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GreenBiz 101

The slow but steady march toward Grid 2.0

Sensors, software analytics and distributed generation are inspiring incremental, yet profound behind-the-scenes changes to our power infrastructure.

The phrase “power grid” calls up vivid images of high-voltage wires, gigantic transmission towers and meters spinning 24x7 to track every kilowatt-hour of electricity consumed.

While that distribution infrastructure certainly will exist for decades to come, the information systems controlling how electricity supplies are added, how power flows and where it illuminates lights, air conditioners, manufacturing equipment, data centers and the rest of our power-hungry, wired world are undergoing a profound overhaul.

Central to that evolution are sensors, wireless communications, integration equipment and software applications that offer more insight than ever into consumption trends “behind the meter.” Taken collectively, these technologies are shaping what is being increasingly dubbed “Grid 2.0.”

Why the makeover?

“Oh, sure,” I can hear GreenBiz readers muttering, “yet another name for the smart grid.” But that understates the extent of the impending overhaul and what exactly is driving this evolution. The smart grid, in fact, is part of Grid 2.0 — but it’s just one component of the technologies and processes falling in place to make it happen.

It wouldn’t be overstatement to suggest that utilities face a perfect storm of disruption — occasioned by the rise of distributed generation resources, concerns over the prolonged nature of many power outages and the quest among many commercial accounts for ever greater levels of energy efficiency.

You should also pile on some regulatory pressure for good measure: both the United States and Europe have adopted legislation that requires utilities to provide more visibility into supply and consumption. Over time.

“Power grid operators worldwide face new and growing challenges — to stability, reliability and even economic viability,” said Richelle Elberg, principal research analyst with Navigant Research, in a statement. “Modern IT solutions can help managers leverage the growing connectivity of grid equipment and devices in order to automate control and maintenance functions and better engage with customers.”

Smart grid software and services, which will generate a projected $17.1 billion in annual revenue by 2024, are definitely part of that solution. But so is next-generation utility billing and business intelligence software, crucial for managing demand response programs. The industry could invest nearly $37 billion on updates over the next decade, Navigant data suggests.

And it would be a mistake to overlook the grid control and monitoring technologies that will be key to accommodating distributed generation sources cropping up on rooftops and at corporate facilities. These include solar installations, energy storage systems and even local wind farms. Annual global revenue for integration projects could reach $14.5 billion by 2024, according to yet another Navigant prediction.

The common motivation: More insight into the power supply, both in front of the meter and “behind the meter” within facilities and buildings.

“There is a growing need for more intelligence, control and agility in the distribution grid, particularly at the edge where many new disruptive resources and loads are located,” said Navigant analyst Lauren Callaway, commenting on the underlying motivation. “This means leveraging existing advanced metering infrastructure networks and legacy control systems, in addition to deploying emerging technologies that are uniquely designed to optimize the grid in the presence of distributed energy resources.”

How might this evolution affect corporate sustainability initiatives?

As it emerges, the next-generation grid promises some very real behind-the-meter benefits for businesses.

For an illustration of what might be possible, read about how technology company Blue Pillar and utility Con Edison are teaming up with New York area hospitals to improve the backup power resources available to these facilities during extreme weather events and blackouts.

The idea is to make sure emergency rooms and hospital beds are up and running, which was not the case during Superstorm Sandy in 2012. Indeed, few events underscored the fragility of the existing grid with the same wallop. Suffice to say, pretty much every utility and business in the New York metropolitan area began thinking about the possibilities of Grid 2.0.

“Bad things happen when the lights go off. Loss of life, loss of safety, loss of revenue,” said Blue Pillar CEO Tom Willie.

In New York, Blue Pillar is using energy management software and the Internet of Things to provide a view into the status of backup power resources. These include combined heat and power plants, microgrids and generators that run on diesel fuel and natural gas. “We, in essence, make these resources look very much like an extension of the distribution grid,” Willie said.

Con Edison offers financial incentives to minimize the upfront capital expense associated with bringing facilities into this distributed network. The quid pro quo? The utility benefits from the additional generation assets that it can use for demand response programs.

The point is that both businesses and the local utilities must make investments to make this possible.

What preparations can your organization make?

One of the first essential steps for corporate sustainability managers is to help get their organization connected behind the meter, so they have a more precise view of consumption trends, including the minimum amount of power needed to keep critical systems up and running.

How long will it take to flip the switch? The bad news is that infrastructure projects have a reputation of progressing rather slowly — for both political and funding reasons. This transition isn’t likely to break that tradition.

The good news is that many forward-thinking businesses are already making investments in smart building management and in on-site solar and energy storage. Both are directly related to the Grid 2.0 movement.

So, chances are your organization is already doing its part to get there. “The next-generation grid and the facility of the future, they go hand-in-hand,” Willie said.

Learn more about Grid 2.0 and the future of utilities at VERGE in San Jose, California, Oct. 26-29.

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