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Reimagining The Grid

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Exploring sustainable and economically efficient methods to expand power delivery and organization in an era where natural disasters and widespread climatic change tail events are no longer so rare

As human beings continue to expand across the Earth, the effects of Global climate change will continue to be far reaching and impact every element of our society. Hurricane Sandy devastated the Caribbean and United States East Coast in October 2012, exposing millions of people and billions of dollars worth of economic assets to the dangers of climate change. It is estimated that 1.8 million structures and homes were destroyed or damaged, with economic losses exceeding $65 billion, nearly rivaling the impact of Hurricane Katrina in 2005 and the most devastating to hit the Northeast coast of the Atlantic in modern history. For example, this includes nearly 19,000 small businesses in New Jersey alone sustaining damage approaching $9b. While many industries were devastated by the storm, it is estimated that most retailers with operations across this region, such as Macy’s and Target, felt impacts to their supply chain, with greater than 1/3 closing stores in concentrated areas of the Northeast in advance of the storm and throughout the busy holiday season. Interestingly however, while yes, physical inventory was damaged from the impacts of the rain and wind, the largest impact to this industry and many others resulted from sustained losses of power. In the years aftermath of the storm, some emerging power providers such as ‘Go Electric’ are looking at innovative ways to make the grid both sustainable and resilient and continuing the trend towards renewable energy that will propel our society through the 21st century.

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Customers with above ground traditional power infrastructure experience ~1.5 power outages per year, on average, while those with below ground ‘traditional’ means of power generation or sustainable power sources (wind and solar for example) have experienced only ~0.1 outages on average during the same time period. With carbon dioxide levels in the atmosphere up 7% since 2007, and the Earth retaining 816 terawatts of excess heat annually (enough for 50x the World’s annual energy needs), it is clear that our needs to produce power and operate our industries in a sustainable way will only further progress! While large power providers in the Northeast, such as ConEdison and Florida Light & Power have sped up their efforts in sustainability as a result of the aforementioned catastrophes, the environment is ripe for start-ups such as Go Electric and another upstart called Sealed to change the landscape in the Northeast and eventually the United States. Shortly after Sandy, New Jersey’s governor Chris Christie signed into law a piece of legislation referred to as ‘The Resurrection Bill’ for solar energy in New Jersey.  With such connectivity between the private and public sectors in the historically regulated energy industry, pieces of legislation like this can spur great innovation in the space, and after great tragedy or disaster there can often arise opportunity for change and progress.

The aforementioned companies are all a part of the Urban Future Lab, a New York based accelerator that is nearly entirely focused on CleanTech, a category that mainstream traditional Venture Capital has largely overlooked, perhaps because Silicon Valley hasn’t experience the first hand impact of climate change in the form of devastating Hurricanes in late October / early November. Go Electric is an advanced power generation system that provides electric power during an outage and actively reduces electricity costs year round. Go Electric’s ERS generators can run on multi-fuel types, providing options to keep power generating during an extended storm or outage and would have done a great deal to help New York’s resilience to Super Storm Sandy. Additionally, Sealed delivers affordable and effective solutions including smart home technologies, insulation, air leakage reduction, and efficient heating and cooling systems through its network of installer partners in an effort to increase the speed to full sustainability. These two early stage companies are among the many that have arisen out of the aftermath of Hurricane Sandy, and the trend should only continue in the near term as we struggle to get a hold on one of the biggest threats facing mankind.

 

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9 thoughts on “Reimagining The Grid

  1. It is ironic that we have spent the past century trying to build an interconnected grid that takes advantage of economies of scale, but that some companies are now considering increasing backup capacity on a piecemeal basis. That is why I do not see this business model as being particularly sustainable or scalable – only few companies will have a Value of Lost Load that justifies investing in off-grid backup power, given the fact that such events are still relatively low probability. Moreover, more and more distribution companies are considering implementing new technologies that allow their engineers to isolate the effects of such disruptions and improve redundancy in their systems. Public Utilities Commissions are also advocating for monetary support from the federal government to support storm-proofing distribution grids(http://www.nytimes.com/2012/12/29/business/hurricane-sandy-alters-utilities-calculus-on-upgrades.html), which drastically reduces the window of opportunity for companies such as Go Electric, unless they manage to find a more integrated business model that does not disproportionately relies on emergency power.

