Grid Evolution Update: ConEd Makes Headway in Bid to Build Distributed, Customer-Centric Grid
The vast bulk of utilities’ capital has traditionally been invested in “hardware” – all the physical infrastructure and operations and maintenance that goes into ensuring the provision of electrical power to the mass public in a manner that’s both highly reliable and affordable. Considered cost centers, investments in administrative and customer relationship services were kept at a minimum in order to maximize profitability. That’s changing fast even as the utility sector’s fundamental guiding principles remain the same.
Pushed and pulled by new technology, rapidly improving economics and shifting regulatory forces, utilities are joining the ranks of banks, financial services, news, media, manufacturing, engineering, education and medical/healthcare companies allocating growing portions of their budgets to software and digital information and communications technology (ICT), as well as all the resources needed to derive maximum value from them.
Developments at Con Edison (ConEd) provide a case in point. A featured participant in the Oracle Industry Connect 2017 conference in Orlando this week, I spoke with Matt Ketschke, Con Edison’s VP of Distributed Energy Integration, on behalf of Energy Central to gain and share insight into developments as the investor-owned utility moves forward with its plans to build a distributed, “customer-centric,” and more environmentally friendly power grid.
Step-wise grid evolution
Opting for a gradualist approach, ConEd initially took small, yet definitive steps towards crafting a comprehensive grid modernization strategy in order to gain a better grasp of the dynamic, wide spectrum of a new generation of distributed, networked power and energy industry technologies and how they might best be applied amidst a fluid regulatory and market environment.
Those numerous and varied forays culminated in March 2015 with the launch of a multifaceted distributed clean energy and grid modernization strategy, a core element of which was a projected eight-year, $1.5 billion automated infrastructure (AMI) project. In short, the AMI project entails rolling out more than 5 million smart meters (3.9 electricity and 1.3 million gas) across the service territories of Consolidated Edison’s two principal regulated utilities: ConEd and Orange & Rockland Utilities.
Combining the latest proven new energy and power technologies, ConEd’s ambitious grid overhaul and restructuring is a key facet of NY-REV, New York State’s renewable energy and decentralized grid transformation strategic policy framework. It also serves as example regarding the ways leading utilities are combining innovative distributed energy resources, Internet of Things (IoT) technology, mobile and cloud network services and new business models to create what’s become known, in various permutations, as the “Energy Internet of Things.”
A wholesale, fundamental shift
Akin to what’s taking place inside leading industrial power and energy engineering companies, such as ABB and GE, ConEd’s transformation invokes a wholesale shift in organizational management and resource allocation, as well as mindset. It entails making substantial, long-term investments in and capitalizing on the use of the latest software and ICT, intelligent grid-edge and distributed renewable and low-emissions grid assets and engaging customers to participate in "behind the meter" distributed grid management solutions.
Ketschke pointed to ConEd’s Brooklyn-Queens (BQ) Neighborhood Program as one of the best illustrations of the ways utility employees are working with a variety of third-party specialists to make innovative use of new grid-edge and customer-sited, “behind the meter” grid resources and ICT and realize ConEd's program and broader grid transformation plans.
With consumer load on the rise, ConEd ran up against a constraint on a power substation that serves parts of the New York City boroughs of Brooklyn and Queens. “The traditional solution would be to build a new substation in order to serve growing load,” Ketschke explained.
Located in a lumpy, congested urban environment, doing so would have entailed ConEd making an investment in excess of $1 billion over its standard 20-year time horizon for grid-asset planning, however. Before proceeding, management decided to explore the prospect of using customer-sited grid assets and distributed energy resources with the potential to yield the same, or equivalent, results, but at lower cost and in a shorter time frame.
Alternative grid investments for utilities
ConEd is making use of a variety of leading edge AMI, smart grid, distributed energy resource management, enterprise resource management (ERM) and critically, customer engagement ICT in realizing BQ Neighborhood's project design. “No one customer-side resource will resolve all your constraints as easily as a utility-side solution; you often need a portfolio of customer-side solutions,” Ketschke elaborated.
“Carrying out an initiative like an energy efficiency program is a great way to resolve some of these constraints, but the associated grid resources are only available when they’re in use. Incorporating lighting management and control in a DM program wouldn’t necessarily be of help if grid loads spike at 10pm on a weekday, for example.”
“Similarly, customer-side solar power generation is only available in really meaningful way from around 10 AM. Generally, it peaks around noon and then drops off. What utility planners now have to do is piece together a series of customer-side solutions into a portfolio of consumer energy services that fit in well with broader-based grid power demand-supply patterns.”
Ketschle and I delved further into the ways in which ConEd is doing this, the results of which will be published in part two of this blog post.
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