Southern California Edison, which serves about 13 million people in the Golden State, is a good example of a big investor-owned utility that’s taken a leading role in the smart grid. SCE has deployed Itron smart meters to all of its roughly 4.3 million customer accounts. It has taken a lead on installing next-generation distribution grid management systems, as well as energy storage and neighborhood grid integration pilot projects.

But this impressive list of smart grid accomplishments (SCE was named one of GTM Research’s Top 10 North American utilities for this year) is just the beginning of a transformation that’s going to bring more changes to the utility in the next decade than it’s experienced in the last 100 years, according to Doug Kim, director of advanced technology for SCE.

That makes for a long list of projects yet to come to meet the myriad challenges the utility is facing in the coming years, Kim told the audience at Greentech Media’s Networked Grid 2013 conference this week. Here’s a recap of those challenges, as well as some of the projects underway to solve them.

The Challenges of Distributed Supply, Unpredictable Demand

One of SCE’s top concerns, shared by other California utilities, is how to manage the growing share of intermittent renewables powering its grid. State mandates call for utilities to get 20 percent of their power from green energy today, and that figure is set to grow to 33 percent by 2020 -- and while some of that power comes from stable sources like geothermal or small hydropower, the lion’s share will come from solar and wind power.

Those on-again, off-again power assets represent a challenge to utilities that have traditionally delivered power from central generation plants to end-customers, Kim said. Unlike those assets, with solar and wind power, “we can’t dispatch them; we can’t predict them; we can’t ramp them smoothly up and down,” he said. “We have to react to those in a very fast-acting way.”

To make things more complicated, many of these generation resources are no longer connecting to transmission lines, but to SCE’s distribution network, which wasn’t designed to manage two-way power flows, Kim explained. That means that SCE can’t rely on central control architectures to manage those resources -- “We have to figure out how to do this in a more distributed manner,” he said.

SCE is also facing a more unpredictable set of demands from new technologies at the customer side, he said. While plug-in electric vehicles aren’t yet common enough to present big challenges to the utility, they’re still big enough power users when they are plugged in that “they may end up looking like a whole home all by itself,” he said.

Even the millions of smart meters SCE has deployed represent a potential disrupting factor -- and not just because they’re a big data challenge for the utility. That’s because they can enable customers used to paying flat fees for power to start signing up for time-of-use rates, changing their energy use based on real-time feedback from home energy management platforms, or even becoming “transactive energy” players, sending their home-generated solar power into energy markets or shifting energy use to take advantage of price fluctuations.

In other words, “Customers will now make their decisions based on economic choices,” which will bring a new level of unpredictability into the equation. “Though we are in the early stage, these things will come.”

The Solutions Set: Energy Storage, Distributed Intelligence, Large-Scale Planning

As for how SCE plans to manage these grid reliability impacts, “There are many, many different solutions,” Kim said. Energy storage, while expensive and mostly untested on the grid, is one option for better managing intermittent wind and solar power, as well as smart inverters, power electronics, and “smarter, faster sensing on the distribution grid,” he said.

“The question, though, is how you can optimally construct the portfolio of all these different solutions. That’s not a trivial matter,” he said.

Take energy storage, or more specifically, battery-based, grid-scale energy storage. SCE is exploring the potential of batteries to help balance the grid via two Department of Energy smart grid stimulus grant-funded projects, both on the large scale and small scale.

On the large scale, SCE is working with A123 Systems on an 8-megawatt, 32-megawatt-hour lithium-ion battery warehouse of sorts in the Tehachapi mountains, aimed at stabilizing and integrating wind power resources into the grid. On the smaller scale, SCE is integrating four different configurations of batteries, ranging from a 2-megawatt substation battery to smaller “residential energy storage units” or RESUs, into its Irvine, Calif. smart grid demonstration project.

While SCE sees a role for energy storage in its future, however, “we’re not ready to mandate how many megawatts in the system we need today -- the economics have not yet been penciled out,” he said. That’s a reference to a recent CPUC decision that would require the utility to find 50 megawatts of energy storage for its Los Angeles region power mix by 2020 -- a move that SCE has argued will distort the market while leaving unaddressed the question of how these storage assets will serve a useful economic purpose.

As for tapping the power of distributed intelligence -- that is, digital devices on the edges of the grid that can help manage the unpredictable ebb and flow of distributed energy resources and more finely-managed customer energy use -- SCE is dealing with a long roster of integration challenges, from hooking up smart meters to distribution management systems (DMS) to integrating transmission grid synchrophasor measurement units into the utility’s operations.

“All of these are now converging, and they have to play together,” he said. On the smaller scale, SCE’s $80 million, Department of Energy grant-funded Irvine project will test the interplay of energy-smart homes, solar panels, grid batteries, plug-in car chargers, grid voltage management, self-healing circuits and communications and controls networks in a single neighborhood. That project has a huge list of partners, including Boeing, General Electric, SunPower and Space-Time Insight, to name a few.

As for integrating rooftop solar power, SCE is testing a variety of “smart inverters” that could help each solar power system better manage its interaction with the grid, he said. “We’re looking at ways to engage, like the Germans do, in supporting the distribution grid,” he said, citing the example of Germany, a country that’s put solar inverter regulations and requirements into place to help manage its massive share of distributed solar power.

As for large-scale grid planning, SCE has undertaken a number of projects, including a California Energy Commission (CEC)-funded partnership with GRIDiant and New Power Associates, which analyzed transmission and distribution systems for a grid serving about 275,000 customers. It’s also a leading player in a DOE stimulus grant-funded project to deploy synchrophasors -- devices that monitor transmission lines by collecting data in sub-second intervals -- across the entire western United States. 

The Long Road Ahead

Despite all these smart grid projects on its books, SCE still spends plenty of money on old-fashioned capital projects such as replacing old power lines, power poles, transformers and the like. Kim noted that SCE’s $3-billion-per-year capital investment plans over the next few years are primarily aimed at these kinds of improvements, with a relatively tiny portion aimed at “smart grid’ investments.

Indeed, “I would think that it’s imprudent to go and make significant investment in the smart grid today,” Kim said, “because we’re just not there yet.” Many of the most advanced smart grid technologies may not be ready for mass-deployment yet, he noted. Even those that are commercial-ready, so to speak, must be approved by the California Public Utilities Commission, which requires a lot of testing and verification of the cost-benefit equations involved with deploying them, he said.

“It’s certainly our hope that in the next rate case, and the following ones, there will be more and more proposals for leveraging these smart grid technologies,” he said. But those proposals will have to make sure to offer better service and more efficiency at less cost -- and provide a potential path toward solving the utility’s future challenges -- to make it out of the gate.