1 IMPLEMENTATION COSTS OF A SMART GRID INFRASTRUCTURE IN FUTURE ELECTRICITY NETWORKS Author: María José Quevedo Silveira Director: Pablo Frías Marín Madrid June 2011
2 Agradecimientos A mi padre, que desde el Cielo me transmite su fuerza a diario A mi madre, mi mejor amiga, mi referente, y la persona que más me ha ayudado en este mundo A Pablo, inseparable compañero de camino y fuente de luz en mi corazón A mi director de proyecto, que me ha guiado constantemente, y ha sido un gran apoyo
3 Table of contents Part I! Report... 1! Chapter 1! Introduction... 2! 1.1! Smart grids... 2! 1.2! Motivation... 5! 1.3! Objectives... 6! 1.4! Working methodology and sources... 7! Chapter 2! Electrical power industry... 9! 2.1! Operation of electric networks... 9! 2.2! Middle and low voltage distribution grids... 12! 2.3! Middle voltage distribution lines... 14! General structures... 14! Connection schemes... 15! Special supplies... 17! Control, measure and protection elements... 17! 2.4! Low voltage distribution lines... 18! Connection between lines and buildings... 19! Meters... 23! Electric panelboard... 24! 2.5! Conclusions... 25! Chapter 3! Turning the network smart... 27! 3.1! Study of the costs and applications of the necessary smart elements... 27! Control, flexibility and management... 28! Security and protection... 35! Summary table... 36! 3.2! Security and communication network solutions for smart sgrids... 38! Smart grid communications... 38!
4 3.2.2 Smart grid security... 41! 3.3! Conclusions... 47! Chapter 4! Cost evaluation of smart grid deployment... 48! 4.1! Methodology... 49! Study of the costs per client in LV and MV in dispersed rural and urban areas considering the three integation scenarios... 49! Study of the implementation costs in Spain at the three integration scenarios in dispersed rural, rural clusters, urban and semi-urban areas... 53! 4.2! Definition of the three scenarios... 55! 4.3! Study of the smart grid costs... 57! Study of the costs per client in LV and MV in dispersed rural and urban areas considering the three integation scenarios... 57! Study of the implementation costs in Spain at the three integration scenarios in dispersed rural, rural clusters, urban and semi-urban areas... 61! 4.4! Conclusions... 66! Chapter 5! Conclusions... 68! References... 72! Part II! Datasheets... 74!
5 List of figures Figure 1 Smart grids ... 4! Figure 2 Power system ... 12! Figure 3 Overhead lines connection  ... 15! Figure 4 Underground lines connection A  ... 16! Figure 5 Underground lines connection B  ... 16! Figure 6 General electric installations ... 19! Figure 7 Electric installations in detail ... 20! Figure 8 Electric connections of buildings ... 22! Figure 9 Electric panel ... 23! Figure 10 Electric panel in detail ... 25! Figure 11 Smart Metering Substitution Plan ... 29! Figure 12 Smart meter ... 30! Figure 13 Telemetering scheme... 31! Figure 14 Clasp configuration of the network ... 36! Figure 15 Communication Network for smart grids ... 41! Figure 16 Cisco grid securiry solution ... 42! Figure 17 Dispersed rural LV line ... 51! Figure 18 Urban LV line ... 51! Figure 19 Dispersed rural MV line ... 52! Figure 20 Urban MV line ... 52! Figure 21 Evolution of the costs per client in LV lines... 61! Figure 22 Evolution of the costs per client in MV lines... 61! Figure 23 Total cost per kind of network Extrapolation to Spain... 62! Figure 24 Total cost per integration grade Extrapolation to Spain... 63!
6 Figure 25 Total implementation costs depending on the kind of network... 64! Figure 26 Total implementation costs depending on the integration grade... 65! Figure 27 Overview of smart grids projects investment ... 70!
