Energy Exchange

U.S. Electric Grid Under Cyber-Attack

John FinniganIf Ben Franklin lived today, he might say that nothing is certain but death, taxes and cyber-attacks.  Cyber-attacks occur when individuals or groups hack into another group’s computer information systems to steal, alter or damage key infrastructure.  Our nation’s electric grid is under constant attack according to a survey of electric utilities by U.S. House Representatives Henry Waxman and (now) Senator Edward Markey.  The grid was the greatest engineering achievement of the 20th Century, but cybersecurity was equally unknown to those grid engineers as it was to Ben Franklin.  We need to do more to protect our energy infrastructure.

The U.S. has finally called out China for repeated and pervasive cyber-attacks.  Mandiant, a cybersecurity firm, released an alarming report in February 2013 regarding the ongoing cyber-attacks by the Chinese army.  James Clapper, the Director of National Intelligence, described cyber-attacks as a soft war already underway and a dire global threat in his April 2013 World Threat Assessment to the U.S. House Permanent Select Committee on Intelligence.  In May of this year, for the first time, the Pentagon’s annual report to Congress on the Chinese military openly accused China’s military of repeated cyber-attacks on the U.S. government and defense contractors.

Cyber-attacks are underway not only by China, but also by Iran, Russia, Al-Queda, organized crime, industrial spies, ex-utility employees and rogue hackers.  The U.S. Department of Homeland Security investigated over 200 serious cyber-attacks against critical infrastructure during the first half of 2013.  The electric grid was targeted in over half of these attacks.  At the recent Black Hat security conference in Las Vegas, Cyrill Brunschwiler of Compass Security explained how the smart grid’s wireless network can be easily exploited to steal electricity and to cause massive blackouts.  Though innovation and new clean energy technologies are key to modernizing our antiquated energy system, the electric grid is more vulnerable to cyber-attacks with increased use of smartphones, tablets, mobile apps and electric vehicles to connect with our home electronic devices.  A July 2012 report by the Government Accountability Office (GAO) outlines the various threats to the electric grid.

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Posted in Grid Modernization, Utility Business Models / Tagged , | Read 1 Response

When We Save Energy In Texas, We Also Save Water

Last week, the Texas Coalition for Water, Energy and Economic Security (TCWEES), of which EDF is a member, held a legislative briefing at the Texas Capitol titled Energy & Water, Dollars & Sense: Improving security and maximizing benefits to Texas businesses and residents. The briefing focused on the nexus of water and energy, and furthered the idea that where you save energy, you save water too. The briefing included a panel discussion and a question and answer session.

State Representative Lyle Larson from San Antonio welcomed attendees, a speaker that is well-suited to talk about water issues. Before becoming a state legislator, he served on San Antonio’s City Council, a city with one of the best water conservation programs in the country. Representative Larson started with an interesting point: In addition to the physical issues of water scarcity, we also need to resolve the psychological issues of water resources.

People simply do not think of water as a scarce resource, despite the multi-year droughts we’ve seen in Texas. Addressing water scarcity has been done in much the same way as system-wide power shortages: in a short term, reactive way, rather than a long term, proactive way. And we will never be able to meet our energy or water needs of our growing populations by being short-sighted.

Representative Larson said that water is the number one impediment to business no matter where you are in the world. Water-rich countries will take American jobs if we can’t address our scarcity, and water-rich states will take Texan jobs. We don’t deploy best management practices in this state when it comes to water. And calling for more water infrastructure is great, but conservation is going to save significantly more water than new infrastructure will. Read More »

Posted in Energy Efficiency, Energy-Water Nexus, Texas / Tagged | Comments are closed

Hurricane Sandy: A Lesson In Risk Planning For The Power Industry

Living in New York City through a week of Sandy and her aftermath was a reminder of just how critical electricity is to our lives.

Electricity is the difference between feeling safe in well-lit buildings and streets, or vulnerable in the dark. Between food kept well-preserved in refrigerators and water pumping through pipes, or dinner spoiling and taps gone dry. Between communications and productivity, or isolation and economic losses — which are now forecasted, from Sandy alone, to reach $50 billion.

