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Smart Grid and Climate Change

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Michael Jung's picture
Policy Director Silver Spring Networks

Michael Jung serves as Policy Director at Silver Spring Networks, a leading provider of networking equipment and services for utility smart grids.Prior to joining Silver Spring Networks, Michael...

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  • Nov 30, 2009
How can we use the smart grid to address climate change? Utilities across the country are deploying smart grids, driven by the need to modernize infrastructure, improve efficiency, and empower customers. If implemented wisely, smart grids also could reduce greenhouse gas (GHG) emissions by five percent to nine percent from 2005 levels, to deliver nearly one-quarter of the proposed Waxman-Markey GHG reduction targets for 2030. A network-first approach to smart grid planning is critical to leverage these investments for forthcoming GHG policy compliance, by accelerating deployment and enhancing the delivery of key GHG-reducing applications, including:
  • Energy conservation through end-use efficiency improvements;
  • Grid efficiency through grid optimization;
  • Renewable integration for both utility-scale and distributed renewables; and
  • Transport electrification, including electric vehicles powered by renewables.
Energy Conservation: The smart grid enhances end-use energy conservation by providing real-time feedback on energy usage and communicating time-sensitive price information to customers. Studies have shown a demonstrable and persistent reduction of five percent to fifteen percent in electricity consumption due to more frequent feedback of energy usage alone. This powerful effect is approximately doubled by availability of enabling technologies, including programmable communicating thermostats and smart appliances. A two percent reduction in end-use energy consumption that is enabled by smart grid deployment can deliver 0.1 gigatons of US CO2e GHG reductions.

Grid Efficiency: Up to 10 percent of the electricity generated at power plants is lost during energy delivery over the grid. Smart grid infrastructure can improve grid efficiency to reduce these line losses by networking distribution automation (DA) devices to minimize reactive power flows through adaptive voltage control. One percent reduction in grid losses from smart grid-networked DA translates into 0.03 gigatons of US CO2e GHG reductions.

Renewable Integration: Renewables stand to benefit dramatically from the smart grid. Using smart grid-enabled demand response transforms static demand into active loads that can offset intermittency from renewable generation. Furthermore, reliable smart grid networking of small-scale distributed renewables is essential for utilities to identify and manage safety risks to line workers posed by decentralized power generation. Both utility-scale and distributed renewables also benefit from smart grid-networked energy storage, which boosts the profitability of renewable generation by storing off-peak generation for on-peak sales. These smart grid-enabled mechanisms can facilitate an additional 10 percent of renewable generation in the overall generation mix, delivering 0.3 gigatons of US CO2e GHG reductions.

Transport Electrification: Electric vehicles (EVs) present a powerful opportunity for the electric grid to reduce US GHG emissions significantly by displacing internal combustion with electric power. Pacific Northwest National Laboratory estimates that EVs could reduce total US carbon emissions by as much as 27 percent by utilizing offpeak power generation and energy delivery capacity to charge plug-in electric vehicles, displacing imported petroleum with domestic electrons.

  • Renewable-powered EVs: Smart grid networking will be necessary for EVs to take full advantage of off-peak renewable power generation. Powering EVs with renewables would effectively eliminate carbon emissions from EV transportation. 50 percent EV penetration leads to 0.1 gigatons of US CO2e GHG reductions from vehicle electrification, which can be doubled to 0.2 gigatons CO2e, if EVs are charged using power from renewable generation.

Cumulatively, these opportunities can reduce US GHG emissions by 0.7 gigatons CO2e by 2030. This represents nearly one-quarter of the 3 gigatons CO2e reduction from 2005 GHG emissions levels targeted by 2030 in the Waxman-Markey American Clean Energy and Security Act of 2009. While some of these GHG-reducing opportunities, such as end-use conservation and grid optimization, may be implemented to without smart grid connectivity, all of these applications will benefit from and can be enhanced through deployment and utilization of the smart grid.

Network-First: How can we fully harness the smart grid's potential to achieve these reductions? Building utility smart grids should begin with a network-first approach to achieve these reductions more quickly and at lower cost.