7 List of tables Table 1 Network characteristics... 13! Table 2 Protection elements in electrical distribution installations ... 17! Table 3 Summary table of smart devices... 37! Table 4 Smart grid communication protocol ... 40! Table 5 JUNIPER NETWORKS Security solutions ... 47! Table 6 Low voltage studied lines ... 50! Table 7 Middle voltage studied lines ... 50! Table 8 Number of demand points... 53! Table 9 Percentage of distribution consumptions at each voltage level... 54! Table 10 Number of demand points classified in voltage levels... 54! Table 11 Total implementation costs in Spain in MV and LV... 54! Table 12 Total implementation costs of a Smart Grid infrastructure in Spain... 55! Table 13 Hypothesis of integration in low voltage lines... 55! Table 14 List of devices... 56! Table 15 Hypothesis of integration in middle voltage lines... 57! Table 16 Low integration costs in LV... 58! Table 17 Middle integration costs in LV... 58! Table 18 High integration costs in LV... 58! Table 19 Low integration costs in MV... 59! Table 20 Middle integration costs in MV... 59! Table 21 High integration costs in MV... 59!
8 Part I Report 1
9 Chapter 1 INTRODUCTION 1.1 SMART GRIDS Electricity is the most versatile power used in the entire world. The electric system s infrastructure necessary to generate, transport, distribute and consume was built long before now. This infrastructure has contributed to the industrialization and economic growth, offering quality service. There is practically no industrial process or domestic appliance with any use of electricity. The electricity demand grows more than other ways of energy, moreover, countries such as India or China with a rapid industrialization, need higher requirements of electric reliability supply because instantaneous cuts cause huge losses. The generation of electricity is the factor that more contributes to the CO 2 emissions because more than forty per cent of the generation comes from coal. Responding to the electricity demand without increasing CO 2 emissions implies efficient and sustainable solutions in the four processes of the electric system. Despite the growth of the renewable energy, their contribution to the electricity generated is too small. Wind and solar energy introduce new problems: their availability, storage and systems to coordinate generation sources and consumption points. In order to integrate the growing generation coming from renewable sources and at the same time improve the efficiency of the value chain, there are huge urgent changes to introduce in the electric system, in their structure and exploitation. This devolved system is called Smart Grid. The new electric system design (Smart Grid) must achieve four important requests of the global society: capacity, reliability, efficiency and sustainability. The electric distribution system is changing in order to offer a wider range of client services, responding to the demand, improving supply quality and achieving an optimal operation of the power distribution. 2
10 The European Union has set three objectives to be met by 2020: Reduction of emissions by 20%. Generation of renewable power sources by 20%. Improvement in energetic efficiency by 20%. The Smart Grid contribution to these objectives will be:! Facilitating the integration of renewable power sources.! Improving energy efficiency (management of losses and demand).! Supporting the incorporation of the electric vehicle on a massive scale. Smart Grids are the technological evolution of the actual distribution network. They upgrade traditional installations with modern monitoring technologies and information and telecommunication systems. The transformation centres will be equipped with electronic equipment to gather information and control the electric grid, for the purpose of improving business operations (operations, planning, investments, grid optimization, etc.). As the quantity of transported electricity grows, nearer of its stability limit will work the system. But power cuts and minimum disturbances are completely unacceptable. The reliability of the electric system is one of the priorities of the engineers to avoid risks derived from power cuts. Massive power cuts can leave a whole country without electricity and brief disturbances cause big economic losses. In order to contribute to the economy and quality of life, it is necessary a reliable electric supply, which means less emissions and less costs, because less supplying stations would be indispensable. Hydroelectric power is the traditional source of electric power without CO 2 emissions and this will continue during the next twenty years. Transporting electricity from the hydroelectric stations to the consumption centres require saving long distances so it is a hard task to connect this energy to the electric grid. The storage of energy will help to overcome the problems of intermittence and would avoid the necessity of additional supplies. 3
