There are a lot of smart lighting startups trying the wireless route to network lights for better efficiency. Then there’s Redwood Systems, the startup that wants to control your lights over Ethernet cable. On Wednesday, the Fremont, Calif.-based startup announced a $11.75 million Series C round, with investors including Battery Ventures, U.S. Venture Partners, Index Ventures and Mitsui & Co, Ltd.

Redwood has raised about $30 million since its 2008 founding for its unusual LED-over-Ethernet power and control technology, and now deploys its system with customers including Johnson Controls, SAP, Volkswagen and Facebook.

It’s also branched out into controlling fluorescent lights, high intensity discharge (HID) lights, and others via its controller-to-fixture low-voltage wiring network. Early this month, it made its first move outside the United States, announcing  a partnership with French mega-utility EDF and cabling partners Anixter and CommScope.

Sam Klepper, Redwood's chief marketing officer and executive vice president of building solutions, said in a Wednesday interview that the Series C round is aimed at expanding growth into new markets. Asia is a particular focus, he said, given the company’s strategic partnership with Mitsui, which invested $3.5 million in the company in June 2011. The company raised $15 million in a Series B round in October 2011, and $4 million in a Series A round.

The new round is also aimed at bringing some new features to Redwood’s network in the ceiling, he said, with potential uses like occupancy sensing that feeds into conference room management systems. Klepper didn’t give any particulars on what Redwood was working on or with which partners, though he said an announcement is expected in June.

While the equipment costs of Redwood’s networked LED lighting architecture are about 10 percent to 20 percent more than traditional lighting setups, it can pay itself back in reduced installation costs alone, Klepper said -- low-voltage cables for power means no expensive electricians and faster deployment. That doesn’t include the plummeting costs of LEDs, which have fallen roughly in half over the past 18 months or so, he noted.

Once they’re in, Redwood’s installations have yielded 70 percent to 80 percent energy savings, compared to a typical, high-efficiency fluorescent lighting system, in customer environments like offices and data centers, he said. Those benefits can come both from the high efficiency and long-life features of LEDs to replace fluorescent tubes, or via controls alone, he said.

One data center client was able to shave 85 percent from its fluorescent lighting bills by dimming the lights just enough so that the security cameras could make out what they were looking at, and no more, for example. Office environments require more sensitive controls, like occupancy sensors, which come on board Redwood’s lighting control node that sits at, or as part of, every lighting fixture.

One big question for Redwood is how quickly LEDs will take hold as a viable alternative for mainstream building lighting. The startup’s February decision to support multiple lighting types would appear to lessen the company’s dependence on this growth to some extent.

Another big question is how well a cabled solution pencils out against the host of wireless lighting networks out there. Startups like Adura, Daintree Networks, Enlighted, Digital Lumens and others say their wireless networks cost far less than hard-wired alternatives. These companies have millions of square feet of projects underway to test their reliability and energy efficiency benefits.

Still, less than 10 percent of buildings now have smart lighting systems installed, making it a potentially wide-open market for startups, as well as lighting giants like Philips, which estimates the global lighting market at $75 billion and growing. Even a small increase in the share of that pie that goes to next-generation smart lighting systems could make a significant market for contenders in the field.   

For the second time this week, Illinois regulators have slapped down big utilities' smart grid spending plans. First it was downstate utility Ameren, and now it's Chicagoland utility Commonwealth Edison.

Yesterday, the Illinois Commerce Commission told ComEd it had to cut about $146 million from the rates it can expect to collect from customers this year. That's about four times more than the $40 million the utility had targeted in cost reductions in a February filing.

That math is open to some interpretation, since ComEd has filed a complex set of formulae for how it's accounting for its costs, which include pension costs and other issues unrelated to the grid itself. Just how the ruling will affect ComEd's $2.6 billion in smart meter and distribution automation projects is unclear. ComEd wants to deploy about 4 million smart meters over the next decade, with Silver Spring Networks as a key partner, along with substation and distribution grid sensors and controls.

ComEd and Ameren are both trying to prove that their plans for a combined $3.2 billion in smart grid spending are worth it to their customers, as per an Illinois state law passed in December. So far, it's not looking so good, although ComEd has filed for a 2013 rate increase that would cover losses this year.

Here's what Greentech Media reporter Katherine Tweed had to say on the ICC's rejection of Ameren Illinois' smart grid proposal on Tuesday:

The final ruling has not been posted, but the ICC said it is asking Ameren for more information about how the technology would benefit customers before it allows it to proceed. The ICC's concerns are in line with many of the concerns posted in the Attorney General’s filing a few weeks ago, the regulator said in a Tuesday statement.

The state Attorney General has asked questions on assumed savings including "truck rolls," or the number of onsite work crews that need to be dispatched to fix grid problems or deal with customers. The catch is, there's a rule on the books that people have to be contacted in person “at the time the service is being discontinued” when they’re being disconnected for nonpayment.

That's just the type of cost that automating the grid, via smart meters and other systems, is meant to end. In Ameren’s proposal, the utility estimated that it received about 247,000 disconnect/reconnect orders per year, about 89,000 of which were disconnects for non-pay, more than a third of the total figure.

Besides the remote disconnect issue, there are also questions about the verification of benefits for customers and the details of where and when the technology will be deployed, since some of Ameren’s territory already has some automatic meter reading.

At stake is a $300 million investment in Ameren’s grid over the next decade, including distribution automation and smart meters.

The rejection harks back to Baltimore Gas & Electric’s rejected proposal nearly two years ago, when the Maryland Public Service Commission told the utility that the plan’s surcharge to customers was not justified and that it lacked sufficient consumer education. Eventually the plan was approved with a far lower surcharge, more robust consumer offerings, and no mandatory time-of-use pricing.

In Illinois, smart grid has had a hard road so far, as the state’s two largest utilities have been repeatedly chastised for not spelling out the benefits to customers well enough.

The issue seemed settled at the end of last year, when the state ordered that Ameren and Commonwealth Edison will have to reduce outages by 20 percent, energy theft by 50 percent, and inactive meters (those delivering power to unoccupied homes) by 90 percent under the new rules. 

Illinois utilities have to prove the benefits up front, but they’re not alone. California utilities have to file smart grid metrics every year, showing the progress on various projects, from consumer access to energy information to distribution automation.

ComEd received approval from the Illinois state legislature for its $2.6 billion smart grid plan, but the details are still awaiting final approval from the ICC, according to the Chicago Tribune. ComEd's plan includes year-over-year performance metrics that it will be measured against. 

Ameren will likely take a page out of ComEd's book and offer up all of the necessary information that is missing to gain approval. The process is being repeated in various other states, where utilities have to be clearer about where the benefits of smart grid lay. Many of the operational benefits from smart grid are for the utility’s bottom line, not the consumer. Bolstering the consumer benefits of smart grid is not important; it is critical for future smart grid projects.

ComEd has signed on to the Green Button initiative to allow consumers to access their data in a standardized format that can then be leveraged by third parties, if the customer chooses, for energy savings applications. Many other utilities that have suffered public concern (or outright backlash) have also signed on to the initiative.

Ameren can be expected to gain approval eventually, but it will take a clear plan, with clear benefits for all, to get there.

With a steep growth of power generation from photovoltaic (PV) and wind power and with 8 GW base load capacity suddenly taken out of service, the situation in Germany has developed into a nightmare for system operators.



The peak demand in Germany is about 80 gigawatts. The variations of wind and PV generation create situations which require long distance transport of huge amounts of power. The grid capacity is far from sufficient for these transports. The result is a remarkably large number of curtailments of RES (renewable energy sources).

Reports from the European Network of Transmission System Operators for Electricity (ENTSO-E)[1] and the German Grid Agency[2] reflect concern for the operational security of the power system. The risk of a prolonged and widespread power blackout was earlier recognized by the German Bundestag and discussed in an interesting report[3].

This note will present the main conclusions from the three reports combined with data, collected from the German system operators.


A New Operating Pattern

Since January 2012, all four German system operators have published estimated photovoltaic generation based on representative samples. The data will give research environments a new opportunity to analyze the impact of RES in Germany.

Some observations are possible from the charts above and other evidence:

• Wind power peaks seem not to be simultaneous with PV peaks. This means that PV does not add its full peak capacity to the grid problems during high wind periods.
• Most German wind power is installed in the northern part of the country, while most PV capacity is installed in Bavaria. The nuclear moratorium has created the most serious supply problems in the southern part of Germany. This observation suggests additional PV generation is needed to relieve the supply problems.
• PV generation cannot reduce the need for peak capacity. The reason is that there is no PV generation during the evening peak load.
• The regulating work which must be made by controllable power sources grows considerably with the growth of wind power and PV. TenneT is one of Germany’s four main grid operators. In the TenneT area, a calculation for April 2011 has shown that wind power alone would extend the regulating range by more than 50 percent, while the actual combination of wind power and PV has doubled the regulating range.

 

Although PV may be able to give some relief to the grids, PV cannot reduce the need for peak capacity and additional PV will cause a considerable growth in the need for regulating capacity.

The German Grid Is a Backbone in Europe

On November 4, 2006, a German 380-kilovolt line had to be temporarily disconnected. Due to insufficient coordination of protection systems, a circuit tripped and started cascading outages. The result was that the continental grid in Europe was divided into three islands and about 17 gigawatts of load was shed. The case demonstrates how a local event in Germany can turn into a widespread European disturbance.

