And the winner is….Thermal storage (for now)

Energy storage is about to get big. New Technologies. Demand Response. $100 a barrel oil. All the old pressures are getting stronger. Grid reliability. Microgeneration and microgrids. Unreliable but attractive renewables. The incentives for energy storage have never been as good. Hydrogen. Vanadium redox. New technologies for energy storage are just over the horizon.

But I am guessing the old fashioned low tech thermal storage will be the first big winner. Well, maybe a little higher tech than it used to be. Peter Drucker observed that a new technology must be an order of magnitude better in either price or performance than a pre-existing technology with market standing to supplant that existing technology. The existing technology can always leverage its market position, its market penetration, and the current producer’s experience to make its own leap forward.

New market conditions are placing a premium on energy storage. Time of day pricing is becoming more common and the price differentials are only going to get bigger. New sources for thermal energy to store are coming out of the new things we do in buildings. New ways to use thermal storage are coming to market.

The needs of the power grid are leading to ever larger price differentials between different times of day. The more sensitive systems in today’s buildings require that buildings establish their own reliability. The greater cost of both minor outages and of using energy at the wrong time now swamp the energy lost during storage. The economic case for buying energy when it is cheap, to be available when needed is getting easier to make.

There are new sources of thermal energy to harvest. Building chillers can harvest heat from office space. Data centers throw off huge amounts of heat that can be stored for reuse. If we can use this energy, then it will be worthwhile to gather and store this energy.

We now can use even moderate-temperature thermal energy for purposes other than heating and cooling. Old models made ice during the night to take advantage of cheap energy, or collected heat from the sun during the day. Stored thermal energy was used only to cool during the day or heat at night. New microprocessor controlled Stirling engines have improved the efficiency and efficiency of low power electrical generation. Prototypes have generated electricity off temperature differentials of 6C, although production units seem to require five times that.

In the short term, thermal storage will create reliability. In the mid-term it will midwife markets based around energy storage and temporal displacement. In the long term, those markets will be the playing field upon which new technologies complete. But I in the short term, I’m betting on thermal storage.

Note: immediately after writing this, I read about a system using black-top roads for thermal energy collection with geostorage. Perhaps some other time….

Not just Sensors and Schedules

Several alert readers have observed recently that most of this is not new, that we have long known how to do this. Occupancy sensors can make the building responsive to the tenants. Operations schedules can make the building responsive to the enterprise. We’ve long had performance contractors offering to tune the building’s performance and get energy savings.

They are right. The building engineering community knows how to tune buildings and to make them responsive. Alas, the building engineering community is applying what it knows in the wrong way. It is still trying to provide an engineering service, and it continues to leave the owner and the tenant out of the conversation. It is still trying to sell the process of automating the building rather than the services that an intelligent building could provide.

Building schedules are a great place to start. Every Energy Management system offers a way for the building engineer to set whether the building is operating from 9 to 5 or from 8 to 6. They all have ways to flag holidays. But buildings aren’t operated for the engineers. The best engineers aren’t even on site as they operate multiple buildings from a distance. These operations schedules may take account of the whole building, but not the individual tenants. Because they operate as “set and forget”, they do not truly respond to needs and operations that may change every day. And so we set up building schedules to be “good enough”.

Building sensors are a great way to cover for the insensibility of the building scheduling. They work pretty well for lighting. As long as a room is almost warm enough, or almost cool enough, sensors can make a room respond fairly quickly to the needs of being occupied. Of course, it can respond so quickly by treating the room as “nearly occupied” most of the time. It can respond so quickly because the designers have over-sized the cooling equipment (often by double) just in case. Just in case what? Well, in case someone enters the room for a planned meeting and they would like to be comfortable before the meeting is over.

So there we have it. Systems that use too much energy because they are too large. Systems that are too large so they can cover for the lack of planning when the sensors only discover that the room is already occupied. Rooms that use too much energy day in and day out because they might need to respond quickly to the sensors.

Building systems that communicated with enterprise systems can anticipate scheduling needs rather than catch up to them. Freed from the need to catch up, we could size building systems properly. They would also have exactly the information they need to respond properly to Demand Response signals. If they were unable to respond, they could tell the enterprise what the scheduling constraints were that prevented the response. The enterprise, unlike the building, can decide to change the constraints.

I will write of how this lack of communication is the largest impediment to performance contracts another day.

Sustaining Sustainability

In the middle ages, people were scared. They had good reason to be scared. Wolves in the forest. Plague in the village. Roving bands of soldiers, and ex-soldiers, living off the land, and farm, and village. Pilgrimages became popular. Get out of town for a while. Get out of the oppressive oversight of your neighbors. It was all to show your devotion and faith.

