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    Is It SmartIf Its Not Clean?

    Smart Grid, Consumer Energy Efciency,

    and Distributed Generation

    March 2011

    2Part

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    1

    Smart Grid, Consumer Energy Efciency, and Distributed Generation

    What does a smart grid have to do with a clean grid? Part one o

    this series described strategies or improving efciency o utilitydistribution systems, with and without a smart grid. It explained

    how smart grid capabilities real-time sensing, communication and

    control might allow utilities to optimize voltage and reactive power, minimizing energy

    losses on the distribution system and reducing energy use by some types o consumer

    equipment.2

    In the second part o this series, we explain smart grid opportunities to advance end-

    use energy efciency and clean distributed generation. Potential benefts or energy

    efciency include:

    1. Providing detailed inormation on electricity use and costs to help consumers

    understand how to save energy and money

    2. Enabling ongoing building diagnostics to help fnd and alert building owners to

    problems in heating and cooling systems

    3. Improving evaluation o energy efciency programs

    For distributed generation, smart grids can mitigate the impacts that high penetration

    levels can have on the utility system helping cities and states to reach renewable energy

    goals at a aster pace. Smart grids also can unlock additional benefts o distributedgeneration or owners and utilities.

    * Lisa Schwartz is a senior associate with the Regulatory Assistance Project. Paul Sheaffer, vice president at Resource Dynamics Corporation, islead author of the distributed generation section of this paper. U.S. Environmental Protection Agency provided funding.

    Is It Smart if Its Not Clean?Smart Grid, Consumer Energy Efciency, and Distributed Generation

    Part two

    Principal authors Lisa Schwartz and Paul Sheafer1*

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    Is It Smart if Its Not Clean?

    Today, most consumers simply receive a monthly

    electric bill that shows their energy use, prices

    and costs or the period sometimes with

    comparisons to historic use. Customers cant

    easily correlate specifc actions they take in their homes and

    businesses with their energy consumption or energy bills.

    Using weather, demographic and other data, some

    The Smart Grid and Energy Efciency

    Inormation-Driven, Behavior-Based Savings

    Figure 1. Types o inormation eedback, rom Electric Research Power Institute3, characterized

    by when and how often the customer receives it. Timing and specicity o eedback are infuentialvariables in studies to date, lending support to advanced metering inrastructure with two-way

    communication smart grid technologies.

    Figure 2. Comparing a customers consumption to their neighbors can be a powerul motivator or energy-

    saving actions. With hourly meter data, customers can receive a more accurate picture o energy use or air-

    conditioning and other end uses. Such interval data also can provide accurate inormation on a customers

    energy use during peak demand hours, when electricity costs are highest. Graphic courtesy o OPOWER.

    1Standard

    Billing

    Monthly,bi-monthly orquarterly bill

    2Enhanced

    Billing

    Household-specifc ino,

    advice, and/orcomparisons;

    monthly orquarterly

    3EstimatedFeedback

    Web-basedenergy audits

    with inoprovided on

    ongoing basis

    4Daily/Weekly

    Feedback

    Household-specifc ino,

    advice, and/orcomparisons;

    daily or weekly

    5Real-TimeFeedback

    Real-timepremise-level

    ino

    6Appliance-level

    Real-TimeFeedback

    Real-timeino down to

    appliance-leveldetail

    Indirect Feedback(Provided ater consumption occurs)

    Direct Feedback(Provided real-time)

    utilities provide enhanced billing through third-party

    providers that includes:

    Anestimatedbreakdownofconsumptionbyend-use

    Acomparisonoftotalusagetoneighbors

    Customizedenergy-savingtipswithlinkstorelevant

    energy efciency programs

    Your estimated AC usage is based on last summers energy use and temperature. For more details, visit sdge/myhome/reports

    Spotlight on Air Conditioning

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    Smart Grid, Consumer Energy Efciency, and Distributed Generation

    Like traditional electric bills, these enhanced energy

    reports typically arrive by mail, monthly or less requently.

    Advancedmeteringinfrastructuresolid-statedigital

    meters with two-way communications between the

    meter and utility enables more requent eedback to

    consumers. It also can be used to provide consumers with

    their consumption by time o use, as well as improved

    analysis o consumption by end use and targeted energy-

    saving recommendations or each customer. Programmable

    communicating thermostats (PCTs) can provide additional

    data on heating and cooling loads, urther enhancing these

    energy reports.

    Instead o waiting or a monthly bill or energy report,

    Web-based portals can provide customers with current

    inormation on energy use by hour, or example

    typically with a days lag. Or meter data can be provided in

    real time or near real time at the customers premise usinga PCT with inormation display, pre-payment meter or a

    stand-alone display.4 Some systems can provide alerts to

    customers when consumption or costs exceed the values

    customers speciy, or when a customer is projected to cross

    into a higher-cost tier o usage under inclining block rates.5

    While energy-use eedback is relatively new or

    households, large commercial and industrial customers

    have or many years been able to choose utility or third-

    party services that provide current and historical energy

    and demand data, along with reports and analysis, to help

    detect malunctions in energy-related systems, optimizetheir operation, guide investments in equipment and

    systems, and reduce energy bills.

    Experience with residential customers to date reveals

    that eedback as soon ater the consumption behavior as

    possible and specicity (such as breakdown by appliance)

    are infuential variables in helping consumers change

    their energy consumption behavior.6 Those ndings tend

    to avor advanced metering inrastructure with two-way

    communication smart grid technologies.

    Studies also have shown a preerence by residential

    customers or pushed inormation or example, theutility sends energy usage reports by mail or email, instead

    o requiring the customer to log into a Web site to retrieve

    the inormation (but having a Web option or more detailed

    analysis).7

    Savings Estimates

    Giving eedback to customers on their energy use can

    motivate them to change their consumption behavior,

    infuence purchase decisions or appliances and equipment

    and help target investments in the most cost-eective

    measures.ArecentliteraturereviewbytheAmericanCouncil

    or an Energy-Ecient Economy on the value o various

    types o energy-use eedback concluded that it could help

    households reduce electricity consumption by 4 percent to

    12 percent.8A2009reportfortheElectricPowerResearch

    Institute ound overall conservation eects o a wide range

    o energy-use eedback methods ranging rom negative to

    18 percent, with some indication that savings persist or at

    least one year.9

    ArecentstudyfortheSacramentoMunicipalUtility

    District on home energy reports mailed monthly (tohigh-consumption households) or quarterly (to low-

    consumption households) ound that energy savings

    persisted, and even increased, in the second year o the

    programfrom2.32percentto2.89percentforhigh-

    consumptionhouseholds,andfrom1.25percentto1.70

    percent or low-usage customers, in the rst and second

    years, respectively.10 Using interval consumption data

    rom advanced meters, these reports also could be used

    to identiy actions consumers can take to reduce peak

    demand.

