The Clean Energy Web:
High Tech's Next Revolution

By Patrick Mazza

The basic shape of the electrical grid has changed little since the late 1800s when Thomas Edison built the first central generating station. But dramatic changes are coming as the distributed intelligence revolution embodied in the Internet spreads to electrical power, offering a major opportunity to turn around what is now the nation's leading industrial source of climate-disrupting greenhouse gases.

"We are on the verge of a significant transformation in the electric industry that will 50 years from now look as important as Edison's invention," says Bonneville Power Administration Vice President Terry Esvelt.

Bonneville -- a major electricity supplier in the Pacific Northwest -- is planning for an "Energy Web" which replaces the old "mainframe" model of one utility pumping out juice to many customers with an "Internet" model where many energy producers and consumers are linked in a smart network. While BPA is known for huge power dams, Bonneville administrator Judi Johansen says the agency has every incentive to involve itself in the new model.

"A technological revolution is breaking out in the electric utility industry," Johansen says. "It promises to turn the business upside down, making reliable, low-cost generators available to virtually every consumer. Utilities will either help make it happen or risk being swept aside."

Distributed generation by fuel cells, solar panels, microturbines and other micropower devices is the foundation of the Energy Web. Many of the new micropower technologies eliminate or drastically reduce air pollution. Since electrical utilities are now the largest industrial air polluter in the U.S., the Energy Web could profoundly improve both human health and the odds of averting catastrophic global warming.

Just as important to the new energy revolution as micropower plants are the very technologies at the heart of distributed intelligence -- microprocessors and telecommunications. They are "the glue that holds the Energy Web together," Esvelt says.

By themselves, small-scale generators can only provide power on-site, Esvelt explains. "The Energy Web works when they start talking to each other." Through telecommunications, micropower plants can receive price signals in real time, particularly important for larger commercial and institutional users. During hours when electricity is cheap the user can pull from the grid while its micropower unit is shut down or recharging batteries. The unit powers the building during peak periods when grid electricity is costly, and might ship juice back to the grid. "By being connected you have a tremendous opportunity to make money or save money," Esvelt notes.

The garage at home or the office could even become a power plant. While parked, fuel cell cars could generate electricity used on site or the grid. The Internet is an integral element of the Energy Web. Notes Hugh Holman, senior equity analyst with the investment firm of Robertson Stephens, "We count 50-odd companies building energy businesses on an Internet platform." Among those are around a dozen websites where buyers and sellers can trade power on line. Marketers of environmentally friendly Green Power are using the web as well.

"There are now people worldwide who broker power millisecond by millisecond," notes Mark Anderson of Strategic News Service. "You can buy power in all flavors and colors. It's a complete revolution."

The more complex energy market demands more information and enhanced abilities to manage it. Holman inventories 34 companies writing business management software specifically for utilities and other energy providers. Distributed intelligence which links micropower plants is also built into the plants themselves in the form of inverters which regulate power flow. "Modern inverters use microcontrollers, miniature computers programmed with software, which provide intelligence so systems can act appropriately according to conditions," notes Bill Roppenecker, president of Xantrex Technologies (formerly Trace Engineering), the world's leading inverter maker.

Inverters make possible "net metering" schemes now in effect in 30 states, which let customers use excess power to spin meters backward. The inverter senses when the micropower station is generating a surplus and so should sell power to the grid. It recognizes when the grid is blacked out and stops outward current so linemen won't be harmed. Regulated by these indispensable devices, solar panels, fuel cells and other micropower plants are no less software-driven than computers.

Many wind turbines, which can be arrayed in installations from small to utility-scale, also rely on inverters. In addition, some turbines are guided by intelligent drives that adjust for wind speed and direction in order to generate maximum wattage. Power production reports are telecommunicated moment by moment to wind farm managers.

Even as information technology makes micropower plants smarter and links them together in a network, the information economy's absolute need for reliable electricity is driving the move to distributed energy sources.

Solar PV panels are the power source of choice for the wireless phone industry's many remote towers and stations. Strategies Unlimited says industrial customers represent one-quarter of the PV market -- Of that telecommunications absorbs 80 percent.

Cell phones, laptops and digital appliances, now limited by battery life, will in a few years be powered by miniature fuel cells. Motorola is testing a model. The Alliance of Angels, a Seattle high-tech venture capital group, is also investing in the field.

The most significant information technology industry push for micropower is coming from computer-dependent businesses which can lose millions from even momentary spikes or outages. Computers are built to withstand blackouts no longer than .008 seconds.