11 End-users decide how much energy they want to consume and in which way. With the actual energy costs and the difference between high and low rates, incentives for saving energy or using it in reduced fare hours are limited. Smart Grids make offer a great transparency in relation with the consumption in every moment and its cost associated. Remote management, regulated by Royal Decree, establishes that the new counters (smart counters) used by households will be equipped with:! Time-of-day discrimination.! Remote management capacity Central Power Plant Offices Houses Storage Micro- turbines CHP Fuel Cells Industrial Plants Wind turbines Virtual Power Plant Figure 1 Smart grids  Smart grids give to the clients the choice of connecting their appliance at the hours with lower demand and a less cost. This will convert the actual curve offer and demand into a plain curve with a considerable reduction of pick hours. This 4
12 allows a better management of the electricity supplies and also it means saving established reserves. The advantages of the Smart Grid are: Accelerate the response to incidents Efficient management by clients of their consumption Reduction on billing amounts Better power supply quality Possibility of choosing counter manufacturing Improve the safety of the operations Reduction of CO 2 emissions due to improvements in energy efficiency integrating renewable energies. Increase vision and control of the entire distribution chain, including HV, MV and LV More active participation by the market s Clients who can play an active role managing their demand Increase the commercial offer 1.2 MOTIVATION Electricity is the most used way of energy in the world. The necessary infrastructures to generate, transport, distribute and consume electricity were designed a long time ago. These infrastructures have supplied the service and have contributed to the industrialization and economic growth of the world in the last decades. There is practically no industrial process or application of our daily lives, which does not depend on the use of electricity. The electric demand increases more than other types of energy, and this reason mixed with the requirements of improving efficiency in the electric supply, in order to avoid momentary power cuts (which cause enormous economic losses), introduce the next step in the electric system: Smart Grids. The EU s Smart Grids Technology Platform defines Smart Grids as: 5
13 Electricity networks that can intelligently integrate the actions of all users connected to it - generators, consumers and those that do both in order to efficiently deliver sustainable, economic and secure electricity supplies. A Smart Grid is supposed to make a better use of technologies, to plan and control more efficiently existing electricity grids, in order to reduce network losses and support efficient end-use. Also it is supposed to control generation in a more intelligent way to enable new energy services (renewable and distributed generation) supply the demand. Smart Grids are an evolution of the electricity grids to supply the needs of consumers. Smart metering contributes to reduce the demand of consumers when prices are high or when power quality is at risk, but smart metering does not provide a Smart Grid. Smart Grids involve transmission and distribution levels, but as is commonly known, the transmission level is more smart than the distribution level. The benefits of a Smart Grid are very important for regulators and end-users, and imply intelligent control, monitoring, communication and operation. Some of the most important benefits are to:! Provide consumers complete information of their consumption, providing them the possibility to choose when to consume and which source.! Reduce CO 2 emissions and contribute to the environment.! Reduce energy losses, optimizing grid operation.! Improve reliability and quality of supply.! Facilitate the connection and operation of generators of all technologies. Smart Grids will also help to achieve the targets for the year 2020, which include a reduction of the 20% in greenhouse gas emissions, a penetration of a 20% in renewable energies, and a reduction of the 20% in consumption as a result of the improvements of the energy efficiency. 1.3 OBJECTIVES This project is divided in five parts, and each one is directed to fulfil an aim: 6
14 1. General description of smart grids and answers to this question: why are we looking to change the current grid? This part explains the requirements in order to improve the current behaviour of the system, and the benefits that it will suppose to have a Smart Grid. 2. Operation of the electric system. This part explains the structure of the electric system, and the role of each voltage level network. It also introduces general ideas about the possible changes, which are necessary in the actual electric grid, to achieve a control of the system. Moreover explains the grade of monitoring in distribution middle and low voltage lines, and the needs for a future smart grid. 3. This part contains a list of essential elements that would have to change. It analyses the costs and improvements that are needed, to make it smarter. 4. It evaluates some case study in which different possibilities of distributed generation s role are tested, allowing it to play a more active and important part in the power system. This evaluation permits obtaining a situation of balance between costs and benefits, in order to reach a possible future smart grid. 5. It is the moment to obtain conclusions after all the studies made. This part gives definitive ideas of the changes that the current grid will implement, their cost, their contribution, and the steps to follow in order to reach an accurate smart grid. 1.4 WORKING METHODOLOGY AND SOURCES The main sources are papers and reports on Smart grids and current projects of Smart grid infrastructures. Some material of electric distribution companies is also reviewed, including definitions, distribution system diagrams, and opinions of experts about different changes, to enable a more intelligent system. 7
