The growing demand for energy has utility operators on their heels, trying to manage electrical grids with layers of complexity that makes air-traffic control look like a picnic. And as new renewable energy facilities get hooked into grids, utilities have to juggle even more resources, and come up with prices for energy on an ongoing basis. To manage the situation, utility operators use a hodge-podge of software programs, but they lack a comprehensive and precise view of all the components on the grid. Given these limitations, it's no wonder that power system failures and unpredictable energy prices have become more prevalent in the U.S. power market.

With the launch of its AEMPFAST (Advanced Energy Management Power Flow Analysis System Technology) software system this week, Optimal Technologies aims to dramatically change the way utilities view and manage energy resources on the grid. Similar to air-traffic control system, AEMPFAST (pronounced "aim-fast") gives a birds-eye view of network resources, so operators can see all the components of energy production, distribution, and consumption. More importantly, though, it can analyze and diagnose events in real time, and manage networks for optimum efficiency and reliability.

"AEMPFAST can move power across a large network, and also optimize it at every point, so you get a global and local understanding. There's no other technology that can do that," said Roland Schoettle, CEO of Optimal Technologies. "It has the ability to get a true asset value for every single item in the network, so the [energy] pricing is real and accurate," he added.

More than a decade in the making, the software system has been field-tested over the last few years, and Schoettle said it typically finds about 10 percent more capacity in the energy grids it analyzes. The more data and information the system can crunch, the more accurately it can do its work.

Of course, utilities already have tools in place – sensors, smart meters, and distributed computers – to help achieve "smart-grid" goals, but these devices have primarily been concentrated on the distribution side of the equation. AEMPFAST can work alongside existing IT systems that utilities have been using, so it's not meant to be a disruptive technology. Likewise, it doesn't require any significant capital investment to run the system – install it on a laptop or desktop, and it starts crunching the data. But one of the challenges for Optimal has been getting access to the proprietary data that is generated throughout the electrical grid, from generators to distributors to retailers. When it has all that information, it can give a precise picture of the entire grid, so operators can get an up to the minute, real-world view of how efficiently it's working.

"AEMPFAST has the potential to provide a whole new level of ability to model a grid and operate it more efficiently, and that means you're saving resources and money," said Barbara Barkovich, a regulatory energy consultant and principal at Barkovich & Yap. "I have never heard of another system like this that's non-linear and can operate in real time – it's a substantial change in the way of doing things," she added.

Barkovich said the system could be particularly important during times of peak demand, when utilities are paying the highest prices to generate or buy power, and resources are stretched to the limit.  She was on the California Public Utilities Commission (CPUC) in the summer of 2000 when the California grid suffered a meltdown and had to schedule rolling blackouts across the state. Based on a study that was recently conducted, using real data from the utilities, she said AEMPFAST could have prevented the collapse, by identifying the problem earlier and shifting power resources where they were needed.

With more and more renewable energy generators hitting the grid, utilities need to determine where to locate these energy resources to best utilize their capacity. Building transmission lines from solar and wind facilities to hook into the grid is a costly enterprise, so the closer the plants are to the areas where power is needed, the better it is for the whole grid.

Optimal recently finished a job in California where a utility company put in wind, solar, and other energy producers onto the grid – adding about 160 megawatts of power -- and engineers located the plants where they thought they would create the most benefit to the network. When AEMPFAST diagnosed the system, Schoettle said, it produced a net total of 240 megawatts, by placing the plants in more optimal areas and freeing up (or de-congesting) other energy resources. "So that's about $50-60 million worth of energy, and you couldn't find that with traditional technology," he said.
 
Another area that Optimal hopes AEMPFAST can make its mark is by reducing greenhouse gases and other pollution. Since electricity production is the biggest source of carbon emissions, utilities will face fines, or be forced to buy carbon credits if they can't meet emissions restrictions in the future. The AEMPFAST system can help control emissions and make systems more reliable by ensuring that all the energy that's being produced is being allocated efficiently. Likewise, creating a healthy mix of energy sources is increasingly important, as volatile fuel prices drive up the price of power.

Optimal recently opened new U.S. headquarters in Downtown Raleigh, North Carolina, and received $25 million in funding from Goldman Sachs International. Schoettle said the company is talking to utility companies around the world, and is close to signing a contract with a UK utility company. Optimal executives have also had discussions with the Department of Energy and the Federal Energy Regulatory Commission, and both agencies have shown interest in the system, according to Schoettle. If Optimal can convince utility companies to sign on to the system, he added, it could have a big impact on energy use across the country. 

"We've met with people in D.C. and they tell us that AEMPFAST could deliver anywhere from $5 billion to $200 billion to the U.S. economy annually."

The company's preferred revenue model is to sign contracts with utility companies and split a certain percentage of the savings that result from the use of the software. As compelling as AEMPFAST may be, though, Optimal faces some challenges as they try to convince utilities to adopt the system.

"Utilities don't have the right incentives to be efficient, and are making money putting more stuff into the system," said Schoettle. "What we do is so far advanced compared to what they think is possible, and we have to overcome the old-world inertia and engineering arrogance."

With more computer-savvy engineers coming to work at utilities, more sophisticated software will certainly be a bigger part of the picture soon. But how soon is anyone's guess.

"There's always the first-mover problem, because everyone wants someone else to be first, it's human nature." said Barkovich. "But this stuff is very exciting and someone has to go first. Since AEMPFAST doesn't involve replacing software, that's an advantage for Optimal."

Photo by Wolfgang Schlegl

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