Case Histories To Learn From
Studies published over the past several years report impressive returns on smart grid investments. However, these studies reflect cost / benefit evaluations and models that, for many reasons, cannot be applied directly to evaluate individual utility investments. The lack of a standard, commonly accepted utility-level cost / benefit framework has led to a number of utility smart grid analysis approaches that poorly serve utility decision-makers.. This paper describes the utilities’ challenges and identifies difficulties associated with several common approaches to smart grid investment analysis.
Data is the fundamental currency of the smart grid. A clear understanding of how this data is generated, what it consists of and the benefi ts it can be used to deliver is critical to realizing the fullest possible returns from smart grid investments.
The issue in this white paper, therefore, is to determine what legal and regulatory relics of an earlier era are still present and may serve as barriers to, or enablers of, the full, economically justifiable deployment and exploitation of smart grid technology. Through an analysis of 11 states, this paper is focused on identifying those historical barriers and enablers, with an emphasis on state regulation. The rationales for those barriers and enablers are then analyzed in both a historical and policy context.
In nearly every state in the U.S., utilities are installing smart meters, according to a May 2009 Edison Foundation report. At a global level, 37% of utilities have smart grid projects under way, according to the recent Microsoft Worldwide Utility Industry Survey.
But this kind of transformation doesn’t just happen with the installation of smart meters, grid communications networks and smart devices. Challenges range from financial and regulatory, to technology and ROI. Something is needed to pull this all together and pave the way to new business opportunities and collaborative partnerships between suppliers and consumers.
That “something” is an integration platform. Clearly, the infrastructure that enabled utilities to interact with consumers on a monthly basis just won’t cut it anymore – an underlying integration platform is required that supports on-demand, two-way communications, supported by information processed in real-time.
A number of studies have been conducted in recent years on how to assure effective and efficient utilization of an owner or operator’s capital. Industry project management best practices have been established that cross all industry sectors, but in the heat of an active project environment we often circumvent these best practices due to time constraints, resource limitations or a lack of respect for the benefits of the practice.
Analysis of comprehensive smart grid technology applications at 200 of the largest US utilities shows potential smart grid savings of 115,145 MegaWatts (MW) with avoided costs of more than $120 billion and net savings after smart grid costs of $48 billion. This study is the first to apply individual utility customer end-use hourly electric loads to evaluate smart grid costs and benefits. Data for more than 800,000 residential and commercial utility customers in the 200 largest US utilities were applied in the study.
In 2003, Austin Energy based in Texas, US, began a long journey to explore and deploy the technologies enabling the Smart Grids of the future. The first part of Austin Energy’s programme, called Smart Grid 1.0, to be concluded at the end of 2009, focuses on the utility side of the grid, going from the central power plant through the transmission and distribution systems and all the way to the meter and back. In total, the project covered the installation of 410,000 meters, 86,000 thermostats, 2,500 sensors, 1,700 computers and 1,000 network elements. Enterprise system architecture redesign and back-office integration were key to successfully orchestrate all the pieces of the project. Before the project was wrapped up, in December 2008, Austin Energy launched the second phase of the journey towards intelligent grid: Smart Grid 2.0, developed in conjunction with the Pecan Street Project. Smart Grid 2.0 focuses on the grid beyond the meter and into the premise (e.g. home, office, store, mall, and buildings) with integration back to the utility grid. The project is concerned with managing and leveraging distributed generation (e.g. solar, micro wind), storage, electric vehicles, and smart appliances on the customer side of the meter.
The security requirements of distribution automation are quite different than those at the transmission and generation levels of the power network. To automate the distribution network, a utility has to deploy a large number of geographically dispersed simple devices that use a variety of communication technologies including wireless and dialup. Typical field devices have limited computational capacity, and communications are often established on demand, using low bandwidth connections. Maintenance is provided by a large number of field technicians for which access and permissions must be managed.
Austin Energy in the first few years of this century, when the company conceived a grand vision for the transformation of its entire operating model—a vision that has evolved into an Intelligent Utility Network (IUN) or smart grid.
