Lecture #10 The Smart Grid - New Server -- foothill25

Lecture #10Smart Grid

1

Ali Firouzi, Ph.D.

11/23/10

Lecture Outline

1. Introduction

2. Stakeholders & Drivers

3. Applications & Technologies

4. Challenges

2

1. Introduction

If Alexander Graham Bell were somehowtransported to the 21st century, he would not begin to recognize the components of modern technology (cell phone, texting,cell towers, iPhone, etc.)

… while Thomas Edison, one of the Grid’searly architects, would be quite familiar with the grid!

Bell vs. Edison

3

… the Grid as it stands

A Hodgepodge of electrical systems• 3 Interconnects (Western, Eastern, Texas)• >3000 electric utilities & >2000 IPPs• Hundreds of organizations• Diverse set of Federal, State, and local regulations

National Academy of Engineering• Grid: “Most significant engineering achievement of 20th century”• Highways: 11th; Internet: 13th

20th Century is struggling to keep up Electricity flows one way; information flows the other way Produce as much as you think you need, without much feedback, but

make sure you have enough so customers don’t go without 99.97% reliable: $150B/yr cost ($500/person/yr)

A call for ‘Unified National Smart Grid’- Al Gore4

No single definition

Coined in 2007 (A. Carvallo)

Smart Grid Dictionary (C. Hertzog)• “The Smart Grid is a bi-directional electric and

communication network that improves the reliability, security, and efficiency of the electric system for small to large-scale generation, transmission, distribution, and storage”

• “It included software and hardware applications for dynamic, integrated, and interoperable optimization of electric system operations, maintenance, and planning; distributed generation interconnection integration; and feedback and controls at the consumer level”

Smart Grid Definition

5

Smart Grid Conceptual Model

source: EPRI Intelligrid Architecture

6

+

Smart Grid Evolution, Not Revolution

Modernizing the Grid “on the fly”

A Tale of Two Timelines:1. Short-Term: the “Smarter Grid”

• Valuable technologies that can be deployed within the very near future or are already deployed today

• A Smarter Grid will function more efficiently, enabling it to deliver more for less, while offering social and environmental benefits

2. Long-Term: the “Smart Grid”• Grid with remarkable intelligence and impressive scope

• Transformational change (similar to the internet)

7

Smart Grid Market Size

source: US Dept of Commerce and DOE

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2. Stakeholders

Utilities Smart Grid

Consumers Policymakers

Technology Providers

Federal & State Regulators

Environmental Groups

9source: DOE

Drivers’ Interactions (Pull & Push)

Policy

Market Technology

10

Policy Drivers

1. Energy independence & security• Decreasing fuel supplies• On-going dependence on volatile nations• Raising/volatile fuel costs

2. Economic considerations• Rising asset costs• Job creation/business opportunities

3. Environmental considerations• Awareness of environmental issues (global warming)• Social pressures (particularly in EU)

4. Regulation & Funding• Renewable Portfolio Standards (RPS)• Energy Independence Act of 2007; ARRA: $4B for Smart Grid• Climate Bill (to come?)

11

Market Drivers

1. Growing energy (and peak) demand• Appliances, electronics, data centers, PHEV/BEV introduction • Demand response

2. Increased efficiency thru grid optimization• Least cost power algorithms at substation distribution

3. Infrastructure reliability & security• Blackout/brownouts cost $150B annually• 21st century power quality (PQ)• Anticipate and automatically respond to system disturbances• Network/systems tolerant of natural disaster or attacks

4. Advanced consumer services• Robust, simple consumer energy management platforms• Networked devices within the “smart home”• Active role in efficient power usage & pricing models

12

Technology Drivers

1. Alternative energy

• Trends toward distributed resources

• Growing supply of renewables generation and storage

• Intelligent support for intermittent renewables integration

2. Smart grid technology advancements

• Convergence of IT, Telecom, and Energy

• Rapid innovation of a range of news products & Solutions

• Significant amount of VC investment

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3. Applications & Technologies(Convergence of Three Giant Industries)

Electric Power Infrastructure

(Energy)

Smart Grid

Telecommunication Infrastructure

(Telecom)

Information Technology

(IT)

14

… with Expertise in Three High-Level Layers

Physical Power(Generation, T&D)

Layer

Smart Grid

Data Transport & Control

Layer

Applications & Services

Layer

15

DifferentCurrencies & Media

Language & Culture

(Nervous System) (Intelligence/Brain)

(Human Body)

(Muscular System)

Origin of Smart Grid’s ‘SMARTS’

source:GTM Research

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End-to-End Smart Grid: High-Level

source:GTM Research

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End-to-End Smart Grid: Detailed

18

source:GTM Research

Leading Players by Market Segment

19

source:GTM Research

Smart Grid Building Blocks

20

source:The Cleantech Group (2010)

(1) (2) (3)(4) (5)order coveredIn this lecture

Lectures 2-3Lecture 9 Lectures 5-8

Smart Grid Venture Capital Spending (2007-2010)

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Total: $1.68 Billion

Advanced Metering Infrastructure (AMI)

Purpose

• A system that measures, collects, and analyzes energy usage by enabling data to be sent back and forth over a 2-way communication network, connecting advanced meters (Smart Meter) and utility’s control systems.

