Energy Efficiency and the Smart Grid

Dale Pennington and Nicole Pennington, Utiliworks

The current smart grid environment focuses on energy efficiency. The global consciousness recognizes the need to conserve energy as natural resources continue to deplete. To understand how the smart grid can maximize energy efficiency, one must analyze how each conservation tactic relates to a particular grid component.

Recent work by Pacific Northwest National Laboratory (PNNL) describes smart grid-related mechanisms that potentially reduce electricity usage; important now, but critical years later.

“In 30 years, the United States will be home to 100 million more people, roughly a third more than we have today,” according to the U.S. Census Bureau in smart grid introduction materials.

This furthers the need to increase grid efficiency as more outlets, pollution and strain are bound to follow the increasing population. In particular, conservation voltage reduction and advanced voltage control, consumer education and feedback, and deployment of diagnostics in residential and commercial buildings allow for the greatest potential energy savings.

To maximize loss reduction regarding efficiencies in voltage reduction and advanced voltage control, a utility must gather appropriate field data, have applications that can use the information, and decide the parameters to manage its voltage program. To maximize s utility’s potential savings, advanced metering technology must be implemented. New smart meters record and transmit the measured voltage at discrete intervals, allowing utilities more data for analyzing customers’ usage trends. Many low-end meters provide voltage as a standard measurement. Many advanced metering infrastructure (AMI) systems have the channel capabilities to capture and transmit information in nearly real time to utilities’ control systems. Many questions must be addressed, however, before voltage reduction and control can be optimized. What are the exact parameters that will initiate the time and duration of voltage reduction? What is the expected benefit? What are the new processes to be created? Are there potential negative effects it may have on my client base? What are the capital costs required to accomplish my voltage program, and what changes must be initiated within the utility to make this program successful?

If managed appropriately, a utility making $500 million annually in kilowatt sales would save $10 million every year at 2 percent direct reduction. As mentioned in the PNNL report, 4 percent can be obtained, which would double the savings to $20 million a year. Proper management of voltage control could avoid disruptions to utility customers and be means of a legitimate financial incentive.

Another energy-efficient subsection relates to consumer education. PNNL attributes a 3 percent direct reduction in energy usage, making it one of the most promising efficiency mechanisms. On the $500 million annual sales in electricity, this is worth more than $15 million. For this to be effective, though, the technology must be simple and not interfere with consumer routines. At the residential level, the smart grid must be an easy set-it-and-forget-it technology. Department of Energy (DOE) research indicates consumers are ready to engage with the smart grid. Utilities must find how to stay connected to consumers. While there has been an explosion of new methods and technologies to communicate customers’ energy use, every communication path has a cost and might be effective only with a specific client community. A utility also must understand what percentage of its clients has the communication channel available. Is using text messaging helpful in generating energy efficiency with its clients? How about sending information to an iPhone and loading up a Google application on the phone to help a customer understand his or her energy costs and usage? This is a small sampling of available communications channels a utility might have to support or consider within its energy efficiency and client conservation programs.

Another energy efficiency subsection relates to diagnostics in residential and small- to medium-sized commercial buildings. Smart meters easily record critical data such as power factor. For example, when a building measures a low power factor, the meter can detect it. This lends itself to possibly addressing the low energy efficiency problem. Many questions must be answered, however, before an advanced meter can translate into energy savings. How does one gather this valuable data from a meter and convert it to a client’s corrective action to improve energy usage? What does the client know about power factor, and what does he or she know about improving it? Should the client be penalized if the power factor is below a certain threshold? Is the penalty significant enough to the client that it would be worthwhile for him or her to purchase the necessary equipment to rectify the situation? If customers are not informed of the technology, information accessibility and drawbacks of resisting efficiency, they’ll be unable to make needed adjustments. Improving power factor is a positive goal, but the process and methods to obtain it must be built into a concrete plan.

While outlining these three areas of energy efficiency improvements, it becomes apparent that significant benefits can be obtained. Utilities, however, must commit to significant planning to address multiple smart grid issues. Each benefit brings a different group of participants, costs and technology that must be accounted for. All the benefits can be obtained.

Dale Pennington is managing director and executive consultant at Utiliworks Consulting, a professional services organization that helps utility clients assess, design, procure and deploy advanced metering systems and smart grid technologies.

Nicole Pennington is marketing coordinator at Utiliworks Consulting.

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