Category: Executive Pulse

One Electric Vehicle = A lot of microwave ovens

When is an electric vehicle like a microwave? When people plug them in at home. To get technical, a microwave is typically rated at 1-1.6 kW (110V, 15 A). A charger for a car on a 220V circuit at 30 A is 6.6 kW. A 50 A charger would be rated at 11 kW. If you take just the 6.6 kW case, that would be like turning on 3-4 microwaves in your house, and running them for about four to eight hours.

On my street, which features a lot of 1920’s era Craftsman style homes and bungalows, there is a transformer in my alley. I walked up and down the alley one day and counted the connections, and estimated about 12-15 houses on that transformer. If one of my neighbors bought a Tesla S or X, and charged it consistently at home, the resulting increase in load would be like stuffing a couple more houses into my block. If two neighbors had Teslas, it would be like adding 3-4 houses to the block. Given that all the automakers are releasing EV’s with 200+ mile range, it doesn’t have to be Teslas. It can be Chevrolets, Nissans, Fords, BMWs, or Volkswagens too.

Because it takes nine months to build a house and one day to buy a car, you can see the electricity load growth rate with EV’s is terrifyingly quick. When I drop my kids of at school, there are not one, but two Teslas in the drop off line, as well as a Nissan Leaf and two Chevrolet Volts. I expect there to be more soon. This is a very real and prescient issue.

Here’s another benchmark, using my own small Craftsman house as an example: My present daily demand is about 30 kWh average. I’d probably need to charge a Tesla P100D once per week. That would add 100 kWh/7 to my daily demand = 14.2 kWh. That increases my household demand by 150%. Adoption of EVs presents a transformer overload challenge, but eventually it produces a wires challenge.

A major concern for utilities is predicting the uptake of EVs and making grid upgrades in lockstep to meet increasing demand. Peak loads are more costly to utilities than baseloads. Anticipating and mitigating peak loads will become more and more important as EVs become more common.

You can’t drive on solar

What if your car could generate its own power? The best solar panels today are about 22% efficient. Peak sun is 1000 W per square meter. A typical car footprint is about 8*15 ft = 120 ft^2 = 11m^2. This means if you covered a car with solar you’d never get more than 2.4 kW out of it. A 100 kWh car with 300 miles of range can consume 100 kWh within 5 hours (at 60 mph); the equivalent power of 20 kW The solar on your car would therefore only achieve 10% of your power needs. You’d have to park it in full sun for 41 hours to get a full charge.

What does this mean in practice? Well, obviously a better place to put the solar is on your house. To charge your car only with solar, you’d need something that offsets your daily electricity consumption from driving, provided you are using solar to power your home as well. If you are like the average American and drive 30 miles per day, assuming your EV can achieve 3 miles per kWh, you consume about 10 kWh per day. To generate this electricity with solar, you’d need a 4 kW solar array in peak sun for 2-3 hours. You’d have to oversize for winter, which might mean 2-3 times bigger, depending on where you live. And that’s just for your car, never mind your microwave.

If everyone had solar on their entire roof

There are a number of ways to put solar on roofs, but Tesla has developed roofing materials that mimic shingles that will cover the entire roof, generate electricity, and store any excess in a Powerwall. ECD Ovonics and Owens Corning had similar designs a decade ago, though Tesla has somehow made them physically attractive. For a 625 square foot Tesla roof at $21.58/square foot, it will cost $13,487 for the Tesla roof materials, plus installation costs. Assuming these are 16% efficient, I estimated 14.8 W/ft^2 of solar power could be generated. The 625 ft^2 roof supports 9.2kW nameplate. Since it’s unlikely for the entire roof to be south facing, and you assume an average of three hours of sun per day year-round, this roof will produce 27.6 kWh/d = 201, 480 kWh over a 20 year life. At $0.12/kWh that power is worth $24,174. My present daily household demand is about 30 kWh. If I covered my whole roof with Tesla shingles I’d barely offset my entire existing demand, not including an EV. However, the same conventional roof replacement is $4500. In other words, if you replace your roof with solar, you’d pay it back in about 12 years, but it won’t power your house and your EV.

