Are We Facing Electrical Gridlock?

26:27 minutes

Solar farm, via Shutterstock

The green trend these days is to go local — and if urbanites can source everything from veggies to craft beer in their neighborhoods, why not solar energy?

LO3 Energy, a New York-based startup, is working on one way to do so. Its project, Brooklyn Microgrid, aims to help electricity users buy energy from their energy-producing neighbors, using smart meters and an app.

“Brooklyn Microgrid is the idea that we can now allow peer-to-peer transactions of energy and energy attributes across the grid,” says Scott Kessler, director of business development at LO3 Energy. “So, if you’re producing via solar panels, via wind, whatever energy-generation resource you might have, you can now actually transact with your neighbor,” keeping the energy’s environmental and economic impact in the community.

[There’s a downside to California’s solar boom.]

Kessler says about 60 microgrid meters have already been installed at energy-producing buildings across Brooklyn, and around 350 people have signed up to participate. The project doesn’t involve rewiring the physical grid, he explains; it just tweaks how electricity is bought and sold. “So, it’s really just a new form of settlements among people,” he says.

The new project relies on blockchain — the same secure digital ledger used in cryptocurrencies like bitcoin. In its pilot phase, neighbors traded test versions of renewable-energy credits, according to The New York Times. Now, Kessler says, the team is working with regulators to define how electricity can legally be traded through the microgrid in the future.

“We’re not a utility, we’re not a generator, and we’re not really an energy retailer,” Kessler says. “So, how do we fit in, and how can we start to trade energy legally while still providing all the protections that folks on the electric grid are accustomed to?”

According to Kessler, the microgrid should be up and running “in a few months.” A video previewing the Brooklyn Microgrid app — which will also let users suggest sites for new solar panels — explains how consumers will set the price they’re willing to pay for different types of energy, including community-produced solar. There’s also mention of “negawatts.” For example, when everyone’s cranking up their air-conditioning on hot summer days, you could be paid to turn your water heater and other energy drains off.

“So, not only can you start to buy and sell energy, all of a sudden I can actually sell the ability to turn on or off my devices,” Kessler says. “And you start to get this idea of grid control through people’s transactions.” The grid, he explains, “just wants to be balanced at the end of the day.”

Once the microgrid is live, Kessler says the company plans to expand the technology to demonstration projects in other communities, and around the world. And, in Brooklyn, experimenting with battery technology could potentially keep the microgrid up and running during larger grid outages — no small offer for an area that experienced major power outages during Hurricane Sandy in 2012.

“We actually just announced a partnership with Siemens where we’re looking at incorporating our technology with existing grid infrastructure, like their transformers and their substations, and also looking at physical microgrids where this has some really interesting applications, as well,” Kessler says.

—Julia Franz (originally published on PRI.org)

Segment Guests

Susan Babinec

Susan Babinec is senior commercial advisor at ARPA-E in Washington, D.C.

Steve Collier

Steve Collier is the director of Smart Grid Strategies at Milsoft Utility Solutions in Austin, Texas.

Scott Kessler

Scott Kessler is the business development director at LO3 Energy in Brooklyn, New York. 

Segment Transcript

IRA FLATOW: This is Science Friday. I’m Ira Flatow. (STAGE WHISPER) If you build it, they will come. That famous line about a ballpark can now aptly refer to wind and solar energy.

Renewable energy is booming all over the country. One day this spring, 40% of California’s energy came from solar panels. And there are 53,000 wind turbines across the country. That represents about 84 gigawatts of potential energy, according to the American Wind Energy Association.

But all of this newly produced energy needs to go somewhere. And that somewhere is the grid. Rick Perry, head of the Department of Energy, said his office would issue the results of a study about the reliability of the grid. That study was to be released last month. We are waiting for it to surface somewhere.

So how can we modernize the grid to handle the renewable boom and the glut of gadgets that are getting smarter? That’s what we’re going to be talking about. If you’d like to join us, you can tweet us @scifri, S-C-I-F-R-I. We are not taking phone calls this hour.

