Smart Grid Energy Analysis

Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue Pratt Institute PSPD: EMS 621f­ Energy Systems Management; Final Project Technology: Smart Grids / Sector: Residential/General

I. Executive Summary Smart Grids and related technology provide a holistic strategy to increase energy efficiency related to energy production and transmission. The technological advancement of the energy grid modernizes the distribution system of electricity, allowing the components to operate efficiently. This grants an opportunity to reduce energy consumption, increase power efficiencies and modernize transmission and distribution services to effectively plan for the implementation of cleaner, more reliable and affordable energy, thus in accordance with the energy goals of PlaNYC 2030. By taking a multi­dimensional, phased approach that relies heavily on a specific smart grid technology at each phase, New York City can engage residents, utility distribution companies, and governing agencies in the path towards a more sustainable energy profile.

Targeting the residential sector for initial smart grid applications and eventually amplifying the initiative’s scope to eventually encompass the entire city, New York can achieve up to 25% in peak usage reduction, 30% reduction in distribution losses, and dramatically cut the risk of costly power failures by 2030.

Smart grids are composed of several technologies, which work to reduce peak power usage, monitor demand and usage, control transmission to improve load matching, and provide greater system­wide reliability. Technologies, programs, and marketing strategies are implemented through short, mid, and long term initiatives, designed to scale up NYC’s smart energy grid from the single unit to a city­wide scale. Initial implementation occurs at residential units, and includes technologies such as smart appliances and devices and Home Area Networks. These technologies are implemented within the first 4 years of the program, and take advantage of current end­user incentive programs, building code updates, and retail market rebates on products to facilitate the retrofitting and upgrading of home devices, appliances, and systems. Smart grid visioning and implementation at this level must be easy, with workshops initiatives and without interfering with people’s everyday lives. From year 5 to year 8, these Home Area Networks are connected into small microgrids, utilizing smart metering to combine into Field Area Networks, monitored via Distribution Automation Controls. These FANs are developed in partnership with power distribution utilities, with the aid of regulations, national and state grants, and tax rebate programs. At this state utility companies are benefited by eliminating the risk of outages during electricity peak demand. From year 9 until the PlaNYC target year of 2030, microgrids will be connected and controlled by utility distribution companies into Wide Area Networks, and coordinated via Enterprise Integration. With oversight from the NYC Department of Energy Management, perhaps through a specific Smart Grid department aiming for the city to be controlled as a database of electricity generation and reducing its dependence on fossil fuels.

The fully implemented New York City smart grid will provide typical smart grid benefits such as improved power distribution and reduce peak loads and outages, and serve as the basis for increased distributed generation. A phased transition into the smart grid will allow New York City to achieve its energy saving 1

Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue goals outlined in PlaNYC, transforming our city into a global energy leader and innovator.

NYC SMART GRID PLAN SUMMARY DIAGRAM:

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Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue

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Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue

II. Technology: Smart Grids

prepared by: Leonel Lima Ponce

A. Basics of Technology The term “smart grid” has no concrete and singular meaning. It can define an entire system that reacts efficiently to fluctuations in demand while managing system capacities in a safe manner. The ability of a system to isolate sections under stress into micro­grids, keeping blackouts from cascading beyond localized branches, also determines its “smartness.” Alternatively, a smart grid actually modifies demand, specifically during peak usage times, by changing operations of end­use appliances and notifying consumers of their 1​ usage patterns ​ . In order to achieve the broadest possible impact on energy efficiency and consumption,

along with related greenhouse gas emissions, any energy plan inclusive of smart grids must tap into each scale and level of technology available, eventually linking each component and micro­grid into a larger, interactive system that can lower demand, cut down on peak usage, and distribute energy more efficiently and effectively through New York City.

To implement smart grids and systems in a cohesive order and scale, we must first identify each technology, its logical phasing of implementation, and potential energy savings. Since smart energy technologies vary in scale, a logical chronological progression of implementation from short term to long term starts at the household and building scale, followed by a neighborhood or district scale, and finally full city implementation. While implementation strategies are discussed later, it is crucial to delineate which technologies are feasible for each phase.

B. Technologies, Phasing of Implementation 1.SHORT TERM (1­4 years) Household/Building Scale In the short term, or the first 4 years of our program, implementation of technologies will concentrate at the home scale; this includes smart appliances and Home Area Networks.

