Saturday, October 10, 2009

Certificate student offers systems analysis of power grid - SDM Pulse Fall 2009

By Brian London, SDM ’09 Certificate Program

Solar, wind, and other alternative sources of power generation may all be part of the solution to today’s energy crisis—but integrating these renewable and new resources along with traditional sources of energy poses major challenges for the nation’s electrical grid.

The current national electrical grid is essentially the same as the electrical distribution system laid out by Thomas Edison; this aging infrastructure and the increasing demand for energy is pushing the grid to its limits. In addition, a growing awareness of environmental issues (including global warming), as well as economic and national security issues, have created a push to limit the use of carbon-based energy sources.

The passing of the economic stimulus bill in February 2009 made billions of dollars available to upgrade the country’s power grid and pursue clean energy technologies. However, many of these technologies are being investigated without a systems-based approach, or an understanding of their true costs and benefits. One example is the addition of corn-based ethanol into gasoline. While its benefits were highly touted, ethanol actually has a negative environmental impact, and it raises the cost of food.

I decided to analyze the problem with the electrical grid for my MIT System Design and Management (SDM) Program capstone project, a required element of the certificate program in systems engineering. Not only is solving the problem a very interesting challenge, but it is one that’s particularly in need of a systems-based solution. This paper describes my analysis of the stakeholder needs, with the end goal of succinctly and clearly defining the root problem, allowing for the evaluation of possible solutions.

Every day I read about new projects and plans to tackle some element of the energy crisis, but people seem to be leaping ahead without first taking time to define the fundamental underlying problem. It’s a pattern I’ve seen time and time again in my career. For example, in the years before I started my current job as a system engineer at Draper Laboratory (an independent, not-for-profit, applied research laboratory located in Cambridge, MA), I spent several years working as a civilian for the US Army in research and development. During that time I observed that while efforts across the industry developed advanced systems in the support of military operations, the soldier in the field was often laboring in need of something completely different.

This lesson has stayed with me, and it is one of the reasons that I decided to work to frame a problem properly for my SDM capstone project. The goal was to develop the metrics to provide a method for evaluating proposed solutions for the US electrical system—including defining the important criteria for success working within known political, economic, and business constraints.

The US electrical system consists not only of the generation, transmission, distribution, and end user of electricity. The system also includes the financial exchange for the purchase and sale of electricity, which is divided into several regions, each with different laws and regulations. System regulations at the state and federal levels have as much impact on the system as the type of fuel used in generation.

In some states, the generation, transmission, distribution, and sale of electricity are all accomplished by the same company or utility. In other states, this vertical monopoly is illegal, so a utility company may only provide the customer point of sale, or more often own a portion of the supply chain. In order to examine the problem at a national level, I separated the generators, transmission companies, and distributors, but assumed that the utilities provided the distribution and sale of electricity.

I started with some tools I learned in Professor Ed Crawley’s class in system architecture and a basic systems engineering approach—a top-down analysis of the US electrical system to frame the problem statement and compile stakeholder-specific needs.

At first, I undertook to identify all the stakeholders with priority needs of the electrical system, using object process methodology (OPM) to model their relationships. Unfortunately, the OPM model was very complex and too intertwined to analyze in the framework of the capstone project.

So, I decided to try to see whether a design structure matrix (DSM) might work. Although DSM is typically used to analyze the dependencies among the system elements or processes, it seemed a useful construct for illustrating how various stakeholders affect each other.

Even with this approach, my initial DSM was enormous because there were so many interdependencies. I therefore determined for a first-level analysis to reduce the number of stakeholders and focus on those most important to the overarching problem. To eliminate superfluous stakeholders, I used the DSM to identify which acted as second-order stakeholders. I defined these as stakeholders that influence others, but do not provide any direct benefit to the system.

Original DSM

Figure 1:
The design structure matrix (DSM) shows how the stakeholder in the row affects the stakeholder in the column. After the formation of this original DSM, stakeholders were grouped together and pared down to produce the final DSM.

