V1M: What do you consider to be the main drivers for current energy related activity today?
GZ: The main themes are clean, affordable energy and energy efficiency. For example, European activity is aimed at the “20-20-20 by 2020” objectives, 20% less emissions compared to 1990, 20% renewable energy, and 20% increase in energy efficiency. The EU seems to be on track for these objectives.
A common theme that you find in most major countries especially rapidly developing countries such as China is reducing energy intensity or energy consumption per unit of Gross National Product (GDP). The objective is more efficient energy utilization so that we can continue to have economic development but with fewer emissions – especially critical for rapidly developing countries such as China and India.
Recently I have been reading the Obama budget for 2012 and specifically the proposed budget for the U.S. Department of Energy (DoE). Although 60% of the DoE’s budget is related to military nuclear applications, the remaining 40% is about reducing the cost of clean energy and about energy efficiency. An area that the DoE has been putting a lot of effort into is “net zero energy buildings.” An example is the new NREL research support facility in Golden, Colorado.
Europe is highly oriented to what Europeans term ‘near zero energy buildings’. In some countries there is an effort to re-write energy building codes to mandate highly energy efficient buildings. As an important example, according to Germany’s 40 year energy plan, the objective is to have all buildings be compliant with a new energy efficient building code and achieve 90% energy efficiency by 2050. Thus, we can see that a significant part of the energy equation is oriented toward efficiency measures and includes planning, construction, building and operation of both sustainable buildings and infrastructure. This is a tremendous amount of work and is more of a challenge since it also includes existing buildings and structures.
One of the most interesting recent initiatives in the area of energy efficient buildings involves electric power utilities. Demand response (DR) is something that European utilities have been doing for years to smooth out the daily variation in electric load. In North America this is often called peak shaving, and the intent is to reduce peak load so that fewer “peakers”, expensive power plants built just for peak load, have to be built. To reduce demand when requested, power utilities provide financial incentives to building and infrastructure owners in the form of direct subsidies and reduced rates. The US Green Building Council, Lawrence Berkeley National Labs, and the Environment Defence Fund have started the Demand Response Partnership Program (DRRP) to educate owners of commercial buildings about the benefits of DR and to encourage greater adoption of DR by this sector. For example, owners who LEED certify their buildings can get a LEED DR credit if they participate in a DR program. Southern California Edison is one example of a utility that has agreed to support the DRDP effort.
V1M: Are countries well on their way to meeting these challenges?
GZ: Most countries have not progressed very far along this path yet. The EU and Germany in particular is an exception, partly because Germany’s emissions statistics improved dramatically when they shut down some of the more dirty coal plants in the former East German areas. In the US many were optimistic when emissions dropped in 2010, but the 2011 statistics show that emissions are continuing to climb. However, the largest increases in emissions are coming from the emerging economies, China and India in particular. Though, I should add that China continues to improve its energy efficiency as measured by energy per dollar of GDP.
While unlike the EU, the US does not have a federal renewable energy objective, about 36 U.S. states have mandatory or voluntary renewable portfolio standards (RPS). We are seeing an effort to increase the proportion of renewable energy generation in the U.S. On-shore wind has taken an early lead in this effort, but solar is catching up rapidly. We are seeing European style feed-in-tariff (FIT) programs for renewable energy technologies in North America. Some electric utilities in the U.S. have implemented this type of program. The Province of Ontario in Canada has had this type of program for several years. As a result of the FIT program about 7,000 micro-projects, mostly involving photovoltaic panels, have been connected to the grid across the province of Ontario in Canada.
V1M: There are differences between North America and Europe it seems when we talk about ‘efficiency’.
GZ: That is true. Demand management is a way of realising more from the investment in energy generation, because the most efficient use of a power plant is when it is operating at its optimal load continuously. In the past North American utilities managed for peak load, in other words they build enough capacity for maximum load – those hot days in August when everyone’s air conditioner is on high. So in North America we have “peakers”, expensive plants that are only fired up to satisfy peak load.