Steven Collier is Director of Smart Grid Strategies at Milsoft Utility Solutions. He’s based in Austin, Texas. Welcome to “Science Friday.”

STEVEN COLLIER: Thank you, Ira. I’m glad to be here.

IRA FLATOW: Let’s talk about the grid. When we talk about modernizing the grid, does that mean we need to build a whole new infrastructure? Or is it more about working what we have already and improving it?

STEVEN COLLIER: It’s really the latter. We do have an infrastructure that’s aging, and has become less reliable. And costs are going up, and so rates are going up. And so even if we didn’t have wind and solar at the front steps waiting to get in, we have some issues with the grid.

And when we first began to talk about the smart grid, the utilities were instrumenting customers with smarter meters, and commercial and industrial customers with the ability to control load so that we could make the grid more economical and more reliable.

Then along comes solar and wind, primarily, originally because it was green and renewable. But interestingly enough in the last year or so, Michael Liebreich at Bloomberg New Energy Finance this year at their Summit, pointed out that for the first time in history on a per kilowatt hour basis, the cost of energy from wind and solar is cheaper than any other source of energy on the grid. Now that’s just per kilowatt hour. It begs the question of what do you do when the sun’s not shining or the wind’s not blowing. But if we have wind and solar, it changes the grid in a fundamental way.

Most of the grid for 100 years has been great big power plants shipping electricity into transmission lines. And that gets stepped down into distribution systems, which brings it to our houses and business. This wind and solar and battery storage, and ultimately fuel cells and who knows what else is more distributed. We have about 20,000 electric generators in the country. We have tens of thousands of wind machines and solar arrays, and a growing number of electric vehicles, so batteries wandering around all over the place. And that requires a different way of planning, monitoring, analyzing, and managing the electric grid.

IRA FLATOW: And we also have a different kind of energy being made by these different devices. We’re talking about a direct current grid now, aren’t we?

STEVEN COLLIER: Well, yes. The solar photovoltaic and batteries is direct current. Just like in the origin of our business back in 1882, Thomas Edison’s first power plant, Pearl Street Station was a direct current power plant. And so these devices create electricity in DC, and then we have to use some electronics to convert that to AC. Or in some cases, if you have a location, let’s say like a server farm, one of the Google or Amazon Web Services farms, most of those appliances in there are direct current.

You’re having to take a wall wart or a rectifier and take the AC and change it to DC so that they can use it. And so we’re beginning to see an emerging idea where you’ve got a solar photovoltaic array, some batteries, and you just use that direct current on site and don’t use AC at all. And so you have a DC microgrid.

IRA FLATOW: I know that you work on the software side for better monitoring of the grid. How can we better monitor the grid? What are some of the projects that are out there, and why do we need to better monitor it?

STEVEN COLLIER: Well, as I mentioned earlier, one of the things that happened when it became evident that the grid was kind of being pressed a bit on economics and reliability was equipping customers with what we call smart meters. And these smart meters do things besides just accumulate how many kilowatt hours you’ve used so that the utility can send you a bill. They can measure voltage, they can detect when the power’s out and send a signal to the electric utility that the power’s out. They can detect if there have been some blinks in the system.

And so all of a sudden now, the electric utility has more information about how their grid is performing, and can do a better job of planning and managing that grid to achieve their goals of the least possible cost, and the highest possible reliability and security.

IRA FLATOW: Now we have a tweet from Robert who says, “it’s cheaper to use it where you make it.” That’s what, you mentioned microgrids.

STEVEN COLLIER: Right. One of the issues that you have, and it’s always been there. But if I generate electricity at a big power plant, someplace far away from the load center, in order to get that electricity to the load center, I move it over long transmission lines and then distribution lines, as I described earlier, and lose anywhere from 10% to 15% of that energy and losses, basically heating those wires up.

If I make it locally, I eliminate that 10% to 15% losses. And if the electricity is cheaper to make than putting in a coal plant or a nuclear plant or a gas plant, all of a sudden electricity becomes cheaper.

