Communications as the third grid
Real Conversations podcast | S5 E5 | March 09, 2023
Liana is the General Manager for the Energy Orchestration Venture Telco for Nokia Strategy and Technology. She is exploring new adjacent business opportunities for Nokia in the power utility industry. Liana has over 20 years' experience in network communication and loves working with power utilities. She is passionate about connecting rural communities, supporting women in STEM education and bringing digital solutions to the grid for sustainable and affordable energy solutions especially for underserved areas and populations.
Taking energy distribution to the next level is complicated, but Nokia's Liana Jo Ault has true pedigree in this space. In this Real Conversation, she talks funding, architecture and why the most important thing is to have a plan.
Below is a transcript of this podcast. Some parts have been edited for clarity.
Michael Hainsworth: When we think of the electrical grid, we often think of the power lines extending out from a generating station or the wires that line our streets, but there's a third grid in modern electricity infrastructure: communications. It's always been there, but as the Venture General Manager for Energy Orchestration at Nokia, Liana Jo Ault believes it's becoming increasingly important during this fourth industrial revolution. We need visibility of demand to lower costs and the carbon footprint. Especially for microgrids.
Ault's background is in where telecom meets the power plug.
Liana Ault: Earlier in my career I actually worked for a fire line service provider and had the opportunity to move to power utility and that's where I completely fell in love with the industry. I really felt like we were doing something really important to society, keeping people safe, keeping people warm, and keeping the lights on. I've never looked back since then.
MH: So, you came into the energy sector a little later in life?
LA: I did. I was probably about mid-career when that happened and I had been working in telecommunications and networking for a long time, typically around some innovative role and then just really had the opportunity to flip over and lift it and really saw a need. Number one for communications in that space and innovation, and, of course, with the renewable transition, it's really been alive with innovation and opportunity.
MH: Let's talk about renewables because the energy crisis is certainly on everybody's mind now and it seems clear that even if this was resolved tomorrow, if we could snap our fingers, we need to rethink our energy policy and consider more green and renewable energy sources regardless. In what way do we need to rethink energy policy?
LA: I think if you look at what we have today, our policies and our markets have really been built around this very traditional idea of centralized generation and then transmission and distribution to the end consumer. And with renewables and the way the intermittency works with generation, it really lends itself more to a distributed energy system. More policies around local generation, more abilities for consumers and nano credits to be part of that picture and enabling private investment, I think really would help the entire energy transition to renewable.
MH: And I can imagine we can sort of take a page from the playbook that we're seeing in Europe at this time. We're seeing more distributed assets instead of investing in these long transmission lines that are expensive and ultimately damage to the environment.
LA: Absolutely. If you look at several of the countries here in the European Union, including the UK where I am, energy communities are actually a regulated entity or regulatory construct where it allows communities to look at balancing their assets, including microgrids, and to pursue more nano grids and be able to operate in this energy community rather than looking necessarily at these supply contracts coming from across the nation or from the North Sea. It really does lend itself to a new way of operation and a new way of investment.
MH: You told me in the past that we couldn't separate digital from green. Let's talk about what you mean by that.
LA: We coined the term smart grid probably a little over a decade ago, and part of that was really around putting intelligence and communication further out into the grid. We've always had some sort of automation, not always, but we've had automation for a long time in the grid, just from a different perspective. But now as we look at the number of assets that we need to understand, that we need to monitor, that we need to control, when you start thinking about vehicles on the grid, that's millions and tens of millions of new storage assets that could be monitored and controlled that need to have some sort of understanding and intelligence behind them to make sure that the system stays reliable-you really can't separate that digital. Now what we're seeing is the advent of edge compute. Now it's not only do we have digital that's helping run the grid and automate the grid, monitoring millions of devices out there, now we're looking at reliability and resiliency being built in through edge compute. Again, another layer of that digital picture, and it's all underpinned by communications. Some form of communication is always present on these assets to move information from one side to another.
MH: When we talk about edge computing, it surprises me because usually we would associate edge computing needs tied to such things as artificial intelligence of visual recognition systems or augmented reality, these types of technologies that require an immediate response, yet a power grid needs this too.
LA: Absolutely, they do. So essentially, historically, there's enough inertia in the system for a few seconds of time to balance the grid, especially when you're looking at frequency balancing. However, when you start looking again at the number of assets behind the meter and what they're doing in these feed-in tariffs where you can actually sell your excess capacity back to the grid. Now every time that's happening, there's a decision that needs to be made essentially, especially to keep the reliability and the quality of the power that's on the grid where it should be. If you start looking at how that needs to work in an automated fashion, artificial intelligence can help with that as well as machine learning. You can then take historical trends, you can take the weather data, you can take the market pricing, start combining that to make a much clearer picture and a profile for each one of these users.
