Why Do We Need Eloncity?

Business Wire

SINGAPORE--(BUSINESS WIRE)-- Our modern way of life depends on the vast electric grids that power everything from light bulbs to mass transit subways. Despite tremendous strides in technological innovation, these existing grids are largely built on an aging design, that is essentially a centralized grid architecture fed by large power generation plants in remote locations that connected customer sites through the complex labyrinth of transmission and distribution (T&D) network. The coordination of electricity production in alternating current (AC) form and its delivery through the complex T&D network are managed by regional system operators or independent system operators (ISO). The ISOs not only need to balance the electricity production and consumption in real time, but also must ensure the electricity produced remotely is transported to customer sites without running into congestions on the vast T&D network. While the current electric power grids are amongst the most complex engineering system ever constructed by humanity, this centralized power grid design is starting to show its age. Today’s centralized power grids face significant challenges in providing safe, reliable, secure, and affordable energy services. Below are examples of just a few of the vexing challenges the existing centralized power grids faced.

Environmental and Public Health Problems: California October 23, 2015 – The underground natural gas storage in Aliso Canyon in Los Angeles experienced a massive leak¹. This storage facility is the second-largest natural gas storage facility of its kind in the United stated, and it supplies gas to electric power generation plants throughout Southern California. The leak problem was so dire that it prompted California Governor Jerry Brown to declare a state of emergency on January 6, 2016. The Aliso Canyon incident created an environmental disaster on a larger scale than the Deepwater Horizon accident in the Gulf of Mexico. It was assessed that Aliso Canyon’s gas leak released about 5.3 gigatons of harmful methane gas into the Earth’s atmosphere. To put this into perspective, this represents an equivalent of roughly 12,800 years of the total annual emission of the entire South Coast Air Basin in Southern California. The power utilities in Southern California implemented contingency plans in anticipation of the natural gas shortages for powering the local gas-based electric plants. Meanwhile, the local residents reported headaches, nausea, and severe nosebleeds. An average, 50 children per day saw school nurses for severe nosebleeds. By January 2016, more than 6,500 families had filed for help, and nearly three thousand households, or about eleven thousand people, had been temporarily relocated. There has been numerous centralized grid disasters over the years, with some gaining worldwide notoriety like the Chernobyl and the Fukushima incidents. In the Chernobyl nuclear power plant catastrophe², over 300,000 people were forced to relocate permanently. This nuclear accident released traceable airborne radioactive particles that were detected in every country in the northern hemisphere. As these few examples attest, the centralized grids pose increasingly unbearable impacts to the environment, health, and safety of the people that it supposes to serve.

Safety and Reliability Problems: California September 8, 2011 – A deficient equipment maintenance procedure at a transmission switch station in Yuma, Arizona, initiated cascade grid power failures that left more than seven million residents without electricity, ranging from San Diego County to western Arizona and Tijuana³. This major incident exposed the inherent susceptibility of the centralized power grid to point-vulnerabilities. Similar to the Aliso Canyon gas leak incident, a failure at one single point on the centralized power grid caused adverse impacts to millions of customers over a vast area. Natural or human-induced accidents can occur at any vulnerable point, anywhere across the complex centralized power grid that sprawls over vast geographical areas, so the existing power grid’s ability to guarantee safe and reliable energy services looks to be increasingly challenged.

Adaptability and Resiliency: Melbourne, Australia January 28, 2018 – More than 10,000 homes in Australia’s second most populous state were stuck without power due to a surge in power demands from the scorching heat wave that overloaded the grid⁴. This blackout was caused by a power network failure, rather than supply shortages. This occurred less than a year after Australia’s biggest city, Sydney, was hit by blackouts during another heatwave that affected more than 50,000 homes. These events often happen during an intense heatwave, where power demands can precipitously peak as customer crank up their air conditioners. Meanwhile, the grid T&D wires and electric power plants experience reduced electricity transmission and generation due to increased ambient temperature. In the foreseeable future of global climate change, cities around the world are expected to experience growing incidents of grid failures due to adverse weather, furthering adding to this problem. From heatwaves in Australia and California to frigid winter spells in the northeastern US, to hurricanes Katrina, Sandy, Rita or Maria, we witness repeated episodes of massive grid failures due to the system’s inability adapt and or absorb the disruptions brought about by climate-change induced events.

