vinod khosla: “smart grid” or “smart hype” — an analytical perspective from a ‘grid’...
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”smart grid” or “smart hype”… an analytical perspective from a ‘grid’ neophyte
Vinod [email protected] 2010
Last year’s summary…
I’m not skeptical about investing in the grid
Storage better than Demand response
Let’s not get caught up in the hype of the smart grid
one successful smart grid company doesn't create a wave
networked grid = new applications
Open = innovation
hype cannot defy economic gravity
Consumer behavior hard to change2
Opportunity exists, hype exists
…”certain” dispatchable supply
Source: Morgan Stanley3
Solar & Uncertain
4
Wind & Uncertain
5
Uncertainty Time Scales
Milliseconds
Seconds
Minutes
Tens of minutes
Hours
Days
Years
Decades
Faults
Markets
EV uptakeC credits
Source: Resnick Institute
PV
WindBackup
Gen
Demand/Response
6
Increased renewables deployment, EVs
Increased reliance on innovation (e.g., Storage, renewables, software, etc)
Huge capital at risk & fast changing technology
Increased security requirements
Consumer response
Drivers of Uncertainty
7
Aggregating supply: wind, solar, coal, gas, nuclear…
Aggregating over geography
Aggregating over time
Information technology
Dynamic response of subsystems
Design for non-catastrophic failure
Increasing Certainty…
8
Central problem of uncertainty demands grid infrastructure redo
… not minor issues like meter reading
…though AMI has a role… Silver Spring with $800m of DOE funding does not make for sustainable “wave” even if it means good equity returns
9
smart meters, HAN and thermostats
Closed protocols
Real-time pricing
most value is automating meter reading
Focus on demand response
Increases energy security
Intelligent consumer electronics
More money in the GRID than in the HOME
OPEN protocols will win (mesh?)
Diverse, bandwidth needs 100X larger?
Grid = smart power electronics (PE)
hard to predict needs (flexibility)
Architecture determines security
distribution automation, 2-way flow, redundancy
…REAL smart grid wisdom?
10
…where’s the BEEF?
… SECURITY & CYBER WARS
… De-coupling “rigid grid”: self healing & adaptive
… Local “power quality”: locally self adjusting
… Evolvable architecture, open, predictive
… Power Electronics (control, quality, locality…)
… (modularity/flexibility & Management)
11
Source: McKinsey
Opportunity: $130B in US alone?
12
Storage and DG can play these roles…
Storage and DG can play these roles…
5-15% from consumer behavioral change or
…efficiency could shrink by 50%
This is what many utility commissions
focus on
May grow…
Issues, drivers & concerns
13
… useful (concerning) but hyped?
…. smart meters (automation, not smart device)
…. demand response (5-15% factor?)
…. consumer engagement
…. time of day pricing
…. proprietary networks
…. fashion of the day & “deterministic need” assumption
14
… modularity and “design for the future”
“The problem here is there has been a rush to install these fancy new hi-tech meters and they're not energy-saving devices; they are simply meters. They're not going to be worth the customer investment.”
15
Westinghouse’s Law vs. Moore’s LawWhen a 70 year lifecycle collides with 18 months..
“Instead of installing meters capable of receiving high-speed broadband Internet signals, Southern California Edison, San Diego Gas & Electric and Pacific Gas & Electric have opted for cheaper, lower-speed connections.
Yet the utilities are also laying the groundwork for advanced "smart grid" networks that will use broadband technology for managing power supplies and distribution.
The upshot: smart grids and smart meters that, in essence, won't speak the same language.”
16
Eco:nomics vs. Greco:nomics( or the principle of economic gravity)
Avoid the hype (and the environmentalist’s solutions)
Economic gravity WILL win: with consumers, regulators and Governments
17
Consumers resistant to costs
…who decides, who pays?
18
Smart grid subsidies?
Misdirected…$19M for networked
home appliances
Needed…$19M for power distribution & management
19
Smart hype ….even your remote is smart grid
20
Zero Net-Energy vs. Efficiency
Environmentalists dream “pay for itself 1st year” Efficiency
VS.
Zero energy is an irrelevant focus21
Standby Power
efficiency vs. “smarts”..what if everything used 80% less electricity?
22
What if we had fundamental new power electronics devices?
…early transistor …Intel I7 (transistors 774million)
23
1 MW wind “converter”: huge=expensive
What if we had the perfect power electronics sub-system?
Reactance worries=expensive
1900’s transformers
24
What if a Russian Hackathon brought down electricity to 20 million US homes?
….is a hackers “how many homes” competition improbable?
25
Managability: focus on IT to Increase Certainty?
Silos ESB Adapter-based Common
Current-state System Integration (IBM) Approach
DoD “style” Approach
Standards –basedInternet-style
Source: Jeff Gooding, Jeremy McDonald, SCE
…but managing (Smart) Grid means manageable grid
elements
26
Efficiency vs. DR
Efficiency vs. conservation/insulation
Storage vs. DR
Storage vs. DG
Transmission vs. storage
Load regulations vs active devices
Command & control vs resilient networks
What if we asked …
A lot of the “wisdom” may be made obsolete by technology27
… beefy solutions?
Active sub-systems, manageable grid components
Ultra efficient consumption devices (80% less!)
Automated & predictive grid flow management
Ubiquitous storage
DC transmission
Beyond networking - fundamental device capability
Cyber security
28
Design for evolution
Design for resiliency
Design for competition
Design for open standards
…..
Suggestions from a neophyte:
29
What will drive grid change?
30
Mckinsey : US mobile subscribers
Source: American Heritage Magazine - http://www.americanheritage.com/articles/magazine/it/2007/3/2007_3_8.shtml
forecast actual
1986 forecast for 2000
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yesterday’s technology, tomorrow’s forecast1980’s phone: year 2000 phone:
32
2010 phone:
300,000 available apps7bn+ apps downloaded
Forecasters, Analysts, Pundits & Astrologers
1990 Unimaginable: >480 pixel, interlaced, analog HDTV
1995 Unimaginable: IP in telco networks
2007 Unimaginable: Iphones & wireless bandwidth use
Today’s unimaginable becomes tomorrow’s conventional wisdom 33