Orchestrating Harmony with the Power Grid 2.0: Lessons from Pablo Bauleo’s Itron Inspire Breakout Session [an Energy Central Power Perspectives Interview]

As Fort Collins pursues its goal of 100% renewable electricity by 2030, Bauleo discusses how grid flexibility serves as the “oil” that keeps the engine of intermittent renewable energy running smoothly. This conversation is a must-read for utility leaders looking to adopt forward-thinking strategies and embrace the transformative power of grid flexibility.

Energy Central: For those who weren’t able to attend your Itron Inspire talk live, can you give us a taste of the topic and why you found it so important to share? What were some of the questions or feedback that you got?

Pablo Bauleo: The energy industry is undergoing a tectonic shift that requires replacing carbon-intensive resources with carbon-free resources. It’s tempting to simply recreate the current electric industry model while replacing the resources in a 1:1 ratio. This short-sighted approach has several technological and strategic challenges.

An effective carbon-free dispatchable generation unit that can be spun-up quickly to mitigate peak load grid conditions doesn’t exist and would be a questionable and expensive technological challenge to develop. Especially considering that existing dispatchable thermal units typically see less than 100 hours of run-time per year.

Recreating the current model which is designed to meet peak demand also misses the mark by failing to consider the growing impact of intermittent renewables. Incorporating renewables into the current model requires shifting energy consumption to better match renewable generation. Some utilities are already curtailing renewable generation because they are unable to flex their energy consumption.

However, we are fortunate, because given the significant changes in the industry, this is the time to replace “peak resources” with “grid flexibility resources” (thermostats, electric water heaters, electric cars, batteries), to more efficiently utilize the non-carbon, non-dispatchable resources that are coming online. By deploying flexible grid resources, we can mitigate (maybe even replace) the need for peaking resources and save consequential amounts of money. We have the opportunity to build the Power Grid 2.0 and to do it better and more efficiently than before.

However, grid flexible resources also include having a human component: the electric utility customer. Having an ongoing and engaged customer base can prove challenging for program implementation and several of the questions I got were about customer participation, customer comfort and regulatory approval, topics that we can expand on later.

EC: In your presentation, I enjoyed how you likened DERMS to an orchestra conductor. Can you explain that a little further and share how has this analogy shaped your approach to integrating diverse DERs at Fort Collins Utilities?

PB: In my presentation, I described all DERs—whether thermostats, EVs, batteries, or otherwise—as musical instruments, while the DERMS plays the role of an orchestra conductor and the different needs of the grid—aspects like duck-curve mitigation, time-of-use load shifting, and solar off-ramp management—are the music sheets they are playing to solve the problem at hand. You always have the same instruments (or same DER portfolio) but depending on how they are dispatched (that is, the music sheet that is being performed) you can address different needs. In some situations, the same DER can be used more than once in the same day for different needs, like for duck-curve mitigation (solar noon consumption) and time-of use load shifting later that evening.

Going back to the orchestra analogy, if you are listening to a score, you might have the brass section go into a crescendo, only to be followed by the string sections with a decrescendo, to balance things out. In the Power Grid 2.0, you can have photovoltaic systems increasing their generation at solar noon, pushing what is not locally consumed into the grid. In a synchronized way, grid-interactive water heaters can be told to turn on and absorb the solar energy being pushed into the grid, mitigating the duck-curve, to balance things out.

Similarly, as people get home at the end of the day and plug-in their electric cars, they unintendedly exacerbate the solar off-ramp problem by initiating a charging session just as the sun goes down. But if they were to delay the charging session to later in the evening (when there is often excess wind generation) they avoid increasing demand as solar generation wanes.  And at the same time, they can help better manage the ‘valley’ of the load profile by increasing consumption when there is excess renewable wind in the middle of the night, which could have otherwise been curtailed.  With grid flexibility you are not just addressing peak management, you are also addressing valley management!

The whole idea here is to be multi-dimensional in your approach to whatever the grid needs are at any point in time. It is not about thinking about how to use a single DER resource type but how to use them all, in full coordination with each other to deliver maximum value to the grid (i.e. providing resilience), the customer (i.e. providing services at a lower cost) and the environment (i.e. providing energy that is carbon-free).

EC: What have been the most significant lessons learned from implementing the Peak Partners Program, especially regarding customer engagement and technology adoption?

PB: One of the most important lessons learned is to offer customers a choice on how to participate in the programs.

