Smart Grid and the REA

Transcription

1 9/24/2010 Smart Grid and the REA Making Smart Choices Part of the Smart Plan

2 Smart Grid and the REA Making Smart Choices Part of the Smart Plan Smart Grid is all the Buzz It s a market-wide, world-wide future-endorsing phenomenon Smart Grid has the power to bring aging electricity systems into the 21 st Century and beyond, and implementation is occurring in almost every corner of the world. Google Smart Grid and there is no shortage of links and web sites, conferences, magazine articles, government papers, blogs, posts and news updates. But what is Smart Grid? How does this initiative fit the rural power utility and what changes have to be made in order for the rural power utility to fit into the Grid? When we talk about Smart Grid, we talk about a vision and in transposing a vision to reality there are perspectives that must be considered in order to acquire completeness. It s not as simple as interconnecting utility distribution systems that have been around for 30, 40, 50, or even 60 years to something that is new technology. Today, REAs utilize business tools such as asset management and pole plant programs to plan and implement upgrades to aging wire systems. This process allows the wire owner to replace tangible items such as wires, poles, and other utility hardware. With the implementation of a Smart Grid, two-way communication capabilities must intertie electricity services with data transfer, metering devices and smart consumers. It s a relationship that assumes 1

3 the end user can take information and change their behavior in order to reap the benefits of this kind of complex system. This is where the relationship with the rural farm customer loses its merit this consumer cannot choose to perform some of the functions of their farm operations at off-peak times. This is where the cost to the rural electrification associations to implement AMI metering is not conducive to cost efficiency, which fails to address the longevity of their association or the benefits to their members. An increase in the number of meters being installed in some jurisdictions is due in part to the influx of money from those governments. The US is injecting $3.4 billion in stimulus funds for Smart Grid technology. It s easy to get excited in investing when the money is handed over to you to ease implementation but is this too quick, given the newness of the initiative and the urgency with which it is consuming the industry. This initiative is not conducive to rural utility applications not only from a cost perspective but from an end use perspective. As mentioned above, the rural farm customer is not readily able to adjust to the suggested changes in use patterns in order to avoid the higher costs associated with electricity consumption during peak times. It must be made clear rural electrification associations are not opposed to the technology of AMR metering and its ability to improve meter reading capabilities and billing accuracies. Many REAs running their own utility operations have implemented the AMR meters and have experienced the benefits technological advances provide. Accurate actual data is possible on a monthly basis utilizing radio frequency technology, including aerial readings in some cases, at a fraction of the cost. For REAs, the difficulty with the AMI strategy lies in the frequency of reads (hourly) and the utility costs that apply to peak usage periods; very often the precise times a farm consumer must consume electricity. There is also a prohibitive cost for obtaining technologically advanced specialized software and systems required to collect data metered through the grid. Has enough study gone into the effects this will have on all areas of the utility market? If Alberta rushes in to implement this just to keep up with global applications, are we sacrificing a planned implementation just to put a Smart Grid in place? We are not leaders in this initiative is there a reason to roll it out in haste? Definition of Smart Grid Smart grid is the electricity system, from point of generation to the point of consumption, integrated with two-way digital communications and information technology. This integration will provide the grid with enhanced operations and reliability, increased customer service efficiency, and a reduction in costs all while providing environmental benefits. A Smart Grid will overlay an already implemented distribution grid with information and metering capabilities producing a smart system of interconnected technologies. In the overall schematics of the plan, it is proposed that a Smart Grid will produce smart consumers because electricity consumption and the ability to change usage patterns will become evident to the end-user the electricity customer. End-use meters and specialized computer software will connect consumers to their consumption habits with the assumption that when presented with this information, consumers will make an educated decision to change their own use patterns, whereby benefiting the system overall. How does Smart Grid fit Alberta? The Smart Grid isn t a thing, but rather, a vision and to be complete, that vision must be expressed from various perspectives its values, its characteristics, and the milestones. Smart Grid values must encompass the answers to smart questions asked about the market into which it will be implemented. There are several questions that must 2

