Authors: Gregg Dixon, Jon Wellinghoff, Dana Guernsey
The three central US power grids, ERCOT, SPP, and MISO, which represent 270,000 MWs of electricity demand (34% of total US demand), faced catastrophic power outages last week. While the pundits and critics point fingers and place blame, we believe this energy crisis could have been significantly alleviated in a sustainable way that ensured reliable power while costing consumers less.
The answer lies in the power, no pun intended, of distributed energy resources (DERs) that largely lie fallow all around us, or more accurately, in the WiFi home thermostat, the remotely controllable on-site generator at the grocery store, the EV in the garage, the rooftop solar panels, the building management system at the mall, the cogeneration system at the food processing plant, and the countless other Internet-connected devices that consume, produce, or store electricity in our modern, digital economy. We now need the courage of lawmakers and regulators across the political spectrum to recognize the potential of these resources, and to acknowledge that no one answer, no one technology, will solve our energy problems, just the same as no one technology or resource type is to blame for them. The power of DERs is by very nature their diversity. Much like a well balanced financial portfolio, the electricity grid also becomes far more resilient and reliable when harnessing the power of decentralized and diverse resources.
Taken together, DERs today have the potential to deliver 54,000 MWs of power to the grid in 30 minutes or less, often in seconds, across the ERCOT, MISO, and SPP grids. In the future, as more and more DERs are networked together and instantly controllable, we will see many multiples of this potential available to consumers and grid operators alike, representing the full potential of the “energy Internet of Things.” In the 20th century, we built our electric grid to ramp supply up and down in order to meet variable demand. In the 21st century, the energy Internet of Things will also allow us to adjust demand to meet supply just as effectively. The possibilities are endless and here today.
So, just what are these DERs and how do we take full advantage of them to help prevent catastrophe in our era of climate change while acting as the backstop and balancing resource that renewable energy needs to fulfill its promise and potential? Let’s take a look at a number of use cases, measure potential, and talk shop about how to tie it all together. Here are some jaw dropping examples:
- Google Nest thermostats are WiFi-enabled controllers of heating and cooling loads, loads that represent nearly 10 percent of all electricity consumption. There’s nearly 27,000 MWs of this load in the central US alone. Our estimates show that about 10 percent of that is already controllable through Google Nests, but almost none of these devices are connected to wholesale power markets where they could offer capacity, energy, and ancillary services. That is about to change though. FERC recently ruled in Order 2222 to allow DERs to compete on a level playing field in US power markets. Companies like Voltus can bring these DERs to market in aggregations, turning these resources into one of the single largest virtual power plants in the US. This reimagined power plant is capable of not only turning load down but also ramping up quickly to provide such services as regulating reserves. The payback on a Nest thermostat during peak power prices in ERCOT last week would have been 28 hours even if the Nest was controlling just a single kW of electricity.
- If that’s not impressive enough, then consider this: a Tesla Model S would have paid for itself in two days in the ERCOT ancillary services market last week, assuming you could export its capacity to the grid (known as V2G). Two days. The whole car. And not the base model. A nicely equipped Model S! You read that right. By the year 2030, the combined lithium ion battery capacity in EVs in the US will be more than double the combined power capacity of all traditional supply-side power plants in the US. All of the coal, gas, wind, hydro, nuclear, and solar . . . times two! Imagine a world where we could interconnect all of these EVs to deliver and benefit from wholesale power markets. This isn’t pie in the sky. In fact, Voltus can manage what’s known as V1G EV (simply curtailing battery charging) market participation today. When we get to V2G, kind of like what 5G is to telephony, the possibilities are staggering. What’s most amazing is that EV manufacturers will allow consumers to dial in their grid services preferences on their dashboard no differently than a consumer signs up to Google’s Rush Hour Rewards program right on their thermostat. We’re at the forefront of this, working with EV manufacturers to innovate the best solutions.
- It’s been said that the “greenest kW is the one never built.” More than 13,000 MWs of electricity load is supported by an existing fleet of onsite generation at tens of thousands of commercial and industrial locations in ERCOT, SPP, and MISO, and hundreds of thousands more at homes that have backup power. Power Secure, Generac, Caterpillar, and a whole host of innovative companies are internetworking these systems to preemptively run to take load off of the grid, helping to keep the lights on for everyone, taking advantage of resources that already exist but aren’t yet fully tied into a broader network.
- Perhaps the most interesting electricity loads we’ve seen in a generation are coming online . . . cryptomines. In the central US alone there are already plans for 10,000 MWs with 1,000 MWs already online. These loads are controllable in microseconds. In fact, we’ve integrated Voltus technology at cryptomines in MISO, SPP, ERCOT, and other wholesale markets. Watching a 100 MW load come offline in seconds, controllable at the microprocessor level, is a grid operator’s dream come true. 95% of cryptomining expense is electricity and, due to the technology in play, these loads are not only massive (the largest single loads ever seen in human history, topping 1,000 MWs in some locations) but hyper-responsive to grid signals, whether prices, automatic generator control (AGC), or calls for emergency capacity where the load needs to stay down for hours, or even days. Think about all of the benefits of Lithium Ion energy storage but with the ability to deliver for a much longer duration and at a small fraction of the cost.
The most affordable, most resilient, and the most sustainable model for computing is the distributed, networked model. This is why the mainframes and “dumb terminals” of the 1970s have given way to cloud computing today. The same promise holds true for the “original network:” the electric grid. Central power stations and “dumb loads” will be complemented by distributed energy resources converging with cloud computing to create an energy internet of things that will deliver one of our generation’s greatest, positive impacts. And, just as cloud computing has created incredibly equitable outcomes, this energy Internet of things will do the same.
About the Authors:
Gregg Dixon is the CEO of Voltus, Inc. Voltus is building the distributed energy platform that accelerates the energy transition, connecting every device that uses, produces, or stores electricity to the electricity grids that value them. With 20 years of experience in distributed energy resources, Gregg and his teams have brought more than 12,000 MWs of distributed energy resources to market around the world.
Jon Wellinghoff is the CEO and founder of GridPolicy Consulting. As a former FERC Chairman, Jon brings more than 40 years of leadership experience in federal, state and local energy policy, regulation, and market development to help solve today’s most pressing electric grid challenges.
Dana Guernsey is the Vice President of Product and Energy Markets at Voltus, Inc. With nearly 15 years of experience developing and operating distributed energy resources in electricity markets around the world, Dana is among the world’s leading experts in distributed energy resource productization and electricity market development.
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