IRA FLATOW: Let me move on and bring another guest on, because the key to making wind and solar energy work is storage, having the electricity stored so it can be tapped when it’s needed when the sun isn’t shining or the wind’s not blowing. And of course, we’re talking batteries. Elon Musk realizes this. We just talked earlier about him building a giant battery in Australia. He’s building battery plants.

And if we have more energy, why don’t we just build a bigger, better battery? Well, that is easier said than done. And joining me now to talk about new battery tech and some of the challenges is Susan Babinec. She is Senior Commercial Adviser for RPE, based out of Washington. Welcome to “Science Friday.”

SUSAN BABINEC: Thank you so much. It’s wonderful to be here today.

IRA FLATOW: So everyone talks about building batteries, but there has not been a breakthrough yet in new battery design, has there?

SUSAN BABINEC: Well, that depends on how you look at it. The first big battery that was invented was lead acid, and that was about 150 years ago. And then about 30 years ago, 30 or 40 years ago, we had the lithium ion batteries, which was developed to power consumer electronics. And now we’re in a whole new era where lithium ion is being developed, so it’s not just for a cell phone battery that lasts three hours, but it’s for electric cars and it can do many, many more things.

So lithium ion is undergoing somewhat of what you might call a Renaissance. But at RPE, we are also looking at brand new types of battery chemistries that can do more than just lithium ion can today. So we are in the middle of a birth of a third generation battery chemistry.

IRA FLATOW: Yeah, because I’ve heard about batteries made of glass, through lithium air, lithium sulfur, all kinds of stuff going on. Is RPE working on any of these new battery ideas?

SUSAN BABINEC: We are working on all of those, and we’re very excited about it. Yes, we are working on all of those.

IRA FLATOW: And Steve, Walmart and these big companies are creating their own storage systems for themselves.

SUSAN BABINEC: Well, when they create their own storage system for themselves, I think that means that they are purchasing some of these new batteries that are being developed right now. And they’re installing them in their factories and on their sites.

IRA FLATOW: Steve, did you want to comment?

STEVEN COLLIER: Yeah, there’s another really interesting thing that batteries make possible. And that is, I mentioned earlier, these smart meters and giving the utility, the ability to manage that peak load and reduce the peak load so that they can be more reliable, and maybe don’t have to build a new generating plant. Batteries enable the customer to shape their load. And it may not be for reliability, it may be to reduce their electric bill. So it’s an additional benefit of a battery, not just making it possible to use more of the electricity from that wind generator or that solar photovoltaic cell, but also to actually sort of play the rate design and save money, or perhaps even sell their ability to control their load into the energy market.

IRA FLATOW: And in fact, with all the cars that are battery-operated, and the homes that have batteries with their solar panels and smart devices coming on that store electricity, or energy in another form, aren’t we really sort of decentralizing the grid? Because these little devices are all acting as little pieces of the grid.

STEVEN COLLIER: Absolutely. We have got sort of a new phrase, a new term in the business that we call distributed energy resources. And it recognizes exactly that, that a lot of the generation, a lot of the energy management systems, the energy storage tends to be decentralized on the distribution side of the grid, rather than centralized in large power stations.

IRA FLATOW: Now Susan, carmakers are talking about moving more towards fully or partially electrified vehicles. Do you think this is going to be a game changer for batteries?

SUSAN BABINEC: Oh, absolutely. Right. This electrified transportation is definitely happening. You can see it right now. And cars have all different levels of the amount of electrification, whether you go from a start-stop car, which has just a small amount of electrification, or a plug-in hybrid, or even one that’s a full electric vehicle.

This is going to happen, it’s happening in transportation. And the types of batteries that you make actually depends on how you want to use them. But this is happening, the batteries are new, and it’s all evolving in real time.

One of the things that’s really interesting about this, so relating to the comments that were just made, is when you design a battery, there’s a thing called the power to energy ratio. So if you have a kilowatt hour of energy, do you want to get it all out of your battery in a short period of time, or in a long period of time? And the way you do that makes a difference in the way you actually design your battery. And the types of batteries that you need for things like whether you’re helping a transmission line be robust, or whether you’re storing energy from a photovoltaic to use overnight, the types of batteries that you designed for those different uses are, in fact, actually different. And we’re doing all of them right now.

