VPPs and Commercial Buildings as Grid Assets (Courtney Blodgett - Edo) - Episode 94

The demand for electricity continues to go up. But instead of relying upon utilities to build more dirtier gas and oil fired power plants, a more novel approach is emerging. These Virtual Power Plants (VPPs) aggregate together a number of residential or commercial buildings and adjust demand in order to keep the grid operating optimally.

Paul talks with Courtney Blodgett, Co-Founder and Director of Strategy at Edo on how VPPs work and how Edo is helping commercial buildings become powerful grid assets.

For further reference:

Courtney Blodgett

"Sector Spotlight: Virtual Power Plants" - Department of Energy

Edo

Follow Paul on LinkedIn.

Transcript

This is Eight Minutes – a podcast helping you understand the energy and climate challenge in just a few minutes – I’m your host, Paul Schuster.

The shift to a decarbonized economy requires a LOT of electricity. And while utilities are doing their best to bring new solar, and wind and other renewable power assets online, they’re also looking at newer, more novel strategies. One of those approaches? Virtual Power Plants.

VPPs are coming into their own. They take all of those smaller, distributed assets such as batteries, thermostats, even EVs and aggregate them together to achieve enough scale to, maybe, avoid having to build another gas power plant.

I’m joined today by Courtnety Blodgett, Director of Strategy at EDO energy. EDO is a VPP solutions provider that focuses on commercial buildings and developing a portfolio of distributed assets that can be used by the grid in flexible ways. I’m hoping she can help us understand a bit more about the role that VPPs play in decarbonizing the power grid.

As a reminder, you can catch the entirety of my interview with Courtney on our sister podcast, MORE THAN EIGHT MINUTES.

Eight Minutes – it’s how long it takes the sun’s rays to hit earth – or about how long the waiter needs to stand there as my wife decides what to order … I’m gonna pay for that one … Let’s get it on!

PAUL SCHUSTER - Virtual Power Plants, or VPPs, are becoming an increasingly popular, relatively inexpensive way to balance the growth in electricity DEMAND without, necessarily, having to bring new fossil fuel burning power plants online. I’ll let Courtney explain a bit more as to what a VPP is:

COURTNEY BLODGETT - Virtual power plants that connect most with people is around residential and homes, so utilities throughout the country have programs where you can upgrade your thermostat to a smart thermostat.
And then during these peak events, which is when, so think of a heat wave that's happening. Everybody comes home at four or five and just cranks up the air conditioning. And if that happens, the grid gets stressed.
Those peak periods are when utilities are starting to sweat and they do we have enough energy to meet the needs of everybody turning on their air conditioners and fans and everything else.
And so with these residential virtual power plants, the utilities via a vendor will say,
we'll pay you if you enable us, if you have your temperature set to 68 degrees during these peak events and during, say, eight events per summer, we will then control your thermostat and it will set it up to 71 degrees instead of 68 degrees.

PAUL SCHUSTER - Why is that important? Well – it means that the HVAC unit isn’t running quite so hard at your house, it isn’t consuming quite as much electricity – and, if you combine ENOUGH homes together where they are shedding load, it means we can avoid turning on a, say, another gas fired plant in order to meet the huge electricity demand. Instead of ADDING generation, we’re removing a bit of the demand.

COURTNEY BLODGETT - And by doing that, by reducing how much your air conditioner is running, you're reducing the impact as the grid.
So all of these homes put together look almost like a battery on the grid system.
And so that is kind of what a virtual power plant looks like. It's an aggregation of all these different either reductions in load or use of actual batteries.

PAUL SCHUSTER - The demand for electricity changes throughout the day, over the seasons … and the way the power grid had traditionally managed that variation is by adding quick start generation that can come online fast – and meet these surging demands. That marginal generation is what is called “peaking” units – and is often gas fired or oil-fired power facilities.

COURTNEY BLODGETT - And those peaker plants are often inefficient power plants. So they have kind of a higher rate of air pollution, water pollution, greenhouse gas emissions. And they're often pretty expensive to run.

PAUL SCHUSTER - Avoiding having those peaker plants come online is a good thing. But as powerful as it is to aggregate residential homes together for a program like this, commercial buildings have been a bit – untapped – as to their potential. For good reasons.

COURTNEY BLODGETT - There's no simple when you're working with commercial buildings. So in a home, you know, you're typically have one, maybe two smart thermostats, a couple of zones, maybe in the house.
And typically one boiler, electric-based heating, are a really simple system that you're controlling. Then we go to commercial buildings where we have hundreds of pieces of equipment that help make up the heating, ventilation, and air conditioning, our HVAC system, and tens of thousands of data points being streamed from the building.

PAUL SCHUSTER - EDO is part of a growing network of companies looking to turn these buildings into assets for the power grid.

COURTNEY BLODGETT - Just explain a little bit how we're doing load shifting and shedding. So a lot of it will come from temperature set points and changing those.
So a commercial building will often have a temperature set point of, say, 69 degrees to 71 degrees, and the HVAC system is constantly working to maintain that temperature. And so what we would do is we would work with a facility manager who would talk to tenants and say, are you okay that during these events, the temperature set point goes from instead of being 69 to 71, it's 68 to 72.
We then receive 25 hours notification from utility, so we'd cool the building down to 68 degrees. And then the event starts at 68 degrees, and then the building is able to ride with minimal use of the HVAC system until it gets to 72 degrees.

PAUL SCHUSTER - That process has a lot fo value for building owners. The building is using less energy, it’s creating less emissions, and it’s creating less stress on the HVAC equipment – which doesn’t need to run AS HOT as it otherwise would. But the process has benefits for the utility system, too.

COURTNEY BLODGETT - We are typically looking, so when we're working with utilities, we're looking for utilities that have decarbonization goals. So the regulator is saying you need to make this transition to clean energy, and they really need a solution so that they don't have to build more or turn on these existing fossil fuel power plants, and ones that have grid constraints. So they're seeing these increases in electric load or geographic grid constraints, so you'll have transformers or substations that are stressed, and they want to defer the upgrade of that piece of equipment. 

PAUL SCHUSTER - Or, as Courtney points out, just gathering the insight into where and how load is shifting in their network.

COURTNEY BLODGETT - That's not something that they're used to seeing. They call a demand response event, and load is shifted somewhere in their system.
They don't know either before, during or after an event, where which customers are participating. There are third party vendors that are doing that, and they don't have that insight.

PAUL SCHUSTER - There’s a lot to like about VPPs – where the solution has value for both the utility AND the customer. And the fact that this load shifting helps to keep the dirtiest of power plants from turning on – is a really good thing for the climate.

COURTNEY BLODGETT - We should expect this load shedding and shifting to just become a normalized part of the grid. This to me is just such a crucial part of the clean energy transition. If we really are going to shift further and further away from fossil fuels, we need to be able to rely on virtual power plants to replace those pico plants that you talked about.
Like, how do we just really change how we think about what a quote unquote power plant is? Now we are all part of a power plant. And I'm really excited for that transition.

PAUL SCHUSTER - I’m Paul Schuster – and this has been your eight minutes.