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 MODERN GRIDS T R A T E G Y

Creat ing a Business Case for  

Sm ar t Gr id Imp lem enta t ion

Smart Grid Initiatives for Utilities

Presented by Steve Pullins, Modern Grid Team

September 2009

Funded by the U.S. Department of Energy,Office of Electricity Delivery and Energy Reliability

Conducted by the National EnergyTechnology Laboratory

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Delivery and EnergyReliability

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2Powering the 21st Century Economy

This material is based upon work supported bythe Department of Energy under Award Number

DE-AC26-04NT41817

This presentation was prepared as an account of work sponsoredby an agency of the United States Government. Neither the UnitedStates Government nor any agency thereof, nor any of their

employees, makes any warranty, express or implied, or assumesany legal liability or responsibility for the accuracy, completeness,or usefulness of any information, apparatus, product, or processdisclosed, or represents that its use would not infringe privatelyowned rights. Reference herein to any specific commercial product,process, or service by trade name, trademark, manufacturer, orotherwise does not necessarily constitute or imply its endorsement,

recommendation, or favoring by the United States Government orany agency thereof. The views and opinions of authors expressedherein do not necessarily state or reflect those of the United StatesGovernment or any agency thereof.

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“A little revolution now andthen is a good thing.”

- Thomas Jefferson, 1787 

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Revolut ion?

Consumers’ interest is increasingly green and self-determining.

Grid complexities are increasing.

Political landscape is shifting, and the old electricitymodel is being questioned at its roots.

While today’s focus is on large wind plants, themassive change on the electric system is reallyhappening with distributed renewables.

This is the disruptive arena for the next 20 years -driven by consumers and the greening of America.

This requires significant intelligence in the grid anda new regulatory model.

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2009 Elec t r ic Gr id ….. and t hen?

Generation

• 47%

• 17,342 units

Transmission

• ~50%

• 164,000 miles

Distribution

• ~30%

• 3 million miles

ConsumerSystems

• <1%• 12.3 M DG

500 wind parks50 solar parks 5,000 distributed wind

5,000 utility solar

2 M architectural wind5 M building solar

25 M residential solar

1 M PHEV/PEV

10 M PHEV/PEV100 M PHEV/PEV

100,000 Buildings as PP

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Resul t – Sea Change in t he Net w ork

Consumer engagement with resources to solve

power issues locally Two-way power flow in Distribution

As prices increase, local renewables will increasein residential, commercial, and industrial

Imperative to transform from passive to activecontrol in Distribution

New ways for Distribution to become a

Transmission resource

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Sm ar t Gr id Charac t er ist ic s

The Smart Grid is “transactive” and will: 

Enable active participation by consumers

Accommodate all generation and storage options

Enable new products, services, and markets

Provide power quality for the digital economy

Optimize asset ut ilization and operate efficiently

Anticipate & respond to system disturbances (self-heal)

Operate resiliently against attack and natural disaster 

…the enabler 

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WEST VIRGINIA SMART GRIDIMPLEMENTATION PLAN

If you come to a fork in the road,take it.- Yogi Berra 

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West V i rg in ia Sm ar t Gr id  

Im p lem enta t ion Pro jec t  

$640K project jointly funded throughAttachment H process by NETL, RDS,

Allegheny Power, AEP, State of WestVirginia, WVU, and DOE OE

Results will describe approach andvalue proposition of implementingSmart Grid in West Virginia

Cost & benefit analysis comparing thestate of current electricity grid andfuture Smart Grid in West Virginia

Address the role of coal in Smart Grid

Support economic development in State of West Virginia Only state-wide Smart Grid implementation plan

Establishes West Virginia and NETL as leader in Smart Grid

Only second Smart Grid study to be published

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West Vi rg in ia Sm art Gr id Solut ions

Solution  Scope Advanced Meter 

Infrastructure (AMI)

  All residential, commercial, and industrial Customers represented by 998,317 meters 

IT Integration (IT)  A CIS Upgrade to accommodate AMI and DR functionality & Outage Management 