    Anoften-citedreportontheimpactofin-homedisplaysestimates savings in the range o 5 percent to 15 percent.11

    Amorerecentreviewofin-homedisplaysfoundsavingsof

    7 percent on average or customers who pay or electricity

    use ater the act (typical monthly billing) and twice that

    or customers on pre-payment plans.12 However, the

    incremental value o real-time eedback through in-premise

    devices such as in-home displays is not a settled issue,

    including persistence o savings over time.13

    The Pacic Northwest National Laboratory (PNNL)

    estimates the technical potential or electricity savings or

    homes and small and medium commercial buildings romimproved eedback enabled by the smart grid at 6 percent.

    PNNL indicates a wide range o uncertainty or potential

    savingsinthisarea1percentto10percent.Thatsdue

    to a number o limitations o studies to date: sel-selection

    bias, small and homogeneous samples, lack o research

    into persistence o savings over time, and shortcomings

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    Is It Smart if Its Not Clean?

    in evaluation to determine how savings were actually

    achieved.14 For perspective, its useul to compare overall

    savings ound in the randomized, large-scale eedback tests

    described above (approaching 3 percent).

    Unless verifed savings rom behavior-based programs

    are qualiying measures or meeting state energy efciency

    goals, and included in any utility shareholder incentive

    mechanisms, these programs will not make signifcant

    inroadswithorwithoutsmartgrid.Alsoneededisan

    agreed-upon ramework or measuring energy savings

    rom behavior-based programs. Energy savings rom home

    energyreportsusingstandardizedEM&Vprocedures

    already count toward energy efciency goals in Caliornia,

    Massachusetts,MinnesotaandTexas,andseveralother

    states have taken the preliminary step o approving flings

    or such programs.15 Incorporating smart meter data into

    these programs will help meet state goals to reduce peakdemand.

    Commissioning and Continuous Building Diagnostics

    Commissioning is a systematic process o ensuring

    that building equipment and systems are designed,

    installed and initially unctioning as the owner intended,

    and building sta are prepared to operate and maintain

    them.16 Existing building commissioning (also called retro-

    commissioning or recommissioning) is used to improve

    operations and maintenance o buildings that were not

    commissioned during design and construction.The commissioning process covers heating, ventilating,

    andairconditioning(HVAC)systemsandcontrols,lighting

    and lie saety systems. It ensures that equipment and

    systems are sized, specifed and tested or a particular

    pattern o operation based on expected occupancy, weather

    and other actors that determine how they are used.

    Using a large database o commissioning results in

    nonresidential buildings in the U.S. o various sizes and

    types, Lawrence Berkeley National Laboratory17 ound

    median energy savings o 16 percent or existing buildings

    and 13 percent or new construction.18

    The costs ocommissioning paid back in energy savings in 1.1 years

    and 4.2 years, respectively, with median beneft/cost ratios

    o 4.5 or existing buildings and 1.1 or new construction.

    Accordingtothestudy,energysavingspersistforatleast

    three to fve years.19Manymeasuresundertakenduring

    commissioning,suchasproperlysizingHVACequipment,

    are very durable.

    Because energy savings exceed the costs o

    commissioning, the analysis estimates negative costs or

    associated reductions in greenhouse gas emissions, with

    medianvaluesof-$110pertonne20 or existing buildings

    and -$25 per tonne or new construction. Benefts beyond

    energy savings include occupant comort and improved

    indoor air quality.

    The report concludes that commissioning may be

    the most cost-eective strategy or reducing energy use

    andgreenhousegasemissionsinbuildings.Applying

    median energy savings rom the study to the stock o U.S.

    nonresidential buildings, the researchers estimated that

    commissioningcouldsave$30billioninenergycosts

    annuallyby2030,withacorrespondingreductionofabout

    340megatons21 o carbon dioxide each year. In addition,

    commissioning ensures that building owners get what

    they pay or when constructing or retroftting buildings,detects and corrects problems early and in a less costly

    manner, and helps veriy that energy efciency programs

    are meeting their savings targets.

    Despite its benefts, commissioning is not widely

    practiced. The smart grid has the potential to considerably

    reduce the cost and time involved or commissioning,

    urther tipping the scales in its avor and accelerating its

    adoption, and to acilitate monitoring-based, ongoing

    commissioning.

    Smart grids interval meter data and two-way

    communication, together with building energymanagement systems and automated diagnostic tools,

    could constantly monitor equipment and perormance

    or some parameters and update settings to optimize

    perormance and efciency. That would avoid the time-

    consuming process o manual inspection and testing o

    end-use devices. In addition, acility energy managers could

    receive immediate alerts when equipment is not perorming

    to efciency specifcations. Such proactive maintenance

    would improve building operation, reducing energy use

    and costs and greenhouse gas emissions. Utilities could

    use automated diagnostics to screen buildings or energyefciency programs.

    TheElectricPowerResearchInstituteestimatesan

    incremental market penetration or ongoing commissioning

    duetosmartgridrangingfrom5percentto20percent

    o large commercial buildings, translating into an annual

    energysavingspotentialof0.14percentto0.18percentin

    retailsalesofelectricityin2030.22

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    Smart Grid, Consumer Energy Efciency, and Distributed Generation

    Only a raction o buildings are using automated

    diagnostic tools today because o complexity, cost and other

    issues. The smart grid is not a requirement or automated

    diagnostics, but such investments can potentially make

    the practice available to all consumers, particularly i a

    common data platorm is developed and historical interval

    data are stored or uture use.23

    Using whole-building, interval meter data, some types o

    energy waste can be detected by identiying base load and

    peak operation patterns, o-hours usage, relative cooling/

    heating efciency, and periods when outside air is not used

    or ree cooling. With thermostat inormation on the status

    o heating, cooling and water heating, end-use loads can be

    disaggregated rom whole building energy use to provide

    betterqualityinformationfordiagnostics.Residentialand

    small commercial applications are most amenable to this

    approach.

    24

    While commissioning today is ocused on large

    commercial buildings, PNNL estimates that using smart

    grid technologies or ongoing diagnostics could reduce

    electricityusedforhomeheatingandcoolingby10percent

    to20percent,andreduceconsumptionforHVACand

    lighting or small and medium commercial buildings by

    10percentto30percent.25 Homeowners, or example,

    could receive alerts immediately when heating equipment

    is operating abnormally. Incorporated into ratepayer-

    unded energy efciency programs, homeowners could

    receive recommendations or correcting the problem,

    including potential costs, savings, and rebates or relevant

    energy efciency measures and high-efciency replacement

    equipment,ifneeded.Alertsalsocouldbeprovidedfor

    routine maintenance schedules.

    Interval data rom advanced metering inrastructure

    also could be used to improve data or benchmarking

    comparing a buildings current energy perormance with its

    energy baseline or with the energy perormance o similar

    buildings, based on use. Key metrics rom interval meter

    data could be benchmarked against a population o similar

    buildings. For example, the ratio o average peak load to

    base load may indicate problems with o-peak energy use.

    26

    With commissioning and automated diagnostics made

    easier and cheaper, eorts can ocus on addressing the

    remaining barriers to their implementation, including

    increasing public awareness, training or the building

    industry, and incorporating these measures in energy

    efciency potential studies and program requirements.