Historically, Utilities has taken the approach of developing a program with a single set of rules to solve a single problem and then try to recruit as many customers as possible, regardless of whether the program was the best possible fit for the customer.  In other words, at times it was like forcing a square peg in a round hole.

With Peak Partners, we approached the challenge from another point of view: Let’s figure it out how many “peg shapes” (i.e. customer types) are out there and let’s create holes with different shapes to fit as many pegs as we can.

Through analytics we cross-referenced disparate sources of customer data (energy use patterns from AMI, DMV registration data, assessor data, demographics, etc.) to identify which program would be a better fit for each customer and market those programs to each subset of customers.

In some cases, it could be a thermostat program, in other cases it might be a water heater program. Or even in some cases it could be “how many hours of a water heater you are willing to shift?”. We found out that some customers are very happy participating daily for one hour, while others can do a five-hour shift. We are making it easy for customers to participate and all bring value to the utility. Through optimization algorithms it is possible to figure out how to best deploy -when and how to call- each customer-DER based on the customer’s willingness to support the grid.

Regarding technology adoption, in some cases you must “seed the field” by offering some equipment for free or deeply discounted. For instance, in addition to BYOD programs, we have direct install programs where customers can get a Wi-Fi thermostat installed (free of charge) or even a whole electric water heater replacement – for free and it includes ongoing maintenance! – but this approach of offering things for free has taught us some equity lessons, which we implemented in newer programs.

EC: In these types of initiatives, how does your organization ensure equity, particularly in programs like the GIWH initiative that target low-to-moderate income households?

PB: Equity is a central piece of all the programs and services offered by the City of Fort Collins but as we found out, offering services that successfully support historically resilient communities is not easy.

When we launched our direct install program for Wi-Fi thermostats, we thought that low-income customers would naturally flock towards the program and benefit from a 100% free Wi-Fi thermostat (including installation). But after the enrollments came in, we found out that while some low-income customers did enroll, most of the customers participating in the program were college graduates, with above-average incomes and living in larger-than-average homes.

The reasons behind that behavior vary, but it is a combination of low-income customers living in homes without central AC, getting by with window AC units or even without AC. They are often just too busy figuring out how to make rent and lack the “bandwidth” to engage with the complexities of a utility program that offers a free thermostat. Finally, often underserved communities tend to be distrustful of things that are “free”, as they have been taken advantage in the past under the pretense of “free” services being offered to them.

Going back to the “peg shapes” analogy we discussed before, finding an effective communication path for low-income customers is just another shape to consider when creating the “hole” for this customer segment. To overcome these challenges, next year we are going to run a pilot thermostat program in which what we are piloting is how to target low-income customers via communications with an equity-focused lens. We are getting guidance from equity experts on how to do that, as we are utility-professionals and are not trained on equity-centered communications.

Shifting now to grid-interactive water heaters (which we offer for free and with free ongoing maintenance, effectively a hot-water-as-a-service program) which are a much higher value item than a thermostat, we have been working together with housing organizations that serve the low-income community.

The key point here is that we (the utility) do not have the trust-relationship with low-income customers, but the housing organization does. The program arrives to the community members through their trusted organization instead of directly from the utility.

Therefore, the program saves capital funds for the housing organization that can be directed towards other expenses. In a particular project we did last year, they were able to install better insulating windows and to perform beautification projects (green space) of the complexes they manage.  That improved the comfort and life quality of the low-income residents and the water heater would automatically shift-load from expensive On-Peak Hour to cheaper Off-Peak Hours (we have a mandatory TOU rate) saving about 1/3 of the yearly cost of running an electric water heater.  Plus, the utility gets to control the GIWH during all the other hours of the day to perform grid-flexibility activities, like mitigation of duck-curve, mitigation of solar off-ramp, wind-integration (valley management) or simply old-fashioned ‘peak management’ during a few dozens of hours per year. It is a win-win-win!

EC: How has the use of AMI and telematics data enhanced program participation and operational efficiency for grid flexibility initiatives?

PB: We mined the AMI data to identify energy patterns that would indicate the type of program a customer would benefit from the most, like the presence of AC, presence of an electric water heater, presence of an EVSE, etc.

We typically do this analysis over the whole population and create a score or likelihood of a customer having a particular DER already in their homes or that could benefit from having a type of DER deployed. This is part of finding different “peg shapes” I referred to earlier.

