WHY A SMART GRID

Smart grid could reduce emissions by 12 percent
January 29, 2010 (PhysOrg)

SUMMARY
There is a new reason to like the “smart” grid.

Its advocates have long talked up the energy-saving opportunities. Upgrading U.S. electricity transmission all along the wires with the capability to better manage the flow of power through information technology will make innovations like demand response and field intelligence possible. It will also increase the power system's capacity to manage the coming plug-in vehicle revolution.

The Smart Grid: An Estimation of the Energy and CO2 Benefits, from the Pacific Northwest National Laboratory (PNNL) of the U.S. Department of Energy (DOE), documents how those innovations and the energy savings they allow mean significant greenhouse gas emissions (GhG) reductions. The PNNL report finds a smart grid will cut GhGs at least 12% by 2030.

From Xcel Energy. (click to enlarge)

The paper investigates 9 mechanisms in the generation and delivery of electricity through which a smart grid could impact energy consumption and GhGs. A smart grid, it shows, will have both direct and indirect impacts on emissions. New technologies will increase control of the flow of power and increase efficient energy use in businesses and homes. These will directly reduce the consumption of energy and, therefore, the emissions produced from it. Smart technology will indirectly cut emissions by making the use of more emissions-free New Energy possible by more readily integrating New Energy into the transmission system in a variety of different ways.

The 9 mechanisms:
(1) Conservation Effect of Consumer Information and Feedback Systems
(2) Joint Marketing of Energy Efficiency and Demand Response Programs
(3) Deployment of Diagnostics in Residential and Small/Medium Commercial Buildings
(4) Measurement & Verification (M&V) for Energy Efficiency Programs
(5) Shifting Load to More Efficient Generation
(6) Support Additional Electric Vehicles and Plug-In Hybrid Electric Vehicles
(7) Conservation Voltage Reduction and Advanced Voltage Control
(8) Support Penetration of Renewable Solar Generation (25% renewable portfolio standard [RPS])
(9) Support Penetration of Renewable Wind Generation (25% renewable portfolio standard [RPS])

The PNNL study is one of the first to bring together the fields of emissions research and smart grid research. It demonstrates that such a combined approach warrants further development by smart grid investors and utilities.

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COMMENTARY
Fully utilizing a smart grid could prevent 442 million metric tons of GhGs yearly. That’s the equivalent of 66 typical coal power plants’ spew.

Primary Assets of the smart grid:
(1) Demand response (DR), a 2-way communication-and-control of end-use business and home devices and systems by grid operators to manage electricity demand as it varies through days and seasons;

(2) Distributed generation (DG), all small-scale power from small engines, generators, wind turbines, solar systems, etc., connected to the grid to add extra capapcity;

(3) Distributed storage (DS), all batteries, flywheels, super-conducting magnetic storage, and other electric and thermal storage technologies connected to the grid to provide dispatchable power;

(4) Distribution automation/feeder automation (DA/FA), the automation in substations and into grid feeders with remote switches for reconfiguring transmission with advanced protective relays and control abilities and sophisticated electronic component management systems to make responses in power suppy transmission more generally automatic, more malleable when necessary and always more efficient;

(5) Transmission wide-area visualization and control, the systems that sense and quickly respond to changes along the wires; and

(6) Electric and plug-in electric hybrid vehicles (EVs/PHEVs), the fleet of vehicles with batteries that can be both a new type of load and, as a source of distributed storage, a new type of load management.

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Enabling Assets (cross-cutting technologies necessary to support the primary assets) of the smart grid:
(1) Wide-area communications networks, servers, gateways and other interconnections;

(2) Smart meters, the basic advanced metering infrastructure (AMI) technology as well as even smarter meters that respond to DR and DG controls more quickly and subtly for peak load management, including full 2-way communication with business and home networks (including smart thermostats and appliances);

(3) Local-area home, commercial building, and industrial energy management and control systems (EMCS) and networks that allow grid operators to manage energy consumption;

(4) Consumer information interfaces and decision support tools such as personal computer dashboards that give business and homeowners opportunities to streamline their energy consumption;

(5) Utility back-office systems, including billing systems, that enhance consumer engagement in efficiency measures;

(6) Other key embedded technical enabling assets: (a) Cyber-security technologies to protect the many 2-way communication systems, and (b) Interoperability standards and protocols that allow the 2-way communications to take place seamlessly.

