There is a growing realization that electricity will be a driving force of the U.S. economy in the 21^st century. And that smart distribution technologies will be necessary to sustain that electric service.  Leading utility executives are concluding that, over time, the practical and cost-effective deployment of Smart Grid strategies will separate long-term winners and losers.

Simply stated, they are starting to see the Smart Grid as smart money. This change comes from a growing grasp of the business case. And from an evolving understanding of the five pieces that make up the essence of a Smart Grid.

Business Case

Distribution utilities are under pressure to meet new electric energy needs. Historically, however, investment in smart distribution systems has been low as utilities struggled with tightened budgets. By some estimates, less than 75% of North America's substations have distribution information and communications systems. The penetration at the system feeder level is estimated at only 15-20% (Utilipoint, 2006). Since nearly 90% of all outages originate in the distribution network, it’s no surprise that the industry is now making a case that investment in intelligent distribution technology should be at or near the top of their priority list.

A Smart Grid implementation scenario based in San Diego showed that an initial $490M investment would generate $1.4B in system benefits and nearly $1.4 B in societal benefits over 20 years.  A Smart Grid also serves an important role in facilitating energy efficiency, distributed generation, and renewable energy to improve environmental outcomes.

Electricity Delivery of the Future

Now that the business case is starting to come clear, utility professionals are asking "how do we get there from here?" The key is an integrated platform that allows a utility to expand tomorrow, while leveraging installed infrastructure today. At Advanced Control Systems, we believe such a platform has five essential pieces.

1. Advanced Metering Infrastructure

AMI systems that support two-way communications with customers while allowing secure and reliable system-wide communication for distribution automation are the enabling foundation for the Smart Grid.

2. Distribution and Outage Management

Distribution and outage management systems (DMS/OMS) provide real-time response to adverse or unstable conditions. They save money and improve customer service. Through the consolidation of both real-time OMS and DMS functionality, telemetry, and integrated security, smart distribution systems will be poised to become truly self-healing.

3. Distribution and Substation Automation

A Smart Grid requires control center supervision, area-wide solutions and visualization with centralized modeling. Implementations should leverage installed infrastructure and use a model-based, scalable approach. This practical, cost-effective method ensures that current technology eventually gives way to reactive, software-driven intelligence.

4. Simulation and Optimization

Smart Grid operations will make effective use of simulators to improve operational performance and prepare for emergencies. Distributed resources will optimize the network for increased reliability, security, and fuel diversification. Modeling will be important in planning for distributed resources and transitioning control from a centralized to decentralized operation.

5. Enterprise Business Intelligence

Overlaying the first four pieces is the enterprise business intelligence derived from system data and analytics. This important piece provides high-level presentation and decision support through real-time dashboards and historical analysis. Increasingly sophisticated modeling will eventually create knowledge from data. But that evolution requires that all operations build on a common information blueprint and industry standard object models (for example, common information model, WG-14, open applications group).

Intelligent distribution systems are an inevitable reality for utilities as they replace aging infrastructure, deal with capacity constraints, and strive to meet the demands of increasingly environmentally conscious and sophisticated customers. Although capital flow into the energy sector is improving, it is time for distribution companies to strike an optimal balance between cost, quality and service in pursuit of a Smart Grid – a Smart Grid that should be built on top of five essential pieces.

David Moore is the President of Atlanta-based Advanced Control Systems, which develops open access Smart Grid applications for utilities. Portions of this article were adapted from an editorial in Electric Light & Power Magazine.

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