Valence Energy is a fresh new technology company working to develop and deploy a package of energy management solutions for institutional campuses, universities or entire neighborhoods known as “smart microgrids.”  A potential stepping-stone to a modern nationwide smart energy grid, smart microgrids combine a local energy system with a dose of IT ‘smarts’ to enable more efficient and dynamic management of both energy demand and on-site energy generation.

To explore the concept of smart microgrids and their potential, I caught up with Alexis Ringwald, Co-founder and Director of Business Development for Valence, for this interview, which you’ll only find here at the Energy Collective.  


Jesse Jenkins, the Energy Collective (TEC): Hi Alexis, thanks for chatting with me.  Please explain to me – and the Energy Collective's readers – what a “smart microgrid” is?   

Alexis Ringwald, Valence Energy (A): Hi Jesse. Good question.

A "smart microgrid" is a mini-grid in which various distributed energy technologies – such as solar panels, small-scale wind, biomass boilers, plug-in electric cars, and more – and smart energy using devices are combined with an intelligent software to both monitor and manage energy supply and demand for a community-scale energy system – a set of buildings, corporate campus, university campus, housing township, etc.

The smart microgrid makes intelligent decisions about what clean energy source to run at what times, links to smart appliances, and regulates energy demand.  It can optimize all of the above for cost reductions, energy savings and CO2 emission reductions.

There are basically 3 key aspects of a smart microgrid (Editors note: see graphic below):

1. Supply:  on-site distributed generation and the broader energy grid
2. Demand: energy consumption devices across an organization including lighting, air-conditioning, IT equipment
3. IT Platform: intelligent system to optimize supply and demand based on energy management objectives and environmental factors (e.g. weather, energy pricing, comfort)

Valence Energy has developed the IT Platform with its Microgrid Energy Manager software. This is essentially the brains of the whole microgrid and ensures the optimization of energy--both supply and demand.


 

TEC: How do these smart microgrids differ from the smart grid concepts our readers may be more familiar with?

A: The difference between smart grids and smart microgrids is scale, the types of decision makers and the potential rate of change. While smart grids take place at the utility and national grid level, involving the large transmission and distribution lines, smart microgrids are smaller scale, require fewer decision makers and have faster implementation.

I think that both "smart grid" and "smart microgrids" need to happen simultaneously. But the "smart microgrid" is a way to take parts of the grid, namely our communities, and make them "smarter" one bit at a time. It's a way to empower individuals and communities to control and manage their energy.

While “smart microgrids” can be a building block, they can also be independent of utility-level smart grids. A facilities manager does not need to wait for the local utility to deploy smart grid technologies before creating a smart microgrid. However, the benefits of a smart microgrid will increase as the utility smart grid is developed.

 

TEC: So do you see smart microgrids as a building block or stepping stone approach that will help pave the way for a full-scale, nationwide smart 21st century energy grid?  Or put another way, by establishing smart microgrids on campuses, neighborhoods and more, is Valence helping create a viable near-term niche market for the same technologies and solutions that could eventually build the demand for smartgrid technologies generally?  Is that part of Valence's long-term vision or plans?

A: Smart microgrids are certainly building blocks to a smarter national grid. We need smarter buildings (homes, offices, etc), which connect into smart communities and campuses, and then connect into a smart nation.

Moreover, smart microgrids enable the use of decentralized energy. While covering the deserts of Nevada or Arizona with solar energy and shipping the electrons on large transmission lines across state boundaries is one option, another option is to generate the electricity at a particular site and consume it nearby. However, since solar and wind are variable depending on the availability of the natural resource, a community may need a variety of sources. All of these sources, including the grid, solar, wind, and fuel cells need to be managed and optimized for use based on the energy consumption within the buildings as well.

This is where Valence plays a critical role in creating the software that can manage these various supply sources with energy demand to offer the lowest cost and lowest carbon option.

