Part IV: Will Industry Focus on New Power Vision?

By Kathleen Davis, senior editor

Given that most every item and entity in the power industry is categorized, separated, compartmentalized and labeled, the Electric Power Research Institute (EPRI) report “Vision for a Holistic Power Supply and Delivery Chain” envisions a 180-degree turn from how the power system is laid out under the choppy status quo.

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Questions remain whether such a vision is practical and feasible. Utility Automation & Engineering T&D (UAE) asked Stephen Lee, EPRI project manager and author of that holistic vision. In this final installment, Lee talks about whether an increase in blackouts around the world might be connected to market changes and how holistic visions of an electric entity from fuel to switch could help decrease that number.

Where Do Blackouts Originate?

Lee said that he cannot say “with any degree of confidence” that market changes lead directly to blackouts, but there is an underlying note that hints it might lead to bigger, wider, larger blackouts.

“Initial events that lead to blackouts are usually random,” Lee said. “What happens after an initiating event may determine whether it leads to a sizable blackout.”

The North American Electric Reliability Corp. (NERC) has compiled a list of blackout causes, and protection system issues and generator turbine control actions lead the problem, Lee said. The leading trigger remains on the transmission and distribution side with equipment failure. Voltage sensitivity of generator auxiliary power systems and human errors appear lower on the list.

“One cannot attribute random natural initiating events to market restructuring,” Lee said. “Problematic operation of equipment and perhaps human errors may be partially attributable to maintenance, inspection or training.”

It could be argued that market restructuring, which provided less cash for maintenance, could contribute to those problems, as well as the restructuring process creating complicated grid operations—with more complications meaning more chance of human error, Lee said.

But he doesn’t advocate laying blame.

“To me, this debate about market restructuring should be behind us,” Lee said. “Instead, we need to work together towards a holistic solution for the planning and operation of the entire power grid.”

How the Holistic Vision Could Keep the Lights On

For Lee, the key to all of these problems mentioned in installments of this series remains simple: No one thinks about the whole picture. No one thinks about how one change in the chain can move up or down that chain and cause issues (like a more complicated grid operations structure potentially increasing human error and triggering blackouts, for example).

“The key criterion is to assess the benefits and the costs of different investments into the various parts of the entire electricity supply and delivery value chain, from the sources of electricity to the consumers,” Lee said.

Lee mentioned electricity payments for wind generators as an example. If paid for regardless whether the entire power value chain benefits, then costs accumulate at other parts of the chain. Because businesses run on money, it is essential to translate social objectives (like climate change issues) into cash, Lee said.

“If we approach these problems holistically, we will find that the solutions will fall out naturally with the properly designed incentive systems,” he said. “If we fail to design the incentive system properly and holistically, we may find unintended consequences, which get in the way of our global objectives.”

Getting people on board for any social issue comes down to finances, and creating the proper incentives system is key for getting a healthy, happy and holistic power system, Lee said.

This article is the fourth and final installment of a multipart series on EPRI’s “Vision for a Holistic Power Supply and Delivery Chain” report. Read all of Lee’s interview and previous installments of the series at http://utilityautomation.com.

Utilities to Spend on Smart Gridp

Despite weakened worldwide economies, electric power utilities continue to make significant financial commitments in smart grid building blocks and related automation programs, according to a June Newton-Evans Research Co. Inc. study. In the Newton-Evans tracking study released in July, a significant majority of the 118 electric power grid officials from 36 countries indicated that capital spending for control systems, substation automation, smart grid-related programs and advanced metering rollouts are largely on track, albeit with some pushback in timing.

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Several planned investments for transmission and distribution grid infrastructure components have been deferred this year but are expected to rebound as early as fourth quarter 2010. Newton-Evans estimates total capital spending for transmission and distribution of electricity by electric power utilities around the world to be in the range of $85 billion to $100 billion. The 2009 outlook overall is trending toward the lower end of that range. If industrial demand for electricity picks up moderately by mid-2010, the outlay for CAPEX investment likely will see a solid increase by late 2010 and into 2011.

GE to Showcase Smart Grid On Military Base

The U.S. Department of Defense (DOD) has awarded General Electric Co. $2 million in federal stimulus funding for a smart microgrid demonstration project at Twentynine Palms Base, Calif. GE and the Environmental Security Technology Certification Program (ESTCP) office at the DOD are finalizing the project contract.

GE will provide an enhanced suite of microgrid control system technologies that will enable a military base to more effectively manage its local energy resources and interaction with the larger electrical grid network.

To develop this new system, GE Global Research in upstate New York will develop and incorporate advanced algorithms and computational decision engines into a microgrid controller built by GE Digital Energy.

NYC Develops Power Plan

The New York City Economic Development Corp. retained CRA International to analyze the economic and environmental impacts of transmission and generation projects that could improve power supply to New York City.

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The study concluded:

  • Because of a projected surplus of generating capacity, there is adequate time to evaluate options.
  • From a consumer’s perspective, a new power plant is superior to the transmission projects analyzed.
  • Other projects that could create significant benefits to the region include a proposed transmission upgrade from Albany to Westchester County and a proposed transmission cable under the Hudson River from northern New Jersey to midtown Manhattan.
  • The study also identifies numerous projects to supply New York City’s energy needs, including offshore wind farms, large transmission lines, conventional generating technologies and increased imports from other states and regions.