Most European utilities in contrast have managed demand to avoid peaks. To do this they have been doing what is called demand-response (DR). Utilities work out agreements with customers, especially large industrial customers, which enables them to shut down non-critical equipment at times of peak demand. As an interesting example, I have spent quite a bit of time in the Czech Republic. Since many years that country has had two electric networks, a high-availability and a low-availability network. The first has a high tariff and is for customers who require continuous power. By comparison, the low availability network has much lower tariffs, but does not guarantee service. Organisations with pumps, motors and other non-critical infrastructure are interested in lower tariff services, but critical applications demand the higher tariff rate.
To reduce costs and to avoid having to build new “peakers”, a top concern for North American utilities is reducing peak load and many are just now embarking on major DR programs. To encourage this the federal electric power regulator FERC has made this more attractive by mandating that a “negawatt” should be remunerated at the same rate as a megawatt. In other words, you should be paid the same for saving a megawatt as for generating a megawatt.
V1M: What amounts of use and economic levels are you referring to?
GZ: North American statistics show that 5% of power generation is used 50 hrs per year. 15% is used for less than 5% of the time. Power from these so called ‘peakers’ is incredibly expensive – more than 10 times the normal base load cost.
Utilities can dramatically reduce costs, if they can manage for these times. This is called ‘peak shaving’ and is a big area of activity in North America. Others sometime call it peak management.
V1M: How does ‘peak shaving’ relate to renewable resources?
GZ: The challenge with electric power is matching generation to demand because it has to be used when it is generated. In the past we have had power plants that generate constant electric power – plants that are slow to fire up or shut down provide base load generation, plants that can be fired up more rapidly to meet variable demand, and “peakers” to meet peak demand. With renewable energy we now have variable power generation as well as variable load because renewable energy included a broad spectrum of energy sources. Some people see 2012 as the breakthrough year for an alternative that could dramatically simplify managing intermittent power sources and variable demand.
Geothermal, hydroelectric and many concentrated solar power sources are nearly constant and can even be used for base load. Offshore/onshore wind and photovoltaic panels, on the other hand, are intermittent forms of energy. They can generate large amounts of power, but the generation varies with sunshine (clouds and darkness) and wind availability. Some concentrated solar plants, such as the ones in Seville, Spain, concentrate solar energy to generate steam to drive generators, but have to go off-line when the sun goes down. Others, such as one of the oldest concentrated solar power plants in the Mojave Desert in California works by super heating molten salt, which then can be stored overnight, effectively providing nearly continuous generation capability.
The disadvantage of intermittent power sources, and even sources that are nearly constant, is that it is necessary to build backup generators for times when the sun doesn’t shine or the wind doesn’t blow and this increases the capital cost of renewable energy. This can be hydroelectric, because hydroelectric power can be powered up very rapidly, but in most jurisdictions it is natural gas turbines or combined cycle gas turbines (CCGT). And so, rather paradoxically, wind and PV solar is driving a lot of CCGT business.
But large scale lithium-ion batteries, for example, with a power of 8 megawatts (MW) and a capacity 32 megawatt-hours (MWh), are now being deployed and are projected to become more affordable by year end. Some industry analysts are projecting that this could dramatically change how we manage variable load and intermittent generation.
V1M: Is the U.S. involved in renewable energy to a large level now?
GZ: Texas is already capable of generating 20% of its electrical needs from renewable energy. Most of that is wind driven. While many people think of gas and oil when they think about Texas, it is one of the hottest areas for renewable energy investment. California has made significant progress in achieving 20% renewable energy and seems to be on its way to getting one third of its energy from renewable souces. In 2011 the U.S., for the first time since 2008, surpassed China in reneweable energy investment. The U.S. Department of Energy foresees some types of renewable energy, specifically PV, becoming cost competitive with conventional sources of energy – and without subsidy – in the near future. And if large scale lithium-ion batteries continue to become more affordable that could solve a major problem with intermittent energy sources.
But there are major two flies in the ointment issues that needed to be addressed. The first is transmission. I have seen estimates ranging from 18,000 to 50,000 miles of theamount of new transmission required in the U.S.