And not everybody's the same. My grandmother, when I was growing up, had an oxygen condenser that needed to run because of a condition that she had. So she has a different profile of need than maybe someone who is in their twenties, healthy and is never home and is always out. There are different needs for different consumers, and businesses are the same way. Not every business has the same profile when it comes to consumption. Enabling this ability to react to the grid in a way, or react to disturbances or changes, not only the consumption of generation in the grid, but something that really needs to be automated the longer we go with the more distributed generation that we have.
MH: You mentioned the communications component being a key component to all of this and communications has really been described as the third grid. What does the third grid mean to you?
LA: This third grid, when we talk about a traditional power utility or traditional grid, again as I mentioned earlier, you've got the transmission grid, which typically is transporting large amounts of electricity or power, then you have a step down to the distribution grid. The distribution grid is much broader, much wider and further reaching as it steps down to deliver that electricity of power to the individual consumers. But all of that is underpinned again by the need for communication at all your substations, your transformers now have a lot of communication, and even the field area network.
A lot of these power utilities have communication grids that are the size of actual carriers and what we consider a wire carrier. In a lot of ways, that becomes the third grid that's necessary, considered mission critical. You need to look at reliability, you need to look at power reliability, and basically five-nines reliability for the mission critical applications that run on it.
MH: When we talk about microgrids coming together to improve sustainability as well as the reliability of a grid for any given community that would need one, the need for communications, I can imagine, is just that much greater because it's just that much smarter of a grid?
LA: Yes, and I think again at the distributed asset level, so there's typically multiple layers in a microgrid of communication. You'll have local communication. A lot of times it's fiber because you want to connect each of those assets, those elements. A microgrid is typically multiple disparate assets, distribution assets or generation assets that are connected together and operating as one asset. And so there's a need to have local communication that's ultra-fast, that can make decisions about do I use my wind? Do I use my solar? Do I need to flip my flywheel? And how those coordinates between each of those elements in order to maintain, again, the reliability of the grid and the frequency of that element of the grid, the area. There's this level which is what I call the primary communication method for the microgrid, and this is also going to need to connect to the traditional grid.
Then you have the secondary level where there can be wireless connectivity. Oftentimes, it's bringing in information maybe about local consumption, maybe it's bringing in information about the weather and the market pricing, so it knows how to behave or creates the behavior profile that then feeds down to the primary level of communication to help the assets know how to behave properly. You can also use that level of communication for data. When you need to basically look at monitoring and performance for whoever's operating that might have been maintaining the health of those assets, they need to have some sort of connection to understand what the assets are actually doing and then monitor those from a distance typically. A lot of times, wireless is used for that type of communication as well.
MH: That brings us back to the idea that wireless communication technology such as 5G would be at a certain level for feeding into artificial intelligence-based systems that would ultimately help predict the needs and the demands of any given microgrid community.
LA: Yeah, absolutely it could. Especially when you look at some of the advances in 5G with the ultra-low latency components and the security behind what 5G offers, a bit more advanced than LTE. 5G becomes a definite game changer enabler for this type of distributed asset system.
MH: Tell me more about the role that artificial intelligence plays in a smart grid, because no one wants to build a grid today without it being smart, and you can't make it smart unless it's predictive.
LA: A lot of AI is really being developed specifically around energy profiles and energy use cases, I would say. When you start looking at how you predict the forecast for what your prediction's going to be, so how much do you need to be able to hedge from a financial perspective, or how do you look at trading in between two houses? The AI that's built into the system, again through edge compute really does help to make some of those decisions and enable things that we wouldn't necessarily look for or we didn't experience in the past. Just like I mentioned earlier, vehicle to grid. When you start looking at the number of storage assets, cars are often parked and sitting there for 80% of the time. So now, being able to make very intelligent decisions about how to use the solar that you have on your roof, whether to charge your EV, whether to heat your water and your water heater, or whether it's to store in a battery or to feed it back to the grid, AI is helping make all those decisions and the logic that's behind that can really enable a better utilization of the renewed energy that's there in the system.
MH: And I can imagine that complexity just advances dramatically when we realize that microgrids aren't just for communities, they're also for industrial complexes and other types of campuses.
LA: You start looking at nested microgrid scenarios where you have multiple industrial complexes that, because of reliability issues or because of renewability and sustainability, want some sort of a green microgrid at their location and help them to, again, maintain their flexibility and their balance and lower their cost. But then when you start looking at multiple microgrids tied with potential nano grids in the same area, now you start looking at potential congestion as they are all trying to feed into the grid or they're trying to balance on their own. And what does that mean? It's also, again, when you have multiple renewable assets, how you most optimally use those assets is typically going to be defined by some sort of AI profile.
MH: Let's step back and talk about some of the complexities of a distributed architecture for power generation. What are some of these complexities that we must address?
