Smart Grid: Costs, Benefits,
And Business Opportunities
Moderator: Shannon Fraser, U.S. Department of Commerce
Panelists: Clark Gellings, EPRI
Drew Hanser, SRI International
Lee Burrows, VantagePoint Capital Partners
#SVEnergy2011
The Smart Grid
Clark W. GellingsFellow
Silicon Valley Leadership GroupJune 24, 2011
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Many Definitions
3
IBM Smart Grid
IntelliGridSMIntelliGridSM
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Highly Instrumented
with Advanced
Sensors and
ComputingInterconnected by
a Communication
Fabric that
Reaches Every
Device
• Engaging Consumers
• Enhancing Efficiency
• Ensuring Reliability
• Enabling Renewables &
Electric Transportation
What is The Smarter and Stronger Grid?
Many Definitions – But One VISION
5© 2011 Electric Power Research Institute, Inc. All rights reserved.
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Source: EPRI Report to NIST on Smart Grid Interoperability, June 2009
Smart Grid Domains
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Prices to Devices:Tomorrow’s Smart Grid
EfficientBuildingSystems
UtilityCommunications
DynamicSystemsControl
DataManagement
DistributionOperations
DistributedGenerationand Storage
Plug-In Hybrids
SmartEnd-UseDevices
ControlInterface
AdvancedMetering
Consumer Portaland Building EMS
Internet Renewables
PV
• Thermostat receivesday-ahead hourlyprices
• Consumer sets upperand lower limits
• Thermostat “learns”thermal, consumerand weather impacts
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Example of Losses in the Value Chain
coal electricity electricity
Light,
heat,
motion,
etc.)
100 ~30
~ 65% loss
~ 7% loss
~28
~ 88% loss
(incandescent)
~3
U.S.: More than 210 billion kWh per year is lost in the delivery of
electricity from power plant to end-use devices
8© 2011 Electric Power Research Institute, Inc. All rights reserved.
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2000 2005 2010 2015 2020 2025 2030
7,000
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
En
erg
y (
Bil
lio
n k
Wh
)Electricity ConsumptionTechnical Potential Electricity Savings
Codes & Standards
Market-Driven Efficiency*
Achievable Potential
+ + +
Technical
Potential
Avoided Electricity Consumption in 2030 . . .
• Technical Potential ~ 26%
* Includes embedded impact of EE programs implicit in AEO 2008
9© 2011 Electric Power Research Institute, Inc. All rights reserved.
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0 0.08 0.16 0.24 0.32 0.40 0.48 0.56 0.64 0.72 0.80 0.88 0.96 1.04 1.12 1.20 1.28-0.25
-0.2
-0.15
-0.1
-0.05
0
0.05
0.1
0.15
0.2
0.25
time (s)
am
plit
ude (
V)
Sensor Technology – Equipment Arcing
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Renewable Resources Need Dance Partners
Wind Intermittency
Solar Intermittency
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Enable the Dance Partners
Compressed Air Energy Storage
Fast-Reacting Demand Response
Batteries
Combustion
Turbines
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Summary of Estimated Cost & Benefits of the Smart Grid
20-Year Total
($billion)
Net Investment Required 338 – 476
Net Benefit 1,294 – 2,028
Benefit-to-Cost Ratio 2.8 – 6.0
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Total Smart Grid Costs
Costs to Enable a Fully Functioning Smart Grid ($M)
Low High
Transmission & Substations 82,046 90,413
Distribution 231,960 339,409
Consumer 23,672 46,368
Total 337,678 476,190
Smart Grid:Costs, Benefits, and Business Opportunities
Drew Hanser24 June 2011
Why Smart Grid?
