Posted by: John Carey on May 29
The electricity grid is vital, but it is a dumb unwieldy beast. Utilities and other power providers must constantly juggle powerplants’ outputs and the ever-changing demand for electricity. Currently they use power flow algorithms that date back to the 1950s. So “what the grid needs is a brain,” says Roland Schoettle, president of Optimal Technologies, in Raleigh, NC.
On May 20, Optimal introduced such a brain, which it has been developing for more than a decade. The tool does what many electrical engineers said was impossible, enabling grid operators to optimize the efficiency of the grid real-time, Schoettle claims. The product’s algorithms are proprietary, but “it takes advantage of clever mathematical concepts,” says David Hawkins, one of the principal engineers at the California ISO, which manages most of the state’s high-voltage grid. Hawkins was skeptical of the claims for the product until “it withstood all the tests we did,” he says.
In one key test, data from a 2000 California blackout were fed into the tool. Not only did it manage the situation so that no customers would have lost power, it was able to keep 100 MW in reserve—with less generating capacity than was then actually available. The tool can also be used to make better decisions about where and when to add new generators to the grid. Such a product “is long overdue,” says Don Kondoleon, manager of strategic transmission planning at the California Energy Commission.
Once they implement this intelligence, presumably they'll be able to reduce redundancy and run the grid closer to the efficiency of the finance system. Those who can calibrate it the finest will win much higher profits. Will this lead them to predict human behavior and to tolerate greater risk? This has been the trend in finance.
Steve, let's hope the smarter electric grid avoids the "efficiencies" of the finance system if at all possible. Would these be the efficiencies that have resulted in the collapse of Bear Sterns and, really just a few years ago, Long Term Capital Management, among others? I'd hate to wake up one day and learn that 4 trillion megawatts had disappeared into the ether because a few risk-loving jerks made a bad bet.
In Green Business, BusinessWeek Energy & Environment Editor Adam Aston and Associate Editor Heather Green cover the green scene from New York, with Senior Correspondent John Carey in Washington D.C. and correspondent Mark Scott filing from London. Keeping on top of the business aspects of energy, the environment and climate change, their focus is the technologies, policies, markets and people that are shaping how the earth's resources will be used in the century ahead.