Latest / Not Another Energy Podcast / Who Brought The Microgrid to the Grid Party?
Transcript
- Bethany Ruhe: Hello, hello and welcome to your favorite podcast, Not Another Energy Podcast. I'm Bethany. Teresa Ringenbach: I'm Teresa. Bethany Ruhe: and together we are Bloom Advisory Partners. Teresa, how are you doing today? Teresa Ringenbach: I'm great. I'm having such a great week. Like, springtime, the snow is gone. One of our bills that we've been working on passed out of committee yesterday. Life's amazing. Bethany Ruhe: Now that is truly a monumentous moment. I know how hard you've been working on that. So congratulations as your partner and your friend. I'm very happy to hear that. I'm gonna give a small little, not really confession, but for our listeners, we do have a script of sorts when we do these, right? And we were at least prepared. We at least have something. And to re- Teresa Ringenbach: Thank you. I mean, we try to fact check and then insert it into a script. Do we follow the script? No. Bethany Ruhe: We rarely follow the script in life and in the pod, but I gotta tell you, so Teresa put this one together and it's a banger. It's funny. It's... Teresa Ringenbach: Hahaha I myself up writing it. ⁓ Bethany Ruhe: That's when you know it's a good one. So I'm gonna do my best, Teresa, let's do our best, at least at the beginning of this, to try to keep to the script. And I'm gonna, no, people might not know this. I went to a performing arts high school for musical theater, and I've done a lot of theater. Teresa Ringenbach: Okay, okay. I was a nun in anything goes in high school. Tap dancing nun. So there you go. Bethany Ruhe: See, I was one of the angels in Anything Goes. So I mean, it's like, see, this was faded from way long time ago. Yeah, so this, I'm very excited to dig into this topic. I'm very excited for the script that you wrote and the ideas that I know we're both gonna bring to the table. So without further ado, to Teresa's script. Teresa Ringenbach: Hahaha Yeah Bethany Ruhe: All right, picture this. You're at a backyard barbecue, someone hands you a drink, and instead of talking about sports or the weather, they whisper, hey, have you heard wholesale demand markets actually pay you to not use electricity during peak hours? And suddenly this party got real interesting. Teresa Ringenbach: I mean, if somebody at a party whispered that to me, that's soulmate energy. That's baby, let's monetize our flexibility together. And scene. Bethany Ruhe: Don't you threaten me with a good time? See I love this whole concept though of it's a grid party and then who brought the micro grid So this whole thing starts with wholesale demand markets paying big energy users to reduce consumption during grid stress So that's classic demand response Basically to continue with Teresa script. It's a love story for people who think Spreadsheets are for play. Teresa Ringenbach: Hahaha Enter smart meters, the little digital tattletales that run around telling utility experts what their building is doing. And they make everything measurable, which in energy speak means getting paid for being flexible. And honestly, guys, just to help you out, we're talking about virtual power plants today. So ⁓ I do think they're sexy and entertaining. Bethany Ruhe: Yes. Teresa Ringenbach: I don't know about spreadsheets, but in the world of the fact that you can virtually participate in the grid and get paid for it, I mean, that's pretty entertaining. Bethany Ruhe: Yeah, no, I agree and give me a VPP over a spreadsheet any day. I'm gonna put you on the spot here. Let's jack it up 40,000 feet because yes, a lot of our listeners are in the energy industry, but my mom isn't, my father-in-law isn't. So what is a VPP? Teresa Ringenbach: Hahaha So VPP is virtual power plant. They're like the potluck dinners of the energy world. ⁓ brings a little bit of something, and then you can all eat. In this case, the little bit of something is ⁓ maybe lets you control their thermostat. ⁓ And you can control enough thermostats, you have enough load to participate ⁓ in demand just like a big commercial customer. ⁓ We've come from a world, Bethany and I, where water heaters were like this. Batteries are the big boomin' thing in VPPs right now. think ⁓ has been doing a lot around this. They're doing interesting things, because they actually went out, ⁓ a company that was inside of homes, ⁓ then monetized all those thermostats and pieces, ⁓ addition to what they were already doing with commercials. So their version of a virtual power plant is ⁓ and everything that can turn on and off. ⁓ can be a part of the grid. And then in return for that, there's a lot of companies out there. There's a company called Leap. They actually enroll residential customers. You enroll with them and you'll either get a gift card or a credit on your bill. And a lot of this, because it's virtual, you don't really notice it. Maybe you're a little bit sweatier in the summer for a quick moment. But in general, the concept is you're not supposed to feel it. It's all virtual, so you don't really see anything. You don't have to build wires. It shouldn't be very invasive into your life. Bethany Ruhe: So not to name drop, but I moderated a panel with Mark