With all the stimulus money that has been invested in Smart Grid to help jump start the advanced metering infrastructure (AMI) business in North America, one can ask the difficult question about return on investment and benefit realization. Given that many of the economic justifications of advanced metering are the societal benefits associated with demand reduction and consumer behavior changes, it may be difficult to ascertain the contribution of this technology to actual customer changes.
While the analysis of customer participation rates, stickiness of participation, and demand response fatigue are all valid metrics and significant factors to consider, some energy utilities appear to be avoiding the difficult process and adopting strategies that stick closer to the “normal” way of doing business.
For example, calculating the impact of conservation voltage reduction (CVR) may be easier to determine than estimating how many customers will over-ride the fifth demand response event during a heat wave. Likewise, managing Volt/VAR in an interactive manner may be easier to assess than determining the impact of conservation alerts provided over an in-home display unit.
To achieve the benefits of an advanced metering system, there must be a saturation level (meters remotely read) before any significant operational savings can be accrued. Whereas, in a distribution automation (DA) environment, one may elect to surgically deploy technology with “trouble” circuits, and avoid blanketing the entire service area with a network.
In a recent commission study, AMI and various distribution automation technologies were analyzed to see how the return on investment of different technology implementations could be realized over time. Treating these different grid technology solutions in a similar manner to generation resources, economic dispatch tools can then be used to schedule execution to achieve the greatest short and long term benefits. For instance, as previously noted, AMI requires a level of saturation to achieve many of the long term benefits; whereas, line fault indicators can yield a quicker return if they are deployed in areas that have historical problems.
Is advanced metering taking a back seat to distribution automation in Smart Grid implementation? My opinion is no. AMI is a strategic utility asset that provides great value beyond revenue collection. Smart meters today produce a suite of comprehensive information that has value throughout the enterprise. In a similar manner, if distribution automation can be deployed surgically to known trouble circuits, then the problem is much easier to solve. However, intelligence is often required to know which circuits are in trouble. That is where AMI can be a strategic DA asset.
So what are your thoughts on advanced metering infrastructure and distribution automation? Are they complementary in the path to Smart Grid? Should they be dispatched equally? Or is there a strategic value to focusing on one first?
By: Ron Chebra, vice president, Management & Operations Consulting, DNV KEMA Energy & Sustainability