Download - Smart Grid Solutions( June 2012)

Market Adoption of Smart Grid

Solutions

Berik Dossayev

[email protected]

Image source: G. Moore “Crossing the chasm”

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Agenda

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① Smart Grid Definition

② Smart Grid as Critical Infrastructure

③ Smart Grid as High Reliability Organisation

④ Technology Adoption Rate/Methodology

⑤ Discussion and Conclusions

①Smart Grid Definition


③ Smart Grid as High Reliability Organisation



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Smart Grid Definition

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“Smart Grid is a set of solutions which add

intelligence to the electrical grid improving its

quality, observability, controllability and reliability”.

Own definition.

Smart Grid Holistic Definition

| 4Source: World Economic Forum, Smart Grid investment report 2009

Transition to Smart Grid

| 5Source: World Economics Forum, EPRI, M.Jelinek and M.Ilic

Important: proprietary standards open standards

Drivers

Transition from commodity provider to

higher–value service provider

Operational and maintenance savings

Fulfill carbon goals and regulations

Accommodate renewables and EV

Development of new products

and services

Improved understanding of

consumer behavior

Return on investment

Energy and bill savings

Smarter energy usage

Desire to be greener

Additional services

Deregulation of power industry

Carbon abatement scheme

Push for open standards

Jobs creation

Innovation

Government and Regulators Utilities

Vendors Consumers

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Barriers

Technology challenges

Lack of common standards

Skill crisis

Return on investment

Policy and regulations

Technology challenges

Resistance to proprietary

standards

Access to capital

Skills crisis

Global market differences

Lack of knowledge

Fear about cost increase

Privacy issue

Behavioral change

Vested interests and influence

of power industry

Resistance to open standards

from incumbent

Complexity of regulation

process

Government and Regulators Utilities

Vendors Consumers

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Smart Grid Patents with Graph

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Source: US patent office


②Smart Grid as Critical Infrastructure

③ Smart Grid as High Reliability Organization



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Smart Grid as Critical Infrastucture

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Characteristics:

• Very complex interdepencies

• Change in one agent has an

impact on whole system

• Strict regulatory environment

• Many stakeholders and

interests

Source: Steven M. Rinaldi, James P. Peerenboom, and Terrence K. Kelly, IEEE control systems magazine 2001

Electric grid is most important

critical infrastructure



③Smart Grid as High ReliabilityOrganization



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Power Industry now vs. Airline Industry before

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Similarities:

• Strictly regulated environment

• Vested interest

• Zero tolerance to failure

• Limited storage capacity

• Few big players

• Was based on guaranteed rate of return

• High dependency on fossil fuels

• High fixed cost base

• Before 1978 US airlines industry almost came to bankruptcy

• Deregulation saved airline industry from bankruptcy brought competition,

reduced prices and increased innovation

Source: M.Jelinek, M. Ilic source image:local.wasp.uwa.edu.au, soil-net.com



③ Smart Grid as High Reliability Organization

④Technology Adoption Rate/Methodology


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Evaluation of Technology Adoption Rate

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>To calculate Technology adoption rate we multiple each criterion impact level to corresponding criterion

influence. Sum of all criteria gives us Technology adoption rate.

Method

List

Discuss

Refine

Select Criteria

Selection

• Literature inspiration

• 5 brainstorming sessions 2-3 people within Company

• Expert interview

• Frequent feedback within company and ETH network

Likert Scale:

Criteria selection

validation within Emerald

• Scale 1 (Lowest)-10(Highest)

• Industry experts

• Academia Experts

Evaluation of Criteria

impact level

• 6 areas of technologies

• Selected by Emerald

Selection of investigated

areas

• +1 – accelerate adoption rate

• -1 – slow down adoption rate

• 0 – no impact

Evaluation of criteria

influence

Technology Adoption Rate excel file

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• Assumption is that criteria

impact level is SAME for all

investigated technologies

Influence on adoption rate is

different for any combination

of technology, customer and

region

Segments selection

From about 40 technology segments in Smart Grid space 6 where selected for evaluation

Selection was based on

• Capital intensity

• Technology maturity

• Relative importance of technology

• Indicated by experts and industry partners

Home automation Energy storage

Cyber Security Data Management

Substation Automation Advanced Metering Infrastructure

Region: USA, California

Customer: Utility

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Criteria Impact Level

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Technology adoption rate: Results

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Technology area Technology adoption rate Capital intensity

Home automation 62.4 Low

Cyber Security 70.5 Low

Substation Automation 58.4 Low

Energy storage -16.2 High

Data Management 70.8 Low

Advanced Metering

Infrastructure

44.3 Low

• Market size and market growth are very important measures

but difficult to find reliable data.

