Our modern way of life depends on the vast electric grids that power
everything from light bulbs to mass transit subways. Despite tremendous
strides in technological innovation, these existing grids are largely
built on an aging design, that is essentially a centralized grid
architecture fed by large power generation plants in remote locations
that connected customer sites through the complex labyrinth of
transmission and distribution (T&D) network. The coordination of
electricity production in alternating current (AC) form and its delivery
through the complex T&D network are managed by regional system operators
or independent system operators (ISO). The ISOs not only need to balance
the electricity production and consumption in real time, but also must
ensure the electricity produced remotely is transported to customer
sites without running into congestions on the vast T&D network. While
the current electric power grids are amongst the most complex
engineering system ever constructed by humanity, this centralized power
grid design is starting to show its age. Today’s centralized power grids
face significant challenges in providing safe, reliable, secure, and
affordable energy services. Below are examples of just a few of the
vexing challenges the existing centralized power grids faced.
Environmental and Public Health Problems: California
October 23, 2015 – The underground natural gas storage in Aliso Canyon
in Los Angeles experienced a massive leak1. This storage
facility is the second-largest natural gas storage facility of its kind
in the United stated, and it supplies gas to electric power generation
plants throughout Southern California. The leak problem was so dire that
it prompted California Governor Jerry Brown to declare a state of
emergency on January 6, 2016. The Aliso Canyon incident created an
environmental disaster on a larger scale than the Deepwater Horizon
accident in the Gulf of Mexico. It was assessed that Aliso Canyon’s gas
leak released about 5.3 gigatons of harmful methane gas into the Earth’s
atmosphere. To put this into perspective, this represents an equivalent
of roughly 12,800 years of the total annual emission of the entire South
Coast Air Basin in Southern California. The power utilities in Southern
California implemented contingency plans in anticipation of the natural
gas shortages for powering the local gas-based electric plants.
Meanwhile, the local residents reported headaches, nausea, and severe
nosebleeds. An average, 50 children per day saw school nurses for severe
nosebleeds. By January 2016, more than 6,500 families had filed for
help, and nearly three thousand households, or about eleven thousand
people, had been temporarily relocated. There has been numerous
centralized grid disasters over the years, with some gaining worldwide
notoriety like the Chernobyl and the Fukushima incidents. In the
Chernobyl nuclear power plant catastrophe2, over 300,000
people were forced to relocate permanently. This nuclear accident
released traceable airborne radioactive particles that were detected in
every country in the northern hemisphere. As these few examples attest,
the centralized grids pose increasingly unbearable impacts to the
environment, health, and safety of the people that it supposes to serve.
Safety and Reliability Problems: California September 8,
2011 – A deficient equipment maintenance procedure at a transmission
switch station in Yuma, Arizona, initiated cascade grid power failures
that left more than seven million residents without electricity, ranging
from San Diego County to western Arizona and Tijuana3. This
major incident exposed the inherent susceptibility of the centralized
power grid to point-vulnerabilities. Similar to the Aliso Canyon gas
leak incident, a failure at one single point on the centralized power
grid caused adverse impacts to millions of customers over a vast area.
Natural or human-induced accidents can occur at any vulnerable point,
anywhere across the complex centralized power grid that sprawls over
vast geographical areas, so the existing power grid’s ability to
guarantee safe and reliable energy services looks to be increasingly
challenged.
Adaptability and Resiliency: Melbourne, Australia January
28, 2018 – More than 10,000 homes in Australia’s second most populous
state were stuck without power due to a surge in power demands from the
scorching heat wave that overloaded the grid4. This blackout
was caused by a power network failure, rather than supply shortages.
This occurred less than a year after Australia’s biggest city, Sydney,
was hit by blackouts during another heatwave that affected more than
50,000 homes. These events often happen during an intense heatwave,
where power demands can precipitously peak as customer crank up their
air conditioners. Meanwhile, the grid T&D wires and electric power
plants experience reduced electricity transmission and generation due to
increased ambient temperature. In the foreseeable future of global
climate change, cities around the world are expected to experience
growing incidents of grid failures due to adverse weather, furthering
adding to this problem. From heatwaves in Australia and California to
frigid winter spells in the northeastern US, to hurricanes Katrina,
Sandy, Rita or Maria, we witness repeated episodes of massive grid
failures due to the system’s inability adapt and or absorb the
disruptions brought about by climate-change induced events.
Unaffordable Electricity Cost: US April 14, 2016 – A study
was published by Groundswell, a nonprofit renewable energy advocacy
group, detailing how the cost of electricity is increasingly burdensome
for America’s working class. The study reports the bottom 20 percent of
earners spend about 10 percent of their income on electricity5.
A few reasons for centralized grid’s high costs of electricity are as
follows: (a) Five to nine percent6, 7 of the total energy
produced is lost during the electricity transmission and distribution.
