“Smart Grid” refers to the process of adding meters and devices to the current power electrical grid. These would offer technology feedback and control loops, thereby augmenting a system of dated technology and networks. In effect, Smart Grid technology makes our archaic power grid better equipped to handle today’s requirements (without being subjected to a complete overhaul).

In simplified terms, Smart Grid technology gives end-user consumers the ability to monitor (and potentially have more control of) their power consumption on a minute-to-minute basis. At the same time, it enables consumers to power their future electric vehicles and to feed the grid with any stored or created energy that they may have generated themselves.

Smart Grid also gives utility companies—the primary producers of power—the ability to monitor real-time demand even as they predict, control and verify usage. Energy demands can be therefore be anticipated and automatically adjusted to optimize energy flows from one neighborhood to another and from one city to another.

UNDERSTANDING THE SMART GRID

Smart Grid has two primary benefits: one, it allows controlled energy traffic to flow in and out of a business or residence, and two, it has the potential to make customers more aware of their real-time energy use. With both of these benefits actualized and monitored, true efficiencies can be achieved. Any increased efficiency in a constrained energy environment is a cumulative gain.

The real problem facing the installation of new metering devices is economic: why would consumers want to pay for it? Considering that the technology is limited in application today (although it is certainly relevant for future uses), why not put off installing it until it’s absolutely necessary? The reason is a simple one—it’s a matter of efficiency. If consumers knew more about their energy use, they’d likely be smarter about the energy they use on a daily basis. Perhaps instead of Smart “Grid,” it should be called Smart “Energy User.”

Today, consumers have no real concept of how much energy is being used by a printer, an air conditioner, a TV, etc. in their homes and businesses—their basic monthly bill is the only objective indication of their energy use. The underlying assumption of the Smart Grid is that more-aware consumers will monitor their energy usage in their homes and make smarter energy-use decisions. This will enable energy companies to benefit by having more accurate real-time information regarding consumer usage. Future benefits to consumers include connectivity for batteries, renewable energy systems (i.e., wind and solar), and connectivity for energy off-loading or charging from plug-in hybrids, electric or fuel cell vehicles.

The chief motivation behind the need for a smart energy network stems from understanding current and future energy supply and demand. In the U.S., energy demands are increasing at an average annual rate of 1.4.% (67.6 billion kilowatthours) or enough electricity to provide light for a year to 72 Million (67%) of American households. This increased demand means that an additional 6.5 GW of energy capacity has to be added to the grid every year. Considering the fact many new coal plants (coal plants account for 50% of electricity production) are currently being suspended, delayed, or cancelled all together, how will the increased demands of energy be fulfilled? The number of coal plants is dwindling due to environmental concerns, a lack of viable clean-coal technology, and the future burden of feed-and-tariff fees on carbon emissions. Power providers are not looking to expand the existing infrastructure; therefore, solutions are needed quickly. If smart metering systems can help power companies better control their production, then they can become more efficient. By the same token, if consumers become better-educated, they’ll consume less energy. Both scenarios decrease the need to build more power plants. Investing in smart meters may therefore result in greater cost savings than investing in new power plant facilities.

Smart Grid technology will also help consumers to adopt smart appliances that can interact with the grid to turn on and off depending on system peaks and valleys. These new appliances—although initially more expensive—will help reduce household energy demands and allow consumers to be more energy-conscious. Appliance companies who provide higher-efficiency products with advanced technologies will enjoy increased sales; their products will last longer and be better consumers of energy than were their predecessors.

