John Estey
President & CEO

Michael Edmonds
Global Smart Grid
Strategies Director

  EET&D   :  This being the first installment of GreenWays, I guess you could say that you have the opportunity to set the tone as we go forward during 2011. Let’s begin with some background on S&C for any of our readers that may not already be aware of the company’s long history, and then we’ll jump right into where you see things headed for the future.

  Estey   :  Sure. S&C Electric Company is a global provider of equipment and services for electric power systems. Founded in 1911, the Chicago-based company designs and manufactures switching and protection products for electric power transmission and distribution. S&C’s products help deliver electric power efficiently and reliably to customers across the United States and Canada and around the world.

  EET&D   :  What do you feel are the principal challenges facing the design/implementation progress of the Smart Grid?

  Estey   :  I’m going to let Michael have the first shot at this because I know that he’s quite passionate about what the future holds and the measures that we – as an industry – need to undertake to get there…

  Edmonds   :  Thanks, John. Yes, I believe there are six primary challenges facing the progress of the smart grid. Let me start by giving you a quick synopsis of each, as I see them…

• A “meter” frame of mind: Despite the attention on smart meters, it’s actually the “grid” that needs to remain reliable. While smart meters are great at gathering data, they can’t increase capacity, optimize assets or improve service reliability. By focusing on distribution and automation, utilities stand to gain more smarts for the grid.
   
• End customer burden: The false starts we have seen over the past 18 months in the smart grid underscore the perils of relying too much on the consumer to understand, adopt and embrace new technology. While it’s important that we bring the consumer into the conversation, it’s important to recognize that reliability and quality of service can’t be fixed with changes in consumer behavior or from smart meters. What we need now are some early wins to help demonstrate to consumers the benefits of smart grid technology such as improved reliability of service and customer choice.
   
• Return on investment: There is a lack of consistency on how utilities will recoup their smart grid investments. Public utility commissions, at times, add to this confusion when they do not approve inclusion of smart grid investments in a utility’s base case, thus making investments unrecoverable in the existing rate structures. Smart grid investments could get stuck in pilot purgatory without a rational framework for utilities to recoup investments and get projects moving again. Utilities also need to carefully consider what their electric grids will require down the road to future-proof the investments they make today and ensure that these investments aren’t wasted. Utilities need technologies today that can be cost-effectively upgraded in the future as new capabilities for the grid are developed.
   
• Communications: Today’s grid communication abilities are limited – think of dial-up Internet before the introduction of broadband. For the smart grid to be truly automated and thus realize its full potential, we need communication systems that are capable of providing more than a meter reading every 15 minutes. Advanced grid applications—like fast service restoration in the event of an outage – require communication systems that can send much more data at much faster speeds.
   
• Data silos: Data integration is critical to the success of the smart grid. Data needs to be used on the local level for some functions but also needs to fulfill other functional systems used to run the utility (GIS, OMS, DMS, and so on). Without data integration, some smart grid benefits will not be realized. This data challenge also affects high-speed communications, critical to the flow of data transmissions on the grid.
   
• Growing pains from renewable integration: As renewable generation increases on the grid, control becomes a challenge as energy sources transition from central and 24X7 to decentralized and intermittent. The good news is that there is an increasing availability of new energy devices such as energy storage on the grid. Storage devices will improve reliability and increase utilization of grid assets, thus reducing carbon emissions because energy unused during lowdemand periods will be made available during peak times. In order for a storage scenario to work, utilities need predictable rules regarding active network management and demand response to maintain grid stability. Embedding intelligence into the grid will also be essential to successfully integrating renewable energy resources. As increasing amounts of these generation sources will be distributed versus the centralized model of the past, distributed intelligence will ensure these resources are used most effectively.

  EET&D   :  The Smart Grid involves making substantially all dimensions of Generation, Transmission & Distribution smarter. What are some key areas where an added level of intelligence and/or automation is needed?

  Edmonds   :  With the common focus on smart meters there has been a tendency to overlook the place we most need intelligence – in the grid itself. Service reliability and improved grid performance are directly tied to distributed intelligence in the grid, since this embedded intelligence allows the grid to deal with problems locally, where they are occurring, and supports response to problems in the proper timeframe. Investments in distributed intelligence will enable utilities to improve reliability and grid efficiency today, while also laying the foundation needed to meet energy demands as the grid evolves.

Future deployments of technology such as electric vehicles and distributed and renewable power will require local intelligence in the grid itself, along with the automation infrastructure that can take action in response to changes in system condition. For example, embedded intelligence will be essential to integrate energy storage within the distribution grid.

Automation will continue to enable more efficient uses for the distributed generation capacity that is increasingly being added to the grid and reduce the need to rely on fossil-fuel-fired generation. Volt-Var optimization applications will reduce the economic losses and carbon emissions associated with electricity losses from transmission and distribution. Utility assets will be used more efficiently when self-healing technology is deployed because less excess capacity will be needed to respond to outages, as utilities can restore power to as many businesses and consumers as possible while the damage that led to the outage is repaired.

