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What makes a grid "smart"?

Lynne Peskoe-Yang Apr 5, 2019
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In February, Rep. Alexandria Ocasio-Cortez, D-New York, and Sen. Ed Markey, D-Mass., revealed the outline of the Green New Deal, a long-awaited bill describing a policy platform to mitigate the effects of climate change.

The outline refers many times to “smart grids” as an essential step toward the development of sustainable, eco-conscious, and even carbon-neutral city infrastructure.

But what is a smart grid? And what do you need to know about it?

A green new grid

Researchers and engineers in American cities from Boulder to San Antonio have begun the work of transforming their traditional utility grids into self-monitoring, demand-responsive digital networks.

The remaking of the electric power grid for optimum sustainability has been a part of American pro-environment legislation for more than a decade.

In the world of high-tech hardware, the term “smart” can refer to anything from a digital whiteboards to a piece of personal technology with an internet connection. But among the engineers and urban planners updating the remote infrastructures (like water and electricity) that make up the grid, the definitions are a bit more consistent. 

According to the U.S. Department of Energy’s Office of Electricity Delivery and Energy Reliability, a smart grid is a grid with digital technology that allows for two-way communication between the utility and its customers.

“The smart grid will consist of controls, computers, automation, and new technologies and equipment working together,” according to the office, which says the smart grid “represents an unprecedented opportunity to move the energy industry into a new era of reliability, availability, and efficiency that will contribute to our economic and environmental health”.

Independent energy and environmental sustainability researcher Kenneth Zame characterizes a smart grid as one that functions like a communications network between utilities distributors and consumers.

Features like “smart meters,” which measure and monitor consumption on the consumer side and share information across all layers of the grid, allow utilities to be delivered according to consumers’ needs, rather than distributed uniformly across a population. With a smart grid, consumers play an active role in the management of their energy usage — they can make decisions based on pricing, which can be adjusted by utility companies according to demand.

“There is a lot of communication and sensing, from generation to transmission and distribution to the end user and back to the utility,” Zame said. “Physically, this involves a lot of components and stakeholders: generators, utilities, monitors.”

For Chris Campbell, the senior director of grid modernization services at the Salt River Project in Arizona — a community-owned enterprise and one of the largest public power utilities in the U.S. — the responsive sharing of usage data is a central trait of a smart grid.

Unlike the conventional energy grid, where resources move from utility to consumer in a uniform pattern, a smart grid is responsive and flexible enough to incorporate alternative energies from multiple other sources, like wind and solar, and redistribute them according to demand.

The “smart” factor lies in the grid’s ability to adapt to variable supply and demand. “An integrated grid supports resource diversity, which is a key requirement due to the variability of renewable energy resources,” Campbell said.

In other words, the smart grid is the missing link between renewable energy options and in-home energy consumption.

Will smart grids benefit consumers?

On the consumer side, the cash benefits seem to depend on the level of engagement with the new-age grid. Some smart grid models rely on participants to moderate their own energy demands, using a combination of demand monitoring, education, and financial rewards to incentivize pro-environmental behavior, which can translate to consumer savings. One smart grid pilot project in Turkey estimated that participants saved an average equivalent to one monthly electric bill per year. 

The infrastructure investment necessary to support a smart grid in the U.S. amounts to a substantial expense, but leaving the old grid in place could be even more costly.

According to a 2011 technical report from the Electric Power Research Institute, deploying a fully functioning smart grid system by 2050 would increase consumers’ electric bills by as much as 50 percent.

But maintaining a conventional grid structure in its current state would require an increase of up to 400 percent by the same year.

Integrating utilities is complicated

Smart grids have the added challenge of integrating the flow of usage data between sources, distributors and consumers, as well as a multiplicity of energy sources that don’t have a role in the conventional grid.

Compared to the utilities in the conventional model, passive energy sources — like wind and solar, as well as the energy collected from regenerative breaking in electric cars — are difficult to regulate. Unlike energy that comes from fuel, which can be increased or decreased on command, the power that comes from most renewable energies relies on variable factors, like weather or car usage. 

At Austin’s Pecan Street energy initiative, sustainability researchers have studied the electricity usage of residents over time to determine how a smart grid can meet energy demands without overloading the grid or distributing extra energy that goes to waste.

Finding a way to manage these resources is what Pecan Street’s director of communications, Colin Rowan, calls the “storage riddle.”

Pecan Street has identified several possible strategies to solve the riddle, the most promising of which is an in-home storage unit, a “microgrid” that would collect energy from household renewable resources: electric cars, solar panels, and wind turbines. The unit is still in beta testing.

Things get even trickier when you consider all the potential conflicts of interest among the various players with a stake in the operation of the average grid. Individual consumers may be most interested in savings and convenience, city and state governments in meeting sustainability goals, while private utilities and hardware manufacturers tend to be concerned with maximizing shareholder dividends.

Arizona’s Salt River Project works around these conflicts in part due to its unique role as a public utility company with elected boards.

Unlike other municipally owned utilities, SRP operates with minimal oversight from the state’s public utilities commission, allowing the project to prioritize both the long-term (like sustainability) and short-term (like savings) needs of residents. “There are no shareholders to satisfy, so all revenue is reinvested into the grid,” Campbell explained.

Aging grids are inefficient

As challenging as the transition might be, the U.S. power system has little choice but to change. The existing energy infrastructures within our borders are in notoriously poor shape. According to research by author and cultural anthropologist Gretchen Bakke, the state of the American grid is dire even without the tremendous pressure of offsetting the effects of climate change.

The average age of an American power plant is 34 years; one expert Bakke interviewed estimated that this aging infrastructure forces the country to use twice the number of power plants it would with maximum efficiency.

America’s blackouts — where grids fail and leave a significant portion of the country without power — are longer and more frequent than they are in most other industrialized countries.

In addition to catastrophic effects on the economy and the dangers for those dependent on electrical support in hospitals, for example, these outages create a national security risk, leaving the grid open to attacks from terrorists and hackers and hobbling federal defense systems.

As extreme weather events increase in intensity and frequency in the changing climate, a grid that can recover from blackouts, draw on alternative energy sources, and respond flexibly to consumer demand may become a matter of survival. Zame said that successful smart grid projects could use energy storage to mitigate the impact of environmental disaster.

He warned that consumer buy-in to the smart grid will be essential. “You have to have the people motivated on the ground level,” he said. Otherwise, he suggested, the interests of those who oppose change will continue to lead the way.

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