Demand Response (DR)  The aggregated sum of  104 MW of  DR from Residential, Commercial, and Industrial Customers 

Distribution Management System (DMS)  The automated fault clearing & restoration of  

service, circuit monitoring, and control of  the Distribution System to include 707 circuits of  1,107 total circuits 

Distributed Energy Resources (DER)  100MW of  Base Generation, 800 MW of  Peak 

Generation, 250 MW of  Advanced Storage and 100 MW of  Wind Resources all capable of  being dispatched on demand 

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WV Sm art Gr id Cost s & Benef i t s

PV 20‐yr Cost and Benefits ($M) Solution  Cost  Benefits AMI  $399  $1,649 IT  $170  $1,308 DR  $22  $1,091 DMS  $454  $3,288 DER  $832  $5,289 Total  $1,878  $12,625 

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WV Benef i t s by Benef ic iary

PV 20‐yr Benefits by Beneficiaries ($M) 

Solution  Consumer  Operational  WV Society  US Society AMI  $630  $439  $308  $271 IT  $563  $136  $326  $283 DR  $23  $614  $240  $214 DMS  $2,909  $73  $303  $2 DER  $3,368  $2  $301  $1,618 Total  $7,493  $1,263  $1,479  $2,389 

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WV Annual Benef i t s ($M)

Key Success Factors  Benefits  Annual Benefits ($M) (All Beneficiaries) 

Reliability  Reduced Consumer Losses  $898 Reduce Power Quality Events  $131 

Economic  Reduce Price of  Electricity  $399 Job Creation  $215 

Consumer Sales of  DER Resources  $175 Increased Energy Sales as Exports  $7 Reduced Transmission Congestion  $1 Increased Transportation Fuels 

Business  $5 Consumer Conservation  $20 Operational Savings  $194 

Environmental  Reduced Emissions  $7 Security  Reduced Blackout Probability & 

Dependence on

 Foreign

 Oil

  $13 Safety  Reduce Hazard Exposure  $1 

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Tota l Benef it s & Cos t Rac k ing

$(2,000) $‐

$2,000 $4,000 

$6,000 $8,000 

$10,000 $12,000 

$14,000 

Benefits Net of  Cost Total Benefits Benefits 

Total Cost 

Costs 

WV SGIP US

 and

 WV

 Benefit

 and

 Cost

 Racking

 20‐year NPV  (in $M) 

(Regional US + WV Utility + WV Consumer + WV Society) 

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Rac k ing Cost s & Benef i t s by So lu t ion

$(2,000) $‐

$2,000 $4,000 $6,000 $8,000 

$10,000 $12,000 $14,000 

Benefits Net of  Cost Total Benefits Benefits Total Cost Costs 

WV SGIP All Solutions Benefit and Cost Racking 

20‐year NPV (in $M) 

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Com par ing Business As Usual t o t he

Sm art Gr id Plan

CapEx & OpEx  ($ Millions) $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 

BAU CapEx 

<‐‐SGCapEx BAU OpEx 

SG OpEx 

1  2  3  4  5  6  7  8  9 10111213141516171819202122232425 

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Conclus ions

Implementing a Smart Grid will: Radically improve system reliability

Lower the carbon footprint Support a better sustainable business climate

Generate benefits beyond the borders

WV “numbers” (20-yr present value) ~ 1 million meters

Total Smart Grid Cost - ~ $1.9B

Total Smart Grid Benefit - ~ $10B

Benefit Cost Ratio: 5:1

A Smart Grid can be implemented with a portion ofthe business as usual (BAU) 10-year capital plan.

The next 20 years will be fun!

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For More In form at ion

For additional Information, contact Modern Grid Strategy Team 

http://www.netl.doe.gov/moderngrid 304‐599‐4273 x101 

Links:

The Modern Grid Strategy Smart Grid Newsletter

EPRI Intelligrid

Galvin Electricity Initiative

GridWise Alliance

GridWise Architecture Council

European SmartGridTechnology Platform

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