Dominion Virginia Power Presents Energy Conservation Plan with Significant Environmental Benefits, Customer SavingsRichmond, Va., June 20, 2008 - Dominion Virginia Power presented on June 19 an aggressive energy conservation plan that would produce significant environmental benefits while providing customers with substantial cost savings.
"This plan will provide a jump-start toward meeting the 10 percent conservation goal enacted last year by the Virginia General Assembly and the governor, getting the Commonwealth more than one-third of the way there within five years," said David A. Heacock, president of Dominion Virginia Power. "It will provide significant environmental benefits in a cost-effective manner that translates into very real financial savings to customers."
A key component of the plan is the installation of "smart grid" technologies that will enhance the electric distribution system to meet the increasing needs and expectations of customers in the 21st Century. The smart grid will allow energy to be delivered more efficiently and will result in significant energy savings by allowing more precise control of the energy flow.
Dominion expects to invest about $600 million and replace all of its existing electric meters with Advanced Metering Infrastructure (AMI), capable of two-way communications, as well as additional equipment to monitor and control the electric distribution system. The resulting fuel savings for customers will more than offset the cost of the new equipment. The technology also is expected to lead ultimately to improvements in service reliability and the ability of customers to monitor and control their electricity use.
Understanding the concept of a more intelligent grid, reveals not only the hurdles which impede the progress of the much needed energy revolution, but it also sheds light on the potential impact alternative resources such as energy efficiency & conservation (EEC) and intermittent renewables can really make.
Regardless of the investment size or the time frame by which Dominion proposes it and future investments will be implemented, that will be delved into when the public portion of the application is filed, but for now, this is the start of what many, including myself, have been waiting for. It give mesome sigh of relief the clean energy is making its way into Virginia.
(A) Home audits, energy efficient appliances, the elimination of phantom loads, programmable thermostats, etc, are basically lumped into the energy efficiency (EE) category. While EE at the residential level can have an impact, it cannot become mandated onto the end user. By itself the impact to the grid is nearly nothing, but it is surely something to the end user. Nationwide, it can make a difference certainly, but since these types of capital improvements cost money, its impact will take a decade or two before it is felt when homeowner upgrades are gradually made over that time. It is duly recognized, this is something important which should be mandated into consumer products by the manufacturing industry, and it has. Here is Dominion's involvement in EE at the residential level:
- Incentives for construction of energy-efficient homes that meet the federal government's Energy Star-« standards. These homes are at least 15 percent more energy efficient than homes built to regular standards.- Incentives for residential customers to install energy-efficient lighting. This includes a continuation of Dominion's rebate program for compact fluorescent light bulbs (CFLs), which already has resulted in the sale of more than 1.5 million CFLs.
- Energy audits and improvements for homes of low-income customers.
- Incentives for residential customers to upgrade heat pumps to more efficient units or have their heat pumps maintained, or "tuned," to run more efficiently.
- Incentives for a refrigerator turn-in program that will allow residential customers who have second refrigerators at least 20 years old to be hauled away and disposed of at no charge.
In order for industrial and residential electric consumer to afford as many upgrades to improve EE, the economy needs to be wealthy. Skyrocketing gas at the pump and large increases in electric utility bills, certainly does not help in these efforts.
(C) EE at the utility level comprises of capital improvements in its delivery system from the point of generation to the end user. While almost ~45% of power generated at your average power plant is lost and unrecoverable, ~12% of all electricity generated nationwide, is lost due to inefficient and aging transmission and distribution equipment.
(D) The C in EEC is among other things, demand management, which is a catch-all phrase used by industry regarding customer demand and utilities' desire to manage it, with the end goal to serve as many customer needs as possible. Conservation can also involve customer habits like turning off lights, etc. More specific types of demand management can be described based on types of action, such as load curtailment, load shedding, load management and demand response. These actions are based on customers who actively or passively agree, through prearrangements with their local utility or a 3rd party, to avoid as much electricity usage as possible, at requested periods of time set by their local utility.
