The Utility's Dilemma

The Utility’s Dilemma

The existing electrical power distribution system is analog and is under increasing pressure to catch up to the digital economy for which it serves. Dedicated sensors and communications infrastructures are necessary components needed to monitor and manage the distribution grid allowing for the improvement of system wide efficiency and security. For several decades, utilities have used their distribution networks to carry low-speed data for simple monitoring and control functions.

The use of multiple high-speed Internet Protocol (IP)-based communications technologies are needed to facilitate the needed migration to the next generation digital distribution grid and to solve some of the problems electric utilities and their customers face.

Electric utilities are under increasing economic, regulatory and societal pressure. Much of the aged infrastructure of the electrical distribution grid in the United States is near the end of its useful life span and needs to be better managed and perhaps eventually replaced. Additionally, energy demand is increasing at double the rate of population growth, raising the pressure to build new generating capacity to serve peak demand. These factors are impinged by economic and regulatory factors, as well as by increasing environmental awareness to make new additions to traditional generating capacity increasingly unattractive.

Moving forward in the 21st century, utilities attach great importance to increasing operational efficiencies and modernizing the distribution grid as key components in addressing the issues raised above, but presently lack the needed supporting infrastructure. Recognizing the increasing environmental awareness, regulators and individual utilities want to create incentives for consumers to both conserve and shift usage away from periods of peak demand but require new tools to do so. Determining the source of equipment failures and inefficiencies presently involve waiting for customers to call in and report outages. Meter reading and service changes are done by costly truck rolls to individual locations. Utilities pay much more for power at peak times but cannot communicate this variable pricing to most consumers to affect use patterns.

Smart Grid communications platform enables the needed utility solutions that increase operational efficiency and improve security, by enabling the ability to monitor and control equipment, remotely read meters, and enable customers to make real-time price based usage decisions; and providing economic benefits for the grid operator, its users, and society as a whole. However, there are currently many problems with Smart Grid technologies and Electric Solution brings and immediate and effective solution to the Utilities dilemma whereby simultaneously saving our clients money!

A Greener Grid

Coal based electrical generation is the most heavily utilized form of electrical generation in the U.S. making up a majority of base-load generation. Coal based generation is also the most pollution intensive form of electrical generation. In 2006, U.S. coal plants were responsible for 83% of U.S. energy related carbon-dioxide emissions, and 33% of total U.S. carbon-dioxide emissions. All forms of electrical generation in the U.S. combine to make this one industry responsible for 40% of total U.S. carbon-dioxide emissions, and our electric power industry a greater contributor to global green house gasses (GHGs) than any other country’s total carbon output, with the exception of China.

As global warming becomes a more serious reality and the U.S becomes subject to increasing international pressure to conform to a carbon cap and trade system, local governments and utilities are focusing on what they can do to reduce their carbon footprints. Many states have mandated renewables and even joined voluntary carbon reduction programs such as the Regional Greenhouse Gas Initiative (RGGI), the Western Climate Initiative, and the Climate Protection Agreement amongst others.

The North American Electric Reliability Corporation predicts an 18% increase in electrical demand in the next ten years, and increased renewable energy portfolios are not alone sufficient to meet this growing energy demand. Even with commitments to renewables and clean energy, there are over 100 new coal fired plants on the drawing boards for U.S. electric utilities. The most environmental and financially viable way for the U.S. to meet our growing energy demand is not to build additional generation capacity, but to use the existing capacity more efficiently.

The Electric Power Research Institute (EPRI) projects that smart grid-enabled distribution systems in the U.S. could reduce electricity consumption by 5% to 10%, carbon dioxide emissions by up to 25%, and the costs of power-related disturbances to business by 87% through the use of AMR and real-time pricing, distributed generation resources, real-time energy sensing and direct load control. The EPRI has also estimated that a $4.2BB investment in energy efficiencies such as those mentioned above, could reduce peak demand by 6.4%, or 45,000MW. Building new generation capacity to generate the same 45,000MW would cost $8.5BB annually and result in increased carbon emissions of 100 million tons a year.

Today many utilities lack a real-time view as to where the electricity they are sending out onto the grid ends up. Without a real-time view of distribution grid operations, utilities often rely on manually reading analog meters on a monthly basis to get a picture of end-users’ electrical usage. Under this model, utilities are able to see the total amount of energy consumed by an end-user, but not when that energy was consumed.

The U.S. electrical generation and distribution follows a model established during the industrial revolution, which continued unchallenged until the 1970’s energy crisis. This model capitalized on the combination of economies of scale and cheap fuel, and resulted in the construction of large capacity generation plants located close to fuel sources and away from populated areas. Generation was connected to load centers via High Voltage (HV) Transmission lines and Medium and Low Voltage (MV and LV) Distribution lines.

Today’s grid is outdated and results in many economical losses for commercial and residential end-users. These losses come in many forms, from basic outages to more complicated power quality disturbances, which are becoming more and more serious in an economy dependent upon digital processes. One aim of the smart grid is to utilize multiple technologies to reduce PQ issues, which cost the U.S. economy over $100BB a year.

Demand Side Management/Direct Load Control

Electric utilities are charged with meeting the combined electrical demand of end-users by increasing and decreasing generation accordingly. Baseload generation is the lowest level of generation required to meet electrical demand over a twenty-four hour period. As electricity demand increases above baseload, utilities produce more electricity in active generation facilities, and also activate reserve additional generation resources often referred to as peaker plants. Peaker plants are activated to meet periods of peak demand when the electrical load the utility must supply is at its highest point. Peaker plants are very expensive to activate. If a utility does not have access to a peaker plant, they are forced to purchase energy on the open market which can be extremely costly.