Kentucky’s Smart Grid Roadmap
In an effort to reduce its near-total dependence on coal, prepare for the prospect of lower coal exports, diversify its generation mix, modernize its grid and serve as a model to other states, Kentucky has been developing a comprehensive smart grid roadmap. Already, the roadmap team has obtained illuminating input from the state's utilities.
Kentucky is one of the most richly endowed U.S. states in terms of energy but also one of the state's most dependent on just one single resource. Coal provides nine-tenths of the state's electrical power, and coal mining is the state's largest industrial employer. In a sense, the state is like a Third World country almost wholly decided to the cultivation of just one crop, so that the country will prosper as long as the world market for that crop remains robust but will be in serious trouble if the crop ever goes out of fashion.
With an eye on that vulnerability, in 2008, Kentucky's governor issued a challenge to make the state a "national leader in energy technology and production," and to "help the country move toward greater energy self-reliance. I intend to put us on such a path."
In 2010, the Kentucky Public Service Commission, the University of Louisville Speed School of Engineering and the University of Kentucky's Department of Electrical and Computer Engineering formed a collaboration to produce a working roadmap for the development and deployment of smart grid technology in Kentucky. Out of this collaboration came the Kentucky Smart Grid Roadmap Initiative, with stimulus funding from the Department of Energy's National Energy Technology Laboratory (NETL).
The starting point for the roadmap team was NETL's Modern Grid Strategy, which categorizes smart grid applications under four major headings: advanced metering infrastructure, advanced distribution operations, advanced transmission operations and advanced asset management. Related technologies include integrated communications, sensing and measurement, advanced components, new control methods and improved interfaces and decision-support software.
Phase one in the team's work was to develop an assessment model for the evaluation of Kentucky's current smart grid deployments and the operations of the state's electric utilities. The team found useful guidance in Carnegie Mellon University's Smart Grid Maturity Model and the aforementioned NETL grid strategy exercise, and it obtained feedback from round-table discussions with representatives from each of the 26 regulated Kentucky utilities.
The Kentucky assessment model went to all the state's utilities for self-evaluation so that the results could be used to enhance understanding of where things stand, where utility leaders believe things need to go and what gaps need to be filled in what order to make a reality of the industry's consensus vision.
In Kentucky, only investor-owned utilities (IOUs) and cooperatives are regulated by the state public service commission. Therefore only they were included in the roadmap survey. Among the results:
- IOU investment in AMI has been cautious, ranging from none to about 25 percent penetration.
- Instead, IOUs have largely invested resources in distribution technologies, particularly distribution level SCADA and energy management systems; to a more limited extent, they have put money into Phasor Measurement Units and optimized volt/VAR controls.
- Co-ops, on the other hand, have concentrated resources in advanced metering technologies, even though Kentucky has yet to extend tiered power pricing structures to residential customers—time-of-use rates, for example.
- Though some co-ops still rely almost entirely on old-fashioned electromechanical metering, others have gone over entirely to advanced digital meters. The variation can be explained largely in terms of prospects for cost recovery; the picture will change significantly if TOU rates are adopted within the state.
Broadly, the Kentucky utilities reported that their smart grid efforts have focused mainly on technology deployments, the development of internal strategy and management, and on customer education and engagement. Areas targeted by many utilities for development are the reorganization of business units to support smart grid operations, the increased use of real-time data to improve work and asset management, and greater focus on environmental sustainability, societal responsibility and energy efficiency.
In the second phase, now ongoing, alternative solutions are being proposed and assessed to address the gaps identified in Phase One. The solution proposals are reports that target the four infrastructure areas previously described, plus distributed energy resources, cyber security, future technology impacts, and consumer education and acceptance needs.
In Phase Three, we will analyze the feasibility of the alternatives developed in Phase Two to develop an implementation plan for the state that is aggressive yet achievable. We will propose a reasonable timeline and sequence of milestones for solution deployment; consider the costs of implementing the various proposed solutions; assess customer receptivity to them; calculate benefits to utilities, consumers, and society; and identify funding sources available. In addition, costs and legal, regulatory, environmental, and human behavioral barriers to smart grid deployment will be identified.
Finally, the reports and data generated in all three phases will be integrated to form the final Kentucky Smart Grid Roadmap, and provide recommendations and best practices to utilities and stakeholders to guide individual grid modernization approaches. The final roadmap will document the methods and results that led to it, present the feasibility analysis and implementation plan, and make recommendations for smart grid related R&D at Kentucky universities.
Such documentation will begin to be available on the Kentucky Public Service Commission website in the first quarter 2012, with the final roadmap document tentatively scheduled for publication the following summer.