• Capital intensity allows easily to evaluate investment potential

Smart Grid Investment matrix

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Technolo

gy a

doption r

ate

Capital intensity

HighLow

Low

High

Energy storage

Data management

Cyber securityHome automation

Advanced metering infrastructure

Substation automation

Evaluation of the method

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+ Covers important areas of technology adoption

+ Can be used for different industries

+ Takes into account different user habits and specifics of the market

+ Gives simple visual feedback

+ Can be used as check list to facilitate discussions

- Input is subjective

- Applicable to current situation only

- Can take a lot of time

- Complex interactions not taken into account

- Score depends on clear common understanding of definitions

Can be used as quick evaluation method

Most useful to encourage right questions

Recommendations and Conclusions: part 1

Investigate deeper Cyber Security

• Is compulsory in US

• Pushed by regulators, underestimated by Utilities

• Several big players, most others provide services and

customer relations

Look for Black Swan or system innovation in storage

• People really want storage to happen so they will invest anyway

• With proper incentives good solutions can come faster

• Storage management is more interesting at current state

Home automation is getting consumer

• Easier to track, interact and buy

• Smartphone as perfect remote

• Technology is smarter

• Potential for big energy and bill savings

• Smartphones, internet shape applications

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Recommendations and Conclusions part 2

Data management is the biggest buzzword(Big Data)

• Only few vendors have expertise

• Core engine could be open source(Hadoop)