15 The methodology consists in keeping firstly the general idea of the current electric system, and the necessities required to change the grid. This is achieved by collecting all the information of Smart grids and expert s opinions about the electric system. Secondly, the analysis of the equipment s costs to implement is the key to compare results of benefits and costs of the Smart grid s implementation. In order to obtain these results Microsoft Excel is the main tool just to make estimations and calculations. 8
16 Chapter 2 ELECTRICAL POWER INDUSTRY 2.1 OPERATION OF ELECTRIC NETWORKS The electrical power industry provides the production and delivery of electrical power. Electricity demand is growing all over the world faster than other forms of energy, especially in countries with rapid industrialization, such as China and India. There is almost practically no industrial process or application in everyday life that does not use electricity. Because of all these reasons it is considered as a public utility. The electrical power industry is composed of four processes:! Electricity generation! Electric power transmission! Electricity distribution! Electricity retailing In many countries, electric power companies own the whole infrastructure from generating stations to transmission and distribution infrastructure. To avoid the existence of a natural monopoly it is necessary to segregate activities, establishing a separation between the four processes mentioned before. The Spanish power sector is a reference for other countries in the liberalisation of the power industry. Red Electrica Española  is the Transmission System Operator, therefore guarantees continuity and security of power supply, and coordinates the proper performance of the production and the transmission system. Red Electrica, the manager of the transmission grid, acts as the sole transmissioner, and recognizes the principles of transparency, objectiveness and independence as one of the most important tasks of its work. The Transmission System Operator manages an effective transmission grid, and coordinates the operation of the generationtransmission system to ensure demand would be satisfied at all times. 9
17 In order to deregulate the supply of electricity, and give the possibility to endusers of electricity to arise better prices, the market reform divided the business of electric companies in two roles: retailers and distributors. As a result, costumers can decide the company they prefer, and come to an agreement about the rate they are going to pay. If the competition increases the benefits will be greater to both buyers and sellers. The most important Spanish electrical companies are Iberdrola, Unión Fenosa and Endesa, and they combine the two different roles mentioned. The limitations of their different business units and their offers are in detailed at their online sites   . Fixed rates, regulated by the Government, have disappeared and the costs of electric power keep being much more higher than the price paid by consumers. The Government has created the Last Resort Rate, the maximum rate marked by the Government. It provides to the consumer a fixed price established by the regulator, which will be charged by retailers. There are many retailers in the electric market, and the citizens choose between two different options:! The last resort rate retailers, who have been selected by the Government, and they supply electricity by the fixed rate. This option is only given to low voltage consumers, so their hired power would be less or equal to 10kW.! The liberalised market companies can make offers, which fit in price and services the necessities of the consumers. Electrical distributors have a limitation in its work, and it is important to represent their restrictions. Their main work consists in delivering electricity from transportation lines to end-user's installations. Their most important functions are: planning and operating the distribution network, developing installations, providing service within regulatory quality of service, billing access and full rates until the last resort rate is established, and running demand management programmes. 10
18 Distribution networks are composed by: " Electric power substations They transform network voltage, reducing it from higher to lower voltages. They can be bigger or smaller, depending on the voltage they transform. " Power lines They are used to carry electricity, and we can differentiate two types: - Overhead lines - Underground lines. The last are used normally inside cities. " Transformer stations They turn mid voltage into low voltage. " The service connection It is the installation which connects the distribution network (owned by the distribution company) to the consumer units (owned by the user), for low voltage (LV) and mid voltage (MV). It can be underground (widely used in urban areas), overhead and mixed. " Meters or metering equipment They measure the energy that has been consumed. They are located in centralised meter rooms or in houses. It is defined as middle voltage distribution grids, the network with a higher voltage than 1kV and lower than 36kV. Low distribution grid is a network with a voltage less or equal to 1kV. Common voltage values of distribution grids are:! Middle voltage: 20/15 kv! Low voltage: 400/230 V 11
