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8/3/2019 Creating a Business Case for Smart Grid 10-2009
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MODERN GRIDS T R A T E G Y
Creat ing a Business Case for
Sm ar t Gr id Imp lem enta t ion
Smart Grid Initiatives for Utilities
Presented by Steve Pullins, Modern Grid Team
September 2009
Funded by the U.S. Department of Energy,Office of Electricity Delivery and Energy Reliability
Conducted by the National EnergyTechnology Laboratory
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Office of Electricity
Delivery and EnergyReliability
MODERN GRIDS T RA T E GY
2Powering the 21st Century Economy
This material is based upon work supported bythe Department of Energy under Award Number
DE-AC26-04NT41817
This presentation was prepared as an account of work sponsoredby an agency of the United States Government. Neither the UnitedStates Government nor any agency thereof, nor any of their
employees, makes any warranty, express or implied, or assumesany legal liability or responsibility for the accuracy, completeness,or usefulness of any information, apparatus, product, or processdisclosed, or represents that its use would not infringe privatelyowned rights. Reference herein to any specific commercial product,process, or service by trade name, trademark, manufacturer, orotherwise does not necessarily constitute or imply its endorsement,
recommendation, or favoring by the United States Government orany agency thereof. The views and opinions of authors expressedherein do not necessarily state or reflect those of the United StatesGovernment or any agency thereof.
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MODERN GRIDS T RA T E GY
3Powering the 21st Century Economy
“A little revolution now andthen is a good thing.”
- Thomas Jefferson, 1787
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4Powering the 21st Century Economy
Revolut ion?
Consumers’ interest is increasingly green and self-determining.
Grid complexities are increasing.
Political landscape is shifting, and the old electricitymodel is being questioned at its roots.
While today’s focus is on large wind plants, themassive change on the electric system is reallyhappening with distributed renewables.
This is the disruptive arena for the next 20 years -driven by consumers and the greening of America.
This requires significant intelligence in the grid anda new regulatory model.
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MODERN GRIDS T RA T E GY
5Powering the 21st Century Economy
2009 Elec t r ic Gr id ….. and t hen?
Generation
• 47%
• 17,342 units
Transmission
• ~50%
• 164,000 miles
Distribution
• ~30%
• 3 million miles
ConsumerSystems
• <1%• 12.3 M DG
500 wind parks50 solar parks 5,000 distributed wind
5,000 utility solar
2 M architectural wind5 M building solar
25 M residential solar
1 M PHEV/PEV
10 M PHEV/PEV100 M PHEV/PEV
100,000 Buildings as PP
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6Powering the 21st Century Economy
Resul t – Sea Change in t he Net w ork
Consumer engagement with resources to solve
power issues locally Two-way power flow in Distribution
As prices increase, local renewables will increasein residential, commercial, and industrial
Imperative to transform from passive to activecontrol in Distribution
New ways for Distribution to become a
Transmission resource
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7Powering the 21st Century Economy 7
Sm ar t Gr id Charac t er ist ic s
The Smart Grid is “transactive” and will:
Enable active participation by consumers
Accommodate all generation and storage options
Enable new products, services, and markets
Provide power quality for the digital economy
Optimize asset ut ilization and operate efficiently
Anticipate & respond to system disturbances (self-heal)
Operate resiliently against attack and natural disaster
…the enabler
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WEST VIRGINIA SMART GRIDIMPLEMENTATION PLAN
If you come to a fork in the road,take it.- Yogi Berra
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9Powering the 21st Century Economy
West V i rg in ia Sm ar t Gr id
Im p lem enta t ion Pro jec t
$640K project jointly funded throughAttachment H process by NETL, RDS,
Allegheny Power, AEP, State of WestVirginia, WVU, and DOE OE
