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Smart Grid
not limited to, the IEC, IEEE, NIST, UCA Users Group, and the Integrating & Leveraging Distributed Energy Resources
Utility Standards Board. A large share of the benefits from the Smart Grid comes from
There is strong interest throughout the industry to the DERs including distributed generation and energy storage.
implement standards before large deployments of Smart Grid At this time, the technology necessary to effectively manage
technology are done. However, the pace at which some players these resources is still emerging. In addition, the cost of the core
are moving, combined with the urgency around the US federal technologies (e.g., photovoltaics and energy storage systems) is
stimulus package, may make this difficult to accomplish in a still too high to stimulate broad adoption. Finally, grid
meaningful way. Funding projects without open protocols or connected DERs are not able to be leveraged as grid resources
standard information systems may compromise the long-term at this time. Lack of communications and coordinated control,
realisation of a tightly integrated Smart Grid infrastructure. along with restrictions on interconnection and operations (e.g.,
IEEE 1547) prevents a DER from delivery grid benefits such as
Value Clarification voltage regulation and power quality support. Moreover, the
Utilities and regulators are considering more complex tariff and pricing mechanisms do not yet exist to support the
business cases that include multiple value streams for different business transactions between DER owners and parties who
stakeholder groups. What remains to be seen is if and how the would purchase energy and related services.
Smart Grid and its component technologies will achieve the
benefits assumed. As with other new technologies, it can be Customer Participation
very difficult to anticipate who will ultimately derive benefits Most Smart Grid business cases are based on broad adoption
and how large they will be. of new technologies such as demand response, customer
energy management and PHEVs. These are assumed to be the
Over time we can expect realised benefits from Smart Grid resources that will flatten the load curve, increase system
to evolve. In December, the Federal Regulatory Energy efficiency, and reduce the emission of GHGs. A significant
Commission (FERC) released its Assessment of Demand challenge will be ensuring that customers adopt these
Response and Advanced Metering Survey. Results indicate that technologies and participate in the programmes that tap their
the number of respondents who believe advanced metering value. The majority of Smart Grid pilots and technology
will be used for demand response and pricing/event rollouts involve AMI and demand response, both of which rely
notification has declined significantly from the previous heavily on the customer to make the business case. In the near
year.
9
This is an interesting finding as many AMI future, regulators and utilities will need to determine which
programmes cite demand response and customer energy mechanisms are best for engaging customers (e.g., incentives
management as key objectives and sources of value. or opt-out provisions).

Key Challenges to Overcome
Forrest Small is a Director in Navigant Consulting’s Energy
Implementation of the Smart Grid and achieving the
Practice. E: Forrest.Small@navigantconsulting.com.
anticipated benefits will require that a number of challenges be
Jacquelyn Bean is a Consultant in Navigant Consulting’s
addressed. At this point, a Smart Grid that supports the seven
Energy Practice. E: Jacquelyn.Bean@navigantconsulting.com
characteristics presented at the beginning of this article
www.navigantconsulting.com
remains conceptual. Even as we clarify the architecture and
Footnotes
implement technologies, a number of key assumptions must be 1.www.kema.com/consulting_services/cross_sector/INC/Automation_Insight
realised before we can achieve the vision of the modern grid.
/February_2008/AMI_Deployment.asp
2.www.acore.org/files/images/email/acore_stimulus_overview.pdf
3. Smart Grid, Enabler of the New Energy Economy, A Report by the Electricity
Managing Information Advisory Committee, December 2008.
The Smart Grid depends on information to deliver value,
4. Sizing Up the Smart Grid, The Brattle Group, Elster EnergyAxis User
Conference, February 24, 2009.
and managing a vast amount of information will be difficult
5. www.metering.com/node/14462
and expensive. Countless new and legacy systems must be able 6. www.gridwise.org/kema.html
to communicate, and operate in a coordinated fashion to
7.www.energypulse.net/centers/article/article_display.cfm?a_id=1547
8. Smart Grid: Interoperability and Standards, Xanthus Consulting
perform in the ways that business cases assume they will.
International, Navigant Consulting, Inc., Distributed Energy Financial
While the information is useful for enabling new capabilities, Group, 2008
it must also be secured to prevent misuse.
9. Assessment of Demand Response & Advanced Metering, Federal Energy
Regulatory Committee, December 2008.
worldPower 2009 133
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