NETL “The Energy Lab”

Presentation Identifier (Title or Location), Month 00, 2008

NETL “The Energy Lab”

Tri-State Cooperative Annual Meeting

Steven Bossart, Director, Integrated Electric Power Systems Division

April 8, 2009

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WV Military Affairs / Public Safety , November 20, 2008

Agenda

• NETL Background• NETL Smart Grid Activities• What is a Smart Grid? • Smart Grid and ARRA• Electric Grid R&D Projects• Clean Coal in a Smart Grid Future• Cooperatives and Municipals• Questions


About NETL

West VirginiaPennsylvaniaOregon

4


National Energy Technology Laboratory

• Research spans fundamental science to technology demonstrations in Fossil Energy, Energy Efficiency, and Electricity Delivery and Energy Reliability

• Only government-owned and government-operated DOE national laboratory

• One lab, three research sites, five locations

• > 1,200 Federal and support-contractor employees

• Internal and external R&D programs

R. Boyle, 01/06/2009

Where Energy Challenges Converge and Energy Solutions Emerge

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Must Aim for Balanced Solutions

Energy Strategy Complexity

Need to Consider All Major Consequences of Energy Strategy

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U.S. data from EIA, Annual Energy Outlook 2009 early release ; world data from IEA, World Energy Outlook 2008

Fossil Energy Continues to Provide Vast Majority of Supply

Energy Demand 2030

675 QBtu / Year81% Fossil Energy


+ 45%

+ 13%

United States

World

Energy Demand 2006

465 QBtu / Year 81% Fossil Energy


Coal23%

Nuclear8%

Renewables13%

Oil 34%

Gas22%

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WV Military Affairs / Public Safety , November 20, 2008FERC, “Increasing Costs in Electric Markets,” June 19, 2008

Capital Cost Uncertainty, FERC

NETL 2007 baseline

NETL 2008 estimates, with capture

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Electricity Delivery & Energy Reliability• Grid modernization• Reliable & secure energy supplies• Disaster response

Energy Efficiency &Renewable Energy• Vehicle technologies• Building technologies• Industrial technologies• Weatherization & state energy

programs

Project Management CenterNon-Fossil Infrastructure and Energy Activities

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NETL Smart Grid Activities

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Smart Grid Supports 21st-Century Demand

The grid of the last century:large, centralized plants ship power in one direction — to the customer

The modern grid incorporates new centralized plants with

renewables, distributed generation, “aggregated” backup

generators, energy storage, and demand-response programs —

seamlessly and safely

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NETL’s Work on Smart Grid

• Overview of NETL Modern Grid Strategy Project

• What is the Smart Grid?

• R&D Electric Grid Projects

• High-Temperature Superconductivity

• Renewable and Distributed Systems Integration

• Visualization and Controls

• Energy Storage and Power Electronics

• Smart Grid Maturity Model

• Smart Grid Clearinghouse

• Federal Smart Grid Task Force

• WV Smart Grid Implementation Plan project

• Smart Grid ARRA projects

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The Modern Grid Strategy (MGS)

• Policy of US to support modernization of the electricity grid (EISA of 2007, Title XIII, Section 1301)

• DOE Office of Electricity Delivery and Energy Reliability is committed to leading a national effort to accomplish it

• The National Energy Technology Lab is conducting the MGS – independent and neutral – previously known as the Modern Grid Initiative

• MGS Mission – Accelerate modernization of the national grid

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Role of the MGS

• Define a vision for the Modern Grid• Reach out to stakeholders to gain consensus• Assist in identification and resolution of barriers &

issues• Promote testing of integrated suites of technologies• Assist states with grid modernization• Communicate success stories to stimulate

deployment

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What is a Smart Grid?

