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An Overview of Smart Grid Issues
Oregon Public Utility Commission
Smart Grid Workshop
September 9, 2009
Roger Levy, Lead Consultant
Smart Grid Technical Advisory Project
Charles Goldman, Program Manager
Electricity Markets and Policy Group
Lawrence Berkeley National Laboratory
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Smart Grid Technical Advisory Project
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Discussion Outline - Overview
What is Smart Grid ?
A. Define Smart Grid
a) Enable consumers
b) Automation
c) Alternatives Renewables
B. Establish a vision
a) Who is the customer
b) Problems to resolve
c) Costs and Benefits
d) Where do you start
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Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory
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A. Define Smart Grid
Smart Grid is System Integration
The Smart Grid is a system of information and
communication applications integrated with electric
generation, transmission, distribution, and end use
technologies which will :
Promote
Customer
Choice
Improve
Reliability
Integrate
Renewables
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[1] enable consumers to manage their usage and chose the most
economically efficient offering, while
[2] use automation and alternative resources to maintain delivery
system reliability and stability
[3] utilize the most environmentally gentle renewable, storage, and
generation alternatives.
Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory
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A. Define Smart Grid
Bulk Power
Generation
Bulk Power
Transmission
Power
Distribution
Customer
Devices
Power Delivery System
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Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory
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A. Define Smart Grid
1. Bulk Power
2. Distribution
3. Load
Technology
Alternative Generation, Storage, Sensors, and Controllers
Customer Authorized Usage and Billing Information
Generation
Alternatives
Generation
Alternatives
Generation
Alternatives
Sensors
Sensors
Bulk Power
Generation
Bulk Power
Transmission
Sensors
Power
Distribution
Customer
Devices
Smart
Appliances
Power Delivery System
Interval readings, voltage, outage and other information
Price, Reliability, Event Signals, Historical Usage, Alerts, Other Information
Information Systems
Utility
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Customer
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A. Define Smart Grid Residential Micro Grid
Distribution primary (13.2 kV)
Distribution Transformer
An efficient and reliable micro-grid
doesnt need to be large or overly
complex.
Secondary (120/240 V)
Power to Six Homes
Isolating Device
House 1
Fuel Cell, Power
conditioning, control
and Storage Equipment
House 2
Heat to Homes
Power System
Secondary
(120/240 V)
Isolating
Device
Utility System
Primary (13.2 kV)
Utility System
Interface &
Controller
This could be several homes or
several hundred homes the
generation & storage would simply
be scaled to accommodate the load.
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House 3
Distribution
Transformer
House 4
50 KVA
Inverter
(Synchronization, fault
protection, islanding
detection, etc.)
House 5
House 6
DC Bus
Fuel
Cell
Thermal
Storage
Charge
Regulator
Energy
Storage
Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory
Heat
Distribution
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A. Define Smart Grid
Claimed Societal Benefits
Attribute
Dramatic reduction in tailpipe emissions
1-6
Reduction in petroleum imports of >50%
1-5
Reduction in peak loads lowering prices for consumers
Improved grid reliability
4-6
Increased grid security
4-6
Positive environmental impact
1-7
Enable new products, services and competitive retail markets
Anticipate and respond to system disturbances (self-heal)
4-6
Perform continuous self-assessment, respond faster by
supplementing human operators.
4-6
10
Operate resiliently against attack and be less vulnerable to
natural disaster
4-6
1. PHEVs 2. Advanced Metering
5. Automation 6. Expert Systems
Realistic ?
2, 3, 5
3. Dynamic Rates 4. Sensing
7. New Technology
Sources: Industry presentations and publications, see Slide #9.
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Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory
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A. Define Smart Grid
Claimed Consumer Benefits
Attribute
Equivalent of $1.00 per gallon for gasoline
Provide prices and opportunity to buy when KWh prices are low
and sell when high
Home back-up power and mobile resource
Protecting against power losses and avoiding costly interruptions
and spoilage
2-7
Reducing the cost of electricity during peak power periods,
2-3
Customer choice from products to services
2, 3
Enhanced system reliability
2, 3
Enable active participation by consumers
power quality at different prices
1
2-7
1, 2-7
2, 3, 5, 7
2, 3, 5
10 Consumers access to information, control and options that allow
them to better manage energy and environmental costs
1. PHEVs 2. Advanced Metering
5. Automation 6. Expert Systems
Realistic ?
2, 3, 5, 7
3. Dynamic Rates 4. Sensing
7. New Technology
Sources: Industry presentations and publications, see Slide #9.
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Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory
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A. Define Smart Grid
Claimed Utility System Benefits
1 Minimizing energy transmission losses
Attribute
2 Improving the efficiency of the electricity grid.
2-7
3 Increased efficiency of power delivery
2-7
4 Extended asset life
5 Seamlessly integrate generation and storage options
6 Operate efficiently to improve load factors, lower system
losses, and improve maintenance.
