September 27, 2011 Steve Bossart , Project Management Center

1. Environmental Impacts of Smart Grid & Challenges of Connecting Electric Vehicles September 27, 2011 Steve Bossart, Project Management Center

2. Topics • Case for modernization Main topics • Environmental impacts • Electric vehicles Other topics • Field projects • Metrics & benefits • Smart Grid maturity model • Smart Grid organizations • Barriers and challenges

3. Case for Grid Modernization

4. Why Modernize the Grid? Today’s grid is aging and outmoded Unreliability is costing consumers billions of dollars Today’s grid is vulnerable to attack and natural disaster An extended loss of today’s grid could be catastrophic to our security, economy and quality of life Today’s grid does not address the 21st century power supply challenges Adverse trends associated with the grid - Costs, reliability, peak loads, asset underutilization, TLRs, grid divorce The benefits of a modernized grid are substantial 4

5. Benefit of Modernization $1,294 – $2,028 Billion Overall benefit-to-cost ratio of 2.8 to 6.0 ValueProposition Cost to Modernize • $338-$476B over 20 years • $ 82-90 B for transmission • $232-$339 B for distribution • $24-46 B for consumer • $17-24 B per year EPRI, 2011 • Previous Studies • Benefit to Cost Ratio for West Virginia of 5:1 • Benefit to Cost Ratio for San Diego of 6:1 • Benefit to Cost Ratio for EPRI (2004) 4:1-5:1 • $165 B Cost • $638 - $802 B Benefits EPRI Report: http://www.smartgridinformation.info/pdf/3272_doc_1.pdf

6. Today’s grid - status quo is not an option • Aging • 70% of transmission lines are 25 years or older • 70% of transformers are 25 years or older • 60% of circuit breakers are 30 years or older • Outmoded • Designed in the 50s and installed in the 60s and 70s, before the era of the microprocessor. • Stressed • Never designed for bulk power shipments • Wholesale power transactions jumped 300% from 2000 to 2005. Insight Magazine, Oct. 2005

7. What’s Different with Smart Grid • Consumer engagement with resources to solve power issues locally • Two-way power flow in Distribution • Two-way communications • Integration of Distributed generation and storage • Imperative to transform from passive to active control in Distribution • Move from radial to network Distribution system • New ways for Distribution to become a Transmission resource • Potential to transform transportation sector

8. Environmental Impacts of Electric Power System & Transportation Sector Enabled by Smart Grid

9. Environmental Impacts • TRANSPORTATION SECTOR • Carbon dioxide • Nitrogen oxides • Hydrocarbons • Carbon monoxide ELECTRIC POWER SYSTEM • Carbon dioxide • Nitrogen oxides • Sulfur dioxide • Particulate matter • Air toxics (e.g., mercury) • Fly ash and bottom ash • Polychlorinated biphenyls • Other transformer oils 9

10. EIA Pollutant DataUnder a “Business As Usual” Scenario

11. Grid Features Enabled by Smart Grid That Impact Environmental Emissions • Demand Response • Electric Vehicles • Variable Renewables • Distributed Energy Resources • Transmission and Distribution Systems • Energy Storage • Customer Systems • Outage Management • Improved Operations and Maintenance

12. Some Smart Grid Operational Practices That Impact Environmental Emissions • Conservation • Load changes • Demand response • Demand dispatch • Efficiency • Generation • T&D • End-use devices • Dispatch of generation & storage • Central, distributed, & consumer • Fossil fuel, nuclear, variable renewables, hydro • Baseload & peaking • Electric vehicle charging

13. Demand Response • Shift load to different time or eliminate or reduce load • Load types include climate control, lighting, hot water, refrigeration, laundry, EV charging, industrial processes • Using demand response for regulation may reduce emissions (ORNL, 2000) • More closely match load and generation • Predict annual growth rate of 1.07% from 2008-2030 (EIA) EE programs could reduce growth rate to 0.83% (EPRI) • Predict annual growth rate for peak demand of 1.5% from 2008-2030 (EIA) EE/DR could reduce peak demand growth rate to 0.83% (EPRI)