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Smart Grid Principal Characteristics

The Smart Grid is “trans-active” 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 utilization and operate efficiently

• Anticipate & respond to system disturbances (self-heal)

• Operate resiliently against attack and natural disaster

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It will “Enable active participation by consumers”

• Consumers have access to new information, control and options to engage in electricity markets– See what they use, when they use it, and what it costs

– Manage energy costs

– Investment in new devices

– Sell resources for revenue or environmental stewardship

• Grid operators have new resource options– Reduce peak load and prices

– Improve grid reliability

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It will “Accommodate all generation and storage options”

• Seamlessly integrates all types and sizes of electrical generation and storage systems

• “Plug-and-play” convenience– Simplified interconnection processes

– Universal interoperability standards

• Number of smaller, distributed sources will increase – shift to a more decentralized model

• Large central power plants will continue to play a major role.

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It will “Enable new products, services and markets”

• Links buyers and sellers – consumer to power supplier

• Supports the creation of new electricity markets– PHEV and vehicle to grid

– Brokers, integrators, aggregators, etc.

– New commercial goods and services

• Provides for consistent market operation across regions

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It will “Provide power quality for the digital economy”

• Monitors, diagnoses and responds to PQ issues

• Supplies various grades of power quality at different pricing levels

• Greatly reduces consumer losses due to PQ (~$25B/year)

• Quality Control for the grid

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It will “Optimize asset utilization and operate efficiently”

• Operational improvements– Improved load factors and lower system losses

– Integrated outage management

– Risk assessment

• Asset Management improvements– The knowledge to build only what we need

– Improved maintenance processes

– Improved resource management processes

– More power through existing assets

• Reduction in utility costs (O&M and Capital)

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Electric Power System Utilization% Asset Utilization

Generation

Transmission

Distribution

Consumer Systems

47%

30%

50%

<1%

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It will “Anticipate & respond to system disturbances”

• Performs continuous self-assessments

• Detects, analyzes, responds to, and restores grid components or network sections

• Handles problems too large or too fast-moving for human intervention

• Self heals - acts as the grid’s “immune system”

• Supports grid reliability, security, and power quality

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It will “Operate resiliently against attack and natural disaster”

• System-wide solution to physical and cyber security

• Reduces threat, vulnerability, consequences

• Deters, detects, mitigates, responds, and restores

• “Fort Knox” image

• Decentralization and self-healing enabled

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Smart Grid Key Success Factors

The Smart Grid is MORE:

• Reliable

• Secure

• Economic

• Efficient

• Environmentally friendly

• Safe

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Smart Grid Technologies

Integration Science & Technology

Integration – biggest gap in today’s science & technology development

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Smart Grid Key Technology AreasSmart metersSmart sensors

• Operating parameters• Asset Condition

Wide area monitoring systems (WAMS)Dynamic rating of transmission lines

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Smart Grid Key Technology Areas

Applications that:•Monitor and collect data from sensors•Analyze data to diagnose and provide solutions•Real time and predictive•Determine and take action autonomously or via operators•Provide information and solutions to operators•Integrate with enterprise-wide processes and technologies

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Next generation FACTS/PQ devicesAdvanced distributed generation and energy storagePHEV - V2G modeFault current limitersSuperconducting transmission cable & rotating machinesMicrogridsAdvanced switches and conductors

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Data reductionData to information to actionVisualizationSpeed of comprehensionSystem operator training

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Smart metersSmart sensorsDemand ResponseDG dispatchDistribution automationMicro-gridsMarketsWork force managementMobile premises (PHEV’s)

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Value Proposition

Cost to Modernize• $165B over 20 years

– $127B for Distribution– $38B for Transmission

• ~$8.3B per year (incremental to business-as-usual)

• Current annual investment - $18B

(Source: EPRI, 2004)

Benefit of Modernization• $638B - $802B over 20

years

• Overall benefit to cost ratio is 4:1 to 5:1

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Many Stakeholders

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Business Case Framework

Smart Grid Vision

Principal Characteristics

Key Success Factors

Current State

TopologyPerformance

Programs

Gap Analysis

TechnologyConsumerRegulatory

Future State

KeyTechnologies

Pro

bab

le

Cost$$

Solutions

Benefit Categories

Beneficiaries

Methods to Monetize

Metrics

UtilityConsumer

Societal

Goal Setting

Benefit$$

Benefit Share

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WV Military Affairs / Public Safety , November 20, 2008 34

Cost

Benefit

Advanced Metering Infrastructure

Advanced Distribution Operations

Advanced Transmission Operations

Generally speaking…

(Advanced Asset Management)

Generally Speaking

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Utility BenefitsOperational improvements• Metering and billing• Outage management• Process improvement• Work force management• Reduced losses (energy)• Asset utilization

Asset Management improvements• System planning• Maintenance practices• Engineering

These benefits are expected to improve customer satisfaction and reduce O&M and capital costs.