In April 2012, the president of ENTSO-E[4], Daniel Dobbeni, stated his concern about security of power system operation in Europe in a letter to the European Commissioner for Energy, Günther Oettinger.

ENTSO-E: “As long as RES generation in certain regions expands faster -- partly as a function of national support schemes -- than the transmission network can accommodate, the risk of insecure system operation coupled with costly generation curtailments will rise significantly.”

A recent briefing paper gives an overview of the current situation. The rapid increase of wind power and other renewable energy sources (RES) without a corresponding reinforcement of the electric grids has caused the problems. The paper explains: “Heavy ‘unplanned’ transit flows added to scheduled flows cause severe loading on southern interconnectors (PL/CZ, PL/SK, DE/CZ, and also SK/HU and SK/UA) and lead to non-compliance with fundamental network security criteria. The high level of flows on the interconnectors leads to overloading of the network in Germany and neighboring countries Poland, Czech Republic, Slovakia and Hungary.”



Among the countermeasures of the transmission system operators (TSOs) is the use of the HVDC links across the Baltic Sea for a redistribution of power flows. A common procedure has been developed by German and Polish TSOs and two Nordic TSOs (Energinet.dk and Svenska Kraftnät). However, the remedial actions cannot be guaranteed, as they depend on prevailing system conditions.

The countermeasures have cost implications and cannot be implemented without cost sharing agreements.

ENTSO-E makes reference to its Ten-Year Network Development Plans (TYNDP). The timely implementation of the projects will require the active support of European policy makers.

The paper estimates the necessary investment for reinforcement of the western and the eastern transport corridors in Germany to be 30 billion euros for the next decade. The German reinforcements must be coordinated with investments in neighboring countries.

Efficient market arrangements are important for efficient congestion management, secure grid operation and overall market efficiency. Therefore, the organization of more consistent markets and redefinition of bidding areas deserve consideration.

The ENTSO-E paper concludes: “If this infrastructure does not materialize in due time, then the rate of RES increase should be examined under a more pragmatic prism."

A German Performance Report for Winter 2011-2012

The Federal German Grid Agency has confirmed the assumption of a strained grid in a 120-page report on the supply situation for electricity and gas in Germany during the winter season of 2011-2012.

It is useful for the general understanding of the significance of the infrastructure when an authority evaluates actual system conditions and publishes annual reports for better or for worse. Unfortunately, that sort of report is rare in the electricity business.

This is my translation of the 10 points of the summary:

• The situation of the power grid was very strained during winter 2011-2012.
• Besides the scenarios described in the Grid Agency report of August 31, 2011 the shortage of natural gas in February 2012 was followed by an unexpected event which added to the load on the electric grids and required additional measures from the transmissions system operators for maintaining system security.
• In addition to that, an unusually large number of forecast errors caused an exhaustion of the regulating reserves. Therefore, the transmissions system operators had to resort to additional measures. The Grid Agency will create incentives for improvements of the forecasts by adaptation of the price system for balancing power.
• The synchronous compensator Biblis was commissioned in February 2012 and provided the expected relief of the voltage problems.
• German and Austrian power plant reserves were used in several cases for the relief of power lines and as a supplement to already exhausted regulating capacity. About the same magnitude of power reserves will be needed next winter.
• The power plant capacity has developed unfavorably. Planned extensions have been delayed. Further decommissioning of conventional power plants cannot be defended in Germany for the time being. The prevention of decommissioning of power plants for conventional production will require regulating and legal measures. If more power stations nevertheless should be decommissioned in southern Germany, the needed reserve capacity would increase correspondingly. Besides, the need for capacity mechanisms should be intensively investigated in the medium term.
• The supply of more power from renewable sources than can actually be transferred by the grid would add to overloading of the grid, because the price signals would displace conventional power plants in the merit order and the electricity export from Germany in the internal market would increase. It is the understanding of the grid agency that the existing legal framework allows the transmission system operators to use measures which can reduce the supply to a level that can be transferred by the grid. Nevertheless, a normative clarification seems to be expedient.
• The cooperation between grid operators for electricity and gas must be improved in order to take account of the growing significance of gas power plants and gas supply to the security of supply of the electric grids. Even here, changes of the legal framework are recommended.
• No technical valid measures can replace grid extensions. A consistent use of the established instruments for acceleration of the reinforcement of the grids is required.
• The reduced supply of gas in February 2012 has revealed the weak points of the gas grids. Action is needed for the gas grids. Fortunately, this need is clearly inferior to the need for action in the electricity grids.

 

The general view seems to be concern for the future capacity of power plants, regulating power and reserves. The rigid point 9 seems surprising, but it may reflect a typical view of a grid agency. A strong grid is important, but several other integration measures deserve careful consideration.

The increasing trend in the use of §13.1 of the German Energy Industry Act (EnWG) for re-dispatch and in the use of §11 of the RES Act (EEG) and §13.2 of EnWG for reduction of feed-in of power is demonstrated in report. The data is valid for the transmission grid.

Re-dispatch is used for the relief of highly loaded grid components.



For both years, most re-dispatch concerned the Remptendorf-Redwitz line between Germany and Austria.

Feed-in reduction was initiated 197 times during the winter season of 2011-2012, compared to 39 times the previous year.

In 184 cases, wind power caused high feed-in from distribution grids into the transmission grids. Five cases were remarkable and affected the entire grid:


This information confirms that the German electricity supply had narrow margins during the winter of 2011-2012 without room for additional heroic political decisions. Hopefully, the messages of the Grid Agency will be understood, so a better harmony between the transition of the production facilities toward green solutions and the necessary adaptation of the infrastructure can be achieved.

A Critical Case

Welt Online has reported on “alarm level yellow” for German power grids on March 28-29, 2012[5].

German grid operators are obliged to report all operational interventions aimed at avoiding overloads or power failures. The grid operator for the eastern Germany, 50Hertz, has published a very brief report on the event in German. More details are given in the Grid Agency report.

At 8:48 p.m., one of two circuits of the 380-kilovolt Wolmirsted-Helmstedt line tripped. The other followed 12 minutes later. The reason was a technical defect in TenneT’s substation Helmstedt. Wolmirsted-Helmstedt is the northernmost link between the 50Hertz area (the former DDR) and the other German system operators.

The wind power peak level was not extreme. Nevertheless the remaining links had to be relieved and 50Hertz had to activate comprehensive measures. This is probably the reason why this event caught the attention of the media.



The interventions included about 2,000 megawatts of re-dispatch and about 4,000 megawatts in feed-in reductions.

The case reveals the vulnerability of the German power system. Through April 9, 50Hertz has issued 23 similar reports on strained grid conditions in 2012.

23 Percent of the Hours in Q1 2012 Affected by Interventions

The number of interventions has increased dramatically in Germany from 2010-2011 to 2011-2012. In spite of the obligation to publish information on all interventions, it is difficult to form an overview.

The practical administration of the rules and the compensation is quite complex. There are four grid operators for the primary level (380 kV) and a number of grid operators at lower voltage levels. Bottlenecks are often detected in local grids. It makes no difference to the owner of a wind turbine if local or national grids are congested.

In an attempt to establish an impression of the extent of interventions in Germany, EON Netz will be used as an example. EON Netz is operating the largest secondary grid in Germany. The primary grid in the same area is operated by TenneT.

The control area is divided into a number of local areas (Landkreise). An intervention concerning EEG § 11 is valid for electricity production in one local area. The severity is indicated in steps between 0 percent and 100 percent.

Each intervention record specifies start time and duration. Interventions for different local areas are usually overlapping. One of the main purposes of the lists of interventions is to support the calculation of economic compensations for the owners of the affected power plants.

During the first quarter of 2012, EON Netz has issued 257 interventions. The average length was 5.7 hours. Up to 10 interventions have been issued for the same hour. A total of 504 hours had one or more interventions.

Thus, there have been interventions active for 23.1 percent of the hours during the first quarter of 2012.

The total amount of curtailed energy from wind and CHP is probably modest, but the observations seem to indicate that German grids are frequently loaded to the capacity limits. Strained grids have a higher risk of cascading outages caused by single events.

What Happens During a Blackout?

The Federal political system in Germany has for some time been conscious of the risk of a large blackout.

In 2011, the Office of Technology Assessment at the German Bundestag (TAB) published an interesting report on the consequences of blackouts lasting up to two weeks.

The following infrastructure sectors are considered:

• Information technology and telecommunications
• Transport and traffic
• Water supply and wastewater disposal
• Food supply
• Health care system
• Financial services
• Public institutions (e.g., a case study on prisons)

 

The conclusion is that an interruption of the power supply will be tantamount to a national disaster after only a few days. Though the probability of this event is very low, the report recommends further efforts at all levels in order to “increase the resilience of critical infrastructure sectors in both the short and medium term and also to further optimize the capacities of the national system for disaster control.”

Planning for blackouts is often neglected. One reason for this is the optimistic assumption that blackouts can be avoided. Another reason is the high cost of measures which are supposed to be superfluous.

However, large blackouts do occur. They cannot be completely avoided, but the restoration process can be more or less well prepared. Therefore, vital infrastructure sectors should be prepared for power failures and the necessary facilities for a black start of the power system should be installed and ready for action.

