“A Guide To Smart Grid Planning”eoplugin.commpartners.com/NRECA/100406/100406_Presentation Sl… · 1. Background and Drivers of the Smart Grid: “Situational Analysis” 2.

Power System Engineering, Inc.


April 6, 2010

“A Guide To Smart Grid Planning”

© 2010 Power System Engineering, Inc.


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Today’s Agenda

4

• Background and drivers of the Smart Grid

• Strategic and Tactical Goals for the Smart Grid

• Developing a Smart Grid Plan specifically for your cooperative



About the Presenters

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Rick Schmidt is presently leading several smart grid related projects for Co-ops and other utilities. Rick as well as other PSE staff have authored several CRN reports relating to Demand Response, AMI, Communications, and other automation technologies. His firm Power System Engineering, Inc. is the consulting/engineering firm supporting the NRECA with the Demonstration Grant. Rick has over 30 years of industry experience with the last twelve years as a consultant. Rick has an MBA from Cardinal Stritch University in Milwaukee.

Chris Ivanov is an economist in Power System Engineering’s Economic and Market Research group. He has prepared, evaluated and managed electric load forecasts, surveys and economic analyses for a wide range of clients including distribution and G&T cooperatives. His current focus is on assisting utilities with DSM studies, such as NRECA Demonstration Grant. Chris has a Masters in Applied Economics and is currently finishing his MBA.

Presenter Names: Rick Schmidt & Chris Ivanov

Power System Engineering, Inc.Web Site: www.powersystem.org

[email protected]:

April 6, 2010


A NRECA/CRN Webinar

“A Guide To Smart Grid Planning”




Agenda1. Background and Drivers of the Smart Grid:

“Situational Analysis”

2. Strategic and Tactical Goals – “What the Smart Grid Should Do”

3. Developing a Smart Grid Plan – “For Your Cooperative”– Technology Strategic Plan – What to deploy in what order?

– Smart Distribution

– Smart Home and Demand Response

– Security & Interoperability

– Project Management and Staffing

– DOE Smart Grid Programs

– Summary from Learning Session7



What is a Smart Grid?

Despite all the buzz, the Smart Grid is still not well understood:

• Many pieces (doesn’t come in a box)

• Airy definitions

• Varying goals (depends who you ask)

• Reaching its potential—a big undertaking

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What is a Smart Grid?

Not a Definition, But a Start:

The Smart Grid Vision is …

… numerous communications, software/hardware systems and devices working to improve the grid’s efficiency, and promote affordable electricity and sustainability.

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What’s Driving Smart Grid Deployment?

• Increasing demands on improved reliability.

• The Northeast blackout of 2003 resulted in a $6 billion economic loss to the region. This blackout jump started national Smart Grid planning.

• Aging utility workforce.

– 40% to 50% eligible to retire within the next 10 years. Need to do more with fewer personnel.

• Increasing power demands on aging infrastructure.

• Increasing energy costs.

• Increasing regulatory demands.

• Increasing environmental concerns.

• Security – attack resistant grid.

• Renewable % increasing.



Agenda1. Background and Drivers of the Smart Grid:

“Situational Analysis”








– Summary from Learning Session11



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Strategic and Tactical Goals –What the Smart Grid Should Do

The emerging smart grid is expected to address many of the present challenges in the electrical power industry.

•Smart Grid Expectations: – Make the electric grid more reliable – More secure and resistant to malicious attacks (security)– Self healing – Reduce peak demand – Other goals…




• Ability to explore the state of the grid at large scale and then switch to see specific details at street level.

– Rapid information about outages and power quality.

– Require less human intervention.

– Provide automatic detection of overload conditions and appropriate re-routing

• Two-way flow of electricity and information and will be capable of monitoring everything from power plants to customer performance and individual appliances.

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Strategic and Tactical Goals –What the Smart Grid Should Do



Smarter Grid Building Blocks & Evolution

Smart Grid

AMI

Communications

System Integration

Data Management

DA.GISOMSSCADA

The foundation & layers:

Somewhat like building a cathedral.