This isn’t awesome, but it’s not bad. However, an asphalt roof has no payback, other than avoided leaks. So yes, in essence, over the life of the roof, a Tesla roof is certainly cheaper than a conventional roof. This could also be financed (without a power purchase agreement) with storage. Tesla uses a certified installer to give you a new roof and a Powerwall in the basement. If we assume the 9.2 kW array is purchased and installed for an all-in $18,000 cost, which is then financed over 20 years for a mere $100/month, you never have a utility bill or an outage again. Is that worth it to you?

When it comes to the increasing penetration of EVs, it behooves utilities to work with partners working on EVs, charging solutions, and fleet software to smooth out peak load when everyone comes home to charge up their cars. EVs, solar, and storage are all part of an interconnected ecosystem that has tremendous financial and technical ramifications.

Davion Hill is organizing and leading the panel “Transportation: hitting the electric gas pedal” at the 2018 DNV GL Energy Executive Forum on May 17th. Register today to meet Davion at the Forum to continue the discussion.

The customer of the future is engaged

Utilities, retail energy providers, distributed energy providers, technology companies: on the surface, they are very different, with unique business models, resources, and areas of expertise. But ultimately their business is to enable customers to conveniently and economically carry out their daily tasks—whether it is washing their family’s clothes or moving goods through a warehouse—without interruption and inconvenience. But things are changing. Like it or not, these customers have a quickly expanding universe of energy market and technology options that allow them to go beyond the typical energy supplier. Attracting and retaining customers with so many alternatives will depend on how good you are at the next level of customer engagement.

The energy provider of the future

Imagine a world where the immense sets of data about markets, technology, use, and the customers themselves can be packaged into smart energy product and service options. Armed with these options, the energy provider can offer products and services that range from efficient appliances and equipment, to energy management systems, and even financing for solar PV or storage, as well as provide the customer with a holistic, strategic understanding of their energy use. This is the energy provider of the future. All of these elements exist today, but not in one place, or even by one type of company. What makes this company different from today’s energy provider? Customer engagement. The opportunity—and possibly the way to thrive in an increasingly competitive energy market—is to become the energy provider of the future.

In the current landscape, communication with customers tends to be very one way and focused on the immediate needs of the service provider: retailers focus on prices, enrollment, and retention; utilities focus on outage management and regulatory compliance; and distributed energy providers focus on sales. They are all communicating to their customers, but not engaging with them.

Customer engagement is two-way communication, where the energy provider understands what the customer wants and needs, and vice versa. The truth is that customers are becoming more and more aware of the choices they have when it comes to energy, but they are navigating these waters mostly by themselves. Going beyond bill inserts, call centers, and blast emails and engaging them with products and services that help them navigate the ocean of choices, energy providers can build trust and cement long term customer partnerships. In turn, customer engagement is essential for energy providers to key in on effective and efficient solutions and form strategies about the services they offer.

While this level of engagement used to require expensive outreach, the increasing deployment of smart meters, energy management widgets, and smart homes allows energy providers to efficiently harness multiple streams of data to build granular customer-level insights. This, in turn, enables creative and customized solutions whether the customer is a residential, a small business, or a giant conglomerate with multiple campuses and operations. Now that’s engagement.

Becoming the energy provider of the future requires innovation, persistence, and a new way of viewing one’s customers. The question that remains is: Who is going to step up?
Join me at the Energy Executive Forum, where we will bring together experts with the insights and knowledge to help you become the energy provider of the future. Register now and take the next step in creating the energy future.

John Landry
Vice President, Competitive Markets
DNV GL Energy

John Landry is organizing and leading the panel “Energy Choices: The Customer-Focus Imperative” at the 2018 DNV GL Energy Executive Forum on May 16th. Register today to meet John at the Forum to continue the discussion.

What does it take to compete when energy costs go to zero?