Unaffordable Electricity Cost: US April 14, 2016 – A study was published by Groundswell, a nonprofit renewable energy advocacy group, detailing how the cost of electricity is increasingly burdensome for America’s working class. The study reports the bottom 20 percent of earners spend about 10 percent of their income on electricity⁵. A few reasons for centralized grid’s high costs of electricity are as follows: (a) Five to nine percent^{6, 7} of the total energy produced is lost during the electricity transmission and distribution. As discussed above, the T&D losses are amplified during hot weather spells due to increasing resistance in the T&D wires and equipment as temperature rises; (b) The electricity in AC form is relatively complex and requires numerous supporting resources, called ancillary services, to ensure the delivered powers at customer sites remain within the required power quality limits. Examples of ancillary services would be frequency regulation, voltage-level regulation, and reactive-powers. Unfortunately, the required ancillary services for the AC-based centralized grid are costly and typically account for three to seven percent of the total electricity bill⁸; (c) Capacity services that ensure adequate power generation capacity to maintain grid reliability during periods of peak demand. The capacity services or standby capacity reserve are compulsory because the current power grid lacks real-time coordination of customer power demands to the system’s available power supply. In other words, because the real-time management of power demands at customer sites is lacking, the centralized grids procure excess generation capacity to standby just in case they are needed. These capacity services are also costly and can add up to 15 percent of the total bill⁹. These examples are just a few of the innate and costly inefficiencies of the centralized AC power grid design.

When you combine the challenges of natural disasters, population growth, and climate change, new approaches to energy production and distribution are needed more than ever. It is our belief that the solutions to these challenges should also create vibrant and sustained growth for all. The AI Grid Foundation (Foundation), a non-profit based in Singapore and an advocate for open access to decentralized renewable energy, shares this vision. The Foundation has collaborated with global organizations and local communities to develop the Eloncity Model, a community-centric approach employed to address these challenges and decentralize renewable energy resources to attain a safe, healthy, vibrant and equitable energy future. The Eloncity Model builds upon four key pillars:

(1) Decentralized renewable energy design architecture, which comprises:

A Blockchain platform that provides an open, secured and distributed ledger for efficient recording of energy transactions in the community in a verifiably and immutable manner. The blockchain platform also enables the Eloncity community to establish an auditable record for tracking the sources of electricity generation within the community, that is GHG-free or non-fossil-fuel based. The auditable tracking of electricity generation sources is critical for valuation of electricity based on generation sources, and also monitors the community’s progress toward de-carbonization.
An intelligent networked battery energy storage system (BESS) deployed on the customer premises to harmonize local electricity supply-demand. The Eloncity BESS mitigates the needs for costly capacity and ancillary services. Additionally, BESS also help to flatten intermittent renewable generation into predictable, reliable, and dispatchable renewable resources.
Customer-sited or community-based renewable generations, such as solar PVs coupled with intelligent networked BESS, that can fulfill all or nearly all the local energy demands. The locally produced renewable powers would eliminate, or significantly lessen, the need to transport remotely generated power through the vastly complex and often vulnerable centralized grid’s T&D network, while at the same time avoiding energy losses from long-distance transmission of remotely produced powers to customer sites.
A community DC power network that uses the renewable DC power more efficiently by minimizing the losses from repeated AC-DC-AC conversion, while eliminating the need for costly AC power ancillary services. Electricity in DC form is much more simple as compared to its AC counterpart. For instance, DC electricity does not require complicated and costly supports such as frequency regulation or reactive power services. The Eloncity’s proposed local DC power grid includes the DCBus Scheduler that orchestrates the community electricity demand-supply. This local scheduler’s role would be equivalent to that of the independent system operator, but with the significant advantage of the ability to balance the local energy demands and supplies at individual customer premises levels in highly granular temporal resolution. In summary, the local DC grid and DCBus Scheduler, together with the networked BESS, would remove the need for costly ancillary services while eliminating the loss from repeated AC-DC-AC conversion. All these technical innovations ultimately aim to reduce the cost of delivered electricity to the energy consumers.

(2) Community-driven planning and implementation that warrants the enduring success of the community’s transition into the sustainable, regenerative energy future. Due to the fact that the community and their children must live with this energy future, it is imperative that the community has active participatory roles in defining and creating this new energy future.

(3) Performance-based and self-funded financing is critical in mobilizing private market capital to fuel wide-scale adoption of decentralized renewable energy. The Foundation will collaborate with financial partners, government agencies, and other key stakeholders to establish revolving loan funds. The revolving loan fund’s goal is to contribute to the upfront capital expenditure necessary for initiating the project in communities that lack access to such funding. The performance-based projects will demonstrate their merits by producing real and meaningful energy bill savings for the community members while generating the required return-of-investment to pay back the startup loans. The repaid loans will be used to finance the subsequent Eloncity projects.

(4) An equitable regulatory framework that facilitates open markets is necessary for mitigating the currently imbalanced market powers, protecting the energy consumers, supporting the local economy, and unleashing market innovations. The regulatory framework must ensure fair market access for innovative market players and guide market-driven solutions to provide: (a) safety for the community and those that live and work in it, (b) reliable energy services that support vibrant community development in the face of climate change, (c) cost-effective energy services that are affordable to all, especially the low-income families, (d) sustained success of the community transition into the healthy and safe regenerative energy future, and (e ) a framework to ensure no community will be left behind as the world accelerates into the clean regenerative energy paradigm.