This is driven by getting renewable energy from where it is generated to the population centers and by reliability. The problem right now is that it takes 12-20 years to plan, get regulatory approval and build a transmission line in the U.S. There are similar problems in other jurisdictions, like Germany, butalthough, last year the Bundestag passed legislation that makes the BNA, the German equivalent of FERC, responsible for interstate transmission with the intention of getting the time it takes to plan and approve a transmission line down from ten years to four. In the US the Obama Administration has announced efforts to streamline the transmission approval process and FERC’s Order 1000 is intended to rationalize transmission planning and cost allocation.
The second fly in the ointment issue is the aging workforce. In the world’s advanced economies experienced skilled people are retiring at a faster rate than they are being replaced. In the U.S., for example, according to the IEEE PES over 51% of electric power engineers will be eligible to retire by 2014. Germany’s shortage of 80,000 engineers and 400,000 skilled tradesmen is slowing down economic development. This means that utilities need to improve productivity if they are going to be able to do all the things like renewable energy, distributed generation, energy efficiency, and smart grid, that they have on their plates. Utilities are turning to technology to enable their experienced engineers and designers to be more efficient, and to enable knowledge transfer by their experienced staff to help the younger engineers and designers get up to speed faster, and to attract and retain the next generation of designers and engineers.
V1M: Who and what is driving the Smart Grid effort?
GZ: This varies from country to country. In Germany renewable energy and specifically bringing off-shore wind energy to the population centers in southern Germany is the key driver behind the smart grid, doubly so now that Chancellor Merkel has decided to shut down all nuclear plants by 2022. Smart metering has been a priority in Sweden and Denmark. France has announced that by 2016, about 95% of French households will have smart meters.
In the U.S. in many states renewable energy is also the priority because of state RPS standards. In other states such as Alabama, smart meters are a priority. Many utilities have focussed on improving distribution reliability by making distribution networks smarter. Almost all utilities are upgrading their substations to make them more intelligent. And I think it is fair to say that underlying all of these smart grid activities there are intelligent electronic devices, communications networks and automated processing.
V1M: Where does gas and shale gas play into generation and energy management?
GZ: North America has extensive reserves of natural gas. In the U.S. there are roughly nearly 500,000 natural gas wells, most of them exploiting shale-gas. The shale-gas boom really got going with the introduction of horizontal drilling and hydraulic fracturing together with the Energy Policy Act signed by President Bush in 2005 which allowed for shale gas exploitation without any federal environmental oversight. From the consumers’ perspective the shale-gas boom has driven down the price of natural gas to the point where for electric power generation it is price-competitive with coal in many jurisdictions, and with the added benefit of 50% less emissions. Even It is anticipated that many trucks are being converted from diesel to natural gas. Without shale gas, power in the U.S. today would have been much more expensive.
Shale gas reserves are being explored in other parts of the world as well. For example, extensive shale gas reserves have been identified in France and Poland. While France is exercising environmental oversight and limiting exploitation, I expect the Polish government foresees Poland being less dependent on Russian energy and is encouraging shale-gas exploration and development.
V1M: If the Department of Energy can now finance energy projects, has that changed the way generation is taking place?
GZ: The Energy Policy Act of 2005 was incredibly important legislation, not only for its impact in stimulating shale-gas exploitation, (and changing daylight savings time), but also because the act changed US energy policy by enabling the Department of Energy (DoE) to provide tax incentives and loan guarantees for energy production. Specifically it authorized long-term loan guarantees of up to 80% of an energy project. The development of the Southern Nuclear’s newest nuclear power generators at the Vogtle site in Alabama are benefitting from this plan. That project is the first new nuclear generation in the U.S. since 1978 and has just received construction approval. The total cost of the project is expected to be $14 billion,. $6 billion of which is guaranteed from Southern Co and the balance from the DoE.
V1M: Where is the main activity in shale gas at the moment?
GZ: There are several major initiatives related to shale-gas that are occurring right now. First in everyone’s minds is the EPA study of the impact of shale-gas drilling on ground water quality that was authorized by Congress last year and is now underway. This was partly motivated by concerens about proposed drilling and fracking in the watersheds from which New York gets its drinking water. Coincidentally, a research team at the University of Texas has just released a major study of the impact of fracking and shale-gas drilling practices on ground water.