    Figure 3.27The basic approach to energy efciency impact evaluation includes defning baseline

    energy use and projecting energy use patterns into the reporting period, with adjustments as

    needed or weather, occupancy, production level and other relevant actors. Smart grids massdeployment o advanced meters plus two-way communication between the meter and the

    customer will allow or impact evaluations to cost eectively incorporate ar more data and thus

    improve the quality and accuracy o savings determinations, as well as reduce data collection

    costs and the time required to present results and provide eedback or project improvement.

    1,000,000

    750,000

    500,000

    250,000

    Implementation

    Baseline Period

    Baseline

    Actual

    Reporting Period

    Jan. 01 July 01 Jan. 02 July 02 Jan. 03 July 03 Jan. 04

    EnergyUse(kWh)

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    Is It Smart if Its Not Clean?

    Enhanced Evaluation, Measurement and

    Verifcation (EM&V)

    Impact evaluations quantiy the energy and peak

    demand savings o energy efciency programs. Such

    evaluations also are used to help assess the cost-

    eectiveness o energy savings programs, set energy savingsgoals, identiy receptive market segments, assist in cost

    recovery determinations, identiy potential energy-saving

    measures in integrated resource planning, and or program

    planning, budgeting and design, among other uses.28

    Measurementandvericationdeterminestheenergyand

    demand savings rom individual projects and measures.

    ThetwokeyobjectivesofEM&Vare:29

    1. To document and measure the eects o a program

    and determine whether it met its goals with respect to

    being a reliable energy resource.

    2. To help understand why those eects occurred andidentiy ways to improve current programs and select

    uture programs.30

    EM&Visincreasinglyimportantasutilities,third-party

    service providers and organized power markets reach or

    advanced levels o efciency to meet energy and capacity

    needs.Manystatesnowhaverequirementstoacquireall

    cost-eective energy efciency, or they have established

    energy efciency resource standards that require utilities

    to meet specifed energy savings that ramp up over time.

    In addition, a number o states provide perormance-based

    incentives that encourage utilities to achieve the highestlevels o savings. Conversely, utilities and other energy

    efciency providers may be subject to penalties or ailure

    to meet minimum standards.

    Assystemoperatorsincreasetheirrelianceonenergy

    efciency to meet peak demand, they need better

    inormation on the size and timing o savings. Forward

    capacitymarketsintheISONewEnglandandPJMregions

    are increasingly relying on energy efciency to meet

    reliability requirements. Capacity payments or energy

    efciency measures are made only or verifed savings.

    Inaddition,airqualityregulatorsneedeffectiveEM&Vprotocols in order to include energy efciency programs

    in implementation plans as a mechanism or meeting air

    quality standards.

    Generally speaking, the most rigorous and reliable

    EM&Vapproachesrequireasignicantamountofend-use

    energy data collected both beore and ater implementation

    o efciency measures. The collection o such data may

    require monitoring devices on isolated circuits or each

    end-use application studied. Because o the expense, such

    monitoring tends to be limited in time and a sample o the

    population o interest.

    SmartgridsbenetsforEM&Vstemfromintervaldata

    rom mass deployment o advanced meters plus two-way

    communication between the meter and the customer data

    collection and transer capability or massive numbers o

    customers that can be turned on when needed. When such

    energy data are collected, or minute-by-minute energy

    consumption or a whole acility or or specifc energy

    loads, the ability to analyze energy use and correlate it

    with external actors (such as weather and use patterns)

    increases and becomes aordable.

    Advancedmeteringinfrastructure,ifcombinedwith

    communicating thermostats, energy management systems,

    demographic data, appliance and equipment surveys,weather data and hourly (or fner-grained) avoided costs,

    offersthefollowingopportunitiestoimproveEM&Vat

    lower cost:31

    Betterunderstandingofhowandwhenenergyis

    consumed

    Higherqualityestimatesofsavingsforexisting

    energy efciency programs

    Betterinformationfordesigningnewprograms

    Disaggregationofheatingandcoolingloadsfrom

    other loads using whole-premise interval data and

    other inormation to break down consumption intoend uses

    Reduceddatacollectioncoststhroughremote

    monitoring, leaving more money or actual efciency

    measures

    Rapidfeedbackonneworexpandedenergyefciency

    programs

    Morerenedload-shapecharacteristicsofindividual

    energy efciency measures, by season and time o day

    Betterinformationfortargetingprogramstodiverse

    customers

    Moreaccurate,individualbaselinesandestimatedsavings and how and why they happened

    Moredetaileddataforanalyzingtheeffectsofweather

    day type, occupancy and other variables aecting

    savings

    Manydatapointsforbettercalibrationofenergy

    savings models

    Betteranalysisbysubgroupcustomertypeor

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    Smart Grid, Consumer Energy Efciency, and Distributed Generation

    location by matching interval meter data or

    survey respondents with premise and occupant

    characteristics

    To get these benefts, however, utilities must make

    arrangements or meter data to be collected at the required

    interval (e.g., hourly), saely stored and easily retrievable.

    Also,unlessthedataarebeingusedroutinelyforanother

    purpose, such as designing rates and allocating revenue

    requirements to customer classes, data clean-up will be

    required. In addition, time stamps or meters by various

    manuacturers may not be aligned.32

    Policies Needed to Take Advantageo Smart Grid Capabilities or EnergyEciency

    I increasing energy efciency is an objective o smartgrid deployments, utilities and stakeholders will need

    to consider how to harness smart grid capabilities or

    ratepayer-unded energy efciency programs. Policies or

    states to consider include the ollowing:

    Broad Strategies, With or Without Smart Grid

    Treatenergyefciencyatleastonaparwithsupply-

    side alternatives in resource planning and acquisition,

    transmission and distribution planning, and organized

    markets

    Acquireallenergyefciencyresourcesthatrepresent the best combination o cost and risk (or

    set aggressive but achievable goals through energy

    efciency resource standards)

    Provideadequateprogramfundingtoachieve

    targets

    Fullyvalueenergyefciencybyincludingall

    relevant benefts in the applied cost test, such as

    avoided costs associated with line losses, avoided

    costs or transmission and distribution systems,

    and reduced ossil uel use and water consumption

    Adoptregulatoryandratemakingmechanismsthat

    align utility and consumer interests33

    Usealternativeregulation(e.g.,decoupling),

    shareholder incentives or both

    Moveawayfromaverageratestodeploymentof

    inclining block or time-varying rates

    Engageconsumersenable,motivateandeducate

    Provideinformation,evaluationtools,andtargeted

    advice coupled with incentives

    Usemultiplechannelstogetandkeepcustomers

    attention

    Includeveriedsavingsfrombehavior-based

    programs as qualiying measures or meeting energy

    efciency goals

    Policies Specifc to Smart Grid Deployments

    Requiresmartgridtransitionplansandupdates Explainhowtheplanmeetsthestatesenergy

    efciency and other goals, estimate costs and

    benefts, orecast phased deployments and establish

    an evaluation plan

    Specifyminimumtechnologyfunctional

    requirements, staging utility cost recovery with

    availability o these services

    Adoptinteroperability34 standards

    Addressinformationaccess,privacyandsecurity

    Giveconsumerseasyaccesstotheirowninterval

    usage data in a helpul ormat Allowthirdpartiesauthorizedbythecustomerto

    receive the data or customized energy efciency

    products and services

    Ensuredatasecurity

    IncorporateintervalmeterdatainEM&Vplansand

    requirements

    Integrateratedesignwithsmartgridtechnologies

    and applications to optimize consumer behavior and

    system operations

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    Is It Smart if Its Not Clean?

