Smart Grids in the USSmart Grids in the USand PV‐Grid Integration
Smart Grids ConferenceSalzburg 2009
May 14, 2009
©2009 Navigant Consulting, Inc.
Navigant Consulting, Inc.77 South Bedford StreetBurlington, MA 01803(781) 270‐8303www.navigantconsulting.com
Navigant Consulting’s Energy Practice
Navigant Consulting, Inc. (NCI) is a specialized consulting firm known globally for its emerging energy technology and strategy expertise.
Navigant Consulting Energy PracticeNavigant Consulting
• Publicly traded since 1996(NYSE NCI)
Energy Practice
Power Systems, Markets and
Business Planning & Pe fo a e
Emerging Technologies &
(NYSE: NCI)• 2008 revenues ‐$810 million
• 42 offices globally
Pricing Performance Improvement
gEnergy Efficiency
Clean Energy and Smart Grids
Visioningand Strategy
Valuation andBusiness Case
Planning andImplementation
1©2009 Navigant Consulting, Inc.
Agenda
1 Evolution of Smart Grids in the US
2 PV Integration with Smart Grids
2©2009 Navigant Consulting, Inc.
Agenda
1 Evolution of Smart Grids in the US
2 PV Integration with Smart Grids
3©2009 Navigant Consulting, Inc.
Drivers of US Smart Grids
Forces including customer involvement, energy reliability and climate change are driving the evolution of the Smart Grid.
Smart Grids in the US
• Po e uality to
Energy Reliabilityand Security
• Re e able e e y
Climate Change
• Mo e a d bette
Customer Involvement
• Power quality to support the future economy
• A resilient electric
• Renewable energy integration
• New end‐use products and services that
• More and better information for utilities, customers and energy service providers
power system to withstand and recover from natural disasters and attack
consume less fossil‐based energy
• More efficient delivery system
• Customers as energy partners
• New energy products and services
©2009 Navigant Consulting, Inc. 4
y
Key Observations and Trends
Several factors are influencing the evolution of the Smart Grid in the United States.Evolutionary Factors Key Observations and Trends
Regulatory/Investment Recovery
y
• Utilities are seeking regulatory security for recovery of Smart Grid investments
• Some utilities are waiting for recovery before implementing any technology others are experimenting first
y
y
Standards Development
technology, others are experimenting first
• Standards bodies are racing to keep up with leading utilities and the vendors they have selected
• New models are being employed to keep pace with the changes in
ValueClarification
technology
• Value analyses and business cases are starting to consider more complex benefits for multiple stakeholder groups
• Companies are beginning to consider new approaches to evaluatingClarification
The Federal Stimulus
• Grants will support deployment of Smart Grid technologies and systems
• Companies are beginning to consider new approaches to evaluating investments in system technologies
5
Stimulus Package
systems• Demonstrations will help explore advanced functionality
©2009 Navigant Consulting, Inc.
Smart Grid Deployments
Utilities across North America are engaged in a number of pilots and system implementations.
eploym
ent
TechnologyImplementation
Smart Grid Implementation
Scale
onFu
ll De Implementation Implementation
Technology Pilot
S
Dem
onstratio
Integrated Pilot
Individual Technology Integrated Systems
Pilot/D
6
Scope
©2009 Navigant Consulting, Inc.
Government Activity and Support
With $4.5 B in funding support, the Federal Stimulus package will be an unprecedented driver for Smart Grids development in the US.
American Recovery and Reinvestment Act
State Initiatives
• $4.5 B in federal investment for Smart Grid development
G t
State Initiatives• California• Pennsylvania• Illinois• Mi hi a
• Smart Grid Investment Grant Program
• Smart Grid Government Activity
• Michigan Demonstrations
Research and Development
7
NARUC‐FERC Smart Grid Collaborative
©2009 Navigant Consulting, Inc.
Agenda
1 Evolution of Smart Grids in the US
2 PV Integration with Smart Grids
8©2009 Navigant Consulting, Inc.
Integrating PV with Smart Grids
Navigant Consulting conducted a large multi‐client study to examine the opportunities created by integrating PV with Smart Grids.
Does PV‐Smart Grid :
• Enable higher penetration of PV?
• Help PV provide value for thePV Drivers Smart Grid
Drivers• Help PV provide value for the grid?
• Create new business opportunities?opportunities?
9©2009 Navigant Consulting, Inc.
Smart Grid‐PV Framework
Smart Grid systems support better communications and control between distributed resources and the utility distribution system.
AMI facilitates communications
Inverter
between utility information systems and PV inverters
Information FlowInverterPower
Control
Operator Interface
ElectricalService Panel
Utility Information Systems
AMISmart Meter
Power Flow
Load Circuits
Utility Distribution
SystemDAEnergy Storage
(ES)
Demand Response (DR)
DR curtails small amounts of customer load for short periods of time (<2 hrs)
ES provides input to inverter to compensate for PV variability (<8 hrs)
DA helps manage feeder voltage and
accommodate changing power flow
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PV system Smart Grid plus DR and ES Functionality Electrical System Components
©2009 Navigant Consulting, Inc.