Recently, a client asked DNV GL Energy’s CEO, Ditlev Engel, “What does it take to compete when the cost of energy goes to zero?” The question was rhetorical of course, but contained an element of sincerity. Why? Because now that the efforts to make energy cleaner, less costly, and more reliable are coming to fruition, this prospect is viewed as an exciting challenge to some energy service providers, and terrifying to others.

The energy sector is going through deep transformation. Changes in the way energy is generated, priced, and used is creating an environment that doesn’t just encourage but demands innovation across the sector. The industry has responded, and the pace of innovation is staggering. What’s more, the number of directions and solutions being proposed and tested is almost overwhelming. There is no shortage of winners and losers, and as one drops out several more join in. There’s no one answer to the question posed above, but at the upcoming Energy Executive Forum, a panel of speakers on the leading edge of innovation are grappling with how to invest and innovate in anticipation of a cleaner, more reliable grid and a zero marginal cost environment. Here is how they are approaching the challenge and finding success:

OhmConnect’s innovation is an app that pays utility customers to not use energy. While demand response programs have been around for a long time, they have generally been targeted toward large commercial and industrial customers. However, this app is for the residential market. It monitors energy markets for spikes in power demand, and uses that information combined with data from a home’s smart meter to ask its users to use less energy.

Much like OhmConnect, Advanced Microgrid Solutions is also managing energy demand, but from a completely different angle and on a much larger scale. They are using energy storage technologies to save commercial/industrial customers energy from behind the meter and tap into it when demand is high. It combines real-time energy use, market pricing and data, and storage to create an energy management system for an entire building or portfolio of buildings.

While innovation isn’t the first thing most people think of when it comes to utilities, Southern Company in partnership with Energy Impact Partners is one of several electric utilities in the US testing new R&D strategies, with programs like their Energy Innovation Center and Smart Neighborhood initiative. Innogy New Ventures, LLC, a venture capital arm of one of Europe’s largest utility companies, is established in Silicon Valley and investing in digital innovations transforming the energy industry. Meanwhile, Constellation is actively collaborating with many global energy service providers to ensure innovations in blockchain enable more efficient and effective relationships with customers.

Each of these companies is shaping the future of energy through innovation, investment, and unusual partnerships as that marginal cost of energy trends towards zero. As Ditlev responded to our customer, “The best way to predict a business is to develop it yourself,” and the same goes for the energy future. What innovations do you see shaping our energy future? We’ll talk more about them at the Energy Executive Forum. Register now and don’t miss out on the conversation!

Clint Johnson
Director, Renewable Energy

Harnessing the power of smart buildings for energy management

Smart buildings. Smart homes. These terms come up a lot in a variety of circles and in many different contexts: energy providers use it when they refer to energy use or savings, technology companies talk about it in reference to the Internet of Things, architects talk about it when discussing achieving zero net energy. But what does it mean when it comes to an actual building, rather than a theoretical one? At the leading edge, a smart building’s systems—lighting, thermostats, energy management, occupancy sensors, security systems—are interconnected to sensors, can be controlled via an app by the facility manager or homeowner, and are programmed to respond to a set of conditions. Essentially, the building takes over and runs itself, optimizing energy use and not reliant on flighty humans to remember to turn off the lights when they leave a room. Smart buildings also provide plenty of data about energy use that can inform building owners and help them make changes to further lower their building’s energy costs.

While a bulk of energy savings (whether from a smart building or just energy efficiency) comes from lighting, smart buildings are the stepping stone to the ultimate in energy savings: zero net energy (ZNE). California has mandated that all new residential buildings be 100% ZNE by 2020, an ambitious goal that is arriving very soon. The state usually sets the stage for these types of initiatives – many states now follow California’s vehicle emissions standards, as well as other mandates that were first initiated in California. While there are many approaches to achieving ZNE, there is one component that underlies all of the renewable generation and high efficiency appliances: behavioral changes. And a smart home, with all of its sensors and interconnections, provides the information that a homeowner needs to understand which changes they need to truly achieve ZNE. Much like Prius owners, who have been found to use up to 20 percent less energy as they drive because of the information their car provides them on the dashboard, people will be able to respond to signals about their energy use from the data their smart home provides.