Parsons from NRG. It was actually ETS last year. he did say that NRG was kind of all in on VPPs. And I think that what they've done from like last May till now has really shown ⁓ fruits of some of that labor. it truly, it really, you know, ⁓ would say NRG has probably been at least the most visible on my LinkedIn feed with what they're doing. But ⁓ think adoption is spreading at a wild pace. Teresa Ringenbach: Oh, it's crazy. They're not really new. I mean, they've been around since, let's see, 2008. I think it was the first time I really heard of one. Bethany checks notes. It was 2009. Bethany Ruhe: It was. We actually do our research and do fact check here people. I mean we we are a very serious, unserious podcast about a serious thing. So. Teresa Ringenbach: We do. do. ⁓ But California really exploded with virtual power plant companies across the board. mean, the last time I looked at California, there was a VPP in so many different forms that it's actually like this huge competitive market out there. ⁓ The East Coast a little bit. think Texas is starting to get into it more, but these, what used to be these tiny little startups are starting to get gobbled up by bigger companies. So it's interesting. You know, I love a good commercialization story and all these VPPs were basically software companies who figured out how you can make money on the grid. And then they needed to physically get behind the meter of your home. And then they figured that out. And now they're so valuable that the bigger guys are are eating them up. So, you know, it's a great story of innovation turned into competition and now it's a real market. Bethany Ruhe: So that's a little prelude to the next party that we are, that we kind of just talked about, but we're gonna dive into a little bit more, which was the Great Acquisition Party, which you're right, was from 2009. I guess it's still going on. Well, you maybe it was the pre-party to the grid party. You have a couple specific examples here. Do you want to maybe pull out one or two of them that really kind of crystallize for our listeners exactly sort of how we went from 09 when we were first hearing about them to how it looks on paper to what we have today? Teresa Ringenbach: Yes, so I think anybody who's been around for a while, they think of Enternock as the original one. Enternock basically did a whole bunch of things. I think they were most famous for the air conditioners with utility programs. They got swallowed up, I think. ⁓ NL became Eternach and then think eitron bought another company called Converge and then somewhere along the line they all sort of merged together and I think they eventually became C-Power. There's ⁓ other companies out there that are sort of merging into the same world. There's ⁓ bought a company called Next Craftwerke? I don't know if it's German. It is, ⁓ is. ⁓ Bethany Ruhe: That sounds like a German band. Yeah. Teresa Ringenbach: But then, know, Bethany, you're going to appreciate this. ⁓ You know how we both love octopus energy because they have like the most adorable frickin' logo and mascot in the entire world. Bethany Ruhe: They truly do, they truly do. if I had them next to me, I would pull them up and make you admire them again. But I've got big and little octopus swag. It's truly pieces of pride in my office. Teresa Ringenbach: You Yeah, I don't know where their marketing people are, they're they're just geniuses. Well, octopus has their own virtual power plant arm and it's called Kraken, which again, I like just I love them so much. I would just put those octopuses all around my house if I could. Bethany Ruhe: Maybe they'll launch a wallpaper line. Who knows? We'll keep our eyes on it. Teresa Ringenbach: But it's, VPPs are not unique to just the United States, right? They're everywhere in the world in different forms, but they all come from the same essential thing. Can I push power to the grid or can I shift something off and I get paid for it? Bethany Ruhe: Okay, so would you say the vibes are, so you used octopus and Kraken. Is that more the vibe now, like if we're talking party vibes, right? So instead of all these companies swallowing other companies, swallowing other companies, now we have an actual energy company that's building out their own ⁓ instead of trying to just eat all the little guys to make a big kind of patchwork. Teresa Ringenbach: Yes, I think we're seeing both, but I think now we're also seeing people who are moving beyond the, hey, let's just enroll a bunch of little guys. And they're coming in and saying, you know what? Let's just make you your entire own little microgrid. And now we're going to control everything. And we'll sell it into the market when we need to, or we'll sell it amongst ourselves when we need to. And I think that's the new future of virtual power plants, our microgrids. Bethany Ruhe: Right, so VPPs and micrograds met at a party. They got together. They're a couple now. Okay, so now, what are they like? What do they do? How are they interacting? How are they impacting all of the people around them and all of the dynamics around them? How do they work together? Teresa Ringenbach: Yeah, yeah. Yeah So now you got me on this couple theme. I did, I did. I should have been