FERC steps up smart grid development

The Federal Energy Regulatory Commission (FERC) has come with a proposed policy statement and action plan that would help set the “rules of the road” of a modern grid.

The proposed policy statement seeks public comment on standards for four priority issues critical to the smooth functioning and operation of the Smart Grid.

After weighing public comments, FERC plans to adopt a final policy statement providing guidance to the electric power industry on standards for:
· Cyber security;
· Communications among regional market operators, utilities, service providers and consumers;
· Ensuring that the bulk power system operators have “wide-area situational awareness” with equipment that allows them to monitor and operate their systems; and
· Coordinating operation of the bulk power system with new and emerging technologies for renewable resources, demand resources, electricity storage and electric transportation systems.

Prioritising the development of key standards will speed up the process of achieving an interoperable smart grid, said Commissioner Suedeen Kelly. Kelly said the proposed policy will require the sharing of information associated with smart grid deployments with the Smart Grid Clearinghouse being developed by the Department of Energy. “This will help to demonstrate the real benefits that investing in a smart grid can bring to the public,” said Kelly.

As per the plan, smart grid advancements will apply digital technologies to the grid, and enable real-time coordination of information from both generating plants and demand-side resources.

Related links: FERC

A call for spending $4.5 billion on smart grid in a rational way

Sen. Lisa Murkowski (R-Alaska) has reportedly said it could be wasteful for the Energy Department to spend $4.5 billion in matching funds provided in the economic stimulus bill to create a digitised, conversant “smart grid” if the investment is made in technology that becomes obsolete or if the public rejects or underutilises the technology.

“Is it possible to expect that this programme can spend $4.5 billion in two years in a rational way?” Murkowski said recently. “We first need to develop standards for the smart grid programme before we start just throwing money at it.”

A report filed by nytimes.com highlighted that smart grid operation standards have not been designated yet despite a provision in the 2007 energy bill calling for the Commerce Department's National Institute of Standards and Technology to come up with standards with the help of the Federal Energy Regulatory Commission and other organizations so that the technology can easily communicate on the same platform -- a concept known as interoperability.

That lapse combined with the general lack of public knowledge about the smart grid and how to manage energy in real-time could be a recipe for failure, said Murkowski, who has already stated that for the most part, the amounts of money allocated to programmes specified in the bill are completely unprecedented.

Murkowski acknowledged there is money in the legislation that would benefit Alaska, but she said a short term cash infusion doesn’t outweigh the long term financial burden the legislation places on future generations and state and local governments.

FERC steps up smart grid development

The Federal Energy Regulatory Commission (FERC) has come with a proposed policy statement and action plan that would help set the “rules of the road” of a modern grid.

The proposed policy statement seeks public comment on standards for four priority issues critical to the smooth functioning and operation of the Smart Grid.

After weighing public comments, FERC plans to adopt a final policy statement providing guidance to the electric power industry on standards for:

· Cyber security;
· Communications among regional market operators, utilities, service providers and consumers;
· Ensuring that the bulk power system operators have “wide-area situational awareness” with equipment that allows them to monitor and operate their systems; and
· Coordinating operation of the bulk power system with new and emerging technologies for renewable resources, demand resources, electricity storage and electric transportation systems.

Prioritising the development of key standards will speed up the process of achieving an interoperable smart grid, said Commissioner Suedeen Kelly.

Kelly said the proposed policy will require the sharing of information associated with smart grid deployments with the Smart Grid Clearinghouse being developed by the Department of Energy.

“This will help to demonstrate the real benefits that investing in a smart grid can bring to the public,” said Kelly.

As per the plan, smart grid advancements will apply digital technologies to the grid, and enable real-time coordination of information from both generating plants and demand-side resources.

Related links: FERC

“Smart metering will revolutionise energy management and grid reliability”

The US industry has welcomed the signing into law of the American Recovery and Reinvestment Act and its ambitious provisions to modernise the U.S. electricity grid.

The American Recovery and Reinvestment Act contains specific provisions for the establishment of a $4.2 billion grant programme that will support the rollout of smart grid and smart metering projects across the country. Smart metering solutions provide utilities with a two-way flow of data required to manage energy use, efficiency, demand response and network protection. Consumers benefit from improved usage information and with it, the ability to reduce overall energy costs and carbon footprints.

Terming the development as a “huge victory for forward-looking utilities and consumers”, Richard Mora, CEO of Landis+Gyr North America said, “National demand for electricity is growing three times faster than power resources are being added, making energy conservation critical. The federal government has now joined in the drive to build a smart and dynamic grid infrastructure.”

“Make no mistake, smart metering will revolutionise energy management and grid reliability across the country,” Mora said.

Landis+Gyr pointd out that the potential benefits are enormous. A recent Brattle Group study found that just a five percent drop in peak demand nationally would eliminate the need for installing and running some 625 infrequently used peaking power plants, translating into annual savings of approximately $3 billion. The Department of Energy recently estimated that if the US grid were just five percent more efficient, it would be the equivalent of eliminating the fuel and greenhouse gas emissions of 53 million cars.

Talks of developing smart grid gain momentum in the US

Even as many states in the US have initiated adoption of policies to move towards efficient transmission systems, House Speaker Nancy Pelosi, D-Calif has poined out that the nation needs a national framework for planning, developing and financing transmission infrastructure.

According to chron.com, Congressional leaders in the US pushing to modernise the nation’s electrical transmission system signaled they want to put the federal government in control of decisions normally left to state authorities, from regulating electrical rates to deciding where to place power lines and poles.

