Energy Savings & Carbon Emissions Reductions Enabled by a Smart Grid
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The Green Grid Energy Savings and Carbon Emissions Reductions Enabled by a Smart Grid 1016905 The Green Grid Energy Savings and Carbon Emissions Reductions Enabled by a Smart Grid 1016905 Technical Update, June 2008 EPRI Project Manager O. Siddiqui ELECTRIC POWER RESEARCH INSTITUTE 3420 Hillview Avenue, Palo Alto, California 94304-1338 ▪ PO Box 10412, Palo Alto, California 94303-0813 ▪ USA 800.313.3774 ▪ 650.855.2121 ▪ [email protected] ▪ www.epri.com DISCLAIMER OF WARRANTIES AND LIMITATION OF LIABILITIES THIS DOCUMENT WAS PREPARED BY THE ORGANIZATION(S) NAMED BELOW AS AN ACCOUNT OF WORK SPONSORED OR COSPONSORED BY THE ELECTRIC POWER RESEARCH INSTITUTE, INC. (EPRI). NEITHER EPRI, ANY MEMBER OF EPRI, ANY COSPONSOR, THE ORGANIZATION(S) BELOW, NOR ANY PERSON ACTING ON BEHALF OF ANY OF THEM: (A) MAKES ANY WARRANTY OR REPRESENTATION WHATSOEVER, EXPRESS OR IMPLIED, (I) WITH RESPECT TO THE USE OF ANY INFORMATION, APPARATUS, METHOD, PROCESS, OR SIMILAR ITEM DISCLOSED IN THIS DOCUMENT, INCLUDING MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, OR (II) THAT SUCH USE DOES NOT INFRINGE ON OR INTERFERE WITH PRIVATELY OWNED RIGHTS, INCLUDING ANY PARTY'S INTELLECTUAL PROPERTY, OR (III) THAT THIS DOCUMENT IS SUITABLE TO ANY PARTICULAR USER'S CIRCUMSTANCE; OR (B) ASSUMES RESPONSIBILITY FOR ANY DAMAGES OR OTHER LIABILITY WHATSOEVER (INCLUDING ANY CONSEQUENTIAL DAMAGES, EVEN IF EPRI OR ANY EPRI REPRESENTATIVE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES) RESULTING FROM YOUR SELECTION OR USE OF THIS DOCUMENT OR ANY INFORMATION, APPARATUS, METHOD, PROCESS, OR SIMILAR ITEM DISCLOSED IN THIS DOCUMENT. ORGANIZATION(S) THAT PREPARED THIS DOCUMENT Global Energy Partners, LLC Electric Power Research Institute This is an EPRI Technical Update report. A Technical Update report is intended as an informal report of continuing research, a meeting, or a topical study. It is not a final EPRI technical report. NOTE For further information about EPRI, call the EPRI Customer Assistance Center at 800.313.3774 or e-mail [email protected]. Electric Power Research Institute, EPRI, and TOGETHER…SHAPING THE FUTURE OF ELECTRICITY are registered service marks of the Electric Power Research Institute, Inc. Copyright © 2008 Electric Power Research Institute, Inc. All rights reserved. CITATIONS This document was prepared by Global Energy Partners, LLC 3569 Mt. Diablo Blvd., Suite 200 Lafayette, CA 94549 Principal Investigator K. Parmenter P. Hurtado Electric Power Research Institute 3420 Hillview Ave. Palo Alto, CA 94304 Principal Investigator O. Siddiqui This document describes research sponsored by the Electric Power Research Institute (EPRI). This publication is a corporate document that should be cited in the literature in the following manner: The Green Grid: Energy Savings and Carbon Emissions Reductions Enabled by a Smart Grid. EPRI, Palo Alto, CA: 2008. 1016905. iii PRODUCT DESCRIPTION This paper, prepared as part of the EPRI Energy Efficiency Initiative, provides a first-order quantification of energy savings and carbon-dioxide (CO2) emissions reduction impacts of a Smart Grid infrastructure. Results and Findings First-order estimates of energy savings and CO2 emission reduction impacts were quantified for five applications enabled by a Smart Grid: 1) continuous commissioning for commercial buildings; 2) distribution voltage control; 3) enhanced demand response and load control; 4) direct feedback on energy usage; and 5) enhanced energy efficiency program measurement and verification capabilities. In addition, first-order estimates of CO2 emissions reductions impacts were quantified for two mechanisms not tied to energy savings: 6) facilitation of expanded integration of intermittent renewable resources and 7) facilitation of plug-in hybrid electric vehicle (PHEV) market penetration. The emissions reduction impact of a Smart Grid, based on these seven mechanisms, is estimated as 60 to 211 million metric tons of CO2 per year in 2030. Challenges and Objectives This study is intended to provide utility professionals and policy makers with an understanding of the range of benefits enabled by a Smart Grid infrastructure, with a focus on energy savings and greenhouse gas emissions reduction. Applications, Values, and Use This analysis can help a utility frame a business case for a Smart Grid infrastructure, including an advanced metering infrastructure (AMI), which includes a robust set of societal benefits beyond the operational benefits normally considered. EPRI Perspective EPRI has been developing Smart Grid research for years through its IntelliGrid program. IntelliGrid has produced methodologies to guide utilities through the process of Smart Grid development, from conceptualization, definition