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Solution: Smart Grid

Detaching AC from MC Rate Decoupling Lowers consumption, therefore results in lower emission Facilitating two-way communication Increase Reliability More accurate pricing structures, hence lower prices for consumers. Solution: Smart Grid. August 2003 Lasted 3 days Affected 50 million

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Solution: Smart Grid

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  1. Detaching AC from MC • Rate Decoupling • Lowers consumption, therefore results in lower emission • Facilitating two-way communication • Increase Reliability • More accurate pricing structures, hence lower prices for consumers Solution: Smart Grid

  2. August 2003 • Lasted 3 days • Affected 50 million • 10 million Canada • 40 million in U.S • Eastern US and Canada • Detroit to New York City and Toronto • $10 billion (USD) in economic loses • 3,000 fire calls in NYC alone • 11 deaths 2003 Northeast Blackout

  3. AC Power Needs Frequency • Interconnects – regions of AC connectivity – strictly regulate frequency (60 Hz) • Frequency is dependent on load (demand) and supply. • When there is an overload frequency drops

  4. North american energy reliabitity council

  5. Transformers: More Than Meets the Eye • Transformers and Generators both break down when the AC Frequency changes • Generators speed up when frequency drop, overheat • Current increases and causes Transformers to overheat and explode…

  6. How to Control Frequency? • Distributed Energy Systems generate emergency power onsite when supply drops, causing a dip in frequency • But there still is a lack of communication about the real demand

  7. For Example…

  8. Structure

  9. Independent system operators

  10. Independent Generators Independent System Operator Managed Investor Owned Utility Managed Market Structure How the grid works Smart Grid SCADA AMI Generation Transmission Distribution Substation Privately Owned Power Plant (generation) Meter FERC/PUCs PUCs

  11. Two-way Flow of Information • Smart Grids • AMI (Advanced Metering Infrastructure) • PEM (Personal Energy Management)

  12. Customer Interface

  13. Prices reflect average, not marginal costs • Consumers have little incentive to constrain electricity use when conservation is required • Quantity demanded exceeds quantity available • Create incentives for decreased electricity consumption during peak periods What’s Wrong with 1-Way Communication

  14. Real-time market information on prices and quantities demanded and supplied • Provide incentives to reduce consumption during peak use periods • Regulates supply on each transmission line through prices • Encourages increased use in rarely used lines and decreased use in overcrowded lines • Encourages increased use during non-peak periods Advantages of Spot Pricing

  15. Imagine a toll road where "permits" are auctioned off.  • The price each person is willing to pay will depend on the number of people on the road • Drivers will pay less for a crowded than a less congested road • End result is traffic from otherwise crowded roads shifts to less crowded roads and congestion is reduced for everybody. Similarly, spot pricing on a Smart Grid encourages consumers to use less crowded transmission lines. • Electricity flow shifts from overused to underused lines • Events leading to the 2003 blackout don't occur. Example

  16. EU looking to implement single-grid by 2020 • Italian Government owned Utility furthest ahead with 30 million “smart-meters” • New Zealand and Australian private market conducting smart-meters in most provinces • World’s 1st Smart Grid – Boulder, Colorado The World is getting “smart”

  17. Policy recommedation # 1 • Modify EPACT 1252-11 • Directed States to either adopt or decline time based rate schedules to enable: • Real-Time/Dynamic Pricing via Customer Interface • Demand Response • Address the concerns of the States Deciding not to Adopt EPACT 1252 11 • Tennessee • Delaware • Utah • Vermont • Idaho • Connecticut • Iowa • Virginia • West Virginia • Kentucky • Montana

  18. Cap & Trade • Strong implications toward energy degregulation • Price Premium on Coal • Provides incentives for RTP • Alternative Energy • Energy Efficiency Policy recommendation # 2

  19. With Real Time Pricing – preliminary steps must be taken • Guaranteed Rate of Return for installing infrastructure • Decoupling (Volume based to Congestion based) • Protection for Public Purpose Programs • Low-Income • Seniors Policy Recommendation cont…

  20. Smart-grids

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