Sioshansi F.P. Smart Grid: Integrating Renewable, Distributed & Efficient Energy
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Microsoft's managing director for Worldwide Power
& Utilities Industry, Jon Arnold, tried his best to put a
positive spin on all this when he said, “Our study
clearly indicates the hype cycle is over, and more
utilities today are planning smart grid
implementations.” But 64% of Microsoft's survey
respondents said they did not have a clear view of the
enterprise-wide information and technology
infrastructure they will use to structure current and
future smart grid deployments.
Mr. Arnold explained, “We're seeing a normal
phenomenon occur in terms of the evolution of
thinking about these projects. Utilities are finding out
what they don't know, and they are, naturally,
exerting some caution before making big investments,
even though the willingness to spend is there.”
Microsoft's own survey results as well as other
studies can lead us to different conclusions. There is a
lot more that the industry does not know about the
how, what, when, where, and how much of the smart
grid puzzle. And companies that have embarked on
large-scale implementation projects are, by and large,
finding it tough going.
Business school gospel says there are clear
advantages to be the first mover in any business, but
many in the industry are waiting to see what happens
to those that jump in the fire first. This explains why
so many utilities are engaged in smart grid pilot
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projects. It is a much safer bet. One cannot be
accused of inaction or indecisiveness, while keeping
the financial and technical risk exposure to a tolerable
level.
The implementation of dynamic pricing in conjunction with
the introduction of a host of enabling technologies is expected
to lead to the “prices-to-devices” revolution, which in turn,
promises to unleash the full potential of smart prices
delivered to smart devices through smart meters resulting in
more efficient utilization of electricity.
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Chapter 16 provides further detail.
There are already clear indications that electricity markets and
grid operators are beginning to take appropriate steps in
response to concerns about climate change. The rules of
conduct in the electricity market in the UK, for example, are
being modified in response to government's desire to meet
future low carbon emission targets. In the case of California,
the Independent System Operator (CAISO) has developed a
future smart grid vision in response to the state's ambitious
climate law as well as the 33% renewable target mandated by
2020.
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Viewed in this context, investments in the smart grid
will be doubly rewarding—as in killing two birds with one
stone.
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Chapter 6 covers this topic in more detail.
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Outline of the book
This book, being an edited collection of chapters, covers a
broad range of topics in the growing smart grid space.
Moreover, it benefits from a diversity of perspectives inherent
in the diversity of its contributors. Not only are they from
different geographical parts of the world, they represent a
wide spectrum of views, disciplines, and backgrounds.
As the editor, I have allowed maximum flexibility to the
contributing authors to develop and present their perspectives
as they see fit. This means that—despite my best attempts to
present a closely intertwined and integrated message—the
book by its collective nature offers a chorus of views and
perspectives. On the flip side—and I must say that in my view
this more than compensates for any shortcomings of an edited
collection—this volume offers the reader a range of views
that is often missing when a single author or a small group of
authors write a book of this nature and scope.
The book is organized into 4 interrelated parts:
• I: Setting the context: The what, why, how, if, and when
of the smart grid;
• II: Growing role of renewable and distributed generation;
• III: Smart infrastructure, smart prices, smart devices; and
• IV: Case studies, applications, and pilot projects
Part I provides the definition, sets the context, and describes
the scope and the evolution of the smart grid concept,
including discussion of its many potential benefits,
challenges, and obstacles as well as policy and regulatory
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issues and alternative visions of what the smart grid may
ultimately deliver.
In Chapter 1, Smart grid is a lot more than just
“technology,” Steve Hauser and Kelly Crandall present a
vision of the “smart grid,” an assessment of its potential
impacts including a discussion of the challenges and obstacles
to the achievement of this vision.
The authors describe the evolution of the smart grid concept
from its inception to the present and present views of how it
may transform the power sector over the next decade. As the
title of the chapter suggests, this book is not a technical
engineering book, but rather is focused on policy, regulatory,
institutional, economic, and strategic aspects of the smart
grid. This chapter provides an overview of the topics covered
in the following chapters.