LA: I think there's a lot of complexities on different levels when you think about it from a regulatory standpoint. We'll start with policy. It's who's investing, who gets the benefit from that, how is that treated, and what type of capabilities do we have to optimize the usage of that generation rather than just shedding it? I think that when we start looking at business models with peer-to-peer trading and things, it'll get really interesting.
I think the second one is how do you protect the data and how you share that data? Here in Europe, of course, we have GDPR policies and regulations that really prevent certain types of information being shared. And now as you look at these distributed assets, you may have multiple layers of people that need to understand what's happening behind the meter, what's happening at the edge, what's happening in the neighborhood, what's happening in the digital complex. And so, now you have multiple streams of data that need to be shared, but how we share that and how it's aggregated is really going to be another key aspect.
Standardization is a huge issue right now. There's not a lot of standards that are in place for microgrid operators and how they need to operate. And so, who has the governance, who's responsible in these areas where maybe they crowdsource a microgrid? Now that governance needs to be in place as well.
From an operational standpoint, again, we've mentioned as you start looking at more feed-in tariffs, more prosumers that aren't able to feed-in or want to feed-in to make money off their assets that they have invested in locally. Now it is becoming a little bit more of an issue operationally, as well as how do you solve those power quality issues that are going to arise? And I believe I read an article last week, and then in the US, 80% of the respondents to the survey said that their number one concern was power quality issues, as feed-in tariffs are allowed in other locations in the US. I think that there's an operational challenge as well.
Another piece that we don't often think about is the idea that we're losing the industry. Overall, the power utility industry is losing people. They're not able to replace their workers as quickly as they need to. And a lot of that's through attrition. Many of these engineers and linemen were from the boomer generation, and as they've retired, there are fewer and fewer people that are going into that particular industry. Recruiting young people and fresh employees into that area is another big challenge that I think we're going to have to address. I think the energy transition and the idea of innovation and renewable energy and being sustainable is going to help with a lot of that recruitment. I think it's now sexy to be in the power industry, and so I do think that they'll have fresh spaces coming in and there's a lot of interest in that as well as a lot of new startups, new entrepreneurial opportunities for these young people.
MH: Or for someone coming into it later in life.
LA: Exactly, exactly. That's one of the things I love about being part of the Nokia Ventures incubators it's really being able to take advantage of some of the innovations that we've had at Nokia Bell Labs to be able to look at how we apply that to the challenges that we have on the grid.
MH: You've mentioned six specific complex issues that need to be addressed, of which any single one of them could be an individual podcast conversation in and of itself. But when you talk about the policies, when you talk about protecting and sharing data, the financial issues, the standardization issues, the operational issues, and staffing and recruiting, which of those six do you think isn't getting enough attention right now that needs to be addressed in greater detail?
LA: Wow, that's probably a tough question.
MH: And yet an entire podcast conversation in and of itself. There again.
LA: Exactly. Wow. So, I think that policy and the financial aspect are probably, if I could pick two and they're kind of tied together, it's how the markets are and how we've built the markets. It needs to be redesigned and I think that policy is going to need to be in place to allow for that. I think technology is there. I think there's a will and desire in society overall. I think we're starting to see that, especially in the US now that the Federal Energy Regulatory Commission (FERC) order No. 2222 was enacted and enabled. We're starting to see a lot of private investment in this space. I think the regulatory policy is probably lagging behind there to allow us to more readily take advantage of the private investment in the system. And I'm not talking about private investment from a large utility or from a mega oil and gas giant. I'm talking about that private investor from the prosumer that wants to go green and that wants to make a difference and reduce their carbon footprint and how they can be enabled.
MH: Let's bring it back to the community because one of the most interesting things to me about a microgrid is that a local community could get together and deploy a microgrid. They would get reliable energy. They would get local energy. I would assume it will be more affordable as well. But how easy is it for a community to achieve a microgrid?
LA: I wish it was easier than it really is, if I'm honest. There's a lot of layers to that as well. I think that when you have a champion, it's really important for them to have two things in mind. Number one, a champion for the project. Typically, it's coming from a local counselor of our local governmental agency that's willing to help cut through red tape to accomplish that. Otherwise, you can go down a real rabbit hole.
I think the second thing that really is necessary is who is that key tenant, that anchor tenant, that's going to take the bulk of what is being produced? And oftentimes, that's either commercial or industrial. So, as you size that properly and as you look at installing it, most developers are going to want to know if that energy is going to be consumed and by whom. I think those are two real elements that, anybody interested in doing this or spearheading that project, need to have in place.
