Lynne Kiesling
So I’ve really been enjoying The Police tour and rediscovering the joy I find in their music. Here’s an article from the Guardian last week about the band, in 1978 and today, by a writer who has traveled with the band and written about them then and now. Of all the articles I’ve read, I think this is the best I’ve seen.
Have a relaxing holiday weekend.
Lynne Kiesling
I have been remiss in not recommending to you the New Daedalus blog by Toby Considine, one of the most visionary folks I know in the intelligent buildings and IT space. His post about information and behavior changes discusses the visual information transmission technology used at Southern California Edison to signal price changes to consumers, and it’s an insightful observation.
In particular, Toby’s recent post about managing the impulse for control is incredibly insightful, and highlights one of the challenges we face in moving from centralized, top-down command-and-control to technology-enabled distributed control by individual agents in the electric power network.
It’s hard to give up control. Giving up control means giving up cherished perquisites of authority and the comfort well-worm processes. Giving up control means establishing objectives and letting others perform. But giving up control means the best and the brightest will work with you. Giving up control means that that your organization will be as intelligent as the sum of your staff, and not just as limited as you are. Giving up controls lets individual agents compete on the most economical provision of the best benefits. Giving up control increases the intelligence of any service, human or machine, as the creativity and skills of all our allowed to compete.
If we could only manage the impulse for control…
Added to the blogroll.
Lynne Kiesling
Data center power use has become substantial over the past decade, as computing has increased and computing power has intensified, so we have smaller processors doing ever more work, requiring ever more electricity. These processors also give off more waste heat, requiring more cooling, which requires more electricity; indeed, data center cooling has become a hot (pun intended) topic for enterprises, IT professionals, and building managers and engineers. This eWeek article from August 2006 highlights some of the data center power use issues:
“The people who spec and build the data centers are not the ones who pay the electric bill,” said Neil Rasmussen, chief technology officer and co-founder of American Power Conversion, in West Kingston, R.I. “Many of them didn’t know what it was or even who paid it.”
As a result, data center managers are doubling as HVAC (heating, ventilating and air conditioning) experts as well as certified IT administrators.
In their efforts to “green” the data center, they are learning to unlearn a lot of data center architecture design that has been handed down over the years.
Any data center, but especially one crammed with servers stacked in compact chassis, is “a radical consumption of power, and the exhaust of power is heat; there is no way you can consume one without the other,” Oliver said.
But as the typical server unit has shrunk from a stand-alone pedestal the size of a filing cabinet to 2U (3.5-inch) stackables, 1U (1.75-inch) pizza boxes and even blades, both power and heat cause problems.
“The whole industry has gotten hotter and more power-hungry. Within the last five years, servers went from using around 30 watts per processor to now more like 135 watts per processor,” Oliver said. “You used to be able to put in up to six servers per rack; now it’s up to 42.”
Every kilowatt burned by those servers requires another 1 to 1.5 kW to cool and support them, according to Jon Koomey, a staff scientist at Berkeley National Laboratory, in Berkeley, Calif., and a consulting professor at Stanford University.
In early 2007 Congress authorized the EPA to evaluate data center power use and cooling, and a separate industry report found that data center power consumption doubled between 2000 and 2005. Yes, doubled.
Meanwhile, a data center power outage in July 2007 disrupted Internet activity at such popular sites as LiveJournal, Craigslist, Technorati, and TypePad. This very interesting analysis from O’Reilly discusses the continuous power system (CPS) flywheel backup system that the data center had in place:
The advantage of a CPS over a battery-based system is that the power going to the datacenter is decoupled from the utility power. This eliminates the complex electrical switching required from most battery-based systems, making many CPS systems simpler and sometimes more reliable.
In this incident, latent defects caused three generators to fail during start-up. No customers were affected until a fourth generator failed 30 seconds later, which overloaded the surviving backup system and caused power failures to 3 of 8 customer areas.