As discussed above, the T&D losses are amplified during hot weather
spells due to increasing resistance in the T&D wires and equipment as
temperature rises; (b) The electricity in AC form is relatively complex
and requires numerous supporting resources, called ancillary services,
to ensure the delivered powers at customer sites remain within the
required power quality limits. Examples of ancillary services would be
frequency regulation, voltage-level regulation, and reactive-powers.
Unfortunately, the required ancillary services for the AC-based
centralized grid are costly and typically account for three to seven
percent of the total electricity bill8; (c) Capacity services
that ensure adequate power generation capacity to maintain grid
reliability during periods of peak demand. The capacity services or
standby capacity reserve are compulsory because the current power grid
lacks real-time coordination of customer power demands to the system’s
available power supply. In other words, because the real-time management
of power demands at customer sites is lacking, the centralized grids
procure excess generation capacity to standby just in case they are
needed. These capacity services are also costly and can add up to 15
percent of the total bill9. These examples are just a few of
the innate and costly inefficiencies of the centralized AC power grid
design.
When you combine the challenges of natural disasters, population growth,
and climate change, new approaches to energy production and distribution
are needed more than ever. It is our belief that the solutions to these
challenges should also create vibrant and sustained growth for all. The
AI Grid Foundation (Foundation), a non-profit based in Singapore and an
advocate for open access to decentralized renewable energy, shares this
vision. The Foundation has collaborated with global organizations and
local communities to develop the Eloncity Model, a community-centric
approach employed to address these challenges and decentralize renewable
energy resources to attain a safe, healthy, vibrant and equitable energy
future. The Eloncity Model builds upon four key pillars:
(1) Decentralized renewable energy design architecture, which comprises:
-
A Blockchain platform that provides an open, secured and distributed
ledger for efficient recording of energy transactions in the community
in a verifiably and immutable manner. The blockchain platform also
enables the Eloncity community to establish an auditable record for
tracking the sources of electricity generation within the community,
that is GHG-free or non-fossil-fuel based. The auditable tracking of
electricity generation sources is critical for valuation of
electricity based on generation sources, and also monitors the
community’s progress toward de-carbonization.
-
An intelligent networked battery energy storage system (BESS) deployed
on the customer premises to harmonize local electricity supply-demand.
The Eloncity BESS mitigates the needs for costly capacity and
ancillary services. Additionally, BESS also help to flatten
intermittent renewable generation into predictable, reliable, and
dispatchable renewable resources.
-
Customer-sited or community-based renewable generations, such as solar
PVs coupled with intelligent networked BESS, that can fulfill all or
nearly all the local energy demands. The locally produced renewable
powers would eliminate, or significantly lessen, the need to transport
remotely generated power through the vastly complex and often
vulnerable centralized grid’s T&D network, while at the same time
avoiding energy losses from long-distance transmission of remotely
produced powers to customer sites.
-
A community DC power network that uses the renewable DC power more
efficiently by minimizing the losses from repeated AC-DC-AC
conversion, while eliminating the need for costly AC power ancillary
services. Electricity in DC form is much more simple as compared to
its AC counterpart. For instance, DC electricity does not require
complicated and costly supports such as frequency regulation or
reactive power services. The Eloncity’s proposed local DC power grid
includes the DCBus Scheduler that orchestrates the community
electricity demand-supply. This local scheduler’s role would be
equivalent to that of the independent system operator, but with the
significant advantage of the ability to balance the local energy
demands and supplies at individual customer premises levels in highly
granular temporal resolution. In summary, the local DC grid and DCBus
Scheduler, together with the networked BESS, would remove the need for
costly ancillary services while eliminating the loss from repeated
AC-DC-AC conversion. All these technical innovations ultimately aim to
reduce the cost of delivered electricity to the energy consumers.
(2) Community-driven planning and implementation that warrants the
enduring success of the community’s transition into the sustainable,
regenerative energy future. Due to the fact that the community and their
children must live with this energy future, it is imperative that the
community has active participatory roles in defining and creating this
new energy future.
(3) Performance-based and self-funded financing is critical in
mobilizing private market capital to fuel wide-scale adoption of
decentralized renewable energy. The Foundation will collaborate with
financial partners, government agencies, and other key stakeholders to
establish revolving loan funds. The revolving loan fund’s goal is to
contribute to the upfront capital expenditure necessary for initiating
the project in communities that lack access to such funding. The
performance-based projects will demonstrate their merits by producing
real and meaningful energy bill savings for the community members while
generating the required return-of-investment to pay back the startup
loans. The repaid loans will be used to finance the subsequent Eloncity
projects.
(4) An equitable regulatory framework that facilitates open markets is
necessary for mitigating the currently imbalanced market powers,
protecting the energy consumers, supporting the local economy, and
unleashing market innovations. The regulatory framework must ensure fair
market access for innovative market players and guide market-driven
solutions to provide: (a) safety for the community and those that live
and work in it, (b) reliable energy services that support vibrant
community development in the face of climate change, (c) cost-effective
energy services that are affordable to all, especially the low-income
families, (d) sustained success of the community transition into the
healthy and safe regenerative energy future, and (e ) a framework to
ensure no community will be left behind as the world accelerates into
the clean regenerative energy paradigm.
