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MINISTRY OF ENERGY
Smart Meters and Smart Grid:
An Ontario Case-Study
Jon NormanOntario Ministry of Energy
The World Bank
March 6, 2012
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MINISTRY OF ENERGY
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What is Smart Grid?
Telecom Network- Phone- Internet- Smart Meter
communicationinfrastructure
Intelligence/Communications Layer
Conventional GridSMARTGRID
Status /Control
Status /Control
Status /Control
Diagram source: EPRI
Diagram source: EPRI
Conventional gridinteroperates withsmart gridintelligencethrough enhanceddevices:- Smart meters
- Auto Switches- IntelligentTransformers
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MINISTRY OF ENERGY
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Why does Ontario need a Smart Grid?
Driven by Aging infrastructure and changing
objectives (e.g. environment) Evolving opportunity to apply
technologies that allow intelligent,two-way communications & control.
Generally, transmission systems arealready equipped with thesecapabilities. Distribution systems aremuch less flexible and efficient.
Smarter grids can enable: more efficient grid operation, connection of diverse and flexible
generation, including renewables, enhanced conservation opportunitiesfor customers
adoption of new and innovativetechnologies, like electric vehicles.
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MINISTRY OF ENERGY
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Ontarios Drivers
Each jurisdiction has its own particular drivers for advancing the smart grid.
These shift with time, highlighting the fact that the smart grid is a journey rather than adestination.
Ontario investment into smart grid
More than $1 billion smart metering infrastructure
Additional $390 million per year over next 5 years (renewable integration, load management)
Ontario has several factors that are leading it toward a smarter grid:
1. Aggressive integration of renewable, distributed generation into the distribution grid
2. One of North Americas most ambitious conservation targets
3. One of the largest smart meter and time of use rollouts globally4. Significant effort to create conditions for accelerated electric vehicle adoption
5. Ability to leverage existing leading edge assets in manufacturing, research, and electricitydistribution systems
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MINISTRY OF ENERGY
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Smart Metering in Ontario
Ontario is the first jurisdiction in North America to roll out smart meters and the first in theworld to introduce mandatory time-of-use pricing.
Commitment to jurisdiction-wide smart metering and time-of-use pricing announced in 2005
Progress to-date:
More than 4.7 million meters are installed (99 percent of households and smallbusinesses).
More than 3.6 million customers on time-of-use rates
Costs
$ 1 billion initiative for smart metering and wireless infrastructure & control systems
$ 90 million centralized data management centre
Costs recovered through electricity customers (about $3 per meter/month)
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MINISTRY OF ENERGY
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Modernize outdated meter infrastructure Enable time-of-use pricing and conservation Provide basis for smart grid / smart homes
Gives customers ability to movediscretionary load to cheaper hours.
Reduces long-term cost of electricity supply
Increases awareness of consumption
What do SmartMeters do?
Benefits to Consumers:
Facilitates conservation and demandmanagement programs
Accurate meter reads (no more estimates)
Timely information to help manageconsumption
Better customer service (e.g. outagesautomatically known)
Benefits to the Electricity System:
Reduces the number of LDC fieldvisits to read and service meters
Reduces tampering and theft ofelectricity
Provides significant operationalbenefits (better outage managementand system control)
Environmental benefits as a result ofload shifting
Savings in avoided/ deferred capacityinvestments (new generation andtransmission)
Smart MeterBenefits
TOUBenefits
Smart Metering Benefits
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MINISTRY OF ENERGY
Time of Use Pricing Structure
Time-of-use rates provide incentives to shift consumption away from peak periods, whenelectricity is costly and/or environmentally damaging to produce.
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MINISTRY OF ENERGY
Functional Specification for Smart Meters
Meet all applicable laws (health, safety, etc)
Acquire, date and time stamp all meter reads at theend of each hour
Transmit meter reads to the distributors AMCC and
MDM/R by 5 a.m. following the end of each dailyread period
Achieve a prescribed minimum success rate inacquiring and transmitting meter reads (98%) and aprecision measure (at least 0.01 kWh)
Maintain time accuracy within a 1.5-minutevariance, as measured against Official Time
Provide the necessary reporting capabilities toenable distributors to monitor the health of thesmart metering infrastructure
Security requirements
LAN
AMRC
AMCC
Meters+ AMCD
MDM/R
WAN
CIS +Billing System
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MINISTRY OF ENERGY
Benefits
In the ramp up to province-wide TOU rollout, several pilot studies were completed byOntario LDCs which indicated that time-of-use pricing contributed to reduction inconsumption of electricity during peak demand hours.
