus are turning on their meters for grid operations purposes in increasing numbers. Dominion, the parent company of electric utilities in Virginia and North Carolina, has teamed up with Lockheed Martin on the Dominion Edge AMI-backed volt/VAR optimization platform that now counts Silver Spring and Elster as partners.
At the same time, MDM providers such as eMeter (now part of Siemens), Ecologic Analytics (now part of Toshiba’s Landis+Gyr), Itron, Oracle, Aclara and many others have been promising new near real-time analytics and integration capabilities, as they strive to help utilities deal with the data flowing from their multi-million smart meter deployments.
Telvent, of course, has a market-leading geographic information system (GIS) platform, along with utility asset management, outage management, and the automated distribution management system (ADMS) that Telvent and Schneider are deploying with utilities around the world.
On the big data front, Telvent has partnered up with OSIsoft, the San Leandro, Calif.-based heavyweight in smart grid data management software, to bring a new level of close to real-time meter data analytics and automation to Conductor, Agbakwu said. We’ve seen a surge of “big data” platforms launch for the smart grid in the past year or so, from heavyweights like OSIsoft and IBM to startups like AutoGrid and Space-Time Insight, to name a few.
OSIsoft's PI platform allows Telvent’s Conductor MDM to capture and analyze data as it comes in from various points in the smart grid, which can be applied to various jobs, he noted. For instance, fast-uploading transformer status data to work crews in the field, or auto-correcting volt/VAR optimization schemes to account for meter power quality readings.
Conductor can also help utilities manage that core function of keeping their AMI networks running at top efficiency, he added. Losing only 5 percent of a month’s worth of smart meter data reads for a 50,000-meter utility like Entegrus can add up to 1.8 million missed reads per month, he noted. Network management systems from the likes of Cisco, SK Telecom’s GridMaven and Proximetry Networks are promising to tackle that problem for smart grid networks, but the MDM can also play a key role, Agbakwu noted.
Before Hurricane Sandy slammed into southern New Jersey, taking out power from Virginia to Maine, some utilities warned that power could take at least seven to ten days to restore.
In Long Island, it could be far more. A new outage management system currently being installed was no match for Sandy, which left 82 percent of Long Island Power Authority customers without power, affecting more than 920,000 at its peak. The storm took the dubious distinction of the worst power outage in terms of numbers in LIPA’s history, a title that was previously held by Hurricane Gloria in 1985, which caused 850,000 outages.
Currently, about 100,000 customers have had power restored -- but that still leaves nearly 850,000 customers in the dark. LIPA reports that crews are repairing the “backbone” of the grid, including high-voltage power lines and damaged substations.
Over all there were more than 8 million people without power because of Sandy. That figure has been reduced by nearly 2 million already, with New Jersey and Pennsylvania making the most progress. For New Jersey, that still leaves more than half of the state’s electricity customers without power.
It will be weeks and maybe longer before utilities can tease out whether any technologies, rather than just old-fashioned tree trimming, allowed them to restore power faster to customers. But with 8 million customers -- which means far more individuals -- without power, public utility commissions should be asking hard questions about investing in smart grid technologies or distributed generation resources that could ease the restoration process.
For politicians in New York, there are already cries that there must be a new way of doing business when 100-year storms come every few years, as Andrew Cuomo, governor of New York, said as the storm raged across his state.
"There has been a series of extreme weather incidents," Cuomo said on Tuesday. "That is not a political statement; that is a factual statement. Anyone who says there's not a dramatic change in weather patterns is denying reality."
In the wind-rich Midwestern United States, one state -- Nebraska -- is missing the boat on wind. Now a new report [PDF] suggests getting on board could be a big economic and health boon for Cornhuskers.
First, the current state of affairs: According to the American Wind Energy Association, all the states that have substantial borders with Nebraska get more than 5 percent of their electricity from wind, usually much more, with Iowa (18.3 percent), South Dakota (14.7) and Wyoming (10.1) all in double-digit figures on wind.
States getting more that 5 percent of electricity from wind in 2011. (Map outline via Wikimedia Commons, data via American Wind Energy Association)
Nebraska, despite having what the National Renewable Energy Laboratory says is the fourth-best wind resource in the country, gets just 1.2 percent of its electricity from wind.
