REVISITING: “What the Heck is Smart Grid, Anyway?”
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A “Simple” Answer
time ago Renewable Energy World posed this question on its website:
What the heck is smartgrid anyway?
Now, a couple of years later, this question continues to be the subject of innumerable conferences, seminars, publications, debates. Here’s my answer:
Make electric utilities smarter by taking advantage of existing and emerging:
1. distributed intelligent electronic devices,
2. fast, two-way digital telecommunications, and
3. information technology & software applications
to better monitor, analyze and control generation, transmission and distribution of electricity. My definition is utility centric, not customer centric as I explain further below.
Why Is Smart Grid Important?
For nearly one hundred years the electric utility industry faced limited change in its business model and technology. Steady growth in demand for power and energy, economies of scale, and a cost-plus franchise monopoly resulted a stable, profitable business model. The technologies for generation, transmission and distribution of electricity have changed little since the days of Thomas Edison and George Westinghouse. However, the world has changed profoundly in every way. Risk of unintended consequences has overcome economies of scale. Competition has eroded the cost plus monopoly franchise. And Moore’s, Metcalfe’s and Gilder’s Laws have resulted in a revolution in electronics, telecommunications and information technologies.
According to the US DOE / EAC Final Report on Electricity Supply Adequacy,
“Keeping the Lights on in a New World”
the U.S. electric system, “the supreme engineering achievement of the 20th century,” is aging, inefficient, congested, and incapable of meeting future energy needs. The report states that the existing US electric grid has largely reached the end of it’s useful life due in part to the topology, capacity and condition of the generation, transmission and distribution facilities and in part to new business environment and operating circumstances. The traditional approach of building more fossil fueled, central station generation and bulk transmission lines is not only no longer as desirable, it will be more difficult if not impossible in many instances for a variety of reasons.
The US DOE / EAC companion Final Report on Smart Grid,
“Smart Grid: Enabler of the New Economy”
concludes that a smarter grid can better achieve a number of desirable objectives including economy, efficiency, reliability, sustainability, and customer service.
Manifold Motivations
While it is clear that the traditional approaches to planning and operating the electric power grid have to change, it is not at all clear how to go about it. There is an overabundance of objectives and a profusion of proposals to achieve them. Aficionados assert manifold motivations and bountiful benefits. Some are complementary, some are contradictory and some are controversial. They include but are not limited to the following:
Control costs
Diminish the need for new capital expenditures
Maximize operational efficiencies
Reduce fuel consumption
Change customer behavior
Shift / reduce peak demand
Reduce energy consumption
Accept higher energy costs
Maintain / improve grid reliability
Assure grid security
Protect public safety
Protect national security
Reduce adverse environmental impact
Reduce pollution
Mitigate climate change
Preserve aesthetics
Minimize (or maximize?) nuclear generation
Reduce dependence on imported oil
Minimize fossil fuel generation (or maximize natural gas generation?)
Accommodate new operational challenges
Distributed generation & storage
Stochastic renewable generation
PHEVs
Microgrids
Competitive wholesale & retail markets
Improve customer service
Maintain / improve reliability
Maintain / improve power quality
Offer more service / price options
Provide more and better information
Achieve better communications
Facilitate customer participation
Enable customer energy management systems
Stimulate economic recovery
New jobs
New business opportunities for incumbent vendors
Opportunities for inventors / entrepreneurs
Return for investors
Maintain global competitiveness
I have no doubt missed a few. And, as time passes and the world continues to change, there will be new challenges and demands for the electric utility grid.
Who Should be Smarter - The Utility or the Customer?
Much if not most of the Smart Grid dialogue and activity is about how best to get customers to fundamentally change their behavior in ways that achieve one or more of the objectives described above. The means range from voluntary response to complex pricing schemes, to active load control by the utility, to on-premises energy management systems. They presume that customers will be willing to invest the effort and expense not only to become experts on electric utility operations and pricing, but to inconvenience themselves to solve their electric utility’s problems. My friend Brewster McCracken of the Pecan Street Project calls this “the secret plan to kill the smart grid.” That is, try to keep customers from using electricity when they want or need to use it the most, and tell them they are going to pay an arm and a leg if they do. Brewster also suggests, “I have a hard time seeing my consumers spending their money at Best Buy on devices that are necessary to unwind a longstanding structural defect in the electric utility industry.” Electric utilities can go a long way toward a Smart Grid with many benefits to consumers without having to ask consumers to become utility operations and pricing experts and reduce their quality of life.
In the telecommunications industry which has preceded electric utilities by several decades in having to deal with open retail competition and revolutionary new technologies, the move has been to simpler pricing schemes that are not dependent upon time of use or distance involved. And consumers have many, many more options and applications available to them in their telecommunications services than ever before. Why would the electric utility industry move in exactly the opposite direction.
Make the Utility Smarter First
Electric distribution utilities can and should deploy state of the art intelligent electronic devices for monitoring and control (e.g., smart meters, SCADA, PMUs, power flow controllers), fast two-way digital telecommunications (i.e., public wired and wireless networks augmented where necessary by private wired and wireless networks), and decision software (e.g., engineering analysis, outage management, geospatial information systems, work & workforce management, automated distribution management, customer communications). There are already many proven devices, software systems, and operational methodologies that make it possible for electric utilities to better monitor, analyze and control the electric grid and thereby achieve many benefits of Smart Grid. Existing electric utility distribution systems can by doing this dramatically improve reliability, safety, security, efficiency, economy, power quality and customer service . . . and be better prepared for an increasingly uncertain future in the bulk power system.
Teeming Possibilities
There are diverse opinions on how a Smart Grid can or should be designed, deployed and operated. Many different approaches, technologies and systems are being proposed. Not all will prove to be technically, economically or institutionally feasible. Some of the ones that are will may not be compatible or able to coexist on the same grid with others. There will be some successes and there will be many failures. Many new vendors will come and go and even some existing vendors will fade away. More importantly, circumstances will continue to change requiring ever new approaches and methods. There are ways for electric utilities to manage the risks that they face in deploying a Smart Grid. I will be talking more about these in future posts.
“This Is Not Your Father’s Oldsmobile”
I believe that the real payoff of a smarter grid will go way beyond just doing what the grid has always done a little or a lot better. It will utilities and their customers to do desirable, amazing things that were not possible before, things that we haven’t thought of yet . . . just like the Internet. The Smart Grid is ultimately revolutionary, not evolutionary. It is quantum leaps, not incremental improvements. But, to get there, electric utilities are going to have to get smarter, and do it before they expect their customers to.
Written by Steve Collier | Sep 08, 2011