There are, however, some caveats in adopting the Smart Grid, namely that it may introduce smart pricing: a means of extracting higher energy fees per kWh depending on use. By breaking usage levels down by time of use, type of use, and location of use, utility companies may be able to reap higher profits when demand is higher and optimize efficiencies to increase revenues when power use is lower. In this model, the standard charge of flat-energy rate or night-time-vs.-day-time rate would shift to a variable tiered rate that would depend on time of day, specific day of the week, and time of year. This would also take into account the type and quantity of power—in fact, pricing could fluctuate from one city block to the next even though the power would be coming from the same supplier. The electrical grid would shift from a macro-grid-system to a micro-controlled-grid-system and would enable utilities to extract higher profits from consumers. Companies in the renewable energy business could also be impacted by variable pricing. Either the effect would be positive, or it would force them out of business—they could suffer lower revenue streams per kWh due to the fact they would be supplanting the grid’s energy and would therefore require higher returns on their more-costly investments in technology.

SMART GRID BENEFITS

1. Demand Management – predicting, monitoring and controlling real-time electrical demands from the major infrastructure nodes to the businesses and residences of individual consumers
   

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3. Supply Management – adjusting and balancing utility energy production levels—including peak loads—by accessing real-time electricity usage information and by controlling demand through network automation controls
   

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5. Multi-Tiered Energy Programs – these would enable utilities to facilitate a tiered-kW structure, a fee-based system by charging more or less for energy depending on system demands and load utilization rates at any given time of the day
   

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7. Vehicle Integration – the ability for electric, fuel-cell, and plug-in hybrid vehicles to feed back into the grid, to be charged as needed, or to be scheduled for charging by taking advantage of cheaper energy prices per kilowatt when demand is lower and energy availability is higher
   

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   Offsite Power Integration – the ability for external energy sources (solar, wind, battery technologies, etc.) to pump electricity back into the grid, thus allowing consumers to profit from electricity production
   

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10. Control Automation – by adding a control loop (something similar to adding a programmable thermostat to the home), consumers and utilities can turn on and off home appliances based on time of need, necessity, and the price of energy
    

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12. Consumer Control Consoles – by replacing dated home metering systems, new upgraded electricity meters will allow consumers to actively monitor real-time energy use; consumers and utilities will therefore have the ability to set control automation parameters to adjust the usage of appliances and other home devices when energy is more expensive or peaking
    

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14. Consumer Online Controls – with the addition of the Internet, consumers will be able to modify, control and optimize home energy usage by analyzing usage patterns
    

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16. Maintenance Pinpointing – with the addition of integrated sensors in the electrical network, power failures and interruptions can be more easily identified and located
    

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18. Power Plant Growth – by adopting a Smart Grid infrastructure, users and utilities can better manage supply and demand loads, thus potentially reducing the need for additional power plants
    

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20. Peak Load Balancing – when loads are sporadically high in the summer months due to high outside temperatures, utilities can interact with consumers to reduce demand on an as-needed basis by optimizing distribution and lowering peak demand; in turn, this would reduce load failures in the network
    

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22. SMART GRID CITY – the City of Boulder, Colorado has been identified as the first city in the U.S. to be designated a Smart Grid City
    

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24. Smart Grid Networks – electric power companies can accurately monitor and control real-time inputs and outputs from the grid. This affords the “dumb grid” some intelligence at the micro-user level (vs. the macro-user city level)
    

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26. Smart Grid – an automated, self-balancing and self-monitoring grid capable of accepting multiple energy sources
    

Smart Grid technology will eventually offer energy companies more intelligent and effective control of power use and distribution; in addition, it will offer consumers a means to monitor and control their energy use. The technology is still under development–many active players are creating proprietary technologies and standards. Whether or not Smart Grid technology will be rolled out nation-wide is still in question. The good news is that the Smart Grid will create smarter consumers and producers of energy. The bad news is that it may be a while before it is adopted and implemented.

NOTE ON THE U.S. STIMULUS PACKAGE

The United States 2009 economic stimulus package includes $4.5 billion for the development of the Smart Grid. It is assumed that this technology will create thousands of jobs, reduce energy demand, accommodate renewable energy technologies, and provide power to millions of future electric propulsion vehicles.

