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• reducing the operational costs of integrating renewables • leveraging the network for energy efficiency and carbon savings. The first four function categories have long been considered central elements of the smart grid and are briefly described here. The last two are the fundamental subjects of this report and are discussed in Section 3.0. Managing peak load capacity includes displacing the need for new generation, localizing this function to displace the need for new transmission, further localizing it to manage capacity to offset the need for new and upgraded distribution substations and feeders, and managing transformer loading to extend their lifetimes. About 40% of grid infrastructure costs are for generation capacity, which must be adequate to serve peak load demand while maintaining adequate reserves for forced outages and contingencies. In light of growing demand for generation worldwide, environmental constraints on new coal generation, the imposition of renewable generation portfolios by states, and rising costs for steel, concrete, and other materials, and costs for new generation capacity to meet load growth are expected to grow substantially. Another 40% of infrastructure costs are for distribution systems, so the opportunity to manage peak load demand at the substation level is an important opportunity. Peak load management from demand response, distributed storage, and optimization of distribution delivery voltages and power factors can all serve to defer investment in generation, transmission, and distribution systems. The value stream from this is derived in terms of the avoided carrying costs for investment in new capacity. Reducing costs for wholesale operations involves lowering the demand for generation when marginal production costs are greater than revenues from retail sales, similarly minimizing purchases or maximize production when wholesale prices are high, and reducing transmission loads when and where congestion costs are high. This can be accomplished by utilizing demand response, distributed storage, and distribution voltage controls to reduce net demand. Enhanced reliability. A smart grid can enhance reliability in two fundamental ways. It can prevent and limit blackouts with transmission wide-area control and visualization tools that enhance situational awareness and rapidly reconfigure the transmission grid to prevent or limit a blackout. At the distribution level, where the vast bulk of outages occur in terms of aggregate customer- minutes without power, outages are typically caused by events such as vehicle accidents, wind and ice storms, and animals shorting out transformers, rather than systemic failures. To remedy these outages, distribution and feeder automation assets can be used to rapidly isolate faults and then reconfigure distribution feeders through remotely actuated switches. This shortens the recovery time for nearly all customers from an hour or more to a matter of seconds. In its ultimate form, this is a stand-alone microgrid fully capable of supply its own power and managing its local distribution. “Through proactive grid management and automated response, the frequency and duration of power outages can be reduced, which will result in fewer anxious calls to utility call centers and improved consumer satisfaction. Remote monitoring and control devices throughout the system can create a “self-healing” grid, which can restore and prevent outages and extend the life of substation equipment and distribution assets. Through such automation, rising consumer expectations for power quality and reliability can be met in the face of growing electricity demand and an aging infrastructure and workforce.” Source: EAC (2008). 2.6PDF Image | The Smart Grid: An Estimation of the Energy and CO2 Benefits
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