U. S. Department of Energy’s Smart Grid Program

Steve Bossart

IEEE Pittsburgh Section

June 20, 2012

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Smart Grid Topics

• Definitions & Concepts• Smart Grids & Microgrids• Drivers & Value Proposition• Deployment Challenges• Smart Grid Field Projects

Metrics & Benefits Approach• Smart Grid Progress

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Definitions & Concepts

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What’s Different with Smart Grid

• Consumer engagement with resources to solve power issues locally

• Two-way power flow in Distribution• Two-way communications • Integration of Distributed generation and storage • Imperative to transform from passive to active

control in Distribution• Move from radial to network Distribution system• New ways for Distribution to become a

Transmission resource• Potential to transform transportation sector

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Smart Grid Principal Characteristics

The Smart Grid will:

• Enable active participation by consumers• Accommodate all generation and storage options• Enable new products, services and markets• Provide power quality for the digital economy• Optimize asset utilization and operate efficiently• Anticipate & respond to system disturbances

(self-heal)• Operate resiliently against attack and natural disaster

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Smart Grid Technologies

Integrated Communications

Advanced Control Methods

Decision Support & Improved Interfaces

Advanced Components

Sensors and Measurement

Integrated Communications

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Smart Grid Key Success Factors

The Smart Grid is MORE:

• Reliable

• Secure

• Resilient

• Economic

• Efficient

• Environmentally friendly

• Safe

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Context of Smart Grid

Smart Grid Enhanced by Smart Grid

Two-way communicationsSensorsControlsDecision support toolsComponents

TransformersPower electronicsConductors

Sensing, control, automation, power transformation, and

communications

Renewable energy resourcesElectric vehiclesEnergy storageDistributed generationGrid friendly appliances/devicesLoad control/demand response

Generation, storage, and load

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Smart Grid & Microgrids

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Definition by Microgrid Exchange Group

A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island-mode.

Microgrid and OE’s Performance Target

Develop commercial scale (<10MW) microgrid systems capable of reducing outage time of required loads by >98% at a cost comparable to non-integrated baseline solutions (UPS + diesel genset), while reducing emissions by >20% and improving system energy efficiencies by >20%

OE’s 2020 Performance Target

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Central Generation

Transmission Load

Distributed Generation E-Storage

Distribution

E-StorageDistributed Generation

Load

Microgrid

Microgrids Smart Grids

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Case for Grid Modernization &

Value Proposition

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Why Modernize the Grid?• Today’s grid is aging and outmoded• Unreliability is costing consumers billions of dollars• Today’s grid is vulnerable to attack and natural disaster• An extended loss of today’s grid could be catastrophic to our

security, economy and quality of life• Today’s grid does not address the 21st century power supply

challenges• Adverse trends associated with the grid

- Costs, reliability, peak loads, asset underutilization, TLRs, grid divorce• The benefits of a modernized grid are substantial

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Value Proposition Cost to Modernize• $338-$476B over 20 years

– $ 82-90B for transmission – $232-$339B for distribution– $24-46B for consumer

• $17-24B per year

Benefit of Modernization• $1294 – 2028 Billion• Overall benefit-to-cost ratio

of 2.8 to 6.0

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EPRI, 2011

Previous StudiesBenefit to Cost Ratio for West Virginia of 5:1Benefit to Cost Ratio for San Diego of 6:1Benefit to Cost Ratio for EPRI (2004) 4:1-5:1

$165B Cost$638 - $802B Benefits

EPRI Report: http://www.smartgridinformation.info/pdf/3272_doc_1.pdf

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Who are the Beneficiaries?

• Utilities (What’s in it for my shareholders?)• Consumers (What’s in it for me?)• Society (What’s in it for us?)

We get what we reward!

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Utility Value Proposition

Opportunities• Rate of return• Operational Benefits

– Outage restoration, billing, reduce T&D losses, optimize asset utilization, maintenance, planning

• Improved Customer Satisfaction

Cost• Risk of cost recovery

Utilities are the engine for investment in Smart Grid

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Consumer Value Proposition

Opportunities• More reliable service• Reduce business loss• Energy bill savings• Transportation cost savings• Information, control, options• Sell resources into the market

Cost• “Consumer always pays”

Is this compelling?

