Anticipating the Smart Grid

Designers, building owners, and operators should understand how the emerging Smart Grid will impact individual buildings.

By Sunondo Roy, PE, Joshua Polasky, and Blake Shanahan, CCJM Engineers, Chicago December 14, 2013

In these times of smartphones, smart cars, smart this, and smart that, how is a building to compete? Well, it’s no news to the readers of Consulting-Specifying Engineer that buildings are already pretty smart with building automation systems (BAS) that allow building managers to know exactly what’s happening to the myriad energy consuming components required to make a building functional and comfortable for its users and profitable for its owners. 

Making buildings capable of reacting to their internal and external surroundings has been evolving for more than 40 years—from manually adjusting boiler and chiller outputs to incremental advances in control and automation, and from pneumatic controls to analog electrical controls to modern direct digital controls. The next step is integrating buildings into the rapidly evolving Smart Grid. The Smart Grid is transforming last century’s national electrical grid from a local, one-way, passive power distribution system to a reactive, interactive, two-way power distribution network.

The Smart Grid will allow regional power producers at the macro level to communicate directly with individual commercial or residential buildings at the micro level. 

This level of communication will enable the Smart Grid to know where demand is required—even to the individual building level. Knowing where and how much power is needed allows the Smart Grid to adjust power distribution in real time. The agility of matching power demand with power production minimizes the amount of power that generating facilities must dump, and keeps base-load plants running at minimum capacity. 

Smart Grid primer

The electrical power grid is one of the most massive and complex undertakings in the U.S. Amazingly, the entire grid was developed independently by countless local power producers without significant coordination by the federal government until fairly recently. 

In 1882, Thomas Edison’s Pearl Street Station, the first power plant, produced 100-V dc power and distributed it to several hundred street lamps serving a single neighborhood of New York. However, by the late 1800s, the predominant power system was ac, which allowed electricity to be transmitted at high voltage to minimize line losses, and then to be stepped down at point of use at a safer, lower voltage. Local power grids were developed throughout the U.S., but it wasn’t until the 1930s that they became regionally connected by means of analog substations. Most of the grid’s infrastructure has been upgraded. What we consider the national transmission grid has been in place since the 1950s. The national transmission grid in the U.S. actually comprises three independent conglomerations of interconnected local transmission lines: the Eastern Interconnected System, the Western Interconnected System, and the Texas Interconnected System. Portions of these grids are also interconnected to the Mexican and Canadian transmission grids. 

The electric power grid is comprised of three main components: power stations, the transmission grid operating at 110,000 Vac or above connecting the various power stations to their distributed substations, and the local utility distribution grid operating at 33,000 Vac or less (see Figure 2). The greatest challenge to the power grid is transmitting the electricity from the power plants to the local utilities where and when it’s needed. The production of electricity is dynamic, varying by region and by capacity. Similarly, the use of that electricity is dynamic, also varying by region and by demand. 

Because there is virtually no storage capacity in the transmission grid, it is up to the power producers, the transmission grid operators, and the local utilities to coordinate production capacity with user demand. By the 1980s, the substations were starting to become automated with analog switching, although they were still controlled by human intervention. By the 1990s, the automation was upgraded to digital controls with limited human intervention. The growth of renewable energy plants also added impetus to improve the automation. Unlike fossil fuel power stations, renewable energy plants have limited control over when they can produce power. If the wind stops blowing at a wind farm or if nightfall or heavy cloud cover puts a solar array below its production threshold, the grid needs to be able to react virtually instantaneously to pick up the lost supply from other sources. 

The Smart Grid offers a design solution to this fundamental power grid problem. Where did the Smart Grid actually come from? It’s actually the existing distributed power grid that’s been around for the past 70 years or so. Like the smartphone and all those other smart devices we covet, the secret sauce that is making the old power grid into the Smart Grid is interactivity. Whereas the current power grid is essentially a one-way stream of power with relatively slow reaction to changes in demand, the quickly evolving Smart Grid will be able to react to power demand changes in real time and realign power production and distribution to match. It can also react to power inputs from customers producing off-grid renewable power and crediting the microproducers in real time. Although this is a gross simplification of the process, the concept provides the necessary background for the purpose of this article. 

