Progress in DOE’s Smart Grid Investment Grant Program

By Debbie Haught

The program is producing tangible payoffs in terms of greater visibility, higher reliability, peak voltage shaving, lower service costs and electrical demand reduction.

Since 2009, the U.S. Department of Energy (DOE) and the electricity industry have jointly invested in 99 Smart Grid Investment Grant (SGIG) projects to modernize the electric grid, strengthen cybersecurity, improve interoperability and collect an unprecedented level of information on smart grid operations.

The American Recovery and Reinvestment Act of 2009 (the stimulus bill) provided $3.4 billion in federal funding, and project recipients have invested an additional $4.5 billion in private funding, for a total SGIG budget of $7.9 billion. The 99 projects involve 228 participating utilities and other organizations, in every region of the country and almost every state.

DOE has managed the SGIG program since its inception, with an emphasis on measuring and analyzing equipment installed and new services provided, as well as determining benefits accrued. In October 2013, DOE published a second general SGIG progress report, having produced a handful of analytic reviews of groups of SGIG projects a year before.

The new progress report finds that advanced metering infrastructure (AMI) installations are nearing completion, with almost all the $4.05 billion allocated already spent as of March this year. Customer systems installations, which depend on AMI installations and sometimes regulatory approvals, are lagging somewhat: Just $510 million of the $ 1.28 billion earmarked for them had been spent in March.

Expenditures for electric transmission and distribution systems are nearing completion, with $1.49 billion of $1.96 billion spent for distribution. Slightly more than half the $620 million dedicated to electric transmission had been spent by March.

Strengthening cybersecurity is an SGIG program objective and a critical element of all SGIG projects, cutting across the aforementioned four categories. DOE has identified areas of improvement for the projects to address. In addition, information sharing activities have enabled project teams to learn from one another and take further steps to strengthen their cybersecurity practices.

The October progress report includes highlights of innovative projects that are demonstrating exceptional progress toward a smarter grid. The expanded capabilities that these projects are deploying represent a real jump start in the investments needed and exhibit the seven characteristics of the smart grid.

Major findings of the general progress report and more specialized SGIG project reports are as follows:

  • SGIG-installed synchrophasor technologies in electric transmission systems (notably, networked phasor measurement units, PMUs) are beginning to permit grid operators to see and correct for disturbances, such as frequency oscillations, before they become more serious grid stability issues. Analysis is showing that average installed costs of networked PMUs vary considerably across the projects, as these devices can have different functional specifications and capabilities, and thus different costs. In addition, some projects are upgrading existing equipment such as digital fault recorders with phasor measurement capabilities, and such upgrades cost considerably less than installing new PMUs.
  • Deployment of automated feeder switches and supporting sensors, communications equipment, and control systems is yielding electrical reliability improvements that include shorter (up to 56 percent) and less frequent (11–49 percent) outages, and fewer affected customers. Reports from one of the projects after a recent wind storm in Chattanooga, Tenn., show that within seconds automated feeder switches reduced the number of customer outages from 80,000 to less than 40,000, and that restoration time was reduced by over one day, saving the utility over a million dollars and helping to avoid customer outage costs.
  • Deployment of voltage regulators, automated capacitor banks, and other advanced voltage and volt-ampere reactive (VAR) technologies is showing conservation voltage reductions that range from 1 to 2.5 percent during peak periods, which is consistent with findings from other utility studies. In addition, in comparison with other energy savings methods from voltage controls, such as capacitor bank switching for line loss reductions, conservation voltage reductions have much greater capabilities for saving energy.
  • Deployment of smart meters is improving operational efficiencies and saving utilities money from reductions in meter reading costs and truck rolls for service connections and disconnections, and more efficient metering services. Initial cost saving estimates range from 13 to 77 percent, depending on several factors including the status of legacy systems, integration issues and customer densities per line mile.
  • Deployment of smart meters in conjunction with time-based rate programs and customer systems such as programmable communicating thermostats is reducing electricity demand during peak periods to improve asset utilization and defer needs for new capacity. Studies from the projects show peak demand reductions that can exceed 30 percent, depending on the rate design and type of customer system being used. Oklahoma Gas and Electric expects that when it has rolled out its demand response program to 20 percent of its customers by 2014 it will be able to defer construction of a 170 MW peaking power plant.
  • Customer recruitment rates are critical factors in the successful implementation of time-based rate programs. Recruitment rate analysis for nine of the projects shows that rates range from 5 to 28 percent for opt-in offers (where customers were informed of the program and asked to join), and 78 to 87 percent for opt-out offers (where those solicited did not reject the offer and were placed into a program).

Catalyzing follow-on investments in cost-effective smart grid solutions is an important SGIG objective. The progress report indicates that the SGIG program will continue to deploy smart grid technologies and systems until the installation phase of all of the projects is complete. Quarterly reports on installations and expenditures will be posted at Project updates on impacts will provide new analysis and reports on costs, benefits and lessons learned.

DOE will continue to work with industry to support the adoption of new technologies and systems, remove barriers, and build an advanced and secure modern grid. DOE will also continue sharing all reports, analysis, case studies and other findings with electricity industry decision makers on the website and through conferences, including IEEE’s Innovative Smart Grid Technologies (ISGT) Conference, which is scheduled for February 19-22, 2014 in Washington, D.C.




Debbie Haught is a program manager in the US Department of Energy Office of Electricity Delivery and Energy Reliability’s Research and Development Division, which leads DOE’s efforts to modernize the electric grid through the development and implementation of national policy pertaining to electric grid reliability and the management of research, development and demonstration activities for “next generation” electric grid infrastructure technologies.