VX2013: The Smart Grid - Real or Hype?

James Kelly: Let’s lead off with a bit of preparatory material on the smart grid. You’ve all heard about it, and I like to ask people: How many of you would like to have a smart grid? And how many of you would like to stand up and tell us what smart grid is? When I speak to utility executives around the country, I always get all hands up about the smart grid. In fact, some say, “I’m not sure what it is, but I want mine to be smarter than yours.”

What is it? And are we getting our money’s worth, or will we in the future? The US Department of Energy says the smart grid is: a) “a developing network of new technologies, equipment, and controls” (right, we’re not there yet); b) “working together” (that’s key, underline that); c) “to respond immediately to our twenty-first-century demand for electricity.” There are a lot of key words in there. DOE spent a lot of money developing that definition, and you can see why.

So what is a smart grid? A smart grid will be largely self-healing—that is, it will fix itself when it breaks, for the most part. A big controversy in today’s paper—folks were saying that the New Orleans Superdome gird was supposed to be self-healing, but something went wrong, and we were all pretty upset, especially if you were rooting for Baltimore. More flexible, more reliable, and safer. My assertion is that a smart grid will integrate millions of smart electronic devises and imbedded sensors, things than can smell, touch, see electronically what’s happening on the grid, sending and analyzing millions of pieces of data per minute to produce actionable information, and using that information to control the electric system better than ever before. That’s the promise of the smart grid: smart devices watching everything, communicating with each other, to produce better results for the consumers.

Let me talk briefly about some of the controversy over what a smart grid is. Dozens and dozens, perhaps now over a hundred, of national and international initiatives—government-sponsored, industry-sponsored—are directed towards a smarter grid. I like to say smarter grid because the assertion when you say “smart grid” is that the existing grid must be dumb. Do you think the existing grid is dumb? I would assert for you, and you can check for yourself, that the existing electric grid is the most complex single machine on earth, in terms of its interaction and scope. Electrification, according to many experts, was the greatest achievement of the twenty-first century. Without it, we’d have no lights, projectors, cell phones, computers, refrigeration, air conditioning, streetlights, or modern medical technology.     

Many of these initiatives are narrowly focused, looking at some particular widget. When we say smart grid, some people say, “Well, it’s smart meters.” Smart meter, of course, is a misnomer. What they’ve done now, if you are in Edison territory, for example, is they’ve put a computer in a communication device on your wall that happens to also meter your electric consumption. That should jar your thinking. I think, increasingly, we have to take an expansive and inclusive view of the smart grid. Here’s one thing: in my view, an advanced grid that doesn’t serve customers better is showmanship, not smart. Just widgets. A true smart grid, I assert, will integrate advanced intelligence from the generator to the customer and everywhere in between.

Now Mike Montoya, a good friend, brilliant guy—he’s much more on the front lines. He’s the guy who’s actually looking at the stuff that’s coming out in the industry that’s being called smart, testing it on a massive electrical system—fifty thousand square miles—trying to make it work and deciding what to do going forward. Mike is going to give us his real-world insights and observations on what’s really happening in smart grid, when your job is on the line to get it right.

Mike Montoya: Thank you, Jim. Today I’m going to talk about what’s going on in California and a lot of the drivers that are propelling us towards new technologies, and also how we have been automating for many years, and understanding how the automation within the electric grid has helped us accomplish a lot of the goals that we’ve had over the years. Over the next seven or eight years, we’re going to look at a very large change in the way that the electric grid is operated. We’re going to have to change the way we engineer and operate the grid in order to meet some of the environmental goals that the State of California is requiring of us. So I’ll talk a little about what we’re doing in that area.

A little bit about our process of how we go through the evaluations of new technologies: We take a look at it first from a policy perspective, and/or some other value drivers that are driving us as a company. Things like Assembly Bill 32, which is meant to reduce greenhouse gases in California, gives us a 33 percent renewable portfolio standard. And when you think about the impacts of the new goals on the electric grid, typically today generation and load are balanced very well because we understand mixed-generation. We understand our loads and how they behave. So it’s not simple, but it’s certainly a fairly straightforward approach to achieve that balance. If you don’t have balance you don’t have sixty hertz; if you don’t have sixty hertz you have a problem, right? So when you think about renewables, you don’t know when they are going to be here or when they are going to be at full-load capability. So one of the things we are looking at is, how are we going to mitigate that intermittency that will occur? For solar, you could have full power one second and have some cloud cover and lose a chunk of generation. And when you’re talking about 33 percent of all the energy in California, that’s a pretty big chunk.

If you think about it from a megawatt perspective, the State of California peaks at around 50,000 megawatts, and it’s not 33 percent of the megawatts, it’s 33 percent of the megawatt-hours that are sold in California. So it’s going to be a very big chunk of our load. Being able to understand how those devices behave is very important to us because we need to understand what they will do to the grid. Will they be a good partner or bad partner to the grid? If they are going to be bad, what are we going to do to take care of the bad moments?

So there are a lot of drivers. We also have areas where in order to meet the policies and goals that we have we have to have capabilities; things like demand response, PEV integration, DER integration, wide-area monitoring. Wide-area monitoring and protection is going to be really important. If you don’t know it, in the Western United States, fourteen states, two provinces in Canada, and northern Baja California are all connected on a transmission system. If you look across the western US, almost every state either has a goal or law that says, “You’re going to meet certain percentages.” California’s is the highest at 33 percent, Colorado is now at 30, and a lot of states around the West have or will soon have an RPS goal. So that wide-area perspective is crucial because, I foresee, when we have that kind of penetration of variable generation, control systems at Southern California Edison are going to have to interact directly with control systems in the Pacific Northwest, the Southwest, etc., in order to keep balance of the entire system. So a lot of the work that we’ve done over the past ten to fifteen years, with synchrophasers and other devices, is going to help us as we go.

