Smart grid resources and the paradigm shift to come (aka locational cost effectiveness)



By Tom Osterhus


A recent California ruling has set the stage for a significant paradigm shift in the pursuit, approval and integration of smart grid resources.  And as California goes, so often goes the rest of the country.  The major consequence to utilities is that traditional system wide Integrated Resource Planning (IRP) is giving way to more granular and micro-oriented planning at the circuit, bank and regional level with a focus on customer satisfaction. 


As more and more distributed resources emerge disproportionately on certain banks, and as EV load building creates clusters of load growth, the issue of optimally balancing supply and demand is increasingly driven to lower levels of planning, namely circuits.  Eliminating reliability issues before they develop improves customer satisfaction and raises the value of these efforts relative to the costs.  There is an optimal mix of demand side and supply side (DG) resources for EACH circuit, now, and more opportunity to yield a more valuable “bang for the buck” by intelligently targeting the right mix of resources to each circuit. 


We have had lengthy and detailed discussions with California regulators and planners along these lines for a couple of years now, and it is clear that the State intends to encourage more granular, tactical and financially optimal solutions at a more granular level.  This does not supplant traditional IRPs at the system level, but it does dramatically change the landscape within which micro level resources are pursued and approved.  In our experience, by optimizing both supply side value buckets (e.g., energy, capacity, ancillary services) simultaneously with grid based value buckets (e.g., improved reliability, voltage reduction, line loss mitigation, deferral of distribution assets, and dynamic dispatching of DG against intermittent wind/sun), utility pilot examples have shown two to fivefold increases in cost savings from optimally tapping into the right mix of resources at this more granular level.


The recent California Rulemaking (13-11-005, dated 11/21/2013) expressly requires a paradigm shift in approval of demand side and Smart Grid based resources.  Specifically, page 19 states that “Recent experience suggests that we can get more “bang for the buck” by targeting energy efficiency programs to particular geographic areas, or to particular types of customers.  For instance, we have observed highly variable results from whole house retrofits depending on climate zone, and also depending on a home’s vintage.  Programs can also be targeted at customers in transmission-or generation-constrained locations to maximize their value.  We will provide the energy efficiency community (and in particular the administrators) additional policy and cost-effectiveness calculation guidance to address these important program design issues, as well as to consider whether or what customer equity issues might arise from more granular targeting of programs.”


A picture is worth mega-word.  Here we see that by forecasting acre-level loads within specific circuits, we can identify exactly where a utility can create much more value from DG, EE, DR (red shading shows overloaded circuits).  In addition, we can determine where load building (EV charging stations, economic development) actually enhances the operating capacity, and value, of the grid overall (see green, under-loaded circuits).  This type of granular analysis also supports exports of load forecast to T&D power flow tools (e.g., CYME, SynerGEE, MilSoft) such that more intelligent grid design is enabled, transmission line construction is optimized, predictions of future load due to innovation (e.g., commuter rail, EV) is realized, outages are reduced, and customer satisfaction is improved. 


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