Virtue is a good cover for economic uncertainty. Worried about the value of your house or the stability of your job? Shocked by $100 a barrel oil and its effects on all energy prices? You cut back. But no one wants to acknowledge they are cutting back. So you can go green, instead. Turn down the thermostat because you want to reduce your carbon footprint. That’s the ticket. I’m not worried. I’m virtuous.

Those who feel guilty about how well off they are can play, too. They can buy indulgences, errrr, carbon credits. Virtue by proxy. Western society is more committed to indulgences than any time since Martin Luther stirred things up in Wittenberg.

This sustainability is as shallow and short-lived as the arguments on a late night sports BLOG. The problem is, when times are good, when the uncertainties are gone, this kind of virtue evaporates. That thermostat will creep back up. That cold shower after the power company turned off the water heater in the afternoon becomes unacceptable.

We have seen this before, following the energy shocks of the 70s. We have worn cardigans to demonstrate virtue. We have seen home-made solar thermal collection installed in house after house. Some house and factories even installed the more expensive photovoltaics. You can see them now in some neighborhoods, rusting on the roof, taken off the window and stacked at the edge of the yard, unmaintained and unused.

The last wave of sustainability faded away because it made economy tolerable, but failed to make life better. Faced with that cusp, we will always go back to a better life, when we can. The challenge, then, is not to make buildings more efficient – we know how to do that.

The challenge is to make buildings that tenants like better, that happen to be more efficient. This keeps the homeowner committed. This lets the commercial owner recapture his investment on resale. We do this by making the building more responsive to the owner. We do this by talking about tenant benefits and not about cost avoidance and efficiency.

A responsive building saves money by responding to the tenant, with enough intelligence to know when to buy on the energy markets. An intelligent building will reward the tenant with rebates and cold cash, not with imagined cost avoidance. A responsible building will provide greater reliability to the tenant by implementing Galvin’s Perfect Power principles. A responsible building will request maintenance when it needs it, reducing the thing the owner and tenant have to worry about.

And if all of these benefits just happen to be more sustainable, then the owners and tenants will keep on using them when the crisis is over.

Today’s concerns and fears are an opportunity. They give us an opening to discuss what we know how to do. If use this opportunity to re-create the un-responsive siloed applications of the 70’s, well shame on all of us who know we can do better.

Storage and the Failure of Energy Markets.

As we build markets between intelligent buildings and the intelligent grid, there are two paths we can take to demand-response. One imposes central control, and is essentially the voluntary acceptance of a specific brown out with some local control of timing. This mode is traditional, as when the power company turns off the home hot water heater. The other path creates market mechanism to encourage local energy arbitrage between time-dependent markets. I’m betting that the second offers considerably more potential.

In today’s public concept and in the political world, the simple load shedding model is the only one. When you get a price signal, you should turn off your A/C. No hot showers in the afternoon. We will be happy to sweat in the dark because we will be saving the planet. Belief in the sustainability of this model right up there with the sustainability of the economic model posed by the red-suited man at the local grocery store this last weekend. It is a desire for how one wishes things worked trumping how things actually do. Very few people not already in monasteries will commit to long term privation, however slight.

Arbitrage is a little harder to think about but easier to sustain. Arbitrage between time markets lets buildings not only respond to times of congestion and shortage, but to also take advantage of times of abundance, to use resources that currently go to waste.

In simplest terms, arbitrage between time markets is the decision by the building operator to buy power when it is cheap, and to refrain from buying power when it is expensive. It no longer matters how inefficient local storage of energy is, just whether that inefficiency is less than the price differential. If I can make 50% return on investment by buying at night rather than during the day, then a 40% loss due to storage inefficiency is inconsequential.

Early adopters will pay a premium for this ability, but will also earn a premium as one of the few able to shed the load. As the market develops, both premiums will come down, as storage becomes more efficient ad as the market broadens, driving prices at both times toward the mean.

The largest barrier to large-scale adoption is the systematic under-pricing of power during peak use. This failure of pricing is yet another symptom of a market that has always foisted it costs off on others. Dirty coal plants push the costs of generation off on those downwind. Storm recovery costs push poor capital allocation and sub-market labor contracts into cost recovery allowed by the utilities commission. Brownouts push the costs of poor pricing strategies onto the general public; except during system failure, every brown-out is a failure of pricing. These systematic failures are predictable symptoms of an industry that has been a regulated monopoly managed for cost recovery for the last 80 years.

Proper pricing will validate and reward the energy storage market. Owners will embrace energy storage when they can see clean numbers from the market. Energy storage will flood the market when the owners want it.

Energy storage is coming. I ask you, my readers, what energy storage strategies do you think will be the early winners? I have some ideas that I will share this weekend.