Smart Grid
Demonstration
Cost/Benefit Analysis
EPRI Smart Grid Advisory Meeting
Albuquerque, New Mexico
October 14, 2009
Bernie Neenan
Technical Executive
bneenan@epri.com
Copyrigth 2009 Electric Power Research Institute
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Outline
A.
B.
C.
D.
E.
F.
Cost and Benefit Analysis (CBA) Defined
What constitute Smart Grid Benefits?
Measuring Smart Grid Impacts
Monetizing Smart Grid Benefits
The Cost to Realize Smart Grid Benefits
CBA Application to EPRI Smart Grid
Demonstration
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1
Cost and Benefit Analysis (CBA) Defined
A
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Cost and Benefit Analysis (CBA) – Design
Principles
• Adaptable to all Smart Grid demonstrations
• Provides for a consistent and fair
comparison of alternative Smart grid
technologies and systems
• Adaptable to new findings and expanded
applications
• Identifies all attributable benefits
• Minimizes redundancy in benefit attribution
• Distinguishes benefits according to:
– Level (how much)
– Distribution (who is the beneficiary)
– Timing (when they are realized)
Copyrigth 2009 Electric Power Research Institute
Intelligent Transmission and
Distribution Automation
Microgrids, Islanding,
Switching, Sectionalizing
Distributed Generation
and Storage
PV, Wind, Micro-Turbines,
CAES, Flywheel
Demand Response & Control
In-Premise
In-PremiseNetwork
Network
In Premise Networks, Automated DR,
Integrated Demand-Side Resources
Advanced Metering
Infrastructure
PLC
BPL
RF Mesh
RF Tower
Reading, Remote Disconnect,
Capacitor Controls, Sensors,
Wastewater
4
2
A Useful Semantic Distinction
• The first order, and therefore defining, impact of Smart
Grid technology is a change in the technical performance
of the electric system
• The term benefit connotes a monetary result
• A transformation function is required link the two
• An important distinction is:
– Impact (cause) = the first-order impact of the investment on the
system (what aspect of service or performance changed?)
– Benefit (effect )= the monetary equivalent of the impact
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Defining and Categorizing Smart Grid
Benefits
B
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3
Benefits 1st Order Distinction
•
Operating cost savings
that result from increased
productivity attributable to
the investment
• Operating costs savings (relative to what is
incorporated into existing rates) provide a
stream of funds that can be used by the
utility to service the Smart Grid investment
carrying costs.
•
Consumer cost avoidance
from reduced generation,
transmission, and distribution
investment or operational
requirements
• Avoided capital and operating costs result
in rates that are lower than they otherwise
would have been
•
Societal Benefits
that inure to consumers,
but in less obvious ways
• These benefits inure directly to consumers
and are:
• Speculative, subjective, and challenging
to monetize
• Not necessarily evenly distributed
among consumers
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Many Benefits Originate at Wholesale and Flow
to Retail
Energy
efficiency
Price-Based Demand Response
TOU
Time scale
DA-RTP
< 15 min
Years
Months
Day-ahead
System
management
action
System
planning
RTP
Operational
planning
ICAP
Scheduling
KWH
Bidding
In-day
< 15 min
Dispatch
Emer
DR
I/C
Load
RT balanced
and regulated
system
DLC
Induced Demand Response
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4
Smart Grid Benefits Categorization
Smart Grid Benefits
Lower Utility Operating
Expenses
Equipment
Maintenance
Better Societal Resource
Utilization
Avoided Consumer Costs
Avoided Costs
Improved Reliability
Operating Cost
Gen Capacity
Others
Energy Generation
Improved National Security
Reduced Outages
Better Environmental
Improved PQ
Efficient Economy
Ancillary Service Capacity
T&D Assets
T&D Asset Operation
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Things that appear to be left out – based on
typical list of benefits
••
Impact on
markets
Impact
onelectricity
electricity
–
More
efficiency
operations
markets
–
–
–
–
Customer participation
More
efficiency market
Flatter
load profiles
operations
Reduced LMP/MC volatility
– Flatter load profiles
– Reduced LMP/MC volatility
•• Customer
Customer impacts
impacts
– Lower electricity rates
– Lower electricity rates
– End-use and premise load
– End-use
control and premise load
control
– More
consumer choices
–
choices
– More
Lower consumer
electricity consumption
Impact on System Operations
– Integration or renewable
generation resources
– Optimized PHEV
charging/discharging
– Better unit operating efficiency
• Externalities
– Lower emissions form renewable
– Achievement of RPS goals
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5
Smart Grid Benefits – Collateral Impacts
Smart Grid
Benefits
Lower Utility
Operating Expenses
Equipment
Maintenance
Avoided Consumer
Costs
Avoided Costs
Better Societal
Resource Utilization
Improved Reliability
Improved National
Security
Operating Cost
Gen Capacity
Reduced Outages
Better Environmental
Others
Energy Generation
Improved PQ
Efficient Economy
Ancillary Service
Capacity
Fewer rollouts
T&D Assets
Competitive Markets
T&D Asset Operation
Enable Renewables
Fewer outages
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Some Puzzlers
• Devices and controls specifically added to mitigate the adverse
impact of distributed PV which itself is claimed as a benefit
– Is that a benefit to consumers? or
– A reduction in the value attributed to PV?
