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'Smart Grid' - Buzz Of The Electric Power Industry

WASHINGTON (AP) - Thomas Alva Edison, meet the Internet.
More than a century after Edison invented a reliable light bulb, the nation’s electricity distribution system, an aging spider web of power lines, is poised to move into the digital age.

The “smart grid” has become the buzz of the electric power industry, at the White House and among members of Congress. President Barack Obama says it’s essential to boost development of wind and solar power, get people to use less energy and tackle climate change.

What smart grid visionaries see coming are home thermostats and individual appliances that adjust automatically based on the cost of power, and water heaters that can draw power from a neighbor’s rooftop solar panel. They see a time when, on a scorching hot day, a plug-in hybrid electric car charges one minute and a few moments later sends electricity back into the grid to help avert a brownout.

Also coming are utilities that get instant feedback on a transformer outage or shift easily among energy sources from wind turbines to coal-burning power plants and back to the turbines when the wind begins to blow again.

And, from miles away, power companies will peer into homes and businesses, then automatically lower thermostats or adjust power use, depending on demand and prearranged agreements.

“ It’s the marriage of information technology and automation technology with the existing electricity network. This is the energy Internet,” said Bob Gilligan, vice president for transmission at GE Energy, one of many companies aggressively pursuing smart grid development. “There are going to be applications 10 years from now that you and I have no idea that we’re going to want or need or think are essential to our lives.”

Hundreds of technology companies, fledgling venture capitalists, longtime corporate icons and almost every major electric utility company want to be part of the grid modernization. Interest only intensified after Obama included $4.5 billion for development of the smart grid in his economic recovery package.

The merger of flowing electrons with the computer-driven information revolution won’t be cheap, nor easy. Who’s going to pay the bill? Will consumers get the payback they are promised? Might some people view utilities and their “smart meters” as being too intrusive?

Could an end-to-end computerization of the grid - with millions of access portals - increase the risk of cyberattacks by pranksters, or more foreboding, by terrorists looking to shut the system down.

Demonstration projects, including the smart meters installed in thousands of homes, are cropping up across the country. But the smart grid as seen by Gilligan and others probably will take years to develop and could cost $75 billion.

Overall transmission modernization, including new higher capacity lines along with the communications technology, could cost as much as $1 trillion, according to some estimates.

Even agreeing on what a smart grid is can be complicated. It’s different things to different people.

Yet to understand the changes being considered means first looking at today’s transmission system.

“ Sadly, if Edison were alive today, he’d be all too familiar with the current system we rely on. Not that much has changed” in 127 years, said Carol Browner, the White House adviser on energy and climate. At a recent energy conference, she described that system as congested, disjointed and out of date.

Others compare the hundreds of thousands of miles of power lines that crisscross the country to a river flowing down a hill: an inefficient one-way movement of electrons from power plant to consumer. It uses primitive technologies - cables, meters, circuit breakers, fuses and rudimentary monitors. But there is little way to provide any feedback of information to the power company running the system or those buying the electricity.

“ The heart of a smart grid is to make the grid more flexible, to more easily control the flow of electrons, and make it more efficient and reliable,” said Greg Scheu, head of the power production division at ABB North America, a leading grid technology provider.

At the core, others see the ability for consumers to monitor and control their electricity use and cost with a keystroke on a laptop computer - or through home thermostats and even appliances that talk to the grid directly to adjust electricity use through smart meters.

“ The meter is only the beginning. It’s the minimal part of smart grid,” said Alex Huang, director of a grid technology center at North Carolina State University. With instant communications and monitoring, a smart grid will use technology to change where electricity is generated and how it is distributed.

Instead of power flowing from a small number of sources, down main electronic highways, the smart grid can user in a system of distributed energy, Huang said. “Electricity will flow from homes and businesses into the grid, neighborhoods will use local power and not just power flowing from a single source,” he said. One day, perhaps an electronically controlled automated system will direct power flow.

Technological breakthroughs will be needed to produce the kind of system Huang envisions. But the ability to shove the aging grid into the digital world is here today, say smart grid advocates.

“ The hurdles are not technological. They’re really policy hurdles,” said Michael Jung, director of policy at California-based Silver Spring Networks, one of a number of smart grid technology companies that have emerged in recent years and are working with utilities.

In cities such as Boulder, CO, Seattle, Houston, Miami, and on the Delaware’s Delmarva Peninsula, there are glimpses of what the future grid might look like.

On the University of Colorado campus in Boulder, the chancellor’s home has been turned into a smart grid showhouse as part of a citywide demonstration project spearheaded by Xcel Energy.

The home has a laptop-controlled electricity management system that integrates a rooftop solar panel with grid-supplied power and that tracks energy use. It also has equipment to charge a plug-in hybrid electric car. Energy consumption in the 7,000-square-foot home has dropped by nearly one-third.

It’s part of an experiment in which Xcel is providing many of the residents of Boulder, a college town of 100,000 people, with smart grid technology. Consumers won’t have to pay for the upgrades because Xcel and technology vendors are covering the $100 million cost.