Secondly, the industry is starting to exploit new deep shale formation, for example, in northeastern Ohio, the Utica shale formation. Thirdly, with the low price of natural gas and the motivation of the EPA’s Mercury and Air Toxics (MATS), many power utilities are converting or are considering converting coal plants tonatural gas as well as building gas-fired plants as backup for intermittent renewables. And the EPA has just begun final rule-making to set CO2 emissions standards for new power plants that will likely encourage more natural gas power plant development and will accelerate this process.
V1M: The ability to manage intermittent energy is a key point as you mentioned. Are other areas around the world now moving toward this approach?
GZ: The Province of Ontario in Canada plans to shut down all coal-fired generation, including North Americas’s largest coal-fired power plant at Nanticoke, by 2014. It is intended that this will be replaced by a combination renewables and nuclear. In Germany it is projected that by 2030 energy conservation measures will reduce annual consumption from about 650 TWh to about 500 TWh, of which about half will be derived from renewable sources. For the last few years China has lead the world in investment in renewable energy generation. India is making a significant effort to increase the use of renewable energy, and to create a smart grid that will allow it to be better integrated into the national grid. Japan is in the throes of deciding on the future of nuclear energy, but because it has no fossil fuel resources it is ramping up geothermal and renewable energy sources. Indonesia, also on the Pacific “ring of fire”, has identified 250 potential geothermal energy sources.
There’s a very innovative and successful program underway in Bangladesh, where in 2005 only around 30% of the population had access to electricity. The Renewable Energy and Rural Electrification project is encouraging the development of off-grid, renewable energy technologies, such as solar home systems (SHS) in rural areas where people live too far from the main electrical grids. In the last seven years, over 1 million rural homes in off-grid areas have got powered lights through solar home systems. The SHS systems are also reducing emissions by replacing kerosene and other combustibles.
V1M: How is India being impacted by these ongoing energy related changes?
GZ: India is projected to become the world’s 5th largest economy by 2020. To achieve that will require a lot more power generation. The investment in renewable energy in India is up 50% over 2010. This represents $10 billion in investment for 2011. For comparison, in 2011 the U.S. invested $57 billion and China $47 billion. India’s investment is stillrelatively small by comparison, but India is rapidly ramping up renewable energy generation as well as nuclear and other sources. The biggest single issue in India right now is the over 30% of Indian energy use that is non-revenue generating, meaning that the energy is effectively lost. This is not just an Indian problem, non-revenue power losses are a major motivator for smart grid in Brazil as well.
In India renewable energy and non-revenue losses together these are driving the need for the smart grid, to allow more effective monitoring of electric power usage and to integrate renewable energy sources. In 2010, the Indian government created a very high profile India Smart Grid Task Force, chaired by Sam Pitroda, advisor to the Prime Minister and a legend in India. Last year eight fast track smart grid pilots were announced that are to be funded jointly by the Ministry of Power and the 14 electric distribution utilities. So India started behind but is moving very fast.
V1M: How do other technological advances figure into the energy equation?
GZ: One of the important areas is changing how we fuel transportation. I mentioned the conversion of truck engines from diesel to LNG. According to a recent report from Pike Research, hybrid electric vehicles (HEVs) and plug-in electric vehicles (PEVs) combined will represent 3.1% of worldwide auto sales and 5.1% of total U.S. vehicle sales in 2017. Many believe that battery technology is going to be key in making electric vehicles attractive to consumers. At the ARPA-E Energy Innovation Summit this year, , it was reported that a new lithium-ion battery was demonstrated that could extend the range of a 100 mile EV to 300 miles. And in his State of the Union address President Obama projected that 80% of Americans will be using high-speed trains by 2030, not just because they are more energy efficient and generate less emissions, but because they will get Americans to their destinations twice as fast as cars.
