Integration Challenges of The Intelligent Grid—

Enterprise Integration of DR & Meter Data

Ali Vojdani, Ph.D.CEO, UISOL

October 7, 2008

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Utility Integration Solutions, Inc.www.UISOL.com

UISOL Solution Center in Silicon Valley, CA

• Integration specialist of the utility industry

• Leader in utility industry integration best practices & standards

• Licensed software for managing demand response

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DR Rewards

• DR is critically important • To bridge the grim reserve margin picture in US (135 GW New Generation required,

57 GW planned)• To avoid the unacceptable price volatility we see in wholesale markets today• To remedy the abysmal asset utilization in the utility industry

• DR is a viable resource• E.g., 7000 sites representing 6 GW in PJM Interconnection today• Many customers are willing to participate• Aggregators have been willing and able to provide curtailment services

• DR is economical• EG., BGE estimates that the capital cost of DR is at $165/kW; 3-4 times cheaper

than the cost of installing new peaking generation, which is around $600-800/kW.

• Many other benefits, including• Green• National security• New jobs• Congestion management in grids• Protecting equipments in a SmartGrids

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DR Challenges

GAPS In DR*

• As a resource, DR is more difficult to manage than central generation

• Unless we get better at managing and automating DR, it will become the limiting factor for DR growth

ECONOMIC ELEMENTS

Low cost of participation

Sufficient level of economic benefits

IT ELEMENTS

Flexible DR Business Architecture

Highly Integrated IT Infrastructure for DR

MARKET OPERATIONS

Broad-base of DR programs

Consistency of DR program offerings

Use of DR as a reliable power resource

Scalability of DR Programs

High penetration across customer classes

Voluntary and default programs

High level of customer awareness

POLICY ELEMENTS

Active market monitoring by regulators

Standardized market rules & regulations

Quality assurance standards for DR services

KEYNo Significant DevelopmentEarly Stages of DevelopmentModerate DevelopmentFully Developed

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ECONOMIC ELEMENTS

Low cost of participation

Sufficient level of economic benefits

IT ELEMENTS

Flexible DR Business Architecture

Highly Integrated IT Infrastructure for DR

MARKET OPERATIONS

Broad-base of DR programs

Consistency of DR program offerings

Use of DR as a reliable power resource

Scalability of DR Programs

High penetration across customer classes

Voluntary and default programs

High level of customer awareness

POLICY ELEMENTS

Active market monitoring by regulators

Standardized market rules & regulations

Quality assurance standards for DR services

KEYNo Significant DevelopmentEarly Stages of DevelopmentModerate DevelopmentFully Developed

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Source: UISOL Final Report submitted to California Energy Commission on Project No. 500-01-043, DR-04-01, “California Demand Response Network, April 2005.

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The Curse of Dimensionality

• Dealing with millions of distributed resources would require a different level of sophistication than we have today*

• Some analysts caution that the impact of distributed resources on the utility industry could be analogous to the impact of personal computers on mainframe computing

It takes a 1000,000 KW to get 1 GW

*Most people know how to make a hamburger. Some may even be able to operate a mom and pop fast food joint. Very few can scale it as McDonald.

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DR Management Technology

DR Transaction Volume

Manual Processes

Semi-Automated Processes

Traditional Automation

Next Generation: Dynamic DRM

Modern Automation

Where

We Are Today

Where We

Need to Be

Sophistication

Gap

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Lessons Learned in California

• Beyond a certain level, manual processes become unmanageable

• Goal is to achieve “10x10” improvements in DR performance

• It is feasible to automate DR end-to end with modern business process integration technologies

“A Major Step Forward for Implementation of Demand Response Programs in California, UISOL press release, 8/11/2006

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Expected Process Automation BenefitsSource: Presentation of Pete Langbein of PJM at UIC2008, 9/16/2008

• Quicker participation of DR resources in markets

• Improved transparency for all participants

• Reduce time and administrative costs

• Scalability for higher volume of participation (number of participants and number of transaction per participant)

• Simplify the process to provide more opportunity to participate for small resources

PJM Interconnection coordinates the movement of electricity through all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. This service area has a population of about 51 million and a peak demand of 144,644 megawatts. See also www.uisol.com/new/news/uisol-to-implement-next-

generation-demand-response-management-application-for-pjm/ Source of statistocs and map: PJM.com

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Why is DR Management Complex?