So then you have your capabilities, and from there you decide what technologies we’ll need for the grid. If you have management control systems, you have different technologies that are going to be necessary for us to operate the grid in an efficient, safe, and reliable manner.

Then you have communications networks. If you think about the millions of devices Jim mentioned that could be out here—there are a lot of folks out there in the world that would like to see all of you bid your washing machines into the ISO market. Just think about that. We have 14 million people in our service territory, I don’t know how many washers and dryers that is, but it’s a lot. Think about the complexity of the control systems and the balance that will have to occur in order for us to get to that point—it’s going to be very complex and difficult. So we’re really thinking about how we are going to get to that point, and we know it’s not going to happen over night. We don’t want to find ourselves flatfooted and not be ready for any of these changes that may occur.

You also have your field devices—what are you going to have in the field in order to make all these different things work as we go forward? At Edison, we’ve automated a lot of our system. The vast majority of our substations have always been automated. In the 30s they were electromechanically automated, with timers and reclosers, but as we progress into the micro-processing world, things will get a little more complex and look and feel more like an IT system rather than a grid system. They’re kind of coming together with all the different technologies, and as we move forward and go through that whole process we really need to understand how that’s going to affect us.

So what are we really looking for from a smart grid? As I mentioned, we want reliability, security, and affordability. We want to make sure that what we do from a technology, operations, and engineering perspective is going to be the right thing. If you think about having generation, if a big chunk of your 33 percent portfolio is going to end up on solar residential rooftops, your distribution system today is not designed for that. The distribution system is a radial system, in Edison’s case, where you have all the force come through a substation and feed out into the distribution system down to the last customer. In the future, we will have generation all over that distribution circuit, and that’s going to pose some problems for protective relay coordination, operations of the distribution system. If you know how we operate our distribution system, we’re switching it around constantly. Now if you have mixed generation out there, you don’t have this. You know what’s out there, you know how much load is on each circuit, you know how much load you can move from one to the other, now you’re going to have: how much generation do I have out there out there? Is it generating? So we’re doing a lot of work in that area, and our automation has taken us to a good spot, where we are today. But we’re going to have to change how we communicate between the distribution system and substation systems in order for us to be able to actually achieve the goals of the state.

We also want to increase efficiency. If we can increase efficiency for our customers, that saves fuel and energy costs for them. We did a pilot back in 1991 on energy efficiency, and in our system, if you reduce the voltage by 1 percent, typically you’ll get 1 percent energy efficiency. So we’re looking at how to make the system more efficient. We want to make sure that whatever we do in this smart grid arena is going to help them lower their energy bill and have some choice.

Cyber security is going to be extremely important if you think about talking to five million meters, or 15 million washers, or generators, across the Western United States. Most of these devices are going to go through Internet protocol instead of the typical utility, serial-connected devices. And once you get into the IP world, you have to understand the security implications of what you’re communicating. For example, in our territory, we have close to five million meters that have disconnect capability. If someone were to hack in there, they could open every meter in the territory. It’d be just as bad as having a volt power outage. So cyber security is very crucial, and we’ve been working with contractors that work with the Department of Defense, and we’re going to demonstrate some new technology in that area in one of our demonstration projects that we’re building as we speak today.

As far as customer needs, I mentioned that we want to make sure that our customers have a reliable, safe, and affordable electric system. We have a lot of programs that are being proposed and/or implemented for demand-response, time-of-use rates, and different things on their smart meters that will be beneficial for them. I talked a little bit about our Smart Connect Program—we’ve got about 99.7 percent complete on the meters. We’ve got about 350,000 customers that are enrolled in our budget assistance program, and 826,000 that are signed up for our save power day. So it’s giving the customers a choice in what they want to pay. They can set a limit and their budget assistant will give them alerts about where they are and what kind of costs they’re going to incur if they don’t curtail usage. So it’ll start giving the customer a bigger role in their energy consumption, and that’s going to throw in another challenge from an operations perspective. Now you’re going to need to understand customer behavior better. If all your customers participate in one way or another, it’s going to change the demand on your system.

Another thing is plug-in electric vehicles. When you think about an EV, a lot of people don’t realize that a level-two EV is about 6 kilowatts. That’s about the average load of a home in Southern California, so every time someone buys an EV, that’s like adding a home to a distribution center. From a grid perspective, we have to be aware of what’s happening out there so we don’t get overloading components or have issues with the distribution system.

A thought on technology and other things that we’re talking about here today: technology maturity is sometimes overestimated. If you go to proceedings in the State and others, there are a lot of folks that talk about technology that is not quite mature, but is being talked about as if it is. We need to step back and make sure those technologies will actually work for the grid and not create havoc for us.

I can’t emphasize enough that standards are going to be really important going forward, not only to get us to the plug-n-play arena, but also so we understand what needs to be done and what’s going to go on in the future. The other thing is, if you don’t have a standards-based approach, your legacy systems may not be able to interface with new technology. And if you think about the way a utility invests in their system, it’s usually a thirty or forty-year investment, not an over-night investment. If you don’t have the proper standards, there’s going to be a lot of stranded investment that’s not good for the customers, the investors, or any of us. Risk of technology obsoleting without standards is also part of that whole risk. We don’t want to be in that arena where we have some stuff that’s just not going to work going forward.