 

***
[1] Interconnected system operation conditions in Continental Central Europe: A briefing paper to the European Commission, EMTSO-E, 13 Mar 2012.

[2] Bericht zum Zustand der leitungsgebundenen Energieversorgung im Winter 2011/12 Bundesnetzagentur, 3 May 2012 (in German)

[3] What happens during a blackout?, Office of Technology Assessment by the German Bundestag, 7 Apr 2011,translated from: “Was bei einem Blackout geschieht.”

[4] The European Network of Transmission System Operators for Electricity

[5] http://www.welt.de/dieweltbewegen/article106143921/Stromnetz-geht-ploetzlich-auf-Alarmstufe-gelb.html

***

This is a guest post by Paul-Frederik Bach. Paul-Frederik has more than 40 years experience in power system planning. He worked with grid and generation planning at ELSAM, the coordinating office for west Danish power stations, until 1997. As Planning Director at Eltra, Transmission System Operator in West Denmark, he was in charge of West Denmark's affiliation to the Nordic spot market for electricity, Nord Pool, in 1999. Until his retirement in 2005, his main responsibility was the integration of wind power into the power grid in Denmark. He is still active as a consultant with an interest in safe and efficient integration of wind power. Check his website for more information.

This article was originally posted on The Oil Drum.

GTM Research just released its latest smart grid report, The Smart Grid in Asia, 2012-2016: Markets, Technologies and Strategies. In this podcast, the report author, Kamil Bojanczyk, provides some insight into the report and enormous scale of investment being made in the smart grid by China, Korea, and Japan.  

China, Japan, and Korea have completely different utility structures and are all building out their smart grids in aggressive but very different ways.

There is an enormous opportunity for U.S. smart grid companies in Asia, as well as a daunting competitive threat. The sheer scale of China's transmission build-out serves as a lesson in the differences in the way China's energy policy works and the manner in which U.S. energy policy doesn't.

Listen in:

 

Lighting Science Group has raised a new round of funding totaling approximately $140 million. The money will be used to finance the company’s growth, expand manufacturing and help keep its place as one of the leaders in the consumer and commercial LED market.

Approximately $88 million of the money is new equity funding and commitments, and another $52 million is the conversion of existing bridge financing since the fourth quarter of last year.  

Lighting Science Group produced 4.5 million LEDs in 2011, a 450 percent increase over 2010. The LED market continues to mature, particularly in certain commercial applications. Lighting Science also began embedding a chip from semiconductor giant Marvell, which was named a 2012 CES Innovations Design and Engineering Award Honoree.

The funding was led by Riverwood Capital and Pegasus Capital Advisors, Lighting Science Group’s majority owner, also participated in the equity financing.

The money will be used to meet the demand of commercial networks, including products for retailers, the hospitality industry, military installations, municipalities and big-box home improvement stores. Lighting Science Group said $10 million will also be used to retire a related-party obligation.

Two executives who have worked with Riverwood Capital, Brad Knight and Keith Scott, will also be joining the management team of Lighting Science, as chief operation officer and chief commercial officer, respectively.

Groom Energy and GTM Research predict that the LED enterprise lighting market will grow by 30 percent in 2011 and surpass $1 billion in annual revenue by 2014. Most of the early growth will come in the commercial and industrial LED lighting space, where the 2010 U.S. market stood at about $330 million in annual revenue. 

Lighting Science Group is successfully competing against lighting giants like Philips, General Electric and Sylvania in the LED space. The incumbents are also looking to stay on top of the market with more innovative offerings. Sylvania recently partnered with Daintree Networks for networked lighting. Falling prices of LEDs are also lifting the prospects of nearly all players in the market, both large and small. 

For the moment, the market is still wide open, and there’s space for everyone to play.

Jigar Shah, former CEO of The Carbon War Room and Founder of SunEdison has joined Inerjys, an equity fund and green finance firm, as Partner, where he will focus on the firm's international renewable energy project strategy. Inerjys, based in Montreal, is looking to raise $1 billion to "reinvent the clean technology and renewable energy sector by investing vertically across the value chain." The fund, which has yet to announce its first close, purports to "overcome market barriers and accelerate the pace of innovation" by investing growth equity "while simultaneously building utility-scale clean technology projects worldwide."
 
 

SCIenergy's board of directors replaced CEO Russ McMeekin, who led the company through last year’s acquisition of energy services company Servidyne and this year’s purchase of efficiency financing startup Transcend Equity, with Steve Gossett Jr. of Transcend Equity. Gossett Jr. brought in a new executive team including his father Stephen Gossett as COO, confirmed in a Friday interview that the company did recently downsize its workforce, though as part of an integration of SCIenergy’s software business, Servidyne’s building auditing and retrofitting business and Transcend’s novel efficiency project financing.

 

FirstFuel Software, a building energy analytics company, today appointed John MacPhee as CFO, Sam Krasnow as VP Regulatory Affairs and Market Development, and Domenic Armano as Director of Customer Solutions. These strategic hires will help to drive FirstFuel’s future growth and expansion plans for 2012 and beyond.

Cree, the solid-state lighting manufacturer, saw its CFO John Kurtzweil depart to join Extreme Networks. Cree's stock price has stumbled in the last month.

As solar module prices drop, the cost and performance of the rest of the solar installation becomes even more crucial. Soft costs need to be addressed, as in the recent legislation in Vermont. Balance of system needs to play a larger and more innovative role -- and the biggest piece of balance-of-system costs is the power conversion from DC to AC via microinverter, optimizer or otherwise.

Microinverter firm SolarBridge won $25 million in a round D funding led by Shea Ventures along with Battery Ventures, Rho Ventures, and Osage University Partners. Shea Ventures is part of Shea Homes, the largest private homebuilder in the U.S. Shea Ventures has also invested in SolarCity.

That brings SolarBridge's VC funding total to more than $71 million to date. SolarBridge differentiates itself from the microinverter and optimizer pack in aiming for integration into true AC modules (ACM). Ron Van Dell, the CEO of SolarBridge, claims
that an ACM is a more bankable product because it "enables an integrated 25-year warranty on the module." The firm has already announced SunPower and AUO as partners and will be naming a few more partners later this summer. The firm started shipping in 2011 with "tens of thousands" last year and will ship "hundreds of thousands" this year, according to the CEO.

Van Dell notes that the SolarBridge ACM business model doesn't require the build-out of a large sales and distribution channel. 

 

Optimizer firm SolarEdge joins microinverter market leader Enphase (Nasdaq:ENPH) in having attached distributed electronics to more than one million solar panels. Last week, SolarEdge, an Israel-based solar panel power optimizer company, announced the one-million-unit milestone and claimed it would reach two million units shipped by year-end. Enphase is at about 1.7 million units sold.
 

Last week Solantro Semiconductor completed its $10 million round A with funding led by family fund Black Coral Capital, as well as Presidio Ventures (a Sumitomo Corporation company), Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Solantro designs and manufactures chipsets for use with distributed solar PV power conversion equipment, which would include microinverters from firms such as Enphase or SolarBridge and DC optimizers from firms such as SolarEdge or Tigo.
 

Trees are a growing problem with smart grid networks. Every day, they stretch toward the sun, expand, droop, lean, and sometimes fall down, changing the physical environment in which wireless networks operate. In some cases, if uncorrected, they can cause network failure.

The usual way to fix that is to put in another base station or concentrator, at additional cost. That’s because routing the network around changes in its environment is complicated, both to plan and then to deploy -- and once you’ve deployed, the trees have gone and grown and fallen again, wrecking your model.

That’s how Andres Carvallo, chief strategy officer at Proximetry, described the problem he’s hoping a new partnership with EDX Wireless will solve.

In simple terms, Eugene, Ore.-based EDX makes the tools to plan networks, and Proximetry makes the tools to manage them, Carvallo said in a Tuesday interview. The San Diego, Calif.-based startup’s software runs on its own, or via licensing partners like Cisco, which uses it for its smart grid network management offering, or CSC Corp. for a cloud-based network management service for utilities.

From there, Proximetry feeds all that data back into the EDX planning process, where it goes into a new cycle of modeling, he said. That keeps engineering and operations updated with fresh tools to make plans, fix problems, and catch the slow degradation of performance that would otherwise manifest in failure and expensive upgrades.

Carvallo saw the problems that neighborhood networks can experience firsthand during his stint as CIO of municipal utility Austin Energy, where crews trim some 400 linear miles of power line corridors per year, mostly to prevent branches from touching power lines and starting fires.

But it turns out that leafy green residential neighborhoods make for poor wireless connectivity as well. At Austin Energy, Carvallo estimated that up to 15 percent of network devices -- smart meters -- experienced failure at one point or another due to such changes as vegetation growth, new construction, public works projects and other environmental changes.

“Today, it’s all manual troubleshooting” to fix the problem, he said. “You have to send people there to figure it out.” Proximetry can optimize networks in a way that avoids having to reinforce troublesome networks with personal inspections and new gear, to the tune of 30 percent to 40 percent reductions in those network maintenance costs, he said. The software can also detect imminent failure for preventative maintenance, or notice when gear is running just fine and doesn't need to be replaced on a schedule, all for additional savings and operations benefits.

