Transcript Solution: Smart Grid - The Franke Institute for the Humanities

SOLUTION: SMART GRID
 Detaching
AC from MC
 Rate Decoupling
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Lowers consumption, therefore results in lower emission
Facilitating two-way communication
 Increase
Reliability
 More accurate pricing structures, hence lower
prices for consumers
2003 NORTHEAST BLACKOUT
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August 2003
Lasted 3 days
Affected 50 million
10 million Canada
40 million in U.S
Eastern US and Canada
Detroit to New York City and Toronto
$10 billion (USD) in economic loses
3,000 fire calls in NYC alone
11 deaths
AC POWER NEEDS FREQUENCY
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Interconnects – regions
of AC connectivity –
strictly regulate
frequency (60 Hz)
Frequency is dependent
on load (demand) and
supply.
When there is an
overload frequency
drops
NORTH AMERICAN ENERGY RELIABITITY
COUNCIL
TRANSFORMERS: MORE THAN MEETS THE
EYE
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Transformers and
Generators both break
down when the AC
Frequency changes
Generators speed up
when frequency drop,
overheat
Current increases and
causes Transformers to
overheat and explode…
HOW TO CONTROL FREQUENCY?
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Distributed Energy
Systems generate
emergency power onsite
when supply drops,
causing a dip in
frequency
But there still is a lack
of communication about
the real demand
FOR EXAMPLE…
STRUCTURE
INDEPENDENT SYSTEM OPERATORS
Market Structure
HOW THE GRID WORKSSmart
Grid
SCADA
Generation
Privately
Owned
Power Plant
(generation
)
Independent
Generators
AMI
Transmission
Distribution
Substation
FERC/PUCs
Independent
System Operator
Managed
PUCs
Investor Owned
Utility Managed
Meter
TWO-WAY FLOW OF INFORMATION
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Smart Grids
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AMI (Advanced
Metering
Infrastructure)
PEM (Personal
Energy
Management)
CUSTOMER INTERFACE
WHAT’S WRONG WITH 1-WAY COMMUNICATION
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Prices reflect average, not marginal costs
 Consumers have little incentive to constrain
electricity use when conservation is required
 Quantity demanded exceeds quantity
available
 Create incentives for decreased electricity
consumption during peak periods
ADVANTAGES OF SPOT PRICING
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Real-time market information on prices and quantities
demanded and supplied
Provide incentives to reduce consumption during peak
use periods
Regulates supply on each transmission line through
prices
 Encourages increased use in rarely used lines and
decreased use in overcrowded lines
 Encourages increased use during non-peak periods
EXAMPLE
Imagine a toll road where "permits" are auctioned off.
• The price each person is willing to pay will depend on
the number of people on the road
• Drivers will pay less for a crowded than a less
congested road
• End result is traffic from otherwise crowded roads
shifts to less crowded roads and congestion is reduced
for everybody.
Similarly, spot pricing on a Smart Grid encourages
consumers to use less crowded transmission lines.
• Electricity flow shifts from overused to underused lines
• Events leading to the 2003 blackout don't occur.
THE WORLD IS GETTING “SMART”
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EU looking to implement single-grid by 2020
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Italian Government owned Utility furthest ahead
with 30 million “smart-meters”
New Zealand and Australian private market
conducting smart-meters in most provinces
World’s 1st Smart Grid – Boulder, Colorado
POLICY RECOMMEDATION # 1
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Modify EPACT 1252-11
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Directed States to either adopt or decline time based rate
schedules to enable:
 Real-Time/Dynamic Pricing via Customer Interface
 Demand Response
Address the concerns of the States Deciding not to Adopt
EPACT 1252 11
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Tennessee
Delaware
Utah
Vermont
Idaho
Connecticut
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Iowa
Virginia
West Virginia
Kentucky
Montana
POLICY RECOMMENDATION # 2
Cap & Trade
 Strong
implications toward energy degregulation
 Price Premium on Coal
 Provides incentives for RTP
 Alternative Energy
 Energy Efficiency
POLICY RECOMMENDATION CONT…
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With Real Time Pricing – preliminary steps
must be taken
 Guaranteed
Rate of Return for installing
infrastructure
 Decoupling (Volume based to Congestion based)
 Protection for Public Purpose Programs
 Low-Income
 Seniors
SMART-GRIDS