The chapter's main insight is to set the context of the changes
the smart grid represents and provide brief answers to the
what, why, how, if, and when of the smart grid. As with
transformations in other industries, the changes are more
organic and inevitable than legislated and engineered. The
chapter cites specific projects that support the claims and
refers to the evidence provided by the scholars and experts
who have contributed to this effort.
In Chapter 2, From smart grid to smart energy use,
Stephen Healy and McGill claim that smart energy use
involves moving beyond monitoring, communications, smart
meters, and dynamic pricing to more fundamentally
empowering energy end-user decision-making.
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They point out that although large-scale integrated grids and
centralized generation have effectively delivered affordable
energy services, they have also resulted in supply-side
imperatives shaping the character of customer expectations,
behaviors, and practices while, at the same time, removing
customers from involvement in decisions about generation
and supply.
The authors argue that growing demand, energy security, and
climate change underscore a requirement to revisit “smart
energy use.” They show that one of the great contributions of
emergent smart-grid and distributed energy options is to put
end-users back at the heart of energy decision-making. The
chapter concludes with a discussion of what technologies,
changes in market structures, and governance processes might
facilitate such a transition.
In Chapter 3, The ethics of dynamic pricing, Ahmad
Faruqui examines arguments for and against the
implementation of dynamic pricing based on its economic
efficiency and ethical implications.
The author points out that fixed, flat tariffs and simple bills
using dumb meters made sense and could be justified in the
context of a declining cost industry reaping the benefits of
massive economies of scale in generation and declining fuel
costs. Those days, however, are over as the industry faces
rising costs and pressures to invest in energy efficiency, fuel
conservation, curbing greenhouse gas emissions, and so on.
The chapter's main conclusion is that dynamic pricing should
be viewed in the context of today's realities and those that are
likely to emerge in the future. Equity requires that prices
reflect costs, and thus customers who cost more to
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serve—such as those who have peakier-than-average load
shapes—should pay more and those who cost less to
serve—such as those with flatter-than-average load
shapes—should pay less. Efficiency requires that price signals
convey the scarcity value of electricity to all customers and
encourage curtailment of peak loads and their possible
shifting to off-peak hours.
InChapter 4, The equity implications of smart grid:
Questioning the size and distribution of smart grid costs
and benefits, Frank Felder points out that if smart grid
technologies and policies are to achieve their potential to
revolutionize the use of the electric power grid, then
legitimate issues of equity need to be addressed to avoid
delaying if not halting smart grid implementation.
Compounding the difficulty in analyzing the equity
implications of smart grid is defining equity in the first place.
The chapter uses multiple definitions of equity to analyze the
potential implications of the smart grid, efficiently
implemented, to determine whether there is an
equity-efficiency conflict or synergy.
The chapter's main insight regarding the implications of
equity for policy makers and regulators is that legitimate
equity concerns exist and even with multiple and somewhat
conflicting definitions of equity the smart grid can enhance
equity if coupled with the right policies.
Part II is primarily focused on the upstream or supply-side of
the smart grid, including the expected evolution of renewable
energy resources, distributed generation and microgrids, and
various options to match intermittent resources on the supply
side with storage and flexible loads on the demand side.
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In Chapter 5, Prospects for renewable energy: meeting the
challenges of integration with storage, W. Maria Wang,
Jianhui Wang, and Dan Ton discuss the issues and potential
solutions in integration of large amounts of renewable energy
into the power grid—a key requirement for the smart grid.
The chapter provides an overview of relevant technological
developments focusing on solar power since wind integration
is covered in other chapters. Since these resources are
inherently intermittent and variable in their energy output,
current industry practices need to be altered to accommodate
high penetration of renewable generation. The authors discuss
the role of various energy storage technologies, such as
batteries and mechanical systems, in addressing this challenge
and highlight projects supported by the US Department of
Energy to demonstrate grid-scale storage technologies.
The authors conclude that the optimal technologies for
addressing renewable energy integration will be
application-specific.
