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session 1 - GE Energy Session 1 of a 5 Part Series on the...

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Unformatted text preview: GE Energy Session 1 of a 5 Part Series on the Smart Grid The Smart Grid … Lunch and Learn Session 1: The Smart Grid and its Benefits 1 Smart Grid Learning Series Session 1: The Smart Grid and its Benefits Session 2: The Smart Grid… The Consumer View Session 3: The Smart Grid… The Distribution View Session 4: The Smart Grid… The Transmission View Session 5: The Smart Grid… The View from Rural America 2 Session 1: The Smart Grid and its Benefits Topics: The Grid … An Overview The Benefits of a Smart Grid Good Things Enabled by the Smart Grid • Renewable Intermittent Generation. i.e. Wind • Renewable Dispatchable Generation i.e. Landfill Gas, Geothermal • PV Solar • Plug In Vehicles • Demand Side Management Calculating the Benefits of A Smart Grid • Utility Benefits • Consumer Benefits • Societal Benefits Impact of Policy Discussion 3 Introduction Electricity changed the world A whole new world of opportunity came into view 5 Add more capacity whenever needed … power more opportunity. No worries. 6 What worked in the past won’t work anymore Old grid structures need to be updated New grid structures are being built at record paces The strain on resources, fuel, siting, building and maintenance are overwhelming 7 Soaring energy demand World energy consumption forecasted to triple in about 40 years Source: U.S. Army Corps of Engineers ERDC/CERL TR-05-21 8 Electricity prices on the rise U.S. sees 6.5% spike in ’09 electric bills 6.5% Source: EIA (Energy information Administration) 9 Outages affect everyday life … every day Woman in iron lung dies during a power outage Los Angeles, CA 5/29/08 Power outages force evacuation of Woodstock hospital 7/30/08 Chicago, IL Lights out in Vancouver after underground fire Thousands in left without power Vancouver, Canada 6/14/08 Trip on Mexico's transmission line causes national power outage 5/26/08 Mexico City, Mexico Power outage disrupts Hynix DRAM production South Korea, Korea 5/22/08 Storm knocks out Euro 2008 TV feed worldwide 6/25/08 Vienna, Austria Power outages widespread in Texas after Dolly 7/25/08 Harlingen, Texas South Africa’s power outages create national emergency Johannesburg, South Africa 2/13/08 Hours-long power outages anger, frustrate Pakistanis; government pushes daylight savings 6/1/08 Islamabad, Pakistan 10 Green energy takes center stage National Geographic Time Magazine Changing climate How to win the War on global warming Vanity Fair April 28, 2008 Green Issue April 2008 The Economist The future of energy Hispanic Business Going Green May 2008 June 21, 2008 May 2008 11 Electricity … Poised to change the world again “We can’t solve problems by using the same kind of thinking we used when we created them.” - Albert Einstein 12 Time is now … to shape the market “…updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation.” -from transcript of America’s Recovery and Investment Plan The American Recovery and Reinvestment Act of 2009 Pay down the cost of smart grid investments Matching grant program Funding pool for pilot projects 13 Today’s Grid Today’s grid … an engineering marvel 15 Grid inefficiency Source: AEP PUC Hearing 16 Aging assets Transformer failure rate 100% 80% 60% 40% 20% 0% 1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 97 Age in Years 17 The Smart Grid What is a Smart Grid? The integration of two infrastructures… securely Electrical infrastructure Electrical Infrastructure Information Infrastructure Sources:: (1) UtilityPoint, by Ethan Cohen 7/18/0 (2) EPRI® Intelligrid 19 Why? Enables … Energy efficiency More renewables Consumer empowerment 20 Growing Complexity In Modern Grids… 21 Capabilities required to manage the future grid 22 Flexibility for emerging capabilities Wide-Area Protection & Automation Wide-Area Monitoring & Control Renewables Smoothing Delivery Optimization Reliability Optimization Renewables Forecasting Demand Optimization Asset Optimization 23 Standards for open architecture NERC Scalable Integrity