Emerging Smart Grid Technologies: The Future of U.S. Power Distribution

Transcription

1 Emerging Smart Grid Technologies: The Future of U.S. Power Distribution Webinar presented to the 2degrees Intelligent Grids Network Dr. Peter Fox-Penner, The Brattle Group April 22, 2009 Copyright 2009 The Brattle Group, Inc. Antitrust/Competition Commercial Damages Environmental Litigation and Regulation Forensic Economics Intellectual Property International Arbitration International Trade Product Liability Regulatory Finance and Accounting Risk Management Securities Tax Utility Regulatory Policy and Ratemaking Valuation Electric Power Financial Institutions Natural Gas Petroleum Pharmaceuticals, Medical Devices, and Biotechnology Telecommunications and Media Transportation

2 Agenda Transforming power distribution Smart Technology Across the Grid Transforming Distribution Challenges for Downstream Grid Deployment Meet the panel: Moderator: Peter Fox-Penner, Principal and Chairman Emeritus, The Brattle Group Jesse Berst, Managing Director, GlobalSmartEnergy Karl Stahlkopf, Senior Vice President of Energy Solutions and Chief Technology Officer, HECO Peter L. Corsell, Chief Executive Officer, GridPoint Ahmad Faruqui, Principal, The Brattle Group Hosted by Roz Curzon of the 2degrees Intelligent Grids Network Panel discussion Privileged and Confidential 2

3 Smart Technology Across the Grid The term Smart Grid has several uses in today s industry: Transmission: expanding our high-voltage system to enable the electricity sector to switch to low- and no-carbon fuel Distribution: communications and control channels that allow electric customers and suppliers to monitor and control the power usage Our focus in on the downstream or distribution level smart grid Privileged and Confidential 3

4 Transforming Distribution Real-time feedback to customers on their energy consumption should help them better manage their energy behavior through more transparent and accurate pricing In-home displays and similar devices can lower energy use by up to 6% Improved signaling and information transfer will increase grid reliability Smart grid could enable wide spread use of PHEV s and opportunities for distributed generation Source: Ahmad Faruqui. Will the Smart Grid Promote Wise Energy Choice? Presented to at the Illinois Smart Grid Initiative, August 5, Privileged and Confidential 4

5 Challenges for downstream grid deployment Regulatory: State regulatory policies towards pricing Regulatory investment approvals National climate and electricity policies Design Issues: Standards, protocols, and interoperability Selecting effective end-use applications Financial and Technical: Evaluating emerging technologies Weighing costs vs. benefits Privileged and Confidential 5

6 Emerging Smart Grid Technologies Jesse Berst Managing Director GlobalSmartEnergy 1

7 Background Technology analyst Many previous tech revolutions SmartGridNews.com Top-rated Web site Strategic consulting Large investment firms Large corporations Stimulus projects Forthcoming book Electronomics: Creating Wealth and Prosperity from the Transition to the Electricity Economy

8 The Long View The world is facing unprecedented energy challenges The electric power industry will bear the brunt Will require us to enhance electric power as an engine of innovation and economic growth Entering a new era More change in next 10 years than last 50 Growth masked by recession Electric power at the epicenter New channel for innovation Will look more like IT, networking, telecom New revenue opportunities New roles New business models 3

9 Those long-term trends have short- and mid-term implications Distribution automation growth Standards as dominos Demand response futures Hardware From DR to DER Smart meters Semi-smart meters Gateways Collision in the home Carrier-class network management Systems integration

10 Karl Stahlkopf Sr. Vice President Energy Solutions & Chief Technology Officer Hawaiian Electric Company, Inc.

11 Corporate Mission GridPoint provides a software platform that aligns the interests of electric utilities, consumers and the environment through an intelligent network of distributed resources that controls load, stores energy and produces power. Proprietary & Confidential 1

12 GridPoint Platform and Solutions Enables purchase of solutions as needed Integrates utility s and 3 rd party data, systems and devices Delivers customizable Web interfaces Leverages any communications network GridPoint Control Console (utility) Packaged Applications GridPoint Customer Portal Web Services Custom Applications & 3 rd Party Integration Web Modules Custom Apps 3 rd Party Communications Network Proprietary & Confidential 2

13 Emerging Smart Grid Technologies: The Future of U.S. Power Distribution Ahmad Faruqui April 22, 2009

14 Ahmad Faruqui and The Brattle Group Ahmad Faruqui, Principal with The Brattle Group. Recent projects include: state-by-state assessment of demand response for the Federal Energy Regulatory Commission national assessment of energy efficiency for the Electric Power Research Institute quantified the benefits of dynamic pricing for the Edison Electric Institute The Brattle Group: provides consulting and expert testimony in economics, finance, and regulation extensive experience in designing and evaluating innovative pricing, demand response, and energy efficiency programs scenario analysis, forecasting methods, and benefit-cost analysis assists utilities in reviewing the accuracy and usefulness of their tools and programs March 17,

