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Due to the fast industrialization and economic development in Korea, energy-guzzling industries such as steel, shipbuilding, oil refining and chemistry came to form a majority of the Korean industrial structure, and the rapidly rising power demand from the industries has been met by increasing power supply facilities. However, due to several reasons including increased uncertainty of the power supply and demand since the large-scale blackout on September 15th, 2011, strong resistance to establishment of T&D facilities and power plants, environmental concerns related to GHG emissions and safety issues on the nuclear power plant stemming from the Fukushima nuclear power plant’s catastrophe, the paradigm of the power policies has shifted from expansion of the power supply to demand management, which has raised awareness of the role and necessity of the Smart Grid to secure flexibility in the power grid. Accordingly, the Korean government implemented a Smart Grid test bed project in Jeju island by investing $220.3 million in it for 42 months from December 2009 to May 2013. During the project, KEPCO invested $21.9 million in 5 areas including Intelligent Consumer, Intelligent Transport, Intelligent New & Renewable energy, Intelligent Power Grid and Intelligent Services to establish a Smart Grid environment and developed a new business model by integrating and verifying relevant technologies.
[Table 1] The overview of the Smart Grid test bed project in Jeju island
|Location||Gujwa-eup, Jeju Island||
|Scale||5 Fields, 2 S/S, 4 D/L,
|Partner||12 Consortiums (168 Companies)|
|Duration||Dec ’09 ~ May ’13 (42 Months)|
|Budget||Total $226.4 million
(Government $67.9m, KEPCO $21.9m, Private $136.6m)
|Results||Development and verification of 153 technologies including, AMI, EMS, EV charge infrastructure, energy storage
9 business models including, management of demand response, EV charging service
During the COP 21 held in Paris in December 2015, the Korean government announced its goal to reduce greenhouse gas emissions by 37% compared to BAU by 2030. To abide by the Paris Agreement, the government has decided to implement the Smart Grid deployment project as a major way to ease the burden of the Korean industry to reduce its greenhouse gas emissions and enhance the energy efficiency by controlling and distributing the power demand in real time.
KEPCO is the only power utility in Korea which can sell electricity to consumers, and it manages all watt-hour meters and installs and manages the watt-hour meters differently according to supply voltages.
[Table 2] Installation & management of watt-hour meters in the terms & conditions of the power supply
|Division||Low voltage (Contract per household)||High voltage (1 contract for a group)|
|Mgmt. method||Installation & mgmt. by KEPCO||Total usage : Installation & mgmt. by KEPCO
Household usage : Installation & mgmt. by consumers
After the SG test bed project in Jeju island, KEPCO invests $10.6 billion in building AMI for 22.5 million households with low-voltage meters managed by KEPCO in Korea from 2010 to 2020. This project is called “AMI establishment project”. On the sidelines of the project, KEPCO also deploys the Smart Grid in cooperation with the Korean government and municipalities by investing $32.1 million for household meters not managed by KEPCO from 2016 to 2018. KEPCO proposed “AMI-based power services” and “Consulting services for energy consumption” verified during the test bed project on Jeju island by forming a consortium of 8 companies including LG U Plus Corp. in cooperation with 12 municipalities including Seoul. Thanks to this, in October 2013, KEPCO was selected as a company to implement the Smart Grid deployment project and signed a business agreement with the Korean government in December 2015 and undertook the project in March 2016.
[Table 3] Process of the PJT implementation
* Expandes from the existing 8 regions to 12 regions
As a result of the pilot project, the “AMI-based service” and “Consulting for energy consumption” reduced the power consumption by 3.4% and 12.1% respectively. Currently, the services are provided through 73,000 AMIs and until 2018, 145,000 AMIs will be completed to be built for providing the services by 2025.
[Table 4] Plans & performance of the SG deployment project(watt-hour meters of customers)
|No. of meters (10,000)||7.3||4.1||3.1||14.5||7.3|
|Total cost (100 mil won)||189||102||74||365||189|
※ KEPCO AMI establishment project (watt-hour meters installed by KEPCO) : 22.50 million AMIs will be built by 2020
3. Overview of the System
The system of the Smart Grid deployment project consists of smart meters, PLC modem, DCU, EMS and TOC. The smart meters communicate with DCU through PLC, and DCU communicates with TOC through LTE.
