Transcript Developing an Investment Strategy with The Smart Grid Investment

Developing an Investment Strategy with the
Smart Grid Investment Model TM
Smart Grid Research Consortium
Conference & Workshop
Rosen Shingle Creek, Orlando, Florida
October 20-21, 2011
Jerry Jackson, Ph.D., Leader and Research Director
Smart Grid Research Consortium, 37 N. Orange Ave, Suite 500
Orlando, FL 32801 [email protected] 979-204-7821
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Smart Grid “Best Practices”
• Smart Grid 1.0: ?  2010
o AMI/smart meters
o Customer pricing/engagement focus
• Smart Grid 2.0: 2010 
o Distributed communication,intelligence and control throughout the
distribution system
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
o
o
o
o
Substation, feeders
Equipment in businesses and homes
Integration of distributed resources
Questions concerning customer program impact persistence
Data & data analytics reflect new challenges
Smart grid options as part of a comprehensive, integrated strategy
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Expanding the Scope of SG Options
Complicates Investment Decisions
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What Does This Mean for Utility
Investment Analysis?
• The good news
o AMI/smart meter costs/benefits more well defined
o Growing number of DA “use cases”
o Recognition that SG investments are complicated
• Challenges
o Customer DM program benefits may decline over time
o Comparing metering/customer programs/DA applications
is difficult
o Each utility is unique
o Cost/benefit calculations are no longer simple
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Consider a Simplified SG Investment
Analysis Question
• Utility considering AMI/smart meter, demand
management and DA investments
• Which,if any, investments should be
undertaken now
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Options?
AMI/Smart
Meters
Customer
Demand Mgmnt
Distribution
Automation
Communications/Software/Hardware
Communications/Software/Hardware
Communications/Software/Hardware
AMI/Smart
Meters
Distribution
Automation
Customer
Demand Mgmnt
Communications/Software/Hardware
Communications/Software/Hardware
Communications/Software/Hardware
Distribution
Automation
Communications/Software/Hardware
?
?
?
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Quantitative Financial Investment Analysis
Provides Strategy Insights
• Consortium’s SGIM considers
o Costs and benefits of technologies/applications
o Unique utility/utility customer characteristics
o Utility monthly hourly loads and SG load impacts

Avoided power purchase costs
• Conduct “what-if” scenario analysis
o Quantitative model framework
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Example Coop Analysis Illustration
• “Representative Coop”
o ~100,000 customers, 0.65 system load factor; $0.05/kWh, $12/kW
summer; $0.02-0.03/kWh, $6-8/kW spring/fall/winter
o Residential: 70% customers, 60% kWh coincident peak kW
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SGIM Cost/Benefits Summary
Smart Grid Benefit Cost Summary
Application Area
Benefits
Costs
AMI/Smart Meters
Distribution Automation
Customer Programs
Meter reading
Field services
Outage restoration
Billing services
Theft/tampering
Meter accuracy
Uncollectables
Improved cash flow
Resource planing
Improved transformer load
management
Communications
Software
Hardware
Management/Operational
Reliability
Improved power quality
Field services
Outage restoration
Environmental
Reduced capital costs
Reduced O&M costs
Reduced power costs
Distributed energy resources
Improved equipment
management/planning
Communications
Software
Hardware
Management/Operational
Customer participation
Customer satisfaction
Reduced power costs
Environmental
Distributed energy resources
Other/new services
Communications
Software
Hardware
Management/Operational
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Replacing EM Meters With AMI Typically
Provides Attractive Returns
• No Customer Programs
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However, More Typical Coops With AMR
Systems May Have Difficulty Justifying AMI
• PLC with remote connect/disconnect
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Customer Programs Can Improve
AMRAMI Returns
• 20 % PCT/pricing + 30% cust engagement (5% AC/SH savings)
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Consider DA Impact of Conservation
Voltage Regulation (Reduction), CVR
VVC Objective: Maintain acceptable
voltage under all loading conditions
Source: RWBeck
Conservation Voltage Regulation factor (% change in
kWh/kW from 1% change in Voltage)
kW
kWh
Elec, No AC
0.40
0.25
Elec, AC
0.35
0.40
Non, AC
0.74
0.60
Non, No AC
0.81
0.40
Distribution
%Source:
Change
in VoltageEfficiency Initiative
1.00 Study
•
CVR Advantages
Source: EPRI
o No customer participation required
o Options: manual adjustments  full automation
o Utility & customer savings
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How Does CVR Stack Up as a 1st Step ?
• $50k/substation; 1% voltage reduction
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More Extensive Conservation Voltage
Regulation Saves Even More
• $250k/substation; 4% voltage reduction
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CVR Savings Can Justify a DA/AMI Initiative at
the AMR Utility Even W/O Cust Programs
• Additional 1% voltage reduction using meters for EOL voltage
• Without customer programs in this scenario
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Conclusions
• CVR turns out to be a better primary option in this
situation than
o AMI based on reasonably well-defined cost/benefits
o Customer demand management programs based on
impacts and concerns over impact persistence
• Advanced meters can be included in a CVR strategy
providing EOL measuring/monitoring in addition to
traditional benefits
• Results depend heavily on customer end-use hourly
loads and avoided costs
• Results can be expected to vary considerably from
utility to utility depending on infrastructure and
customer characteristics
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Consortium’s Smart Grid Investment Model
Provides More “Real-World Detail”
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Along With More Insightful Graphical Results
Presentations
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Smart Grid Investment Model Supports
SG Investment Strategy Development
• Detailed characterization of utility
infrastructure and customer characteristics
• Forecasting customer class-end use hourly
loads and program impacts
• Incorporation of all SG technology/program
impacts
• Ability to conduct alternative “what-if”
scenarios
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