In Chapter 6, The smart grid vision and roadmap for
California, Heather Sanders, Lorenzo Kristov, and Mark
Rothleder point out that the “smart grid” is a broad umbrella
that encompasses emerging technologies covering the entire
value chain, from electricity production and transportation to
ultimate consumption. In this context, the California
Independent System Operator, CAISO, envisions a future that
captures the full potential benefits of smart grid technologies
while meeting California's ambitious environmental,
renewable, and energy efficiency policy goals.
The authors describe CAISO's roadmap for promoting the
evolution of the smart grid in all its dimensions by focusing
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on ISO's core functions, namely reliable grid operation,
efficient spot markets, open-access transmission service, grid
planning, new generation interconnection, and integration of
renewable resources to achieve California's ambitious
environmental goals.
The successful evolution of the smart grid requires a
consistent vision of the future capabilities of these
technologies in supporting the ISO's core responsibilities,
which must be coordinated with the requirements of the key
stakeholders.
In Chapter 7, Realizing the potential of renewable and
distributed generation, William Lilley, Jennifer Hayward,
and Luke Reedman describe the role of distributed and
renewable generation in the context of the evolving smart
grid.
The authors believe that distributed and renewable
technologies will evolve in response to external factors
including changing fuel prices and the imposition of carbon
pricing. Using an international economic analysis, the authors
show that smart grid technologies and techniques can play an
important role in integrating and managing the power
produced by these options to ensure a safe, reliable, and
secure energy supply.
The chapter's main contribution is to show that it is cost
effective for smart grid technologies to be developed to
enhance the integration and management of two-way flows
that will result from the large-scale uptake of distributed and
large proportions of intermittent renewable generation in both
transmission and distribution systems as plant is deployed in
response to climate change. The modeling demonstrates that
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the potential savings that can be gained globally by the year
2050 by the use of intermittent generation and smart grid
technologies are of the order of $14 trillion dollars.
In Chapter 8, What role for microgrids? Glenn Platt,
Adam Berry, and David Cornforth claim that microgrids
hold great potential for developed electricity systems as a
transitionary path between current methods of system
operation and the truly dynamic smart grids often envisioned.
While microgrids are often seen as a technology for remote
power provision, the authors point out that they are equally
suitable to developed electricity systems, providing a
hierarchy of operation that isolates the wider network control
system from the low-level issues often associated with large
numbers of renewable generation and storage devices. The
authors detail these benefits through examples of deployed
microgrids around the world, while also discussing the
challenges associated with their operation and deployment.
The chapter's main conclusion is that microgrids, by
internally addressing issues such as generation intermittency,
storage management, reactive power flows, and load control,
offer a fantastic route to a smart grid with a high penetration
of renewable generation and dynamic load management,
without requiring dramatic changes to the wider distribution
system or its operation.
In Chapter 9, Renewables integration through direct load
control and demand response, Theodore Hesser and Samir
Succar point out that demand response (DR) has the potential
to become the glue of a decarbonized grid. Specifically, direct
load control (DLC) can be utilized to bolster the grid's
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reliability and flexibility to accommodate variable energy
resources (VER).
The authors describe how regionally clustered wind
development is expected to result from high-penetration
scenarios. Heterogeneous distributions of wind resources will
impose significant reliability concerns on balancing
authorities in certain parts of the country. These expected
reliability constraints can be ameliorated with the additional
firming capacity of novel flexibility resources such as DLC.
The chapter's main contribution is a topology of DLC
resources that includes wind integration costs on the
regulation, load following, and unit commitment timescales.
An upper and lower bound for DLC's contribution to growing
ancillary service requirements are also presented.
In Chapter 10, Riding the wave: using demand response
for integrating intermittent resources, Philip Hanser,
Kamen Madjarov, Warren Katzenstein, and Judy Chang
point out that the impact of wind's variability and
unpredictability on system operations is becoming a growing
concern with the continued penetration of wind resources.
Traditional supply-side options will no doubt play a key role
in integrating intermittent and non-dispatchable resources, but
the smart grid can also play a role.
The authors review recent wind integration studies and
examine tools to assess the smart grid's potential, particularly
power spectrum analysis of the output of wind resources in
combination with techniques such as optimal inventory
methods including deploying demand-side resources for
ancillary services and the benefits of substituting load for
generation.
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