So how does Nebraska generate its electricity? Coal, baby -- king coal might be in decline in the U.S., but it’s still big in Nebraska. There aren’t any coal mines in Nebraska, but there are a lot next door in Wyoming, far and away the biggest coal-producing state in the country, and so that coal gets brought in to generate around two-thirds of Nebraska’s electricity.
Image via National Renewable Energy Laboratory
According to a new report co-authored for the Sierra Club by American Council for an Energy-Efficient Economy fellow John A. “Skip” Laitner, the state could do a lot better by joining its neighbors in encouraging wind power development, and also by investing in energy efficiency. Laitner writes:
Productive investments in wind energy systems and more energy-efficient technologies can provide more than half of Nebraska’s electricity needs by 2030. It is both technically and economically feasible. Such investments can lead to nearly 14,000 new jobs for Nebraska’s economy while saving businesses and consumers a cumulative of $3.8 billion in lower electric bills over the next two decades – meaning a net benefit of more than $2,000 for every resident in the state today.
The first question likely to be raised by naysayers: What about the cost? Won’t wind drive up electricity costs? Well, according to Laitner, electricity costs are already going up for Nebraskans. He notes that the Nebraska Public Power District recently hiked wholesale and retail rates 6.5 percent, telling its customers that “fuel costs have risen more than 50 percent in the past five years and fuel transportation costs are rising significantly in 2012.”
And while there would be some additional costs because more wind would require switching to some higher-cost reserves, Laitner notes that “recently, Nebraska’s neighbors have demonstrated that very high levels of wind penetration can be achieved and at costs as low as 2.75 cents/kWh,” which is very cheap indeed.
Meanwhile, Laitner estimates that coal results in 13,600 lost work days due to illness in the state, and as many as 81,000 “minor restricted activity days in which both children and adults must slow down their normal activities because of respiratory health effects” from coal. Kicking coal would change all that, in addition to dramatically decreasing the state’s greenhouse-gas contribution.
But the wind argument that might resonate most powerfully in this deeply red state is the economic one. In 2009, Nebraska sent $338 million to Wyoming. If it ratcheted wind up to the levels of some of its neighbors, much of that money could stay home.
And a recent study showed just how beneficial that could be: “Taking into account factors influencing wind turbine location, we find an aggregate increase in county-level personal income and employment of approximately $11,000 and 0.5 jobs per megawatt of wind power capacity installed over the sample period of 2000 to 2008,” reported researchers from the U.S. Department of Agriculture’s Economic Research Service, Lawrence Berkeley National Laboratory and the National Renewable Energy Laboratory.
Over the last two days, dozens of senior solar professionals served as panelists at the GTM Research Solar Market Insight event and offered a snapshot of today's solar industry and some hints of what the solar industry will look like in 2013 and 2014. The panelists weighed in on soft costs, balance-of-system costs, product quality, and a new era in financing solar projects. Here are some viewpoints from the experts on this week's panels.
First Solar, AE, and Belectric on Lowering System Costs
First Solar's Engineering Director John Schroeder said, "Finance cost is more expensive than module cost" outside the U.S.
First Solar (Nasdaq:FSLR) has between two and three gigawatts of utility-scale solar currently in construction and "five gigawatts in the ground." As part of driving energy yield, Schroeder seemed keen on trackers -- noting that tracker technology and cost are "really hitting their sweet spots." He said that trackers were one of the best ways to reduce levelized cost of energy (LCOE), because although they might raise O&M by 10 percent, in Dubai trackers result in "a 25 percent yield increase."
"We need more bankable trackers in the market," said Schroeder. First Solar has its own tracker product from its acquisition of RayTracker in late 2010.
Schroeder is also looking to get the best out of inverters with a wish-list of controls including reactive power capabilities, dynamic voltage regulation, and frequency response features. He'd like to see a system voltage raised to 1,500 volts from its current 600- or 1,000-volt level with inverters that can handle that potential. He said that a higher voltage and fewer inverters could mean solar at $0.08 per kilowatt-hour and that "PV can't get to $.07 without a higher voltage," adding that that figure was without an ITC.