    The U.S. electric power system was

    designed to produce electricityat large power plants in remote

    locations, send it over high-

    voltage transmission lines, and deliver it on

    lower-voltage utility distribution systems

    to passive end-use customers. Increasingly,

    electricity is produced by smaller, cleaner

    distributed generation units at or near

    customer sites and connected to the utility distribution

    system.

    The traditional one-way power ow rom power plants

    to customers is turning into a two-way street. Customersare becoming active partners in meeting energy and

    environmental goals through clean distributed generation,

    peak load response and energy efciency. Smart grids

    intelligent sensors, two-way communications and advanced

    controls can acilitate this partnership.

    Manyformsofdistributedgenerationaregrowingin

    their use and potential impact on distribution systems.

    Costsarecontinuingtodeclineforsolarphotovoltaic(PV)

    and other small-scale renewable energy systems. Federal,

    state and local governments are encouraging these systems

    through grants, tax credits, net metering,

    PURPA35policies,set-asidesinRenewablePortfolioStandards(RPS),feed-intariffsand

    other programs. Some states also provide

    incentives or combined heat and power

    (CHP) acilities.36Aspenetrationlevelsof

    distributed generation increase, concerns

    about the stability and operation o the

    electricity system could create barriers to

    urther development. The evolution o distribution systems

    to smart grids is expected to reduce many o these barriers

    and help reach clean energy goals at a aster pace.

    Initiatives underway are demonstrating how smart gridscan support distributed generation to provide sae, clean

    and reliable power.37 But not all potential benefts o the

    smartgridareunequivocallyproven.Andbenetsvs.

    costs or smart grid components must be considered, as

    well as costs or related, conventional distribution system

    upgrades. For example, transormers may need to be

    replaced with larger units to accommodate higher levels

    o distributed generation. In addition, utility protection

    schemes will need to be modifed to realize the advantages

    o smart grids.

    Figure 4.Potential smart grid benefts or distributed generation in the uture, compared to operations today

    Distributed Generation (DG) as Smart Grid Evolves

    Today

    LowpenetrationofDG

    Littleornocommunications

    between DG and the grid

    Detailedsystemimpactstudiesneeded or many applications

    DGmeetsIEEEStandard1547

    Microgriddemonstrations

    Mid-Term

    IncreasedpenetrationofDG

    SomeinteractionbetweenDG

    and the grid to respond to

    price signals, or example Interconnectionstandardsand

    rules are updated

    Moremicrogridsdevelop

    Long-Term

    HighpenetrationofDG

    DGcanbemonitored,controlledand

    dispatched by utility

    Easierinterconnection DGrides-throughsomegriddisturbances

    DGprovideslocalvoltageregulationand

    other ancillary services

    Microgridsarecommonplace

    The Smart Grid and Distributed Generation

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    Smart Grid, Consumer Energy Efciency, and Distributed Generation

    Potential Benefts o the Smart Grid or

    Distributed GenerationThe smart grid will enable additional benefts o

    distributed generation and energy storage (distributed

    resources) or owners, utilities and system operators,

    including:

    Betterhandlingoftwo-wayelectricalows

    Distributed generators export power to the utility

    system when generation output exceeds any on-

    site load demand. That makes it more difcult

    or the utility to provide voltage regulation and

    protective unctions. Smart grids monitoring and

    communication unctions will make these tasks easier

    or utilities.

    Easierdeployment With real-time inormationprovided by the smart grid, the utility system

    operator will have detailed reports on the current

    conditions o individual eeders and loads. That

    should allow or simpler interconnection studies

    or no study at all i certain screens are passed or

    some applications. Increasingly, distributed generators

    may apply or power export i costs and complexity

    o interconnection associated with power export are

    reduced.

    Higherpenetrationlevels With real-time knowledge o conditions on eeders, and

    communication between the utility system and

    distributed resources and loads, some utility operating

    practices could be modifed to acilitate higher

    concentrations o distributed generation.

    Dynamicintegrationofvariableenergy

    generation Smart grids will remotely monitor

    and report generation rom distributed resources so

    automated systems and system operators can dispatch

    other resources to meet net loads.

    Reduceddistributedgenerationdowntime New

    inverter designs integrated with smart grids will allow

    distributed generation to detect operational problems

    on the utility system, such as aults, and continue

    operating during some o these grid disturbances.

    Maintainingpowertolocalmicrogrids

    duringutilitysystemoutages Smart grids

    could acilitate the ormation o intentional islands

    o distributed resources and loads that disconnect

    automatically when the local utility system is down

    and automatically resynchronize to the system when

    conditions return to normal. Distributed resources

    within the microgrid continue to serve customer loads

    in the island.

    Valuingdistributedgenerationoutputbytime

    ofdayAdvancedmeteringinfrastructurea

    undamental part o the smart grid enables time-

    varying rate designs or retail customers that better

    supportsolarPVsystems,whichgeneratepower

    primarily during on-peak hours38 when it is typically

    more valuable.

    Providingancillaryservices Smart grids built-in

    communications inrastructure will enable the system

    operator to manage distributed resources to provide

    reactive power, voltage support and other ancillary

    services under some circumstances. The system

    operator would need to have operational control

    over distributed resources in order to provide these

    services.

    Some o these benefts are described in more detailbelow.

    Allowing Inverter-Based Systems to Stay On-LineWith smart grid communications, utility system

    operators could more readily control inverter-based

    distributed resources to optimize utility operations by

    providing the ollowing services:

    Variablevoltageoutputforlocalvoltageregulation

    Variablereactivepowersupport

    Variableramprate Ride-throughofvoltagedisturbances

    Absentsmartgrids,inverter-basedsystemscouldprovide

    a limited set o these unctions at a reduced level.39

    Mostutilitiestodaydonotallowdistributedresources

    to continue to provide power to the utility system during

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    Is It Smart if Its Not Clean?

    minorvoltageandfrequencydisturbances.Asaresult,

    the widely accepted Institute o Electrical and Electronics

    Engineers (IEEE) Standard 1547 requires that during

    abnormal voltage and requency conditions on the utility

    system, the distributed resource will not energize the utility

    system. Thus, distributed resources are not allowed tosupport the operation o distribution systems.

