Smart Grid Sector Study

The Smart Grid:
a business sector study and
economic development
opportunities for Michigan

New energy economy plays a critical role in a new round
economic development

• Substitution effect
to cope with energy crisis and preserve human living environment

• Pull effect
to attract a large investment and create numerous jobs

• Effect of technological progress
to further technology level of energy supply and provide a new platform for economic
development

UP6550 | Robert Moreo + Yuchen Mao | Wayne State University 2

Smart grid: an enabler of energy economy
Grid: an enormous, complex network of transmission and distribution lines and devices along
which electricity, generated at large, central fossil fuel plants, hydroelectric dams, and
nuclear facilities, travels many hundreds of miles.

Smart grid:
Wikipedia: delivering s electricity from suppliers to consumers using two-way digital
technology to control appliances at consumer’s homes to save energy, reduce cost and
increase reliability and transparency.
GridWise Alliance: a more complex and sophisticated infrastructure that will continue to
power our digital economy but in a cleaner, more reliable, and more affordable way.
The Smart Grid: An introduction: using digital technology to improve reliability, security , and
efficiency of the electric system: from large generation, through the delivery systems to
electricity consumers and a growing number of distributed generation and storage resources.
Smart grid solutions: an energy internet: marrying information technology with our current
electrical infrastructure, helping us support the energy needs of our 21st century society. In
essence, an energy internet, delivering real-time energy information and knowledge,
empowering smarter energy choices.


Principal characteristics
• Enable active participation by consumers
• Accommodate all generation and storage options
• Enable new products, services, and markets
• Provide power quality for the digital economy
• Optimize asset utilization and operate efficiently
• Anticipate & respond to system disturbances (self-heal)
• Operate resiliently against attack and natural disaster


Smart grid is more
• Reliable
• Secure
• Economic
• Efficient
• Environmentally friendly
• safe

Smart Grid Technology
Research, Development and Demonstration

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UP6550 | Robert Moreo + Yuchen Mao | Wayne State University

Smart Grid Functions

7

Smart Grid Technologies and
their applicability
• Enables active participation by consumers
smart meters
advanced metering infrastructure
existing automatic meter reading technology
programmable communicating thermostat
smart home software
home automation network interfaced with utility smart grid system
building/ facility energy management system interfaced with market
pricing signal/ utility smart grid system


• Accommodates all generation and storage option
virtual utilities (integrated diesel generator with load management
plug-in hybrid electric vehicles
solar/ wind generation
distributed energy resource management system
energy storage devices/ systems


• Enables new products, services, and markets
real-time/ time-of-use pricing options design and research
new market system (applying intelligent network feedbacks and
consumer responses)
demand response/ load management program
appliances interface with utility smart grid system
motor and drives interface with utility smart grid system


• Provides power quality for the range of needs in a digital economy
smart sensors
intelligent electronic devices
smart switches capable of communications
smart reclosers with communications capability
intelligent assets with built-in communications (smart transformer,
breakers)
smart feeder automation
interconnection protocols
system interoperability adoption project


• Optimizes asset utilization and operating efficiency
condition-based monitoring/ maintenance
computerized maintenance management
advanced asset management software
advanced outage avoidance and management
dynamic line rating to improving system reliability
transformer load management
grid simulator and modeler
flexible power flow control
process re-engineering using intelligent system

• Addresses and responds to system distribution in a
self-healing manner
integrated outage and work management system
outage damage assessment for restoration
distribution state estimator
fault location and analysis, management
wide area monitoring system
substation automation
station equipment condition and reliability monitoring
feeder and distribution automation
smart feeder automation
automated adaptive relaying
feeder fault detection and diagnostics
voltage regulator with communication capability
capacitor control with communication capability


• Operates resiliently against physical and cyber
attacks and natural disasters
cyber-security and data integrity
weather prediction and storm damage forecast and outage
management system


Brief history
• Alternating current power grid evolved after 1896
• Automatic metering reading in 1980s
• Advanced metering infrastructure, prototype sensor
and then smart meters in 1990s
• In 2000, Telegestore Project in Italy and wide area
measurement system
• In the US, Austin, Texas and Boulder, Colorado