Potential impact on the commercial building market

While the Smart Grid as a market is still in its infancy, smart owners/managers are monitoring the trends, staying alert for opportunities to cut costs, and planning to keep their buildings compatible in the future. The grid continues to get smarter, presenting building owners/managers with greater tech-based opportunities for cost savings. Concurrently, more sophisticated financial tools and legal structures are beginning to evolve to support the technology, slowly creating a stronger business case for investments in this sector. Major Smart Grid investment this early should be done only with significant research, but the day is coming when those unfamiliar or unprepared to interact with a Smart Grid will be at a competitive disadvantage in the commercial building market. 

Becoming familiar with available technology is the first step. Smart meters, BAS, and building energy management systems (BEMS) are basic tools building owners/managers can use to cut costs internally as well as take advantage of external opportunities. The degree to which a building is centrally controlled/monitored and able to interact with the outside world determines its potential to benefit from Smart Grid-related opportunities. For example, knowing and being able to isolate the individual energy use of each major piece of an HVAC system allows for more flexibility when taking advantage of dynamic electricity pricing or negotiating a demand response (DR) contract. 

Currently, the most common opportunities are related to DR agreements with utilities. The Federal Energy Regulatory Commission defines “demand response” as: “Changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices, or when system reliability is jeopardized.” It is important to note that DR agreements are negotiated contracts between businesses and utilities. As such, they are purely optional and intended to be a flexible way for large electricity customers and utilities to mutually benefit from the real-time information smart meters can now provide. Whether done manually or remotely through installed automatic demand response (ADR) components, it is a contractual agreement between two parties, and both parties must understand the expectations and benefits before moving forward. 

Aside from DR, owners/managers can use building smart meters to benefit from dynamic electricity pricing by running equipment with strategic intent. BAS can be set to limit cooling, for example, when power prices hit a setpoint or pre-cool a space when prices are low. This is another scenario where proper technology (smart meter + BAS/BEMS) can yield financial benefits and justify investment. 

Also, smart meters, and the advanced metering infrastructure (AMI) necessary to effectively use them, have not yet achieved widespread use. Much remains in both the R&D pipeline and regulatory negotiations before the fully functional AMI is ready for prime time. The transition to a fully integrated Smart Grid will take time, but it is a matter of when—not if. As this structure evolves technologically as a market concept, there will be more opportunities. Building owners should prepare their buildings now to take advantage of the opportunities that are on the horizon. 

How the Smart Grid will affect building owners

To capitalize on these rapidly evolving business opportunities of the emerging Smart Grid, building owners and managers should ensure their building infrastructure is set up to take advantage of them. Although there are many emerging technologies associated with the Smart Grid, most are related either to power stations or to transmission and distribution networks. Because this article is intended for building owners, managers, and designers, those technologies are not addressed in this article. Rather, the focus is on those emerging technologies that will be implemented at the micro-level of individual buildings up to a campus of related buildings. The common thread at this end of the power spectrum is targeted metering of power usage, disciplined and orderly power distribution within the facility, and, to the extent it is applicable, local renewable power production. 

Traditional metering is a one-way stream of usage data from the utility meter up to the local utility and eventually the power producer with a significant time lag from days to weeks. On the fully functional Smart Grid, a smart meter will be the communication gateway between the building and the local utility and also the other two parts of the grid: the transmission and the power stations. The goal of the Smart Grid is to allow all these components of the power grid—major producers, power transmitters, and end users—to react in real time to the aggregate power demands across their domains.

How the Smart Grid will affect building operators, designers

Now that a basic understanding of how the Smart Grid will eventually operate has been established, and the financial incentives have been identified, an intelligent determination of the features an individual building will need to reach its full potential on the Smart Grid can be explored. Without the preceding background information, the uninformed operator and designer could fall for the next fad touting Smart Grid integration—whether cost- and operationally effective, or not. 

Advanced Metering Infrastructure: AMI is the power industry term for the overall infrastructure including electronic hardware, data management software, and local building smart meters that will allow all the market players to communicate power usage data securely, efficiently, and, most importantly, in real time. For building operators and designers, the component of interest and responsibility is the smart meter. 

