By Bob Fesmire, Anne-Marie Borbely-Bartis and Vikram Janardhan
Much has been written about the opportunities distributed generation (DG) technologies offer the energy marketplace, and how proliferation of these “backyard gensets” will not only alleviate the supply and demand crunch in many regions, but also empower customers by enabling the creation of a true demand-side exchange. A portfolio of interconnected DG devices can, if harnessed properly, serve to offset wholesale supply prices by bidding the aggregated MW’s into the central market exchange (ISO/RTO), while simultaneously relieving locational constraints on the transmission system.
Solar arrays, fuel cells, microturbines, reciprocating engines and wind turbines all show great promise in an open marketplace. DG offers inherent advantages such as the ability to avoid local power disruption, reduce demand on the local grid, and serve as a more energy-efficient and lower emissions alternative to central power generation. But rather than rehash the technologies behind (or inside) these products and the R&D efforts under way to ready them for widespread commercialization, this article will instead focus on the infrastructure needed to realize the full value these technologies represent.
A Few Words about Words
The term “infrastructure” in the energy industry usually conjures up images of transmission lines and distribution systems-the physical “plumbing” that brings power from a central generation plant to the multitude of end users it serves. As applied to distributed generation in this article, however, this definition will be expanded to encompass all of the hardware, software, processes and protocols needed to facilitate true end-to-end functioning of a localized “microgrid.” Such microgrids may host a variety of onsite generators or energy storage devices optimized for local load requirements but still interconnected to the surrounding distribution system. This definition of DG infrastructure, then, includes all the technical, business, IT and regulatory aspects associated with the interconnection of a large number of DG devices to the parent grid.
The components of this more holistic view of infrastructure can be broken into two main categories: those relating to the physical interconnection (switchgear equipment, energy meters, copper cable, protective devices, etc.) and those relating to the logical interconnection (data collection gateways, remote device monitoring systems, business applications to track the flow of money, etc.) The physical infrastructure facilitates the smooth flow of electrons between the DG device and the surrounding grid while the logical infrastructure handles the associated information flow between the device owner and the market.
It is important to note that these two classes are equally important. For DG technologies to realize their market potential in the greater energy ecosystem, both the physical and logical components of the DG infrastructure must be developed, and the barriers that prevent the free flow of electrons and data alike must be broken down.
The vast majority of DG units installed in the United States today are intended for backup generation in the event of a grid failure. As such, they are not packaged with the necessary switchgear and other safety equipment required to enable two-way electricity flow with the parent grid. Similarly, most generators today typically do not come equipped with synchronizing devices to match the AC power coming from the device with the standard 60 Hz on the grid.
In addition to retrofitting the generator with hardware, the DG owner also must install the underground or overhead lines that connect the device to the grid. However, because the cable interconnection cost is not covered in the utility’s rate base, the DG owner must bear the full cost of connecting his device to the grid.
At present, there is no way for an energy customer with even substantial technical knowledge to interconnect a DG device in a “plug and play” manner. He is left to navigate interconnection rules that were never intended to address small generators, and to absorb the myriad costs associated with compliance to those rules.
If an energy customer buys a DG unit, installs it and outfits it with all the requisite ancillary equipment, he still must control its operation and make decisions about its use. And if he intends to sell power back to the grid, his information needs increase dramatically. Additionally, the market entities that the DG owner interacts with to sell his unit’s output also require a variety of IT capabilities to facilitate the process. The communication and control technologies needed to support the business decisions and transactions associated with DG interconnection-as well as read the DG unit’s “vital signs”-are what make up the logical components of the DG infrastructure.
These technologies can be divided further into those that support a DG owner’s business decisions and the financial processes that define his participation in energy markets, and those that perform functions associated with monitoring and control of the DG device and related physical components. The systems associated with the latter category must:
“- support real-time monitoring and control of the DG device itself,
“- diagnose faulty unit operation,
“- determine optimal schedule for regular unit maintenance, and
“- report on generation trip events or short circuit events.
The financial applications the DG owner needs, must:
“- support decisions about when to run the unit (vs. demand-side or load management to reduce energy costs),
“- value the DG unit’s output in terms of market clearing prices, and
“- facilitate monetary transactions between the owner and market entities, up to the central exchange (ISO or RTO).
Thus, energy customers face a bewildering array of choices and requirements when deciding whether to connect their device to the electric distribution grid:
“- A DG unit suited to the specific needs of the given customer,
“- A DG installer familiar with all required safety devices,
“- The safety components themselves,
“- An interconnection expert familiar with the local utility’s rules,
“- A way to market surplus power to the ISO, and/or,
“- A way to benefit from peak shaving (e.g., through a load curtailment program),”- A financial settlement agent,
“- Operation and maintenance of the unit, and
Software to value the unit’s output and support run/don’t run decisions.
This list is by no means comprehensive, but gives an idea of just what an energy customer is up against when considering interconnection of a DG device. To reduce the size and complexity of the problem, a number of barriers to widespread DG implementation must be broken down. These include regulatory as well as market barriers, a complete discussion of which could fill the pages of this magazine for months. In lieu of attempting to address all these concerns, we will focus this article on one area where industry changes will simplify DG interconnection and encourage the proliferation of DG ownership.
