Smart Grid Success Will Rely On System Solutions

A July 2009 report from the U.S. Department of Energy (DoE) describing a future “Smart Grid” for electric utilities [¹] details its plans and hopes for the grid of the future. It will comprise information networks applied to applications to dynamically optimize the operation, maintenance, and planning of electrical systems.

Resources and services that were separately managed will be integrated and re-bundled to address traditional problems in new ways; adapt the system to tackle new challenges; and discover new benefits that have transformational potential. As shown in Fig. 1, the IEEE's vision of the Smart Grid is a major upgrade to the existing utility system with a more complex configuration that includes power parks, photovoltaic technologies, smart substations, and other associated information networks.

THE GRID: EVERYONE IS CONNECTED AND AFFECTED

Virtually everyone is connected to and affected by some aspect of our electric grid system, so there are many Smart Grid stakeholders, including:

End users (consumers)
Electric-service retailers
Distribution and transmission service providers
Power-balancing authorities
Wholesale-electricity traders/brokers/markets
Reliability coordinators
Electric product and service providers
Energy policymakers
Regulators
Advanced metering-system producers
Standards organizations
The financial community

The Smart Grid stakeholder's landscape (Fig. 2) is complex. The lines of distinction are not always well-drawn as corporations and other organizations may assume the responsibility of multiple functions.

As Smart Grid concerns are future-looking, several of the metrics represent areas where deployment activities have only begun to be explored. Finding baseline status information for these areas is difficult. This is the case with several metrics in information networks and distributed-resource technologies. Micro-grids, electric or hybrid vehicles, and grid-responsive, non-generating demand-side equipment fall into this category.

A Smart Grid would also allow feedback to the electric utility, enabling consumer-oriented “smart” equipment such as communicating thermostats, microwaves, space heaters, refrigerators, clothes washers and dryers, and water heaters. This equipment will be fitted with signaling software or, more specifically, firmware, which enables the device to communicate with the other components of a Smart Grid. These technologies will allow the customer and/or the utility — or other authorized third parties — to dynamically control the device's energy consumption based on energy prices and grid conditions.

Besides specific appliances, this category of equipment encompasses other devices, including meters, switches, power outlets, and various other controllers that could be used to retrofit or otherwise enable existing equipment to respond to Smart Grid conditions. For example, a new smart water heater may be equipped with a device that coordinates with the facility's energy management system to adjust temperature controls within user-specified limits based on energy prices. These technologies are under development but not yet commercially available on a widespread basis.

There are a number of other currently available commercial technologies that can take advantage of Smart Grid features. For example, solar panels can be installed on rooftops by homeowners and safely generate power for years. Solar power typically generates power at a cost of $10 to $12 per watt, but these costs should be much lower in the future.

NIST PLANS FOR STANDARDIZATION

The U.S. Commerce Department's National Institute of Standards and Technology (NIST) announced a three-phase plan to expedite development of key standards for a Smart Grid. The American Recovery and Reinvestment Act (ARRA) contains investments critical to spurring the Smart Grid development process.

NIST's three-phase approach will further engage utilities, equipment suppliers, consumers, standards developers, and other stakeholders to achieve consensus on Smart Grid standards. This process will include a stakeholders' summit where various participants will set the Smart Grid architectural priorities for:

Interoperability and cyber security standards
An initial set of standards to support implementation and plans to meet remaining standards needs — launch a formal partnership to facilitate the development of additional standards to address remaining gaps and integrate new technologies
Develop a plan for testing and certification to ensure that Smart Grid equipment and systems conform to standards for security and interoperability

NIST hopes to issue the initial set of priority, standards, and action plans by early fall, and will then initiate the partnership and complete a testing-and-certification plan by the end of the year.

The Energy Independence and Security Act (EISA) of 2007 charges NIST with “primary responsibility to coordinate development of a framework that includes protocols and model standards for information management to achieve interoperability of Smart Grid devices and systems.” NIST will combine part of its own appropriation from the American Recovery and Reinvestment Act (ARRA) with $10 million from the Department of Energy's ARRA appropriation to carry out these responsibilities. Interoperability standards are needed to ensure that software and hardware components from different vendors will work together, while cyber-security standards will protect the network against disruptions.

