Smart Grid Pilot Projects

M. Hammersley | Protocol Labs | Oct 2018

Summary

There are thousands of smart grid pilot projects all around the world, having begun largely in the early 2000s. With the introduction of blockchain, and with the grid becoming more unpredictable and decentralized, several use cases are becoming apparent for blockchain. This report points to work that has already been done on Smart Grids -- particularly in the United States and Europe -- as well as to several blockchain projects underway. The space is quickly becoming saturated, with over 120 blockchain companies as of mid 2018.

Introduction

Because the smart grid encompasses so many different technologies, and the interplays between them all can quickly become complicated and unpredictable, it is useful to learn from the lessons of others as they test, separately and together, each of the various elements.

Happily, a number of organizations have arrived at the same conclusion, and have created summaries and reviews of a number of pilot projects, grants, smart-meter roll-outs, and other related efforts both in the United States and around the world. In the United States, the American Recovery and Reinvestment Act of 2009 gave the Department of Energy $4.5 billion in funding for grid modernization purposes. Funds went to programs ranging from under $500,000 for workforce training programs up to several programs of $200 million of federal money (combined with private funding) for demonstration projects.

In Europe, funding and planning efforts are much more decentralized. Data collection efforts performed by the Joint Research Centre of the European Commission have identified (as of 2017) 950 projects with approximately €5 billion of investment in all 28 member states (plus Sweden and Norway).

The Global Smart Grid Federation, a loose collective of organizations around the world dedicated to advancing the Smart Grid, also releases reports pointing to additional pilot projects, as well as reports on microgrids, flexibility, storage, and standards/interoperability.

United States Smart Grid Programs and Projects

The Office of Electricity Delivery and Energy Reliability (within the US Department of Energy) split the $4.5 billion of economic stimulus into three main areas:

• Renewable and Distributed Systems Integration Program (RDSI);
• Smart Grid Demonstration Program (SGDP); and
• Smart Grid Investment Grant Program (SGIG).

Figure 1. Breakdown of funding from the American Recovery and Reinvestment Act (reproduced from [4], p2).

Renewable and Distributed Systems Integration Program (RDSI)

A report was issued by the Department of Energy in May of 2015 that gave updates on the RDSI and SGDP programs. These are listed individually in tables 1 and 2.

Table 1. List of projects and the key technologies present in those projects (adapted from [5]).

Notable is Monongahela, in that it was deemed economically non-viable, and so the project was terminated in Sept 2013. Only two projects -- the IIT microgrid and Con Edison's Demand Response Control Center (DRCC) had positive business cases.

At the time the 2015 progress report was written, two projects didn't have final reports: the Fort Collins and University of Nevada projects. As of this writing (Oct 2018), those final reports had not been uploaded to the smartgrid.gov website. No further progress reports are planned.

More complete summaries of each project are detailed in the referenced report.

Smart Grid Demonstration Program

The Smart Grid Demonstration Program itself was split into two subparts: 16 projects were funded as regional demonstration projects; and another 16 were conceived of specifically as energy storage projects. The first sixteen are tabulated in Table 2, and have more complete summaries in the progress report.

Table 2. Projects and Key Technologies for smart grid demonstration projects (adapted from [5]).

The 16 storage projects are testing specific battery technologies more than grid integration; as such, they're not included here, but are listed, along with more complete summaries, in the referenced report.

Smart Grid Investment Grants (SGIG)

The Smart Grid Investment Program funded 99 competitively-selected projects to support the grid integration and regional demonstrations described previously; to upgrade the transmission systems; and to deploy smart metering, among other projects. It is comprehensively summarized in a 2016 report put out by the Department of Energy.

Awards ranged from $150k for job training programs at colleges to a maximum of $200 million; six projects received this larger amount.

The 99 projects were generally categorized as touching on either advanced metering infrastructure (AMI), customer systems (CS), electric distribution systems (EDS), electric transmission systems (ETS), or some combination of the above. Most projects included at least two of the four elements; while 5 touched on all four. Of the 99 projects, 65 included AMI; 66 included CS; 57 included EDS; and 19 included ETS.

Overall, the authors of the report conclude that the following development challenges exist in developing a smart grid:

• Data management and visualization tools for SCADA systems;
• Control algorithms that can quickly respond to the high-volume data streams advanced SCADA systems will be generating;
• Low-cost, high-resolution, low-latency sensors for distribution systems;
• Resilient and adaptive control systems with secure, low-latency communication networks;
• Strong support from both utilities and regulators as new architectures and DER systems develop.

