During the past 36-month period, Newton-Evans Research studied a few topics that we had not researched in prior years. These topics included data diodes, synchronous condensers, battery energy storage systems and network transformers. During the months leading up to the Covid era of 2020-2021, we also completed studies of distribution line sensors and uncovered trends in application of voltage regulation devices. During 2020, we looked in-depth at electric vehicle adoption rates and prepared a mid-range outlook for grid modernization programs. Here are some of the more interesting and perhaps relevant insights gathered from some of these research assignments.
Data Diodes:
Data diodes have been around for decades. These devices are most often used by the military and by critical infrastructure organizations around the world. Data diodes and unidirectional gateways are network appliances that allow data to travel in only one direction. Typically, these devices are used as connections between two or more systems of differing security classifications, such as operational control systems transmission of data files to IT systems.
The product life cycle for these devices in the U.S. energy industry is still in its embryonic stage in some segments (T&D, renewables); while in other energy segments (TOP 25 energy companies) the product life cycle is clearly in the growth phase, and in a few segments (nuclear plants, large oil refineries) data diodes are nearing the maturity stage.
Energy industry spending in the United States on data diodes/unidirectional gateway systems now exceeds $25 million annually. The majority of equipment sales have been limited to the largest oil and gas companies, large power generation facilities, nuclear plants, and to some larger electric power transmission and distribution utilities. Our own limited surveying in 2022 indicates additional evaluations are now underway for data diode – unidirectional gateway use in more T&D applications and among a broader array of utility types and sizes.
Battery Energy Storage Systems – BESS.
The battery energy storage systems (BESS) market in the United States has grown exponentially over the past decade. The Energy Information Agency (EIA) within the Department of Energy has maintained a repository of information on energy storage trends in the United States. The total energy storage capacity for electricity exceeded 1000 MW and about 1700 MWh by 2020, according to the EIA. Published commercial sources report that the growth trends for BESS continued during the COVID pandemic and further reported that battery energy storage capacity is larger than the numbers last reported by EIA. For one example, IHS-Markit reported recently that battery energy storage amounted to nearly 2000 MW in 2019, and had grown to 4,000 MW by 2021.
Battery R&D Today in the United States . . . Key to independence and assured supply in coming years!
- Very active level of battery R&D underway
- Battery R&D start-ups funded largely by private investment firms.
Services Provided by Battery Manufacturers
- Major Li-Ion battery manufacturers are becoming (or planning to become) full-service partners with utilities – providing integration and maintenance services, thereby attempting to cut out the “middleman” integrators currently involved in BESS Engineering, Procurement and Construction/Integration, thereby shortening the supply chain.
- Utilities are currently using one, two or all three of these sources for BESS integration: battery manufacturers, BESS integration specialist firms, or their own engineering staffs.
- The Newton-Evans’ commissioned survey conducted as part of the study found a number of commercial BESS integration services being used by large electric utilities.
Synchronous Condensers:
There are four drivers that affect the U.S. market (in terms of annual opportunities and units of syncon equipment) for synchronous condensers (or syncons) that exists today. These drivers include early shutdowns of fossil power plants; loss (or erosion of) of spinning reserves; increased use of distributed energy resources and its impact on grid stability; and, the lack of grid-forming devices.
What we have heard is that utility/plant engineering staffs are looking for reliable, cost-effective approaches to deal with the threats to grid stability in some utilities and in some regions of the country caused by the above-listed drivers.
“About 15% of the US fossil fuel power fleet shuttered between 2009 and 2018. But most of these plants are built to last 30 to 50 years, long enough to pay off the hundreds of millions of dollars it takes to build them. To meet (President) Biden’s 2035 goal, many plants will inevitably have to be switched off before the end of their natural lifespan.” (Source: Yahoo Finance). There are a total of about 10,400 fossil-powered generators in the U.S. and about 3,500 utility-operated or commercially-operated fossil plants (source: EIA).
U.S. coal power capacity peaked over 317,600 MW in 2011, according to EIA data. It has declined every year since and was down to about 216,800 MW by the end of 2020. By year-end 2022, the figure yet to be reported by EIA, coal power capacity will likely be less than 200,000 MW.
We found that even though synchronous condenser equipment has been available for more than a century, and implementations have been quite successful in providing grid stability, voltage support and short circuit capacity and in offsetting the lack of grid-forming devices, there are other FACTS-based approaches to meeting similar grid operational requirements.
Nonetheless, there is a resurgence of interest in syncon technology and a wave of recent utility reviews are ongoing for both very large MVAR capacity units, as well as for syncon units that could be installed at key medium voltage substations and at DER interconnection points along the grid. The overall U.S. market for syncon equipment may well reach the quarter billion dollar level by 2024, in our opinion.
Network Transformers: Industry’s Response to Densely Populated Inner-City Areas
Network transformers are vault or subway type units of equipment and are not pole, pad or substation units. The specifications for vault and subway are very similar with substation units having better corrosion specifications. NWTX units are designed for mounting in underground rooms and are common in dense city locations where surface mounted transformers would be a visual and traffic obstacle.
Network Transformers (NWTX) typically range from 300 kVA to 2,500 kVA three-phase. The Primary voltage ranges from 2400 VAC to 34,500 VAC and the secondary from 600VAC to 208 VAC. The type may be oil, dry or cast coil. The primary is usually delta connected, and the secondary is wye connected. The high-voltage connection is usually to a network switch or an interrupter-type switch. The secondary connection is usually to a network protector or a low-voltage air circuit breaker.
Downstream protection equipment is almost always provided separately and not bundled into the NTWX sale. All come with a basic DNP3 interface, but no suppliers currently add any type of asset management software. Standards for NWTX are C.57.12.24-2016 and C.57.12.40-2017. All suppliers to the North American market meet these standards for NWTX units. Some older rebuild units, however, may not meet these standards.
Liquid filled NWTX systems traditionally came with mineral oil fill but FR3 10C is now the most popular fill. The 2016 DOE energy standard did require all suppliers to upgrade their NWTX products. Virtually all NWTX transformers are built to order and virtually none are stocked ready to ship. There appear to be too many variables in the voltages, material of construction, gauges, piping, etc. to justify stocking a ready supply of NWTX units. The manufacturing process may take about 6 weeks from receipt of order. None of the suppliers we interviewed see much change in the regulations over the mid-term, since the adoption of the DOE 2016 specification, so product designs should remain stable going forward for the next few years.
Perhaps the most important regulatory driver affecting the future of network transformers is the increasing need among critical infrastructure facilities (hospitals, commercial centers, military installations, certain micro-grids) requiring reliable, resilient electric power. Secondary and spot networks comprised of network transformers and network protectors can help urban utilities meet these requirements.
Network transformers have been playing a critical role in keeping the lights on in major urban centers for decades. NWTX installations have been highly reliable as silent “partners” in the provision of power critical to commerce, industry and government offices. Secondary and spot networks have proven their worth as they have continued to work in a near “fail-safe” environment. This is often seen in power outages occurring in the same metropolitan area not being served by such distribution network configurations.
The combined network transformer market in the US and Canada likely reached/crossed the $100 Million level in 2021. The bulk of the market (85-90%) is usually comprised of sales of 3p units. This estimated market size seems realistic in light of the annual unit replacement rate (based on a 35-year life expectancy) and moderate levels of net new shipments. We had excellent support from ARC Advisory, which firm partnered with us in undertaking this baseline study.
Next month, our posting will include excerpts from recent studies of distribution line sensors, trends in application of voltage regulation devices, electric vehicle adoption trends and a mid-range outlook for grid modernization programs
– Chuck Newton
summary reviews and highlights from completed studies
