Smart Grid 101

By Michael Munson, Metropolitan Energy and
Michael Cornicelli, BOMA/Chicago

What is Smart Grid? Smart grid is a term with varied meanings to different audiences. The multitude of perspectives makes it difficult for consumers and businesses to identify what it is, understand how it applies or grasp the potential benefits and costs associated. An interesting parallel may have occurred in the 1980’s as people attempted to define the “internet” or “cyberspace.” At that time, it was a tool used by the government and university researchers with rooms full of mainframe computers. Today, it’s something that we carry with us by way of the iPhone and Blackberry. Caveats aside, the term “smart grid” represents a technology vision to optimize efficient electricity information, transfer and use.

The United States Department of Energy (DOE) has identified key goals and objectives for upgrading the grid. These goals include increased reliability, increased security, greater economic efficiency, greater energy efficiency, improvements to the environment and increased safety.

Achieving the goals outlined by the DOE requires updating the electric power infrastructure, some of which has been in place for almost a century. Adding local generation or additional delivery capabilities is becoming increasingly expensive as energy consumers are forced to bear the costs of investment on both sides of the electric meter. Therefore, the challenge will be to update the infrastructure in a way that enables—not dictates—smarter solutions to grid functionality. This will lower energy costs and ensure future energy resources for many generations to come.

How Can Buildings Benefit?

It’s often assumed that the delivery of a smart grid must come from utilities and governmental entities—not necessarily the cornerstones of innovation. However, programs are currently available and are becoming increasingly popular to monitor and manage energy performance in conjunction with real time energy grid conditions. As building owners continue to install equipment that enables more energy management precision, they can use these infrastructure tools to support smart grid activities, and get paid for doing so.

Many buildings have what can be described as “localized smart grids” with intricate building automation systems (BAS) that perform many routine and sophisticated functions. Newer BAS systems can be accessed and programmed remotely to respond to issues that arise, as well as participate in demand response programs. By leveraging this technology, buildings equipped to effectively manage their energy use can dictate their own smart grid benefits in the market and reduce their peak loads. This, in turn, benefits the entire grid and, over time, potentially negates the need for new generation construction.

In addition, increasing participation in green building certification programs such as LEED and Green Globes, as well as in benchmarking programs like the Environmental Protection Agency’s Portfolio Manager, provide a forum in which to standardize performance and compare energy costs per square foot across regions.

Commercial customers have unique skills and can contribute significant sophistication to the smart grid evolution by implementing strategies targeted at energy efficiency, demand response and renewable energy. All combined, these strategies ultimately pay dividends to all consumers in a region. Reducing building electricity use during peak periods and shifting load to non-peak periods can actually provide direct benefits to the entire utility system, not just to buildings that shift load. However, buildings have very specific operational requirements, and it is important for technology vendors, utilities and project developers to understand the specific building operations and systems in order to assist in successfully reducing overall system costs.

The Electric Power Research Institute (EPRI) has estimated that with a market penetration of between 5% and 20% in large commercial buildings, smart grid devices could result in annual energy saving potential ranges of 2.2 to 8.8 billion kWh. According to the Energy Information Administration’s Outlook for the year 2030, this is equivalent to between a 0.14% and 0.18% reduction in retail sales.

Smarter technology investment will inevitably include acquiring tools to continuously assess and verify the costs, risks and benefits of various programs on building performance. Understanding exactly when and how buildings use energy is necessary for effective energy efficient investment implementation and management. Actively monitoring these various systems enables building owners and managers to systematically maintain end use equipment.

For example, when chillers, lighting or energy management control systems are first installed, each component is sized, specified and tested for operation based on expected levels of occupancy, weather and other load determining factors. The ability to understand and forecast outcomes is predicated on access to granular consumption information delivered in a timely manner.

The Importance of Consumption Data.

Simple access to buildings’ own utility consumption data is the first step in analyzing options; the better the data, the better the application to projects. Access to real time energy information appears inevitable. Understanding how your building uses energy—not just on a monthly or annual basis but in real time—will not only assist building managers and engineers with reducing energy costs, but also provide for more discerning capital and energy efficiency investment analysis.

Real time consumption information will help buildings manage energy use by ensuring that installed equipment such as chillers, lighting and energy management control systems are maintained and operating as designed. In addition, real time data allows for buildings to understand and prepare for changes in operational requirements and the consequences of such changes on cost. It also ensures installed technology is performing optimally. With access to consumption information, building owners, managers and engineers can effectively monitor overall building performance and respond in real time should a problem arise.

Finally, emphasis on smart grid security will necessitate the need for buildings, as well as utilities and other stakeholders, to take measures to protect against cyber security infiltrations. However, much work has been done to develop secure systems for e-commerce and for BAS system accessibility. The lessons learned from establishing internet protocols should be directly applicable to smart grid activities, and buildings can assist in the dialogue on smart grid establishment through application of past practices, and the adoption of technologies designed to ensure against problems that may arise.

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