For the data that a smart meter collects to be useful upstream, it has to be as targeted as possible. To take advantage of peak demand saving incentives, the peak demand loads must be isolated from all other metered loads. Examples of these peak demand loads include major power consuming HVAC equipment such as chillers, air handlers, and pumps and cooling towers. In larger facilities and campus facilities, these loads should be submetered further to enable determination of power usage, not only by building or area, but also by operational priority. 

Examples of the need to categorize based on operation priority include mission critical servers for financial institutions or major life safety equipment in a larger commercial building that cannot be shunted for any reason regardless of the financial incentive from the utility. If they are on the same power infrastructure as general tenant spaces—or support spaces in the case of owner occupied buildings—the entire power demand of the co-mingled systems is taken off the table for eventual utility incentives. As such, it is imperative for building operators and designers to be able to segregate critical systems from noncritical and support systems. Typically, for most businesses, the cost impact of reduced productivity from even noncritical systems may be too great compared to the potential utility incentives that are being offered. As such, it is important for the entire building management and operations team to establish the true costs and benefits of any DR scheme and agree to cutbacks only where the impact of the reduction makes overall financial sense. After the determination of appropriate systems is made, then only those sub-systems need to be isolated and tracked through the AMI. 

Design, renovation of power distribution: The critical issue at the local building level is the efficacy of the power distribution infrastructure. The promise of the Smart Grid is to allow buildings to help their local utilities manage peak power demand in return for financial incentives. The facility electrical designer has a number of options to implement a smart metering infrastructure into new and existing buildings. The common feature among all solutions involves a central signal from the utility that a curtailment event is required. Typically, this communication component is by the utility and is a part of the actual utility meter. The two general approaches the building owner can implement include a more rigid solution and a more flexible solution. Each has its pros and cons. In the rigid solution approach, the designer provides smart breakers for various power circuits for non-emergency, non-essential loads that he or she can actively disable based on a hierarchy similar to Table 1. This rigid solution, though more invasive to the building’s power infrastructure and thus higher first cost, ensures a higher level of certainty that curtailment loads will meet contractual requirements of a DR agreement. Alternatively, a more flexible solution is to allow the BAS to send signals to various equipment controllers or even to smart panelboards to either raise setpoint temperatures or other parameter settings that will produce the desired demand reduction in HVAC systems, selectively shutting off particular lighting circuits to create step dimming (most economical), or sending a signal to a lighting control panel to dim all or specific lighting fixtures or circuits to achieve desired lighting reductions. The risk to this solution is that the reductions may not always meet the reduction targets based on the intricacies of BAS sequencing, safeties, and overrides. The following describes the general design considerations to implement these options. 

For the rigid solution, the challenge to implement smart breaker load shedding is the redesign and re-installation of existing power distribution to the extent necessary to allow isolating non-essential power loads at the scale that meet the requirements of the utility offering the DR incentive. The solution is a balancing act. In some situations, it will require selective re-feeding of feeders from comingled panels to dedicated panels that are on the smart metered non-essential feed. In most instances, the most cost-effective solution may be to isolate the non-essential loads, wherever they may be fed from, using smart breakers that have a shared communication protocol—typically wireless—with the smart metering system. This allows the maximum penetration into the building’s power distribution infrastructure and allows multiple levels of control over non-essential and even noncritical loads, depending on the incentives that are being offered. 

For new buildings, it is imperative for electrical designers, building owners, and building operators to establish a hierarchy of specific targeted and critical loads to segregate those that the building owner has determined are “on the table” during eventual DR agreement negotiations. After the loads are classified, the electrical designer can proceed with a power distribution scheme that not just allows originally installed components to be properly segregated, but also anticipates future growth of the loads by category. Table 1 offers an example of the categories and sample loads that may be established to help define the overall power distribution system and provide guidelines for future expansion and renovation within the building. 

The flexible solution also requires some level of upgrade to the power distribution. However, most of the curtailment actions can be implemented through modifications to BAS sequence of operations and lighting controller sequencing. In new construction, the designer may choose to include smart panelboards and smart breakers to allow a hybrid solution that includes BAS sequences of operations tailored to lowering power demand through raised thermal setpoints in the cooling season and lowered setpoints in the heating season, and also implementing direct shunting of specific power circuits where it makes more economical sense to isolate non-essential loads and simply turn them off instead of variably reducing capacity. 