The potential markets for the Eloncity Solution would be any areas that are being served by fossil fuel and nuclear powered centralized grids. However, the Foundation will focus on disaster-prone and rural areas during the initial market development phase because these areas: (a) are most vulnerable to electricity service disruptions; (b) typically lack the local capacity to plan and create the safe, healthy, secure and sustainable energy future; and (c) are hard-to-reach and underserved communities that often get left behind. Concurrently, the Foundation will collaborate with large utilities in dense urban areas to provide the decentralized Eloncity Model to address localized constrained service areas. Similar to the example of the Melbourne grid blackout during heatwaves, the constrained areas do not have the adequate T&D capacity to import needed electricity supply. The traditional solution would be costly grid infrastructure upgrades and the re-commission of dirty fossil-fuel or dangerous nuclear power plants. On the other hand, the Eloncity Model produces renewable energy locally for local consumption, thus negating the need to import remotely produced energy through costly and often vulnerable T&D networks.

The Eloncity implementation roadmap is segmented into three primary phases: Throughout Phase 1, the Foundation has spent the last four years collaborating with a coalition of global partners to develop key building block technologies for the Eloncity Model. These collaborative efforts have successfully developed and commercially launched intelligent networked BESS, energy management software, DC appliances and customer-sited renewable power generators. These building block technologies have enabled successful deployments of several hundred self-sufficient buildings. During Phase 2, within the next 18 to 24 months, the Foundation will collaborate with government energy agencies, research and education institutions, public agencies, local governments, local utilities, global technology partners, financing partners, community-based organizations, and community members to demonstratively scale the Eloncity Model in communities within North America, Latin America, and Asia. The Eloncity Model will be the integration of Phase-1’s building block technologies with four additional building blocks: the blockchain protocol to support decentralized energy transactions (Eloncity Protocol), community capacity development for the planning and implementation of the community-based decentralized energy projects, performance-based project financing with revolving loan funding, and a decentralized regulatory framework to support market-driven decarbonization. The pilot sites will be in diverse geographical regions to demonstrate the replicability of Eloncity’s universal design in meeting the unique needs of diverse local markets. Key outputs of Phase 2 will be the recipe for replicating the Eloncity Model, based on the synthesis of the lessons from the pilot projects. The Foundation will publish best practices, lessons learned, and project implementation processes to assist global communities in adopting and implementing the Eloncity Model. In Phase 3, the Foundation will focus on mass market transformation to proliferate the Eloncity Model to all targeted global markets. More detailed information will be provided in the upcoming Eloncity Whitepaper and the Eloncity website.

¹ Newikis (No date). Aliso Canyon Gas Leak. Retrieved May 30, 2018, from https://www.newikis.com/en/wiki/Aliso_Canyon_gas_leak

² A Report Commissioned by UNDP and UNICEF with Support of UN-OCHA and WHO, (Final Report Jan 22, 2002), The Human Consequences of the Chernobyl Nuclear Accident – A Strategy for Recovery. Page 66.

³ Morgan Lee, (Feb 4, 2014). Feds Blame Six Groups for 2011 Blackout. Retrieved May 30, 2018, from http://www.sandiegouniontribune.com/sdut-violations-southwest-power-outage-2014feb04-story.html

⁴ Reuters Staff, (Jan 28, 2018). Heat Wave Leaves Thousands of Australian Homes Without Power. Retrieved May 30, 2018, from https://www.reuters.com/article/us-australia-power/heat-wave-leaves-thousands-of-australian-homes-without-power-idUSKBN1FI0CO

⁵ Patrick Sabol (no date), From Power to Empowerment – Plugging Low Income Communities Into the Clean Energy Industry. Groundswell.

⁶ U.S. Energy Information Administration, (no date). How much electricity is lost in transmission and distribution in the United States? Retrieved May 30, 2018, from https://www.eia.gov/tools/faqs/faq.php?id=105&t=3

⁷ The World Bank (no date). Electric power transmission and distribution losses (% of output). Retrieved May 30, 2018, from https://data.worldbank.org/indicator/EG.ELC.LOSS.ZS?end=2014&start=1960

⁸ Engie (Jan 20, 2014). Electricity Pricing Breakdown: Ancillary Services Cost Components, Retrieved May 20, 2018, from http://www.engieresources.com/index.php?id=122

⁹ Engie (Jan 6, 2014). Electricity Pricing Breakdown: Capacity Cost Components, Retrieved May 20, 2018, from http://www.engieresources.com/index.php?id=1330

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