IRA FLATOW: All of them. That’s a lot of research, then.

STEVEN COLLIER: Ira, there’s one other really interesting thing about the electrification of transportation. And there’s also a move towards electrification of heating. For 100 years the, electric utility business benefited from a constantly growing consumption of energy. The demand for energy increased and increased. Over the last two or three years, the per capita usage of electricity in this country has actually declined.

And so what utilities find is they’re selling less electricity. And that makes it even more expensive, because they’ve still got that power plant and those transmission lines to pay for. If we have a major electrification of transportation, all of a sudden we have a new market for electric utilities. And it can change the economics pretty profoundly.

IRA FLATOW: I’m Ira Flatow. This is “Science Friday” from PRI, Public Radio International. Talking about the electric grid and batteries. And Susan, how would the battery be different for storage in a grid versus in my home?

SUSAN BABINEC: Well, it depends on– well, even within the grid there are many, many uses. But let’s talk about just a couple of extremes. Well actually, let’s talk about your home. Let’s say you have a battery in your home because you want to store energy that comes from photovoltaic panels on your house, for example.

What you do is you start during the day, and then you want to have that available to be used over, let’s say anywhere from five to seven hours. So that battery has to be able to provide energy for seven hours, which is a very long time. But the amount of power it dishes out is really not that high– the power at that level that you have.

Now that’s one case. If you go to a transmission line, there’s many different ways you can use it. But one of them is to just keep the frequency where it needs to be, and to keep the power constant. Now in order to keep that power level adjusted so that it’s at like 60 Hertz, for example, you need many, many small bursts of power over milliseconds, or even second intervals. So you need a very high power event there. And the types of batteries that do that, that pulse the grid over very brief periods of time, those are very differently designed than the ones that are in your home that are going to provide a steady amount of energy over five or seven hours.

IRA FLATOW: Is ARPA-E working on those batteries too?

SUSAN BABINEC: Yes, we are. We’re working on both types of batteries. We have several different companies that are actually scaling up right now, by the way.

IRA FLATOW: But ARPA-E is slated to be zeroed out in the president’s new budget. If its budget is cut, where is all your research going to go?

SUSAN BABINEC: Well, we are a science organization. So we tend to not address policy. What we are seeing is that there really is a need to have this sort of research funded, because typically, it’s not really in the American innovation pipeline to do the high risk sort of research that we do right now. But beyond that, I really shouldn’t comment. Thank you.

IRA FLATOW: No, I’m not going to press you to become political. I’m just saying, all this great battery research that you’re doing at ARPA-E and suddenly it wants to be cut. It’s all about basic research, you’re saying, in which basic research usually is a government work. And then it’s taken over by industry. Steve, what do you believe about battery research?

STEVEN COLLIER: Well, I think it’s not just the United States of America that sees the benefit of batteries. One of the things we have going on in the world is 20% of the world’s population uses 80% of the world’s energy. And 80% of the world’s population only uses 20% of the world’s energy. And so you have China and India, throughout Asia, ultimately Africa, though they don’t use as much kilowatt hours per person as we do. And they want to.

We use about 14,000 kilowatt hours per year, per person in the United States. In China, it’s 1/10 of that. So they’re building a grid, but they’re not going to build a grid like ours. They are building fundamentally, a more decentralized grid. They see the value of batteries. And I think that the whole world is going to be wanting better batteries for all these variety of applications that Susan talks about.

SUSAN BABINEC: Now that, I can comment on. I think that whatever happens in whatever short time frames that there are when it comes to politics, is independent of the very fundamental question, which is, are batteries super important for enabling renewables to be brought forward and for these new generations of the grid?

IRA FLATOW: And that’s a great point to end on. Susan Babinec, Senior Commercial Advisor for ARPA-E based out of Washington. We’re going to talk more about upgrading the grid in a little tiny grid in Brooklyn. Stay with us, we’ll be right back after this break.