Today’sApplications

From Strategic Communication Plan

Chronologica

l O

rder

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Connected Home (HAN)(Smart Meter, Thermostat,

Load Management & Dynamic Pricing

Home Area Network

ServerServer

Wide Area Network (WAN)Enterprise System

Communications

Shared communications network

Enterprise system Interoperability (AMI,

OMS, SCADA, CIS, GIS, Databases, etc.)

Utility Data Center

Substation Digital Equip.

TCP/IP Communications

Cap Bank Controls

Voltage Regulator Controls

AutomatedSwitch ControlsUnderground

Switching

Typical Pieces of the Smart Grid




Agenda1. Background and Drivers of the Smart Grid: “Situational

Analysis”





– Security and Interoperability



– Summary from Learning Session

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• Dependent on the co-op’s starting point…

– Begin by understanding the most pressing present challenges by benchmarking against peers?

• What is the present reliability situation versus peers?

• What is the present member satisfaction level?

• What is the present retail and wholesale rates situation?

• What amount of automation technology is in place now?

• Are you getting all you can out of your present technology investments?

• What is the debt to equity ratio and access to borrowing?

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What to Deploy In What Order?



• Status quo may not be good enough!

– Many utilities will be making major investments with automation technologies that will improve reliability.

– Various other new pricing opportunities will also be introduced such as dynamic pricing and Critical Peak Pricing. Risk exists without having the core infrastructure for these services.

• Selecting a overall strategy of technology adoption will become more obvious with a decision to be:

– Leaders/innovators

– Fast-followers

– or Laggards

What to Deploy In What Order?

Nothing wrong with being a laggard if it makes good strategic sense for your co-op.

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Fourth quartile (Lowest 25% of the total group)

Third quartile (25% to 50% of the total group)

Second quartile (50% to 75% of the total group)

First quartile (top 25%)

Utility Comparison of Technology Use

Present Position Compared With Other Peer Utilities

Sample Comparison. Where is your utility?

Tec

hnol

ogy

Leve

l of

Mat

urity

Technology Maturity Use Comparison

Technology Maturity Level?

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Developing a Technology Strategic Plan

Benchmark Customer Satisfaction

Metrics

Benchmark Customer Satisfaction

Metrics

Benchmark Reliability

Metrics

Benchmark Reliability

Metrics

Benchmark Staffing Levels

With Peers

Benchmark Staffing Levels

With Peers

Complete Business Cases for

Possible Automation Technology Selections

Complete Business Cases for

Possible Automation Technology Selections

Create Technology RoadmapCreate Technology Roadmap

Develop Plan to

Address Smart Grid Technology Roadmap

Develop Plan to

Address Smart Grid Technology Roadmap

Benchmark Customer

Rates

Benchmark Customer

Rates

Consider Various Technology ApplicationsConsider Various Technology Applications

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Present StatePresent State

GapAnalysis

GapAnalysis Transition PlanTransition Plan

Desired StateDesired State

Automation Roadmap –AMI, DA, SCADA, MWM, AVL, Others

Automation Roadmap –AMI, DA, SCADA, MWM, AVL, Others

Smart Grid ReadySmart Grid Ready

Identify High Value ProgramsIdentify High

Value Programs

CommunicationsRoadmap

CommunicationsRoadmap

ImplementationImplementation

Developing a Technology Roadmap

Smarter DatabaseSmarter Database

Distribution AutomationDistribution Automation

Need for Demand Response

Need for Demand Response

Future Automation Programs

Future Automation Programs

Current Programsand Assets

Current Programsand Assets

IdentifyBusiness Goals

IdentifyBusiness Goals

What are Industry Trends?

What are Industry Trends?

Available Staff Resources

Available Staff Resources

Current LimitationsCurrent

Limitations




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PSE Project Methodology

Strategic Planning Approach

• Continuous interaction with project team• Formal project management process• Best balance between technology costs and functionality• Address security, interoperability, and regulatory requirements• Risk mitigation assessment• Create the most favorable contract terms and costs• Formal testing

Strategic Planning Approach

• Continuous interaction with project team• Formal project management process• Best balance between technology costs and functionality• Address security, interoperability, and regulatory requirements• Risk mitigation assessment• Create the most favorable contract terms and costs• Formal testing

Moving Forward Towards Deployment



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1. Background and Drivers of the Smart Grid: “Situational Analysis”









Agenda



The Need for Distribution Automation (DA)• Aging Infrastructure:

– Requires enhanced monitoring for reliable service.