• Reduced cost of Smart Grid elements due to economies of scale
– Is this attributable to the SG? or
– Just the way of the world, a coincidental, not attributable, benefit?
• Improved perception of utilities, other entities – who gains from good
will, and what is it worth to monopoly entity?
• Enabling more retail competition,
– Is the real benefit measured already in induced kW and kWh changes?
• Horizontal and vertical expansion of utility economic activity
– If utilities provide PHEV charging service, offer HAN systems, who gains
and how , especially if those are regulated services? Does this restrict
their competitive supply that might be cheaper or more robust?
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6
Summary
• The DOE/EPRI CBA framework provides a foundation
for consistent and credible evaluation of Smart Grid
benefits
• Some adaptations improve its suitability
–
–
–
–
A functional definition of benefits
Methods for measuring the benefits by category
Monetizing the benefits
Clear linkage of cause and effect
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Measuring Smart Grid Impacts
C
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7
Metrics for Utility Expense Reduction
• Impacts that are direct measures of benefits:
Data Sources
– Reduced expenses
•
•
•
•
• Utility customer billing
records
• Utility general accounts
Lower theft losses
Reduced outage restoration expenses
Lower maintenance expenses
Lower system dispatch costs
– Increased net revenues (another source to offset
investment costs)
•
•
•
•
•
•
Prepaid service enabled
Seasonal shut off
Reduced read-to-pay time
Fewer estimated bills
Faster account service initiation/termination
In-home device monitoring services
• Department account
records
• Cost of service studies
• Customer
demographics
• Estimates of new
service enrollment and
usage
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Metrics for Avoided Costs
• Avoided capital costs
– Reflect the reduction in the
cost to serve load
• Generation plant investments
• T&D investments
– Generally measured in terms
of kW avoided
• Avoided energy costs
– Reflect the cost of operating
cost of the generation unit that
otherwise would have been
dispatched
• Measurement issues
– How is capacity adequacy
affected (kW impact)?
– What generation units are
not built
• Peaking
• Base load
• Cycling
– How is total dispatch
effected?
– Are ancillary services
requirement affected?
– Impact of market structure
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8
Baselines
• A baseline establishes:
–
–
–
–
For a specific impact
The level of impact that would have otherwise realized
But for the Smart Grid investment
Need to forecast outcomes (baseline) over the SG
investment lifetime to account of base dynamic influences
• Perspective
– Marginal perspective- how did things change
– Measures temporal and spatial changes
– Historic data generally used to establish the basis for impact
measurement, but may have to model the baseline in some
cases
– Dynamic adjustments if investments system usage changes
would been made (occurred) anyway
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Baseline for Measuring Impacts Attributable to
Smart Grid Investments
• Asset performance
– Measures of currently generation efficiency (unit and
portfolio)
– Measure of today’s T&D system performance
• Consumer behavior
– What would consumption otherwise have been?
– What is today’s level of reliability? Service quality?
Area of
active
inquiry
• Economic activity
– Oil consumption for generation
– Character of electricity sector
• Expenditures by sector
• Labor multipliers
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Needs t
men
devlop
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9
Who is Responsible for, or Concerned
about, Demand Response EM&V Protocols?
