Generac Grid Services Blog

This blog post is authored by special guest Peter Asmus of Guidehouse Insights

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. 

It’s all about “commitments to zero” these days. The urgency of climate change and the need to reduce carbon emissions has seen many influential organizations making commitments to Net Zero by 2050, including the Biden administration, 73 electric utilities across the United States, global energy giants like Shell and Equinor and the German parliament. 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.

I describe myself as a technological optimist—well, within reason. I don’t think that Moore’s Law, the notion that our computing capabilities double every couple of years, permits humans to continue reckless consumption and assume that we’ll be able to innovate our way out of any self-created calamity. 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.

Last year, when we put together our predictions for 2020, we missed one very important, game-changing element: COVID-19. And today, while still in the midst of the pandemic that has turned the world on end, we once again engage our collective brainpower to foretell what the coming months will bring.

As part of last week's 2020 New York Climate Week, Credit Suisse and Dynamo Energy Hub co-hosted an informative online panel in collaboration with IBM. The panel, titled Cleantech, Collaboration and Climate Action: Driving the Clean Energy Transition Through COVID-19, brought together industry leaders to discuss their experiences and insights on trends over the previous — very disruptive — six months.

I think it’s safe to say that, with the possible exception of a psychic or two who claim to have predicted the global pandemic that we’re all hoping would stop plaguing us, none of us had any idea that 2020 would be turned on its ear by a virus we’d never heard of a few short months ago. We’re all wondering what the short- and long-term impacts will be on all aspects of our lives, and at Enbala, we’ve been studying, pondering and prognosticating what the impact will be on the world’s evolution to distributed energy resources — and a greener, more sustainable energy future.

• Will business and residential customers continue to demand clean energy alternatives, and how will the answer to this question impact the market for renewables?
• How long will overall reductions in electricity demand persist, and how will the ramifications impact short- and long-term energy costs and the impact of these costs as drivers for cleaner energy alternatives?
• Can an increased focus on distributed energy resources help speed recovery from the pandemic?
• How will on-again, off-again stay-at-home orders and summer high-demand expectations impact grid reliability/stability, and how can distributed energy resources help?

I’m wondering how everyone out there is doing today. As I sit down to write this blog, many thoughts and ideas swim through my head about what to write. Should I ruminate on how the virus that has turned all our lives upside down will impact the utility industry? Should I speculate on what the future will bring, offering theories on how long this will last and the different scenarios that might play out when summer peak loads arrive? Or perhaps offer beacons of hope and optimism? 

The French author Andre Gide coined an oft-copied phrase, “Everything that needs to be said has already been said,” and in this case, there is a lot of truth in that.  The virus is all anyone has been talking and thinking about for days, weeks or months now—depending on where you happen to live. Many of us, including me, are experiencing serious information overload; I feel like I’ve been drinking from a fire hose.

From mainstream media to social media, the world is abuzz with the topic of climate change.  A simple Google search on the phrase today yielded 1,100,000,00 results, and typing “gret” into Google is all it takes to bring up 107 million stories about Greta Thunberg.  This 16-year-old Swedish environmental activist whose lone mission to protest climate change outside the Swedish Parliament has ignited a flame within millions of young people from more than 100 countries who have joined her with demands for climate action and a cry to “listen to the scientists.”

Even those associated with the oil industry are taking up the charge. For example, the former CEO of BP, Lord John Browne, is speaking globally about the need to clean up the atmosphere and reduce reliance on fossil fuels. His new book “Make, Think, Imagine” considers whether our demand for energy has driven the Earth’s climate to the edge of catastrophe and suggests that the same spark that triggers innovation can be used to counter its negative consequences and that it is time to “listen to the engineers.”

Energy systems are changing. As variable renewable energy generation replaces retiring fossil fuel-run power plants, we see a shift from our century-old mindset of centralized supply following demand, to a more distributed grid with distributed energy resources (DERs) playing an essential role in a sustainable energy future. In order for renewable energy resources and DERs to replace conventional power plants, they need to be able to act like power plants – virtually at least.

At technology and innovation’s finest hour, we are able to aggregate disparate, geographically dispersed DERs and orchestrate them in such a way that they are able to respond to the grid’s needs at the same speed and accuracy as a traditional power plant. That’s where the Virtual Power Plant (or VPP for short) comes in. Navigant Research defines a VPP as:

“… a system that relies upon software and a smart grid to remotely and automatically dispatch retail DER services to a distribution or wholesale market via an aggregation and optimization platform”

VPPs are critical for the transition to more sustainable energy systems – so where is the technology at? Where can we find VPPs? And what can we expect in the future?

There is no doubt that we are facing real problems with climate, fossil fuels and carbon emissions, but as we look to solve these problems, I think that we need to look carefully at the underlying facts, rather than focusing (as some do) on the short-term elimination of fossil fuel.

1. The biggest sources of emissions in the US are the generation of electricity from coal and transportation-related emissions (60% of which is for personal transportation). These two sources are responsible for more than 2/3 of total emissions.  Canada is only slightly better, in that its electric system generates almost 60% of total energy with hydro, and nuclear is a large contributor to clean electricity as well.  Canada’s petroleum industry ranks second, behind transportation.
2. Electricity provides less than 20% of total energy, and the remainder is almost all fossil fuel. The average person gets fuel in three forms: electricity, natural gas and transportation fuel (gasoline or diesel fuel).  Any major reduction in the direct delivery of fossil fuel will be expected to be replaced with electricity, and that may be a big challenge, given the fact that the electric grid at present delivers only about 20% of the total energy.
3. Many people seem to think that if they can convert their current electricity use to solar energy, the problem will be solved. They tend to forget, however, about heating and transportation fuel. In most cases, the fossil fuel energy is far larger than the electrical energy delivered.
4. I keep hearing that the problem is someone else’s fault – blame India, China, the oil industry or the government. We all need to look in the mirror – and recognize who the big users are.  The fact is that North Americans are among the largest users of energy per capita in the world.  As “Pogo” would have said, “We have seen the enemy, and it is us!”

There are two areas to look at: the supply of energy and the use of energy.