This is “Science Friday,” I’m Ira Flatow. We’re talking this hour about the grid, with Steven Collier, who is Director of Smart Grid Strategies at Milsoft Utilities Solutions, based in Austin, Texas, a state that has its own grid. We’ll get into that a little bit.

The trend these days is to go local. And when you’re talking about your food, your beer, why not your electric grid? I want to bring on a guest who is working on just this thing. The project is called Brooklyn Microgrid. Scott Kessler is the Director of Business Development at LO3 Energy based out of Brooklyn, New York. Welcome to “Science Friday.”

SCOTT KESSLER: Hi, thanks for having me.

IRA FLATOW: Can you explain what the Brooklyn Microgrid is?

SCOTT KESSLER: Yeah, sure. So Brooklyn Microgrid is the idea that we can now allow peer-to-peer transactions of energy and energy attributes across the grid, and basically allow folks to start to buy energy from their neighbors. So if you’re producing via solar panels, via wind, whatever energy generation research you might have, you can now actually transact with your neighbor and make sure that the environmental and the economic impact of your energy purchasing stays in your community.

IRA FLATOW: So give me an example of how that would work on a street in Brooklyn. How would that transaction happen?

SCOTT KESSLER: So we’re not actually using any new wires. So we’re all living on the same electric distribution grid that we already have. So what we’re really doing is a financial transaction on the electrons already going onto and coming off the grid. So it’s really just a new form of settlements among people.

But you can start with just the settlement, and then turn that into physical actions. So not only can you start to buy and sell energy, all of a sudden, I can actually sell the ability to turn on or off my devices. And you start to get this idea of Grid Control through people’s transactions.

IRA FLATOW: So you could sort of get credit, so to speak, for turning off your electricity?

SCOTT KESSLER: Exactly, yes. You could start to sell that to your neighbor. The grid just wants to be balanced at the end of the day. So whether I’m turning on generation or turning off load, as we call it, as long as the grid stays balanced, it shouldn’t really matter which one you’re selling.

IRA FLATOW: And so, would this mostly be for people who have solar panels or wind energy on their roofs?

SCOTT KESSLER: So this should work for any energy resource we have. It should be batteries that have stored power, it should be electric vehicles. All you need is really a meter that can count the energy and talk to other meters and form these transactions.

So the color of the electrons isn’t really important. We want to know what the type of resource is, because if you’re buying local solar power, you want to make sure it’s from a solar panel. But at the end of the day, this works for any type of electricity.

IRA FLATOW: And how secure would it be from hacking my grid system, my little microgrid?

SCOTT KESSLER: So actually, the system we use is called Blockchain. And it’s the same software behind things like Bitcoin. And it’s thought to be the most secure system there is currently on the internet. They refer to it as military grade security. And the beauty of it is, anytime we want to add data or change data, you have to get what they call consensus from a majority of participants on the network. And if you look at a grid where you have hundreds or thousands of people participating on it, you’d have to have access to all of those points in order to change the data.

IRA FLATOW: Steven Collier, have you heard about projects like this?

STEVEN COLLIER: Yes, absolutely. And I think there’s a really simple example to illustrate what Scott is talking about. And one of the cooperatives, rural electric cooperatives that I work with, has been experimenting with this. Let’s suppose I have a rooftop solar array on my house, and I’m using that electricity. But my family and I are going to go to Europe for the summer.

So I call my electric utility up and I say, well, you’ve been giving me credit for the energy that I’m using by reducing my bill. I’m not going to have as much usage for about a month. But my brother-in-law across town, could he get credit for the energy that that solar array is producing? Because it’s going to be producing more than I’m using at my house.

And as Scott mentions, the physics really don’t matter here. It’s just the transaction. And there’s absolutely no reason in the world that the utility couldn’t say, oh sure, we’ll apply that to their account. Let us know when you get back. The wholesale power market has worked this way for three decades. And I absolutely agree with Scott that we’ll be seeing this happen on the retail market, sooner than anybody thinks.

IRA FLATOW: Scott, have you gotten any pushback from the local utility?