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Operational Objectives, the categories of benefits or applications of the smart grid that improve cost effectiveness, reliability, and energy efficiency:
(1) Managing peak load capacity for generation, transmission, and distribution;

(2) Cutting the costs of wholesale generation, transmission, and distribution operations;

(3) Enhanced reliability at reduced cost;

(4) Making ancillary services available;

(5) Cutting the cost of New Energy integrations; and

(6) Using the transmission system and its expanded network to increase efficiency and emissions reductions.

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The study assesses 9 mechanisms of electricity generation and transmission through which the smart grid could make energy consumption more efficient and cut GhGs.

The 9 mechanisms that together can produce a total direct reduction in GhGs by 2030 of 12% and a total indirect reduction of another 6%:
(1) Conservation Effect of Consumer Information and Feedback Systems (Direct reductions of 3%)
(2) Joint Marketing of Energy Efficiency and Demand Response Programs (Indirect reductions of 0%)
(3) Deployment of Diagnostics in Residential and Small/Medium Commercial Buildings (Direct reductions of 3%)
(4) Measurement & Verification (M&V) for Energy Efficiency Programs (Direct reductions of 1% and Indirect reductions of 0.5%)
(5) Shifting Load to More Efficient Generation (Direct reductions of <0.1%)
(6) Support Additional Electric Vehicles and Plug-In Hybrid Electric Vehicles (Direct reductions of 3%)
(7) Conservation Voltage Reduction and Advanced Voltage Control (Direct reductions of 2%)
(8) & (9) Support Penetration of Renewable Wind and Solar Generation (25% renewable portfolio standard [RPS]) (Direct reductions of <0.1% and Indirect reductions of 5%)

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Air and water quality and land use impacts were not considered in the PNNL study. The use of natural gas by end users was also not considered.

Uncertainty in the specific estimates is relatively high, in a range of ~50% and in some cases larger. There is a higher level of confidence in the accuracy of the total estimate of reductions based on the fact that the wide variety of mechanisms allows for compensating over and under estimates.

The estimates assume full deployment (100% penetration) of smart grid technologies.

Several of the mechanisms may have little or negligible impacts but 5 could potentially cut emissions more than 1% each. The combined effect is what is important. The total direct reduction of 12% of GhGs and the indirect reduction of 6% of GhGs by 2030 means the smart grid is an important tool for the U.S. in meeting its total emissions cutting goals.

The effects estimated in goals (8) and (9) pertaining to the deployment of New Energy also make the smart grid a crucial tool in the nation’s energy policy.

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The PNNL’s general recommendations for next steps:
(1) All technical mechanisms must be analyzed in more depth, with quantification of and uncertainties for the estimates.
(2) Customer feedback is needed to better implement and sustain energy efficiency and demand response management programs. A better understanding of consumer behavior and response to smart grid technologies will be necessary.
(3) Customer programs will work better with better long-term measurement and verification (M&V) and diagnostics. This necessitates improved analytic methods and software, especially on the customer side of the meter.
(4) Key research needs: How smart grid technologies can support (a) integration of New Energies above 20% through demand response, New Energy sources and storage technologies, (b) increased levels of battery electric vehicles, (c) management of voltage control and losses within the transmission and distribution system, and (d) increased reliability of electricity delivery.

Key issues:
(1) Acceptance by federal and state regulatory bodies. A major driver will be how cost-efffective smart grid technology proves to be, while providing equal or improved levels of power delivery and reliability. A quantitative method to define and monetize improvements will be needed. Involving stakeholders in moving from a centralized to a decentralized system will also improve acceptance.
(2) The smart grid must deliver offsetting increases in consumption from servers located in every distribution substation and from demand response/GFA devices installed in the stock of appliances. The combined effect may increase emission reductions by a small but significant ~0.1-to-0.4%.

