US Department of Energy Smart Grid Perspectives & Implementation Experience

1. US Department of Energy Smart Grid Perspectives & Implementation Experience Presented to EENR and ITC Committees of National League of Cities Eric Lightner Director, Smart Grid Task Force September 9, 2011

2. Presentation Outline • Overview of Smart GridDefinition, Stakeholder Process, Applications, Values • Smart Grid Challenges • Recovery Act Grid Modernization Focus Areas • Benefits Methodology and Analysis Tool • Potential Smart Grid Benefits Relating to EENR 2

3. US DOE Smart Grid Implementation Plan 3

4. Smart Grid: What is it? DOE has defined seven core Smart Grid characteristics The Smart Grid Initiative seeks to develop and implement advanced information, communication, and control technologies, along with supportive policies, to achieve all seven characteristics. 4

5. Mapping of Smart Grid Assets (Components), Applications, and Technology Areas technology areas manage peak load wholesale operations Applications ancillary services integrate renewables enhance reliability efficiency & carbon PMUs … EVs & PHEVs Smart Meters Comm. Networks Business Systems DG DS DA/FA* DR Primary Assets Enabling Assets * DA/FA: Distribution automation/feeder automation 5

6. Assets + Applications Value Creation 6

7. Established, sound business case built on validated performance data of benefits and costs Technologies, components, and systems that fully exploit IT capabilities to reveal value at all levels (G, T, D & customer systems) Interoperability standards for systems and components Strong cyber security for a smart grid architecture Skilled workforce to build, install, operate, and maintain systems and equipment (current and future) Consumer understanding of the electrical infrastructure and opportunities enabled by smart grid technologies Key Challenges for a Smart Grid 7

8. OE Programs Addresses Key Challenges Challenges to Smart Grid Strong Business Case Cyber Security Technologies and Components Interoperability Standards Skilled Workforce Educated Consumers Smart Grid Stakeholder Books Federal Smart Grid Task Force Smart Grid R&D Cyber Security For Energy Delivery Smart Grid Investment Grants Energy Storage R&D Workforce Training Development Grants Interoperability Standards Smart Grid Websites Smartgrid.com Clean Energy Transmission Reliability OE Activities Infrastructure Security and Energy Restoration Smart Grid Demonstration Program Smart Grid Information Clearinghouse Stakeholder Engagement Process Smart Grid Development NARUC FERC NIST Smart Response Collaborative DOE EERE Programs State Training - California - Arkansas - Colorado - Wyoming - Northern Plains and Rocky Mtn Consortium Utility Programs SmartGrid Consumer Collaborative NARUC DHS S&T DHS NCSD NIST DOD Spiders NERC EPRI NIST APPA DOE ARPA-E FERC Other Activities DOD Spiders NRECA EPRI The Galvin Initiative ISGAN PSERC 8

9. Recovery Act Grid Modernization Focus Areas 9

10. Recovery Act – Grid Modernization • Programs created by statute • Energy Infrastructure Security Act 2007: • Smart Grid Investment Grants (Sec. 1306) • Smart Grid Regional Demonstrations (Sec.1304) • Recovery Act Directed Programs: • Workforce Training - $100M • Interconnection-wide Transmission Planning and Resource Analysis - $80M • Interoperability Standards - $12M • Additional OE initiatives • State & Local Energy Assurance • State Regulatory Assistance One-time Appropriation, $4.5B in ARRA funds • $620M for demonstration projects • $3.425B for deployment projects Resource Assessment & Transmission Planning Smart Grid Interoperability Standards Other Workforce Training Smart Grid Demos Investment Grants Amounts are in billion US Dollars $4.5 billion obligatedby end of FY10 $1.6 billion paid out to date 10

11. Recovery Act – AMI Projects & Customer Engagement 76 projects have AMI and some type of customer program, most being pilot activities engaging a limited segment initially Note: Project components are NOT mutually exclusive

