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TECHBriefs
A quarterly publication by Burns & McDonnell
2008 No. 3
Smart Grid: Driven by Sustainability
Electric utilities must be prepared to offer
solutions to their customers or potentially face
a firestorm of protest in years to come. Many
believe that the intelligent or Smart Grid is one
such solution; however, electric utilities across
North America are struggling to answer the
question: What is the Smart Grid?
Simply stated, the Smart Grid is the
convergence of information and operational
technology applied to the electric grid, allowing
sustainable options to customers and improved
security, reliability and efficiency to utilities.
The Smart Grid can be applied to generation,
transmission, distribution, metering and,
certainly, beyond the meter on customer
facilities (see Figure 1). Distributed generation
and the dispatch/storage of renewables,
transmission line loading and substation
equipment monitoring, distribution power
flows and voltage measurement, automated
meter reads and turn-on/turn-off service all
hold promise. However, if the Smart Grid is to
be a solution for offsetting the negative impact
of rising rates and bills, it must be deployed in
a manner that specifically addresses these rate
and bill impacts (see Table 1).
The Political Landscape
Customers (voters) will soon demand an
immediate and tangible response from
regulators and lawmakers that will require
serious attention to this complex situation.
GENERATION
TRANSMISSION
DISTRIBUTION
METER
CUSTOMER
Figure 1: An intelligent Smart Grid deployment strategy can touch all stages of the
electric power life cycle, but it should initially focus on sustainable options for
customers at the distribution, meter and customer phases.
Lawmakers and regulators may not wait.
Congress passed the Energy Independence
and Security Act of 2007 (HR6) that discusses
but does not fund research and development
about the Smart Grid. The California Assembly
has passed Senate Bill 1438, which requires
investor-owned utilities, the California Energy
Commission and the California Independent
System Operator to develop a definition of
Smart Grid to improve “overall efficiency,
reliability and cost-effectiveness of electrical
system operations, planning and maintenance”
by July 15, 2009, with a plan for implementation
by June 30, 2010.
Energy and energy policy is a volatile political
issue. According to Public Utilities Fortnightly
magazine, presidential candidate Sen. Barack
Obama promises to “invest in a digital smart
grid … to enable a tremendous increase in
renewable generation and accommodate
modern energy requirements, such as reliability,
smart metering and distributed storage.”
Electric utilities would be prudent to start
developmental Smart Grid efforts now and,
in order to achieve the best political results,
consider focusing those efforts on distribution,
metering and customer solutions that quickly
deliver quantifiable value to the customer.
To that end, the most important part of the
simple definition of Smart Grid becomes
“allowing sustainable options to customers.”
COMPLETION
By Mike Beehler, PE
Everyone agrees that retail electric rates and
bills are going up in the face of rising worldwide
demand for fossil energy resources, expanding
fuel transportation costs, climate change,
renewable portfolio standards and aging
infrastructure. In fact, average electric rates
nationwide are up more than 35% in the past
six years.
CONCEPTION
Utilities Must Define What It Means,
Sort Through Political, Technical Challenges
Deployment Strategy and Project Execution
Rates and bills are going up. Customers (voters) will soon demand
an immediate and tangible response. Utilities need a deployment
strategy and a project execution plan. This 12-step process outlines a
concept-to-completion deployment strategy that encompasses electric
generation, transmission, distribution, metering and the end user with
initial Smart Grid efforts clearly focused on the distribution, metering
and end-user levels.
1. Program Management: Develop and implement a multifaceted,
multiyear contracting strategy and implementation plan to define,
promote and deliver a Smart Grid program in the context of high
performance, cost control, adherence to schedule, stakeholder
relations, revenue protection and prudency review.
2. Business Analysis: Develop strategies, technology assessments
and the business case to support regulatory requests and funding
for pilots.
3. Distributed Generation: Engineer the connection, dispatch and/or
storage of renewable and microscale generation resources to the
customer/owner and the electric distribution system.
4. Remote Equipment Monitoring: Design and manage the
installation of intelligent equipment devices on major substation
equipment and critical transmission spans to remotely monitor
asset and environmental condition on a quasi real-time basis.
5. Data Acquisition Technologies: Specify a vendor-neutral
advanced meter infrastructure (AMI) system or a substation/DA
program that acquires real-time data to support improved security,
reliability and operational efficiency of the distribution system.
6. Telecommunications: Study and develop a robust broadband
telecommunications system for rural, suburban and urban
applications to transfer mission-critical and non-critical data
from the customer, distribution feeder or substation to system
operations centers.
7. NERC Compliance: Evaluate the physical and cyber security
requirements of the distribution system to include substations and
system operations centers and develop a plan for compliance with
existing mandatory North American Electric Reliability Corp. (NERC)
standards and for future cyber security challenges related to AMI.
8. Data Integration Management: Coordinate the integration and
long-term management and warehousing of operational and/
or customer data from new and legacy systems onto a secure
platform that allows data analysis, visualization and reporting
by various user groups.
9. Data Analytics and Evaluation: Analyze real-time and archived
data to develop a better understanding of load factors, energy
usage patterns, equipment conditions, voltage levels, etc., and
integrate the data into usable customer programs and/or operation
and maintenance algorithms that identify, trend and alert
operators to incipient failure.
10. Demand-Side Management: Study the rate impacts of
conservation and load management programs, to include demand
response programs and the use of dispatchable or stored
renewables, using AMI data for various customer classifications.