(A+B+C+D) = THE SMART GRID
It is at the utility level where EE combined with innovations in the transmission and distribution system, can to better manage the demand for electricity, the C in EEC, and "re-obtain" the greatest amount of capacity, which is currently and simply being wasted.
(1) New t&d equipment, comprising of smart meters and smart switches will allow the local utility to direct whatever appliances to function and when, all at the option of the end user, is the closest thing the power grid has to a silver bullet. Alone its impact is near nothing, but gridwise, the resource potential can be massive. This innovation is what is being referred to as the Smart Grid - a two-way communicating energy efficient electric power grid system. Enabling customers at every level to operate their homes and businesses during the most affordable and beneficial times, without disruption to lifestyle or in commerce, extends capacity, decreases the need for new capital investments in the power infrastructure, and saves everyone a hell of lot of money.
(2) With the smart grid, generation of electricity by the end user, which can be sold back into the grid for credit at the utilities request, becomes more of a widespread possibility. This is the concept of distributed generation (DG) - localized smaller low or zero emissions type generation: plug-in type low emission gas generators serving factories, malls, office parks, apartment buildings, large stores, etc., residential pv solar roofing, and small wind turbines, as examples. Electric hybrid automobiles could also be utilized to supply the grid with power.
(3)These developments lead to the concept of a grid more at the micro-level, a micro-grid versus the macro-grid we currently have, which places generation resource closer to the area of demand, and not far away from load center which encourages inefficiencies and increased costs for extra high-voltage transmission. A micro-grid promotes system reliability and encourages the stability of resource pricing, and debunks the need for National Interest Electric Transmission Corridors.
(4)Furthermore, the importance of the smart grid's arrival, will allow for the greater utilization of renewables resources beyond their more preferred and profitable geographic locations.
What is to often overlooked, is the fact that renewable generation is much more expensive in terms of true kwh, due to the fact that today, intermittent resources like wind and solar require fossil-fuel backup, in addition to the likely requirement of transmission. Without the guarantee of capacity behind a wind farm, for example, the wind generator will not obtain profitable margins when the power is sold. And since a steady stream of profit is just as important as profit margin, long-term power contracts are the most sought after arraignments. In order to ensure such contracts, capacity sold must be reliable, 24/7, 365 or how many days out of the year being requested. A substitute in part or in full for fossil-fuel backup, can be capacity obtained thru demand management. While this is increasing today w/o a smart grid, demand management, which is much cheaper than fossil-fuel by the way, can be utilized far wider and more effectively through the Smart Grid, thus becoming more available to provide more opportunities for siting intermittent renewable resources beyond their most preferred geographic limits.
A more intelligent grid cannot alleviate the wind generating industry from overcoming its hurdle for transmission, which is currently a growing bottleneck at the planning stage delaying some 80% of today turbines from connection to the grid. However, new technology in the form of higher capacity transmission lines, which has the same affect of moving traffic on an interstate highway, at speeds 2 to 3 times the current speed limit, all while avoiding the need for expanding existing right of way's, may help resolve some of the backlog. This technology alleviates the problem of congestion, which develops on transmission lines similar to our roadways, costing consumers millions of dollars and forces the capital investment to expand the grid, more costs which are passed down to consumers.
(5)Based on what is forthcoming thru a smarter grid, most, consumer advocates and industry, feel decoupling electricity revenues will not create the incentive the market needs which to advance a smart grid and all it could facilitate - greater implementation of EEC, renewables and DG. Instead a real-time pricing formula referred to as dynamic pricing, could supply the end user the financial incentive to participate with the utility with no inconvenience to lifestyle, reducing their energy consumption and saving them money, while not removing industry's incentive through sales, their preferred way of doing business.
For more eye-opening information, the former CEO of Motorola now heads the Galvin Electric Institute, which is a leading industry consulting group spearheading utilities' acceptance of a more intelligent grid. Here is their latest literature.
My next diary will provide information who you can participate in industry's transformation towards a more intelligent grid.
PS - While I this is indeed good news for Virginia, knowing Dominion past record, I smell something foul in the air. Dominion has had a habit of releasing positive news just as the air is beginning to rank with the odor of some negative piece of news it is about to release.