Proximetry isn’t alone in offering smart grid network management of some kind, of course. Telcordia, now owned by Ericsson, has a smart grid NMS offering. Another contender is GridMaven, a business unit of SK Telecom’s American subsidiary that launched in January, the same day as Cisco announced its Proximetry-backed network management system. This week, GridMaven announced it had finished deploying the network management system for South Korea’s Jeju Island, a national smart grid test bed that’s one of the biggest single deployments in the world.

But for now, GridMaven has said it is sticking to network fault detection and correction, rather than automation of network responses. Proximetry, on the other hand, is looking at increased automation with EDX, in terms of constantly updating the models that utilities use to plan and execute their projects.

“There’s got to be a closed loop, iterative cycle of design, planning operations, optimization, design, and so on and so on,” Carvallo said. Otherwise, every new project needs a team of engineers to solve all the new problems, he said.

Just how Proximetry’s technology compares to the likely contestants in the field of winning utility business remains to be seen. The big cellular carriers have their own network optimization underway to support the smart grid’s particular needs, for example. Smart grid services offerings from the likes of General Electric, SAIC and Lockheed Martin presumably have some way to tie their views together.

Proximetry was founded in 2005 and has been backed by Munich Venture Partners, Aeris Capital, Investec, and Rembrandt Venture Partners. It raised a $5 million Round A in 2007 and in June raised $792,000 of a planned $1.08 million round, according to a regulatory filing. It has also won grants from European government entities (PDF), and has offices in Poland and Germany.

The Illinois Commerce Commission rejected the smart grid proposal from Ameren Illinois on Tuesday, calling for more information about how the technology would benefit customers.

The final ruling has not been posted, but the ICC said it is in line with many of the concerns posted in the Attorney General’s filing a few weeks ago.

The filing by Illinois’ AG questions whether there would be as much savings from truck rolls, since there is currently a rule on the books that people have to be contacted in person “at the time the service is being discontinued” when they’re being disconnected for nonpayment.

In Ameren’s proposal, the utility estimated that it received about 247,000 disconnect/reconnect orders per year, about 89,000 of which were disconnects for non-pay, more than a third of the total figure.

Besides the remote disconnect issue, there are also questions about the verification of benefits for customers and the details of where and when the technology will be deployed, since some of Ameren’s territory already has some automatic meter reading.

At stake is a $300 million investment in Ameren’s grid over the next decade, including distribution automation and smart meters.

The rejection harks back to Baltimore Gas & Electric’s rejected proposal nearly two years ago, when the Maryland Public Service Commission told the utility that the plan’s surcharge to customers was not justified and that it lacked sufficient consumer education. Eventually the plan was approved with a far lower surcharge, more robust consumer offerings, and no mandatory time-of-use pricing.

In Illinois, smart grid has had a hard road so far, as the state’s two largest utilities have been repeatedly chastised for not spelling out the benefits to customers well enough.

The issue seemed settled at the end of last year, when the state ordered that Ameren and Commonwealth Edison will have to reduce outages by 20 percent, energy theft by 50 percent, and inactive meters (those delivering power to unoccupied homes) by 90 percent under the new rules. 

Illinois utilities have to prove the benefits up front, but they’re not alone. California utilities have to file smart grid metrics every year, showing the progress on various projects, from consumer access to energy information to distribution automation.

ComEd received approval from the Illinois state legislature for its $2.6 billion smart grid plan, but the details are still awaiting final approval from the ICC, according to the Chicago Tribune. ComEd's plan includes year-over-year performance metrics that it will be measured against. 

Ameren will likely take a page out of ComEd's book and offer up all of the necessary information that is missing to gain approval. The process is being repeated in various other states, where utilities have to be clearer about where the benefits of smart grid lay. Many of the operational benefits from smart grid are for the utility’s bottom line, not the consumer. Bolstering the consumer benefits of smart grid is not important; it is critical for future smart grid projects.

ComEd has signed on to the Green Button initiative to allow consumers to access their data in a standardized format that can then be leveraged by third parties, if the customer chooses, for energy savings applications. Many other utilities that have suffered public concern (or outright backlash) have also signed on to the initiative.

Ameren can be expected to gain approval eventually, but it will take a clear plan, with clear benefits for all, to get there.

The 230-megawatt Antelope Valley Solar Ranch One (AVSR1) photovoltaic power plant being built for Exelon Corporation (NYSE: EXC) by First Solar (Nasdaq: FSLR) is facing some challenges.

Exclusively to GTM, Assistant Los Angeles County Supervisor Norm Hickling confirmed rumors of “a large layoff” affecting the AVSR1 workforce on Friday. “I also understand that negotiations continue,” Hickling added about attempts to settle the dispute between First Solar and LA County that has put the project six weeks behind schedule, with “little progress.”

Approximately 120 of the current 240-person workforce was “furloughed,” according to First Solar Public Relations Director Alan Bernheimer.

This is a severe blow to an already jobs-poor Los Angeles-adjacent community where recent studies found as many as one in three homeowners behind and/or underwater with their mortgages.

Negotiations began in early April after an LA County safety inspector discovered that electrical connections on the 3.7 million First Solar cadmium telluride (CdTe) thin-film photovoltaic panels that were to be used at the site could not be approved by LA County Building and Safety officials, according to County spokesperson Kerjon Lee.

The Conditional Use Permit granted to First Solar by LA County specifies that electrical installations “shall be designed in accordance with the National Electric Safety Code [NESC] or in accordance with other standards or regulations acceptable to the building official.”

The NESC, Bernheimer informed GTM by email, “recognizes IEC certifications for 1000 V systems. First Solar modules are IEC 61646 and IEC 61730 certified for such use.”

Neither the company nor the county would specify how these facts led to work being stopped at AVSR1 or why the impasse has lasted six weeks.

The inspector was reportedly doing a routine site visit, in service to the County’s conditional use permit (CUP) for the solar power plant, when he discovered the problem with the panels’ electrical connections. The problem has apparently not been at issue or was not noticed in other states, such as Nevada, where First Solar has done thin film installations, and it is also a standard to which First Solar has not been held at installations it has done elsewhere in California.
 

Neither the County nor First Solar have offered many details. “The Los Angeles County Public Works Department,” County spokesperson Bob Spencer told GTM when negotiations began, “is working with First Solar to address its plan check comments relative to the rating of the modules and the applicable electrical safety regulations.”

“First Solar is in discussions with Los Angeles County Public Works regarding electrical codes and standards interpretations as they relate to utility-scale, solar photovoltaic (PV) installations,” First Solar spokesperson Ted Meyer told GTM at that time. “We are confident these discussions will result in a satisfactory resolution.”

That was six weeks ago.

“Our discussions with the county are ongoing and we are working to resolve the issue so we can put people back to work,” Bernheimer told GTM Saturday.

First Solar's Adam Eventov told the Oso Town Council on Thursday night a settlement was expected by mid-June but noted, in the same statement, that problems with dust were preventing the company from continuing to grade land and prepare racks for panel installation at the project site. A proposal to use decomposed granite to minimize dust had been blocked by the County, Eventov said, leaving them with only the expensive alternative of hydroseeding.

Eventov also said that First Solar has, as promised, made a $140,000 donation to Antelope Valley College on behalf of the AVSR1 project but continues to hold a matching donation to the local communities until panel installation can continue.

At the same meeting, elected members of the Oso Town Council Richard Skaggs and Gerry Conroy, just back from the annual First Solar shareholder meeting in Phoenix, reported to the community that they thought the County was more responsible for impediments to continued construction than the company.

Panel installation was scheduled to begin at AVSR1 by mid-April. If the panels cannot be approved until UL certification is obtained or replacement with another technology becomes necessary, the financial consequences for First Solar could be problematic to the already financially hamstrung company. First Solar’s share price was as high as $140 in July 2011 but now hovers around $15.

First Solar continues to be in charge of engineering, procurement and construction (EPC) at the site. It is also in charge of EPC at the NRG Energy Alpine Solar project located a few miles away, which, like AVSR1, would use the problematic panels and is subject to provisions of an LA County CUP.

The total number of panels that will require some kind of attention or adjustment is well in excess of four million.

Neither the County nor First Solar would comment on whether corrections at other First Solar projects in development or retroactive corrections of panels at other California sites will be necessary.

Also under development with First Solar as panel supplier and in the EPC role and -- therefore potentially affected by this issue -- are the 550-megawatt Topaz Solar Farm in San Luis Obispo County owned by MidAmerican Holdings and the 550-megawatt Desert Center Solar Farm in Riverside County owned by NextEra Energy and GE.

The 21-megawatt Blythe Solar Project in Riverside County owned by NRG Energy may also be affected.

With a power supply uncertainty looming due to the safety issues that took the 2,200-megawatt Son Onofre Nuclear Generating Station (SONGS) off-line, it would have been a positive result for Southern California if AVSR1 was coming on-line this summer.

Do you know what an experience curve is? Does your representative in Congress know what it is?

It's a well-established and oft-proven truth of manufacturing costs that as you make more of something over time, costs come down. This is separate from manufacturing scale effects, which can also drive costs down, but, simply put: the more we make of something over time, the more we figure out how to drive the costs out. 'Incremental innovations' add up to significant cost savings over time.

BCG summarized this way back in the mid-1960s this way: Costs fall about 20 percent to 30 percent every time cumulative installations double.