Austin Energy is at the forefront of the drive to create a better way to generate, deliver and manage power and is among the thought leaders in smart grid implementations. The utility’s vision is to make better use of resources, improve service to its customers, become more responsive to outages and encourage conservation. To achieve these goals, Austin Energy devised a mosaic of approaches to transform the grid.
The brilliance of Austin Energy’s idea is that it does not focus only on technical solutions. For example, the utility is looking to make use of off-peak generation capacity (power that is less expensive to produce) to make ice, which is then used to cool buildings in downtown Austin the next day. It’s a stunningly simple idea; a non-technological answer to the issue of energy storage and peak load reduction.
“…As a municipal utility, the city owns the utility, and so one of the things that was important was to build a communications system that could be shared by multiple city services — not just Smart Grid. One of the things that was attractive about Tropos was the ability to support AMI and distribution automation as well as police, fire, public works and all of the other city departments. We viewed the Tropos installation as kind of a down payment on a larger, more comprehensive citywide communication foundation. We liked that we could start with AMI and then add water’s applications and distribution automation and if the city wants to add public safety, fire and public works and so on, there’s very little additional investment. We end up with a robust multi-use network and have the latency and the bandwidth that is needed to serve all of those applications…”
Buckeye Power, Inc. is the wholesale power supplier for the 25 electric distribution cooperatives operating in Ohio. The 25 cooperatives combined serve more than 380,000 homes and businesses in 77 of Ohio’s 88 counties. This combined service territory covers about 40 percent of Ohio’s land area, including a majority of the state’s rural sections. It is in this area that Ohio’s major source of agricultural business is produced for the state’s population, as well as a large export market.
To enhance system reliability, Buckeye Power wanted a system that could report outages from the more than 330 delivery points on their system. In addition, operations wanted power quality information from the delivery points as well. By combining outage data with power quality information, Buckeye could achieve better real-time monitoring of the delivery points on their system.
Entergy, a Fortune 500 company with 14,300 employees, produces and delivers electric power to 2.7 million customers in Arkansas, Louisiana, Mississippi, and Texas.
The company has captured trillions of records from its supervisory control and data acquisition (SCADA) system and its more than 320,000 SCADA objects. To better extract value from SCADA data, the utility deployed a real-time data storage application, called Pegasus RDS™, which was created by Microsoft® partner Nobadeer Software, Inc. using the Microsoft Application Platform, including Microsoft SQL Server® and Microsoft Visual Studio®. The solution, which manages trillions of records, will soon be upgraded to SQL Server 2008. Pegasus RDS gives Entergy numerous benefits including a better view into its data which helps the utility to identify potential problems early so it can act proactively to protect its electrical grid.
As a pioneer in the utility industry, JEA embarked in 2004 on a search for ways to extend the value of its smart metering investments beyond automated meter reading. After a thorough review and prioritization of business needs JEA management decided on requirements to address the following critical areas:
• Improve customer service and billing exception handling by providing customer care consultants with easy access to current usage history.
• Automate meter operations in order to reduce field service costs associated with physical disconnects, manual meter reading and meter re-reads.
• Significantly enhance outage management capabilities
• Provide multi-vendor support for meter reads from Landis + Gyr AMR network, Itron MV90 and Itron handhelds.
• JEA also set disciplined budgets for the initiative and aimed to minimize impact on existing IT infrastructure.
ESB Networks, the electric network utility in Ireland, and the Ireland government are developing one of the most comprehensive smart grid initiatives that will support the Irish government’s aggressive targets for wind integration, energy efficiency, and electric vehicle integration.
ESB Networks has joined the smart grid demonstration initiative organized by the Electric Power Research Institute (EPRI) to collaborate during the development of the smart grid in Ireland while learning from other smart grid deployments around the world. The Electricity Research Centre (ERC) of Ireland, with 16 industrial partners, is helping to coordinate and conduct the ongoing smart grid research. The two Ireland government agencies associated with this effort are the Sustainable Energy Authority of Ireland (SEAI) and the Commission for Energy Regulation (CER).
A key aspect of this demonstration project will be to understand the challenges of integrating renewable energy resources such as wind power into the electricity grid. The country has a target of providing nearly 40 percent of the total electric energy production through wind energy by 2020, and because it is an intermittent resource system operators will need to understand how this resource will impact grid planning and operations.