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EXECUTIVE SUMMARY:
Deploying an Advanced Metering Infrastructure (AMI) is a fundamental early step to grid modernization. AMI provides the framework for meeting one of the Modern Grid’s Principal Characteristics – Motivation and Inclusion of the Consumer.
AMI is not a single technology, but rather an integration of many technologies that provides an intelligent connection between consumers and system operators. AMI gives consumers the information they need to make intelligent decisions, the ability to execute those decisions and a variety of choices leading to substantial benefits they do not currently enjoy. In addition, system operators are able to greatly improve consumer service by refining utility operating and asset management processes based on AMI data.
Through the integration of multiple technologies (such as smart metering, home area networks, integrated communications, data management applications, and standardized software interfaces) with existing utility operations and asset management processes, AMI provides an essential link between the grid, consumers and their loads, and generation and storage resources. Such a link is a fundamental requirement of a Modern Grid.
How does AMI support the vision for the Modern Grid? Initially, Automated Meter Reading (AMR) technologies were deployed to reduce costs and improve the accuracy of meter reads. A growing understanding of the benefits of two-way interactions between system operators, consumers and their loads and resources led to the evolution of AMR into AMI. The vision of the Modern Grid’s seven principal characteristics (Figure 1) further reinforces the need for AMI:
o Motivation and inclusion of the consumer is enabled by AMI technologies that provide the fundamental link between the consumer and the grid.
o Generation and storage options distributed at consumer locations can be monitored and controlled through AMI technologies.
o Markets are enabled by connecting the consumer to the grid through AMI and permitting them to actively participate, either as load that is directly responsive to price signals, or as part of load resources that can be bid into various types of markets,
o AMI smart meters equipped with Power Quality (PQ) monitoring capabilities enable more rapid detection, diagnosis and resolution of PQ problems.
o AMI enables a more distributed operating model that reduces the vulnerability of the grid to terrorist attacks.
o AMI provides for self healing by helping outage management systems detect and locate failures more quickly and accurately. It can also provide a ubiquitous distributed communications infrastructure having excess capacity that can be used to accelerate the deployment of advanced distribution operations equipment and applications.
o AMI data provides the granularity and timeliness of information needed to greatly improve asset management and operations.
The purpose of this document is to describe AMI and discuss how it contributes to the achievement of the overall Modern Grid vision. AMI can be the first of four major milestones on the road to a modern grid:
• Advanced Metering Infrastructure (AMI)
• Advanced Distribution Operations (ADO)
• Advanced Transmission Operations (ATO)
• Advanced Asset Management (AAM)
By properly sequencing these milestones, a more cost effective modernization program can be achieved.
WHAT IS AMI?
AMI is not a single technology implementation, but rather a fully configured infrastructure that must be integrated into existing and new utility processes and applications.
This infrastructure includes home network systems, including communicating thermostats and other in-home controls, smart meters, communication networks from the meters to local data concentrators, back-haul communications networks to corporate data centers, meter data management systems (MDMS) and, finally, data integration into existing and new software application platforms. Additionally, AMI provides a very “intelligent” step toward modernizing the entire power system. Figure 4 below graphically describes the AMI technologies and how they interface:
At the consumer level, smart meters communicate consumption data to both the user and the service provider. Smart meters communicate with in-home displays to make consumers more aware of their energy usage. Going further, electric pricing information supplied by the service provider enables load control devices like smart thermostats to modulate electric demand, based on pre-established consumer price preferences. More advanced customers deploy distributed energy resources (DER) based on these economic signals. And consumer portals process the AMI data in ways that enable more intelligent energy consumption decisions, even providing interactive services like prepayment.
The service provider (utility) employs existing, enhanced or new back office systems that collect and analyze AMI data to help optimize operations, economics and consumer service. For example, AMI provides immediate feedback on consumer outages and power quality, enabling the service provider to rapidly address grid deficiencies. And AMI’s bidirectional communications infrastructure also supports grid automation at the station and circuit level. The vast amount of new data flowing from AMI allows improved management of utility assets as well as better planning of asset maintenance, additions and replacements.
