By Jeff Postelwait
The Smart Grid is the convergence of information and operational technology applied to the electric grid, allowing improved security, reliability and efficiency to electric utilities.
That is the definition used by Burns & McDonnell's transmission and distribution group. Mike Beehler, vice president of that group, said the Smart Grid can be hard to define at all because of all the different technologies and applications it brings together.
"There are many competing interests in the technology of the Smart Grid and each technology wants theirs to be favored," Beehler said.
In addition, utilities want to get full rate recovery for what they invest in the Smart Grid, and to date many states have not specified how that expenditure can be recovered, he said.
Kiah Harris, a principal in Burns & McDonnell's management services group, said how the Smart Grid is defined also depends on who is looking at it.
"The regulator, the customer, the distribution system, the transmission system, the generator, the utility enterprise and the IT department — each is seeing only their piece of the pie and there is still not an overall concept of Smart Grid from the air conditioner to the generator," Harris said.
One of the most important benefits of Smart Grid implementation for electricity generators is sustainability, Beehler said. Sustainability means an improved level of energy efficiency in transmission, distribution and use of electricity. This translates into lower line and transformer losses for the utility asset owner and conservation and load management opportunities for end-use customers.
The key question for those in the power generation industry is how the Smart Grid can improve efficiency on their side of the business. Beehler said the Smart Grid would enable utilities to send real cost-of-generation price signals to end-us customers.
"If that in fact works technically and is accepted by the customer, the generation asset can be used more effectively by improving its load factor," Beehler said.
The Smart Grid has other advantages for power generators, Harris said.
"It also provides for the ability to use load instead of generation for reserves and regulation service," Harris said. "This reduces the cycling requirements on units, which increases reliability and efficiency."
Another advantage that will only become more attractive over time as more renewable energy sources send their power onto the grid is how the Smart Grid makes renewable integration easier.
"Interconnection and metering of renewable distributed generation such as solar and wind is very challenging. The Smart Grid will require a highly reliable telecommunications backbone to deliver real-time generation data from distributed resources so that utilities can safely and efficiently integrate the resources into the general mix," Beehler said.
Some challenges, such as interconnection agreements, technical standards, net metering rate structures and resource availability and system dispatch may be addressed by the Smart Grid, however some may not, he said.
The real problem, Harris said, is the non-dispatchability of generation units and how to effectively operate the system with additional wind and solar power.
"Also, the integration of storage in plug-in hybrid electric vehicles and ice storage units will allow the load to be sculpted better to follow the renewables and keep traditional generation at a more efficient loading point," Harris said.
Politically speaking, there have been some advances that could prove useful to the implementation of the Smart Grid, Beehler said. There is $4.5 billion in recovery act funding available for demonstration projects (including the Smart Grid) through the Department of Energy Office of Electricity. Requests for proposals are expected in June, and funds will be released in phases through 2010.
"The states are getting stimulus funds as well and several are allowing utilities to do immediate, 'shovel ready' distribution system upgrade projects," Beehler said.
Although some progress has been made, the rising cost of electricity will remain the biggest factor in spurring interest in the greater efficiency that the Smart Grid offers, he said.
"The Smart Grid will enable sustainable options for customers. They will demand it. Therefore, the next steps are for utilities to implement a deployment strategy for the Smart Grid that includes pilots of the most promising technologies," he said.
This would be followed by a full roll-out of a customer-oriented deployment strategy, he said. Distribution companies may prove to be the leaders once the Smart Grid enters the implementation phase, he said.