A full list of the 99 projects, as well as links to the project pages, is included at the end of the SGIG report.

Also noteworthy are the topical reports that were written as a result of these studies, which touched on the following subjects:

• Advanced metering infrastructure;
• Distribution automation;
• Synchrophasor technology; and
• Customer behavior studies along with several other reports.

European smart grid efforts

As of 2017, the Joint Research Centre of the European Commission has identified 950 projects, with a total of approximately €5 billion of investment, in all 28 member states (plus Sweden and Norway). Approximately two thirds of these are listed on an inventory on their website that allows for rudimentary searching.

As with the United States projects, a given project can fit into multiple categories. The 527 smart grid projects listed are each labeled with at least one of the following categories (the percentage indicates how many of the 527 containing this label):

• Smart Network Management (36%)
• Electric Vehicles and Vehicle2Grid applications (17%)
• Smart Customer and Smart Home (23%)
• Integration of DER (22%)
• Integration of large scale RES (9%)
• Aggregation (Demand Response; VPP) (18%)
• Other (14%)

An additional 73 projects had no labels; see Figure 2 for a more precise count.

Figure 2. Counts of project types in the HRC Smart Grid Projects List database.

Most countries have their own national smart grid organizations promulgating and funding particular smart grid projects, with Germany, the UK, France, and Spain investing the most. Interestingly, the single largest funders, as a category, are Distribution System Operators: they are identified as investing 830 million euros into the projects they've identified, and 70% of that capital is private. The authors believe this level of investment is the DSOs' way to respond to rapid changes in electricity distribution. They explain that smart grid technologies and solutions are expected to radically change the local electricity industry and markets at the distribution level.

Other projects around the world

While much more information is readily available on US and European energy efforts, other countries also have plenty of projects. China's "Strong and Smart Grid" already comprised 263 smart grid pilot projects in 2012; and Japan, South Korea, India, and Australia, also have several notable projects of their own. Similarly, there are a number of experiments with microgrids in Africa; and projects are also developing in South America.

Blockchain pilot projects

Max Luke, of NERA Economic Consulting, et al., published in early 2018 a brief history of blockchain projects related to energy. The first transactions were taking place in 2014, and growth since then has been explosive, with 122 energy sector organizations involved in blockchain technology and 40 publicly announced deployed projects. SolarPlaza identified 66 blockchain companies involved in energy.

Luke et al. categorize their efforts as falling into the following categories:

• Wholesale energy trading;
• Retail electricity markets;
• Peer-to-peer marketplaces;
• Flexibility services (i.e., demand response);
• Electric vehicle charging and coordination;
• Network management and security; and
• Environmental attribute markets (e.g., confirming the generation of electricity as part of a carbon-credits system).

Academic research

Where companies have begun, formal academic interest has followed.

Livingston et al. performed a review on the applications of blockchain technology to the grid. They have identified 55 start-up companies operating in many of the same categories that Luke has found, 50 utilities exploring initiatives involving blockchain, mostly involving grid and peer-to-peer transactions, and 16 regulatory initiatives around the world utilizing blockchain in the energy sector. They are less bullish in their assessments of three of the more developed blockchain projects:

• LO3 Energy, in the Brooklyn microgrid, is utilizing blockchain for peer-to-peer trading. However, the peer-to-peer trading employed is purely virtual: the flow of electricity remains unchanged, and so -- at least in its first iteration -- is not providing any resilience, cost, or sustainability benefits to the grid.
• Grid+, in Texas, sells residential customers tokens in order to let them buy electricity at wholesale rates. Because they require customers to pre-pay for tokens, they pass on the credit risk to wholesale producers.
• Electron, in the UK, is piloting a distribution market and matching buyers and sellers of flexibility (demand response). In this case, blockchain could help process transactions swiftly, transparently, and cheaply.

While about half of companies are utilizing Ethereum as their base blockchain, plenty of companies are using other blockchains, including ERC20, Quasar, Tendermint, and Hyperledger (as well as several proprietary blockchains). To prevent conflict among them all, the Energy Web Foundation is creating a “blockchain of blockchains” to ensure interoperability in global energy trading.

Conclusions

Smart grids are proliferating rapidly, and have plenty of change yet to make with the addition of large quantities of distributed renewable energy, electric charging, and smart homes & appliances. Blockchain is well-placed to aid in several challenges facing them and a number of companies are already exploring the space.

Protocol Labs should choose a particular use case they’d like to explore first and run with it, as the space is likely to become quickly saturated.