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Building a Smarter Grid: More than just smart meters

Joe H — Thu, 13 Aug 2009 11:54:16 +0000

Listen to podcast by Transmission & Distribution World.

T&D podcast series: Smart Grid — ABB perspectives

Sorting through Smart Grid hype (Xcel Energy and Wall Street Journal)

Joe H — Fri, 01 May 2009 17:49:21 +0000

Boulder, CO

Xcel Energy created a Benefits Hypothesis Summary that defined its perspectives and desired outcomes from the SmartGridCity effort in Boulder, CO. Xcel has partnered with Accenture, Current Group, Gridpoint, OSIsoft, Schweitzer Engineering Laboratories, SmartSynch and Ventyx. The program was begun in 2008 and expects to quantify the benefits during the second half of 2009.

The Xcel Benefits Summary clearly defines the challenges and possibilities for SmartGridCity and while the paper was developed in 2008, it is still very current and deserves reviewing in light of the rush to national demonstration projects to take advantage of Stimulus Act incentives.

A summary of the key points is provided below (italicized text is taken directly from the Xcel paper, text in parentheses are my comments)

Need for a hypothesis driven approach as the utility industry has been hampered by the need for tried and true “prudent” investments.
- Consequently, true boundary-stretching R&D happens too infrequently.
- If the smart grid project is unnecessarily conservative, then Xcel believes it will have lost a true opportunity to plow significant new ground.
Long term benefits assumptions
- Reduced customer outages (through more dynamic management than is current industry standard)
  - Proactively identify devices approaching imminent failure
  - Provide more accurate and targeted information to outage response teams
  - Establish real time maps of outage areas… (presumably down to the house level since could determine if a home is energized)
- Customer benefits
  - Allow customers to shift usage to times of the day when renewable generation is available and/or when prices are lower, if desired.
    - However, real-time pricing programs have previously been unpopular with customers because they have been complex and inconvenient.
    - Xcel plans to counter this resistance by using a system that allows customers to establish preferences, with the ultimate decisions being made by Xcel.
- Reduced Billing and Customer Service costs
  - Reduced costs of meter reading (no need for meter readers)
  - Smaller call center since problems can more accurately be identified and addressed
  - Reduced theft of electricity
  - Ability to connect and disconnect remotely (and presumably much more quickly)
- System Losses (this is rarely described as a major benefit, but many utilities have no real understanding of their actual losses and how these can be reduced)
  - Through using remotely controlled capacitor banks, can better provide reactive power adjustments which help to manage power factor and reduce the amount of real power that needs to be generated
  - Ability to better redistribute power and management of grid components
- Asset Optimization
  - Through extensive metering at a vast array of grid points, an ability to discover failing components before they create outages.
  - Through better more efficient management of the system, then less need to add new generation capacity (related to understanding system losses and how to more effectively system flows).
- Power Generation
  - If they are able to more efficiently manage grid capacity, then less need for new generation and standby capacity
- Renewable energy integration
  - Better able to integrate highly variable distributed generation units (e.g wind and solar)
- Vehicle to Grid
  - Ability to use electric vehicles as energy storage devices that could be drawn upon if there was a need to redirect power to other sources and/or to reduce costs of peak power purchases. (although the benefit of using electric vehicles as passive energy storage is years off due to few vehicles on the road)

The WSJ (Feb 9, 2009) provided some insightful perspectives on the groundbreaking smart grid test in Boulder, CO.

$100 million experiment to test the viability of the latest smart grid technologies
Political challenges include persuading regulators and consumer advocates to accept a radical new rate structure
Orwellian control and perhaps utilities should focus on improving efficiency as the top priority?
In test to date, some customers complain that it is too complicated and confusing… resulting in a slow behavioral changes even among the city’s most committed environmentalists.
Changes to usage included discussion on whether to use the dryer or clothesline, possibly ditch the second freezer and/or do they want to run the dishwasher only when wind power is available?
Potential for Xcel to remotely control multiple appliances within the home
Difficulty with customers in determining the “value” of their actions (environmental and/or price)
Challenges with information standards among appliances and meters… much more complex than VCR versus Betamax.