Although most people are naturally excited by the prospect of smart grid devices and applications, the heart of any smart grid is at its underlying networking infrastructure. A network-first approach to smart grid deployment prioritizes the performance, interoperability, and security of smart grid networking technologies. Done right, these networks can serve as the foundation for related and subsequent investments in smart grid devices and applications, reducing cumbersome systems integration and interoperability issues associated with deploying applications in parallel or in advanced of an integrated network infrastructure.

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Bob Amorosi's picture
Bob Amorosi on Dec 1, 2009

It does indeed seem that much of the smart grid effort so far has been focusing just on computerized metering to facilitate Time-Of-Use billing rates. The future reasons for smart grid however go far beyond the handling of electrification of our vehicles.

Among the many reasons is the need to automatically handle the widespread grid integration of intermittent renewable source generators. These are now being heavily subsidized by governments everywhere to get them commercially established along side our existing large central generation plants. Their intermittent nature and much larger numbers of generators over time will require a much more complex automated electricity grid than the largely manually controlled legacy ones we currently have.

Another reason for smart grid is to allow consumers, or should I say push consumers, to more actively manage their energy demand at peak times to reduce the levels of need for peak generation, hence flatten demand curves and make generation more efficient. The smart grid is also supposed to foster more energy efficiencies and conservation with consumers. These are all better enabled by TOU billing, automated demand response, and other home automation that must eventually work by communicating (somehow) with an automated smart grid, and especially using interval meter data that only computerized smart meters can record.

Of course I am highly skeptical the utility industry will be able to deploy all this smart grid technology to all parts of their grids and to every customer in a timely manner. The total cost of smart grid deployed everywhere will be so staggering it would either lead to draconian rate increases to pay for it, or (continued) massive government handouts at taxpayers expense.

Michael Jung's picture
Michael Jung on Dec 1, 2009
Fred and Bob: Thanks for taking the time and effort to comment. You both raise interesting points that I'd appreciate this opportunity to address:

From a policy perspective, not everyone has to participate in demand response/dynamic pricing for significant benefits to be realized. In the same way that ~1% of the hours in a year account for ~10% of overall power costs to consumers, price response from a relatively small share of end-use demand (~5%) can bring about disproportionately large share (~$66B, according to the Brattle Group) of benefits for *everyone*.

Whether utilities implement opt-in or opt-out programs, demand response/dynamic pricing implementation will most likely be voluntary in nearly every case. In short, while smart grid connectivity should be ubiquitous (to realize economies of scale, accommodate communications architecture, and due to Metcalfe's Law), demand response/dynamic pricing does *not* have to be 100% mandatory for all customers - indeed far from it - to prove successful.

Bob Amorosi's picture
Bob Amorosi on Dec 2, 2009

I agree demand response/dynamic pricing is not required to be 100% mandatory for all customers to be successful in terms of realizing significant benefits for all customers on the grid. I'm sure most utility people already know this, and in any case the public would never broadly accept it as 100% mandatory as there would be a huge public backlash towards governments if it was.

So yes customers will probably have a choice whether to participate in demand response, but I don't believe customers will have a choice for energy pricing. Witness utilities everywhere in North America are embarking on widespread deployment of electronic interval (smart) metering because they are needed to impose Time-Of-Use (TOU) billing rates. If a utility adopts TOU billing with the new meters, it will surely be imposed on all their customers, and not an optional billing method.

Real-time dynamic pricing on the other hand is quite different that TOU billing because real-time wholesale grid prices change constantly by the minute, which if exposed to customers in a smart grid requires real-time monitoring capabilities by the customer, and considerably more in-home technologies for automated DR to effectively deal with them. The up-front costs to set up the in-home technologies will be a bitter pill to swallow (for someone) if even a limited portion of customers in a utility grid are expected to participate.

I doubt a utility company will bear any of the costs of smart grid themselves because unless they receive government handouts, under current regulatory regimes they must impose rate increases to all customers to do so, which surely will offend those customers who don’t wish to participate in smart grid. In fact this is already happening in some parts of California where consumer backlash in the form of lawsuits is challenging all customers being forced to bear higher rates simply to pay for the new smart meters alone.

