Interview with Naimish Patel, CEO, Gridco Systems (USA) Speaker at Australian Utility Week 2015 Australian Utility Week (24-25 November, Luna Park Sydney) is focused on innovation and as our utility partners will attest, rapid innovation is taking place at the grid-edge with the massive adoption of Distributed Energy Resources (DER). We are pleased to have Naimish Patel, CEO, Gridco Systems (USA) joining as one of our keynote speakers. As a thought leader in this space, and one of the top utility technology innovators, we asked Naimish a few questions on where grid modernization is headed. Q. Naimish, by way of introduction since you are new to the Australian and New Zealand market, can you please explain how your technology works and why it would be relevant to our utilities? Is it right to say that you are pushing the evolution of the Smart Grid? Since its inception in 2010, Gridco Systems has been singularly focused on helping Distribution Network Operators (DNOs) evolve their power delivery systems into agile energy exchange platforms. Such platforms are increasingly decentralized in their operation and accommodating of two-way power flow, while continuing to provide safe, reliable and affordable delivery of electricity amid a changing energy landscape characterized by rapid proliferation of DER, increased emphasis on energy efficiency and greater need to manage peak capacity. As such, Gridco Systems is now a leading provider of a new class of agile grid infrastructure solutions that control power in a distributed, dynamic and decoupled fashion. Gridco Systems empower Solution is being used by distribution utilities globally to cost-effectively and reliably integrate DER, improve system efficiency and capacity utilization, and deliver higher power quality and service reliability to endcustomers issues that are relevant to all utilities worldwide, including those here in Australia and New Zealand. Our empower Solution, an integrated hardware and software platform, consists of an end-to-end solution for the distribution grid, and includes; the Gridco Systems In-Line Power Regulator (IPR), a power electronics based hardware system that extends power flow and power quality regulation to the edge of the grid, the Gridco Systems 1
Distributed Grid Controller (DGC), a communications and coordination device that enables de-centralized and localized DER management all the way out to the edge of the grid, and the Gridco Systems Grid Management and Analytics Platform (GMAP), a device management, data collection and analytics software system for advanced distribution system management. The empower Solution has been selected by some of the world s largest electric utilities as the technology necessary to lay the foundation for the next-generation distribution grid, because it provides a comprehensive suite of products with a broad range of functionality. As a result, it can simultaneously address multiple applications, unlock significant capital and operational savings, and increase the long-term strategic value of the distribution grid. Q. I see you have won a number of prestigious innovation-related awards. Why do people in the industry see your solution as being so special? Surely, there are other companies doing what you do? Thank you. We are very proud and honoured to have been recognized by our industry and customers as an innovator and technology leader. Many of the judges for these awards represent some of the most progressive utilities in energy innovation, and their recognition is greatly appreciated. Gridco Systems is committed to delivering innovative and cost-effective solutions that solve real problems on the distribution grid today and into the future. As the industry continues its shift from the traditional centralized production of power to more local and distributed sources of power, we are seeing greater need to solve problems at the distribution level, all the way out to the grid edge. This is exciting, since historically the majority of grid investments have been made in transmission and generation. Now the opportunities for innovation and value creation lie with distribution operators. Our empower Solution allows utilities to increase the agility, flexibility and controllability of their grid, and meets all the fundamental utility requirements it is field-proven, reliable, efficient, safe and cost-effective. While we can t speculate on what other companies are doing, we have heard that others are working on point elements of Gridco s offering. Our approach is to provide a foundational end-to-end solution that simultaneously addresses multiple applications so that distribution utilities can avoid the complexity and cost of integrating multiple point-solutions from disparate vendors. Q. In recent years electric utilities have seen the beginnings of a customer-driven transformation of the distribution system into an energy exchange. How do you see this field evolving over the next few years? Utility-scale power distribution has historically been characterized by predictable, unidirectional power flows from relatively few centralized generating plants to many geographically dispersed loads. Such power flows have enabled utilities to design distribution feeders with relatively few sensing and control points located primarily at the substation and along the medium voltage primary. Today, a number of developments are beginning to strain the reliability, capacity, and efficiency of the distribution grid: Adoption of increasingly cost-effective, customer-owned distributed generation Increasing transmission and base-load generation capacity constraints Increasing focus on energy efficiency and conservation 2
Increasing severity of outages due to severe storms Emerging load types, including electric vehicles and data centers Increasing diversification of customer demand Higher frequency of cyber-attacks targeted at the energy industry These trends are challenging the core of the utility mission to deliver safe, reliable, and affordable power. Distribution systems are experiencing larger, more frequent, and more rapid power flow fluctuations. In a growing number of cases, these dynamics render existing medium voltage power management equipment incapable of regulating power to within mandated limits. With the increased emphasis on the grid edge, we expect Distribution Automation (DA), and distribution investments in general, to not only include our new class of power and control technology, but also include medium and low voltage assets. Q. Do you have any general technology advice for utilities as they brace for the change ahead driven by DER including residential solar and storage? How would you be repositioning your technology architecture if you were a utility leader? Are there other strategic positioning changes you can comment on from your experiences with US utilities? There are a number of new challenges presented by DER, many of which are already being experienced by utilities here in Australia and around the world. Some examples of these challenges include: regulating steady-state voltage in response to PV-induced voltage rise; smoothing out dynamic power quality fluctuations as a result of the variable operation of distributed PV and energy storage; and regulating the flow of power for efficient use of network capacity as customer generation and load patterns become more variable. Add that to existing challenges such as: maintaining delivered voltage within standard limits, reducing feeder voltage for energy efficiency