Most small commercial HVAC equipment does not have an option to variably reduce performance; it is simply on/off. For those devices, shutting power off through a smart breaker may be the most practical approach. For HID lighting, the only practical load reduction scheme is to segregate a portion of the lighting to specific circuits that can be shut off when required. Fluorescent lighting may be dimmed using dimming ballasts, but the cost of the premium ballasts may outweigh any utility-based financial incentive or extend the payback beyond acceptable limits. The more practical solution is to simply route certain fixtures to dedicated circuits that can be selectively shut off through lighting controller relays or smart breakers to simulate a step dimming solution that is acceptable to the building occupants, life safety requirements, and curtailment requirements (see Figure 3). Alternatively, where light levels must remain more uniform, fixtures may be provided with dual ballasts to reduce a portion of lamps within each fixture in certain coverage areas.

Wireless, smart meter and panel/BAS integration, renewable energy sources, and electric vehicle are technologies on the horizon that will directly affect commercial buildings and are worth further exploration. 

Wireless technologies: In the U.S., the National Institute of Standards and Technology (NIST) has been tasked under the Energy Independence and Security Act of 2007 with creating the overall master plan of Smart Grid interoperability standards. Within that framework, IEEE is at the forefront of standards development to ensure uniformity and interoperability of the various components of the power production, metering, and data tracking on the Smart Grid. Of particular interest to building designers is a group of specialized standards developed under the IEEE 802 LAN/MAN Standards Committee. The various working groups under this committee are developing the protocols for local area networks and metropolitan area networks that are the foundation of the interconnectivity and communications needed to ensure secure, reliable data transfer from buildings all the way up to the power producers as part of the AMI. Of the myriad wireless protocols, most of the major technology vendors are using this technology instead of the technology used for cellular telephony. As such, there may be interoperability issues within the growing field of BAS wireless controls. As of last 2012, IEEE has adopted a new dedicated wireless protocol for emerging Smart Grid technologies commercially referred to as the wiSUN protocol, an open-source protocol based on IEEE 802.15.4g-2012, IEEE Standard for Local and Metropolitan Area Networks—Part 15.4: Low-Rate Wireless Personal Area Networks (LR-WPANs) Amendment 3: Physical Layer (PHY) Specifications for Low-Data-Rate, Wireless, Smart Metering Utility Networks, that operates in the 896-901 MHz, 901-202 MHz, 902–928 MHz, 928-960 MHz, 1427-1518 MHz, and 2,400–2,483.5 MHz bands within the U.S.

Integration of BAS with smart meters, power panels: To achieve a flexible power reduction scheme, it will be essential that HVAC and lighting controls are able to react to the Smart Grid’s AMI. This communication will allow selective shunting of segregated loads or partial reduction of targeted loads, depending on operational and life safety requirements. The nuances of the various categories in Table 1 and Figure 3 will require intimate communication between the AMI and not just the building level smart meter, but also with contractually defined specific power-consuming devices within a building under ADR schemes. 

Without a solid understanding of these systems and hierarchy, there is great potential for abuse and unintended release of operation control for nonproportional compensation through utility incentives. Many of these instances of apparent utility takeover of private residences and commercial properties litter the typical Internet searches for the term “demand response.” In virtually every case, it was a situation where the building owner was uninformed about the agreements he or she was signing and what was expected in return for the financial incentives that were so gladly received.

Electrical and HVAC designers should be aware of standards that are being developed to establish an agreed-upon protocol for the communication of these systems with the technologies being developed within the AMI domain, which will intersect with the facility engineering domains at the smart meter. Of particular note will be ASHARAE Standard 201P (proposed)—Facility Smart Grid Information Model, which is currently under development in conjunction with NEMA to create uniformity in the communication between HVAC equipment, BAS, smart breakers and panels, lighting controls, and the AMI. This eventual standard, along with IEEE 802.15.4g, will enable the discrete control of virtually all energy consuming equipment to allow variable reduction in power consumption to meet negotiated power reduction targets of ADR agreements. By properly categorizing load centers and establishing a communication protocol between controlled equipment and the power source without and beyond the building envelope, all parties can benefit without surprises or sensational headlines in the media.

