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Outsmarting the Grid

A trio of eager tech startups confronts an industry intent on preserving the status quo.

Fortnightly Magazine - February 2010

In light of all the excitement created by smart-grid regulatory initiatives and stimulus funding, three clever tech startups have come forward in the last several months with proposals for novel grid projects.

First, in California, the independent start-up, Western Grid Development (WGD), proposes to install energy storage devices ranging in size from 10 to 50 MW, using large-scale sodium-sulfur (NaS) batteries manufactured by the Tokyo Electric subdivision, NGK, at various discrete and strategic locations in PG&E’s service territory where the California ISO (CAISO) has identified reliability problems.

These storage devices, under WGD’s operational control, would remedy voltage drops, thermal overloads, plus other problems that could threaten line trips and loss of retail load, and so avoid conventional transmission line expansions that cost more and take longer to complete.

Second, in PJM, a company called Primary Power, a joint venture of Trans-Elect and the engineering firm Tangibl, backed by the private equity investor United States Power Fund III (controlled by EIF Management), proposes to deploy a total of four advanced, 500-MVAR static VAR compensators (SVC) at three separate locations within the PJM footprint. Though widely spaced ( i.e., tens of miles apart), the SVCs nevertheless would operate as a single, integrated $200 million network (dubbed the “Grid Plus” system) to provide reactive power to boost overall physical system efficiency across wide areas of the PJM grid, producing (as claimed) $45 million to $485 million in energy savings per year.

Third, in Clovis, N.M., in perhaps the most remote corner of the Eastern Interconnection (a scant mile across the border from the sparsely populated Texas Panhandle), comes the startup firm Tres Amigas ( www.tresamigasllc.com).

Owned and led by PJM’s ex-chief Phillip G. Harris, CAISO’s former head of market and grid operations, Ziad Alaywan (also CEO of the engineering firm ZGlobal), American Superconductor, and finally, the private equity fund Alt Energy, Tres Amigas has proposed perhaps the most audacious utility industry project seen in the United States since the nuclear heyday of the 1960s and ’70s, or maybe even the 1930s TVA. The project, with an initial investment cost of approximately $1 billion, would for the first time allow power producers to move market-relevant quantities of electric power and energy between and among the nation’s three asynchronous transmission grids: ERCOT and the Eastern and Western Interconnections. Tres Amigas would allow power producers and market participants to schedule “massive” amounts of power for transmission delivery anywhere in the United States.

To do this, Tres Amigas will create an underground high-voltage DC transmission facility on 22.5 square miles of land leased from the State of New Mexico, making up a triangular ring of about two miles of three discrete superconducting cable segments, multiple AC/DC voltage source converters (VSC), each rated at 750 MW for converting AC power to DC and back again. Each single superconducting cable segment would measure three feet in diameter and carry as much

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