Advanced Energy's Sr. Marketing Manager, Matt Denninger, listed a number of ways that PV costs can be lowered through the inverter:
- Reduce the length of the home run conductor.
- Don't replace the inverter in year ten; instead, work with an extended warranty and annual preventative maintenance.
- Consolidate content; incorporate more into one inverter cabinet.
- Reduce O&M costs by strengthening warranty T&Cs.
- Increase production to improve LCOE, maximize availability and inverter efficiency
Dave Taggart, the CEO of Belectric, an EPC and the first firm to surpass one gigawatt of installed PV, is looking "to break the scale relationship" of solar plants. Can a one-megawatt build have the same cost per watt as a 25-megawatt build?
Utility Impressions of Solar
Emily Felt serves as Renewable Strategy and Policy Director at Duke Energy, a regulated utility and one of the largest power providers in the country. Felt's job "is to put together renewable roadmaps" at a utility which generates fifty gigawatts of power from nuclear power and coal. She's had to explain to her colleagues by saying, "Not all solar is the same; not all solar is bad." She is also seeking to deploy solar that is "not just reliable" but "controllable" as well.
Lowering Soft Costs
Barry Cinnamon, founder of Westinghouse Solar, pointed out the parallel between today's solar industry and yesterday's satellite dish industry. Satellite dishes have become cheap, standardized, and easy to install because of a concerted effort by industry on the hardware and policy fronts. Cinnamon suggests that scenario could be solar's future.
Danny Kennedy, the founder of Sungevity, on solar soft costs: "All of these soft costs can be addressed. The cost of customer acquisition is addressable and will come with scale."
Investing in Solar Power
Raj Agrawal, the head of the North American infrastructure business at private equity investor KKR, said, "We feel that solar provides one of the most attractive risk returns in the infrastructure space," adding, "We're actively looking for more renewable projects." But, Agrawal cautioned, "Anything novel about a panel is a detriment. Novel is not a great thing to have in your project."
Brian Matthay, VP Environmental Finance at Wells Fargo, noted that the bank's investments in solar tax equity have "crossed $1 billion." Of the 250 solar projects that Wells Fargo has invested in, seven are over 10 megawatts in output. Matthay said, "We have a lot of Evergreen and Satcon in our portfolio," adding, "Modules are definitely not a commodity." Amidst recalls and safety concerns, "it's incumbent [on investors] to pay attention and test these modules to negotiate a tough warranty."
Panel Makers Differentiating
"Materials matter," said Conrad Burke, GM of DuPont Innovalight, adding that DuPont's pastes, backsheet films, and encapsulants have logged "over five trillion panel hours." Of the roughly 300 million panels installed globally, 150 million of those panels include DuPont materials, according to Burke.
"If you take silicon out of the equation, DuPont is the largest materials supplier." Burke urged the audience to realize that solar is a $100 billion industry at a very important juncture -- and quality is critical. "We cannot afford any more black eyes in this industry," said Burke.
"In a race for survival amongst falling prices ... commoditization should not be at the expense of quality," said the DuPont GM, adding, "We think the industry can grow 20 percent per year, and that the firm had a unique 'inside perspective.'"
He said that DuPont was "seeing a rise in defect rates" at solar sites with encapsulant discoloration, backsheet failure, glass delamination and backsheet delamination. Burke's data showed IRR dropping sharply with just a small reduction in power produced annually.
Dan Alcombright of Solon, now part of Microsol, has installed 100 megawatts of solar in the U.S. and 310 megawatts worldwide. Solon, as we recently reported, has designed a solar system meant to trim labor, material, and handling. Modules are frameless, easily interconnected, and on a mounting platform made of lightweight composite material manufactured in partnership with Andersen. Alcombright, with a post-ITC world in mind, said, "This makes solar systems work in more states."
Jonathan Pickering, the President of JA Solar Americas said, "We are at a critical stage -- moving out of the technology-driven phase and transitioning from 100 gigawatts to 1000 gigawatts of installed capacity by 2020. Despite purchasing decisions made primarily on price, the solar industry has to "Stop selling vanilla ice cream. You'll want to check the label if you're going to eat the stuff for the next 25 years."