Also, Democratic congressional leaders and the Obama administration recently indicated that that they will push for greater federal authority to locate electric transmission lines.

Senate Majority Leader Harry Reid, D-Nev., said he will soon introduce legislation that gives federal regulators authority to override states on electric grid placement decisions as part of a package of energy proposals the Senate is expected to take up in the coming weeks, reported AP.

Pelosi also called for expansion of the nation’s power transmission grid and development of a “smart grid” that allows increased efficiency and access to remote wind and solar energy resources. She said addressing the grid issue “is essential to all that we do” to promote renewable fuels.

RESA calls for freedom to choose retail electric supplier

The Retail Energy Supply Association (RESA) has testified before the Connecticut General Assembly to oppose three bills that combined will eliminate a customer’s right to choose their energy supplier.

The Association also mentioned that the bills would also establish an electric procurement structure that will shift cost responsibility from private investors to Connecticut ratepayers.

Specifically, RESA members testified in opposition to: (1) H.B. 6507, which would repeal customer choice for Connecticut residential and business customers with maximum demands below 500 kilowatts effective January 1, 2010; (2) H.B. 6510, which would establish a state power authority; and (3) H.B. 6512, which would replace the customer choice structure repealed by H.B. 6507 with a "managed portfolio" electric procurement structure heavily dependent on ratepayer-backed medium-term and long-term contracts.

Describing the adoption of some of the bills as a backward step for Connecticut energy customers, Jay Kooper, President of RESA, said, “What’s more detrimental is the plan to replace the current structure with a failed one-size-fits-all electric procurement structure that, in the past, has exposed Connecticut ratepayers to billions of dollars in stranded costs stemming from utility investment decisions that have done little to contain costs or improve electric system reliability.”

"Smart Grid is not a fad; smart is the future of the electric grid"

A survey featuring utilities in North America has indicated that there is clearly an increasing regulatory acceptance of AMI and a need to ascertain how a smarter grid will improve utility services for consumers.

The North American utility industry is now facing growing political, societal and regulatory pressure to produce energy with less environmental impact and to help consumers use energy more efficiently. To meet this challenge, industry regulators are beginning to consider the role of a Smarter Grid, stated Capgemini, as it released the results from the first Smart Grid and Renewable Energy opinion survey of energy regulators across North America.

The findings were as follows: 38 percent of respondents already have regulations that require an AMI deployment, an additional seven percent reported that they are allowing deployments without regulations, while 22 percent report additional analysis is either underway or required; 48 percent of respondents favor the recent formation of the NARUC-Federal Energy Regulatory Commission (FERC) Smart Grid Collaborative, while an additional 31 percent felt more time is needed before they can judge. Eighteen states have already joined the Collaborative.

The Capgemini survey was conducted in conjunction with the National Association of Regulatory Utility Commissioners (NARUC) and Canadian Association of Members of Public Utility Tribunals (CAMPUT) in an effort to develop a comprehensive perspective on Smart Grid and renewable energy policy in North America.

"Smart Grid is not a fad; smart is the future of the electric grid," said Frederick Butler, president of NARUC.

Even as regulators are clearly intererested in Smart Grid and increased energy efficiency, they are not certain that the benefits outweigh the cost for customers at this point: Commissioners have not yet formed a consensus about the values of AMI (the cost of AMI may exceed direct operational savings causing regulators to rely on case-specific filings not general industry valuations); Most regulators are not ready to share the real-time costs of energy with all classes of customers: More than half (51 percent) of the respondents do not support real-time pricing for all customer classes and only nine percent do.

"Utility regulators are in the very early stages of an education and valuation process," said Roy Ellis, energy, utilities and chemicals regulatory relations leader at Capgemini.

Ellis added,"In most cases, this process is a complicated effort to view a cleaner more efficient grid through a prism of existing laws, regulations and market dynamics that were designed to promote the rapid expansion of a least-cost, highly-dependable grid using carbon-based fuels. Interestingly, the speed with which both renewables and the smarter grid take hold may be the result of a growing political belief that a rapid move to clean energy is necessary, and the only way to make the move quickly is with an equally rapid enablement of a Smart Grid."

Bright future ahead of smart grid technology

In its global predictions for technology industry, Deloitte has stated that smart grid solutions providers enjoyed 50 percent revenue growth in 2008 and may generate $25 billion in revenues in 2009.

Although the global economy may make public spending on smart grid unlikely, governments may choose to offer tax incentives as well as consider how smart grid technology can reduce non-domestic energy dependence and help make the grid more secure.

According to Deloitte, to conserve costs, profit-oriented utilities and enterprises may deploy smart grid technologies even without government support.

Also, major manufacturers and utilities may even want to explore partnerships with or acquisition of smart energy companies.

"Smart grid technology will represent the biggest and fastest growing sector in green tech," said Eric Openshaw, vice chairman and U.S. technology leader for Deloitte LLP.
"The most significant emerging technologies will be those that deliver cost-efficiency, contribute to environmental sustainability and drive new forms of personal and business collaboration."

Beacon Power tests its first megawatt of flywheel energy storage

Beacon Power Corporation has built and tested an integrated matrix of ten high-power flywheels that operated together to absorb and supply a full megawatt of electricity.

The system, located in Beacon's Tyngsboro Mass. headquarters, will be the first of up to five megawatts of flywheel-based regulation capability that will be produced this year and commercially deployed to generate revenues from the provision of regulation services.