One of the things that people are increasingly aware of is the inter-dependence of water and energy. For example, in the US half of the water withdrawals are used for conventional thermal power generation. Recently a very innovative new development involving microbial reverse-electrodialysis cells (MRC) has been reported. A year or two ago I visited a waste water treatment plant in Cleveland in the US. This is a traditional activated sludge plant. What really surprised me was the the amount of money they were paying for energy, about $900,000 per month for electricity for pumping and natural gas for incinerating the sludge. The MRC work suggests that this process could turn waste water treatment plants into net electric power generators, rather than consumers. A number of wastewater treatment plants are already using sludge digesters to produce methane to generate a portion of the power the plant requires.
V1M: Are we creating enough specialists and professionals to meet the innovation challenges in energy that you mention?
GZ: Utilities are facing two distinct challenges. Experienced workers are retiring at an increasing rate. Secondly, utilities are finding it difficult to recruit the next generation of workers. As a result, utility companies are facing both a loss of headcount and a loss of experience. To pick just one area, electric power engineering, the IEEE Power and Engineering Society (IEEE PES), has reported that by 2014 over half of the electric power engineers in the U.S. will be eligible to retire.
Mark Carpenter of Oncor, the largest power distribution utility in Texas, plotted the years of experience against the age of Oncor’s electric power engineers. The graph showed two clusters, engineers averaging 25-30 years experience who are expected to retire soon, and a cluster of recently hired engineers averaging 2.5 years of experience, and a gap in between. There is evidence for a similar workforce problem in the skilled trades.
In addition to replacing retiring workers, it is estimated that 60,000 additional workers will be needed by 2030 to operate and maintain renewable electric generation systems. In the near term, an estimated additional 90,000 people will be needed to deploy smart grid technologies. A shortage of skilled workers is a major dilemma for many utilities in the world’s advanced economies.
V1M: What are companies like Autodesk doing to help meet the current challenges in energy?
GZ: Data from the U.S. Bureau of Labor Statistics show that since 1998 productivity in the electric power industry has stagnated. This trend is being exacerbated as utilities lose experienced staff to retirement faster than they can replace them with less experienced workers. The serious workforce productivity challenge that the electric power utility industry is facing could not be happening at a worse time. Aging infrastructure, mandated renewable energy, and smart grid initiatives mean that utilities have more on their plate than at any other time in recent memory.
There are historical precedents that when industries faced a serious business challenge such as low or declining margins, they invested in automation technology to raise productivity. Well-known examples include retail banking, the low cost airline industry, and retail. Within a short period of time, ATMs, automated ticketing and check-in, and point of sale systems have become the prevalent way to do many things that used to be done manually. A similar transformation is occurring in the utility sector throughout the plan, design, build, operate, and maintain lifecycle.
One of the most important transformations impacting engineering design is model-based design, which goes beyond traditional CAD, where the ultimate output is paper construction drawings, and involves creating intelligent digital models of structures. A digital model can do far more than a paper or electronic construction drawing. You can automate things like generating a bill of materials, for example. It helps design teams to collaborate, it enables knowledge transfer between experienced and younger designers andbecause model- based design incorporates 3D visualization, it dramatically improves communication between design teams and non-technical decision makers.
An integrated model-based design process also reduces design errors because the same information doesn’t have to be re-entered into multiple systems. For example, at Duke Energy this type of approach reduced substation design time by at least 50% for both greenfield and brownfield projects. And Duke found that with a model-based design approach information can be captured from experienced workers in a way that conveys more information to the less experienced designer than was possible with a paper-based process.
V1M: How is data management changing for energy projects?
GZ: There was a very interesting study done by Gartner a few years ago that really highlighted the major problem in data management. Gartner went to one utility and looked at how many groups within the utility had data about power poles – type of material, location, when installed, maintenance records, that type of thing. They found that in that one company, nine different groups maintained their own pole data independently of each other. That is not only a waste of resourcess, but when management, or the regulator, asks for information on the status of the company’s power poles, they could potentially get nine different answers.