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Societal Value Proposition

Opportunities• Downward pressure on electricity prices• Improved reliability reducing consumer losses• Increased grid robustness improving grid security• Reduced emissions• New jobs and growth in GDP • Revolutionize the transportation sector• Reduce import of foreign oil

Cost• No incremental cost?

Does the societal value proposition make it compelling?

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Smart Grid Implementation Challenges and Risks

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Change Management

A significant change management effort is needed:• Why do we need to change?

• What is the vision?

• Who’s in charge?

• What is the value proposition?

• Consumer education, alignment, and motivation is critical• Metrics needed for accountability and to monitor progress• Active leadership by stakeholder groups needed

Move at the “Speed of Value”

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Technical Challenges

• Interoperability and scalability• Large number of consumers actively involved• Decentralized operations with 2-way power flow• Getting the communications right• “Future proofing” the technologies• Cyber Security• Conversion of data to information to action• Market driven

Where will we find the skilled resources to solve these?

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Regulatory Challenges• Time-based rates• Clear cost recovery policies• Policy changes that remove disincentives to utilities• Societal benefits included in business case• Increased utility commission workload• Consistency among state utility commissions• Potential cost of “carbon management”• Future proofing vs. stranded assets• Consumer privacy concerns• Least cost• Used and useful• New operating and market models

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Smart Grid Field Projects

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Programs created by statute Energy Infrastructure Security Act 2007:

– Smart Grid Investment Grants (Sec. 1306)– Smart Grid Regional Demonstrations

(Sec.1304)

Recovery Act Directed Programs: – Workforce Training - $100M

– Interconnection-wide Transmission Planning and Resource Analysis - $80M

– Interoperability Standards - $12M

Additional OE initiatives- State & Local Energy Assurance

- State Regulatory Assistance

Recovery Act – Grid Modernization

Top 10 States by Total Awarded

State Amt ($M)

NC 434

CA 419

TX 293

NY 276

FL 270

PA 265

MD 233

DC 213

AL 166

OH 146

One-time Appropriation, $4.5B in ARRA funds

$620M for demonstration projects

$3.425B for deployment projects

Investment Grants

Smart Grid Demos

Workforce Training

Resource Assessment &Transmission Planning

Smart Grid Interoperability Standards

Other

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American Recovery and Reinvestment Act ($4.3B)

• Smart Grid Investment Grants (99 projects)– $3.4 billion Federal; $4.7 billion private sector– >800 PMUs covering almost 100% of transmission– 6500 distribution automation circuits– >15 million smart meters

• Smart Grid Demonstration Projects (32 projects)– $620 million Federal; $1 billion private sector– 16 storage projects– 16 regional demonstrations

Smart Grid ARRA Activities

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Additional ARRA Smart Grid Activities

– Interoperability Framework by NIST ($10M)

– Transmission Analysis and Planning ($80M)

– State Electricity Regulator Assistance ($50M)

– State Planning for Smart Grid Resiliency ($55M)

– Workforce Development ($100M)

Smart Grid ARRA Activities (continued)

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Technology Deployment

Customer Systems

Customer Systems

Customer Systems

Customer Systems

SGIG/SGDP Areas of Smart Grid Technology Deployment

Customer Systems

Advance Metering

Infrastructure

Electric Distribution

Systems

Electric Transmission

Systems

• Displays

• Portals

• Energy management

• Direct load controls

• Smart meters

• Data management

• Back office integration

• Switches

• Feeder optimization

• Equipment monitoring

• Energy Storage

• Wide area monitoring and visualization

• Synchrophasor Technology

• Energy Storage

Customer Systems

EquipmentManufacturing

• Energy devices

• Software

• Appliances

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Schedule for Benefits Analysis

The DOE Metrics and Benefits work is transitioning into the reporting and analysis of impact metrics. See smartgrid.gov