Until now, Beacon had been building and running individual flywheels in preparation for its first full megawatt implementation. Based on internal testing of an integrated matrix of ten flywheels, the company says its one-megawatt Smart Energy Matrix can ramp up and down to absorb and supply a full megawatt of power.

Bill Capp, president and CEO, Beacon Power said, "We've proven that a matrix of our Smart Energy 25 flywheels, together with associated electronics, software and other components, can store and release a megawatt of electricity."

Beacon will begin system testing in conjunction with ISO New England, during which time the flywheel matrix will respond to actual ISO test signals to absorb and supply power. This plan will allow the company to meet its schedule to interconnect live to the grid and to begin performing frequency regulation services under an ISO New England Alternative Technologies Pilot Program scheduled to start on November 18th.

The ISO New England Alternative Technologies Pilot Program, which was announced last month, will provide revenue for regulation services until permanent market rules have been developed. This process is expected to take approximately 18 months.

“The whole future of energy is linked”

Article: Interview with Capgemini’s Doug Houseman

smartelectricnews.com special

There is a call for greater integration of demand response and energy efficiency to ensure that investments in energy systems, technologies, and practices are integrated and optimised.

Experts acknowledge that energy efficiency and demand response, demand side management, distributed energy resources, plug in electric hybrid vehicles etc. all have to fit together into a single picture for each country or service territory.

“The whole future of energy is linked,” says Capgemini’s Doug Houseman.

“You can not pull one thread out of the tapestry and still have a complete picture,” Houseman told smartelectricnews.com.

According to Houseman, who is scheduled to speak during Intelligent Demand Response for Electricity Summit 2009, to be held in Amsterdam on 28-29 January this year, it is important to realise that the regulators play the biggest role in determining the future.

“They will frame the picture, providing incentives to one set of answers, ignoring others, and penalising another set. In many cases, the penalties will not be intentional, but they will exist. There is no way to design a programme that does not impact some items in a negative way, so regulators have to carefully choose what they want to do and run market simulations to see what the knock on effects are of their policy.”

Citing an example, he said, “Germany did not mean to make solar more expensive globally and reduce the overall availability of the solar power in the rest of the world. Their aggressive incentives for solar photovoltaic did just that. Even though the manufacturing costs for solar are down by more than 10 percent, the global demand for solar - the main growth is from Germany - has driven prices up on the wholesale level by more than 15 percent. This will in the long run result in more factories to handle the demand, but in the meantime, a country with one of the lowest production potentials (based on hours of available light bright enough to produce power) has cornered the market on photovoltaic cells. If Germany had not put the incentives in place, solar would not have been a viable option for most business and home owners.”

Further from the regulatory standpoint, Houseman shared his viewpoint regarding how demand response can be used effectively to manage energy use year-round, managing residential programmes and much more. Excerpts from an interview:

smartelectricnews.com: It is said that technologies that can enable demand response also can be used effectively to manage energy use year-round. How do you assess the situation?

Doug Houseman: It is true that once you have communications with your customer and/or their equipment, it is easy to use that communications all year round. In home displays, home area networks and direct load control equipment can all be used for more than the 200 hours or so that the market really needs demand reduction during peak times…it would be a shame to put in equipment and then let it sit idle more than 8,500 hours a year.

smartelectricnews.com: Can you cite example of financial benefits resulting from optimal execution of such programmes?

Doug Houseman: The best example is at Florida Power and Light – it is also one of the oldest programmes having been in existence for almost 30 years now. By 2006, as per the last time numbers were published, the programme had cost FPL about $1.1 billion dollars and saved FPL more than $8 billion dollars. The regulatory requirement is that ½ of the cost savings be given directly back to all customers – not just the ones that are part of the programme. The rest of the savings can be used to fund the programme and to make profits for FPL. There are several others that can be discussed, but this in the largest, best documented and the oldest programme in the world.

smartelectricnews.com: When it comes to installation, maintenance and data management of such programmes, what factors do you think need to be taken into consideration for enablement cost where one-time cost includes equipment installation and administration and annual maintenance cost?

Doug Houseman: It is not a simple one size fits all (situation)– residential programmes can be done along the lines of one size fits all, but commercial and industrial programmes can not. If I stick to the residential programme, there are some clear winners from regulatory rules standpoint that help with the overall programme size, pace and effectiveness:

• Allow utilities to earn their usual rate of return on the equipment (or more if you want the programme to go faster).
• Allow companies to depreciate the equipment coming out at the same pace as they would have and continue to earn the normal rate of return on the value on the books of the old equipment.
• Reduce the amount of data that has to be retained to only the amount that is really required to deal with bad bills. Most regulators require that all information be kept for several years, if you want to keep the programme costs down, determine what will make a difference for the ratepayer and the commission and allow the utility to decide what they want to keep beyond that. In a single day, a single meter will send in more than 10 times the data that a meter generates in a year with the current meters.
• Agree to a simple VEE method – most methods that are on the books today are intended for very large customers, where the difference of 2 or 3 percent can mean thousands of dollars in added costs to the business. In the home owner’s world, having 2 to 3 percent of the power in the wrong interval would normally be less than $2. Over time, the mistakes tend to even out on the smaller customers (e.g. a kilowatt hour is placed in the peak bucket one month because reading is missing, and then if it happened again the next kilowatt hour would be allocated to off peak evening up the charges).
• Allow consumers to buy most of what they want to put in their home at the local hardware or DIY center. Different customers will want different levels of knowledge and control. Make sure you provide the customers with the right information so they can buy equipment that will run with the equipment from the utility.
• Never stop monitoring the programme for equipment failures, maintenance deferral or bad consumer level devices.