This is not rocket science. It's well understood, and frankly pretty basic.

So why can't many politicians and their lamprey (like the RAND Corporation) understand this very basic business concept?

We've seen attacks on all kinds of renewable energy technology policies because the renewable energy costs are high. That is, high today. Early in their experience curves. Well...duh.

Most recently, some politicians have even gone so far as to deny the military the ability to acquire relatively small amounts of advanced biofuels. The argument made, of course, is that these biofuels cost too much.

Energy is a crucial strategic issue for our military. Much of our military strategy is dictated by energy supply, at both a national and a tactical level. Soldiers regularly carry 20-60 pounds worth of batteries into battle. From 2003-2010, more than 3,000 soldiers were wounded or killed while guarding energy supplies. The U.S. military spends more than $19B per year on energy, and that's expected to rise over time. Every three days, the U.S. military consumes 1 million barrels of petroleum (PDF).

The military has undoubtedly done lots of studies to understand just how vulnerable they are to disruptions from foreign-supplied energy, especially liquid fuel, before making this request. And they've decided it's a strategic priority, as a critical part of their mission, to help buy down the cost of advanced biofuels (as well as advanced energy storage and distributed electricity generation techs) by making some early purchases, to jump start those experience curves. They understand they're under budgetary constraints. They're not making a political request. They're making a strategic request. They're planning ahead, beyond the current budget crisis, to the next military crisis.

Politicians supposedly pride themselves on their business savvy. And, supposedly, they support our troops.

Why don't these politicians understand experience curves? And why don't these politicians understand the life-and-death nature of energy supplies for our men and women in uniform?

I would suggest to you, Gentle Reader, that these politicians understand both concepts quite well. And that this is a sign of how toothless the alternative energy lobby is in D.C. Because what's really driving this is that the partisan hacks in DC drove a bad political deal last year where there are significant cuts in defense spending to be triggered if they can't make a budget together. And they're realizing they can't make a budget together. Because they're partisan hacks and it's an election year. So therefore when they see an undefended target like advanced biofuels spending, especially since these same partisan hacks have decided to politicize energy technology as an election issue, so therefore it's perfectly fine to ignore well-established concepts like experience curves. And, I guess, to ignore the welfare of our troops.

This simply should not be a partisan political issue. It's not even a 'green' issue. It's a strategic military issue. Shame on them.

This should piss you off. They're either being ignorant or disingenuous. And it's far from the only case of this. It's just the most egregious example. Perhaps the most unpatriotic example.

Contact your senators and congressional representatives. Tell them to stop it. Both parties are at fault one way or another. If they don't put a stop to it, do what you can to make them feel the implications of their ignorance or disingenuousness come November. 

P.S.: I'm not a Democrat. And I'm not even a big biofuels supporter. I'm just sick and tired of the cleantech sector being politicians' undeserving punching bag, and suffering collateral damage due to their incompetence at governing. Make your voice heard. You're more influential than you might think. But only if you speak up and participate.

In Albuquerque, N.M., a smart grid-solar-energy storage project backed by a consortium of Japanese giants is testing out a key element of the idea of net-zero energy communities: how to harness mass-market solar to balance the grid inside and outside the neighborhood’s borders.

At least, that’s where the idea could go for Mesa Del Sol, a mixed-use redevelopment project with plans for 18 million square feet of office, industrial, and retail space and about 37,000 homes. Forest City, the Cleveland-based property development giant, is in charge of the decades-long development plan, and last week unveiled the first piece of it: the 78,000-square-foot Aperture Center, which has been set up to run on its own solar power.

The event center’s 440-kilowatt peak load will be covered by a 50-kilowatt solar photovoltaic system, an 80-kilowatt fuel cell, a 240-kilowatt natural gas powered generator and a 160-kilowatt-hour battery storage system. The technology -- and funding -- comes via Japan’s New Energy and Industrial Technology Development Organization (NEDO), which is investing about $10 million in the Mesa Del Sol project and another $12 million in another project in Santa Fe.

On the U.S. side, utility PNM, Sandia National Laboratories and the University of New Mexico are on the team. In its entirety, it’s still pretty small, on a par with the many different solar-storage-backup power systems being tested out around the country and the world.

But if it fulfills its promise of smoothly connecting and disconnecting from PNM’s grid -- as well as providing its power to smooth out the grid during times of peak stress -- it could take the claim of the first fully functioning microgrid in the country, said Manny Barrera, Mesa Del Sol’s director of engineering.

And that, in turn, could help developers like Forest City tackle a key challenge of managing all the rooftop solar that they can pencil into their plans, now that solar panel prices and installation costs are plummeting.

Distributed solar is booming, driven by the flood of cheap panels from China and financial innovations like the leasing and financing plans from the likes of SunEdison, SolarCity, SunRun and others. Up to a point, all that two-way power flow from homes and businesses isn’t too disruptive to utility operation. But higher penetration rates can start to cause instability on feeder lines, substations or even entire regions.

This used to be a hypothetical problem, but it isn’t any longer, Barrera noted. Some neighborhoods in incentive-rich states like California and New Jersey are seeing penetration rates of 10 percent, 15 percent or even 20 percent or more. At those levels, passing clouds can be more than a nuisance: they can shut off an invisible source of power to the grid, causing frequency and voltage destabilization, and, eventually, power outages.

Utilities don’t know where solar panels are, and can’t control them -- though work is underway to make solar inverters responsive to grid commands. In the meantime, buildings themselves have the ability to shape their own solar output, especially if they have batteries or fuel cells to back them up and the control systems to manage it all. That's what the Aperture Center is meant to demonstrate, Barrera said -- but in the future, the same concepts could be applied to multiple buildings in a neighborhood, or across a city, he said.

NEDO’s next step for the project is to test out solar smoothing, peak shaving and other such operations, Barrera said. While the entire building and environs can run on its own power indefinitely, that would require more use of the natural gas-fired backup power system. The point is not to run on its own as an island -- though it can do that if the utility needs it -- but rather to make solar’s impact on the grid a benefit, rather than a problem, for the utility.

Governments and industry are pouring billions of dollars into research on this front. In the United States, the Department of Energy’s SEGIS (solar energy grid integration systems) program ties Sandia Labs with utilities including PNM, Duke Energy and San Diego Gas & Electric, and companies like Petra Solar and Princeton Power on testing various combinations of smart meters, solar power controls, energy storage systems, customer interfaces and variable pricing schemes. Energy storage companies like A123, Xtreme Power, SAIC and others are backing up wind and solar power for power smoothing and load-shifting. 

As for Japan, it is scrambling to deploy smart grid and renewable power en masse to cope with the Fukushima nuclear reactor disaster, which crippled the island nation’s nuclear power production. At the same time, it is seeking foreign markets for its technology -- the NEDO consortium is one of several partnerships pushing Japanese technology to market, including others in the U.S., such as Hitachi’s lead role in a DOE-funded smart grid demonstration in Hawaii.  

The list of particular project roles assigned to the nine-company Japanese consortium provides further detail on where these competitors to General Electric, Siemens, Schneider Electric, ABB et al. are staking their claims. According to Barrera, Toshiba is doing the upstream energy management system, Sharp is providing the solar panels, Fuji Electric builds the fuel cells, Tokyo Gas built the cogeneration plant, Mitsubishi Heavy provided the gas-fired power generator, and Furukawa provides both the advanced lead-acid batteries that back up the solar array and the management and operations software for it.

Somewhere at the end of this long, dark tunnel of solar corporate insolvencies and failures lies a sweet future of healthy and strong solar manufacturing firms.

In the meantime:

Day4 Energy of British Columbia, formerly listed on the Toronto Stock Exchange (TSX: DFE), has voluntarily delisted its common shares from the exchange as well as entered an asset transfer to a company owned by its CEO and CFO for the sum of $500,000. The firm has PV cell interconnection and other solar module and cell technology that it once looked to license.

The Swiss firm, VHF-Technologies, also known as Flexcell, has halted production of its 25-megawatt roll-to-roll (Strike 1) amorphous silicon (Strike 2) solar product for BIPV applications (Strike 3), according to reports in La Cote. The firm deposited amorphous silicon (a-Si) on flexible plastic film via a very high frequency (VHF) plasma deposition technique. Flexcell received $9 million from the now insolvent Q-Cells in 2006. According to a release, Capricorn Capital has provided approximately $9 million to the company to keep it alive and its 50 employees working for the next few months. A low-single-digit efficiency, small-scale, non-bankable solar firm with uncertain reliability stands little chance of survival in the current solar market environment.

Pramac, a division of a Swiss firm that had shipped more than 40 megawatts of amorphous silicon solar panels built with equipment from Oerlikon has filed for insolvency, according to PV-Tech.

Hoku (Nasdaq: HOKU) issued a statement that confirmed that it had "substantially reduced construction activities at the polysilicon production facility of Hoku Materials, its subsidiary, in December 2011, and by April 2012, all construction contractors had stopped work." Hoku's stock price is currently trading at $0.09 per share and the firm has a market cap of $5 million.