It is true that if consumers change power consumption habits and collectively reduce peak demand, they will help reduce the need for new generation and infrastructure upgrades. However, consumers do not have the ability to improve service reliability or create additional grid capacity. In fact, proper application of energy storage, located at the substation or at the community level of the grid, can have the same or better effect as shifting consumer habits while providing greater control, predictability and reliability. Utilities can also use storage to shift system loading and generation patterns, which positively affects grid asset utilization, increases overall grid reliability and reduces emissions without the added investment required to change consumer behavior. While investments in distribution automation and energy storage seem to be smart investments for the intelligent grid, utilities need the proper mechanisms to allow recovery of the investments. In the end, without some type of return on their investment, many utilities will not invest in the smart grid, particularly once stimulus funds begin to dwindle.

  EET&D   :  Any specific examples of how S&C is contributing to Energy/Efficiency/Environment issues?

  Estey   :  S&C continues to provide innovative solutions that increase the efficiency and reliability of grid operations. For instance, the company played a lead role in several projects aimed at integrating stored energy into today’s grid. Our Smart Grid Storage Management System provides the necessary technology to integrate NaS (Sodium-Sulfur) batteries into the grid. This provides a number of benefits, including deferring capital investments, improving service reliability and integrating renewable energy generation.

Energy storage also provides a green alternative for frequency regulation, as it reduces the need for spinning reserves from carbon-emitting, fossil fuelfired generation. In addition to the Smart Grid SMS, we are developing community energy storage systems, which provide storage at the residential level to support a number of goals ranging from connection of electric vehicles to peak shifting. Community energy storage can be controlled in aggregate so utilities can bring stored energy online in the increments that are needed.

  EET&D   :  What else do you see on the planning and development horizon for transforming the grid?

  Edmonds   :  S&C continues to invest in R&D to advance self-healing solutions, and one area of focus is developing new smart switching technology. S&C invented pulseclosing, an innovative approach for responding to faults on distribution systems. Pulseclosing leverages distributed intelligence to significantly reduce the wearand- tear on a utility’s distribution assets compared to conventional protective approaches. Smart switches also use distributed intelligence to respond rapidly to system issues where they are occurring and thus provide improved reliability. They can simultaneously support smart grid applications such as volt/var optimization, which, in turn, delivers significant benefits in system efficiency.

  Estey   :  Also, this year we opened the Advanced Technology Center (ATC) at our Chicago headquarters to support smart grid research and development, one of our top priorities. The ATC is a high-power testing facility that allows us to test our products at home and thus, accelerate the development and delivery of critical solutions such as those related to renewable energy integration. This 43,000-square-foot facility is one of the most environmentally friendly facilities of its kind, and it’s the first industrial building in Chicago to be Gold Certified by the Leadership in Energy and Environmental Design (LEED).

  EET&D   :  Lately we’ve been seeing some indications that the economy is recovering, which is of course, good news for the country and for our industry. But what happens to transmission congestion when the economy recovers and steady annual demand growth returns as an issue?

  Estey   :  Our industry has seen how difficult it is to site and build new transmission lines, and in some cases, these investments aren’t a practical method for addressing demand growth due to the time it takes to build a new line. As such, the industry will look to smart grid technologies to maximize the amount of electricity demand that can be met with our existing transmission lines, and energy storage will be an important ingredient in the mix. It allows utilities to address capacity and reliability problems that might otherwise require the construction of new transmission lines. Use of energy storage for frequency regulation also reduces the need for spinning reserve from centralized generation plants, and thus reduces the need for transmission capacity to support such services.

  EET&D   :  Any additional comments on that, Michael?

  Edmonds   :  Yes. Integration of distributed energy resources and energy storage into the distribution system will further reduce the need for transmission capacity expansion. Smart grid solutions will enable integration of these resources. Distributed intelligence, for instance, will allow utilities to maximize the demand that can be met from distributed energy resources, while ensuring reliability of service to businesses and consumers by addressing problems on the grid locally, where they are occurring. Automation for Volt-Var optimization will also minimize the losses that occur through the transmission of electricity, effectively freeing additional capacity and further minimizing the burden of growing electricity demand on our transmission grid.

  EET&D   :  John, as we close, how would you sum up the role of automation in making the Smart Grid a reality?

  Estey   :  The future of a reliable smart grid is dependent upon automation. Automation helps the grid self-heal, efficiently use generation resources, avoid distribution losses and rapidly respond to changes, such as those related to storage and generation connected to the grid. The key is to build in the intelligence and communication bandwidth that will support both today’s grid demands as well as demands that emerge down the road. If utilities adopt this strategy, they will extend the life of their investments, improve service reliability and lay the foundation needed to address the complexity of the future grid.