NIST contracted with the Electric Power Research Institute, Inc. (EPRI) to develop a standards roadmap and an interim report on Smart Grid architecture. EPRI is a nonprofit, noncommercial organization that conducts research and development related to the generation, delivery, and use of electricity.

EPRI also will support consensus-building activities to create an initial slate of Smart Grid standards. By the end of 2009, NIST plans to submit these standards for review and approval by the Federal Energy Regulation Commission, which has jurisdiction over interstate distribution and sales of electric power.

TALKING ABOUT DISTRIBUTED GENERATION

The ability to accommodate a diverse range of generation types — including centralized and distributed generation as well as a variety of storage options — is central to the concept of a Smart Grid. These generation and storage solutions can allow a Smart Grid to meet consumer load demands as well as accommodate intermittent renewable-energy technologies.

Distributed resources can help alleviate peak load, provide needed system support during emergencies, and lower the cost of power provided by the utility. Accommodating a large number of disparate generation and storage resources requires anticipation of issues such as intermittency and unavailability, while balancing costs, reliability, and environmental emissions. Accommodating the diverse nature of these options requires an interconnection process similar to the computer industry's “plug-and-play” environment.

In Fig. 3, DoE data shows the yearly U.S. installed distributed generation capacity in terms of the technologies employed: internal combustion, combustion turbine, steam turbine, hydroelectric, wind, and other types. Fig. 4 presents the projected U.S. distributed generation capacity.

SMART GRID FACES CHALLENGES

Among the significant challenges facing Smart Grid development are the implementation costs — estimates are as high as $27 billion (Kuhn 2008) for just the electric utility advanced-metering capability — and the regulations that allow recovery of such investments. For perspective, the Brattle Group estimates that it may take as much as $1.5 trillion to update the Grid by 2030 (Chupka, et al. 2008). Ensuring interoperability of Smart Grid standards is another hurdle state and federal regulators will need to leap. Major technical barriers include:

Developing economical storage systems, which can help solve other technical challenges
Integrating distributed renewable-energy sources with the grid
Addressing power-quality problems that would otherwise exacerbate the situation
Enhancing asset utilization
The uncertainty of the path that development will take over time with changing technology, alternative energy solutions, changing energy policy, and developing climate-change policy
Providing flexible regulation that leverages desired and developing technology through goal-directed and business-case-supported policy that promotes a positive economic outcome

Smart Grid development is also challenged from a technical vantage point. The various technologies needed to enable cost-effective communication from both sides of the meter must be developed, implemented, and deployed. One of the most important of these technologies is Advanced Metering Infrastructure (AMI). This technology helps coordinate consumer equipment, receives market signals, and adjusts household consumption based on a combination of this data and consumer preferences.

Another significant technical consideration is the impact of new technology on the existing grid infrastructure. Implementing new improvements into the grid is pivotal to increasing operational efficiency. Additionally, in a recent NERC survey that explored the challenges to grid reliability, “aging infrastructure and limited new construction” was ranked at the top. How this aging infrastructure will function when combined with new “smart” technology remains to be seen, particularly with regard to solar, wind, and other forms of distributed generation.

At the distribution level, the Smart Grid must manage voltage levels, reactive power, potential reverse power flows, and power conditioning — all critical to running grid-connected distributed generation systems, with particularly high penetrations of solar- and wind-power technologies. Advanced voltage regulation, fault-detection, and system-protection practices need to be rethought as an increasing number of distributed generation resources become available. This may require new equipment to identify and isolate distributed generation resources in the event of a fault occurrence.

Another consideration for power-generation systems — distributed or otherwise — is power quality. Power consumers and the utilities that feed them lack standards for classifying varying qualities of power. Because customers have different power quality requirements (e.g., willingness to accept outages of varying durations, and load sensitivity to power harmonics) and with the increasing availability of distributed generation resources to produce power locally, there may be smaller sub-markets for power that would be better served if such differentiated power standards existed.

