One of the under-reported tragedies of Hurricane Sandy is that those buildings that had committed to local, renewable energy were not allowed to use it. Grid-centric policy and system architecture treated them as mere adjuncts to the local distribution system. Grid-centric design and codes led to installations that could not verifiably disconnect from the distribution system. Grid-centric regulations require these systems to go off-line in case of grid failure. Assets that should have had their greatest value following a disaster, were reduced to providing no value following a disaster. Instead of adding reliability, they were installed and managed to add unreliability.

Buildings must assure their own energy supplies despite an unreliable partner. Historically, power markets have provided predictable supplies of power, albeit with unpredictable quality. The introduction of intermittent power sources into the grid changes this. The introduction of local power sources, including from inside the building, degrade power on the local distribution system. Buildings should be designed as microgrids in their own right, managing their own energy supply and quality. Any microgrid may have multiple ways to store and use energy, and multiple ways to acquire energy.

Traditional smart grid discussions assume that all power comes from the grid. On-site generation is valued for direct sale to the grid. Thermal storage is valued as a pre-purchase from the grid to replace purchases that would be made later in the day. This does not necessarily align with the perspectives of the end node. It also limits the ability of these microgrids to accept new technology in the future.

Assume a small commercial building with several energy collectors. It is normally connected to the grid, and buys its power from the grid. On-site PV cells generate a predictable flow of energy that is stored on-site in hydrogen cells. That energy in hydrogen may be used to improve the site’s ability to respond to grid-based (DR) events or to grid failures for energy surety.

This commercial building also uses solar cooling to generate chill-water for a number of internal processes. Whenever the supply is greater than the internal use, that cooling is applied to thermal storage; this storage may be configured later for use to support DR just as are systems that use the grid for pre-cooling. It provides exactly the same sort of asset for Demand Response as it would if purchased from the grid.

A commercial building may “host” a hydrogen vehicle that consumes the stored hydrogen. A visiting hydrogen vehicle may wish to fill up. In accord with building policy (“No outside sales unless half full”), and subject to a special market rule (“Sales to strangers are offered at a 25% premium to market”) the visiting vehicle may request a purchase. The price offered, though, may be tied to the value of the hydrogen as a battery within the local power market.

The commercial building may have a fixed capacity for receiving natural gas. Some of that natural gas may be used on-site, to back-stop the power markets. It can also support slow filling of a natural gas vehicle. The availability of the natural gas to a vehicle may be limited by prior commitment deriving from the power market.

We know how to do all this, one building at a time. Members of the International District Energy Association (IDEA) have been doing this for decades. The integration cost is high, largely because it requires many hours of engineering time. Piecework energy integration cannot scale to continent-scale problems. (Usually, people refer to Grid-Scale problems here, which extends the error of grid-centric thinking).

Within a building, each system has different values and different purposes as each provides services. The relative value, or priority, of each is changing. Different technologies use energy in different patterns, and may be able to use different strategies to relocate (in time) or reduce energy use. Those purposes and priorities change in response to the occupants of the building and their business needs. This is the heart of the custom integration problem.

In the wider world of people, we also have the problem of different values, different schedules, and imperfect knowledge. This problem is what economists call the knowledge problem, i.e., that one entity cannot know the optimum allocation of resources. We use markets to optimize resource allocation across diverse interests. So, too, can systems use markets to allocate their energy production, storage, and use. If the systems are in the microgrid of a building, then they can use a micromarket for integration.

[an error occurred while processing this directive] As long ago as 1993, Mike Lavelle described using transactions to balance energy use. Bernardo Huberman and Scott Clearwater described market control through multi-agent systems in 1995. (If their work is new to you, search for “Thermal markets for controlling building environments” as a start.) Local markets can solve the integration problem because each system can be represented solely by an agent.

A system agent must only find the market, know its own needs, and be able to take positions in the market. More advanced agents can respond to domain-specific policies as set by their owners. Different agents can respond to different policies. The market optimizes the results. The integration effort to introduce (or remove) a particular system to a particular microgrid is minimal.

The micromarket model allows for the fungibility of energy sources. Diverse commodities can coexist in the same market. The complexity of this decision-making is hidden from the suppliers. Smart energy is an emergent behavior of the micromarket.

Campuses, bases, neighborhoods, districts, and regions can be segmented into microgrids using the same model of integration. The building, as a node on the distribution grid, presents only an aggregate position to each of the markets it participates in. Already, buildings are beginning to participate in those markets using profiles of OASIS Energy Interoperation, i.e., TeMIX and OpenADR 2.0.

A smart grid based on microgrids does not require distributed energy to shut down when the grid fails. Microgrids run by micromarkets provide the simplicity and constancy of integration we need to scale smart energy to encompass all buildings. Energy surety is based in the building instead of the grid.

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