Thursday, March 04, 2010

Some Questions on Smart Grid

Speaking about smart grids is speaking mainly about technology because the smart grid success will be founded necessarily in the success of emerging technologies. Within this context, regulatory framework can be an important driver or an obstacle to innovation and distribution grid transformation, and it can determine the future approach to distribution networks are more or less decentralized, more or less actives. For instance, balancing arrangements could illustrate the direct relationship between technology approaches and regulation schemes, as well as the link with the performance of different players in the distribution grid.

Let us see for instance three important regulatory factors that could influence the future approach to distribution network:
• Regulatory frameworks biased in favor of large-scale renewable options would favor centralized hierarchical control schemes.
• Current pricing schemes are designed typically with conventional plant in mind, thereby constituting a disincentive to decentralized solutions. Current price cap regulation (RPI-X) schemes stimulate efficiency within the existing systems, rather than providing an incentive to introduce new technologies in the distribution grid.
• Reforming scheme prices and developing real-time pricing would require more advanced metering and trading functions and the application of information and communication systems to facilitate control of generators and loads.

Moreover, regulatory framework must provide a level playing field whereupon all new technologies valid and available can be introduced in the grid. Regulators should watch adverse selection could not take place so that the future grid is technology-neutral. Then, regulation framework should care of smart grid powerful enabling "ad intra grid" technologies such as power electronics. For instance, power electronics can provide frequency-power control in low voltage networks using the converters of the distributed generators. Another example of a real smart grid based on power electronics is the AC/DC distribution grid in the Swedish Gotland Island working for ten years.

Consequently, when approaching the relationships among business, regulation and smart grids there are many questions to deal with. Some of them follow below:

Regulation
1. What recommendations should be taken to move forward with the Smart Grid on an expeditious timeline?
2. If we can prioritize smart grid efforts, what would be done first?
3. What are the societal benefits of smart grid investments?
4. What is the right regulatory recovery scheme (short and long-term)?
5. How will incremental cost in CapEx requirements be integrated into existing grid resource plans?
6. How DSO's remuneration schemes should introduce explicit incentives for DER integration?
7. How to implement DSO's innovation programs that promote a deep transformation from passive to active networks?
8. How can DER help DSO's to improve their performance if active networks operation in implemented?
9. How connection charges should be design to ensure fair and non-discriminatory network access?
10. How should be incentivized DER's to participate in ancillary services?
11. Where should the regulators address the smart grid development efforts? Towards the customers, or towards the product (kWh) infrastructure?
12. What difference will regulatory requirements make in the deployment of the smart grid?
13. What are the barriers to wide scale deployment of a Smart Grid? Is the current relevance of Regulation over Technology and Standards in the electricity industry a barrier to introduce new grid technologies?
14. Are the skills on smart grid technologies of the existing regulatory workforce adequate for smart grid deployment?
15. How can regulators avoid a smart grid bias in favor Information Technologies and other "ad extra" grid technologies? How will they deal with adverse selection? How will they balance the current supremacy of Information Technologies with "ad intra" grid technologies such as Power Electronics?

Business
1. What is the business case for the smart grid?
2. What are the utility drivers for a Smart Grid?
3. How are quantified advantages of a Smart Grid? Is it cost, emissions, technical benefits, or all of them?
4. What are the risks associated with deploying today’s smart grid technologies?
5. How can be identified Smart Grid business opportunities? Is this more like traditional gap analysis in the technology arena, or like an economic analysis performed by utilities and regulators?
6. What are the major Smart Grid issues and challenges by electric service providers – such as generators, DISCO's, TSO's, aggregators, suppliers, vendors, etc.?
7. What can wholesalers do to enable Smart Grid?
8. How can Smart Grid affect TSO's with no real customers (i.e., no end users) with no retail choice?
9. Given the shift in consumer attitudes and the rapid advancement of new technologies, what will the industry look like in five to ten years?
10. How quickly will utilities and regulators respond to the emerging consumer needs?
11. How much control do consumers really want?
12. How can utilities best prepare for this very different future?
13. Why are these times different than any other time in the history of the industry?
14. How will consumers accept and interact with these applications?
15. What rate and service offerings is needed to maximize consumer participation?
16. What Smart Grid applications are the most significant or have the highest potential benefit by customer segment – such as residential, business/commercial, business/college campus, and large industrial?

Technology
1. How do we define the Smart Grid?
2. Is “Smart Grid” revolution or evolution?
3. What role will “transmission” play in a “Smart Grid?”
4. What are the interoperability needs in a Smart Grid?
5. What types of emerging standards need to be developed to assure smart grid interoperability?
6. How well will standards drive innovation, while maintaining security and reliability?
7. How will PHEV affect the grid?
8. How soon is foresees the advent of Home Area Networks?
9. What technologies are needed to develop or deploy to allow the load to provide ancillary services (spinning reserve, balancing, etc.)?
10. How can initial investments in AMI or Smart Metering are leveraged into a broader Smart Grid architecture?
11. Is the technology for smart grid deployment readily available?
12. What is the required R&D investment?
13. Which technologies are ready for investment now? Which ones should be deferred?
14. What are the most critical R&D areas?

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