As you said, Jesse, we see smart microgrids as a viable near-term niche market that does build up demand for smart grid technologies overall. The thing to point out, however, is that the solutions needed for a campus or neighborhood are different from those needed by a utility in the short term because there are different expectations and goals. In the long run, however, consumers will have more choice and technologies may merge as utilities integrate more with smart microgrids.


TEC: This week, Valence officially launched a new partnership with IT giant, Cisco Systems, Inc. What will Cisco's role be in constructing smart microgrids, and what do each of your companies bring to the table in this partnership?

A: Cisco has inspiring grand plans for a major initiative they call "Smart + Connected Communities." "Smart+Connected Communities" provides a network-enabled blueprint for successful smart cities of the future. It includes renewable energy and smart grids to meet the demands of an urbanized population, smart mobility networks, e-learning, virtual healthcare, e-governance, etc.  

A key component of this vision is "Smart+Connected Buildings," and is based on a new, exciting Cisco product launched July 1st called the Building Network Mediator. This hardware technology provides the intelligence to interconnect and enable building systems such as heating, ventilation and cooling (HVAC), lighting, electrical, security, and renewables to communicate with each other over the IP network.

Once these various systems are interconnected by the Mediator hardware, Valence via its partnership with Cisco is the software provider that collects all the data and acts on it, providing operators and owners of these buildings with the ability to manage their energy based on policies optimized for carbon savings, cost reductions, clean energy and comfort. Hence, the Cisco-Valence partnership allows us to offer building owners or facilities managers a complete solution.

This fits into Valence's larger goals because smart and energy-efficient buildings together in a campus or neighborhood build up to a "smart microgrid." Cisco agrees. As they enter significantly into the larger smart grid market, they too view the creation of these intelligent connected communities and neighborhoods as the critical building blocks. So the Cisco-Valence partnership allows us to create the smart microgrid from the bottom (i.e. the building) on up.


TEC: Many of your management team are Indian or Indian-American and your website touts plans to "develop the first smart microgrid in India."  What's "the India connection" for Valence?  Do you see a particular opportunity or advantage for smart microgrids in India or other rapidly developing nations?  

A: Valence sees an exciting market opportunity in both the USA and India. The grid in India has losses of 30% on average between generation and distribution. Some of this is due to poor infrastructure and some due to theft. A smarter grid is definitely needed.

Moreover, because the grid is so unreliable, nearly 1/7th of India's electricity consumption comes from backup diesel generators, according to unofficial statistics, an energy supply, which is both very expensive and polluting.

In India, nearly every development already has a mini-grid of diesel generators to supply communities, malls, and office complexes. Valence is trying to reduce the dependence on diesel by deploying "smart microgrids" using renewable energy and energy efficiency. As energy needs for the nearly 1.2 billion people in India increase, we see a tremendous opportunity for smarter energy generation and use.

Our company has a strong connection to the country with several of our senior management team being Indian-American. Also I lived in India for nearly 3 years, first as a U.S. Fulbright Scholar researching renewable energy technologies and then later in working on Valence's projects there.


TEC: According to your website, "Valence Energy evolved out of a multi-disciplinary prize-winning team of engineers from the U.S. Department of Energy's International Solar Decathlon, leading the category for balancing energy generation and consumption."  Tell me about the Solar Decathlon team and how that experience paved the way for Valence.

A: In 2007, a team of students from Santa Clara won 3rd place in the US Department of Energy's Solar Decathlon, an international competition among universities to build solar homes. The home had intelligent features for managing demand, charging an electric car, automatically tinting windows, etc.

Working together for two years, the team gained in-depth knowledge on various renewable energy and storage technologies and learned how to integrate them with "intelligence" and automation that would manage demand. Combining the background gained from the DOE project with experienced leadership from our senior management, the Valence vision evolved into designing and deploying smart microgrids.


TEC: Thanks Alexis and best of luck forging ahead with these smart energy solutions.