  2. Transmission is one segment in the energy industry that definitely require innovation and new way of thinking. With the spread of Internet of Things, IoT, and other digital technologies, the industry will only boom with a faster pace. However, as you mentioned above, the role of government can never be under-estimated. Thus, the synergy between private and public sectors must be continuously emphasized in this industry.

    With that being said, the volatile supply of clean energy also gives rise to the rising demand of storage technologies. Energy storage technologies, complementing grid technologies, will help further development of sustainability in energy distribution and consumption.

  3. JPrice and Concerned Corker,

    I actually believe the market potential for off-grid backup power is huge, but it is directly tied to whether companies like GoElectric can offer a compelling enough value over traditional diesel powered backup generators. Paradoxically, as renewable penetration increases in the national grid, the grid becomes less reliable because these sources are highly variable and place a heavy strain on the grid. For any company that has any sort of high value manufacturing, the value of lost load for even a fraction of a day can very quickly turn into millions of dollars, and so investing in backup power is something all these plants already do. Additionally, the growth in manufacturing in the US is primarily concentrated in states like South Carolina and Texas, places which are very vulnerable to storm interruptions; therefore, the value is there. The point comes back to these large companies are already investing in back up power when they build these plants, and companies like GoElectric need to offer compelling value over traditional backup power solutions in order to gain any substantial amount of market share.

    Jaime

  4. It is interesting to know that the most affected sector/ part in economy after the hurricanes was the power sector. I definitely agree that we need more innovation of electricity generation and transmission. It is also alarming to know that there was no focus on the sustainable grid solution prior to the hurricane. I agree that we definitely reforms such as those made in California to incentivize companies and investors in focusing and bringing new sustainable solutions that can make a difference.

  5. I agree on many points discussed in this article. However, my hopes is still that the grid will become less and less relevant. New combinations of renewable energies + storage capabilities will avoid the problem of the inefficient altogether. As we increase efficiencies in the renewables and lower their prices, energy will be generated at or near consumption.

    I recommend a White House study on the subject
    https://www.whitehouse.gov/sites/default/files/page/files/20160616_cea_renewables_electricgrid.pdf

    On a final note, it would have been great to include the sources of this post!

  6. I thought that this was an interesting article and presents some valuable food for thought. With that in mind, isn’t there already a lot of momentum behind private sector solutions to do this? Obviously the tax subsidies paid to solar companies are substantial, but it seems that we have reached a tipping point of sorts in the solar and alternative generation market and that further tax subsidies will help push consumer adoption. This, in turn, should make the grid obsolete. Just last week Elon Musk showcased a form of solar panels that are essentially roofing tiles that are coated in solar glass. Despite a high upfront cost, these tiles do not look like current versions of solar panels and therefore don’t carry a lot of the stigmas that consumers associate with bulky panels. A link to the announcement can be seen here: http://www.wkbw.com/news/tesla-ceo-elon-musk-reveals-solar-roof-tiles

    I believe that these inventions and a lot of other new technologies will ultimately make the concept of a “grid” obsolete as all power distribution will become hyper-local and fully decontrol.

  7. Great article! However, I didn’t understand your point about above ground ‘traditional’ infrastructure, vs. below ground infrastructure have to do with the sustainability conversation. I agree that below ground transmission lines are more reliable (because I tree can’t fall and knock it down), but to me it seems like how the electricity is generation, whether from traditional coal or natural gas plants, or wind and solar plants, is a different conversation from whether the utilities decide to build overhead or underground lines. I am assuming the underground lines are much more expensive to build and the reason why there are more overhead lines. I realize this wasn’t the focus of your article, but I was curious as to how you were thinking about this.

  8. Great post highlighting the start-up companies attempting to tackle the variability and inefficiencies in the modern electric power grid system! The loss from power generators to consumers is 8%-15% of the total generated. Clearly a large issue! Smoothing out production versus demand, as well as increasing grid efficiency will be essential to building a sustainable energy grid going forward.

  9. Very interesting post! Seems that disastrous atmospheric occurance can constitute a business opportunity for some creative thinkers!
    As of the future I would be very eager to see if the grid itself is not an outdated notion and if we will not end up just sending electricity between location without using network. The wireless charging is already possible.
    I also see an interesting business opportunity for Go Electric in offering its services for grid maintenance – they could also help reduce the scheduled outages time.
    FInally, I would only slightly be concerned if their generator solution is eco-friendly as it seems it might be quite dirty an engine.

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