Measuring Progress and Benefits of ARRA Smart Grid Programs March 9, 2010
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Measuring Progress and Benefits of ARRA Smart Grid Programs Joe Paladino DOE Office of Electricity Delivery and Energy Reliability March 9, 2010 American Recovery and Reinvestment Act Funding ($4.5 B) Office of Electricity Delivery and Energy Reliability $ Millions Smart Grid Investment Grant Program; 3-5 years Smart Grid Demonstrations; 3-5 years $3,400 $615 Interoperability Framework Development by NIST $10 Resource Assessment and Interconnection-Level Transmission Analysis and Planning $80 State Electricity Regulators Assistance $50 Enhancing State Government Energy Assurance Capabilities and Planning for Smart Grid Resiliency $55 Workforce Development $100 2 SGIG Systems and Equipment Smart Grid Systems and Equipment Numbers of Units Improvements Networked Phasor Measurement Units 877 Smart Transformers 205,983 Automated Substations 671 Load Control Devices 176,814 • Enables peak demand reductions Smart Thermostats 170,218 • Enables peak demand reductions Smart Meters 18,179,912 • 13% of the 142 million customers in the U.S. In-Home Display Units 1,183, 265 • Enables customer empowerment PHEVs/Charging Stations 12/100 Impacts (self-reported estimates) • Near-nationwide coverage • 6X the 166 existing networked PMUs • Enables preventative maintenance Enhanced situational awareness and electric system reliability and resiliency • 5% of 12,466 transmission and distribution substations in the U.S. • Accelerates market entry 1444 MWs of peak demand reduction per year (self-reported estimates) Transformational changes in consumer behavior and energy consumption Begins the path toward energy independence An Opportunity for Transformation Investments Transformation •• Equipment Equipment Manufacturing Manufacturing •• Customer Systems Customer Systems •• Job Creation and Job Creation and Marketplace Innovation Marketplace Innovation Customer Customer Empowerment Empowerment •• Advanced Metering Advanced Metering Infrastructure Infrastructure •• Integrated and/or Integrated and/or Crosscutting Systems Crosscutting Systems •• Reduced Peak Load and Reduced Peak Load and Consumption Consumption •• Operational Efficiency Operational Efficiency •• Electric Distribution Electric Distribution Systems Systems •• Electric Transmission Electric Transmission Systems Systems Results •• Grid Reliability and Grid Reliability and Resilience Resilience Advanced Grid Advanced Grid Functionality Functionality •• More Distributed and More Distributed and Renewable Energy Renewable Energy •• Lower Carbon Dioxide Lower Carbon Dioxide Emissions Emissions Observations There is no consensus on what kinds of benefits to expect from smart grid implementation Lack of demonstrated results creates uncertainty in performance expectations Value of demand management Value of transmission and distribution monitoring and control (asset management and reliability) A compelling case may lie in the smart grid’s aggregate economics Digitalization is inevitable Primary Intent Is to Determine SGIG Program Impact Secondary Intent Is to Learn (to Address Uncertainty) Project-Based Cost/Benefit Analysis SGIG Program – Building the Smart Grid, Impacts, Benefits Key Components for Information Gathering Job Creation Statistics Asset Investments/Build Metrics Baseline Performance Smart Grid Performance/Impact Metrics and Benefits t = 0 years t = 3 years t = 5 years Build Metrics Advanced Grid Advanced Grid Functionality Functionality •Over XX,000 advanced •Over XX,000 advanced grid devices deployed grid devices deployed •YY grid management •YY grid management systems in operation systems in operation •Over $X billion in •Over $X billion in related investment related investment Number of in‐home energy displays Number of in‐home energy displays Number of customer web portals Number of customer web portals Number of customers with smart appliances Number of customers with smart appliances Number of PEV charging stations Number of PEV charging stations Number of smart meters Number of smart meters Number of meter data management systems Number of meter data management systems Key Assets Key Assets Distribution Distribution •Over XX million •Over XX million customers involved customers involved •YY different pricing •YY different pricing programs tested programs tested •Over $X billion in •Over $X billion in related investment related investment Key Assets Key Assets Number of substations with automation Number of substations with automation Number of feeders with sensing/automation Number of feeders with sensing/automation Number of distribution management systems Number of distribution management systems Transmission Transmission Customer Customer Empowerment Empowerment Number of phasor measurement units Number of phasor measurement units Number of phasor data concentrators Number of phasor data concentrators Number of grid visualization systems Number of grid visualization systems Number of advanced feeder switches Number of advanced feeder switches Number of lines with dynamic ratings Number of lines with dynamic ratings Measuring Smart Grid Performance – Impact Metrics and Benefits Shared Responsibility between Project Teams and DOE Data Impact Metrics Benefits AMI Example: Electricity consumption by customer class per pricing program and technology Cost of generation to serve load Peak load reduction Peaking generation reduction Transmission and generation capacity deferral Economic: T&D capital and O&M savings; electricity cost savings Environmental: Reduced carbon dioxide emissions Energy Security: Reduced consumption of oil AMI Business Case and the Role of Dynamic Pricing $1,400 Capacity Revenues from Price Mitigation Energy Revenues from Price Mitigation $1,200 Avoided T&D CapEx Energy Conservation $1,000 Avoided Meter CapEx 64% of total benefits depend upon response to PTR Distribution O&M Total Cost $800 AMI Benefits alone do not justify costs $600 $400 15% of total benefits energy conserva ‐tion 21% of total benefits AMI related $200 Without benefits from dynamic pricing, many AMI business cases would NOT be cost effective But these benefits hinge upon assumptions concerning customer participation and response to dynamic pricing $0 Costs Benefits ‐ AMI Only Benefits AMI & Dynamic Pricing Business Case Source: Rick Hornby Direct Testimony MDPSC Case 9208: Exhibit JRH-4 Understanding the Impact of Dynamic Pricing on Customer Behavior Special Case: AMI, Dynamic Pricing and Randomization Several projects currently have submitted “acceptable” study plans; others may participate DOE will work with the project teams to ensure that data collection and analysis efforts will satisfy goals (elasticity of demand) Valid control and treatment groups Customer demographic information for consistent segmentation of results into cohorts Rich dataset correlating demand, rate tariff design, and customer-level information Data Management and Analysis Project Teams Consumer Behavior Studies Plan Development and Assistance (Technical Advisory Group) Data Hub Data Management and Visualization Smartgrid.gov Analysis SGIG Build and Impact Metrics Correlation and Benefits Estimation Smart Grid Systems Report
