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Smart Meters and Smart Grid: An Ontario Case-Study

Jon Norman
Ontario Ministry of Energy

The World Bank March 6, 2012

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What is Smart Grid?

Intelligence/Communications Layer
Telecom Network - Phone - Internet - Smart Meter communication infrastructure

SMART GRID

Diagram source: EPRI

Status / Control

Status / Control

Status / Control

Conventional Grid

Conventional grid interoperates with smart grid intelligence through enhanced devices: - Smart meters - Auto Switches - Intelligent Transformers

Diagram source: EPRI

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Why does Ontario need a Smart Grid?

Driven by

Aging infrastructure and changing objectives (e.g. environment) Evolving opportunity to apply technologies that allow intelligent, two-way communications & control.

Generally, transmission systems are already equipped with these capabilities. Distribution systems are much less flexible and efficient. Smarter grids can enable:

more efficient grid operation, connection of diverse and flexible generation, including renewables, enhanced conservation opportunities for customers adoption of new and innovative technologies, like electric vehicles.

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Ontarios Drivers

Each jurisdiction has its own particular drivers for advancing the smart grid. These shift with time, highlighting the fact that the smart grid is a journey rather than a destination. Ontario investment into smart grid

More than $1 billion smart metering infrastructure Additional $390 million per year over next 5 years (renewable integration, load management)

Ontario has several factors that are leading it toward a smarter grid:
1.

2.
3. 4. 5.

Aggressive integration of renewable, distributed generation into the distribution grid One of North Americas most ambitious conservation targets One of the largest smart meter and time of use rollouts globally Significant effort to create conditions for accelerated electric vehicle adoption Ability to leverage existing leading edge assets in manufacturing, research, and electricity distribution systems

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Smart Metering in Ontario

Ontario is the first jurisdiction in North America to roll out smart meters and the first in the world to introduce mandatory time-of-use pricing. Commitment to jurisdiction-wide smart metering and time-of-use pricing announced in 2005 Progress to-date:

More than 4.7 million meters are installed (99 percent of households and small businesses). More than 3.6 million customers on time-of-use rates

Costs

$ 1 billion initiative for smart metering and wireless infrastructure & control systems

$ 90 million centralized data management centre

Costs recovered through electricity customers (about $3 per meter/month)

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Smart Metering Benefits

What do Smart Meters do?
Modernize outdated meter infrastructure Enable time-of-use pricing and conservation Provide basis for smart grid / smart homes

Benefits to the Electricity System:

Benefits to Consumers:
Facilitates conservation and demand management programs Accurate meter reads (no more estimates) Timely information to help manage consumption Better customer service (e.g. outages automatically known)

Smart Meter Benefits

Reduces the number of LDC field visits to read and service meters Reduces tampering and theft of electricity Provides significant operational benefits (better outage management and system control)

TOU Benefits

Environmental benefits as a result of load shifting Savings in avoided/ deferred capacity investments (new generation and transmission)

Gives customers ability to move discretionary load to cheaper hours. Reduces long-term cost of electricity supply Increases awareness of consumption

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Time of Use Pricing Structure

Time-of-use rates provide incentives to shift consumption away from peak periods, when electricity is costly and/or environmentally damaging to produce.

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Functional Specification for Smart Meters

Meet all applicable laws (health, safety, etc)

Acquire, date and time stamp all meter reads at the end of each hour Transmit meter reads to the distributors AMCC and MDM/R by 5 a.m. following the end of each daily read period Achieve a prescribed minimum success rate in acquiring and transmitting meter reads (98%) and a precision measure (at least 0.01 kWh) Maintain time accuracy within a 1.5-minute variance, as measured against Official Time Provide the necessary reporting capabilities to enable distributors to monitor the health of the smart metering infrastructure
WAN MDM/R AMRC

Meters + AMCD CIS + Billing System LAN

AMCC

Security requirements

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Benefits
In the ramp up to province-wide TOU rollout, several pilot studies were completed by Ontario LDCs which indicated that time-of-use pricing contributed to reduction in consumption of electricity during peak demand hours. Early results show load shifting impacts in the range of 3-5% Smart meters have also: Helped utilities manage their systems better as increasing amounts of renewable energy come onto the distribution system. Provided automatic notification of outages and improved ability to detect source of outages Enabled a comprehensive database for improved services and potential for open energy data Provided a platform for smart home energy management systems.

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Objectives for a Smart Grid in Ontario

The Green Energy Act set a framework for the development of a smart grid Over 80 distinct utilities across province with different objectives Ontario government has: Defined smart grid objectives for the province Established responsibilities of stakeholders Identified areas for coordination

The Green Energy Act established what a smart grid should do for Ontario.
Customer Control
Enable more conservation through a shift to smarter homes

Power System Flexibility

Enable more renewables and better efficiency in grid operation

Adaptive Infrastructure
Encourage more innovation and ensure adaptivness to future conditions (e.g. electric vehicles)

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Customer Control
Focus Area

Expected Outcomes
Smart meters Time-of-use rates Home Energy Management Load control

Customer Control

More Conservation

Installation of a Smart Meter

Implementation of Time of Use Rates

Increase visibility of price and commodity usage for customer

Add load control for Air Conditioning and Appliances

Customers are active participants in Conservation

Complete

Now

In various stages of piloting

More opportunities for conservation and energy management 11

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Enabling Renewables and Power System Flexibility

Focus Area Power System Flexibility Expected Outcomes
Distribution Automation Customer based micro-generation More distributed generation, used more efficiently Increased visibility and control over grid operations

Feed-in Tariff (FIT) and Micro FIT Limited System Visibility/Control

Smart Grid Capacity Building / Demonstration Projects

Implement Projects to give information on realtime supply to grid operator

Seamless integration of distributed generation; Better Grid Efficiency; More flexible operation

Now

Advanced stages of piloting, e.g. Hydro Ones Smart Zone

Increased efficiency and flexibility managing distribution networks

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Adaptive Infrastructure
Focus Area Adaptive Infrastructure Expected Outcomes
Mobile charging infrastructure to support EVs Storage opportunities Keeping room for innovative technologies

More More Innovation Renewables

Installation of a Smart Meter and Implementation of Time of Use Rates

Charging Infrastructure Fund

Capacity Building / Demonstration Projects, particularly charging infrastructure

Enablement of new products, services, and markets More efficient and flexible grid operation

Near Complete

Now

Future

More innovation and flexible grid infrastructure

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Need for Caution

.Even so, 2 key facts are likely to mean continued move to smarter grids:
1.

The technology exists and is largely proven. Increasingly it is being integrated on electricity systems. BAU unlikely to be sustainable Environmental and security considerations in the west Reliability and load growth in developing world

2.

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Drivers for Smart Grid

Western Jurisdictions
Drivers

Developing Countries
Drivers

System efficiency (operational costs)

Aging infrastructure Environmental benefits (Integrating renewable generation) Improving conservation opportunities (demand response) Security

Power system challenges

Reliability (several hour interruptions per day) Growth (tremendous load growth, not enough supply)

Rural electrification (microgrids)

Theft of electricity

Barriers

Barriers

Mature (and rigid) regulatory system

Benefits are marginal rather than groundchanging

Cost could be prohibitive, depending on state of specific technology Institutional capacity & public education

Primarily asset management strategy

Can be integral part of system development

Lessons are often mutually relevant

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Lessons from Ontario

Lessons from Ontario: Dont get ahead of population Need to understand objectives IT implementations can be more complex than at first appear Early adoption risk, but.

We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run
Roy Amara

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