• Continued growth in energy demand
• Requirements for energy sustainability and reduced environmental impact
• Changing regulatory requirements and incentives
• Need to improve performance and power quality
• Cost reduction possibilities through new operational capabilities
Source: SRI Consulting
Source: renewablenergie.com
Smart Grid Elements
• Distributed energy resources
– Solar, wind, V2G
• Management of intermittent and variable energy resources
– Voltage instability, generation drop-off, unbalanced load and generation
– A recognized solution path is energy storage integration
• Power control capabilities in transmission and distribution
– Intelligent control and conversion of power
– Bi-directional power flow
• Networked devices
– Information distribution: rates, market conditions
– Data collection (demand, consumption, storage, system state)
– Data analysis
Changes In Electric Grid Topology
Source: ABB
Today’s Hierarchical Power System Fully Realized Smart Grid
Research and Implementation Challenges: Highlights
• Energy storage
– Applications: peak shaving, voltage support, frequency response, grid stability
– Challenges: how best to integrate, what technology to use, cost reduction
• Power electronics
– Applications: power control, power conversion, voltage transformation, intelligent fault control and isolation, distributed direct load control
– Challenges: continued high power device and system development, reliability demonstrations
• Grid operational security
– Applications: network security, equipment protection and configuration management, monitoring and incidence response, access/audit/integrity
– Challenges: Need for interoperable security standards (NIST)
• Intellectual property
• Collaborative development efforts
Business Opportunities
Market Market Size
Energy Storage:Advanced battery technologies, pumped hydro, compressed air,flow batteries
$4.6B in 2014(TechNavio)
Power Electronics:MOSFETs, IGBTs, GTO, thyristors, solid-state transformers, current-fault limiters, statcoms
$3.1B in 2016: Sensing, measurement, control
(Electronics Publications)
Smart Grid Security:Software and hardware development and integration for cyber security
$3.7B in 2015(Pike Research)
Headquarters: Silicon Valley
SRI International333 Ravenswood AvenueMenlo Park, CA 94025-3493650.859.2000
Washington, D.C.
SRI International1100 Wilson Blvd., Suite 2800Arlington, VA 22209-3915703.524.2053
Princeton, New Jersey
SRI International Sarnoff201 Washington RoadPrinceton, NJ 08540609.734.2553
Additional U.S. and international locations
www.sri.com
Thank You
Growth EquityFor Energy Innovation and Efficiency
Silicon Valley Energy Summit
Smart Grid: Costs, Benefits and
Business Opportunities
June 24, 2011
VantagePoint CleanTech at a glance
22
Portfolio of Transformative Companies Connected to Corporate Leaders
Global Resources
Energy
Storage
Smart Grid presents tremendous market opportunities
Advanced Metering
Infrastructure
Distribution
Automation
Demand
Response
Meter Data
Management
Grid Security
Smart Grid
C+I Building Energy
Management
EV Charging
MicrogridTransmission
Home Energy
Management
Renewable
Integration
Energy
Storage
Smart Grid provides enormous benefits
Advanced Metering
Infrastructure
Distribution
Automation
Reliability: fault anticipation, detection and location
Efficiency: dynamic Vol/Var control
Power quality: reduction of sags, surges, harmonics, etc.
Renewable integration: intermittency, power quality
Peak load reduction
Energy security/power backup
Automatic meter reading
Outage management
Communication layer for advanced distribution automation
…..
Smart Grid venture investment records a new high
Source: Cleantech Group
Key factors to watch
26
Startups emerge from all around the world
Regulatory and financial drivers in U.S., Europe and Asia
Consumer-oriented vs. utility-centric
Growing corporate engagement through partnership, direct
investment and M&As
Corporate engagement – Smart Grid snapshot
27
Acquisition
Investment
& partnership
Acquisition
Acquisition
$300M joint
investment
venture
Investment
& partnership
Partnership
Partnership
Investment
& partnership
Investment
& partnership
PartnershipPartnership
PartnershipPartnershipPartnershipPartnership
Investment
$1B acquisition
Partnership
Acquisition
AcquisitionAcquisition Acquisition
Investment & partnership
Investment
& partnership
Every major transformation creates new global companies; we are still in the early stages of this for Smart Grid
28
Computer and Biotech
Innovation Wave
Data Networking and
Internet Wave Energy Innovation Wave
1980 1990 20102000
PC Software Biotech Networking Social
Networking
RenewableInternet LED Lighting
Smart Grid
Electric Vehicles
Solar-Thermal
Water
Sustainability
Biofuels
Energy Storage
Energy
Energy Innovation and Efficiency
