Towards uniform benefit-cost analysis for smart grid projects: an example using the Smart Grid Computational Tool

Smart grid technology is being rolled out around the world, with the United States nearing completion of a particularly significant 4 plus billion-dollar Federal program funded under the American Recovery and Reconstruction Act (2009). Under the Climate Change Working Group Implementation Plan, Smart Grid activity comparative analyses are being conducted of benefits estimation methods with example applications to 4 case study smart grid projects, 2 in each country. In this first study, three of eight Southern California Edison’s Irvine Smart Grid Demonstration Project sub-project benefits have been analysed over the period 2010-2035. The analysis uses the Smart Grid Computational Tool (SGCT) developed by Navigant Consulting Inc. for the U.S. Department of Energy based on Electric Power Research Institute methods. Results show significant benefits potential for technologies such as distribution voltage and VAR control and utility-scale batteries, while a 22-residence zero net energy home demonstration inspired by California’s 2020 residential energy efficiency standard falls far short of economic breakeven at the current stage of costs and technology performance. The experience gathered indicates the SGCT being intended for widespread U.S. smart grid evaluation use is necessarily simple, and consequently has limited applicability for international applications or comparisons.