[Figure 1] The system configuration
|TOC(Total Operation Center)||The system configuration|
|▪ Monitoring the overall operation & data collection status
▪ Data storage in DB, overall monitoring/control of operation
▪ Collecting/verifying/analyzing/managing the metering data
▪ Providing customer services including power planner(App/Web)
▪ Alignment with SG project’s control center etc.
The smart meters which are the key component of the SG deployment project have 2 types. AE-Type is applied to apartments and G-Type is applied to shopping malls, and the LP metering cycle is 15 minutes for both of them. DCU is a device to gather data of meters and it can communicate with 200 or more meters at the same time. Furthermore, the PLC modem is a device inserted in meters for PLC communication between DCU and meters, and it is very economical as it can communicate with up to 30 meters through RS-485 and has a repeater function to enhance the communication success rate.
|Smart Meter||▪Metering function : Active, reactive, VA, peak power
▪LP metering cycle : 1, 5, 10, 15, 30, 60 min.
▪Channel : 8(4 for sending & receiving power)
▪Other function : Instantaneous metering of voltage, current, frequency etc.
▪Rate sys. : Progressive charging system, TOU etc.
|▪Power line communication btw data concentrator & modem
▪Support for coding 128-bit AES or more
▪Communication with 200 or more w/h meters
|Com. method||▪Wired/wireless communication including PLC, RS-485, LTE etc.||ISO IEC 12139-1
|Modem||▪PLC communication btw data concentrator & modem
▪Protocol relay btw data concentrator & smart meter
▪Support for coding 128-bit AES
▪Communication btw up to 30 Ea-type, G-type w/h meter & RS-485
|EMS||▪Various electric power services including processing/analyzing/controling energy
▪Operation/mgmt./control services for managers and various consumer services via web & a smart phone application
|TOC||▪Gathering & storing data from LOC, overall monitoring & control of operation by each data storage location|
Not only does EMS carry out remote metering for consumers and power managers, it also provides additional services such as real-time energy usage notification and consulting services via PCs and a smart phone application by processing and analyzing the energy information. It provides monthly estimates for electric bills as well as the real-time power usage and current electric charging rates. Furthermore, it analyzes consumers’ energy consumption patterns and compares them with those of average people and energy savers in the neighborhood to motivate them to save their energy. It also provides Push functions through the smart phone application to notify usage goals and progressive & maximum demand to induce consumers to voluntarily join the demand response.
[Figure 2] Main functions of the APP services
1) Project overview
Since March 2016, KEPCO has been pushing forward with “AMI-based power services” and “Consulting services for energy consumption” to meters in apartments and shopping malls not managed by KEPCO in cooperation with the Korean government and municipalities.
[Table 6] Details of Project
|PJT||AMI-based power services||Consulting for energy consumption|
|Subject||131,500 apartments||13,000 shopping malls|
|PJT cost||$ 29 million($0.14/month per household)||$ 3.4 million ($0.88/month per mall)|
|Details||Inducing consumers to voluntarily save energy through notification of the progressive charging range and comparison with the neighborhood||Encouraging the reduction of peak load and energy consumption by providing consulting services such as offering real-time electric charging info.|
|PJT period||Establishment : 2016∼2018(3 years), operation : 2016∼2025(10 years)|
|Consortium||21 participants (Municipalities : 12 areas including Seoul, 9 business partners including KEPCO)|
[Figure 3] Business models of the project
From 2016 to 2018, 144,500 AMI facilities are going to be built for apartments and shopping malls in 12 municipal areas.
2) The purpose of the project
The major goal of the SG deployment project is to secure flexibility of the power system. KEPCO already completed introduction of the SG system in the existing power system about 10 years ago, and it is planning to build the nationwide Smart Grid by installing AMIs for meters directly linking the power supplier and consumers in the power system.
[Table 8] Project Objective
|Division||Reduction in power consumption||Reduction in the
|Consulting for energy consumption||3.4%||5.0%||3.4%|
3) Pilot project
The pilot project was implemented to 1,181 apartments and 61 shopping malls, which helped the apartments and shopping malls to reduce the power consumption by 3.4% and 12.1% respectively.
