Smart Grid Ushers In New Era Of Energy Conservation

When President Obama signed into law the American Recovery and Reinvestment Act (ARRA) in February, he set into motion an ambitious effort to modernize the nation's energy infrastructure. The legislation appropriated $43 billion for the U.S. energy sector, of which roughly $4.5 billion go toward a “smart” grid. The bill calls for a Smart Grid Task Force to run up to five demonstration projects focused on smart grids and energy reliability.

The deployment of a smart grid became policy with passage of Title 13, the Energy Independence and Security Act of 2007. The law funds the building of a smart grid and creates a Grid Modernization Committee to assess the benefits of energy demand response (DR) and to recommend needed protocol standards for the grid.

Rapid injection of capital by the ARRA legislation “will solidify and encourage more investment in smart metering and the smart grid,” according to Sam Lucero, ABI Research senior analyst. “There's widespread agreement on the advantage to be gained from smart metering, and the smart grid is a market opportunity for many hardware and software vendors,” he adds.

What Is The Smart Grid?

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According to the DoE, the smart grid concept applies a systems approach to grid modernization. It uses a communication network linking the entire energy supply chain, from the point-of-generation to the end user. The smart grid uses information transmitted over the network to make timely decisions in response to supply and demand, as well as in response to anticipated natural and unnatural events. It will also be overlaid with a level of security. Advanced meter reading (AMR) of energy usage and sending usage data over an advanced meter infrastructure (AMI) are all key elements of the grid.

The smart grid is not just for electricity from conventional power plants. In fact, as of this writing, a Florida developer has announced plans to build a 195,000-home development in Fort Myers, the first powered by zero-emission solar energy. The photovoltaic plant will be the largest such entity to be operated by the electric utility Florida Power & Light. The utility is presently working with suppliers of AMR components for the smart grid.

To put things into perspective, a crude form of a smart grid has been around for years in the form of DR systems for large customers that provide uninterruptable service in the event of power outages. DR, in fact, is still in use today. It lets the grid operator cut power to users who have previously agreed to this arrangement in return for lower electricity rates or cash payments.

But in a truly smart grid, processors attached to key grid components will act in concert with sensors at energy point-of-use nodes. They will let the grid not only self manage itself, but also be self-healing. Such a grid will be able to localize and anticipate the consequences of natural disturbances such as hurricanes, lightning, earthquakes, rainstorms, and even intentional acts of sabotage.

This concept is favored by many energy experts including Massoud Amin, a distinguished professor of Electrical & Computer Engineering at the University of Minnesota and Director of its Center for Technological Leadership. He calls for a more predictive type of network, instead of just a reactive one, to meet growing energy demands. Despite the seemingly high capital investment needed to make the energy grid smarter, Massoud believes the cost is but a fraction of the current annual outlay caused by power interruptions.

Smart grid has a lot of possible benefits. As an example, Stephen J. Callahan, a partner with the Energy & Utilities industry of IBM Business Services, alludes to a smart grid project conducted by researchers at the Pacific Northwest National Laboratory (PNNL). The pilot project showed consumers cut their overall peak load on the grid by 15% when offered the opportunity to slice their electricity bills by 10%. That study highlights the importance of implementing a smart grid technology at the local level using micro-grids that reach the consumer premises.

Indeed, a recent study by the Consumer Electronics Association (CEA) found that home owners factor energy efficiency into purchasing decisions for consumer electronics and home appliances to reduce energy costs. Of those who underwent an energy audit, 61% have shown an interest in using smart energy meters.