CSPs
North American Energy Standards Board
s
litie
Uti
State
Agencies
National Associate of Regulatory Utility Commissioners
ISO/RTOs
Curtailment Service Providers
EPRI
ISO/RTO Council
C
IR
PSCs
Public Service Commissions
NAESB
RU
NA
Public Service Commissions
C
LB
NL
Federal Energy Regulatory Commission
EV
O
Lawrence Berkeley National Laboratory
FERC
Efficiency Valuation Organization
Technology Firms
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How demand response product
performance is measured
Deemed Device Response
kW
Metered
Metered Output
FPL
kW
kW
ICD
Deemed
Metered
Event
FPL
Metered
Output
Implied
Load
Response
Time
Typical
Output
Non -
Non compliance
compliance
Event
Event
Time
Time
Event-Driven CBL
Prior
Pre-Specified CBL
Days
kW
kW
Metered
Non compliance
CBL
Non compliance
Event
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Time
Metered
Event
CBL
Event
20
Time
10
Metrics for Improved Reliability
• Outage Mitigation
– Fewer outages
– Shorter duration outages
– Increased outage notice
• Power Quality
Improvement
– Reduced voltage sags and
spikes
– Harmonic stability
• Measurement issues
– What constitutes an
outage?
– Impacts of sags on
premise service
– Spatial and temporal
measurement
requirements
• Premise
• Circuit
• Network
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Metrics for Better Societal Resource Utilization
•National security
– Reduced imported oil consumption for generation
•Better environment
– Lower net emissions from electricity generation
•Efficient economy
– Employment
• Net job creation, character of the jobs
• Wages
– Economic output – GNP
– Social welfare
• Economic measure of resource productivity
Most are difficult to quantify, but methods
have been developed
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Monetizing Smart Grid Benefits
D
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All Roads Lead to Demand Response
On Average, 34% of Attributed Smart
Meter Benefits are Societal
(Customer)
Household-level Benefits of Demand Response
Societal
Operational and Societal Benefits (%)
Attributed to Smart Metering
100%
Operational
$350
$300
80%
$250
High
Low
60%
$200
$150
40%
$100
20%
$50
c
Se
t'
Na
it
cr
2
CO
ed
ba
ed
ck
P
Fe
d
(b
)
mE
on
Co
t
( a)
eg
Or
on
rm
on
eg
Or
t
e
as
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Ve
yE
nM
erg
Ce
En
RT
DR
E
d
G&
nE
SD
Co
E
&E
SC
PG
TO
U
$0
0%
Revised 0721.08
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12
What is the Value of Demand Response?
• Demand response is a change in the
consumption of electricity due to a
change in the price paid, or another
inducement to do so
• The value of such changes depend on:
– Economic outcomes
• Market price changes
• Dispatch costs
– Reliability conditions
• Value of reliability
• Net demand response benefits
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Lots of Demand Response Already
DR Resources by Type
Distribution of Demand Response Resources by Category
80%
70%
73%
ISO/RTO Total (23,129 MW)
68%
United States (20,864 MW)
57%
60%
Canada (2,265 MW)
50%
40%
30%
17%
17%
20%
12%
12% 12% 14%
10%
12%
4%
3%
0%
Capacity
Ancillary Services
Energy-Price
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Energy-Voluntary
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13
IRC Estimates of DR Resources as
Percentage of Peak
Demand Response Reources as Percentage of
System Peak by ISO/RTO - Summer 2007
Mean
SPP
PJM
NYISO
MISO
ISO-NE
ERCOT
CASIO
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
ISO/RTO Council, Markets Committee. October 16, 2007. Harnessing the Power of Demand.
Available from www.isorto.org.