15 The igrid Modeling Suite The Brattle Group developed a modeling suite, igrid, to assist in the quantification of smart grid benefits igrid focuses on the customer side of the Smart Grid and technologies that create value at the interface between customers and the distribution grid Established Technologies/Benefits AMI IT backbone of the smart grid DR Time-based pricing and automating technologies can be offered once AMI is deployed EE igrid measures added EE benefits over and above traditional EE measures and programs enabled by the SG (e.g. information displays) Leading-Edge Technologies/Benefits DER downstream solar, wind, storage, and other resources are already entering, but the smart grid will improve their economics via timedifferentiated prices and customer or utility dispatch PHEV with the SG, PHEV charging can be better controlled and both G2V and V2G benefits realized March 17,

16 Emerging smart grid technologies Timing and level of leading-edge technology benefits have much larger uncertainties but potential economic and policy benefits are extraordinary Distributed energy storage: Peak reduction from load shifting Energy and ancillary services benefits Reliability benefits by acting as backup generator Increase in wind generation PHEVs: With smart grid technologies, PHEVs charge and send power back to the grida major potential benefit A smarter grid is needed to handle the increased charging load with more flexibility The range of possible PHEV penetration by 2050 is wide March 17,

17 Questions for the Panel Privileged and Confidential 6

18 At The Brattle Group, we ve identified seven different value streams that the downstream smart grid will deliver to customers: Advanced metering infrastructure Dynamic pricing Dynamic pricing enabled technologies Energy efficiency from in home displays Energy efficiency from building commissioning Distributed energy resources Plug-in hybrid electric vehicles When and in what order do you see these applications entering broad-scale use? Tell us about your timing vision for each of these applications. Privileged and Confidential 7

19 Deployment costs How much do we know about the costs of upgrading a conventional utility distribution network to a full-scale smart grid? What do the numbers look like on the cost side, and how do we know? Privileged and Confidential 8

20 State approval for smart grid technologies State regulatory agencies are key to the approvals utilities need to install Smart Grid technologies. What are the barriers to getting regulator approval, and what is the best way to surmount them? Privileged and Confidential 9

21 Adoption of smart grid standards How many different standards and protocols are there now between the distribution utilities and the behind-the-meter smart grid technologies? Being as concrete as possible, what are the problems encountered now with lack of standardization (if any) and what should be done to address them? Privileged and Confidential 10

22 Energy Storage Technologies How important is economical storage to the business case for the downstream smart grid? What are the storage technologies you see coming into the market and when? Privileged and Confidential 11

23 The Brattle Group Smart Grid Presentations and Papers Faruqui, Ahmad, Ryan Hledik, Clay Davis, and Peter Fox-Penner, Sizing Up the Smart Grid, forthcoming, The Brattle Group. Faruqui, Ahmad, Ryan Hledik, and John Tsoukalis, The Power of Dynamic Pricing, The Electricity Journal, April Faruqui, Ahmad, Sanem Sergici and Ahmed Sharif, The Power of Information, The Brattle Group, February Hledik, Ryan. How Green is the Smart Grid, forthcoming, The Electricity Journal, April Fox-Penner, Peter. Smart Grid Opportunities for the Design Professional Industry. Presented at Design Profession Coalition Winter Membership Meeting, Washington, DC, March 2, Faruqui, Ahmad and Ryan Hledik, Transitioning to Dynamic Pricing, Public Utilities Fortnightly, March Faruqui, Ahmad and Sanem Sergici, Household Response of Dynamic Pricing to Electricity A Survey of the Experimental Evidence, January Fox-Penner, Peter. Smart Grid Observations on the Eve of the Obama Administration. (talking points). Presented at the GridWise Alliance Membership Meeting, Houston, TX, December 9, Faruqui, Ahmad, Inclining Toward Efficiency, Public Utilities Fortnightly, August Faruqui, Ahmad, Ryan Hledik, Sam Newell, and Hannes Pfeifenberger, The Power of Five Percent, The Electricity Journal, October Privileged and Confidential 12

24 The Brattle Group The Brattle Group provides consulting and expert testimony in economics, finance, and regulation to corporations, law firms, and governments around the world. The Brattle Group is a frequent consultant to all segments of the energy industry, primarily IOUs, and The Edison Electric Institute (EEI). The Brattle Group has worked with half of the companies in the Fortune 100 and for a quarter of the companies in the Fortune 500. Dr. Peter Fox-Penner, Principal and Chairman emeritus of The Brattle Group, is the former DOE Senior official in Energy Efficiency and Renewable Energy, and serves on several boards including the Advisory Board for Enviance, Inc. Visit for more information. Privileged and Confidential 13