19 Figure 2 Power system  2.2 MIDDLE AND LOW VOLTAGE DISTRIBUTION GRIDS Middle voltage sources, transformers stations and middle voltage cables compose middle voltage distribution networks. Middle voltage sources are the electric power substations HV/MV. Transformer stations belong to companies or to clients and they are the delivery points. Middle voltage cables are middle voltage distribution lines, which canalize to the consumers the electricity demanded. Urban areas are characterized by a high concentration of loads (high density and high power), and also by a great difficulty to build electric installations. The town centre is full of homes and stores, but these are not the unique loads to supply. There is also, a big contribution to the electricity demand, of some appliances such as heating, illumination systems and elevators. 12
20 Outskirts loads are more diversified than the centre ones. It depends on the type of consumer, but typically there are industries, which have more localized charges than residential areas. As a consequence, low distribution lines will be more or less developed depending in load s concentration. According to the density of charges, low distribution lines can vary: High concentration of loads means shorter lines. Middle voltage lines will end nearby clients. Low concentration means longer lines. The distance between sources and end-users will be part of low voltage line and part of middle voltage lines. Kind of Network Structure Operation flexibility Clients Monitoring Transport lines (400, 220KV) Distribution HV lines (132, 66, 45 KV) Distribution MV lines (20, 15 KV) Distribution LV lines (400, 220 V) Mesh High Few High Mesh Middle Few High Mesh/Radial Few Many Middle Mesh/Radial Few Many Low Table 1 Network characteristics In order to reduce losses on lines and contribute to the quality of service, it is essential to shorten distribution lines. Also, this is important to decrease the costs of electric distribution, but it is not possible to reduce the length of low voltage 13
21 lines without adding a great number of transformer stations MV/LV. This reasoning is the same for electric substations. As a consequence, increasing the number of transformer stations and electric substations implies the necessity of reducing their price. 2.3 MIDDLE VOLTAGE DISTRIBUTION LINES Middle voltage distribution lines ensure the connection from substations HV/MV to distribution lines, and also the connection from these lines to transformer stations MV/LV. The time required in localizing and repairing breakdowns could rise, and the density of loads affected could be also higher, as current grids are not prepared to identify exactly where a fault has taken place. This reason explains that each transformer station MV/LW is linked to one source HV/MV by two different ways GENERAL STRUCTURES Electric structures of wires in middle voltage urban grids are divided in these groups: o CUT IN ARTERY Every transformer station MV/LV is supplied by a cut of middle voltage wires. The principle structures that correspond to this way of connexion are: ring, spindle, spike, mesh, petal of daisy and grille. o DOUBLE DERIVATION Two wires connect each transformer station to one source on middle voltage. One of these wires is included for security in case of loss of the working wire. This structure is useful in areas with a large concentration of charges (5 to 15 MVA/km 2 ), like industrial areas or commercial and touristic areas. They have the 14
22 necessity to ensure continuity because a breakdown would suppose a great economic loss. o MULTIPLE DERIVATION This structure is used in huge concentrations of charges with a density of more than 30 MVA/km 2. Connecting new loads would not have to affect the normal operation of the distribution network, and it cannot introduce changes in the exploitation philosophy neither in the grid architecture. As a general rule there must exist one cutting element with free access to the operators of the company, in order to connect and disconnect particular installations to the distribution network CONNECTION SCHEMES There are different ways of connecting loads depending on the nature of the line. The simplest schedule is the one used in overhead lines, in comparison with the ones used for underground lines. # CONNECTION IN OVERHEAD LINES: TRANSFORMER STATION   Figure 3 Overhead lines connection # CONNECTION TO UNDERGROUND LINES: There are different possibilities of connection for clients that are supplied by underground middle voltage network: 15
23 A. The client s centre is included in one active circuit of the urban structure. The cells of entrance and exit can be integrated or not with the ones, which belong to the transformer station, and its location can be adjacent to the other consumer s installations. This installation will have a disconnector or a general switch exclusively for client s use. COMPANY S PROPERTY TRANSFORMER STATION   Figure 4 Underground lines connection A B. It derives the client s centre from one transformer station, property of the company. This transformer station will have one cell for switching the client s line. Also the client has a transformer station, which can be managed by him, in order to have two different levels of voltage.   Figure 5 Underground lines connection B 16
