Showing posts with label White Papers. Show all posts
Showing posts with label White Papers. Show all posts

Saturday, May 14, 2011

Oracle EBS 12.1: A Recipe for Success



A business strategy in today’s fast-paced economic environment is a constantly changing process. To remain competitive, an organization’s packaged enterprise application infrastructure must provide a level of adoptability that supports this dynamism. When business challenges warrant enhancing existing information systems, mission-critical packaged enterprise applications must be upgraded to ensure that these business processes will remain consistently linked to customer requirements.



In order to remain competitive, demands to reduce costs are being made with the added expectation of no loss or impact on business process. As a result of corporations becoming Global and due to M&A activities, companies are managing business processes and IT operations across multiple business unites and locations.



Therefore organizations have to meet global and local regulatory compliance requirements and mitigate risks across the enterprise.



More internal IT organizations have started feeling the strain from demands for more detailed, timely information as a result of an expected rise in government oversight as well as a heightened regulatory compliance environment.



Companies are realizing that the only way that they can achieve sustainable cost reductions and meet most of the above challenges of being a Global Organization is through standardization and simplification of the processes. This can be achieved using the new features and functionality of Oracle EBS 12.1.



To do or not to do – that IS the question



The upgrade can impact various facets of your organization. Hence, it is imperative to assess the impact that the upgrade would have on your Business and Operations, Finance, IT strategies, Manufacturing and Inventory Management. The success of any upgrade would depend upon two key factors: how well defined an upgrade strategy is and a solid, flawless execution.



Determine Drivers for Upgrade



Following are the Key Drivers one should think when an upgrade is needed:



a) Establish common business processes and standards
· Simplification – reduce complexity of the local processes
· Standardization/Automation – Use or Oracle EBS 12 and best of breed technologies to standardize processes




b) Support Global reporting needs
· Financial reporting – the baseline for every organization (External, internal, Multi GAAP, SOX, etc.)
· Managerial reporting – Delivering information to the management team (Operational reports, HR reports, IT performance reports, etc.)
· Composite reporting – Delivering Business Analytics (Profitability analysis, Budget to actualcomparisons, Risk analysis, etc.)
· Business performance and risk reporting – Linking Strategy and execution (Planning/Forecasting, etc.)



c) Shared Services – Delivering Financial process in a consistent and quality manner at the lowest possible internal cost. Many organizations are establishing shared service centers to optimize their cost structure and reduce risk.
· Management re-focuses on the real drivers of value and their core businesses
· Resources freed up to do what they do best
· Higher service levels – failures in routine processes do not get in the way of business performance
· Costs are reduced in Accounting, Finance, and other functions
· IT support complexity is reduced
· Short term arbitrage benefits
· Improved visibility of the effectiveness and efficiency of non-core processes
· Better control of the cost of business support services
· Reduced business risk/increased visibility of controls



d) Meet Global and local regulatory requirements
· IFRS and Tax Compliance – Accounting Standards worldwide moving towards IFRS to have a common set of reporting and tax compliance. Many countries are adopting it. Conversions to IFRS are therefore mandatory for the organization pushing for an Upgrade need



e) Reduce total cost of ownership (TCO) of Oracle EBS by analyzing
· Multiple Instances – Resulting in infrastructure costs, resources, customizations, interfaces, application integration, support maintenance and upgrades
· Data Quality – resulting in ongoing transformations for analytics, inconsistencies in customers, suppliers and employees
· User Training and Adoption



f) Time, Cost, R12.1 Skills and ROI – Traditional, upgrade initiatives have been looked at as periodical transactional events and are not included as part of the overall IT strategy of the organization. However, with the diminishing budgets and the emphasis on quantifiable ROI, the CIOs need to find the right consulting partner, who has the capability to provide a predictable upgrade roadmap with correct time and cost estimates, as well as have the required expertise skills. To derive the maximum value out of your upgrade initiative investments, the partner should offer advice on areas of the applications that have not yet been leveraged for the process improvements and new technology areas that can be leveraged.



Leveraging Key Oracle R12 Functionality and Benefits



a) Establish common business processes and standards
· Sub-ledger Accounting allows organizations to operate under accounting policies and rules throughout the enterprise
· e-Business Tax offers an organization to consistently process and regulate numerous taxes
· New ledger system allows an organization to store financial transactions easily and have easier user access
· Oracle Payments allows an organization to centrally credit and debit payments
· Single point of access allows efficient management of bank accounts and numerous banks
· Simplify inter-account reconciliation for key business flows such as procure-to-pay or order-to-cash



b) Support Global reporting needs
· Sub-ledger Accounting allows organizations to report financial transactions in multiple ways to meet local and global reporting needs
· Increase the efficiency of reporting across operating units and ledgers
· Streamline reporting and inquiries by leveraging a common and consistent data model across all sub-ledger applications



c) Shared Services
· Increase the efficiency of shared services and single database operations with streamlined ACCESS, processing and reporting across operating units



d) Meet Global and local regulatory requirements
· Endure both corporate visibility and local compliance by automatically creating accounting for all legal entities and multiple accounting representation
· Document test, monitor and certify ongoing compliance with Sarbanes-Oxley, JSOX, HIPA and other global regulations using GRC (Governance, Risk and Compliance)



e) Reduce total cost of ownership (TCO) of Oracle EBS 12.1
· Reduction in TCO by system consolidation and administrating fewer systems
· Reduction in TCO by shared support model



Why traditional approaches are not sufficient



Most of the existing solutions for Oracle EBS upgrades do not incorporate structured assessment processes. There is a lack of comprehensive upgrade planning. Upgrades are points in time of the application lifecycle that provide a friendly trigger to enable the organization to consider the available options. These options emanate from the consideration of the future state of the business and opportunities for realizing the business objectives as well as reducing IT costs.




If the initial assessments are not adequate or rigorous, organizations will be unable to adopt a long term focus while planning their upgrade strategy. This often results in upgrades being more technical exercises, where the assessment offers little or no focus on the functional or transformational aspects of the upgrade. Organizations are therefore unable to plan for long term decoupling of the technology and process layers. Such assessments are theoretical exercises rather than enablers for planning, executing and stabilizing the upgrade effort.



Decision Interface’s experience suggests that a major reason why organizations fail to optimally extract value from their upgrade initiatives is due to a common perception that upgrades are isolated initiatives and should not be tied to overall business strategy. Business should adopt a holistic approach to enterprise application upgrades and ensure a long term focus on the goals associated with the functional and transformational aspects of the upgrade, especially when upgrade to something like the Oracle EBS 12.1 environment.



The Delivery Process for the Enterprise applications upgrade



Based on our industry experience, Decision Interface recommends that the organization should have an integrated upgrade strategy to align it with their strategic initiatives in order to derive maximum value from their incremental investments in Enterprise Applications.
To achieve this goal, there are three key elements in the upgrade strategy that must be considered.



1) Alignment with Strategic Initiatives of the Organization: Instead of treating the upgrade as an isolated initiative, organizations should view the upgrade process as an integral activity closely aligned with the business objectives of the organization. As business requirements and business environment changes, the processes and related applications will need to change and the modifications made to support the functional value. Organizations that are able to overcome this hurdle can turn the upgrade process into a positive opportunity and achieve a competitive advantage, improving business processes, compliance to the regulatory needs and creating cost efficiencies.



2) Use an Upgrade Assessment based approach to create and complete upgrade roadmap: Before conducting a mission critical application upgrade, organizations should embark on a comprehensive assessment to:



a. Discover whether Oracle EBS 12.1 will help achieve the business goals – before investing significant time and money
b. Learn ways to streamline the work, tighten controls and automate manual processes
c. Find out which problems Oracle EBS 12.1 will solve and which it won’t
d. Understand the right timing for the EBS 12.1 upgrade based on the needs assessment




3) Use an experienced and trusted partner: Not all organizations need to partner with a third-party implementation team. However, all organizations need an experienced leader. Whether done “in-house” or teamed with third-party providers, experience is the key – not with the product but with the process.



Decision Interface’s upgrade methodology, ManageIT, consists of four separate stages, Assessment, Envision, Deliver, and Optimize. The ManageIT process provides specific phases, tasks, and deliverables needed to deliver the upgrade/reimplementation project to the client.



The stages are unique in the phases/tasks they offer but can overlap durations where multiple stages can be in process at the same time. This allows clients the flexibility to:



1. Assess the business environment and project needs to develop a common strategy.
2. Envision the user’s requirements and identify key future business processes and workflows to devise if, when, and how to implement business, system, and technical needs.
3. Deliver a completed solution based on the plan identified during the Envision phase.
4. Optimize a system by auditing its performance. This allows the organization to identify any additional project needs to be addressed via another project or change request.

Conclusion



Organizations have traditionally viewed Enterprise application upgrade initiatives as transactional events with no or minimal strategic importance. They often do not have an upgrade strategy or if there is one, it is hardly aligned with the strategic objectives of the business.



Decision Interface, based on our past experiences in managing end-to-end upgrade initiatives for various enterprise applications, believes that the Decision Interface upgrade methodology, ManageIT, will help organizations to change the perspective and establish an enterprise application strategy as a critical component of their business, operations and IT strategy. Why do we believe this? It has worked and it will work.