1. Large dimensionality of transaction management• E.G., ,PJM already has to deal with 7000 DR sites, compared with 2000 gen. sites

2. DR Business Network is complex• Many entities are involved in the DR value chain• Many people at each entity• Many DR processes, many tasks• Many interfacing systems

3. DR processes are new and evolving • Process maturity level 1 on a 1-5 scale• Processes are not documented, consistent, measured, or optimized• Processes are extending to residential customers with programmable communicating

thermostats (PCT), in home displays, and home area networks (HAN)• There is a shortage of experienced people• Standards (e.g., for Process and IT) are yet to be developed

4. DR business rules change frequently• Need to keep up with the changes in the (often inflexible) IT applications• As an industry we are not used to rapid change

5. Need visibility to maintain the integrity of DR, including• Audit trail (Who did What, When)• Measurement and verification (M&V) of DR to avoid gaming and ensure reliability

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DR Business Network Is ComplexExample

EnergyCustomer

Energy Service Provider

Curtailment Service Provider

ISO/RTO

DR CommunityUtility

DR Aggregator

Meter Service Provider

MarketMonitor

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DR Business Network Need to Be Integrated

CustomerCustomer

AggregatorAggregator ISOISO

UtilityUtility

Data Integration(e.g., Customer

Information)

Business Process

Integration (e.g., Demand

Bid Processing)

Collaboration (e.g.,

Registration Process)

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DR Processes Touch Many Systems

Key

ServicePoint

Metering System

Data Collection

Control and Reconfiguration

Readings, eventsand status

Controls and signals

Meter Maintenance

Configuration, installation, etc.

MeterData

Management

CustomerInformation

andBilling

Load curves, Measurement history, etc.

NetworkOperations

Tariffs, parameters

On request read

WorkManagement

Install,Remove,

Disconnect,Reconnect

Meter service request

Special read

Outage Management

Power reliability and quality events

Outage and restoration verification

Meter health and tamper detection

Interface and protocol details of the Service Point are outside the scope of

IEC 61968-9

Data obtained by special read

Transaction information

Pointof

Sale

Account information

Planningand

Scheduling

Disconnect/reconnect,demand reset

Outside the scope of 61968

61968 Part 9

Defined by other 61968 Parts

DemandResponse

signals

CustomerDataSet

Meterreadings

Meterhistory

Tokens

Transaction records

61968-10

61968-3

61968-8

61968-561968-3

61968-6

LoadManagement

System

Load Control

Load Analysis

LoadScenarios

MeterReadings

MeterAsset

Management

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DR Touches Many Application Interfaces

Market Management

E_TAGS for the DC line / Before DAM through end of ADJ Period?? / As needed

Energy Management

Transmission Rights Mgt

Settlement &Billing

REGISTRATION

Commercial Systems

NetworkModelManagement

Data Warehouse

TAGGING

EXTERNAL

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Inflexible Systems Cannot Handle Change

The Graveyard of Stranded DR Applications

See “California Demand Response Network”, Final Report on California Energy Commission Project No. 500-01-043, DR-04-01, April 2005.

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Need for Flexible Infrastructure

• We need flexible DR applications that can withstand significant changes in DR tariffs and business rules

• It is often cheaper to buy a new flexible application than to maintain an inflexible one

Impact of 1989 Loma Prieta Earthquakeon San Francisco Bay Bridge

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Implementing DR Enabling Technologies Example-A Utility

ISO

Aggregators

Service Providers

Customers

Devices

AMI Network Collection Engine

IVR

OMS

Demand ResponseManagement

(DRM)

CIS/Billing

System Planning& Asset Management

Field Service/Work Mgt

GIS

AMI Network Collection System

Existing Database

(e.g., MV90)

OperationHandheldHandheld &Mobile

Stan

dard

s-ba

sed

Ente

rpris

e Se

rvic

e B

usOther

Monitoring/SensingDevices, PCTs, …

MDM ApplicationsAggregation

Customer Baseline Load CalculationRevenue Protection

Advanced BillingConnect/Disconnect

AMI Asset MgtCSR Tools

AMI Deployment Support

Data Collection Adapters

Meter Data Management(MDM)

Storage(Configuration

& Usage)

Calculation Engine

Validation, Estimation, and Editing

System Management & Admin. Tools

Reports

Application Interface Adapters

Customer Self Service

SCADA

Analytics/Business

Intelligence

Finance & Accounting

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Integrating the DR Business Network