Locally produced renewables at the building level: Currently, an increasing number of large-scale renewable production facilities are being developed by the major power producers and their affiliates. Because they are developed with direct interaction with the power producers, they are directly connected to the power grid and integrated through the AMI. Point-of-use renewable energy technology—namely solar photovoltaic and wind power—is beginning to turn buildings into micro power generators. This brings opportunities for energy arbitrage through net metering while creating a more complex legal situation. The promise of a fully functional Smart Grid must also include a fairer and more interactive marketplace for locally produced renewable power at this micro scale of 10 MW or less. At present, customers may produce on-site wind or solar photovoltaic power to offset local building loads and back feed unused power to the local utility grid and reverse power usage charges. This activity is known in real time by the utility or the power producers to determine the magnitude of the aggregated regional load to establish a utility-level response back to the power producer whether or not additional power station resources are required for real-time loads. Similarly, weather predictive loads such as forecasted heat waves, high wind events, or similar meteorological forces can affect not only demand, but also local production capacity. However, utilities currently do not know the specific production at the individual building level unless smart meters are installed. Without that discrete knowledge, it is not possible to provide targeted incentives to individual customers. 

IEEE has developed Standard 1547: Standard for Distributed Resources Interconnected with Electric Power Systems to help standardize the technologies and processes necessary to integrate these small organic producers into the overall AMI of utilities and power producers. 

Electric vehicle technologies and the Smart Grid: Electric cars might become the grid’s first widespread energy storage system. Demand for building charging/discharging stations is increasing and along with other energy storage systems, they will need to be integrated into the AMI and DR agreements. To promote interoperability and standard design for plug-in electric vehicles (PEVs), NIST developed PAP (Priority Action Plan) 11: Common Object Models for Electric Transportation. PAP-11 will ensure that the grid can support the charging of the anticipated growing number of PEVs and optimize charging capabilities and vendor innovation. PAP-11 also supports energy storage integration with the local utility distribution grid, which is addressed separately under PAP-07: Energy Storage Interconnection Guidelines. 

Opportunities on the horizon

The emerging Smart Grid offers tremendous promise for all levels of the power grid, but can also cause tremendous pain if not properly understood and implemented. Consider this introduction to some of the basic technology, developments, and pitfalls that owners, operators, and designers of the individual building should understand to position the building to take advantage of everything the emerging Smart Grid has to offer. By designing the power distribution system properly and understanding what operation controls owners are willing to cede to the power producers and utilities, the Smart Grid can offer significant financial incentives to building owners. The proactive owner who makes his or her buildings as smart as the grid is the one who will reap the rewards.

Smart panel and breaker implementation notes

1. The utility level smart meter is the gateway from the utility to the customer and is provided by the utility. Depending on the level of control that a customer is comfortable ceding to the utility in exchange for financial incentives, the gateway modem or other communication device can communicate with other smart controllers further down the distribution, either directly or indirectly through customer-initiated and directed BAS curtailment actions.

2. Lower level panelboard smart controllers are provided by the customer.

3. The designer must ensure that the communication protocols of the entire smart power system are compatible. Coordinate with the utility meter’s communication protocol.

4. The distribution level panelboards typically have RS-232 and/or dry contacts for local computer and/or BAS interfaces. Most manufacturers offer multiple channels to control a discrete number of breakers or groupings of breakers to allow zoning or variable levels of programmable control authority.

Sunondo Roy is vice president of CCJM Engineers. He is a cross-disciplinary engineer who has worked in educational, commercial, aviation, industrial, and institutional facilities for the past 25 years.

Joshua Polasky is an associate at CCJM Engineers, where he specializes in business process assessments and energy audits.

Blake Shanahan is an electrical engineering intern at CCJM Engineers who is pursuing his electrical engineering undergraduate degree at Northern Illinois University.

For further reading

The Smart Grid: An Introduction. Prepared for the U.S. Department of Energy by Litos Strategic Communication under contract No. DE-AC26-04NT41817, Subtask 560.01.04

Advanced Metering Infrastructure (AMI).Document # 1014793. Electric Power Research Institute, February 2007.