Friday, May 6, 2011

Oracle EBS 12.1: To Do or Not To DO

To do or not to do

It was just three years ago. I was leading an Oracle upgrade project. We were debating whether to upgrade from Oracle 11i11.8 to either 11.10 or 12. It was obvious that 12 was the bleeding edge. Thus, we reimplemented to 11.5.10 with the intent of waiting for Oracle Fusion for the next upgrade. One caveat was that we knew we would have to move through 12 to get to Fusion. Well, it’s time to make the move to 12.1. Let’s take a closer look as to why, when and with whom.

Oracle E-Business Suite (EBS) 12.1 is the go-to release for EBS users, and, so far, feedback indicates it is a better-quality release than EBS 12. EBS 11i users need to plan their upgrades, being aware that it is still a major upgrade, and that the availability of skills and resources will remain patchy in the short term.

Key Findings



  • Only a small percentage of EBS users have upgrades to EBS 12.1, but momentum is increasing. This means EBS 12.1 skills will be in high demand in the Oracle ecosystem.

  • Several larger organizations are re-implementing, rather than upgrading. They are changing the conceptual designs of their implementations, because their businesses have changed since the original implementations, and a move to EBS 12 enables them to take advantage of the new capabilities in Oracle Financials to optimize their setups.

  • EBS 12.1 has fewer quality issues than EBS 12, although users have experienced some critical issues in EBS 12.1’s new functionality. Customers that have a positive working relationship with Oracle and the appropriate escalation path have found these to be important to resolving problems quickly and effectively.
Recommendations


  • Multinational organizations with Oracle Financials should approach the move to EBS 12.1 with the mind-set of a reimplementation, rather than an upgrade.

  • Allocate more functional, technical and capital resources to this upgrade than for a point release upgrade on EBS 11i.

  • Establish good communication lines to Oracle executives and Oracle development to allow you to escalate problems quickly if they can’t be resolved through normal support channels.

  • Secure required third-party skills early on, because they are likely to be under demand pressure for at least the next 2 years.

What You Need to Know

EBS 12.1 is a major release with substantial new areas of functionality, but does not appear to suffer from the same level of quality issues that created challenges for users upgrading to early releases of EBS 12. Consequently, EBS 12.1 is the go-to release for Oracle EBS customers that are strategically committed to Oracle applications. Although there have been far fewer major issues reported by organizations upgrading to EBS 12.1 (compared with EBS 12), there are still some potential issues in the areas of new functionality of EBS 12.1.

Only a small number of EBS 12.1 upgrades have been completed, so experience among support staff, consultants and service providers is limited. Oracle and its partners are addressing this. However, the increasing numbers of organizations that are initiating EBS 12.1 upgrade projects means these skills are likely to be in demand for at least the next 2 years. Consequently, good project planning and appropriate internal resourcing are important for success with EBS 12.1 upgrades.

Analysis

EBS 12 was a significant release in the life cycle of EBS and is deployed by all new customers of Oracle. However, only a minority of users (at present, approximately 5%) have completed the upgrade to EBS 12 or EBS 12.1. Several organizations that upgraded to EBS 12 in 2008 and 2009 experienced many issues, and Gartner advised a cautionary approach to upgrades. However, in May 2009, Oracle released EBS 12.1 and the experience of organizations upgrading to EBS 12.1 has been more positive than with early versions of EBS 12. Thus, organizations on EBS 11i should plan their upgrade strategies accordingly.

The main elements of EBS 12 were a significant re-architecting of Oracle Financials (including the new sub-ledger accounting capability and a global tax engine), and some significant technology changes (see “Planning for Oracle E-Business Suite Release 12”). EBS 12.1 includes all of these changes, but adds new functionality in many other areas of EBS, including:



  • Enhancements to strategic sourcing, including two-stage RFP evaluation, flexible price tier structures and award-based cost factors

  • The full implementation of the converged inventory system for discrete and process manufacturing, along with enhancements to manufacturing operations functionality, improvements to warehouse management and a new Landed Cost Management module

  • Human capital management with a focus on strengthening Oracle’s talent management capabilities; there are enhancements to incentive compensation, iRecruitment, workforce life cycle management and performance management, plus new core HR management system integrations with organization charting, resume parsing, background checking and job board posting vendors. EBS 12.1 also provides an extended multi-tenancy model in EBS HR that better supports business process outsourcing.

There are a number of industry enhancements, and Oracle has also packaged several analytical applications (built using Oracle Business Intelligence Enterprise Edition (OBIEE)) with EBS 12.1, including project analytics, HR analytics, procurement and spend analytics, Oracle Manufacturing Operations Center, and a number of value chain planning analytic applications. Some of these were available prior to EBS 12.1, but are now packaged as part of the release. However users will need to purchase these analytic applications. One manufacturing organization that upgrades to EBS 12.1 and did not add these analytic applications felt that it had lost functionality as a result.

EBS 12.1 Upgrade Momentum is Accelerating

Uptake of EBS 12 was slow among the EBS user base. There were two reasons for this: 1) Many organizations were taking a “wait and see” approach, based on the potential impact of Oracle Fusion Applications and the lack of clarity over its delivery, and 2) the functionality improvements were mainly in the financial applications, and, even then, were primarily of value to large, complex multinationals. Many organizations that were on EBS 11i10 did not see major value in upgrading to EBS 12.

EBS 12.1 has a far wider range of functional enhancements that will help build the business case for an upgrade from an end-user perspective, while Oracle has now announced that the first release of Oracle Fusion Applications will be in late 2011.This has resolved the uncertainty about Oracle Fusion Applications. Gartner believes that Oracle Fusion Applications will not be a logical migration path for most EBS users for at least 2-3 years or longer.

Decision Interface’s position is that Oracle Fusion Applications will not be a viable full-ERP replacement for EBS until at least 2013, although some technically aggressive early adopters could consider replacing EBS financial (and, possibly, HR) applications with Oracle Fusion Applications from 2012. However, this will be a small number of early adopters. Consequently, as EBS 11i9 is already on sustaining support, and standard support for EBS 11i10 ends in November 2011 (Oracle waived the fee for the first year of extended support), many EBS users are planning to upgrade to EBS 12.1 prior to moving to Oracle Fusion Applications, as this give them a good window of support, while Oracle Fusion Applications become proven in the market.
This has been borne out by a number of client inquiries by both Gartner and Decision Interface. The volume of inquiries from users considering an upgrade to EBS 12.1 has increased steadily during the past six months. Oracle does not disclose detailed user numbers or upgrade statistics; however, it claims that the uptake of EBS 12.1 is approaching twice the rate of EBS 12 adoption.

Only a minority of the EBS user base has completed an upgrade to EBS 12.1. Consequently, this increasing momentum of EBS 12.1 adoption will put pressure on the availability of EBS 12.1 skills in the Oracle ecosystem in the next 2 years. However, despite this increased momentum, many organizations on EBS 11i10 may struggle to justify the upgrade to EBS 12.1, due to its complexity, especially if they have extensive customizations. Organizations in this situation need to do initial upgrade planning to identify if they can eliminate customizations as part of the upgrade to EBS 12.1, to help support the business case.

Early Upgrade Adopter Feedback on EBS 12.1

The biggest challenge facing early adopters of EBS 12 was product quality. Early releases had significant quality issues in a number of areas, and many upgrade projects stalled or were halted while the issues were addressed. Three reference customers of Oracle, that completed the upgrade to EBS 12.1, commend this releases quality over EBS 12. There have still been issues: Two of the three references encountered a small number of critical issues in manufacturing, warehouse management and inventory that delayed their go-lives and required escalation to Oracle R&D to get the issues resolved (which they were). Despite these issues, all the references said, overall, they were happy with the quality of EBS 12.1 that reinforces the findings of the Gartner Group. These findings were that the number of clients reporting issues with EBS 12.1 upgrades is lower than for EBS 12.

Generally, the more significant issues tend to be in the areas with new functionality, while the financial applications are now relatively stable. Some 12.1 clients had issues with general ledger reporting: however, these were not deemed significant. Also, system integrations working on EBS 12.1 projects have said they encountered fewer issues compared with the EBS 12 release.
Although product quality has improved, organizations upgrading to EBS 12.1 have still encountered some general issues. This is to be expected with any major release, and the following common themes have emerged:


  • Custom object upgrade – Several organizations reported that customer objects were not well-handled by the upgrade scripts. Users found that the upgrade process did not flag that some custom objects had not been upgraded that, subsequently, required additional testing activities.

  • Multiple upgrade iterations – All the reference clients highlighted that they needed more upgrade iterations than originally planned, especially organizations that were implementing new functionality in EBS 12.1 in areas outside Oracle Financials. This varied between two and five upgrade iterations among the reference customers. Although running through multiple iterations is part of any upgrade process, organizations moving to EBS 12.1 should plan for at least one more upgrade iteration than they did for point release upgrades in EBS 11i.

  • User Testing – EBS 12.1 has a lot of new functionality across the range of EBS (in addition to the major architecture changes introduced in EBS 12 for Oracle Financials). Organizations that had completed the upgrade emphasized the importance of end-user training and change management. One project leader specifically recommended that unit testing was not enough, and that full process testing was required. This was because the combination of new functionality, coupled with user interface (UI) changes, could have a broader impact on the process flow from an end-user perspective.