Green Power Transmission: “Congress can change the laws of the land, but not the laws of physics”

Joe H — Fri, 01 May 2009 17:43:52 +0000

FERC Chairman Wellinghoff

Yesterday, the Energy & Natural Resources Committee heard from FERC, NARUC (National Association of Regulated Utility Commissioners) and major transmission stakeholders on issues and potential for new extra high voltage (EHV) transmission lines (as proposed by legislation put forth by Reid and separately Bingaman) that would be used to bring renewable electricity generation from distant regions to demand centers. Reid’s bill proposes that upwards of 75% of the capacity of these new EHV lines be set aside for renewable electricity.

Importantly and in contrast to the the Energy Policy Act of 2005, the proposed increase in FERC’s jurisdiction over interstate transmission lines (as proposed by Reid) is for the sole reason to bring renewable electricity from distant (typically low population density) to major load centers in order to achieve proposed RPS standard levels. It is not to increase the reliability of grid as identified in the EPACT 2005. Many senators and witnesses made the point that dedicating the lines for renewables would violate the laws of physics since other generation (nuclear, coal, natural gas) would flow if the renewable resources were not operating and that these typically operate at lower power factors.

It was also stressed that while FERC was tasked with trying to determine ways to increase realibility that little has been done since EPACT 2005. Now the priorities are changing, where it would seem that getting green power to market is more important than grid reliability. The grid operators and power companies who gave testimony were concerned about this appearance of a major shift.

There is no doubt that to achieve an RPS as has been proposed will mean bringing more renewable energy from distant markets to load centers. However, efforts to increase the efficiency and reliability of the current grid should not become secondary as a more robust and better operated grid will mean that less real power needs to be generated.

The majority of participants, including the state-minded NARUC agreed that there is need for improvement in the planning and siting of new transmission lines. The current process is not effective as evidenced by the 6000+ miles of new gas pipelines (where FERC has jurisdiction) that have been built in the last decade as compared to ~600 miles of transmission.

In addition to the concerns of planning and siting was the issue of cost allocation. Who pays for these new lines? It was estimated that $80 billion are required to upgrade the transmission system for reliability ($50b) and to bring “location-constrained” renewables ($30b) to market. The CEO for ITC made the point that if the proposed transmission line from Michigan to the eastern midwest had been built then the blackout of 2003 would have been avoided and power would not have been disrupted to 50 million people– but this would have been paid for exclusively by Michigan ratepayers. Allocated costs and benefits do not add up in the current regime.

Since a good portion of planned renewable generation could come from western states, effective siting of transmission lines will be critical to ensure least cost and avoid extensive delays. However, as brought up by the Wyoming Senator, his and other western states have strong property laws. The proposed legislation would expand on FERC’s ability to use imminent domain as a basis for siting. Ultimately, developing specific transmission corridors and using Federal lands where appropriate could lessen this problem.

NARUC had a number of critical points that it members had put forth regarding the proposed increase in FERC jurisdiction.

States shall still be the primary authority in siting of interstate transmission with FERC serving as a backstop
FERC shall have no intrastate authority on transmission or distribution
FERC shall not override regional transmission plans
Cost allocation methodology needs to be in place before any approvals are given
FERC shall not override retail rate making authority, generation siting and/or distribution interconnections
FERC shall not override bundled retail transmission schemes.

The proposed RPS is very ambitious and widely believed that either the House or Senate version will make it into law. In order to meet the RPS levels will require substantially enhanced transmission capabilities. At the same time, it will be important that grid reliability and congestion management objectives are not secondary to gettting green power to market. Multiple objectives from EPACT 2005 and the latest proposals can be achieved. However, the challenges are tough and the number of (perhaps unaligned) stakeholders are large.