The potential markets for the Eloncity Solution would be any areas that
are being served by fossil fuel and nuclear powered centralized grids.
However, the Foundation will focus on disaster-prone and rural areas
during the initial market development phase because these areas: (a) are
most vulnerable to electricity service disruptions; (b) typically lack
the local capacity to plan and create the safe, healthy, secure and
sustainable energy future; and (c) are hard-to-reach and underserved
communities that often get left behind. Concurrently, the Foundation
will collaborate with large utilities in dense urban areas to provide
the decentralized Eloncity Model to address localized constrained
service areas. Similar to the example of the Melbourne grid blackout
during heatwaves, the constrained areas do not have the adequate T&D
capacity to import needed electricity supply. The traditional solution
would be costly grid infrastructure upgrades and the re-commission of
dirty fossil-fuel or dangerous nuclear power plants. On the other hand,
the Eloncity Model produces renewable energy locally for local
consumption, thus negating the need to import remotely produced energy
through costly and often vulnerable T&D networks.
The Eloncity implementation roadmap is segmented into three primary
phases: Throughout Phase 1, the Foundation has spent the last four years
collaborating with a coalition of global partners to develop key
building block technologies for the Eloncity Model. These collaborative
efforts have successfully developed and commercially launched
intelligent networked BESS, energy management software, DC appliances
and customer-sited renewable power generators. These building block
technologies have enabled successful deployments of several hundred
self-sufficient buildings. During Phase 2, within the next 18 to 24
months, the Foundation will collaborate with government energy agencies,
research and education institutions, public agencies, local governments,
local utilities, global technology partners, financing partners,
community-based organizations, and community members to demonstratively
scale the Eloncity Model in communities within North America, Latin
America, and Asia. The Eloncity Model will be the integration of
Phase-1’s building block technologies with four additional building
blocks: the blockchain protocol to support decentralized energy
transactions (Eloncity Protocol), community capacity development for the
planning and implementation of the community-based decentralized energy
projects, performance-based project financing with revolving loan
funding, and a decentralized regulatory framework to support
market-driven decarbonization. The pilot sites will be in diverse
geographical regions to demonstrate the replicability of Eloncity’s
universal design in meeting the unique needs of diverse local markets.
Key outputs of Phase 2 will be the recipe for replicating the Eloncity
Model, based on the synthesis of the lessons from the pilot projects.
The Foundation will publish best practices, lessons learned, and project
implementation processes to assist global communities in adopting and
implementing the Eloncity Model. In Phase 3, the Foundation will focus
on mass market transformation to proliferate the Eloncity Model to all
targeted global markets. More detailed information will be provided in
the upcoming Eloncity Whitepaper and the Eloncity website.
1 Newikis (No date). Aliso Canyon Gas Leak. Retrieved May 30,
2018, from https://www.newikis.com/en/wiki/Aliso_Canyon_gas_leak
2 A Report Commissioned by UNDP and UNICEF with Support of
UN-OCHA and WHO, (Final Report Jan 22, 2002), The Human Consequences of
the Chernobyl Nuclear Accident – A Strategy for Recovery. Page 66.
3 Morgan Lee, (Feb 4, 2014). Feds Blame Six Groups for 2011
Blackout. Retrieved May 30, 2018, from http://www.sandiegouniontribune.com/sdut-violations-southwest-power-outage-2014feb04-story.html
4 Reuters Staff, (Jan 28, 2018). Heat Wave Leaves Thousands
of Australian Homes Without Power. Retrieved May 30, 2018, from https://www.reuters.com/article/us-australia-power/heat-wave-leaves-thousands-of-australian-homes-without-power-idUSKBN1FI0CO
5 Patrick Sabol (no date), From Power to Empowerment –
Plugging Low Income Communities Into the Clean Energy Industry.
Groundswell.
6 U.S. Energy Information Administration, (no date). How much
electricity is lost in transmission and distribution in the United
States? Retrieved May 30, 2018, from https://www.eia.gov/tools/faqs/faq.php?id=105&t=3
7 The World Bank (no date). Electric power transmission and
distribution losses (% of output). Retrieved May 30, 2018, from https://data.worldbank.org/indicator/EG.ELC.LOSS.ZS?end=2014&start=1960
8 Engie (Jan 20, 2014). Electricity Pricing Breakdown:
Ancillary Services Cost Components, Retrieved May 20, 2018, from http://www.engieresources.com/index.php?id=122
9 Engie (Jan 6, 2014). Electricity Pricing Breakdown:
Capacity Cost Components, Retrieved May 20, 2018, from http://www.engieresources.com/index.php?id=1330
Official Website: https://eloncity.io/
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