Graphs at PacifiCorp's Transmissions Grid Operations center in Portland, Oregon.
Natalie Behring/Bloomberg—Getty Images

Sensors and so-called active network management software promise to overhaul transmission limitations and diversify supply as demand increases.

By Brady Dale
June 16, 2014

Eight and a half million people were without power after Superstorm Sandy. There’s an irony built into our power grid: Because transmission systems are designed to make sure the power we need can get to us to avoid an extreme event like a blackout, they are more vulnerable during extreme events like hurricanes.

One Scottish company has recently exported part of its staff to the U.S. because it says its technology can help North American utility companies solve that problem. Smarter Grid Solutions believes that an electricity portfolio can be diverse and nimble enough to improve resiliency and handle growing energy demand, but can do so with less waste and at a much lower cost. There is latent capacity in an existing grid; SGS says its technology helps make better use of it.

The company’s technology originated in the doctoral research of its chief technology officer, Bob Currie, now based in Brooklyn’s Urban Future Lab. Today, “You make assumptions when you plan [the power grid] that not all of the infrastructure will be available during that worst case scenario,” he says, “when more often than not, it is available.”

SGS worked with Silver Spring Networks and UK Power Networks on a project called Flexible Plug and Play, a £9.7 million (approx. $16.5 million) project that aims to more quickly and affordably integrate additional distributed energy resources—solar farms, wind turbines—with an existing grid.

Silver Spring provides a radio-based mesh network that allows all parts of an energy network to communicate, including SGS’s technology, which governs overall capacity and directs wind energy to storage as appropriate. Based in Redwood City, Calif., Silver Spring is notable for its broad American utility footprint, and seeks to convince those companies to use SGS’s technology. SGS is already working with five of the six distribution operators in the U.K., says James Pace, managing director for European markets at Silver Spring. There are additional opportunities in the U.S. “They have found a sweet spot in the emerging DER space,” he says, using the acronym for distributed energy resources.

To understand what SGS does, it helps to think about power like water in a pipe. If the system knows a city needs 100 gallons of water per minute at peak demand, it will build two pipes that can each pump that much water. The thinking: If one pipe breaks, the other can meet peak demand.

But the system rarely sees peak demand. So there is, most of the time, lots of room in the system. Yet if a new supplier would like to start regularly pumping 20 gallons of water—20 more than the system is designed for, excluding redundancy—the operators of the system will say no. What if the new supplier keeps pumping their 20 gallons when the main system is pumping a full 100 and the original pipe breaks down? The system needs to fail over.

Today’s grid, then, has a lot of redundant capacity but little redundant supply. SGS has demonstrated that, using sensors and software deployed throughout a grid, it can avoid the potential catastrophe of using redundant capacity by judiciously and automatically ratcheting down power flow from each source. The company calls the technology Active Network Management.

“Not everyone is going to generate at the same time,” Currie says. “Your worst-case scenario is that they will.” If too much capacity goes over a line, very nasty things can happen: Equipment could fry and overloaded power lines could sag, putting people and property at risk.

In the U.S., companies have been fearful of building too many new energy sources, which would help increase source diversity and therefore resiliency, because in a worst-case scenario—say, the aftermath of a giant storm, during which an unusual amount of energy is needed—they would overload the grid at its bottlenecks. More demand and more supply, but not enough grid capacity in between.

With climate change afoot, the industry is preparing for more extreme events that will tax the electrical grid. Tom King, president of National Grid, a major transmitter of electricity and natural gas, wrote in a February 2014 white paper that “The new and improved 21st century backbone needs to be nimble enough to accommodate the growing demand for both solar and wind-powered energy sources.”

Which is why SGS is making waves. Currie started his Ph.D in 2002, sponsored by Scottish and Southern Energy, with a goal to find ways to get more renewable energy onto the existing grid. Currie completed his research but put off writing his dissertation to start the company. His doctoral sponsor invested.

His team was able to increase renewable capacity on Scotland’s wind-rich Orkney Islands by more than 20 megawatts at a cost of about £500,000 (approx. $849,000) for transmission upgrades, rather than new supply. Under the conventional approach, that kind of capacity increase might cost £30 million (about $51 million). “This can reduce the cost of connection to wind and solar by 80 to 90 percent,” Currie says.

The company has about 45 people on staff and makes about £3 million ($5 million) in annual revenue. It expects between 40% and 50% growth next year. Its only active project in North America is funded by New York State Energy Research and Development Authority, which set aside a grant of $663,000 for SGS to work with New York University and Consolidated Edison to evaluate how New York City can increase its energy resilience in the near term and what existing technologies could enable ConEd to cost effectively meet the requirements. It’s a small project, but with an enormous partner.

As the price of solar energy goes down, wind farms proliferate, and electric-vehicle charging gains popularity, the pressure to better manage flows will increase. “There is much talk regarding the changing utility business model, but at the end of the day, the utility is still responsible for grid reliability,” Pace says. “As more and more renewables come on the market, you’ve got to manage these things as you bring them onto the network.”

There is an adverse side effect of SGS’s technology. Though active network management allows supply to become available faster and at much less cost, it will sometimes turn down a utility’s output, which reduces revenue. What utilities are banking on is that the lost revenue will be a smaller penalty than the upfront cost of new transmission infrastructure or the cascading costs initiated by not doing anything at all.

It’s still early days. “Unless regulators say so, there’s not really an imperative to do what we are talking about,” Currie says. “We are asking our customers to do something they haven’t done before.”

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