The Enabling Technology

• Provides utilities unmatched system management/control

• Foundation of the Smart Grid• It had been the “missing link”

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Automated Meter Reading (AMR)

• Capable of integrating a communication unit to transmit data, in at least one direction, that has been collected (even if only a few ft to a handheld device)

• 1st Generation– Majority of units shipped through 2009– Unidirectional & only over short distance to a mobile unit– Not capable of any other form of communication or control

• 2nd Generation– The so-called “Smart Meter” or AMI meter– Richer meter data over longer distances and bi-directionally over a fixed network

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Tota

l AM

R

• 82 Million Cumulative by 2009• 12 Million AMI units• 20 Million AMI by 2010

AMR

AMI

AMI: TWO Layers1. Transport Layer: 2 components

A. The physical smart meter-replacing the older mechanical one

B. AMI Communications network to transport the data

2. Application Layer• Info converted to actionable intelligence via meter-specific applications

(1A)

(1B)

(2)

source:EKA Systems

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Transport Layer: The Smart Meter (1A)

4 features that make a Smart Meter, “smart”:

Deployments: • First wave of Smart Grid deployment: Millions in NA, Europe, Asia• Lion’s share of media attention: Obama calling for 40 million smart meters

Key Players:• Top 3 in the world: Itron (US), GE (US), Landis+Gyr (Switzerland)• Other notables: Echelon (San Jose), Elster (US), Sensus (US)• Most are also involved in AMI networking/communications

source:FERC

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Smart Meter Market Size


26

Features:• Bi-directional bridge between Smart Meter & Wide Area Network (WAN)

• Sometimes referred to as FAN (Field Area Network)- “last mile” analogy

Design Considerations:• Media: Radio, Cellular, Broadband over powerline, powerline carrier, fiber

• Network Type: Mesh, Wireless, or hybrid of the two

• Characteristics: reliability/resiliency, scalability, cost, resiliency and bandwidth

Transport Layer: Networking & Communications (1B)

Mesh Network Schematics

source:GTM Research

27

AMI Networking & CommunicationsNetwork Trade-offs

Competition is HEATING up real fast

• Europe has been favoring broadband over powerline

• North America’s leading solution: RF mesh networks

• Public Cell Phone Wireless making a run for it

RF Mesh Networks (900 MHz- unlicensed part of the spectrum)

• Advantages : scalability; reliability through redundancy

• Disadvantages: High latency (possibly not ‘future proof’)

Cellular Wireless: 3G and WiMax (4G)

• Advantages : entire network build-out not necessary; low latency

• Disadvantages: expensive licensed network, expensive meters

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AMI Networking & Communications: Key Players

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Company HQPublic/

Private

Product

Name

AMI

Network

Utility

PartnershipsComments

ElsterRaleigh,

NCPrivate EnergyAxis

900 MHz RF -

MeshAPS

ItronLiberty Lake,

WA

Public

(ITRI)OpenWay

900 MHz RF -

MeshSCE, SDG&E, DTE embedded Ember's ZigBee for HAN gateway

Landis+GyrZug,

SwitzerlandPrivate GridStream

900 MHz RF -

MeshPG&E, Oncor, PHI secured 4 major NA contracts

Eka SystemsGermantown,

MdPrivate EkaNet

900 MHz/ 2.4 GHz

RF - MeshN/A two note-worthy pilots; needs large-scale utility

Silver Spring

Networks

Rewood City,

CAPrivate

Smart Energy

Platform

900 MHz RF -

Mesh

PG&E, Florida

P&L, PHI

leader in AMI networking with many contracts;

has raised $275M to date; recent acquisitions

TrilliantRewood City,

CAPrivate SecureMesh

900 MHz RF -

MeshHydro One as of Oct '08 crossed $100M revenue mark

SensusRaleigh,

NCPrivate FlexNet

FCC licensed

spectrumSouthern Co.

