Jerry Jackson, Ph.D. Leader & Research Director Smart Grid Research Consortium, USA

Transcription

1 Jerry Jackson, Ph.D. Leader & Research Director Smart Grid Research Consortium, USA

2 Evaluating the Business Case for Smart Grid Investments Survey of utility activities The SG big picture Investment analysis problems Investment model requirements Customer load profiles The consortium SG investment model 7 on-the-ground recommendations Example model applications

3 Utility SG Activities and Analysis Approach to Smart Grid Investment Strategies 60% Percentage of Population 50% 40% 30% 20% 10% 0% Waiting Evaluating Pilot Initiated Source: Smart Grid Research Consortium US Survey, 7/2010 Coops Municipals Percentage of Population % 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Formal Business Model Yes No Coops Municipals

4 Utility Returns and Load Data Sm art Grid Payback Requirem ents Years Likely Peak Hour Impacts 1 0 Coops Municipals Percentage 60% 50% 40% 30% 20% Coops Municipals 10% 0% No Information Rule of Thumb Other utilities Our Custumer Analysis

5 How Will We Get Where We Are Going On Time? Utility SG Development Expectations Years Trials/pilots Begin system-wide deployment Majority of customers with in-premise technologies for DR, CPP, etc. Coops Municipals

6 The Smart Grid Big Picture

7 Our Focus Smart Grid Study Customer and Distribution Focus Smart Grid Study Customer and Distribution Impacts on Generation Functions

8 Questions We Have to Answer to Arrive on Time Which technologies, software, programs? Which distribution system areas? AMI/smart metering Distribution automation Behind-the-meter technologies Behind-the-meter programs Timing of components? How to evaluate?

9 The Basic SG Investment Problem High Outcome Discounted Net Benefit... Expected Investment Outcome Risk Low Outcome 0 (break-even) Remote Meter Reading Remote Connect/ Disconnect Outage Detection/ Restoration Distribution Automation Demand Response

10 Another SG Investment Issue Investment analysis requires future values to be discounted: divide value by (1+r) t Result: $1,000 benefit 5 years in the future = $784, 10 years = $614 (at 5% discount rate) Implications? $ Present Value of a $1,000 Beneft Year of Benefit

11 Smart Grid Research Consortium Formed to Address These Investment Problems 9 coops, 3 municipal and 1 generation utility May 1, 2010 January 31, 2011 Smart Grid Investment Model, User Guide and Conference Table 1. Smart Grid Research Consortium Member Utilities 1. Bandera Electric Cooperative 2. Bastrop Power and Light 3. Bluebonnet Electric Cooperative 4. CPS Energy 5. Gainesville Regional Utilities 6. Houston Country Electric Cooperative 7. Independence Power & Light 8. Lawrenceburg Utility Systems 9. Lower Colorado River Authority 10. Midwest Energy Cooperative 11. Nebraska Public Power District 12. Pedernales Electric Cooperative 13. Southwest Louisiana Electric Membership Corporation

12 SG Investment Model Requirements Standard cost/benefit framework Excel platform/computational subprograms Substation/feeders to in-premise devices/pricing programs Utility-specific monthly kwh, kw, load profile forecasts Baseline and program impacts Capabilities: investment analysis, strategy development, target setting, evaluation,whatif scenarios, scaleable, individual/combined technology/program evaluations

13 Hourly Load Data Development Member Utility Data: Historical Billing Data Energy, Demand by Customer Class Historical System Loads, Weather Data, Customer Class End-Use Hourly Load Modeling US State Utility Customer Hourly Load Profile Databases Service Area Customer Characteristics Utility Energy and Hourly Load Models Residential Customer Utility Average August 5 Hourly Loads 7 6 kw Hour of the Day AC Water Heat Other

14 Customer-Class End-Use Detail Cust Class B-load kw kw Hour of Day Res Baseload Res WH Com Baseload Com WH

15 Models Provide W/WO Demand Management Impacts July Load Forecasts W&W/O Programs System kw Peak Day Peak Day W/Programs Week Day Week Day W/Programs

16 Load Profile Impacts Determine Avoided Power & Capital Costs, etc.

17 Other Inputs Specified in Excel Worksheet Interfaces

18 Results: Discounted Break-Even Curve Provides Intuitive Investment View Cummulative Net Benefit $10,000 $5,000 1,000$ $ $(5,000) $(10,000) $(15,000) $(20,000) $(25,000) Years

19 Results: Benefits Breakdown Avoided GTD Cap Costs Avoided Gen Costs Other Meter Reading Discounted Benefits Avoided Pow er Purchase Charges Field Services Outage Restoration Billing Services Distribution Operations Other AMI Benefits Improved Transformer Load Management Improved Cash Flow Uncollectables Meter Accuracyregistration Theft/Tampering

