Friday, August 31, 2012

Five Smart Grid Issues You Won't Hear Elsewhere

You should take a look at Phil Carson's excellent observations about some smart grid issues in today's Intelligent Utility - - "Five Smart Grid Issues That You Won't Hear Elsewhere"

Phil identifies issues that the industry seems to avoid (perhaps in hopes that they will go away?). All five of the issues, if recognized, embraced and exploited to the full extent can and will be good for utilities, ratepayers, shareholders and the general public. Here are the comments that I posted on Phil's article:

Stimulus Wasted? The national energy legislation and regulation following the 1973 OPEC embargo were certainly not perfect, and much of the churning afterwards was less than efficient. Even so, it significantly heightened public awareness of the importance of natiional energy policy and it ultimately led to very desirable and efficient competitive wholesale power markets. Similarly, much of the stimulus was, unfortunately, invested in yesterday's technology to solve today's problems tomorrow, but on the whole it has advanced the investigation and deployment of smart grid concepts and technologies.

Emissions are Costly. Regardless of one's position on the causes of or solutions for the global warming issue, isn't the ulitimate end result (i.e., putting less crud into the air, water and earth) a good thing? And, using the earth's natural resources in a more efficient and sustainable manner is absolutely necessary. After all,  other 80% of the people in the world will eventually be using the same amount of energy as we are in the developed countries?

New Business Models and Disintermediation. This has occurred in every other network industry in the world where the incumbent infrastructure and technologies are displaced by killer apps. An industry whose DNA is a cost-plus franchised monopoly business model is ill-suited to the risk involved in the innovation that new entrants are willing to embrace. So why not partner with them rather than try to fight them?

Microgrids. The deterioration of economies of scale which have been swamped by the ever increasing economic, reliability and security risk of a monolithic, centralized power grid make decentralization essential. Imagine the possible reduction in the extent and duration of the recent nearly nationwide outages if India had been pursuing a microgrid strategy rather than a centralized one. And imagine the reduction in consumers' inconvenience and trauma if fully automated outage management systems and distribution automation (and distributed generation?) had been widespread during the windstorms that recently crashed the grid in Virginia, Maryland, California, the Gulf Coast. Accelerating, revolutionary advancement of electronics, information and telecommunications technologies thanks to Moore's and Metcalfe's and Kurzweil's Laws have led to the advent of the intelligent electronic devices, the Internet, the Cloud, and the software that will make it possible to plan, operate and manage a totally different kind of grid.

Politics. Federal and state regulation that has been based for many decades upon a cost-plus monopoly franchise model must be profoundly changed to reflect new realities: technology advancement, global economic, energy and environmental issues, disintermediation of the cost plus monopoly franchise, physical and cybersecurity, etc. Even the most cursory investigation quickly reveals the deficiencies of continuing to plan, build, operate and regulate the grid the same way that we have since the days of Thomas Edison and Samuel Insull.  Phil makes important point that we simply can no longer ignore the "Flat World" that Tom Friedman wrote about. With less than 5% of the world's total population, the US currently uses 25% of all the electric energy in the world.  This cannot and will not continue to be true. If the US is going to compete and prosper in the global economy, we need to achieve just the opposite, using less energy per person than any other country in the world because we are relentless pursuing and achieving efficiency and sustainability.

I have been working in and around the electric, telecomm and energy industry for nearly forty years and I find it now to be more exciting and, er, energizing than ever before. The electric utility industry has the first opportunity that it has had since it first brought the power and convenience of electricity to consumers to again bring them "Wow!" and "Cool!" and "I'm really happy."  Let's embrace it and accelerate it and enjoy it.

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