Sioshansi F.P. Smart Grid: Integrating Renewable, Distributed & Efficient Energy
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The chapter concludes that the potential for the smart grid as
an integrating resource is large, but its success will critically
depend on the ability to recruit and maintain customers’
participation.
Part III is primarily focused on the growing role of smart
infrastructure, smart meters, smart prices, and smart devices
that, taken together, can result in smart and efficient energy
utilization, broadly defined. It includes theoretical and applied
topics.
In Chapter 11, Software infrastructure and the smart
grid, Chris King and James Strapp address a number of
major information technology challenges facing utilities,
energy retailers, and other market participants in
implementing smart grid initiatives.
The authors focus on two universal challenges: managing
large and imperfect data streams and integrating a plethora of
communicating smart grid devices with multiple legacy and
new software applications. Resolving these difficulties
requires overcoming IT silos built around individual business
applications and supporting diverse devices from smart
meters to smart appliances. The authors describe success
strategies, including case studies, to address these problems.
The strategies include flexibility to handle new versions of
technology, new technologies, new applications, and new
standards.
The chapter's main contribution is in providing strategies and
specific best practice examples of how different utilities are
addressing these problems in different parts of the world
including California, Texas, Canada, Scandinavia, and the
UK.
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In Chapter 12, How large commercial and industrial
customers respond to dynamic prices—the California
experience, Steven Braithwait and Daniel Hansen point out
that while a number of residential smart pricing pilot studies
have been conducted in various regions of the US in support
of smart grid business plans, few have focused on large
commercial and industrial (C&I) customers. An important
exception has been in California, where utilities have installed
hourly interval meters on C&I customers and have
experimented with a variety of dynamic pricing and demand
response (DR) programs.
This chapter describes the results of load-impact evaluations
of critical peak pricing (CPP) tariffs for large C&I customers.
The CPP tariffs, which began in 2004 as voluntary programs,
are transitioning to default tariffs.
The authors describe the potential role that C&I customers
can play in linking wholesale and retail electricity markets by
responding to dynamic pricing and DR program payments.
The chapter concludes that CPP customers respond in
significant ways, but load reductions tend to be concentrated
in a relatively small fraction of the customers, and many
price-responsive C&I customers appear to participate in DR
programs rather than CPP.
In Chapter 13, Smart pricing to reduce network
investment in smart distribution grids—experience in
Germany, Christine Brandstätt, Gert Brunekreeft, and
Nele Friedrichsen point out that integrating large amounts of
decentralized resources into future smart grids requires
significant distribution network investment. Smart pricing
could substantially reduce this investment need through
coordination of network, generation, and load.
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Locational signals can be implemented in general tariff plans
for network or energy, but also in individual smart contracts.
The chapter gives a brief overview of theoretical concepts and
international experience with locational pricing with a focus
on distribution networks. The authors then present an in-depth
analysis of the German case and the details of current
developments towards smart pricing.
The authors provide insights on how small steps towards
tariff flexibility and locational signals can reduce distribution
network investment while encouraging efficient network
development and utilization.
In Chapter 14, Succeeding in the smart grid space by
listening to stakeholders and customers, William Prindle
and Michael Koszalka examine a number of critical program
design questions that smart grid technology poses, focusing
on the customers, their needs, and their priorities.
The authors examine how technology, information, and
behavior interact in the smart grid space; what level of energy
savings can smart-grid-based programs produce; what kinds
of product/service/program bundles can utilities and their
partners offer that would meet both DR and energy efficiency
goals; and what kinds of program models need to be
developed/tested/evaluated to satisfy regulatory requirements.
The chapter's main contribution is to ask what might the
future look like when viewed from the perspective of
customers at the receiving end of the smart grid.
In Chapter 15, Customer view of smart grid—set and
forget? Patti Harper-Slaboszewicz, Todd McGregor, and
Steve Sunderhauf point out that while some see “smart
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homes” as the inevitable application of new technology to
energy, there is a wide gap between what consumers want and
what industry experts and vendors are expecting customers to
do.
The authors suggest that convenience, ease of use,
multifunctionality, and privacy will strongly influence how
and when the smart grid is invited into our living rooms and
becomes part of our daily lives. This transition requires an
understanding of how to turn the industry's need for consumer
engagement into reality on the ground.
The chapter's main conclusions are to determine practical
means of engaging customers to interact with the smart home
of the future.
In Chapter 16, The customer side of the meter, Bruce
Hamilton, Chris Thomas, Se Jin Park, and Jeong-Gon
Choi point out that utilities are in the process of installing
smarter, and more expensive, meters in homes around the
globe, offering the promise of improving the reliability of the
grid while delivering cost savings to consumers. However,
this promise can really only be achieved by going beyond the
meter and affecting the way energy is consumed within
customers’ premises.
The authors examine how advanced technology, including
programs that send prices to devices, can enhance customer
participation and stimulate significant behavior change
including the potential from developments still on the
horizon.