Smart Appliances Increasingly common in today’s households, smart appliances are pre­programmed to save energy and lower power consumption of typical household equipment. “Smart Appliances” represent a modernization of the electricity usage system of a home appliance that enables monitoring, protection and automatic 2​ adjustments to an owner’s needs ​ . One of the principal benefits of smart grids is the interactive approach to

resource consumption and demand; this starts with the inclusion of smart appliances that can alter energy consumption automatically. Smart appliances and devices have recently evolved, can now be regulated in relation to energy demand elsewhere in the system. During demand peak, appliances may be turned off or cut off from the grid without consumer interference, alleviating loads on stressed portions of the system: Pacific Northwest GridWise pilot project, devised by Pacific Northwest National Laboratory.

Two demonstration projects in 300 homes around Olympic Peninsula in Washington.

Installed demand­response thermostats and water heaters that can be programmed to lower target temperatures during peak demand periods, and Grid Friendly Appliance control 4

Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue ​ chips that turns off appliances when it senses instability in the grid 1​ .

After implementation of smart appliances, transmission systems must begin to shift over to better transmit

data between households, and thus form the foundation for eventual microgrids.

Home Area Networks (HAN) Home Area Networks aggregate smart technologies at the device level into networks within a single premise. Systems such as building management systems, programmable thermostats can communicate over one or multiple networks, optimizing performance and efficiency. Electric utilities are looking to leverage these networks to provide relief during high demand periods (demand response) by communicating through 3​ some type of home gateway bridging utility and home networks ​ .

2.​ MID TERM​ (5­8) Neighborhood / District Scale After improving the performance of home devices and networks, the next step in the development of a smart grid is the transitioning of electricity distribution into communications and data infrastructure. The most efficient way to do this is through microgrids that operate at a local or neighborhood scale. Various utilities are beginning to experiment with these smarter, more responsive microgrids, designed to avoid disaster without human intervention: But in a truly smart grid, the analogous programs would run in processors attached to the various key components of the grid, and would be fed by a rich stream of real­time data flowing in from sensors all over the grid. In principle, [...] such a smart grid could be not only self­managing, but ‘self­healing’. [...] the processors in the future grid will be able to ‘localize and anticipate the consequences of disturbances,...’ 4​ ​ .

Coupled with grid configurations isolating specific sections of the system in case of failure, this interconnected system of sensors can fill in for human response immediately after a disturbance. Smart grids can evolve beyond blackout prevention, providing enhanced services and savings for customer and provider. In order to achieve this scale of implementation, three technologies must be implemented: cabling for communications data transmission, smart metering, and Field Area Networks.

Smart meters Proper control of power distribution between several HANs can only be accomplished through smart metering technologies. A smart meter records consumption of energy in short intervals, communicates that information back to the ​ utility​ for monitoring and billing purposes. Smart meters enable two­way communication between the meter and the central system. Unlike home energy monitors, smart meters can gather data for remote reporting. Such an Advanced Metering Infrastructure (AMI) enables two­way communications with the meter, so that users and utilities may monitor usage through voltage and current levels. With constant monitoring, utilities control the amount of power sent to each line, and detects surges in power that may cause an outage.

Moreover, American utility companies are installing smart meters in distribution nodes, substations, and homes throughout the country. SunWave of New Jersey and other power companies have installed 5

Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue pole­mounted solar cells that not only help bring a little extra energy into the grid, but also contain “communications capabilities that provide utilities with an energy snapshot of power passing through the grid 5​ at that location” ​ . Meters along the grid constantly gather data on energy usage and transmission, allowing

power utilities employ resources more efficiently.

Field Area Networks (FAN) Once advanced and smart metering are set up at each HAN and within the distribution system, microgrids can be developed as Field Area Networks. This network’s scope includes devices communicating over one or more networks, between the individual service connections and backhaul points leading to the utility.

Distribution automation and control (DAC) devices manage the flow of energy through the system, given information provided by the meters. A Field Area Network is the most widespread communications network 3​ an individual utility can install within its jurisdiction ​ .

3.LONG TERM (9+ years)​ ​ Scaling from microgrids to general grid (city scale)

Once microgrids run by distribution companies are set up, connecting these FANs into a larger, more responsive system depends on added coordination and capacity.

Wide Area Networks (WAN) This zone is the bridge between FANs and the utility controls, including communications from control centers 3​ to the substations ​ . Due to the large scope of WANs, control centers must coordinate power transmission

between distribution and transmission companies, and possibly power generating companies.

Enterprise Integration In order to connect these various WANs into a city­wide system, Enterprise Integration through data, electricity, and power utilities must occur, connecting a variety of products and systems into one cohesive network: Enterprise Integration identifies the connection of disparate applications needed to drive the utility business needs. This typically includes applications [...] such as outage management systems (OMS), graphical information systems (GIS), distribution management systems (DMS), energy management systems (EMS), customer information systems (CIS), meter data management systems (MDMS), or even an enterprise resource planning (ERP) system. Common practice is for each of these systems to be supplied by a different vendor, leading to difficulties in managing the data needed to run the utility business. The industry is moving toward common information model (CIM) development and away from proprietary ​ integration development 3​ .