7 Grid operators have new resource options to provide energy,
capacity and ancillary services
1. PHEVs 2. Advanced Metering
5. Automation 6. Expert Systems
Realistic ?
[2,3,5] [4-7]
[2,3,5] [4-7]
[2,3,5] [4-7]
3. Dynamic Rates 4. Sensing
7. New Technology
Sources
1. The Smart Grid Benefits and Challenges, EEI Annual Convention, J.Miller Modern Grid Strategy Team, June 16, 2008
2. What will the Smart Grid Look Like ?, A Vision for the Smart Grid., DOE Office of Electricity Delivery and Energy Reliability, June 2008.
3. Miscellaneous public reports, press releases, presentations, and private sources.
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Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory
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B. Vision of smart grid ?
1. Which customer(s) are you trying to serve: end-user
(rate payer) or the utility ?
2. What problem(s) are you trying to solve: manage future
costs, improve reliability, or integrate renewables ?
3. How is the Smart Grid different from what youve
already been doing ?
4. What are the smart grid costs and benefits?
5. Where do you start and what information do you need to
proceed: [1] Pilot programs or [2] Transition Plan ?
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Discussion Outline Key Issues
Key Smart Grid Regulatory Issues ?
1. Metering
2. Rates
a) Rate Design
b) Demand Response
c) Empowering the Customer
3. Reliability
4. Pilots or Transition Plans
5. Standards
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1. Metering
Key Issues ?
1. System integration vs. hardware integration
a) Advanced meters vs. Smart meters ?
b) What is the role of the HAN?
2. Establishing a business case [costs and benefits]
3. Targeted vs. system-wide implementation
4. Security and privacy who owns the data ?
5. Utility vs. the regulatory / customer use case
a) utility programs or open markets
b) Customer vs. utility control strategies
6. Standards Communication and hardware vs. data models.
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1. Metering: Two Fundamental Choices
Register Based Meters
Programmable Meters
1
Standard kWh
Electromechanical
kWh Cumulative
2
Remote Metering
[AMR]
Advanced Metering
Infrastructure [AMI]
kWh Cumulative
or TOU
kW Interval
kW Interval
Communication
Network
Enhanced
Communication Network
Smart Metering
HAN Gateway
Remote Service Switch
[connect / disconnect]
Meter Data
Management
Enhanced Meter Data
Management
Back Office Systems
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1. Metering: Two Fundamental Choices
Metering
Advanced
Metering System
Smart
Interval Recording
Tradeoffs - Issues
none
Primary Function
Interval Recording
Communications Capability
Network, two-way
Network, two-way into
customer premise
Focus on Meter Network
Reach into customer premise
Remotely Configurable
Demand Limit ConnectDisconnect Service Switch
A separate piece of
equipment
Integrated
Hardware Integration
Home Area Network Gateway
Separate system or
piece of equipment
Partially Integrated
Partial Hardware Integration
$70-$150
$130-$250
Cost, Depreciation,
Obsolescence
Interval kWh
Interval kWh
Customer device status
Rate Forms Supported
Flat, Tiered, TOU,
Dynamic
Flat, Tiered, TOU,
Dynamic
none
Support for Usage Displays
Remote Access
Separate Service
Integrated Plus Separate
Service
Thru the Meter
Obsolescence Ranking
Low to Moderate
Moderate to Uncertain
Increased Risk
Open
Gate Keeper Potential
May Limit Open Market
Cost Range per Meter
[excludes customer devices]
Data Collection
Support for Market Based Devices
and Services
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More complex data
Security and Privacy
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2. Rates and Pricing
Rate designs and pricing are the integrating link
between the physical utility transmissiondistribution system and customer
Rate designs influence the efficiency, demand
response, and renewable potential .
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2. Rates [Pricing] - Issues
Customer Acceptance, Bill Impacts
Dynamic Pricing
Default or Voluntary
Integrated Incentives
Customer Understanding
Rate Design
Simplification
Facilitate Dispatchable DR
Open vs. Closed Market
Wholesale Retail
Integration
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Time Differentiated Fixed Costs
Reliability vs. Congestion DR
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2. Rates and Pricing - Tradeoffs
a
f. Cumulative
Metering
Static
Interval metering provides data to support all rate forms.
Communication supports dynamic rate, outage
management, and customer information options.
Dynamic rates (CPP, RTP) reflect system costs and
support dispatchable economic and reliability options.
Static rates do not reflect system costs or performance
based rates / incentives.
Rate Form
TOU, Flat,
Tiered
bb. Dynamic
h
DR limited to:
Utility programs
Targeted end-uses
Voluntary participation
Participation payments
Utility owned equipment
Utility control strategies
Interval &
Communication
Voluntary,
opt-in
Rate
Participation
c
Default,
opt-out
i
Utility
Who
Controls
DR
Direct Control
d
d Customer
j
Limited Market
Utility
Specifies
Technology
Expanded Direct
Control
Technology
Guidance
e Open Market
Customer
Specifies
Technology
Default, opt-out rates create a market for DR.
