Twenty-first century telecommunication technologies are transforming the relationship between generators, utilities and customers. Energy Source & Distribution looks at the paradigm shift needed in order to engage end users with the smart grid.
Engineers can envision a smart grid based on open communication, active users, dynamic pricing and decentralised control. The smart grid will improve grid operations while allowing customers to access and control their energy usage through remote devices. Once the technology is taken up, it will save money, reduce load and transform the smart grid into the most significant technology revolution since the inception of the internet.
If only the story would follow the script. As smart grid equipment rolls out to customers, the technology capable of gathering personal information and the regulations protecting personal privacy are still being resolved. Victorians saw their smart meter roll-out halted in March 2010 due to concerns that pensioners and the disadvantaged would be hit by higher electricity prices. The Federal Government’s National Broadband Network roll-out was criticised by the OECD in November as unnecessarily ‘picking a ‘winning strategy’, with the recommendation that it be slowed down. In order to close the disconnect between technology opportunities and consumer engagement, the industry is now focused on understanding the pschology of customer needs through smart grid trials.
Looking to bridge the gap between the old and new grid is Royal Melbourne Institute of Technology innovation Professor, smart energy systems, Grahame Holmes. According to Professor Holmes, the presumption by engineers that customers will follow engineering rules when it comes to smart grid technologies threatens to sideline its progress. The blockade of the Victorian smart meter roll-out is evidence of society’s capability to disrupt a reasonable plan aimed at community benefit.
“The Victorian application is a classic,” Professor Holmes explained to Energy Source & Distribution.
“The backlash that the Victorian Government got out of the rolling-out smart meters is a pretty fair illustration of that. There are investigations ongoing that suggest customers might have been better off with the smart meter variations that were being talked about, but politically that didn’t go down very well, because there were some examples, supposedly, of some customers that might not have been.
“So I think that is a very nice illustration of how to manage the problem better by addressing the issues and looking at it not just from a technical expert. And the utilities aren’t particularly good at that,” he said.
A power engineer by trade before commencing his academic career 20 years ago, the 57-year-old researcher looks at ways to ‘marry’ information processing with the fundamentals of operating a power system.
“I think what happens is that in the rush to get everything to the information-communication side of things, there’s a lot of people that are losing sight of the fundamental principles of a power system. There’s comparisons (of the) smart grid with the internet and it’s not the same beast. The internet operates purely on the basis of data manipulation. The presumption is that data manipulation will improve the performance of the electrical grid, but underneath that you still need to maintain an electrical grid,” he said.
According to Professor Holmes, power distributors must become prepared for a changing energy paradigm.
“You have customers that might be changing their load profiles based on some information, you may have customers that are changing their information based on (other) information (and) misinterpretation. If you only have a few customers doing this it won’t make any difference, just like renewable generation. When you actually start to have more and more people taking up this option, you actually start to get enough mass of customer response to start changing the way you have to operate your power system.
“That is where I think the energy utilities are going to have to begin to reflect on what they’re going to do. They can’t just assume that they have a load base that works the same as it does now.”
Tasked to launch 680,000 m as part of the highly publicised advanced meter infrastructure (AMI) program, Victorian distributor SP Ausnet experienced customer backlash firsthand. Group general manager – networks strategy and development division, Charles Popple told Energy Source & Distribution that the past 12 months highlighted the need for them to have more than just an asset or operations focus.
“(It’s) probably an area where we… as an industry, haven’t kept pace. We’ve had all these great ideas and initiatives around smart grids, but we tend to think what’s good for the customer without getting their engagement. So I think that is a focus of our activities,” Mr Popple said.
“Particularly, it was brought home to us pretty clearly with the AMI program because we had proposed, for example, time-of-use tariffs as part of using that capability to achieve economic outcomes. But in that process, for example, (we) hadn’t engaged properly enough with customers.”
Mr Popple said the Victorian backlash wasn’t so much to do with consumers disagreeing with the concept, but instead not understanding the protections and arrangements available to address their diversity of interests.
“I think we got a pretty clear message and I think it goes beyond AMI as well. When we think about smart network alternatives, particularly where they’re for customer benefit behind the meter, as we see with our network intelligence options, a crucial thing is to get customer engagement and understanding. That’s probably something as an industry we have never had a great history of doing well. That’s probably a bit of a cultural change for us as well,” Mr Popple said.
“(The Victorian) Government established a pretty comprehensive customer engagement process, so we are engaged with that quite heavily and that’s really focused on getting customer consultation around the tariffs that might be introduced. Internally, in terms of our objectives, we see that as a business transformation exercise for us to embark upon.”
SP Ausnet now intends to run a number of trials focused on customer engagement in conjunction with the AMI roll-out, including the use of in-home displays. Mr Popple said the trials demonstrate the benefits they could provide with an increased focus on trying to get customer understanding, engagement and feedback.
Other distributors have commenced trials testing consumer responses to smart grid systems and devices. EnergyAustralia invited a family to blog their life inside a Sydney ‘Smart Home’, a trial to show the future of household energy and water use. Queensland distributor Energex commenced its ‘Peak Rate Rewards Trial’ to test how electricity prices may be used to encourage customers to alter their energy consumption. NSW electricity transmission system operator TransGrid launched its energy efficiency campaign ‘Home Energy Makeover’, hoping to raise awareness of energy usage amongst residents in The Hills Shire Council and Blacktown City Council local government areas. TransGrid acting executive general manager/network planning and performance, Dr Ashok Manglick is working to both improve the grid as well as gain insights into their customers’ energy usage.
“The aim of the program is to provide education to households and small businesses and make them aware of the choices they would have once all these (smart grids) are rolled out,” Dr Manglick explained to Energy Source & Distribution.
Dr Manglick led the acquisition of 350 MW of network support in 2008, which allowed deferral of TransGrid’s 500 kV Western NSW upgrade project and saved $14 million in reduced transmission charges for NSW customers. The general manager has now turned his attention to improving substation technologies, particularly in Newcastle, as well as wide area communications, to form a controlled chain for their grid and the $100 million Smart Grid, Smart City project.
“The advantage of (the substation improvements) is that (EnergyAustralia) can look at, in an aggregate way, how the customer demand is changing at a particular substation site and then profile the changes in demand and use that profiling to inform the customers,” Dr Manglick said.
TransGrid supports EnergyAustralia to form part of the Smart Grid, Smart City “jigsaw puzzle” and will be assisting the distributor to test phasor measurement units with new monitoring and diagnosis software. The New South Wales Government corporation will assist with dynamic transmission live ratings using sophisticated weather transmission measurement to increase capacity during peak periods and sharing the data gathered during these periods with distributors.
It’s not all just about the nuts and bolts, however.
“We are aware of the importance of consumer psyche behind the success of all those things,” Dr Manglick said.
TransGrid has partnered with the Royal Melbourne Institute of Technology to commence a research project to gain insight into customer decision-making. The project will focus on understanding how energy demand management programs shape, and are shaped by, social practices, expectations and conventions. Proposed to run for three years from January 2011, the trial aims to identify practical opportunities for improving demand management and resource conservation outcomes in a residential context.
Dr Manglick said it was necessary to embrace reform and encourage choice for customers.
“That’s all part of that changing scenario and I’m glad to say, at least in New South Wales, all the distributors are very much behind, and all doing the best we can, in terms of providing support and providing resources to make it happen,” he said.
If customers can be successfully brought onboard to the smart grid, the critical issue may return to technology integration. According to RMIT’s Professor Holmes, power engineers now have to take into account power electronics.
“I think a lot of power engineers are going to have a new learning curve to come to terms with the technology that, to date, they have been able to relatively ignore. The technology of power electronics and energy control has been at the users’ end. Most of it has been after the terminal and that’s the technology that underpins smart grid.
“So if you start getting into that business and managing that process, I think you need to understand what the technology is, what it can do, what it can’t do and be able to manage it. And that’s not a skill base that any of the existing power companies have,” he said.
Protective measures for SCADA
Depth defence and proactive solutions to improve the security of SCADA control systems ensures the future of control systems and survivability of critical infrastructure.
Anything connected to the internet today is a potential victim to malicious attacks. Regardless of how easy it is to attack SCADA systems, one thing is clear: the impact of a successful attack can be catastrophic. The continuous growth of cyber security threats and attacks including the increasing sophistication of malware is impacting the security of critical infrastructure, industrial control systems and supervisory control and data acquisition (SCADA) control systems.
The reliable operation of modern infrastructure depends on computerised systems and SCADA systems. Since the emergence of internet and World Wide Web technologies, these systems have been integrated with business systems and became more exposed to cyber threats. There is a growing concern about the security and safety of SCADA control systems.
SCADA systems are exposed to the same cyberspace threats as any business system because they share the common vulnerabilities with the traditional Information Technology (IT) systems. Also, most SCADA systems are not protected with appropriate security safeguards. Operating personnel are lacking necessary security training and awareness. Threats against SCADA systems are ranked high in the list of government concerns, since terrorists have threatened to attack several SCADA systems of critical infrastructure and successfully launched near-disastrous attacks.
In addition to the SCADA communication moving more and more to the TCP/IP network, the following additional factors increase risks:
• the historical lack of concern about security issues within SCADA networks;
• the perception that SCADA networks are secure because they are physically or logically isolated;
• the security-by-obscurity approach in the design of SCADA systems; and
• the introduction of cyber warfare for which SCADA is a perfect playground.
Besides security concerns, the computer systems including SCADA control systems raise the issue of safety causing harm and catastrophic damage when they fail to support applications as intended. In January 2003, the Slammer worm infected the safety monitoring systems at the Davis-Besse nuclear plant in US. In 2003, two hackers gained access to control technology for the US’ Amundsen-Scott South Pole Station which ran life-support technology for scientists. This attack disabled the safety monitoring system for nearly five hours.
The infamous breach of SCADA for Maroochy water system in Australia plagued the wastewater system for two months. This caused a leak of hundreds of thousands of gallons of putrid sludge into parks, rivers, and private properties as a result of which marine life died, the creek water turned black and the stench was unbearable for residents.
In addition, recent attacks are becoming more sophisticated and the notion of what kind of vulnerabilities actually matter is constantly changing. For example, recently Stuxnet worm infected nearly 30,000 Windows PCs. According to Computerworld, Stuxnet is considered by many security researchers to be the most sophisticated malware ever, and was first spotted in mid-June by VirusBlokAda, a little-known security firm based in Belarus.
The threats are often poorly understood and ignored, and the vast majority of organisations lag in realising secure infrastructures. In complexly interactive systems whose elements are tightly coupled, great accidents are inevitable. Vulnerabilities and attacks could be at different levels – software controlling or controlled device, application, storage, data access, LAN, enterprise, internet and communications.
A number of things can be done today to protect control systems. The first involves governance. Senior management, including the chief executive and chief operating officers, must support the company’s security program. A person or group responsible and held accountable for security must be identified, and the organisation’s control system staff made aware of the team’s mission. The security program must undergo periodic review as well.
Policies involving IT systems and control systems should be consistent with each other. Almost all organisations have awareness and training programs for their employees on computer security that cover, for example, passwords or identifying inappropriate websites. Such components should, of course, be part of security programs for control systems, but they also should include components unique to each system, as well as reflect industry standards and guidelines.
Vulnerability assessments must be performed regularly. Each such test is ‘simply a snapshot in time’. Whenever the system is modified, upgraded, tested, or reconfigured, the previous vulnerability assessment is no longer relevant, because the system is no longer the same system.
Cybersecurity is a living issue, because there is no single technology – be it a firewall, intrusion detection system, or other technology – that will adequately protect control systems.
Transformation of the electric grid
There is a transformation taking place in the energy arena today that is fast becoming a global movement. It will redefine the energy landscape; how the world generates, distributes and consumes energy, as well as our lifestyle and the environment. The result will be a connected energy superstructure for the 21st century and beyond.
Within this transformation lies a key foundation, the smart grid – a superstructure to be deployed throughout the electrical infrastructure that integrates all the key facets required to deliver on the promise. Essential to creating this foundation will be three intersecting components: policy, technology and economics.
Policy makers globally are viewing the transformation of the electric grid as an opportunity to address broad policy objectives related to climate change, energy independence and development of clean technology. They realise that energy independence and infrastructure stability and security is a means of ensuring sustainable economic growth.
The resulting legislation and regulation has triggered the fundamental electric industry transformation currently underway. While the specific policy goals differ across the world, there are generally five themes related to smart grid policy:
• improved grid efficiency reducing system losses;
• integration of large amounts of renewable resources (both central and distributed);
• broader market participation by independent energy resource suppliers and customers;
• improved system utilisation through improved power flow management; and
• improved grid resiliency and reliability (including cyber security).
Spurred by new energy policy, utility planners worldwide are considering designs for the grid of the future. The best designs are including innovation in both energy technology and information communication technology (ICT). While the smart grid is often associated with just ICT investment, it is actually the integration of both energy and IC technology that results in a smarter grid. Therefore, it is essential that utilities develop an overall smart grid architecture that reflects the physical changes to the electric system as well as the integration of ICT.
Distributed generation (DG)
The increased adoption of feed-in tariffs suggests that we will see continued exponential growth in renewable DG (e.g. a California utility reports 60 per cent annual growth the past two years). The focus on distributed resources to reduce the complexities of building new transmission means renewable generation on distribution circuits will continue to grow for the foreseeable future.
Widespread deployment of sensor technology across the electric grid is occurring in the form of synchrophasors, intelligent electronic devices in substation and distribution equipment and smart meters. Synchrophasors will be vital to integrating renewable sources on the grid, increasing the amount of energy that can be reliably transmitted, and reporting information to utility control centres.
Plug-in electric vehicles (PEV)
will be coming to mass market over the next 12 months, and based on the popularity of hybrids, will likely establish a solid foothold in new car sales that will increase over this decade and beyond. The current analogue electrical grid was built more than 50 years ago and not set up to handle “appliances” of this nature being plugged into the grid all at once, or even one at a time. Coincident charging and charging during system peaks are serious grid reliability issues to consider and ICT can help address them.
Energy storage has the potential to enable the electric system to be more reliable and stable, and provide better power quality and customer-side energy management. Climate and energy policies are advocating energy storage as an asset that can be used to mitigate renewable energy intermittency, and storage technologies that can provide adequate dynamic response are becoming commercially viable at grid scale. It is possible that battery-based systems leveraging similar technologies used in electric vehicles could achieve breakthroughs on the engineering economics such that wide spread adoption could occur in this decade.
Utilities worldwide are rethinking their telecommunications needs and infrastructure architectures. These architectures are addressing requirements for highly available, low latency wired networks to link substation and control centre operations as well as robust, secure wireless field area networks to support distribution automation, mobile field force automation and smart metering. The electric utility industry is adopting Ethernet/Internet Protocol (IP)-based architectures in order to manage the transition from legacy systems to the emerging demands of syncrophasor and teleprotection systems. Likewise, utilities are evaluating their field communication needs of both utility grid operations and customer engagement.
A comprehensive, end-to-end, IP-based communications network will allow utilities to manage proliferating smart grid sensors and devices (including those located behind the customer meter), enable advanced mobile workforce automation, backhaul for the smart metering system and support high volume, near real time system state measurement and control.
Analytics will leverage data from many sources including smart meters, distribution and substation intelligent energy devices, and phasor measurement unit (PMU) devices. Advanced analytics will enable smarter, faster decisions by automated utility information systems, utility personnel and customers. The flood of data will require effective visualisation and intelligent alarming tools to provide useful and actionable information to system operators.
With the expansion of millions of intelligent devices on the grid and consumer smart devices, security becomes a challenge. Because of the critical nature of the technology and the services it provides, the grid is a prime target for acts of terrorism. Therefore, the transformation of traditional energy networks to smart grids requires an intrinsic security strategy to safeguard this critical infrastructure. That said, innovative utilities will not wait until regulations and standards are finalised to begin risk-based threat assessments and will start development of their security architectures and mitigation planning.
Utilities worldwide are considering the adoption of an architecture based on distributed intelligence. The use of distributed intelligence provides opportunities for utilities to implement scalable systems to integrate greater amounts of renewable distributed generation, enhance grid efficiency and operations.
Globally, trillions of dollars are being invested over the next 20 years in electrical infrastructure and technology to make the electrical grid more modern, secure, reliable and efficient. It is essential that the investment benefits are articulated to society, now and in the future, to ensure effective adoption.
Societal value attempts to capture the climate and energy independence value, the economic value from increased reliability and customer value. On global climate benefits, the Climate Group recently estimated that smart grid technology can enable reductions up to 2.03 GtCO2e by 2020 representing a value of $264 billion in energy, fuel and carbon saved assuming a cost of carbon of $22.
Central to smart grid investments and new business models is the creation and articulation of increased customer value. This value is typically thought to fall into either rewarding customers for changing their use of electricity or providing a new service that is enabled from a deployed technology platform. Many new customer value propositions being considered worldwide involve providing financial rewards for customers to dynamically change energy consumption.
Exciting opportunities are emerging enabling new customer products and services that leverage the technology platforms being deployed. Increasing adoption of open standards and IP-based networks are enabling innovation in customer use and experience and a wide variety of new products and services are being developed. Adoption of responsive electro-technologies (e.g. solar PV with intelligent inverters, electric vehicles, energy smart appliances) are also providing opportunities to develop compelling customer value.
Adjacent consumer technologies, like ‘apps’ for smart devices are enabling fast cycle development of new offerings that converge several platforms. An example is Cisco’s recently launched Home Energy Controller (HEC) that allows a customer to link their smart meter, energy smart appliances in the home, a variety of third party energy management apps on the HEC, the internet and Cisco’s hosted cloud services to create a unique customer experience for managing their home.
New business opportunities are emerging for both utilities, existing competitive energy services providers and new entrants to create customer value as described earlier. Multiple means of monetising these opportunities exist, ranging from traditional product sales, to wholesale markets for responsive demand and energy conservation, to financial services (e.g. pre-payment, levelised payment and financing), and to potentially the several “free” market models that have emerged over the past decade in other commercial sectors.
Utilities, technology suppliers and new market entrants worldwide are managing portfolios of investments in infrastructure and new products and services to enable an ‘energy revolution’. In doing so, it will be critical that they deploy innovative energy and information communication technologies enabling them to provide service in a manner consistent with present and future customer needs, while remaining flexible enough to accommodate changes in market structures and participation. It is these efforts that will enable a sustainable, reliable, efficient and stable 21st century smart grid.
Gridwise smart grid forum report
In September 2010 BuddeComm’s Paul Budde attended the Gridwise Global Forum in Washington DC and presented at two of the panels. This report by Paul draws on his 10-year involvement in this market to highlight the key topics that were discussed and to analyse the issues surrounding them.
Progress is certainly being made, but because of its nature the concept of smart grids continues to be ill-defined and rather fluid and this makes it difficult to develop firm plans of action. Smart grids involve several key elements – the grid itself, the consumer home energy network and the facility to include and manage renewable energy and e-cars.
The electricity utilities started off with one of the smart grid elements, the smart meter, and that still dominates many of the developments. At the same time it does to a certain extent limit more truly ‘smart’ developments. And the focus is still very much associated with the traditional grid and the upgrading that is needed there.
The jury is still out on how smart grids are going to be developed. Will the industry lead the development of smart grids? Will it be government-mandated or will disruptive elements force changes in a traditionally risk-averse and slow-moving industry?
Consumer issues were high on the agenda at the Gridwise smart grid conference in Washington – not just relating to the need for consumers to become far more involved in the process, but also the fact that there is no groundswell demand in the market for smart grids. In that respect it is rather different from the broadband issue in Australia, where there is a consumer groundswell demanding better broadband. A similar consumer push is needed to get politicians more interested in supporting the development of smart grids.
There is also a belief in the market that once energy prices for consumers increase even further, the call for action might become louder.
Given the above, it will be essential for the developments in smart grids to clearly spell out the social and economic benefits, and as such, build a case for consumers to support this. Of course, in such a massive industry transformation process things will go wrong and any problems that arise will be used by opposing factions in politics and the media to try and kill such initiatives. The industry needs to prepare itself for this, and it also needs to have consumer groups involved who can assist in managing the process.
The industry should highlight and promote positive developments, such as cases where it can be proved that real consumer savings can be made.
While climate change has now largely dropped off the top of the agenda, many customers will still wish to do the right thing in relation to saving energy and the industry should use those positive sentiments to capture more customer interest and buy-in. This, in turn, can be used to achieve political support and regulatory changes.
Government or industry led?
There are some good government initiatives in several countries around the world and these should be able to kick-start further developments. But at the same time there is still reluctance and hesitation among electricity companies to take the lead and become more involved. Saving energy will mean less revenue and that obviously creates problems. The social and economic benefits resulting from smart grids don’t always translate back to the balance sheets of the electricity companies.
Despite a call for more industry leadership from the electricity utilities, it seems that smart grid developments will continue to need a government mandate to proceed. This can be stimulated through incentives (rather than a stick) and could be facilitated with improved government policies and regulations.
Also, there is still a lot of work to be done to change the mindset of electricity companies from smart meters to smart grids. Based on their own internal requirements, utilities around the world have commenced with the roll-out of what are often not-so-smart meters. While many utilities accept the longer term development of smart grids, nobody has yet found the silver bullet to accomplish this. And so the focus remains for the most part on smart meters. Nevertheless there are some exceptions to the rule and many of these were showcased at the conference.
The eco-systemic model – using a trans-sector approach that includes IT, telecoms, renewables, infrastructure and other sectors – that is being taken by some of the countries represented in the Global Smart Grid Federation (Australia, Canada, Japan, India, Ireland, South Korea) is showing results; however several utilities, while paying lip services to a broader eco-approach, believe that they can do this themselves, without the broader industry.
The Federation is also an excellent platform for countries to learn from each other. While this is not too difficult for most countries, the US still struggles with the notion that anything of interest exists that was not invented in that country.
Regulatory issues and policy initiatives
Regulatory issues are still seen as key inhibitors, since the current regulatory environment in most western countries does not provide electricity companies with much wiggle room to invest in smart grids. Many regulators still see this as extra costs that fall outside the regulated monopoly of the utilities. This is distinctly different from Asian countries – namely China, Japan, South Korea and Singapore.
In the US, legislation is further hampered by a gridlocked Congress, similar to the circumstances that surround broadband and other serious reforms in this country. While there is a great deal of support from the President and the government agencies and departments involved, when it comes down to action it is blocked by Congress.
It will be interesting to see what happens following this year’s (mid-term) election – this problem could possibly become worse. At the same time, as many speakers mentioned, the rest of the world is progressing at a much faster pace. The developments in China in particular were highlighted as a good example of this. Obviously government decision-making processes are much quicker in that country.
China is rolling out what is arguably the largest smart grid in the world. Korea is not far behind, and it is operating on an even more sophisticated smart grid level.
Smart grids is a telecoms play
It is interesting to also note that in the US the electricity industry is slowly beginning to understand that smart grids is a telecoms play. Smart grids don’t touch the electrons, the difference is that telecoms are added to the grid. When I spoke at the Gridwise conference in Washington two years ago that was certainly not accepted as a given. It was still very much seen as an electricity play.
This is certainly changing – nevertheless the conference still only had one session dedicated to it.
Of course, with this reality becoming more accepted we now also see companies looking at co-operative models with telcos. Several wireless companies in the US are now offering wholesale-based services that allow utilities far greater freedom in the development of smart grids; but it is still to a large extent a learning process.
Sharing infrastructure remains a foreign concept in the US. There is great resistance to it. However the financial reality (plus better deals) is now starting to bridge that gap. In the absence of any certainty about the US Federal Communications Commission’s (FCC) National Broadband Plan, most electricity companies are betting on wireless telecoms networks; however many do acknowledge that a more technology-neutral approach would be preferable. The National Broadband Network approach in Australia certainly attracted much attention in this respect.
There is another FCC initiative that is receiving attention – the plan to build a nationwide wireless broadband network for the public safety sector. Utilities are asking if they should look at participating in this also. Of course, embarking on this path raises issues such as spectrum allocation and again highlights the very different situation that exists in the US. Changes to the spectrum plan there would necessitate co-operation between, for instance, the department of defense and the broadcasters, and to-date this has not transpired.