  • Skills availability – All the organizations reported a lack of knowledge about EBS 12.1 among Oracle support staff and third-party service providers. None of the organizations could find any service providers with EBS 12.1 upgrade skills, and all felt that the Oracle support team was not fully conversant in EBS 12.1. However, these organizations undertook the upgrades in the second half of 2009 and the first quarter of 2010. Knowledge of EBS 12.1 and skills availability is improving. It is still likely to remain patchy for at least the next 2 years.

Planning an EBS 12.1 Upgrade

Although EBS 12.1 is an improvement over EBS 12 in terms of quality, much of our original advice regarding upgrading to EBS 12 remains valid. The following guidelines should be followed in planning such an upgrade:


  • Don’t wait for Oracle Fusion Applications before upgrading to EBS 12.1, unless you are 1) on EBS 11.5.10, 2) have an Oracle Financials-only implementation, 3) are a very aggressive adopter of new technology and 4) have a very positive relationship with Oracle. The key word in this last sentence was the “and”. Oracle Fusion Applications have yet to be delivered to the market and moving to EBS 12.1 gives you a support window that will allow you to pick the right time to consider moving to Oracle Fusion Applications.

  • Allocate more functional, technical and testing resources to this upgrade than you did for a point release upgrade on EBS 11i. For example, the new sub-ledger accounting and global tax engine can add significant time to the upgrade project. Multi-national companies or any customers using Oracle’s “multi-org” functionality should budget extra time and resources to understand these new features, and consider how they may impact financial processes and management reporting. Also, financial staff will need extensive education and training to understand the concepts and capabilities, and all end users will need training in the new UI and functionality. The extent of this training will depend on the breadth of your EBS implementation and the quality and capabilities of your user base.

  • Plan for multiple upgrade iterations. Although the release quality with EBS 12.1 (and many of the critical issues reported by early adopters will be patched in EBS 12.1.2 and subsequent releases), plan resourcing to support at least one more upgrade iteration than you did for a point release upgrade in EBS 11i (e.g., upgrading from EBS 11.5.9 to EBS 11.5.10). Ensure that you undertake full process retesting in areas of new functionality, rather than just unit testing.

  • Decide if you will reimplement or upgrade if you are moving from EBS 11i. The rearchitecting of financial applications in EBS 12 means that many organizations are reimplementing their EBS systems (i.e., changing the instance strategy or conceptual design). Larger and more-complex organizations (typically multi-nationals) that use EBS Financials should approach EBS 12.1 upgrades with the mind-set of a reimplementation, rather than simple upgrades of their environments. However, existing Financials configurations can be migrated as-is, if desired. Smaller organizations, and those in the public sector or the no-for-profit area, should consider a move to EBS 12.1 to be a major upgrade.

  • Ensure that you have good communication lines to Oracle executives and Oracle development, to allow you to escalate any problems quickly if they cannot be resolved through normal support channels, especially if you are one of the early adopters in you region of operations or your implementation includes functionality outside Financials. Organizations that encountered critical issues with EBS 12.1 upgrades still needed to involve Oracle’s development organization and senior executives to get these issues resolved. Skills and knowledge in EBS 12.1 are still building in the Oracle ecosystem, and the new areas of functionality mean that new critical issues may emerge. Having a clear and agreed-on escalation path will ensure that you can get these issues resolved if they arise.

  • Identify and secure any required EBS 12.1 skills early in the project. Skills in EBS 12.1 remain in relatively short supply, and demand is ramping up. System integrators are developing upgrade tools to allow them to deliver cost-effective upgrades, but these take time to mature. Consequently, the availability of third-party skills will remain patchy for at least the next couple of years. Also, consider investing more in training your personnel in EBS 12.1, because this is a major change in EBS, and these skills will prove to be valuable over the lifetime of your investment.

Tactical Guidelines


  • Allocate more internal resources than you would for an EBS 11i point release upgrade. Significant areas of new functionality across all areas of EBS in 12.1 will require functional design and testing, as well as end-user training -- plan for a minimum of four upgrade iterations.

  • Develop a positive working relationship with Oracle, including an escalation path to an appropriate executive, if you are planning to upgrade to EBS 12 during the next 2 years.

  • If you are working with service providers, ensure that they have suitable EBS 12.1 upgrade experience. Be aware that skills may be in limited supply during the next 2 years, as increasing numbers of EBS users initiate upgrade projects.

Tuesday, March 29, 2011

Smart Grid Technology

The bulk of smart grid technologies are already used in other applications such as manufacturing and telecommunications and are being adapted for use in grid operations. In general, smart grid technology can be grouped into five key areas[29]:

Integrated communications

Some communications are up to date, but are not uniform because they have been developed in an incremental fashion and not fully integrated. In most cases, data is being collected via modem rather than direct network connection. Areas for improvement include: substation automation, demand response, distribution automation, supervisory control and data acquisition (SCADA), energy management systems, wireless mesh networks and other technologies, power-line carrier communications, and fiber-optics. Integrated communications will allow for real-time control, information and data exchange to optimize system reliability, asset utilization, and security.

Sensing and measurement

Core duties are evaluating congestion and grid stability, monitoring equipment health, energy theft prevention, and control strategies support. Technologies include: advanced microprocessor meters (smart meter) and meter reading equipment, wide-area monitoring systems, dynamic line rating (typically based on online readings by Distributed temperature sensing combined with Real time thermal rating (RTTR) systems), electromagnetic signature measurement / analysis, time-of-use and real-time pricing tools, advanced switches and cables, backscatter radio technology, and Digital protective relays.

Smart meters

A smart grid replaces analog mechanical meters with digital meters that record usage in real time. Smart meters are similar to Advanced Metering Infrastructure meters and provide a communication path extending from generation plants to electrical outlets (smart socket) and other smart grid-enabled devices. By customer option, such devices can shut down during times of peak demand. Phasor measurement units Main article: Phasor measurement unit High speed sensors called PMUs distributed throughout their network can be used to monitor power quality and in some cases respond automatically to them. Phasors are representations of the waveforms of alternating current that ideally in real-time, are identical everywhere on the network and conform to the most desirable shape. In the 1980s, it was realized that the clock pulses from global positioning system (GPS) satellites could be used for very precise time measurements in the grid. With large numbers of PMUs and the ability to compare shapes from alternating current readings everywhere on the grid, research suggests that automated systems will be able to revolutionize the management of power systems by responding to system conditions in a rapid, dynamic fashion[30]. A Wide-Area Measurement Systems (WAMS) is a network of PMUS that can provide real-time monitoring on a regional and national scale. Many in the power systems engineering community believe that the Northeast blackout of 2003 would have been contained to a much smaller area if a wide area phasor measurement network was in place.[31] Advanced Components Innovations in superconductivity, fault tolerance, storage, power electronics, and diagnostics components are changing fundamental abilities and characteristics of grids. Technologies within these broad R&D categories include: flexible alternating current transmission system devices, high voltage direct current, first and second generation superconducting wire, high temperature superconducting cable, distributed energy generation and storage devices, composite conductors, and “intelligent” appliances. Advanced control Power system automation enables rapid diagnosis of and precise solutions to specific grid disruptions or outages. These technologies rely on and contribute to each of the other four key areas. Three technology categories for advanced control methods are: distributed intelligent agents (control systems), analytical tools (software algorithms and high-speed computers), and operational applications (SCADA, substation automation, demand response, etc). Using artificial intelligence programming techniques, Fujian power grid in China created a wide area protection system that is rapidly able to accurately calculate a control strategy and execute it[32]. The Voltage Stability Monitoring & Control (VSMC) software uses a sensitivity-based successive linear programming method to reliably determine the optimal control solution[33]. Improved interfaces and decision support Information systems that reduce complexity so that operators and managers have tools to effectively and efficiently operate a grid with an increasing number of variables. Technologies include visualization techniques that reduce large quantities of data into easily understood visual formats, software systems that provide multiple options when systems operator actions are required, and simulators for operational training and “what-if” analysis. Standards and groups IEC TC57 has created a family of international standards that can be used as part of the smart grid. These standards include IEC61850 that is an architecture for substation automation, and IEC 61970/61968 — the Common Information Model (CIM). The CIM provides for common semantics to be used for turning data into information. MultiSpeak has created a specification that supports distribution functionality of the smart grid. MultiSpeak has a robust set of integration definitions that supports nearly all of the software interfaces necessary for a distribution utility or for the distribution portion of a vertically integrated utility. MultiSpeak integration is defined using extensible markup language (XML) and web services. The IEEE has created a standard to support synchrophasors — C37.118. A User Group that discusses and supports real world experience of the standards used in smart grids is the UCA International User Group. There is a Utility Task Group within LonMark International that deals with smart grid related issues. There is a growing trend towards the use of TCP/IP technology as a common communication platform for Smart Meter applications, so that utilities can deploy multiple communication systems, while using IP technology as a common management platform.[34][35] IEEE P2030 is an IEEE project developing a "Draft Guide for Smart Grid Interoperability of Energy Technology and Information Technology Operation with the Electric Power System (EPS), and End-Use Applications and Loads"[36][37]. NIST has included ITU-T G.hn as one of the "Standards Identified for Implementation" for the Smart Grid that it believed there was strong stakeholder consensus"[38]. G.hn is standard for high-speed communications over power lines, phone lines and coaxial cables. OASIS EnergyInterop' – is an OASIS technical committee developing XML standards for energy interoperation. It's starting point is the California OpenADR standard. Footnotes

Monday, November 22, 2010

Smart Grid Features and Functions

Smart Grid Features and Functions


Before examining particular technologies, a proposal can be understood in terms of what it is being required to do. The governments and utilities funding development of grid modernization have defined the functions required for smart grids. According to the United States Department of Energy's Modern Grid Initiative report[24], a modern smart grid must:


  1. Be able to heal itself

  2. Motivate consumers to actively participate in operations of the grid

  3. Resist attack

  4. Provide higher quality power that will save money wasted from outages

  5. Accommodate all generation and storage options

  6. Enable electricity markets to flourish

  7. Run more efficiently

  8. Enable higher penetration of intermittent power generation sources

Self-healing



Using real-time information from embedded sensors and automated controls to anticipate, detect, and respond to system problems, a smart grid can automatically avoid or mitigate power outages, power quality problems, and service disruptions.


