Elster and the Smart Grid

May 2009

Ali Mouslmani

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The Smart Grid vision…

• Efficient- Supports increased demand without additional infrastructure

• Accommodating- Open to energy from virtually any source including renewables as easily, transparently, and reliably as traditional generation technologies; capable of integrating new technologies such as energy storage as they become available & proven

• Intelligent- Capable of sensing system problems and intelligently rerouting power or altering loads to prevent or minimize impact

• Barrier reducing- Enabling real time communication between the consumer and utility allowing consumers to tailor their energy consumption based on individual preferences, like price and/or environmental concerns

• Quality focused- capable of delivering the power quality necessary- free of sags, spikes, disturbances, and interruptions, to power the increasingly digital economy, and the data centers, computers and electronicsnecessary to make it run

• Resilient- increasingly resistant to attack and natural disasters as it becomes more decentralized and reinforced with smart grid security protocols

• Green- slowing the advance of global climate change and offering a real path toward significant environmental improvement

What embodies the Smart Grid?

Grid

Modernization

Energy

Efficiency

Distributed

Energy Resources

Climate

Change

Demand

Response

Alternatives

& Renewables

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Smart Grid - Energy Efficiency

• Why Energy Efficiency?

– Large untapped resource- National Energy Efficiency Plan believes

50% of load growth can be met with energy efficiency programs

– Utilities are well positioned to deliver

– Multiple states have mandates

• How?

– Recognize it as a high-priority resource

– Make long term commitment to implement cost-effective programs

– Align utility incentives & ratemaking

– Educate & engage consumers

– Provide a feedback loop

• Studies show a consumption reduction of 4 to 15% when consumers

were given real-time feedback

Segment Efficiency Potential

Residential Median 26%

Commercial Median 22%

Industrial Median 14%

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• Existing

– Substation protection

– Feeder automation

– Distribution automation

– Volt-VAR optimization

• New

– Home area networking

– Distributed monitoring & control

– Distributed energy resources

– Micro-grids

• Goal

– Integrate existing grid monitoring & control to new distributed & consumer focused resources

• Requires new generation of distribution management systems

– Pervasive communications

– Advanced analytics

– Dynamic control

Smart Grid - Modernization

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*Source:”EEI Quantifying the Benefits of Dynamic Pricing In the Mass Market”, The Brattle Group

• A key element of the smart grid is dynamic energy pricing

– Dynamic pricing and smart grid technologies will enable consumers to see and react to pricing before they use energy, a powerful motivator for conservation

• Studies and pilots have shown a mass market elasticity of response

– Customers are more interested in programs if they realize a significant bill savings (10% or more)

• Demand response uses:

– Economic dispatch to reduce generation costs

– Socioeconomic dispatch where consumers respond for the benefit of society as whole

– Reliability dispatch to reduce/eliminate service interruptions

– Environmental sustainability dispatch when renewables such as wind or solar aren’t readily available

• Key Success Factor - Consumers will want something simple and accessible to interact with the grid. Set it and forget it.

Smart Grid -Demand Response

Source:”EEI Quantifying the Benefits of Dynamic Pricing In the Mass Market”, Jan 2008 Ahmad Faruqui & Lisa Wood, The Brattle Group

Critical Peak Pricing Non Critical Peak Pricing

7Source: WWEA Source: IEA

Smart Grid - Renewable Generation

Source: EPA

• Renewable energy roadmap

– Renewable portfolio standards exist in 33 states

• Major sources

– Wind : 2008 US overtook Germany as world’s leading source (25 of 121 total GW)

– Solar: US expected to take world lead this year

• Grid parity estimates between 2010-2015 based on

– Decreasing cost of Solar & Wind technologies

• Solar: Thin film, Building integrated PV

• Wind: Superconducting turbines

– Increasing costs of current generation

• Issues

– Distributed nature of supply

– Intermittency of supply

– Forecasting supply (availability, adequacy)

– Potential for decreased reliability

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Smart Grid - Distributed Energy Resources

• Micro-generation

– Recuperative micro-turbines

– Combined heat & power

– Fuel cells

• Energy storage

– Ice energy storage for AC

– Rechargeable batteries

• Plug in Electric Hybrids (PHEVs)

