Sept./Oct. 2011 - Richard Schlesinger - energybiz.com

THE ELECTRIC GRID is the biggest machine in the world and the greatest engineering feat of the 20th century, according to the National Academy of Engineering. It's one of those human accomplishments so successful as to have become virtually invisible. And it's incredible that, despite the enormous demands we've placed on the grid - the unprecedented technological developments and the concomitant social and economic upheavals and metamorphoses - its essential structure has remained the same. It still basically serves to transmit power from a central point of generation to end users within a certain locale.

That basic structure is beginning to change, and the pace of change and the extent of technological innovation are looking more and more like a revolution, at least in terms of the scope of change. But the pace of change is another thing. The revolution has yet to hit the streets.

"The biggest enabler of the smart grid is communications technology," says Matt Wakefield, smart grid program manager at the Electric Power Research Institute. Communications technology is transforming the grid from a one-way highway to an interactive, dynamic, integrated network. The most obvious manifestation of this change is smart metering. With the advent of dynamic pricing, which encourages customers to shift demand to match off-peak supply, customer acceptance would seem to be a no-brainer. However, most customers don't seem to want to participate, according to Wakefield. "Where dynamic pricing has been in place for some time we do see signifificant growth, but in newer programs, we typically see participation on the order of 5 to 15 percent in the first year. That translates to energy savings in the 5 to 10 percent range. As the technology evolves and automation is enabled, we hope to see those numbers go up," he says.

Another factor that's slowing the evolution of the grid is a lack of standards. Automation, especially the ability of appliances to communicate directly with the grid, depends on the development of standards, which have yet to be established. EPRI is rolling out a three-year demonstration initiative to automate demand response signals and is working with utilities to understand how they can be standardized and utilized across the entire industry. "If we can agree as an industry to adopt common mechanisms, we'll unleash the creativity of the market, so that an appliance bought in Tennessee won't need to be retro fitted when you move to California. Only with national standards will appliance manufacturers come on board," says Wakefield.

While smart meters are at the heart of the evolution toward a smart grid, the lack of public enthusiasm for them is another fairly serious stumbling block. A study by Oracle, the software and hardware systems company, finds that although 71 percent of utilities see customer buy-in as essential to driving the success of the smart grid, only 43 percent acknowledge taking any steps to educate customers about the smart grid's advantages. The fact that both Google and Microsoft recently announced their withdrawal for the time being from participating in the manufacture and design of smart meters and the software to run them suggests that the industry needs to invest much more in selling the benefits of the smart grid before it can expect the support it needs from the private sector. Google remains a player on the transmission side, with its 37.5 percent investment in the $5 billion Atlantic Wind Connection project, the offshore cable that's projected to carry 6,000 megawatts of wind-generated power from off the Atlantic coast to users along a 350-mile corridor on the Atlantic seaboard.

The new communications technology has implications that go well beyond smart metering. It enables the integration of renewable, intermittent, distributed generation with the rest of the grid. It allows each element to instantly and seamlessly interact with the others in order to precisely regulate power in a dynamic system. And integration allows discrete elements to play multiple roles and thus become cost effective. EPRI's Wakefield cites energy storage as typical of an application that in its stand-alone version may not be cost effective., but when employed in multiple applications - for backup power, to smooth out the intermittency of wind or solar and to help regulate voltage within ANSI standards - ROI can turn positive.

The smart grid will also provide utilities with real-time information about the capacity of transmission lines. Traditionally, utilities estimate how much power is lost as it moves across the grid to end-users and build in enough capacity to make up for the loss. That results in significant waste. A study cited by the National Science and Technology Council found that using advanced communications technology to implement real-time voltage control could reduce systemwide demand by as much as 3 percent. Of course, cutting demand is a two-edged sword. Although it obviates, at least temporarily, the need for additional peaking plants, it also cuts revenue based on end-use consumption. Regulatory bodies will have to take into consideration both the capital costs of upgrading the grid and the effects- positive and negative - that greater energy efficiency will have on utilities.

Real-time information is also key to integrating the changing resource mix with the legacy grid. Addressing control issues and the intermittent nature of many of these resources, as well as their physical characteristics, requires new standards as well as real-time information, according to Mark Lauby, the vice president and director of reliability assessments and performance analysis for the North American Electric Reliability Corp. Lauby notes that wind turbines, for instance, have inherently different characteristics from, say, combined-cycle gas generators when it comes to spinning and frequency response reserves, the ability of generators to increase their output on a contingency basis. "We're going to have to have enough spinning to pick up any loss and sustain the frequency at 60 hertz, because if we fall too low, things start tripping," he said.

The increased dependence on complex, distributed information technology inevitably involves an increased level of risk. "The risk profile has changed dramatically and it will continue to change," says David Batz, manager for cyber and infrastructure security at the Edison Electric Institute. Batz cites numerous risks beyond terrorism. "Terrorism is a threat, but while it may receive the most attention by the public, the system is vulnerable to many other threats, including from state-sponsored entities and organized crime as well as from hackers of various stripes." Batz emphasizes the need for the industry and government to work hand-in-hand to ensure the sharing of information about risks and threats to the grid. That means a shift in the culture of grid security from a compliance-based model of checklists and inventories, to one rooted in risk management and situational awareness.

The grid is clearly at a critical juncture. The forces for change are powerful, from the rise in demand to the increasing pressure to address environmental issues and reduce dependence on dwindling carbon sources. But the obstacles to changing the structure of the grid are daunting, from cost issues to security, from a fragmented regulatory environment to the complex technical challenges of integrating disparate sources of power. What the grid will look like five, 10 or 20 years from now is unclear. The only certainty is that it will be radically different from the grid that has performed so well for more than 100 years.

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