As applied to distribution networks, there is no such thing as a "self healing" network. If there is a failure of an overhead power line, given that these tend to operate on a radial basis (for the most part) there is an inevitable loss of power. In the case of urban/city networks that for the most part are fed using underground cables, networks can be designed (through the use of interconnected topologies) such that failure of one part of the network will result in no loss of supply to end users. A fine example of an interconnected network using zoned protection is that of the Merseyside and North Wales Electricity Board (MANWEB).


It is envisioned that the smart grid will likely have a control system that analyzes its performance using distributed, autonomous reinforcement learning controllers that have learned successful strategies to govern the behavior of the grid in the face of an ever changing environment such as equipment failures. Such a system might be used to control electronic switches that are tied to multiple substations with varying costs of generation and reliability.[25]


Consumer participation


A smart grid, is, in essence, an attempt to require consumers to change their behavior around variable electric rates or to pay vastly increased rates for the privilege of reliable electrical service during high-demand conditions. Historically, the intelligence of the grid in North America has been demonstrated by the utilities operating it in the spirit of public service and shared responsibility, ensuring constant availability of electricity at a constant price, day in and day out, in the face of any and all hazards and changing conditions. A smart grid incorporates consumer equipment and behavior in grid design, operation, and communication. This enables consumers to better control (or be controlled by) “smart appliances” and “intelligent equipment” in homes and businesses, interconnecting energy management systems in “smart buildings” and enabling consumers to better manage energy use and reduce energy costs. Advanced communications capabilities equip customers with tools to exploit real-time electricity pricing, incentive-based load reduction signals, or emergency load reduction signals.


There is marketing evidence of consumer demand for greater choice. A survey conducted in the summer of 2007 interviewed almost 100 utility executives and sought the opinions of 1,900 households and small businesses from the U.S., Germany, Netherlands, England, Japan and Australia[26]. Among the findings:


  1. 83% of those who cannot yet choose their utility provider would welcome that option

  2. Roughly two-thirds of the customers that do not yet have renewable power options would like the choice

  3. Almost two-thirds are interested in operating their own generation, provided they can sell power back to the utility

And as already noted, in the UK where the experiment has been running longest, 80% have no interest in change (source: National Grid).


The real-time, two-way communications available in a smart grid will enable consumers to be compensated for their efforts to save energy and to sell energy back to the grid through net-metering. By enabling distributed generation resources like residential solar panels, small wind and plug-in hybrid, smart grid will spark a revolution in the energy industry by allowing small players like individual homes and small businesses to sell power to their neighbors or back to the grid. The same will hold true for larger commercial businesses that have renewable or back-up power systems that can provide power for a price during peak demand events, typically in the summer when air condition units place a strain on the grid. This participation by smaller entities has been called the "democratization of energy"—it is similar to former Vice President Al Gore's vision for a Unified Smart Grid.


Resist attack


Smart grid technologies better identify and respond to man-made or natural disruptions. Real-time information enables grid operators to isolate affected areas and redirect power flows around damaged facilities.


One of the most important issues of resist attack is the smart monitoring of power grids that is the basis of control and management of smart grids to avoid or mitigate the system-wide disruptions like blackouts. The traditional monitoring is based on weighted least square (WLS) that is very weak and prone to fail when gross errors (including topology errors, measurement errors or parameter errors) are present. New technology of state monitor is needed to achieve the goals of the smart grids.


High quality power


Outages and power quality issues cost US businesses more than $100 billion on average each year[27]. It is asserted that assuring more stable power provided by smart grid technologies will reduce downtime and prevent such high losses.


Accommodate generation options


As smart grids continue to support traditional power loads they also seamlessly interconnect fuel cells, renewables, microturbines, and other distributed generation technologies at local and regional levels. Integration of small-scale, localized, or on-site power generation allows residential, commercial, and industrial customers to self-generate and sell excess power to the grid with minimal technical or regulatory barriers. This also improves reliability and power quality, reduces electricity costs, and offers more customer choice.


Enable electricity market


Significant increases in bulk transmission capacity will require improvements in transmission grid management. Such improvements are aimed at creating an open marketplace where alternative energy sources from geographically distant locations can easily be sold to customers wherever they are located.


Intelligence in distribution grids will enable small producers to generate and sell electricity at the local level using alternative sources such as rooftop-mounted photo voltaic panels, small-scale wind turbines, and micro hydro generators. Without the additional intelligence provided by sensors and software designed to react instantaneously to imbalances caused by intermittent sources, such distributed generation can degrade system quality.


Optimize assets


A smart grid can optimize capital assets while minimizing operations and maintenance costs. Optimized power flows reduce waste and maximize use of lowest-cost generation resources. Harmonizing local distribution with interregional energy flows and transmission traffic improves use of existing grid assets and reduces grid congestion and bottlenecks that can ultimately produce consumer savings.


Enable high penetration of intermittent generation sources


Climate change and environmental concerns will increase the amount of renewable energy resources. These are for the most part intermittent in nature. Smart Grid technologies will enable power systems to operate with larger amounts of such energy resources since they enable both the suppliers and consumers to compensate for such intermittency.


Features


Existing and planned implementations of smart grids provide a wide range of features to perform the required functions.


Load adjustment


The total load connected to the power grid can vary significantly over time. Although the total load is the sum of many individual choices of the clients, the overall load is not a stable, slow varying, average power consumption. Imagine the increment of the load if a popular television program starts and millions of televisions will draw current instantly. Traditionally, to respond to a rapid increase in power consumption, faster than the start-up time of a large generator, some spare generators are put on a dissipative standby mode. A smart grid may warn all individual television sets, or another larger customer, to reduce the load temporarily (to allow time to start up a larger generator) or continuously (in the case of limited resources). Using mathematical prediction algorithms it is possible to predict how many standby generators need to be used, to reach a certain failure rate. In the traditional grid, the failure rate can only be reduced at the cost of more standby generators. In a smart grid, the load reduction by even a small portion of the clients may eliminate the problem.


Demand response support


Demand response support allows generators and loads to interact in an automated fashion in real time, coordinating demand to flatten spikes. Eliminating the fraction of demand that occurs in these spikes eliminates the cost of adding reserve generators, cuts wear and tear and extends the life of equipment, and allows users to cut their energy bills by telling low priority devices to use energy only when it is cheapest[28].


Currently, power grid systems have varying degrees of communication within control systems for their high value assets, such as in generating plants, transmission lines, substations and major energy users. In general information flows one way, from the users and the loads they control back to the utilities. The utilities attempt to meet the demand and succeed or fail to varying degrees (brownout, rolling blackout, uncontrolled blackout). The total amount of power demand by the users can have a very wide probability distribution that requires spare generating plants in standby mode to respond to the rapidly changing power usage. This one-way flow of information is expensive; the last 10% of generating capacity may be required as little as 1% of the time, and brownouts and outages can be costly to consumers.


Greater resilience to loading


Although multiple routes are touted as a feature of the smart grid, the old grid also featured multiple routes. Initial power lines in the grid were built using a radial model, later connectivity was guaranteed via multiple routes, referred to as a network structure. However, this created a new problem: if the current flow or related effects across the network exceed the limits of any particular network element, it could fail, and the current would be shunted to other network elements that eventually may fail also, causing a domino effect. See power outage. A technique to prevent this is load shedding by rolling blackout or voltage reduction (brownout).


Decentralization of power generation


Another element of fault tolerance of smart grids is decentralized power generation. Distributed generation allows individual consumers to generate power onsite, using whatever generation method they find appropriate. This allows individual loads to tailor their generation directly to their load, making them independent from grid power failures. Classic grids were designed for one-way flow of electricity, but if a local sub-network generates more power than it is consuming, the reverse flow can raise safety and reliability issues. A smart grid can manage these situations.


Price signaling to consumers


In many countries, including Belgium, the Netherlands and the UK, the electric utilities have installed double tariff electricity meters in many homes to encourage people to use their electric power during night time or weekends, when the overall demand from industry is very low. During off-peak time the price is reduced significantly, primarily for heating storage radiators or heat pumps with a high thermal mass, but also for domestic appliances. This idea will be further explored in a smart grid, where the price could be changing in seconds and electric equipment is given methods to react on that. Also, personal preferences of customers, for example to use only green energy, can be incorporated in such a power grid.


