This utility is integrating smart meter data and customer
insights for a holistic approach to DERs and grid planning.
Utilities traditionally haven’t had to consider the
vagaries of consumer behavior as a big part of their grid investment and power
procurement plans.
But with the rise of customer-owned solar PV, plug-in
electric vehicles, demand response, behind-the-meter batteries and other
distributed energy resources (DERs), leaving the customer out of the equation
is no longer an option -- at least, not for the Sacramento Municipal Utility
District.
In fact, the utility DER projects that its customers and
third-party companies are financing total around $150 million to $200 million
per year. That’s more than what SMUD spends on all the utility-scale solar and
wind energy it's procuring to meet the state’s renewable portfolio standard,
indicating how important a role they will play in the utility's carbon and
green energy goals.
These DERs are largely outside utility control. But they
have an increasingly important impact on how SMUD operates and invests in its
grid and procures power for future years.
At the same time, there are also opportunities for utilities
to explore new financial structures and business models.
This week, SMUD, the Smart Electric Power Alliance (SEPA)
and engineering firm Black & Veatch released a report that could lay out a new model for
utilities struggling to bring DER-equipped customers into their long-range
plans. It’s based on more than a year of work integrating dozens of different
sources of data about customers, and then using it to predict just how different
neighborhoods will adopt DERs at different rates over the next decade or so.
Black & Veatch has been working with SMUD on this new
approach for two years now, and this approach has now been described as part of SEPA’s “Beyond the Meter” research into how
utilities can plan proactively for a distributed energy future. The latest
report, the fifth in the series, is the first time SEPA has been able to apply
its new concepts to a real-world utility.
“In terms of how this compares to what other utilities have
done, SMUD is, at least in our opinion and experience, on the cutting edge in
terms of DER planning, and putting a lot of different pieces together,” said
Dan Wilson, manager at Black & Veatch.
Utilities around the country are exploring DERs as grid
assets. California’s investor-owned utilities have created DER
capacity maps for their distribution grids, and are in the process of
enumerating their localized values. New York is doing the same under the
state’s Reforming
the Energy Vision initiative. And big utilities in Hawaii, Arizona, Vermont and
other states are doing pilot projects to see how solar, batteries, EVs and
building energy controls can be aggregated for local and system-wide
benefits.
But as Wilson noted: “What I think is interesting about
SMUD, and what makes this study kind of unique, is combining these pieces
together using the same set of data through the whole process." Those
pieces include customer adoption forecasting, distribution grid impacts, bulk
power system planning, and broader utility financial modeling.
SMUD has incorporated all three elements of SEPA’s protocol
for dealing with DERs -- evaluating them as grid assets, integrating customer
insights, and reconfiguring the utility’s standard operating practices to make
use of these new sources of data. Unlike most traditional utility distribution
grid planning, however, this process begins not with power flow models or
engineering estimates, but with customer data.
SMUD has done a lot of work on the customer engagement and
data analysis front, from the efforts to design its time-of-use
rates, to its work with solar-plus-storage
net-zero-energy projects in Sacramento. But like many utilities, these
efforts were often set up in ways that made their data sets different from one
another, requiring a lot of cleaning up to integrate into a single database,
Wilson noted.
The results have yielded a smorgasbord of data to use in
modeling and forecasting DER adoption, he said. This includes consumer
marketing-type data on historical solar adoption, customer behavior,
demographics and segmentation, including PRIZM data from Nielsen, as well as
key building attributes such as ownership, square footage, age and unit
size.
SMUD’s smart meters, meanwhile, yield granular electricity
usage data, along with the critical location data to integrate into the
utility’s distribution grid management system. All of this comes together in
maps that can give utility planners address- and neighborhood-specific data on
load shapes, the presence of DERs, and future investment needs, as shown below.
According to this forecast, SMUD has some big potential for
DER growth, specifically in solar PV. While its 2030 high adoption case sees
about 500 megawatts coming on-line, its technical potential is 3,000 megawatts
of rooftop solar, as well as 4,600 megawatts on commercial parking lots.
For demand response, SMUD sees a technical potential of
1,220 megawatts, although its 2030 Adoption Case only predicts 360 megawatts.
Energy storage predictions, meanwhile, are largely based on linking batteries
to help smooth and shift solar power, with the potential for 40 megawatts of
customer-owned storage and 160 megawatts of utility-owned storage.
For the next step in its analysis of DERs' distribution grid
impacts, SMUD and Black & Veatch turned to Landis+Gyr’s
GRIDiant software platform.
While there were some limitations to the study --
specifically, it used 2013 power flow models, which are unlikely to be accurate
for predicting impacts on a much different grid in 2030 -- the analysis did
yield an estimated mitigation cost of $50 million to $100 million for
“unmanaged DERs” by 2030. That adds up to about 8 cents per watt for solar PV
and $100 per electric vehicle.
This was mainly driven by EV adoption putting increased
stress on transformers, and variable solar PV output requiring investment in
voltage regulation equipment.
This figure shouldn’t be taken as a given, however, Wilson
noted. Not only is it based on an old grid model and very specific assumptions,
it also doesn't include the potential benefits of "managed DERs" --
batteries, EVs and demand response -- that SMUD can control in some fashion to
help serve grid needs.
Meanwhile, the analysis of bulk power system impacts of DERs
yielded some interesting, and even counterintuitive, results, he said. High DER
scenarios through 2030 did lower annual retail electricity sales, as one might
expect. But they also reduced peak load by 10 to 20 percent, reduced carbon
emissions and power purchases, and led to a flatter net load profile, the
report noted.
Still, according to the financial impact piece of the
analysis, most unmanaged DERs have a negative net value to SMUD, given today’s
rate structures. And while demand response is generally cost-effective, energy
storage is not “at least without additional revenue streams or dramatically
lower costs than those modeled; modified rates could change these
results.”
The financial impact results are the most uncertain of the
study’s findings, Wilson noted. “It was a very broad-brush first attempt, I
would say. It doesn’t include cost or benefits at the distribution level, and
that’s a big thing.”
Nor does it consider the potential for electric vehicles to
boost electricity sales to make up for revenues lost to solar PV or energy
efficiency.
The report goes into great detail about what SMUD intends to
do next to fine-tune their approach to DER integration, as well as what its
findings mean for the utility sector more broadly.
One main point is that utilities should look at distributed
energy not only as a threat, but also as an opportunity to “improve customer
engagement, maximize the net benefits of DERs, and offer new products and
services that can lead to new revenue streams.”
