Delivering Benefits With A Smarter Grid September 2011

E N E R G YE N E R G Y

Delivering BenefitsDelivering Benefitswith a Smarter Grid

©2011 N i t C lti I

Navigant Reference: 850179

©2011 Navigant Consulting, Inc.

D I S P U T E S & I N V E S T I G AT I O N S • E C O NO M I C S • F I N A N C I A L A D V I S O RY • M A N A G E M E N T C O N S U LT I N G

Navigant Smart Grid Service Offerings

Navigant works with clients to develop Smart Grid strategies and implement Smart Grid programsimplement Smart Grid programs.

CompetenciesService Offerings CompetenciesVisioning Process and Strategic Objective

Development

Total Value Assessment and Dynamic Rates A aly i

Service OfferingsSMART GRID STRATEGY

Analysis

Business Analysis and Business Case Development

Strategic Option and Planning Development

Vision & Strategy

Business Case

e e op e t

PMO/ Construction Management / EVM

ARRA Reporting and ComplianceSMART GRID IMPLEMENTATION

Customer Interface and Change Management

IT / Systems Integration / Cyber Security

Smart Grid and Distribution Technology

Implementation Planning

Smart Grid Implementation

Monitoring & Evaluation

1©2011 Navigant Consulting, Inc.E N E R G Y

IT / Systems Integration / Cyber Security

We are entering the “Second Wave” of smart grid deployments where d d t di f th b i ill b iti l

Smart Grid Deployment Waves

deeper understanding of the business case will become critical.

Se o d Wa e

Future Waves“Addressing Strategic Needs”

Second Wave“Understanding the Business Case”

stment

• Targeted

First Wave“Laying the Foundation

and Learning”• Scaling up deployment• More rigorous business casesR

ate of Inves Targeted

deployment• Gradual build‐out• Continuous

cases• Cost recovery• Demonstrating value

Cumulative R

• Pilot programs and demos

improvement

C • Pilot programs and demos• Government incentives and subsidies

• Regulatory mandates


2015 20202005

Smart Metering and Advanced Metering Infrastructure

Smart metering and Advanced Metering Infrastructure will allow utilities and their customers to manage electricity consumptionutilities and their customers to manage electricity consumption.

Functionality• Real‐time load measurement and management by utilities

• Optimization of electricity p yusage by customers

BenefitsBenefits• Peak demand reduction• Lower meter reading and operations costoperations cost

• Faster restoration of power after outages

Sources: Elster, Navigant


Distribution Automation

Distribution automation technologies are being implemented improve reliability increase operational efficiency and save energyreliability, increase operational efficiency, and save energy.

Functionality• Feeder switching and reconfiguration

• Voltage controlg• Equipment health monitoring

BenefitsBenefits• Lower distribution operations and maintenance costs

• Higher reliability and power• Higher reliability and power quality

• Energy savings from customer equipment and distribution

Sources: S&C Electric, Cooper Power Systems


equipment and distribution

SynchroPhasor Technology

SynchroPhasor technology will monitor electrical conditions across regional grids and deliver that information to operatorsregional grids and deliver that information to operators.

Functionality• Wide area monitoring• System visualization• Advanced control applications• Advanced control applications

BenefitsBenefits• Higher grid reliability• Reduced transmission congestioncongestion

• Better management of variable renewable energy resources

Sources: Southern California Edison, Schweitzer Engineering Laboratories


DOE ARRA Smart Grid Programs

DOE’s ARRA Smart Grid Investment Grant and Demonstration programs have been a critical catalyst for US smart grid deploymentprograms have been a critical catalyst for US smart grid deployment.

Smart Grid Investment Grant Program Smart Grid Demonstration Program

American Recovery and Reinvestment Act Smart Grid Programs

• $3.4 billion in federal funding• $8.2 billion of total project value• 99 projects selected

• Regional Smart Grid Demonstrations• 16 projects selected• $435 million in federal funding

• Project categories:• Customer Systems• Advanced Metering

I f t t

• $877 million of total project value• Energy Storage Demonstrations

• 16 projects selectedInfrastructure

• Distribution Systems• Transmission Systems• Equipment Manufacturing

• $185 million in federal funding• $770 million of total project value

• Equipment Manufacturing• Integrated and Crosscutting

There are also ten Renewable and Distributed Systems Integration (RDSI) and


High Temperature Superconductor projects.

In the coming years, smart grid technologies will support higher functionality and grid automation

Increasing Smart Grid Functionality

functionality and grid automation.

