In Search of Perfect Power

James M. Hylko

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Step 6: Implement the Plan and Achieve Cost Savings

IIT’s PPS is being implemented in the following four phases, determined mainly by the prerequisite infrastructure upgrades described previously.

Phase 1: Perfect Power Foundation. The first phase, started by IIT several years ago and currently near completion, built the foundation for this project by improving the overall efficiency of the campus and the reliability of the ComEd supply system. During this phase, the existing IIT gas turbines were modified for fast-start capability and to meet expanding building demand response capability, thus providing for continued operation of the IIT campus in the case of a loss of offsite power.

Phase 2: Real-Time Pricing and Ancillary Services. IIT and ComEd are located in the PJM Independent System Operator territory, which will provide IIT the opportunity to purchase lower-cost electricity in real time from the retail electricity market. With every opportunity, however, comes risk.

Entering the real-time markets without a means of hedging hourly price spikes could result in a sizable increase in electrical costs of $1 or more per kWh during peak periods. This volatility is the reason most facilities such as IIT do not accept real-time market risk. However, IIT’s on-site generation, coupled with expanded building demand response capability, can be operated to mitigate peak demand prices and provide demand response. Fast-starting gas turbines also can provide new spinning reserve services to ComEd and PJM, effectively capping prices at the operating costs of the on-site generation. This arrangement will give IIT the flexibility in the future to purchase electricity when real-time markets’ costs are lower than the cost of generating power on site and to deploy its backup generation when the price of electricity exceeds seven to eight cents per kWh.

If IIT had procured electricity in the real-time market in 2008 by leveraging the PPS to hedge peak prices, the campus would have reduced its annual electricity bill by about $800,000. IIT today can also generate revenue by participating in system operator load or demand response programs and purchase power contracts. A purchase power contract with Constellation Energy for 2009 is expected to reduce IIT’s electricity bill by 25% this year.

Phase 3: Perfect Power, Distribution System Reliability, and Automation. Next, a redundant and intelligent distribution system that interfaces with a dynamic campuswide energy system controller will be implemented. This upgrade will ensure continuous service to IIT buildings in the event of a site cable or switch failure. The S&C Vista switches automatically and instantaneously reconfigures when a fault is detected, with no loss of service.

Phase 4. Distribution-Level Peak Demand Reduction. A local uninterruptible power supply, solar energy, and demand response capability will complete the PPS. This system will optimize building operating efficiency and reliability, demand response revenues, and ancillary services.

The Galvin Electricity Initiative

Former Motorola Chairman Robert W. Galvin formed the Galvin Electricity Initiative (www.galvinpower.org) in 2005, not long after the northeast U.S. blackout in August 2003 that left nearly 50 million people without power for days. Galvin was inspired by the event to design and promote a "Perfect Power System" that cannot fail the end user, primarily by eliminating outages at the consumer level. In addition, he claims the system is environmentally sound and fuel-efficient, robust and resilient, able to withstand natural and weather-related disasters, and mitigate the potential damage caused by terrorist attack. (Galvin’s policy principles can be found at www.galvinpower.org/files/PolicyPrinciples_1008.pdf.)

Galvin, known throughout the business and technology communities for his dedication and leadership in quality improvement, asserts that the pursuit of perfection allowed Motorola to thrive in the face of fierce international competition. Galvin now sees an opportunity for utilities to leverage quality methods to achieve perfection — not in a few years, but over the next four decades. The Galvin Electricity Initiative believes that continuous improvement methods, which have been developed and refined over the past century, provide utility executives and entrepreneurs with a lever for improving quality and spurring innovation in the electricity sector.

Galvin has often been quoted as saying that "quality is a journey, not an end state." By applying Six Sigma quality principles and available technology to enhance the efficiency, reliability, and security of the dynamic U.S. power system, his Initiative intends to demonstrate that it is both economically plausible and practical to deliver what he calls "Perfect Power" to the consumer.

What’s the Price?

The PPS, funded by IIT and the DOE, will allow IIT to avoid costly system upgrades and realize efficiency savings well into the future. The team estimates that the PPS will pay for itself even as it is being built over the next five years (Table 2).

Table 2. Estimated Perfect Power System costs and savings. Source: IIT/Endurant Energy

Coincidentally, IIT’s investment will save all Illinois customers money by eliminating $2,000,000 in upgrades to the ComEd area substation that would have been needed to meet the rise in IIT’s expected demand had the PPS upgrades not been proposed.

Implementation of a PPS at IIT will provide a powerful resource for attracting students and government/industry funding. For example, the electrical engineering program expects to raise an additional $1,000,000 per year in research funding due to the added campus features and functions.

In fact, the DOE recently awarded IIT a $6.7 million research grant to develop and demonstrate more advanced PPS technologies.

IIT plans to have construction photos and project status updates on its web site (www.iit.edu).

--James M. Hylko is a POWER contributing editor.

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