No longer a futuristic daydream, owning a “smart home” is now a reality, from energy-efficient solar panels to security systems. Even if the building isn’t designed to be ZNE, using less energy is becoming a priority to many consumers. Moving forward, buildings will need to have more than the current trendy finishes to sell—they will also need to be smart enough to save their owners energy—and money.

Betty Seto

Head of Department,
Sustainable Buildings and Communities

Why transportation is the energy market you’ve never thought of

A 1% shift in energy demand in transportation can tip the US economy into recession

Back in 2011 I published an analysis with Prof. Carey King at UT Austin looking at the impact of the use of automotive fuels on the US economy. As we were digging ourselves out of the 2008 market catastrophe, we were trying to understand how and why oil prices spiked, and what it meant for the economy overall.

One piece of our analysis shocked me. The world is very sensitive to an oil production cap associated with global refinery production. As demand squeezes production limitations, the price for oil spikes, and in some cases that is enough to crush the national economies. There appeared to be very little tolerance for error, +/- 1%, in the undersupply constraint globally.

In contrast, for every electric vehicle on the road, it can displace hundreds of gallons of gasoline. A vehicle achieving 20 mpg and driving 12,000 miles per year will consume 600 gallons of gasoline. An EV attaining 3 miles per kWh will consume 4,000 kWh.

There is a direct relationship – 600 gallons of gasoline becomes 4 MWh of variable utility demand.

Let’s scale that. 600 gal per 4 MWh = for every MWh of utlity load transferred to EVs, 150 gallons of gasoline are saved annually.

This means two things. It is depressing for the oil & gas sector. For the utility sector, it is both exciting and terrifying. EVs are enormously transformative to the energy mix. The petroleum refined products into fuels sector represents 40 quadrillion BTU of energy. If it were all transferred to electricity, it would represent 11.7 billion MWh or 11.7 million GWh or 11,700 TWh. For reference, the US has approximately 1 TW of generating capacity. If these generators were on all year, this would be 8760 TWh. We would need to add another 1.3 electric grids to the US to support transportation. More if it was not operating at 100% capacity factor.

Yikes!

Filling up your gas tank is like having a 2 MW power station in your hand

Look at it this way… a Tesla P100D is a 100 kWh battery.

You fill up your gas tank in about 3 minutes (0.05 hr).

If you could achieve the same speed with your gas pump, your charger would be rated at 100 kWh / 0.05 hr = 2000 kW or 2 MW.

This has other ramifications. Your normal gas station has ~10 or so gas pumps, and they are often operating simultaneously. AT today’s best charging time of 30 minutes (~50 kW) , that is still a half megawatt load for a “gas station”.

For large gas stations, there is likely no way that the existing distribution infrastructure can support that load. There is an argument to add storage on site, and buffer the EV load with a trickle charge from the grid.

That demonstrates how EVs drive demand for energy storage even more.

Davion Hill
Energy Storage Leader — North America
DNV GL Energy

Davion Hill is organizing and leading the panel “Transportation: hitting the electric gas pedal” at the 2018 DNV GL Energy Executive Forum on May 17th. Register today to meet Davion at the Forum to continue the discussion. 

Smart thermostats: the gateway drug to true energy choice

Today, the choices consumers make about energy use are mostly based on how much and when energy is used, within a relatively limited framework. Energy choice tomorrow will mean something much different – technologies will enable consumers to decide how much energy they use, when they use it, what price they want to pay, and even where the electrons come from. This change is coming, and the bellwether is the smart thermostat. It’s the first step in the evolution from consumer to prosumer.

