The electricity industry is undergoing a transformational change. In the technology sector, we have become accustomed to major shifts in our industry every few years. But if you are a utility, these disruptions are likely keeping you up at night. How do you deliver reliable energy to a more engaged and dynamic customer base when your power supply is increasingly renewable and therefore intermittent, all in a system that has not really changed since the early 1900s? Utilities have a choice – hold on tightly to a hundred-year-old business model, or embrace the disruption and transform their industry in the process.
Microsoft is betting on transformation. We believe deeply in the power of data-driven insights to create new efficiencies across every industry, especially the energy and utilities sector. What we see and hear indicates that technology can help utilities build more effective, reliable and autonomous grids. Much like how self-driving cars will transform the hundred-year-old auto industry, a self-driving grid will be the catalyst for transformation in the electricity industry.
Today, I’m excited to announce the launch of a new video that showcases the work Microsoft is doing in this space. It shows how autonomous grids can help create a virtuous feedback loop both for utilities and customers as demand is matched with supply, allowing for the consumption of clean and affordable energy.
The project with Agder Energi and Powel, highlighted in the video, is powered by Azure, PowerBI and Azure IoT Hub. Using these Microsoft technologies, operators are now able to better predict demand and engage distributed resources, like rooftop solar panels, electric vehicles and smart homes, when they are needed. Not only does this benefit customers by keeping the lights on, but it may also help Agder Energi by keeping them from having to build a new substation – saving time, money and emissions.
A changing environment requires a transformed grid
The need for these solutions has never been more acute. The combination of a changing climate, the rapid growth of renewables, and increasing adoption of distributed energy resources means that utilities must adapt to a far more dynamic system than what existed just a few years ago. And in the developing world, utilities and governments must accommodate growing electricity demand from a burgeoning middle class. As the global population grows, and is increasingly urban, the world must find ways to supply more electricity while achieving massive decarbonization.
Utilities have seen this coming and, like many organizations around the world, have begun exploring how the cloud and the Internet of Things can help. The concept of a ‘smart’ grid has been around for some time. But as the issues have evolved, so too has the need for a more elegant solution than a grid that is ‘smart’. The grid must become more autonomous and responsive. That means enhancing the existing grid with the ability to forecast demand, while also leveraging new distributed resources to meet that demand without building new power plants.
Microsoft’s work on the connected grid
We are now entering the era of the connected and increasingly autonomous grid, where energy providers can use the intelligent cloud to more efficiently and accurately predict demand as well as integrate and tap the power of connected devices at the customer level.
Microsoft is working with several companies and utilities to build this grid of the future. Australian technology start-up Evergen has created a solution that combines the power of Azure and advanced machine learning capabilities with the Internet of Things (IoT) to help homeowners get the best deal on their power consumption. In Hawaii, Steffes Corporation and Mesh Systems are using sensors and Microsoft Azure to transform smart water heaters into a giant community battery that can store energy and help balance the grid. And we’ve recently completed another grid-based pilot project in Holland. In partnership with ICT and the city of Herrhugowaard, the Energie Koploper project is testing an advanced smart grid in a neighborhood of approximately 200 households using smart thermostats and sensors to optimize energy use.
We’re also exploring new ways to use the cloud in a different way to drive this transformation, by leveraging our datacenters. In every datacenter, we build out a substantial amount of backup power in the form of distributed energy resources like generators and batteries. But the industry standard of diesel generators and lead acid batteries will do little to help delivery flexibility and reduced emissions. In Cheyenne, WY, we created a new model that allows us to integrate natural gas turbine backup generators into the datacenter. When the grid experiences stress, we will use these cleaner generators to deliver backup power to the grid – this innovation eliminated the need for the utility to build a new power plant. Microsoft has also invested in many R&D projects to test energy storage options, including testing grid integration possibilities for flow batteries in partnership with University of Texas – San Antonio (UTSA) and testing the integration of another flow battery into the datacenter environment in Redmond, WA in partnership with Primus Power.
Creating a triple win
Making electrical grids more resilient and flexible through technology is a triple win. It’s good for the environment, enabling greater use and adoption of renewables to power the grid. It’s good for consumers, decreasing both impact and cost as they can leverage their own smart devices and distributed energy resources. And, it’s good for utilities and cities that need to provide cost-effective and reliable services.
We’re looking forward to working with other utilities and customers to digitally transform the way the energy system works. Based on what we’ve seen so far at Microsoft, the future is bright.