POWER August 2012 - 41

2012 SMART GRID AWARD
to all projects in the SGDP, whether they are
required to meet state or federal policy requirements
or support customer choice and
preferences. SDG&E says in its SGDP that
it " will not request authorization for funding
of projects not necessary to comply with policy
unless the benefits exceed the associated
costs or where they are required to effectively
communicate with customers. "
That position alone is worth adopting nationwide.
That's not to say that the utility has
a crystal ball. SDG&E acknowledges that,
because much of the technology is new, future
costs could vary from initial estimates.
As Senior Vice President for Power Supply
James Avery told POWER when asked about
the biggest smart grid implementation challenges
SDG&E has faced, " The nascent nature
of the technology continues to surprise
us. Whenever new technology is adopted for
the first time, a learning curve ensues. However,
we expect our industry to continue its
transformation into a more technologically
focused one that embraces innovation. "
As the SGDP explains, " Where technology
innovations or energy markets are not mature
enough to support a full deployment of a new
or potentially promising Smart Grid investment,
SDG&E's strategy is to leverage pilot and demonstration
projects to improve the utility's understanding
of likely costs and benefits before a
full deployment decision is proposed. "
Two examples of this approach are its careful
testing of home area networks (HANs),
discussed later, and the Borrego Springs Microgrid
project (see sidebar below).
Many of the nine program areas, and the
smart grid project deployments that support
them, overlap. Later sections look at what
SDG&E has achieved to date with just some
of the more than 60 projects that support its
multiple goals.
The Cost/Benefit Bottom Line
SDG&E smart grid program cost estimates
for 2006-2020 are " approximately $3.5 to
$3.6 billion and include previously authorized
investments. " Overall estimated benefits
are higher, it says, " between $3.8 and
$7.1 billion, " including " estimated societal
and environmental benefits of $760 million-$1.9
billion based on avoided emissions
through the integration of renewable energy
and PEVs as well as the estimated avoided
fuel costs PEV owners realize by the successful
integration of PEVs. "
Though such benefits may be a harder
sell in some parts of the country, they are
in a sense " mandated benefits " ultimately
deriving from state requirements. Utilities
without such aggressive RPS goals may be
able to invest less for comparable returns on
investment.
Avery said that " SDG&E will seek to fund
its Smart Grid effort primarily through the
normal CPUC and Federal Energy Regulatory
Commission rate-making process. Other
funding opportunities through the Department
of Energy and California Energy Commission
or other avenues will be utilized on a
case-by-case basis. "
Addressing Security and Privacy
Concerns
Before looking at some of the actual projects
and their results, it's worth noting SDG&E's
attention to what may be the hottest hot button
smart grid issues for end users: security
and privacy. SDG&E's " Smart Grid Deployment
Plan 2011-2020 " runs 354 pages, and
20% of those pages are devoted to grid and
cybersecurity strategies, including customer
privacy.
Although most of the media coverage of
grid security focuses on the new challenges
that smart grid technologies pose, new technologies
also provide opportunities. For
example, new communications and control
technologies can help " prevent or isolate the
impacts of any physical or cyber threats to
one or multiple portions of the Smart Grid
to maintain system reliability in the event of
a threat. "
As for consumer privacy, the Southern
California utility is using both the National
Institute of Standards and Technology's four
Microgrid Puts the Pieces Together to Study Integration Issues
San Diego Gas & Electric is creating a new $25 million microgrid
in Borrego Springs with the help of $10 million in grants from the
Department of Energy and California Energy Commission. SDG&E's
Borrego Springs Microgrid will be the largest project of its kind in
the nation and will integrate solar power, battery energy storage,
automated switching, and active customer participation. The mi3.
Banking energy. A 1.5-MWh battery energy storage component
for the Borrego Springs Microgrid was installed in June.
The ability to store energy, from renewable generation sources in
particular, provides grid operators flexibility for handling unexpected
condition changes. Courtesy: SDG&E
crogrid will interconnect these elements to create a more robust,
self-sustaining grid that can better manage outages and enhance
local reliability.
Borrego Springs residents have installed numerous rooftop solar
arrays, and SDG&E has installed traditional generators for the
microgrid project. The utility also installed a 1.5-MWh battery
energy storage device at the local substation in June that is expected
to be operational in July (Figure 3).
The utility is recruiting 125 residential and small commercial
customers in Borrego Springs to be part of the Microgrid Energy
Manager pilot program for testing home area networks. This new
technology will provide simulated real-time pricing signals and
" reduce your use " requests, and will offer incentives to customers
for participating and actively managing their energy usage to
reduce peak load. That pilot is expected to launch in the second
half of 2012.
SDG&E also worked with the University of California at San Diego
as it developed a microgrid on the La Jolla campus (see " Smart
Power Generation at UCSD " in the Nov. 2010 issue of POWER). For
more information on the value of microgrids to larger smart grid
efforts, visit www.powermag.com and search for " microgrid. " In
particular, see " The U.S. Military Gets Smart Grid " in the Jan. 2012
issue and " The Smart Grid and Distributed Generation: Better Together "
in the April 2011 issue.
42
www.powermag.com
POWER | August 2012
http://www.powermag.com http://www.powermag.com

POWER August 2012

Table of Contents for the Digital Edition of POWER August 2012

Contents
POWER August 2012 - Cover1
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POWER August 2012 - Contents
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