Communications: The IT Layer
As the emerging energy IT industry now stands, DG devices-be they fuel cells, microturbines, diesel generators or photovoltaic panels-produce a stream of operational data in addition to electric current. Most units in place today are not outfitted with the IT systems needed to capture this information, which is another obstacle to DG’s acceptance. For the units that do have such systems, the operational data is captured by sensors on the device itself and collected by a gateway that in turn makes the information available to business applications. These applications then are used to transact the business of selling DG power back to the grid, and to support operational decisions for the generator itself.
There are various “layers” within the DG infrastructure: generation units, gateway devices and business applications (see Figure). The data exchange between these is currently governed by a patchwork of standards that in itself becomes another barrier to the free flow of information, potentially numbing the market penetration of DG technologies. Data collected by one manufacturer’s gateway, for example, cannot be imported to another vendor’s software. But what are DG-related vendors to do?
What we propose is the adoption of open standards in DG communications technology. To take a historical example, the supervisory control and data acquisition (SCADA) businesses charged with managing the nation’s high voltage transmission systems have run on proprietary databases and transferred data in proprietary protocols since the early ’70s. Now they are redesigning their systems to run on Internet-based protocols and commercially available relational databases. What changed?
Open Standards: DG’s Silver Bullet
In the IT community, much has been written about the efficacy of “open source” or “open standards,” the idea of non-proprietary source code as the basis for commercial software products. The prevailing wisdom in the open source world states that software developed by many programmers from a variety of perspectives is better than that developed by a few programmers from one perspective. The concept of open standards has a few key advantages that would have a significant impact on fostering growth in the DG arena:
Reduced Cost. Products developed on open standards incur lower development costs since much of the base code has already been written. Even the largest software companies could not hope to assemble the amount of programming expertise that went into the development of Linux, for example. Competition between vendors, then, is focused on value-added features and capabilities, and pricing is exorcised of overhead. In addition, open source products frequently offer flexible licensing agreements by virtue of their non-proprietary nature.
Better Reliability. The open source development process offers a number of advantages when it comes to finished product quality. Massive independent peer review for both code and design, the implementation of “best practice” development models, and greater pride of authorship all contribute to a level of reliability that proprietary products are hard-pressed to match. The success of Linux is a prime example of how an open source alternative can compete with proprietary systems on quality-and win.
Vendor Independence. A major point of concern for DG owners today is being tied to a particular vendor because proprietary protocols preclude the use of competing company’s products, even if those products are a better fit for the specific application. In an open standard environment, the customer is truly king. A product from one vendor can exchange information with that of another seamlessly. This allows the DG customer to choose the best IT components for his specific needs without having to make a commitment to a specific vendor’s platform.
Kilowatt readings, voltage and current values are the DNA of the energy ecosystem. Remote access to that data is essential to the evolution and eventual proliferation of DG. Open standards present compelling advantages for energy customers-and vendors alike-that will foster the free flow of information and encourage wider DG implementation.
Who’s Your GSP?
The DG customer needs not just one or two, but many hardware and software components to make the interconnection puzzle fit. He or she might try to find a consultant, or energy service provider to coordinate all of these pieces, or act as a DG “general contractor.” But few, if any, companies are both prepared and willing to navigate today’s jungle of proprietary systems.
Another potential benefit of open standards is that it would promote the emergence of “grid service providers” (GSPs) analogous to Internet service providers or “ISPs.” A GSP could combine all the physical and logical infrastructure components needed for DG interconnection into a customer-friendly package, and offer a one-stop solution for the potential DG owner. With non-proprietary standards for data exchange between the various DG layers, the GSP could offer a variety of solutions utilizing the best products for each function.
With a GSP’s help, the DG owner’s view of interconnection is radically altered. Instead of facing a phalanx of confusing decisions about hardware, software and operational issues, the energy customer essentially now faces only two: choosing a DG device and selecting a GSP to get it up and running.
“Open Standards Now!” (A modest call for action)
Distributed generation shows enormous potential, but the barriers to DG acceptance must be addressed. Within the sphere of DG technology, the current collection of proprietary systems presents one such barrier. Open standards offer a way to break down the walls between proprietary technologies, encourage better product development and foster DG proliferation.
There are already a number of different protocols within the DG infrastructure-formats for how various devices “talk” to one another. It is important to point out that we are not recommending the creation of another protocol, but rather a standard format for what the devices “say” to one another. So, no matter what method is used for communicating information, the kW reading, for example, will always appear in the same location in the file.
The development of standards for data exchange between the DG device and the market is paramount to DG’s success. To that end, we submit that the energy industry should create a standards body-along the lines of GISB or ETSG-to facilitate the development of open standards in the DG realm. Government agencies at all levels can help with funding, but also by being vocal advocates for open standards and their implications for DG. Vendors, too, can aid this process by embracing open standards and actively participating in their development. Open standards, of course, will not solve all the issues facing DG. The regulatory environment must be changed, and a variety of new products and services must be created to serve the DG owner. However, by taking a proactive approach, the industry can lay an important foundation for DG technologies and pave the way for their widespread implementation.
Bob Fesmire (email@example.com) is a marketing manager in ABB’s Utilities division. He writes periodically on information technology, distributed generation and other energy industry issues.
Anne-Marie Borbely-Bartis is currently working in Washington, D.C., as adviser to the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy. Her most recent book, “Distributed Generation: Power Paradigm for the New Millenium,” was published by CRC Press, 2001.
Vikram Janardhan was a Group Marketing Manager in ABB’s Utilities division at the time of writing.