Cost benefit analysis for smart grid projects
- Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
- Southern California Edison, CA (United States)
The U.S. is unusual in that a definition of the term “smart grid” was written into legislation, appearing in the Energy Independence and Security Act (2007). When the recession called for stimulus spending and the American Recovery and Reinvestment Act (ARRA, 2009) was passed, a framework already existed for identification of smart grid projects. About $4.5B of the U.S. Department of Energy’s (U.S. DOE’s) $37B allocation from ARRA was directed to smart grid projects of two types, investment grants and demonstrations. Matching funds from other sources more than doubled the total value of ARRA-funded smart grid projects. The Smart Grid Investment Grant Program (SGIG) consumed all but $620M of the ARRA funds, which was available for the 32 projects in the Smart Grid Demonstration Program (SGDP, or demonstrations). Given the economic potential of these projects and the substantial investments required, there was keen interest in estimating the benefits of the projects (i.e., quantifying and monetizing the performance of smart grid technologies). Common method development and application, data collection, and analysis to calculate and publicize the benefits were central objectives of the program. For this purpose standard methods and a software tool, the Smart Grid Computational Tool (SGCT), were developed by U.S. DOE and a spreadsheet model was made freely available to grantees and other analysts. The methodology was intended to define smart grid technologies or assets, the mechanisms by which they generate functions, their impacts and, ultimately, their benefits. The SGCT and its application to the Demonstration Projects are described, and actual projects in Southern California and in China are selected to test and illustrate the tool. The usefulness of the methodology and tool for international analyses is then assessed.
- Research Organization:
- Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA (United States)
- Sponsoring Organization:
- USDOE Office of Energy Efficiency and Renewable Energy (EERE)
- DOE Contract Number:
- AC02-05CH11231
- OSTI ID:
- 1440967
- Country of Publication:
- United States
- Language:
- English
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