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How DR Generates Value
• Product design determines how the demand response program is
activated and produces benefits
– Autonomous. The consumer decides at what price it changes
consumption
– Directly dispatched. An external entity has the ability to curtail a device’s
usage
– Self-dispatched the consumer controls the response decision
• Market or enterprise circumstances determine when an event is
manifested
– Prevailing energy prices
– Level of system operating reserves
– Demand response provider’s internal value
• Value is determined by how markets and consumers are impacted
– Wholesale value is transparent
– Vertically integrated utility value is like administratively determined
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14
Modified NERC and NAESB characterization to
accommodate retail pricing structures
DemandSide
Demand
Response
Energy
Efficiency
Dispatchable
Resource
Reliability
Customer Choice
& Control
Economic
Dynamic
Pricing
Energy
Bids
Capacity
Fully
Hedged
Time-of-day
Schedule
Uniform
Price
Emergency
Day
Ahead
Streaming
Prices
Step
Rates
Ancillary
Services
Real
Time
Call
Options
Demand
& Energy
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DR Program Features
Plan Features and Provisions
Product Features
Event Characteristics
Benefits
• Term
• Notice
• Option/availability payment (+)
• Caps and floors on enrolled
load
• Duration
• Event performance payment (+)
• Frequency
• Overall performance payment (+)
• Total Exposure/yr, /contract
period
• Non-compliance penalties (-)
• Instrumentation requirements
• Transaction costs (-)
• CBL determination
Participation
Response
Number of
Customers and
their load basis
Load reduction
undertaken (MW,
MWH)
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Valuation ($/MW,
$/MWH)
30
15
Dynamic Pricing Participation
• Residential Dynamic Pricing
–
–
–
–
EDF = 75% or more on dynamic TOU rate
Salt River and APS + 20% or more on TOU rate schedule
Gulf Power = 30% of target on TOU/CCP
CA pilots estimate
• ~30% predicted acceptance
• 5% actual participation
– Pilots report 20-25% subscription rates for pilots
• Target recruiting
• Participation incentives
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Simulated DR Plan Participation Rates
Pricing Portfolio Participation
80
Participation
%
70
Res
60
Com
50
Ind
40
30
20
10
Ind
Com
Res
0
RTP
VPP
TOU
Class
Defualt
Pricing Plan
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16
Potential Benefits Attributable to Residential RTP
$ Million/Yr.
$40
Potential Residential RTP BenefitsScenario-W eighted 7 Yr. Av erage
$35
Non-Par ticipants
$30
Participants
$25
Total Re s ide ntial
$20
$15
$10
$5
$0
Seven Year Avg.
Real-Tim e Response
Price
Doubled Elasticity
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Reliability Improvements
• Smart Grid provides for more localized measurement of
individual premise service status
• If this information is integrated into restoration systems, the
duration of outages may be reduced, which translates into
more value to consumers
• Such an analysis requires:
– Identifying changes in CAIDI that would be attributable to Smart
Metering
– Estimating customer outage costs
Change in Outage
Duration
X
Outage Cost
OUTPUT
=
Smart Metering Premiselevel Reliability Value
Residential
Small Commercial
Baseline Cost per Outage
$5.73
$295 - $475
Marginal Cost per CAIDI Minute
$0.01
$5.45
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17
Improved Utilization Efficiency- Feedback
30
Feedback Studies - % Electricity Savings; Direct and Indirect
Feedback
• A wide variety of studies have been
conducted over the past 20 years to
quantify the impact of information on
electricity consumption:
25
% Savings
20
15
...
• Indirect feedback – provides
consumers with more detailed and indepth analyses of billing information
10
5
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
0
Study #
• Direct feedback – provides consumers
direct access to the meter contents
• The reported impacts over both feedback
types, reductions in total kWh consumed,
range from zero to 25%
Feedback Studies - % Electricity Savings - Electronic Display
20
18
• Electronic display results also exhibit a
wide range of energy reduction values
Pre-paid metering
16
% Savings
14
12
10
• Most studies involved only very few (under
150) participants for a year or less.
...
8
6
4
2
0
2
6
9
10
17
18
19
20
21
23
24
25
Study #
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Feedback Impacts
% Reduction in HH Energy
Metastudies
30%
• Darby 2001, 2006
• Fischer 2007
25%
• Abrahamse, et al., 2005
20%
Pilots
15%
• Before and after 2000
10%
• Direct vs. indirect
• Slow vs. fast feedback
5%
• North America, Europe
0
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18
Feedback Hierarchy
• Darby provided an important distinction; indirect vs. direct
• EPRI added a functional hierarchy
Feedback Hierarchy
1
2
3
4
5
6
Standard
Billing
Enhanced
Billing
Estimated
Feedback
Daily/Weekly
Feedback
Real-time
Plus
Monthly
invoice
Tips on
how to
save
Tailor
audits
and
advice
Real time
Feedback
Readily
available
usage
data
(actual or
estimated
usage)
Periodic
reports on
actual
usage
“Indirect” Feedback
provided after consumption occurs
Real – tie
data plus
controls
“Direct” Feedback
provided as consumption
occurs
Information availability
Low
High
Cost/Effort to implement
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Smart Grid & Smart Pricing- Example
Application
• Thermostat receives
day-ahead hourly
prices
Utility
Communications
