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Duke Energy Uses Charlotte as its Living Lab

David Hatch

As far as Chairman, President, and CEO Jim Rogers is concerned, Duke Energy is a technology company disguised as a utility--a theme he's proudly trumpeted in recent years. A tour of Charlotte, N.C., where Duke is headquartered, should easily confirm the assertion.

In the downtown core, Duke is helping to spearhead an energy-efficiency initiative with an unprecedented goal: Slash consumption by 20 percent in five years to create the most sustainable urban core in the nation. If it succeeds, the initiative could be replicated within Duke's service territory, across the United States and in other countries. The Envision Charlotte project, announced by former President Bill Clinton at the Clinton Global Initiative in 2010, also includes air, waste, and water components.

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Across town in south Charlotte at the company's McAlpine Creek substation, Duke has operated a "virtual power plant" since 2007. The utility uses the self-contained miniature power grid, known as a microgrid, to test new technologies, from smart appliances in homes to energy stored in small batteries in yards, to research improvements for its entire grid.

"I really admire what Duke does," says Gary Rahl, senior vice president at Booz Allen Hamilton and head of the firm's energy practice. "They've tried to take on big initiatives" that, if successful, could be "transformative of the industry."

Duke, chosen by U.S. News as one of America's "Most Connected" energy companies for its commitment to technology and customer outreach, will have an opportunity to showcase these and other developments when the Democratic National Convention comes to town the first week of September.

While Duke has research labs, it recognizes the importance of real-world experience. "You can't get the full effect of how [a project is] really going to work until you get it out into the field," says Mark Wyatt, vice president for retail customer products and services at Duke. An important criterion for any Duke project is that it must have practical applications. "There's got to be a good business case," he says. "It has to be of value for the customer and it has to be of value for the company."

Duke also takes a holistic approach to its tech strategy. "One of the things that we try to do is leverage from a multitude of projects so that we can get the most bang for our buck," explains Melanie Miller, senior project manager for the McAlpine project.

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Under Envision Charlotte, the tenants and owners of about 70 commercial buildings are encouraged to reduce energy through behavioral adjustments, such as turning off lights and computers when they leave offices. Duke, which is investing $4 million in the project, hopes to achieve 5 percent of its energy-reduction goal from these sorts of changes.

The remaining 15 percent would result from implementation of energy-efficient technologies, such as systems that automatically control lights and thermostats. Displays in the lobbies of participating buildings allow the public to track the initiative's progress and receive energy-saving tips.

Corporate partners include Cisco and Verizon, an alliance Wyatt says is essential. The provision of clean, affordable, and reliable energy "is not something that Duke does alone," he says. "We need to have partnerships and collaboration with communities, customers, city, county officials--it takes all of us to come together."

Wyatt says it's too early to know whether the Envision Charlotte project is on track to meet its goals. The company will assess progress at the end of the year after reviewing energy usage patterns and holding focus groups.

Regarding the McAlpine initiative, rather than test a microgrid per se, Duke is more interested in learning how to improve its response to outages, store energy for off-peak use, seamlessly integrate new technologies, and operate a more intelligent grid. About 16,000 residents participate in various ways, in some cases volunteering to have their power curtailed during peak periods in exchange for credits to bills. Duke uses the lessons it learns from the McAlpine project to make improvements to its larger, multi-state power grid.

To reach customers online, Duke launched a blog last year called "Youtility" that features clever energy-saving tips, such as recipes that don't require appliances and the best ways to save on heating and water usage while bathing (take showers, not baths, and buy a low-flow showerhead).

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Rounding out Duke's portfolio, the utility has invested in a range of technologies, from smart meters to smart cities. The company has installed more than 600,000 smart meters in Ohio to replace outdated units often located inside homes, although it's holding off for now on upgrading meters in the other states it serves--the Carolinas, Kentucky, and Indiana--because those devices are not as old and still functional.

In China, Duke is advising ENN, the country's leading clean energy company, on ways to power a planned eco city in Langfang, near Beijing, sharing tips on subjects such as solar, community battery storage, and energy generation from swine waste, and culling valuable lessons. "The sharing is very beneficial, especially around energy storage and solar," Miller says.

In what might be a first for a regulated utility, Duke's McAlpine experiment has morphed into a minor tourist attraction. As the neighborhood began to attract curious visitors, Duke added a walking path and informational kiosk for school groups, locals, and intrepid travelers interested in learning more about the futuristic technology that dots the neighborhood.

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