In Seattle, the utility is testing how 13 plug-in hybrid electric cars interact with the power grid, using equipment that sends real-time performance information back to a utility to determine when a vehicle needs to be charged. In the future, utilities remotely may prearrange schedules for charging hundreds of thousands of such vehicles.

Florida Power & Light is planning to provide smart meters covering 1 million homes and businesses in the Miami area over the next two years, hoping the federal economic recovery package will cover half the projected $200 million cost. Pepco Holdings, Inc. plans to install 250,000 smart electric meters in Delaware and is seeking state go-ahead to do the same in other Mid-Atlantic states in which it operates.

“ We’ve got about 70 (smart grid) pilots all over the country right now,” said Mike Oldak, an expert on smart grid at the Edison Electric Institute, which represents investor-owned power companies.

Oldak said utilities see smart grid as a way to meet future electricity needs with fewer additional power plants. His group estimates that $700 billion in new electricity generation will be needed over the next 20 years, but that energy savings through grid modernization can cut that by $200 billion.

David Rouls of the consulting firm Accenture, which is involved in smart grid projects in the United States and Europe, says he doubts there is a utility that hasn’t had a smart meter vendor try to sell them on a pilot project. “Everyone is doing something with this right now. Boards of directors want to understand from their CEOs what is your strategy to address this,” Rouls said.

Center Point Energy, which serves 2.2 million customers in the metropolitan Houston area, expects to spend $1 billion over the next five years on smart grid. The company hopes it eventually will pay for itself in efficiency savings - both in how it ships power and how people use it.

The utility has about 20,000 smart meters installed and plans to have all its customers covered by 2015. Houston area residential customers will see an additional $3.24 a month on the electric bills. But Center Point says that should be more than offset by energy savings as people begin to get real-time information about their electricity costs and adjust their energy use.

An Energy Department study projects energy savings of 5 percent to 15 percent from smart grid.

“ This pays for itself through efficiency and demand reduction and if you don’t look at it from that perspective you won’t get your money back,” says Thomas Standish, group president for regulated operations at Center Power Energy. “If you don’t get more efficiency savings ... this would be the world’s most expensive meter reading system.”

The cost and payback is what worries state regulators. Their job is to make sure utilities put their money into wise investments before they raise electricity rates to pay for them.

Frederick Butler is chairman of New Jersey’s utility commission and president of NARUC, the national group that represents those state agencies. He urges caution.

“ We need to demonstrate to folks that there’s a benefit here before we ask them to pay for this stuff,” he said.

“ We’re telling them you’re going to love it,” said Butler. He noted that in a rush to bring competition to the retail electricity industry some years ago, “we promised too much and delivered too little. ... We cannot make the same mistake about smart grid.”

Garry Brown, chairman of the New York State Public Service Commission and head of NARUC’s electricity committee, said state regulators “see the excitement ... and the potential” of smart grid. But he questions asking ratepayers to pony up money at a time of economic hardship and when people already are seeing their electricity costs going up. “Is it, in fact, cost effective?” he asked.

A promise of $4.5 billion in economic recovery money for smart grid development, much of it is going to help pay for installing new meters, has produced a rush by utilities and technology companies to start or accelerate projects. Recently, the Energy Department increased the maximum amount a project can get from $20 million to $200 million.

Energy Secretary Steven Chu calls smart grid “an urgent national priority” because a failure to modernize the electric transmission system will stand in the way of developing renewable energy sources such as wind and solar technology. “You will need a system that can dispatch power here, there and everywhere on a very quick basis,” Chu said.

But Chu also worries about security, saying that must be a priority if smart grid is to proceed. “If you want to create mischief one very good way to create a great deal of mischief is to actually bring down a smart grid system. This system has to be incredibly secure,” he said.

A smart grid “provides a lot more portals for cybermischief to happen,” Butler said. “It’s going to provide more opportunity for people to monkey around.”

Brian Seal, a senior project manager at the Electricity Power Research Institute, said the industry is studying the security risks of expanding the cyberinfrastructure all along the electricity grid. The consensus now is that “the potential benefits far outweigh the risks.”

To some, smart grid’s biggest benefit will be in providing consumers, for the first time, detailed information in electricity costs and the ability to choose when and how much power to use at any given time.

It is no wonder that Google, the Internet search-engine powerhouse, this year unveiled a Google PowerMeter for the homeowner to track energy use. It is being tested by its employees. Google estimates that over the next four years, half of America’s households will have smart meters and might want to have one of the devices.

“ This whole area of energy information is of keen interest to Google,” said Dan Reicher, director of climate change and energy initiatives at Google. “People should have access to this data.”

But are people going to be tied to their laptops digesting energy usage and costs?

At a recent Senate hearing on smart grid, Sen. Lisa Murkowski, R-Alaska, acknowledged the promises of a smart grid are many, but also questioned public acceptance.

Is the average consumer willing to pay the upfront costs of a new system and then respond appropriately to price signals?” she asked. “Or will people view a utility’s ability to reach inside a home to turn down a thermostat as Orwellian?”

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