White Paper: An overview of smart grid technology

Mon, 04/20/2009 - 00:00

Executive Summary: 

This research paper focuses on “smart grid” technology and related issues in an effort to gain a clear working understanding of the term and how it is being used by various stakeholders. 

“Smart grid” is a term being used by many people and organizations, and yet an authoritative definition of a smart grid is something that has not yet been universally accepted. Several definitions have goals and characteristics in common, such as: digital technology, improved reliability, cyber-security, distributed resources and generation, “smart” technologies that are interactive in real time, advanced storage, customer controlled usage, and interoperability. Adding the goal of achieving zero carbon emissions would have a fundamental impact on how we conceive and implement a functional smart grid society. 

The smart grid can work in the public interest by being a powerful tool in environmental stewardship. The development of the distributed grid is an essential step in reaching a vision of carbon-free and nuclear-free energy, and eventually making obsolete the polluting systems we currently use. 

In looking at what is achievable now, the utility industry has made varied progress toward testing or implementing smart technologies, which indicates that we have not yet achieved a standardized progress toward a nation-wide smart grid reality. Real steps toward that standardized progress have recently been taken, as FERC’s interim policy statement, circulated in April 2009, provides guidance on standards to the electric power industry. 

In the meantime there are achievable steps thatcan be taken now to address the drivers for energy improvement. A stressed grid infrastructure can be eased by affordable end-use energy efficiency initiatives that address both policy-making and also change at the household level. End-use energy efficiency and renewables contribute to addressing global warming and rising energy costs. Many of the involved technologies or techniques involved are also affordable to implement. 

End-use efficiency can be achieved without a smart gird. The potential savings through efficiency now are enormous. Placing an emphasis on the ability of end-use energy efficiency to save hundreds of billions nationwide can be part ofa strategy for how we frame the cost/benefits of smart grid development to customers. 

Technologies involved in the development ofa smart grid are internet-based and interactive in nature, such as smart meters. While the advanced or smart metering technology may be needed in the creation of the smart grid, the current uses of these meters can be abusive to customers. Also, recent predictions suggest the U.S. will make an investment of $300 billion dollars over the next decade, which ultimately will be funded by the taxpayer/ratepayer base. Therefore the technology and cost issues become, inevitably, a policy issue. There is also no single comprehensive timeline for implementation, although some timelines project as far as 2030. 

We have to move beyond current conventional thinking to accept this new paradigm of transformative technology and take steps forward that protect the public interest. Given the detailed, expensive and exploratory nature of employing smart grid technology, individual state commissions should hold off approval for smart meter investments until a clear connection to FERC’s immediate goals with respect to cost recovery can be proven. 

There are two steps to a rational approach to the smart grid issue in Indiana The first, most critical and economical step is to establish an Energy Efficiency Resource Standard (EERS), as already have been implemented by 18 other states. The second step is to develop pilot projects that test smart grid technologies and strategies inorder to make more informed policy decisions that will inevitably havesweeping consequences, keeping in close communication with FERC and present mandates. 

Just as evidenced by the various local and regional pilot projects that have been undertaken, only incremental progress can be made by individual utilities and stakeholders. In order to fully realize a national transformation to smart grids along with all the attendant technologies needed to make them work, the visionary action must occur at the federal level. What also should occur at the federal level is the adoption of an EERS, as outlined by the ACEEE, which will substantially reduce stress on our current energy systems, create jobs, and produce significant savings not only financially but environmentally. Above all else, critical questions need to be answered, such as the allocation of costs and how the public interest will be protected, before definitive and very expensive action is taken inthis swiftly evolving industry phenomenon. 

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