Integration issues in present automation systems that manage transmission and distribution networks, along with the interface codes and standards required to enable a more reliable and smoothly operating electric system, must be considered at all levels of implementation. However, it is at the scaling up where integration gets tested. One of the most important foundations of a Smart Grid is the interoperability that enables all of the required devices, technologies, and agents (for example, energy producers, consumers, and operators) to interact beneficially in the network.

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Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue

C. Potential & Benefits Peak usage reduction from smart appliance use in the residential sector can reach between 7% and 10% depending on the scale of implementation. Overall peak demand reduction from smart appliance use can 2​ reach 20% ​ . ​ As the system grows beyond smart

appliances and HANs, and begins to incorporate two­way communication, potential benefits from peak load reduction expand significantly. Through available smart metering and communication technologies, consumers and system operators can monitor and control consumption and cost at 15 minute intervals.

Based on nationwide pilot data, consumers could reduce electricity consumption by up to 25% during 6​ peak periods ​ . Additional impacts in energy savings from Smart Grid implementations can come from

transmission and distribution efficiency, which partially depends on the potential to regulate voltage more precisely. Voltage reduction enabled by a Smart Grid may be confined to the residential sector, since these loads are more responsive to voltage reduction. Average percent reduction of voltage ranges between 1% and 4%, and reduction in power usage has a 0.8 ratio in relation to voltage reduction; voltage reduction from a residential Smart Grids ranges from 0.8 to 3.2%. But with added system balancing, up to a 30% reduction 7​ in distribution losses is possible in smart grid applications ​ .

The overall benefits of a smart grid to energy consumption reduction lead to direct financial repercussions.

According to the Galvin Electricity Initiative, “Smart Grid technologies would reduce power disturbance costs to the U.S. economy by $49 billion per year. Smart Grids would also reduce the need for massive infrastructure investments by between $46 billion and $117 billion over the next 20 years. Widespread deployment of technology that allows consumers to easily control their power consumption could add $5 billion to $7 billion per year back into the U.S. economy by 2015, and $15 billion to $20 billion per year by 6​ 2020” ​ . From industries outside the energy sector, the value of interoperability is clear; tangible and

intangible benefits up to 0.3%–4% in cost savings or avoided construction are common. In the U.S. electric 7​ power industry, that could result in additional net benefits up to $12.6 billion per year ​ . Additionally, EPRI

studies show that the societal cost of a massive blackout is estimated to be in the order of $10 billion per 8​ event ​ .

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Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue

D. Costs Capital costs for smart grid implementation are divided into customer end use devices and HAN infrastructure; smart metering and FAN infrastructure and controls; and distribution retrofits, devices, and system integration. Each of these levels of implementation have costs distributed to various stakeholders.

Costs at the appliance and HAN level are distributed to homeowners and residents. Smart metering technology, distribution automation and control devices, and data transmission infrastructure involve great capital costs to distribution companies. These costs can be partially transferred to residential consumers, 8​ and represent an 8.5 ­ 12% increase in a unit’s monthly electric bill ​ . Some equipment that must be

purchased and managed includes transmission line sensors, short­circuit current limiters. Costs associated with interoperability of Smart Grid components include capital costs of implementing outage management, distribution management, condition­based maintenance, supervisory control and data acquisition (SCADA), advanced metering infrastructure (AMI), distribution planning, load forecasting, and other monitoring and 7​ control mechanisms ​ . Some estimates for the necessary investment for full Smart Grid implementation in

the United States range from $338 to $476 billion over 20 years. Perhaps the most important concept to understand in the pricing of Smart Grid Systems is that over the course of these 20 years, the benefit­to­cost 8​ ratio of a fully implemented grid falls somewhere in the range of 2.6 ­ 6.0 to 1 ​ .

E. Incorporation of Distributed Generation While the cost of distributed power generation, specifically solar photovoltaics, is still prohibitive for most 9​ utilities and consumers ​ , programs for energy credits have appeared around the country. The proliferation

of these incentives has helped the growth of the solar industry, driving innovation and increase efficiency. A smart grid adds the opportunity for reverse metering and a benefit to energy end­users, easing some concerns about initial capital costs of a solar installation. This can be seen as a boon to utility distributors, which can then buy excess energy from consumers and redistribute it over the grid. Additionally, 8

Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue decentralization of power generation could help the efficiency of grid, as energy could travel less through distribution lines to the consumer. There is less embedded energy loss if distance traveled and phase changes are diminished. The integration of these systems also provides more reliability for renewable energy sources, managing inherent minute­to­minute fluctuations in wind and solar power, counterbalancing 7​ them in real time with demand response, to avoid frequency imbalance and an unstable electrical system ​ .

