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What’s so smart about the smart grid?

What’s so smart about the smart grid?. Presentation at IAEE Annual Conference 10 October 2011 Washington, DC Perry Sioshansi Menlo Energy Economics San Francisco CA www.menloenergy.com. Smart Grid Nov 2011. What is the “smart grid?”. Wrong question

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What’s so smart about the smart grid?

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  1. What’s so smartabout the smart grid? Presentation at IAEE Annual Conference 10 October 2011 Washington, DC Perry Sioshansi Menlo Energy Economics San Francisco CA www.menloenergy.com

  2. Smart GridNov 2011

  3. What is the “smart grid?” Wrong question Wrong answer: As many definitions as there are experts Why all the interest in smart grid? Because current grid is outdated for what we need today Even more so for what we will need in the future What sort of grid do we need? A more versatile and accommodating grid

  4. What sort of grid do we want?One that meets industry’s changing needs A more enabling delivery infrastructure 1. More “reliable”, of course Self-detecting, self-healing & plain “smart” 2. More “integrated” Better balancing of supply & demand in real time 3. Capable of absorbing more renewable energy resources Not 10%, 20% or 30% but 80% and more as in Germany 4. Allows integration of more distributed generation CA Gov. Brown envisions 12 GW of DG by 2025 5. A “two-way” conduit connecting load & generation No longer transferring central generation to major load centers 6. Allows “prices-to-devices” revolution Smart prices to smart devices leading to smart energy usage

  5. Proposed outline Few examples/anecdotes for each of the 6 To convince those who are not already convinced Q: What’s real and what is hype? Q: What obstacles/challenges remain? Q: Why the lingering skepticism? Discussion

  6. Aug 03 Northeast BlackoutNeed a “smart grid” that is self-correcting, self-healing ON NY MI CT PA NJ OH

  7. Better balancing of load/generationCA’s summer peaks are aggravated by flat pricing Source: David Hungerford, CEC

  8. RPS mandates in US WECC Source: Black & Veatch

  9. 80% by 2050!German target post Fukushima

  10. Numbers talk Annual and cumulative installed wind capacity, in MW Source: 2010 Wind Technologies Market Report, Ryan Wiser and Mark Bolinger, Lawrence Berkeley National Laboratory, June 2011

  11. US wind contribution Contribution of wind as % of new capacity additions, 2000-10 Source: 2010 Wind Technologies Market Report, Ryan Wiser and Mark Bolinger, Lawrence Berkeley National Laboratory, June 2011

  12. US wind US wind capacity, annual & cumulative, GW Source: 2010 Wind Technologies Market Report, Ryan Wiser and Mark Bolinger, Lawrence Berkeley National Laboratory, June 2011

  13. Room to grow Wind generations as % of total electricity consumption Source: 2010 Wind Technologies Market Report, Ryan Wiser and Mark Bolinger, LBL, June 2011

  14. Distributed generationCalifornia Gov. envisions 12 GW of DG by 2025

  15. Zero Net Energy Seeking eventual crossover zero net energy on-side electricity demand distributed renewable generation

  16. Prices-to-devicesKey feature of smart grid: Delivering time-variable pricing Source: A. Faruqui, Brattle Group, Aug 2010

  17. What is real and what is not?Sometimes lost in hyperbole Renewables & DG – real Integration issues – real headaches EVs – two edged sword Dynamic pricing – regulators with back bone Smart devices – chicken & egg problem Taken together? These are exciting times to be in industry

  18. Challenges & skepticismsNot everyone is convinced, for different reasons Enormous up-front costs, elusive distant gains How do we finance, how do we distribute pains/gains? Investment, regulatory & policy misalignment? Utilities, are by and large, heavily regulated Technology – a lot more is expected Rapidly evolving on multiple fronts Integration Huge issue – getting various components to “synergize” Implementation & execution What is easy on paper is often difficult in practice Managing public expectations Many more painful lessons to be learned along the way

  19. Few take away points Current grid may not be smart but ain’t dumb Considered a significant “engineering achievement” Rapid progress on multiple fronts Ample funding, R&D and entrepreneurial zest Expect more setbacks/surprises Regulators reluctant to mandate dynamic pricing Small but vocal opposition to smart meters, data privacy, etc No panacea, but a critical step in right direction Driven by desire for cleaner/greener/more efficient future

  20. Questions? Thank you

  21. Back up slides Most likely NOT used

  22. Smart GridIt is contagious Source: Smart from the start, PwC, 2010

  23. Renewables are for realSunPower claims it can install 1 MW per day

  24. Balancing in real timeBased on simulated CA data for 25 July 2012, MW Source:

  25. Wind not available when neededCA wind capacity during all-time summer peak load in 2006 Source:

  26. Think of it as massive spongeEV batteries can store energy & feed it back to the grid

  27. EV Penetration Alternative projections of # EVs on PG&E system

  28. EVs massive load on networkA fast charging EV more than an entire house load

  29. Will EVs fry the grid?EV charging must be strictly curtailed during peak periods

  30. No more power plants?Texas ACEEE study, Mar 2007

  31. California keeps it flatPer capita electricity consumption Source: A. Faruqui, Brattle Group, Aug 2010

  32. 664 TWh EE potentialEPRI claims 14% energy reduction possible by 2030 Source: A. Faruqui, Brattle Group, Aug 2010

  33. Costs and perhaps benefits?EPRI study Apr 2011 Source: Estimating the Costs and Benefits of the Smart Grid, EPRI, April 2011

  34. The costsEPRI study Apr 2011 Source: Estimating the Costs and Benefits of the Smart Grid, EPRI, April 2011

  35. And the benefitsEPRI study Apr 2011 Source: Estimating the Costs and Benefits of the Smart Grid, EPRI, April 2011

  36. Renewable portfolio standardsUS states with mandatory targets * Florida now has a 20% RPS by 2020 not reflected in the map. There may be other states as well that have adopted mandates since the map was published Source: Edison Electric Institute, 8 Apr 08

  37. Exponential PV growthCustomer installed PVs on PG&E system 1,400 MW by 2015

  38. 5. The cheapest kWh is the oneyou don’t use * Includes current federal & state level incentives, natural gas price is assumed at $4.50/MMBTU Source: US Renewable Energy Quarterly Report, ACORE, Oct 2010

  39. 8. Demand ResponseAs much as 20% of US peak load may be managed by DR

  40. More renewable generationUS non-hydro generation 1990-2035, in bkWh Source: EIA’s Annual Energy Outlook 2011, 16 Dec 2010

  41. California going low-carbonDon’t count on nuclear, CCS, cap-&-trade, or market signals Source: Black & Veatch

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