If you do these six things, then the determination on how to handle the installation, maintenance and data management can be managed for a reasonable cost and customers can have choices about what they want.

smartelectricnews.com: When it comes to components of such programmes being subsidised / regulated, what role according to you national, local governments and the European Union can play in the time to come?

Doug Houseman: They will have to lead, there is no way in a regulated (or semi-regulated) market that anyone can take a substantial decision without a nod from each of the regulators they have to deal with. In the UK, there is a potential for more than a dozen regulators to get involved in these programmes.


Intelligent Demand Response for Electricity Summit 2009

Capgemini’s Doug Houseman is scheduled to speak during ‘DR Cost Benefit Analysis: Assess the cost to install, operate and maintain your DR & DSM programme’ of Intelligent Demand Response for Electricity Summit 2009, to be held in Amsterdam on 28-29 January.

For more information, click here: www.smartelectricnews.com/demand08

Or

Contact:
Abbie Badcock ,
Smart Electric News,
abbie@smartelectricnews.com

Ensuring a fit between a business and its chosen demand response programme

Article: Interview with Capgemini’s Doug Houseman

smartelectricnews.com Special

Businesses are increasingly embracing demand response (DR) and load management programmes that not only curtail energy use during the times of peak demand but also result in energy efficiency gains. Considering several benefits such as strategic conservation, time-based rates, peak load reduction, as well as management of energy bills, the adoption of demand response is showing signs of gaining momentum.

For such initiatives, organisations have to diligently plan, implement, and monitor activities, which best fits in with the kind of business of they are in, scale of their operations and other factors.

Providing an insight into how companies should approach and keep a vigil on initiatives related to DR, Capgemini’s Doug Houseman told smartelectricnews.com that all this depends on the characteristics of the company.

Citing an example, Houseman says small retailers probably do not have a lot of electric load they can shift to off peak times, so they need to have lights and heating or cooling during store hours.

“Any programme that causes them to have to cut their usage will mean one of three things - that they have to install more efficient equipment or they will have to curtail their load and impact lighting or temperature in the store or they will have to close during curtailments to deal with the curtailment. Programmes that shift the price of power and do not demand a curtailment may mean that the cost of doing business just went up or that the store hours will have to change,” explained Houseman, who is scheduled to speak during Intelligent Demand Response for Electricity Summit 2008, to be held in Amsterdam on 24-25 November this year.

According to Houseman, for larger businesses the issues are more complex. They need to think about production schedules (such as do I run a night shift instead of a day shift in the summer?) and what equipment they can replace. Should a curtailment programme be the choice for DR, then the question is do they install their own generation to deal with it, and if so how do they deal with the carbon issues?

“Since they mostly are not dependent on customer traffic during the daytime – but rather do things that are out of the direct line of sight of the customers, they have more options, but they also, in many cases, have even smaller margins between profit and loss. Doing the wrong things, can end up with the business having to shift production off shore to a country that has better energy pricing or a more friendly energy policy to large companies,” said Houseman.

In all cases, businesses need to participate in the process of deciding the rules, and how they want to be impacted.

“The future is not that there will be no impact. Rather, the future is that there will be an impact and the question is what will that impact be? What do they want it to be? What will hurt the least?” shared Houseman.

Before planning and executing such initiatives, ones needs to take into consideration that these programmes can also result in other benefits such as deferring the need to build new infrastructure and mitigating the level and volatility of wholesale energy markets. Specialists feel in case of a pilot programme, one should evaluate equipment, acceptance, and improved energy efficiency and the contribution to reducing GHG emissions.

For his part, Houseman acknowledged the fact that without knowing what the rules and incentives will be, it is difficult to decide as a business to make change to hours, equipment, staffing, locations, etc.

Referring to partnering with specialists, Houseman said it should be around determining which kinds of programmes have the smallest negative impact on the business and then working to get them implemented.

“For a small machine shop, high efficiency motors, better air compressors, and rethinking ventilation in many cases can exceed the demand for reduction, and the nice thing is that the changes are in use every hour the shop is open, helping to create long-term savings. But on the margins that most small machine shops operate on, they can not afford the capital costs of doing this. So a programme that would either offer very low cost loans, or would provide rebates for such installations is an important step to opening up the market and as the market grows the cost of this kind of equipment will drop, making it more affordable to others,” he said.

Houseman added that installing equipment monitoring and building control systems helps a lot.

“At the Dutch Tax Authority, installing building monitoring equipment, light switches that turn themselves off and training the staff has resulted in a 19 percent reduction in overall energy consumption. This programme was originally expected to add cost to the agency, but now looks like it may pay back in as little as four years, if the staff sustains their part in the programme,” he pointed out.

If the first step is getting the policy right, then the second is partnering to determine what steps to take.

Houseman says the matrix of options is more than 200 items long and some are simple and quick and others are long and complex. Some of the long and complex ones have faster returns on investment than the simple and quick ones (e.g. the payback for shutting down the factory on a critical peak pricing day – can be either the same day or never, depending on how much electricity you use and the price of the electricity as a component of your outputs).

Getting the right mix of options figured out for each business will be specific to the business, their required operating hours, margins, percentage of their business cost that is energy related and how the energy is consumed.

“Once the right steps are figured out, it is important to look at monetising the energy consumption – can an energy broker or trading firm add to the overall value of the changes you are about to make,” he said.