WHAT ARE THE TECHNOLOGY OPTIONS FOR AMI?
An AMI system is comprised of a number of technologies and applications that have been integrated to perform as one:
o Smart meters
o Wide-area communications infrastructure
o Home (local) area networks (HANs)
o Meter Data Management Systems (MDMS)
o Operational Gateways
SMART METERS
Conventional electromechanical meters served as the utility cash register for most of its history. At the residential level, these meters simply recorded the total energy consumed over a period of time – typically a month. Smart meters are solid state programmable devices that perform many more functions, including most or all of the following:
• Time-based pricing
• Consumption data for consumer and utility
• Net metering
• Loss of power (and restoration) notification
• Remote turn on / turn off operations
• Load limiting for “bad pay” or demand response purposes
• Energy prepayment
• Power quality monitoring
• Tamper and energy theft detection
• Communications with other intelligent devices in the home
COMMUNICATIONS INFRASTRUCTURE
The AMI communications infrastructure supports continuous interaction between the utility, the consumer and the controllable electrical load. It must employ open bi-directional communication standards, yet be highly secure. It has the potential to also serve as the foundation for a multitude of modern grid functions beyond AMI. Various architectures can be employed, with one of the most common being local concentrators that collect data from groups of meters and transmit that data to a central server via a backhaul channel. Various media can be considered to provide part or all of this architecture:
o Power Line Carrier (PLC)
o Broadband over power lines (BPL)
o Copper or optical fiber
o Wireless (Radio frequency), either centralized or a distributed mesh
o Internet
o Combinations of the above
Future inclusion of smart grid applications and potential consumer services should be considered when determining communication bandwidth requirements.
HOME AREA NETWORKS (HAN)
A HAN interfaces with a consumer portal to link smart meters to controllable electrical devices. Its energy management functions may include:
• In-home displays so the consumer always knows what energy is being used and what it is costing
• Responsiveness to price signals based on consumer-entered preferences
• Set points that limit utility or local control actions to a consumer-specified band
• Control of loads without continuing consumer involvement
• Consumer over-ride capability
The HAN/consumer portal provides a smart interface to the market by acting as the consumer’s “agent.” It can also support new value added services such as security monitoring
A HAN may be implemented in a number of ways, with the consumer portal located in any of several possible devices including the meter itself, the neighborhood collector, a stand-alone utility-supplied gateway or even within customer-supplied equipment.
METER DATA MANAGEMENT SYSTEM (MDMS)
A MDMS is a database with analytical tools that enable interaction with other information systems (see Operational Gateways below) such as the following:
o Consumer Information System (CIS), billing systems, and the utility web site
o Outage Management System (OMS)
o Enterprise Resource Planning (ERP) power quality management and load forecasting systems
o Mobile Workforce Management (MWM)
o Geographic Information System (GIS)
o Transformer Load Management (TLM)
One of the primary functions of an MDMS is to perform validation, editing and estimation (VEE) on the AMI data to ensure that despite disruptions in the communications network or at customer premises, the data flowing to the systems described above is complete and accurate.
OPERATIONAL GATEWAYS
AMI interfaces with many system-side applications (see MDMS above) to support:
Advanced Distribution Operations (ADO)
• Distribution Management System with advanced sensors (including PQ data from AMI meters)
• Advanced Outage Management (real-time outage information from AMI meters)
• DER Operations (using Watt and VAR data from AMI meters)
• Distribution automation (including Volt/VAR optimization and fault location, isolation, sectionalization and restoration (FLISR))
• Distribution Geographic Information System
• Application of AMI communications infrastructure for:
Micro-grid operations (AC and DC) o Hi-speed information processing o Advanced protection and control
Advanced grid components for distribution
Advanced Transmission Operations (ATO)
o Substation Automation
o Hi-speed information processing
o Advanced protection and control (including distribution control to improve transmission conditions)
o Modeling, simulation and visualization tools
o Advanced regional operational applications
o Electricity Markets
Advanced Asset Management (AAM)
AMI data will support AAM in the following areas:
• System operating information
• Asset “health” information
• Operations to optimize asset utilization
• T&D planning
• Condition-based maintenance
• Engineering design and construction
• Consumer service
• Work and resource management
• Modeling and simulation
WHAT ARE SOME DEPLOYMENT APPROACHES?
