How AMI Enables the Smart Grid

The Department of Energys (DOE) Smart Grid Task Force brought together some of the leading thought and research groups in the Smart Grid arena in early 2008. Together, they agreed upon seven characteristics of a Smart Grid, and these characteristics now form the basis for defining a future power delivery grid that will meet the needs of the next generation of Americans. These seven characteristics that define a Smart Grid consist of: 1. 2. 3. 4. 5. 6. 7. Enable active participation by consumers Accommodate all generation and storage options Enable new products, services, and markets Provide power quality for the range of needs in a digital economy Optimize asset utilization and operating efficiency Anticipate and respond to system disturbances in a self-healing manner Operate resiliently against physical and cyber attacks, and natural disasters

Advanced metering infrastructure (AMI), also commonly referred to as smart meters or simply advanced metering, is one of the key technologies required to enable several of the Smart Grid characteristics, and it plays some role in all of them. For this reason, AMI must be viewed as a

Advanced metering infrastructure (AMI), also commonly referred to as smart meters or simply advanced metering, is one of the key technologies required to enable several of the Smart Grid characteristics, and it plays some role in all of them. For this reason, AMI must be viewed as a foundational enabling technology for the Smart Grid. The following describes the way in which AMI contributes to the realization of each of the seven characteristics of the Smart Grid: Enable active participation by consumers > Changing the manner in which electricity is consumed requires, by definition, some action or change in behavior by consumers. Historically, consumers typically received a bill for one month of electricity usage, with little or no explanation of how their habits and behavior influenced their monthly cost of power. Since the future supply-demand balance requires that we address both sides of the equation, the Smart Grid must provide the mechanism for participation by consumers. In order for consumers to begin to understand their usage of electricity, the meter must be able to track not just the total amount of electricity consumed in a billing period, but precisely when that electricity was used. This is a core capability of an AMI system, and is referred to as interval data, or load profiling.

foundational enabling technology for the Smart Grid.

The other key enabler provided by a proper AMI system is the AMI home area network (HAN), which allows real-time usage information to be transmitted wirelessly from the meter to devices in the home. Having the ability to monitor their usage in real time, using a device like an in-home display (IHD), gives the consumer meaningful feedback on how their habits or behavior ultimately impact their electricity bill, and provide them the opportunity to make more informed decisions about how and when they consume electricity. > Once the utility has implemented AMI and begun collecting interval data for all of their customers, they can then fundamentally change the way they charge for usage of electricity. Instead of charging a flat rate for usage, regardless of when it is consumed, they have the ability to link the time of consumption with an appropriate price for that time period that accurately reflects the wholesale power market conditions and relative scarcity of electricity at that time. The reason this is important is that implementation of time-based rates enables price-based demand response. > Demand response (DR) is defined by DOE and the Federal Energy Regulatory Commission as Changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized. - The industry has broadened the DR definition by including direct load control (DLC) solutions under the generic header of DR, although DLC is traditionally and more correctly categorized as demand side management (DSM). > Changes in the price of electricity over time can be accomplished via any of a number of different mechanisms using an AMI system, including: - Time-of-use (TOU), which uses pre-determined time buckets in which to record usage. Each bucket has a fixed price proportionate to the relative scarcity of electricity for that approximate period of time. - Real time pricing (RTP), a scheme under which the retail price of electricity is allowed to float to properly reflect the relative scarcity of electricity during any given period of time. Increments of time for RTP could be anywhere from as short as 5 minutes to as long as 1 day, and price information would typically be provided to consumers and/or end devices at least one time period ahead. - Critical peak pricing (CPP), which enacts significantly higher pricing for each incremental unit of energy consumed during critical peak periods, which are those periods when the electric delivery system is under severe stress. CPP is a subset of RTP. - Peak time rebate (PTR), is similar in concept to CPP in that it uses pricing to incentivize consumers to use less electricity during critical periods of system loading, but instead of charging more during those time windows, it provides a rebate to customers for their conservation during that time relative to a pre-defined baseline scenario. In effect, the utility is purchasing capacity from customers during critical peaks.