“the dog caught the bus” — Google

Joe H — Fri, 01 May 2009 17:28:49 +0000

Dan Reicher, Director of Climate Change and Energy Initiatives, Google, Inc spoke to a packed audience of 300-500 who were looking for insights. Dan, who is also a co-chairman of the American Council of Renewable Energy (ACORE), was part of Obama’s transition team and seemed to have had some real influence in the energy provisions within the Stimulus Bill. After decades of working to bring real renewable energy to the US, he felt (as did almost all others) that the time has finally come.

Google didn’t share much information that has not previously been reported or known about the company’s interest in energy. Dan indicated that Google is interested in renewable energy for profit and for goodwill reasons. They are a big user of power and expect this to increase. Google’s energy interest are primarily broken down into two areas:

RE
Information: Given Google’s principal business lines, this is of little surprise. Recently they announced their effort to provide online software that when incorporated with smart meters, would allow households to evaluate their energy usage and ultimately find ways to change usage behavior. Changes in behavior would be driven by the end customers interest in reducing consumption or in better understanding the mix of energy used to supply the household during any period of the day.

Anecdotally, Google has found that by simply monitoring household usage and being more conscious, 5% of typical daily kwh could be saved. Not very scientific, but they were surprised at these findings. In addition, the effects of simple daily actions in the house now took on more meaning. It also helped a particular beta tester determine that their pool pump had likely been running non-stop for years.

At this point, Dan opened the discussion up to questions from the audience. Predictably, questions were all over the place.

Interestingly, when asked about what they might be doing to get utiliites/state regulators to provide time of use rates for households so that their metering software could achieve maximum potential, they agreed that this would be very hard (50 different jurisdictions) and would likely limit the impact of their software and initiatives. Simply, with meters, software and time of use rates, households would have the economic incentive to load shift (e.g. drying clothes in the middle of the night).

After the presentation, I spoke with the head of ACORE about this issue and he said there was zero interest by utiltiies and commissions to expand retail choice. He thought that this would have to be mandated at the federal level… right after the passing of a national renewable portfolio standard.

Smart Grid Information Clearinghouse

Joe H — Fri, 01 May 2009 17:18:20 +0000

Transmission Loading Relief

The newly passed Stimulus Law contains provisions and incentives for Smart Grid investments and demonstration projects. However, as a requirement for funds, the user must agree to provide information on the demonstration and other elements to a information clearinghouse administered by the Sec of Energy. While the grid companies are principally owned by utilities and operated as monopolies, 3rd party technology providers may be less willing to provide information as part of a publicly funded project if it will be shared. Confidentiality provisions are contemplated, but it is difficult to determine how much will need to be shared.

It is understandable that the government (and taxpayers) want to get the most for their money and avoid duplication of effort, but sophisticated and proprietary algorithms and methodologies are at the root of the smart grid technologies. For these technology companies, the challenges in the past have been related to gaining acceptance by the utilities who are quite reluctant to change. Giving up IP may limit the ability to reach a workable solution.

As utilities are paid as a return on their asset base, smart grid technologies and efficiency programs ultimately mean less energy usage. This will result in lower per kwh earnings for the utility which may drive higher end customer rates.

There is huge need to get more out of the existing grid network versus building more transmission capacity (difficult to do) and/or adding more power plants. In particular, the system is highly constrained particularly along the NorthEast corridor and in Texas.

To acheive a successful result will mean (still) years of testing and then final (and gradual) acceptance by the utilities and by the regulators. In the mean time, we will be left with a grid system highly prone to failure as shown in graph below.

Customers (as they have been doing) will have to take some energy reliability actions themselves either through back up power and/or through power conditioning systems.

Smart Grid technology companies may consider approaching those that market and trade energy on the grid to test their algorithms amongst a group with high profit incentives. The feedback from the “traders” on the ability to use these technology algorithms may provide the quickest and most robust “commercial testing” of the technology without having to share information via a clearinghouse.