Bob Amorosi's picture
Bob Amorosi on Dec 2, 2009
Fred Linn,

One smart grid benefit that comes to my mind is maintaining electric service reliability. If aspects of smart grid are not implemented to deal with integrating ever increasing numbers of distributed small renewable source generators, or dealing with substantial constant increases in demand with the electrification of vehicles, then the reliability of our electric services will surely decline. Without these aspects of smart grid, declining service reliability would render us a third world country, with typically much more frequent unpredictable service interruptions, or intentional rotating blackouts, and possible much higher rate increases in areas where much more peak generators are implemented as the only alternative to deal with them.

Another benefit is other aspects of smart grid enabling consumers to monitor their electricity consumption habits in real-time or near real-time. This is typically made technologically more convenient with electronic interval (smart) meters that are being deployed, where some smart meters will be capable to communicate wirelessly this information on demand to a in-home energy display. This is a benefit most consumers don't have with cumulative metering used by the old electromechanical meters, but it is one that would be very useful to have. Here's why.

Hydro One, Ontario's largest distribution-only utility company with over a million urban and rural customers, have conducted study after study on the effects of equipping customers with a real-time energy display. The display products used came from a Canadian pioneer in this technology, BlueLineInnovations, which logged cumulative energy consumption, instantaneous power demand, the cost per hour at the current power demand level, and of course one’s cumulative energy bill.

In study groups of several hundred residential customers provided with a display, on average their total energy consumption over time decreased by nearly 10% on average. Some customers who didn't care about their energy spending obviously had no reductions, but others had as much as 20%. Can you just imagine the impact on the grid if thousands or millions of customers were capable of real-time energy monitoring. A near 10% total reduced consumption overall would be akin to taking some large central generators completely off the grid, and clearly would save some consumers potentially hundreds of dollars per year in energy costs.

The reasons for the total reductions in consumption are multiple, but the main ones are the fact a display places one’s energy bill in your face every day instead once at the end of a billing period when you receive it. Another is the ability of a real-time energy display to educate consumers who otherwise have no clue as to the specific energy demands and costs associated with individual specific loads in their homes. Real-time feedback effectively permits learning this when the effects on power demand and your energy bill are immediately seen on the display when turning on or turning off a switch.

There are other benefits to a lesser degree. The hourly interval energy consumption patterns logged by a smart meter and later stored in the utility's computer billing systems are planned to be made available later for viewing by individual customers typically over the internet, further educating them on their past hourly consumption habits. Many third party technology companies have already designed web presentment tools that will permit customers to login to their secure utility account webpage and view historical hourly consumption data in various formats. While this is not as effective as real-time feedback, in principle delayed feedback can enlighten customers where to focus on changing their habits if they are interested in practicing more conservation or implementing more efficiency upgrades in their homes to lower their energy bills. And under TOU billing where any given load will vary in energy cost throughout the day, this feedback should inevitably grow in popularity with customers.

Malcolm Rawlingson's picture
Malcolm Rawlingson on Dec 2, 2009
Bob, I cannot imagine my 87 year old Mom logging on to "view historical hourly consumption data in various formats". She just wants to do her washing at a reasonable hour of the day not in the middle of the night. The smart grid is not so smart if costs go up and service goes down. Smart for who is the question one must ask. It certainly is not smart for the consumer. I have a wonderful digital electric meter that someone screwed on my wall which distinguishes itself mainly by the fact that the country of manufacture is NOT Canada. It has been there for several years now. Soon I will be charged for it. I will now be charged another 8% next summer and as far as I can tell my service did not improve and the price of it went up. And this is the "SMART" grid. I'd sooner have the dumb old grid. It was cheaper. While all of these wonderful technological "advances" may make life easier for the grid operators they cost money and that comes from consumers who get nothing in return. While I am at it the key technology that will REALLY make a difference to grid efficiency and reliability is completely absent from the above discussion. That is of course superconductor technology which enables vastly higher power transmission with fewer cables, much lower transmission voltages and almost zero line losses. I squared R is a thing of the past. They also potentially do away with HV transmission towers and are readily placed underground as they do not need to operate at high voltage. I am told that they also do not produce electromagnetic fields although I cannot explain why that is so. Electrical theory taught me that current flowing in a conductor must produce an electromagnetic field but apparently at low temperatures this is not the case. Moving power around our cities is where you will see the technology appear first and as the price falls it will be used for longer distance transmission. It is also quite feasible for the power output of most electric generators to be connected directly to the grid without passing through main power output transformers to step up the voltage from about 24kV to 500kV since the superconducting cable can carry the full generator current at 24kV without the massive losses that would otherwise occur. I think that will cause a step change in the efficiency of the grid and my Mom will not have to worry about real time feedback or logging on to her utility account web page as she will likely have her computer turned off to save electricity. Rather than smart grid engineers need to turn their brains to making lots of electricity cheaper so that we don't have to ration it...which what all this smart grid nonsense is all about. Malcolm
Malcolm Rawlingson's picture
Malcolm Rawlingson on Dec 2, 2009
In some respects I agree with Fred Linn that the use of coal involves damage to the environment but there is no technology that does not do that to a greater or lesser extent. Coal is nearer to the "greater" end of the scale but to imply that natural gas is benign is misleading.

