For nearly 30 years, Steve Pullins has worked in and around the utility industry, in capacities ranging from systems engineering to project development to high-level consulting. He currently works at SAIC, where he heads the Modern Grid Initiative for the National Energy Technology Laboratory.

I spoke with him at the Discover Brilliant conference in Sep. 2007. He stressed that he was speaking to me as a concerned private citizen, not as a representative of the MGI. Part one is here.

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DR: What does intelligence look like at the generation end? Responding to demand signals in real time?

SP: It depends if you’re talking about baseload generation or more aggressive use of distributed generation. From a central generation station standpoint, utility-scale baseload, there’s plenty of intelligence. I don’t think we need to work on that aspect of it. What we need to work on is the fact that there’s about 12 million distributed generators in the United States that are unengaged in the solution. A lot of those are diesel, but you can convert those — if you created a proper incentive program, a ton of them would change out to a clean generating mechanism. At that point we have to put some intelligence on those units.

DR: Are most of those private generators hooked into the grid?

SP: No. Extremely few. Half the nation’s capacity is used on the grid — there’s another 50 percent, 250 gigawatts, sitting there basically unused most of the time. We have a very detailed report: 12.3 million generation units in the United States, in 2005. Seventy-eight percent of the businesses in the U.S. have a DG unit. The average size is 18kW — small — but it’s right at the load. No transmission losses, no distribution losses.

DR: If you could get all of that DG on the grid, it’s enough to balance loads or shave peaks, right?

SP: It is. It’s more than enough. What we have to do is make sure we’re doing it in an environmentally sound way. Again, most of those are diesel. Right now we’re limited to being able to run maybe 72 hours of emergency operation a year. But if we convert them to biodiesels, within environmental laws, we can run them maybe 200, 300, 800 hours a year.

DR: How much new generation could we avoid with your national smart grid plan?

SP: The average energy usage in the nation is 440 gigawatts a day. To address the peak load for a few hours a week, we have to add another 330 gigawatts of generation.

But we’ve already got another 220 gigawatts paid for, sitting here in those 12 million DG units. Why should we build that 330 gigawatts to chase the peak?

We’ve got to have a certain amount of baseload generation, a certain amount of load follow, a certain amount of peak, because the the load is not constant. What we need to do is find a different way of addressing the peak than just building more plants that are turned on and off a few times a year. Let’s use things that make more sense for the larger picture, i.e., energy storage.

Make energy storage a viable mechanism and pervasive throughout the network. We not only shift peak loads, we engage more of that distributed generation and renewables. We probably wouldn’t need to build a new power plant in the country for 20 years. Think about it. We’ve got 2 percent per year growth in our energy consumption. Twenty years, compounded, that’s probably about 50 percent. We’re using 440 megawatts and we’ve got 220 sitting unused. Sounds like we don’t need to build anything else.

DR: Are you planning for a grid that’s primarily distributed energy and storage, or one that’s mostly an upgrade of our existing hub-and-spoke system?

SP: To do what we need the grid to do for the 21st-century economy, a centralized generation- and transmission-focused system will not deliver. Look at Denmark’s motivations in the mid-80s. They were going through their life-changing approach, struck then with the same concerns and drivers we are struck with today. I would suggest Denmark found very good model, heavily distributed, which can deliver the goods we’re talking about. We’re going to be going down that path, as opposed to an upgrade of our standard system.

DR: We’ll be forced down that path?

SP: I think we will get there with or without the utilities. Compare Denmark today with what’s happening on the edge of our network, outside the control of the utilities — in other words, what’s happening in the consumer picture, primarily commercial and industrial. These guys are headed to microgrid strategies. If the utilities don’t embrace that strategy, 20 or 30 years from now they’ll be irrelevant and out of business, and a new electric service model will emerge, centered around whatever comes out of the consumer space.

DR: How do you get around all the barriers utilities throw up?

SP: Those barriers are going to drop over time, because they are going to prevent consumers from doing what they think they need to do to survive and prosper. Who are the representatives of the consumer base, when it comes to major infrastructure like electric and gas, in the U.S.? It’s the public service commissions. So that’s where the influence is going to happen. The walls of the club are going to get broken down.

DR: If you were emperor for a day, what would you do?

SP: I would do three things:

I would force every utility to have a broad communications platform — to be able to touch all parts of their network. If you’re going to send electricity over there, you’ve got to be able to communicate with that area.

 

The second thing I would do is advanced metering infrastructure (AMI), a good first step in this continuum toward a smart grid.

The third thing is, I would require all utilities to include societal benefits in their rate cases. When you’re going to come with a business case to do something new, you’ve got to include not only system benefits, but societal benefits.

If there’s an outage, the 75 cents of lost revenue for the utility is considered, but the $50,000 from a business being out is not considered, in the business case. So what do you get? You get small, incremental, operation-and-management-focused solutions. All the big things that really change the game, that make the grid smart, that make it more economical long-term, never get considered. It’s because they don’t allow societal benefits to be considered. That’s the big-ticket item.