Grid Optimization: More Software, Less Hardware

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by James A. Bacon

Dominion Voltage, Inc., a subsidiary of Dominion Resources, has announced the deployment of its electric grid optimization platform to the Duck River Electric Membership Corporation served by the Tennessee Valley Authority. Duck River expects to generate energy savings of 2% to 4% annually and says the technology will accelerate the deployment of Advanced Metering Infrastructure, which should enable even greater energy conservation.

Dominion Voltage’s EDGE platform “leverages the smart grid network for Volt/VAR optimization and voltage stabilization, which leads to a more efficient grid,” stated Executive Director Todd Headlee in a press release today.

The most concise explanation of “voltage optimization” that I’ve seen comes from Dick Munson, director of the Environmental Defense Fund’s Midwest Clean Energy initiative, writing a week ago for the EDF blog:

Many appliances, including incandescent lighting, work just as effectively, yet consume less energy, when the flow of electricity to them is reduced. Put another way, higher voltages generally make individuals and businesses needlessly use more energy, driving up electricity bills and air pollution. Therefore, if voltage was “right-sized,” residents would get enough power to run their appliances efficiently, but not so much that they use more electricity than needed.

According to Munson, recent study by Commonwealth Edison Company (ConEd)  concluded that voltage optimization could reduce the need for almost 20,000 gigawatt hours of electricity yearly across its system, enough to power 180,000 homes, at the incredibly low cost of 2 cents per kilowatt-hour.

Bacon’s bottom line: Grid optimization technologies are a sub-set of a larger cluster of technologies including microprocessor controls, sensors and software algorithms collectively referred to as “smart grid” technologies that hold out the potential to improve energy efficiency and integrate variable power sources like wind and solar into the grid.

Richmond-based Dominion Resources is investing in some of these technologies through unregulated subsidiaries like Dominion Voltage. That makes an interesting business story. What makes it a Virginia public policy story is whether Dominion is applying these same technologies in its regulated subsidiary, Dominion Virginia Power. If not, why not. What are the hold-ups? Or has the story simply gone unnoticed?

If there’s one thing that rate payers, environmentalists, electric utilities, the Commonwealth of Virginia and just about everyone else should be able to agree upon, it’s that reducing energy consumption at the cost of 2 cents per kilowatt hour is a win-win for everyone. I will pursue this line of questioning as I have time.