According to Houseman, it is critical to look at this aspect with an open mind, sometimes things that on the surface seem like a good idea, don’t pan out when the overall market economics are factored in, in other cases – things that look hopeless can have a very positive impact on the bottom line. Once the monetising is complete, then and only then should you undertake to make the equipment, business hour or other changes to your business.

“Finally, the focus should be on getting enough information to plan ahead. In many cases, the electric providers have a day or two’s notice on when it is likely the prices will be higher in a time of use or critical peak pricing market. In a curtailment market, they also have a reasonable chance of determining the curtailments a day or two ahead, in most cases (the failure of a power plant or two in very hot or cold weather can result in a wild swing in market price with very little notice). Getting help through this whole process from people, who make energy their business, will make a big difference in the success of the project,” he said.

Specifically, referring to selection of a partner, Houseman following factors should be taken into consideration:

· Understanding of the local and national regulatory policies and the status of any changes;
· A clear understanding of your business – how you make money and where you use electricity or other energy;
· A clear understanding of the options your business has, if they have fewer than 40 or 50 options for you in their kit bag, you will not maximise your investment;
· An energy broker or trader they work with – and references from that firm;
· A pragmatic approach to improving your situation – in one furniture shop it may be fine to turn off all the power at 5PM and in another in may mean that fumes build up from the finishing process and may cause a nasty explosion. Any partner firm will have to have enough knowledge to walk your business and see what can be done;
· Be product agnostic. If they are pushing a specific product, you will find that is your answer, no matter what your question is.


Intelligent Demand Response for Electricity Summit 2008

Capgemini’s Doug Houseman is scheduled to speak during ‘DR Cost Benefit Analysis: Assess the cost to install, operate and maintain your DR & DSM programme’ of Intelligent Demand Response for Electricity Summit 2008, to be held in Amsterdam on 24-25 November.

For more information, click here: www.smartelectricnews.com/demand08

Or

Contact:
Abbie Badcock ,
Smart Electric News,
abbie@smartelectricnews.com

State of Rhode Island focuses on New England's energy resources

The State of Rhode Island has entered into a five-year contract with EnerNOC, Inc. The development is being described as a positive one in Rhode Island's broader mission to promote environmentally responsible energy policies.

As per the contract, EnerNOC, a developer and provider of clean and intelligent energy solutions, will manage demand response capacity from city, town and government-related buildings into the Independent System Operator of New England, Inc. (ISO-NE) market.

Under the contract terms, individual government buildings can enroll in EnerNOC's technology-enabled demand response network. Each site will be paid for agreeing to reduce non-essential electricity consumption during periods of peak demand. In addition, each participating site will gain basic access to EnerNOC's PowerTrak energy management platform, which enables users to view and analyse their energy consumption data in near real-time and measure efficiency gains.

The pact will also result in a revenue stream for the State that can be used to fund other government programmes.

"As Rhode Island is facing skyrocketing energy costs and consumers are being asked to pay more for electricity, reducing non-essential consumption is an important component of our commitment to support reliable, cost-effective and environmentally sustainable energy solutions," said Governor Donald L. Carcieiri.

EU money is on smart grids

Intelligent electricity generation and distribution is essential to make the EU's 2020 renewable energy target writes Stephen Gardner of Climate Change Corp. (http://www.climatechangecorp.com/), an independent news website, dedicated to providing high quality news and analysis on climate change to companies around the world.

Europe's energy grids are ripe for renewal.

Like steam railways, they are an infrastructure from another age. They are creakingly inefficient, hopelessly wasteful and liable to break down, as they did in London in August 2003, when an early evening blackout trapped people in lifts, halted transport systems and shut down 60 percent of the London Underground.

The grids are also ill-equipped to deal with the environmental and energy challenges facing the world, chiefly climate change and security of supply. In fact, on both counts, the present energy infrastructure is part of the problem. Power generation is one of the main causes of greenhouse gas emissions, while the current supply model of a few generating plants supplying electricity to wide areas is vulnerable.

This was shown when North America suffered – like London, in August 2003 – its worst ever blackout. The cause was a single Ohio power plant failing because of a demand surge, causing a cascade effect resulting in the shutdown of more than 100 power plants. It seemed to prove the words of Bill Richardson, United States energy secretary under Bill Clinton, who called his country a "superpower with a third world electricity grid".

Fortunately there is a vision for a cleaner, leaner energy future. A European Union-backed research consortium known as SmartGrids has published a blueprint for a power system that will be "highly reliable, flexible, accessible and cost effective." Smart grids, says the consortium’s Pau Rey, are “a concept that involves adding intelligence to the electricity networks".

Power to the people

The key element of a smart grid is that, unlike a dumb one, it will be able to take power from multiple sources and distribute it according to demand so that optimum efficiency is achieved. There will be less reliance on massive power plants. Energy will be generated locally and fed into ‘intelligrids’ organised at municipal level, with surpluses being sold to other areas, according to demand.

Renewables will provide a far greater share of power than today. A farmer might have a wind turbine on his or her land, or a generator producing power from flowing water. Households might have mini wind generators on the roof. The goal, as Spencer Abraham, another former US energy secretary, recently said, is "a two-way electricity grid where homes or businesses can sell their surplus power back to the grid".

Sophisticated software that accurately measures demand will monitor the network. Homes and offices will have meters that respond to peaks and troughs. The future grid has been compared to an 'energy internet' with 'user-generated' electricity feeding into it from every direction. US economist Jeremy Rifkin has christened the future power infrastructure the "intergrid". Management of it, he has said, will be "the next IT revolution."