• Increased reliability requirements:

– Increased expectations from customers.

– CAIDI, SAIFI, SAIDI etc., used to benchmark reliability performance

• Information era demands higher power quality:

– Estimated $52 billion annually in the US lost due to poor power quality.

– Loss due to sustained interruptions of five minutes: $26 billion.

• Increased demand for power:

– High cost of peaking units, longer gestation of base load plants combined with the carbon costs as well as the negative publicity associated with fossil fuel technologies are becoming strong reasons for utilities to implement advanced DA.

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Benefits of Distribution Automation (DA)

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DAProgram

Types

Improved Reliability

Improved Performance

Indices

Increased Revenue

Reduce Losses

Improved Asset Life

Smart Switching

Conservation Voltage Reduction (CVR)

Power Factor Improvement (VAr)

Fault Indicators



Deployment of DA - Smart Switching

• Automatically determine section of line that is experiencing problems.

• Isolate the fault to a small segment of the system thereby increasing revenue/improved reliability.– DA communicates back to dispatch, providing more

effective crew dispatching and routing.

• Makes crews more effective and productive.– Faster restoration time.

– Less patrolling time.

First, Maximize Today’s Applications

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no

Sub 1 Sub 22 4 5 6

Sectionalizing Device ---closed

Sectionalizing Device ---open

1

71

8

3

Customers 1

Customers 2

Customers 3

• When Fault A occurs, customers 2 & 3 experience“blinks” & outage.• DA detects the faulted area and then initiates network reconfiguration by opening switch 3 and closing switch 4.

Fault A

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Smart Switching




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VAr ControlWhat is Distribution VAr Control?

• VAr control corrects for Power Factor under various loading conditions. An assessment is required to determine appropriate amount of VAr correction.

• Installing both fixed and switched capacitors will achieve Power factor improvement.

Why implement VAr Control? • To improve distribution voltage profile, especially

for long feeders and variable load conditions.

• To improve customer voltage profile.

• Reduce wholesale Power Factor penalty. Capacitor Bank- Cooper Power Systems

• To reduce line losses (I2R) resulting in kWh savings and improved system efficiency.

• Can be used in conjunction with CVR.

• Dynamically dispatch VArs based on load to improve Power Factor



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Conservation Voltage Reduction - CVRWhat is Distribution CVR?

• CVR lowers system voltage under peak demand conditions resulting in lower demand. An assessment is required to determine the appropriate step(s) of voltage reduction to not impact end user ANSI voltage standard.

• Substation regulator or transformer LTC controls can be programmed to reduce voltage in step increments.

• CVR is coordinated using a SCADA system.

Why implement CVR? • For every 1% in voltage reduction, approximately 0.8% demand reduction can be achieved. This can be a significantsavings during peak demand conditions.• Switched capacitors can be used in conjunction with CVR

control to optimize CVR benefits.

• Overall Cost Reduction

Distribution Programs



� Conservation Voltage Reduction (CVR)

� Conservation Voltage Reduction or CVR is the practice of lowering voltage on a distribution system with the objective of decreasing coincident peak demand (MW).

� Typically studies have shown that load will decrease between 0.72% - 1% for each 1% reduction in voltage

� Result: Reduce distribution system coincident peak

� Deployment Steps

� Base line your system

� Analyze & Identify

• Low voltage spots

• Voltage Vs Energy Savings

• Would VAR compensation make sense?

� Conceptual & Detail Designs

Volts

Feeder Distance (%)

Typical Profile

Desired Profile

Energy Savings Potential

CVR Applied:Peak Demand

Savings

Feeder Voltage Profile

Conservation Voltage Reduction (CVR)

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Faulted Circuit Indicators (FCI)

• Fault Indicators provide visual indication of faults that helps in quickly tracing the fault location on an electrical distribution line.

• Types:

– Overhead: Provides visual indication of overhead circuit fault.