Early results show load shifting impacts in the range of 3-5%
Smart meters have also:
Helped utilities manage their systems better as increasing amounts of renewableenergy come onto the distribution system.
Provided automatic notification of outages and improved ability to detect source ofoutages
Enabled a comprehensive database for improved services and potential for openenergy data
Provided a platform for smart home energy management systems.
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MINISTRY OF ENERGY
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Objectives for a Smart Grid in Ontario
The Green Energy Act set aframework for the development of asmart grid
Over 80 distinct utilities acrossprovince with different objectives
Ontario government has:
Defined smart grid objectives forthe province
Established responsibilities ofstakeholders
Identified areas for coordination
The Green Energy Actestablished what a smart
grid should do for Ontario.
Power System Flexibility
Enable more renewables and better
efficiency in grid operation
Adaptive Infrastructure
Encourage more innovation and
ensure adaptivness to future
conditions (e.g. electric vehicles)
Customer Control
Enable more conservation through
a shift to smarter homes
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MINISTRY OF ENERGY
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Customer Control
Installation of a
Smart Meter
Implementation of
Time of Use Rates
Increase visibility ofprice and
commodity usagefor customer
Add load control for
Air Conditioningand Appliances
Customers are
active participantsin Conservation
Complete Now In various stages of piloting
More opportunities for conservation and energy management
Focus Area Expected Outcomes
Customer Control
Smart meters Time-of-use rates Home Energy Management Load control
More Conservation
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MINISTRY OF ENERGY
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Enabling Renewables and Power System Flexibility
Feed-in Tariff (FIT) and
Micro FITLimited SystemVisibility/Control
Smart Grid Capacity
Building / DemonstrationProjects
Implement Projects to
give information on real-time supply to gridoperator
Seamless integration of
distributed generation;Better Grid Efficiency;More flexible operation
Now Advanced stages of piloting, e.g. Hydro Ones Smart Zone
Power SystemFlexibility
Distribution Automation Customer based micro-generation More distributed generation,
used more efficiently
Increased visibility and controlover grid operations
Increased efficiency and flexibility managing distribution networks
Focus Area Expected Outcomes
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MINISTRY OF ENERGY
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Adaptive Infrastructure
Installation of a SmartMeter and
Implementation ofTime of Use Rates
Charging InfrastructureFund
Capacity Building /Demonstration
Projects, particularlycharging infrastructure
Enablement of new products, services, and
marketsMore efficient and flexible grid operation
Near Complete Now Future
MoreRenewables
More innovation and flexible grid infrastructure
AdaptiveInfrastructure
Mobile charging infrastructure to support EVs Storage opportunities Keeping room for innovative technologies
More Innovation
Focus Area Expected Outcomes
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MINISTRY OF ENERGY
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Need for Caution
.Even so, 2 key facts are likely to meancontinued move to smarter grids:
1. The technology exists and is largelyproven. Increasingly it is being integratedon electricity systems.
2. BAU unlikely to be sustainable
Environmental and securityconsiderations in the west
Reliability and load growth indeveloping world
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MINISTRY OF ENERGY
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Drivers for Smart Grid
Drivers
System efficiency (operational costs)
Aging infrastructure
Environmental benefits (Integrating renewablegeneration)
Improving conservation opportunities
(demand response) Security
Barriers
Mature (and rigid) regulatory system
Benefits are marginal rather than ground-changing
Drivers
Power system challenges
Reliability (several hour interruptionsper day)
Growth (tremendous load growth, notenough supply)
Rural electrification (microgrids) Theft of electricity
Barriers
Cost could be prohibitive, depending on stateof specific technology
Institutional capacity & public education
Primarily asset management strategy Can be integral part of system development
Western Jurisdictions Developing Countries
Lessons are often mutually relevant
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MINISTRY OF ENERGY
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Lessons from Ontario
Lessons from Ontario:
Dont get ahead of population
Need to understand objectives
IT implementations can be more complex than at first appear
Early adoption risk, but.
We tend to overestimate the effect of a
technology in the short run andunderestimate the effect in the long run
Roy Amara