Energy and Power Engineering, 2013, 5, 42-45
doi:10.4236/epe.2013.53B009 Published Online May 2013 (http://www.scirp.org/journal/epe)
Economic Analysis of the Investment in Smart Substation
Yaping Wang
State Grid Beijing Economic and Technology Research Institute, Beijing, China
Received 2013
ABSTRACT
Intelligent Substation as one of the core components converting and managing energy within sturdy and smart power
grid system coordinates electricity generation, transformation, transmission, distribution, usage and dispatching. In this
paper, a thorough contrast was made between intellig ent and conventional substation in terms of technical deployment,
investment scale etc. Using life-span cycle tech nique, the economic analysis o f intelligent substation revealed so me key
factors that dictate economy level. Finally, some rational proposals for decision makes to promote smart grid were
given to improve economy of intelligent substation with a reasonable con struc tion scale and sequence.
Keywords: Intelligent Technology; Whole Life Cycle; Investment Economy
1. Introduction
Smart grid is China's future needs to achieve a low-
carbon and sustaina ble development. The intelligent sub-
station convergence of smart grid power generation,
transmission, substation, distribution, electricity and
scheduleing six links, one of the core platforms is strong
and smart grid construction, energy conversion and con-
tro l, bu t al so wind, solar and other new important support
energy connected to the grid [1].
China has put into operation more than 100 intelli-
gent substations, to achieve a major breakthrough in the
field of intelligent substation core technology research and
development, key equipment development and product
manufacturing, the breakthrough in the Chinese occupied
the international leader in intelligent substation technol-
ogy to become the world leader of intelligent substation
technology. According to the life cycle cost analysis,
analysis of intelligent substation investment economic
analysis of the key factors affect the economy of intelli-
gent substation investment scale of intelligent substation
construction and construction timing, to promote the de-
velopment of the smart grid to provide decision-making
reference for the rational distribution.
2. The Smart Substation with Conventional
Substation Technical and Economic
Differences
The intelligent substation characterized equipment
maintenance operation the substation do it all digital in-
formation transmission network, the communication
model of standardization, so that a variety of devices and
functions to share unified information platform, a break-
through in the traditional sense as to the artificial guard-
ianship and operation the main mode, the computer
"one-click" process operation. Compared with conven-
tional substation intelligent substation to better meet the
technical and functional smart grid information technol-
ogy, automation, interactive requirements, it is put into
operation, can significantly improve the equipment intel-
ligent level and the equipment running reliability,
achieve the unattended and equipment operation automa-
tion to improve the efficiency of resource use and pro-
duction management, running more economical, en-
ergy-saving and environmental protection [2].
Due to the increase of intelligent devices, the smart
substation initial investment th an conventional subs tation
certain level of increase, according to 7 smart substation
project statistics, with the same size and the same level of
the building conventional substation compared to the
smart substation initial investment increased by 2.9% to
5.1%.
Substation intelligent, reduce operating costs, re-
duce equipment failure caused the outage cost, Statistics
based on the intelligent substation engineering data has
built, with the same size and the same level of the build-
ing substation, compared the intelligent substation late
running costs can be reduced by 21% to 32%.
3. Reason Intelligent Substation with
Conventional Substation Investment
Differences
Compared with the conventional substation of the
same size and the same level of the building, the the in-
telligent substation initial investment will increase from

Y. P. WANG 43
2.9% to 5.1%. Four in the initial investment costs (buildings,
equipment, installation, and others), intelligent and not all
cos ts increase, compared with the conventional substation,
major equipment purchase costs, construction costs, in-
stallation the engineering fees decreased substantially,
has built in smart substation project statistics, equipment
purchase costs than conventional stations increased by
3.3% to 5.9%,construction costs decreased by 3.2% to
6.2% than the conventio nal station, installatio n costs than
conventional stations decreased by 2.3% to 5.8%.
Smart substation equipment purchase costs com-
pared to the conventional station high reason to increase
the intelligent device. The smart substation with tradi-
tional substation biggest difference is reflected in the
following three aspects: a device intelligent the secon-
dary device networking, device status visualization. It is
these three areas of difference so smart substation intel-
ligent terminal than conventional stations, merged cells,
electronic transformer, increase equipment online moni-
toring device, process layer network switches and related
integration platform, application software, such as a di-
rect result of the the increase of the costs of purchasing
equipment, as follows:
(1) Equipment intelligent. The intelligent substation
than conventional station intelligen t terminal device elec-
tronic transformer, merged cells, cancel the main trans-
former body, and in the pressure side of the bushing cur-
rent transformers. Rogowski coil and pure optical fiber
electronic transformer ratio is basically half and half,
most of the electronic voltage transformer capacitance
division type the partial AIS substation electronic trans-
former installed in combination with a circuit breaker or
disconnecting switch Alpha.