Assuming a 10% share of generation in the US by 2020, distributed generation technologies and smart, interactive storage capacity for residential and small commercial applications could add $10 billion to the 6​ country’s economy per year by 2020 ​ . Thus, smart grids not only provide various technical advantages in

and of themselves, but the foundation to be coupled with renewable, distributed power generation for increased efficiency and environmental sustainability.

III.Program

​ prepared by: Michael Transue

A. PlaNYC 2030 Goals / Objectives The phased implementations of smart grid components directly influence the energy goals of PlaNYC 2030.

Smart grid installations ​ modernize the transmission and distribution systems​ of electrical resources.

Short term (1­4 years) solutions such as smart appliances for consumers as well as home and local network construction, both ​ minimize resource demand​ and ​ increase energy efficiencies​ . As electricity demand stabilizes despite growing populations, mid term (5­8 years) programs such as smart meter installation, field area network microgrids can be implemented. Achieving coordination between network resource capacity data and monitored consumer consumption data allows for long term solutions such as wide area networks and enterprise integration. Long term smart grids also rely on distributed energy generation via renewable sources such as solar and wind power. Large scale smart grids, operating at higher efficiencies, inherently provide cleaner, more reliable and affordable energy​ .

The establishment of innovative rates, regulations, and markets and the development of smart and efficient end­use devices are all key pillars of energy efficiency. The development of a Smart Grid communications infrastructure has the potential to compound energy savings beyond what is achievable through conventional energy efficiency strategies and demand response measures. The enhanced communications and control functions of a Smart Grid can allow the following mechanisms to facilitate greater levels of energy savings: ​ reduce transmission and distribution (T&D) line losses​ , ​ direct feedback to customers​ , ​ enhance​ ​ measurement and verification (M&V) capabilities​ , and ​ continuoous commissioning of buildings​ 7​ ​ .

Energy generation and transmission efficiency values and concepts must be explored prior to discussing the 9

Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue 10​ benefits of Smart Grids in New York City. Seventy percent of energy is lost during generation of electricity ​ ;

a large portion of that loss can be averted by lowering demand and improving efficiencies. “The cheapest and cleanest electricity is that which is never produced, otherwise known as the ‘negawatt.’ Negawatts come 11​ from the cleanest power plants ever – the ones that don’t have to be built” ​ . Negawatts are units of energy

not consumed, either by reducing the need for electricity, or by boosting efficiencies through incorporation technologies that require less energy to perform the same function. Also, 10% of electricity is lost during 10​ transmission and distribution ​ ; much of this loss can be averted by diminishing the required distance of

transmission service, and optimizing local pathways to meet location of peak demand.

The average base load electricity demand for NYC is 8,000 megawatts, and the average peak capacity of NYC’s electrical supply is 13,000 megawatts. The ideal reserve capacity margin for New York City is 18% or 10​ 12​ more ​ . The residential building sector of New York City consists of about ​ 3,000,000 ​ residential units ​ , and

extrapolating from Consolidated Edison’s calculations of around 4,000 kWh annual electricity use per 13​ customer ​ , we can determine that an annual electricity load of around 1400 MW, or 17.5% of NYC’s base

load demand, lies in the residential sector. Taking this percentage and applying it to the peak load, the residential component becomes 2275 MW. At the first phase of implementation, smart appliances net up to 10% peak load reduction within the residential sector, equaling a savings of 227 MW. In latter stages of implementation (15­20 years), peak demand reduction can reach up to 20­25% of the total peak, equaling up to 3250 MW reduction. In terms of distribution losses, a business as usual scenario of 800 MW electricity loss is reduced by 30%, so that an extra 240 MW remain in the system. Using these numbers, we can set reasonable targets for Smart Grid implementation in New York City:

Peak Demand Reduction (residential, short­term): 200 MW Peak Demand Reduction (residential/city­wide, mid­term): PROGRESS Peak Demand Reduction (city­wide, long­term): 3000 MW Distribution Loss Reduction (city­wide, long­term): 240 MW Increased Reliability of Grid (city­wide, long­term): NO failures

B. Programs to Address Objectives 1. Short Term The goals of short term initiatives are to minimize resource demand and increase energy efficiencies. The stakeholders involved in short term smart grid programs are the consumers of electricity; the residents, tenants and owners within the system play a key role in minimizing the consumptive demand of buildings.

Smart appliance implementation and localized networks for distributional service performance improvement are foundational strategies in incorporating smart grid system technologies for large scale, or long term, applications.

