New technologies are opening the utility domain to innovation and competition. Traditional utilities will shrink as outsourcing providers and competitors grow. Survival in this new market requires...
Middle Mile Moxie
As chief architect of Xcel Energy’s Smart Grid City project in Boulder, Colo., Ray Gogel served on the front lines in the industry’s technology revolution.
With the Smart Grid City project, Xcel proposes to create America’s first fully functional intelligent grid, with communications and automation systems linking the network from end to end, power plants to meters. Although Xcel still is deploying the system, Gogel says the project already has yielded some important results. Most notably, it’s shown that the early payoff from smart-grid investments won’t necessarily come from automated metering, but from automation in the distribution network—the “middle mile.”
Moreover, he says, these investments are driving the industry toward a new world of risks and opportunities for utilities.
Fortnightly spoke with Gogel in late 2009, after he left Xcel to take the helm at Current Group—one of the companies that’s providing distribution automation technology for Xcel’s Smart Grid City.
Fortnightly: What do you mean by the “middle mile,” and why is it important?
Gogel: The smart grid started when people realized we should re-engineer the existing grid, because its design principles were fundamentally flawed. The distribution system was designed to run to failure. When it failed, customers would complain, and that was the intelligence in the value chain. That’s not a business model that most industries can survive with, but we’ve done it for decades.
What I see now is a deepening of thought. First people began asking how we’ll leverage technology in the last mile to bring customers into the system. The middle mile is the next step in the grid’s evolution.
Traditionally, we’ve had very little visibility beyond the transformer. Xcel Energy’s Boulder pilot showed that if you can light up every transformer and see the voltage that’s there, you can use software to analyze quickly what’s taking place, and you can use the same software to control network elements, like load tap changers and capacitor banks. If you can start manipulating a complex grid on the fly, you can deal with VARs automatically. You can improve power factors and reduce losses.
First, you make the grid transparent, then you put in automated controls, and then the middle mile becomes an optimization play. For example, it becomes the condition of possibility for energy to flow in both directions. If you can anticipate bilateral flows and consider multiple inputs on a feeder-by-feeder basis, then you can manage distributed generation and plug-in hybrid electric vehicles (PHEV) that will be coming onto the grid.
This leads to some interesting possibilities. In the new world, companies will aggregate distributed generators on peoples’ houses, similar to the way EnerNOC or Comverge aggregate demand response, and they’ll make automation investments in the middle mile that will allow them to create and sell virtual power. They’ll back it up with traditional offerings, but their role fundamentally revolutionizes and accelerates the evolution of the smart grid.
Fortnightly: How might these changes affect the evolution of electricity markets?