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.

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