    Mostinverterscannotdifferentiatebetweenautility

    outage, when the generator must disconnect rom the

    utility system, and a minor disturbance, where remaining

    on-line would help stabilize the system. New inverter

    designs and the smart grids sensors, communication

    and control systems could allow distributed resources to

    remain connected to the utility system during some types

    o abnormal conditions. Close cooperation among utility

    owners, inverter designers and smart grid developers is

    required to achieve successul development and integrationo new inverters with utility acilities and operations. Work

    is underway to develop standard protocols.

    Smart grids plus new inverter technology or distributed

    resources could help address problems on distribution

    feeders,suchasoutagesandperiodsofinstability.And

    utilities could control inverter-based systems to supply

    reactive power and regulate voltage in a more cost-eective

    manner than installing traditional utility-owned equipment

    Simplifying Interconnection Studies

    Smart grids should make it easier to interconnectdistributed generation to utility systems by simpliying

    studies required prior to commissioning the generator,

    saving time and money.

    Utility impact studies investigate the potential adverse

    eects on operation, saety and reliability o interconnecting

    a proposed distributed resource to the utility system, absent

    modicationstothesystem.Afterthat,theutilityconducts

    a acilities study to identiy equipment and operational

    changes that address the negative impacts identied.

    In some cases, a smart grid would not make any

    dierence in this process. For example, a large distributedresource on a eeder circuit would likely still require impact

    and acilities studies and additional utility equipment to

    accommodate the generator. In other cases, the historical

    and real-time inormation on eeder operation that smart

    grids can provide could reduce the need and scope o an

    impactstudy.Andbecausesmartgridscouldallowutilities

    to control distributed resources on a eeder, including

    The interaction o distributed resources with the

    utility distribution system is infuenced by the type o

    power conversion device used:

    Inverter-basedsystems,suchassolarPVand

    small wind turbines, use power electronics to

    convert electricity rom direct current (DC) or

    non-synchronousalternatingcurrent(AC)to

    ACpowersynchronizedwiththeutilitysystem.

    They can provide reactive power and, by varying

    the output between real and reactive power,40

    providevoltageregulationaswell.Mostinverter-

    based systems have sotware-based protective

    relaying41 and coordination and communication

    unctions. That gives them two advantages over

    other systems: 1) they are easier to interconnect

    with the utility system and 2) they provide more

    unctionality, potentially or both the distributed

    resource owner and the utility system.

    Synchronousgeneratorscan operate indepen-

    dently or in parallel with the utility system. They

    can produce reactive power and regulate voltage.

    They need equipment to synchronize with the

    utility system and protective equipment to isolate

    rom the system during aults.42

    Inductiongenerators receive their excitation43

    rom the utility system and cannot operate

    independently; the utility system governs the

    requency and voltage produced by the generator.

    Mostinductiongeneratorsabsorbreactivepower

    and cannot control voltage or power actor.44

    The reactive power requirements o induction

    generators can adversely aect the utility system.

    Generators that use biogas rom landlls, arms and

    wastewater treatment plants generally use synchronous

    or induction generators. CHP and waste energyrecovery acilities also typically use one o these two

    conversion devices, although most microturbines use

    inverters. Distributed energy storage technologies

    such as advanced batteries and electric vehicle-to-grid

    systems use inverter-based designs. On-site diesel or

    natural gas-red distributed generators typically use

    synchronous or induction designs.

    How Distributed Resources InteractWith the Utility System

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    Smart Grid, Consumer Energy Efciency, and Distributed Generation

    their voltage, reactive power and ramp rate, some o the

    potential grid problems distributed resources can cause

    today could be alleviated.

    Smart grids also could reduce interconnection cost

    and complexity or distributed generators that will export

    power to the utility system. Currently, in many cases

    modications to a utilitys protective scheme may be

    required when a distributed generation unit applies to

    export power to the grid. The generation owner typically

    bears the cost o these modications. The smart grid

    may alleviate some o these costs by applying adaptive

    protection systems that can better accommodate power

    fows rom distributed generators, without requiring

    extensive modications.

    TheFederalEnergyRegulatoryCommission(FERC)

    and many states have adopted technical standards and

    procedures that simpliy the process o interconnectingdistributedgeneration.FERCandnearlyallthesestates

    provide an expedited and less expensive interconnection

    process including no impact study in some cases i the

    application passes a set o screens that include criteria

    such as:

    Thesizeofeachdistributedgenerationunitmustnot

    exceed2megawatts(MW).

    Theaggregateddistributedgenerationonaline

    section must not exceed 15 percent o the lines

    annual peak load.

    Theaggregateddistributedgenerationonthe

    distribution circuit must not contribute more than

    10percenttothecircuitsmaximumfaultcurrentat

    the point on the primary line nearest the point o

    common coupling.

    Figure 5.Distributed energy resources (DER) and the smart grid 45

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    Is It Smart if Its Not Clean?

    Theaggregateddistributedgenerationonthe

    distribution circuit must not cause any fault

    currents exceeding 87.5 percent of the short circuit-

    interrupting capability.

    Smart grid capabilities could go further by allowing

    some of these screens to be relaxed. The additional

    information, communication and remote monitoring

    infrastructure will give the utility the operating

    characteristics of individual feeder circuits, allowing for

    higher penetration of distributed generation without

    performing detailed impact studies for some installations.

    That will lower costs and speed deployment.

    Enabling Microgrids and Premium Power Parks

    Microgridsincludepartsoftheutilitygrid,multiple

    distributed generation units and multiple loads connectedby circuits. The generators are distributed within a campus

    or among multiple buildings. The generating system can

    detect grid stability events that trigger disconnection from

    the utility system, quickly creating an electrical island

    thatcontinuesprovidingpowertoloadswithin.Microgrids

    needtobecarefullyplannedandimplemented.Microgrid

    loads need to be managed and, in some cases, loads need

    to be reduced when the microgrid is disconnected from the

    utility grid.

    There are several types of microgrids, including the

    following:

    Type1microgrids are designed for continuous

    operation in parallel with the grid. Distributed

    generators feed the campus own distribution

    system, generating some or all of the power required.

    When a fault is detected on the utility grid, the

    microgrid disconnects and operates independently.

    The transition to microgrid supply is typically

    accomplished through the use of paralleling

    switchgear. In some cases, load will need to be

    reduced.

    Premiumpowerparks(CriticalType2

    microgrids) provide critical backup power systems

    that serve multiple facilities. These microgrids include

    energy storage systems and static transfer switches

    that can seamlessly switch over part or all load during

    utility outages. Storage carries the system through

    until emergency generators start up.46

    Non-criticalType2microgrids are for campuses

    that can tolerate a short outage. These microgrids

    manually or semi-automatically disconnect from the

    grid, start their emergency generators and continue

    operation. In some cases, Type 2 microgrids can

    be used for peak shaving or short-term baseload

    operation, but additional equipment is required.

    Using smart grid capability, microgrids could be much

    larger in scale than those existing today and could be part

    of the utility-owned distribution system. IEEE Standard

    1547.4, currently under development, will provide

    alternative approaches and good practices for the design,

    operation and integration of microgrid systems with the

    utility grid.