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Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue The reduction of consumer electrical energy demand is paramount in the fabrication of a smart grid system: [D]uring episodes of peak demand, stress on the grid threatens its reliability and raises the probability of widespread blackouts. By enabling consumers to automatically reduce demand for brief periods through new technologies and motivating mechanisms, the grid remains reliable – and consumers are compensated for their help 14 ​​ .

The reduction in consumption is accomplished by “shifting” usage to a non­critical time of the day as notified via another signal, or the smart appliance can “shed” load temporarily therefore reducing peak power usage 2​

. These “shifts” and “sheds” derive from incentive and rebate programs rewarding smart technology

implementation are growing in popularity. Con Edison is offering the Residential HVAC Electric Rebate Program that grants incentives on energy efficient heating and cooling equipment for residences in eligible service areas. Service measures and equipment include central air conditioning units, heat pumps, water heaters and weatherization strategies. The program also provides a “free programmable thermostat, capable of managing energy use over the internet or manually. The thermostat connect[s] to the customer’s 15​ central air conditioning system," ​ offering seamless transition to the new technology.

The Pacific Northwest GridWise Demonstration, devised by Pacific Northwest National Laboratory, is another program aiming to integrate energy transmission data with customer consumption data. The program “implements computer chips in appliances, real­time pricing and automatic power adjustments to 16​ better use existing power and place less strain on the grid” ​ .

System standardization begins at the Home Area Network (HAN) level with the implementation of customer directed smart meters. The smart meters allow consumers to understand the overall consumption in terms of price as well as their personal behaviors. Google has implemented a program promoting a customer sector better equipped to control personal energy consumption rates. Google PowerMeter was a” free energy monitoring tool that raised awareness about the importance of giving people access to their energy information. [The] PowerMeter [program] included key features like visualizations of your energy usage, the 17​ ability [to] share information with others, [as] [well] [as] personalized recommendations to save energy,” ​ .

2. Mid Term The goals of mid term initiatives are to reduce transmission and distribution loss and to enhance measurement and verification capabilities, offering standardization geared toward long term regulation and control. ​ The ​ stakeholders involved in mid term smart grid programs are the consumers of electricity as well as the distribution and transmission utilities delivering the energy. Responsive metering, decentralized networking systems and regulatory controls allow utilities to efficiently serve communities, while granting the residents of those communities lower energy costs and higher electrical service reliability.

Smart meters are required to extract value from a two­way communication in support of distributed technologies, like Field Area Network (FAN) systems. Field Area Networks connect power generation and 3​ consumers, as well as process data working as the “brain” of the smart grid ​ . FANs unite Home Area

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Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue Networks together to form microgrids. Consumption data from end­users via Home Area Networks trigger operational modifications in FANs. These changes in service are conducted by utility employed individuals working in FANs or by automated controls per data collected. Data collection analytics via metering offer the 18​ opportunity to time­shift decisions in energy generation, transmission and distribution ​ .

Additionally, in 2010, “NYC Green Codes Task Force, led by the Urban Green Council, released what is likely the most sophisticated and comprehensive analysis of building codes ever conducted by a 19​ municipality” ​ . The Task Force was charged with recommending changes to the laws and regulations

affecting buildings in New York, to bring them to the next level of energy and sustainability performance. The 111 recommendations (28 specifically concerning energy efficiency, including measuring electricity use in tenant spaces) impact new construction and renovations, and many remove current impediments to green practices; the regulations primarily alter building codes, but can also affect zoning, health, consumer affairs and environmental protection.

When successful responsive microgrids are implemented, the energy generated load matches the energy demand load. Peak loads are shifted to accommodate demand and utilities have greater reliability to serve customers. Consumers also benefit from electricity price transparencies, displaying the actual cost of energy, which could alter behaviors further reducing peak demand loads and therefore potential outages.

“Enabled by Smart Grid technology and dynamic pricing, consumers will have the opportunity to​ ​ see what price they are paying for energy before they buy – a powerful motivator toward​ ​ managing their energy costs by reducing electric 14​ use during peak periods” ​ .

On Washington’s Olympic Peninsula, a DOE demonstration project set in motion a sophisticated system that responded to simple instructions set in place by a consumer in his or her preference profile. Meanwhile, in the background, energy was managed on the consumer’s behalf to save money and reduce the impact on the grid. Consumers saved approximately 10% on their bills. More significantly, peak load was reduced by 15%, bringing the constrained regional grid another 3­5 years of peak load growth and enabling the installation of cleaner, more efficient technologies for supply 14 ​​ .

3. Long Term The goals of long term initiatives are to organize continuous commissioning of systems and to provide cleaner, more reliable and affordable energy. The stakeholders involved in long term smart grid programs are city governmental agencies, distribution and transmission utilities, and power generation companies. To implement a complete smart grid, each component and stakeholder must shift their traditional roles and capabilities to innovative, systematic approaches and techniques regulated by governing bodies.