[Table 9] The overview & performance of the pilot project
|Division||Subject||No. of consumers||Period||Reduction rate(%)|
|AMI-based power services||Gumho Daewoo Apt.||1,181 households||‘16.9. 2∼9.30||3.4%|
|Consulting for energy consumption||Tower plus||61 shops||‘16.8.16∼9.30||12.1%|
1) Economic Rationale
Reduction of the peak load & power consumption
The power rate system for Korean households in 2016(3 stages now) was subject to 6 stages of the progressive rate charging and the power rate of stage 6 was 11.7 times more than that of stage 1, one of the world’s top progressive rates. Last summer, the continuous heat wave resulted in the rapid rise in the household power consumption due to the increased usage of cooling machines including air conditioners, which has emerged as a serious social issue as it caused bad press and a series of suits against record high electric bills and the progressive charging system. This issue occurred as the consumers were not aware of their power consumption amount and charging information in real time until they got their electric bills. To resolve the issue, KEPCO is providing AMI consumers and power managers with additional services such as real-time energy use notification and consulting via EIS(Energy Information System) and a smart phone application. KEPCO provides the real-time power usage and charging information to consumers on a daily, weekly and monthly basis, analyzes their consumption patterns and compares them with those of average consumers and energy savers in the neighborhood to induce them to voluntarily join the demand response. The key function of EIS is the Push function notifying the usage goal and progressive & maximum demand. In case of the push function for the usage goal, when the individual energy consumption hits 80% or 90% of the usage goal, it is notified to consumers to be able to effectively manage their energy consumption. And in regard to the push function for the progressive & maximum demand, household consumers are notified of whenever their stage for the progressive charging range changes to prevent them from unexpected and enormous electric bills, and general power users including shopping malls are notified of whenever their maximum demand is reached to effectively manage their peak load. As a result of the analysis on the effects of the services, a remarkable difference was found in the power consumption patterns between consumers who received the services and those who haven’t. The power consumption of households and general users was reduced by 3.4% and 12.1% respectively, and the peak load was cut at a similar level to the power consumption. Through this, consumers can reduce the power rates and KEPCO, in return, can decrease the cost of building power plants and T&D facilities.
[Table 10] Reduction effects (Standard : 14,5000, 2.5% for 10 years)
|Reduction in energy
|Reduction in peak load||Reduction in greenhouse
Creation of the new business ecosystem and profits
KEPCO’s Smart Grid deployment project makes profits by receiving service charges from customers for providing its services to them after establishing the Smart Grid infrastructure. The AMI based services consist of fixed fee and flexible fee services. The fixed fee service charges each household $0.14(VAT excluded) every month, and the flexible fee service charges consumers 50% of the margin of the fixed arising when consumers’ stage of the progressive system drops to a low level due to their cut in energy consumption. The energy consumption consulting service charges each household $0.88(VAT excluded) every month. The service model in the Smart Grid is the 1st business model in the world and it is expected to make a great contribution to establishing a new energy business ecosystem.
※ VAT : 10%of supply value
2) Potential impact
Enhancement in the flexibility of the power system by applying the new rate system
Under the Korean power rate system, high-capacity consumers(contract demand-100kW or more, supply voltage-22,900V or more) are subject to Time of Use system(TOU), the low-capacity consumers(contract demand-less than 100kW, supply voltage-220/380V) are subject to seasonal rate system, and household consumers are subject to the progressive charging system, which are decided by the Korean government’s policy. The Korean government is now considering adopting a new power rate system to supplement a weak price signal and increase options for customers. When KEPCO’s Smart Grid deployment project is completed, a new rate system including Time of Use(TOU), Critical Peak Price(CPP) and Real Time Price(RTP) can be applied immediately. When such a flexible power rate system is applied, the volatility of the energy price will be reflected in a timely manner so that the flexibility of the power system will be enhanced by the efficient allocation and usage of national energy resources, improvement in the power demand & supply and increased options for customers.
Stabilization of the power supply & demand by enhancing the flexibility of the power system
As the paradigm of power policies has shifted from supply-centered to demand-centered, the Korean government has been reviewing the National DR in which household consumers can participate in the negawatt market to expand the demand response system from 2018. When this system is implemented, the DR solution is going to be provided to consumers via the infrastructure and smart phone application established by KEPCO’s Smart Grid deployment project, which helps KEPCO to secure the flexibility of the power system by quickly responding to the power supply and demand.