Smart Grid Enables More PV on Distribution Feeders
The Smart Grid enables higher penetrations of PV by addressing key technical challenges.
Can the PV‐Smart Grid enable higher penetrations of PV?
• Barriers to high penetration of PV include:− Technical T&D challenges
Can the PV‐Smart Grid enable higher penetrations of PV?
g− Communications challenges− Regulatory and business model challenges Th S t G id dd k t h i l T&D h ll• The Smart Grid addresses key technical T&D challenges
• By addressing the technical issues will allow utilities to accept more PV on distribution feeders without compromising
ti f d i litoperating performance and service quality
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Yes. Smart Grid could support more PV on distribution feeders.
©2009 Navigant Consulting, Inc.
Increased Distributed PV Penetration
NCI estimates that rooftop PV penetration could be significantly higher by 2020 as a result of addressing T&D barriers with Smart Grid.
Cumulative Installed CapacityThe Smart Grid Enables
• Addressing technical challenges could result in:• hi h t t i
p yRooftop PVHigher Penetration of PV
16 000
20,000
• higher net metering caps• better interconnection
standards and processes• more prevalent time of use 8 000
12,000
16,000
MWpDC
ptariff options
• These changes simplify interconnection of PV and improve its economics increasing the 0
4,000
8,000Mits economics, increasing the projected installed capacity by over 60% by 2020.
2010 2015 2020
Rooftop PV Penetration without Smart GridRooftop PV with Smart Grid
12©2009 Navigant Consulting, Inc.
High Penetrations of PV Adds New Value
Distributed PV can provide benefits in key areas. Combining this resource with energy storage enhances its value.
Can the PV Smart Grid help PV provide value for the grid?
• The greatest value of PV is derived from avoiding central generating capacity and avoided energy costs
Can the PV‐Smart Grid help PV provide value for the grid?
• Energy storage is a key for enhancing the value of PV in a Smart Grid context
• When concentrated, PV can provide benefits related to grid e o e a e , a p o i e e e i e a e o g ioptimization
• PV is cost effective assuming continuation of rebates and ITC credits – however, the incremental value of Smart Grid is notcredits however, the incremental value of Smart Grid is not enough to overcome the loss of incentives
13
Yes. PV in high penetrations can provide grid benefits.
©2009 Navigant Consulting, Inc.
Most Promising Areas of Opportunity
NCI identified the three most promising areas of business opportunity created by the PV‐Smart Grid.
S i i
Grid Optimization
T&D Capital Deferral3%
Spinning Reserve3%
Emissions Reductions
Reliability3%
Power Quality1%
Grid OptimizationCoordinated control of PV inverters,
primarily for regulating feeder voltage, may also provide utility or others ability to trip PV off in an
active mode
3%
Central Generation
Central Generation Energy Offset
59%
Capacity Deferral28%
DG PV Power PlantAggregate distributed PV systems across area or region into a reliable
d di t bl
Smart Capacity FirmingMeet end‐use energy demand by
coordinating on‐site PV and energy storage with demand response and potentially coordinate net end‐use d d ith tilit i t
59%
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and predictable energy resourcedemand with utility requirements
©2009 Navigant Consulting, Inc.
Unlocking Value Could Create New Business Opportunities
By leveraging the Smart Grid and high penetrations of distributed PV, new opportunities to unlock value can be created.
Can the PV Smart Grid create new business opportunities?
• The analysis reveals three main areas for new value:• Deferred/avoided energy and capacity from traditional
Can the PV‐Smart Grid create new business opportunities?
/ gy p ygeneration
• Smart capacity firming by combining PV with energy storage• Grid optimization through coordinated control of PV• Grid optimization through coordinated control of PV
inverters• Tapping this value will require enhancements to technology,
policy and business modelspolicy and business models
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Yes. PV‐Smart Grid could create new business opportunities.
©2009 Navigant Consulting, Inc.
Enhancements to Achieve Benefits
Achieving the benefits highlighted in the study requires enhancement of technology, policy and business models.
Technology Policy Business Models
• Technical/business requirements for
di i f
• Eligibility of integrated PV/
• Tariffs and pricing mechanisms that
i h
Technology Policy Business Models
coordination of AMI and PV
• Functional f
PV/energy storage systems for state/federal rebates and
monetize the benefits provided by distributed PVS ffrequirements for
leveraging PV as a grid resource
rebates and Investment Tax Credits
• Modification of
• Service offerings to facilitate participation of PV as a grid resource• Modification of
technical standards (e.g., IEEE 1547) to allow PV inverters
as a grid resource
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to provide grid support
©2009 Navigant Consulting, Inc.
Contact Information
Forrest SmallDirector, Energy PracticeBurlington MA 01803Burlington, MA 01803+1 781‐270‐8303 [email protected]
17©2009 Navigant Consulting, Inc.
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