Tag Archive for: energy

The BIG (but hidden) deal in the Inflation Reduction Act and other upcoming regulations

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Following the $1.2 trillion Infrastructure Investment and Jobs Act (or Bipartisan Infrastructure Law) last year, an additional $437 billion in Tuesday’s Inflation Reduction Act may seem like small change. 

It’s not.

Unless you’re into the policy details like VIA is, one thing that may have gone under the radar is that there’s the potential to add billions of dollars to consumers’ wallets and purses each year. The reason isn’t the tax credits or incentives in the bill itself (although that’s certainly part of it).

There are two different pieces of legislation and regulation that are going to make this happen. The first is this week’s Inflation Reduction Act and second is FERC 2222. The rule came out a few years ago, but won’t go into full effect until 2023. This is a national (except Texas) rule that makes it possible for pretty much anyone to participate in the wholesale energy markets. 

Wait, wholesale what?

In short, FERC 2222 says that consumers of a certain size (individually or aggregated together) can buy and sell energy at the same price that a multi-billion dollar company can. Up until now, most consumers were paid or saved whatever their going retail rate was (e.g., $0.15 to $0.30 per kWh) for reducing their consumption, shifting the time of their consumption, or selling their generation (e.g., solar) back to the grid. While not nothing, wholesale electricity rates can fluctuate dramatically. For example, during emergencies, wholesale prices can be MUCH higher (e.g., $20 per kWh). Those volatile, skyrocketing prices are becoming more frequent and lasting longer. We’ll actually be talking about the drivers of that volatility in an upcoming blog post.

The impact is that, by some estimates, a consumer could earn $500 to $1,000 (your mileage may vary) per year through various demand response programs. That’s with retail pricing. With wholesale rates, those cash payments will be significantly higher.

So that’s FERC 2222. What’s the connection to the Inflation Reduction Act?

Well, a lot of incentives are in place for consumers to upgrade to electric heat pumps, add solar, add EVs, and upgrade appliances. Anything new has the potential to be “smart.” That is, remote controlled so it can automate the process of turning on or off when needed. Like during an emergency.

The combination of new “smart equipment” purchased through the Inflation Reduction Act and FERC 2222 mean greater incentives and lower barriers to adoption (automated transactions instead of manual transactions).

If you follow the news, there’s been some backlash against the idea of having a company, like a utility, remote controlling the appliances in your home. 

We agree. That’s why we believe so strongly in our new Web3 solution, Skylight.

Three key benefits of VIA’s Skylight value proposition are:

So, overall, we’re pretty excited about the combination of events playing out right now. For savvy consumers, there’s HUGE potential for additional income and you don’t even need your tax accountant to help you out.

Of course, we’re equally excited that the regulatory direction is in line with VIA’s overall mission to make communities cleaner, safer, and more equitable.

Stay tuned for more upcoming announcements from VIA on this topic.

  1. Text – H.R.3684 – 117th Congress (2021-2022): Infrastructure Investment and Jobs Act
  2. H.R.5376 – 117th Congress (2021-2022): Inflation Reduction Act of 2022
  3. The actual amount will vary by size of home, local tariffs, local grid topology, etc. In many instances, demand response happens through an aggregator who may take as much as 90% of the savings for their role as a middle man.
  4. A demand response program is a program where electricity consumers agree to reduce their power consumption a certain number of times per contract period in return for financial compensation. A twist on this model is the Ford F-150, Duke Energy program. “Pilot incentives will reduce vehicle lease payments for program participants who lease an eligible electric vehicle (EV), including Ford F-150 Lightning trucks. In exchange, customers will allow their EVs to feed energy back to the grid – helping to balance it during peak demand.”

Why Switzerland?

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Yes, we love chocolate, cheese, and clean mountain air.
That (alone), however, is not why VIA is spending so much time in Switzerland.
Switzerland is the leader in three areas core to VIA: clean energy, data privacy, and blockchain.

Clean Energy

More than 190 countries around the world have pledged to reduce carbon emissions. Switzerland is one of the few that has legislation, a deadline, and active programs to move towards net zero. Not only is this commitment aligned with VIA’s mission, it enables VIA to actively support the clean energy transition and exactly where that transition is happening the fastest. As part of VIA’s commitment to energy and Switzerland, we’re pleased to have been admitted to the Association of Swiss Electrical Companies last week.

Data Privacy 

Arguably no country in the world has a stronger reputation for data privacy than Switzerland. The laws around data privacy continue to evolve and become stricter over time. By being aware of the leading edge of privacy regulations, VIA’s platform is in a position to support any jurisdiction.

Blockchain

Switzerland’s Crypto Valley is to blockchain what Silicon Valley is to software. With over 1,000 blockchain companies and one of the world’s first countries to enact crypto and blockchain legislation, Switzerland is an ideal location to lead blockchain initiatives. Earlier this year, VIA was admitted to the Swiss Blockchain Federation (see photo below). It’s in everyone’s interest to participate in an active innovation community that also has a clear regulatory framework.

Pictured above at the general assembly of the Swiss Blockchain Federation in Zurich: Ray Neubauer, Expansion Manager at VIA, Markus Riner, Head of Digitalization at VSE (Swiss Association of Electricity Suppliers), and Dr. Fabian Streiff, Head of Economic Development Agency of the Canton of Zurich.

If you’re interested in hearing more about how and why we chose Switzerland as our European headquarters, you can watch this ten minute video with our CEO, Colin Gounden being interviewed by the Swiss Ambassador to the U.S.

The End of Pilot Purgatory

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We’re excited to have Andrew Bright, former ABB executive and VIA’s advisor to our Swiss office, contribute to our blog. Read on to hear his commentary on VIA’s GDAC™ Transformers: 3-Minute Pilot, which was recently upgraded to maximize the value of transformer data while minimizing time.