    Supporting Variable Generation

    Some distributed generation technologies use renewable

    energy resources, such as solar and wind, with power

    productionlevelsdependentonforcesofnature.Athigh

    penetration, these variable energy resources can create

    instability on the grid the way it is operated today as their

    power output decreases or increases within the hour.

    Within-hour scheduling and other operational changes

    under consideration to support variable generation would

    complement smart grid applications and new inverterdesigns. For example:

    Distributedgenerationcouldbecontrolledlikeutility

    scale power plants to provide automatic generation

    control instantaneous regulation of electricity

    to maintain frequency on the system within tight

    parameters.

    Smartgridssensorsandcommunicationscouldhelp

    grid operators predict short-term generation impacts

    of winds and clouds as they move from one region to

    the next.

    Gridoperatorscouldcontrolenergystoragesystemsto meet peak demands when generation levels from

    distributed energy resources are low.

    Distributedgeneratorscouldgainaccesstonew

    markets for energy, capacity and ancillary services.

    The additional revenue streams could help overcome

    economic barriers to greater investment in distributed

    renewable resources.

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    Smart Grid, Consumer Energy Efciency, and Distributed Generation

    Smart Grids and Combined Heat and PowerCombined heat and power (CHP) systems are typically

    run near their ull capacity or are limited by on-site

    (host) thermal demands or manuacturing processes,

    or example. However, some CHP systems can provide

    additional capacity or brie periods. Others may increaseoutput beyond what is needed on site and reject excess

    thermal output, similar to conventional power plants. Some

    applications use condensing turbines that are operated

    only when thermal demands drop. These could be used

    more requently to serve periods o high loads on the utility

    system. In addition, new CHP units could be sized larger

    or power export to the grid, i it became economically

    avorable to do so. CHP also can enable customers to

    participate in demand response programs and capacity

    markets.

    Following are two examples o CHP systems providinggrid support in a smart grid concept:

    AtPrincetonUniversity,facilityplannersincorporated

    a number o smart grid attributes when they changed

    production strategies involving the campus CHP

    system as well as steam and electric chillers to take

    advantage o high-priced electric periods. The system

    increases electricity production and reduces electric

    loads during periods o high grid demand and reduces

    electricity production during low-demand periods.47

    TheCityofStamford,Connecticut,isdevelopingan

    Energy Improvement District that embodies many

    smart grid concepts, such as reducing demand on

    the grid and deploying advanced generation in a

    microgrid structure. The district will deploy CHP,

    distributed generation using renewable resources,

    and advanced controls that will allow it to operate

    independently or in conjunction with the utility

    grid, connecting or disconnecting itsel seamlessly as

    needed without disrupting service.48

    Standards and Rules Will Need to ChangeTechnical standards and interconnection procedures or

    distributed resources must build upon the current IEEE

    Standard 1547, which was designed or low penetration

    o distributed generation and does not address impacts

    on the grid or grid operations. Standards will need to beupdated to address higher penetration levels and improved

    utility operations made possible by smart grids, and to take

    advantage o smart grid-enabled capabilities such as riding

    through some types o utility disturbances, regulating

    voltage, reclosing and automating utility reliability schemes

    IEEEP203049 provides guidelines to defne

    interoperability50 between the smart grid and end-

    use applications and loads. The drat guide addresses

    terminology, characteristics, unctional perormance

    and evaluation criteria, and application o engineering

    principles or interoperability. It also discusses other bestpractices or the smart grid.

    IEEE P1547.851 recommends practices to expand

    strategies or interconnecting distributed generation with

    electric power systems and will include guidance on

    generatorsbeyond10MW,extendingitsreachbeyondthe

    stated scope o IEEE Standard 1547. The new standard also

    identifes innovative designs, processes and operational

    procedures that may be used to realize extended use

    beyond IEEE Standard 1547 requirements.

    TheElectricPowerResearchInstitute,theU.S.

    Department o Energy, Sandia National LaboratoriesandtheSolarElectricPowerAssociationhavelaunched

    a collaborative to develop common methods or

    communication between inverter-based distributed

    resources and other grid components.

    Federal and state regulators can modiy their

    interconnection rules to incorporate these new standards as

    they become available.

    Smart Distributed Generation Policies for

    Smart Grids

    Smart grids are expected to enable higher levels odistributed generation. But supportive policies are needed

    to achieve this goal. The ollowing table highlights potential

    smart grid benefts or distributed generation and policies

    needed to take advantage o these capabilities.

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    Smart Capabilities

    Enable higher penetration levels o clean

    distributed generation

    Acceleratedeploymentandallow

    interconnected distributed generators to

    operate during utility outages

    Dynamically integrate distributed wind and

    solar resources

    Optimize voltage and reactive power on

    distribution systems

    Increase demand response to allow loads to

    ollow variable renewable energy resources

    Provide physical connection and communica-

    tion with wholesale and retail markets

    Provide timely inormation on each distributed

    generator, including type and availability;

    allowtrackingforRPScomplianceandreduce

    tracking costs

    Easier and timely interconnection o

    distributed generation or exporting power tothe grid

    Distributed Generation Policies to Take Advantage of Smart Grids

    Smart Policies

    Provide incentives or clean distributed resources, adopt

    best practices or net metering, require advanced meteringinrastructure to support net metering,52 and enable excess power

    salesthroughRPSset-asides,statePURPApoliciesorfeed-intariffs

    Update interconnection standards and utility operations to reect

    smart grid capabilities and provide incentives to distributed

    resources to provide new services or the utility system

    Improve utility planning or renewable resources and support

    mechanisms to reduce integration costs or example, intra-hour

    scheduling

    Removebarrierstoutilityinvestmentsthatimprovedistribution

    system efciency or example, through decoupling, where

    retail customer rates or recovering fxed utility costs are adjusted

    periodically to keep utility revenue at the allowed level

    Oer customers dynamic pricing options and incentives or other

    types o demand response programs; provide customers with easy

    access to useul energy consumption data, evaluation tools and

    targeted advice; oster innovation in the marketplace or controls

    that automate the customers response; and incorporate demand

    response in integrated resource planning

    Provide access to new markets and revenue streams or customer-

    owned distributed generation

    Better incorporate distributed generation into energy orecasting

    andRPScompliance

    Provide transparent cost inormation and air cost allocation or

    interconnection; streamline and update interconnection studyrequirements or exporting power to the grid

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    Smart Grid, Consumer Energy Efciency, and Distributed Generation

    Conclusion

    The smart grid oers the potential to increase

    energy savings and improve customer control o bills

    through inormation and automation. In addition,

    widespread availability o interval meter data and two-way communication between the utility and the meter

    shouldsignicantlyimproveEM&Vforenergyefciency

    programs.