3) Potential for Replication or Adaptation
Establishment of AMI standard & construction standards
Standardization of the AMI was necessary to expand the Smart Grid nationally and secure its flexibility. Therefore, KEPCO standardized purchase specifications and construction & maintenance criteria for AMI applying Korean and foreign technical standards such as KS and IEC and prepared security policies. Through the work, the interoperability between devices and security policies have been secured to lay the foundation for expanding the nationwide Smart Grid and the project’s economic feasibility has been improved thanks to the enhancement in the quality of the facilities and construction.
Cooperation with the government & local municipalities
To maximize the effects of the Smart Grid deployment project and expand them nationally, KEPCO has been forming a virtuous cycle by cooperating with the Korean government, municipalities, big conglomerates and SMEs.(Market creation, new service development, institutional improvement, technological development & foundation establishment) The national project is implemented in line with municipalities to lay a firm foundation for the local economic development and it serves as a new growth engine establishing a new industrial ecosystem by converging various industries and creating jobs.
[Table 12] The participation status of municipalities
|Lower level municipalities|
Cooperation with SMEs
KEPCO’s SG deployment project encompasses a consortium of 3 EMS companies, 2 watt-hour companies, 2 DCU&PLC modem companies and 1 telecommunication company. Six out of the total 8 companies in the consortium are SMEs to lay a foundation for co-prosperity with SMEs through fair benefit sharing and technological cooperation and build a SG ecosystem by fostering SMEs in the area.
[Table 13] The participation status of business partners
|Large & mid enterprises|
Development of MDMS & AOS
KEPCO has independently developed Meter Data Management System(MDMS) to provide the overall management of the metering data such as collecting the data, verifying its validity, estimating wrong/omitted meter values and managing & analyzing the remote control, and AMI Operation system(AOS) to inform the internal users and consumers of the metering status, real-time information and the power quality. At the same time, KEPCO also developed open source based software and system in the distributed/parallel processing method in line with international standards to process the nationwide metering data in real time and achieved reliability, stability and scalability of the system.
|Meter Data Management System||AMI Operation System|
[Figure 4] MDMS & AOS
Development of the CBL estimation algorithm
For analysis of the project’s economic feasibility and effects, it is necessary to calculate the reduction rate of the peak load and power consumption, a key effect of the project, in a precise and objective manner. Thus, KEPCO developed Customer Base Line(CBL) estimation algorithm based on the performance data analysis by outsourcing it to an external research institute and secured the legitimacy of participating in the project.
[Figure 5] CBL(Customer Base Line)
5) Other Benefit
Contribution to reducing GHG emissions
During the COP 21 held in Paris in December 2015, the Korean government announced its goal to reduce greenhouse gas emissions by 37% compared to BAU by 2030. To abide by the government’s decision, KEPCO has been strongly pushing forward with the Smart Grid deployment project as a key way to reduce greenhouse gas emissions and eased the emission reduction burden in the Korean industry by cutting them through optimizing the energy efficiency and demand response.
Providing social safety net services through the convergence with IoT
KEPCO signed an MOU on the SG deployment project and cooperation on the Home IoT project with LGU+, a largest IoT company in Korea in September 2016 for CSV. It is also planning to provide social safety net services through the convergence of AMI and IoT to consumers joining the Smart Grid deployment project from 2018. The major services include providing weather information such as temperature, humidity & fine dust with sensors and care services for senior citizens living alone. Through these services, it is expected to realize public interest and improve the acceptability of the Smart Grid by promoting its good points.
5. Future Plans
Until 2030, KEPCO is planning to complete the SG establishment for apartments and shopping malls nationally to build the nationwide SG. Furthermore, it is scheduled to provide new energy services based on the energy platform in line with Home ESS, integrated metering infrastructure and smart appliances.
[Figure 6] KEPCO Smart Grid Expansion Roadmap
Customer Service URL of the “Smart Grid Deployment Project”: http://sg.kepco.co.kr
Customer Approval URL of the “Smart Grid Deployment Project”: http://sgadmin.kepco.co.kr