The release announced that as of March 31, 2012, "its preliminary estimates of cash, other current assets and current liabilities was approximately $7.7 million, $6.7 million, and $278.8 million, respectively. The current liabilities include approximately $74.4 million of accounts payable at Hoku Materials. Due to the delinquency of unpaid construction obligations, liens have been filed against the Hoku Materials polysilicon plant, and some lienholders have begun foreclosure proceedings in the Idaho courts."

Hoku Materials reported that it terminated approximately 100 of its Pocatello plant employees and "ceased business activities and terminated all its staff at Tianwei Solar USA." Hoku is a subsidiary of Tianwei New Energy Holdings, which is an affiliate of China South Industries Group Corporation (CSGC). CSGC is a mammoth firm with 191,000 employees. Tianwei manufactures polysilicon, wafers, cells and modules. Hoku Solar, its solar installation division with business in Hawaii, might be able to survive the restructuring of Hoku Materials.

Hoku manufactures, well, nothing. Hoku started out as a fuel cell company, went public in 2005, and pivoted into being a solar manufacturer with $2 million in "service and license revenue" in 2011 according to a recent 10-K filing. 

These firms join the growing number of German (Q-Cells, Soltecture, Odersun, Solar Millennium, Sovello, etc.) and American (ECD, Evergreen, SpectraWatt, Solyndra, Energy Innovations, etc.) solar companies that are no longer with us. There will be more.

We reported on the NRG legal settlement with the state of California earlier this month. 

On the surface it seemed like a good deal.

NRG would make good on a past $1 billion overcharging infraction by investing $100 million in battery electric vehicle (BEV) charging infrastructure in California including a $50.5 million investment in 200 eVgo Freedom Station sites installed at commercial and retail locations, a $40 million investment in 10,000 make-ready electrical installations, and a $9 million investment in advanced BEV charging technology and BEV car-sharing programs.

Leaders in the electric vehicle advocacy community expressed satisfaction, along with concern at the initial settlement. “Basically, we see that this settlement could be a good deal for California and get a lot of charging in the ground,” said Plug In America President Jay Friedland, “but the devil is in the details, especially when it comes to access and business models.”

According to NRG Energy, those investments would resolve “all outstanding claims and disputes” pertaining to litigation between Dynegy, bought by NRG Energy in 2006, and the state, represented by the California Public Utilities Commission (CPUC), over unsatisfactorily fulfilled electricity contracts during the 2000-01 energy crisis.

Not so fast.

As the Mercury News reported, San Francisco-based ECOtality is suing state regulators over the deal. A release by ECOtality (Nasdaq:ECTY) notes that the firm has filed documents "seeking to halt implementation of an agreement between the California Public Utilities Commission (PUC) and New Jersey-based company NRG Energy, Inc."

The document goes on to state that "the agreement, which was intended to settle NRG's role in overcharging California energy ratepayers $940 million during the 2000-2001 energy crisis, instead rewards NRG by requiring only that the company spend $102.5 million on its own EVCS business. Secondly, the company alleges the PUC intervened outside of its authority in the private marketplace by endorsing one of multiple competitors, and indeed the most powerful, thereby handing the company a monopoly over the nascent market in California."

"This so-called ‘punishment' is like a restaurant failing a health inspection then being given an exclusive franchise to open and operate every restaurant in the city, subsidized by public funds," said ECOtality CEO Jonathan Read. "This is an illegal giveaway, negotiated without public input, that will not only impede the development of the electric vehicle market in California and ultimately cost consumers more -- but it also denies California rate-payers any refunds from the nearly $1 billion in overcharging that occurred during the energy crisis," according to the release.

ECOtality also claims that the agreement was settled "behind closed doors, without public review or input."

Dana Hull writes in the Mercury News that "NRG has argued that the agreement will jump-start a nascent industry, and that nothing prevents other companies from installing charging stations of their own."
 

What’s happening at building energy management startup SCIenergy? Last week, the company’s board of directors replaced CEO Russ McMeekin, who led the company through last year’s acquisition of energy services company Servidyne and this year’s purchase of efficiency financing startup Transcend Equity, with Steve Gossett Jr. of Transcend Equity.

The move comes one year after a very public lawsuit pitting McMeekin against company founder John Pitcher and members of his original software team, who left last summer to join rival firm Serious Energy.

It also comes amidst anonymous reports that the San Francisco-based startup is struggling to get and retain customers for its core software product. One source said that the firm has laid off about 55 people in the past month, and may be close to tapping out the roughly $50 million it has raised from venture capital investors.

Gossett Jr., who has brought in a new executive team, including his father Stephen Gossett as COO, confirmed in a Friday interview that the company did recently downsize its workforce, though as part of an integration of SCIenergy’s software business, Servidyne’s building auditing and retrofitting business and Transcend’s novel efficiency project financing, rather than as a result of running short on money. The company had about 160 employees as of last year.

As for how much of the company’s $50 million remains, Gossett Jr. wouldn’t provide specific details, but said in a Friday interview that the startup has “more than enough capital to meet our financial needs, and our investors are committed long-term to the business."

“This business has a great idea, and has always had a tremendous amount of vision,” he said. “What’s been at issue with SCIenergy, and the other companies like it -- well, I won’t say 'like it,' because there’s nothing exactly like it -- is that this industry has been long on vision and short on execution.”

Gossett Jr. said he intends to change that, with the goal to land paying deals for the company’s software, as well as for its Servidyne and Transcend lines of business. The longer-term goal is to integrate the three, and go to market with mid-level, regional contractors, installers and other boots-on-the-ground channels to market. Upcoming announcements include a utility test of SCIenergy’s platform to lure building owners into efficiency programs, as well as ongoing work with pilot customers such as General Electric, which is also a strategic investor.

Specifically, he contrasted SCIenergy’s position from that of the collapse of Serious Energy, a rival VC-backed startup which announced in April that it was abandoning its building energy software and project financing lines of business to focus on its initial business of building drywall and windows.

A Promising Concept

Now the question is, how will the startup grow the pilot project stage of its first rollouts, which required a high level of manual support to keep its data-intensive software running, to grow to commercial scale?

That’s still very much the plan for SCIenergy, by the way. Some sources speculated that Gossett Jr.’s ascendance as CEO meant that the company would fall back on the energy services of Servidyne and the efficiency project financing of Transcend.

But according to Gossett Jr., “Our cloud-based solutions remain the core focus of the business.” That includes SCIwatch, the name for the fault detection and continuous commissioning software that comes from Scientific Conservation, the startup founded by John Pitcher in 2007 with complex technology that essentially creates a living, growing model of a building and how it uses energy.

SCIenergy has raised roughly $50 million from investors, including a $5 million round in 2010 and separate rounds of $19 million and of $9.6 million in 2011, to bring that technology to commercial scale. Investors include venture capital firms Draper Fisher Jurvetson, Westly Group and Triangle Peak Partners, as well as GE Energy and Intel Capital, which announced last year that they would test the startup’s software in real estate and data center environments, respectively. (On the outflow side, SCI paid $12.5 million for Servidyne, which was a publicly traded company at the time, and didn’t disclose the price it paid for Transcend.)

By creating a real-world model of a building’s energy use, using thousands of data points and complex math to model its performance, the company says it can determine how a building should be consuming energy, and then compare it against real sensor data to find discrepancies. From there, it runs more complex math to pinpoint the source of the problem, to differentiate between things like mechanical failures, preset mistakes, or human intervention. That can guide building facilities managers to save money and energy via retrofits, preventative maintenance and predictive diagnostics.

That’s a far more complicated undertaking than the simple energy usage “dashboard” products out there, with potentially greater rewards for the additional investment. But it hasn’t been an easy task getting it to work for customers, Gossett said -- a view echoed by sources critical of the company.

SCIenergy has some big-name clients, including Boeing, Neiman Marcus, Apple, Google, NASA, GE and Intel, testing out its software over the past several years. But several sources told me that those customers have grown increasingly dissatisfied with the poor performance of the software, leading some to cancel their contracts and others to stop paying for it.

Gossett Jr. denied that any of the company’s customers had canceled their contracts with SCIenergy. But at the same time, he did note that many of the initial pilot project deals were done without upfront payment, in order to get the technology into deployments where it could be tested.

Founder and CEO Fought -- Did Software Suffer?

What happened? According to one person with knowledge of the matter, the problem lay in the data-intensive nature of the Scientific Conservation platform that became SCIwatch, now SCIenergy's core product. From the start, SCIenergy’s data-intensive, building energy modeling approach meant that it faced challenges in scaling from single buildings to multiple properties, Gossett Jr. said. It also meant that the software required a lot of hands-on support from the company’s software engineers, and much of the company’s focus -- and money from investors -- has been focused on solving those problems, he said.

But two sources with knowledge of the company said that former CEO McMeekin, who came on in 2010, decided to short-change investment in these areas, choosing instead to concentrate on marketing the product to more and more customers. Those sources say that this led to disappointed customers -- as well as to a major split between McMeekin and founder Pitcher and his core software team.

That dispute came to a head in June 2011, when Pitcher and about a dozen other employees from the original Scientific Conservation software team left the company.  McMeekin reacted to the employee exodus by filing a lawsuit in July against Pitcher and Pieper, as well as Serious as a company, for alleged misappropriation of trade secrets.

Serious denied the charges, and the parties reached an undisclosed settlement in April. Pitcher told me in an April interview that he personally settled with SCIenergy for $10,000, plus the agreement to not develop software based on his founding work at the company until July 2012, but with no admission of wrongdoing.