Worldwide smart grid
• Australia
Committing to investing heavily
• Canada
Energy Conservation Responsibility Act
• China
wide area monitoring system
• UK
Green Recovery Plan
• Republic of Korea
fully integrated smart grid system

usa
• Electricity Advisory Committee
• GridWise Alliance
• Electric Power Research Institute
• GridWise Architecture Council
• Galvin Electricity Initiative
• Smart Grid Policy Center
• Electric Drive Transportation Association
• Federal Energy Regulatory Commission and the National Association of Regulatory Utility
Commissioners
• North American Electric Reliability Corporation
• DOE and the U.S. Environment Protection Agency
• American Public Power Association
• Edison Electric Institute
• Center for American Progress


The State of Michigan
• Michigan DELEG: workforce training in smart grid technology
• Whirlpool Corp. : smart appliances
• DTE: smart meter technology
• GE: new research center and A123 battery manufacturing facilities
• Michigan Clean Renewable and Efficient Energy Act


Case Study: DTE Energy
 Provides gas and electric utility services
to 2.7 million Michigan homes and businesses,
and energy-related services to businesses and
industries nationwide.
 Business operations in 26 states
 Headquarters in Detroit
 $532M earnings on $8B 2009 revenue
 10,200 employees 19

 Vincent G. Dow – VP Distribution Operations
 Oversees electrical distribution system, including
distribution and substation operations, outage
restoration, new customer connections,
engineering, field and meter services, and all
distribution system construction.
 Also oversees asset optimization, resource
management, performance management, and
the Smart Grid efforts for DTE Energy. 20

 DTE Energy Ventures:
 Over $100 million in venture capital invested in
energy-related companies in MI and elsewhere
 Investment focus includes Smart Grid sector
 Collaborates with University of Michigan to offer
$100,000 Clean Energy Prize

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 DTE Economic Development:
 Confidential building and site location assistance
 Rate analysis and support
 Strong community and economic development
partnerships to provide direct access to key
decision-makers
 Expertise and experience in the electric and
natural gas utility business
22

 DTE SmartCurrents Program:
 $83 million from the U.S. Department of Energy
over the next two years; matched by DTE Energy
and its technology partners.
 660,000 new "smart" meters in 2010-2011
 700 deployment and construction jobs for IT
contractors and overhead linemen, and 350
permanent positions for suppliers
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 Smart Home would provide different pricing
levels to incentivize off-peak electrical usage,
web-based customer energy usage presentation
and customer outage notification. In addition,
certain "smart" appliances could communicate
with DTE Energy to provide optimum energy
savings.
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 As a result of the DOE funding, DTE Energy will
have the opportunity to offer Smart Home
technology with in-home displays and high tech
thermostats to 5,000 customers, and make
improvements to 11 substations and 55 circuits
over the next two years.

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 Community Energy Storage (CES):
 Detroit Edison’s Advanced Implementation of
A123s Community Energy Storage Systems for
Grid Support
 $5M DOE/ARRA funding
 This project will install 20 CES units, 25kW/2hr
each, into a system that includes a 1 MW storage
device integrated into a solar system.
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Other Michigan Successes
 A123 Systems
 Leading supplier of high-power lithium ion
batteries, which can provide grid storage for
renewable energy production
 MIT startup; acquired Ann Arbor based T/J
Technologies in 2006
 300,000 square foot assembly plant in Livonia
 300,000 square foot coatings facility in Romulus
27