For some, electric power is literally life or death: heat on

(Credit: Master Sgt. Mark Olsen/U.S. Air Force)

a cold night, access to vital medical services.

The responsibility for providing these essential services rests on utilities. And the gravity of that responsibility – along with a reliance on long-lived and costly assets – has led to a culture of caution. One that has given the power industry pause in moving away from the tried and true methods it has used to generate and deliver power for the past 100 years.

But what the increasingly intense storms rolling across the country reveal is that – sometimes – what seems the cautious path is in fact the most risky.

With an estimated 9.5 million homes and businesses having lost power thanks to Sandy, the utilities faring best at restoring their customers to warmth and safety are those that have begun modernizing their grids with advanced information technologies, and using those “smart grids” to build resilience and reliance on community-based energy resources. I spoke with Bloomberg Businessweek earlier this week to discuss our outdated grid and the crucial need for modernization.

We’re already seeing proof these investments can reduce recovery time, keep crews and customers safer, and save lots of money. Thanks in part to federal stimulus grants, a number of utilities are embedding sensors, communications and controls across their networks. On the power lines that it has helped prevent cascading disasters like the one that knocked out power to 55 million people in 2003, when a single Ohio tree fell on a power line. Automated systems can detect a fault, cordon it off and reroute power flow around it.

Digital “smart” meters, capable of two-way communications, have also proved their worth: providing utilities real-time, granular visibility into their networks, without resorting to (often failing) phones or trucks dispatched on wild goose chases.  Programmed to send a “last gasp” signal when they lose power, those meters have enabled rapid diagnostics – pinpointing exactly which homes or blocks were out, where the break had occurred – and expedited repairs.

Baltimore Gas and Electric, for instance, has installed about 10 percent of its planned 1.3 million smart meters. Linked to a “smart command center” borrowed from sister utility ComEd of Illinois (with whom EDF has been working on developing a set of performance metrics for its grid investments), the meters are telling them when their power restoration efforts have been successful or when further troubleshooting is needed. Without smart meters, they’d have to phone customers to ask if the power is back on. In storm conditions, according to Jeannette Mills, BG&E’s VP of Customer Operations, two-thirds of those calls go unanswered, which means they have to dispatch crews block by block across the region. This time, they’ve been able to ping the meters, asking “are you on?” Mills reports “a much higher rate of success getting through to smart meters than we do reaching customers by phone” enabling far more efficient dispatch of crews.

Utilities with smart grids have also kept customers better informed. A Pennsylvania Power and Light customer described to Smart Grid News how the real time tracking enabled by smart meters allowed him not only “to check on repair status for my own home (with crew on site info and estimated time to repair) … but also remotely online check the status of our two rental houses without having to physically drive to each to check them out.”

One of the first utilities to demonstrate a smart grid’s resilience was Alabama Power, which was slammed in April 2011 by 30 tornadoes across 70 miles with winds up to 190 mph. The twisters left 400,000 without power and thousands of poles, wires and substations damaged or destroyed. But by using its 1.4m smart meters to locate the outages and prioritize repairs, the utility restored all of its customers within a week. It also drives 4 million fewer miles each year.

The security benefits of a smarter, more resilient grid have caught the attention of the U.S. military. It has begun installing smart grid technologies on bases so they can function as “microgrids”: decoupling from the commercial grid in the case of a natural or manmade disaster and maintaining vital homeland security operations. The bases will also become reliability resources themselves, capable of supplying power to the grid, or reducing demand, at times when the grid is stressed.

Most importantly, these smart grids will enable the military to meet its aggressive goals for shifting to low-carbon, domestic energy resources, particularly renewable energy on or near bases. Secretary of the Navy Ray Mabus has set a goal for the service to get half its power from renewable resources by 2015. A smart grid will be absolutely critical to enabling the integration of millions of smaller, regional resources, and for managing the on-again, off-again character of the wind and sun.

The Secretary’s leadership reflects his recognition of the greatest risks that come from sticking to our tried and true ways of making and delivering power:  the national security threats posed by climate change. These include the threats we’ve seen this last week, again, from rising seas and extreme weather, as well as the casualties incurred by troops having to protect vulnerable fuel supplies, and the acceleration of instability and conflict warned of in a 2010 DOD report. When it comes to power, the greatest risks will come from failing to be bold.