EchelonSan Jose,

CA

Public

(ELON)Lon Works Powerline Duke Energy to use T-Mobile's cellular network in future

CurrentGermantown,

MdPrivate SmarrGrid

Fiber Optics,

Cellular NetworksXcel Energy

expensive low latency IP-based communications

(3G, WiMax); SmartGridCity contract

Smart SynchJackson,

MSPrivate N/A

GSM/CDMA

Cellular

Hydro One,

PG&E, SCE, AEP

partnership with wireless networks (AT&T, T-

Mobile)

CiscoSan Jose,

CA

Public

(CSCO)

Cisco

Smart Grid

Fiber Optics,

Cellular Networks

Florida P&L,

Duke Energy

communications architecture based on IP

protocols

Venture-backed, start-up communications vendors

AMI Networking Market Size


30

Functions:• Remote meter reading

• Customer Relationship Management (CRM)

• Customer Care and Billing (CIS)

• Short interval readings (TOU/market-based energy rates)

• Outage Management Systems (OMS)

• Tamper and theft detection

• Remote connect/disconnect

Key Players:• Aclara Software (Wellesley, MA) - subsidiary of ESCO NYSE: ESE

• Ecologic (Bloomington, MN); key partner of PG&E

• eMeter (San Mateo, CA); 20 million meters under contract

• OSIsoft (San Mateo, CA); partnership with GridPoint

AMI: Application Layer (2)Meter Data Management (MDM)

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Meter Data Consolidation as Integration Layer

32

source: eMeter

AMI Supply Chain & Related Costs

33

source: Itron (2010)

AMI Vendor Ecosystem

34source: The Cleantech Group (2010)

Meters

AMI Communications

Meter Data Management (MDM)

HW & Subsystems Systems & SW Services

50%28%6%5%6%

28%3%22%9%27%4%11%5%

13%10%8%15%10%8%N/A

Specialists (pure-play)End-to-end solutions

2009 Communication Unit Shipments by Utility Type


AMI: Challenges/Opportunities

Leverage AMI as a transformative initiative

• Not simply another technology deployment

Transforming utility operating model and Redefining customer experience

• Foundation for mass penetration of distributed generation resources

• Gateway to Home Area Networks & future applications (EVs)

• Create possibility of new Energy trading markets Buy energy at different prices

Sell energy back to the grid

36

Demand Response (DR)Concept & Benefits

Highlights:• Utilities incentivize electricity

(commercial & industrial) customers to reduce consumption at critical, “peak” times, on demand

• Advanced contracts determine how/when utility reduces user’s load

• Future: extend to residential

Key Benefits:• Cheaper, faster, cleaner, more reliable

than peaking power plants• DR: $240/KW of capacity

Natural gas peaker: $400/KW• 5% decrease of Peak demand translates

to $3B in savings• 13 GW of actual peak reduction in ‘08

• 33 GW potential load reduction• $8 Billion total market opportunity source: EPRI

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Demand Response Chronology


Curtailment ServiceProviders

( )

(aka “Aggregators”)(≤ 200 kW)

(≤ 5 kW)

(≥ 200 kW)

2010 DR Market Share (15 GW total)


Demand Response Options

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1. Price-based

– Time-of-use (TOU)

– Real-time pricing (RTP)

– Critical Peak Pricing (CPP)

2. Incentive-based– Direct Load Control (DLC)

– Interruptible/Curtailable (I/C)

– Demand Bid/Buyback programs

– Emergency DemaDR programs

– Capacity Market programs

– Ancillary Services Market

source: The Cleantech Group (2010)

DR Evolution Through Various Change Agents


Demand Response (DR)Market & Players

Market:• FERC commissioner has called it the “killer app” of Smart Grid

• An intermediary third-party entity can act as the load aggregator Creation of a “virtual power plant”

• Estimated $1.5B market in 2008, growing to $8B in 5-10 yrs

• PG&E has one of the most comprehensive DR programs in place SmartRate trial of 10,000 customers showed 16% load reduction

Two Key Players (together managing over 4.5 GW of power):• Comverge (NASD: COMV); went public in 2007

Apollo Integrated Demand Management Response System

25% of DR portfolio from residential sector

• EnerNoc (NASD: ENOC); incorporated in 2003 Main Customers: ISO, Utility, commercial, institutional, industrial

1650 different customers

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Demand Response (DR)Future Challenges

Three Primary Challenges

1. Limited number of retail customers on time-based rates, which provides the necessary incentive to respond/react to market prices

2. Limitations to the number of customers that have access to meter data (and home energy management systems)

3. The scale of infrastructure investment needed to deploy enabling technologies during economic downterm

Other Factors

• “Big Brother” concern to having utilities control consumer appliances and assets

• As utilities develop Smart Grid infrastructures, is there a place for 3rd party aggregators?

