Northwest plays it smart with energy
Regional firms that offer power alternatives could change the industry here and
By LISA COHN Issue date: Fri, May 7, 2004
For 100 years, the Northwest’s electric power system has been made up of “big
iron, big concrete and big steel,” the power stations, poles and wires
that generate electricity and distribute it to homes and businesses, says
Rob Pratt, staff scientist at the Pacific Northwest National Laboratory,
in Richland, Wash.
Right now, that big steel-and-concrete infrastructure needs huge capital
improvements — about
$23 billion through 2020 — to avert troublesome transmission roadblocks
and power blackouts, he says. In some areas during peak hours, when many customers
are calling for power at once, the region’s “poles and wires” can
barely manage all the electricity traffic required to meet customers’ demands,
“ In the Northwest, we have some of the most constrained transmission corridors
in the U.S. They go over the mountains from east to west, and are loaded to the
max on cold winter mornings,” Pratt says.
For example, Portland-based PacifiCorp has experienced difficulties delivering
electricity to customers in Castle Valley, Utah, who are located at the end
of the company’s longest distribution line, says Margaret Kessler, a spokeswoman
for PacifiCorp. Licensing of a power plant’s capital improvements — required
by public utility commissions — to handle high-demand times of day
would be time-consuming and expensive, she says.
To solve such problems, the “smart energy” industry has emerged
in the Northwest in recent years. About 225 businesses offer software, meters
other technology as alternatives to traditional power system upgrades, says
Rhys Roth, co-director of Climate Solutions, a nonprofit organization based
Wash., that focuses on ways to create jobs by improving the environment.
The group recently released a report about the smart power industry.
The Oregon and Washington firms — which bring in about $2 billion of the
$15 billion in annual revenues generated globally by the smart energy industry — are
expected to help revolutionize the electricity business here and nationwide,
The Northwest plays an important role in smart energy because it’s
rich in the resources needed for such companies to grow, says David Hoffman,
and chief executive officer of Portland-based smart power company, Celerity
Hoffman says the industry capitalizes on the presence of the federal Bonneville
Power Administration, the region’s long history of producing hydropower
on the Columbia River, the plethora of public and private utilities, the
existence of laboratories such as PNNL, and the proximity to high-tech companies.
PNNL, one of nine U.S. Department of Energy research facilities, is based near
the Hanford Nuclear Reservation and has a Portland office.
“ This leads to collaboration that allows ideas to move from high-tech to
energy,” Hoffman says.
And that collaboration is expected to solve critical problems.
“ As the recent worldwide blackouts have shown us, there are economic, safety
and environmental reasons driving us to upgrade our electrical grid,” Roth
says. “Smart energy technologies can help us do that much better and
more effectively than the old poles-and-wires approach.”
To better manage existing resources, smart energy companies manufacture computerized
meters that turn power-guzzling equipment off when there’s high demand
for electricity; software that helps avoid blackouts by monitoring the operations
of critical electrical equipment; and control systems that feed into the
electrical system energy generated by alternative technologies.
“ By using information and advanced controls, we can save a ton of money.
That’s the opportunity that presents itself. We need to use our newfound
cleverness in the e-business to build technology into our everyday lives,” Pratt
That’s what PacifiCorp is doing to solve its problem in Castle Valley,
The utility purchased a unit that will allow it to store electrical energy in
a battery system during off-peak times and distribute the stored energy during
times of high electrical demand. The manufacturer is VRB Power Systems Inc. of
Vancouver, British Columbia.
VRB Power Systems, which has sold its technology in Australia and South Africa,
soon may join the ranks of Portland-area smart energy firms. The company
is considering moving some of its operations to Portland, where its chief
Tim Hennessy, is based, says Vince Sorace, VRB’s president.
VRB focuses on delivering power to utilities during times of high demand.
also the focus of Celerity Energy, but the company employs a different approach.
The firm uses software and hardware to create “virtual” power
plants for utilities.
“Part of the problem with the electrical grid is it’s not uniformly
used,” Hoffman says. “It’s mostly used during peak times,
in the morning or when we go home and cook dinner. During the rest of the
has less than 50 percent utilization.”
Channeling the energy
Celerity Energy finds ways to gather up unused power from a number of locations
and then feeds the electricity to utilities when it’s most needed.
For example, a hospital and airport in Albuquerque, N.M., have backup electrical
generators required to protect patients and travelers.
“ Ninety-nine percent of the time, the generators sit there unutilized,” Hoffman
says. “We add new controls and a software package that allows the resources
to be there for their primary purpose and to be used by utilities simultaneously
to provide power to the electrical grid.”
Portland General Electric employs a similar strategy for making use of idle
backup generators, says spokesman Scott Simms. During periods of high demand,
the customer’s backup generators to feed power back into the PGE system
for other customers.
Rather than focusing on adding electricity to the grid, Hillsboro-based Serveron
Corp. concentrates on ensuring the existing system doesn’t fail. The company
provides monitors that tell utilities whether critical assets — battery
backup systems and transformers, for instance — are operating properly,
says Bart Tichelman, chief executive.
“ We monitor systems so they don’t go down,” says Tichelman,
whose company has been nurtured by Portland investor Ralph Shaw.
By helping avoid blackouts, maximizing the use of existing resources and storing
electricity, these and other Northwest smart energy companies are expected to
yield more than $4 billion in benefits to the region, Pratt says.
They will do this by cutting plant operation costs, reducing energy use, reducing
power outage expenses and helping avoid the need to build new generating plants.
In addition, smart energy firms are providing work for area consultants,
engineers and manufacturers — among them Portland-based Ch2M Hill Industrial Design
and Construction, Bouillon Engineering, Black & Veatch LLP and Cutler-Hammer.