Results will describe approach andvalue proposition of implementingSmart Grid in West Virginia
Cost & benefit analysis comparing thestate of current electricity grid andfuture Smart Grid in West Virginia
Address the role of coal in Smart Grid
Support economic development in State of West Virginia Only state-wide Smart Grid implementation plan
Establishes West Virginia and NETL as leader in Smart Grid
Only second Smart Grid study to be published
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West Vi rg in ia Sm art Gr id Solut ions
Solution Scope Advanced Meter
Infrastructure (AMI)
All residential, commercial, and industrial Customers represented by 998,317 meters
IT Integration (IT) A CIS Upgrade to accommodate AMI and DR functionality & Outage Management
Demand Response (DR) The aggregated sum of 104 MW of DR from Residential, Commercial, and Industrial Customers
Distribution Management System (DMS) The automated fault clearing & restoration of
service, circuit monitoring, and control of the Distribution System to include 707 circuits of 1,107 total circuits
Distributed Energy Resources (DER) 100MW of Base Generation, 800 MW of Peak
Generation, 250 MW of Advanced Storage and 100 MW of Wind Resources all capable of being dispatched on demand
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WV Sm art Gr id Cost s & Benef i t s
PV 20‐yr Cost and Benefits ($M) Solution Cost Benefits AMI $399 $1,649 IT $170 $1,308 DR $22 $1,091 DMS $454 $3,288 DER $832 $5,289 Total $1,878 $12,625
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WV Benef i t s by Benef ic iary
PV 20‐yr Benefits by Beneficiaries ($M)
Solution Consumer Operational WV Society US Society AMI $630 $439 $308 $271 IT $563 $136 $326 $283 DR $23 $614 $240 $214 DMS $2,909 $73 $303 $2 DER $3,368 $2 $301 $1,618 Total $7,493 $1,263 $1,479 $2,389
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WV Annual Benef i t s ($M)
Key Success Factors Benefits Annual Benefits ($M) (All Beneficiaries)
Reliability Reduced Consumer Losses $898 Reduce Power Quality Events $131
Economic Reduce Price of Electricity $399 Job Creation $215
Consumer Sales of DER Resources $175 Increased Energy Sales as Exports $7 Reduced Transmission Congestion $1 Increased Transportation Fuels
Business $5 Consumer Conservation $20 Operational Savings $194
Environmental Reduced Emissions $7 Security Reduced Blackout Probability &
Dependence on
Foreign
Oil
$13 Safety Reduce Hazard Exposure $1
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Tota l Benef it s & Cos t Rac k ing
$(2,000) $‐
$2,000 $4,000
$6,000 $8,000
$10,000 $12,000
$14,000
Benefits Net of Cost Total Benefits Benefits
Total Cost
Costs
WV SGIP US
and
WV
Benefit
and
Cost
Racking
20‐year NPV (in $M)
(Regional US + WV Utility + WV Consumer + WV Society)
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Rac k ing Cost s & Benef i t s by So lu t ion
$(2,000) $‐
$2,000 $4,000 $6,000 $8,000
$10,000 $12,000 $14,000
Benefits Net of Cost Total Benefits Benefits Total Cost Costs
WV SGIP All Solutions Benefit and Cost Racking
20‐year NPV (in $M)
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Com par ing Business As Usual t o t he
Sm art Gr id Plan
CapEx & OpEx ($ Millions) $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0
BAU CapEx
<‐‐SGCapEx BAU OpEx
SG OpEx
1 2 3 4 5 6 7 8 9 10111213141516171819202122232425
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MODERN GRIDS T RA T E GY
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Conclus ions
Implementing a Smart Grid will: Radically improve system reliability
Lower the carbon footprint Support a better sustainable business climate
Generate benefits beyond the borders
WV “numbers” (20-yr present value) ~ 1 million meters
Total Smart Grid Cost - ~ $1.9B
Total Smart Grid Benefit - ~ $10B
Benefit Cost Ratio: 5:1
A Smart Grid can be implemented with a portion ofthe business as usual (BAU) 10-year capital plan.
The next 20 years will be fun!
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For More In form at ion
For additional Information, contact Modern Grid Strategy Team
http://www.netl.doe.gov/moderngrid 304‐599‐4273 x101
Links:
The Modern Grid Strategy Smart Grid Newsletter
EPRI Intelligrid
Galvin Electricity Initiative
GridWise Alliance
GridWise Architecture Council
European SmartGridTechnology Platform
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