• Consumer sets upper
and lower limits
• Thermostat “learns”
thermal, consumer
and weather impacts
Demand
Utility
Dynamic
Communications
Systems
Control
PreCool
Clip
Efficient
Building
Systems
Internet
PV
Consumer Portal
& Building EMS
Distribution
Operations
Recover
12
Midnight
Renewables
Distribution 12
12
Data
Operations
Noon
Midnight
Management
Advanced
Metering
Control
Interface
Plug-In Hybrids
Distributed
Generation
& Storage
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Smart
End-Use
Devices
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19
Smart Charging: Key to Reducing PHEV
Impacts
July 27th 2007 24 hr: Total Loading for the Feeder Under Study
Added peak load without PHEV
charging integration
12000
Total Loading at Substation (KW)
11000
10000
9000
Added off-peak load with smart
PHEV charging
8000
off-peak load
7000
off-peak load
6000
Base Load Scenario
5000
PHEV Case 3:- (240V, 12A) Diversified Charging @9pm-1am Penetration=10%
4000
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Hours
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Comparison of DR Plan Event Impacts
Source: Faruqui, April 20008
60%
CPP with
enabling
tech
% Impact on Load
50%
50%
TOU with
enabling
tech
40%
40%
CPP
30%
30%
PTR
TOU
20%
20%
10%
10%
:
• Differences among pricing structures are largely due to event
price differences, not elasticity differences
• Participation levels and sustainability is highly speculative
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20
Valuing Demand Response Benefits - An
Elemental Method
Basic Program Characterization
• Participation rate
• Reference load profiles for target customers
• Price change
–
–
X
Elasticity
Event prices, penalties
Reference price
X
• Price response
–
–
–
Event load
Level of price response
Event/Peak coincidence
Price Change
X
• Avoided cost
–
–
Usage and
Coincidence
Participation
Energy
Capacity
Generation Capacity
& Energy Values
• Reliability benefit
• Costs of program implementation
=
Benefits
For Smart Metering business cases, the frame of reference is incremental; how
does Smart Metering enhance the levels of key parameters?
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An Illustrative Example
• An example of a specific demand response product illustrates the assumptions required
and their implications for the resulting level of benefits
• The Peak Time Rebate (PTR) serves to illustrate the methods and implications
• PTR is assumed to be deployed to reduce coincident peak demand and thereby reduce
capacity costs
• PTR Events are declared each year to coincide with the system peak load
Assumptions
Peak Time Rebate
• Participation is voluntary
• Utility determines when to
declare an event
• Participants that reduce
load are paid the Rebate
price
• No penalty for failure to
respond
•
•
•
•
•
•
•
Perfect foreknowledge of when the system peak occurs
Avoided capacity cost = $100/kW year
20 year lifetime for Smart Metering
100,000 households
Average 14,000 kWh/yr
65% coincidence of peak energy and system peak kW
System cost - $20 million (NPV)
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21
NPV 20-Year Value at Higher Buy-back Rebate
• Lightly shaded (green) cells exceed the Smart Metering capital cost of $20 million.
• Participation rate of at least 30% (corrected value)
• Elasticity of at least 0.10
What some pilots exhibited
• The dark shaded (black) cells exceed the capital cost plus the participant incentives
• Participation of at least 50% (corrected value)
Not yet demonstrated
• Elasticity of at least 0.175
• Values assume that only one event is called per year to achieve the peak reduction. If more
events are required, then the net benefits are less.
NPV 20-Year Value at Buy-back Rebate 8 times Standard Rates
Participation
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
$
$
$
$
$
$
$
$
$
$
0.025
872,603
1,745,205
2,617,808
3,490,411
4,363,014
5,235,616
6,108,219
6,980,822
7,853,425
8,726,027
$
$
$
$
$
$
$
$
$
$
0.05
1,745,205
3,490,411
5,235,616
6,980,822
8,726,027
10,471,233
12,216,438
13,961,644
15,706,849
17,452,055
$
$
$
$
$
$
$
$
$
$
0.1
3,490,411
6,980,822
10,471,233
13,961,644
17,452,055
20,942,466
24,432,877
27,923,288
31,413,699
34,904,110
$
$
$
$
$
$
$
$
$
$
Elasticity
0.15
5,235,616
10,471,233
15,706,849
20,942,466
26,178,082
31,413,699
36,649,315
41,884,932
47,120,548
52,356,164
$
$
$
$
$
$
$
$
$
$
0.175
6,108,219
12,216,438
18,324,658
24,432,877
30,541,096
36,649,315
42,757,534
48,865,753
54,973,973
61,082,192
$
$
$
$
$
$
$
$
$
$
0.2
6,980,822
13,961,644
20,942,466
27,923,288
34,904,110
41,884,932
48,865,753
55,846,575
62,827,397
69,808,219
$
$
$
$
$
$
$
$
$
$
0.25
8,726,027
17,452,055
26,178,082
34,904,110
43,630,137
52,356,164
61,082,192
69,808,219
78,534,247
87,260,274
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Externalities
• Externalities are costs associated with economic activity that are
not included in the price paid by consumers
• As a result, resources are not used optimally from a societal
perspective
• Smart Metering may enable changes that reduce externalities
– Reduced kWh usage that is oil-based reduces reliance on imports, which may
have implications for national security
– Reduced kWh usage that reduces generation carbon emission reduces costs
associated with the associated adverse environmental impacts
• Externalities are sometimes associated with market failure – the
missing cost element in the good is an indication that the market is not
functioning properly
• But, in the absence of a market, how are such costs monetized?
