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October 20, 2009 @ 11:55 am
Is the Smart Grid Possible?

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If you’re like me, you have seen the GE and IBM “Smart Grid” commercials and perhaps other promotions espousing the benefits of the smart grid. You probably agree that having a smart grid sounds like a fantastic idea, but you wonder how are we ever going to reach the smart grid utopia that is being promoted?

The existing power grid in the U.S. transmits and distributes electricity that traditionally has been produced by about 10,000 centralized generating plants that are inherently inefficient. They’re long-lived assets that cannot and are not replaced often due to costs and regulations. Thus, targeting the grid would seem to be a bountiful shortcut to energy efficiency gains and reduced consumption, but this is no small task either.

tranmission

According to the Department of Energy, there are over 157,000 miles of high voltage transmission lines but construction of and investment in new facilities has continually decreased while electricity demand has continually increased. Newly developed renewable resources often don’t match population and industrial density so there is a desperate need for new transmission capacity. However, local opposition and litigation regularly stalls new projects, costs outpace investment returns and permitting can take years. Distribution infrastructure is even more highly regulated and controlled by thousands of different state and local government and utility operators making coordinated investments and improvements difficult.

If the infrastructure is too costly and time-consuming to replace in short order then the bridge would seem to be enabling, add-on technologies that make what we’re stuck with more efficient. Currently, the grid is a jumble of one-way streets with crossing guards that forgot there walkie-talkies. It needs to be a network of two-way highways with automated systems connected by real-time dynamic communications. Right now, a utility often doesn’t know you lost power until you call them. Meanwhile, consumers lack information about peak and off-peak usage and details about their energy usage. The smart grid would derive much of its benefits from automation and the collaboration of market participants, but we have little proof of concept to go on. This video provides a good overview of the issues:

The primary theory of smart grid technology is that consumers will actively reduce electricity demand/drive energy efficiency. A new project/large-scale test by Xcel Energy will provide worthy insights as to whether a nationwide smart grid is an achievable goal.

In the process of turning Boulder, CO into “SmartGridCity,” the company has spent millions installing 200 miles of fiber optics communications cables, 16,000 “smart” meters. You can read more about it in the NY Times here.  

There are currently few, if any incentives for utilities and customers to better manage and reduce electricity consumption. Compounding the problem is that each state’s public utility commission (PUC) has their own ideas and authority so the evolution will happen in a piecemeal fashion. Aside from that, if you’re a capital intensive utility can you afford to sell less electricity? Many are saying “likely not,” by continuing to oppose the distributed generation model (consumers have their own generation sources; solar, wind, etc. and sell excess power back to the grid). The utilities need new revenue models and the consumers need transparent, dynamic pricing information along with their smart meters so that are engaged and motivated to make energy consumption decisions.

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