The Great Green Grid A Smart Grid That Lets Us Better Control Our Energy Use May Finally Be Ready to Launch

Our current electric power grid hasn’t changed in the last 100 years. It’s designed to move electricity in one direction—from mostly fossil-fueled generation plants to user—and makes only limited use of automation and information technology. And it can’t collect power consumption information in real time. The smart grid would change that dynamic with a two-way flow of both electricity and information. It would also open the door for renewable energy sources like wind and solar to get connected and start to reduce the national dependence on dirty fossil fuels like coal, oil and gas.

Many homes already feature solar panels and even wind turbines that could actually add electricity to the grid. But the current system of transmission lines isn’t able to determine how much renewable energy will be available at a given time—after all, solar power and wind power are both subject to fluctuation—so utilities produce the same amount of electricity regardless. And, in general, they have to overcompensate. In order to match electricity supply with demand, utilities decide on a level of demand that would be excessive and then match it.

“In reality,” write Lena Hansen and Amory B. Lovins for the Rocky Mountain Institute, “neither electricity demand nor generation is steady over time. Demand changes at every moment as individual devices turn on and off.” What’s more, the pair write, all generators are intermittent, too. Lots of coal-fired, gas-fired and nuclear power plants have unexpected shutdowns. From 2003-2007, coal-fired capacity was shut down an average of 12.3% of the time—4.3% without warning—according to the North American Electric Reliability Council.

Utilities, in other words, have had to adapt to sudden changes in demand and supply since the current grid was built in the late 1800s. The only difference now is that they have a lot more clean and efficient renewable energy generators at their disposal—but not the technology to use them.

Enter the Smart Grid

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A smart grid—basically the electric grid gone digital—would allow power plants to respond, in real time, to power needs. The “real time” aspect is important. It means consumers will be able to decide ahead of time what they are willing to pay. Run a washing machine at night, for instance, and pay a cheaper rate. Tell the utility company to diminish or even shut down service during peak usage times, and reduce your rate even further.

Adding consumer control represents a big paradigm shift. Rather than “broadcasting” power down one-way transmission lines, the smart grid promises the same interactivity that transformed communication over the Internet. On a digital network of power lines, transformers, turbines, homes, businesses and even automobiles, energy will be a two-way street.

“The smart grid will allow distributors, meters and even appliances to communicate with each other, while providing customers with information, tools and pricing options to manage their energy costs and usage,” says James Robb, senior vice president for enterprise planning and development at New England’s largest energy supplier, Northeast Utilities. “With a smart grid, there are no excuses for using energy inefficiently. We will have tools to control our usage that do not exist today, like using a cell phone to change the thermostat settings in your home in response to peaking energy prices.”But the dream of using cell phones and smart meters to reduce energy prices is still a ways off. Plenty of infrastructure and investment obstacles remain. “The infrastructure challenges are enormous,” says Gus Ezcurra, CEO and president of San Diego-based Advanced Telemetry, a smart grid technology provider. “Smart grid implementation will be a decades-long endeavor.” Other concerns—chief among them, new questions about privacy as private and public utilities extend their digital fingers into individual homes—pose additional hurdles. “Part of what makes the smart grid “smart” is its ability to know a lot about the energy-consuming devices in our homes,” says Susan Lyon, a privacy and security attorney at law firm Perkins Coie in Seattle. “Home energy consumption patterns could be gathered and analyzed on a room-by-room and device-by-device basis. Although this sort of information may not be considered terribly invasive for some, for others anything that violates the sanctity of “home” may cause tremendous concern.”

Who Pays? In years to come, utilities and their customers will recoup the smart grid’s startup costs through improved reliability and efficiency. But there’s still a question of who pays now. Political considerations are likely to hamper efforts to make consumers pay for the new grid ahead of time. Instead, wake-up calls like the August 13, 2003, Northeast blackouts periodically jump-start the process.

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Blackouts are becoming more frequent and are predicted to increase, bringing plant shutdowns, food spoilage, traffic light failures and other dangerous problems. When power fails, big dollars are lost: $20 trillion in delayed trades during a 2000 blackout in Chicago, $6 billion lost during the 2003 blackout.

Reporting that our current transmission system is woefully underfunded—only 668 additional miles of interstate transmission have been built since 2000—the U.S. Department of Energy (DOE) reports that demand for electricity is expected to double by 2050, while the cost of raw materials needed to operate the grid has tripled since 2006.

Although the U.S. lags behind Europe and Canada in smart grid implementation, the Electric Power Research Institute’s IntelliGrid program finds U.S. utilities well positioned to assume the lead in smart grid technology. Based in Palo Alto, California, IntelliGrid is already in use at utilities like Southern California Edison and the Long Island Power Authority.