Many industrial digitalization projects suffer from “Pilot Purgatory.” The pilots seemingly take forever and never end because no one can decide if they are a success or a failure. Since the term Pilot Purgatory was first coined a few years ago, much has been written about how to avoid it. However, the vast majority of this advice seems to involve throwing more resources, money and scale at the pilot, until well it no longer looks like a pilot but a full-scale roll-out. The logic is clear if the monthly cost of a pilot project is high enough – no one can afford to let the pilot continue indefinitely. How refreshing then, that VIA has come up with a radically different and frankly opposing approach for avoiding Pilot Purgatory.

Their new GDAC™ Transformers: 3-Minute Pilot takes just 3 minutes to complete once data is gathered. If this were a recipe, you would be allowed up to 27 minutes to source the ingredients and just 3 minutes to do the cooking. Resources, time and money are all minimized. After this experience, VIA hopes to have delivered a valuable summary of the health of one of your transformers. If this has proved insightful, the pilot has been a success, if not then GDAC™ may not be for you. Either way, the pilot will have been concluded.

With their 3-Minute Pilot, VIA aims to demonstrate three specific concepts:

  1. show valuable insights about the health of one transformer and that the math really works;
  2. show that valuable analysis can be conducted whilst keeping data private and confidential; and
  3. provide an educational component about how VIA does what it does. VIA does more than provide recommendations, it also explains why & how a particular recommendation was made.

All three of these components are embedded in the 3-Minute Pilot. If you are interested in performing a full fleet analysis going back say 20 years, that’s more of a project and not the goal of this pilot. VIA’s 3-Minute Pilot is true to the spirit and literal about the term “proof-of-concept.” This seems to be an industry first and given the simplicity and radical reduction in resources, I hope that it becomes an industry standard approach.

VIA note:

If you are interested in learning more about VIA’s GDAC™ Transformers: 3-Minute Pilot and perhaps want to give it a try, feel free to contact us.

VIA’s 3-Minute Pilot provides valuable insights on the health of transformers in just 3 minutes.

 

Understanding How EV Charging Behavior Affects Distribution Networks

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The International Energy Agency projects that 30% of all vehicles will be electric vehicles (EV) by 2030. This transition, at the intersection of electric power and mobility, combined with increased generation from renewable resources has the potential to significantly reduce greenhouse gas emissions in the years ahead. To make this happen, utilities who operate the distribution network need to understand how this new demand for electricity will affect smart grid assets. Our primary job at VIA is to help utilities navigate these shifts by understanding their data and fostering collaboration through our Global Data Asset Collaborative™ (GDAC™) program. As an example, VIA recently kicked off our first GDAC™ by focusing on transformers. Through this GDAC™, we are beginning to see that transformers are stressed by the switch to EVs and our focus will be on helping utilities find ways to keep these assets healthy over the coming years.

There are at least two things that make charging an EV different than, say, running a central AC unit. First, the power that needs to be delivered to an EV is around 20kW, which is four or five times the power required for a typical central AC unit, which ranges from 3-5kW. A “short-range” charge to power the EV so that its owner can commute could require around 40kWh, thus a “slow-charge” for a “short-range” car requires about two hours of charging. Powering large fleets of EVs will clearly require extending the capacity of current electricity distribution networks. 

The second issue that makes charging an EV different is timing. The timing of EV charging events changes the daily load profile of the home, workplace, and in urban centers equipped with networks of charging stations. Transformers are generally able to run past their rated capacity so long as they are given ample time to cool overnight. That is changing as commuters return home after work to charge their vehicles, never allowing transformers that time to cool down, which can cause them to malfunction and in extreme cases, explode. EV charging events, because they demand so much power so quickly from the grid, can lead to shifts in voltages along the distribution network. This leads to wear and tear on tap changers and other voltage regulation mechanisms. 

Utility asset managers need to understand which transformers in their fleet are most at risk as EV penetration increases. A recent study by researchers at Ohio State University illustrates what needs to be done to understand the effects EVs have on transformers and voltage regulators (“An Integrated Algorithm for Evaluating Plug-in Electric Vehicle’s Impact of the State of Power Grid Assets”). The authors have studied a representative sample of urban, suburban, and rural areas and tried to answer the question “What would happen to the distribution grid if each home had an EV?” To understand both the total load and the rapid charging behavior, the authors used actual distribution grid topology provided by American Electric Power (AEP) and simulated the behavior of the system as EV charging events are inserted into today’s “baseline” load demand. The authors find that suburban areas are expected to see the greatest stress, as it is assumed that, in urban areas, additional power will be provisioned by specific “fast-charging” stations while the suburban dwellers load will stress the transformers that serve their primary residences. In rural areas, the lower population density typically means that the transformers are not as heavily loaded as in a suburban area. Some authors predict long-term changes in mobility patterns that will increase the number of rideshare services (i.e., Uber). Rideshare cars are typically required to drive all day and would require longer charge times. This corresponds to the most aggressive scenario studied by the authors, in which case they expect insulator degradation to occur after just one year. The results illustrate the socio-technical complexities of planning the future smart grid and the need for detailed studies on how people are expected to use their vehicles.

Author’s Note

As a highly-trained problem solver with deep scientific and computing expertise, I’m always hungry for tough problems to solve. There’s no doubt that integrating EVs into the smart grid is a tough problem. More importantly, it is a high-impact socio-technical problem that we as a society need to solve to transition to a greener future. Working together with the world’s largest utilities, VIA is in a position to help solve these problems, a privilege I am grateful for every day I go to work. At VIA, we have a company value, “Love in=Love out” which means that if you love what you are doing, you will do great work. I expect we will do great work in this area, and help our customers navigate the challenges of the EV revolution.