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Among the most salient features of the PNNL study were discussions of (1) the business case for the smart grid, (2) how the smart grid can support the transition to plug-in vehicles, and (3) how the smart grid can support the transition to New Energy.

(1) The business case for the smart grid compares the capital investments in its parts to the many value streams from the multivarious applications they support. The business case is successful when the sum of the value streams is greater than their total cost.

Each of the many parts of the smart grid support a number of functions. Any of the many functions can be supported by a variety of components. The result is that the component assets support and compete against each other. Therefore, a primary asset and its enabling assets must be more cost effective than its competitors.

One of the earliest indications of the smart grid’s viability was Xcel Energy’s SmartGridCity in Boulder, Colorado. Subsequently, various utilities and states have done successful work with advanced metering infrastructure (AMI) and demand response (DR). DOE has also invested much in pilot projects.

The PNNL study does not include a monetization of the smart grid concept but catalogues a list of evidence of its cost effectiveness and predicts only that smart grid deployment will be justified once it is instituted and the nation will additionally reap enormous benefits from energy and emissions savings. Associated marginal costs for software applications and control algorithms will be low.

The study's author stress, however, that the business case for a smart grid cannot be made without including the additional energy and emissions benefits.

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(2) The smart grid can support the transition to plug-in vehicles through its advanced load management technologies in conjunction with plug-in vehicles’ smart charging capabilities. The result will be a significant gain in energy efficiency and a big reduction in GhGs.

Because battery electric vehicles (BEVs) have electric drive engines that are far more efficient than the internal combustion engines (ICEs) that burn gasoline for fuel, even plug-in light duty vehicles (LDVs) (cars, vans, SUVs, and light trucks) that draw from a grid powered by dirty coal will generate fewer GhGs. It would, of course, also move the nation away from dependence on imports of foreign oil. As more New Energy sources supply the grid, BEVs will allow for greater and greater emissions-free driving.

BEVs are estimated to require 30% less energy and to cut GhGs 27% while reducing by 52% dependence on foreign oil. Plug-in hybrid electric vehicles (PHEVs) are expected to be the transitional phase in a process that will eventually lead to all electric vehicles (EVs).

Reliable estimates show that the present U.S. transmission system could supply over 70% of today’s LDV fleet if it were electric and if the bulk of the charging was effectively managed, through time-of-use pricing and smart charging.

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Managing the charging is the crucial enabling characteristic of smart technologies. The big cost is in the vehicle, not the smart grid, but the combination could represent big savings in energy and emissions. By facilitating the energy savings and the concomitant cost savings, the smart grid becomes a means to spur the penetration of electric transportation and the emissions savings that will come with it.

In the PNNL study, driving data was used to estimate when vehicles arrive at home and it was assumed battery-charging at 120 volts would begin immediately. Absent smart charging, this could detrimentally add to the last part of the peak demand period. With smart charging and a smart grid, the grid could support 18 million more BEVs. This significantly increases the benefits from BEVs and the convenience of having one.

There is some question as to whether 120-volt charging will be the norm. Large vehicles (like SUVs) can take 12 hours to charge for a 30-mile range at 120 volts. 240-volt charging may become necessary. Charging at 240 volts doubles the peak load impact of unmanaged charging and further impedes by as much as 32% the benefits from BEVs and therefore increases the need for, and enhances the value of, the smart grid.

An indirect benefit of the smart grid would be that by facilitating the penetration of BEVs it furthers the use of intermittent New Energies. If there are enough vehicles to use V2G technology to charge and discharge New Energy sources on demand, more resources can be developed, though the impacts on the vehicles and their batteries is not yet established.

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(3) The smart grid can support the transition to New Energy through V2G technology but it can also do so in a much more important way independently of the BEV revolution.

A smart grid can facilitate the integration of New Energies through the implementation of price-scheduling and/or incentives that engage demand response and distributed storage (DS, including but not limited to storage in BEVs).

