Energy -- A system in transformation

For decades, the energy system has done exactly what people need it to do. Flip the switch the lights come on. Reliable service, at least for most, came at a reasonable price. But in the last few years, things began to change. Energy policy is a hot topic. Consumers in California have seen rolling blackouts. Utilities are paying more for wholesale power than they've ever imagined.

Steve Hauser, senior account manager for Pacific Northwest National Laboratory's Energy Science and Technology Division, is leading activities that could help address the current energy crisis and may change the way the nation thinks about the energy system. We talked to him about the transforming energy system.

If the system worked well for so many years, what led to the energy crisis that is in the headlines every day?

There are many elements that brought us here. The growing economy is one. We need to meet increasing needs for energy. Determining what kind of generation capacity to add and where it should go puts new challenges on the system. Of course, changes in energy policy are another factor. Discussions at the national and state level include the concept of regional transmission organizations and deregulation of retail energy markets.

Consumer demands are changing. The situation in California has made everyone more aware and focused on energy. Businesses are becoming interested not only in the direct cost for energy, but about how other aspects like backup generation, insurance and business risk affect their bottom line. As consumers realize their unique energy and power needs, there is more demand for mass customization, which is happening already in other unregulated businesses.

There is a need for a new and more complicated infrastructure that simply must make better use of capital investments. Energy resources — all of them — are somehow limited by availability, climate or environmental requirements. New energy technologies are being introduced, like fuel cells, microturbines and photovoltaics. There are a myriad of issues that are changing and influencing the way the system operates and will operate in the future.

What is Pacific Northwest National Laboratory's view of the changing energy system?

We believe that an inevitable change is taking place and we've only begun to get a glimpse of it. Some pieces are clear — like the greater use of fuel cells, storage and renewable resources — others involve emerging technologies. We're imagining a much more complex future, but we certainly don't have all the details.

We are just beginning to study and understand implications of a new energy system where we would have the ability to know energy load details and system conditions at any time. As more powerful computers and communications become available, information technology will be key. An information-rich energy system will allow a much more comprehensive understanding of each individual part of the system.

For example, we would like to know how much energy is required or supplied by every device linked to the system, when it might be needed and what it could do in response to other system signals.

How soon do you expect to see this energy system transformation?

It will be an evolutionary process. Today the system is generally passive. A generator runs over here, someone turns on a hair dryer over there. The only interactions occur when gas or electricity flows to the consumers or when consumers pay their bills and the money flows back.

In the near future, many more generators — articularly smaller ones — will be on the system and more technologies will be available. Utilities will have a greater desire to control your appliances, for example. They might offer a financial incentive if you agree to allow them to shut off your water heater during peak hours. Commercial businesses might install their own generator to improve reliability and sell excess power back to the local utility. In fact, these things already are happening in some places.

In about five years, the system will be even more interactive. Parts of it will be Web-enabled and consumers will be able to choose their energy providers online in real time. Even further in the future, the system will be transactive, a term I use to describe the millions and even billions of transactions, both financial and commodity, which will be taking place constantly.

In what other ways will the system of the future be different than today's?

As I mentioned before, information will be flowing between every device on the system and these devices will react and respond appropriately. This will present opportunities for a much more integrated approach to managing the systems complex optimization resulting in a system that is more efficient, clean, robust and cost-effective.

The ideal energy system of the future will deal with apparent dichotomies like both central and distributed power. It will have to make better use of assets and provide lower life cycle costs. It will be efficient, using the least amount of resources and creating the least impact on the planet while being flexible enough to survive serious disruptions.

The new system will enable the broad exchange of information; however, added communication cannot come at the expense of consumers' privacy or the ability to audit information. The future will require the system to be adaptable, adjusting to changes in weather, the economy and customer needs.

Where does the Laboratory fit into these changes?

Fundamental research is needed to understand a system with this level of complexity. We have to build new models and test them to provide insights into potential efficiencies and costs. New technologies and innovations must be developed to take advantage of the better information that will be available. Plus, new information management tools are needed for the system of the future to become a reality.

We will need mathematicians, economists, computer scientists and engineers to work on these solutions — and the Laboratory has all of these resources. One of our unique contributions will be the ability to provide such a broad range of expertise in one team.

I expect that we can contribute to changes in communications, infrastructure and information networks that will be required for the system to become transactive. New controls and diagnostics will be added to manage the system differently. There will be a need for experiments and pilot tests to validate the expected outcomes on the system.

Lastly, what I think is the key, is the need to simulate the system, not just how it operates in an engineering sense, but the economics and market responses as well. If we can help understand how the system operates and how its various parts impact each other, then we can begin designing innovative technologies and crafting appropriate economic structures and regulatory policies that realize the promise of this transformation.

Why is it important to begin looking at the energy system in a new way?

This region and the nation have to invest in new generating sources and new infrastructure that will cost billions of dollars. We don't have a choice. We need to be sure we're doing it right.

People are beginning to realize that there are more options available than the traditional way of thinking about the energy system. We may not understand them all right now, but we know new ideas are needed.

The Laboratory's work in this area can help ensure that future decisions are cost-effective and that the investments being made result in the best value. Already we have developed new partnerships and collaborations in this area and I expect many more to be formed in the months and years ahead.

Why do you think the Laboratory can succeed?

We have many of the unique capabilities that will be necessary to build an understanding of the entire system. I've worked in the Department of Energy laboratory system for almost 25 years and I can't think of a challenge better matched to our expertise. We've always looked at things from a little different perspective. Our historical work in metering and analyzing end-use loads gave us insights into how appliances and buildings really work, interacting with the occupants to create loads. We were among the first to realize opportunities presented by debugging these systems and changing their control strategies.

We are forecasting technology penetrations and economic impacts for DOE; developing grid-friendly appliances, advanced diagnostics and plug-and-play controls for buildings and distributed generation; and studying transmission networks. We also are exploring completely different, nontraditional ways of doing things. We are applying complexity theory to detect price manipulation in energy markets, and looking at a conversion and distribution technology called Flexbus that allows different voltages and frequencies to be delivered to different circuits in a building.

As we're putting these diverse pieces together, we're starting to see the whole story. It's a little unusual in that we're creating a transformation — not just a business, not just a technology, not just science — but we'll need all of those elements for success. We think we can paint a pretty good picture of the future, but the details will evolve. It's exciting. I expect a lot of opportunities and a lot of challenges.

Right now, the Pacific Northwest is facing some very difficult choices about its energy options. Innovation and careful decisions are critical to ensuring that the region can meet its energy needs in the next decade while keeping the economy strong. This Laboratory can apply DOE's science and technology to address these issues. I think we can be an asset in helping the region find innovative and creative solutions — it's part of being a good citizen in the Pacific Northwest.