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Why New Daedalus?

Daedalus was the mythical great architect and artificer of the classical world. Today, embedded intelligence is enabling the most profound changes in the way we create and use buildings since his day.

Building Intelligence meets the Intelligent Building. The Intelligent Building negotiates with the Intelligent Grid. How will this transform how we interact with the physical world?

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Tuesday
Nov252008

To Market, To Market to Buy a Fat Watt

There is a strong tug of war, not only in the buildings to grid (B2G) arena, but in all others, about whether GridWise is about controlling gizmos or about interactions between economic agents. One is paving interstates along the old cow-paths, and one is laying out a city. When you lay out a city, you never know what markets and neighborhoods will actually develop.

Those who have worked long in utilities or in building systems have a deep impulse toward the perfecting old models of control rather than laying out the market rules for transacted energy. Like a dog to his vomit, even those that see the potential from new markets return instead to deep process interactions to better support the old model of hierarchical control. This is not a failure of morality or imagination, it just is. The effort today is to tug, often against great resistance, the traditional players in the power industry in the [to me] correct direction. And at that, many of the players in that industry don’t even show up to be tugged at events such as Grid-Interop.

This tendency lies in all sectors of energy use, including in buildings. One of the largest building shows (AHR) (Heating & Refrigeration) of the year is in Chicago the third week in January. Because so many of the installers and designers of this equipment make their annual purchasing decisions at the AHR show, the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) holds one of its semiannual meetings in conjunction with AHR each year. ASRAE is the designated domain expert for the promulgation of HVAC standards in the US, a mission that ranges from best practices in grounding equipment to ventilation standards for health to involvement in many green initiatives. As a point of reference, Legionnaire’s disease threw down a gauntlet to ASHRAE analogous to what the Cleveland Outage did to EPRI.

The problem, though, is that this show and these participants are similar in many ways, to those who show up at Utility events. Many of the absolute best are the best at the wrong thing, at the old way. This is the challenge and the opportunity. Some of them are looking for something new. Some of them are just hoping not to miss the next wave. Some will become conservative from the anticipated downturn in building starts. Some will be scared enough to try something new. There are side meetings during AHR that will wave the flag for show attendees.

Structurally, there is a problem in trying to build new markets through AHR. HVAC guys typically sell to the Facilities guys. These have support rather than strategic roles in their respective companies. It is hard for them to do anything other than minimize drag on ongoing business activities. I would like to reach further...perhaps to The Green Grid (Data Center guys) who understand a strong relationship between costs / reliability / capacity business environment....

We are currently looking at Wednesday afternoon, to pull in exhibitors whose responsibilities are done Wednesday morning. There are also a variety of talks during the week I will be at which touch on the same themes, but from the perspective of the building systems integrator...(http://www.ahrexpo.com/showinfo/)

But come March—it is not scheduled yet–and NIST will hold another meeting in Chicago. We hope that this meeting will bring in technical staff from the great commodities markets. I shut my eyes when I saw a careful list of “price and bidding models”—developed by EPRI and IEEE and ASHRAE and.... To me, we have a commodity whose price varies cyclically, and whose future cost is affected by anticipated weather. Sounds like soybeans or orange juice. Except the season is 24 hours. I want daily energy bidding to look more like a commodities exchange.

There are some attributes relevant to commodities. Soybeans are different from juice is different from pork bellies. I assume there is now a futures market in organic orange juice. Energy is a commodity, even though it has some attributes (quality, carbon, location). I began wondering, can we get advice from the CBOT (Chicago Board of Trade) or the Merc (Chicago Mercantile Exchange) about the data structures and interaction patterns they use? Or is NASDAQ, with its widely distributed network of dealers, a better model?

These groups areas certainly understand Demand / Response in a market. They understand bidding and futures markets. They understand every kind of hedge I can imagine and some others as well. In other words, if I have a personal agent sitting on my electric meter acting as my personal day trader, can I get him one of those nifty yellow coats....

So who might participate? People who understand big multi-party bidding systems, and the information standards they run on. Auditors who know what transaction information needs to be kept for instantly executing electronic bids. Anyone else who has an area of expertise near these rawest of markets. Their knowledge is what will unlock e-tech by creating the markets of transacted energy.

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