Technology


The bulk of smart grid technologies are already used in other applications such as manufacturing and telecommunications and are being adapted for use in grid operations. In general, smart grid technology can be grouped into five key areas[29]:


Integrated communications


Some communications are up to date, but are not uniform because they have been developed in an incremental fashion and not fully integrated. In most cases, data is being collected via modem rather than direct network connection. Areas for improvement include: substation automation, demand response, distribution automation, supervisory control and data acquisition (SCADA), energy management systems, wireless mesh networks and other technologies, power-line carrier communications, and fiber-optics. Integrated communications will allow for real-time control, information and data exchange to optimize system reliability, asset utilization, and security.


Sensing and measurement


Core duties are evaluating congestion and grid stability, monitoring equipment health, energy theft prevention, and control strategies support. Technologies include: advanced microprocessor meters (smart meter) and meter reading equipment, wide-area monitoring systems, dynamic line rating (typically based on online readings by Distributed temperature sensing combined with Real time thermal rating (RTTR) systems), electromagnetic signature measurement/analysis, time-of-use and real-time pricing tools, advanced switches and cables, backscatter radio technology, and Digital protective relays.


Smart meters


Main article: Smart meter


A smart grid replaces analog mechanical meters with digital meters that record usage in real time. Smart meters are similar to Advanced Metering Infrastructure meters and provide a communication path extending from generation plants to electrical outlets (smart socket) and other smart grid-enabled devices. By customer option, such devices can shut down during times of peak demand.


Phasor measurement units


Main article: Phasor measurement unit


High speed sensors called PMUs distributed throughout their network can be used to monitor power quality and in some cases respond automatically to them. Phasors are representations of the waveforms of alternating current that ideally in real-time, are identical everywhere on the network and conform to the most desirable shape. In the 1980s, it was realized that the clock pulses from global positioning system (GPS) satellites could be used for very precise time measurements in the grid. With large numbers of PMUs and the ability to compare shapes from alternating current readings everywhere on the grid, research suggests that automated systems will be able to revolutionize the management of power systems by responding to system conditions in a rapid, dynamic fashion[30].


A Wide-Area Measurement Systems (WAMS) is a network of PMUS that can provide real-time monitoring on a regional and national scale. Many in the power systems engineering community believe that the Northeast blackout of 2003 would have been contained to a much smaller area if a wide area phasor measurement network was in place.[31]


Advanced Components


Innovations in superconductivity, fault tolerance, storage, power electronics, and diagnostics components are changing fundamental abilities and characteristics of grids. Technologies within these broad R&D categories include: flexible alternating current transmission system devices, high voltage direct current, first and second generation superconducting wire, high temperature superconducting cable, distributed energy generation and storage devices, composite conductors, and “intelligent” appliances.


Advanced control


Power system automation enables rapid diagnosis of and precise solutions to specific grid disruptions or outages. These technologies rely on and contribute to each of the other four key areas. Three technology categories for advanced control methods are: distributed intelligent agents (control systems), analytical tools (software algorithms and high-speed computers), and operational applications (SCADA, substation automation, demand response, etc). Using artificial intelligence programming techniques, Fujian power grid in China created a wide area protection system that is rapidly able to accurately calculate a control strategy and execute it[32]. The Voltage Stability Monitoring & Control (VSMC) software uses a sensitivity-based successive linear programming method to reliably determine the optimal control solution[33].


Improved interfaces and decision support


Information systems that reduce complexity so that operators and managers have tools to effectively and efficiently operate a grid with an increasing number of variables. Technologies include visualization techniques that reduce large quantities of data into easily understood visual formats, software systems that provide multiple options when systems operator actions are required, and simulators for operational training and “what-if” analysis.


Standards and groups


IEC TC57 has created a family of international standards that can be used as part of the smart grid. These standards include IEC61850 that is an architecture for substation automation, and IEC 61970/61968 — the Common Information Model (CIM). The CIM provides for common semantics to be used for turning data into information.


MultiSpeak has created a specification that supports distribution functionality of the smart grid. MultiSpeak has a robust set of integration definitions that supports nearly all of the software interfaces necessary for a distribution utility or for the distribution portion of a vertically integrated utility. MultiSpeak integration is defined using extensible markup language (XML) and web services.
The IEEE has created a standard to support synchrophasors — C37.118.


A User Group that discusses and supports real world experience of the standards used in smart grids is the UCA International User Group.


There is a Utility Task Group within LonMark International that deals with smart grid related issues.


There is a growing trend towards the use of TCP/IP technology as a common communication platform for Smart Meter applications, so that utilities can deploy multiple communication systems, while using IP technology as a common management platform.[34][35]


IEEE P2030 is an IEEE project developing a "Draft Guide for Smart Grid Interoperability of Energy Technology and Information Technology Operation with the Electric Power System (EPS), and End-Use Applications and Loads"[36][37].


NIST has included ITU-T G.hn as one of the "Standards Identified for Implementation" for the Smart Grid that it believed there was strong stakeholder consensus"[38]. G.hn is standard for high-speed communications over power lines, phone lines and coaxial cables.


OASIS EnergyInterop' – is an OASIS technical committee developing XML standards for energy interoperation. It's starting point is the California OpenADR standard.


The following footnotes and links will be published with each blog in this series.


