Smart Grid Metrics: Measuring the Benefits of the Smart Grid

chart with pen

The American Recovery and Reinvestment Act of 2009 included about $4 billion in federal funding for the smart Grid Investment Grant Program (SGIG) and the Smart Grid Demonstration Program (SGDP). SGIG is focused on deployment of existing smart grid technologies, tools, and techniques while SGDP is focused on demonstrating advanced concepts and innovative applications in regional smart grid and energy storage demonstrations.

In early 2010, the U.S. Department of Energy (DOE) announced competitive awards for 99 SGIG projects and 32 SGDP projects following an open solicitation process. One of the solicitation requirements was cost-sharing by the award recipients so the total public-private funding available for the projects exceeds $8 billion.

One of DOE’s goals for both SGIG and SGDP is the assessment of metrics, impacts, costs, and benefits for the full spectrum of smart grid programs and applications including those for electric transmission systems, electric distribution systems, advanced metering infrastructure, and customer systems. The aim is to provide fact-based information from actual projects and assist public and private decision makers to identify the most cost-effective smart grid technologies, tools, and techniques.

To carry out this assessment DOE has assembled a team of experts from national laboratories, universities, and consulting firms. This team is involved in a hands-on partnership with each of the recipients to determine the data that each of the projects needs to collect and report to DOE. The goal is to track and evaluate the performance and impact of the projects on the electric system and consumers.

A key step involved collaborating with the Electric Power Research Institute (EPRI) to develop a standard methodology that could be applied by anyone interested in assessing the costs and benefits of smart grid projects. The aim of this collaboration is to promote greater consistency in comparing results from different types and locations of smart grid projects across the country. The methodology provides definitions of terms, benefits streams, and algorithms and is described in the peer-reviewed EPRI report, Methodological Approach for Estimating the Benefits and Costs of Smart Grid Demonstration Projects (PDF).

This methodology was used to develop detailed instructions for SGIG and SGDP award recipients on the types of smart grid and related data that they would need to collect and report. These instructions can be found in two foundational documents: the SGIG metrics and benefits guidebook (PDF) and the SGDP metrics and benefits guidebook (PDF).

The methodology includes a computational tool to provide users with software for organizing, analyzing, and accounting for costs and benefits of smart grid projects. The computational tool is currently undergoing beta testing prior to posting on this website. Users will soon be able to download the computational tool for conducting retrospective evaluations, cost-benefit studies, and business case analyses of smart grid projects.

The guidebooks are being applied by the DOE team and each of the SGIG and SGDP project recipients to develop a Metrics and Benefits Reporting Plan, which are documents that describe the smart grid assets, functions, impacts, and related data that will be collected by the recipients and reported to DOE. Each project has its own unique Metrics and Benefits Reporting Plan that has been customized to the particulars of each project’s objectives, assets, and smart grid functions.

DOE has built an on-line computer database called the Smart Grid Data Hub to store the project data after it has been uploaded by the recipients in accordance with each Metrics and Benefits Reporting Plan. As the projects are implemented, equipment installed, and functions made operational, recipients begin the process of uploading their information on “build metrics” and “impact metrics” to the Smart Grid Data Hub.

Build metrics measure progress toward deployment of smart grid assets. Build metrics include, for example, reports from recipients on the number of smart meters installed, the number of substation automated, and the number of dynamic pricing programs offered.

Impact metrics measure how, and to what extent, these smart grid assets are affecting grid operations and performance, or how they enable customer programs and behavior changes. Impact metrics include, for example, reports from recipients on the magnitude of peak demand reductions, the number of truck rolls reduced, and the amount of maintenance cost avoided as a result of the project’s smart grid activities.

Each SGIG and SGDP project recipient is responsible for timeliness and accuracy of its reports to DOE. A review process by DOE ensures that the reports are consistent with the build and impact metrics outlined in each project’s Metrics and Benefits Reporting Plan. Track the progress of the SGIG and SGDP projects here.

SGIG and SGDP projects have different reporting requirements to the Smart Grid Data Hub for build and impact metrics:

  • Build metrics are uploaded to the Data Hub on a quarterly basis for both SGIG and SGDP projects, following approval by DOE of a project’s Metrics and Benefits Reporting Plan.
  • Impact metrics for SGIG projects are uploaded to the Data Hub on a semi-annual basis, following approval by DOE of a project’s Metrics and Benefits Reporting Plan.
  • Impact metrics for SGDP projects are contained in a project’s Technical Performance Report. At minimum, SGDP projects will upload an interim and final Technical Performance Report to DOE’s Data Hub. (However, depending on the specific terms and conditions of the SGDP project, some will upload Technical Performance Reports more frequently than that.)

DOE will analyze smart grid topics from across the SGIG and SGDP projects to find those of general interest or those that are essential for informing investment decision making for the adoption of smart grid programs, projects, technologies, tools, and techniques. The idea of these topical studies is to determine the cost-effectiveness of smart grid investments generally using empirical data from aggregated groupings of actual smart grid projects.

The topical studies are called “analysis clusters” and are currently under development by DOE, with input from the project recipients and key stakeholder organizations. The effort involves identifying relevant SGIG and/or SGDP projects and recruiting them to participate in a cluster to assess smart grid impacts and identify the findings that are generally applicable and replicable.

The preliminary list of analysis clusters identified so far include:

  • Advanced metering infrastructure and customer systems
    • Peak demand reductions and electricity savings
    • Meter operations and maintenance savings
  • Consumer behavior studies
    • Impact of advanced metering, dynamic pricing, enabling technologies, and information treatments on consumer behavior
    • Effectiveness of marketing, consumer education, and outreach programs
  • Distribution systems
    • Impact on reliability
    • Energy efficiency improvements (e.g., lower line losses)
    • Operations and maintenance savings
  • Transmission systems
    • Applications of synchrophasor technologies and systems
  • Energy storage systems
    • Technical and financial performance
  • Marketplace Innovation
    • Introduction of new products and services
    • Electric vehicle charging
  • Cyber security
    • Advancements in cyber security practices