43

One-line diagram ofbasic power system structure

44source: Alexandra von Meier (2006)

Generator

Bus CircuitBreaker

Step-up Transformer

Step-down Transformer @ Transmission

Substation

Step-down Transformer @

Distribution Substation

Primary Distribution

Line orFeeders

LateralFeeders

Step-down Distribution Transformer

Distribution Grid Management (DGM) Highlights

Definition• Umbrella term refer to communication- and data-enabled

improvements across all elements of electrical distribution system

• Increase in visibility and control• Historically: utilities have had ZERO control beyond the substation

Major Applications1. Distribution (feeder) Automation (DA)- millions of miles of lines

• Volt/Var Control

• Fault Detection, Isolation, and Recovery (FDIR)

• Feeder Monitoring, Maintenance, & Load Balancing

2. Substation Automation: 100,000 substations• Equipment Monitoring, Load Balancing, & Optimization

3. Distribution Management System (DSM)- “Brain” of the operation

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Distribution Grid Management Benefits

System Reliability• Monitor power flow and grid assets in real-time• Decrease the quantity and duration of faults and outages• Integrated operations data to make better decisions• Reduce equipment failure

Operational Efficiency• Re-route power to maximize efficiency• Optimize power delivery and improve PQ• Decrease in generation needs thru mitigation of energy losses• Improvements on system load serving capability

Asset utilization and Protection• Manage capital thru aging infrastructure challenges & economic downterm• Report on health and performance of critical grid assets

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DGM Distribution/Substation Automation

47

source: The Cleantech Group

(2010)

Mixture of Multi-Product & Equipment-Specific Vendors

Example of DGM Product Portfolio

48

source: Cooper Industries

LegacyApparatus

EnergyAutomationSolutions

(EAS)

U.S. Electric Utility Investment in DA

49

source: Newton Evans (2010)

Smart Grid Communication Requirements

50


Advanced Utility Control SystemsDefinition

Integrated Enterprise-Wide Approach

• Upgrade and continued integration of various mission-critical systems, applications, and back-end technology infrastructure necessary to support utility’s monitoring, control, and optimization of the grid.

Primarily includes:

• Energy Management Systems (EMS)

• Supervisory Control and Data Acquisition (SCADA) systems

• Distribution Management Systems (DMS)

• Other advanced applications Meter Data Management (MDM)

Energy Trading51

Advanced Utility Control SystemsArchitecture & Players

source:Reliance Energy

Key Players• DMS specific: Telvent, ABB, OSI, ACS, Siemens, Survalent

• Enterprise-wide: IBM, Oracle, SAP, HP, Logica, Accenture, Ventyx52

Incremental Value Capture

53source: Enernex (2010)

Home Energy Management (HEM)

Highlights

• Extend into homes/businesses: Customer-side of the Meter

• Add networking and intelligence to appliances, thermostats, HVAC, lighting

• Leads to the concept of Smart Home

• Without an end-to-end approach: cannot reap all the benefits

• ‘Bleeding Edge’ Technology

• The fun part of Smart Grid

54

Home Energy Management (HEM)Benefits

source: Edison Foundation 55

Home Energy Management (HEM)Components

1. The Communication Network Network within home enables devices/appliances to communicate

with each other and dynamically respond to price signals

Technologies (Wireless, Wired, or Hybrid) Wireless

ZigBee (low power wireless mesh closed network); dominant leader

WiFi; concerns with higher power requirements

Z-wave (sub-GHz frequency): low interference

6LoWPAN: low power, open IP-based network

Wired

HomePlug Power Alliance: leading promoter

2. The ‘portal’ or In-Home Display (IHD) Consumer interface energy data, setting consumption choices and

preferences, and option to sell generated/storage back to the grid56

HEM Communication Landscape

57


HEM Product Ecosystem


Building Energy Management(Product Ecosystem)


Grid Interconnection Ecosystem


Lecture6

Lecture5

Lecture7

Lecture8

Renewables Integration: Grid InflowHighlights

Large-scale, centralized renewable Grid integration

• Solar PV/CSP & Wind deployed ahead of distributed assets

• Integration into transmission easier than into distribution network

• Smart Grid is not the solution, mainly transmission constraints

Distributed Renewable Penetration

• A natural solution for developing countries Wireless network analogy for cell phone deployment

• Ability to create microgrids (on-grid & off-grid) Independent, self-reliant, small-scale grids that generate/store needed energy

“Islanding” in the event of power outage for on-grid microgrids

• Smart Grid needed for mass-scale ‘plug and play’ integration

• Drivers: cost, RPS mandates, subsidies, environment, etc.61

Renewables Integration: Grid Inflow Challenges

1. Variability/Intermittency/Unpredictability• RPS: CaISO: 20% by 2010 (will miss), 33% by 2020

• Renewables do not contribute to Grid Inertia & Stability

2. Bi-directional power flow to and from distributed points• IT/Communication concerns

Network reach to majority of customer

• Physical infrastructure issues Resizing power lines

Re-engineering architecture (transformers, circuit-breakers, etc.)