Obtain regulatory approval to test the marketing, performance and
acceptance of the programs through pilot projects for customers.
11.Energy Services: Provide design only or turnkey (engineerprocure-construct/EPC) services for commercial and industrial
customers that implement energy efficiency or load-shifting
projects at their facilities.
12. Home Area Network: Identify, test and analyze the response
of new electric household appliances and consumer devices to
market price signals from the utility via AMI in the context of
existing or pilot rate structures.
Table 1: The execution plan for a Smart Grid deployment must address rate and bill impacts.
transformation, distribution and use of
electricity. One approach is the implementation
of substation and distribution automation
(DA) systems that improve utility operational
efficiency through the application of intelligent
equipment devices (IEDs) to remotely monitor,
measure, coordinate and operate distribution
capacitors, switches, transformers and feeders
over a secure, robust telecommunication
network. An advanced DA system allows
interdevice messaging between substation and
distribution IEDs and the supervisory control
and data acquisition system using IEC61850
(a standard for equipment interoperability
among equipment made by different vendors)
or other legacy open protocols such as DNP3 or
Modbus. The ability of various new and legacy
Taking the Sustainable View
Sustainability is defined as proactive
stewardship of the environment, providing for
the long-term health and vitality of ecosystems.
Applied to obtain the most immediate customer
impact on the retail electric power delivery
system, sustainability means an improved level
of energy efficiency in the transformation,
distribution and use of electricity.
This improved level of efficiency translates into
such things as lower line and transformer losses
for the utility asset owner and conservation and
load management opportunities for end-use
commercial and residential customers.
There are two fundamental approaches
to achieving higher efficiency in the
TECHBriefs 2008 No. 3
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Burns & McDonnell
components of the electric distribution system
to communicate with one another is expected
to lead to better operational efficiency and
reliability.
Read More
Look for part two of this
Smart Grid series in a future
issue of TechBriefs.
For a complete analysis of
the major challenges of
Smart Grid deployment, read
our white paper at:
www.burnsmcd.com/
smartgrid
Michael E. Beehler, PE, is an
associate vice president in the
Burns & McDonnell Transmission
& Distribution Group. He
graduated from the University of
Arizona in 1981 with a bachelor’s
degree in civil engineering.
He received his MBA from the
University of Phoenix in 1984.
Previously, he held transmission
engineering positions at the
Tucson Electric Power Co. and
the Hawaiian Electric Co. He is a
registered professional engineer
in eight states and is a fellow in
ASCE and a member of IEEE.
For more information, please e-mail:
mbeehle@burnsmcd.com
In this case, a utility may improve performance
and perhaps reduce operational overheads to
help control overall rates charged to customers.
Some large and progressive utilities have
embraced this advanced DA approach with
some early success; however, the customer has
no personal control over their electric usage
other than an on/off switch. The grid is smart,
but it could be smarter.
The second approach is the implementation
of advanced meter infrastructure (AMI) that
will allow the electric utility to communicate
directly with customers and create new
opportunities for service. Regulators in many
states have embraced and authorized the
implementation of AMI, and many utilities
are purchasing and installing millions of new
electronic, two-way meters and the required
broadband communications system to support
them. Paul De Martini, director of Edison
SmartConnect for Southern California Edison,
told Public Utilities Fortnightly, “At the outset, we
wanted the message to be that we were going
to introduce a new metering program that
would benefit our customers. People focus on
what the utility gets out of it, but we want to
demonstrate that there’s a lot more to be gained
by the customer.”
There are many tangible and intangible benefits
of an advanced DA system or an AMI-enabled
Smart Grid, but the regulatory driver for this
effort is sustainability. Regulators will require
quantifiable system efficiency improvements
or progressive demand response and demandside management programs that provide load
shifting and load reduction leading to more
sustainable electric power use. Focusing on
Smart Grid benefits outside the sustainability
drivers of today’s political environment is
imprudent. Utilities expecting full rate recovery
on a DA system or an AMI-enabled Smart Grid
Burns & McDonnell must implement improvements that deliver
tangible and quantifiable efficiencies to major
customer classes.
Project Justification
Utilities that expect to build new transmission,
substation and distribution assets may
be required during the routing, siting and
permitting process to demonstrate how their
implementation of a Smart Grid in a region
balances the need for the project. Sustainability
implies that peaks have been shifted or shaved,
loads have been managed and efficiencies have
been achieved before new transmission and
distribution assets are employed. Regulators,
lawmakers and their constituents will demand
no less. But there are three major challenges to
meeting those demands:
• The DA or AMI build-out requires a secure,
robust telecommunication network for
mission critical and non-mission critical data
transport.
• Meter data integration and management for
billions of meter readings turning data into
information and, ultimately, action will be
culturally disruptive for utilities.
• Demand response and demand-side
management programs allowing for
“prices to devices” for residential and small
commercial customers must be part of an
ultra-simple, readily accepted rate structure.
Thoughtful and prudent attention to these
fundamental challenges of implementing the
Smart Grid will lead to sustainable options for
customers and satisfied regulators that will
allow full recovery and return on investment.
When that is accomplished, utilities can
confidently use the Smart Grid to achieve
other security, reliability and efficiency
objectives. However, without early success
in telecommunications, data integration
management and customer programs, the
industry will find that it has simply given old
ideas a new name.
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TECHBriefs 2008 No. 3