An Introduction to the Smart Grid

Envision a Smarter Electric Grid

New strategies, communication and information flows, technologies, transaction structures, and control of the electricity system in order to: Lower costs and give more choices for consumers Improve system reliability and efficiency Modernize the energy infrastructure Change the way humans manage their energy footprint
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How Does the Electric Grid Work Now?

Traditional Power System: A One-Way Process

Source: EPRI 2011

How Does the Smart Grid Work?

Tomorrows Power System: An Interactive Process

Source: EPRI 2011

What is the Smart Grid?

According to US Department of Energy (DOE):
Smart Grid is the term used for an electricity delivery system that is integrated with modern digital and information technology to provide improved reliability, security, efficiency and ultimately lower cost to the user.

According to Electric Power Research Institute (EPRI):

The Smart Grid is envisioned to provide the enhancements to ensure high levels of security, quality, reliability, and availability (SQRA) of electric power; to improve economic productivity and quality of life; and to minimize environmental impact while maximizing safety and sustainability.

Why All This Interest In Energy?

Electricity is one of the largest and most capital-intensive sectors of the economy.
Total asset value is estimated to exceed $800 billion, with approximately 60% invested in power plants, 30% in distribution facilities, and 10% in transmission facilities. Paid by Americas 131 million electricity customers, which includes nearly every business and household. There are more than 3,100 electric utilities and, there are nearly 2,100 non-utility power producers, including both independent power companies and customer-owned distributed energy facilities. Uncertain access to fuel resources cost may go out of control Increasing harm to the atmosphere global warming may change the planet Unpredictable power outages cascading grid failures disrupt commerce Poor utilization of economic capital unnecessary cost increases for energy users

Annual electric revenues the Nations electric bill are about $247 billion

There are a lot of risks we face by staying on the current path.

The concept of the base requirements for the smart grid is significantly more expansive today than it was seven years ago - EPRI, 2011 technical report
an investment level of between $17 and $24 billion per year will be required over the next 20 years.

Challenges For Utilities

The present electric power delivery infrastructure was not designed to meet the needs of a restructured electricity marketplace.
the increasing demands of a highly connected digital society increased use of renewable power production High concentrations of significant load and generation potential in the commercial and residential environment vulnerability to various security threats

In addition, investments in expansion and maintenance are constantly being challenged

Why is Smart Grid Important?

Fundamental shift in how electricity is generated, distributed, and consumed. Done right, and early, Smart Grid will be a major new economic driver . A major enabler of energy independence, green house gas reduction and the shift away from fossil fuels.

Smart Grid Benefits

Allows Direct Participation by Consumers.
The smart grid consumer is informed, modifying the way they use and purchase electricity.

Accommodates all Generation and Storage Options.

The Smart Grid accommodates all generation and storage options. The Smart Grid enables a market system that provides cost-benefit tradeoffs to consumers.

Enables New Products, Services, and Markets. Provides Power Quality for the Digital Economy.
The Smart Grid provides reliable power that is relatively interruption-free.

Optimizes Asset Utilization and Operational Efficiently.

The Smart Grid optimizes assets and operates efficiently.

Anticipates and Responds to System Disturbances (Self-heal).

Independently identifies and reacts to disturbances and performs mitigation efforts.

The Smart Grid resists attacks on both the physical and cyber infrastructure.
Source: EPRI 2011 Technical report

Operates Resiliently against Attack and Natural Disaster.

Who Will Benefit?

Utility customers Local investors Distributors of electricity and their suppliers Distributed generation suppliers Labor unions Utilities Industry Entrepreneurs EV manufacturers and distributors Universities

And Much MORE

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Smart Grid Attributes

In addition to the obvious benefits achieved by this enhanced functionality it is now obvious that other substantive benefits will accrue once the Smart Grid is implemented.
Chief among these is: 1. reduction of peak demand, 2. adoption of electric vehicles, 3. use of storage, and the increased use of renewable power production.

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Examples of Smart Grid Economic Benefits

Accelerated wind integration
More exportable energy/RECs Exportable technology and business processes

Accelerated EVs as storage and ancillary services

Reduced costs of EV operation and ownership Exportable technology and business processes

Advanced commercial building DR, monitoring and EE integration

Reduced building operating costs Exportable technology , business process and financing models Attraction of researchers
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Elements of a Smarter Grid

Source: US DOE, Smart Grid System Report, 2009

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Critical Smart Grid Elements

Networking capabilities to provide real-time understanding of grid status
Enables prompt correction of system disturbances, and to ensure interoperability among grid elements

Meters, sensors, controls and monitoring technologies

to allow for smart energy management, remote reading, fault detection, and tailored pricing options

Electric vehicles, water heaters, appliances and building energy management systems
used to smooth system peaks, integrate wind and hydropower, and to avoid cascading faults

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Smart Grid Things to Work On

Its Time to Think Different

While the Smart Grid will utilize the latest technology to achieve its goals, it is not just about technology. Implementation of the Smart Grid will require a complete rethinking of the public policy, technology application, utility business models, business processes and consumer behavior.

This is a real paradigm shift!