Final DSM

Figure 2:

In this simplified form of the DSM, it’s easy to see, for example, how consumers (given
the designator 1) influence the state government and provide money to utilities. They
are also regulated by state government, receive a product from the utilities (equipment
to tie to grid), and get energy from the transmission company.

I then removed the second-order stakeholders to simplify the DSM. This was important as some of the stakeholders have conflicting needs, and identifying the key stakeholder allows me to focus on those that can provide the most benefit to "society," a conglomerate of all stakeholders.

Grouping stakeholders was a second technique used to eliminate stakeholders from the analysis. I began by arranging stakeholders with similar relationships together. Some clusters clearly displayed that some stakeholders only influence others. Lobbyists, for example, were removed because they only advocate for the needs of others. Those whose interests were more tangential to power generation and distribution also had to be removed. Investors, for example, were removed because their needs are not specific to this field. In addition, a variety of government organizations were removed as they provided input to the Federal Energy Regulatory Commission (FERC), which could then act in their behalf.

The resulting list of stakeholders includes three major groups; regulators, consumers, and energy providers, which include the utilities, generation companies, and transmission companies. There are also three levels of regulators—federal, regional, and state. With an understanding of the primary stakeholders, I then had to perform a deeper dive to examine their needs. Their relationships were also identified and grouped.

I used a "to, by, using" analysis to communicate the needs of the individual stakeholder. For example I found that consumers need "to" consume electricity, have minimal direct change, reduce greenhouse gas emissions, and reduce dependence on foreign oil. I then assigned attributes to the needs. Attributes of the customer’s need to minimize direct change are: convenience, equipment location, and effort. The need to minimize direct change could be met by minimizing apparent complexity, minimizing new infrastructure, and minimizing change. But these "by" statements are design, and I had to force myself from completing this part of the analysis.

Examining these needs in detail not only reveals how they align or diverge, it makes it possible to ensure that each need is considered, which drives system requirements. We would not want to design a product that could require significant input from the end user, as it would be impossible to implement across the country. And yet, such solutions have been proposed.

The needs of each key stakeholder can be summarized as follows:

Consumers want a low-cost, "clean" solution, where the change (and complexity) is concealed. They want something at least comparable to today’s availability, reliability, convenience, and safety. And, some are willing to make trades for lower rates.

Utilities want to maximize profits by increasing efficiency, minimizing blackouts (increasing reliability), and reducing costs (including for electricity).

Generators want to maximize profits by increasing efficiency, having lower fuel costs, maximizing revenue opportunities, minimizing ramp-ups and downs, and minimizing fees and taxes.

Transmission companies want to maximize profits by charging for use and minimizing upkeep costs. Regional transmission offices want to ensure reliable operation within the region, meeting the current and future needs of the wholesale electricity marketplace members.

The FERC wants to ensure that the nation’s current and future energy needs will be reliably met (protected against natural and malicious outages) and to maintain an environmentally safe and secure infrastructure.

States want to protect the varied desires of their constituents, meeting their energy needs, environmental concerns, job stability, etc.

Thoroughly examining these different perspectives enabled me to formulate the following problem statement:
To transform the current electrical system into a more flexible and expandable system that reduces emissions of greenhouse gasses and other pollutants, by safely and reliably meeting electrical demands without impacting customer lifestyle, while using cost-effective, distributed, and centralized energy generation sources. This statement may seem obvious—indeed I was surprised it was not more complicated—but it is grounded in a systematic design approach to analyzing the problems facing the national grid and therefore not haphazardly conceived. Proposed solutions should strive to satisfy the problem, but a set of metrics is needed to compare competing solutions for the current system. Each attribute will become a metric once formally defined. This uniform definition is the next step of analysis, and I hope to follow up by working with the selected stakeholders to establish their relative importance. The metrics will not include values, as the goal of this effort was not to develop a specification for the design of a system upgrade, but to develop the tool for the evaluation of proposals.

I am currently applying to the SDM master’s program and intend to delve deeper into these issues for my master’s thesis.

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