Highly charged

However, getting from the energy inefficient present to the energy-optimised future will be a major challenge. To begin with, it will be expensive, costing, according to the International Energy Agency, 750 billion euros over the next three decades.

Massive infrastructure work is needed to adapt grids so they can accommodate distributed, rather than centralised, power generation. The EU has seven million kilometres of cable, and four million transformers, says Hans de Keulenaer, manager of Leonardo Energy, a platform for sharing information about advances in electrical power. Grids are organised across wide areas and are supplied by centralised power plants, compared to the decentralised smart grid vision. "That is not going to change overnight," de Keulenaer says.

A major overhaul is also needed to interconnect Europe's national grids. Notwithstanding the creation of a European single market, power generation remains largely a national concern. Less than five percent of electricity is traded across borders, de Keulenaer estimates.

Interconnecting European grids will increase the potential for use of renewable power. Spain, for example, may be able to produce more solar power than it can consume, and can send the excess to the chilly north. At present, interconnection limitations mean this is not possible.

Role for renewables

Greenpeace estimates that renewable power can meet a perhaps surprising 50 percent of the world’s energy needs by 2050. Smart grids and interconnection have "a huge role to play",says Sven Teske, one of the authors of Energy Revolution, a joint report from Greenpeace and the European Renewable Energy Council, published in 2007 and due to be revised and republished in late 2008.

Like anything else involving vast expenditure, progress on overhauling EU energy infrastructure has been slow. But, says Teske, the pressing issues of climate change and security of supply mean this is changing.

Political targets are key, such as the EU’s aim, declared in March 2007, for 20 percent of energy demand to be met from renewable supplies by 2020. For this to happen, the period between 2010 and 2020 will need to see substantial structural change, says Teske.

Hans de Keulenaer agrees a "renewable infrastructure" needs to be installed. This will enable renewable energy to be fed into the grid from multiple sources, from large-scale installations such as offshore windfarms, to multiple small-scale sources, such as solar panels and rooftop mini wind turbines.

These energy sources are not constant – the sun does not always shine – which can create problems when renewables are scaled up to meet a significant proportion of total demand, says Pau Rey of SmartGrids. At present, "there is no capacity" for handling the renewables revolution. Current grids are "decades old and equipment specifications are out of date", he says.

Multiple challenges

Furthermore, de Keulenaer cautions that the future electricity network based on smart grids will face obstacles, from the lobbying power of the conventional power industry, to ineffective politicians, to communities who do not see why they should accommodate a major wind farm or solar power installation so that demand can be better managed on the other side of the continent. "It always takes longer than you expect", de Keulenaer says, pointing out that Belgium is only now starting work on offshore wind capacity after years of discussion.

Nevertheless, SmartGrids is in the final stages of preparing an initial deployment strategy to make the ‘intelligrid’ a reality. According to Greenpeace’s Teske, "it will be tight" for the EU to start decentralising its power infrastructure to accommodate renewable generation and meet its 20 percent by 2020 renewables commitment. But, he concludes, "I’m optimistic".

Source; www.climatechangecorp.com

EPB SmartGrid project gets boost

A lawsuit filed against EPB - Chattanooga's public utility - has been dismissed opening the door for a Fibre network project to be undertaken in a key step towards the Smart Grid in the region.

"We are very pleased with the court’s decision – this project is an important economic development initiative and we are glad to be moving forward," says Harold DePriest, EPB’s President and CEO. "Our community has maintained an overwhelmingly positive response to the fiber initiative and we want to thank them for supporting us through this legal process. We hope that TCTA will not continue in its attempt to keep Chattanoogans from experiencing the benefits of this project by prolonging the lawsuit through frivolous and time-consuming appeals."

DPriset went ton to say "We are eager to get underway on our build-out of the Smart Grid, which will enable us to provide even more reliable power and to offset rising energy costs to every EPB customer," said Mr. DePriest. "And soon, building upon the fiber network which enables the Smart Grid, we will begin offering our community the Internet, video and telephone choices and options they’ve told us that they want."

Sixteen State Regulators Join NARUC-FERC Smart Grid Collaborative

The National Association of Regulatory Utility Commissioners named 16 State commissioners to serve on the joint federal-State Smart Grid Collaborative.

The NARUC-Federal Energy Regulatory Commission Smart Grid Collaborative, developed in early February, will serve as an important forum for discussing technological and other issues to facilitate the transition to a smart electric grid. Many companies are promoting Smart-Grid technologies and this dialogue will help regulators understand what is being developed and how it will impact consumers.

NARUC First Vice President Frederick Butler of New Jersey and FERC Commissioner Suedeen Kelly serve as co-chairs of the Collaborative. "This is an issue that is coming to the attention of State regulators as local delivery utilities and purveyors of Smart Grid technology are seeking our approval for installing this technology and rate recovery for their efforts," said First Vice President Butler. "Before we get too far down this road, State and federal regulators must have a better idea of what technologies are out there, how they will benefit consumers, and how they will impact the grid."

The following State regulators will join First Vice President Butler on the Collaborative: Commissioner Garry Brown of New York; Commissioner Paul Centolella of Ohio; Rachelle Chong of California; Commissioner Robert Clayton of Missouri; Commissioner Sherman Elliott of Illinois; Commissioner Wendell Holland of Pennsylvania; Commissioner Colette Honorable of Arkansas; Commissioner Orjiakor Isiogu of Michigan; Commissioner Jon McKinney of West Virginia; Commissioner Katrina McMurrian of Florida; Commissioner Rick Morgan of the District of Columbia; Commissioner Pat Oshie of Washington; Commissioner Sharon Reishus of Maine; Commissioner James Tarpey of Colorado; Commissioner Harold Williams of Maryland; and Commissioner Dallas Winslow of Delaware.