MH: That's fascinating to me, the idea that you would need an anchor tenant, much like the way a shopping mall requires an anchor tenant to draw in foot traffic to the other stores. Wouldn't that be putting a lot of eggs in one basket? Say that industry moves away? They go offshore or they change their location. Wouldn't a broader spread of homes be a more realistic and reasonable expectation that there's always going to be housing there, but there may not be Fred's Storm Door Company that needs to run aluminum plant operations?
LA: Yes, I would absolutely say that there probably is. I know that a broader picture of multiple homes makes a lot of sense, but you really have to size it properly and you'd have to really look at the power utility, helping a great deal from the grid perspective. I mean they're going to be involved anyway. The grid operator's always going to be involved. But I think that the reliability of knowing the profile of this off-taker, so to speak, this industrial company, that profile is going to be much less 'peaky'. When you think about what we always talk about here in the UK, you know it's a football match at halftime, because everyone turns on their tea kettle and you see a spike in consumption.
And so, it's really unpredictable and I think the predictability of that off-taker that the renewable developer is looking for, and it usually is a return on investment of probably 15 to 20 years of what they're looking for. So, as long as your industry's going to be there for 15 to 20 years, we hope that really helps spearhead the project because the grid owner knows they'll get a return on investment.
I think too, if you look, a lot of the technologies are really changing. There's so much happening in micro-wind turbines. I've even seen wind turbines, where they're horizontal that fit on the ridge pole of a house.
MH: They're quieter.
LA: They are quieter, but I don't know how efficient they are. I haven't really checked into that. But typically, you see microgrids with wind on the edge of a community, or they may not have wind in them at all. They may have some kind of a combined heat and power kind of location, or they may be part of a lot of times right now they're gas turbines. So, they're gas turbines that are spinning when there's no solar or there's no in and out of storage. And so that's one of the challenges I think was we need more renewable components that are in the microgrid. But along with that, I think that there are new technologies that are coming along that will help. Number one, make the microgrids more renewable. And number two, probably create more variety in the type of generation assets that are viable for a microgrid.
MH: What about the storage component to this conversation? To your point about all the kettles going on at once, you're going to want to have a certain base load, but you're also going to want to be able to feed-in as necessary when the sun isn't shining, or the wind isn't blowing.
LA: Absolutely. I think lithium-ion batteries are kind of the standard right now for storage, but we're seeing other types of storage, especially around thermal. I've seen Iron Core where it's literally molten iron, of which I'm not sure of the safety of it in my own backyard or the practicality of it, but I've also seen there's a company, the Nordics, that's developing and using sand as thermal storage. It's much cheaper. It's a really interesting company. It's a startup there that's been doing some things on that, on thermal storage this way.
I think that really, when you think about heat pumps and you think about water heaters, there is some storage or flexibility that is inherent in most homes today. But yes, I think, by far, lithium-ion batteries are still going to be the standard for a while. And again, everybody has batteries in their electric vehicles. And so, I think that the whole idea of being able to grid is going to become a much hotter topic over the next few years. There's a couple of car companies that are actually developing or have developed bidirectional batteries specifically for storage at the home, at the residential level.
MH: That's just fascinating to me. Again, tying back into artificial intelligence, recognizing, well, Michael isn't going to be driving his car for the next six hours, and we have a need for electricity right now, so let's sap his battery a little bit and charge it later on so that it's still available when he needs it.
LA: And then you have the other layer of let's charge it. Who is Sally and Tom, the next-door neighbors? When are they charging their vehicles? And so, the grid operator's still going to be able to balance by understanding what's happening and scheduling those assets. You're shifting that load basically to say, okay, you're going to be scheduled to charge at 3:00 AM to 4:00 AM, you have an hour worth of charging that'll get you just to work and back, but you don't overcharge. It's only what you need necessarily. And so, you're looking at smaller cycles perhaps on your batteries. And I think that if you look at that overall intelligence, now you have a controller in your home.
I mean, could you imagine if you think, Michael, about the number of devices that you have plugged in, the number of light switches, the number of sockets, and the number of things that may be taking just a small amount of energy all the time. And can you imagine trying to actually create a behavior profile for every one of those devices? Now they've got intelligent controllers in the home that you can say, this is my profile, this is how I would run. And now you can match that with your neighborhood and understand what's happening. So maybe if you're not using your car battery, maybe I can use some of the energy because I'm a little bit short tonight for some reason. I think there's just so much that a possibility that could potentially come to fruition, I guess, when you start talking about artificial intelligence and all the connectivity in place.
MH: For the listener, when it comes to how to network a microgrid, if there was one key takeaway for you, what would you want that listener to walk away with?
LA: It would be to have a plan. I think that it's not something you just go and decide one day to do. You need to be patient, and it's going to take some time in order for that plan to come together. And I think we've developed a really good asset to refer back to some of the things that I've been doing within Nokia lately. We've had a pretty good asset to help people through that thought process. We really need to have a plan. And then you start with buy-in from people.