And through its Office of Electricity Delivery and Energy Reliability, the DOE created the new Smart Grid Task Force. National Institute of Standards and Technology (NIST), meanwhile, is developing smart grid standards through an organization called the Smart Grid Interoperability Panel. “We have engaged hundreds of organizations and over 1,500 individuals to develop a framework,” says George Arnold, the panel coordinator. “Ultimately, hundreds of standards will be needed.” But government agencies and power plants alone can’t make the grid smarter. Once power is in the building, it’s the people inside who must use it efficiently. This should happen, in part, as customers are able to better monitor when electricity is more or less expensive throughout the day, and alter their use accordingly, but “this information alone cannot and will not reduce energy consumption or costs,” says engineer and smart grid expert Michael C. English. Even with the added incentive of saving money, people may prove reluctant to change their habits—i.e., in deciding when to wash clothes or dishes or run the air conditioner. A public education campaign will almost certainly need to be part of a smart grid rollout.

Privacy Concerns

And then there’s the issue of privacy. Not everyone is comfortable with the idea of outside monitors tracking their daily household habits. “The smart grid requires deployment of monitoring technology

in every home it touches,” says attorney Lyon. “The impact is significant, considering that home privacy is such an important value in our society that its protection is guaranteed in the U.S. Bill of Rights.” But the smarter the home, the more apt it is to present privacy challenges. “Security technology already exists to monitor break-ins. Could that same technology be applied in a smart grid environment to monitor residents?” Lyon asks. “Will a “smart” refrigerator be able to disclose the food products and pharmaceuticals stored on shelves? Who will get this information?” Security and privacy aren’t necessarily comfortable partners, either. Citing the Federal Cybersecurity Act—which aims to protect our nation’s infrastructure, including our energy grid, from threats by hackers, terrorists and foreign intelligence—privacy advocates are concerned that legal provisions mandating access to “relevant data” could someday include household activities tracked by the smart grid. And as stores and businesses take on smart grid features, they, too, will have to consider their customers’ privacy rights. Pilot Projects Widespread smart grid use may be years away, but pilot programs—from small concept to big picture—are already happening. With its Plan-it Wise program, utility Connecticut Light & Power studied 3,000 participants, and learned that residential customers who used smart grid technologies reduced energy consumption by 16.1%, versus a 2.8% savings for commercial clients. Smart thermostats and other so-called “control technologies’ reduced peak energy use by 7%, while information devices like power cost monitors “had no statistical effect in reducing peak energy usage,” according to Robb.

Attempting to modernize the energy grid in Boulder, Colorado, utility company Xcel Energy has launched SmartGridCity (see “A City Gone Smart,” page 26). More than 50,000 homes and businesses in Boulder are scheduled to be connected to the smart grid, with participants installing smart meters that program their home energy use through an online site, where they can watch exactly how much energy they consume. In Austin, Texas, the Environmental Defense Fund (EDF) went a step farther with its Pecan Street Project. Calling it “a unique community-wide collaboration” involving a local utility, universities, nonprofits, a chamber of commerce and local government, EDF National Energy Program Director Jim Marston says participants set out to “reinvent the current energy delivery system.” Local utility Austin Energy “had already begun installing smart meters in most households,” Marston explains. Wanting to tie the smart grid to green, low-carbon lifestyles, Pecan Street participants also added technologies such as plug-in hybrid cars. “As far as we know, there isn’t any other similar project involving such a diverse group of stakeholders and interests,” Marston says. But that diversity has also posed management difficulties. Focusing on tough questions such as how utilities could continue to profit as electricity use went down, Marstonsays his group “ultimately got so many recommendations that it has been a chore narrowing the project’s scope.” But, overall, it’s been a success. “Getting green benefits from the smart grid, understanding business model problems and system integration are the keys to getting maximum social benefits from the smart grid,”Marston says. “EDF views Pecan Street as so groundbreaking, we believe we”ll be able to recommend it as a future model for other utilities around the nation.”

The Big Smart Picture

Arnold says the U.S. leads the world in smart grid development—particularly when it comes to establishing standards. But, he adds, “Italy has already fully deployed smart meters, and other nations are moving rapidly. China, for example, is making huge investments in transmission using advanced technologies.” Next-door neighbor Canada has jumped ahead of the U.S. “in terms of the deployment of smart meters and customer technologies,” Robb adds. Sweden and Denmark have made important advances and in the U.K., “there are strong mandates to have a smart meter in each home by 2020,” he says. But don’t expect a coordinated worldwide smart grid to happen overnight. Instead, experts say, the smart grid will come online in small bursts, one city at a time.