The bigger question for SCIenergy is how Pitcher et al.'s departure affected the company’s software development. Sources critical of the company told me that SCIenergy’s ability to manage and improve its SCIwatch software platform has suffered from the lack of the core team that created it. That may have created problems in the marketplace -- one CEO of a rival building energy software told me that his company won a contract from a customer last year that had previously tried SCIenergy’s platform, only to find they couldn’t get it to work properly.

But Gossett Jr. denied that the departure of Pitcher and crew put an end to software development at SCIenergy. “To say somehow the product regressed after the departure of some of the original development team is completely false,” he wrote in an email. CTO Pat Richards has led this development effort since mid-2011, and the company has also kept key executives such as Andy Tang, a former Intel executive and head of Pacific Gas & Electric’s smart grid efforts.

In the meantime, SCIenergy’s June 2011 merger with Servidyne led to the company launching another software platform, known as SCItrack, meant to supply the energy dashboard side of the building energy efficiency equation. But it’s unclear just what parts of SCItrack came from SCIenergy. The CEO of a Canadian startup told me in April that his company’s building energy software was being white-labeled as SCItrack in customer deployments in the second half of 2011, but that the companies ended their partnership after SCIenergy didn’t give the company credit. Since then, another third-party software platform has taken his company’s place, he said.

Gossett didn’t deny that SCIenergy has used other companies’ software tools to back up its SCItrack offering, but pointed out that this is not unusual in the software industry. What’s important is how SCIenergy merges these disparate platforms into a single cloud-based service for its customers, he said.

Problematic Track Record for Former CEO

Critics of the company have focused their complaints on ex-CEO McMeekin, who joined the company in early 2010. Beyond their charges that he failed to give the software team the time they needed to get the product up to commercial-ready status -- an ageless dispute in the high-tech startup world --  several sources describe a leader with an abrasive, and even abusive, way of dealing with subordinates.

Gossett Jr. declined to comment on McMeekin’s conduct as CEO, though he did say that he has been a  “polarizing figure” during his time at SCIenergy’s helm. McMeekin’s building energy technology pedigree lies in his decade-long career at Honeywell, where he led business units including Honeywell’s Hi-Spec Solutions business unit for industrial controls automation.

His history as a CEO includes a position at wireless software company ViaFone, as well as a six-year stint (2002-2008) as CEO of Progressive Gaming International Corp., a Las Vegas-based gambling technology provider with a troubled history. The publicly traded company went bankrupt in Jan. 2009 after failing to meet a $17 million obligation to a lender, the Las Vegas Review-Journal reported. The company had seen its share value fall nearly 75 percent from 2007 onward, wiping out about $200 million in shareholder value. In 2007, the company settled with plaintiffs in a class-action lawsuit alleging fraud and misrepresentation of financial information by agreeing to pay nearly $3 million in exchange for all charges being dismissed.

A Multi-Pronged Approach to an Emerging Market

As SCIenergy moves forward under Gossett Jr.’s leadership, one of its key challenges will be to reassure its customers that its core technology platform can work as promised at commercial scale. Another key challenge will be integrating the different lines of business represented by the original Scientific Conservation and its acquisitions of Servidyne and Transcend Equity.

First of all, Gossett Jr. doesn’t intend to try to keep all of SCIenergy’s business within its own walls. Instead, he envisions creating a cloud-based technology, service and financing platform that can be used by regional energy services companies to offer building owners a cheap and effective way to do energy efficiency projects.

“You have to go to an indirect model of selling this to partners,” such as regional contractors and installers, he said. “That’s how this thing gets into a million buildings.” That’s an important way that Gossett Jr. envisions being able to compete with giants like Honeywell, Johnson Controls, Siemens, Schneider Electric, Eaton and other big energy services (ESCO) companies, which are all rolling out software platforms of their own.

“I don’t want to be an ESCO,” he said. “I want to be a software company that sells building optimization systems to these people who are the real boots on the ground." Of course, this also means that Servidyne, which has a going business in building energy efficiency contracting, won’t be the only company able to offer the technology smarts of SCIenergy.

As for Transcend, it has about 30 projects representing about $30 million in invested capital for its MESA (managed energy service agreement) financing model. In simple terms, Transcend (and its financial backers) agree to take over a building’s utility bills completely, in exchange for being allowed to own the assets of an energy efficiency retrofit, as well as all the savings that the retrofit delivers on monthly power bills. Transcend has a joint venture with giant Japanese trading house Mitsui & Co. that’s meant to supply the financing to grow its business.

That’s different than the traditional ESCO models that rely on guaranteed savings and other measures that can lead to complicated contracts and disputes between contractor and building owner, Gossett Jr. said. Other startups with different variants on the model include Metrus Energy and Skyline Innovations, and Serious Energy had plans for a similar financing scheme, though those are now on hold.

Not all of Transcend’s projects involve SCIenergy’s cloud-based software platform, though it is being used for some showcase projects like its New York City project at 125 Maiden Lane, Gossett Jr. said.

But in the future, he sees SCIenergy’s cloud-based platform being a natural add-on for partners that want to prove that its efficiency investments are paying off over time. That could include the building owners themselves, or the indirect third-party contractors or financing parties that SCIenergy is working with, he noted.

Image Credit: photo by chensiyuan, creative commons, wikimedia

The state of Vermont might have solved the problem of solar's 'soft costs' -- as well as provided an impetus for increased solar penetration with a re-vamped feed-in tariff.

Solar pricing in the U.S. is driven by materials costs, as it is everywhere. But the states in the U.S. possess an inconsistent, time-consuming, and costly permitting process, often lumped in as the 'soft costs' of a solar installation. That's why the dollar-per-watt cost of solar in the U.S. is significantly higher than in Germany.

A DOE report from last year claims that inconsistencies in permitting can cost consumers up to $2,500 on a 5-kilowatt rooftop solar system. Solar financier SunRun has said that the wasted money from permitting inefficiencies "looks like a $1 billion tax on solar over the next five years." The cost stems from the time spent by installers in getting the building, zoning, and fire department permits, waiting for inspection and utilities, dealing with changes -- and losing customers in the process. The report adds that Germany has a 40 percent installation price advantage over the United States.

Vermont has shown that the solar permitting beast can be tamed.  

Last year, Vermont Governor Peter Shumlin signed the Vermont Energy Act of 2011 (H.56). The law provided for net metered solar power in Vermont, as well as a pioneering permitting process for small solar systems (less than 5 kilowatts) that is a model for reducing the "soft costs" of residential solar.    

Now the program is being expanded.

Act 125, in effect this summer, doubles the size of projects allowed under the registration program from 5 kilowatts to 10 kilowatts, opening it up to larger residential and modest commercial-sized roofs.

While the registration and permitting process confronts interconnection issues, the state has also expanded its feed-in tariff program, which addresses the procurement aspect of solar.

Statewide, solar installations now have a simple and consistent permitting process that can get solar deployments approved in ten days. The new registration form covers system components, configuration, and compliance with interconnection requirements.
 
Prior to the new law, before beginning a project, a solar applicant would need to receive a permit or Certificate of Public Good (CPG) from the state’s Public Service Board, a quasi-judicial agency that oversees electric power companies and energy projects. When determining whether to grant the CPG for a specific project, the Board would weigh whether the project met site-specific environmental criteria and factors such as need, reliability, and economic benefit. After the application was filed, there was a 30-day comment period, and contested projects were resolved through a public process, beginning with a public hearing.

Now, Vermont's utilities have 10 days to raise any interconnection issues, otherwise, the CPG is granted and the project can go forward.

The cry for an improved permitting process in the U.S. has been put forth by SolarTech, Vote Solar, and other organizations and firms. The DOE SunShot program is looking to get solar to $1.00 per watt installed. It can't happen without a well-thought out permitting process.

Here's the simple one-page registration form:

Doug Payne, the Executive Director of SolarTech, has called this "the sort of 'Micro-Policy' innovation critical to driving up to $1.00 per watt of red-tape out of the marketplace in the next few years."   

SunRun's Ethan Sprague said that since solar is new, permitting entities are subjecting 100 percent of system applications to a high degree of scrutiny, when only a few need to be looked at. He said, "It should be more like installing an appliance than re-wiring a house." About Vermont, Sprague said, "What's unique and significant about Vermont's program is the uniformity. They took state-level action, which demonstrates to other states that local permitting reform with the same standards across all jurisdictions is possible."

Vermont has a population of about 630,000 -- so the scale of the state's residential solar deployments is in the hundreds of rooftops as opposed to the tens of thousands of rooftops in California, Arizona, Nevada, or New Jersey, but it is a step in the right direction.

The other policy shift in the Vermont solar market is a 122-megawatt feed-in tariff which comes with a bit of help from the Clean Coalition, a foundation-sponsored distributed solar advocacy group headed by Craig Lewis. The group promotes what they refer to as a "Clean Program," which addresses solar procurement with a feed-in tariff and improved interconnection and permitting policy in the spirit of what was done in Vermont.

Lewis said, "Interconnection is as big a barrier to clean energy as the procurement process." The Clean Coalition also hopes to shift the less-than-graceful term "feed-in tariff" to the only slightly improved "Clean Program." 'Clean' stands for 'clean local energy available now.'