3. Resiliency & Security• Risk averse Utilities need high confidence to count on capacity

• Utility not in control of assents on the customer-side of the meter Lease real-estate (i.e., roof space) or revenue sharing model?

62

Control generator output w/ governor valve(‘droop characteristics’ for load-following)

63

source:

Alexandra von Meier (2006)

Load

Condition

Measured

Frequency

Steam Valve

Action

Inc Dec Open up

Dec Inc Close down

Load

Regulation: a contract between ISO and Poweplant to allow ISO to Inc/Dec output

Renewables Integration: Grid Inflow Selected Players

Smart Grid Pure-Plays• GridPoint

Most funded Start-up (> $220M)

Recently hired Xcel Energy’s CP and CIO

Wind/Storage (with NaS) pilot with Xcel Energy

PHEV pilot with Duke Energy

• Enernex

Multinational Generalists• GE

• Siemens

• Cisco

• IBM

• Google

• Oracle64

Energy Storage: Grid Inflow/Outflow

Missing link/holy grail• Commercialization of storage technologies a pressing challenge

• A Smart Grid w/o Storage is analogous to a computer w/o hard drive

• Cost-performance still not attractive

• Need subsidies, feed-in-tariffs, new markets

• Variety of prominent actors are finally on-board Politicians, Fortune 500s, start-ups, financial (VCs, institutional investors)

• Will Storage be the Achilles’ heel of Smart Grid?

Technology contenders relevant to Smart Grid (Energy apps)• Substation-scale for local distribution utility

Compressed Air Energy Storage (CAES)

Sodium Sulfur (NaS)

Flow Battery

• Community Energy Storage (CES) Lithium Ion

Advanced Lead Acid65

Electric Vehicles Integration: Grid Outflow

A Truly Disruptive Technology

• Market fundamentals in Automotive/Energy industries not in place

Two Distinct Challenges/Opportunities

• Charging during Grid to Vehicle (G2V) Millions of new “appliances” cause accidental peaks or system interruptions

NREL study with 4 methods: delayed and off-peak avoids additional capacity

• Discharging during Vehicle to Grid (V2G) Battery pack as storage means more frequent charge/discharge cycles

Incentives? How much consumers reasonable expect to earn?

Requires massive infrastructure

Key Players

• Gridpoint: collaboration with Xcel and Duke for Wind/PHEV charging

• Better Place, Coulomb Technologies, Ecotality, etc66

Load-Based Regulation with EVs(“Smart Charging”)

• Current Approach for Frequency Regulation:– Generation is “load following”

• Smart Charging:– Some of the load can become “generation-following”

• EVs can be aggregated & controlled to have the net recharging power match regulation dispatch command

• Other good candidates for time-shifting the load:– Electric hot water heaters, Refrigerators, Dishwashers

67

EV response is muchfaster than a PowerPlant

Applications & Market Sector Timeline

source: GTM Research

68

Hype Cycle for Smart Grid Technologies

source: Gartner (2009)69

Today’s Grid. And TOMORROW’s.

source: DOE, “The Smart Grid, An Introduction”

Assets & Efficiency

Self-healing

Tolerant of attack

High PQ

New Markets

Generation options

Empower consumers

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4. Challenges

Interoperability Standards• Need “plug and play” to provide modular solutions• GridWise Architecture Council; Open Smart Grid; NIST

Future-proofing Utility System Architecture• Historically system upgrades as a series of “one-offs”• Need “top-down” style integration platforms

Integration of Large Amounts of Renewable Energy• Distribution-level challenges: intermittency & bi-directionality• Influenced heavily by policy (standards, incentives)

Re-defining Utility Business Models and Incentives• Historically: sale-based and base-rate return on capital investments• Need regulatory innovations (e.g., decoupling)

Consumer Adoption of Smart Grid Devices• Historically: electricity perceived as “dirt cheap”• “Big Brother” concern to having utilities control consumer

71

Utility Industry Evolution over the next decade

source: IBM Institute for Business Analysis

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Lecture #10 The Smart Grid - New Server -- foothill25