4 be answered in order to determine the value of Smart Grid implementation in Alberta. Does the analysis of timing, cost benefits, economics, and technology ensure they are in sync with Alberta`s electric system? What is the value to Alberta power consumers? The transformation to the Smart Grid will require new investment and commitment by the Government and its many stakeholders. These stakeholders expect significant value in return. Understanding how this value will be created is an important step in defining the vision. Expectations for the Smart Grid are great and will be realized through advances in each of the six areas described below: It must be more reliable. A reliable grid provides power, when and where its users need it, and of the quality they value. It must be more secure. A secure grid withstands physical and cyber attacks without suffering massive blackouts or exorbitant recovery costs. It is also less vulnerable to natural disasters and recovers quickly. It must be more economic. An economic grid operates under the basic laws of supply and demand, resulting in fair prices to consumers and adequate supplies. It must be more efficient. An efficient grid employs strategies that lead to cost control, minimal transmission and distribution losses, efficient power production, and optimal asset utilization while providing consumers with options for managing their energy usage. It must be more environmentally friendly. An environmentally friendly grid reduces environmental impacts through improvement in efficiency and by enabling the integration of a large percentage of intermittent resources that could not otherwise be reliably supported. It must be safer. A safe grid does no harm to the public or to grid workers and is sensitive to users who depend on it as a medical necessity. Smart Grid Principal Characteristics The Smart Grid can be considered a transactive agent. That is, it will enable financial, informational, as well as electrical transactions among consumers, grid assets, and other authorized users. Its functionality is defined by the following seven principal characteristics: First, it will enable active participation by consumers. The Smart Grid will give consumers information, control, and options that enable them to engage in electricity markets. Grid operators will treat willing consumers as resources in the day-to-day operation of the grid. Well-informed consumers will modify consumption based on the balancing of their demands and resources with the electric system s capability to meet those demands. Second, it will accommodate generation and storage options. It will seamlessly integrate all types and sizes of electrical generation and storage systems using simplified interconnection processes and universal interoperability standards to support a plug-and-play level of convenience. Large central power plants, including environmentally friendly sources such as wind and solar farms and advanced nuclear plants, will continue to play a major role even as large numbers of smaller distributed resources, including Plug-in Electric Vehicles, are deployed. Third, it will enable new products, services, and markets. The Smart Grid will link buyers and sellers together from the consumer to the Regional Transmission Organization. It will support the creation of new electricity markets from the home energy management system at the consumer s premises to technologies that allow consumers and third parties to bid their energy resources into the electricity market. The Smart Grid will support consistent market operation across regions. 3

5 Fourth, it will provide power quality for the digital economy. It will monitor, diagnose, and respond to power quality deficiencies resulting in a dramatic reduction in the business losses currently experienced by consumers due to insufficient power quality. Fifth, it will optimize asset utilization and operate efficiently. Operationally, the Smart Grid will improve load factors, lower system losses, and dramatically improve outage management performance. The availability of additional grid intelligence will give planners and engineers the knowledge to build what is needed when it is needed, to extend the life of assets, to repair equipment before it fails unexpectedly, and to more effectively manage the work force. Operational, maintenance and capital costs will be reduced, thereby keeping downward pressure on prices. Sixth, it will anticipate and respond to system disturbances (self-heal) implemented using the consumer application and system criticality. It will heal itself by performing continuous self-assessments to detect and analyze issues, take corrective action to mitigate them and, if needed, rapidly restore grid components or network sections. It will also handle problems too large or too fast-moving for human intervention. And finally, the Smart Grid will operate resiliently against attack and natural disaster. The Smart Grid will incorporate a system-wide solution that reduces physical and cyber vulnerabilities and enables a rapid recovery from disruptions. Its resilience will create an image that intimidates would-be attackers. It will also be less vulnerable to natural disasters. Smart Grid Objectives: To have good stewardship of Alberta s economic and natural resources, demands that we all understand the outcomes, and costs of these efforts. Affordability, technology readiness, and long-term effectiveness raise complex questions that need answers before cooperative utilities can make significant investments. Since there is no existing harmonizing of software, hardware and communications applications, any technology development must be identified and addressed prior to implementation. Requires identification and understanding of roles and actions of industry and consumer stakeholders. Development of studies or pilot projects to test the efficiency and cost effectiveness deployment of Smart Grid capabilities. Potential benefits: lower electricity costs, lower demand, reduced cost of power interruptions, lower emissions of greenhouse gases, improved power quality, system reliability through the use of integrated, secure computerized systems. Deployment of a Smart Grid in Alberta means interlaying a system over a system and interconnecting all the components that will enable a useable and feasible system. We must also consider that this implementation will be integrating systems between utilities. In establishing compatibility, there are necessary studies that need to be done in order to determine the relationship between the new and the old systems, between systems operated by different companies, and any barriers that might exist. 4

