GE’s WattStation, an electric vehicle charger that can charge vehicles in four to eight hours. A green LED ring around the top of the charger indicates that it is available, a red ring signals that the charger is out of service, and a blue ring indicates that it is in use
Source: GE

John D. McDonald is the technical strategy & policy development director for GE’s Digital Energy business. John, a respected expert with 36 years of experience, is a fellow and past president of the IEEE Power & Energy Society and has developed power application software for SCADA, Energy Management System (EMS) and Distribution Management System (DMS) applications. The 55 year-old from Chicago, USA, updates deputy editor Tim Probert on technological and strategic developments in the Smart Grid’.

PEi: What is a Smart Grid, exactly?

John D. McDonald is technical strategy & policy development director for GE’s Digital Energy business

McDonald: My definition of a Smart Grid is bringing together the operational side of a utility, which typically means the control centres, data systems, with the IT side of a utility. Traditionally these have been two cultures very different from each other, and they have not worked together very closely in the past.

There are six main aspects to the Smart Grid. Firstly, smart meters and two-way communications. Second, asset optimization, i.e. transformers. Third, demand response, including home energy management.

Fourth, optimizing the transmission system of utilities; part of that includes renewables, as well as higher speed protection in communication systems. Fifth, optimizing the distribution system, i.e. lowering losses, lowering peak demand and improving reliability and sixth, productivity improvements to engineering design, i.e. standardization.

PEi: Some might say that the Smart Grid really nothing more than a marketing gimmick? Is it?

McDonald: I’ve been in this industry for 36 years and we have been adding intelligence to the system for a long time. To me the big thing with the smart grid is solutions as opposed to devices and systems. We never did solutions before.

One example of this is being able to get information about the health of transformers every second and building it into an artificial intelligence system to process the information. One of GE’s new solutions detects up to 80 per cent of all the different failure modes of a transformer without any human needed in the loop. This has not been done before. It is revolutionary.

PEi: Why do we need a Smart Grid?

McDonald: Primarily because we are putting more sensors on the system and we want to know more about what is going on with the grid, and with more and more information available, we need to manage it. Particularly with renewables at the T&D level, the grid is becoming ever more complex. Resource optimization is so much more complex, in fact, that without a Smart Grid there is a limit to how much humans can handle it via a control centre. In addition to renewables, we also have demand response, which we can use as a negative generator. As the load goes up, instead of increasing generation, we can activate demand response and lower the load.

PEi: Why has the momentum behind the Smart Grid snowballed in recent years, particulalry in North America?

McDonald: Two things come to mind. One is stimulus funding. When the US federal government makes available $4.5 billion for Smart Grid projects, that is going to concentrate people’s minds on what they can do with the utilities.

The second thing is regulatory policy. For example, the regulators are incentivizing utilities in US states or Canadian provinces to put in smart meters system-wide, while California has demanded utilities to have 20 per cent renewable generation by 2020. This is all new.

PEi: So the stimulus money for Smart Grids has found its way through the system? How does it work? Does the government send GE a cheque?

McDonald: In the US, the utilities have applied to the Department of Energy (DOE) for up to $200 million each. They were evaluated, approved and cheques have been written and given to utilities to implement Smart Grid projects.

The utilities have to satisfy certain criteria. The DOE looks at the business case for the project, the goals and objectives of the utility, the number of companies involved, whether the technology to be deployed is truly innovating, and whether the other half of the required funding hasbeen secured.

GE is involved with 30–35 projects in the US alone. More than half of the projects involve metering, with the rest being improving the distribution system, i.e. reducing losses, reducing demand and improving reliability.

PEi: Is that smart? Or just efficient?

McDonald: Well, it’s the technology being implemented. The Smart Grid is driving us to talk to utilities about what business needs they have and what technologies they want, and we are tailoring solutions to meet these needs. Part of this might be existing technology, part of this might be brand new technology that we have not done before.

PEi: I understand you teach about T&D at Iowa State University, and also about Smart Grids. What do you teach?

McDonald: I teach a course at the Iowa State University and Georgia Institute of Technology in Atlanta about power system automation. This includes distribution SCADA, generation transmission SCADA, plus feeder automation, communication protocols and how to build the business case for automation projects.

This is part of the continuing education programme at Iowa State University. There is no major in Smart Grids yet (!), but we have developed a two-day Smart Grid course that we teach within GE as part of our Power System Engineering curriculum. This is taught at our global headquarters in Schenectady, New York, and people come from all over the world.

I teach about the fundamental technology involved with the Smart Grid, the nomenclature, market trends, industry standards, policy and regulation. I have been with GE for three years, and before that I was at KEMA for 12 years as vice president for power system automation.

PEi: Do you think the stimulus funding is money well spent?

McDonald: Yes, I do. And do you know why? Because the power grid industry is very conservative and we needed something to get over the hump, to try new things. It is a very risk-averse industry.

Without these policies, there really is not an incentive for utilities to conserve and sell less electricity. One of the policy changes that some US states have adopted is that they have decoupled the rates. California is one example. Utilities get compensated by the state Public Service Commission for the electricity they do not sell.

But there are other tangible benefits to utilities of reducing load. The average delivered voltage to US homes is 122.5 volts. The industry standard is 114–126 volts. If I lowered the voltage at your home by 4.5 volts, you would not notice it, but it would free up a lot of infrastructure and it could mean deferring investment in new substations, or new power lines, or purchasing power. If I defer buying a million-dollar transformer by two years, that is a 10 per cent saving on the investment.

PEi: Does GE collaborate with any IT companies in the development of Smart Grid technology?

McDonald: For four years we have been part of the Smart Energy Alliance with Cisco Systems, Oracle, Intel, Hewlett Packard and Capgemini. The purpose of the alliance is to pool the technologies we have and put solutions together. Every six months we publish reports about the benefits we receive from the alliance and we also present papers at trade shows.

GE is also working with small business to develop Smart Grid solutions. We have offered $200 million, half of that coming from our venture capital partners, through our Ecomagination Challenge. We have hundreds of proposals and we are evaluating them right now.

PEi: How will the Smart Grid cope with the growing volume of intermittent sources of power generation such as wind?

McDonald: Wind output today is generally a very low percentage of total power generation. At present it is easy to manage intermittent sources of power generation manually. We monitor it as it comes up and we can manually reduce baseload generation.

As utilities reach the targets that are set for them by regulatory policy, the percentage of renewable energy will be far higher. When you get up to 10 per cent, 20 per cent or 25 per cent it is much more complex.

For one thing, we cannot forecast when the wind will be blowing, so we have to react fast. The potential change, the intermittency, is huge – power output could conceivably drop to zero in a very short time. The question is how we compensate for that on the grid. Large batteries are one way, and pumped hydro is another, but the potential applications for this are of course limited. Beacon Power in the northeastern United States is installing flywheels.

GE has investments in battery companies like A123, which develop lithium-ion battery solutions that have grid-level applications, as well as in electric vehicles. We are also developing a variation of NaS (sodium sulphur) batteries for grid applications, and we are building a manufacturing plant in the state of New York to mass produce that battery.

More Power Engineering International Issue Articles
Power Engineering International Archives
View Power Generation Articles on