In any event it is a waste of a valuable natural resource to burn it in a power plant. While I understand the convenience of those plants (predictable construction costs, fully automatic operation with almost no operating staff, rapid run-up and sync to the grid) the burning of gas in a power station at 40-50% efficiencies compared to burning it in a high efficiency furnace to heat homes and business at 95-98% efficiency seems very very wasteful.

The better solution is nuclear plants of course that produce no emissions, no waste and the fuel is recyclable.

Ask consumers what they want and they will not tell you they want a smart grid they will tell you they want lower energy costs. Neither smart grids nor gas power plants do that.


Bob Amorosi's picture
Bob Amorosi on Dec 3, 2009

I must reluctantly agree with most of what you are saying.

About superconductors, they would have huge potential to improve many components of electricity generation and distribution with huge cost benefits, in theory. Physicists at universities have been searching for room-temperature superconducting compounds since the 1970's knowing this. While there have been some breakthroughs along the way, I haven't heard of any revolutionary ones myself that are practical and commercialized on a large scale that can compete with conventional wiring metals. But I do believe that with today's computer power available to researchers in laboratories, the quest to synthesize practical superconductors, or commercialize ones that have been found, is worth spending much more money on.

In the meantime however the electricity industry is being literally forced by governments, in Ontario especially, to adopt growing numbers of smaller intermittent renewable source generators whether we like it or not. And you know as well as I do, the management of the grid by the Independent Electricity System Operator in Ontario, and I'm sure elsewhere too, will become increasingly daunting to do without substantially more automation of the grid, and much more transmission lines from remote areas.

The “rationing” of electricity through smart grid technologies is essentially what will happen, your terminology is correct. Ontarians today all being pushed to adopt a conservation and efficiency culture to achieve it, and it also includes greater load shifting to flatten load curves through Time-Of-Use billing, again whether we like it or not. I suspect the same trend will happen eventually throughout North America because governments are gradually concluding that the cheapest generation capacity to add to the grid is the power consumers don’t use through these rationing measures.

I agree with you too that my grandmother too is not likely to log onto her utility's website to view her past hourly consumption patterns even once let alone routinely every day. However a real-time in-home energy display sitting on her countertop would be much more effective, and would surely be noticed by her just as much as she notices her digital clock or digital wall thermostat. The trouble is customers in many large Ontario urban utility companies won't have the option to use an in-home display that talks directly to their new smart meters because most of the smart meters deployed in Ontario have been "orphaned" without the capability to communicate directly with in-home devices. To change this will mean replacing the meters someday, at huge expense of course.

Fred Linn,

Governments have known for a long time that consumers don’t live their lives on the utility company’s peak demand hours, nor do they have the time to manage their electricity uses to reduce their bills or reduce their total energy consumption. But with a smart grid in place, and sufficient home automation technology, it can all be handled automatically without having to spend time on it. The technology is far from rocket science today, but the problem I keep saying on this website is its staggering costs to implement it on a wide scale, specifically how will it be paid for.

Bob Amorosi's picture
Bob Amorosi on Dec 3, 2009
Fred Linn,

Good points, there are many different ways to solve grid problems much like there are often many ways to design electronics in my industry to solve a given design problem. One thing to keep in mind about the electricity grid is there are many political forces shaping the solution paths we are being pushed along, like environmental concerns and established legacy infrastructures resisting big changes.

