Volt-VAR optimization: Is it for energy efficiency or demand response?
Don Parker, Alabama Power Company and Jared Green, Electric Power Research Institute
Optimization of the electric distribution system has received an enormous amount of interest over the past few years with smart grid initiatives. By controlling the voltage and VAR levels of the system, many utilities are creating programs to optimize the power flow from the distribution substation to the customer meter and even beyond the meter.
Historically, utilities have controlled the voltage level at the point of regulation, either at the load-tap changing transformer (LTC) or line regulator, so that the voltage at all points along the feeder is maintained within established standards such as ANSI Standard C84.1-1995 or CAN3-C235-83 (R2000). Capacitor banks are then added along the distribution line to maintain the power factor as high as possible for reduced losses and additional voltage support. Typically, the controllers for these devices operate the system based on a standard set of parameters and the local conditions at the device.
With the proliferation of communication capability into every area of the electrical system over the last decade, utilities now utilize the data from communicating devices to aid in improving the power flow across the electrical system. In the future, utilities will be able to use sensors along the line, including AMI meters, as communication nodes to relay information back to the regulation devices and capacitor banks. This remote feedback will allow utilities to fine tune the system for its most efficient operation for any given time of the day or year.
Currently, the two primary modes of Volt-VAR optimization (VVO) under consideration are energy efficiency (EE) and demand response (DR). The energy efficiency mode would call for the system to be operated year-round at a near-unity power factor with the voltage as near as possible to the lowest ANSI allowable voltage. As determined in the Electric Power Research Institute’s Green Circuits project and other documented research, end-use equipment typically operates most efficiently at the lower end of the usual operating voltage band. Operation of the distribution system at the lowest ANSI voltage would increase the risk of power quality and reliability issues for customers, such as voltage sags and more sustained outages. Based on findings by Alabama Power in the Green Circuits project, system line and transformer losses only accounted for a percentage, typically less than 5 percent, of the overall energy reduction when VVO was implemented.
On the other hand, the utility could choose to develop a DR program to utilize the VVO equipment during peak load periods. This mode of operation would control distribution devices in a manner that would maximize the demand reduction of the system. This type of operation might also result in a leading power factor at the substation; however, the excess VAR flow back to the transmission and generation systems should aid in the overall efficiency of the T&D system as a whole. This approach, as with the EE mode, would allow the utility to avoid building additional generation units, to defer capital improvement projects, and/or reduce demand charges from the generation supplier. However, the DR mode of operation would limit any loss of revenue and the potential for power quality issues since it would be used relatively few hours each year.
With recent technology advancements and research being performed with VVO programs and controllers, the utility would need the flexibility of selecting which mode of operation to use based on system conditions and the regulatory environment faced by that utility today and in the future. As evidence, utilities faced the challenges, at both the state and federal level, of meeting acid rain policies in the 1980s and climate change policies in the 1990s and these continue to evolve today. Depending on the structure of the utility, a utility in the western part of the U.S. may operate their VVO program in an EE mode for all hours of the year whereas a utility in the Southeast may operate a similar program in a DR mode for less than 100 hours per year. Although the mode of operation is different, each utility would be using their VVO program to achieve the maximum benefit for their customers and/or shareholders while addressing environmental and regulatory policies.