SMART GRID People

Senator Jeff Bingaman, D-N.M, Chairman of the Senate Energy Commission

Ralph Cavanaugh, Natural Resources Defense Council

Dick Kelly, Chairman, President & CEO of Xcel Energy

Raymond Gogel, VP of Xcel Energy

David Mohler, CTO of Duke Energy

Michael Carlson, CIO of Xcel Energy

Roy Palmer, Project Executive of Xcel Energy

Peter L. Corsell, President and CEO GridPoint

Karl Lewis, Chief Strategy Office of GridPoint

Steven G. Hauser, President of Gridwise Alliance & VP of GridPoint

Katherine Hamilton, Head of GridWise Alliance

Steven Biel, Greenpeace USA

Vinod Khosla, Khosla Ventures

Tom Casey, CEO of Current Group LLC

Brendan Herron, VP of Current Group LLC

Charles Zimmerman, VP of Wal-Mart Stores Inc.

Michael Jung, Policy Director at Silver Spring Networks

Paul Nagel, VP of Strategic Development at Control4

Edward Myska, COO of Comverge

Ralph Masiello, Consultant at KEMA

Roger W. Gale, Utilities Consultant

Roy Ellis, Consultant at Capgemini

Jesse Berst, Founder of Smart Grid News

Ed Lu, PowerMeter Engineer at Google.org

Kirsten Olsen Cahill, Program Manager at Google.org

Susan Tomasky, Transmission Chief at AEP

Eric Wesoff, Greentech Media Analyst

Marzio Pozzuoli, CEO of RuggedCom Inc.

Bob Gillian, VP Energy Division of GE

Reid Detchon, head of Energy Future Coalition

Drew Clark, IBM Venture Capital Group

Allan Schurr, VP, IBM Global Energy and Utilities

Guido Bartels, General Manager of the Energy and Utilities Division, IBM

John Loughhead, Executive Director, United Kingdom Energy Research Center

Frederick Butler, President, National Association of Regulatory Utility Commissioners

Revis James, Director of Energy Technology, Electric Power Research Institutive

Fred Krupp, President, Environmental Defense Fund

Gregory Kunkel, VP Environmental Affairs, Tenaska

Patrick Gallagher, Deputy Director of NIST

Scott Lang, CEO, Silver Spring Networks

Timothy G. Healy, CEO,  EnerNOC

Adam Grosser, Partner, Foundation Capital

Warren Weiss, Partner, Foundation Capital

Tim Enwall, President and COO, Tendril Networks

Adrian Tuck, CEO, Tendril Networks

SMART GRID Consortium Partners

Accenture, Current Group, GridPoint, Schwietzer Engineering Laboratories, Ventyx

SMART GRID GridWise Alliance Members

IBM, Microsoft, Accenture, Hewlett-Packard, Cisco

SMART GRID Utility Players

Xcel Energy, Duke Energy

SMART GRID Home Energy Management Companies

Tendril, Greenbox, Control4

SMART GRID Software and Application Players

Google (Google’s Power Meter), Gridpoint, Comverge Inc., EnerNOC Inc.

SMART GRID Hardware Players

Landis+Gyr and Itron Inc.

SMART GRID Other Players

American Electric Power (AEP)

FPL Energy

American Wind Energy Association

ITC Transmission

Oak Ridge National Labs (ORNL)

National Renewable Energy Laboratory (NREL)

National Institute of Standards and Technology (NIST)

SMART GRID Venture Capitalists

Adam Grosser of Foundation Capital

Scott MacDonald of Emerald Technology Ventures

Foundation Capital

Kleiner Perkins Caufield & Byers

Sequoia Capital

Duquesne Capital Management

VantagePoint Venture Partners

Vista Ventures

SMART GRID Other Companies

Silver Spring Networks

SynapSense

EnerNOC

Tendril Networks Inc.

SMART GRID Books
The Sequel, a business-centric approach to alleviated climate change by Fred Krupp

The Clean Tech Revolution by Ron Pernick and Clint Wilder