> In order to enable any type of time-based rates, the utility must be able to both measure, and collect in a timely manner, data which correlates an individual consumers usage with the time of that usage. - The higher the granularity of data that is available to the utility, the more flexibility they have in creating future time-based rate programs. - In order for billing calculation engines to process the interval data from every meter, that data needs to get back to the meter data management system (MDMS) at least once per day. - A redundant storage of interval data in both the meter and the MDMS nearly eliminates the possibility of lost data. > For consumers to alter their behavior in response to time varying electricity rates, they need the proper tools to both understand their usage patterns, and then manage them going forward - One such tool is the consumer display or as mentioned previously, IHD, which gathers data directly from the AMI electric meter and presents it to the consumer. - The customer portal is also a consumer data user interface, but rather than collect data directly from the meter, it is a Web interface that provides data as stored in the MDMS Accommodate all generation and storage options > At the residential level, supporting the connection and use of distributed generation (DG) and/or energy storage, collectively referred to as distributed energy resources (DER), requires the accurate measurement of the actual energy supplied by these DER. A properly designed AMI system enables full bi-directional energy measurement at the billing meter, as well as allowing for retrieval of measurement data from the device itself or an associated sub-meter, via the HAN. Collecting actual energy generated by each specific device will allow the utility to understand exactly how much customer generated power is being used to offset load, and exactly when that power is being produced. > The importance of proper creation and collection of measurement data for DER can not be over-emphasized. The majority of small scale, residential sized DG will most likely consist of solar and/or small scale wind turbines. As these are both classified as intermittent renewables, they will not always be available to offset load. When the percentage of a given utilitys load being offset by these sources is very small, the availability of the sources has little impact on the amount of power that the utility needs to provide from traditional resources. However, when the penetration rate of DG gets high enough that the availability of the DG resources starts to impact the load and supply forecasting of the utility, it becomes imperative that they know how much DG capacity to expect on any given day, and how much of their forecast load might be offset by these DG sources.

> In addition to DG, DER also encompasses distributed storage devices, which at the residential level will appear first in the form of electric vehicles. Whether they are pure electric, or plug-in hybrid electric vehicles (PHEVs), is less important than the fact that they are relatively large energy storage devices widely dispersed across the distribution system. In addition, during their charging mode, they are a significant new load on the system that can adversely affect system stability and reliability if their charging is not properly coordinated. Here again, the AMI system can play the role of enabler by collecting data on the energy being used specifically for charging an electric vehicle, and also for transmitting pricing signals to the vehicle to help coordinate when charging takes place. Enable new products, services and markets > The ability for end-users of electricity, and potentially even end-use devices themselves, to participate in energy markets is essential in order to remove the functional inefficiencies of wholesale power markets. The key to enabling this participation is linking the demand for electricity to the price of electricity in real-time, and a new class of products, services and markets can be created to address this problem once the enabling technology is deployed in the form of AMI. - In its simplest form, this can be accomplished by making price signals available to end devices via the AMI HAN. - The device that receives the price signal from the HAN could be as basic as an IHD, which simply increases consumer awareness to the fluctuating price of electricity during different periods of supply and system demand. This provides the consumer the basic knowledge necessary to make decisions on how and when to consume electricity. - On the other end of the spectrum, the price signals could go directly to an energy management system (EMS) in the premise that automatically modifies the operation of end devices based on pricing and user-defined parameters. - Additionally, by enrolling in utility programs that allow for direct load control within their premise, customers are in fact participating in energy markets by giving the utility flexibility in how and when they purchase power during various system operating conditions. Two-way communications with load control devices in the premise, as enabled by the AMI HAN, ensures that load control events can be authenticated for settlement purposes. > Going a step further, new services, such as aggregation of demand-side resources for all classes of customers, become a reality with AMI. Previously, this type of service was only practical with larger commercial and industrial customers, and required specific capital infrastructure to be deployed at those customers for them to participate. AMI, as an integral enabler of the Smart Grid, places the most important pieces of that infrastructure on every customer.

