Virtual power plant gives utilities the upper hand
by Brett Burger
January 3, 2018

Utility companies are asked to manage the grid safely, reliably and affordably—a challenging task considering the lack of control over anything on the consumer side of the meter. Utilities typically do not control when loads come on and off the grid.

They also do not control consumer-owned solar equipment —commercial buildings, parking lots, residential—that is connected to the grid at an ever-increasing pace. Despite this, utilities balance demand with generation in real time.

Hardware installed at participant building sites gives utilities real-time control of customer-owned assetsImage 1. Hardware installed at participant building sites gives utilities real-time control of customer-owned assets like HVAC, lighting, back-up generators and solar arrays. (Images and graphics courtesy of National Instruments)

Bridging the Gap at the Meter, Using IoT

To help compensate for lack of control and real-time visibility, grids are built to manage peak conditions that occur only about 5 percent of the time. This “state of today” represents the most efficient, safe and reliable way given technology at the time of construction, but innovative companies are using Internet of Things (IoT) technologies to bridge the gap that exists at the meter between utility companies and energy customers to optimize grid utilization.

Innovari is one such company using IoT technologies and utility expertise to improve how energy is produced and consumed. The proliferation of smart and connected “things” in the Industrial Internet of Things (IIoT) provides opportunities for increased performance and lower costs.

By implementing intelligent edge nodes distributed across the grid and cloud-based analytics, companies working in the IIoT space are able to help utilities improve overall system utilization and save costs.

One IIoT platform solution uses machine learning, “big data” analytics, proprietary optimization routines, and distributed measurement and control hardware to deliver generation quality capacity that can address grid demand. The IIoT company’s grid-edge hardware attaches to participant buildings to monitor and control various elements of the building that impact the grid such as heating, ventilation and air conditioning (HVAC) systems, lighting, back-up generators and solar arrays.

The hardware uses single board controllers, designed for intelligent IoT edge nodes, to calculate various features of energy consumption along with real-time, two-way communication to the cloud analytics component of the platform. Typical participant buildings include big box retailers, shopping malls, hotels, universities and larger office buildings.

As a demand-based event occurs on the grid, utilities can request a specific amount of load to be shed for a specific length of time to balance the grid. The IIoT platform solution’s cloud algorithm surveys all the circuits under control and turns off appropriate circuits at the right time and in the right order to predictably give the utility the exact load drop requested. This ability to shed load with the same level of control as adding capacity with a power plant gives utilities another tool to help manage challenging demand-based grid events—effectively a virtual power plant.

Control of multiple customer-owned assets helps create a virtual power plant utilitiesFigure 1. Control of multiple customer-owned assets helps create a virtual power plant utilities can use to mitigate demand-based events.

Grid Operators Improve Utilization & Lower Costs

Utility companies and commercial utility customers (retail chains, grocery stores, universities and more) have benefited from deployed systems on the IIoT platform solution. Mumbai-based electric utility Reliance Infrastructure (RInfra) serves more than 2.9 million customers in India and has a track record of adopting the latest distribution-grid technologies. While it has consistently proven it can meet peak demand, RInfra was seeking a demand-side, load management solution that could lower infrastructure investment costs, improve grid performance and lower customer costs by balancing peak demand.

RInfra implemented the IIoT platform solution on commercial buildings and mobile generators to stabilize the grid in regional areas under stress. Customer loads across malls, hotels and offices were brought onto the platform to improve grid optimization. Because the IIoT platform solution provides two-way verifiable, closed-loop control technology, it can unlock capacity from existing grid infrastructure to improve system utilization and save both customer and infrastructure costs.

Since October 2014, RInfra has responded to hundreds of grid events using the IIoT solution and has shown that the demand side can be a real part of their resource plan year-round. Customers benefit from reduced energy costs and greater control of their facilities. The Raghuleela Mall has almost a megawatt (MW) of controlled capacity, including 60 air-handling units and multiple 400-ton chillers.

What It All Means

There are multiple stakeholders connected to the grid: energy customers, utilities and regulators. They all need to tick “yes” in the win column for this type of solution to be accepted and successful. Hardware installed at customer sites that do not already have a building management system can see a reduction of total energy costs by 5 to 7 percent. Utilities can avoid purchasing expensive capacity during peak times.

Asset utilization also improves, avoiding the need for costly infrastructure investment. Power generators can take excess energy from overnight and use it to pre-cool buildings rather than dump it. It is easier to manage the impact of renewables on the grid paving the way for even more DER rollouts.

All utility benefits combined, a vertically integrated utility could see up to $170 million in avoided capital expenditures. But, the benefits of this solution aren’t limited to bottom-line costs. When installed on highly stressed grids, like in India, the additional control is the difference between people having power and people living and working in the dark. For every 100 MW of controlled or unlocked capacity on India’s grid, 250,000 small businesses, homes and schools are electrified.