Smart Internet+Smart-Grid: making money and reducing carbon footprint

Two technology/commercial trends are coming our way in Australia:

• the Internet everywhere (3G wireless or NBN), means "smart controllers" will be cheap, simple and everywhere. They will be able to trivially hook into 3-7 day local forecasts, especially useful for air-conditioning units.
• "Smart Power" metering will start to charge power at different prices during the day, rather than the disconnected traditional pricing of "a single price whenever you use it".
  You can see real-time wholesale electricity prices on-line and a Pretty graph in 30-min periods.
  Yesterday (12/12/11), the 30-min price varied from $52/MWhr @ 4PM to $16/MWhr @ 2AM. In 5-min periods, the price ranged from $95 to $16.

There's a bit of background you may or may not know about Power Generators: they over-build capacity to meet any and all demands placed on them. There aren't just no incentives for Power Generators or their customers to reduce either aggregate or instantaneous demand, but the reverse: significant economic disincentives to reducing demand, and hence to lowered income and profit. This is a perverse economic outcome costing us a lot of money and burning carbon unnecessarily.

From "An EnergySmart Plan. Positioning Queensland for a Diversified Energy Future 2010 - 2050" [original dead link] (Nov 2010 report for Queensland Government):

Ergon and ENERGEX will each spend $6 billion (that is $12B combined) in capital expenditure over the next five years to cope with extraordinary consumption during a fraction of the year, rather than the average consumption over the course of the year.

To put this into perspective, ENERGEX has over $900M in assets that are only used for approximately 3.5 days per year. (Mark Paterson, ENERGEX, The SPRA Standard).

That's not good business, but how can a solution be converted into useful products that make a profit?


1. "Trigeneration" (being implemented in Sydney, and already very big in UK/Europe)
results in some Zero-carbon footprint services.

• Burn methane/natural-gas in "gas turbines" (really jet engines).
• they are very high efficiency, start quickly and are responsive to load, unlike big coal-fired units which take days to start and cannot easily adjust to extra demand.
• extra money is saved by locating at point-of-use.
  There are no "network" losses, avoiding very expensive network upgrades because of the separation of generator and load: the current cause of huge price rises in NSW over the last few years.
• Around 66% (yes more than half!) the energy released in burning coal/gas is wasted: just thrown away as heat into the local environment. "Tri-gen" captures a bunch of this in hot-water.
• The "Tri" in "Tri-gen" is
• electricity,
• heating and
• cooling.
• Hot water can be used to drive "chillers" in the same way that old Kero Fridges and modern caravan LPG fridges work.
• For cities, avoiding using grid-electricity to drive skyscraper air-conditioning is a massive win. The heating and air-conditioning is "carbon free" - created free from the gas turbine waste heat, with the power running lighting etc.

This is the sort of thing that could be retrofitted to high-end apartments, where the owners collectively have capital to invest, the willingness to "spend money to make money" and possibly a concern for the environment. There is no additional gas or electricity distribution network to be built: they will already have gas connected for hot-water heating.

There must be ways to down-scale this technology to suburban residential, [or small shopping centres who all need refrigeration, air-conditioning and power] In time, Governments might allow such power to be sold back to the grid by individuals. Right now, if current large generators owned and controlled the equipment, they could use it for highly profitable peak-load generation.

These systems could be built under "lease-back" arrangements. The property owners raise the money for the installation, then the asset is leased back to the power generation company under a standard commercial contract. The power generators get to save carbon offsets and can sell those on the open market, over time a useful revenue source.

This approach would be especially useful for regional country towns (Cairns, Mt Isa) that could locally source methane/natural gas. "Methane Digesters", running on agricultural waste are cheap and well known.

2. Large shopping centres/malls in hot climates save BIG slabs of money (both Capital and Operating costs) by making ice overnight, storing it in tanks, then using that ice to provide cooling, especially in the hottest part of the day (late afternoon). It saves money and energy in many ways:

• the ice-plant is maybe 25% capacity of the "chillers" normally needed. Much cheaper to build and service.
• the power to drive the ice-plant is bought at the cheapest rates possible, as against the guaranteed most expensive rate when you buy-when-you-use.
• the work required to make 1 tonne of ice is the least possible: being done at the coolest time of day, working against the "least resistance" of the air temperature.
• The ice making plant always works at optimum efficiency. It is run just long enough each day to make whatever is needed, then stops.
• Controlling large electric motors on heavy machinery, like the compressors in "chillers", is difficult and expensive. Mostly the are run like domestic refrigerators, in "stop-start" mode. This causes a lot of extra wear-and-tear on the mechanical parts as well as massive spikes in load: electric motors take a big whack of current to get them going. (more than 10 times operating current). This is why modern domestic split-systems are mostly "inverters" - the compressor can be adjusted to run continuously at a fraction of full-power.
• the plant to chill the air is simpler, smaller and cheaper because 2-5,000 times (by volume) less cold water is needed:
  A small pump brings very cold water from a tank through a "radiator" (heat-exchanger) that cools the air. To cool more/less just change the speed of the pump, versus starting/stopping the large compressors. Much simpler/easier/cheaper than running massive chillers in "make-when-you-use" mode.
• the tanks to store ice are cheap and robust. Easy to build extra storage (if you know you've got a heat-wave coming). When big enough, you don't even have to insulate them.
• One cubic meter of ice, around one tonne, stores approx. 3.5kWatt-hours of input energy, around three hours use of a small domestic unit. Not sure of "large plant" sizes, but I think 200-400 tonnes of ice in a day would be "large". Olympic swimming pools are 2,500 cubic meters in comparison
• plant breakdown under very high loads are more unlikely. If there isn't enough ice, the A/C air just gets a little warmer.

Can this be applied to suburban residential (houses or town-houses) - individually or in groups?
It certainly can be applied to high-end apartment complexes: saving a bunch of money, being more reliable and "being green".

There's a simple A/C technique used in large buildings that I've never seen in houses.

• evaporative cooling for the "chiller". (Those water cooling towers you see).
  In normally hot-dry areas (inland) this is a really big win for domestic A/C plant.
  In coastal areas (Cairns, Brisbane), it provides some benefit, even on humid days.
  BUT, would really only become economic/cheap when serving multiple dwellings.

3. Instead of building large, expensive generators out in the country-side that get used 3-4 days a year, store power in batteries (buy overnight, sell at peak, for approx 3:1 difference).

If such a simple/obvious idea was "economic", then the big generators would already be doing it, aside from the perverse economic incentives to build and sell more power...

• such a system, like Mobile Phone networks, only works when run by one big "provider", but ideally you'd have thousands of small-scale units (homes etc) embedded in the network, which by definition is all those householders who've put up Solar Panels.
• They already done 80% of the investment and pre-qualified themselves as having an interest in "thinking differently" and shown they have the necessary financial resources.
• Problem:
  currently domestic solar power installations selling electricity back to the grid are banned from having batteries.
• The large generators could lobby for this additional function for individuals, but as long as they own and control in-network power storage, there should be no regulatory problems.
  It's a really good investment compared to $900M sitting idle for 360 days/year.
• The CSIRO have developed a hybrid "ultra battery", suitable for many applications and already in testing for power storage.
  Some questions and options:
• How to make money in small scale, when the big players are owning/running it all?
• Scouting for sites, signing them up and organising installation. [cf. people who buy rights to "air space" for mobile phone antennas]
• Householders already with Solar PV could add power-storage under a "lease-back" deal. But who gets to keep the gear at the end? The householder or lessee (power company)?
• Installation/upgrade is:
  controller/power-meter, charger, batteries.
• Does a reseller/installer need to become an Electricity Provider to do this?
• Who is responsible for installation and site maintenance and on-going replacements? (the batteries especially).

  The idea of addressing the perverse economic incentives of Power Generators isn't new.
Amory Lovins, author and co-creator of the Rocky Mountain Institute, created the "negawatt" concept in 1989:

increase efficient power use by consumers and claim-back the avoided consumption as power generated.

The "mere technical difficulty" is measuring (and accounting for) product/service not used. [Update: April-2012. Potential Economic Solutions]

The underlying economic drivers are simple:

• There is no nett difference between a watt avoided and a watt generated, there is exactly the same nett economic benefit derived from the consumption of the derived service.
• the capital cost of avoiding generating a watt is many times lower than building plant to generate a watt.
• the on-going operational costs of an avoided-watt are precisely zero, and it is available "24x7", unlike some popular renewal resources (solar PV, wind, waves).
• For completeness, additional costs, like the replacement of lead-acid batteries after 5-7 years and the recycling/recovery of the lead and sulphuric acid, need to be borne.

There can be hidden costs like additional maintenance, but often new technologies, such as compact fluorescent bulbs, reduce maintenance/replacement costs by extending component useful life by 2-10 times.