– As a distributed energy resource

• e.g. “better place” battery exchanges & charge spots powered via renewable energy

– Vehicle-to-grid = source for on-peak supply & energy storage (potentially selective)

• Goal of all distributed energy resources is efficiency,demand distribution / peak shaving, environmental impact reduction & other ancillary services

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Source: EPA

Alliance for Climate Protection:9% Activists

35% Engaged

38% State of Fear18% Ignorant of Issues

EIA Base Case

2007

Smart Grid - Climate Change

• Target reduction of GHG emissions– 19 States have established targets

• EPRI estimates the US Electric sector can by 2030 achieve a reduction to below 1990 levels through:– Energy efficiency

– Renewables

– Nuclear & advanced coal generation

– CO2 capture & storage

– Distributed energy resources

– Plug-in hybrid electric vehicles

– Demand Response

• Engaging consumers is key

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Smart Grid Enablers

• Integrated Communications – Robust, integrated, two-way communications

• Sensing and Measurement – Enhanced synchronized distribution system measurement and monitoring

• Advanced Components – Power system devices that apply the latest in materials, energy storage, and electronics to determine the grid’s behavior

• Advanced Control Methods – Methods to monitor essential grid components and enable rapid diagnosis and timely, appropriate, response to any event

• Improved Interfaces and Decision Support – Seamless, real-time applications that enable grid operators to make decisions quickly

• Applications – Linking consumers to producers and all elements of the energy/resource value chain

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Smart Metering- Enabling the Smart Grid

Source: EPRI

The Smart Grid is an evolutionSmart Metering is today’s building block

SmartMeter

Smart Grid Impact

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Source: “The Green Grid - Energy Savings and Carbon Emissions Reductions Enabled by a Smart Grid”,

EPRI, O.Siddiqui June 2008

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A network of smart devices requires…

• Elster’s ubiquitous, reliable, scalable, & secure communications

– Distributed intelligence

• Scalable hierarchies, not client-server

– Scalable bandwidth

• Optimized cost-benefit by application

– Multi-mode communications

• Public & private services

• Open standards

– Secure

• Access Control

• Non-repudiation

• NERC CIP

• Encryption & Authentication (AES128)

– Mesh Networking

• Adaptive

• Guaranteed reliability (QoS)

• Deterministic latency

• Territory-wide coverage

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Elster Vision - Network Smart Devices

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Grid Node

• WAN-to-LAN

• LAN-to-LAN (Bridge)

• Home router

Comm/Grid

Applicance

• AMI collector/concentrator

• Dispatch coordination

• Circuit monitor

Comm/Grid

Applicance

Grid Node

Grid Node

Grid Node

• LAN

• Edge connection

• Battery-powered comms

Edge Router

Virtualized

Comm/GridAppliance

Grid Node

Grid Node

Grid Node

Grid Node • Meter (E,G,W)

• In-premise device

• Distribution sense

& control device

Grid Node

Grid Node

Grid Node

Grid Node

Grid Node

Collector Node

TCP/IP

Applications

Enterprise Connection

Network

Mgmt

Public/Private WAN

Op’s

Suite

Demand

Response

Distributed

Resource Mgmt

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Elster Enabled Smart Grid - Networks of Smart Devices

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• Time of Use & Interval data

– Time variant rates

• Continuous voltage monitoring and control

• Consumer feedback via Home Area Networking

– Integrated 900MHz

– ZigBee Pro Smart Energy Profile

– Multiple in-home/premise displays/devices & services

• E, G, W consumption

• Rates, estimated cost

• CO2 footprints

• Whole home disconnect/reconnect

– Load limiting

– Remote load control

• Prepayment

– Central wallet

– With or without in-home displays

– With or without time-variant rates

Elster Energy Efficiency Solutions

Source: Residential Energy Consumption Survey, 2001

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• Distributed measurement nodes

– Time synchronous interval data measurement

• Entire distribution grid

– Sense today, control tomorrow (in development)