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Consumer Benefits• Improved reliability

• Improved overall level of service

• Access to information

• Ability to manage energy consumption

• Option to participate in demand response

• Convenient interconnection of distributed

generation

• Option to bid (sell) into electricity markets

• Potential to dramatically reduce transportation

costs (PHEV)

Consumers have access to information, control and options

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Societal Benefits• Downward pressure on electricity prices through improved

operating and market efficiencies, consumer involvement

• Improved reliability leading to reduction in consumer losses (~$135B)

• Increased grid robustness improving grid security

• Reduced emissions through integration of renewable generation and reduced losses

• New jobs and growth in GDP

• Opportunity to revolutionize the transportation sector through integration of electric vehicles as generation and storage devices

Societal benefits must be included in the value proposition

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Barriers to the Smart Grid

Insanity is defined as doing the same old thing expecting a different result.

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Change Management

A significant change management effort is needed:

• Why do we need to change?

• What is the vision?

• What is the value proposition?

• 300 Million consumers affected

• Consumer education, alignment and motivation is

critical

• Metrics needed for accountability and to monitor progress

• Active leadership by stakeholder groups needed

Our challenge is to align under a common long term vision and make our short term investment decisions consistent with the “end in mind”.

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Regulatory• Time based rates - incentives for consumers to

become actively involved

• Favorable depreciation rules – recovery of book value for assets that are retired early for “smart grid” reasons

• Policy changes that provide incentives and remove disincentives to utilities – investment in a Smart Grid should make business sense

• Clear cost recovery policies - uncertain cost recovery increases investment risk

• Societal benefits – quantified and included in business cases

• New regulatory models

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Technical• Incorporating 2-way power flow into operations

• Simplifying interconnection standards while maintaining safety

• Getting the communications system right

• Integration of disruptive technologies

• Sharing successes and “lessons learned”

• Need a “real” electricity market

• Lack of resources to “change” and also “keep the lights on”

• Shortage of skilled human resources

• More focus on R&D – breakthrough technologies

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American Recovery & Reinvestment ActKey Energy Stimulus

• Energy Efficiency and Renewable Energy ($16.8B)– Energy Efficiency and Conservation Block Grants ($3.2B)– Weatherization Assistance ($5B)– State Energy Program ($3.1B)– Advanced Batteries ($2B)

• Electricity Delivery and Energy Reliability ($4.5B)– EISA 2007 Title XIII– Worker training– Development of regional transmission plans– Development of interoperability standards for Smart Grid devices

• Fossil Energy R&D ($3.4B)• Advanced Research Projects Agency – Energy ($0.4B)• Innovative Technology Loan Guarantee Program ($6B)

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Electric Grid R&D Projects

• Renewable and Distributed Systems Integration

• Storage and Power Electronics

• High-Temperature Superconductivity

• Visualization and Controls

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RDSI Program

• Develop technologies, tools, and techniques to integrate load management and DER– Develop and demonstrate Smart Grid technologies in an

integrated and intelligent T&D network– Advance integration technologies to access renewable

energy sources– Demonstrate DER to decrease peak load, increase asset

utilization, and defer electric system upgrades• NETL is managing nine RDSI projects

– $55M of DOE funds over 5 years; total is >$100M– Primary goal is to use DER to reduce peak load by 15%– DER (storage and DG), DR, Communications,

Automation

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Fort Collins Project Scope

• Demonstrate the monitoring, aggregation, integration, dispatch, and verification of distributed generation, renewable energy, and demand response resources

• Reduce peak loading in the range of 20-30% on two feeders within Fort Collins Utilities’ electric distribution network

• Demonstrate Intentional Islanding and Import/Export capabilities

• R&D covering advanced mixed-fuel control systems, adapting Plug-in Hybrid Vehicles to the grid, fuel cell integration, on-site energy management, etc.