That failure was an interesting example of a cascading failure occurring in the backup system (but cascading failures are a subject for another post!). The large power use of data centers necessitates more sophisticated, or more complex, backup systems, so reducing datacenter power use could take some strain off of the redundant backup systems as well as reducing overall resource use.
More recently, this SmartCool blog discusses IBM’s efforts to “green” their data centers, and this post makes a hugely important point:
The other aspect of the greening of datacenters is going to be green building techniques themselves. Intelligent management solutions like a SmartCool system or smart grid technology will go a long way to reducing the datacenter’s infrastructure electricity demands, which makes up a considerable portion of the usage. Some suggestions exist out there for building more robust hardware that can withstand higher temperatures, but aside from a concern over expenses that do not offset, there’s still going to be a need for air conditioning no matter how hardy the servers are; that kind of thing must be handled at the building infrastructure level.
I think data centers, and the enterprises that establish them, run them, and pay the power bills for them, should be and are on the vanguard of synthesizing hardware design and building design that take electricity prices and use patterns into account, that get the most “bang for the buck” out of each kilowatt consumed, and that will push the development of smart grid capabilities at the customer level.
To build a little bit on my criticism of Duke’s Jim Rogers’ top-down approach to energy efficiency last week, customer response, action, and innovation with respect to the data center power use issue illustrates how price signals and the dynamics of economic change create incentives for such customers to invest in energy efficiency technologies, in a decentralized and distributed way, that in aggregate can contribute substantially to reducing overall energy and resource use. When the incentives are there, presented through the transparency of true costs, customers will act.
Lynne Kiesling
It was pretty hot on the East Coast a couple of weeks ago, wasn’t it? The kind of heat that drives up the use of air conditioning and creates electricity demand spikes near system capacity, threatening service reliability. But there were no blackouts, no brownouts … what gives?
Price signals and demand response, that’s what gives. Price signals give incentives to reduce use at precisely the times when the system is the most stressed. As reported in the Philadelphia Enquirer on 11 August:
PJM Interconnection said yesterday that, as electricity use soared Wednesday, the region’s power grid set a record in the amount of peak need that was met by so-called demand response, in which power customers are paid market rates to curtail consumption. …
PJM said demand-response providers, typically businesses or institutions that offer to cut their consumption as needed, provided nearly twice that much, 1,945 megawatts of power, to meet the system’s peak requirements Wednesday afternoon.
The volume of demand response was “similar to the amount of power used by a mid-size city,” PJM said.
“This was the largest amount of demand response we’ve ever had on one day, and it’s an encouraging milestone,” PJM vice president Andrew L. Ott said in a statement. “Participating consumers responded to price signals in the wholesale electricity market and to system needs.”
See also Patrick Mazza’s comments over at Grist about his time in sticky Pennsylvania in August.
Price signals just keep giving and giving … when our regulatory institutions let them.
Back in July, Mazza also had a nice post about demand response, in which he went through a lot of the economic logic familiar to you KP readers. He also talked with the ever-insightful Rob Pratt at Pacific Northwest National Laboratory about the system-wide benefits that smart-grid-enabled, widespread demand response would provide:
On the old “dumb” grid, information flow from power users to suppliers consists almost entirely of 12 meter readings a year; from suppliers to users, it is 12 power bills. One of the most profound changes introduced by the smart grid — indeed, what makes it smart — is a communications backbone that allows massive two-way information flows. An information network is overlaid on top of the power network. Demand response (DR) employs these information/communications capabilities to engage power users directly in managing the grid. In essence, information becomes a new power resource. …
DR provides some clear environmental benefits. It can serve as a substitute for spinning reserve — power plants that run ready to supply power on short notice, typically around 10-15 percent of overall power generation. The less spinning reserve, the fewer emissions. And DR could sharply reduce the need for peaker power plants and infrastructure, with all their embedded energy and land-use impacts. Pacific Northwest National Laboratory (PNNL) calculates that moving to smart-grid technology will eliminate the need for between $46 and $117 billion in conventional utility infrastructure. That does not count investments in new smart grid technology. But one PNNL calculation gives an indication of comparative costs: smart appliances that can adjust their demand to grid conditions could, for $600 million, provide reserve capacity equal to power plants costing $6 billion, proving that “bytes are cheaper than iron.”
