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The Carbon-Smart Grid

Network intelligence yields green returns.

Fortnightly Magazine - October 2008

created for the financially interested parties. In other words, if the smart grid enables or facilitates an incremental amount of renewable generation, the associated carbon value can be attributed directly to the utility that deployed it. In states with RPS mandates, that same carbon value also is linked to more cost-effective renewable power to meet the increasingly stringent RPS targets. At this writing, RPS laws were in effect in 29 states and the District of Columbia.

Carbon value also can be realized as avoided carbon costs across a portfolio of generation assets. For example, a cost assigned to carbon emissions will increase the value of zero-carbon generation assets, such as wind and solar, relative to conventional fossil-based sources. A higher proportion of zero-emitting assets across a portfolio improves the competitive position of a utility vis-á-vis future carbon compliance obligations.

T&D Efficiency

In the midst of mounting discussions about energy efficiency, the electric transmission and distribution system itself poses great potential for improvement. According to a recent estimate by the DOE’s Office of Electricity Delivery and Energy Reliability, U.S. transmission and distribution networks lose nearly 10 percent of the energy fed into them.

Historically, many utilities have taken these energy losses into consideration when planning and operating their systems. Minimization of losses was not the primary driver. Calculating losses and configuring T&D systems to minimize these losses always has been challenging due to a lack of information and modeling sophistication in the distribution system. Sensor networks, increased system-communication capabilities and more efficient operating capabilities afforded by the smart grid would allow utilities to optimize the electricity delivery system, not only for energy efficiency, but for reliability and capacity as well.

Indeed, utilities at the forefront of the smart grid recognize this, and are currently using distribution-management systems and distribution-automation technologies to determine more energy-efficient distribution configurations, and position their distribution networks accordingly. By collecting operating information from multiple points throughout the network, analytical tools can be used to determine the control settings that result in the lowest possible energy loss while maintaining service quality. Distribution devices such as capacitors, voltage regulators and switches then can be positioned automatically to configure the system quickly—without the need for manual operation by field crews.

To the extent a utility actively can manage its delivery system to increase efficiency, it reduces its potential liability associated with the system’s carbon-emission contributions. Simply stated, increased delivery efficiency translates into less carbon-emitting fuel required for the same amount of electrical output. By increasing delivery efficiency, electricity’s carbon intensity is reduced as less carbon-emitting fuels are required to serve a given load—assuming energy savings displaces fossil generation.

For a utility also owning generation, the overall carbon intensity of applying that resource to customer load is reduced. The result in both cases is lower carbon-compliance costs.

In many regions of the country, electricity delivery has been unbundled from generation. In such cases, delivery losses effectively become an adder to generation costs passed on to electricity customers, and there may be little, if any, incentive for delivery companies to reduce these losses. However,