Monthly Archives: November 2015

The Smart Grid: Stacking the Benefits (Part 4)

SG IIoT Logo Powerpoint 10.12.15Part 4: Starting with Situational Awareness, Each SG IIoT Application Generates a “Stack of Benefits”

Dom Geraghty

Excerpts from Part 4 of “The SG National Necessity Series

  • Primary benefits of the SG IIoT are increased operating efficiency, reduction in outages (as measured by SAIDI), increased asset utilization factors, and optimized replacement of aging infrastructure
    • Efficiency: A 1% reduction in transmission and distribution losses would reduce U.S. customers’ annual bills by about $4.3 billion
    • Outages: There is a wide variation world-wide in SAIDI performance, e.g., SAIDIs for Germany’s power system at 24 minutes and South Korea’s distribution system at 3.2 minutes (!) are far less than those in the U.S. -- even allowing for situational differences, there appears to be significant potential for decreasing the duration of outages
    • Asset utilization factor: Power sector asset utilization factors are surprisingly low in the  U.S., estimated as follows: generation: 47%, transmission: 43%, and distribution: 34% -- other capital intensive industries that experience high peak to average demand ratios have used very sophisticated  variable pricing techniques to create substantial improvements in utilization factors – the value of improving U.S. power production utilization factor from 47% to 48% is between $10 and $40 billion
    • Aging infrastructure: SG IIoT applications allow us to move from empirical asset replacement to intelligent replacement of aging assets -- intelligent replacement offers economic optimization – the total amount of savings is yet to be determined
  • Many SG IIoT applications generate more than one of the above benefits, i.e., a “stack” of near-term and long-term benefits – the most appropriate benefit to cost ( B/C) ratio is based on the full “stack” of benefits
  • Some significant benefits of SG IIoT applications are qualitative/societal requiring human value judgements
  • The fundamental SG IIoT application is situational awareness -- all SG IIoT applications are based on it -- situation awareness data enable the development of a “least cost” deployment of the SG IIoT, leveraging the 80% value/20% cost rule
  • Yield management is a potentially powerful tool for increasing power system asset utilization, which is the largest economic benefit created by deploying the SG IIoT - examples are provided of SG IIoT applications that can “create” incremental capacity by increasing the utilization factors of existing power sector assets

“The way to solve the conflict between human values and technological needs is not to run away from technology. That’s impossible.

The way to resolve the conflict is to break down the barriers that prevent a real understanding of what technology is ... not an exploitation of nature, but a fusion of nature and the human spirit into a new kind of creation that transcends both.

When this transcendence occurs in such events as the first airplane flight across the ocean or the first footstep on the moon, a kind of public recognition of the transcendent nature of technology occurs.”

-Robert Pirsig, “Zen and the Art of Motorbike Maintenance”, 1974

As always, comments welcome and appreciated.

The Smart Grid: It’s a “Crazy Quilt” (Part 3)

SG IIoT Logo Powerpoint 10.12.15

Part 3: Plan for a Slow and Untidy Transition to the SG IIoT

Dom Geraghty

Excerpts from Part 3 of “The SG National Necessity Series

  • The U.S. power sector is heterogeneous and its governance and coordination is balkanized: over 3,200 utilities implementing a broad range of different business strategies; 50 state regulatory commissions that more often than not implement different regulatory policies, e.g., on mandated RPS targets; independent siting boards; 100 balancing authorities; 6 ISOs with very different market protocols
  • The transition to the SG IIoT is like the construction of a "crazy quilt", project by project, utility by utility, one disparate patch (project) at a time with many zigs and zags along the way – a “random walk down grid street”
  • The pathway to the SG IIoT is indeterminate because it is governed by thousands of independent decisions and uncoordinated projects that are randomly implemented
  • Today, the SG is a hodge-podge of opportunistic situation-specific application projects (“patches” in the crazy quilt) with different functionalities which don’t communicate across applications and which operate in different time domains
  • There is no universal architecture driving the SG transition, although a number have been proposed – in the U.S., we are undergoing a laissez-faire “transition” to the SG in contrast to, for example, Germany’s top down “transformation” of its power sector
  • New SG applications have to interface with a range of different product and technology vintages because power system assets have a 40-year lifetime and often undergo multiple upgrades during their lifetime
  • Interoperability between SG IIoT applications and the existing power system is being achieved mostly by customized Application Programming Interfaces (APIs)
  • The “real-world” transition to the SG IIoT is protracted because of:
    • The requirements to “do no harm”
    • The need to provide due process
    • The modest level of technology readiness
    • The reluctance of vendors to cannibalize existing revenue-producing products
    • Uncertainties in prospective investment returns, and
    • The lack of broad-based interoperability standards
  • The slowness of the SG IIoT transition raises its cost and duration
  • Part 5 of this series suggests ways to accelerate the transition to the SG IIoT while meeting regulatory mandates, achieving a least cost national deployment, and maintaining service reliability

“You have your way. I have my way. As for the right way, the correct way, and the only way, it does not exist.” 

          -Friedrich Nietzsche, “Thus Spake Zarathustra”, 1885

“His way had therefore come full circle, or rather had taken the form of an ellipse or a spiral, following as ever no straight unbroken line, for the rectilinear belongs only to Geometry and not to Nature and Life.” 

          -“The Glass Bead Game”, Hermann Hesse, 1946

“What need is there of suspicious fear? And if you see clearly, go by this way content, without turning back: but if you do not see clearly, stop and take the best advisors.”

          -Emperor Marcus Aurelius, “Meditations”, 174 A.D.

As always, comments welcome and appreciated.