GE Energy
Session 2 of a 5 Part
Series on the Smart Grid
The Smart Grid … Lunch and Learn
Session 2: The Smart Grid – The Consumer
View
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Smart Grid Learning Series
Session 1: The Smart Grid and its Benefits
Session 2: The Smart Grid… The Consumer View
Session 3: The Smart Grid… The Distribution View
Session 4: The Smart Grid… The Transmission View
Session 5: The Smart Grid… The View from Rural America
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Session 2: The Smart Grid – The Consumer
View
Topics:
Smart Grid Overview
• Benefits Overview
• Overview of Good Things Enabled by the Smart Grid
• Overview of the Calculated Benefits of the Smart Grid
Consumer Options
• The Power of Information
• Energy Management
• Demand Side Management
• Smart Appliances
• Plug In Vehicles
• PV and Small Wind Generation
New Consumer Possibilities … Customer, Generator, Partner
Impact of Policy
3
Introduction
Industry challenges
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9
9
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Soaring energy demand
Power outages’ financial impact
Green energy takes center stage
Electricity prices on the rise
Aging infrastructure/workforce
5
Electricity prices on the rise
U.S. sees 6.5%
spike in ’09
electric bills
6.5%
Source: EIA (Energy information Administration)
6
Electricity … Poised to change the world again
“We can’t solve
problems by using the
same kind of thinking we
used when we created
them.”
- Albert Einstein
7
The Smart Grid
Growing complexity in modern grids
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What is a Smart Grid?
The integration of two infrastructures… securely
Electrical infrastructure
Electrical
Infrastructure
Information
Infrastructure
Sources: EPRI® Intelligrid
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Flexibility for emerging capabilities
Wide-Area
Protection &
Automation
Wide-Area
Monitoring
& Control
Renewables
Forecasting
Renewables
Smoothing
Delivery
Optimization
Demand
Optimization
Asset
Optimization
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Roadmap for a Smarter Grid
What it is
Demand
optimization
Manage peak via control
of power consumption
Why
Utility Value/MM Customers*
Defer upgrades, optimize
generation & renewables
$16MM/yr, 51K tons of CO2
reduction+
Res. consumer savings up to 10%
Based on 1.6% peak load reduction using critical peak
pricing resulting in reduction in fuel costs and deferral
of generation capacity
Delivery
optimization
Reduce delivery losses in
distribution systems
Less energy waste and
higher profit margins
Asset
optimization
Prognostics for proactive
equipment maintenance
Reduced outages and
focused maintainers
Reliability
optimization
Wide Area Protection &
Control
Increased network
performance & reliability
Renewables
optimization
Use of Forecasting &
Smoothing
Compensation for
production variability
$7MM/yr,, 45K tons of CO2
reduction+
Based on 0.2% loss reduction and 0.5% CVR peak
load reduction resulting in reduction in fuel costs and
deferral of generation capacity
$11MM/yr, ~4.5 yr ROI
Based on system-wide deployment of advanced
transformer M&D resulting in transformer life
extension and reduction in inspection,
maintenance & repair costs
$7MM/yr
Based on the deferral of the capacity upgrade of
two 220kV transmission lines for 3 yrs (each line
30 miles long with a cost of upgrade of $1.5MM
per mile)
Key step for meeting RPS targets,
especially in areas with weak
grids
*Utility savings are approximate annual
savings per one million customers
+ $85/kW-yr peak generation capacity value
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Demand Optimization – Value to Consumer
Demand
Smart
Thermostat
Consumer
Interface
Smart
lighting
Smart Meter
Efficient
appliances
Pacific Northwest National Laboratory announces the
results of two studies demonstrating consumers and
information technology can play an active role in
managing the grid
“On average, consumers who participated in the
project saved approximately 10 percent on their
electricity bills”
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Energy
Management
Demand Optimization … the green alternative
and GE estimates
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Energy consumption profile …
16
Peak power use … electrical appliances only
Electric appliances only
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Price variations …. driving behavior
Electricity Cost by State, January 2009
WA
7.65
MT
8.44
OR
8.41
ID
7.05
NV
12.23
CA
14.95
ND
6.55
WY
7.76
MN
9.59
WI
12.35
SD
7.58
IA
8.88
NE
6.89
UT
8.00
CO
9.25
AZ
9.51
KS
8.16
OK
7.67
NM
9.54
TX
12.79
AK
17.25
NH
16.29
ME
VT
16.03
14.37
MI
11.17
OH
9.39
IN
IL
8.62
10.78
MO
7.02
AR
8.94
NY
17.46
KY
8.10
PA
10.83
WV
7.40 VA
10.01
NJ 15.8
DE 13.25
MD 14.40
DC 12.83
NC
9.45
TN
9.44
MS
AL
9.64 10.31
MA 18.12
RI 17.20
CT 19.49
GA
9.40
SC
9.80
Residential Average
Price (cents per KW)
6.00 – 7.99
8.00 – 9.99
LA
8.92
10.00 – 11.99
FL
12.43
12.00 – 15.99
16.00 – 26.00
HI
25.76
Source: Energy Information Administration
Table 5.6.A. Average Retail Price of Electricity to Ultimate Customers by End-Use
Sector, by State, January 2009 and 2008 (Cents per kilowatthour)
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Homeowner segmentation (US) ….