Metrics and Benefits Plan

Build Metric Reporting and Analysis

We are here

Impact Metric Reporting and Analysis

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Key Program Objectives

Key Stakeholders:

NARUC and PUCs

EEI/EPRI

NRECA/CRN

APPA

NASPI

Consumer Advocates

Utilities

Three Objectives:

Information Derived from

131 ARRA Smart Grid

Projects

Advancing the Business Case

Sharing Lessons-

Learned and Best Practices

Determining R&D Needs

• System Engineering

• Advanced Analytics

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Consumer Behavior Studies

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SGIG Consumer Behavior Studies:Study Population Statistics

• Total of ~145,000 customers are expected to “participate” as treatment or control customers• Plan to collect key demographic information on all treatment and

control customers (ideally), subject to survey response rates• Assuming 3 years worth of hourly interval usage meter data (1

year pre-treatment and 2 years post-treatment); this represents 3.9 billion data observations

• To put our SGIG analysis and evaluation effort into perspective:• ComEd’s CAP study included ~8,500 participants and ran for 12

months (June 2010 - May 2011)• CA Statewide Pricing Pilot included ~2,500 participants and ran

for 18 months (July 2002 – December 2003)

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SGIG Consumer Behavior Studies: Overview of Research Topics

Given the diversity of studies being undertaken as part of the SGIG program, we have a unique opportunity to evaluate issues in

several topical areas:

Research Topical Areas1. Customer Acceptance: What motivates customers to accept time-based rate programs?

2. Customer Retention: What motivates customers to remain on time-based rate programs?

3. Customer Response: Will customers respond, and if so by how much will they respond, to time-based rate programs?

4. Role of enabling technology and information/education: Will customers respond, and if so by how much will they respond, to control and/or information technology and/or education alone?

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Metrics and BenefitsApproach

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DOE Analytical ApproachE

xam

ple

Improvesfeeder voltage regulation

Reduced feeder losses worth$60 per MWh

Automatic Voltage and VAR Control

• Capacitor controls

• Distribution Management System

Functions Mechanisms Benefits

What does the Smart Grid

do?

How does itdo that?

What “goodness”

results?

Monetary Value

What is the goodness

worth?

What are Smart Grid

technologies?

Assets

$6000

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Smart Grid FunctionsSensing Control Protection

Wide Area Monitoring, Visualization, and Simulation

Power Flow Control Fault Current Limiting

Diagnosis & Notification of Equipment Condition

Automated Feeder Switching

Dynamic Capability Rating

Real-Time Load Measurement and Management

Automated Islanding and Reconnection

Adaptive Protection

Automated Voltage and VAR Control

Enhance Fault Protection

Real-Time Load Transfer

Customer Electric Use Optimization

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Energy Storage Applications

Renewable Support Investment Deferral Ancillary Services Load Management

Renewables Energy Time Shift

Electric Supply Capacity Deferral

Area Regulation Electric Energy Time Shift

Renewables Capacity Firming

T&D Upgrade Deferral

Load Following Transmission Congestion Relief

Wind Generation Grid Integration, Short Duration

Substation Onsite Power

Electric Supply Reserve Capacity

Time-of-Use Energy Cost Management

Wind Generation Grid Integration, Long Duration

Electric Service Reliability

Voltage Support Demand Charge Management

Electric Service Power Quality

Transmission Support

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Five Primary Analytical Focus Areas

Peak Demand and Electricity Consumption

• Advanced metering infrastructure

• Pricing programs & consumer devices

• Direct load control

Operations & Maintenance Savings

from Advanced Metering

• Meter reading• Service changes• Outage management

Distribution System Reliability

• Automated & remote operations

• Feeder switching Monitoring & health sensors

Energy Efficiency in Distribution Systems

• Voltage optimization• Conservation voltage

reduction• Line losses • Operational efficiency

Transmission System Operations & Reliability

• Application of synchrophasor technology for wide area monitoring, visualization, and control