Footnotes

  1. http://earth2tech.com/2009/06/05/why-the-smart-grid-wont-have-the-innovations-of-the-internet-any-time-soon/
  2. http://earth2tech.com/2009/04/21/ciscos-latest-consumer-play-the-smart-grid/
  3. http://earth2tech.com/2008/05/01/silver-springs-the-cisco-of-smart-grid/
  4. http://earth2tech.com/2009/05/20/utility-perspective-why-partner-with-google-powermeter/
  5. http://www.ecommercetimes.com/story/67126.html?wlc=1245096400&wlc=1245366756
  6. Supersmart grid paper
  7. http://earth2tech.com/2009/04/20/smart-grid-miami-fpl-ge-cisco-silver-spring-rolling-out-1m-smart-meters/
  8. "The rise of the Smart Grid". Deloitte TMT Predictions. http://www.deloitte.co.uk/TMTPredictions/technology/SmartGrid-electricity-grid-efficiency.cfm.
  9. "Obama's Speech on the Economy". New York Times. 2009-01-09. http://www.nytimes.com/2009/01/08/us/politics/08text-obama.html?pagewanted=4.
  10. "NIST Announces Three Phase Plan for Smart Grid". National Institute for Standards and Technology. 2009-04-13. http://www.nist.gov/public_affairs/smartgrid_041309.html.
  11. NIST announces smart grid interoperability project via IEEE P2030, June 2009
  12. St. Arnaud's "green broadband" news
  13. The Federal Energy Regulatory Commission Chairman Pat Wood, III (appointed by George Bush) stated that the US transmission system cannot afford to be "antiquated" in this news release Federal Energy Regulatory Commission (2002-09-18) (pdf). FERC news release on ISO. p. 1. http://www.ferc.gov/news/news-releases/2002/2002-3/Sept18rto9.pdf. Retrieved 2009-04-29.
  14. [L. D. Kannberg]; M. C. Kintner-Meyer, D. P. Chassin, R. G. Pratt, J. G. DeSteese, L. A. Schienbein, S. G. Hauser, W. M. Warwick (2003-11) (pdf). GridWise: The Benefits of a Transformed Energy System. Pacific Northwest National Laboratory under contract with the United States Department of Energy. p. 25. http://arxiv.org/pdf/nlin/0409035. Retrieved 2008-12-05.
  15. Smart Grid Working Group (2003-06) (pdf). Challenge and Opportunity: Charting a New Energy Future, Appendix A: Working Group Reports. Energy Future Coalition. http://www.energyfuturecoalition.org/files/webfmuploads/EFC_Report/EFCReport.pdf. Retrieved 2008-11-27.
  16. Federal Energy Regulatory Commission staff report (2006-08) (pdf). Assessment of Demand Response and Advanced Metering (Docket AD06-2-000). United States Department of Energy. p. 20. http://www.ferc.gov/legal/staff-reports/demand-response.pdf. Retrieved 2008-11-27.
  17. a b National Energy Technology Laboratory (2007-08) (pdf). NETL Modern Grid Initiative — Powering Our 21st-Century Economy. United States Department of Energy Office of Electricity Delivery and Energy Reliability. p. 17. http://www.netl.doe.gov/moderngrid/docs/Modern%20Grid%20Benefits_Final_v1_0.pdf. Retrieved 2008-12-06.
  18. "Gridwise History: How did GridWise start?". Pacific Northwest National Laboratory. 2007-10-30. http://gridwise.pnl.gov/foundations/history.stm. Retrieved 2008-12-03.
  19. a b c d Qixun Yang, Board Chairman, Beijing Sifang Automation Co. Ltd., China and .Bi Tianshu, Professor, North China Electric Power University, China. (2001-06-24). "WAMS Implementation in China and the Challenges for Bulk Power System Protection" (pdf). Panel Session: Developments in Power Generation and Transmission — Infrastructures in China, IEEE 2007 General Meeting, Tampa, FL, USA, 24–28 June 2007 Electric Power, ABB Power T&D Company, and Tennessee Valley Authority (Institute of Electrical and Electronics Engineers). http://www.ewh.ieee.org/cmte/ips/2007GM/2007GM_china_intro.pdf. Retrieved 2008-12-01.
  20. "Building for the future: Interview with Andres Carvallo, CIO — Austin Energy Utility". Next Generation Power and Energy (GDS Publishing Ltd.) (244). http://nextgenpe.com/currentissue/article.asp?art=273073&issue=244. Retrieved 2008-11-
  21. Betsy Loeff (2008-03). "AMI Anatomy: Core Technologies in Advanced Metering". Ultrimetrics Newsletter (Automatic Meter Reading Association (Utilimetrics)). http://www.utilimetrics.org/newsletter/index.cfm?fuseaction=Newsletter.showIssuetoPrint&Issue_ID=68. Retrieved 2008-11-26.
  22. Demanding standards: Hydro One aims to leverage AMI via interoperability
  23. Smartgrids Advisory Council. "Driving Factors in the Move Towards Smartgrids" (PDF). European Smartgrids Technology Platform: Vision and Strategy. European Commission. p. 9. ISBN 92-79-01414-5. http://www.smartgrids.eu/documents/vision.pdf.
  24. a b National Energy Technology Laboratory (2007-07-27) (pdf). A Vision for the Modern Grid. United States Department of Energy. p. 5. http://www.netl.doe.gov/moderngrid/docs/A%20Vision%20for%20the%20Modern%20Grid_Final_v1_0.pdf. Retrieved 2008-11-27.
  25. Anderson, Roger; A. Boulanger, J. A. Johnson and A. Kressner (2008 ISBN 978-1-59370-157-4). p 333. Computer-Aided Lean Management for the Energy Industry.
  26. 2007 IBM Energy and Utilities Global Residential/Small Business Consumer Survey http://www-03.ibm.com/industries/utilities/doc/content/landingdtw/3165578119.html?g_type=pspot
  27. page 10
  28. Energy Future Coalition, “Challenge and Opportunity: Charting a New Energy Future,” Appendix A: Working Group Reports, Report of the Smart Grid Working Group. http://www.energyfuturecoalition.org/pubs/app_smart_grid.pdf
  29. U.S. Department of Energy, National Energy Technology Laboratory, Modern Grid Initiative, http://www.netl.doe.gov/moderngrid/opportunity/vision_technologies.html
  30. Yilu Liu, Lamine Mili, Jaime De La Ree, Reynaldo Francisco Nuqui, Reynaldo Francisco Nuqui (2001-07-12). "State Estimation and Voltage Security Monitoring Using Synchronized Phasor Measurement" (pdf). Research paper from work sponsored by American Electric Power, ABB Power T&D Company, and Tennessee Valley Authority (Virginia Polytechnic Institute and State University). http://citeseerx.ist.psu.edu/viewdoc/download;jsessionid=3B975B94733D906CA197813C53C2BD86?doi=10.1.1.2.7959&rep=rep1&type=pdf. Retrieved 2008-12-01. abstract Lay summary. ""Simulations and field experiences suggest that PMUs can revolutionize the way power systems are monitored and controlled."".
  31. a b Patrick Mazza (2005-04-27) (doc). [http://fortress.wa.gov/wutc/home/webdocs.nsf/de53b07997d108ea882563b50072c5b3/bc3ced6bb5f4cf29882570200083aaa3/$FILE/Powering%20Up%20Smart%20Grid%20report.doc Powering Up the Smart Grid: A Northwest Initiative for Job Creation, Energy Security, and Clean, Affordable Electricity.]. Climate Solutions. p. 7. http://fortress.wa.gov/wutc/home/webdocs.nsf/de53b07997d108ea882563b50072c5b3/bc3ced6bb5f4cf29882570200083aaa3/$FILE/Powering%20Up%20Smart%20Grid%20report.doc. Retrieved 2008-12-01.
  32. (pdf) Wide Area Protection System for Stability. Nanjing Nari-Relays Electric Co., Ltd. 2008-04-22. p. 2. http://www.nari-relays.com/en/files/Wide%20Area%20Protection%20System%20for%20Stability.pdf. Retrieved 2008-12-12. Examples are given of two events, one stabilizing the system after a fault on a 1 gigawatt HVDC feed, with response timed in milliseconds.
  33. "On-Line Voltage Stability Monitoring and Control (VSMC) System in Fujian power grid" (pdf). Proceedings, Power Engineering Society General Meeting, 2007. (Tampa, FL, USA: IEEE). 2007-06-24. doi:10.1109/PES.2007.385975. Lay summary.
  34. Cisco Outlines Strategy for Highly Secure, 'Smart Grid' Infrastructure
  35. Why the Smart Grid must be based on IP standards
  36. IEEE P2030 Official Website
  37. EETimes.com: IEEE, conference drive smart grids - P2030 aims to develop a guide to grid standards
  38. Commerce Secretary Unveils Plan for Smart Grid Interoperability
  39. Li, Jerry (2009), From Strong to Smart: the Chinese Smart Grid and its relation with the Globe, AEPN, Article No. 0018602, Asia Energy Platform. Available at http://www.aepfm.org/link.php
  40. http://www.smartgrids.eu/: Look under 'background'
  41. "U.S. Energy Independence and Security Act of 2007". http://www.thomas.gov/cgi-bin/query/z?c110:H.R.6.ENR:. Retrieved 2007-12-23.
  42. http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ140.110
  43. http://apps1.eere.energy.gov/news/news_detail.cfm/news_id=12364
  44. "Report: Smart Grid Market Could Double in Four Years". Zpryme Smart Grid Market. http://www.smartgridnews.com/artman/publish/Business_Markets_Pricing_News/Report-Smart-Grid-Market-Could-Double-in-Four-Years-1662.html.
  45. http://www.e-energy.de/en/index.php
  46. a b c d e Massachusetts rejects utility's prepayment plan for low income customers, The Boston Globe, 2009-07-23

External links


Tuesday, November 9, 2010

What a Smart Grid is

There is a difference between "What is a Smart Grid" and "What a Smart Grid is".

The function of an Electrical grid is not a single entity but an aggregate of multiple networks and multiple power generation companies with multiple operators employing varying levels of communication and coordination, most of which is manually controlled. Smart grids increase the connectivity, automation and coordination between these suppliers, consumers and networks that perform either long distance transmission or local distribution tasks.



  • Transmission networks move electricity in bulk over medium to long distances, are actively managed, and generally operate from 345kV to 800kV over AC and DC lines.

  • Local networks traditionally moved power in one direction, "distributing" the bulk power to consumers and businesses via lines operating at 132kV and lower.

This paradigm is changing as businesses and homes begin generating more wind and solar electricity, enabling them to sell surplus energy back to their utilities. Modernization is necessary for energy consumption efficiency, real time management of power flows and to provide the bi-directional metering needed to compensate local producers of power. Although transmission networks are already controlled in real time, many in the US and European countries are antiquated[13] by world standards, and unable to handle modern challenges such as those posed by the intermittent nature of alternative electricity generation, or continental scale bulk energy transmission.


Modernizes both transmission and distribution


A smart grid is an umbrella term that covers modernization of both the transmission and distribution grids. The modernization is directed at a disparate set of goals including facilitating greater competition between providers, enabling greater use of variable energy sources, establishing the automation and monitoring capabilities needed for bulk transmission at cross continent distances, and enabling the use of market forces to drive energy conservation.


Many smart grid features readily apparent to consumers such as smart meters serve the energy efficiency goal. The approach is to make it possible for energy suppliers to charge variable electric rates so that charges would reflect the large differences in cost of generating electricity during peak or off peak periods. Such capabilities allow load control switches to control large energy consuming devices such as hot water heaters so that they consume electricity when it is cheaper to produce.


Peak curtailment/levelling and time of use pricing


To reduce demand during the high cost peak usage periods, communications and metering technologies inform smart devices in the home and business when energy demand is high and track how much electricity is used and when it is used. To motivate them to cut back use and perform what is called peak curtailment or peak levelling, prices of electricity are increased during high demand periods, and decreased during low demand periods. It is thought that consumers and businesses will tend to consume less during high demand periods if it is possible for consumers and consumer devices to be aware of the high price premium for using electricity at peak periods, this could mean cooking dinner at 9pm instead of 5pm. When businesses and consumers see a direct economic benefit of not having to pay double for the same energy use to become more energy efficient, the theory is that they will include energy cost of operation into their consumer device and building construction decisions. See Time of day metering and demand response.


According to proponents of smart grid plans,[who?] this will reduce the amount of spinning reserve that electric utilities have to keep on stand-by, as the load curve will level itself through a combination of "invisible hand" free-market capitalism and central control of a large number of devices by power management services that pay consumers a portion of the peak power saved by turning their devices off.


Essential for renewable energy


Supporters of renewable energy favor smarter grids, because most renewable energy sources are intermittent in nature, depending on natural phenomena (the sun and the wind) to generate power. Thus, any type of power infrastructure using a significant portion of intermittent renewable energy resources must have means of effectively reducing electrical demand by "load shedding" in the event that the natural phenomena necessary to generate power do not occur. By increasing electricity prices exactly when the desired natural phenomena are not present, consumers will, in theory, decrease consumption. However this means prices are unpredictable and literally vary with the weather, at least to the distribution utility.