24 2.3.3 SPECIAL SUPPLIES $ Double supply: By reasons of continuity and security of supply, there are some clients who have two service connections. The normal service connection will be prior, and it will be the one that supplies the charges. The second service connection will supply loads by a different electric line, independent from the first one, and with the necessary capacity for the expected power. The connection will be considered double supply, if the line has more than the fifty per cent of capacity of the hired power by the normal supply. $ Reserve and emergency supply: It maintains the reserved service of the indispensable elements for the operation and help of the installation. The service is lower than the twenty five per cent of the hired power CONTROL, MEASURE AND PROTECTION ELEMENTS Every transformer station needs the installation of protection elements which allows the disconnection of the electric station from the supply line. The minimum list of elements is: Primary s coil voltage (KV) Power margin (KVA) Elements 6!200 Disconnectors and fuses 6 >200 Disconnectors and automatic breakers 15!100 Disconnectors and fuses 15 >100 Disconnectors and automatic breakers Table 2 Protection elements in electrical distribution installations  17
25 There are also measure elements reporting: - Exploitation conditions - Supplied energy - Power losses This information is not only necessary for the correct behaviour of the network, but also for identifying possible faults in the electric power supply. The devices used are voltmeters, ammeters and wattmeters. They have an ammeter coil, a galvanometer coil, or a combination of them, inserted in serial or parallel to the main circuit. It is also necessary to insert transformers between lines and devices to have measurable values with these devices. A battery of accumulators normally supplies monitoring and security circuits. These circuits are composed by relays, automatic breakers, control devices and signalling devices. In order to limit selected fault in auxiliary circuits it is required direct current derivations to the different parts of the installation. Fuses or circuit breakers protect these derivations and there is also necessary a centralized monitoring device to localize ground faults. 2.4 LOW VOLTAGE DISTRIBUTION LINES Low voltage network comprises overhead or underground lines. This last technique is more expensive. $ Overhead lines allow the supply of areas with low density of loads, and where the buildings are not so high. They are typically used in rural areas and small villages. Their structure is radial and branched. Derivations and service connections are connected in T, and these lines are accessible in their entire route. $ On the other hand, underground lines cover areas with high density of electricity consumption, where modern buildings prevail. They are typically used in urban areas. These lines are radial, with possible 18
26 derivations. They are accessible in the cells of the service connection and in derivations in T of the grid. If the electricity demand increases is better to build bigger transformers in the current transformer stations than to build new transformer stations. In general for each transformer stations there is only one transformer CONNECTION BETWEEN LINES AND BUILDINGS The connection of buildings to the electric grid implies a list of wares and systems, some of them are necessary just for the supply and others takes care of the protection and control of the installations. Furthermore, electric companies need to measure the consumption of each consumer, so there are some devices that carry out this task. Individual derivation Individual installation General protection box Service connection Meters General supply line Figure 6 General electric installations  Following the order of objects that make possible the connection to the distribution line, the derivation from it starts with the service connection. It is the 19
27 installation which connects the distribution network to the consumer units for low voltage and mid voltage. It can be underground (widely used in urban areas), overhead and mixed. The elements that follow the service connection and permit to link the general protection box with individual installations are: General protection box General supply line Meters Individual derivation Individual installation: o Mains isolator o Control and protection mechanisms All of them make the installation of linkage. Individual derivation Public line General protection box Mains isolator Meters General control and protection mechanisms Service connection Meters centralization General supply line Figure 7 Electric installations in detail  1. General protection box This box keeps all the protection elements of the general lines of supply. For each live line there is a fuse to cut short circuits. If there is only one consumer, the general supply line disappears and there is a unique box for measure and protection. 20