CYBER SECURITY

Economic forces and technology development are making the power system more dependent on information systems and external communications networks. Security challenges are further compounded by the interconnected nature of the communications systems that support regional and interregional grid control, and the need to continue supporting older legacy systems in parallel with newer generations of control systems.

Additionally, there is a growing demand for increased intelligence and capability in field equipment installed in substations, within the distribution network, and even at the customer's premises. This increased control capability, while vastly increasing the flexibility and functionality to improve economies, also introduces cyber-vulnerabilities that have not previously existed and presents a significantly larger number of targets.

Understanding the vulnerabilities of components and associated systems will be necessary to quantify cyber-security issues inherent in Smart Grid deployments, particularly when these systems can be used to control or influence the behavior of the system. Assessments will be needed in controlled laboratory and test-bed environments as well as actual field-deployed conditions to explore and understand the implications of various cyber-attack scenarios, the resilience of existing security measures, and the robustness of proposed countermeasures.

Adoption of these countermeasures by vendors and operators will be critical in broadly influencing the installed base of future deployments. The asset owners remain responsible for their legacy systems as Smart Grid technologies are deployed. A security culture that is vigilant will continually assess evolving threats and risks, and then balance those with the countermeasures needed to permeate the stakeholder base.

The Federal Energy Regulatory Commission (FERC) is well aware of the challenges posed by the Smart Grid. The commission notes that standards developed for the country's Smart Grid should put a high priority on cyber security and systems monitoring.

The Energy Independence and Security Act (EISA) law gave NIST the main responsibility for working with industry to develop a framework of standards and protocols to ensure the interoperability and security for the Grid. However, the law states that the final standards need to be approved by FERC, which has regulatory authority over industryies that undertake interstate business.

Achieving the level of interoperability and security required for the Smart Grid means that the associated data communications network architecture should employ standard, open protocols, such as Internet Protocol (IP). These communications networks deliver the reliability, scalability, interoperability, manageability, and security necessary to meet future energy needs. And, there must be a backup plan in case the Internet is inoperative.

A report by the DoE's Electricity Advisory Committee generally lauds the advent of a high-tech grid but also warns of its vulnerabilities:

“However, many of the technologies being deployed to support Smart Grid projects — such as smart meters, sensors, and advanced communications networks — can themselves increase the vulnerability of the Grid to cyber attacks. Accordingly, it is essential that Smart Grid deployment leverage the benefits of increased threat awareness while mitigating against heightened security concerns. It will be a difficult task, but one that can be addressed by being aware of the risks and leveraging security best practices from other industries.”

ENABLING NEW PRODUCTS AND SERVICES

Because a Smart Grid holds great potential for enabling new products, services, and markets, public and private interests have aligned in support of these technologies. For example, EISA provided incentives for utilities to undertake Smart Grid investments in Section 1306, which authorizes the Secretary of Energy to establish the Smart Grid Investment Matching Grant Program.

This program was designed to provide reimbursement for up to 20% of a utility's investment in Smart Grid technologies. Section 1306 of EISA also defined what constituted a qualified investment and outlined a process for applying for cost reimbursement.

Section 1307 of EISA encouraged states to require utilities prior to investing in non-advanced grid technologies to demonstrate consideration for Smart Grid investments. Section 1307 also encouraged states to consider regulatory requirements that included the reimbursement of book-value costs for any equipment rendered obsolete through Smart Grid investment.

While the primary objectives for implementing a Smart Grid may encompass environmental, energy-efficiency, and national security goals, the effort falls short if utilities are unable or unwilling to make an effective business case to regulatory agencies. Smart Grid investments are often capital intensive, expensive, and include multiple jurisdictions within a utility's service area.

While Smart-Grid investments can enable numerous new products (e.g., advanced meters, solar panels, electric vehicles, and smart appliances) and operational efficiencies (e.g., reduced meter-reading costs, fewer field visits, enhanced billing accuracy, improved cash flow, and enhanced response to outages), such benefits may be difficult to quantify and to build into business cases given the nascent stages in which these technologies often exist and the lack of industry standards and best practices for integrating Smart-Grid technologies.

