Grid edge

Schneider CTO: The transmission bottleneck requires demand-side solutions

Amid accelerating data center demands and a transmission rollout that Scott Harden says is unlikely to happen fast enough, innovation is focused behind the meter.

November 9, 2023
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Photo credit: Department of Energy

Photo credit: Department of Energy

As renewable energy developers grapple with severe grid constraints that are holding up terawatts of new potential capacity, energy management giant Schneider is prioritizing demand-side solutions.

Schneider CTO of innovation Scott Harden told Latitude Media that the transmission capacity problem — which comes alongside staggering grid development needs — is “probably not going to get solved as fast as we need it to.” 

Instead, Harden expects that the sector will eventually hit a “critical point,” and be forced into an “emergency posture.”

However, “there are things we can do to offset the need for more transmission,” he said. ”This is where we’re really focused on the demand-side of the equation.”

Armed with a string of acquisitions, investments, and partnerships, Schneider is digging in with both software and hardware solutions. For instance, last year Schneider acquired both distributed energy resources software developer Autogrid and clean energy market platform EnergySage.

Innovation in behind-the-meter hardware includes applying Schieder’s industrial solutions — like intelligent inverters and smart panels — to residential use cases, Harden said. But the company also sees an opportunity on the software side; hence the company’s investments and partnerships geared toward the “problem space” of tech adoption. He pointed to EnergySage, Autogrid, and electric charger installation company Qmerit as examples that can help Schneider educate consumers, connect distributed technologies, and manage distributed workforces, respectively.

There are broader demand-side developments that could move adoption along more quickly as well. For instance, Harden anticipates subsidies for grid-edge and behind-the-meter systems, as well as a rise in residential, grid-forming converters. 

He’s also expecting to see the increased use of technologies like small modular nuclear reactors in the next five to 10 years, particularly as developers figure out how to site them to take advantage of the existing network.

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AI’s purchasing power

In many ways, the AI boom is setting the pace for demand-side technical innovation, Harden said, as well as for both policy needs and strategies to increase adoption.

“Globally, PPAs are running out, and the project pipeline to provide substantial clean energy is running into the interconnection issues and permitting issues,” he added.

It’s that tension, Harden said, that will make the next few years so fascinating: accelerating demand on data centers that consume enormous amounts of energy, data center providers with ambitious net zero commitments, and a “challenged” supply of clean energy.

In this context, Harden anticipates that hyperscale data center operators like Microsoft (where Harden previously served as CTO of worldwide energy and sustainability) will turn to demand-side partnerships when the pace of development on the supply side can’t keep up with their growth.

As evidence, Harden pointed to Microsoft’s January announcement that it decided to tackle its clean energy needs from further upstream by teaming up with solar manufacturer Qcells to develop utility-scale projects in the U.S. Those strategic moves by hyperscalers will be key indicators of just how much the market is focused on the demand side.

That need-driven focus is ultimately a good thing for the energy transition and the decentralized future of the grid, Harden said:  “If transmission was easy, then you really wouldn’t be focused on these innovations. We'd approach the energy systems in the same way that we did when it came to bulk generation with coal or other emitting sources.”

“But I like this,” he said. “I think it’s a challenge. I think that it creates opportunities for innovation.”

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