In 2009, the Federal Government enacted the American Recovery and Reinvestment Act, known simply as the Recovery Act. The unprecedented action to stimulate the economy, included measures to modernize the energy infrastructure of the nation as well as promote energy independence. President Obama stated upon 12

Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue signing the Act into legislation, “The investment we’re making today will create a newer, smarter electric grid 20​ that will allow for broader use of alternative energy” ​ .

In addition, if power utilities adapt to an interconnected grid model similar to a communications grid, the system provides a more efficient and logical power transmission model, monitored and controlled more directly and accurately. Given utility companies’ monopolies on the current system, strict regulations must be imposed on to get them to comply with policies that facilitate the public good, and therefore the companies’ own sustainability.

Regulators on both the state and federal level are stepping up their dialog. State regulators represented by the National Association of Regulatory Utility Commissions (NARUC) are exploring options for expediting Smart Grid implementation with their federal counterpart, the Federal Energy Regulatory Commission (FERC). Meanwhile, DOE is providing leadership with the passing into law of the Energy Independence and Security Act of 2007 (EISA), which codifies a research, development and demonstration program for Smart Grid technologies.

Thanks to these and other efforts, many regulators are moving toward new regulations designed to incentivize utility investment in the Smart Grid. Among these are dynamic pricing, selling energy back to the grid, and policies that guarantee utilities cost recovery and/or favorable depreciation on new Smart Grid investments and legacy systems made obsolete by the switch to “smart meters” and other Smart Grid investments 14 ​​ .

Transmission and distribution companies must be convinced to invest in smart grid technologies and consumer­end generation with pricing and incentive policies that align the utilities’ economic interests with public interests in a cost effective manner.

IV. Marketing

prepared by: Kleoniki Mandalou ​

Target Market: Residential Buildings, Private Owners, Managing Companies

Marketing Plan In order to change society's conventional thinking of technology to an unorthodox path it requires making people aware of the potential of the smart grid technology. By showing how beneficial that particular technology is for the end users. Promoting smart grid will require hosting workshops institutions, making people aware of the cost/benefit and what impact the technology will have on climate change. In the Short Term (1­4) the basic issue would be making people aware of the costs of the installation of the new smart appliances . Informing the end users about the financial strategies and grants which will be provided by city agencies and stakeholders, who will be the key point to initiate the program. ..the smart grid market is in a relatively early stage of development though, broad themes are emerging which may affect the growth of 13

Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue profit for different applications and regions. In the Mid­term (5­8) the ones who play the most important role ­ utilities, equipment providers, and investors ­ will have to consider their potential in changing the market as a whole. Smart grid will be adopted at a district scale transitioning data for each neighborhood in the city. As government and regulators drive adoption of smart grid technologies through mandates or incentives, the pace and scale of deployment will be increased and will accelerate market development. The nature of policy instruments deployed and the timing of specific interventions will require regulatory improvements in order to foster smart grid investments. Development of the smart grid will create opportunities for traditional energy infrastructure vendors while opening the market to new players. Traditional vendors will benefit from large­scale renewal of utility assets as customer and grid applications are deployed and will be able to differentiate their products lines through increased functionality and integration with other smart technologies. By implementing the smart grid technology numerous jobs will be created in the transmission, infrastructure and monitoring sectors.

A.SHORT TERM (1­4 years) residents & energy $ savings Real time monitoring of energy consumption and cost by consumers With traditional energy distribution residential buildings tend to consume more energy than they actually need. For example people go out and leave all their appliances on. Even if the appliances are plugged in and not operating, they consume energy. An objective of the smart grid is to provide technology and systems (integrated into appliances and computer devices used in everyday activities) that will allow consumers to automatically manage their energy use/demand and therefore their costs. People have to understand that the smart grid technology is easy to use and beneficial for their bank accounts. Research has shown that users do not want the interface of the smart grid to interfere with their lives nor to be sitting around their appliances all day checking how their houses use energy. Users will be “setting and forgetting” this new technology at home easily, exactly as if it was before but with a new system allowing them to control and adjust their own energy use. Prior to the change of the home appliances users will receive easy and understandable (infographic type) information (leaflets and maximum two workshops) that will take a very small amount of their time. Then the procedure will be “set and go”, automatically adjusted for them and most importantly controllable at any time.

Since the consumer is the decision maker who will realise the vision of the smart grid, the “dynamic of money saving $” will have to be provided so that he/she is motivated to participate.

