0 Smart Grid Computational Tool (SGCT) For best results view this presentation in Slide Show mode.

1 What is the DOE Smart Grid Computational Tool (SGCT)? What does it do?  The SGCT is an analysis tool that identifies the benefits of a SG project and guides the user through an analysis which quantifies those benefits.  The SGCT characterizes smart grid (SG) projects by identifying the what technology will be installed and what functionality that technology will enable.  Based on the characterization of a project it identifies the economic, reliability, environmental and security benefits the SG project will yield.  The SGCT uses user entered data to calculate the monetary value of benefits and prepares graphs and tables that compare the costs and benefits to help determine the project’s overall value.  The SGCT can also perform a sensitivity analysis.

2 The SGCT can calculate the value of the following benefits*: Benefit Category Benefit Sub-category Benefit Economic Improved Asset Utilization Optimized Generator Operation (utility/ratepayer) Deferred Generation Capacity Investments (utility/ratepayer) Reduced Ancillary Service Cost (utility/ratepayer) Reduced Congestion Cost (utility/ratepayer) T&D Capital Savings Deferred Transmission Capacity Investments (utility/ratepayer) Deferred Distribution Capacity Investments (utility/ratepayer) Reduced Equipment Failures (utility/ratepayer) T&D O&M Savings Reduced Distribution Equipment Maintenance Cost (utility/ratepayer) Reduced Distribution Operations Cost (utility/ratepayer) Reduced Meter Reading Cost (utility/ratepayer) Theft ReductionReduced Electricity Theft (utility/ratepayer) Energy EfficiencyReduced Electricity Losses (utility/ratepayer) Electricity Cost Savings Reduced Electricity Cost (consumer) Reliability Power Interruptions Reduced Sustained Outages (consumer) Reduced Major Outages (consumer) Reduced Restoration Cost (utility/ratepayer) Power Quality Reduced Momentary Outages (consumer) Reduced Sags and Swells (consumer) EnvironmentalAir Emissions Reduced Carbon Dioxide Emissions (society) Reduced SO X, NO X, and PM-10 Emissions (society) SecurityEnergy Security Reduced Oil Usage (society) Reduced Wide-scale Blackouts (society) *Methodological Approach for Estimating the Benefits and Costs of Smart Grid Demonstration Projects, EPRI, January 2010.

3 How can the SGCT be used?  The tool was designed to be used by a number of different groups for a number of different purposed. For utilities:  The SGCT can be used after SG technology is implemented to:  Better understand the benefits of a SG project or technology  Compare costs and benefits of a SG project  Compare the benefits of a SG project given different scenarios  Inform future investment with the results of the analysis  The SGCT can be used prior to implementing a SG project to:  Help prepare a business case for the project  Identify the potential benefits of the project and estimate their magnitude  Help plan a data collection strategy that will allow benefits of the project to be quantified  IMPORTANT: This type of analysis requires the user to make assumptions about how the project will impact the system.

4 HOW DOES THE TOOL WORK?

5 Illustration of the inputs and outputs of the SGCT US DOE SGCT InputsOutputs Data that corresponds to Impact Metrics Data derived from estimates and assumptions Examples AMI/Smart Meters, Automated Feeder and Line Switching Annual Generation Costs, Number of Tamper Detections Cost Parameters and Escalation FactorsFactors Discount Rate, Total Capital Cost, Inflation Rate, Population Growth Value of Service, Price of Capacity at Peak, Value of CO2 Sensitivity Factors High and Low case Value of CO2 Monetary Value of up to 22 Benefits NPV Analysis of Project Sensitivity Analysis of Project All Output is calculated over multiple years (beyond initial 5 years of data entry) The SGCT identifies, organizes, and processes the inputs required to analyze the costs and benefits a SG project. Smart Grid Project Assets, Functions, and Mechanisms Click each of the chevrons to “dig deeper”

6 What equations are required to translate data into monetary value? The Theory Behind the Tool: How do you analyze the monetary benefit of a smart grid project? Functions Mechanisms Benefits What does the Smart Grid do? How does it do that? What “goodness” results? Monetary Value What is the goodness worth? Assets What are Smart Grid technologies? Metrics Calculations Forecast What data should be tracked to capture benefits? How can benefits be projected beyond the first 5 years? Module 1 of the SGCT Module 2 of the SGCT Module 3 of the SGCT The analysis that the tool guides a user through is based on the questions above.