"This Collaborative cannot succeed without the time and energy from our State colleagues and I thank them for going above and beyond in their efforts to serve the ratepayers of this country," said NARUC President Marsha Smith of Idaho. "The Smart Grid has the potential to help our nation meet its growing need for energy by making the transmission system more reliable, robust, and efficient, and through our efforts with FERC, this Collaborative will help us understand these developments."

"I am very pleased by the great interest around the country in the Smart Grid collaborative," Commissioner Kelly said. "It suggests that the time is ripe for development of the Smart Grid to begin. I look forward to working with my State colleagues to determine the functional requirements of the technologies that the utilities will install and to ensure that systems are built to a consistent set of technical standards to provide maximum benefit, quality and interoperability to electricity consumers."

NARUC is a non-profit organization founded in 1889 whose members include the governmental agencies that are engaged in the regulation of utilities and carriers in the fifty States, the District of Columbia, Puerto Rico and the Virgin Islands. NARUC's member agencies regulate telecommunications, energy, and water utilities. NARUC represents the interests of State public utility commissions before the three branches of the Federal government.

Source; NARUC

Irelands’s ESB plan 22 billion Euros Spend on Renewables Future to include financing for Smart Metering and Smart Networks

Energy Supply Board (ESB) has announced that the company is to embark on an unprecedented capital investment programme of Euros 22 billion.

The Board of ESB has approved a Strategic Framework to 2020 that will see major company investment in renewable energy, the halving of its carbon emissions within 12 years, and the achievement of carbon net-zero by 2035. Fifty percent of the overall investment package is geared towards investments in our renewable future. Euros 4bn of this will be directly invested in renewable energy projects and Euros 6.5bn will be spent facilitating renewables including smart metering and smart networks.

The plan, which will establish ESB as a world class renewables company, makes emissions reduction and energy efficiency central to its ambitious targets.

By 2020, ESB will be delivering one-third of its electricity from renewable generation. This will include over 1,400 megawatts of wind generation, in addition to wave, tidal and biomass. To promote this, the company will invest in emerging green technologies.

The Euros 11 billion to be invested by ESB in its Networks will ensure continued efficient delivery of the vital infrastructure needed to support the Irish economy. It will also facilitate the development of up to 6,000 megawatts of wind on the island.

ESB will maintain its market share of power generation at well below 40 percent to facilitate continuing competition in the energy market. Completion of the present closure/divestment of 1500 megawatts of its stations and sites will assist this process. ESB will continue to enhance plant availability and performance in line with EU norms.

ESB will drive substantial cost reductions in overheads across all its businesses in order to meet its new financial challenges. Strong financial performance and continuing rigorous funding will underpin the investment plan while achieving shareholder and customer value.
Preparing for competition in the retail market, ESB will focus on delivering energy conservation and new initiatives on energy efficiencies.

With the development of a single British-Irish electricity market by 2020, ESB's international profile will continue to expand. The company will invest in more generation plants and renewables in Britain and further plants in Europe.

ESB Chairman, Lochlann Quinn, said the Strategic Framework to 2020 addresses ESB's response to those major imperatives now demanding action. "ESB is operating in a dramatically changing environment. Three overarching concerns now exist - the consequences of climate change, energy security and competitiveness of energy supply and ESB is strong, focussed and prepared to deal with them", Mr Quinn said.

ESB Chief Executive, Padraig McManus, said ESB had demonstrated its ability to execute strategic change in the past while maintaining profitable growth. "ESB is now entering a new period of particular challenge that we embrace with enthusiasm and vigour. This robust plan will deliver tangible and sustainable results for the economy as we face global challenges in a coherent and managed way. It positions us as a leading energy company in Europe", he said

Source: ESB

Ontario Smart Grid Forum launched

Ontario's electricity sector has begun a broad-based industry dialogue to develop a vision for a provincial smart grid that will provide consumers with more efficient, responsive and cost-effective electricity service. The Ontario Smart Grid Forum launched today by the Independent Electricity System Operator (IESO) in collaboration with representatives from local distribution companies will bring together leaders from across the sector.

"The transformation taking place within the province's electricity sector, combined with advances in information technology, creates a unique opportunity for the development of a smart grid," said Paul Murphy, President and CEO of the Independent Electricity System Operator. "This forum builds on the provincial Smart Metering Initiative to install smart meters in all homes and businesses by 2010 and complements the renewal taking place in Ontario's transmission and generation sectors."

An initial working group, made up of senior representatives from the IESO, Hydro One, Hydro Ottawa, Burlington Hydro and Toronto Hydro, will help define the membership and terms of reference for the broader Smart Grid Forum. New members will be added over the coming weeks to ensure a broad cross-sector representation.

"Hydro One recognized the potential benefits of smart grid advancements during the conceptual stage of its smart meter initiative," said Laura Formusa, President and CEO of Hydro One. "Leveraging the two-way communications provided by advanced metering allows us to monitor performance of our electricity system and will also provide our customers with new opportunities to actively participate in a variety of conservation and demand management initiatives - a key requirement in our design decision."