 General Electric
 $70M invested (10% stakeholder) in A123 Systems
 $100M investment in new advanced
manufacturing technology and software center,
Visteon Village, Van Buren Twp.
 “Michigan is a great location for a technology center because of its world-class
engineering, technical talent and public officials who understand that
investing now will create tomorrow’s leading positions in information
technology, clean energy and transportation.” -Jeff Immelt, GE CEO
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 Whirlpool Corporation
 Benton Harbor-based company since 1911
 World's leading manufacturer and marketer of
major home appliances
 "By 2015, Whirlpool Corporation will make all the
electronically controlled appliances it produces --
everywhere in the world -- capable of receiving
and responding to signals from smart grids"
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Policy and the Smart Grid
 Energy Independence and Security Act of 2007
(EISA) TITLE XII– SEC. 1301. STATEMENT OF POLICY ON
MODERNIZATION OF THE ELECTRICITY GRID:
 It is the policy of the United States to support the
modernization of the Nation’s electricity transmission and
distribution system to maintain a reliable and secure
electricity infrastructure that can meet future demand
growth and achieve the ultimate goals that together define a
Smart Grid.
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 Elements of TITLE XII:
I. Increased use of digital information VI. Integration of `smart’ appliances
and controls technology. and consumer devices.
II. Optimization of grid operations and VII. Deployment and integration of
resources, with full cyber-security. advanced electricity storage and
III. Deployment and integration of peakshaving technologies,
distributed resources and including plug-in electric and hybrid
generation, including renewable electric vehicles, and thermal-
resources. storage air conditioning.
IV. Incorporation of demand response, VIII. Provision to consumers of timely
demand-side resources, and information and control options.
energy efficiency resources. IX. Development of standards for
V. Deployment of `smart’ technologies communication and interoperability
for metering, communications of appliances and equipment
concerning grid operations and connected to the electric grid.
status, and distribution automation. X. The lowering of unreasonable or
unnecessary barriers to adoption.
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• On April 6, 2006, Michigan Governor Jennifer Granholm
called for the development of a comprehensive plan for
meeting the state's electric power needs.
• Executive Directive No. 2006-2 21st Century Energy Plan
 Michigan has had essentially no energy efficiency
programs since 1996.
 Forecasted Michigan’s future energy needs
 Made recommendations to legislators and regulators

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 MI Clean, Renewable, and Efficient Energy Act of 2008
 Energy efficiency programs are supported by customer
rates via a volumetric charge (per kWh) for residential
customers and monthly "per meter" charges for
commercial and industrial customers.
 Establishes energy optimization savings standard,
decoupling mechanisms, and economic incentives for
implementing energy efficiency programs.
 Renewable Portfolio Standard of 10% by 2015
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 21st Century Jobs Fund
 Authorized in 2005
 Over 500 applications for first
round of funding
 Smart Grid technology not a
targeted area for investment:
 71% of funding has gone towards
Life Sciences
 Some of the 8% devoted to
infrastructure may be grid-related

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Michigan’s Priorities 2010
 State is focusing on life sciences, construction, and
certain alternative energy technologies, and
developing a workforce capable of working within
those industries
 Building from strength in skilled trades and
manufacturing, Michigan’s priority is finding work for
displaced workers
 40% of Michigan’s existing “green” jobs are in
transportation and alternative fuels
35

 Despite nationwide
attention to “green”
jobs, Michigan is still
losing jobs across
the board – except
within renewable
energy production
 Low concentration
could mean
opportunity for
growth
36

 The single best Competitive Employment Performance
industry in Michigan included firms in the business of
producing semiconductors and related devices
 Michigan is outpacing US averages in grid-related industries:

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 Developing a Smart Grid workforce in Michigan
 $4.39M Recovery Act grant for training, April 2010:
 Train Michigan workers and create career pathways in skilled trades
and other in-demand jobs in the electric power workforce sector.
 Meet the needs of employers for highly skilled workers in the electric
power workforce sector.
 Improve preparedness of both new hires and incumbent workers
within the electric power sector to migrate to the Smart Grid.

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Growth Potential

39

Growth Potential

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Recommendations to NEI
 Capitalizing on Existing Assets and Resources:
 DTE Energy, GE, and A123 Systems are heavily
invested in battery technology in Michigan
 Because of parallel applications within automotive
industry, applying Smart Grid battery storage solutions
to improve alternative energy reliability makes sense
 Expand or replicate DTE/A123 pilot project
 Provide funding to help create secondary market for
future used battery cells
41

 Workforce Development:
 “NEI’s approach is to be a catalyst for change.”
 Training focus in Michigan needs to shift to the
understanding of computer and electronic devices and
components that will connect the Smart Grid
 Smart meters, monitoring devices and software,
sensors and controls
 Electronics training needs to begin in high schools,
partnering with colleges and business where possible
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 Consumer education and awareness
 Leverage federal funds to build a complete
regional generation to end user Smart Grid
demonstration project
 Alleviate public perception that Smart Grid
improvements will cost too much
 Compare to CFL bulbs as an example of life-cycle
costs, and how prices have come down over time
43

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