14. Impact of Peak Demand Reduction by DR 2030 EPRI (2008)

16. Electric Vehicles • Includes plug-in hybrid and all-electric vehicles • Reduces transportation emissions from gasoline & diesel fuels while reducing import of crude oil • During EV charging, electric power system emissions will depend on generation mix • Plug-in electric vehicles will increase demand for electricity

17. Annual GHG Emissions Reductions from PHEVs in the Year 2050“Well to Wheels Study” EPRI (2007)

18. Carbon Footprint by Vehicle Type Source: (ICF, 2010)

19. Variable Renewables & Energy Storage • Environmental impacts must consider: • Generation/storage mix used to meet demand when power output from variable renewables cannot meet demand • Distance between variable renewables/storage and load • Need for ancillary services to maintain grid stability(volt/VAR, frequency regulation, load following) • Power losses during storage • Serving baseload, peak load, or both

20. CO2 Impact of Smart Grid Enablement of Renewable Resource Deployment 2030 Source: EPRI (2008)

21. Electricity Demand 2008 Electricity Demand 2035 5,150 BkWh / Year69% Fossil Energy 4,107 BkWh / Year71% Fossil Energy + 25% United States 2,357 mmt CO2 2,526 mmt CO2 Coal could shift toward clean coal with CCS? Natural gas from Marcellus and other shale gas? Permanent repository for spent nuclear fuel? Renewables includes hydro at about 7% Continued reduction in cost for variable renewables? Incentives favoring investments in technologies with GHG reduction?

22. Compensating Power Variable Power Firm Power + 1 Power = + Gas 2 Wind Time + n Study by Carnegie Mellon UniversityThermal Plant Emissions Due to Variable Renewable Does operating one or more gas turbines to fill in variable wind or solar power result in increased NOx and CO2 emissions compared to full-power steady-state operation of natural-gas turbines?

23. Results • The results of CMU’s analysis demonstrates that CO2 emissions reductions from a wind (or solar PV) plus natural gas system are likely to be 75-80% of those presently assumed by policy makers. • Nitrous oxide reduction from such a system depends strongly on the type of NOx control and how it is dispatched. • For the best system examined, NOx reductions with 20% wind or solar PV penetration are 30-50% of those expected. • For the worst, emissions are increased by 2-4 times the expected reductions with a 20% RPS using wind or solar PV.

24. Transmission and Distribution Systems • Power loss increases with distance • Power loss associated with voltage transformation • More generation is needed to offset T&D losses • Typical losses on U.S. T&D system is about 6-7% • Transmission congestion can be relieved with DER • Low-loss conductors & superconductors

25. Impact of Reduced Line Losses Voltage Reduction 2030 Source: EPRI (2008)

26. Customer Systems • Demand response requires smart appliances and customer interface (e.g., HAN, in-home displays, programmable thermostats) • Encourages conservation (i.e., Prius effect) • Efficient appliances (i.e., EnergyStar) • Customer-owned generation and storage • Electric vehicles • Photovoltaic • Different classes of customers • Residential, commercial, industrial, agriculture • Industrial parks, universities, manufacturing • Potential microgrid and CHP applications

27. Improved Operations and Maintenance • Reduced vehicle miles • Condition-based maintenance • Remote meter reading • Generation dispatch considering cost & emissions • Generation type • Distance from generation to load • Charging storage and electric vehicles

28. Outage Management • Less vehicle miles • Reduced outages, duration, and extent • Knowledge of location and cause of outage • Better planning

29. Reduction in Electricity Use from Smart Grid Reduce CO2 emissions by 442 million metric tons by 2030 PNNL (2010)

30. Smart Grid Energy Savings and Avoided CO2 Emissions EPRI, 2008

31. Some References on Environmental Impact of Smart Grid • EPRI. “Environmental Assessment of Plug-In Hybrid EVs,” Palo Alto, CA, 2007 • EPRI. “The Green Grid: Energy Savings and Carbon Emissions Reductions Enabled by a Smart Grid,” Palo Alto, CA, June 2008 • PNNL. “The Smart Grid: An Estimation of the Energy and CO2 Benefits,” January 2010 • NETL, “Environmental Impacts of Smart Grid”, DOE/NETL-2010/1428, January 10, 2011