"Bits demand unusually clean, stable, reliable electrons," notes the Huber Mills Power Report. While the grid provides 99.9 percent reliability, Huber Mills explains, "Reliability demands start at six nines for the telecom and dot-com world -- 99.9999 percent. Practically speaking, the traditional power grid will never be able to provide much better than three, perhaps four nines...information-quality power is becoming a sine qua non of the information economy, and thus one of the greatest business opportunities of our time."

"To accommodate this great energy shift," Huber Mills says, "much of the sprawling infrastructure of the U.S. power grid will have to be rebuilt." The information technology economy, spreading through all sectors, requires "a constellation of new sources of electric power," connected by a relative of the microchip, the power chip, that can reliably, seamlessly switch from source to source. A more stable power network is in prospect. Peak loads and prices "will be flattened by back-up generation systems whose owners start wheeling their excess power back on the grid."

Most on-site generators are diesel, while natural-gas-fired microturbines are emerging. But the more climate-friendly alternative of fuel cells is starting to make inroads. First National Bank of Omaha, the seventh largest credit card processor in the U.S., in 1999 installed a fuel cell power system at its new Omaha processing center. It came from Connecticut-based Sure Power, which builds such systems for the high nines market.

"For data centers, Internet hubs, telecom centers, high tech manufacturing and a lot of different types of facilities where high reliability is very important, fuel cells are robustly cost effective," notes Chris Robertson, a Portland consultant who has advised the area's microchip makers on energy issues.

That is because some electricity is far more valuable than plain vanilla grid power. Three nines power might market for 10¢/kWh. Information-intensive businesses typically invest $1,000 for the same quantity of six nines. To protect against spikes and provide reliable backup generation, U.S. businesses annually spend $4 billion. The market for premium, information-quality electricity is growing at double digit rates, Huber Mills says.

Not only is the distributed intelligence revolution driving creation of the distributed energy network -- It is also yielding dramatic leaps in energy efficiency.

The Business Roundtable in a 1999 assessment of technology's role in responding to climate change concerns noted, "The `digital revolution' likely will bring pervasive and deep changes in how energy is used and managed in every sector. Not only are machines, motors, lights and equipment in general afforded `intelligence,' but entire processes from design to fabrication, delivery and operation are improved by the rapidly emerging capabilities of the microprocessor and telecommunications."

"Innovations which cut heat-trapping carbon dioxide emissions by saving energy put electronic technologies at the forefront in protecting the global climate in ways unforeseen just a few years ago," says a World Resources Institute report.

Commonplace technologies such as lighting and motors, still the top energy consumers, are undergoing electronic transformation which has already produced major efficiency improvements. The process is far from played out. Fluorescent lights with controls that adjust to various lighting conditions, computer-controlled speed drives on motors, micrkprocessors that can cut boiler energy use 25 percent, all tied in digital energy management systems that monitor and control entire buildings, spell remarkable efficiency improvements. Texas A&M researchers have demonstrated building control systems that cut energy use 25 percent and pay for themselves in 18 months. An advanced system at Xerox's research center which switches on heating, cooling and office equipment only when a person approaches cut energy use 45 percent.

The Internet connects with building energy management at a number of points. Large businesses are increasingly hiring Energy Service Companies, ESCOs, to handle all energy needs. ESCOs typically provide clients with up-front financing for efficiency improvements, and recoup the investment through a portion of the resulting energy savings. With that incentive, ESCOs are starting to link building control systems via the net so they can monitor and operate them from a central location.

At the residential level, Puget Sound Energy in December 1999 announced one of the nation's first tests of a technology that uses the net to adjust heating levelsIn 200 Kent, Wash. homes the utility employs the net to turn down smart thermostats up to 6 degrees during daytime peak demand. If customers want the heat they can log on to the net, either from home or a remote location, to override the command. The utility is interested in reducing the need for costly peaking facilities. Some savings could be reflected in customers' bills.

"Early trials of remote controlled home energy management systems suggest the savings in energy bills could be as high as 10 percent," energy analyst Joseph Romm notes.

The test is tied to deployment of another smart technology, digital meters that instead of being read once a month report real time electrical use data by radio every few minutes. Such real-time information is a crucial component of the Energy Web, Esvelt says. By the end of 2001, 95 percent of Puget's customers will have smart meters. Customers will be able to monitor their usage from a password-protected location on the web, information they can use to control energy use.

The spread of information-crunching power throughout the economy is both driving and making possible the widespread distribution of electrical-generating power. At the same time, distributed intelligence is transforming how energy is used in every area of life. The microchip is the keystone technology in the shift to a super-efficient economy powered by distributed energy sources. If this transformation is deliberately steered toward climate-friendly, carbon-free energy, computing power can become the most important clean energy source of all.

Patrick Mazza is staff writer-researcher for Climate Solutions. This article is excerpted from Climate Solutions' report, Accelerating the Clean Energy Revolution: How the Northwest Can Lead.