Looking to Efficiency to Build Energy Independence
In our current economy, one of the biggest challenges for American lawmakers—at both the state and federal levels—is to do what they can to minimize the impact and shorten the duration of the recession.
A cornerstone of our return to prosperity should be a program designed to establish energy independence, with a focus on improving the efficiency of our electrical grid, reducing energy losses, and speeding the adoption of renewable energy sources.
Grid modernization is critical, but very expensive. A recent report from the Department of Energy’s Pacific Northwest National Laboratory (PNNL), estimated that we’ll need $450 billion in grid infrastructure investment between now and 2020 just to keep up with anticipated U.S. electric demand.
A seldom-reported fact is that up to 67 percent of our electricity we generate from fossil fuels is wasted from the point where it is generated and enters the grid to the point where it is consumed by the end-user, according to the Department of Energy. That means if we can save a kilowatt-hour (kWh) on the consumption side by making the grid more efficient, we don’t have to generate 3 kWhs! This equation has potentially dramatic effects on greenhouse gas emissions. We believe that making the grid “smarter,” with digital tools that monitor and manage loads while balancing generation sources, can save energy, lower electricity bills, and substantially reduce greenhouse gas emissions.
Recent studies support this view. Department of Energy studies show that if we can flatten the electric grid’s demand peaks, we can avoid spending $50 billion on new generation. Bringing smart technology to the grid can also generate substantial economic benefits, including the creation of tens of thousands of green-collar jobs.
There are hundreds of companies working to expand generation from wind, solar, and other renewable sources. These are a critical component in our quest for energy independence. However, there are relatively few companies working on what we see as the low hanging fruit: improving the energy efficiency of our existing grid. MicroPlanet is one of the companies providing advanced grid solutions. [The author is president and CEO of MicroPlanet—Eds.]
Our technology dynamically manages the voltage received from electric utilities to optimum levels at the point of consumption. In areas where incoming voltage is high, this allows customers to reduce energy consumption and lower their electric bills without changing behavior patterns. In areas where voltage is low, MicroPlanet’s products can raise it, enabling utilities to improve service quality for their customers quickly and cost effectively. In areas where there is a substantial amount of renewable generation, these same products will dynamically adjust the voltage up or down, to keep it at a stable, optimal setting.
This is a crucial—but often overlooked—part of the smart grid technology. Solutions that help us manage voltage efficiently can reduce consumption and enhance power quality. The optimal voltage for most businesses and residences in the U.S. is 114 volts; if it is higher, energy is wasted for most types of electrical loads. Lowering and stabilizing voltage also allows electrical devices to run cooler and last longer.
Unfortunately, the average American business and home runs at 120+ volts. Seventy percent of the utility industry’s customers receive more electricity voltage than they really need and can effectively utilize. In over 600 installations around the world over the last 10 years, we have seen that stabilizing and lowering voltage reduces energy consumption from 5 to 12 percent, while improving power quality.
Most utility grids were designed in an era of low energy costs. The primary directive from their regulatory boards was to make sure that the power was available 24/7. By design, utilities often distribute electricity from their substations at the highest allowable voltage to ensure that those at the end of the line get at least 114 volts.
Here’s an example of this problem. Take two businesses that need the same amount of electricity; the only difference is that one is near the sub-station and the other is further away. The company that’s near the sub-station gets 125 volts and pays $4,500 a month for its electricity, and the one that’s further away gets 114 volts and pays $4,000 a month for the same electrical load. The same is true for homeowners. If your house has voltage on the high side of the scale, you consume more energy and have a higher utility bill that another house that has lower voltage. As grids are modernized, this kind of inefficiency will all but disappear. We now have the ability to “fine tune” voltage at each electrical meter.
Strengthening the electric grid, and making it as efficient as possible, is essential for another reason, too. We are moving into an era when we use less fossil fuel and more renewable energy sources like solar and wind. These new sources do not always deliver power consistently. Their generation is dependent on changing weather conditions. To effectively utilize these renewable sources, we need a more dynamic grid that responds to changing loads and generation—while keeping the voltage stable.
We have a great opportunity now to reduce our dependence on foreign oil and reduce greenhouse gas emissions, all by beginning to modernize the electrical grid. We can start making real progress on updating our country’s electric grid with smart devices. And, if we do this right, we can help accomplish crucial national goals: long-term energy independence and sustained economic prosperity.