# Grid C onnected Equipment

How can we capture the new value streams enabled by connected products

Roland Risser – Program Director Building Technologies Office2



### Building Technologies Office (BTO) Delivering Energy

- Efficient Solutions

Emerging Technologies

High- impact building technologies

~Five years to market-ready


### Residential Building Integration

Cost

‐ effective technologies, tools, solutions

Peak energy performance in new & existing homes


### Commercial Building Integration

Cost

‐ effective technologies, tools, solutions

Peak energy performance in new & existing commercial buildings



### Codes & Standards

Building energy code language with adoption/compliance strategy

National appliance & equipment standards

### Buildings and Grid Opportunities

Challenges :

• Proliferation of intermittent renewable energy impacts utility operations and business models

• Advanced sensors and controls allow significantly enhanced equipment performance (Smart) – value proposition is limited

Opportunity:

• An interoperable transaction based platform can unlock enhanced value propositions for manufacturers, utilities and their customers (and mitigate the challenges above)

– Leverages big data, new markets, and monetization

– Full interoperability may require a significantly enhanced market, faster responses, open source software, common data structures, communication protocols, and a settlement platform.

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## Grid Integration Initiative

- Wind Example

• As EERE drives down the cost of emerging technologies, these technologies proliferate (e.g. Wind, PV).

• The Grid Integration Initiative addresses challenges associated with the operation of the power system when these technologies are deployed at scale.

Seamlessly integrating these technologies into the grid in a safe, reliable,

and cost

- effective manner is critical to enable deployment at scale.

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### What is the Opportunity for Buildings?

• Building systems can enhance grid reliability and enable the integration of Renewable Energy and Storage.

HOWEVER

• Buildings are limited by existing controls systems that can ’ t easily transact at the speed or scale that is required by the grid

– Proprietary systems do not easily interoperate with other systems

– High cost to “ get it right ” with existing technology and economics

– Currently only implemented in some large buildings

– Technologies are evolving with greater capabilities of control

• Building solutions must “ think across the meter ”

– Energy Efficiency is at the core, but there are potentially additional value streams to/from third party entrepreneurs

– Better control of loads has other benefits

• We want to unlock these new value streams...

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## What would success look like in the building domain?

“Across the meter solution to enable transactions for commoditizing energy related services”

Every significant building related device will know how it is performing, how it could perform, and be capable of communicating to the internal/external systems (e.g. grid) to unlock financial opportunities for all participants.

• Embed intelligence to protect owner/operator from negative

consequences

• Must “know” actual and potential operational characteristics

• Must be able to match or settle transactions and “report back”.

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# i i

U

. S

. DEPARTMENT O F ENERGY Energy Eff i ciency &

Renewable Energy Example Opportunity:

- Value of dynamic controls on rooftop air

conditioning units on a peak summer day

7ISO communicates that
price is about to increase from $0.1/KWH to $1.0/KWH unless 100 MW is

removed from the system. Example Opportunity:

- Value of dynamic controls on rooftop air

conditioning units on a peak summer day

8I’ m a hotel with a big conference
underway. I need maximum cooling for my building. I ’ m looking to buy your additional
load reduction to avoid price

increases. Example Opportunity:

- Value of dynamic controls on rooftop air

conditioning units on a peak summer day

9I’ m a big box store, with variable speed fans on
my RTUs, and I can run those fans at
somewhat lower speeds for 10 minutes and

“ sell ” you the load reduction. It will make no
noticeable difference to my customers, and I can make some money (part of the price increase the other customer is avoiding). Example Opportunity:

- Value of dynamic controls on rooftop air

conditioning units on a peak summer day

10But to reach 100MW, negotiating and controlling across a few RTUs in a few buildings won’t realize an impact.

However, if all the RTUs in a service territory

-- across the national accounts AND the independents

-- could autonomously and automatically aggregate to deliver a solution for the utility, the system would be optimized and building owners/operators would realize energy and financial savings.

What if the controllers could systematically communicate, transact, and settle amongst

themselves? These solutions are beyond simple Demand Response

- they inherently understand, value, and can act for the owner’s or tenant’s operational needs while simultaneously optimizing to help the grid. Example Opportunity:

- Value of dynamic controls on rooftop air

conditioning units on a peak summer day

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### Can we estimate the Market for Grid Connected Equipment?

• Many variables are needed to determine the market:

– Competition

– Technology innovation and cost

– Existing infrastructure and different utility/ISO needs

– Future Policies

– Value Proposition

• McKinsey (2010) estimates annual market value at:

– Customer Applications

- $3

- 10 Billion

– Advanced Metering

- $7

- 13 Billion PNNL initial estimate =

– Grid

- $5

- 8 Billion $22B/year

– Renewable energy/energy storage/PHEV - ?

• What can DOE do to help all business models

– Lower risks: greater transparency and certainty

– Lower costs: technology innovation, standardization, interoperability

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### Networked Products Lead to Better Utilization of Energy at all Scales

• Equipment needs to be smart to participate in transactions within the
building, with other buildings, and with grid entities.

• Networked products at the whole building and the component level are

critical to optimize DER and the grid



### .

– Hypothesis: a model with multiple
transactions within an energy

ecosys t em enhances the value
proposition.

Advanced equipment will be transaction capable, with auto M&V

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# We Need to Define Metrics Together...

We need metrics for device characteristics and

value to users

• As an example of user metrics targeted at utilities, we could propose a performance map with three grid services and their rated value to the utility

• As an example of metrics for device characteristics, we could propose communication capabilities.

• A key outcome will be a definition of clear metrics that have meaning/value to all interested user groups

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## DOE and Grid Integration

- Objectives

DOE is working to provide a clear and consistent definition for energy efficient and smart/utility

- ready appliances, their characteristics/capabilities, and their potential value to consumers, utilities, and manufacturers.

Objectives:

• Work with manufacturers through an open/transparent process to develop physical characterization procedures , leveraging traditional test procedures to the extent practical.

• Work with testing labs to develop the capability to conduct tests , leveraging the existing testing infrastructure to the extent practical.

• Work with market participants and stakeholders to define and communicate

the value of “smartness ,” leveraging existing DOE programs.

• Work with utilities to encourage appropriate deployment of energy efficient and networked appliances and equipment, leveraging existing utility efficiency programs after the benefits and values are clear.

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## EERE BTO’s Buildings

- to

- Grid Website

EERE >>> Office of Building Technologies>>> Emerging Technologies

http://www1.eere.energy.gov/buildings/technologies/buildings_grid_integration.html

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# THANK YOU!

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