As discussed, the effort to move from using smarter technology to a Smart Grid is a significant undertaking that needs focused coordination both strategically and tactically. This undertaking also will require significant investment. Investors often face the challenges of access to capital to make these investments, as well as the lack of ability to bear the associated costs of the expenses. Utilities must grapple with making Smart Grid investments, knowing that significant utility and consumer benefits may not occur for several years. A Smart 14

Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue Grid is a complex, comprehensive, and integrated monitoring and operating system; it will provide publicly observable benefits only after considerable investments have been made in upgrading the infrastructure of the nation’s utilities and the monitoring and control devices in the homes and businesses of consumers.

Investing in equipment and personnel training, for which there are few short­term benefits, creates operating costs that may be difficult to justify without policy direction and support from government agencies​ 5​ ​ . example: Another component of the GridWise project was real time monitoring of energy consumption and cost by consumers, encouraging engagement: Approximately 100 homes on the Olympic Peninsula in Washington State received energy price information through a broadband Internet connection and automated demand­response thermostats and water heaters that adjusted energy use based on price. Automated controls adjusted appliances and thermostats based on predetermined instructions from homeowners. The volunteers had their own computer website on which they managed their responses. There, they chose from a range of responses from no response to maximum economy response. At any point, homeowners could override their preprogrammed preferences to achieve maximum comfort and convenience 16​ ​.

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Utilities to expand the number of products for their customers.

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Retailers must evaluate which customers are likely to be the most profitable.

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Tax breaks for smart appliance companies and policy incentives

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Buy back for old appliances

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Savings from energy reduction

B. MID TERM (5­8 years) utility companies (generation/transmission/distribution) + benefiting local neighborhoods In order to successfully define a smart grid strategy, utilities must find a way to transition this type of analysis to smart grid technologies. After the completion of Phase A (1­4 years), the Phase B will require the smart meters to communicate with the microgrids. At this level of engagement, however, the smart grid is still based on existing generation plants. To increase efficiency and productivity, alternate forms of energy generation must be incorporated into the grid. Safeguards through decentralization of power sources could pressure power companies into updating services to meet new standards. This will create a sustainable interaction where the distributor (utility companies) will focus on demand and the customer on the smart grid’s goal; overall energy reduction.

The Time of Use (TOU) tariff creates the conditions that encourage the consumer to change their or the appliance’ s behavior by using appliances when the rates are lower, which if properly developed will save the consumer money on their total electricity bill. As previously stated, a Smart Appliance can respond automatically to utility signals requesting the reduction of an appliance’ s energy usage to a non­critical time 2​ of the day by “shifting” load or by reducing peak load by “spreading” the load ​ .

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Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue There are other benefits when the consumer is incentivized by the rate structure to intelligently manage energy usage. If the consumer can receive information relating to what type of power is available, in addition to the price, choices can be made to utilize renewable energy sources when they are available. For example, if there is a strong wind blowing across a wind turbine generation facility, it may be advantageous to consume power during that time so that it is not used when a higher emission alternative may be the only option.

By reducing the overall energy usage at a district level, it automatically means that customers will have stabilised the energy they use and have already gained money back from the smart appliances installations.

Furthermore, at the Phase B the smart grid program will allow other kinds of low­carbon innovations to flourish by capital planning. Then, retrofits will take place at the residential level at an accelerated pace giving jobs and opportunities to other markets; refurbishing the equipment, changing the boilers so that the buildings act like controlling units in efficient neighborhoods.

In addition, the utility companies will be benefited by reducing their costs during times of outages. When outages take place, the utility companies pay for the expenses. By implementing the smart grid technology at a communicative data infrastructure the microgrids will be responsive and designed to avoid outages. example:

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The U.K. government recently announced a mandatory replacement of both electricity and natural gas meters for all 46 million customers between 2010 and 2020. The U.K.'s unique market structure with competitive retailers having responsibility for meter ownership and operation is driving interoperability standards beyond currently available technology 21 ​​ .

Solution providers should consider managed services as an offering.

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Consumer monitoring of energy costs and usages encourages conservation.

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Eliminate outages during peak times

C. LONG TERM (9+ years) city government (city­wide controlling agency), utilities, residents At the last stage of implementation and according to the Energy Independence and Security Act of 2007, the smart grid will be designed to ensure high levels of security, reliability and availability of electric power; improve economic productivity and quality of life; and minimize environmental impact while maximizing 8​ safety ​ . The city will be controlled by the Smart Grid Department and its customers at the Phase C will

include whole neighborhood blocks. That means that the smart grid will be installed in the commercial, residential and public sector so that real­time information can be delivered and near­ instantaneous balance of supply (capacity) can become a two­way flow of electricity and information between utilities and consumers. All appliances will be efficiently communicating and result to the power of a reliable and productive delivery system, that are controlled by the city.