In the beginning, people had simple thermostats that were easy to operate: set the temperature with a dial or a tiny lever and adjust as needed. While they were easy to use, if you wanted to save energy while you were out or sleeping, you had to remember to adjust it manually. Next came programmable thermostats, where the occupant could set a schedule for the temperature range during a certain time of day, depending on occupancy or preference. You had more control, didn’t have to come home to a cold or hot house, but, unlike its predecessor, it was a bit more difficult to use. You need to actually program the thermostat, and studies have shown that the expected energy and cost savings are not always achieved, either because people continue to use their programmable thermostat like a manual one, or they didn’t set up the schedule correctly, overestimating operational time and comfort levels.

The latest advance in controlling interior temperature and occupant comfort, smart thermostats, are easily programmable and controlled through an app or via their friendly interfaces. They have cute names like “Nest” or “Ecobee” (which comes with a “Lil’bee” so it can more accurately monitor temperature and occupancy) and can sense when you are home or away and automatically adjust accordingly. An estimated 8 million households currently have smart thermostats, and this is expected to rise to 40 million households by 2020. While this isn’t a huge segment of the population (there are 126 million households in the US), it will change the way a lot of people approach their energy use – and the choices they make about it.

The next evolution in technology – which, in some cases, is already here– will give consumers a much more granular view of their energy use, and provide even more choices. Right now, consumers can see how much energy individual appliances use or automatically operate something based on the price of electricity, rather than a set schedule. Blockchain may make it possible to trace electrons from their renewable source to the electric bill, allowing consumers to decisively know that their energy use is sustainable and green. These are things that already exist in some form or another. Just imagine what’s next.

 

Best,

Michele Tihami

Country Manager – North America
DNV GL Energy

Join us in May at the Energy Executive Forum where Michele Tihami leads the main stage panel “Energy Choice: the customer-focus imperative.” Registration is now open. 

Bitcoin energy hogs in the post-middleman era

There’s been a lot of news involving Bitcoin recently, the cryptocurrency that’s skyrocketing in value. But what really got me thinking about Bitcoin was hearing that the world’s first waste-to-energy crypto-mine had opened. Entrepreneurs built their very own plant to power the mega-computers needed to create money out of thin air (or in this case, burning tires). The value of each bitcoin is now so high, and the market for them so volatile, these new age miners have the drive to be selective and creative with their energy procurement. And what they are choosing is unconventional, cheap, on site and independent from the grid.

What I find most interesting is that this kind of innovation is happening way faster than anyone anticipated.

Entrepreneurs appear to have no patience to wait for what they perceive as “middlemen”—namely, electric utilities. There also may be a mindset where innovative thinkers have a bias towards innovative energy. If they’re smart enough to build a Bitcoin mining operation, they’re smart enough to figure out that old tires are a cheap power source—and they don’t have to wait around to get it.

If coal fueled the industrial revolution, what will fuel the cryptocurrency revolution? How can utilities and other power providers cater to the needs of fast-moving, power-hungry technologists (yes, that double meaning is intended)?

I’d really like your thoughts on this and hope you’ll have time to join the conversation here—or attend the Energy Executive Forum in May where we’ll talk about customer energy choice. This landscape keeps changing at blurring speed but when we put our heads together we can find a path through it, and perhaps make some bitcoin along the way.

Best,

Michele Tihami

Country Manager – North America
DNV GL Energy

The truck-sized EV regulatory challenge

Elon Musk is at it again—this time with his sleek bullet-shaped, multi-electric engined, nuclear bomb-proof glass equipped rocket of a semi truck. You look at the launch video and it’s easy to think (yet again) “this is so cool.” Walmart, DHL and other major truck purchasers agree, with numerous pre-orders already on the books.

Where there is disagreement is on the question of who should own the new system of charging stations that will be required when EVs are used on a wide scale? DNV GL’s Energy Transition Outlook report shows 2022 as the tipping point where EVs will reach cost-performance parity with conventional light vehicles. That’s not far off.

