Real-world Green Tech Innovators That Start Up and Scale Up
Developing and Deploying Energy Efficiency Technology, the first of two panels exploring the emergence and growth of New York City's clean tech industry, was held on September 20, 2011, at the New York Academy of Sciences.
In opening remarks, Sallan Foundation Executive Director Nancy Anderson said she was encouraged that the international stage provided by Climate Week NYºC could "connect the movers and shakers in climate change" to advance useful knowledge for greener cities.
Reflecting that advocates of a green economy are often on the defensive today, Anderson posed a question that set the tone for the panel: Are government bets on growing the green economy and green jobs a lost cause, or are they creating ecological multiplier effects with game-changing growth potential?
Can green tech boost market value, operational resilience, and market share?
The hypothesis that undergirds the Market Makers series, she explained, is that "by adopting green science and energy-saving technology innovations, big economic assets like urban energy-efficient buildings and electric power systems will gain value, operational resilience, and market share. Through my lens," she continued, "I see our market makers finding the formula for an ecological multiplier effect on the urban economy that green-lights growth." The interrelated case studies that the evening's panelists would be presenting "evidence the impact of energy-tech innovation and utility expertise incubated in New York City and Philadelphia," she stated. "They are proof-positive of how to do it right."
David Biello, Energy and Environment Editor at Scientific American and moderator for the evening, took up Anderson's theme. He observed that Americans have been talking about green tech and jobs since the '70s, and that it may seem little progress has been made. But, he suggested, Market Makers panelists' endeavors can help "light" the way to an energy-efficient future.
The imperative to meet peak demand drives the system.
As the Demand Response Section Manager at Con Edison, Colin Smart understands that energy efficiency measures practiced by customers can help create a significantly more efficient electricity system. That system is driven by the imperative to meet peak load demand. If the peak threatens to rise beyond system capacity, costly new power plants must be built, at ratepayers' expense. Displaying a typical electricity load demand curve for New York City, Smart explained that the highs and lows can be graphed in the shape of a triangle - its tip represents peak demand. Steady demand would look something like a rectangle. "My goal," Smart stated, "Is to turn triangles into rectangles." For New York City, the triangle's tip reached its historic peak on July 22, 2011, at 4 p.m., when 13,189 megawatts of electricity were consumed.
NYC's 6.1 million window A/C units use 25% of the load.
ConEd transmits and distributes electricity; it's no longer in the generation business. Now, to reduce peaks in load demand, the company relies primarily on partnerships and innovations with large customers. The most dramatic example of how strategic innovation can work involves the huge summertime drain on the grid due to the "coincidental demand" of air conditioning during heat waves: 6.1 million window units currently run in the city, consuming 25% of the electric load; the projected 1 million more units obviously will tax the grid in the next 5 years. And the impact of heat waves on demand for electricity is prolonged by the fact that buildings continue to retain the heat they've absorbed after ambient temperatures decline, thus inducing continued A/C usage.
Working with ThinkEco, Smart devised a program that, in the summer of 2011, paid 25,000 customers to allow ConEd to turn off their air conditioning for up to an hour a day to reduce system-stressing peak load demand. This short-term shutdown resulted in thousands of dollars in savings for program participants. And it helped spare all ConEd ratepayers from having to pay for the construction of additional power plants to provide extra capacity that would be used only on steamy summer days.
Ice can be nice.
Another innovative strategy mentioned by Smart involves ice. Goldman Sachs and some other large companies in New York City are using chiller units in their building basements on summer nights to make ice. During the day, air forced over the ice drops in temperature and is then circulated throughout the building as cool air. Because ConEd charges less for electricity at night than during daytime business hours, this "thermal energy storage" reduces electricity costs, in some cases sharply.
ConEd's strategic vision for "targeted curtailment" demand reduction is comprehensive (see Smart's slide #6). Smart emphasized that the large goal is not to create a smart grid, the magic bullet advocated by many parties, but to create a smarter grid, one with individual metering — including a cheap technology that ConEd can use to read individual meters now out of range from the street - and room for innovation to adapt to new challenges and opportunities as they arise.
Mei Shibata, Co-Founder of ThinkEco, is blazing a different but related path to energy efficiency. Plug-load demand in homes and offices has soared in recent years, as more and more electronic devices draw power from the grid. This consumption presents significant opportunities for energy savings. ThinkEco, incubated at NYC-ACRE and founded in 2008, created the Modlet expressly to reduce plug-load demand. A scalable energy management system device for homes and offices, the Modlet (short for Modern Outlet) plugs directly into existing outlets and "automates energy savings," as ThinkEco puts it.
Plug-load demand has soared.