With DS and V2G technology, storage sources and BEVs can relieve the burden on power plants to absorb the supply fluctuations inherent with intermittent New Energies by allowing grid operators to dispatch the stored power and charge and discharge available BEVs as needed.

This type of power plant regulation is standard operating procedure by grid operators already but can become a standard ancillary service provided by a smart grid to integrate higher proportions of New Energy into the power supply.

In February 2008, Texas’ wind production dropped 1700 megawatts unexpectedly early in the evening. Auxilliary supplies were inadequate in the time frame. But grid operators were able to prevent a blackout by exercising pre-existing emergency curtailment contracts with large industrial customers.

The amount of such services needed, now rare, will accelerate as more New Energy is in the power mix. With demand response and distributed generation and storage assets, a smart grid will allow widespread automatic and instantaneous regulation of the grid’s power supply to whatever New Energy intermittencies might occur without causing service disruptions.

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By doing so, the smart grid will reduce the need for new backup power plants, further streamlining the nation’s energy consumption and reducing emissions generation.

The smart grid will also increase New Energy’s role in the power mix by removing barriers to a larger presence in the transmission system. Examples of this include (1) making larger areas of wind resources available to local grid operators and (2) increasing the amount of rooftop solar PV a given circumscribed locality can flow to and from the central grid.

The ultimate barrier is the limit to New Energy’s role in power generation created because of the need to have replacement sources. A smart grid’s capability to draw on stored New Energies and backup distributed generation would reduce the amount of replacement sources needed without increasing the cost of the New Energies, making the economics of a larger share of New Energies equitable.

When the amount of energy used by power plants for New Energy backup supplies is the only non-New Energy in the system, there can theoretically be no more New Energy in the mix. Aggressive management of all sources by a smart grid, including the use of V2G and a fleet of BEVs, can reduce the need for backup and therefore expand the absolute limit of the use of New Energy. (This limit is not enumerated in the PNNL report and has not yet been estimated.)

Wide-area control (the use of high-precision data and high-performance computing techniques to analyze and reconfigure power on the lines), a future capability of the smart grid, was not analyzed in the PNNL study.

Dynamic thermal rating schemes for transmission systems (the use of weather sensors in computing the thermal capacity limits on the lines), presently available, was also not analyzed in the PNNL study.

Unknowns exist for both but both are expected to eventually make transmission more efficient, eliminate losses along the wires and further decrease energy consumption and increase emissions savings.

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QUOTES
- Rob Pratt, research scientist and report co-author, PNNL: "By making the grid smart, we make it more efficient and more accommodating of renewables, and we're able to cut down on the amount of carbon we emit to generate the electricity we need…This report suggests that we could substantially reduce emissions by deploying a smart grid…We wanted to show the additional benefits inherent in the smart grid's potential contribution to the nation's goal of mitigating climate change by reducing the carbon footprint of the electric power system…"

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- Mike Davis, associate laboratory director/Energy and Environment, PNNL: "This report has significant implications for public and private sector interests engaging in future research, financial and policy decisions in this area…Reducing our dependence on foreign oil and reducing our carbon footprint can go hand-in-hand and be profitable."
- From the report: “The economics of the smart grid are difficult to analyze, but the business case is gradually becoming clearer and the smart grid vision is becoming a reality.”

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- From the report: “Regulation is one form of ancillary services needed to stabilize the grid during normal operations…to manage high penetrations of renewables. An illustrative example of this occurred in February 2008, when the Electric Reliability Council of Texas (ERCOT) had to curtail power to many interruptible customers because wind production suddenly fell 1700 megawatts. The drop in output had been forecast, but occurred several hours earlier than expected…[T]his event exceeded the capacity of the spinning reserves and fast-acting non-spinning reserves to pick up the deficit in output. In addition, February is in the off- peak-load season in Texas when many power plants were down for scheduled maintenance. As a result of this deficit, grid frequency dropped quickly, and emergency curtailment contracts, mostly with large industrial customers, were called upon to drop load to prevent a potential blackout until additional power plants could be brought online…”