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Qualitative Feedback

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Lessons Learned

Surveys

RecommendationsCorrective Actions

Root Cause

Preferences

Best PracticesCompliments

Anecdotes

Observations

Complaints

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Variety of Stakeholders

Electric Service Provider• Decision makers• Operations &

maintenance• Planning • Engineering & design• Customer service• Traders• Purchasing• Regulatory support• Billing

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Smart Grid Progress

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SGIG Deployment Status

AMI and Customer System Assets

Distribution Assets Transmission Assets $-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

$2,767

$888

$163

~$4,500

~$2,500

~$1,000

Total Investments in 99 SGIG Projectsas of March 19, 2012

Reported to date Estimated at completion

To

tal I

nv

es

tme

nts

(M

illio

ns

$)

9.3 of 15.5 million residential and commercial smart meters

Distribution automation equipment on 4,200 out of 6,500

circuits

195 out of over 800 networked phasor measurement units

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Smart Meters Deployed in SGIG Projects

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Status of Smart Grid Investments in SGIG Program

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Automated Distribution Circuits in SGIG

There are approximately 81,200 distribution circuits in US6,500 circuits is about 8% of total distribution circuits

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Phasor Measurement Units in SGIG Projects

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Customer Devices in SGIG Projects

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Customers with Smart Meters Enrolled in Pricing Programs in SGIG

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Case Studies

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eEnergy VermontA State-Wide Strategy for Smart Grid Development

Key Activities• Smart metering roll-out for outage management and time-based rates for

demand response. • Distribution system automation including switches, reclosers, SCADA, and

communications backbone systems.• Consumer behavior studies by Vermont Electric Cooperative (VEC)and

Central Vermont Public Service to assess customer acceptance, response, and retention.

Aims and Strategies• A collaborative effort involving all of the state’s electric distribution companies

to modernize Vermont’s electric grid and foster economic growth as part of the state’s “eState Initiative” with telecommunications and health care.

Results and Benefits • VEC’s outage management system has improved SAIFI by 50% and CAIDI

by 40% since installed in 2008.• VEC’s smart metering roll-out and outage management system has a 5 year

payback period from operational saving alone.• VEC received POWER Magazine’s first “Smart Grid Award” in August 2011 for

its pioneering efforts in outage management.• Restoration of the grid from Tropical storm Irene occurred quicker and with

greater customer awareness of repair schedules due to smart meters, web portals, and more effective outage management.

Utilities working together to

modernize the grid.

Facts & FiguresTotal Project Budget: $137,857,302

Federal Share: $69,928,650

Distribution Automation:

47 circuits and substations

Smart meters:311,380

Time-Based Rates:

1,500 customers targeted

Vermont Electric Cooperative’s Smart Grid Operations Center

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Oklahoma Gas & ElectricReducing peak demand in Oklahoma

Key Activities• OG&E’s “Positive Energy Smart Grid Project” is installing 750,000

smart meters system-wide and distribution automation equipment on 40% of the circuits serving homes, offices, farms, and factories.

Aims and Strategies• Defer construction of two 165 MW power plants by lowering peak

demand using demand response programs that involve time-based rates and customer enabling technologies.

• Improve service and lower costs by operating automated capacitors and distribution switches.

Results and Benefits • Pilot demand response project of 3,000 customers during the

summer of 2010o 98% of participating customers saved money on their billso Measureable demand reductions from customers participating

in critical peak and variable peak pricing and who use the web portal, programmable communicating thermostats, and in-home displays

• Expect to lower operations and maintenance costs and improve service reliability and power quality.

Customer-Enabling

Technologies Used by OG&E

Facts & FiguresTotal Project Budget: $293,201,332

Federal Share: $130,000,000

Customers Served:766,866

Service Area: 30,000 square miles in Oklahoma and Western Arkansas

Generation Capacity: 6,600 MW

In-Home Display

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City of NapervilleEmpowering Consumers in Illinois

Key Activities• Naperville’s “Smart Grid Initiative” completes a decade long efforts

to automate the city’s entire electric distribution grid.• Deploys smart meters city wide to all customers.• Provides consumer education programs to engage public

participation in shaping smart grid policies and programs.