The skills and experience that ThinkEco's founders brought to their venture span fundamental math and science research, in-silico drug-discovery research at a start-up, and consumer advertising and marketing. In designing the Modlet, this team sought to provide a user experience similar to users' existing routines. Thus, the ability to monitor and control energy usage by communicating with the Modlet from a computer, or remotely from a smartphone, was a logical design choice. The device's average payback period of 6-9 months, as determined for over 100 commercial sites, only adds to the Modlet's appeal.
Partnering with ConEd, in the summer of 2011 ThinkEco conducted an energy efficiency and demand response study that found that use of the Modlet reduced demand significantly - and, that all respondents in a post-study survey said they'd like to participate in the same study the following summer.
Bringing new technology to market isn't easy.
Shibata noted that the process of filing patents, building prototypes, obtaining funding, and testing products is very time-consuming, and that this helps explain why bringing new technology to market is difficult. And then, once a technology is introduced, consumer acceptance must be won. It took around 60 years for electricity to penetrate the market, around 20 years for TV, and around 10 for cell phones. While the trend is toward faster adoption, a decade is still a long time to wait. Shibata hopes the Modlet, which is now available for homes as well as offices, will spark customer demand for energy efficiency solutions while not overwhelming consumers with too much change before they're ready for it. The product has already won a number of awards and drawn wide media interest.
Allen Freifeld, Senior Vice President & Director of Regulatory Affairs at Viridity Energy, described his company as a "curtailment service provider." Key to Viridity's business model are these real-world facts: Because the grid can't store energy, it must be instantaneous in load and production; energy prices fluctuate; large energy customers can modulate their energy use to take advantage of price differentials; federal rules now recognize energy conserved as equivalent in financial value to energy generated, which means customers can receive payments from utilities to conserve energy during peak-load times. And, customers can sell energy into the grid.
Viridity uses proprietary software, hardware, and forecasting techniques to help clients manage their energy systems as an integrated resource. Continuous real-time monitoring of clients' energy usage and fluctuating energy prices, coupled with monitoring of variables that affect energy prices, enables clients to reduce usage when prices are high, creating a revenue stream from utility payments for load reduction. Some clients also sell energy into the grid, timing sales to peak-price periods.
Actively managed, energy systems yield savings and revenue.
As the company's web site memorably puts it, "Viridity Energy transforms clients into virtual power plants, enabling 24/7 participation in wholesale electricity markets." That is, large passive energy consumers become market players, actively managing their energy systems as an asset. By using "dynamic pricing," they can inject a stream of economic value into the market that previously did not exist. It's this added value that creates opportunities to increase efficiency and reduce environmental impacts. To gain a sense of the technical sophistication of Viridity's approach, a glance at its explanation of "dynamic load optimization" is instructive.
Viridity's clients are large institutions such as college campuses, federal and municipal complexes, military bases, industrial companies, and hospitals. One is SEPTA, the Southeastern Pennsylvania transportation authority. The company is now working with clients in New York City, too.
Paying people to choose to not consume electricity seems counterintuitive.
The idea of paying people to choose to not consume electricity is still an unconventional way to think about energy efficiency, Freifeld stated, and may seem counterintuitive at first. In a market in which electricity conservation is now a commodity, turning passive consumers into active and reliable commodity providers creates an asset for electricity grid operators. If you can pay a consumer 10 cents per megawatt to not use electricity, he said, rather than pay a generator 11 cents to supply that same quantity of power, you not only encourage less energy use; you reduce prices for all consumers by lowering the overall cost of energy.
He used the example of a Viridity client in Philadelphia, the Drexel University campus, to illustrate how the ability to monitor electricity price changes in five- or ten-minute increments has allowed facility managers to curtail usage when prices are high, resulting in significant cost savings.
The bottom line: for Viridity's clients, lower energy costs and a stream of revenue; for system operators, a more stable, secure grid; for power generators, less need to expand generating capacity; for society, a cleaner environment.
Intelligence is moving to the edge of the system.
Taking the long view, Freifeld observed, "Intelligence is moving to the edge of the system." He believes our energy network is "on the cusp of a paradigm shift," led by advanced technology, networked devices, and informed consumer choice, and that microgrids (see his slide #5) will transform power distribution, boosting system reliability and efficiency.
During the Q&A session, write-in and live audience questions ranged from broad subjects such as why more innovation isn't occurring in the energy efficiency space to topical issues such as how cheap natural gas might affect the demand for energy efficiency. Panelists also discussed the role of behavior modification in reducing energy use and the question of what other technologies the audience should keep its eye on, such as energy storage systems and advanced metering.
Market Makers: Developing and Deploying Energy Efficiency Technology in NYC would not have been possible without event co-planner, Micah Kotch, Director of Operations, NYC ACRE. Also indispensable were our co-sponsor, the New York Academy of Sciences and the support of the Academy's Brett Van Landingham and its Green Science Discussion Group.