DOE’s Grid Modernization Activities

Potential Roles for Equipment Manufacturers

March 17, 2005

National Electrical Manufacturers Association

William Parks

Office of Electricity and Energy Assurance

We’ve Changed!

OETD, EA merge to

form new office

Office of Electricity and Energy Assurance

Mission

“The mission of the Office of Electricity and

Energy Assurance is to lead national efforts

to modernize the electric grid, increase grid

capacity and reliability, and strengthen

energy infrastructure security.”

Transmission ReliabilityElectric Distribution

Transformation Electricity StorageSuperconductivityGridWorksGridWise Infrastructure security

technologyVisualization and

Decision Analysis Tools

Office of the Director

Modeling and Analysis Electric Markets

Technical Assistance Electricity Exports/

Presidential Permits Power Marketing

Administration Liaison

Permitting, Siting, & Analysis

Organizational Structure

Energy Infrastructure Protection

State/Local Gov’t Partnerships

Training and Exercises Visualization Critical/Vulnerability

Assessment Emergency response

support

Infrastructure Security & Emergency Response

Research & Development

Resource Management Staff

Grid Modernization – A National Energy Priority

“Transmission lines and pipe lines and generating facilities are deteriorating. Different regions share electricity over unreliable transmission lines. These strains on the system lead to higher prices and they lead to bottlenecks in

delivery. …we've got modern interstate grids for phone; we've got a modern connection with our highways; America needs a modern electricity grid, too, in

order to make sure that we can compete in a global economy…”March 9, 2005

“To keep our economy growing, we also need reliable supplies of affordable, environmentally responsible energy. Nearly four years ago, I submitted a comprehensive energy strategy that encourages conservation, alternative sources, a modernized electricity grid and more production here at home,

including safe, clean nuclear energy.”State-of-the-Union Address, February 2, 2005

“Consumers and businesses need reliable supplies of energy to make our economy run -- so I urge you to pass legislation to modernize our electricity system,

promote conservation, and make America less dependent on foreign sources of energy.”State-of-the-Union Address, January 20, 2004

“…it's clear that the power grid needs an overhaul. It needs to be modernized. As we go into an exciting new period of American history, we want the most modern

electricity grid for our people… we need more investment; we need research and development…”

September 15, 2003President George W. Bush

May 27, ‘04 Schools closed by power outage

in Detroit,

Michigan

May 17, ‘04 Multiple power outages affect

Michigan- Indiana

Border

April 29, ‘04 200k lose power in

Washington State

June 3, ‘04Over 400,000

without power

in Texas

Outages are widespread, frequent, and costly to the

economy*

May 31, ‘04Power outages causes fire at

hospital, school

in Illinois

May 12, ‘04Tree limbs cut off power to 31k in

Utah

January 31, ‘05 60,000 lose

power in

Jacksonville

January 19, ‘05 25,000 without

power in

California

November 5, ‘04

35,000 in DC

area lose power

November 2, ‘04 Over 280,000 lose power in

Michigan

October 29, ‘04 60,000 lose

power in San Francisco,

California

August 16, ‘04 800,000 lose

power in

Hurricane Charley

*Recent LBNL study estimates annual costs from outages at $80 Billion

Outage Costs to the Nation

Selected 2004 Reliability Events

Grid Modernization Issues

Need greater regulatory certainty at the Federal,

regional, and state levels (e.g., restructuring, siting,

and permitting) Need to attract more investment and develop new

technologies for upgrading aging electric delivery

infrastructure and equipment Need mandatory and enforceable national electric

reliability standards Need to relieve constraints in power flows and

supplies Need to strengthen regional entities for streamlined

planning and more efficient market operations

Grid Modernization Benefits

Improves electric reliability and lowers outage

costs to consumers

Strengthens energy security and lowers financial

risks to utilities from terrorism

Promotes investment in infrastructure, jobs

creation, and regional economic growth

Enables greater development of alternative

energy sources (e.g., wind, nuclear)

Increases energy efficiency and lessens

environmental impacts

Grid Modernization and Electric Reliability Strategies

Prevention – keep problems from occurring

Detection – ready for immediate action

Response – proper ”tool kits” for any contingency

Modernization – “next generation” of grid technologies

and partnerships for market integration

Portfolio of Technologies

HTS tape to HTS cable

Advanced Conductors

Interconnection Device

Novel storage concept

Diamond Sensor

2kWh Superconductor Flywheel Demonstrator

Superconducting Substation

Supervar System

Smart Controller

ETO DC to AC inverters

Eastern Interconnection Phasor Project

Partnerships for Market Integration (Recent Examples)

IEEE 1547 – Standards for interconnecting distributed energy

systems with the grid

New England Demand Response Initiative

Mid-Atlantic Demand Response Initiative

PJM Interconnection – Implementing IEEE 1547 in Mid-Atlantic

states

Pre-certification of Distributed Generation

NRECA

NARUC

USCHPA

FERC

Mechanisms for Participation

Planning – help determine future priorities and advanced technology needs of the grid

Implementation – support research, development, and demonstration of advanced transmission and distribution technologies and appropriate electricity legislation

Evaluation – provide feedback on the effectiveness of RD&D activities and new technologies

Planning –

Participate in RD&D planning workshops and webcasts

Provide feedback on program plans and office documents

Stay abreast of office activities by visiting the office website often

Be cognizant of pertinent energy-related legislation

~120 Organizations participated

Program Plans

Help determine future priorities and advanced technology needs of the grid

National Electricity Roadmap

Implementation –

Participate in solicitations

Upcoming GridWise/ GridWorks solicitation

Develop advanced technologies

Partner with utilities to field test the latest technologies

Electric reliability legislation

Utility Organizations

Equipment Manufacturers

+

Support research, development, and demonstrations of advanced transmission and distribution technologies and appropriate electricity legislation

Energy Legislation – Electricity Title (e.g. HR6)

Most urgent: Create legal foundation for mandatory and enforceable national electric reliability standards

• Establish FERC jurisdiction for reliability• Establish ERO to develop technically sound standards• Either ERO or FERC can enforce standards• Provide technical support to FERC and ERO

Facilitate grid investment by reducing siting, permitting, and cost recovery uncertainties

• Designate “National Interest Electric Transmission Corridors”• Corridor designation required for FERC exercise of backstop authority

• Coordinate federal review of T&D projects, if applicant requests• Support regional transmission plans, siting protocols, and cost allocation plans

Other provisions• Authorize OE and RD&D programs• Increase use of demand response; report on real time transmission system monitoring

projects, study benefits of economic dispatch

Evaluation –

Provide feedback about new technologies

Participate in peer review workshops

Work to identify vulnerable components of the electric grid

Superconductivity for Electric Systems 2004 Annual Peer Review

2004 Transmission Reliability Program Peer Review

Electric Distribution Transformation FY04 Annual Program and Peer Review Meeting

Energy Storage Systems 2004 Annual Peer Review

Provide feedback on the effectiveness of RD&D activities and new technologies

Public-Private Partnerships

Utilities Investor-Owned Public Power Cooperatives Federal

Equipment Manufacturers State Agencies Trade Associations Professional Societies Universities National Labs

DOE can’t do it alone…Making connections with

partners is crucial for success

For the latest updates on the office merger and other news, check the following websites: www.electricity.doe.gov and www.ea.doe.gov