Thursday, May 3, 2012

Get Smart: Grid Definitions, Affordability and Cutting Demos

Stop. Go get a cup of coffee and then get comfortable. This one is a bit of a ride. Part rant and part observation, it is, as Andy B would say, an overlong review of the most recent conference on smart microgrids in development and demonstration by DOD. Comfy? Good.

I attended the TTC sponsored Military Smart Grids & Microgrids Conference in Arlington, VA. The goal of the meeting was to ” bring together the key planners and technical experts who are leading the way in developing military smart and microgrid systems”. Mission accomplished. Lots of fascinating presentations on the engineering, cyber security, care and feeding of a smart microgrid. What is a smart microgrid you might ask? TCC describes it a “localized groupings of power generation, storage and load management units”, but, please feel free to continue to ask.

Like energy security, DOD has been unable to come up with a single definition for the microgrid or smart microgrid. The benefit is that EVERYONE in industry can claim to have one. The two days were filled with interesting discussions of the various demonstrations being done throughout DOD. There is the Energy Test Bed Demonstration Projects being done by the Strategic Environmental Research and Development Program, the SPIDERS Joint Concept Technology Demonstration, the MYRTE Demonstration for large scale PV and hydrogen and the Microgrid Demonstration at Idaho National Laboratory. Since the conference began on May Day, a day best known for massive demonstrations, all these were probably appropriate.

Neil Holloran from OSD’s Mission Assurance Division at Dahlgren laid out the threat to the grid in an excellent, unclassified presentation with great detail, but you get the sense that people have become inured to the threat. It is like smokers who are no longer appalled by pictures of cancer riddled organs. People change for one of two reasons; overwhelming threat or overwhelming opportunity. Otherwise they maintain the status quo. I hope we do not have to wait until the threat manifests. The opportunities to lower cost and use our energy more intelligently ought to be enough.

One presentation by the Program Manager, Hybrid Intelligent Power Program, (HI Power) not only grabbed my attention; it got my Irish up. This is a program that came in to being because an Air Force Captain, while working in an Army program, tried to help a Marine two star.

In 2006, CPT Brian Smith, USAF, was working for the Army's Rapid Equipping Force (REF). The REF was started by a mad scientist named Dr, COL Bruce Jette (my friend and classmate). The REF was charged with the responsible for finding technology solutions to commanders' immediate battlefield needs. The REF had received an unusual, urgent operational need statement from the USMC in the Anbar Province in western Iraq. The Marines were asking for a hybrid electric power station to reduce their fuel use because transporting fuel for standard generators exposed their Marines to fire. CPT Smith took on the mission, was given a small amount of money and developed the Hybrid Electric Power Station in a little over a year. The first prototype, quickly done and on the cheap, did not pass muster, but did provide valuable insight. So much so, that the Director of Defense Research and Engineering carved out $30M of his own budget to help the Army in 2008.

By that time, CPT Smith’s efforts had spawned the Power Surety Task Force and many other energy efforts. The Army, specifically, Research, Development, and Engineer Command, saw real money and determined that the money should go to someone how could “really” do something with it. So, instead of the REF getting the funds to continue the effort to answer the request, RDECOM swept up the windfall and started the HI Power program. Four years later, they have produced one 350Kw demonstration microgrid, three architectures and a jobs program that stretches out to 2016.

I will admit that I am a bit cranky because, at the time, I was working for CPT Smith (and sometimes feel I still am!) and thought that the PSTF would have made better use of the funds to meet the operational need. That need is still unmet. It wasn't until I heard the PM for HI Power say that they were waiting on the next phase of funding that my outrage as a tax payer was invoked. I hope someone from DDRE is getting audit reports on how their $30M is being spent. I look forward to the next briefing on HI Power.

One of the final brief of the day was from a young engineer from the Eaton Corporation who had the audacity to ask why DOD was still doing one-off projects and demonstrations for microgrids. She laid out all the Eaton components that one could buy, right off the shelf, to assemble a microgrid. The engineer did allow that they were still looking for affordable renewable generation, affordable storage and cyber security. Note that the question is not one of technology; it is economics and definitions.

When I pressed her about what affordability meant, the response was a bit vague, but I assume it meant that electricity must be produced from the microgrid competitively with the commercial grid. That means at the avoided costs the utilities, munis and coops have to pay in accordance with the Public Utility Regulatory Policy Act of 1978. More on that in the next post when I pull out my self-awarded JD/EE degree and examine the various statues and Titles that make the Army think they are The All Being, Master of Time, Space and Dimension and makes the Navy think they must compete a contract that has already been awarded!

The definition of cyber security may be the more problematic issue. As my Combat Engineer friends tell me, "If you can build a defense so strong that no one can get in, you can’t get out". The National Institute of Standards and Technology (NIST) is working on this with standards, definitions and more committee than at which you could shake a stick. Dr. Hefner, the assistant to the National Coordinator of Smart Grid Interoperability, NIST, laid out the Byzantine array of committees and bodies responsibilities for establishing these standards. Interestingly, his slides looked almost the same as they did last year; not an encouraging sign.

The bottom line (and if you made it this far, bless you) is that industry is saying, “Enough demonstrations; Build something!”. Unfortunately, DOD has R&D dollars, but the color of money necessary to proliferate smart grid technology in infrastructure projects is spoken for for the next ten years. Once NIST figures out what cyber security means, once DOD figures out what they can and cannot pay for electricity and once the threat to, and opportunity for, our National grid(s) is truly understood we might finally get smart. Dan Nolan


nvh said...

Dan, lunch packed! Another informative commentary, strikingly on point and thanks for reiterating my soon to be mantra for action "overwhelming threat or overwhelming opportunity". Appreciate the honorable mention and looking forward to the next discussion on the PURPA act and how it plays in business case analysis, a critical next step for DoD action in this Energy Security Arena

Joe W. said...

Hooah, Sir. "once DOD figures out what they can and cannot pay for electricity..." This is the key that has got the development community returning to bearishness on DOD.

Strike 1 - NDAA 11 authorizes a "premium" for energy security, but doesn't define the premium in c/kWh nor in percentage of deviation from market.

Strike 2 - DOD wants (or seems to want) the price premium to include cost of securing - on a hardened microgrid - supply, and storing energy for intermittent technologies that are being sought/deployed at scale.

Strike 3 - As of today, DOD wants to hold the RECs.

Such a deal, if financeable, would require a huge rate. Developers - and the DOD - have to be concerned about the political risk of signing long-term PPAs at those dollars.

Great observations. I think you are right in perceiving a weariness with technology demos and test bed projects. Technology can answer the mail. What we need is policy/contracting innovation to match.

Bogdan Tomoiaga said...

Interesting indeed. What about a Pareto based approach? ... like in this paper: