Smart technology is the critical component for turning our nation's aging, unreliable power grids into cost-efficient, environment-friendly systems.
Carrying energy at the speed of light, the U.S. electrical grid is like a massive living organism, with a digestive system that converts fuel into energy, organs, cells, nerves and blood vessels. From heart-like power stations, electrons are pumped through arterial transmission lines and transformers, and spread through the capillaries of wires into virtually every home and business in the nation. Our national electric power grid brings to life televisions, computers, motors – the skin of modern living. In reality, the grid is the largest and most complex machine ever built, one the National Academy of Engineering has ranked as the 20th century's greatest engineering accomplishment.
Alas, like the Scarecrow in "The Wizard of Oz," this "organism" doesn't have a brain.
Unlike the nimble Internet, our electrical infrastructure is a static, one-way system that sends power to consumers through meters that, for the most part, are still read manually each month. Except for industrial users, few consumers have a way to acquire and respond to information about their power use and adjust to its fluctuating price. At a time when nearly every electrical device in sight is digital and computerized, the grid is controlled primarily by relatively "dumb" analog equipment designed and built in the 1900s.
Lack of intelligence notwithstanding, the grid has been the foundation of U.S. prosperity. Abundant and relatively inexpensive electricity enabled mass production, communications and the air conditioning that made the Sun Belt more inhabitable.
Without electricity, the rest of America's energy equation wouldn't exist; refineries couldn't make gasoline, diesel and jet fuel out of oil.
Embedded in the landscape, the grid's transmission towers, relay stations, transformers and wires are so familiar they almost go unseen. In turn, the system is generally unappreciated, so long as the power remains on. And because it usually works, we think little about what's on the other side of the switch. Only at night, from the air and above a metropolis, with rows of interlocking lights stretching to the horizon in a brilliant luminous web, does an individual actually see a piece – and just one piece – of the grid's amazing complexity.
As noted in The American Legion Magazine's special report on "The Power of Power" (March 2009), much of the grid's hardware is around 50 years old – near the road's end for most industrial equipment. It is thus increasingly unreliable, inefficient and vulnerable to natural disasters, terrorists and even squirrels falling onto power lines. In its current form, the grid cannot take advantage of renewable energy, such as solar and wind power, that would help reduce greenhouse gases that contribute to climate change.
Monopoly utilities served the nation well during the 20th century. But an industry regulated by 50 different state utility commissions, with 50 sets of rules, has resisted change. Consequently, even though the crumbling electrical infrastructure can and will be rebuilt, the question is whether the existing system will be replicated or reinvented.
The Smart Grid
Fortunately, a free-form and fast-moving coalition of nonprofit visionaries, entrepreneurs and federal officials want to ensure that, this time around, the Scarecrow gets his brain. This reinvented system is dubbed the "smart grid."
"It seems clear that private investment and consumer investment is rapidly taking place in the energy technology space," observes Steve Pullins, president of Horizon Energy Group in Knoxville, Tenn. He is a leader in the Modern Grid Strategy, an initiative associated with the Department of Energy. "Over the past three years, there's been an explosion of innovation from venture-backed firms ... geared to the consumer side of the meter."
More than 185,000 small businesses and com-munities are already acquiring electricity from alternative sources, a trend that, over the past decade, has grown by 33 percent each year. Called "grid divorce," it is a direct departure from the centralized, regulated monopolies that, until recently, have operated without challenge. "If utilities fail to notice what is going on," Pullins says, "they could become less and less relevant to their customers."
Utilities, and the states that regulate them, are caught in yet another set of cross-hairs. Senate Majority Leader Harry Reid, D-Nev., is a strong advocate for strengthening the grid. In March, he introduced legislation that would give federal regulators authority to override states on where to locate long-distance, high-voltage power lines. To alternative power developers, this bill – the Clean Renewable Energy and Economic Development Act, or S. 539 – would expedite the movement of energy from rural wind and solar farm projects to where it's needed. "We cannot let 231 state regulators hold up progress," Reid said at a clean-energy conference last year, referring to state public-utility commissions that usually decide
Although states may resist such change, the technical and federal consensus on the need for a smart grid is already here, says Jesse Berst, founder and editor of the Smart Grid Newsletter and an internationally recognized energy analyst. The federal stimulus package, in fact, had $4.6 billion specifically devoted to a smart grid. "And there are many other pots of money with more generic labels that could be applied to the smart grid," Berst says. Included is money for transmission lines, energy efficiency and electric vehicles.
So just what is a smart grid? According to the Electricity Advisory Committee, there are many working definitions. Broadly speaking, a smart grid is a range of technologies, equipment and business models that optimize the energy-value chain.
Such a grid would include meters that enable consumers to monitor the cost of incoming electricity in real time; they could decide to shift their energy use to off-peak hours, when power is less expensive. A smart grid incorporates smaller alternative power sources, such as solar panels on homes and office buildings, with the larger grid. It includes a vast network of microgrids, each operating with its own power-generation sources that are usually alternative, renewable and within reach of buildings or communities that can communicate with each other in real time via computers.
Networks of microgrids would be connected to the main grid through master controllers, in a system as interactive as the Internet. Should one microgrid, or an area served by the main grid, begin to experience a power drain, a smart system would sense the impending outage and repair it faster than the humans watching control panels.
Benefits and Barriers
The new technologies may replace the meter readers and other workers. The Electricity Advisory Committee's report notes that smart-grid technologies would eliminate unneeded field trips, reducing maintenance and operations costs. But as President Obama noted during his campaign and in the economic stimulus bill, a conversion to green energy and a smart grid will create far more jobs than are lost.
What's more, while utility executives contend that replacing the existing infrastructure would cost about $900 billion over 12 years, smarter technologies would take less investment and ultimately reduce energy costs to consumers. The payoff on smart technologies should be robust.
Berst says the smart grid "is perhaps the most fiscally responsible of all stimulus investments, because it has a five-times multiplier." Each dollar invested should generate a $5 return: for workers installing new equipment or in long-term green-collar jobs, in competitive advantages for U.S. firms using cheaper electricity, and in a more reliable system for national security.
By managing our electricity use more efficiently, the smart grid also has the potential to generate profound environmental benefits. The Electric Power Research Institute figures that a smart grid would reduce carbon-dioxide emissions from electric-power generation by 25 percent – the same as taking 140 million cars off the roads.
There are barriers to microgrids, which in most jurisdictions are not legal. Laws intended to protect regulated utilities prohibit private parties from stringing a power line across a public street, or putting a pipeline beneath it. While most utilities allow consumers with solar panels to "zero-out" their energy costs, few pay for excess production.
Today's electric power industry is like the telecommunications monopoly of the past, which had little incentive to develop technologies that reduced cost, offered choices or improved service. The deregulation of that business led to the cell phone and mobile e-mail devices of today.
"Utilities still view regulators as their key customers," says Kurt Yeager, head of the Galvin Initiative. "But in a truly open market, innovative entrepreneurs have incentives to provide high-value services and products to consumers."
Thanks to a conversion of technology, climate concerns, good business instincts and political will, electric-system incentives are developing. And high-value services and products will likely flow from a sophisticated smart grid. It will operate with "brains," which would make the Wizard proud and leave the Scarecrow grinning with glee.
Jay Stuller is co-author of "Perfect Power: How the Microgrid Revolution Will Unleash Cleaner, Greener and More Abundant Energy" (McGraw-Hill, 2008).