so sassy in the script. Bethany Ruhe: Sorry, it's in your script you wrote you literally wrote it You were this was peak sassy Teresa here, I love I'm here for it Teresa Ringenbach: So basically, I mean, it's the hookup of the century, right? VPP meets a microgrid. One brings the revenue. One brings the resilience. They're both halves of distributed energy. Snap them together and some magic happens. Bethany Ruhe: So, and again, let's shoot this up 40,000 feet. How would you define or how would the industry define a microgrid? Because I feel like that's another word that gets bandied about and it means different things to different stakeholders. So, I I know what I think one is. So in this context, how are we describing a microgrid? Teresa Ringenbach: In this context, we mean a microgrid is an area where you have your own gen, your own, whether you need wires or you're just directly connected into that gen, you have some sort of storage. And basically you can, ⁓ I'm going to say island yourself, which for those who don't know what that means, it means you can completely disconnect from the rest of the grid and always keep your power on in a reliable way for yourself. Bethany Ruhe: Okay, and what are some applications of a microgrid? Where might people see a microgrid? know, just getting back from that Tribal Energy Conference, there was a lot of talk about microgrids in these deeply rural situations. So what are some other sort of applications for this? Teresa Ringenbach: Yes, so ⁓ microgrids have been around for a while. lot of bases use them, ports use them, so military bases, ⁓ port authorities, Hospitals have microgrids. So historically, you've seen it any place where you need reliable sources of electricity that can't be disrupted by somebody else. But technologies today, you're seeing microgrids in different forms. So my favorite version of it is actually the Cornwall project in the UK. They took an entire town, made it some microgrid. They gave everybody in that town some form of gen or battery. And then they use their VPP as a virtual market so that everybody in the town could sell against each other. market prices are high, but I can use my own low or market prices are high and I already have some stored so I'm going to sell out to the market when I'm producing and it became this whole flexible little microgrid using that combination of a VPP and a microgrid. You also, like, just to be honest, preppers, right? lot of preppers have a version of a microgrid. Yeah. But I think you're seeing it's becoming more more prevalent. The data center conversation right now, right? Like, across the board is, hey, as long as you don't touch the grid, you can do whatever you want. Well, they have to have a microgrid to do that. Bethany Ruhe: Yeah, yeah, that's, you know. Yeah. Teresa Ringenbach: ⁓ There's been cities that have looked at it for police and fire stations. So if something happened, those entities still have power. It's becoming more more prevalent, I think, in the private sector where businesses have decided, hey, I don't want to do this. I'm going to do my own microgrid. Ypsilanti, well, actually Ann Arbor has one of my favorite supper clubs, ⁓ Supper Club. ⁓ It's Knights. Knights has their own giant generator outside so that they can keep the power on in the restaurant. Yeah, they also, hopefully, Knights is also making money off of that by working with a VPP. Bethany Ruhe: People have to eat, Teresa. So the premise is I can keep the lights on during a blackout and get paid by like an RTL like PJM. Teresa Ringenbach: Yes, yeah, it's the best of both worlds. Bethany Ruhe: But there's a plot twist. Teresa Ringenbach: There is, there is. So some states are restricting or limited, ⁓ whether it's a VPP or microgrid. So Michigan. Sorry, Knights, you can't island yourself. Michigan actually passed a law that said if you're going to install on-site generation or these types of microgrids, you have to be connected to your monopoly, your local utility. So you can have a generator, but it better be connected just like the rest of us. Bethany Ruhe: Now what was the rationale for that? Aside from being Big Brother and Monopoly and all those laundry list of things. Teresa Ringenbach: Well, as somebody who vehemently opposed that language, the rationale was that the utilities were afraid microgrids would become prevalent and then nobody would need them anymore. So if you forced them to connect, you remain in control and you can tell them what to do still. Bethany Ruhe: you God forbid people want to be independent of 150 year old aging infrastructure that's dying at a very quick clip. Teresa Ringenbach: Yeah, can't keep my power on. I'll put my own in, but still got to pay you whatever my monthly customer charge is. Bethany Ruhe: So it's giving like you could play outside but keep the garage door open vibes like the the the very parent energy. Okay, so when things like that happen, what does that do with the forward progress? I mean, it's got like spook investors. mean, that's got to have negative ramifications across the board ⁓ people see things like this going down. Teresa Ringenbach: Hahaha Yes, yes. On the private sector side, think we're seeing things change a little bit, but