White Paper on Benefit Analysis of Smart Grid Projects

Smart grids are rolling out internationally, with the United States (U.S.) nearing completion of a significant USD4-plus-billion federal program funded under the American Recovery and Reinvestment Act (ARRA-2009). The emergence of smart grids is widespread across developed countries. Multiple approaches to analyzing the benefits of smart grids have emerged. The goals of this white paper are to review these approaches and analyze examples of each to highlight their differences, advantages, and disadvantages. This work was conducted under the auspices of a joint U.S.-China research effort, the Climate Change Working Group (CCWG) Implementation Plan, Smart Grid. We present comparative benefits assessments (BAs) of smart grid demonstrations in the U.S. and China along with a BA of a pilot project in Europe. In the U.S., we assess projects at two sites: (1) the University of California, Irvine campus (UCI), which consists of two distinct demonstrations: Southern California Edison's (SCE) Irvine Smart Grid Demonstration Project (ISGD) and the UCI campus itself; and (2) the Navy Yard (TNY) area in Philadelphia, which has been repurposed as a mixed commercial-industrial, and possibly residential, development. In China, we cover several smart-grid aspects of the Sino-Singapore Tianjin Eco-city (TEC) and the Shenzhen Bay Technology and Ecology City (B-TEC). In Europe, we look at a BA of a pilot smart grid project in the Malagrotta area west of Rome, Italy, contributed by the Joint Research Centre (JRC) of the European Commission. The Irvine sub-project BAs use the U.S. Department of Energy (U.S. DOE) Smart Grid Computational Tool (SGCT), which is built on methods developed by the Electric Power Research Institute (EPRI). The TEC sub-project BAs apply Smart Grid Multi-Criteria Analysis (SG-MCA) developed by the State Grid Corporation of China (SGCC) based on the analytic hierarchy process (AHP) with fuzzy logic. The B-TEC and TNY sub-project BAs are evaluated using new approaches developed by those project teams. JRC has adopted an approach similar to EPRI's but tailored to the Malagrotta distribution grid.