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What you should know about PG&E’s smart grid plan

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Utility PG&E unveiled a tome (close to 300 pages) detailing the ins and outs of its smart grid plans on Thursday. A lot of the report drills down into information about the smart meter, energy efficiency, and energy storage projects that PG&E has slowly been putting into place for the past few years. But at a high level, the report offers a glimpse of a first-mover utility looking to modernize its power grid with IT, learn from some of its mistakes in the past, and enable the greater integration of clean power, like solar and wind.

Here is what you need to know from the report (because we know 300 pages is a bit of a rough read):

  • Capital costs. PG&E plans to spend between $800 million and $1.25 billion in capital investments for its various proposed smart grid projects over 20 years, and another $500 million to $700 million in cumulative operating expenses over 20 years.
  • Benefits. PG&E says it expects to generate $600 million to $1.4 billion in lower energy procurement costs, $200 million to $400 million in avoided capital costs of things like more power plants, $100 million to $200 million in avoided operating and maintenance costs. In addition, PG&E plans to achieve a 10- to 20-percent improvement in grid reliability. In terms of emissions, PG&E says it can save 1.4 to 2.1 million metric tons of avoided carbon emissions.
  • Smart meters. PG&E says it has already installed 8 million meters, which it says is the largest installation in the country.
  • How to get a deal with PG&E. PG&E says it will continue to evaluate and test technologies and services from third-party vendors, including ways to build out its network, ways to make the network run more efficiently, options for using public networks for services, and options for public network partnerships. PG&E also says it is looking into ways to potentially lease or buy more wireless frequency. PG&E says it looks at “cost-effectiveness, security and performance,” when evaluating third-party vendors.
  • Weighing maturity of OpenADR standard. On whether PG&E wants to embrace the open-source version of the demand response standard OpenADR, PG&E says “[A]s with other technologies being developed in the absence of standards, PG&E will carefully consider the maturity of OpenADR product offering before it will be able to make major investments in its information and telecommunications systems to shift more broadly to OpenADR.”
  • ZigBee 2.0 taking more time than expected. Utilities are installing radios in smart meters to wirelessly talk to connected gadgets, thermostats and appliances in homes. Most are using ZigBee radios for this, but the protocol that guides the use of the ZigBee radio is under transition from a first-gen protocol called the “Smart Energy Profile (SEP)” to the next-generation protocol SEP 2.0. PG&E says while the current version of SEP is “not sufficiently mature to support large-scale deployments,”  the approval of SEP 2.0 “is taking longer than expected,” and “creating uncertainty,” for how to offer ZigBee-based home wireless products.
  • Energy storage plans. PG&E is working on a project to use compressed air for energy storage, and plans to build a 300 MW plant using porous rock structure for storage in California. PG&E expects the first phase of that project to be competed by August 2015. PG&E also plans to build two demonstration projects using NaS batteries by December 2012.
  • Big  data plans. PG&E is building something called the Data Historian Foundation Project, which will be the central data archiving and analytics system for time-series data, and which PG&E wants to have completed by December 2012. The cost: $12.3 million.
  • Smarter utility operations. PG&E plans to spend the most money on making its network operations smarter — like substation, and transmission and distribution, intelligence. PG&E plans to spend between $595 million and $850 million in capital on this.
  • Cost per customer: PG&E says the nominal cost per customer account for its smart grid plans will be about $12 to $20 per year and $4 to $7 per year for each customer.
  • PG&E’s customer outreach: Attempting to learn from its previous mistakes of complaints and angry customers after the first wave of smart meters were installed, PG&E says it will implement a broader outreach plan beginning in 2014. It also lists lessons like: customer education on benefits, tools and pricing options are critical for the success if consumer-facing smart grid projects.

Word cloud courtesy of Wordle:

Image courtesy of Gus Thomson.