As mentioned in last week’s blog entry, a draft document from the Illinois Statewide Smart Grid Collaborative describing Smart Grid Applications and Technologies provides an excellent summary of various smart grid applications and their benefits to various stakeholders as well as a description of the technologies that would be used to implement these applications. The ISSGC was charted by the Illinois Commerce Commission in 2008 to accomplish the following major goals:
- Develop a strategic plan to guide Smart Grid deployment
- Recommend policies to guide Smart Grid Deployment
- Analyze benefits and costs for utilities and consumers.
Erich Gunther of Enernex Corporation was selected by the ICC to facilitate the ISSGC.
The Smart Grid Applications chapter of the final report was published on June 21 and will be reviewed at an ISSGC meeting this week. The purpose of this chapter is to provide a definition of Smart Grid and its functionalities, providing a context within which the ICC can evaluate Smart Grid proposals. The chapter addresses both applications and technologies which it defines as follows:
- Smart grid applications integrate hardware, software, and/or infrastructure (technologies) to deliver defined smart grid functionality and value.
- Smart grid technologies are the hardware, software, and infrastructure building blocks needed for the applications to deliver smart grid functionality/value.
The chapter defines the following Smart Grid applications:
- AMI Applications
- Customer-Oriented Applications ( in-home monitors, web portals etc)
- Demand Response Applications
- Distribution Automation Applications
- System and Asset Monitoring Applications
- Distributed Resource Applications
- Transmission Applications
The corresponding Technologies that are covered are:
- End Point Technologies (AMI meters, EV charging portals and in-premises devices)
- Line Technologies (capacitor banks, sensors, feeder switches, reclosers)
- Substation Technologies (fault monitoring, data concentrators, computer systems, FACTS devices)
- Telecommunications technologies
- Enterprise Systems Technologies (meter data management systems, asset management systems, SCADA etc)
The first thing to notice is the breadth that this report covers. Much of the public debate around Smart Grid focuses only on smart meters, communication technology and demand response. As a result, and due to some well publicized public relations disasters, there is a serious risk that the entire Smart Grid initiative will be poorly perceived by the public and rejected by consumer advocacy groups and public utility commissions. The scramble to secure funding from the stimulus bill is also causing a rush to promote ill-conceived, narrowly defined plans that further erode the vision of a truly Smart Grid and undermine the effort to engage and inform the consumer about the benefits of this transformation of the national electrical grid. Even within the topic of demand response, there is much more subtlety than much of the public debate on this topic would suggest. The ISSGC report demonstrates an understanding of this and includes discussion of:
- demand response via price signals from the utility that leave the customer in control of how (or if) they will respond to the price fluctuations,
- direct load control which places the utility in control but only with the consent of the customer and in return for financial incentives that typically exceed the cost of any instantaneous energy savings,
- frequency sensing by devices or appliances at the customer premises to detect instability due to overload conditions within the grid and voluntarily reduce demand,
- signaling based on availability of renewable power to smart appliances that can choose to reduce demand when renewable power availability is low.
While some of these technologies are less mature and others have limited cost benefit projections, the fact that the ISSGC report addresses each of them shows the breadth of the analysis that has gone into this document and helps to expand the understanding of the range of possibilities that exist in the Smart Grid arena. It is necessary to expand the discussion of demand response beyond the idea of a socialist infringement on private liberty by monopolistic utilities supported by an overreaching government which many commentators seem to see in this area. Renewable based signaling in particular is something that I have seen no coverage of and illustrates the innovative potential of the Smart Grid which is difficult to predict. Once we have reliable two way communications between the utility and the consumer via AMI systems, innovators will find new and exciting ways to leverage the available communications and data to develop new products and services that will benefit both consumers and utilities alike.
For each covered application, the report provides a description of the application, and identifies potential sources of cost, benefits and beneficiaries, and potential negative impacts. Benefits are assessed for likelihood and significance and categorized as primary or secondary benefits. Beneficiaries include utilities, the regional electricity market, RTO/ISO entities, competitive suppliers and third parties, customers and society at large. The customer beneficiary is segmented into residential/small business customers, medium sized businesses and large businesses. Each of these groups is further segmented into active and passive participants. Active participants are those who engage with the utility to accrue the benefits of Smart Grid. Passive participants are those to whom benefits accrue as a result of general improvements in reliability, availability, cost etc .
Considering one specific area of Smart Grid applications about which there is much debate concerning benefits, the section on AMI applications provides the following major insights:
- Core AMI functionality has no direct customer benefit. All customer benefits are indirectly achieved through benefits that accrue to the utility.
- The primary benefits of core AMI functionality which accrue to utilities include; increased field labor productivity, improved employee safety, and improved forecasting ability.
- Secondary benefits from core AMI functionality can include reduced back office support costs, reduced lost revenues through theft and improved situational awareness for the utilities, the ability for competitive suppliers and third parties to offer improved or expanded products and services and a reduced carbon footprint benefiting society at large.
- Remote Connect/Disconnect, which is an incremental capability offered on top of some AMI systems reinforces the core AMI utility benefits and adds the benefit of improved collections through remote disconnect. Secondary benefits of this application include improved service to customers wishing to schedule move-in/move-out changes on their accounts.
- Another application that is enabled by core AMI functionality is Outage Management Support whereby the smart meters can report outage situations to the utility. In addition to further improving field labor productivity, this application also improves system reliability and situational awareness for the utility as well as improving system availability for customers.
- Core AMI functionality can also enable Power Quality/Voltage Monitoring at the smart meter. This application also delivers improved system reliability and situational awareness to the utility and improved system availability and power quality for customers.
- Customer Prepayment Utilizing AMI offers improved collections or cash flow to utilities and enhanced services to customers. Note, the report assumes that customers choosing to participate in prepayment would do so because of some financial incentive such as not requiring a deposit payment to the utility.
This analysis is important to consider when utilities present rate cases, as BG&E did, that seek to transfer all of the cost of implementing core AMI functionality to the customer. By categorizing the benefits and beneficiaries of various Smart Grid applications in this way, the report provides valuable information to the ICC to frame the debate about how a particular Smart Grid project should be funded.
If widely disseminated, this report should also help to inform the public debate about the breadth of technologies and applications that exist under the umbrella of Smart Grid and the benefits of Smart Grid in general.