(2) Secondary device networking. Substation secon-
dary equipment unified networking star network structure.
Substation automation systems, compared with conven-
tional substation to increase the process layer switch 220
kV and above all independent protection, measurement
and control devices, IEC 61588 when the way has not yet
been widely adopted in the level of 220 kV and above
high-voltage substation spacer layer, process layer The
device is still the way to when using IRIG-B. To some
extent, intelligent auxiliary control system video, security,
environmental monitoring subsystem interoperability and
linkage to improve substation automation.
(3) The status of the device visualization-Intelligent
Substation Configuration online monitoring system, in-
dependent condition monitoring station configuration
back-office systems, condition monitoring IED configu-
ration monitoring content. Advanced application func-
tionality integration backstage unified consideration by
the monitoring system, implemented in phases. At this
stage most of the sequence control and comprehensive
analysis of the policy-making functions of the smart
alarm and fault information. Prepared from the cast func-
tion integration platform by the station within the small
current line selection function, part of substation protec-
tion and fault information management sub-station, the
low-frequency voltage load shedding function is realized
by the integration platform within the station, AC, DC,
communications station The power integrated design.
Smart substation constru ction cost than a conventiona l
station, a decrease of 3.2% to 6.2%, mainly because of
the intelligent substation will measure, control, monitor-
ing and protection functions fully integrated secondary
equipment cubicle 50% -70% less than conventional sta-
tion, the second The equ ipment room area of a correspond-
ing reduction in 60-100 m2, With the substation commu-
nications platform network, control cable usage com-
pared with conventional stations decreased by 60-80%
and 50%-70%, thereby reducing the cable trench.
Intelligent Substation installation costs compared to
the conventional station a decrease of 2.3% to 5.8%,
mainly because intelligent substation secondary equip-
ment cubicle than conventional station reduced by 50% -
70%, a corresponding reduction in installation costs,
along with substation communication network platform-
times the cable length is reduced by 60% - 80% on aver-
age, and a corresponding reduction in installation costs
4. Intelligent Substation Life Cycle Cost
Analysis
The life cycle cost (LCC) analysis is a departure
from the equipment project's long-term economic bene-
fits, and take full account of the equipment, project plan-
ning, design, manufacture, purchase, installation, operati on,
maintenance, renovation, updating until scrapped process,
so that the life cycle cost of a management concepts and
methods to minimize. This method is scientifically di-
vided all the costs of the eq uipment in the life cycle, and
the use of statistical data and establish cost estimates of
the relationship and the cost model, which may be dif-
ferent from the needs of a fairly accurate estimate of the
life cycle cost of the equipment or items for decision-
making and management of need. Its core content of the
total life cycle cost of the equipment, project or system
analysis an d decision-making [3].
Smart substation to 110 kV Beichuan life cycle cost
analysis, the scale of construction: 110 kV main trans-
former Current 2, the final two sets, volume 2 × 50 MVA;
110 kV cable entry Current back the final two back out-
door GIS combination appliances within the bridge wir-
ing; 10 kV Current qualify 18 back, final qualifying 24
back, single busbar wiring; 10 kV capacitor Current4
groups, the final four groups.
The intelligent substatio n life cycle cost (LCC) is the
total fees paid in the smart the substation economic life
cycle consists of the following parts: the cost of power

Y. P. WANG
44
outages caused by the loss of the initial investment costs
(IC), operating costs (OC), equipment failure(FC), de-
struction of equipment costs (DC) [4]. Therefore the in-
telligent substation life cycle cost (LCC) is calculated as
follows:
LCC=IC+OC+FC+DC
According to the 110kV Beichuan smart substation
infrastructure data and run the repair data, as well as
conventional 110 kV substation infrastructure and run
maintenance data, can be calculated as follows:
The Intelligent Substation 110 kV Beichuan IC is
29280000 yuan, if the conventional station construction,
the IC is 27500000 yuan.
The 110 kV Beichuan smart substation OC 231000
yuan/year, convention al station construction, OC 425000
yuan/year. Intelligent substation devices "routine main-
tenance" changes to the state maintenance, extend equip-
ment maintenance cycle, reduce inspection costs 12000
yuan/year, reduce repair cost 11000 yuan/year; the sub-
station remote operation, protection the soft platen re-
mote control switching means to reduce operating costs
96000 yuan/year; high luminous efficiency light source
through LED lights and solar high-efficiency energy-
saving green lighting, electricity savings of 75000 yuan /
year.
