Grid Talk - Watt's New in Power | Edition #1

Let me start of by saying a big thank you to all the folks that have signed up to my monthly newsletter (we just crossed 500 folks). I am hoping that folks find this informative as well as engaging at the same time. Since this is my first newsletter, let me layout the format for this one and the rest to follow. I will be addressing the latest topic of interest that will be broken down in more detail, then I'll share a few news stories at the bottom that will be related to tech as well as the power grid and finally close out the newsletter with a few fun facts/learnings of mine personally that hopefully helps you all in your personal and professional journeys.

To DER or not to DER, that's the question!

To the uninitiated, this is a play on words on the famous line from the 16th/17th century play by Shakespeare, Hamlet where the protagonist, Prince Hamlet, delivers this line as part of his soliloquy where he delves into the depths of existential inquiry and the fear of the unknown. I know this sounds a bit too morose for this conversation here but let me walk you through the analogy and why this made sense to me as the title of the first newsletter.

Similar to Hamlet, We as part of the electric utility industry, and this includes all stakeholders, whether it is the utilities themselves, the software and hardware vendors (this includes not just field equipment but all electronic devices including electric car manufacturers, etc.) and folks like myself who are supporting our utility clients are at a similar crossroads where we need to pivot from our current way of operating our grid to the new model where the electric utility is not the only source of energy for home, businesses and industry alike. In this new world, there is a proliferation of renewable energy sources that are being deployed across the distribution landscape and these consumers of power are now becoming "prosumers". The utility will now need to implement technologies such as DERMS, DRMS and transition to a DSO model of operating from the traditional GTD model. To read more about the DSO model, check out my previous blog on Grid Transformation official company blog -> here.

Now, you might be asking me, "Why is this such an existential issue and why should I be worried about this today? I am sure this is something that is going to happen in a future far, far, away." To answer this question, let's jump into a couple of areas where we can see an obvious shift in how all the various types of customers (residential, commercial/industrial) are spending their money, which in turn is impacting the how we need to operate the grid of the future.

In the first example, if we look at an average home, there is a concerted push by governments globally and by all consumer brands to "electrify everything", whether it is electric cars (Chart below shows increase in EV sales across the globe over the past 5 years), smart thermostats, electric water heaters, electric heat pump systems, battery solutions like the Tesla Powerwall and not to mention the number personal electronic devices (iPhone, iPad, vision pro, etc.) that need to be charged every single day. With the addition of EVs (there are currently ~2.7 million light-duty electric vehicles in the US and 26 million globally) and home battery solutions, all these devices are all part of what we call distributed energy resources (DERs) along with the traditional solar panels/farms and wind farms that have been deployed in large numbers across the globe over the last couple of decades. These DERs are not only being used to power homes but help the utility during peak load hours (summer and winter peaks) to shave off the consumption by switching to their own sources of generation OR turn of the biggest loads in their homes like ACs/heat pumps, this is more commonly known as demand response (example found -> here). But now, with private players deploying large number of DERs (Solar panels/Battery solutions), these resources are getting aggregated by these suppliers to provide power back to the grid and participate in the markets where both the company that is aggregating and the end customer are getting compensated for providing power back to the grid. Couple of examples provided below -

• https://www.pv-magazine.com/2022/10/13/sunruns-residential-vpp-injects-1-8-gwh-into-grid-over-3-month-period/
• https://www.pgecurrents.com/articles/3486-25-000-pg-e-tesla-customers-invited-form-world-s-largest-distributed-battery-support-electric-grid-reliability
• https://www.tesla.com/support/energy/virtual-power-plant/tesla-electric

The second example is when we look at all the latest technology that has been developed and deployed (Enterprise Cloud, blockchain (coins and non-coins), and now most recently AI) in the last decade, all requiring large amounts of energy to run data centers that are essentially servers, upon servers racked up in Walmart-sized buildings that are cooled down to 64-80 degrees F (there are different ranges on the internet but they all are in the same range) and need to maintain a relative humidity of 50-70%. The energy consumption for data centers globally was about 240-340 TWh in 2022 (See image below of all the data centers spread across the globe, a total of 5631 as of 2023), which is about 1-1.3% of global electricity demand and this doesn't include the cryptocurrency mining, which is estimated to have consumed 110TWh in the same year as above which accounted for 0.4% of global electricity demand. Now, this might seem low but if we look at the growth over the last decade, there is an 340% increase in consumption in this timeframe and this will grow exponentially with the new AI chips and AI specific data centers that will be built across the globe in the next 5 to 10 years.