    To support these outcomes, state regulatory utility

    commissions can speciy unctional requirements or

    smart grid technology and applications to support energy

    eciency programs, ensure consumers and authorized

    third-party service providers have secure access to

    energy usage inormation, require utilities to develop

    and periodically update a smart grid transition plan that

    explains how all the components phased in over time will

    t together and address state goals or energy eciency,

    and adopt rate designs that encourage energy-ecient

    consumer behavior.53

    Clean, distributed generation also can fourish

    with the support o smart grids advanced monitoring,

    communication and controls. To take advantage o thisopportunity, states can adopt best practices in areas such

    as distributed generator interconnection,54 net metering,

    accounting or distributed generation in resource planning

    and distribution system planning, distributed generation

    procurement, and removing utility disincentives to non-

    utility-owned generation.

    With an understanding o the potential benets o smart

    grids or energy eciency and clean distributed generation,

    state regulators can use their broad authority to put in place

    a regulatory ramework to tap smart grids ull potential.

    Endnotes

    1 Thankstoourreviewers:ThomasBasso,NationalRenewableEnergy

    Laboratory(distributedgeneration),ChrisKing,eMeter,andOgi

    Kavazovic,OPOWER(informationfeedback);HannahFriedman,

    PECI (building diagnostics); Steven Schiller, Schiller Consulting, and

    MiriamGoldberg,KEMA,Inc.(EM&V).

    2 Lisa Schwartz and William Steinhurst, Is It Smart i Its NotClean? Part One: Strategies or Utility Distribution Systems,May2010,http://www.raponline.org/docs/RAP_Schwartz_

    SmartGridDistributionEfciency_2010_05_06.pdf.

    3 ElectricResearchPowerInstitute(EPRI),Guidelines for DesigningEffective Energy Information Feedback Pilots: Research Protocols,April2010,http://my.epri.com/portal/server.pt?Abstract_

    id=000000000001020855.

    4 Going even urther, device monitors can show instantaneous usageor individual appliances.

    5 Inclining block rates, also called inverted block or tiered rates, charge

    a higher rate per kilowatt-hour at higher levels o energy usage (and alowerrateatlowerusagelevels).PacicGas&Electric,forexample,

    allows customers to sign up or tier alerts to help them avoid moreexpensive energy use.

    6 EPRI,2010.

    7 SeeeMeterStrategicConsulting,Power Cents DC Final Report,September2010;Idaho Power, Time-of-Day and Energy Watch PilotPrograms Final Report,March29,2006,AppendixB;andNexus

    Energy Sotware, Opinion Dynamics Corporation and Primen,

    Information Display Pilot: California Statewide Pricing Pilot (FinalReport),Jan.5,2005.

    8 KarenEhrhardt-Martinez,KatA.DonnellyandSkipLaitner,Advanced Metering Initiatives and Residential Feedback Programs:A Meta-Review for Household Electricity-Saving Opportunities,AmericanCouncilforanEnergy-EfcientEconomy,June2010,

    http://aceee.org/pubs/e105.htm.

    9 EPRI,Residential Electricity Use Feedback: A Research Synthesis andEconomic Framework,2009,www.epri.com.

    10BillProvencherandMaryKlos,NavigantConsulting,UsingSocial

    NudgestoReduceEnergyDemand:EvidencefortheLongTerm,

    Behavior,Energy&ClimateChangeConference,Nov.17,2010,

    http://www.navigantconsulting.com/downloads/knowledge_center/Navigant_BECC2010_OPOWER_SMUD.pdf.Reportsonother

    homeenergyreportprogramsathttp://www.opower.com/Results/

    IndependentVerication.aspx.

    11 Sarah Darby, The Eectiveness o Feedback on Energy ConsumptionAReviewforDEFRAoftheLiteratureonMetering,BillingandDirect

    Displays, Environmental Change Institute, University o Oxord,2006.

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    Is It Smart if Its Not Clean?

    12AhmadFaruqui,SanemSergiciandAhmedSharif,Theimpactofinformationalfeedbackonenergyconsumption:Asurveyoftheexperimentalevidence,Energy(35),2009.

    13 See, or example, Brien Sipe and Sarah Castor, Energy Trust oOregon,TheNetImpactofHomeEnergyFeedbackDevices,2009Energy Program Evaluation Conerence, http://energytrust.org/library/reports/Home_Energy_Monitors.pdf;S.S.vanDam,C.A.BakkerandJ.D.M.vanHal,Homeenergymonitors:impactoverthemediumterm, Building Research & Inormation(2010)38(5),458-469.

    14RPratt,MCWKintner-Meyer,PJBalducci,TFSanquist,CGerkensmeyer, KP Schneider, S Katipamula, and TJ Secrest, PacifcNorthwest National Laboratory, The Smart Grid: An Estimation o theEnergy and CO2 Benefts, prepared or the U.S. Department o Energy,January2010,http://energyenvironment.pnl.gov/news/pdf/PNNL-19112_Revision_1_Final.pdf.

    15CommunicationwithOgiKavazovic,OPOWER,February2011.

    16 Buildings should be re-commissioned periodically to address

    changes in unctional requirements over time that reduce energyefciency and compromise efcient operations.

    17EvanMills,LawrenceBerkeleyNationalLaboratory, BuildingCommissioning: A Golden Opportunity or Reducing Energy Costs andGreenhouse Gas Emissions, prepared or Caliornia Energy CommissionPublicInterestEnergyResearchProgram,July2009,http://cx.lbl.gov/2009-assessment.html.

    18Moretypicalapplicationsmayseelowersavings,intherangeof8percentto10percent(communicationwithHannahFriedman).

    19Dataoverlongertimehorizonswerenotavailable.

    20Atonne,ormetricton,isequalto1,000kilograms(roughly2,205pounds).

    21Millionsofmetrictons.

    22EPRI,The Green Grid: Energy Savings and Carbon Emissions ReductionsEnabled by a Smart Grid,TechnicalUpdate,June2008,www.epri.com.

    23 Hannah Friedman, PECI Inc., Wiring the Smart Grid or EnergySavings: Integrating Buildings to Maximize Investment,2009,http://www.peci.org/documents/white-paper/smartgrid_whitepaper_031010.pdf.

    24HannahFriedman,PECI,andPriyaSreedharan,EPA,WiringtheSmartGridforEnergySavings:MechanismsandPolicyConsiderations,2010ACEEESummerStudyonEnergyEfciencyin

    Buildings,August2010.

    25 PNNL did not attribute any incremental savings to smart grid-enabled diagnostics in large commercial buildings, in part becauseresearchers did not view simple, uniorm diagnostics to be well-matchedtocustom-designedandcomplexHVACsystems.

    26 Interval meter data also could be used to help identiy opportunitiesor customers to oer demand response resources to the utility ormarket.

    27StevenR.Schiller,SchillerConsulting,Inc.,Model Energy EfciencyProgram Impact Evaluation Guide,preparedforNationalActionPlanforEnergyEfciency,2007,http://www.cee1.org/eval/evaluation_

    guide.pd.