DR ProcessDefinitions/

Business Rules

Agent(Requestor)

Agent(Approval)

Agent(Responsible)

DR BPM

Application

Y

Application

B

Application

A

Application Z

Other Agents(Substitution/

Escalation)

AdapterNotifications

Task Lists/In-Box

DR Information

Model

DR Information

Model

DR ProcessDefinitions/

Business Rules

DR BPM

Monitoring, Measurement,

ControlDR

Information Model

DR Information

Model

DR ProcessDefinitions/

Business Rules

DR BPM

Monitoring, Measurement,

ControlDR

Information Model

DR Information

Model

DR Bus

*See also www.uisol.com/demand-response/

DRMMonitoring,

Measurement, Control

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Demanding Flexibility From DR VendorsSmart Requirements Specification

Need to add “flexibility” as a key requirement to the list of traditional requirements for:• Performance• Security• Usability• Portability• Availability• Scalability• Reliability

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Ensuring FlexibilityThe Flexibility Test

• Need to add “flexibility test” to the list of traditional tests:• Functionality test• Availability test• Performance test• Security test• Volume test • Integration test

• Flexibility test would be a predictor of change order costs, and should answer questions such as:

• How fast and at what cost can you change an application?• Are small modules of business functions exposed as services, so that they can be

reconnected?• How fast and at what cost can you change an interface?

• While our industry has recognized the need for “interoperability testing”*, the need for “flexibility testing”has yet to be widely recognized.

* See MultiSpeak.org

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Need to Be Proactive in Enabling DR

• To enable growth in DR we need to improve our DR • Processes• Systems • Organization/People

• The best time to improve our DR capability is before we are forced to

• A good starting point is to• Assess where you are, • Where you need to be, and• Design a flexible DR

Transformation Roadmap that can bridge the gap

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Summary

• A major challenge in the Intelligent Grid is integration and management of DR • DR management (DRM) is complex and unless we get much better at it, it will

become the limiting factor in DR growth • To get better at DRM, we need to

• Understand what DR processes are, assess/troubleshoot their performance, and come up with a realistic DR Process Improvement Roadmap that we can successfully execute over time

• Implement a Dynamic DRM Software that can automate and efficiently manage the DR business network

• Design and execute a DR Organization Change Enablement Program to manage the people dimension

• We need to follow a Smart Integration Approach to ensure the DR systems and processes are flexible and can easily incorporate the never ending changes in DR business rules

• Request flexibility• Perform flexibility test• Build flexibility into interfaces

• Meeting these challenges will not be easy but is worth it--there is no better alternative

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References*

• Building an infrastructure for demand response, Power Economics, Volume 5, Issue 9, October 2001.

• California Demand Response Network, Distributech 2006. • How to Get More Response from Demand Response, the

Electricity Journal, Vol 19, No. 8, Oct 2006.• The Missing Link-Every one is in favor of demand

response, but little gets delivered when system operators need it the most., Public Utilities Fortnightly, Special Editionon Demand Response, March 2007.

• Smart Integration-The smart grid needs infrastructure that is dynamic and flexible, IEEE Power & Energy Magazine, November/December 2008

*Authored/Co-authored by Ali Vojdani

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More Information

• UISOL web site: http://UISOL.com• E-mail: AVojdani@UISOL.com• Tel: 925-939-0449

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Speaker Bio

Ali Vojdani is the CEO of UISOL. He has over 27 years of experience in the application of IT in the utility industry as part of his professional career at UISOL, Vitria Technology, Perot Systems, EPRI, PG&E, and McGill University.

Ali has been involved in numerous business integration and transformation projects in US, Canada, UK, and Australia. His work on improving resource scheduling at PG&E became the finalist of the 1997 prestigious Frantz Edelman award for the best management science application world-wide.

In 2004 Ali instigated the all new annual Utility Integration Conference (UIC) and has successfully chaired UIC for the last five years. He also regularly conducts training workshops on Business Process Management (BPM) and Demand Response Management for utilities.

Ali has been an evangelist for enabling Demand Response (DR) over the last decade. His work has resulted in the cutting edge software solution DRBizNet for integrating the demand response business network.

Dr. Vojdani has a Ph.D. in electrical engineering and has authored over 60 technical publications.