The problem is often silos of information, the engineering folks used CAD, the construction contractors, pieces of paper, the records group, GIS, and the operations people ruggedized laptops and PDFs, for example. The information flow between these groups is more often than not usually includes paper. This leads to lots of redundant data, as Gartner found, and very inefficient paper-based, information flows. Utilities have been able to stumble along with these processes that date back to Thomas Edison, but I thinkforesee that the smart grid is going to force a change. In the smart gird age, we can no longer afford to have utility operations staff spending hours looking for equipment in the dark or in the snow because the information in the records database is out-of-date or and inaccurate. The information flow from engineering to records has to be seamless, electronic, and intelligent. A good measure for any utility to assess the reliability of their records is the length of itstheir as-built backlog. If it is’s measured in days, they are doing well, but if it is months or years, which is more likely, I would strongly recommend that they need to convene a cross-disciplinary team to look at how information is flowing between the different groups in the organization. In the long run this willlead to improved their productivity, most directly of their records and operations folks, and it will better prepare them for the smart grid.
V1M: What are your thoughts about CAD and GIS integration at the present time?
GZ: To me this is not a technical issue, but is the result of not understanding the information flow between different groups in the organization. With a model-based design approach, the objective is not just to produce a piece of paper, but to produce an intelligent, digital model that can be re-used by other groups in the organization. If you look at as-builts, as an example, in many utilities you’ll find that the records folks re-digitize the information from paper construction drawings. If you look at optimizing the entire information flow, this type of error-prone, wasted effort can be avoided. Autodesk has introduced the Feature Data Objects (FDO) API to enable drafters to load their design drawings directly into a GIS database. Many people also find that Safe Software’s FME helps with this process as well.
V1M: What about spatial analytics, I’ve noticed that some of the Autodesk work not only involves power generation, but also energy assessment, monitoring and incorporating that into design tools.
GZ: Because of the explosion in intelligent electronic devices and communications networks in transmission, substations and distribution networks, analytics is generating a lot of interest in utilities. Because model-based design creates intelligent models of network facilities such as substations, and utilities are deploying more sensors to monitor everything from temperature, voltage, phase, moisture, and so on, there are more possibilities for including analytics.
There are now tools that tightly link analytics and design together and are designed to allow simulation of different aspects of utility networks. Autodesk has introduced applications for analyzing the energy, water and emissions footprints of buildings from building information models (BIM) models in the cloud and simulating storm and sanitary wastewater networks, as two examples. These are not yet real-time, but with cloud computing, I expect that this type of analysis and simulation will be near real-time in the not too distant future.
V1M: Earlier you mentioned redundancy in the grid. Can you explain that a bit further?
GZ: Unlike the internet and European power grids, North American grids generally do not have a lot of
redundancy in them, which means that when there is a disturbance, there are fewer options for reconfiguring the network to isolate the problem and restore power to the maximum number of consumers. An interesting statistic from the EIA is that if 4% of U.S. substations were to fail, 60% of the U.S. would be without power. The last figures I have seen for U.S. power grid reliability is 99.96 % reliable, which means that outages still cost the economy about a $100 billion per year. In Germany the total number of minutes that the average consumer is without power is about 14.63 minutes annually, reflecting a very high level of reliability. But North American utilities are developing self-healing or active networks with more redundancy and the built-in intelligence to automatically reconfigure themselves.
Geoff Zeiss has more than 20 years experience in the geospatial software industry and 15 years experience developing enterprise geospatial solutions for the utilities, communications, and public works industries. His particular interests include streamlining the infrastructure management workflow, open source geospatial, the shrinking workforce and Web 2.0, and converged BIM/CAD/GIS/3D visualization solutions. Geoff came to Autodesk from MCI VISION* Solutions where he was Director of Product Development. VISION* Solutions is credited with pioneering RDBMS-based spatial data management, CAD/GIS integration, and long transactions (data versioning) in the utility, communications, and public works industries. Geoff is a frequent speaker at geospatial events around the world including Where 2.0, GITA (US, Australia, Japan), GeoBrazil, GIS in the Rockies, World Map Forum, India Geospatial Forum, Location Intelligence, and MapAsia and received Speaker Excellence Awards at GITA in 2007 – 2009.