• Leverage the sensors and communications networks installed during the first

Sensing and

Remote Control

Automation

wave

• Use the technologies to develop “apps” that enable

Sensing and Reporting

operational efficiency, resilience, and optimization

• Increase speed to impact• Standardize processes• Reduce cost• Reduce cost


Smart Grid Benefits

The resultant benefits will come from areas that have been difficult to demonstrate and monetize in the pastdemonstrate and monetize in the past.

Smart Grid BenefitsSmart Grid BenefitsSmart Grid BenefitsSmart Grid Benefits

FinancialFinancial

TypeType DescriptionDescription ExamplesExamples

Benefits related to utility or consumer costs that can be expressed directly in financial termsBenefits related to utility or consumer costs that can be expressed directly in financial terms

• Reduced T&D operations costs• Lower electricity bills for customers• Reduced T&D operations costs• Lower electricity bills for customers

Easier to monetize

ReliabilityReliability

can be expressed directly in financial terms.can be expressed directly in financial terms. • Lower electricity bills for customers• Lower electricity bills for customers

Benefits related to power interruptions or power quality, but that may not be easily expressed in financial terms.

Benefits related to power interruptions or power quality, but that may not be easily expressed in financial terms.

• Shorter power outages• Less severe voltage sags• Shorter power outages• Less severe voltage sags

monetize

EnvironmentalEnvironmental Benefits related to air polluting emissions.Benefits related to air polluting emissions. • Reduced CO2 emissions• Reduced SOx and NOx

• Reduced CO2 emissions• Reduced SOx and NOx

SecuritySecurity Benefits related to maintaining a secure energy supply and infrastructure.Benefits related to maintaining a secure energy supply and infrastructure.

• Reduced oil consumption• Fewer, or smaller blackouts• Reduced oil consumption• Fewer, or smaller blackouts

Harder to monetize


Source: Navigant

A Tool to Monetize Smart Grid Benefits

Navigant’s Smart Grid Computational Tool is based on a rigorous analytical framework being utilized for over 140 U S projectsanalytical framework being utilized for over 140 U.S. projects.

A I/A I/S a t id oje tS a t id oje t

Inputs Outputs

Data that Data that

AMI/Smart Meters, Automated Feeder and Line Switching

AMI/Smart Meters, Automated Feeder and Line Switching

Annual Generation Annual Generation

Monetary Value of up to 22 Benefits

Monetary Value of up to 22 Benefits

Smart grid project Assets, Functions, and Mechanisms

Smart grid project Assets, Functions, and Mechanisms

SGCTSGCT

corresponds to Impact Metricscorresponds to Impact Metrics

Data derived from estimates and

Data derived from estimates and

Costs, Number of Tamper DetectionsCosts, Number of Tamper Detections

Value of Service, Price of Capacity at Value of Service,

Price of Capacity at NPV Analysis of Project

NPV Analysis of Project

All Output is calculated

over

All Output is calculated

over SGCTSGCTassumptionsassumptions

Cost Parameters and Escalation

Factors

Cost Parameters and Escalation

Factors

Discount Rate, Inflation Rate, Population G h

Discount Rate, Inflation Rate, Population G h

Peak, Value of CO2Peak, Value of CO2of Projectof Project

SensitivitySensitivity

multiple years

multiple years

FactorsFactors GrowthGrowth

Sensitivity FactorsSensitivity Factors High and Low case Value of CO2

High and Low case Value of CO2

Sensitivity Analysis of Project

Sensitivity Analysis of Project


Source: Navigant

Achieving smart grid benefits will require metrics that demonstrate impact

Metrics to Demonstrate Impact

impact.

Performance metrics can be used to demonstrate smart grid impactPerformance metrics can be used to demonstrate smart grid impactSmart Grid

Strategy • Operational efficiency• Reliability improvement• Operational efficiency• Reliability improvement

to demonstrate smart grid impactto demonstrate smart grid impact

Systems Deployment

Lessons Learned

• Customer satisfaction• Customer demand profiles• Capital investment deferral

• Customer satisfaction• Customer demand profiles• Capital investment deferral

Performance

Capital investment deferral• Asset utilization• Electricity cost savings• Fuel savings

Capital investment deferral• Asset utilization• Electricity cost savings• Fuel savingsMeasurement • Fuel savings• Generation mix• CO2 reductions

• Fuel savings• Generation mix• CO2 reductions


KeyC O N TAC T SKeyC O N TAC T SKeyC O N TAC T SKeyC O N TAC T SC O N T A C T S C O N T A C T S C O N T A C T S C O N T A C T S

Forrest SmallDirectorBurlington, Massachusetts, USA+1 (781) 270‐8303 F S ll [email protected]

©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy.©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy.©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy.©2011 Navigant Consulting, Inc. 11

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Delivering Benefits With A Smarter Grid September 2011

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