A big advantage of smart grid is it is more sexy politically because it mostly involves adding hi-tech electronics to the grid and to customers, which to some governments means new technology developments for hi-tech and the potential to create new industries for its applications. Another big advantage of implementing smart grid is it is probably much easier to retrofit grid elements and consumers with electronics without major disruptions to infrastructure.

Natural gas for vehicles is less sexy since it is already an existing technology. Enabling most vehicles to use it would require considerably more distribution infrastructure and/or many more compressors in people’s homes to match the gasoline and diesel station network we already have. But I believe it will be used much more in vehicle transportation and heating over time as oil prices skyrocket.

Remember too natural gas will be viewed much like oil as a source of carbon emissions, and subject to the same nightmare price escalations that oil is bound for if it becomes as heavily used as oil for transportation. Consumers and governments are likely to prefer to avoid depending heavily on natural gas fearing they will become at the mercy of its unpredictable price down the road. Electrification of vehicles on the other hand allows vehicles to have more flexibility because the electrical energy can come from the grid and hence a variety of fuel sources.

Solar PV is definitely being pursued fervently everywhere for renewable source generation on the grid. AC on a hot summer day up here in Canada is often among the biggest loads on our grid too, but consumers run their AC at night up here in July. So, smart grid is probably better deal with its intermittent nature and lack of economical storage until there are some future breakthroughs in storage if any.

Solar thermal is something we should really be exploiting heavily even up here in Canada, since we could certainly get a lot from it at least 6 months of the year. But a painful problem is the massive costs of retrofitting existing buildings and infrastructure to use it. New construction however should seriously tap into it.

In conclusion implementing smart grid and promoting more conservation and efficiency upgrades with consumers may cost a lot in the long run, and even conflict with a utility company’s business model. But any solution path is likely to be costly, and whether we like it or not a utility company’s business model is not high on the list of government priorities to satisfy when it comes to making strategic decisions on which solution paths to favor with interventionism.

Bob Amorosi's picture
Bob Amorosi on Dec 4, 2009
Fred Linn,

Keep in mind our governments just about everywhere in the US and Canada are on the verge of desperation trying to create new jobs and new wealth. Over the last two decades, almost every new high growth sector in the economy has happened because of my industry's relentless infiltration of other industries with new high-tech goodies and computerization. So it is only natural for them to view it as a savior perhaps. If forcibly creating an economic climate within our electricity grid industries and consumers' use of electricity is perceived to do it also, you can probably count on them pushing for it.

In fact many have falsely criticized our electricity industries as being still living in the stone age, lagging most other industries in progress with adopting high-tech. am probably biased because I work in the rapidly changing high-tech world, but you have got to admit, the "ooohhh, aaahhh" factor usually sells very well to the public, just ask Google what historically is the most searched topic.

Whatever happens, as a consumer I just hope the two pillars of keeping the lights on reliably and keeping a lid on massive electricity rate hikes are not destroyed along whatever pathways we and the grid are forced to take. Suggestion - maybe we should all consider opening up a businesses making and selling the latest smart grid accessories and hire some biki-clad girls to promote it (LOL).

Bob Amorosi's picture
Bob Amorosi on Dec 4, 2009
I meant to type "bikini-clad girls to promote it".

I even have a suggestion for a smart-grid accessory product Fred. How about a color LCD screen that hangs on your wall that serves as a real-time home and appliance energy monitor and a household financial data terminal. It would also display all the pertinent information for your natural gas, water, telephone, and cable-TV service providers, including their financials, and indicate precisely what electrical loads in your home are active in real time. When not viewing the screen, a screen saver would come on showing a nice wall painting of mountain scenery, or perhaps some of those bikini-clad girls. I would probably buy one but I'm not so sure about my wife (LOL).