EE and DR implicit conditions of service for all customers
DR ubiquitous system wide
Expands and creates a market for customer ownership
and competitive equipment providers.
Voluntary, opt-in rates restrict the creation of open
markets for DR and can significantly increase
transaction costs for utility or ISO/RT programs.
Limits ubiquity and value of DR.
Customer choice opens the market for competitive
non-utility DR suppliers and service providers
Direct control disincents customer ownership and
restricts competitive equipment and service providers
Customer value establishes technology options
Regulators establish: (1) Need for subsidies to
address market barriers, (2) Data models - to provide
interoperability, and (3) Data ownership to address
security and privacy
Utility establishes technology, value, and protocols.
Price Response
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2. Rates and Pricing Demand Response
Under some utility demand response programs, customers often can participate in
only one option at a time.
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2. Rates and Pricing Demand Response
Static Pricing
Flat -Tiered
Time of Use
Dynamic Pricing
Critical Peak Pricing
Real Time Pricing
Rate Design
System and
Customer
Capability to
Respond
Metering and
Communication
Needs
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3. Reliability
What are the Objectives ?
1. Reduce the Frequency of outages ?
2. Reduce Outage Duration ?
3. Contain the Magnitude / Scope of outages ?
4. Improve Customer Notification ?
5. Reduce Unserved kWh ?
6. Reduce Customer Outage Costs ?
7. Reduce the Outage Damage Function ?
8. Improve Reliability Indices ?
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3. Reliability
Defining and Measuring Reliability
There is no consistent definition, no universally applied industry standard
for defining and reporting reliability [ outages ].
Major and Sustained events dont capture power quality (sags and
surges) or momentary outages.
The value inherent in outage management is the reduction of the
customer outage cost, which is a function of multiple variables
including frequency, duration and customer type.
Clarify Objectives
What is the reliability objective (frequency, duration, cost)?
Is there more than one solution ?
Where in the system will reliability investments have the greatest value ?
How will you determine if reliability investments have been effective ?
Should you consider standardizing reporting criteria IEEE 1366-2003 ?
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4. Pilots or Transition
Pilot Programs considered experiments for testing or gauging shortterm customer issues, rates, incentives, or technology options that may or
may not lead to deployment.
Transition Programs - staged implementations or core deployments that
begins with a base system and plan for systematic testing, acceptance
and expansion with additional components over time.
1. What do you know ?
2. What are you trying to learn or test ?
a) Customer acceptance
b) Technology / Engineering Performance
c) Market / system operation
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4. Pilots or Transition Plans
Attributes
Objective
Pilots
Transition Plans
Test and Evaluate
Systematic Implementation
Scope
1. Tech evaluation
2. Customer acceptance
3. Cost effectiveness
Sampling
Yes focus on representation
No focus on operational
integration
Restricted avoid bias
Required manage response
< 2 years
5 or more years
No separate systems
Yes integration objectives
Separate systems
Integrated systems
Regulatory Approach
Voluntary participation
Default participation or opt-out
Equipment Ownership
Utility
Utility or customer
Restricted
Open
Customer Education
Duration
Back Office Integration
System Operations
Customer Choice
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1. Tech implementation
2. Customer education
3. Operational effectiveness
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5. Standards
Key Issues ?
1. Interoperability
2. Obsolescence
3. Where are standards needed?
4. Key challenges?
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5. Standards: Interoperability and Data Models
Data
Model
Interoperability
Utility Programs
o
o
o
o
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Vertically Integrated
Utility owns equipment
Utility installs / maintains
Utility controls
Open Market
o
o
o
o
o
Horizontally Integrated
Customer owns equipment
Third party installation
Customer / Third party maintains
Customer controls
Control
Signals
Price, Event
Signals
Interoperability is a
regulatory issue.
Interoperability is a
market issue.
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5. Standards: Interoperability and Data Models
The OpenADR standard outlines specific communication models that use the Internet to
send DR signals to end-use customer systems. The standard, initially developed for
commercial and industrial applications, may be leveraged in residential settings to
reduce cost, promote interoperability among DR technologies and allow utilities and
energy providers to better manage pricing and critical load issues while actively
engaging their consumers.*
Utility
LSE
Demand
Response
Event and
Price Server
Price
[Reliability and
Event Signals]
Receiver
Data
Model
Rate Design
Customer
Owned
Automated
Controls
[EMS, PCT, HA]
Tendril Achieves First Open ADR Compliant Platform, January 29, 2009, http://www.tendrilinc.com/2009/01/tendril-achieves-firstopen-adr-compliant-platform-2/
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