yeah, for a long time, because you had to do that, the utilities would make it really hard to connect to their grid, which then made it expensive or difficult to actually create your own microgrid. And as you know, at some point everybody's like, I don't care anymore, right? I just don't want to deal with this. So it does solve the use of them. Bethany Ruhe: Alright, so we've talked about them sort of on a grander scale. Let's get granular. One of the things that I did talk about when I was talking to NRG was how powerful this is getting all of this technology into people's homes and using this technology to try to pull or control the energy. So where does that fall? Who would that be at the party? Where does that fall? Is that the person that shows up drunk already? We're relying on this uncontrollable aspect, right? We can give you all the tools and put them in your home, but we can't make you use them. We can't force you to do these things. So talk to me about that aspect of this grand VPP world. Teresa Ringenbach: Yes, so there's a view of all of this, is residential customers just haven't caught up. ⁓ has a smart thermostat, but do I want you touching my smart thermostat? And that used to be like a big brother thing, but I think now we live in a world where big brother is everywhere, so people are less inclined to say, don't touch my stuff. ⁓ Bethany Ruhe: See, I would push back a little bit on that because I more feel like... Teresa Ringenbach: my turn with dog Bethany. Bethany Ruhe: That is kind of like somebody spying on you through your laptop camera-esque in terms of how it makes me feel, like on a personal level. And I think there's a little bit, I mean, yeah, sure. I'll give my saliva to a company that's absolutely tracking all my data. I will let AI do facial recognition on me so I can see what I would look like as a giraffe. But there's still this level of invasiveness. Teresa Ringenbach: Yeah, first we're going to discuss why a giraffe later, but Bethany Ruhe: Yeah Teresa Ringenbach: It's not as invasive anymore. I think when they first started it was, hey, we're just going to shift your thermostat. Now it comes with an app and alerts to you and you have control to override it from your own phone. But it comes with information at the same time. This is only going to last the next two hours. Don't forget we're going to pay you for this. So I think it's less about somebody just like creeping up behind you and shifting the thermostat and more about you are willing to participate in what's happening and you understand what's happening and I think it's gonna grow because FERC passed these they passed an order years ago it's called FERC 2222 yeah I've heard it two by two like all sorts of things at the end of the day that is like Bethany Ruhe: So elegantly named. Teresa Ringenbach: to use a clueless reference. It's like shared a tie. It's a total makeover of what a VPP can do. It took what was this ugly process, like you're talking about, feeling creepy and gross and somebody's pushing on you, and gave it some lipstick and a new dress and said, look how pretty this is. Everybody should be doing this. And a lot of states are now implementing their rules and requirements to allow for residential customers to participate under the FERC 2222 regime. Bethany Ruhe: It lowered the threshold for what amount you had to have to be able to participate in the demand response market, right? Teresa Ringenbach: Yes, it basically said residential customers can participate just like commercial customers and states need to provide them that same access just like a commercial customer can participate. Bethany Ruhe: Well, Teresa, this has been a great party. Teresa Ringenbach: I mean, we went to the party, we had a makeover at the party, we had a couple get together and kick it off at the party. I mean, it's all, yeah. Yeah, exactly. It was amazing. And somewhere along the way you put on a mask that's of a giraffe and I'm not sure why. Bethany Ruhe: Did you have fun at the grid party? We had a drunk person show up. I mean, this has been insane. Yeah, well, you know, little known fact about me, giraffes are my favorite animal. So that was as simple as that. So all right, for VPPs, thank you for the orchestration platforms, the fancy DER control layers, and all the acquisitions from the Great Acquisition Party of 2009 to 2025. It feels like a corporate version of musical chairs. Teresa Ringenbach: and two micro grids. Thanks for keeping the lights on and giving us something cooler to talk about than Bitcoin. Bethany Ruhe: Yes, God, please anything but Bitcoin. To Michigan, we love you. You're shaped like a mitten, and apparently you've got a really good supper club named Knights. But please let your micro grids grow, and let them island occasionally. have so many islands already. What's a few more? ⁓ builds character, Michigan. Teresa Ringenbach: Ha ha ha. and to residential customers, congrats, you're the future. Don't forget to tip your smart reader. Bethany Ruhe: All right, listeners, thank you so much for joining us. We hope you enjoyed the party. Until next time, I'm Bethany. We hope you join us again. And remember, energy is never just about energy. Teresa Ringenbach: and I'm Teresa.