Customer Side of the Grid: Architecture Options

1. Customer Side of the Grid: Architecture Options Harvey Michaels, Scientist/Lecturer DUSP Environmental Policy and MITEI 617-253-2084 hgm@mit.edu 9-326 Instructor: Enabling an Energy Efficient Society

3. Energy Efficiency at MIT • Expanding Coursework – Energy Minor • Integrated Technology, Economic, Management, Behavior, Policy Research: • 2050 Resource Assessment • Customer Side of Smart Grid: Architectural Options: • Smart Grid or Smart Citizen? • Public or Private Networks? • How to maximize behavior impact • How to maximize market innovation • Internet Innovation: • I2EE-based buildings • Web 2.0 GIS/Community Systems • Federal/State/Utility Program Design: • Utility/Community/Campus Partnerships • Zero Net Energy buildings

4. Information and pricing as an efficiency/DR option: Providing consumers with energy diagnostics, feedback, control

5. The Demand Response Issue: The Load Duration Curve Continues to Erode With the continued penetration of central air conditioning systems, the top 60 hours of the year now account for 10-15 percent of the system peak

6. Smart Grid: One Network or Three? SCADA: “System Control and Distribution Automation” of G,T& D • to improve system efficiency and performance and provide resilience to failure. AMI: “Advanced Meter Infrastructure” • automates the meter read process, • increases the frequency of reads to at least hourly, • and possibly communicates two-way between utility and meter for demand response (DR) services. LAN: “Local Area Networks” within buildings • communications (powerline or wireless) between devices • managing software process (in-home dedicated server, utility managed off-site, or Internet). • consumer display device (kitchen, thermostat) or multi-purpose display (TV, computer, phone).

7. The Customer Side of Smart Grid : 2 strategies/architectures 1: Customer-Controlled Architectures • Price-based demand response, using time-differentiated rates, which requires AMI. • Vision: Customers view data, make choices, in time automatic response by customers thermostat and other devices. 2: Utility-Controlled Architectures • Push-button Control-based demand response – The Utility monitors and controls end use equipment. • Vision: Generation, transmission, distribution, and end use equipment as part of a single system. • Interval meter reads not essential.

8. Utility Private Network Architecture – utility provides meter-to-devices communication and control Utility-network devices in home Customer MDM/Head-end Utility-side

9. Third parties or utility “Energy Desks” control registered loads Customer 1 Customer 2 Customer 3 Customer 4 Utility Customer 5 Customer 6 Customer 7 Customer 8 Customer 9 Customer 10 Customer 11 Customer 12 Customer 13 Customer 14 Customer 15 Customer X 0% RISK 100% RISK 0% RISK

10. Politics of the “Smart Grid” – Does Society want Utility Control? • End use equipment is visible and controllable by the utility or third party– • “Utility control” is more dispatchable and therefore can replace spinning reserve ….but some find it kind of scary. Resistance is Futile Prepare to be Assimilated

11. Customer-responsive Architecture = Providing consumers with energy diagnostics, feedback, control refers to systems for optimizing consumers’ end-use needs (especially air conditioning, heat, hot water) • based on weather, schedules, and time differentiated costs. Time-differentiated rates are more fair, and some would argue inevitable. Customer Responsive Systems work 24/7, providing efficiency as well as peak demand response.

12. AMI needed for Time-Dependent (dynamic) Pricing Higher prices during Critical Peak Events ~ 50-150 hours/year Discounted price during off peak hours ~ 7,700 hours/year Higher TOU prices during peak hours ~ 1,000 hours/year

13. Customers respond to CPP price signals… Price Ratio: 4.1:1 4:1 4.6:1 6:1

14. Critical Peak Impacts By Rate Treatment Hottest Critical Peak Day * Average Critical Peak Day – Year 1 47.4% 50% Critical Peak Variable With Automated Controls 34.5% 40% Critical Peak Variable With Automated Controls 30% Peak Load Reduction 20% 12.5% Critical Peak Fixed 10% 4.1% TOU 0% Time of Use TOU CPP-F CPP-V CPP-V Smart Grid AMI/pricing helps, but consumers respond more with information and/or controls Source: Roger Levy, Statewide Pricing Pilot Summer 2003 Impact Analysis, Charles Rivers Associates, Table 1-3, 1-4, August 9, 2004.

15. Customer-Controlled, Public Network Architecture: Device Workspace Consumer-side Utility’s Web Workspace MDM CRM Utility-side

16. Vision - Applications for the Smart Consumer • Utility, thermostat, appliance, Google, etc. make app. • View on home PC, work PC, TV, cell phone (at least until next year). Application ideas: • Make my AC, water heater, pool pump, refrigerator use pattern smarter. • Find out what anything costs to run. • Choose the best rate for me. • Choose a theme – understand the consequences- do it (ie. More Green) • Sell a DR option.

17. Opportunity Time for new leadership with capability, courage, and imagination to shift paradigms to develop greater energy efficiency! …through strategic thinking about technologies, policies, planning, building methods, systems, software, business models. TIME IS SHORT NEED IS HIGH OPPORTUNITY IS GREAT