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Fort Collins DER Integration

New Belgium Brewing DER Asset Overview

DER Network Operating System Configuration

Fort Collins Team13 members

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West Virginia Smart Grid Implementation Plan

• $540K project jointly funded by NETL, RDS, Allegheny Power, AEP, State of West Virginia, WVU, and DOE OE

• Results will describe approach and value proposition of implementing Smart Grid in West Virginia

• Cost & benefit analysis comparing state of current electricity grid and future Smart Grid in West Virginia

• Address role of coal in Smart Grid• Support economic development in West Virginia• Establishes WV and NETL as leaders in Smart Grid• Only state-wide Smart Grid implementation plan • Only second Smart Grid study to be published

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Other NETL Smart Grid Activities

• Smart Grid Maturity Model– Roadmap of activities, investments, and best practices– Measures progress and level of achieving Smart Grid

• Smart Grid Clearinghouse– First-stop website for public information on Smart Grid– Technologies, tests and demonstrations, business cases,

cost & benefits, best practices, legislation• Federal Smart Grid Task Force

– Multi-agency task force created by Title XIII of EISA 2007– DOE (OE&EE), NIST, DOD, USDA, DHS, EPA, FERC

• Smart Grid and Clean Coal Relationship


Clean Coal in a Smart Grid Future

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Common Factors

• Smart Grid and electricity generation from Clean Coal Technology support energy independence for the US. Both support holding the line against rising electric prices.

• A Smart Grid helps the US Clean Coal Strategy by (1) closing the gap between generation capacity and

electricity supply which increases the importance of coal as a baseload resource, and

(2) closing this gap frees up capital investment needed to finance clean coal technology, emission projects including carbon management, and baseload coal generation plants

• There are several key facts that present an interesting situation to explore. Coal is a domestic resource. The Smart Grid is a domestic resource. From an energy independence perspective, a clean coal future is necessary and sustainable.

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Potential Synergy

• Fleet of small clean coal generation distributed within the electric delivery system.

• This could break the dominance of natural gas volatility on the electricity price, and provide a stronger domestic base for the nation’s electric service.

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Recommendations

• Establish a Smart Grid – Clean Coal working group to identify and address benefits and challenges of moving to a generation portfolio using the principles discussed in this report.

• There are four key developments that should be explored as R&D or demonstrations:– Small Clean Coal plants as CHP consistent with the renewable – CHP

applications proven in Denmark.– Microgrid (or mini-grid) application of local generation portfolios using

small Clean Coal plants as baseload generation matched with DR/DER as peak load management. It may be worthwhile to explore a local wind / coal hybrid plant in this vein.

– Process to keep key industry average generation parameters up to date quarterly including current capital expense, fuel costs, O&M costs, LCOE, carbon market / tax assumptions – this is so important to understanding the benefit – cost tradeoffs of all future generation scenarios.

– Market study and development project to determine the long-term tariff effects of a small clean coal with smart grid (microgrid) future compared to the BAU scenario.

– Multi-purpose coal plant demonstrations tied to a Smart Grid demonstration.

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Cooperatives and Municipals

• Cooperatives and Municipals have been participating in Smart Grid like activities for years– Energy efficiency, Direct Load Control, AMR, now AMI

pilots, use of standardized protocol (Multi-speak)• Direct consumer education important to technology

change and adoption• Future Smart Grid approach may be different than an

Investor-Owned Utility (IOU) and state regulatory commission

• Need to leverage DOE and new funding for R&D

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References

The Modern Grid StrategyCollaborative, public/private effort

open to all

Independent “broker”

www.netl.doe.gov/moderngrid/

Downloadable documents

www.smartgridnews.com

Grid modernization columns,

articles and case studies

[email protected]

(304) 599-4273 x101

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NETL “The Energy Lab”

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