"Smart meters are just the first step - sending and receiving information to and from the power grid," said David O'Brien, President and CEO of Toronto Hydro Corporation. "Smart meter technologies open the door to smart home - where residential consumers can manage their electricity consumption more effectively with in-home control systems, self-generation such as solar panels, and smart appliances."

"Ontario - and Ottawa in particular - relies on high-tech industries as a major source of new jobs. These businesses demand high levels of reliability and power quality, and smart grid technology will be a valuable tool for achieving this," said Norm Fraser, Chief Operating Officer of Hydro Ottawa. "We see the smart grid as an important business attraction tool, providing the province with an additional competitive advantage in the years ahead."

"By leveraging smart grid capabilities, we'll be creating an electricity system that is not only more efficient in the way it delivers electricity, but is also more flexible, accommodating more demand response and other environmentally-sustainable sources of supply," said David Collie, President and CEO of Burlington Hydro and Past Chair of the Electricity Distributors Association.

The full Forum will hold its first meeting in May, with a final report expected by the end of 2008, identifying benefits that will arise from smart grid investments and what needs to be done to enable implementation.

Source: IESO

The Smart Grid Transportation Utility

Every one should agree that "It is clear that dramatic change is coming in the future for the electric utility industry and the way energy is generated, delivered and consumed substantially changing the whole business model. This change is coming to a piece of the industry that hasn't been known for radical change over its 120 plus year history... Implementation of the Smart Grid will require a complete rethinking of the utility business model and business processes."
Such dramatic and radical change is leading to an emergent smart grid transportation utility to replace today's utilities, with customer oriented front office and back office activity done today by the enterprise side of the utility and power generation front office and back office activity becoming competitive activities at the federal level.

A complete rethinking of the industry structure has already been done during the past two years in the Energy Central Network and what has emerged is the Electricity Without Price Controls (EWPC) market architecture and paradigm shift. As a result there is a grand vision as can be seen in the EWPC article Value Creation for the Customers to shift from the "compliance-based industry in which utilities operate," to one that "offer enough incentive for consumers, [generators and retailers] to take the difficult steps necessary to make electrical energy markets operate efficiently."

In sum, the utility as we know it evolves as the smart grid becomes the transportation utility under central planning. Shifting from price controls to prudential regulation, generation and customer facing front and back office activities will become free market activities as can be seen in the EWPC article Free Market and Central Planning, Under R1E2. R1E2 is the policy system reliability first, economy second, that gives priority to "real-time/near real-time" generation, transportation and demand power system smart grid activities with respect to economic free market activities.

Source: Jose Antonio Vanderhorst-Silverio

National Grid to appeal Competition Act decision on Metering

The following posting was placed on the National Grid website.

National Grid plc (“National Grid”) is extremely disappointed with the Gas and Electricity Markets Authority’s (GEMA) decision that National Grid has infringed the Competition Act in relation to a number of metering contracts entered into with gas suppliers in 2004.

These contracts were negotiated over a two year period, were voluntarily entered into by gas suppliers and delivered immediate and substantial reductions in charges for meter services, saving customers around £120m over the four years of their operation. Ofgem was consulted throughout this process of contract development and negotiation and has acknowledged that National Grid had no intention to breach the Competition Act.

We are convinced that the contracts do not infringe competition law and therefore believe that they should remain in full effect. We also believe that the £41.6m fine is wholly inappropriate. We will be lodging an appeal with the Competition Appeal Tribunal.

National Grid’s Chief Executive, Steve Holliday, said: "National Grid has been instrumental in helping Ofgem to develop competition in the UK metering industry, and we strongly believe we have never acted anti-competitively in the development of our contracts. Despite nearly three years of exhaustive analysis by Ofgem, we believe there is no evidence that National Grid has harmed consumers, competition or gas suppliers, and we are left with no option but to present our case to the Competition Appeal Tribunal.”

Source: National Grid

Institute for Energy releases report - “Distributed Power Generation in Europe: technical issues for further integration”

The electric power sector in Europe is currently facing different changes and evolutions mainly in response to the three issues at EU level - environmental sustainability, security of supply, and competitiveness. These challenges, against a background of growing electricity demand, may represent drivers for facilitating the further deployment of Distributed Power Generation technologies in Europe.

The Report focuses on the potential role of Distributed Power Generation (or simply Distributed Generation, DG) in a European perspective. More specifically, this work aims to assess the technical issues and developments related to DG technologies and their integration into the European power systems.

As a starting point the concept of Distributed Generation is characterised for the purpose of the study. Distributed Generation, defined as an electric power source connected to the distribution network, serving a customer on-site or providing network support, may offer various benefits to the European electric power systems. DG technologies may consist of small/medium size, modular energy conversion units, which are generally located close to end users and transform primary energy resources into electricity and eventually heat.

There are, however, major issues concerning the integration of DG technology into the distribution networks. In fact, the existing distribution networks were not generally designed to operate in presence of DG technologies. Consequently, a sustained increase in the deployment of DG resources may imply several changes in the electric power system architecture in the near future.

The Report on Distributed Generation in Europe, after an overview of the basic elements of electric power systems, introduces the proposed definition and main features of DG. Then, it reviews the state-of-the-art of DG technologies as well as focuses on current DG grid integration issues. Technical solutions towards DG integration in Europe and developments concerning the future distribution systems are also addressed in the study.

The Report is downloadable at http://ie.jrc.ec.europa.eu/ (under Scientific Publications 2008) and its complete Abstract is hereunder transcribed.

Source: Smart Electric News