Many utilities are eager to counter flattening demand with revenue from fueling EVs at their own charging stations. But regulators are saying, “Not so fast.” Many regulatory bodies believe allowing utilities to own the new charging infrastructure would represent an unfair competitive advantage and rate of return.

Some might argue this is short-sighted. Others enjoy market competition.

Utilities ask, what better way is there of increasing load and adding onto the grid than having a larger infrastructure? The more customers go off grid, the fewer customers there are sharing the total infrastructure cost. In the end, utilities spread infrastructure cost across a larger asset base and provide cost-effective power for consumers.

What’s your view on this? Share your perspective: the voice of our energy executive community needs to be heard in order to shape the debate and find solutions that work for customers.

Best,

Michele Tihami

Country Manager – North America
DNV GL Energy

What can Internet Providers Learn From Utilities?

On November 6th, huge swaths of the Internet went dark for about 90 minutes. The cause turned out to be human error traced to something referred to as a “route leak”. Internet Service Providers (ISPs) use Autonomous Systems (ASes) to track data that travels through different networks. On the 6th, the route leak occurred when the ASes relayed bad information about their IP addresses.

Net-net: about half of the United States’ vital information infrastructure went down thanks to several ASes and their route leaks (Google it if the Internet’s working—I’m not making this up).

Utilities have taken a rap at times for being slow-moving traditional energy players, though many of them are eager to transition to a digital “Internet of energy.” But the instant, interconnected nature of the Internet creates challenges when downtime is on a massive scale. If half the country lost its power for 90 minutes there would be chaos, followed by Congressional Inquiries. It seems to me that utilities could teach ISPs a thing or two about reliability.

The digitization of energy has much to offer. Greater efficiency. Data access. Lower costs. The list of benefits is long, and the rallying cry of change will surely not abate. But you need to have a clear-eyed view of the risks that digitization brings. While utilities are skilled at balancing risk/reward, how can others—in areas like distributed energy and IoT—move forward while being cognizant of what’s at stake?

Successful transformation will come to those who consider three things: possibilities, priorities, and pace. First, understand the entire landscape—how are your customers changing, and what possible unique solutions can you provide in a digital energy economy? Second, what are the priorities of your stakeholders, shareholders and customers? Lastly, set an appropriate pace for moving forward. Change doesn’t have to happen overnight.

Did you notice last week’s Internet outages? What’s the number one thing DER and IoT players could learn from utilities? Let me know in the comments below. I’m excited to hear what you think.

 

Best,

Michele Tihami

Country Manager – North America
DNV GL Energy

Re-write the energy playbook before someone else does

Anyone who has spent time in London has ridden in a classic Black Cab—a knowledgeable driver, courteous and reliable service, reasonably priced. And a business model that’s in serious trouble: Despite a recent court ruling revoking Uber’s London license, the trend towards cheaper fares enabled by app-guided navigation may be unstoppable.

What are the parallels in today’s energy landscape? Some see utilities facing the same uphill battles as Black Cabs. Massive investments in generation and T&D infrastructure have enabled utilities to provide reliable service. Distributed energy providers are seen as disruptors eager to rip up the playbook, gaining access to customers without paying their fair share. The reliance on regulation to even the playing field is understandable. Unlike the world of London’s Black Cabs, however, the outcome here is far less certain.

The reason: Many utilities are not waiting for others to rip up the playbook. They’re doing it first, choosing a customer-centric value proposition.

Canada’s Alectra utility is offering its customers solar-plus-storage systems for backup power and rate arbitrage. Vermont’s Green Mountain Power has an eHome program that provides customized, holistic solutions that include everything from heat pumps and weatherization to solar, EVs and energy storage. In essence, these utilities are adding exciting new products to the Black Cab aspects of their business: Dependability and long-term relationships now combined with future-facing technology. It’s not cannibalization. It’s just what it takes to stay competitive.

What can London’s Black Cabs learn from Uber to beat them at their own game? As energy goes through a period of rapid transformation, what business models will put customers first—and win? Join the conversation below so we can find the answers together.

Best,
Ed Cuoco