SCOTT KESSLER: You know, we worked actually pretty well with utilities. So in New York, we’re going through this process called Reforming the Energy Vision. And all the utilities are looking for their future business model. Like we were talking about before, we’ve seen electric demand actually decrease in parts of this country. And so utilities realize that their existing business model probably has to change.

And so startups like us have a really big opportunity to demonstrate, what does the utility of the future look like? What are the revenue streams that come from that? And what’s the business model of a utility or an energy provider in that future? So that’s really where we position ourselves.

IRA FLATOW: So where do you stand in actually getting this working now? Is it up and running?

SCOTT KESSLER: So we have about 60 meters installed across Brooklyn, all at buildings that are producing energy, usually solar panels, but a few different types of resources. And we have about 350 folks who have signed up to participate. We’re working with the regulator right now to figure out, what exactly do we look like? We’re not a utility, we’re not a generator, and we’re not really an energy retailer. So how do we fit in, and how can we start to trade energy legally, while still providing all the protections that folks on the electric grid are accustomed to?

IRA FLATOW: You have to go through the paperwork.

SCOTT KESSLER: Yes, indeed.

IRA FLATOW: And when will we see results? Have any projection?

SCOTT KESSLER: So we expect to be up and running in a few months, and then we’ll have transactions going. There is really no end date planned for this. It should be a self-sustaining business that can continue on.

IRA FLATOW: And can people do this in their own communities?

SCOTT KESSLER: So we eventually want to get there. Right now you would need our technology. And so we’re still a young little startup, figuring out, how do we expand to every community that wants to work with us? But we’re actually looking at demonstration projects all over the world. We actually just announced a partnership with Siemens, where we’re looking at incorporating our technology with existing grid infrastructure, like their transformers and their substations, and also looking at physical microgrids, where this has some really interesting applications as well.

IRA FLATOW: Scott, different cities prioritize what’s important to them in terms of energy. Can you give me an example of how you say someone in New York might think of their energy differently than say, Des Moines or a smaller city?

SCOTT KESSLER: Yeah. So what we want to do at the end of the day is really just give energy customers choice here. So you should be able to pick. Do I want to buy local solar power? How much am I willing to spend on that? That’s a question that depends on my values and my economics. And that’s going to be different for folks in Brooklyn, for folks in Des Moines.

And so what you really just need to do is put in place a system where you can express your preference. We have a mobile app for the customers in Brooklyn, of course, which is how we go about actually allowing them to express their preferences. So they can pick, what is the energy source that’s right for me? Do you have an uncle that works in coal and you support it? Or are you a real big renewable energy local fanatic? Whatever’s right for you.

IRA FLATOW: So we have two million listeners. Some of them are going to want to be interested in this. Are you going to be overwhelmed with requests as people find out about this?

SCOTT KESSLER: I hope so. At the end of the day, that’s what a startup wants.

IRA FLATOW: Steve, what do you think?

SCOTT KESSLER: I think for the most part, retail electric consumers aren’t thinking about this very much. There’s a next tier of folks who are thinking about it. And I believe that the rules will change. It represents a pretty drastic change in the way we think about the utility business, which the utility thinks well, I’ve generated my power. I’m going to deliver it over my lines through my meter to you, and you will pay for it.

What Scott is describing is actually what is happening in many cases physically, because in many cases, the electricity that flows through my toaster didn’t come from a generator operated by an electric utility. It may have come from a shorter electric distance, from a generator owned by some other utility. Electricity flows according to the laws of physics, not according to who sends the bill. So I think we’ll see this change. I think it will be coalitions of customers that caused this to occur, because the average retail customer really doesn’t understand this. The commercial and industrial customer does. And I think it will be at that level that we began to see some of this stuff really take off.

IRA FLATOW: Quite interesting. I think we’ve just started a great discussion about the grid. Thank you both for taking time to be with us today. Thank you Steve. Steve Collier is Director of Smart Grid Strategies at Milsoft Utility Solutions based in Austin. Scott Kessler, Director of Business Development at LO3 Energy, based out of Brooklyn, New York. Thank you for taking time to be with us today.

STEVEN COLLIER: Thanks for having me.

SCOTT KESSLER: Thank you for having me.

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