of functional requirements, specification of applications, and design and architecture to roll out and deployment. This study is complementary to that constellation of EPRI Smart Grid research and is one of the first that attempts to quantify energy savings and emissions reduction impacts of a Smart Grid. Approach The project team prepared this report through secondary research of publicly available content, including EPRI literature, as well as consultation with industry experts within and outside of EPRI. Keywords Smart grid Green grid Direct feedback Energy efficiency Demand response Carbon emissions v CONTENTS 1 THE NEW IMPERATIVE – CARBON REDUCTION ..............................................................1-1 2 THE SMART GRID CONCEPT ..............................................................................................2-1 3 SMART GRID MECHANISMS FOR ENERGY EFFICIENCY & CARBON REDUCTIONS ...3-1 4 ENHANCE CUSTOMER SERVICE........................................................................................4-1 Continuous Commissioning & Proactive Maintenance of End-Use Equipment ...................4-1 Easier Access to Green Power ............................................................................................4-3 Greater Options for Dynamic Pricing and Demand Response Services..............................4-3 5 IMPROVE OPERATIONAL EFFICIENCY..............................................................................5-1 Reduced Line Losses...........................................................................................................5-1 Reduced Transportation Requirements through Automated Meter Reading .......................5-4 Indirect Feedback to Customers on Energy Use through Improved Metering & Billing .......5-4 6 FACILITATE ENHANCED DEMAND RESPONSE AND LOAD CONTROL .........................6-1 Energy Savings through Peak Demand Reductions (Demand Response Programs) .........6-2 Energy Savings through Peak Demand Reductions (Other Load Control Programs) .........6-5 Eased Deployment of Renewable Resources to Meet Peak Demand.................................6-5 Reduced Operation of Less Efficient Peaking Plants...........................................................6-6 7 TRANSFORM CUSTOMER ENERGY USE BEHAVIOR.......................................................7-1 Direct Feedback to Consumers via Display Devices ...........................................................7-1 Indirect Feedback to Consumers via Improved Billing .........................................................7-3 8 SUPPORT NEW UTILITY BUSINESS MODELS...................................................................8-1 Accelerated Deployment of Energy Efficiency and Demand Response through Superior Measurement and Verification Capabilities..........................................................................8-1 Accelerated Innovation in Devices through Open Standards...............................................8-4 9 SMART GRID MECHANISMS FACILITATING CARBON EMISSIONS REDUCTIONS INDEPENDENT OF ENERGY SAVINGS..................................................................................9-1 Integration of Intermittent Renewables ................................................................................9-1 Facilitation of Plug-In Hybrid Electric Vehicles (PHEVs)......................................................9-3 10 ALL PATHS LEAD TO CARBON REDUCTION................................................................10-1 11 CONCLUSION....................................................................................................................11-1 A APPENDIX: SUMMARY OF SMART GRID BENEFITS....................................................... A-1 vii LIST OF FIGURES Figure 1-1 EPRI 2008 Prism – Technical Potential for CO2 Reductions in US Electric Sector .................1-2 Figure 1-2 Four Building Blocks of Energy Efficiency Infrastructure..........................................................1-3 Figure 2-1 Smart Grid Concept, PJM Illustration .......................................................................................2-2 Figure 2-2 Smart Grid Concept, EPRI Illustration......................................................................................2-3 Figure 2-3 Illustration of Prices to Devices Concept..................................................................................2-3 Figure 2-4 Concept of Dynamic Energy Management Enabled by a Smart Grid......................................2-5 Figure 3-1 Utility Smart Grid Goals: All Paths Lead to Carbon Reductions...............................................3-2 Figure 3-2 Summary of Energy-Savings & Carbon-Reduction Mechanisms Enabled by a Smart Grid....3-3 Figure 4-1 Enhance Customer Service: Energy Savings & CO2 Reduction Mechanisms.........................4-1