Energy Supplement: Smart Grid

The electric power industry is poised for an unprecedented change in the way it operates. Motivated by forecasted changes in its generation profile, including increased use of renewable sources, the power industry is looking to create a more-interactive relationship with its consumers. This effort is referred to as Smart Grid

The concept of a smart grid continues to evolve. Wikipedia defines it as “a modernized electrical grid that uses analog or digital information and communications technology to gather and act on information, such as information about the behaviors of suppliers and consumers, in an automated fashion to improve the efficiency, reliability, economics, and sustainability of the production and distribution of electricity.”

Smart grid relies on electricity users to provide demand response (DR), which the Federal Energy Regulatory Commission defines as “changes in electric usage by demand-side resources from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.”

The smart grid effort has many stakeholders, among them electricity generators, transmission line operators, distribution companies, grid operators, manufacturers of instrumentation and automation equipment, the information technology community, and industrial, commercial, and residential consumers. This supplement takes an in-depth look at smart grid technology and its potential to transform energy consumption by industry, specifically the chemical process industries.

1. Smart Grid Basics: What? Why? Who? and How? — This article is a basic introduction to the electric power system and smart grid. It first explains the electric power system (or power grid), which consists of three major components — generation, transmission, and consumer demand — and draws an analogy between the electric power network and a chemical plant’s multiple time scales of operation — regulatory (PID) control, multivariate constrained control, and real-time optimization. The article then outlines the types of demand response that industrial power consumers could provide on each of these time scales.

2. You’re Not Alone: The Role of Curtailment Service Providers in Assessing and Implementing Smart Grid Opportunities — A curtailment service provider (CSP, also known as a demand response aggregator) is a company that serves as an intermediary between utilities and customers, pooling together groups of customers who participate in demand response programs to reduce energy usage during periods of peak demand. This article describes the network of independent system operators (ISOs) that coordinate, control, and monitor the operation of the electrical power system; discusses the economic considerations associated with the various types of demand response and how to determine which is right for a particular industrial process; and explains the role of CSPs and how to work effectively with a CSP for maximum economic return. The article also provides a list of questions a company should ask as it considers participation in smart grid through demand response.

3. Communicating with the Smart Grid — Demand Response and Automation Systems for Industrial Facilities — Demand response is a set of actions that an electricity user takes to reduce its consumption (or load) in response to signals sent by the grid operator. This article discusses the communication protocols and systems involved in transmitting that information and carrying out the required transactions.

4. Smart Grids Meet Industry — The transformation of the electric power infrastructure into a more dynamic, interactive, controllable power grid has opened new possibilities for the application of automation technology. The chemical process industries, where some facilities still use spreadsheets (or even paper) for production planning and scheduling, are showing interest in more-advanced scheduling solutions. Facilities need to be able to not only save energy by more optimal use, but also be able to procure it under the best possible financial terms. The key to this, the authors of this article say, is flexibility — flexibility through integrated dynamic control and management of both supply and demand. Proper instrumentation and actuators enabling online monitoring and control can provide this flexibility and allow industrial processes to react to changing situations. This article discusses the use of instrumentation and automation in demand response, and presents three examples of successful demand-side management (in the petrochemical industry, the steel industry, and the pulp and paper industry).

Equipment and Services: 
Curtailment service providers (CSPs)
Electricity metering instrumentation
Process automation equipment (sensors, actuators, controllers, communication networking devices, servers, software),
Energy storage (batteries, capacitors)
August, 2014