Michael Giberson
Would perfectly internalizing motor vehicle externalities make the economy less efficient? Jerry Taylor and Peter Van Doren of the Cato Institute make that claim in a paper advocating the repeal of federal and state gasoline taxes. The paper has picked up a couple of high profile econoblogging mentions – from Tyler Cowen, Greg Mankiw, The Economist’s FreeExchange among others.
I haven’t read the paper yet, yet suspect that I will be largely sympathetic to the conclusions reached. But I wonder what Taylor and Van Doren mean when they say, in the executive summary, that “perfectly internalizing motor vehicle externalities would likely make the economy less efficient—not more—by inducing motorists into even more (economically) inefficient mass transit use.”
Since mass transit relies on motor vehicles (are their exceptions?), if externalities associated with motor vehicles are perfectly internalized then persons desirous of transit would face the appropriate prices at the margin across private and publicly-organized alternatives.
I suppose it is a little unfair to pick at the logic in the executive summary, which necessarily omits much of the explanation. I guess I’ll have to read the paper.
Lynne Kiesling
In late June the KP Spouse and I were flying back from the ISNIE conference in Iceland, and we had a lengthy layover at BWI while awaiting our Southwest flight to Midway. Tired after a long flight from Reykjavik, we grabbed a crabcake dinner at the restaurant we knew of, then sauntered down to our gate for two more hours of lounging before departure. We rounded the corner, and couldn’t believe what we saw before us: a minimalist, tastefully-decorated wine bar and shop. Could we be hallucinating? Were we so beaten down by the modern travel experience that we created a mirage?
Thankfully, no. It was BWI’s outpost of Vino Volo, a relatively new line of airport terminal wine bars. Vino Volo currently has locations in Dulles, Sea-Tac, BWI, Sacramento, and New York’s JFK, and they are planning to expand further. They offer a thoughtful selection of wines by the glass, tasting flights, small plate nibbles, and bottles of wine for purchase (which is possible since they are inside of airport security).
Today’s Wall Street Journal has an article about Vino Volo (subscription required). The author recounts his experience:
We dropped in at the Vino Volo for lunch a few days ago and plunked ourself down in a modern-looking leather chair with old-fashioned comfort. An eager and vinously informed young woman called Jennifer emerged from the adjacent Vino Volo wine store bearing a menu and a wine list.
In a spirit of earnest inquiry, we ordered several of the small platters. Smoked salmon came as rollups, attractively plated. Duck confit with lentils and a generous sprinkling of cracklings was bathed in a vinaigrette made from Banyuls, a wine of Provence, the same region where duck has been parcooked in its own fat and preserved in this way for centuries. The plate (white china like the others) of cured meats included prosciutto, fennel salami and jambon de Bayonne, with crisp-fried crostini sliced from a good baguette-style loaf and bocconcini, little balls of mozzarella.
The teetotaler could limit herself to this food alone and wash it down with a bottle of sparkling Tau water from Wales. But, once again performing a reportorial service for travelers, I matched these platters with appropriate flights of wines. For the duck, I ordered Shades of White, a trio of glasses, each roughly half full, of Villa Maria Cellar Selection Sauvignon Blanc 2006 from the Central Otago region of New Zealand, and two from California: Terlato Family Vineyard’s Russian River Valley Pinot Grigio 2006 and Ferrari-Carano’s Alexander Valley 2005 Chardonnay. This adventure in global quaffing cost $10.