• Outage & restoration notification

– Momentary counts, Outage indices monitoring & calc

• Voltage monitoring & control

• Power quality monitoring & control

• Loss detection

• Load flow/state estimation

– Recloser monitoring

• Distribution Automation

– DNP routing

– Cap bank control

– Feeder reconfigurationMeter: Power On

Meter: Power OffTransformer Outage

Meter: Power cycled

Momentaries > threshold

Elster Grid Modernization Solutions

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• Capabilities– Appliance control

– Thermostat set point control

– Impending event indicator

– User override of thermostat control

– Displays energy usage information

– Rate information & cost estimation

– Command acknowledgement

– Verification and override events

• Home area networking (HAN)– 2-way communications

– ZigBee Pro + Smart Energy Profile

– Demand Response Command Center

• Thermostat

• Remote load control

• Energy Management– Configure (program)

– Set-back / control

– Load control scheduling

Demand ResponseControl Center

Remote Load Control

Elster Demand Response Solutions

1919

Smart Grid and Smart MeteringEnergy Efficiency, Demand Response, & Climate Change

Load

Reduction

Time -Differentiated Rates2-12%

Time Differentiated

Rates

Time Differentiated

Rates

Awareness & ResourceEfficiency

4-15%Customer Feedback

Customer

Feedback

Customer

Feedback

20-30% LoadLoad

ControlControl

LoadControl

LoadControl

12-40%Demand Response

Demand

Response

Demand

Response

15-35%Automated

Demand Response

Automated

Demand

Response

Automated

Demand

Response

ClimateChange

Smart Grid Network

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• Distributed Energy Resources & Renewables

– Integration into reserve management programs

– Networked in-premise/facility measurement

– Time synchronous interval data

• In-home/premise displays

– Monitoring of renewables

• Solution integration (control)

– Net consumption

• Load control for zero net

• CO2 footprint / intermittency

• DR / control

• Energy storage dispatch

– Net consumption

• Distributed Generation & Renewables

– Net consumption

Elster Distributed Energy Resource & Renewables

Solutions

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Elster delivered smart grid enablers

• Integrated Communications

– Provides the critical connection between the grid and the system operator

• Sensing and Measurement

– Smart meters extensively measure system conditions down to the consumer level

• Advanced Control Methods

– Consumer-side applications react to available information and initiate control actions locally.

– Distribution operations centers process collected information and take control actions at the system and regional level

• Advanced Grid Components

– Supporting the deployment of distributed energy resources and can reduce communication costs of distribution automation components

• Improved Interfaces & Decision Support

– Web portals, home area networks, and in-home displays provide interface and support consumer decision-making

– Decision support at distribution operations centers enabled by the additional information provided by smart metering systems

• Open and Interoperable

– Allow best of breed solution integration and flexibility in solution choices through support of smart grid standard

• Climate Change

– Connecting consumers to the grid via home area networking allows active consumer participation in conversation and energy efficiency programs

– Allows for seamless integration of renewables and other distributed energy resources into the grid

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Elster MissionEnable energy and environmental sustainability

• Through pervasive, scalable, secure two-way networks of smart devices (sense, measurement, and control nodes)

• Delivering an open and interoperable system architecture that will adapt to your smart grid needs today and in the future

• Creating more than just a communications pipe. Leveraging in network distributed intelligence to enable smart grid applications

• Support demand response programs through time variable usage measurement and consumer linkage through home area networking capabilities

• Create seamless data access through enterprise information integration & applications

• Deliver these capabilities while in a cost effective smart metering and smart grid system solution deployable today

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Elster Value Proposition

• Proven track record of delivering market leading products, systems and solutions to the gas, water, and electric utility industry for over 170 years

• We are financially strong with revenues exceeding $2B and growing

• We are investing and will continue to invest in our smart metering and smart grid system solutions to ensure they remain world-class in capability and flexibility

• We have market leading experience with over 2M smart meters

• We have lead the market in piloting smart grid concepts such as demand response and grid sensing nodes

• We are global and can support customers in markets from North America, South America, Europe, Africa, Asia and the Middle East

• We local and understand the unique requirements of our customer markets and are able to deliver tailored solutions to meet business needs

• We want to be your partner in creating the smart grid

24Copyright © 2008 Elster Integrated Solutions 24

Thank-you

Ali Mouslmani

Elster

May 2009