Size Value Prop
VOC
Profile
Description
Savers
First-Costers
Control Freaks
Lazyboys
Warm-Bloods
Creatures of
Comfort
While initial
Installation Cost is
important for this
segment, this
customer is also
highly influenced by
Net Monthly Savings.
Three types: Basic,
Comfort, and
Convenience Savers.
Home Age: >20 yrs
Gas Bill: >$50/mo
Elec Bill: >$75/mo
Initial Installation
Cost is the clear
driver for this
segment. This
segment is averse to
Changes in
Appliance Use, and
the Method of
Control is a
secondary concern.
Age: >36 yrs old
Home Size: <2000 ft2
Home Age: >20 yrs
This customer is
primarily concerned
about the Method of
Control to generate
savings, yet this
customer also
prioritizes Net
Monthly Savings or
Appliance to Control
Just like the WarmBloods except this
customer is just as
concerned about the
Method of Control to
generate savings.
Besides Installation
Cost, this customer is
averse to Home
Temp Changes of 5°F
or more, yet is rather
insensitive to Method
of Control. Net
Monthly Savings
much less important.
Age: >36 yrs old
Home Size: 1K
-3K ft2
Home Age: <5 >26yrs
Home Size: >1000 ft2
Income: $75-$200K/yr
Hardly found in CA
Support Conservation
“I would run a washer
and dryer at off-peak
times. If you could
save more by running
things at a different
time, why not?”
“Appliances, heat and
air conditioners
consume the most
unless you buy
[energy saving]
appliances… It’s
expensive to change
out all this stuff.”
“If the utility …had a
breakout of what I
used when and
where my major
usage is …that would
help…but I don’t want
them manipulating
my energy.”
“Empowerment has
an ugly twin. The
utility company can
also manipulate my
usage.”
“I try to watch [energy
usage] but me and
my wife have a
different idea of
what’s comfortable.”
“It’s hard …it’s
running your heater
or air conditioner if
you want to be
comfortable…leaving
the lights on …so you
don’t come home to a
dark house.”
“A partnership with
your utility to slash
monthly bills and help
save you money, with
a low up-front
installation cost.”
“Our energy
management system
will enable you to
reduce your monthly
energy bill by as much
as 20% without any
up-front cost.”
“A premium energy
management system
that you control to
manage your bills,
and helps you predict
your bill payments.”
“An energy
management system
you program to fit
your lifestyle and
match your usage
needs.”
“Our basic home
system will find the
best times of day and
appliances to control,
helping you trim
energy costs.”
“Our premium energy
management system
helps you command
and control your home
environment.”
36%
20%
12%
19%
9%
4%
Source: GE Study
Regardless of
Installation Cost, this
customer is most
highly averse to
Home Temp Changes
of 5°F or more to
generate savings.
Often concerned with
Method of Control.