Using concrete examples from around the globe, the chapter
concludes that there are many sustainable business models
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that can enable consumers to bring home the anticipated
benefits of the smart grid.
Part VI includes a number of experiments, case studies, or
pilot projects that cover one or more interesting aspects or
applications of the smart grid concept described in earlier
sections of the book and presents the results that have been
achieved or are expected from such applications.
In Chapter 17, Demand response participation in
organized electricity markets: a PJM case study, Susan
Covino, Peter Langbein, and Paul M. Sotkiewicz describe
how PJM has succeeded in developing a significant role for
demand participation in the largest organized US electricity
market.
The authors examine the evolution of DR participation in
PJM's markets achieved by implementation of early vintage
smart grid technologies such as interval metering, which
facilitates the necessary measurement and verification of
demand reductions in conjunction with market design
enhancements that monetize the value of DR. Customers can
participate in PJM's energy markets, capacity market,
synchronized reserve market, or the regulation market – with
room for considerable growth with continued enhancements
in the interface between customer load and PJM's
demand-focused markets.
The chapter's main contribution is to present empirical
evidence that the theory works in practice and results in
win-win outcomes. Since 2002 DR participation in PJM has
grown significantly to the point where the RPM capacity
market now accounts for roughly 7% of PJM's all-time
system peak, providing a benchmark for others.
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In Chapter 18, Perfect partners: Wind power and electric
vehicles—a New Zealand case study, Magnus
Hindsberger, John Boys, and Graeme Ancell examine the
integration of large-scale wind generation and large numbers
of EVs into the New Zealand power system, a rather smallish
and isolated network posing unique challenges.
The authors point out that the NZ system exhibits behavior
not seen in larger, interconnected networks and examine how
wind generation and EVs can complement each other,
enabled by a smart grid, to support rather than challenge the
operation of the power system.
The chapter's main contribution is to show how market
integration costs can be lowered and investment in
generation, transmission, and distribution deferred through
linking the charging of EVs to system frequency as well as
price signals.
In Chapter 19, Impact of smart EVs on day-ahead prices
in the French market, Margaret Armstrong, Amira Iguer,
Valeriia Iezhova, Jerome Adnot, Philippe Rivière, and
Alain Galli examine the impact that the introduction of
electric cars would have on day-ahead electricity prices over
the next 15 years, using the French grid as a case study.
The authors are particularly interested in statistically
predicting the impact of EVs on the network by simulating
the offers to buy and sell electricity on the day-ahead market.
Different scenarios for recharging the EVs are considered
including a case where the grid is drawing power from the
batteries when prices are high—the vehicle-to-grid (V2G)
concept. Most studies on the impact of wind power on
day-ahead prices make two strong assumptions, namely that
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the demand is inelastic and/or supply is the same as the merit
order.
The major contribution of the chapter is to propose a method
for modeling the offers to buy and sell power on the
wholesale market in the absence of such restrictive
assumptions.
The book's Epilogue offers the editor's concluding thoughts
on how the smart grid vision espoused by the contributors to
the book may ultimately be achieved.
Fereidoon P. Sioshansi Menlo Energy Economics
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Chapter 1. Smart Grid is a Lot More than
Just “Technology”
Steve G. Hauser and Kelly Crandall
Chapter Outline
Introduction 3
An Inevitable Evolution 5
Envisioning the Smart Grid: What Do We Want From
It? 8
We Would Want the Smart Grid to Be Affordable 8
We Would Want the Smart Grid to Be Clean 16
We Would Want the Smart Grid to Be Reliable 19
We Would Want the Smart Grid to Continue to Support
Our Economy and Society 21
The Path to the Smart Grid 22
Conclusions 25
References 26
A new vision of the “smart grid” is needed to drive the twenty-first-century economy much as the grid
of the twentieth century drove the economy of the past century This chapter provides an assessment of
its potential impacts, including a discussion of the challenges and obstacles to achieving this vision
Included is a description of the evolution of the smart grid concept from its inception to the present, and
views of how it may transform the power sector over the next decade The chapter sets the context of
the transformational changes the smart grid represents and provides 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 While technology is a key driver, it is only the
seed for the eventual outcome
Smart grid, technological innovation, electric power sector
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Introduction
The electricity industry has arguably been the primary driver
for the world's growing economy from the early twentieth
century to the present. The correlation between electricity use
and availability with standard of living is strong, as shown in
Figure 1.1 and it continues to be a critical element in
developing economies around the world. Nevertheless,
critical barriers are emerging that may prevent or challenge
the continuation of the business-as-usual trends in the future.
While the mandate of the power industry in the twentieth
century was to provide any amount of power consumers
required, anywhere, anytime, and at an affordable price—as
eloquently described in Chapter 2 by Healy and MacGill—the
mandate as we enter the second decade of the twenty-first
century is much more complex, demanding not only reliable
power, but cleaner and more efficient power with increasingly
diverse consumer requirements.
Figure 1.1
Global electricity consumption vs. gross domestic product.
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