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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.

“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.