Software – the new »hard factor« in smart grids?
My colleague Stefan Ferber recently argued that software is currently the greenest raw material available – and has the power to move us to a greener economy. In particular for sectors that are hardware and infrastructure intensive such as electric utilities, latest software developments can bring significant savings potential. One of our U.S. customers, Green Charge Networks (GCN), a thought leader for U.S. energy software and storage solutions, argues that “utilities can save between three and ten times the cost using software versus infrastructure upgrades”. A strong statement.
Vic Shao, Executive Vice President and CTO of GCN, says: “The U.S. electric transmission and distribution grids cannot scale up fast enough to accommodate the accelerated pace of electrical consumption patterns caused by the growing population, increased per capita energy usage, growing commercial demand and so on.” He also argues that massive grid updates are needed to provide reliable service now and in the future, but these upgrades are costly and disruptive. That is why GCN is convinced that the implementation of systems that avoid infrastructure investments while maximizing current assets, is a much more efficient way to meet the growing energy demand.
How did they find out? GCN talked to its utility and commercial clients. Here are some key results of their smart grid research:
According to a 2008 Edison Foundation study, electric utilities in the U.S. will need to spend approximately $582 billion between 2010 and 2030 to strengthen the country’s distribution systems.
The majority of the time, the demand on the grid tends to be well below its maximum system rating. Only a few days out of the year, conditions are such that the grid struggles to keep up with demand – typically during the summer. Investing in hardware to ensure network reliability for this handful of days is therefore in many cases expensive and unproductive.
In a September 2010 report, the Edison Foundation estimated that by year 2020, there will be 65 million smart meters deployed — representing 50 percent of U.S. households. This rich dataset holds tremendous promise of providing utilities real-time snapshot of the electric grid – and provides a playground for new software solutions able to handle and leverage Big Data.
Real-life project: With an international car rental project partner, GCN worked on a software solution for renting electric vehicles (EVs) at LaGuardia airport. Due to the fast turnaround needed at rental facilities, the car rental company needed to install more than 20 EV chargers, requiring a number of grid upgrades as these are high-powered electrical devices. Going the traditional infrastructure upgrade route, the service equipment, construction cost and the associated operational interruption would cost more than $0.5 million in last mile electrical upgrades, which was a deal breaker for this EV project. Using a software-based solution was one-third of the hardware cost and the deal winner.
If you are interested in more of GCN’s findings and get a snapshot of some U.S. smart grid challenges, their new whitepaper including real-life cases of a car rental company and convenience stores is a really good read! Access the whitepaper here. Do you think that GCN’s thesis is true for other countries, too?