Solution: Smart Grid

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Solution Smart Grid

• Detaching AC from MC
• Rate Decoupling
• Lowers consumption, therefore results in lower
  emission
• Facilitating two-way communication
• Increase Reliability
• More accurate pricing structures, hence lower
  prices for consumers

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2003 Northeast Blackout

• August 2003
• Lasted 3 days
• Affected 50 million
• 10 million Canada
• 40 million in U.S
• Eastern US and Canada
• Detroit to New York City and Toronto
• 10 billion (USD) in economic loses
• 3,000 fire calls in NYC alone
• 11 deaths

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AC Power Needs Frequency

• Interconnects regions of AC connectivity
  strictly regulate frequency (60 Hz)
• Frequency is dependent on load (demand) and
  supply.
• When there is an overload frequency drops

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North american energy reliabitity council
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Transformers More Than Meets the Eye

• Transformers and Generators both break down when
  the AC Frequency changes
• Generators speed up when frequency drop, overheat
• Current increases and causes Transformers to
  overheat and explode

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How to Control Frequency?

• Distributed Energy Systems generate emergency
  power onsite when supply drops, causing a dip in
  frequency
• But there still is a lack of communication about
  the real demand

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For Example
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Structure
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Independent system operators
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How the grid works
Market Structure
Smart Grid
SCADA
AMI
Generation
Transmission
Distribution
Substation
Privately Owned Power Plant (generation)
Meter
FERC/PUCs
PUCs
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Two-way Flow of Information

• Smart Grids
• AMI (Advanced Metering Infrastructure)
• PEM (Personal Energy Management)

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Customer Interface
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Whats Wrong with 1-Way Communication

• Prices reflect average, not marginal costs
• Consumers have little incentive to constrain
  electricity use when conservation is required
• Quantity demanded exceeds quantity available
• Create incentives for decreased electricity
  consumption during peak periods

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Advantages of Spot Pricing

• Real-time market information on prices and
  quantities demanded and supplied
• Provide incentives to reduce consumption during
  peak use periods
• Regulates supply on each transmission line
  through prices
• Encourages increased use in rarely used lines and
  decreased use in overcrowded lines
• Encourages increased use during non-peak periods

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Example

• Imagine a toll road where "permits" are auctioned
  off. 
• The price each person is willing to pay will
  depend on the number of people on the road
• Drivers will pay less for a crowded than a less
  congested road
• End result is traffic from otherwise crowded
  roads shifts to less crowded roads and congestion
  is reduced for everybody.
•  
• Similarly, spot pricing on a Smart Grid
  encourages consumers to use less crowded
  transmission lines.
• Electricity flow shifts from overused to
  underused lines
• Events leading to the 2003 blackout don't occur.

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The World is getting smart

• EU looking to implement single-grid by 2020
• Italian Government owned Utility furthest ahead
  with 30 million smart-meters
• New Zealand and Australian private market
  conducting smart-meters in most provinces
• Worlds 1st Smart Grid Boulder, Colorado

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Policy recommedation 1

• Modify EPACT 1252-11
• Directed States to either adopt or decline time
  based rate schedules to enable
• Real-Time/Dynamic Pricing via Customer Interface
• Demand Response
• Address the concerns of the States Deciding not
  to Adopt EPACT 1252 11

• Tennessee
• Delaware
• Utah
• Vermont
• Idaho
• Connecticut

• Iowa
• Virginia
• West Virginia
• Kentucky
• Montana

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Policy recommendation 2

• Cap Trade
• Strong implications toward energy degregulation
• Price Premium on Coal
• Provides incentives for RTP
• Alternative Energy
• Energy Efficiency

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Policy Recommendation cont

• With Real Time Pricing preliminary steps must
  be taken
• Guaranteed Rate of Return for installing
  infrastructure
• Decoupling (Volume based to Congestion based)
• Protection for Public Purpose Programs
• Low-Income
• Seniors

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Smart-grids