Deployment approaches will depend upon the utility’s starting point, geography, regulatory situation and long-term vision. For those utilities that already have deployed an AMR system, the question will be whether they can build on that system or need to start afresh. If the system includes a two-way communications infrastructure, it should be possible to upgrade the metering to accommodate a range of AMI applications. Where the communications infrastructure is unidirectional (i.e. outgoing only), it may be possible to overlay a return channel using a complementary technology. This option would have to be compared to the cost and benefits of installing a new integrated two-way communications infrastructure. The speed, reliability and security of the communications infrastructure will determine the range of applications it can support. For utilities with widespread and diverse territories, it may be that multiple communications solutions will be needed. Pilot programs that explore the performance of various solutions can be useful as the first phase of an AMI deployment.
The choice of an AMI communications infrastructure is also influenced by the utility’s long-term vision for AMI. If AMI is seen as the foundation for overall grid modernization, the communications system will need to accommodate anticipated future needs and have the flexibility to handle applications that are not even currently on the utility’s radar screen. Experience has shown that these evolving grid modernization applications often produce major benefits, as discussed in later sections.
The deployment of AMI is a strategic initiative that must be endorsed by the utility regulator. The benefits of AMI, and ultimately of overall grid modernization, flow to not just the utility, but also to the consumer and society in general. Hence regulators need to consider the possibility that traditional utility economic analysis may not capture the true value of an AMI strategic initiative and that an expanded framework may be more appropriate, as discussed later in this document. Some regulators may see AMI and grid modernization as very desirable and they will encourage their utilities to move aggressively. Others may be less proactive and will expect their utilities to broach AMI and bring with them a compelling argument on its merits. In either case, recognition of the wide-ranging societal benefits of AMI must be addressed.
Together, the utility and its regulators should communicate the full benefits of an AMI initiative to consumers and society at large. There is a general lack of understanding among the public regarding how electricity is produced and delivered, how it affects their quality of life and how it can meet their needs in the 21st century. In particular, the value of consumers’ increased involvement in electricity markets, and the potential benefits for consumers involved in such programs needs to be explained.
WHAT ARE THE BENEFITS OF AMI?
AMI provides benefits to consumers, utilities and society as a whole.
CONSUMER BENEFITS
For the consumer, this means more choices about price and service, less intrusion and more information with which to manage consumption, cost and other decisions. It also means higher reliability, better power quality, and more prompt, more accurate billing . In addition, AMI will help keep down utility costs, and therefore electricity prices. And, as members of society, consumers also reap all the benefits that accrue to society in general, as described below.
UTILITY BENEFITS
Utility benefits fall into two major categories, billing and operations.
AMI helps the utility avoid estimated readings, provide accurate and timely bills, operate more efficiently and reliably, and offer significantly better consumer service. AMI eliminates the vehicle, training, health insurance, and other overhead expenses of manual meter reading, while the shorter read-to-pay time advances the utility’s cash flow, creating a one-time benefit. And consumer concerns about meter readers on their premises are eliminated.
Operationally, with AMI the utility knows immediately when and where an outage occurs so it can dispatch repair crews in a more timely and efficient way. Meter-level outage and restoration information accelerates the outage restoration process, which includes notifying consumers about when power is likely to return.
Using AMI, the utility can receive significant benefits from being able to manage customer accounts more promptly and efficiently, starting with the ability to remotely connect and disconnect service without having to send personnel to the customer site. Similarly, many maintenance and customer service issues can be resolved more quickly and cost-effectively through the use of remote diagnostics. And AMI enables new programs and methods for creating and recovering revenue such as distributed generation and prepayment programs.
AMI also provides vast amounts of energy usage and grid status information that can be used by consumers to make more informed consumption decisions and by utilities to make better decisions about system improvements and service offerings.