6 The AFREA believes the principles and criteria that should guide the provincial deployment of a smart grid would be, as one example, to implement two studies similar to the US DOE NRECA model i : Study 1: End-to-End Demand Management Study 1.1: Demand Response Using Two-Way Communication Study 1.2: Utility-Consumer Technology and Pricing Pilots Core Objectives: End-to-End Demand Management a. Demonstrate advanced two-way metering infrastructure and conservation voltage reduction programs to study technology readiness and impact on peak demand. b. Advance systems integration and cyber security controls that will enable end-to-end control, sophisticated pricing signals and load control. c. Quantify the impact of in-home energy use display devices for household accounts in terms of energy use reduction and shifts in time of energy use; describe the shifts in customer energy usage behavior in response to the presence of in-home displays and, if applicable, price signals. d. Support the DOE s Smart Grid Demonstration Program (SGDP) studies, Clearinghouse, and industry/public outreach. Study 2: Advanced Distribution Grid Management Study 2.1: Integrated Systems Advances and Studies Study 2.2: Meter Data Management (MDM) Applications and Uses Study 2.3: Distribution Automation Applications and Studies Core Objectives: Advanced Distribution Grid Management a. Develop and test MultiSpeak specification extensions and additional software development to enable and advance systems integration of multiple AMI, MDM systems, self-healing feeders, and advanced Volt/VAr programs. b. Demonstrate self-healing feeders for low-density utilities and advanced Volt/VAr programs for reducing losses. Learn what works and what doesn t work and at what cost. There would also need to be a report on case studies and best practices. c. Measure impact on the power quality and reliability metrics of these programs and report on leading approaches. d. Support the DOE s SGDP studies, Smart Grid Clearinghouse, and industry/public outreach. At the time of writing this paper, the US DOE granted final approval to matching financial assistance to the NRECA in the amount of $33.9 million to embark on the nationwide demonstration deploying more than 153, 000 smart grid components across the country to test the value of the new technologies for cooperative consumer members. ii Smart Grid Diagram iii 5

7 Smart Grid An AFREA Alberta Perspective: In defining Smart Grid there are three major components to consider: System Reliability Automated and Advanced metering Consumer equipment and appliances System Reliability is critical to the well being of all Albertans including the efficiency of industry regardless of the size or type. To implement this initiative, consideration must be given to the criticality of the system feeder and the customer/member it serves. Feeders in urban areas that feed thousands of customers and carry critical loads require a much higher level of reliability than one that feeds a rural customer/member on a radial feed that can endure a longer outage. There is a realization that electricity is an interruptible service and system reliability is not 100%. In the implementation, this application is critical as it does not cater to the one size fits all concept. Automated Metering (AMR) has been or is being implemented in Alberta with resounding success. The process of two way communication with the implementation of advanced meter reading equipment does have its technological benefits within the REA world. Distribution System Owners are providing accurate monthly meter reading and with those advancements, the bills to our members/ customers are considerably more accurate. The REA also experiences a decrease in costs to administer this service due to the reduced overhead and the ability to perform essential services in a more efficient manner. Advanced Metering Infrastructure (AMI) The Alberta DOE continues to promote AMI with hourly meter readings which could very costly with little or no benefit to consumers in Alberta. Studies have been completed throughout the world identifying that Smart Grid is the best approach to enhancing an electrical system. Due to the enormous cost and the impact on Rural Alberta we propose that a pilot and subsequent study be initiated to confirm these benefits in the Alberta Electric System and Market. With the current information available the AFREA supports the concept of Smart Grid including AMI/AMR that facilitates monthly meter readings. Equipment and Appliances: Having a view and remote control over equipment and appliances in the home or business using today s technology has proven successful in areas where there is large residential load (i.e. -Air Conditioning and Heating) that have major impacts on peak shaving. There has been considerable research completed in other jurisdictions, however, a pilot and a study is required to prove the application and benefits in Alberta. The AFREA has identified four main areas of concern with Alberta AMI and its implementation for REAs: There is no business case to support AMI with hourly meter reading capability and the cost/benefit analysis of such a project has not been proven Efficient data collection and transfer technology is not currently available for rural applications however Smart appliances have been developed and are being implemented in Smart Grid Systems Our members could see a substantial increase in their power bills which requires a pilot and a study to fully understand the impact Some areas of the agriculture sector would have difficulty changing their operation to avoid the peak costs. To determine the impact and solutions, initiate a pilot and study around rural options to deal with business structures that need energy at peak times, such as grain drying, fans barns etc. The bigger issue may also be that the price for energy comes after the hour, not at the beginning of the hour, so a farmer would have the ability to change his behavior based on pricing. 6

