In Search of Perfect Power

James M. Hylko

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What do you do when your research institution is losing roughly half a million dollars annually as a result of multiple electricity outages — and electricity demand keeps rising? If you’re the Illinois Institute of Technology, you turn the challenge into a campuswide learning experience by teaming with the Galvin Electricity Initiative and other experts to design and construct a prototype Perfect Power System (PPS). Even during its implementation, the PPS promises to provide more reliable and sustainable electricity to the university at a lower cost than it had been paying.

Between 2004 and 2006, the 120-acre campus of the Illinois Institute of Technology (IIT) in Chicago (see cover photo and Figure 1) experienced an average of three unplanned electricity outages per year. Those outages ranged from partial to complete loss of load on the main campus and cost the university an estimated $500,000 annually in destroyed experiments, damaged equipment, lost productivity, cancelled classes, and other consequential damages.

1. Windy City campus. This shot looks northeast across the IIT campus. Main is the red brick building to the left, and the Galvin Library is the one-story building to the right of Main. The three-story Siegel Hall, which houses the Department of Electrical and Computer Engineering, is directly up from the Galvin Library. Courtesy: IIT

IIT offers degrees in engineering, science, psychology, architecture, business, and law. Together with the IIT Research Institute (IITRI), its contract research affiliate, the institution specializes in areas such as aerospace, synchrotron radiation science, environmental engineering and regulatory policy, polymer science and recycling, food safety and technology, and transportation and infrastructure. A common concern among researchers working on such projects is insulating their long-term and critical experiments from the university’s notoriously unreliable electricity supply (see "The Cost of an Unreliable Electricity Supply"). Each of the research laboratories is much like a small business that is open 24/7 — but with student employees who can’t take a weekend off or head to Daytona for spring break when an experiment is in process.

Together, IIT and IITRI enjoy annual research revenues of $130 million. Protecting that revenue means ensuring a reliable power supply.

In response to the too-frequent outages, some laboratories shifted key experiments to evening and/or weekend hours, when the risk of an outage was less than during the day. By the summer of 2006, the mounting costs and complaints captured the attention of senior university administrators and even the IIT Board of Trustees.

Robert W. Galvin, former chairman of the IIT Board of Trustees, extended an invitation to the IIT power engineering faculty to join the Galvin Electricity Initiative (GEI) and proposed using IIT’s main campus as a possible site for what Galvin calls the "Perfect Power System" or smart microgrid. IIT soon signed on with the GEI (see sidebar) and began work on GEI’s first Perfect Power System (PPS) installation with the goal of improving electricity reliability and reducing costs on the IIT campus.

Energy efficiency projects were soon under way at IIT after its 2006 Energy Master Plan to maximize energy efficiency technologies and introduce renewable energy options was adopted. That plan requires energy efficiency improvements to reduce electricity consumption by up to 11 million kWh (20% reduction) and reduce natural gas consumption by nearly 1 million therms (10% reduction) per year. IIT was soon to find that a PPS could produce this level of energy savings while significantly improving overall system reliability.

The Cost of an Unreliable Electricity Supply

The Lawrence Berkeley National Laboratory (LBNL) attempted to capture the costs incurred by consumers because of unreliable electricity supplies in a September 2004 study titled, "Understanding the Cost of Power Interruptions to U.S. Electricity Consumers." This report, prepared after the August 2003 Northeast Blackout, revealed that the cost of power interruptions approaches $80 billion annually and that the bulk of that cost is being born by commercial users (Figure 2). One of the report’s authors estimated that the level of investment in the grid needed to improve reliability was in the range of $50 billion to $100 billion.

2. The average cost of a power interruption. Lawrence Berkeley National Laboratory (LBNL) estimated that the total losses due to U.S. power outages are
approximately $80 billion per year. Source: LBNL

The LBLN researchers found that the industry knowledge base available to analyze power outages had many data gaps. Lab researchers aggregated data from three key sources: surveys on the value electricity customers place on uninterrupted service, information recorded by electric utilities on power interruptions, and information from the U.S. Energy Information Administration on the number, location, and type of U.S. electricity customers.

One of the key conclusions of the study was that mere momentary outages, which tend to be more frequent, have a bigger impact on the total cost of interruptions than major outages. Intermittent outages were estimated as accounting for two-thirds of the $80 billion annual loss.

The Electric Power Research Institute (EPRI) estimated the annual cost of interruptions and power quality events at $104 billion to $164 billion annually in another study of the impact of power outages on the digital economy. That study also found that between $15 billion and $24 billion in losses were attributable to power quality problems.

The EPRI study concluded that the cost of an outage increased with the length of the outage, although even very short outages were expensive (Figure 3). In addition, the average cost of even a recloser event is more than that incurred by a 1-second outage. Perhaps some utilities are operating their equipment in ways that are detrimental to their customers.

3. The average cost per outage by duration. Source: EPRI

The EPRI study also concluded that the distribution of costs related to outages is uneven (Figure 4). For example, almost three-quarters of the businesses surveyed reported virtually no cost to their business for a 1-second outage or a recloser event. In sum, the majority of businesses incur little or no costs from an outage, but a few have very large costs. Five percent of businesses studied incurred costs in excess of $20,000 or more for a 1-hour outage, and a select few reported losses as high as $1.5 million or more.

4. Distribution of costs per outage by duration. Fewer companies experience large losses than smaller losses as a result of a power outage, but a small portion of companies experience losses as large as $1.5 million or more. Source: EPRI