Secure Ease of use Shareability Ubiquity Cost effectiveness Openness 24 Smart Grid Benefits Increasing grid efficiency Commissioner Wellinghof, U.S. Federal Energy Regulatory Commission testifying to U.S. Congress, May 2007 Smart Grid delivers: Utility savings: $46MM/yr (2% total load reduction) Environmental benefits: 290K tons of CO2 reduction Source: Energy Information Administration & GE Estimates 26 Quantifying the benefits … demand response Customers enrolled in direct load control programs, by region 1,400,000 Customers 1,200,000 1,000,000 “Demand response is clearly the ‘killer application’ for the smart grid.” 5 MM customers 800,000 600,000 400,000 - Jon Wellinghoff, FERC Commissioner, Dec. 29, 200,000 2008 0 RFC FRCC MRO SERC WECC NPCC TRE SPP ASCC/HI 10000 41 GW 8000 6000 Current DR programs can reduce peak load demand by up to 41 GW (~6% of peak demand for 2008). Utilities reported 13.6 GW of actual peak load reduction in 2007. Smart grid-enabled DR programs may achieve peak load reductions of 7%-22%1 4000 1Electric Advisory Committee, “Keeping the Lights On in a New World,” January 2009 2000 ns e C R d an ap An ac ci lla ity ry Se D rv em ic es an d Bi dd in g M ul tip le R O ea th l-T er im C e rit Pr ic al ic in Pe g C ak rit Pr ic al ic in Pe g ak R eb at Ti e m e of U se nc y ge es po tro l on C d D em tL oa D ire c In t er ru pt ib le 0 Em er Potential Peak Load Reduction (MW) Current potential peak load reduction, by DR program 12000 Source: FERC Assessment of Demand Response & Advanced Metering, December 2008 Demand Optimization – Value to Consumer Demand Smart Thermostat Consumer Interface Smart lighting Smart Meter Efficient appliances Pacific Northwest National Laboratory announces the results of two studies demonstrating consumers and information technology can play an active role in managing the grid “On average, consumers who participated in the project saved approximately 10 percent on their electricity bills” 28 GE roadmap for a Smarter Grid What it is Demand optimization Manage peak via control of power consumption Why Utility Value/MM Customers* Defer upgrades, optimize generation & renewables $16MM/yr, 51K tons of CO2 reduction+ Res. consumer savings up to 10% Based on 1.6% peak load reduction using critical peak pricing resulting in reduction in fuel costs and deferral of generation capacity Delivery optimization Reduce delivery losses in distribution systems Less energy waste and higher profit margins Asset optimization Prognostics for proactive equipment maintenance Reduced outages and focused maintainers Reliability optimization Wide Area Protection & Control Increased network performance & reliability Renewables optimization Use of Forecasting & Smoothing Compensation for production variability $7MM/yr,, 45K tons of CO2 reduction+ Based on 0.2% loss reduction and 0.5% CVR peak load reduction resulting in reduction in fuel costs and deferral of generation capacity $11MM/yr, ~4.5 yr ROI Based on system-wide deployment of advanced transformer M&D resulting in transformer life extension and reduction in inspection, maintenance & repair costs $7MM/yr Based on the deferral of the capacity upgrade of two 220kV transmission lines for 3 yrs (each line 30 miles long with a cost of upgrade of $1.5MM per mile) Key step for meeting RPS targets, especially in areas with weak grids *Utility savings are approximate annual savings per one million customers + $85/kW-yr peak generation capacity value 29 Policy Discussion North American trends and drivers State Programs and Policies…Dealing with generation in a carbon constrained world State & Market Policy…… Wholesale markets still evolving RPS…… Evolves to become one of the solutions for GHG emissions Energy Efficiency & Demand Response…... Increasing use of programs, impact varies Environmental Policy….. States tackling “sticky” issues CO2/GHG Policy….. States feel the need to take action CAIR/CAMR….. Cleaner air Regulations to address water scarcity.….. Usage restriction may impact gen. type & output Transmission Expansion….. Federal & state help on the way, conflicts & timing Fuels, Supply, & Price….. Supply & Government policy driving the fuel of choice Natural Gas….Takes on a bigger role in generation; Can supply match? LNG.