Malcolm Rawlingson's picture
Malcolm Rawlingson on Dec 5, 2009
Fred,Hate to burst your bubble but solar thermal heating is good if you live in a warm and sunny climate but in Canada it is only useful about 50% or less of the time. I know - I had an indoor swimming pool with a solar thermal collector on the roof. It worked quite well June July of the time totally useless. It froze up twice (even with glycol additive) sprang leaks all over the place. All in all a complete waste of time and money. Plus I risked life and limb out on the roof more than once fixing it. Solar thermal is not as good as it is claimed to be. Probably fine if you live in Arizona. Not much good in Canada. Good idea but..... Malcolm
Malcolm Rawlingson's picture
Malcolm Rawlingson on Dec 5, 2009
Bob, Superconductor technology is already being implemented. American Superconductor is now manufacturing utility transmission cables for use in cities where conventional underground transmission cables are too congested to add any more. Long Island Power Authority is experimenting with a new cable to replace part of a 115kV line as are a number of other utilities. The distances for these new cables is fairly short at the moment but that will change. These new cables are the way of the future and will make the smart grid unnecessary and obsolete. American Superconductor is also making superconducting windings for large electric motors for the US Navy. A fraction of the size and with almost no losses....close to 100% efficient. Malcolm
Malcolm Rawlingson's picture
Malcolm Rawlingson on Dec 5, 2009
Fred, The so called "waste" you speak of contains about 98% of the original fissile atoms of Uranium 235. It is hardly waste and is fully recyclable. As far as dangerous, well I have been working with these materials for 40 years and of course if one does not take the necessary precautions it can certainly kill you. But driving my car is also dangerous (statistically very much more dangerous than handling nuclear fuel) and if I don't take the necessary precautions it can kill me too. If I don't take the necessary precautions when dispensing gasoline that can kill me. So I do take the required precautions and when I do handling nuclear materials is not dangerous. But if you want to talk danger - clearing the snow off my solar panel in the middle of winter on a slippery roof - now THAT is dangerous. Malcolm
peter yeung's picture
peter yeung on Dec 6, 2009
For an earlier question about the GHG impact of EV's. From a well to wheel emissions perspective, EV's emit ~50% less emissions than power plants, even when compared to an oil based power plant. Electric engines are much more efficient than ICE engines. The economics are below:

ICE = 83% (oil plant to tank) x 20% (tank to wheel - VW Golf) = 17% efficiency EV = 29% (oil power plant efficiency - incl transmission losses) x 85% (Elec motor efficiency) = 25% efficiency

Hope that's helpful.

John K. Sutherland's picture
John K. Sutherland on Dec 13, 2009
Fred Linn, Your comments about N Korea and Iran get you into an illogical fallacy kind of argument. We are not about to go to war with France, or Germany or any of the numerous other countries who have peaceful applications of Nuclear Energy. We need to be cautious of terrorist states at any stage of developement when they seek access to weapons of any kind, but especially if they seek nuclear technology for obviously questionable purposes rather than generating electricity. Please restrict yourself to logical arguments.

Malcolm, Good points.

Malcolm Rawlingson's picture
Malcolm Rawlingson on Dec 14, 2009
Fred, There is the same connection between the peaceful uses of nuclear energy and atomic warheads as there is between the peaceful uses of chemical explosives and the bullets fired from soldiers gun. It is not the technology it is the use of the technology. It is a completely bogus argument. Malcolm
Jim Beyer's picture
Jim Beyer on Dec 15, 2009
Malcolm and John,

I largely agree with you. But one could argue that Iran could not play its nuclear games so easily if there were no nuclear power industry. I'm not saying the nuclear power shouldn't be encouraged, but this is just part of its reality. The IFR research was canceled by Clinton/O'Leary in 1994 in large part due to its by-product of plutonium, which raised nuclear proliferation fears. (NOTE: I think that was a HUGE mistake).

Jim Beyer's picture
Jim Beyer on Dec 16, 2009
When questioning the inherent safety (or lack thereof) and any product or process, I can't help but be reminded of the wisdom of Irwin Mainway, Toy Manufacturer, from "Consumer Probe" on SNL.

Bag O'Glass Sketch

John K. Sutherland's picture
John K. Sutherland on Dec 18, 2009
Fred Linn, you need to read a little more about relative risks. Of all of our energy generating options, nuclear is by far, the safest. A lot safer than wind or solar, megawatt for megawatt, and less environmentally damaging too. Read some of my earlier papers on this site. I do dislike having to re-educate a new generation of naifs every few years!
Jim Beyer's picture
Jim Beyer on Dec 18, 2009
It would be fun to watch John K. Sutherland and James Carson debate nuclear power.

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