Power Efficiency is the New Frontier in Efficiency Savings

Power Efficiency is the new frontier in efficiency savings, displacing the Energy Efficiency paradigm. It requires sophisticated software and predictive algorithms; but if done right, Power Efficiency holds the promise of using software instead of copper to keep up with rising electric demands on the grid, at 3X – 10X less cost than current practice of hardware-based service upgrades.

Consolidated Edison of New York, a regulated utility, provides electric service in New York City and Westchester County. According to its 2012 annual report, it spent $2.27B in operation and maintenance costs on its electric operations, an increase of 11.3% from 2011. In fact, over the course of the past 5 years, its electric O&M budget has increased year over year by 4 – 13%. It further maintains a construction expenditures budget around $2.5B per year to keep up with rising demands on the distribution grid. Considering that Con Edison is just one out of thousands of electric utilities across the country, altogether supplying over 4 million GWhs of energy annually, the cost to upkeep the electric grid runs into hundreds of billions of dollars. This massive and growing capital expenditure is a strain on the US economy and is the focus of the Smart Grid movement.

But let’s examine the problem in more details. Currently, much of the capital is spent on hardware equipment – bigger transformers, cables, and power gear to sustain growth. The challenge is not energy but power; it is the maximum throughput of energy at a given time through the grid infrastructure. Power spikes create a grossly inefficient use of capital, as is clearly shown in the graph below:

ConEd2011

This graph shows the record all-time-high loading on the distribution grid in Con Edison service territory of 13,189 MW, which occurred on July 22, 2011. For the 2011 calendar year, the grid was above 12,000 GW for only 36 hours or 0.4% of the time, and above 11,000 GW for 156 hours or 1.8% of the year. Yet, utilities spend billions to upgrade distribution grid infrastructure by brute force – essentially by installing more copper in the ground.

Power Efficiency, as opposed to Energy Efficiency, is what’s needed to even out the loading and to increase utilization of assets already in service. Green Charge Networks believes that by combining small, distributed energy storage with sophisticated software algorithms, we can meet rising demand at significantly less cost than traditional infrastructure upgrades. Everyone wins if as a society we utilize power efficiently.