12. Recovery Act – Distribution Automation

13. Consumer Behavior Study Projects • Ten statistically rigorous studies will be conducted to: • Identify factors influencing customer acceptance of dynamic electricity rates and AMI technology • Quantify the effect of dynamic rates on electricity consumption (peak and overall load reduction) • Understand the relative and combined contributions of pricing, information feedback, and control technology on consumer behavior • Provide statistically-relevant data with analysis to researchers and decision-makers Oklahoma Gas and Electric (OG&E):undertaking 2 yr study with 4,600 residential and 650 small businesses to determine load reduction from combinations of dynamic rates and enabling technologies OG&E expects to avoid building two 165 MW peaking units based on achieving a 20% customer participation rate (on an opt-in basis) 13

14. Recovery Act - Energy Storage 20 Li-Ion community energy storage units on Detroit Edison grid 14 $586 million in private investment from $185 million in federal funds Better than 3:1 Energy Storage Regional Demonstration Projects Include • Large Battery Systems (3 projects, 53MW) • Compressed Air (2 projects, 450MW) • Frequency Regulation (20MW) • Distributed Projects (5 projects, 9MW) • Technology Development (5 projects)

15. Recovery Act – PMU Deployment • The SGIG program is supporting the deployment of 804 phasor measurement units (PMUs) across the US, providing nearly complete coverage of the transmission system. ATC 48 PMUs NYISO 39 PMUs ISO-NE 30 PMUs WECC 250 PMUs PJM 81 PMUs MISO 150 PMUs Duke Energy Carolinas 102 PMUs Midwest Energy 21 PMUs SGIG Total 804 PMUs Entergy 38 PMUs FPL 45 PMUs Source: Map from North American Synchrophasor Initiative, 2009 15

16. Recovery Act - Transmission Planning • Consensus scenarios for future electricity supplies and analyzing environmental and other considerations that will be incorporated into transmission plans • Long-term resource and transmission planning studies in 2011, with update in 2013 • The knowledge and perspective gained from this work will inform policy and regulatory decisions in the years to come and provide critical information to electricity industry planners, states and others to develop a modernized, low-carbon electricity system • Time horizon expanded to 20 years for planning • First time environmental stakeholders included in process 16

17. Recovery Act - Workforce Training 17 • Recipients of the Recovery Act funds will provide training in demand response, distributed generation, energy utilization/optimization, and cost simulations. • $100 million in Recovery Act funds were being offered to 54 workforce training programs. Target benefits include: • Up to 175,000 technicians, staff, and management positions filled with qualified personnel • Skilled workforce educated in energy conservation and renewable energy • Increased investment in advanced laboratory equipment, faculty development, and academic research • Increased skills and pay rates for technicians and displaced workers • Increased awareness of cybersecurity issues

18. Released NIST Framework and Roadmap for Smart Grid Interoperability Standards, Release 1.0 Released Guidelines for Smart Grid Cyber Security Launched Smart Grid Interoperability Panel (SGIP) to provide a forum for collaboration with the private sector – now 1,750 members from 634 organizations Recovery Act - Smart Grid Interoperability Framework Through close work with DOE, the NIST Smart Grid Interoperability Standards Program has: 18

19. Smart Grid Benefits Analysis Methodology and Tool 19

20. Smart Grid Computational Tool » What is the SGCT? • The SGCT is an Excel based tool that follows a specific methodology for identifying and quantifying smart grid project benefits.

21. Smart Grid Computational Tool » What is the primary purpose? • The primary purpose of the SGCT is to account for benefits delivered by a smart grid project. Account for Project Benefits and Value (Backcasting)

22. Smart Grid Computational Tool » What is the secondary purpose? • The SGCT can also be used for estimating and forecasting the benefits of future projects. Estimate Potential Project Benefits and Value (Forecasting)

23. Smart Grid Computational Tool » What methodology does the tool use? • The structure of the tool’s analysis is based on a series of logical questions. MODULE 1 What is the goodness worth? What are Smart Grid technologies? What does the Smart Grid do? How does it do that? What “goodness” results? Assets Functions Mechanisms Benefits Monetary Value MODULE 2 MODULE 3 Metrics Calculations Forecast What data should be tracked to capture benefits? What equations are required to translate data into monetary value? How can benefits be projected beyond the first 5 years?

