The operations and planning rules for integrating variable resources aren’t the same across the electric power industry in the United States at present. Opinions are somewhat divided about what...
A decision-maker’s checklist provide a starting point—but not an end-point.
these communications and automation flow down from the grid to energy users and their buildings and equipment, enabling automatic interaction between energy-using devices and the electric grid.
Interoperability down to the consumer and energy-using buildings and equipment—facilitated by making real-time electricity prices accessible to users—will improve market operations by letting users react to electricity prices and grid conditions, reducing energy use when prices are highest or supply is tightest. When users and their equipment can receive and respond to dynamic electricity prices automatically, this will lower consumers’ electricity costs and improve service reliability and quality while lowering costs and risks to wholesale power purchasers. It also will enable easier integration of renewable resources and distributed generation and storage, and simplify potential transformations such as those possible from widespread use of plug-in hybrid vehicles.
Over time, interoperability and integration will lower grid capital costs by using information to leverage and fine-tune capital investments. Utilities and grid operators will be able to use the information richness from advanced metering, customer data management systems, demand response, and transmission and distribution automation to better size a new distribution or transmission line; precisely manage customer loads on hot days to protect heavily loaded distribution or transmission transformers; displace costly reliability-must-run generation for voltage support; and identify pre-blackout conditions and prevent a grid failure. All of these functions exploit information and information technology to use conventional grid assets more effectively. Grid operational costs will fall as smart devices leveraging information technology and advanced electronics perform the same tasks at lower costs and higher speeds than electromechanical devices, and they will be more easily integrated without costly rework when they are all designed to be interoperable.
But interoperability doesn’t just happen, it takes work. Underlying every interoperable system is hard work by many people over many years to converge around a common vision of the value of an interoperable system—to develop common principles and architecture for the bones of the system and some early applications goals, agree to common information protocols and device identification, and eventually to converge around the detailed standards that express and implement all of these things.
Cost and Value
Building in interoperability doesn’t cost more at the end. A system that is designed from the start to be integrated and interoperable is economical from the start. But the electric system, like the early days of computing or banking, clearly is not interoperable yet, and attempts to modernize or improve it will require grafting or overlaying new technologies onto existing physical, operational, informational and institutional infrastructures. If each change or upgrade is done in isolation, ad hoc changes will require costly “one-off” integrations to make each work. In contrast, if utilities approach their smart grid projects with a broad goal and vision, using systematic planning and creativity with a commitment to broad system reengineering and investment for interoperability, they will achieve significant long-term benefit and drive costs down as value rises.
Building carefully planned interoperability and integration into project-specific upgrades might raise initial costs by 20 percent (based on the authors’ experience with other industrial systems),