Platform for advanced services


As with other industries, use of robust two-way communications, advanced sensors, and distributed computing technology will improve the efficiency, reliability and safety of power delivery and use. It also opens up the potential for entirely new services or improvements on existing ones, such as fire monitoring and alarms that can shut off power, make phone calls to emergency services and etc..


US and UK savings estimates and assumptions behind them


One United States Department of Energy study calculated that internal modernization of US grids with smart grid capabilities would save between 46 and 117 billion dollars over the next 20 years[14]. As well as these industrial modernization benefits, smart grid features could expand energy efficiency beyond the grid into the home by coordinating low priority home devices such as water heaters so that their use of power takes advantage of the most desirable energy sources. Smart grids can also coordinate the production of power from large numbers of small power producers such as owners of rooftop solar panels — an arrangement that would otherwise prove problematic for power systems operators at local utilities.


The above vision makes two assumptions. First, that they will act in response to market signals and there needs to be some sort of telecommunications network. In the UK, where consumers have for nearly 10 years had a choice in the company from which they purchase electricity, more than 80% have stayed with their existing supplier, despite the fact that there are significant differences in the prices offered by a given electricity supplier. End users may be less responsive to price signals than proponents of Smart Grids think. Second, in the case of the telecomms aspect of Smart Grids, this ignores the possibility of bringing autonomy to a given appliance. Various companies (such as RLTec) have developed low cost systems that allow products to react to network fluctuations (usually network frequency). This type of control is called "dynamic demand management". A feature of DDM being that, it is low cost, needs no telecomms network and is available now. Of course these are not points that proponents of a "power telecomms network" may wish to hear about or indeed see propagated.


Although there are specific and proven smart grid technologies in use, smart grid is an aggregate term for a set of related technologies on which a specification is generally agreed, rather than a name for a specific technology. Some of the benefits of such a modernized electricity network include the ability to reduce power consumption at the consumer side during peak hours, called Demand side management; enabling grid connection of distributed generation power (with photovoltaic arrays, small wind turbines, micro hydro, or even combined heat power generators in buildings); incorporating grid energy storage for distributed generation load balancing; and eliminating or containing failures such as widespread power grid cascading failures. The increased efficiency and reliability of the smart grid is expected to save consumers money and help reduce CO2 emissions.


History


Today's alternating current power grid evolved after 1896, based in part on Nikola Tesla's design published in 1888 (see War of Currents). Many implementation decisions that are still in use today were made for the first time using the limited emerging technology available 120 years ago. Specific obsolete power grid assumptions and features (like centralized unidirectional[1] electric power transmission, electricity distribution, and demand-driven control) represent a vision of what was thought possible in the 19th century.


Part of this is due to an institutional risk aversion that utilities naturally feel regarding use of untested technologies on a critical infrastructure they have been charged with defending against any failure, however momentary.[citation needed]


Over the past 50 years, electricity networks have not kept pace with modern challenges, such as:



  • security threats, from either energy suppliers or cyber attack

  • national goals to employ alternative power generation sources whose intermittent supply makes maintaining stable power significantly more complex

  • conservation goals that seek to lessen peak demand surges during the day so that less energy is wasted in order to ensure adequate reserves

  • high demand for an electricity supply that is un-interruptible

  • digitally controlled devices that can alter the nature of the electrical load (giving the electric company the ability to turn off appliances in your home if they see fit) and result in electricity demand that is incompatible with a power system that was built to serve an “analog economy.” For a simple example, timed Christmas lights can present significant surges in demand because they come on at near the same time (sundown or a set time).[citation needed] Without the kind of coordination that a smart grid can provide, the increased use of such devices lead to electric service reliability problems, power quality disturbances, blackouts, and brownouts [15].

Although these points tend to be the "conventional wisdom" with respect to smart grids, their relative importance is debatable. For instance, despite the weaknesses of power network being publicly broadcast, there has never been an attack on a power network in the United States or Europe.[citation needed] However, in April 2009 it was learned that spies had infiltrated the power grids, perhaps as a means to attack the grid at a later time.[citation needed] In the case of renewable power and its variability, recent work undertaken in Europe (Dr. Bart Ummels et al.)[Full citation needed] suggests that a given power network can take up to 30% renewables (such as wind and solar) without any changes whatsoever.


The term smart grid has been in use since at least 2005, when the article "Toward A Smart Grid", authored by S. Massoud Amin and Bruce F. Wollenberg appeared in the September/October issue of IEEE P&E Magazine (Vol. 3, No.3, pgs 34-41). The term had been used previously and may date as far back as 1998. There are a great many smart grid definitions, some functional, some technological, and some benefits-oriented. A common element to most definitions is the application of digital processing and communications to the power grid, making data flow and information management central to the smart grid. Various capabilities result from the deeply integrated use of digital technology with power grids, and integration of the new grid information flows into utility processes and systems is one of the key issues in the design of smart grids. Electric utilities now find themselves making three classes of transformations: improvement of infrastructure, called the strong grid in China; addition of the digital layer that is the essence of the smart grid; and business process transformation, necessary to capitalize on the investments in smart technology. Much of the modernization work that has been going on in electric grid modernization, especially substation and distribution automation, is now included in the general concept of the smart grid, but additional capabilities are evolving as well.


Smart grid technologies have emerged from earlier attempts at using electronic control, metering, and monitoring. In the 1980s, Automatic meter reading was used for monitoring loads from large customers, and evolved into the Advanced Metering Infrastructure of the 1990s, whose meters could store how electricity was used at different times of the day.[16] Smart meters add continuous communications so that monitoring can be done in real time, and can be used as a gateway to demand response-aware devices and "smart sockets" in the home. Early forms of such Demand side management technologies were dynamic demand aware devices that passively sensed the load on the grid by monitoring changes in the power supply frequency. Devices such as industrial and domestic air conditioners, refrigerators and heaters adjusted their duty cycle to avoid activation during times the grid was suffering a peak condition. Beginning in 2000, Italy's Telegestore Project was the first to network large numbers (27 million) of homes using such smart meters connected via low bandwidth power line communication[17]. Recent projects use Broadband over Power Line (BPL) communications, or wireless technologies such as mesh networking that is advocated as providing more reliable connections to disparate devices in the home as well as supporting metering of other utilities such as gas and water[citation needed].


Monitoring and synchronization of wide area networks were revolutionized the early 1990s when the Bonneville Power Administration expanded its smart grid research with prototype sensors that are capable of very rapid analysis of anomalies in electricity quality over very large geographic areas. The culmination of this work was the first operational Wide Area Measurement System (WAMS) in 2000[18]. Other countries are rapidly integrating this technology — China will have a comprehensive national WAMS system when its current 5-year economic plan is complete in 2012[19].


First cities with smart grids


The earliest, and still largest, example of a smart grid is the Italian system installed by Enel S.p.A. of Italy. Completed in 2005, the Telegestore project was highly unusual in the utility world because the company designed and manufactured their own meters, acted as their own system integrator, and developed their own system software. The Telegestore project is widely regarded as the first commercial scale use of smart grid technology to the home, and delivers annual savings of 500 million € at a project cost of 2.1 billion €.[17].


In the US, the city of Austin, Texas has been working on building its smart grid since 2003, when its utility first replaced 1/3 of its manual meters with smart meters that communicate via a wireless mesh network. It currently manages 200,000 devices real-time (smart meters, smart thermostats, and sensors across its service area), and expects to be supporting 500,000 devices real-time in 2009 servicing 1 million consumers and 43,000 businesses[20]. Boulder, Colorado completed the first phase of its smart grid project in August 2008. Both systems use the smart meter as a gateway to the home automation network (HAN) that controls smart sockets and devices. Some HAN designers favor decoupling control functions from the meter, out of concern of future mismatches with new standards and technologies available from the fast moving business segment of home electronic devices[21].


Hydro One, in Ontario, Canada is in the midst of a large-scale Smart Grid initiative, deploying a standards-compliant communications infrastructure from Trilliant. By the end of 2010, the system will serve 1.3 million customers in the province of Ontario. The initiative won the "Best AMR Initiative in North America" award from the Utility Planning Network. [22]


Problem definition


The major driving forces to modernize current power grids can be divided in four, general categories.



  • Increasing reliability, efficiency and safety of the power grid.

  • Enabling decentralized power generation so homes can be both an energy client and supplier (provide consumers with interactive tool to manage energy usage).

  • Flexibility of power consumption at the clients side to allow supplier selection (enables distributed generation, solar, wind, biomass).

  • Increase GDP by creating more new, green-collar energy jobs related to renewable energy industry manufacturing, plug-in electric vehicles, solar panel and wind turbine generation, energy conservation construction[23][24].

The following footnotes and links will be published with each blog in this series.