Posted in General / Read 7 Responses

Energy Innovation Series Feature #4: Solar Financing For Project SolarStrong

Throughout 2012, EDF’s Energy Innovation Series will highlight more than 20 innovations across a broad range of energy categories, including smart grid and renewable energy technologies, energy efficiency financing, and progressive utilities, to name a few. This series will demonstrate that cost-effective, clean energy solutions are available now and imperative to lowering our dependence on fossil fuels.

For more information on this featured innovation, please view this video on solar financing for SolarCity’s project SolarStrong.

Project SolarStrong by SolarCity is not only expected to be the largest residential solar photovoltaic (PV) project in American history if completed, but will also be a groundbreaking milestone for solar financing in the United States.

In November 2011, SolarCity – along with Bank of America and Merrill Lynch – announced Project Solar Strong, an ambitious five-year plan to build more than $1 billion in solar projects for privatized U.S. military housing communities across the country.  SolarCity partners with leading privatized military housing developers to install, own and operate rooftop solar installations and provide solar electricity at a lower cost than utility-provided power.  SolarStrong is expected to create up to 300 megawatts of solar generation capacity that could power up to 120,000 military homes if completed.

This project will allow privatized military housing developers to save money on energy costs that can be reallocated toward quality-of-life improvements and enhanced services for military families.  SolarStrong will also help the Department of Defense (DOD)—the single-largest energy consumer in the U.S.—secure more of its energy needs from renewable sources operated in parallel with the utility grid.

SolarStrong is expected to create thousands of full-time and temporary jobs; SolarCity hopes to provide many of these jobs to U.S. veterans and military family members, which have been among those hardest hit by the economic downturn.  SolarStrong is a groundbreaking innovation that demonstrates the long term viability of distributed solar generation and the potential for creative financing structures to significantly grow residential solar in the U.S..

SolarStrong’s original plan to secure a loan guarantee from the U.S. Department of Energy (DOE) did not come to fruition, but the project was fortunately able to launch without being part of the loan guarantee program.  Aggressive, creative projects that confirm the viability of alternative financing structures, such as SolarCity’s SolarStrong, are paving the way to making affordable clean energy available on a significantly larger scale.

Posted in Energy Innovation, General / Comments are closed

2011 World Energy Outlook Implications

By: Drew Nelson, EDF’s Clean Energy Project Manager

Source: IEA

Yesterday the International Energy Agency (IEA) released its 2011 World Energy Outlook.  The report models expected demand for energy in three scenarios: a business as usual scenario, an aggressive policy scenario to cut greenhouse gas emissions and a middle of the road scenario.  As a result of this analysis, the report lays out some pretty eye-catching conclusions.  The conclusion that will likely receive the most press attention is summed up by the head of the IEA, who states:

“[by] 2015 over 90% of the permissible energy sector emissions [to avoid dangerous climate change]… will already be locked in [due to investments in carbon-based energy sources].  By 2017, 100%. We can still act in time to preserve a plausible path to a sustainable energy future; but each year the necessary measures get progressively tougher and viciously more expensive.”

In other words, we only have five years to make investments in the energy sector that avoid locking us into a future of dangerous climate change.  Any delay will be more expensive than taking action today.  Some of the best scientists, economists, and business officials who drafted and provided comments on this report are clear – NOW is the time to make the urgent investments needed in clean technologies like wind and solar as well as smart-grid technologies to deliver that clean energy to consumers.

However, another conclusion of the report caught our eye here in EDF’s energy program.  For the scenarios that were modeled, natural gas was “the only fossil fuel for which demand rises in all three” scenarios.  This highlights the important role that natural gas will play as an energy source no matter how aggressive policy-makers are in reducing greenhouse gas emissions.  Natural gas use will grow because deposits of “unconventional” sources of gas, like shale gas, are being discovered and drilled in almost every part of the globe.  The report finds that the share of unconventional gas production in North America is projected to rise so that there will be more “unconventional” gas in North America than “conventional.” 