20 Results: Cost Breakdown inpremis-install Other O&M Discounted Costs Inpremise-hardware AMI Meters DLC-Install DLC-hardware DA-Install DA-Hardware IT Meter Installation Network

21 Example SG Customer Evaluation (Base Case AMI/SM; No Programs) 95,000 meters Mid-TX climate characteristics AMI system planned Current plans w/o customer programs = 8.5 yr payback Project Financial Indicators Net Present Value (NPV, $1,000) $ 30,399 Internal Rate of Return (%) 14.9% Year Quarter Payback (years) Undiscounted Breakeven Period Discounted Breakeven Period Expenditures and Benefits Over 20 Years ($1,000) Nominal Discounted Total Capital Expenditures $ 38,012 $ 33,824 Total O&M Expenditures $ 8,792 $ 5,405 Total Benefits $ 119,654 $ 69,628 Cummulative Net Benefit Summer Peak Day Loads $5, ,000$ $ $(5,000) $(10,000) $(15,000) $(20,000) Years Hour of Day Baseline With Programs

22 Achievable Customer Program Impacts (50% DLC & PCT Saturation, Pricing, Customer Engagement) Project Financial Indicators Net Present Value (NPV, $1,000) $ 146,201 Internal Rate of Return (%) 30.3% Year Quarter Payback (years) Undiscounted Breakeven Period Discounted Breakeven Period Expenditures and Benefits Over 20 Years ($1,000) Nominal Discounted Total Capital Expenditures $ 63,721 $ 56,150 Total O&M Expenditures $ 8,792 $ 5,405 Total Benefits $ 363,816 $ 207,756 Cummulative Net Benefit Summer Peak Day Loads 1,000$ $20,000 $15,000 $10,000 $5,000 $ $(5,000) $(10,000) $(15,000) $(20,000) $(25,000) Years Hour of Day Baseline With Programs

23 Customer Program Strategy Development Project Financial Indicators Net Present Value (NPV, $1,000) $ 30,399 Internal Rate of Return (%) 14.9% Year Quarter Payback (years) Undiscounted Breakeven Period Discounted Breakeven Period No Customer Programs Expenditures and Benefits Over 20 Years ($1,000) Nominal Discounted Total Capital Expenditures $ 38,012 $ 33,824 Total O&M Expenditures $ 8,792 $ 5,405 Total Benefits $ 119,654 $ 69,628 Project Financial Indicators Net Present Value (NPV, $1,000) $ 45,221 Internal Rate of Return (%) 18.6% Year Quarter Payback (years) Undiscounted Breakeven Period Discounted Breakeven Period % Residential PCT Penetration Expenditures and Benefits Over 20 Years ($1,000) Nominal Discounted Total Capital Expenditures $ 39,976 $ 35,617 Total O&M Expenditures $ 8,792 $ 5,405 Total Benefits $ 148,323 $ 86,242

24 7 On-The-Ground Recommendations For SG Investment Models Develop as in-house, long-term modeling tool Include/integrate all tech/sw/programs Ensure scalability Apply monthly analysis Include detailed load profile forecasting model Provide a transparent, easy-to-use, intuitive interface Strategically refine parameters

25 Example Model Applications Representative Model

26 Questions?

27 2011 Smart Grid Research Consortium The Smart Grid Research Consortium is an independent research Consortium open to electric cooperatives, municipal and other public utilities. Consortium members contribute input on project direction and receive benefits of a large-scale research project while sharing costs with other Consortium members. Each Consortium utility receives a Smart Grid Investment Model customized for their utility including monthly customer class/end-use kwh, peak kw and load profile forecasting and smart grid impact models, a User and Resource Guide and two complementary passes to the October conference in Orlando. The Consortium membership fee is $15,000 with early registration through April 30, Smart Grid Research Consortium 37 N Orange Ave, Suite 500 Orlando, FL

28 Research Consortium Leader Dr. Jerry Jackson, leader of the Smart Grid Research Consortium, is an energy economist with more than thirty years experience in smart grid analysis, new energy technology market analysis, energy and hourly load forecasting, and utility program and strategy development. Hewas previously a professor at Texas A&M University and Chief of the Applied Research Division at Georgia Tech Research Institute. He is also president of Jackson Associates where he has worked with utilities, state regulatory agencies, equipment manufactures and others in addressing energy industry issues. His clients include leading technology companies such as Toyota, United Technologies, Ingersoll Rand, state and federal government agencies, and utilities ranging in size from small coops and municipal utilities to the largest investor-owned utilities in the US and Canada. He may be reached at or by at jjackson@smartgridresearchconsortium.org