Footnotes

  1. http://earth2tech.com/2009/06/05/why-the-smart-grid-wont-have-the-innovations-of-the-internet-any-time-soon/
  2. http://earth2tech.com/2009/04/21/ciscos-latest-consumer-play-the-smart-grid/
  3. http://earth2tech.com/2008/05/01/silver-springs-the-cisco-of-smart-grid/
  4. http://earth2tech.com/2009/05/20/utility-perspective-why-partner-with-google-powermeter/
  5. http://www.ecommercetimes.com/story/67126.html?wlc=1245096400&wlc=1245366756
  6. Supersmart grid paper
  7. http://earth2tech.com/2009/04/20/smart-grid-miami-fpl-ge-cisco-silver-spring-rolling-out-1m-smart-meters/
  8. "The rise of the Smart Grid". Deloitte TMT Predictions. http://www.deloitte.co.uk/TMTPredictions/technology/SmartGrid-electricity-grid-efficiency.cfm.
  9. "Obama's Speech on the Economy". New York Times. 2009-01-09. http://www.nytimes.com/2009/01/08/us/politics/08text-obama.html?pagewanted=4.
  10. "NIST Announces Three Phase Plan for Smart Grid". National Institute for Standards and Technology. 2009-04-13. http://www.nist.gov/public_affairs/smartgrid_041309.html.
  11. NIST announces smart grid interoperability project via IEEE P2030, June 2009
  12. St. Arnaud's "green broadband" news
  13. The Federal Energy Regulatory Commission Chairman Pat Wood, III (appointed by George Bush) stated that the US transmission system cannot afford to be "antiquated" in this news release Federal Energy Regulatory Commission (2002-09-18) (pdf). FERC news release on ISO. p. 1. http://www.ferc.gov/news/news-releases/2002/2002-3/Sept18rto9.pdf. Retrieved 2009-04-29.
  14. [L. D. Kannberg]; M. C. Kintner-Meyer, D. P. Chassin, R. G. Pratt, J. G. DeSteese, L. A. Schienbein, S. G. Hauser, W. M. Warwick (2003-11) (pdf). GridWise: The Benefits of a Transformed Energy System. Pacific Northwest National Laboratory under contract with the United States Department of Energy. p. 25. http://arxiv.org/pdf/nlin/0409035. Retrieved 2008-12-05.
  15. Smart Grid Working Group (2003-06) (pdf). Challenge and Opportunity: Charting a New Energy Future, Appendix A: Working Group Reports. Energy Future Coalition. http://www.energyfuturecoalition.org/files/webfmuploads/EFC_Report/EFCReport.pdf. Retrieved 2008-11-27.
  16. Federal Energy Regulatory Commission staff report (2006-08) (pdf). Assessment of Demand Response and Advanced Metering (Docket AD06-2-000). United States Department of Energy. p. 20. http://www.ferc.gov/legal/staff-reports/demand-response.pdf. Retrieved 2008-11-27.
  17. a b National Energy Technology Laboratory (2007-08) (pdf). NETL Modern Grid Initiative — Powering Our 21st-Century Economy. United States Department of Energy Office of Electricity Delivery and Energy Reliability. p. 17. http://www.netl.doe.gov/moderngrid/docs/Modern%20Grid%20Benefits_Final_v1_0.pdf. Retrieved 2008-12-06.
  18. "Gridwise History: How did GridWise start?". Pacific Northwest National Laboratory. 2007-10-30. http://gridwise.pnl.gov/foundations/history.stm. Retrieved 2008-12-03.
  19. a b c d Qixun Yang, Board Chairman, Beijing Sifang Automation Co. Ltd., China and .Bi Tianshu, Professor, North China Electric Power University, China. (2001-06-24). "WAMS Implementation in China and the Challenges for Bulk Power System Protection" (pdf). Panel Session: Developments in Power Generation and Transmission — Infrastructures in China, IEEE 2007 General Meeting, Tampa, FL, USA, 24–28 June 2007 Electric Power, ABB Power T&D Company, and Tennessee Valley Authority (Institute of Electrical and Electronics Engineers). http://www.ewh.ieee.org/cmte/ips/2007GM/2007GM_china_intro.pdf. Retrieved 2008-12-01.
  20. "Building for the future: Interview with Andres Carvallo, CIO — Austin Energy Utility". Next Generation Power and Energy (GDS Publishing Ltd.) (244). http://nextgenpe.com/currentissue/article.asp?art=273073&issue=244. Retrieved 2008-11-
  21. Betsy Loeff (2008-03). "AMI Anatomy: Core Technologies in Advanced Metering". Ultrimetrics Newsletter (Automatic Meter Reading Association (Utilimetrics)). http://www.utilimetrics.org/newsletter/index.cfm?fuseaction=Newsletter.showIssuetoPrint&Issue_ID=68. Retrieved 2008-11-26.
  22. Demanding standards: Hydro One aims to leverage AMI via interoperability
  23. Smartgrids Advisory Council. "Driving Factors in the Move Towards Smartgrids" (PDF). European Smartgrids Technology Platform: Vision and Strategy. European Commission. p. 9. ISBN 92-79-01414-5. http://www.smartgrids.eu/documents/vision.pdf.
  24. a b National Energy Technology Laboratory (2007-07-27) (pdf). A Vision for the Modern Grid. United States Department of Energy. p. 5. http://www.netl.doe.gov/moderngrid/docs/A%20Vision%20for%20the%20Modern%20Grid_Final_v1_0.pdf. Retrieved 2008-11-27.
  25. Anderson, Roger; A. Boulanger, J. A. Johnson and A. Kressner (2008 ISBN 978-1-59370-157-4). p 333. Computer-Aided Lean Management for the Energy Industry.
  26. 2007 IBM Energy and Utilities Global Residential/Small Business Consumer Survey http://www-03.ibm.com/industries/utilities/doc/content/landingdtw/3165578119.html?g_type=pspot
  27. page 10
  28. Energy Future Coalition, “Challenge and Opportunity: Charting a New Energy Future,” Appendix A: Working Group Reports, Report of the Smart Grid Working Group. http://www.energyfuturecoalition.org/pubs/app_smart_grid.pdf
  29. U.S. Department of Energy, National Energy Technology Laboratory, Modern Grid Initiative, http://www.netl.doe.gov/moderngrid/opportunity/vision_technologies.html
  30. Yilu Liu, Lamine Mili, Jaime De La Ree, Reynaldo Francisco Nuqui, Reynaldo Francisco Nuqui (2001-07-12). "State Estimation and Voltage Security Monitoring Using Synchronized Phasor Measurement" (pdf). Research paper from work sponsored by American Electric Power, ABB Power T&D Company, and Tennessee Valley Authority (Virginia Polytechnic Institute and State University). http://citeseerx.ist.psu.edu/viewdoc/download;jsessionid=3B975B94733D906CA197813C53C2BD86?doi=10.1.1.2.7959&rep=rep1&type=pdf. Retrieved 2008-12-01. abstract Lay summary. ""Simulations and field experiences suggest that PMUs can revolutionize the way power systems are monitored and controlled."".
  31. a b Patrick Mazza (2005-04-27) (doc). [http://fortress.wa.gov/wutc/home/webdocs.nsf/de53b07997d108ea882563b50072c5b3/bc3ced6bb5f4cf29882570200083aaa3/$FILE/Powering%20Up%20Smart%20Grid%20report.doc Powering Up the Smart Grid: A Northwest Initiative for Job Creation, Energy Security, and Clean, Affordable Electricity.]. Climate Solutions. p. 7. http://fortress.wa.gov/wutc/home/webdocs.nsf/de53b07997d108ea882563b50072c5b3/bc3ced6bb5f4cf29882570200083aaa3/$FILE/Powering%20Up%20Smart%20Grid%20report.doc. Retrieved 2008-12-01.
  32. (pdf) Wide Area Protection System for Stability. Nanjing Nari-Relays Electric Co., Ltd. 2008-04-22. p. 2. http://www.nari-relays.com/en/files/Wide%20Area%20Protection%20System%20for%20Stability.pdf. Retrieved 2008-12-12. Examples are given of two events, one stabilizing the system after a fault on a 1 gigawatt HVDC feed, with response timed in milliseconds.
  33. "On-Line Voltage Stability Monitoring and Control (VSMC) System in Fujian power grid" (pdf). Proceedings, Power Engineering Society General Meeting, 2007. (Tampa, FL, USA: IEEE). 2007-06-24. doi:10.1109/PES.2007.385975. Lay summary.
  34. Cisco Outlines Strategy for Highly Secure, 'Smart Grid' Infrastructure
  35. Why the Smart Grid must be based on IP standards
  36. IEEE P2030 Official Website
  37. EETimes.com: IEEE, conference drive smart grids - P2030 aims to develop a guide to grid standards
  38. Commerce Secretary Unveils Plan for Smart Grid Interoperability
  39. Li, Jerry (2009), From Strong to Smart: the Chinese Smart Grid and its relation with the Globe, AEPN, Article No. 0018602, Asia Energy Platform. Available at http://www.aepfm.org/link.php
  40. http://www.smartgrids.eu/: Look under 'background'
  41. "U.S. Energy Independence and Security Act of 2007". http://www.thomas.gov/cgi-bin/query/z?c110:H.R.6.ENR:. Retrieved 2007-12-23.
  42. http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ140.110
  43. http://apps1.eere.energy.gov/news/news_detail.cfm/news_id=12364
  44. "Report: Smart Grid Market Could Double in Four Years". Zpryme Smart Grid Market. http://www.smartgridnews.com/artman/publish/Business_Markets_Pricing_News/Report-Smart-Grid-Market-Could-Double-in-Four-Years-1662.html.
  45. http://www.e-energy.de/en/index.php
  46. a b c d e Massachusetts rejects utility's prepayment plan for low income customers, The Boston Globe, 2009-07-23

External links