• Privacy and data ownership are big issues

• Most of technology is software based

• Data is not used in most cases

AMI will be everywhere

• Most widely adopted element of smart grid

• Very case specific implementation

• GSM seems as most robust solution for communication

• Enabler for social

• Innovation will be in software and usage

not hardware

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Backup Slides

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Smart Grid technologies

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Smart Grid Patents

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Appendix table 6-69

Region/country/economy 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

World 295 289 295 312 304 277 316 305 350 305 288 384 360 385 378 528

United States 140 153 160 178 160 158 186 174 195 172 162 226 218 248 230 303

EU 40 36 47 42 69 51 48 63 57 42 47 43 45 50 59 81

France 13 10 9 3 15 6 8 9 12 4 9 2 8 5 7 15

Germany 11 7 13 17 19 19 13 20 20 14 14 11 13 20 25 29

Italy 1 1 1 2 3 4 3 3 4 8 7 8 6 4 2 4

Netherlands 0 0 0 2 2 0 1 0 1 2 0 1 0 1 2 0

Sweden 5 8 16 7 22 8 10 17 10 3 6 7 5 5 2 12

United Kingdom 8 9 8 11 8 10 10 10 6 6 1 10 7 5 10 7

All others 2 1 1 1 1 4 4 4 5 5 11 4 6 10 11 15

Japan 93 77 65 59 52 43 54 41 52 42 31 53 40 36 33 66

China 0 0 1 0 0 0 2 0 1 0 1 1 1 4 6 5

Asia-8 4 6 3 9 6 5 9 6 13 10 12 22 20 15 20 24

India 0 1 0 1 0 0 1 1 1 2 1 2 3 2 1 4

South Korea 2 2 1 8 4 3 6 3 5 5 3 14 10 6 14 9

Taiwan 2 3 2 0 1 2 2 1 6 3 8 6 6 7 4 10

All others 0 0 0 0 1 0 0 1 1 0 0 0 1 0 1 1

All others 18 18 19 25 18 20 19 21 33 38 34 40 36 33 30 50

Central Asia and Europe 1 0 0 0 0 1 0 1 1 0 0 0 0 1 1 0

Russia 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0

All others 1 0 0 0 0 1 0 1 1 0 0 0 0 0 0 0

Middle East and North Africa 1 1 1 1 0 1 0 1 2 2 5 6 3 5 5 8

Israel 1 1 1 1 0 1 0 1 2 2 4 6 3 5 5 6

All others 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 2

South and Central America 0 1 0 2 0 0 0 0 3 1 1 1 0 0 1 3

Argentina 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0

Brazil 0 0 0 2 0 0 0 0 1 1 0 0 0 0 0 0

Mexico 0 1 0 0 0 0 0 0 1 0 1 1 0 0 0 3

All others 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0

Sub-Saharan Africa 0 1 0 0 1 0 0 0 0 0 0 0 1 0 1 1

South Africa 0 0 0 0 1 0 0 0 0 0 0 0 1 0 1 0

All others 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1

All others 16 15 18 21 17 18 19 19 27 35 28 33 32 27 22 38

Australia 1 1 1 2 1 2 0 1 3 5 4 4 3 0 2 3

Canada 7 7 8 10 11 5 11 13 15 19 12 19 23 21 14 29

Switzerland 8 7 7 8 2 8 8 4 10 7 9 10 5 5 6 4

All others 0 0 3 2 3 3 1 1 0 4 3 0 1 2 0 2

USPTO patents granted in smart grid technology, by region/country/economy: 1995–2010

EU = European Union; USPTO = U.S. Patent and Trademark Office NOTES: Technologies classified by The Patent BoardTM. Patents fractionally allocated among regions/countries/economies based on proportion of residences of all named inventors. United States includes Puerto Rico. EU includes 27 member countries. China includes Hong Kong and Macau. Detail may not add to total because of rounding or minor discrepancies. See appendix table 6-62 for full list of countries by region. SOURCE: The Patent BoardTM, Proprietary Patent Database, special tabulations (2011). Science and Engineering Indicators 2012

New architecture for electrical grid

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Figure 3: Opportunities for Alternative Architectures for the Electrical Power Industry

Arrangements

Existing Power Grid

Institutional

Structure Regulations on Pollution,

Recoverable Costs

Technology Coal, Nuclear or Oil Fired,

Centrally-Generated &

Transmitted

New Technology Set

New Institutional Set

Alternative Power

Generating

Some Architectures for Electric Energy in the Future:

Opportunities exist to make strides in all areas affecting the electric power industry, as shown in

Figures 3 and 4. On the technological dimension, serious R&D (into to the new types of energy sources,

energy storage, technologies for cost effective customer choice) to support systematic understanding of the

role of transmission providers offers potential. So, too, does the promise of flexibility in power delivery to

facilitate the needs of the competitive supply/demand markets. IT deployment affects all these forces, by

offering new ways of providing products and services under competition, reacting to information

instantaneously. Temporal and locational aspects of demand and supply make this effort particularly

challenging. In what follows we highlight both such challenges and some emerging alternative solutions.

Before we do so, however, a summary of the shortcomings of the existing technologically based

paradigm of today’s power industry is in order. The existing paradigm fails when

a) The new environment is more complex and more complexly linked than in the past;

b) The old regulatory regime fails to address urgent questions that arise;

c) Technological possibilities not hitherto envisioned undercut the old regime; and

d) Former externalities demand attention.

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Source: jelinek, ilic

Improtant events

Energy Independence and Security Act of 2007

• Smart Grid definition

• Smart grid vision

American Recovery and Reinvestment Act of 2009

• 3.4 billion investment into smart grid technology

The Federal Energy Regulatory Commission (FERC)

• main regulatory body of power industry in USA

The National Institute of Standards and Technology (NIST)

• standards

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Inducement and blocking mechanisms of

innovation

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Sourse: Anna Bergek, PhD thesis


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8.2

6.57.2 7.3 7

3.5

6

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6.37.8 8

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People category

Very smart meters

•Smart meter

•Social app

•Interaktive web portal

For utilities

•Cusotmer retention

•Differentiation

•Added value

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Energy efficiency

Consumption feedback

Psicology

Game mechanics

Customer engagement

•Trying to enter area where utilities have

least experianse

•Experienced team with full support from

ETH

•Customers in Switzerland with expansion

in EU

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Nest - not your average boring thermostat

Learns over time that you don`t have to

Remote control

Easy to use

Saves energy and money

Innovation: thermostat as CONSUMER PRODUCT

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Adoptation of major technologies

Source: Harvard Buseiness Review| 34

Download - Smart Grid Solutions( June 2012)

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