Aims and Strategies• Strengthen reliability and reduce the frequency and duration of

power outages.• Empower consumers to manage their own power consumption

and costs to enhance energy efficiency, reduce peak, and reduce power purchase costs from wholesale suppliers.

Results and Benefits • Distribution automation investments have improved System

Average Interruption Duration Index each years since 1991 by from 15% to 55%.

• O&M costs from dispatching repair crews reduced by about 40%.• Enacted Naperville Smart Grid Consumer Bill of Rights.• Implemented Smart Grid Ambassadors Program

Consumer programs for

smart grid-savvy customers

Facts & FiguresTotal Project Budget: $21,988,220

Federal Share: $10,994,110

Distribution Automation:

Remaining 6 of 117 circuits

Smart meters:57,000

Time-based Rates:

1,500 customers targeted

Residents provide feedback on Naperville’s smart grid policies

and programs.

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M2M Communications Agricultural Demand Response Program Saves Electricity in California

Key Activities• M2M Communications of Boise, Idaho, has developed a two-way,

web-to-wireless controller for irrigation pumps. The controller is part of an irrigation load control system that includes sensors, smart meters, and other monitoring equipment.

• M2M created the Peak Energy Agricultural Rewards (PEAR) program, a demand response program marketed to agricultural customers of California’s investor owned utilities.

Aims and Strategies• As part of the PEAR program, farmers can earn cash incentives

and avoid peak demand charges.• Water consumption and soil moisture can be monitored from a web

portal, enabling farmers to make informed decisions about possible participation in peak demand events.

• Farmers can schedule irrigation pump start up/shut off, saving water, time, and manpower, and improving overall efficiency.

Results and Benefits • DOE ARRA funds greatly contributed to M2M’s final R&D push to

get the controller to market.

• PG&E called four peak pricing events in 2011; PEAR program participation reduced summer peak demand by an average of 18 MW per event.

Reducing Peak Electric Demand and

Increasing Efficiency of Farm Operations

Facts & FiguresTotal project budget:

$4,342,340

Federal share: $2,171,170

Devices installed: 300

Total summer peak demand reduction in 2011: 72 MW

An irrigation pump connected to and controlled by M2M’s web-to-wireless controller

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Operational Efficiency Improvements at Talquin Electric Cooperative

Background:• For over 70 years, members submitted their own meter

readings (highly inaccurate)• Rolling trucks 6,000 times/year for routine service

connection/reconnection and 9,000 times/year for non-payment problems ($40-$50/truck roll)

• Outage locations based on pattern of customer phone calls

TEC’s SmartGrid Program:• Deployed AMI to about 56,000 customers and upgraded 46

of 86 circuits with advanced capacitors for voltage control and outage management.

• With AMI, TEC avoided 8,800 truck rolls in 2011 for non-payment problems saving more than $350,000

• Expecting to avoid additional 5,500 truck rolls for routine service connections (savings of $200,000/year)

• Expecting to reduce outage durations from more precise pinpointing of faults and dispatching of repair crews to exact locations without guesswork.

Technician changes out analog meter with a smart meter

Facts & FiguresTotal Project Budget: $16,200,000

Federal Share: $ 8,100,000

Customers Served:57,000

Service Area: 2,600 square miles spanning 4 counties in northern Florida

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Life After ARRA Smart Grid Program

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Life After ARRA Smart Grid Program

Build and maintain momentum

• Make business case

• Identify, allocate, and quantify benefits

• Identify and quantify costs

• Address technical issues

• Address regulatory issues

• Address customers concerns

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Contact InformationSteve Bossart

(304) 285-4643

Steven.Bossart@netl.doe.gov

Federal Smart Grid Website

www.smartgrid.gov

Smart Grid Clearinghouse

www.sgiclearinghouse.org/

Smart Grid Implementation Strategy

www.netl.doe.gov/smartgrid/index.html

Questions ?