REFERENCES

IEEE'S P2030 OFFERS SMART GRID KNOWLEDGE BASE

http://www.oe.energy.gov/DocumentsandMedia/SGSRMain_090707_lowres.pdf

RECENTLY, THE IEEE announced a Smart Grid initiative for the power engineering, communications, and information technology industries with a project approval for the IEEE 2030 Guide for Smart Grid Interoperability of Energy Technology and Information Technology Operation with the Electric Power System (EPS) and End-Use Applications and Loads (P2030).

Leveraging IEEE's technical breadth and open-standards development process, IEEE P2030 will provide a knowledge base for understanding and defining Smart Grid interoperability with end-use applications and loads. It will consider the integration of energy, communications, and information technologies necessary to achieve seamless operation for electric generation, delivery, and end-use benefits that permit two-way power flow with communication and control.

“This landmark initiative, which spans multiple diverse industries, will tap into the numerous ubiquitously deployed IEEE standards developed by a variety of expert groups,” said Chuck Adams, president, IEEE Standards Association. “IEEE P2030 will define key elements of the modernized grid, and it will accelerate progress in making the Smart Grid a reality.”

Sponsored by the IEEE Standards Coordinating Committee 21 (SCC21), IEEE P2030 is chaired by Dick DeBlasio, program manager at the U.S. Department of Energy's National Renewable Energy Lab facility.

DeBlasio points out that “this P2030 standards project will support NIST's role to coordinate the development of Smart Grid interoperability standards. IEEE P2030 will provide urgently needed guidelines for smart grid interoperability, building on the many technologies used in the electric power system and merging these with communication, monitoring, and analysis technologies and capabilities.”

INTEL'S OPEN ENERGY INITIATIVE

Pat Ryan, executive director, IEEE Power & Energy Society, added, “What makes the IEEE engagement in Smart Grid technical work even more robust are the activities taking place in the IEEE Power and Energy Society (PES) where we are harnessing and optimizing our technical expertise to help ensure grid modernization. grid modernization.”

AS THE NUMBER ONE PURCHASER of renewable energy in the U.S. and a strategic investor in renewable-energy start-up companies, Intel is helping lead the development of the clean energy industry. One imperative that is closely linked to clean energy is to help make smart energy a global reality.

To that end, the Intel Open Energy Initiative aligns and mobilizes Intel and its partners around the application of technology and open standards to accelerate the global transition to smart energy. Specifically, Intel is working to accelerate the integration of and synergy between intelligent renewable energy sources, smart grids, smart buildings, and empowered energy consumers.

DISTRIBUTED, CONNECTED, COLLECTIVE INTELLIGENCE

An issue facing smart grids is the absence of an agreed-upon specification prescribing how all grid components should be architected and made to communicate with each other. There are many competing open standards and proprietary protocols. To help address this interoperability challenge, key grid sub-systems and consumer-side systems should be open platforms, i.e. designed to flexibly support a variety of standard interfaces. In addition, grid systems should be future-proof, supporting new innovations and the integration of future applications and services. Grids need to be smart, programmable and adaptable. One way to achieve this is with open standards and microprocessor-based intelligence throughout the grid.

Distributed intelligence, throughout the grid and its end points, enables optimized levels of automation and decision-making at each link in the chain. It also enables greater communication, visibility, and collaboration across the entire energy chain. Here are some examples of how distributed, connected, collective intelligence is optimizing the effectiveness in the energy network as a whole.

Embedded microprocessors in distributed renewable-energy sources such as wind turbines and solar systems enable them to exchange data and operational status with the grid.
Real-time monitoring, analysis, and control enabled by microprocessor-based intelligence in the electricity transmission and distribution networks.
Energy-management dashboards running on PCs and other microprocessor-based systems empower energy consumers to view and optimize the behavior of the networked energy assets within their personal smart grid; from appliances to rooftop solar systems to electric vehicles.
Networks of efficiency-minded consumers using PCs and online social networks share best practices, aggregate energy savings, and participate in carbon-reduction competitions.

The successful transformation of the energy sector to the smart energy sector requires the ability to harness the full potential of renewable energy sources, distributed microprocessor intelligence, open standards, consumer empowerment, and network effects. The Intel Open Energy Initiative is working to help accelerate this transformation.