The glasses arrived on a silvery tray, atop a sheet of information about the wines. To describe each wine, Vino Volo provides a chart divided into four quadrants — bright, light, rich and brooding. A black dot shows where the wine falls in the spectrum. Vino Volo pegged the Sauvignon Blanc as bright, the Chardonnay as rich. The Pinot Grigio’s dot hovered over the line between bright and light. Next to each chart were tasting notes: The Chardonnay, we were told, has “enticing aromas of dried apricots, papaya and mango…with a toasted-almond finish.”
We had a delightful experience at Vino Volo; our server was quite knowledgeable and happy to talk about the wines and Vino Volo’s business model. We had one wine with which we are quite familiar, the Sausal Alexander Valley Estate Zinfandel 2003, and a new wine for us, the Borsao Campo de Borja Reserva 2001 from Spain (a blend of garnacha, tempranillo, and cabernet). Each glass came on a coaster with tasting notes; the Sausal notes said “raspberry & spicy clove”, among other things, and the Borsao said “cherry pie & vanilla”. Both were pretty accurate. The 2×2 taste matrix that they use to describe their wines has compexity on the X axis and fruit on the Y axis, and the four quadrants mentioned above do a nice job of capturing the salient characteristics of the taste, for comparison across wines.
Finally, something to add some pleasure back into air travel …
Lynne Kiesling
Yesterday we had a terrible micro-burst in my neighborhood; it didn’t go rotational so it really wasn’t a tornado, but the winds were up to 78 m.p.h. at Wrigley Field. I was sitting in one of the second floor front bedrooms at the desk, writing, when the sky went greenish-black. A whistling wind came from the west, picked up the 4.5-foot-diameter tree just to the east of our house, and uprooted it easily.
By the time I got down to the basement for safety, it was all over.
My gorgeous little street has the dubious distinction of being the worst hit in this storm; of the beautiful 100-year-old trees that line our street, three-quarters of them are down:
Happily, I don’t know of anyone being injured, although there’s plenty of damage to garages and cars.
Yikes.
Lynne Kiesling
Today’s New York Times has a column by Thomas Friedman, “Go Green And Save Money” (TimesSelect $$), on the importance of energy efficiency for both reducing costs and reducing overall resource use. In it Friedman draws attention to the crucial fact that both electricity use and prices are determined by the interaction of supply and demand, not just generation supply. He also highlights the energy efficiency proposals of Duke Energy’s Jim Rogers; this attention is worthy, because Rogers is proposing novel ways of thinking about the role of energy efficiency in this industry. In particular, Rogers emphasizes how important it is for utilities to have incentives to make the capital investments required to make large-scale energy efficiency choices available and easy for large numbers of consumers; those choices make it easier for them to reduce use, thereby leading to lower wholesale generation prices.
One important insight to draw from that point is that such capital investments will also pay off in reduced operation costs to utilities, particularly if these investments are made in technologies that are interoperable with other technologies, devices, and parts of the communication system. Interoperability is the ability of two or more networks, systems, components, devices, or applications to exchange information and to use that information effectively for action, often with little or no human intervention. Creating an intelligent interconnected network, with fluid information flows all the way to and from power plants to end-use premises, will deliver better reliability and higher throughput at lower long-term costs. Thus the potential for energy efficiency investments to reduce ultimate retail prices comes not just from reducing wholesale electricity prices, but also from enhancing information flows and reducing operating costs.
However, both Friedman and Rogers are overlooking the potential benefits that such an intelligent distributed network can deliver when it’s coupled with dynamic pricing to end-use customers. By focusing on the top-down provision of energy efficiency from the utility to the customer, both Rogers and Friedman perpetuate the centralized, control-and-manage vision of this industry as it moves into the technological, and probably carbon-constrained, future. This vision is too narrow.
Another vision exists, and in some ways it is complementary with the utility-driven vision. consider the fact that consumers are the ones who are best situated to figure out what energy uses, technologies, product bundles, and efficiency strategies work for them. Entrepreneurial retailers, who may or may not be the utility, can risk their own capital coming up with products and services that attract consumers and induce them to change their enegy use. But the crucial component in that distributed, decentralized dynamic is pricing.