Hurricane Sandy has already left about 7.5 million U.S. East Coast residents without power, a number that could climb to 10 million from Maine to North Carolina. Some hard-hit utilities are warning that outages could last more than a week. In the meantime, utilities are scrambling to restore power to centers like downtown Manhattan, or hospitals that are evacuating patients under backup power.
In short, it’s an enormous test of the grid’s ability to handle a major weather disaster, from generation and transmission all the way down to end customer -- and both above and below ground. Much of the power infrastructure of New York and other major cities lies underground, making it particularly susceptible to flooding, as well as difficult and dangerous to operate or repair under flooding conditions.
Distribution automation, fault detection and restoration, circuit monitoring and other such smart grid systems that can stand up to flood conditions could really help in situations like these. In fact, a recent bid by Brazilian utility Cemig Distribuição SA for 450 underground distribution switches -- devices that can shift power from one circuit to another in the medium-voltage grid -- specified that they had to be flood-proof in some fashion.
Last week, Chicago-based S&C Electric Co. announced that it had won that contract, worth 78 million reals ($38.5 million), to install its Vista Underground Distribution Switchgear systems across Cemig’s territory, including the soccer stadium in Belo Horizonte that will host games during the 2014 World Cup, as well as urban and rural territories across the state of Minas Gerais.
Cleverson Takiguchi, general manager of S&C Electric in Brazil, said in a Tuesday interview that Cemig’s bid had included requirements for the ability to keep operating during a flood. The utility has manually operated underground circuit switches in place today, but S&C is adding both automation and sensor capabilities to the vaults where these devices sit, and hooking it up to an existing fiber network, he said.
“In Brazil, the demand for this is growing. Many customers have manual switches that they want to automate,” Takiguchi said. They also want to connect to sensors to track everything from transformer loads and faults to attempted theft, a big problem in Brazil -- S&C’s devices connect to motion detectors to sense intrusion, as well as temperature sensors, power quality monitors and the rest.
Everything -- the switches and power cables that connect to them, the controls and automation and sensors and communications gear -- sits inside a metal box that’s engineered to keep the contents dry in extreme conditions, he said.
“The main substation is still up and running and capable of energizing, our system is able to switch from one feeder to another, even if the vault is completely flooded,” he said. One Brazilian customer who installed the S&C device in a room un-mounted to floor or walls discovered that the gas-filled device was actually floating in that room after it flooded, he said -- still operating via the cables that tethered it like a buoy in a bathtub.
Other grid equipment vendors make gear that can run while submerged in water, Takiguchi said. But most of that equipment requires separate communications connections to make it truly “smart” -- and those control systems are rarely made to run underwater. S&C has put all of it together in a single waterproof package, though it did cost a bit more to make sure the connections to Cemig’s fiber network were leakproof, he noted.
Takiguchi was quick to add that it’s impossible to say whether or not this kind of waterproofing could have helped reduce power outages in cases like Hurricane Sandy’s widespread destruction. Much of the East Coast’s problems have been caused by wind and rain knocking down power lines, and of course, the entire generation and transmission system is aboveground.
But dense urban environments could be well served by an underground fault detection and circuit switching system that can keep running underwater. S&C has sold about 1,000 of these devices in Brazil over the past fourteen years or so, making the new deal with Cemig an important expansion, Takiguchi said. But it’s anticipating more business as the country gears up to support the upcoming World Cup, as well as the 2016 Olympic Games.
Indeed, Brazil’s smart grid market is expected to continue to grow, despite a recent government decision that significantly reduced forecasts for how many smart meters the country would deploy over the coming decade. Companies like Itron, Landis+Gyr, Elster, Echelon, Sensus, Silver Spring Networks, Trilliant and General Electric are all doing projects in Brazil.
Brazil’s extreme climate and geography both play an important role in the country’s grid plans. Takiguchi said that S&C’s flood-proof system is in demand from many of the ten or so customers it has in Brazil. In Rio de Janeiro, IBM is building a citywide emergency response command center, one of its many “smarter cities” projects, which includes managing the floods that can ravage the city in heavy rains. Global warming is only going to make flooding a more pressing problem for cities and utilities across the globe. Waterproofing one’s smart grid assets seems like a good place to start.