…. The backstop for NG; Are supplies secure? Coal/IGCC ..… Uncertain future due to policy & technology constraints Nuclear..…The holy grail with issues Oil..…Small role but potentially significant 31 Importance of Policy Incentives Source: EER 32 Optimizing our electrical infrastructure Through knowledge and empowerment System capacity Demand Time of use rates Base rate 2 4 6 8 Peak 2X-4X Base 0 High 3X–15X Base 10 12 14 16 18 20 22 24 33 Regulation must reward utility efficiency Per Capita Electricity Sales (kWh/person) 14,000 U.S. 10,000 CA 6,000 2,000 0 1960 1973 2008 34 Wind RPS and purchase obligations Wind Issues/Outlook US Wind Installations and RPS, 2008 High $/kw costs drives continued need for subsidies Capital dries up, Stimulus $$ need to start flowing National RES policy needed to drive growth Bottlenecks driving transmission needs Cumulative Wind Power Capacity Projected Growth, 2000-2020(MW) Source: EER Capital supply & transmission constrains growth 35 Energy efficiency and demand response Trends/Observations States trying to favorably impact conservation & efficiency Energy Efficiency Resource Standards Proliferation of Energy Efficiency & Demand Response programs Electric consumers do not see utility wholesale cost volatility Income factor impacting demand Activists: ban new transmission to encourage efficiency in NE Impact EE program impact limited, lg. size housing dampens results CA programs have averted construction of 15 large power plants NY peak shaved by 1GW during peak period by DR program Industry recognizing DR is cost effective and profitable States adding smart meters, transparent pricing Source: Pew Center on Global Climate Change EE & DR Programs Impact Need for Gen. & T&D 36 Emissions, CO2 and GHG Regional Initiatives, Driving Uncertainty States & Provinces taking lead on legislation State Regulatory Commissioners target CO2 emissions Financial burden to consumers not clearly articulated Shift to out of state generation…impact on system reliability? Emissions’ leakage…cost of CO2 to be a major contributing factor; Penalties Legislation adds burden to the states Generation mix critical to success NG to play a major role. Renewables becoming more important Proven “clean technology” can revitalize Coal Efficiency & Demand response programs become more critical Meeting deadlines very challenging RGGI CO2 capped at 188 tons through 2014; capped at 169M tons by 2018 Midwestern Regional Greenhouse Gas Reduction Accord Reduction of GHG emissions 60-80 % below 1990 levels by 2050 Western Climate Initiative Reduction of GHG emissions 15% below 2005 levels by 2020, industry wide. Gas Generation & Renewables Big Winners Sources: EPA, Pew Center on Global Climate Change; RGGI/WCI/CERA 37 Transmission expansion needed Average Congestion and RMR Costs, 2001–06 $7 $6 Stagnant investment over the past 15-20 years creates congestion and limits renewable implementation EPAct 2005 created NIETC, FERC backstop authority to site new transmission lines 2005-09 Federal vs. States’ rights issues $5 $$/MW $4 $3 $2 $1 $0 PJN CAISO NEW YORK ISO ISO NE ERCOT Transmission Projects Across N America 2000 investment level grows from $5B to 10B/yr by 2006, expected to reach to ~$13B/year by 2010 (2008 data) Total transmission investments of $150 billion through 2022 (2008 data) Legislation & Investments needed to address Congestion & Enable Renewables Growth Sources:, EIA, CERA, CEC 38 Summary Economic and environmental demands are forcing functions Investment in technology can accelerate their adoption The Smart Grid is dynamic and must be viewed as a system Demand response is the 5th fuel … let’s compensate for it Policy will drive behavior 39 Smart Grid Learning Series … next week Session 1: The Smart Grid and its Benefits Session 2: The Smart Grid… The Consumer View Session 3: The Smart Grid… The Distribution View Session 4: The Smart Grid… The Transmission View Session 5: The Smart Grid… The View from Rural America 40 ...
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