22​ New York City will have achieved the “cleanest air” goal city in the U.S ​ and there is a potential for

decommissioning the bigger power plants, which are the ones generating the most emissions since they are 16

Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue continuously operating by burning coal.

The future of the smart grid is the transition to renewables which will expand the availability of green jobs by simultaneously reducing the city’s dependence to fossil fuels. example: With its PRIME initiative, the Spanish utility Iberdrola plans to develop a new PLC­based, open standard for smart metering. It is starting with a pilot project in 2009, leading to full deployment to more than 10 million 23​ residential customers ​ .

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Install digital metering technology for customers as well as help customers reduce their overall energy use and their energy demand during the 100 highest use hours of the year.

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Low carbon Roadmap

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Data analytics and control traffic city mapping

V. Conclusion

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Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue

VI. Bibliography

WORKS CITED

1. ​ Abel, A. (2007) “Smart Grid Provisions in H.R. 6, 110th Congress.” Congressional Research Service Report for Congress.

2.​ Association of Home Appliance Manufacturers (2009).“Smart Grid White Paper: The Home Appliance Industry’s Principles & Requirements for Achieving a Widely Accepted Smart Grid.” http://www.aham.org/ht/a/GetDocumentAction/i/4​ 4191

3.​ Gunther, E. W, et al. (2009) “Smart Grid Standards Assessment and Recommendations for Adoption and Development.” EnerNex Corporation white paper.

4.​ Marris, E. (2008) "Upgrading the Grid," Nature 454: 570­573.

5.​ DeLung, J. (2010) “Pioneering the Grid: Pole­Mounted Solar.” http://www.energy.gov/articles/pioneering­new­grid­polemounted­solar.

6.​ Energy Action Committee (2008). “Smart Grid: Enabler of the New Energy Economy.” U.S. Department of Energy Report.

7.​ Electric Power Research Institute (2009). “The Green Grid: Energy Savings and Carbon Emissions Reductions Enabled by a Smart Grid.”

8.​ Electric Power Research Institute (2011). “Estimating the Costs and Benefits of the Smart Grid.”

9.​ Schiermeier, Q. (2008) "Electricity without Carbon." Nature 454: 816­823.

10.​ Bobker, M. (2012) Lectures, Pratt institute PSPD, Spring 2012.

11.​ Alliance for Clean Energy New York (2008) ”The ‘Negawatt’” http://www.aceny.org/clean­technologies/energy­efficiency.cfm

12.​ U.S. Census Bureau (2011). “US Census Bureau New York City Quick Facts.”

13.​ Consolidated Edison Company of New York (2010). “Con Edison Facts for the periods ending December 31, 2010 and 2009.”

14.​ Litos Strategic Communication (2008) “The Smart Grid: An Introduction.” U.S. Department of Energy Report.

15.​ DSIRE. http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=NY69F&re=1&ee=1

16.​ Pacific Northwest National Laboratory (2011). “Power to the People.” http://eioc.pnnl.gov/research/gridwise.stm

17.​ Google (2012). “Google PowerMeter: A Google.org Project.” Google. http://www.google.com/powermeter/about/ 18

Kleoniki Mandalou, Leonel Lima Ponce, Michael Transue

18.​ Hertzog, C. (2012) “​ How smart cities reap the benefits of data analytics” http://www.greenbiz.com/blog/2012/04/10/how­smart­cities­reap­benefits­data­analytics

19. ​ American Council for an Energy Efficient Economy (2011) “New York City Green Codes Task Force http://aceee.org/sector/local­policy/case­studies/new­york­city­green­codes­task­force

20.​ Office of Electricity Delivery and Energy Reliability (2012) “Recovery Act” http://energy.gov/oe/information­center/recovery­act

21.​ Strapp, J. “Measuring Smart Metering’ s Progress” http://mthink.com/utilities/utilities/measuring­smart­meterings­progress

22.​ The City of New York (2011). “PlaNYC 2030 Update.”

23.​ PRIME Alliance website. http://www.prime­alliance.org/

OTHER REFERENCES

Boonin, D. M. (2009) “Aligning a Utility’s Interests with the Public Interest in Cost­Effective Purchased Power Transactions.” NRRI Report.

Koener, B.J. (2009) “Power to the People.” Wired Apr­2009: 76­87.

New York City Energy Policy Task Force (2004). “New York City Energy Policy:An Electricity Resource Roadmap.”

Pullins, S. (2006). “San Diego Smart Grid Study Final Report.” Science Applications International Corporation (SAIC), October 2006.

Zeiss, G. (2011). “Gridweek: Smart grid scope for electric distribution companies”. http://geospatial.blogs.com/geospatial/2011/09/gridweek­smart­grid­priorities­for­electric­distribution­compan ies.html

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