7 The output from one module becomes the input for the next module. Characterization Module Characterization Module Data Input Module Data Input Module Computational Module Computational Module Purpose Determine the list of project benefits. Filter irrelevant metrics. Guide and assist data entry. Calculation engine. Present results. Inputs Assets, Functions, Mechanisms List of BenefitsCalculation Dataset, Sensitivity Ranges Outputs List of BenefitsCalculation Dataset Tabular and Graphic Presentation of Monetized Benefits. Key Methodologies Asset-to-Functions and Function-to- Benefits Relational Models Benefit-to-Inputs Relational Model Smart Grid Benefits Calculations DOE SGCT Modules 123 Click each of the chevrons to “dig deeper”

8 The Characterization Module helps the user navigate the Asset-Function-Mechanism-Benefit Map. USER INPUT IPSM OUTPUT BACK Screenshots Enables Functions A, C, and D Enables Mechanisms B, C, and D Results in Benefit #4

9 Calculation Dataset Data Quality Filter The Data Input Module prompts users to enter data only for relevant metrics and checks data entry. BACK Screenshots Relevant Metrics for SG Project Complete Metric Bank Filters based on the project Benefits determined in the previous module

10 The Computational Module performs various analyses, carries out calculations and produces outputs. Calculation Dataset from previous module High and Low Sensitivity Ranges for Inputs 22 Benefit Calculations NPV Analysis Sensitivity Analysis INPUTS Calculation EngineOUTPUTS BACK Screenshots

11 The SGCT User Guide includes explanations of the methodologies and step-by-step instructions.  The first half of the User Guide is dedicated to:  Providing context for the tool and explaining its purpose.  Explaining the general methodology for assessing the benefits of a smart grid project.  Explaining the Asset-Function-Benefit Mapping and defining each Asset, Function and Benefit.  The second half of the User Guide is dedicated to:  Explaining the general Architecture of the SGCT  Providing a step-by-step instruction manual for using the SGCT.  The Appendix of the User Guide documents and explains:  The detailed cost and benefit calculations used in the tool  Key concepts and assumptions (ex. baseline, inputs, escalation techniques, s-curve model).

12 IPSM Screenshots BACK

13 PDIM Screenshots BACK

14 MCT Screenshots BACK

15 Assets, Functions, and Mechanisms define what the SG project is and what it does. Smart Grid Project Assets, Functions, and Mechanisms  Assets – These inputs describe the SG technologies or technology groups being implemented by the project.  Functions – These inputs describe what the SG does.  Mechanisms – These inputs are linked to specific Functions and describe in greater detail how the SG exercises each function. BACK

16 Data that corresponds to Impact Metrics Impact metrics capture the effects SG has on the electric grid or its management and operation.  Impact metrics quantitatively capture the impacts of the SG on the electricity grid or its management and operation.  This data must be directly measured or tracked after the SG project is implemented.  These metrics are used to calculate benefits. BACK

17 Data or information that can be estimated or assumed are used in benefit calculations.  In addition to using data that must be directly measured or tracked, the tool uses data that can be estimated or assumed.  Examples of this type of data include: price of generation capacity at peak, the value of service to a customer during an outage, and the value of CO2.  This data is used to calculate benefits. Data derived from estimates and assumptions BACK

18 Parameters that describe the cost of the project and factors that allow results to be extrapolated  Cost parameters describe the overall cost of the project and include items such as discount rate, interest rate, amortization period, and capital cost.  Escalation factors allow inputs to be extrapolated beyond the first 5 years of data entry so that results can be extrapolated.  Examples of escalation factors include population growth rate, inflation rate, and electricity demand rate. BACK Cost Parameters and Escalation Factors

19 Sensitivity Factors are used in the sensitivity analysis.  Sensitivity factors multiply the data inputs by a certain percentage  A high and low sensitivity factor can be set for every input in the analysis  Using these sensitivity factors high and low scenarios can be created and the results of these scenarios can be compared Sensitivity Factors BACK