Wednesday, April 7, 2010

The smart grid imperative

The latest buzzword in electricity sector is smart grid (see nice intro here), which seeks to "deliver electricity from suppliers to consumers using digital technology to save energy, reduce cost and increase reliability and transparency". A true Smart Grid would enables multiple applications - from generation to transmission to distribution - to operate over a shared, inter-operable network, similar in concept to the way the Internet works today.

Just as computers and routers manage the flow of bits on the Internet, smart-grid uses computers and communications technologies to optimize the flow of electricity. A smart grid is characterized by a two-way flow of both electricity and information unlike the traditional one-way flow from generators to the consumer.

Smart grid analyst Jesse Berst has outlined three rules for what the smart grid needs to make it work - open and interoperable standards, like the Internet; dynamic pricing models; and right government policies. The technology for smartgrid would involve installing various hardware - smart meters, energy management technologies, wireless sensor networks, control systems like SCADA - and software - system integrators, demand response programs - to make the power grid an intelligent 2-way digital network.

Once in place, all these devices have to be seamlessly integrated to ensure real-time and uninterrupted communication with each other. The demand side incentives have to be managed with pricing models that both optimize on consumption and minimizes peak load usage. And all this requires an enabling framework and proactive regulation, especially on standardizing interoperability protocols and standards.

A smart grid seeks to save energy, reduce cost and increase reliability and transparency, accomodate renewable energy sources, and reduce carbon footprint, in a seamless integration of the entire value-chain from generators to consumers through transmission and distribution utilities. It helps manage the transition from a centralized, producer controlled network to one that is less centralized and more consumer interactive. For generators, a smart grid enables them to schedule their generation in response to demand and switch from different modes of generation based on demand. This assumes greater importance with capapcity addition in wind and solar power generation, which is critically dependent on time.

Transmission and distribution utilities can prevent and reduce outages by putting in place mechanisms to prevent and pre-emptively detect and repair emerging flaws and defects in the transmission and distribution network by placing technological devices like networked sensors inside various equipments in the network. They can also have alternate supply channels to maintain supply even in cases of failures at certain levels.

An ideal smart grid would include advanced metering infrastructure and smart meters (to both monitor the consumption of energy and also enable consumer side responses to the power availability conditions); real-time load monitoring and load-growth planning softwares that integrate the information flowing in from different sources - consumers, generators, defects and repairs etc; phasor management units (PMU) (that samples voltage and current many times a second at a given location to provide wide-area situational awareness, monitors power quality and even helps respond to problems - an "MRI" of the power system); automated power systems (SCADA, sub-station automation, control systems, network of PMUs etc to help rapid diagnoses and offer precise solutions to specific grid disruptions and outages).

Such smart grids also pre-suppose consumers who have "smart" home electricity controllers and smart appliances which can respond immediately to the changing load conditions. They also require common standards for integrating the various devices that straddle the network - home electricity controllers, smart meters, data concentrators, phasor management units, network communication interfaces etc. These sensing, measurement, control and communication devices will all have to communicate with each seamlessly to enable a smart grid. Even in the US, they are in the process of developing an appropriate standard for ensuring inter-operability of these myriad of devices that constitute the network.

The critical nodes in any distribution network are substations, distribution transformers and energy meters. In India, all these three work as stand alone silos without any integration, leave alone real-time networking. Even in the smaller, city-based distribution utilities, the level of integration, leave alone achievement of an intelligent network is partial.

One of the major components of the $787 bn fiscal stimulus plan of the Obama administration is the package for clean energy, to be apportioned from the $43 billion allocated for energy to the $111 billion that will go toward infrastructure and science. Within this too, one of the most high-profile allocations is the $4.3 billion made for projects that will upgrade the nation's electric grid.

President Obama has called for installation of 40 million smart meters and 3,000 miles of transmission lines (a national transmission superhighway) to modernize America's electricity grid.

The smart grid stimulus includes about $100 million for smart-grid related worker training, $80 million for resource assessment and $10 million for the development of new inter-operability standards for the grid. The $10 million allocated for development of inter-operability standards will go to the National Institute for Standards and Technology to help implement a smart grid interoperability framework "that includes protocols and model standards for information management to achieve interoperability of smart grid devices and systems".

China too proposes to spend $7.3 billion from its $586 bn stimulus in the form of loans, grants and tax credits to encourage the development of smart grid.