– Underground: Usually located in underground vaults, they provide visualization of faults in underground systems. Many vendors provide a wireless interface to check the status of FCI. Notable developments include:

– a remotely-programmable overhead line indicator with wireless communications

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Smart Home and Demand Response

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Demand Side Management Components and Definitions

“Changes in electric usage by end-use customers from the normal consumption patterns in response to changes in the price of electricity over time, or to incentive paymentsdesigned to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.”U.S. Department of Energy

DEMAND RESPONSEPeak Clipping & Load Shifting

DEMAND SIDE MANAGEMENT

ENERGY RESPONSE

Direct Load Control Innovative Pricing CPP

, Conservation

Less Output to Consumers

Energy Efficiency




Direct Load Control• These are not new programs. Many cooperatives have had

these programs since the 1980s.

• Control appliances typically could be:

– Water heaters

– AC units

– Space heat

– Irrigation

• What is New with Direct Load Control? AMI will now provide two-way verifications with direct load control programs.

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Historically, load management has been provided over One-

Way VHF Radio and Commercial Paging

Technology .



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Illustrative Load Reduction Simulation

Smart Thermostat Example: 4 Degree Shift in Thermostat - on hypothetical single family home.



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Demand Side Management Components and Definitions

“Changes in electric usage by end-use customers from the normal consumption patterns in response to changes in the price of electricity over time, or to incentive paymentsdesigned to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.”U.S. Department of Energy

DEMAND RESPONSEPeak Clipping & Load Shifting

DEMAND SIDE MANAGEMENT

ENERGY RESPONSE

Direct Load Control Innovative Pricing CPP

, Conservation

Less Output to Consumers

Energy Efficiency




Rate Design Options

• Load Management Rates.

• Dynamic Pricing.

– Real-Time Pricing.

– Time of Use (TOU).

– Critical Peak Pricing (CPP).

– Critical Peak Pricing w/Time of Use.

• Inverted Block Rates.

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Peak Reduction

Energy Conservation



Dynamic Pricing

• Not necessarily real-time prices, could be pre-set TOU.

• Billing for electricity according to when it is used.

• Provides an incentive to reduce consumption during peak times, but relies on customers to take action.

• Requires integration of capable metering, billing, device automation, communications and data management systems, i.e. early stage smart grid.

• End goal is to better align the cost of producing electricity with the retail price charged to customers.

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Real Time Pricing• Pricing structure that charges hourly real-time prices for

consumption based on some index or market-clearing price.

– Provides a “transparent” price signal to customers.

– Very complex and difficult to explain.

– Has typically only been made available for large C&I loads.

– Does encourage and can be effective at causing load reductions during high cost hours.

– However, complexity may preclude behavior modification.

– Have to play by market rules.

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Critical Peak Pricing

• Rate structure that prices peak capacity or energy costs into “critical” peak hours.– Consumers notified ahead of peak.

– Peak hours predetermined, i.e. 4-hour window.

– Typically 40-80 hours per year.

– Retail per kWh price may be 4-6x higher than standard rate.

– Could be provided as a rebate (carrot) vs. charge (stick).

– Can include or exclude Time-of-Use.

– Increase success/efficiency if coordinated with power supplier.

– Are typically offered as voluntary or pilot programs.

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Critical Peak Pricing - Rate Structure

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Published in the January 2008 NRECA CRN Report, AMI: Value Beyond Meter Reading

Example of CPP Rate Design

Rate PeriodPresent Rate (per kWh)

New Rate (per kWh)

% of Annual Time on Each New Rate

Off Peak

$0.08

$0.065 85%

Peak $0.09 14%

Super Peak $0.25 1%



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Smart Thermostat Programs? Similar to CPP. Enables a utility to inform customers about a near-

term/impending "peak" or critical period, in which the customer will begin throttling up the thermostat during the hot summer days. The goal is not to shut off the air-conditioning but to adjust the timing.

Why do it? Primary reason: financial and cost avoidance. It has been introduced for some of

the same reasons as direct load control was introduced at utilities years ago –shift energy use off the peaks to the extent as possible.