8 A more measured approach to changing consumer s behavior would be to develop and encourage the use of energy efficient equipment and appliances with use in-home devices that monitor energy usage. Engaging the consumer in their own electricity education first creates awareness then encourages accountability. With a targeted media campaign for consumers and promotion of energy efficient products, the benefits would be longrange with a change that reaches farther. This investment would be more affordable in comparison to the infrastructure costs for implementation by Distribution Owners. It would be prudent to implement cheaper alternatives to achieve the stated goals of the Provincial AMI initiative. AMR is virtually implemented in Alberta already. ATCO, FortisAlberta, and many of the REAs already have automated monthly meter reads. In-home devices are already available for less than $ but these blueline types do not work in the rural areas at all if your transformer and meter is over 50 feet away from the house; secondly, they do not work if you have stucco, metal or anything between your meter and your house! There are other in-house devices for rural applications, such as the Itron system, but they start at $ and need to be directly linked with the Internet at all times. If the Internet is not up and running or utilizing high speed connections, receiving timely information could be an issue especially if we are relying on that data to make behavior or usage decisions. The overall infrastructure, whether electrical or Internet technology, must support this application to make it successful. Alberta Solutions Our Position: Global awareness brings us to a point of realization Smart Grid is Inevitable There is a need for a reliable electric system that meets or exceeds consumer requirements, and a sustainable system that looks at today and the future. Smart Grid implementation is a world-wide initiative and the AFREA appreciates that this smart technology is part of the Alberta Energy Strategy. While we have our reservations on certain issues for REAs, and have expressed our concerns to the Department of Energy on their behalf, the AFREA also realizes that at some point there must be a level of acceptance and support, in order to move forward. Our REA members are rural Albertans with specific consumer needs, but strategies that meet the requirements of a growing province and a dynamic industry, affect everyone. Our expressed support of the system, if taken as a whole, benefits the community at a high level and shows our leadership in a process where there are logical steps to take. We must consider a sustainable and vibrant power future. This does not mean that an overall blanket application will work considering the differences in power consumers. As representative for a specific demographic, the AFREA proposes that a rural sample be selected to test Smart Grid implementation that sample chosen from our member Rural Electrification Associations would provide valuable feedback and data reporting based on usage and the farm consumer s ability to implement this new process. After this test sample of rural services is in place, monitoring would provide the measurements that allow for the identification of issues and concerns; statistics will either show support for the system or identify necessary improvements and changes required to the system as a whole. A structured implementation process geared 7

9 toward specific demographics and consumption requirements would provide valuable feedback that would benefit the system overall Alberta consumers would benefit from this model strategy. As technology changes and implementation progresses, there may be advances we are unaware of at this point in time. Considering only the current data, our position also supports the recommendation to implement AMI with hourly technology at some point in the future when the necessary technology is practical, efficient, and affordable. Because Smart Grid technology employs systems that rely on increased data transfer, investigation and implementation of a provincial data transfer and storage system, such as the NRECA s Multi-Speak, would be cost-efficient and could be accessed by all utilities in Alberta. A scheduled implementation and deployment study would allow for the necessary testing to provide valuable feedback on which to base further implementation. Smart Grid Alberta When we talk about Smart Grid, we talk about a vision and Alberta Government has that vision in the Provincial Energy Strategy. Rural Electrification Associations belong to the strategy as part of Alberta s history in the power revolution and are representative of consumers with similar yet specialized needs. In transposing this vision to reality there are perspectives that must be considered in order to acquire completeness and ensure success. What changes have to be made in order for the rural power utility to fit into the Grid? There must be a commitment from both sides to working together for a sustainable future and the AFREA is confident that Government support and financial backing would facilitate a successful Smart Grid implementation throughout Alberta. There needs to be a benefit and a plan for all Albertans. i United States (US) Department of Energy (DOE) National Rural Electric Cooperative Association (NRECA) model: Smart Grid Regional Demonstration (SGRD) Program. The NRECA project proposed to the US DOE in 2009 would include 27 cooperatives in 10 states and require over $66 million for implementation. It would be the test case across the country in support of the Smart Grid deployment. ii Patrick Lavigne, NRECA News releases iii Smart Grid diagram 8