24. The SGCT can calculate the value of specific benefits* *Methodological Approach for Estimating the Benefits and Costs of Smart Grid Demonstration Projects, EPRI, January 2010. 24

25. Potential Smart Grid Benefits Relating to EENR 25

26. Smart Grid for Energy Efficiency Assuming 100% penetration of smart grid in 2030: • 12% direct reductions • 3% reductions from smart charging of PEVs at very high penetrations (> 60%) • 5% indirect reductions from reinvestment of $ from avoiding the addition of extra capacity for regulation and reserves to support a 25% renewable portfolio standard • ~ ±50% uncertainty under each mechanism investigated Pratt, R. G., et al., “The Smart grid: An Estimation of the Energy and CO2 Benefit,” Pacific Northwest National Laboratory, Dec 2009. 26

27. Smart Grid for Operational Efficiency Nameplate Smart grid technologies improve system efficiency and asset utilization to achieve a significantly higher load factor. (Note: an average load factor of 43% is shown in the chart for 2008.) Ave. Demand Data Source: Electric Power Industry 2008: Year in Review, U.S. Energy Information Administration (January 2010) 27

28. Smart Grid Automated Demand Response Saves Capacity and Energy Electric Load Profile of Auto DR Participants on 8/30/2007 Source: PG&E 28

29. Smart Grid Integrates Renewables Projected Portion of Variable Generation 29

30. Smart Grid for Managing High Penetration of Renewable Energy No wind 11% renewables 23% renewables 35% renewables Lew et al. “How do Wind and Solar Power Affect Grid Operations: The Western Wind and Solar Integration Study,” National Renewable Energy Laboratory, (September 2009), p. 6. 30

31. Smart Grid Enables Electric Vehicles Vision for EV and PHEV Growth 31

32. Smart Grid for Integration of PEV and Renewables • Use plug-in hybrid electric vehicles to aid in renewable generation source integration • Determine balancing requirements for 10 GW of additional wind • NWPP oriented • Represents 12% RPS requirement • Determine resource availability • Use 2001 NHTS Data for driving habits and population information • Use V2GHalf and V2GFull charging Balancing Requirements Resource Availability Max. charging (3.6 kW = 240V*15A) Max. charging (3.6 kW) charging V2GFull charging Never discharge ! discharging discharging V2GHalf Max. discharging (-3.6 kW) 32

33. Smart Grid for Integration of PEVs and Renewables • Completed report with the following key insights % of NWPP vehicle fleet to meet new balancing requirements • All new balancing requirements for 10GW of new wind capacity in NWPP by 2020 could be furnished by electric vehicles • Solution insensitive to battery size • Availability of infrastructure during day is essential Population to meet additional balancing based on work charging availability 33

34. Information Resources Smart Grid Information Clearinghouse Smartgrid.gov • Smart grid project summaries (with focus on non-ARRA projects), use cases, and business cases for the U.S. and internationally • >200 & >50 smart grid projects in the U.S. and oversees; >1,000 smart grid-related documents and multimedia (use cases, c/b analyses, business cases, legislation & regulation, standards, and technologies) • ARRA smart grid project summaries and other Federal program activities • Reporting of ARRA SGIG & SGDP projects (progress, metrics and benefits, consumer behavior studies) and provision of analysis results to the public 34

35. Contact Information Eric M. Lightner Director, Smart Grid Task Force Office of Electricity Delivery and Energy Reliability U.S. Department of Energy (202) 586-8130eric.lightner@hq.doe.gov For more Smart Grid information: www.smartgrid.gov 35