Smart Thermostat Programs




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Cellnet+Hunt ecoMeter

Energate Pioneer

PRI Home Energy Controller

Ambient Energy Orb The Energy Detective

Aclara IHD

SRP M-Meter

Energy Monitoring TechnologiesEUT-200Greenwire

Energy Monitor

Power Cost Display (ECSI)USCL EMS 2020

Kill-A-Watt

Cent-a-Meter

Brultech EML-2020

Some Available In-Home DisplaysRefer to CRN’s report on Determining the Effectiveness of In-Home Energy Use Displays for more information on this.

Itron Aztech



Web Portals – For Home Automation

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Google cites figures showing that regularly viewing real-time energy use will prod people to cut electricityby 5 to 15% on average through behavioral changes.

Refer to CRN’s Tech Surveillance Article “Home Automation Networks: Will a Clear Winner Emerge?



• Use of a web site that contains energy efficiency and various forms of Time of Use Pricing announcements.

– This can be in place of a Home Display Unit, Load Management Switch, Smart Thermostat, etc.

Web Portals – Home Automation

Password Protected Public Web Site

Home

S e rv e rS e rv e r

Enterprise System

(AMI – Demand Response Manager &

Databases, etc.)

Utility Data CenterCo-op Web Site

Standard Internet

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Historical Consumption and

Price Data

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47










Agenda



48

NIST• NIST - National Institute of

Standards & Technology Second draft for commenting February 2010

– Power plants, substations and control centers, distribution system, servers, software systems field IEDs, meters, all the way from the home to the data centers “end to end”.

– “Essential to the reliable operation of critical assets”.




Six Steps to Security Compliance1. Follow the NIST “Smart Grid Security Strategy and

Requirements” Feb 2010 Draft Report

2. Based on the above NIST document, create a cyber-security policy for your Co-op

3. Identify critical assets and assess risks.

4. Deploy protective measures.

5. Monitor and manage networks on a regular basis to ensure compliance

6. Also plan for disaster recovery.

– NIST: National Institute of Standards and Technology 49



1. Understanding the regulatory environment

2. Assessing assets, deciding what’s important

3. Developing policies

4. Developing procedures

5. Training

6. Providing physical security

7. Perimeter protection

8. Malware protection

9. Software security

10. Financial and legal tools

11. Monitoring

12. Audit

13. Planning for failure

14. Reviewing and revising to keep everything current

Elements of Cyber Security Plan

And Testing, Testing and More Testing50



Integration of Applications

51




Smart Database Architecture

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CPP TOU AMI

SCADAFault

RecordingDemand Response

Smart Thermostat

Auto Sectionalizing

Volt/VAr Control

Databases of Field Applications

Distribution Automation

Enterprise Integration of Applications

OMSCISDAAMIEMS GIS



53

NIST: Long Term View of Interoperability & Security



54










Agenda




Project Management• More projects fail due to poor project management

than technology shortfalls.

• Smart Grid projects are often more complex than single technology deployments due to:

– Needs for a greater amount of integration.

– The needs to add more sophisticated databases.

– Multiple departments are often working together.

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Project Management MethodologyThe project management office (PMO), as defined by the Project Management Institute, is “an organizational body or entity assigned various responsibilities related to the centralized and coordinated management” of projects. The primary function of the PMO is to support project managers by:

1.Managing shared resources across all projects.

2.Establishing project management methods, standards and best practice.

3.Demonstrating leadership – coaching, training, and oversight.

4.Monitoring compliance to establish standards, policies and procedures.

5.Establishing standardized tools, templates, and documentation repository.



Project Managers Must

• See the big picture.

• Clearly document realistic and balanced costs, schedule, and objectives.

• Manage project scope and balance of cost, schedule, and objectives.

• Maintain management support.

• Motivate team.

• Leverage team skills.

• Maintain quality targets.

• Manage risks and respond quickly to problems.

• Manage schedule.

• Watch budget and costs.

• Review milestones.

• Assure attention to detail.

• Manage major contracts.

Most importantly - achieve accurate and timely communications among

the project team.57




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Agenda









– Summary of Learning Lessons



• Investment Grants

– 100 utility projects were selected across the US.