By looking at the whole population, the AMI data is used to “size” the opportunity of a program (answering whether there enough DERs of a given type to justify a program) and later to develop list of targeted marketing that will increase our enrollment rates.

On the other hand, we use telemetry and telematics to monitor and to verify performance shortly after the event has occurred or to identify if a given customer might benefit from being in a different subset of the same program (like changing the number of hours they allow load shifting).

Finally, we also use AMI to cross-validate the information provided by the telematics, although at this time the AMI cross-validation is typically done as a spot-check and not for each event. We are working with our DERMS provider (Itron) to fully integrate and automate the performance report via AMI for all our DERs.

EC: With Fort Collins’ goal of 100% renewable electricity by 2030, how do grid flexibility programs play a role in managing intermittent resources effectively? Do you find yourselves to be on the track expected to reach that goal? 

PB: Yes, we are on track to reach our goal of 100% renewable energy consumption by the year 2030, assuming all our energy efficiency and grid flexibility programs plus plans for new carbon-free generation stay the course. We have a 2-year cadence to review our progress against our plans to ensure that we will reach our goal by 2030. We need to keep a close eye on all the above and be ready to perform course corrections if necessary.

I like to think of Grid Flexibility as the ‘oil’ in an engine, rather than the fuel. Grid-Flex per-se is not renewable generation, but Grid-Flex is needed to run an electric grid that is fueled by intermittent generation renewables, like solar and wind.

Over time, grid flexibility will become a daily activity for grid operators. We are already dispatching events every day of the year, often multiple times a day. A decade ago, we would dispatch maybe 20 times in a year, because we were only doing peak management. This year we are on track to dispatch over 10,000 grid flexibility events as we target many grid needs (peak management, duck curve, solar off-ramp, time-of-use load shifting, etc.). On average that is more than 1 event per hour, although naturally the events tend to “bunch up” around certain times of the day and to run in parallel with each other (i.e., we count events as separate when we dispatch different DER types at the same time).

Although at this point our cumulative events have a minimal impact on the grid due to the limited scale of our portfolio (a few MW) we are exercising our grid flexibility resources in different grid conditions to both confirm the resources are available when needed and to become comfortable with using them for grid-operations on a daily basis. We have laid the groundwork so we can now begin scaling all of our DERs to help meet the 2030 goals.

EC: Looking ahead, what emerging trends or technologies are you most excited about, and how might they impact utilities’ roles in sustainability? Anything else top of mind you’d be excited to share with the Energy Central community? 

PB: Electrification and fuel switching are going to be big trends that present some challenges that need to be understood and addressed. There is going to be a need to upgrade the electric service and electric panels at residences. Perhaps distribution transformers might even need to be upgraded. But even in those cases grid-flexibility can help defer capital investments.

By flexing consumption locally, either at the house level via a smart electric panel or across homes that share a distribution transformer, it is possible to avoid a transformer upgrade or at least being able to upgrade it with a smaller size transformer than it would have been required without localized grid-flex capabilities.

For instance, with another partner (Panasonic) we have demonstrated a solution that allows us to virtually group EVSE, as if they were around a single distribution transformer, and to throttle back the charging sessions of all EVSE in that group to avoid overloading the (virtual) transformer.  It is even possible to give priority to a given vehicle (imagine having four vehicles charging at the same time but one of them being for EMS services) to charge up faster than the others in the group.

Another opportunity would be to leverage Wi-Fi refrigerators and to be able to delay their auto-defrost cycles, which typically use four times more power than the refrigerator compressor cycle. Each home has at least one refrigerator. Imagine the potential to scale this program if we could coordinate the time of the auto-defrost cycle to match, let’s say, solar noon and to mitigate the duck-curve. The appliance OEMs are getting there but I don’t think they are ready to offer a “BYOR” (refrigerator) type of program to utilities yet.

The last thing I would like to share with the Energy Central community is to remind all of us of the reason we are working to decarbonize our energy. I would like to do it by quoting Carl Sagan when he was referring to a picture of Earth taken by a spacecraft at the edge of the solar system, looking inwards, and finding that Earth was just the size of a pixel, just a frail pale blue dot against the darkness of space.

              “To my mind, there is perhaps no better demonstration of the folly of human conceits than this distant image of our tiny world. To me, it underscores our responsibility to deal more kindly and compassionately with one another and to preserve and cherish that pale blue dot, the only home we’ve ever known”

                                                                                                                Carl Sagan, February 14th, 1990