With the scale and size of just this one small sliver of the electricity demand has been understood. Similar to the residential customer, these data centers are more and more being run using renewable energy sources such as solar/wind farms that are owned and operated by data center owners and they have their own battery backup solutions deployed in case the power provided by the utility is interrupted for whatsoever reason. (See graphic below that shows the breakdown by renewable energy source for the big 4 tech companies' data centers). These customers are now playing a big role in keeping the lights on for everyone in major weather events, where the electric utility or the Independent system operator (ISO) are either asking these customers to cut down their consumption from the power grid or in some cases asking these customers to feed power back into the grid to support the needs of all customers during peak load hours in a given year. Some examples are provided below -

• https://www.texastribune.org/2024/01/03/texas-bitcoin-profit-electricity/
• https://www.power-grid.com/executive-insight/how-data-centers-facilitate-the-clean-energy-transition-and-help-grid-reliability-while-doing-it/#gref

These are just a couple of examples that I have called out above, but we are seeing this across the board for all major loads that are present in a residential customers' home and the same for all the various types of commercial and industrial loads that are adding their own DERs (Solar/Wind/Battery solutions) with the expectation that they can be fully integrated to the grid where there is a bi-directional relationship (i.e., prosumers) instead of a one-way relationship.

So, in conclusion, even though we are at a crossroad and the question at hand is existential, I would like to end on a positive note that the industry as a whole has woken up to this challenge and we all as stakeholders have taken upon ourselves to solve this very complex problem head on and we should see positive results of our actions in the upcoming years to come.

Top Stories from Grid & Tech

Here are some of the top stories from the world of tech and power grid that piqued my interest since the start of the year. This list is not exhaustive (I will keep this to a top 10 list in no particular order) nor exclusive. I am sure there are more stories out there that I missed out. Please feel free to add your top stories in the comments to this newsletter below!

1. https://www.itron.com/na/company/newsroom/2024/02/22/itron-and-ge-vernova-pioneer-unification-of-grid-edge - GE Vernova & Itron partnership announcement
2. https://openai.com/sora - OpenAI's text-to-video model that is only available to limited users at this point.
3. https://www.nerc.com/comm/RSTC_Reliability_Guidelines/NERC_Potential_Bulk_Power_System_Impact_of_Vehicle_Chargers_2024.pdf - white paper highlights the impact of electric vehicles on the power grid, emphasizing the need for cross-sector collaboration
4. https://www.utilitydive.com/news/integrate-renewables-grid-derms-grid-forming-inverter/704403/ - News article talking about DERMS, DSO and more (related to what was covered in today's news letter)
5. https://www.utilitydive.com/news/doe-rfp-solicitation-transmission-capacity-berkshire-national-grid-cross-tie-southline/706792/ - DOE launching transmission projects worth 1.2 billion projects
6. https://www.businesswire.com/news/home/20240201701375/en/EnergyHub-Helps-Ontario%E2%80%99s-IESO-Build-Canada%E2%80%99s-Largest-Residential-Virtual-Power-Plant-in-Just-Six-Months - IESO Built Canada’s Largest Residential Virtual Power Plant
7. https://www.theverge.com/24066646/ai-electricity-energy-watts-generative-consumption - AI electricity consumption (now and the future)
8. https://www.eia.gov/todayinenergy/detail.php?id=61364&src=email - Cryptocurrency mining electricity consumption
9. https://www.theglobeandmail.com/canada/article-ontario-pickering-nuclear-reactor/ - Ontario to refurbish Pickering nuclear power plant
10. https://www.dhirubhai.net/posts/microsoftforstartups_now-theres-a-siri-for-spreadsheets-ugcPost-7156707029250691072-eDc0?utm_source=share&utm_medium=member_desktop - Siri for spreadsheets & PowerPoints (https://www.igenius.ai/)
11. https://www.reuters.com/technology/space/us-achieves-first-moon-landing-half-century-with-private-spacecraft-2024-02-23/ - Special mention: US moon landing for the first time in 50 years (I lied, there is more then 10. :D)

"Make it so"

Folks who know the reference, feel free to comment below as to who says this catchphrase. Coming back to my personal learnings, 2024 so far has been all about focusing on overall health (physical, mental, and emotional health) and spending time with the kid (who has been sick pretty much 6 weeks in a row and multiple times staying home during the week in the process). So, here are my 3 fun facts for you all to enjoy as I wrap up this months newsletter

1. Walnuts are rich in omega-3 fatty acids and have long term benefits to keep your heart and brain in good health well into your old age. Add a few walnuts to your diet everyday if possible. - https://www.health.harvard.edu/blog/health-benefits-of-walnuts-2018081314526
2. Your body contains ~100 trillion bacterial cells in your gut which weigh anywhere from 2 - 5 pounds (1-2 Kgs) that play a vital role in keeping your mind and body in good shape! Who knew? - https://www.healthline.com/nutrition/gut-microbiome-and-health
3. Hippos, despite being massive size (~2 times the size of a standard SUV) and living mostly under water do NOT know how to swim! (This one is attributed to all the one-on-one time with the kid) - https://www.youtube.com/watch?v=X-YRJCSZRJU&t=6s

As a reminder to all my connections who are attending, I will be at DistribuTECH next week in Orlando! Swing by our booth at #621B or catch the Grid Transformation pitch at 11.45 AM on the 28th of February on Stage 1, #707. It has been a pleasure curating this content for all the subscribers. Please feel free to like, comment and share this content with your friends and connections on LinkedIn if you think this newsletter was worthwhile. As always, feel free to reach out to me here or via email [email protected].

GridTalk will be out with its' next newsletter in a months time. Till then, be safe and stay curious!