    28CharlesGoldman,MichaelMessengerandSteveSchiller,Surveyo Current Energy Efciency Program Evaluation Practices andEmergingIssues,presentationtoNationalAssociationofRegulatoryUtilityCommissioners,Feb.10,2010,http://www.narucmeetings.orgPresentations/Goldman_EMV_NARUC_wintermtg_v7_021210%20%282%29.pdf.

    29Schiller.

    30FormoreinformationaboutEM&V,seehttp://epa.gov/statelocalclimate/state/activities/measuring-savings.html.

    31 See Lisa Schwartz, Smart Policies Beore Smart Grids: How StateRegulatorsCanSteerInvestmentsTowardCustomer-SideSolutions,2010ACEEESummerStudyonEnergyEfciencyinBuildings,http://raponline.org/docs/RAP_Schwartz_SmartGrid_ACEEE_paper_2010_08_23.pdf.AlsoseeMiriamGoldberg,KEMAInc.,ImprovedAnalysisofSavingsPotentialandAchievementviaSmart

    Grid/Meters,presentationforEPA-DOEWebinar,Dec.2,2010,http://www.emvwebinar.org/Meeting%20Materials/2010-2011/index.html.

    32 Goldberg.

    33SeeNationalActionPlanforEnergyEfciency, Aligning UtilityIncentives With Investment in Energy Efciency,November2007,athttp://www.epa.gov/cleanenergy/energyprograms/napee/resources/guides.html;additionalresourcesfromtheRegulatoryAssistanceProject at http://raponline.org/.

    34 The ability o systems or products to work with other systems orproducts without special eort by the customer.

    35ThePublicUtilityRegulatoryPoliciesActof1978requiresutilitiesto buy all energy and capacity made available by QualiyingFacilities(QFs)renewableresourcesupto80MWandenergy-efcient cogeneration o any size at avoided cost rates. States havebroaddiscretionoverimplementation.Whilea2005amendmentprovides or termination o a utilitys obligation to enter into newcontractswithQFsiftheFederalEnergyRegulatoryCommissionmakes specifc fndings about their access to competitive markets,termination is typically limited to organized markets and QFs largerthan20MW.

    36 CHP systems sequentially produce both electric power and thermalenergy.Related,wasteenergyrecoveryrecyclesheatfromindustrial

    processes to generate electricity. Some states oer incentives orefcient CHP systems.

    37 Initiatives include projects unded by the U.S. Department o EnergyanddemonstrationprojectsbytheElectricPowerResearchInstitute.

    38 Sundays are o-peak all-day in U.S. energy markets. Thus, somepowerfromsolarPVsystemswillbeproducedduringoff-peakhours

    39Inductionandsynchronousgeneratorscannotprovidethese

    unctions as easily or at all.

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    Smart Grid, Consumer Energy Efciency, and Distributed Generation

    The Regulatory Assistance Project (RAP) is a global, non-prot team o experts that ocuses on

    the long-term economic and environmental sustainability o the power and natural gas sectors, providingtechnical and policy assistance to government ocials on a broad range o energy and environmental issues.RAPhasdeepexpertiseinregulatoryandmarketpoliciesthatpromoteeconomicefciency,protecttheenvironment, ensure system reliability, and airly allocate system benets among all consumers. We haveworkedextensivelyintheUSsince1992andinChinasince1999,andhaveassistedgovernmentsinnearlyeveryUSstateandmanynationsthroughouttheworld.RAPisnowexpandingoperationswithnewprogramsandofcesinEurope,andplanstooffersimilarservicesinIndiain2011.RAPfunctionsasthehubofanetwork that includes many international experts, and is primarily unded by oundations and ederal grants.

    40Reactivepowerestablishesandsustainstheelectricandmagneticelds o alternating-current equipment and directly infuenceselectricsystemvoltage.Reactivepowermustbesuppliedtomosttypes o magnetic (non-resistive) equipment and to compensateor the reactive losses in distribution and transmission systems.Reactivepowerisprovidedbygenerators,synchronouscondensers,andelectrostaticequipmentsuchascapacitors.Realpoweristhe

    component o electric power that perorms work, typically measuredin kilowatts or megawatts.

    41 Protective unctions address issues such as under/over current, under/overvoltageandgroundfaultdetection.Mostinverterunitsprovideautomatic, built-in overload and short-circuit protection.

    42Afaultisanabnormalconnectioncausingcurrenttoowfromoneconductortogroundortoanotherconductor.Afaultmaybecorrected automatically or may lead to a voltage sag or power outage.

    43Ageneratorconsistsofarotorspinninginamagneticeld.Themagnetic eld may be produced by permanent magnets or by eldcoils, where a current must fow to generate the eld. Excitationis the process o generating a magnetic eld by means o an electric

    current.44 Power actor is the ratio o real power fow to a piece o equipment

    to the apparent power fow. The dierence is determined by thereactive power required by certain types o loads, such as motors andtransormers. The power actor is less than one i there is a reactivepower requirement.

    45FromThomasBassoandRichardDeBlasio,NationalRenewableEnergyLaboratory,AdvancingSmartGridInteroperabilityandImplementingNISTsInteroperabilityRoadmap:IEEEP2030TMInitiativeandIEEE1547TMInterconnectionStandards,athttp://www.gridwiseac.org/pdfs/forum_papers09/basso.pdf.

    46 Emergency generators may be subject to operational-hour limitations

    due to emissions regulations.

    47 Thomas Nyquist, director o Facilities Engineering, PrincetonUniversity, Princeton University and the Smart Grid, CHP, andDistrictEnergy,presentedtotheEPACHPPartnership,November2009.

    48MichaelFreimuth,CityofStamford,andGuyWarner,ParetoEnergy,ProgressReportonCHPDevelopmentinStamford,presentedtothEPACHPPartnership,November2009.

    49 IEEE P2030 Draft Guide for Smart Grid Interoperability of EnergyTechnology and Information Technology Operation with the Electric PowerSystem, and End-Use Applications and Loads. This guide is amongthe smart grid interoperability standards under development by theNational Institute o Standards and Technology, or considerationbyFERC.Formoreinformationonthestandards,seeSmartGridInteroperabilityPanelStandardsUpdate,Nov.5,2010,http://www.smartgridlistserv.org/presentations/naruc/index.html (or http://vimeo.com/16831719forasimpliedversionthatworksonallcomputer

    operating systems).

    50Interoperabilityistheabilityofsystemsorproductstoworkwithother systems or products without special eort by the customer.

    51IEEEP1547.8,RecommendedPracticeforEstablishingMethodsandProcedures that Provide Supplemental Support or ImplementationStrategies or Expanded Use o IEEE Standard 1547.

    52 For example, Pennsylvanias unctional requirements or advancedmetering inrastructure require that the system support net metering.

    53SeeJimLazar,LisaSchwartzandRileyAllen,PricingDosandDonts:DesigningRetailRatesasifEfciencyCounts,April2011,http://www.raponline.org/docs/RAP_PricingDosAndDonts_2011_04.pd

    54AnewRAPpublicationonbestpracticesforinterconnectionofdistributed generators will be available soon at www.raponline.org.

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