I’m sure I’m not the only one who gets frustrated when we hear politicians and others claiming the U.S. has a 100-year-old “dumb grid.” Those people have no idea what they are talking about.
In fact, utilities have been working on smarter grids for a quarter of a century. Surely it isn’t necessary to recapitulate here the development of SCADA, EMS, enterprise systems, artificial intelligence, etc. Many utilities already have very smart grids in place. The problem is that not all of some 3,500 electric utilities have all of these systems. There still is a lot of build-out to be done and utilities are actively engaged in that build-out and have been for more than 20 years.
What those who make dumb statements like those mentioned in the first paragraph don’t understand is that while the smart grid already exists, it still doesn’t reach all parts of the country—it’s a patchwork depending upon the resources and advancement of each local utility. To complete a nationwide build-out will require time and money—lots of both.
That build-out would have been completed by utilities anyway, at a responsible and affordable pace. What all the politicians are screaming about now, and wanting the build-out immediately, has nothing to do with how smart the grid is or isn’t. What they’re doing is imposing an artificial timeline on the build out—they want it yesterday. Why?
The why has to do with their own agenda. The dominant politicians now controlling Washington are beholden to the more radical portions of the environmental movement (including the United Nations IPCC). That movement has imposed an artificial sense of urgency by claiming all kinds of catastrophic things will happen if we don’t do a crash conversion from carbon-based generation to their beloved “renewables”.
To complete the smart grid build-out in the timeframe radical environmentalists and their in-pocket politicians want will cost trillions more than they've poneyed up through the so-called stimulus packages. And there comes the rub--somone is going to have to pay the trillions more to spread the smart grid nationwide. To these environmentalists and their politician buddies, the someone is the American taxpayer. Oh, and by the way American taxpayer, do this in the midst of the worst recession of modern times. Sometimes I wonder what environmentalists and politicians use for brains. They aren't nearly as smart as the grid already is.
You are right on in that it could cost American taxpayers literally trillions to build out Smart Grid in every single electric local utility company across the country. It is even more sobering that government wants it done yesterday. But the costs of implementing Smart Grid everywhere need not be forced down the throats of every American taxpayer with massive government handouts. To explain my view the following is most of the comment I posted to the article published just today on EnergyPulse titled "Smart Grids Need Even Smarter Governance" by Filomena Gogel;
"....there are widely varying objectives and definitions of success that a Smart Grid intiative should meet from the many stakeholders involved, including government. This presents very daunting challenges for utility companies in implementing a successful Smart Grid initiative.
In my view the real problem for utility companies is that their incomes are constrained by uniform customer price regulation. This means they have no easy way to raise their incomes without going through the slow and sometimes frustrating regulatory approval process to raise all consumer rates uniformly. I call this is a problem because, for example, say a utility Smart Grid initiative involves upgrades to T&D equipment to achieve greater infrastructure reliability. Customers won't see the results of these upgrades unless that particular utility grid is already very unstable or unreliable. Hence it becomes very difficult for the utility to get approval for uniform rate increases to pay for the upgrades.
In other less regulated industries like Cable-TV or telephony, companies are free to grow their business income by offering customers extra optional services over and above their basic TV or phone service. Customers willing to pay for the extras pay higher monthly bills, and the extra income to the service provider pays for infrastructure upgrades to handle the added services. Such is not possible for electric utility companies who must uniformly bill all customers the same price for energy, and apply for approvals to increase it.
If utility companies were given the freedom to charge non-uniform customer energy rates for a variety of additional services, it would open up whole new business opportunities to pay for Smart Grid initiatives. Basic energy rates could still be regulated, but other services targeted at specific customers could pay for Smart Grid initiatives. Such services might include real-time utility-to-customer communications to provide real-time electricity rates, utility demand response requests and confirmation signals back to the utility company when a request has been fulfilled, and real-time smart-meter-to-customer power and energy data monitoring or messaging.
Attaching additional business income for a utility company's Smart Grid initiatives would among other things help to CLARIFY IN FINANCIAL TERMS the objectives and definitions of success. And as this article correctly points out, clarifying the objectives and definitions of success is badly needed before any utility company can move forward implementing anything."
Bob Amorosi, M.Eng.
Resident of Ontario Canada
Yes, there have been improvements and the technology upgrades to date have been extensive and expensive. It is a big grid. Nevertheless, we have only begun to tap the value and benefits of applying innovation to the power grid.
The analogy runs along these lines: The cable company runs cable from their distribution location to the end user location. The original cableTV services to users were very simple and the pricing was low and regulated. We now know call these connections "Basic Cable". As the industry developed and premium services were added, the pricing structure became more complex, more channels were available, the interface between the end user and the cable company required replacement of the portal (cable box). Innovations including VOIP have had tremendous impact and high value to end users - to the point that I now regard my cable service as another essential utility function. Voice, Data, and TV.
Building out the SmartGrid is very similar from the standpoint of the end user at the inception of the cable TV industry. The electric utility is basically replacing the meter (analagous to the original TV Cable Box) with a more sophisticated portal that has benefits primarily to the electric utility. (Assuming one agrees that load shifting is a valid goal). The end user has to be sold on the benefits of having the ability to monitor their electric usage - the most obvious selling point being a rate adjustment. Whatever more sophisticated services might be available down the road are far more likely to come from innovations in the private sector.
Regardless of which iteration of the home "cable box" is installed by the utility - the results for the consumer are not likely to match the expectations. Call me a cynic - but there is too much funny money being thrown around to perform "new" functions which could be done with far less cost and far less complexity. If all we really is a demand reduction during the hours of 2-6 pm on hot days in July - a pre-programmed thermostat will more than do the trick.
And one more point - when my cable box doesn't work - I call the cable company. They walk me through a series of diagnostics, often connect directly to my box through their cable and make corrections. If all else fails - I have to deinstall the box and drag it to the cable company offices for an exchange. I see no evidence that utilities are even cognizant of how much more of a customer service and repair service function they will be required to perform. Scary.
Thanks for the supportive comments. I agree a programmable thermostat could go a very long way to helping with demand reduction during peak times, however our utility companies want much more than this. For a start they do not trust consumers to voluntarily reduce their power demand for example by making use of a programmable thermostat during peak times when required. A utility company or grid operators prefer by far to control load shedding themselves to guarantee a certain amount of loads get turned off. But consumers in general are strongly opposed to anyone outside (a.k.a. "big brother") controlling their environment in their homes, so they must be incentivized to do so with flexible energy rates as you say. This is a big reason why utility demand response programmes have primarily been focused on demand response contracts with commercial and industrial customers and not residential home owners.
Engaging residential consumers for demand response will need utility-to-customer real-time communications, ideally through the utility AMI system and customer's smart meter. The customer communication link through their AMI infrastructure is much more preferred because it is always on line and is usually completely owned and operated by the utility company instead of by some third party over the internet for example.
Here in Canada our utility companies are tightly regulated by our provincial governments, and most have no interest in implementing anything beyond their meters in customer's homes unless forced to do so by government legislation. Hence also the appearance of them being unaware of the massive customer support they would need to provide if they did support in-home technologies and more customer communications. Or perhaps they are indeed in some cases aware of it but shudder at the mere thought of massively expanding their customer support to deal with it.
I agree completely. Government involvement will only lead to more problems for this technology. Government and long term sustainability generally don't mix. Why not build more power plants?
Nick
www.nenniandassoc.com