– Cicchetti- implied national security adder = $.057 to $.014 /kWh
– Synapse – implied CO2 emissions
= $.016 to $.018/kWh
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Different Average Emissions Approaches
Yield Different Results
1.2
0.95
0.8
Tons CO2
0.85
0.79
0.75
0.69
0.67
MWH
0.4
0.0
Avg. U.S.
Total
1
Avg. U.S.
Non-Base
Source: U.S. EPA eGrid Database
2
Avg.
Southwest
Total
3
Avg.
Southwest
Non-Base
4
Avg. State
(Arizona)
Total
5
Avg. State
6
7
(Arizona)
Non-Base
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Macroeconomic Impacts
• Disruptive changes in sector spending
behaviors
can trigger beneficial changes in the economy:
– Expanded regional economic activity
– Increased employment and wages
• Smart Grid may be the source of such
• changes arising from:
– Changes in utility expenditures
– Changes in consumer expenditures associated
with
• Reduced electricity costs (if applicable)
• Purchase of other products and services
• Characterizing and quantifying them involves
economic sector macroeconomic
(Input/Output) modeling
. Economic Impacts for AMI and Resulting Demand Reduction Programs
AMI Investment and Demand Response
Additional
Indirect and Induced
“Multiplier”Effects
Phase I: The Installation
AMI Hardware and
Software Installation
Installation of Customers’
Smart Meters
Customers’ Increased
Utility Bills, no
Change in
Electricity Use
Increased Direct, Indirect,
and Induced Effects:
Sales, Income,
Value Added, Employment
New Direct
Spending: Equipment
& Installation
MINUS
Reduced Direct
Consumption Spending
Reduced
Indirect and Induced
“Multiplier”Effects
Reduced Direct, Indirect,
and Induced Effects:
Sales, Income,
Value Added, Employment
Net Total Effects:
Sales,
Income,
Value Added
Employment
Base Scenario, without AMI Investment and Installation
Customers’ Original
Utility Bills &
Electricity Use
Original Direct
Consumption Spending
Indirect and Induced
“Multiplier”Effects
Total Effects:
Sales,
Income,
Value Added
Employment
– Requires using very specialized and generally
expensive modeling techniques
– The expenditure changes associated with Smart
Metering may not involve substantial changes in
expenditure
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The Cost to Realize Smart Grid Benefits
E
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Issues to Resolve
• What is the purpose of the CBA?
– Calculate demonstration project net benefits
– Estimate the net benefits for the project
• Under repeated applications at the same scale
• Scaled-up applications
• What costs need to be measured?
–
–
–
–
All project costs
Distinguish R&D (one-time) from project requirements costs
Today’s cost or cost at full scale and scope
Collateral costs
• Access to pertinent data
– Utility
– Vendor/contractor
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CBA Application to EPRI Smart Grid
Demonstration
F
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Step-wise process
1.
2.
3.
4.
5.
Characterize project outcomes
Map goals to impacts
Monetize estimated impacts
Estimate costs
Establish performance tracking requirement
1.
2.
3.
Cost reporting
M&V protocols
External variable measurement
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Next Steps
• Develop operational manual to guide
protocol application
• Test out protocols on one or more projects
• Revise and document protocols
– Application guides for EPRI Smart Grid (and
Energy Efficiency) demo
– Coordinate with DOE
• Coordinate development of protocols
• Share experiences
• Develop analytical tools
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