Article | April 29, 2008

What Does Smart Grid Mean For Your Utility?

By David Scott, Utilimetrics

Smart this and smart that appear everywhere in our vocabulary these days. Isn't it a bit overdone? Now in the electric utility industry, we're hearing the term Smart Grid. What is Smart Grid? Is it just a passing fad, just another smart .....? And what does it mean for your utility?

What is Smart Grid?
Simply put, Smart Grid is moving the electric grid from a "static" to a "dynamic" state. There are five key characteristics in the future Smart Grid utility. The characteristics are:

  1. two-way communication down to appliances
  2. self-healing ability
  3. customer empowerment
  4. generation choices
  5. capital asset optimization

The goal is to use advanced, information-based technologies to increase power grid efficiency, reliability, and flexibility, and reduce the pace for more electric utility infrastructure.

Rebuilding the existing grid to this future state will not happen overnight, and not every utility will carry out Smart Grid the same way. It is a goal to work toward, a place we need to be, and thus a "vision" for the electric utility of the future.

Why Now?
Utilities face five converging trends today. These trends form what some describe as a "perfect storm" and are the drivers for change. What are these trends? They are:

  1. a stressed grid infrastructure
  2. global warming
  3. energy costs
  4. customer expectations
  5. technology

The first three are obvious but the last two need more explanation. While energy costs increase, customer expectations also increase. Customers want to do more to protect the environment, use less energy, and control their costs. Also, customers are increasingly technology savvy and expect to receive the information to help them manage their energy use. One of the main characteristics of Smart Grid is enabling customers to manage energy and control their costs.

Probably the most important trend on the list is technology. Advanced metering infrastructure (AMI) deployments are happening in large-scale today. AMI includes two-way communication with every customer, hourly (or more frequent) data, home area network (HAN) communications, and even service switches integral to the revenue meters. The cost of AMI meters has come down to the point where automatic meter reading (AMR) meters was not long ago. Essentially, Smart Grid is not possible without AMI.

Is it a passing fad?
First, the government does not think so. In 2007, Smart Grid legislation passed in the Energy Independence and Security Act of 2007 (EISA 2007). Title XIII "Smart Grid", Section 1301, establishes a federal policy to modernize the electric utility transmission and distribution system to preserve reliability and protect infrastructure.

Further, smartening the grid is similar to the subject of the best-selling book about the changing world called "The World is Flat". This book speaks about digital technology advances and their impacts on globalization. The book's author, Thomas L. Friedman, describes how, over the last 15 years, digital technology has changed the world from a vertical "command and control" environment to a level playing field where the world is "communicating and collaborating horizontally".

In the same way the world is flattening because of digital-technology, the vision of the Smart Grid will result in "The Flattening Utility", where the utility and customers are communicating and collaborating horizontally. Yet this transformation has to happen reliably, efficiently, and economically.

What does it mean for my utility?
The utility systems involved with Smart Grid cross all functions and will fundamentally change the way the utility performs in the future. Utility systems involved in Smart Grid include AMI, HAN, distribution automation, outage management, asset management, distributed resources including DG, and even efficient circuits.

Beyond the systems mentioned above, the Smart Grid vision will have to address the following four important questions:

  1. How long will it take to get there?
  2. How standard and integrated will it be?
  3. How much communication bandwidth?
  4. And how or who will pay for it?

Answers for these questions will be different for each utility based on specific needs, the political environment, and economic drivers.

Conclusion
So in summary, the Smart Grid is a "vision" of a digitized, dynamic, and secure grid of the future. It is taking shape today in response to the aging grid infrastructure, global warming, rising energy costs, customer expectations, and technology. Implementation will be different for each utility depending on needs. And the result will flatten utility-customer communications and transform your utility.

Find out more about the Smart Grid from Utilimetrics. Watch for an Utilimetrics sponsored Webinar on the Smart Grid planned for summer 2008 and plan to attend Autovation 2008, Sept. 7-10 in Atlanta, Georgia. See http://www.utilimetrics.org.

David Scott is a Senior Consultant at Plexus Research, an R. W. Beck company, and supports utility clients in their AMI and Smart Grid vision, decisions, and procurement. He has over 34 years experience in the utility industry, metering, AMR, and AMI before joining Plexus Research in 2007. He serves as the vice president of Utilimetrics, dscott@plexusresearch.com

SOURCE: Utilimetrics