Customers and retailers entering into dynamic pricing contracts that, for example, give customers access to low overnight prices and charge them higher peak prices through a real-time price, provide a distributed, decentralized approach to changing energy use behavior. And it’s an approach that gives customers the incentives to weigh their own decisions, using their own local knowledge, in ways that the utility can never access, because they cannot tap that local knowledge that individual customers possess about their own preferences and situations. Transparent, dynamic pricing enables consumers to evaluate the costs of their decisions, and provides them with incentives to take energy use and device investment decisions that reflect the true value that they place on energy efficiency.
Without dynamic retail pricing, the energy efficiency proposals that Rogers is promoting are unlikely to be particularly effective at producing sustained demand reduction. One reason why the justifiably-scorned energy efficiency and “demand-side management” programs of the 1980s were so ineffectual was that they did not provide incentives for utilities to cater to the diverse, heterogeneous ways and times that their consumers use power and could change their behavior.
Energy efficiency, digital technology, and dynamic pricing go hand in hand to optimize our resource use at the lowest feasible long-term cost, and interoperability is the grease in that information-flow system that will enable us to achieve that vision. Rogers’ proposals and Friedman’s column draw attention to an important part of what is possible.
NOTE: I also wrote about Rogers’ proposals back in March 2007, along the same lines.
Lynne Kiesling
I just want to amplify what Mike just said about the difference between AMR and AMI, and why you, the non-energy-professional, should care. Over the past couple of decades, some utilities have been putting in new meters with AMR capabilities when they’ve had to replace meters. AMR meters are only capable of one-way communication; they digitally communicate your usage to the utility, often to a meter-reader in a truck driving down your street. AMI allows true two-way digital information flow, so that the utility can send you information as well as receiving information from you. Furthermore, AMI can take advantage of the native communication capabilities of electricity wires, or it can use a broadband connection that you already have, to capture, aggregate, analyze, and respond to those data remotely.
AMR was all about reducing meter reading costs to the utility, which in turn should contribute to lower retail rates to residential customers. AMI, however, promises more. It offers such deep, broad, granular communication capabilities that there are many ways that utilities can achieve lowers costs with AMI. But it also opens up opportunities to offer different, novel, custom value propositions to different customers. AMI enables product differentiation, particularly through differential pricing of electricity use across time and by volume. As a communication service, it also can be bundled with other services that are valuable to homeowners (such as security, entertainment, etc.).
Now the question is twofold: 1. Can utilities in states without retail competition come up with differentiated, bundled products that appeal to residential customers, and in states with retail competition, can the retailers do it? 2. What differentiated, bundled products will appeal to residential customers? Will they buy them?
This is yet another example of why we should care about infrastructure questions that we routinely take for granted.
Michael Giberson
An article about meter technology company Itron in the Spokane (WA) Journal of Business makes the distinction between the last hot new thing in metering — automatic meter reading (AMR) — and the latest new thing — advanced meter infrastructure (AMI).
AMR provided a giant leap forward in reducing meter reading costs and improving accuracy and timeliness. The article reports that Itron is the No. 1 supplier of automatic meter-reading equipment in North America, but perhaps because of their success at AMR, they were a little slow jumping into the AMI business.
But AMI, because it provides a platform for two-way communication between the meter and the network, is the truly transformative development. The story explains:
When demand for electricity peaks on a utility’s system, the utility can seek to reduce usage by raising the rates it charges for power, and when demand falls, the utility can lower its rates, giving customers an incentive to use electrical equipment at such times, [Itron svp Philip] Mezey says. Two-way communication enables a utility to signal to customers when rates are being raised or lowered, and gives their customers’ meters the capability to measure their energy usage during periods of increased or decreased rates and the capability to price usage at the appropriate rates during those periods.
The article list several other options, none of which will be surprising to anyone who has been reading Lynne’s posts here. This Google search for “meter” on the KP site produces over 400 search results. (Note that some posts show up more than once.)