– $3.4 Billion in funds.• Projects split between:

– AMI projects.

– Demand Response.

– Distribution Automation.

– Others

• Demonstration Grants

– 32 utility projects.

– $877 million in funds:• Advanced Distribution

• Demand Response

• Hybrid Vehicle

• Smart Home

• Others

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DOE Smart Grid Programs



NRECA Demonstration Grant Winner• Enhanced demand and distribution management regional

demonstration - Install and operate of a suite of diverse smart grid technologies and aggregate the data from 23 rural electric cooperatives across 10 states.

• Technologies will include over 130,000 meters.

• Over 18,000 demand response switches.

• Nearly 4,000 in-home displays or smart thermostats and others.

• Voltage sensors and fault detectors.

• The demonstration data will be centralized for all sites and include studies on total demand, distributed energy resources, peak pricing, customer appliance control, and self-healing technologies.

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NRECA DOE Demo Grant Summary

61

Ty

pe

s

ParticipantsIHD/WP

Pilots

DR over

AMI (water

heater &

AC direct

load

control)

Interactive

Thermal

Storage

Smart

Feeder

Switching

Advanced

Volt/Var

Control

CVR

AMI

(DR

Program)

MDM

(DR

Program)

Comm

(DR & DA

Program)

SCADA

(Front

End

Master

System)

Adams Electric Co-op, IL X X X X X X X X

Adams-Columbia Electric Co-op, WI X X X X

Clarke Electric Co-op, Inc., IA X X X X X X X

Consumers Energy, IA X X X X

Corn Belt Power Co-op, IA X X X

Calhoun Co. ECA X X

Grundy Co. REC X

Humboldt Co. REC X X

Iowa Lakes EC X

Midland Power Co-op X

Prairie Energy Co-op X X

Delaware County Electric Co-op, Inc., NY X X X X

Flint EMC, GA X X

Kaua'i Island Utility Co-op, HI X X X X X

Menard Electric Co-op, IL X X X X

New Hampshire Electric Co-op, NH X X X X X

Nolin RECC, KY X X X X X X X X

Owen Electric Co-op, Inc., KY X X X X X X X X

Prairie Power, Inc., IL X X

Salt River Electric Co-op Corp., KY X

Snapping Shoals EMC, GA X X X X X X

United REMC, IN X X X X X X X

Washington-St. Tammany Elec. Co-op, LA X X X X X

Act

ivit

ies

Enabling TechnologiesDistribution Automation Demand Response (DR)



Share Results with the Industry

62

Sample of Hypothetical Demonstration Results



63

Agenda













Summary From Learning Session

1. Each co-op can create their own Definition of their Smart Grid Plan

2. Create a plan - what to deploy in what order – Business Cases

3. Select Programs – New DA, Demand Response, Substation Automation, get more out of present systems – AMI, GIS, other

4. Seek benefits with advanced integration and comply with new cyber security mandates.

5. Learn from others

6. Deploy with a solid project management plan

64



CRN Smart Grid Related Reports• CRN and the Smart Grid

– go to www.cooperative.com/crnand select Resources, CRN Guides, CRN & The Smart Grid”.

• AMI: Beyond Meter Reading

• Guide to Down Line Automation

• Communication Infrastructure for Electric System Automation

• Turning Data Into Useful Information, Problems and Potential Solutions for Electric Cooperatives

• Communication Technologies for SCADA, AMR, Mobile Radio, and Distribution Automation

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PSE would like to thank you for your time and the opportunity to speak at this event.

Rick Schmidt

VP, System Design and Communications

Direct: 608-268-3502

Mobile: 608-358-5661

Email: [email protected]

Christopher Ivanov

Economic Analyst

Direct: 608-268-3516

Mobile: 608-335-7858

Email: [email protected]

Website: www. powersystem.org

Thank You.




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2010 CRN SUMMITTheme: The Smart Grid for Co-ops

June 29 & 30

New Orleans

Find out more: www.cooperative.com/CRN

“A Guide To Smart Grid Planning”eoplugin.commpartners.com/NRECA/100406/100406_Presentation Sl… · 1. Background and Drivers of the Smart Grid: “Situational Analysis” 2.

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