In India too the government have initiated ambitious efforts at upgrading our transmission and distribution infrastructure to usher in a smarter grid. To start with, following the recommendations of a Task Force on IT interventions in the power sector, the R-APDRP program was initiated with the objective of intensification of the use of IT in distribution to reduce transmission and distribution losses. Smart grid offers smarter solutions to some of the most serious problems facing the downstream side of electricity sector in the country.

One of the biggest obstacles in the growth of automatic metering infrastructure in India has been over the failure of meter manufacturers to standardize their protocols and share the same for integration with other devices. It is therefore important that the government play an important role in catalyzing the development of uniform and interoperable standards for various network devices that form critical components in the smart grid eco-system.

One of the most persistent challenges with power sector reforms in India has been the inability to address the problem of very high AT&C losses, which was touching 30% in 2009. While less than a fifth of this can be attributed to technical losses, the bulk of the losses are commercial - arising from theft and irregular billing, and poor collection. In this context, there could be nothing more smart than introducing high accuracy electronic meters with tamper detection features and which have automatic meter reading (AMR)features, atleast for the high consumption customers. In one stroke, it would become possible to more or less accurately measure and bill the electricity consumed by those who form the dominant share of consumers. The challenge would then be reduced to collecting the payment for the billed units.

Another big challenge faced by the sector is the management of the peak power deficit, forecast by the management consultants KPMG to be 12.6% for 2010. Given the slow pace of capacity addition, rapid pace of economic growth, and the huge pent-up demand suppressed by load shedding, peak power deficits are certainties in the electricity landscape of India for many years. Consumers can exercise "demand response" and shed load depending on the grid demand and availability conditions. In the circumstances, tariff policies that incentivize bulk consumers, especially industries, to shift some share of their production away from peak times, can go a long way towards smoothing the load profile. can achieve this. However, administering Availability Based Tariffs (ABT)or Time of Day (ToD) tariffs required to so incentivize consumers would require installation of smart or AMR meters.

A smart grid can also provide a smart solution to address the issue of climate change. Real-time home energy-monitoring tools could help consumers access information about their energy use and minimize their consumption accordingly. Such smart grid investments can also finance itself partially by accessing carbon emission offsets under the Kyoto Protocol. It would also help integrate home generation sources like solar panels with the grid.

A robust smart grid would also require massive investments in the development of modernized and seamlessly integrated transmission and distribution networks that have both the capacity to evacuate power from the large numbers of generators across multiple chanels simultaneously and also monitor this bulk transmission. Comprehensive system of ring loops that provide alternate transmission and distribution supply channels for sub-stations to ensure reliability of supply.

It is important that policy makers avoid the pitfall of confusing a smart grid for the simplicity and attractiveness of technology heavy investments that fail to appreciate the fundamental challenges facing electricity transmission and distribution in the country. If this precaution is not taken the R-APDRP could go the way of similar interventions that promised a lot but fell short on its objectives.

These IT solutions need to move beyond the mere data acquisition to exercise supervisory remote control over the functioning of various elements in the transmission and distribution grid. More effective SCADA systems that use powerline and various hybird communication technologies to deliver on its control functions - VAR (capacitor) control, VOLT control, and Breaker tripping control. It presently functions as simple data acquisition systems. However, it may be some time before devices like PMUs gain a crucial role in our networks.

In other words, India should aim for the achievement of a "smarter" grid atleast for the delivery of energy to a category of services like HT/EHT; more effective integration between our generation and transmission interfaces; and make available alternate supply channels in cases of disruptions from one location etc

Interestingly the smart meters that have been rolled out in the US has evoked mixed response, with controversies surrounding allegations that the meters are running too fast and are not billing accurately. In the first phase these meters are being used by utilities to issue automatic bills, carry out remote disconnections and reconnections, and impose Time of Day (ToD) billing to encourage consumers to optimize on consumption.

There is also the justifiable reasoning that while the utilities gain immediat benefits, the consumers will be able to make full use of things like the ToD billing only in due course of time. That would require consumers having access to instantaneous rate information through in-home displays of instantaneous price; the ability to adjust use; appliances that can be set to switch on or off when the meter announces that prices have reached a certain level; and devices that gather data about the weather, as well as consumers’ individual climate-control habits, to adjust a home’s air-conditioning and heating systems. All of them presently looks some time away.

A report from Pike Research estimates that more than 250 million smart meters, which are the vanguard of Smart Grid deployments, will be installed worldwide by 2015, representing a penetration rate of 18% of all electrical meters by then, up from 46 million in 2008.

Update 1 (10/4/2010)
See also this report that suggests that the mounting evidence of widespread consumer dissatisfaction with smart meters is linked to a lack of understanding about how businesses and homeowners can boost energy efficiency.

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