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Smart Grid Lite: Is a Simple Grid a Better Grid? By Guest Editorial Jan 28, 2010 - 1:59:24 PM
As reported here in SGN, the Smart Grid idea has expanded to a level of complexity that is slowing adoption. Much of this complexity comes from EV integration. Utilities could buy and sell power to and from consumers (and their vehicles), applying trading rules and balancing renewables against load in response to real-time pricing signals. Utilities thus could piggy-back on consumers’ investments in their vehicles’ batteries. Consumers whose cars sit idly parked most of the time could make money on the energy arbitrage. What’s wrong with that? What would Colin Chapman say?
The Meter is a Cash Register. Most businesses serve their customers and make money by selling their product or service. It’s rare to find a business that prospers by selling its products to customers and then buys them back later when prices rise. Rather, smart consumers look for good prices and stock up. Businesses make money on margin, not on spread. Cash registers are optimized for sales, not for arbitrage. Simplify.
Batteries are Life Limited. We think of cars as durable goods, but in fact they are short-lived by consumer product standards: 100,000 miles at average 40 mph is only 2500 hours of life. We consumers tolerate this because our cars are parked most of the time. The batteries in an EV are the most severely life-limited part of the car. If we were to give our cars’ batteries a “part-time job” when they were parked, they would need to be replaced more often. I doubt that car makers will see this as a reasonable warranty issue. Simplify.
Batteries are Expensive and Heavy. We know that EVs’ batteries are very expensive and heavy. Using a car’s battery for arbitrage means that it will have to be heavier and more expensive than if it was sized only to propel the car. Add Lightness.
I Bought A Car, Not A Day-Trader. I would be rather stressed out if I got into my car and found it had sold its energy to the grid and I didn’t have enough range to get home. Chill Out. (As far as I know Colin Chapman didn’t say that but I bet he felt it now and then.)
Simplify and Add Lightness. I suggest that Smart Grid and EV roll-out and success will come most quickly if we stick to the basics. Sell energy to our customers at real-time prices that reflect production costs and distribution constraints. Charge them a fair and transparent price. Don’t damage the value of their investment with tricky arbitrage schemes. Most important, establish a straightforward Smart Grid definition that can be agreed and adopted quickly.
Maurice Gunderson is a Senior Partner in the Energy & Materials practice of CMEA Capital. Phone 415-352-1520. www.cmea.com. Maurice has been a venture capital investor in the energy sector for 18 years. Prior to joining CMEA in 2006, he was co-founder and managing director of Nth Power, a venture capital firm specializing in the energy sector.
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Smart Grid Newsletter (SGN) is the insider's guide to the Smart Grid revolution. It consists of a FREE bi-monthly email summary, along with a companion Web site that contains the full stories and other helpful materials. Benefits of subscribing: SGN is the only central source for all of the news, trends, research and marketplace information relevant to grid automation. In it, you will read about cutting edge technologies; successful pioneers and how they got ahead; regulatory changes that could unleash new markets; the latest research; and new opportunities for sales of grid-related products and services. © Copyright 2009 SmartGridNews.com |