32. Electric Vehicles

33. Challenges of Electric Vehicle Charging • Cul-de-sac factor • Transformer overload • Mobility of load • Billing • Gas tax recovery • Carbon credits • Helpdesk support • Data security and privacy • Installation model • Messaging and education Reference: Public Utilities Fortnightly, June 2011, Top 10 EV Challenges

34. PEVs and Emissions Public Utilities Fortnightly, June, 2010

35. Electric Vehicle Charging • Assume all U.S. passenger vehicles excluding cars and trucks are converted to plug-in electric vehicles • Electricity to charge 130 million PEV would be 13% of U.S. electricity consumption (3,723 TWh) • PNNL - Up to 84% of vehicles could convert to PHEV without additional electric infrastructure • ORNL - By 2020, 10% PEV penetration would increase electricity by 1-2% and • By2030, 25% PEV penetration would increase electricity by 2-5% Plugging In, Public Utilities Fortnightly, June 2010

36. Metrics for Best In-Class Alternative Vehicles

37. Trip Distance vs. Average Fuel $/Mile

38. Trip Distance vs. Total Cost Per Mile

39. Capital, “Fuel”, and Total Cost

40. Smart Grid Activities

41. Current Smart Grid Activities American Recovery and Reinvestment Act • Smart Grid Investment Grants (99 projects) • $3.4 billion Federal; $4.7 billion private sector • 877 PMUs covering almost 100% of transmission • 200,000 smart transformers • 700 automated substations • 40 million smart meters • 1 million in-home displays • Smart Grid Demonstration Projects (32 projects) • $620 million Federal; $1 billion private sector • 16 storage projects • 16 regional demonstrations

42. Current Smart Grid Activities (continued) • Additional ARRA Smart Grid Activities • Interoperability Framework by NIST ($10M) • Transmission Analysis and Planning ($80M) • State Electricity Regulator Assistance ($50M) • State Planning for Smart Grid Resiliency ($55M) • Workforce Development ($100M) • DOE Renewable & Distributed Systems Integration (9) • EPRI Smart Grid Demonstrations (12 projects) • Smart Grid System Report to Congress • http://www.smartgrid.gov/resources

43. Metrics

44. Smart Grid Metrics Reliability Outage duration and frequency, momentary disruption, power quality Security Ratio of distributed generation to total generation Economics Electricity prices & bills, transmission congestion costs, cost of outages Efficient T&D electrical losses, peak-to-average load ratio Environmentally Friendly Ratio of renewable generation to total generation, emissions per kwh Safety Injuries and deaths to workers and public Field Data Metrics Benefits Value 44

45. Benefits Analysis Framework . *Methodological Approach for Estimating the Benefits and Costs of Smart Grid Demonstration Projects, EPRI, January 2010.

46. Who are the Beneficiaries? • Utilities (What’s in it for my shareholders?) • Consumers (What’s in it for me?) • Society (What’s in it for us?) We get what we reward!

47. DOE has supported development of a computational tool Inputs Examples Analytics Outputs Assets, Functions, and Mechanisms AMI/Smart Meters, Automated Feeder and Line Switching Smart Grid Computational Tool Monetary Value of up to 22 Benefits Impact Metric Results Annual Generation Costs, Number of Tamper Detections NPV Analysis of Project Estimates and assumptions Value of Service, Price of Capacity at Peak, Value of CO2 Cost Parameters and Escalation Factors Discount Rate, Total Capital Cost, Inflation Rate, Population Growth Sensitivity Analysis of Project Sensitivity Factors High and Low case Value of CO2

48. Observational Results • Utility workers (management, planners, designers, O&M) • Job impact, complexity, troubleshooting, business model • Customers (residential, commercial, industrial, agricultural) • Cost, comfort, convenience, involvement, understanding • Regulators (Federal, state, and local) • Used and useful, cost recovery, customer preferences • Investors (IOU, municipalities, coops, …) • Business case, risk • Product and service providers • Competition and market

49. Smart Grid Organizations

50. Some of the Smart Grid Working Groups • NERC Smart Grid Task Force • Federal Smart Grid Task Force • Electricity Advisory Board • GridWise Alliance • Smart Grid Policy Center • FERC NARUC Smart Grid Committee • GridWise Architecture Council • EPRI Smart Grid Advisory Group • Smart Grid Interoperability Panel