The right way to make the business case for self-healing smart grids

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By: SGN Staff

The very hardest part of many smart grid projects is making the business case to regulators or (in the case of munis) city councils. Happily, self-healing grids have now been around long enough that we have real-life data to help with this challenge.

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The company with arguably the greatest experience in self-healing is S&C Electric Company. So I asked Vice President Mike Edmonds to explain the new, better approach. I encourage you to take a glance at his remarks below. For more details, click to Page 2 to view the video "From Old Grid to Smart Grid: The Economic Impact on Electricity Customers.” It further describes this new approach for evaluating the benefits of a self-healing grid and explains the economic impact of a power disturbance on an "old” grid versus a modern grid. - Jesse Berst

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By Mike Edmonds

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For years, we’ve heard skepticism about whether self-healing grid automation solutions can pay for themselves. Our answer is that this type of system can absolutely provide a strong return on investment. Self-healing grid technologies have proven that they can minimize outages and restore power quickly. Yet all too often, we’ve seen a narrow focus on only one side of the business case equation, and that leads to misunderstanding about the total economic benefits that a self-healing grid can provide.

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The danger of focusing only on cost savings

In many cases, the main focus is on the cost savings that utilities will realize from a DA program. These cost savings are real. However, an exclusive focus on these savings neglects the biggest benefit of a self-healing grid: a major improvement in power reliability for all those served. Improved power reliability not only increases quality of life for customers, it also provides significant economic benefits to the community.

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Power outages cost the U.S. tens of billions of dollars every year. Improved power reliability can also help attract new business, which is essential to increasing the economic vitality of a community. As we’ve written about previously, a reduction in outages will also reduce the costs associated with those outages for everyone in the community - consumers, businesses, schools, government and other non-profit entities.

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For instance, it is not unreasonable to expect a 40-50 percent reduction in customer outage minutes with system-wide deployments of self-healing technology. In Chattanooga, Tenn., which boasts the most automated grid of its size in the U.S., local utility EPB has already exceeded outage reduction goals of 40 percent or more, just one year after completing installation of intelligent automated switching devices. EPB has estimated that their self-healing smart grid saves between $50-60 million every year in prevented power outages and lost productivity.