Green Power Express Garners Partners

MDU Resources Group Inc. will participate in ITC Holdings Corp.’s Green Power Express transmission project.

The Green Power Express will provide grid access for many wind farms in the upper Midwest and traverse portions of North Dakota, South Dakota, Minnesota, Iowa, Wisconsin, Illinois and Indiana. It will include some 3,000 miles of extra-high-voltage 765 kV transmission and connect with existing 765 kV lines in Illinois and Indiana. The project will facilitate the flow of up to 12,000 MW of renewable power to the Midwest and mid-Atlantic regions of the United States. It is estimated to cost $10 billion to $12 billion.

On the Net: http://thegreen powerexpress.com

AEP Ohio Provides More Than $125,000 in Assistance in a Month

During its first month, a program helped more than 450 low-income AEP Ohio customers maintain or restore electric service by applying more than $125,000 in utility assistance grants directly to their bills.

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AEP Ohio, a unit of American Electric Power, and Dollar Energy Fund created the Neighbor to Neighbor Program in May.

“Many AEP Ohio families are in need of a helping hand during these challenging economic times,” said Joe Hamrock, AEP Ohio president and chief operating officer. “We are proud of the efforts so far, and we continue to seek ways to promote the program to offer assistance to other struggling families.”

A family of four earning up to $44,100 a year is eligible. To qualify, households must have made an effort to pay their electric bills in the past 90 days and have a back balance.

AEP Ohio provided $1 million to the Neighbor to Neighbor Program

On the Net: http:// dollarenergyfund.org

AWEA Gives Transmission Below Average Grade

In July, the American Wind Energy Association (AWEA) issued a wind report card with a C- in transmission. The “20% Wind Report Card” follows up on the May 2008 U.S. Department of Energy report “20% Wind by 2030,” which examines the feasibility of the nation’s receiving 20 percent of its electricity supply from wind energy by 2030 (see table for detailed analysis of the AWEA report card).

On the Net: http://awea.org/newsroom/releases/pdf/AWEA20%25ReportCard09.pdf

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EEI expo: Chu describes carbon-constrained world

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BY Teresa Hansen, editor in chief

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Energy Secretary Steven Chu addressed industry executives June 25 at the annual Edison Electric Institute (EEI) conference and expo in San Francisco.

The secretary, who speaks as a scientist and not like political figures who formerly filled the position, talked primarily about climate change. He thanked EEI for supporting the Waxman-Markey climate change bill, which passed the House of Representatives the next day, and said that the industry’s outlook is not doom and gloom but one of optimism and hope.

“Sooner or later we will be living in a carbon-constrained world,” Chu said.

He listed five things we need to do to get where we need to be.

1. Alignment of financial incentives. “We need to break the business-as-usual model of making more money by selling more energy,” he said. Policies that provide utilities with return-on-investment incentives on things other than energy sales need to be developed. The DOE’s goal is to create demand response programs that will lower peak demand by 20 percent, he said. This is one reason the department is allotting $3.9 billion in stimulus funding for smart grid investment. The minimum grant amount is $200 million per grant, and the office has made $615 million available for smart grid demonstration projects, he said.

2. Energy efficiency. Energy efficiency matters, and the department is making $90 million available to California energy programs, Chu said. Efficiency gains in household refrigerators have saved more energy than all the energy produced by nonhydro renewable energy sources in the United States, he said.

3. Renewable energy. The American Recovery and Reinvestment Act is designed to double all nonhydro renewable energy generation in the next three years, and 20 percent of U.S. energy can be supplied by wind power, Chu said. For renewables to meet their potential, the nation’s grid must be modernized, and the smart grid must be developed, Chu said. The National Institute of Standards and Technology has already identified more than 80 standards.

4. Carbon capture and sequestration (CCS) and nuclear energy. The United States leads the world in coal reserves, so much so that little prospecting for new coal supplies is being done, Chu said. An international collaboration in CCS technologies is necessary right away, he said. “Even if the United States turns its back on coal, and I don’t believe it will, China and India will not,” Chu said. He said there is a worldwide goal to have 20 CCS pilot plants operating, a reason the DOE is reviving FutureGen. It is also important to find technologies to retrofit existing plants with stack capture technology, Chu said. Nuclear power is needed for carbon-free, baseload generation, and nuclear waste is solvable scientifically and politically, Chu said. He didn’t elaborate how the DOE will handle it.

5. Transformational energy technologies. The DOE has always funded basic science, and it provides an opportunity to enlist “knowledge horsepower” to solve the nation’s and world’s energy problems, Chu said. Because buildings consume 40 percent of the energy produced in the United States, the department and industry should look for new ways to design them, he said. New energy crops being developed for biofuel have much potential and make more sense than corn-based biofuels, he said.

The DOE is ready and able to address the nation’s and world’s urgent energy challenges, Chu said.

“For the first time in human history, science has shown that human beings are altering the destination of our planet,” Chu said. “The consequences of what we are doing today will not be fully realized for at least 100 years from now. One of the ironies about climate change is that the ones who will be hurt the most are those yet to be born.”

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