The 110 kV Beichuan smart substation FC is 0 yuan /
year, conventional station construction, FC is 210000
yuan/year. Mainly because intelligent substation equip-
ment online monitoring, can advance to find fault and
timely processing, basic does not appear to cause power
outages due to equipment failure, thus greatly reducing
the cost of the outage cost.
The 110 kV Beichuan smart substation DC is 50000
yuan, and the conventional station construction, DC is
150000 yuan. The smart substation scrapped equipment
can produce residual value higher income, retirement
costs are lower than conventional subs tation.
Assumptions intelligent equipment life of 15 years,
the 2012 price for the base price, long-term loan interest
rate of 6.55 percent as the discount rate，,According to
the formula: LCC= IC+OC×(P/A，6.55%，15)+FC×
(P/A，6.55%，15 )+DC×(P/F，6.55%，15)，can be
calculated the follo wing resu lts:
LCC(Intelligent Substation)= 31400 000 yuan
LCC(Conventional Substation) = 33340000 yuan
LCC(Intelligent Substation)< LCC Conventional
Substation), The intelligent substation investment econ-
omy better than conventional substations, low prices will
increasingly intelligent devices and With intelligent
technology matures, the increased investment will be
reduced year by year, the cost savings will increase year
by year, intelligent substation the economy will be very
competitive
5. The Intelligent Substation Investment
Economic Impact Factors
LCC suggests that, wheth er it is smart t h e subs tation
or conventional substation, the proportion accounted for
by the initial investment (IC) in the LCC are in one, but
also a considerable proportion, so we can determine the
impact of the LCC main factor is the IC, so want to re-
duce the intelligent Substation LCC, improve its invest-
ment economy, we have the following recommendations:
(1) Large-scale production of smart devices and
centralized bidding
With the smart device manufacturing technology,
manufacturing processes continue to mature and widely
used smart devices will achieve mass production, the
smart device production from the investment period the
mature stage, the early equipment costs will be quickly
sharing equipment unit price will drop substantially. For
example, 2009-2012 equipment with the 220 kV gas
density and micro-water line monitoring device, because
the device has entered a mature stage from the invest-
ment period, the equipment prices fell by 76.7%.
With the further expansion of the smart device
market, the smart procurement of equipment have been
included in the State Grid Corporation of centralized
bidding system, due to the large-scale procurement, the
equipment supplier gives the best price, which makes
electronic current and voltage transformers, electronic
are more substantial decline in equipment prices from the
previous month of the current transformers, electronic
voltage transformers, main transformer line monitoring
device, circuit breaker line monitoring devices.
With the sharp decline of the substation intelligent
equipment purchase costs, the intelligent substation ini-
tial investment also dropped, LCC (smart Station) will
become smaller and smaller, the intelligent substation
investment economy will become more and more obvi-
ous.
(2) Optimized design, the promotion of universal
design of intelligent substation
As the the Intelligent Substation key technology
matures and the core equipment of the application, de-
sign, optimization, and intelligent substation universal
design popularization and ap plicatio n o f future in tellig ent
substation investment is expected to have a more signifi-
cant decline than the current.
With the measurement of substation, control, moni-
toring, protection, and other functions fully integrated,
will gradually reduce the number of substation secon dary
equipment, the secondary device screen cabinet is ex-
pected to be reduced by 50% to 70%, a corresponding
reduction in the secondary equipment room area of 60
100m2. With the continuous development and promotion
of the use of network communication technology and
IEC 61588 when technology such as substation commu-

Y. P. WANG
45
nication network platform, secondary cable length is re-
duced by an average of 8–40 km, the cable channel is
reduced by 80% to 90%.
As the smart substation technology matures, the
promotion of universal design of intelligent substation,
not only to reduce the difficulty of design, and the con-
struction and commissioning work will also be difficult
to significantly reduce the engineering investment will
have a certain level of decline.
6. Conclusions
Intelligent Substation compared with conventional
substation, device status visualization, smart alarm the
smart against misuse intelligent advanced applications,
reducing the maintenance time of power outages and the
failure of electricity [5], the main use of the equipment
cycle has been extended, while area there is a certain de-
crease in technology have obvious advantages. With the
advances in smart substation technologies in the future,
large-scale production of the smart device applications
and smart devices centralized procurement brings econ-
omies of scale, the smart substation investment will con-
tinue to decline, investment in smart substation and con-
ventional the substations investment basic flat or even
lower than the conventional substations investment with
better prospects for the economy and promote.
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