> As new products and services related to end-use energy management continue to evolve, it can be anticipated that markets will evolve alongside them to take advantage of the value created by improving the efficiency of energy usage. One example could be the creation of marketable GHG emission reduction credits resulting from technology deployed specifically to improve energy efficiency. Provide power quality for the range of needs in a digital economy > There are many aspects to power quality, and the meaning and importance of power quality is different for differing classes of electric consumers. Specific to the residential customer, voltage is a key determinant of power quality. Utilities are supposed to deliver electricity to residential consumers within a specified voltage band of 120 volts +/- 5% during normal operating conditions, and when designing distribution systems, this was one of their design criteria. However, voltage at any given point on the distribution system is not a constant, as it varies according to the amount of cumulative load on the circuit. Therefore, the voltage delivered to any given customer at any given time will vary significantly, and historically the utility had no way of monitoring delivered voltage without installing special equipment in response to customer complaints. As a result, residential consumers have been relegated to living with whatever voltage levels they received from the utility, which may or may not be within the appropriate operating band. Abnormally high or low voltage can be highly problematic for certain types of devices or electrical equipment, adversely impacting operation and sometimes dramatically shortening operating lifespan. However, only a very small percentage of the utilitys customer base understands the effects of voltage on their equipment or devices, and therefore most customers are unaware of the reason for device malfunction or failure when it is caused by variations in voltage. > Because of the enhanced capabilities of the electric meters that make up AMI, the technology will, for the first time, enable utilities to monitor voltage at the point of electricity delivery to every customer on their system. In doing so, they will be able to take a proactive position in identifying areas of their distribution systems where voltage levels are chronically out of tolerance, and address those problem areas before their customers suffer from equipment malfunction or failure. Optimize asset utilization and operating efficiency > Collecting and analyzing the proper data set from various points on the electric grid during all types of operating conditions can give the system operator and/or system designers a much deeper look into how the systems assets are being utilized - Asset management applications are interested primarily in historical data vs. real-time data. A proper AMI system has the ability to measure, record and retrieve data of sufficient granularity to allow for highly detailed usage analysis of all the components of the distribution system.

> Improving the electrical efficiency of the Grid, from the point where electricity is generated all the way to where it is consumed, is one of the objectives of the Smart Grid. Approximately 9 percent of electrical energy is lost as system losses in the transmission and distribution systems. One of the keys to reducing system losses on the distribution system is accurate measurement of operating parameters at as many points on the system as reasonably possible, such that system analysts can better understand exactly where losses are occurring, and can then determine which losses can be economically reduced. Not only does AMI, by virtue of its smart meters, provide a high accuracy sensor at every delivery point on the distribution network, but the communication system used for AMI data retrieval also allows data collection from other non-meter data sensors. The AMI system is one of the keys to generating the data that can ultimately be used by advanced analytical software tools to help reduce technical losses in the Grid. Anticipate and respond to system disturbances in a self-healing manner > The ability of portions of the distribution system to analyze operational parameters in real-time, and proactively take actions (switch re-configurations, etc) to isolate faults and recover undamaged sections has the potential to greatly reduce average outage times. These types of applications require very low latency data and communications capabilities which would typically be outside the scope of applicability for an AMI communications network. However, AMI systems do have some capabilities that are highly complementary to these applications: - Outage notification messages are sent by every AMI meter upon sensing loss of power. If a series of switch re-configurations occurs as a result of a self-healing sequence, these outage notifications will be an important source of data to system operators in verifying the state of the system after it returns to steady state. - Likewise, restoration messages are generated by every AMI meter when power is restored. These messages will provide key audit trail data for system operators to document the extent of individual outages. - After the system has returned to steady-state operation, the AMI system can be used to talk to individual meters, which gives system operators the ability to determine in real-time whether a meter has connectivity, and thus verify the assumed status of the distribution system. - Additionally, the ability to view delivered voltage for any individual meter would allow system operators greater insight into the operating state of a specific part of a circuit during troubleshooting or restoration. > Real-time simulation of the operation of transmission and distribution systems is a capability that does not exist today, but that is recognized as a tool that could provide incredible value to the system operator. This type of application could be extremely data intensive, and is likely to require extensive customization to model individual system configurations. While it is unlikely that an AMI systems data would be used to directly feed such a real-time model (due to data latency), there are some potential usages of AMI meter data that could enter into the modeling process.

Operate resiliently against physical and cyber attacks, and natural disasters > Unless utility systems are automated and interconnected, there is little real need for robust cyber security practices. However, since the entire concept of the Smart Grid relies on interconnected devices with high levels of automation, cyber security becomes one of, if not the most, important issues relative to Smart Grid. > Resiliency against physical attacks and natural disasters is outside the scope of advanced metering, but fortunately resiliency against cyber attacks is a core competency of AMI. With pervasive communication networks and previously unimaginable levels of automation on the distribution system, such as integrated service disconnect switches on every meter, comes a need for very robust communication security. With the deployment of highly secure AMI networks, utilities will have the ability to extend automation out to all levels of their system without compromising system reliability. AMI is one of the primary drivers of security practices for the distribution network level of the Grid.

Corporate Headquarters 2111 North Molter Road Liberty Lake, WA 99019 U.S.A. Tel.: 1.509.924.9900 Fax: 1.509.891.3355 Contact your Itron regional representative to learn more about the many ways Itron can help improve your business, or visit www.itron.com

Publication 100907MP-01 09/08