This has broad implications.  Increased shale gas means greater energy security and jobs, but also potential increased impacts in the backyards of some of our most populous states.  There are significant public concerns with shale gas drilling: water quality, air pollution, noise, wildlife impacts and increased traffic are some of the most common.  New data is also showing that current methane gas leakage rates are cutting into the previously accepted greenhouse gas benefits of natural gas.

Yet many oil and gas industry representatives, rather than working with the public, are dismissive of these concerns.  At an industry gathering last week one representative referred to critics of shale gas as an “insurgency.”  This comes on the heels of a gas company announcing that it has employed former military officials who specialize in “psychological operations” in order to help “convince” communities of the merits of shale gas.  Many companies continue to refuse disclosing the chemicals they are pumping into the earth.  These actions do not build trust or goodwill and could endanger further growth of shale gas.  The IEA report states that growth in output of natural gas will “depend on the gas industry dealing successfully with the environmental challenges: a golden age of gas will require golden standards for production.” 

At EDF we are working to develop those golden standards and ensure that shale gas is developed the right way in order to maximize the benefits of shale gas without sacrificing public health, environmental protection and safety.

Posted in Natural Gas / Comments are closed

The Solyndra Panic

Source: Solyndra / BusinessWire

Bad news from Solyndra has set off a bit of a panic around everything from the future of solar in the U.S., the role of government in supporting innovative technologies, and prospects for clean energy jobs.  Caution is advised and perspective is needed lest we walk away from a pivotal new global market.  Let’s start with the big picture on solar.  I believe it is critical that we focus on the full value chain for energy and environmental solutions to better understand the economic growth inherent in the clean energy market.  In the case of solar, an analysis released last month by GTM Research examined the entire value chain – from raw material inputs and capital equipment needs to panel assembly and installation and maintenance.  The results show that the U.S. has a trade SURPLUS with rest of the world AND with China in the solar sector defined across the entire value.

Let me highlight some of the key findings: 

  • The U.S. was a significant net exporter of solar energy products with total net exports of $1.9 billion in 2010.
  • The U.S. solar industry had a positive trade balance with China with net exports of $247 million – $540 million.
  • The largest solar energy export product is polysilicon, the feedstock for crystalline silicon photovoltaics, of which the U.S. exported $2.5 billion in 2010.
  • 2010 U.S. solar energy installations created a combined $6.0 billion in direct value, of which $4.4 billion (75%) accrued to the U.S.

This is a good news story, and not surprisingly to me as over the past several years we’ve heard positive stories from companies like Komax Solar, an equipment supplier.  Six years ago, Komax took a risk and transitioned itself from medical technology and electronic machines to supplying the equipment needed in the assembly plants for solar panels.  Komax is exporting, has tripled its workforce, and has leveraged its expertise in precision machining to move into new solar markets.

What role the government played in the larger solar story is hard to pinpoint, but many solar companies had real and critical capital needs during the recession that the American Recovery & Reinvestment Act of 2009 (ARRA) filled.  Project Sunburst, a Maryland Energy Administration (MEA) initiative that benefitted greatly from the ARRA funding, created demand for solar panels installation on public buildings and triggered $36 million private investment.  In addition, while the primary goal was making it easier for public entities to go solar, “It had an additional goal or larger goal to encourage the growth of solar energy generation in the state as a resource,” MEA spokesperson Ian Hines said. The investment helped give the industry the extra push that put it over the tipping point as a maturing industry in Maryland.

This leads me to believe that ARRA has indeed been an important ingredient.  The government has also taken a portfolio approach that includes companies like Nanosolar, which received almost $44 million as a 48C tax credit (one of the ARRA programs) and is currently hiring.  This is a company whose prospects excite me.   

At the end of the day, experience shows that the private sector is better at picking winners and losers, and the government is much better at “setting the table” – for example, investing in core, enabling innovations such as developing a well-designed, open-platform smart grid that enables new entrants such as solar power to compete with old electricity providers (the value chain for smart grid solutions, by the way, is extremely promising for US firms and job creation).  And, equally as important, the government must put into place energy policies that provide a level playing field and ensure that the full costs to society of energy products and services are accounted for, policies that ultimately put a price on carbon.

Posted in Grid Modernization, Renewable Energy, Washington, DC / Tagged , , | Read 1 Response