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Consumer
Enablement
Smart Grid to Smart Home …
Smart Home
Fiber, Sonet
Smart Home
9 Two way communication
9 Smart Meter
9 Price schedule
9 Demand response signal
9 Utility specific commands
Utility Operating Center
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What is a Smart Home?
Responsible Energy Use
9 Energy-efficient lighting & appliances
9 Solar PV and water heating
9 Smart thermostats
Energy Optimizer
Responsible Power Use
9 Participation in utility DSM programs
9 Home energy management
9 Smart lighting & appliances
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The challenge …..
Demand suppression
to shift/shave peak
Energy rebound of ~ 80%
of suppressed demand*
*Source: California Study
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Shift use to off-peak hours with minimal impact
Refrigerator
9 Delay defrost
9 Modification of run time during peak
9 Reduced features during peak
9 Energy saver mode
Washer/Dryer
9 Delayed wash and dry
9 Reduced cycle time
9 Manage water usage- cold wash
9 Energy saver mode
Range and Microwave
9 Reduced energy cooking
9 Use of small cavity
9 Cooking efficiency
9 Electronic cook top
Home Energy Manager (HEM)
9 Complete Energy usage tracking
9 Water usage tracking
9 Configurable settings
Smart Thermostat
9 Fully programmable
9 $KWh Usage
9 Instantaneous KWh
9 Instantaneous $Pricing
Dish Washer
9 Delayed wash
9 Reduced cycle time
9 Manage water usage
9 Energy saver mode
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Controlling energy and power use
Energy – Key Concepts
Power – Key Concepts
9 Don’t heat and cool unnecessarily
9 Leverage future knowledge – (TOU
structures, weather forecasts…)
Thermostat
Electricity Rate
Pre-cool
Plan
9 Leverage solar energy
9 Leverage grid-friendly loads
California load
profile, and
impact of 30%
PV penetration
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The Future Ahead
Leveraging emerging technologies
Smart PV
9 Smart Home enabled
9 Coincide with peak
Small Wind
9 Smart Home enabled
9 Residential/Small commercial
Smart HEV
9 Smart Grid/Home enabled
9 Schedule charging
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Many states driving solar & renewables requirements
Recent legislation
Policy
• 30% ITC with utility eligibility
• Option to take Treasury grant
Proposed legislation
• Florida RPS… 20% by 2025
• Federal RES… 25% by 2021
Renewable Portfolio Standards (RPS)
States with RPS Solar Carveouts (11 + DC)
States with RPS DG Carveouts (4)
Mandatory RPS (28 + DC)
Voluntary RPS (5)
Considering RPS (2)
Fed & State Government advocating Green
Energy
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Residents will realize future savings
Breakeven Cash Flow Analysis
using Home Financing
$/W
(installed)
Breakeven Retail Rate
(cents/kWh)*
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18.8⍧
7
16.6⍧
6
14.3⍧
5
12.1⍧
4
9.8⍧
* Resident achieves cash savings when retail
electricity rate exceeds $/kWh value for 4kW
system
Calculations
Net capital cost ($)
$/W * 1000 *4kWp – Federal & State tax ITC
Annual payment ($)
Monthly payment (assuming interest is
compounded monthly) * 12 + O&M
System output (kWh)
4kWp * 8760 hours * capacity factor
Breakeven (⍧ /kWh)
Annual payment / system output * 100
Assumptions
• Location: Atlanta
• System size: 4 kWp
• Capacity factor:
15%
• Debt terms: 25
years
• Cost of debt: 7%
•
•
•
•
O&M (annual): $40
# hours/year: 8760
Federal ITC: 30%
State ITC: 35%
Residential customers who finance PV in mortgage
can get positive cash flow
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Summary
Economic and environmental demands are forcing functions
Investment in technology can accelerate their adoption
The Smart Grid is dynamic and must be viewed as a system
Demand response is the 5th fuel … let’s compensate for it
Renewables play an important role in the grid of the future
Policy will drive behavior
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Smart Grid Learning Series … next week
Session 1: The Smart Grid and its Benefits
Session 2: The Smart Grid… The Consumer View
Session 3: The Smart Grid… The Distribution View
Session 4: The Smart Grid… The Transmission View
Session 5: The Smart Grid… The View from Rural America
31