In Vermont, The Clean Coalition focused on removing permitting barriers and expanding the scale of the incentive program. The Vermont incentive program (FIT program, CLEAN program, whatever) has "an interesting feature" in Lewis' words -- if a project provides "locational benefits," it does not count against the 122-megawatt program cap. Lewis defined "locational benefits" as "providing power generation near the load." That would include most urban locations -- places where the energy generated is not subject to large line-loss, the necessity of new transmission, or increasing congestion.

In addition to Vermont, The Clean Coalition was also involved with the recent initiation of a feed-in tariff / Clean Program in Palo Alto, California which Lewis cited as a good example of how to streamline the procurement and interconnection bottleneck. The local micro-policy appears to be catching on. The 10-megawatt Los Angeles LADWP program went live this month with its first pilot and Long Island, New York's LIPA (Long Island Power Authority) starts its own program in July.

Vermont installed 5.2 megawatts of solar in 2011, and looks to install 9 megawatts in 2012 and 16 megawatts in 2013, according to GTM Research.

A bit of good news in solar for a change.

According Germany's IWR, the country set a world record for the most solar energy production on midday of Friday last week.

The IWR, Germany's renewable energy organization, issued a release that said (translated via Google from the original German) that "under a cloudless sky on Friday at noon" German solar generation reached 22,000 megawatts. That's about half of Germany's peak afternoon load, depending on the time year.

Dr. Norbert Allnoch of the IWR said that there is no other country on earth with solar plants capable of producing over 20,000 megawatts of electricity.  

The cumulative amount of solar installed in the U.S. at the end of 2011 was approximately 4 gigawatts, according to GTM Research.



 

The best way to keep your data center cool is to use the cool, ambient air of your natural surroundings.

But if your company doesn’t have the luxury of locating the data center near the moderate Oregon coast, like Facebook, or near the fjords of Norway, the cost of cooling data can be significant. 

Data center efficiency has become big business in recent years, with startups like Power Assure getting into the business along with power engineering giants IBM, General Electric and HP. Now there is one more company in the mix, SM Group International, an international engineering firm based in Montreal that is tackling the cooling methods with claimed savings up to 50 percent.

SMi Group’s patent-pending technology isn’t actually new technology at all, but rather a paradigm shift in how to go about lifting heat off of the computers. “We said, let’s try to remove equipment and simplify the equation,” said Jean-Simon Venne, head of the energy efficiency division.

The key to the system is to pressurize the space and blow area directly over the servers before the heat builds up. It also uses traditional strategies, like precooling. But in warm environments, like Miami or Singapore, precooling can only cut down on energy use about 10 percent of the time, said Venne. Data centers account for about 2 percent of electricity use in the U.S. and that figure is growing.

After SMi focused on optimizing precooling, the engineers asked themselves, “Why don’t we just put the computer in a wind tunnel instead of pushing cold air into a square room?”

The combination of moving air efficiently in a pressurized environment cut the energy use by up to 50 percent. But the even bigger savings is that the configuration of SMi’s data centers can cut capital costs by up to 40 percent. Because SMi has also cut down on the equipment needed overall in the data center, Venne said they could also cut the construction time by up to 25 percent.

Venne compared the pressure to somewhere between sea level and riding in an airplane. “Think of how dry an airplane is,” he said. “It’s that simple.”

The average data center has a power use effectiveness (PUE) ratio of about 2 to 3.  Facebook’s latest Oregon data center sports a PUE of 1.07 and consumes 38 percent less power than average thanks to a new server design and DC power. GE’s ultra-efficient data center rates a score of 1.63.

SMi said its system can cut the PUE to as low as 1.1 for a new facility. Retrofits results would vary, but if a data center had a PUE of 2, they could probably bring it down to about 1.3.

Venne admitted that he was surprised that their design could be patented, since it was just based on the basic rules of thermodynamics. But with so many other companies focusing on power source (AC vs. DC) or optimizing how the servers run, no one had taken this approach.

The company is currently working with six universities, although Venne said that the number of data center projects coming across his desk is “stunning.”

Cooling, of course, is just one aspect of data center power. Other ideas for curbing power have included weather mapping inside data centers (Sentilla, SynapSense), application shifting (Power Assure), improved AC controls (Vigilent), switching from AC to DC power (ABB, GE, Nextek), swapping disks for flash memory (SandForce), better power conversion (Transphorm), and smaller, more energy efficient servers and chips (SeaMicro, Calxeda).

SMi’s technology also does not have to work by itself. If a data center is converted to DC and uses the cooling system, the savings will be even greater. Because of the lower capital expense and quicker construction time, Venne said his company’s technology can help to commoditize data centers. “It’s easy to do,” he said, “and it doesn’t cost that much.”

In a wide-ranging panel discussion at ABB’s Eastern Utility Executive Conference held in Pinehurst, North Carolina on Saturday, four industry executives -- Steve Whitley of the New York ISO, David DeCampli of PPL, Charles White of SCEG and Chuck Jones of First Energy -- were bound to get around to talking about natural gas.  

But far from cheerleading the current glut, these utility leaders expressed concern about utilities becoming too dependent on one fuel.

Steve Whitley noted that while regulations will force the retirement of older coal-fired plants, low gas prices are already making them uneconomical. That has transmission implications as the geographic distribution of generation assets shifts, but perhaps a more immediate issue is reliability.

In short, gas supplies are not managed the way electricity is.

“There isn’t as much planning around pipelines. They don’t have n-1 criteria,” Whitley said, referring to the power industry maxim that system integrity should never be compromised by the loss of a single transmission line.

Indeed, the nation’s network of gas pipelines was built around commercial considerations, not to ensure the security of supply across the system as a whole. If in ten or twenty years we find our power grid is dependent on gas supplies, we could be confronted with some unpleasant choices.

NYISO’s Whitley also noted that there is currently a mass retrofit going on in buildings in New York as property owners shift from oil to gas. As another conference attendee later observed over lunch, in a pinch, gas companies are obligated to serve consumers first, so utilities could find themselves at the back of an increasingly long line.

In another lunchtime conversation, Lee Mazzocchi, Chief Procurement Officer at Progress Energy, noted that if you look at energy costs overall, variable costs like fuel make up only a small portion of the total. The majority is in fixed costs like power plants, transmission and distribution lines. Having a variety of fuel sources allows markets to dispatch the most economical generators, but the fixed costs remain and in fact are increasing.

Back at the panel, PPL’s David DeCampli emphasized the need for fuel diversity, and provided a cautionary tale drawn from his company’s history.  After investing heavily in gas-fired generation over a decade ago, PPL ended up selling some simple-cycle turbines for a fraction of what they paid for them when fuel prices rose.

DeCampli didn’t specifically refer to putting the capex cart before the opex horse, but PPL’s experience certainly illustrates the risk. That and the reliability issues should give pause to anyone tempted to see gas as an energy cure-all.  It has great potential as a stepping stone away from coal, but it’s not a panacea.

***

Bob Fesmire is the Strategic Communications Manager at ABB.
 
 

Asia is quickly becoming a center of global smart grid activity. The cumulative smart grid market in China, Japan and South Korea is currently valued at $8.5 billion, with that number forecasted to increase to $19 billion by 2016, according to GTM Research's latest market report, The Smart Grid in Asia, 2012-2016: Markets, Technologies and Strategies.

At over 180 pages, The Smart Grid in Asia, 2012-2016 is the definitive source for organizations looking to capitalize on Asia's predominant smart grid markets. A clear understanding of the energy scenarios in China, Japan, and South Korea, as well as their respective smart grid technology and deployment trends, will be crucial to achieving meaningful entry in Asia. This report provides a detailed five-year smart grid forecast, domestic vendor taxonomies, and strategic perspectives on how smart grid players should position themselves for success in each market.

Here's a recent podcast from the report's author:

 

"We expect to see the smart grid in Asia move forward at a breakneck pace," said Kamil Bojanczyk, the report's lead author and an analyst-at-large with GTM Research. "Over $45 billion in funding has been earmarked by governments and utilities across China, Japan and South Korea, with the clear majority of those funds and opportunities originating in the Chinese market."

FIGURE: Smart Grid Market Assessment for 2016

Source: The Smart Grid in Asia, 2012-2016 (GTM Research)

Bojanczyk indicated that each country's growth will be characterized by the specific needs of its utilities and existing grids. The vast majority of smart grid investment in China centers around transmission, distribution automation and automatic metering reading (AMR) to support a developing grid and robust renewable energy build-out.

In Japan, the sunsetting of all of the country's nuclear plants has created an acute need for demand response, home energy management and smart meter deployments.

In South Korea, the market is developing quite differently; for the country with the most reliable grid in the world, South Korea and its chaebols are looking to develop next-gen smart grid technologies across all segments, primarily for global export.

In addition, the report identifies the leading strategies for addressing each of Asia's smart grid markets, and analyzes the companies that are currently winning big. This list includes; ABB, Accenture, BPL Global, Echelon, Freescale, GE, Holley Metering, Moxa, RuggedCom, Siemens, State Grid Corporation of China, Wasion, XD Electric, and XJ Group.

For more information on this report and to download a brochure with the complete table of contents, visit http://www.greentechmedia.com/research/report/smart-grid-in-asia-2012-2016.