Next-Generation Energy Company

The pivot to clean energy is accelerating the transformation of the power grid to optimize it for reliability, resiliency, efficiency, affordability and environmental responsibility. Technology, innovation and information are key drivers of this transformation. We must have appropriate planning, communication and engagement among all stakeholders to ensure the proper balance of technologies and infrastructure to prevent creating new risks to the grid.

The cost and maturity of technology is changing fast and impacting our business model. As we develop options for our companies to deploy, we are simultaneously working in our states to encourage public policies and regulatory actions to support them. We recognize that we have to take the lead if we want to innovate, or we risk our competitiveness. The technologies we are focused on and investing in today present the greatest opportunity for building the next generation energy company.

The energy company of the future will be more complex, efficient and distributed. We are building a better network to make it easier for customers to plug in to the power grid when and how they want to, while providing quality, reliable power as efficiently and cost-effectively as possible.

A Smarter Network

Modernizing the power grid requires sustained, strategic investments. To build a network capable of providing benefits beyond what is in place today, we need reliable generation resources and a modern transmission and distribution system. At the same time, we have to maintain and operate a system that provides safe, reliable electricity to our customers, every day.

AEP's underground network monitoring system will give our operating companies greater insight into the status and health of the underground networks.

Some of our infrastructure is more than a century old and the legacy systems that make operational and control decisions for the major generation, transmission and distribution equipment that make up the grid are in the process of being transformed from analog to digital. This transformation includes thousands of devices across the AEP system and construction of an AEP-owned fiber network.

As we modernize the grid, we deploy new technologies that generate real-time data, allowing us to determine the health of new assets. There is also an evolution under way to learn how to use the data we collect to better serve our customers, prioritize our resources and manage our work force. As we do this, we are making the grid more flexible and putting in place a self-healing grid that is more secure, reliable and connected.

AEP’s Underground Distribution Network Monitoring project is a good example of grid hardening and modernization. It is the deployment of a robust monitoring system of the health and operational status of equipment that will support existing sensor technology as well as developing technology. When complete in 2018, we will have next-generation capabilities to handle the technologies and resources of the future, making our underground networks one of the first in the country to have this level of monitoring and control.

AEP is also deploying a continuous, online monitoring system for existing underground transmission systems. Implementing new monitoring technology, including analytics, will allow AEP to better assess the health of these existing, critical underground circuits, improving reliability. One pilot project includes the Davidson-Dublin 138-kV circuit, scheduled to be completed in 2016. Other underground transmission circuits will be upgraded over the next few years to develop and incorporate different types of new sensor technologies.

The Self-Healing Grid

AEP’s gridSMART® initiative is the foundation for providing advanced grid infrastructure that is needed to realize the many potential benefits of the smart grid. AEP is deploying smart grid technologies across our service territory, with regulatory support.

Smart meters – a critical step in creating a smarter network – establish a two-way data connection between AEP and our customers, which is increasingly important as smart appliances and devices need more information from the grid to function optimally. Having smart grid technology helps us to pinpoint sources of customer outages with greater speed and accuracy, improving outage restoration capabilities. We have installed more than 1.6 million smart meters across our system and plan to deploy approximately 900,000 additional meters, with regulatory support.

Distribution automation circuit reconfiguration (DACR) is an important grid technology that significantly improves reliability of the power grid through real-time monitoring and reaction. DACR continuously monitors for potential electrical faults and isolates portions of the network when a fault occurs, strategically re-routing electric loads to available circuits to maintain energy delivery to the majority of customers. This is known as a “self-healing” system. A smart grid has the ability to locate and isolate problems within the network as they occur. With DACR, we can effectively split the network into islands that would be managed separately to prevent a larger event, such as cascading outages. As the repairs are made, controllers would prepare the island to rejoin the larger grid.