Instead of relying on rough estimates, engineers armed with AMI’s detailed knowledge of distribution loads and electrical quality can accurately size equipment and protection devices, and better understand distribution system behavior. This huge increase in valuable information helps the utility:
• Assess equipment health
• Maximize asset utilization and life
• Optimize maintenance, capital and O&M spending
• Pinpoint grid problems
• Improve grid planning
• Locate/ identify power quality issues
• Detect/reduce energy theft
SOCIETAL BENEFITS
Society, in general, benefits from AMI in many ways. One way is through improved efficiency in energy delivery and use, producing a favorable environmental impact. It can accelerate the use of distributed generation, which can in turn encourage the use of green energy sources. And it is likely that emissions trading will be enabled by AMI’s detailed measurement and recording capabilities.
A major benefit of AMI is its facilitation of demand response and innovative energy tariffs. During periods of high energy demand, a small reduction in demand produces a relatively large reduction in the market price of electricity. And reduced demand can avoid rolling blackouts. According to Edison Electric Institute (EEI), the direct costs (e.g. power costs) of rolling blackouts in California have been estimated at tens of millions of dollars. Business and consumer losses may be many times higher. Hence, a modest demand response capability could produce a societal benefit worth billions of dollars.
The benefits accrued may vary depending on the type of demand response programs initiated. For instance, demand response distributed to the individual premise in forms like thermostat and pool pump control allows load to be reduced without sacrificing consumer satisfaction. However, even just shifting demand away from peak hours through time-of-use tariffs can have major benefits, including the reduced cost to both utilities and consumers by deferring building new, expensive peak generation facilities.
There is also a societal fairness issue that AMI addresses. Full deployment of AMI results in the elimination of old and obsolete electromechanical meters that tend to slow down as they age. Modern AMI meters maintain their accuracy over time, resulting in a more equitable situation for all consumers. In addition, modern meters are self monitoring, making it easier to identify inaccurate measurements, incorrect installations and, especially, electric energy theft.
As reported by Edison Electric Institute (EEI), price and demand reductions during high-demand periods lead to:
• Reduced
o peak capacity requirements
o congestion costs
o T&D costs
o electrical losses
o generation costs
o market influence by any one supplier
• Improved
electric system efficiency (lower operating costs)
electric system reliability (lower maintenance costs) o settlement data management
ADDED BENEFITS WHEN AMI SERVES AS A MODERN GRID PLATFORM
Since smart metering and demand response programs can be one of the foundations of a modern grid, it is wise to also assess the associated communications infrastructure strategy to identify incremental investments in communications that might benefit the functional needs of ADO, ATO and AAM (see Operational Gateways above).
Increased bandwidth and broader area coverage generally lead to more opportunities for grid modernization. In other words, a ubiquitous AMI communications network could be designed, for a small incremental cost, to also accommodate transmission and distribution automation systems, reducing the total cost of both AMI and other forms of grid modernization. And a useful by-product could be the use of excess bandwidth to provide broadband services, such as internet access and voice over IP, to consumers.
Enhanced functionality can be achieved when the AMI infrastructure sequences into a fully enabled modern grid (see Figure 2.). When that occurs, EPRI (Electric Power Research Institute) estimates that at least a 4 to 1 total benefit to cost ratio will be realized.
As described in other Modern Grid Strategy white papers, achieving the vision of the Modern Grid depends on the correct and effective deployment of technologies and applications in five key technology areas (KTAs). AMI relates to each of these KTAs as described below:
• Integrated Communications: AMI provides the last and by far the most extensive link between the grid (including the consumer’s load) and the system operator.
• Sensing and Measurement: Smart meters extensively measure system conditions (including PQ) down to the consumer level.
• Advanced Control Methods: Consumer-side applications process information and initiate control actions locally (sometimes based on real time pricing). Distribution operations centers process AMI information and take control actions at the system and regional level.
• Advanced Grid Components: AMI supports the deployment of distributed energy resources and can reduce the communication network costs of deploying pole-top distribution automation components. Improved Interfaces & Decision Support: AMI consumer portals, home area networks, and in-home displays provide the human interface and support consumer decision-making. Decision support at distribution operations centers is enabled by the additional information provided by AMI.