and/or peak demand reduction; maintaining phase balance, ensuring power quality by managing harmonics induced by nonlinear loads; automatically rerouting power around failures; among many others, and distribution utilities have their work cut out for them. The existing tools in the distribution engineer's toolbox are not well-suited to meet the increasingly dynamic challenges facing today's grid. Business-as-usual techniques such as grid reinforcement (reconductoring or replacing transformers) are often costprohibitive and do not give the utility the awareness, intelligence, and agility needed to handle these new challenges that are impacting today's distribution grid. Our general advice to utilities is to invest in new technology that can provide not only the situational awareness but also the ability to autonomously assure power quality against mandated standards. Beyond simple sensors and data collection systems, utilities should be thinking about how to dynamically manage power quality and power flow, and control and coordinate distributed assets, both in front of and behind the meter. Gridco's products give the distribution utility greater visibility into the secondary side with more command and power control capabilities than ever before. Q. I understand your solution helps with the integration of DER. How does your solution compare economically and technically with smart inverters? Our robust, multi-function and utility-owned empower Solution gives distribution engineers a greater level of visibility and control of the grid than ever before, whether it s integrating DERs, extracting greater program benefits from Volt/VAR 3
Optimization/Conservation Voltage Reduction (VVO/CVR) programs or ensuring power quality. In the context of DER, voltage management and reverse power flow can become serious issues, particularly at high penetration levels; for example, residential clusters of PV. Our empower Solution includes two key elements that utilities can employ together or separately: the IPRs and the DGCs. The advantage of our utility-owned IPRs is that it gives utilities direct volt/var control, allowing them to precisely and accurately dial voltage up/down based on DER supply, demand, weather conditions and other factors, while not relying on customer-owned assets such as smart inverters. Similarly, to manage power flow, our DGC enables communication with behind-the-meter smart inverters, in a way that effectively coordinates them with available grid-side capacity and grid-side devices such as our IPR. This approach of using grid-side assets to directly control power or coordinate with smart inverters provides much more deterministic results, both technically and economically. For example, smart inverters may not be available in the areas of the distribution circuit where volt/var control is needed. And even if they are, the cost of using their VAR capabilities to support voltage is not widely understood or determined. The appropriate compensation for using that resource for grid support instead of its intended generation will need to be agreed upon by customers, regulators and utilities. Furthermore, this will likely be a recurring cost, since it will be a service to utilities, turning voltage control into an operational expense, rather than a capital expense. Moreover, an often overlooked challenge with smart inverters is one of coordination, particularly when there are thousands (and potentially millions) of residential- and commercial-scale systems interconnected to the distribution grid. Lack of coordination or miscoordination of smart inverters can result in power quality and power-flow problems, protection problems, and grid inefficiency. This presents an opportunity for companies like Gridco to help utilities coordinate smart inverters and manage the flow of power into and out of the distribution system. That said, smart inverters are an essential component of the agile distribution grid. However, relying on them as an exclusive remedy for local and system voltage issues is really not what they were intended for. Q. I know that you work with US regulators and provide advice across a range of themes. Are there any tips that you think might have relevance for Australian or New Zealand utility regulators? What should they focus on long-term? Yes, I recently participated at the Advanced Energy Economy s Pathway to 2050 event, where I had the opportunity to interview California Public Utilities Commission s President Michael Picker on a panel about the Future of the Electricity System. He shared his long-term vision for the distribution grid and associated regulatory modifications and utility business models needed to achieve a truly agile distribution grid. Many of the themes he touched on: the need to provide resiliency, security, and adaptability, while continuing to provide safe, reliable, and affordable power to endusers, also ring true for the Australian and New Zealand markets. Although there are differences in regulatory structures, both regions are experiencing significant growth in customer-owned PV and electric vehicles (EV), which tend to be clustered, placing additional burdens on the utility to ensure system reliability and absorb associated capital expense. True grid modernization entails more than just upgrading existing assets, deploying communications and data analytics systems, and installing sensing and metering infrastructure. 4
The continually evolving demands placed on the electric grid resulting from increasing penetration of DER, increasing transmission capacity constraints, and increasing grid reliability challenges, requires a new class of agile grid infrastructure that enables utilities to economically address the challenges of today, while providing reliable and scalable adaptation to the challenges of tomorrow. Inherent in these solutions is the ability to respond to time-varying grid conditions through adaptive, localized, and continuous power regulation, thereby providing the fundamental function of real-time power quality assurance. The essential economic value proposition to utility, regulator, and customer is one rooted in systemic reliability and efficiency enhancements, lower capital expenditures as compared to traditional grid reinforcement solutions, and one that does not rely on financial subsidy or intangible societal benefits to render it whole. At a basic level, it is more important than ever to further incentivize distribution operators to make capital efficient investments to address evolving challenges, as this will be crucial to containing rate increases across the entire customer base. Q. Finally Naimish, while you are in Australia for AUW, who are you keen on meeting? I am very excited to be in Australia again this year, this time for AUW. My goal is to meet with forward-thinking utilities that are looking for cost effective and reliable solutions to address their distribution grid challenges and a trusted partner they can count on. In particular, I am most keen to meet with utilities who are: 1) experiencing increasing penetration of DER, 2) would like to extract maximum benefits from utility-side energy efficiency or peak-demand reduction programs (VVO/CVR), and 3) need to solve power quality problems for end customers. If you would like to meet Naimish Patel in person, register your book your delegate pass or contact us today and don t miss this opportunity to learn and connect with Australian and New Zealand utilities under one roof at Luna Park Sydney, Australia 5