Part 2: A Grand Vision for Smart Grid
By Wanda K. Reder
Smart Grid Introduces New Technologies and Services to Address these Trends
There is relief in sight, however: The smart grid will introduce transformative technologies and services to meet these very important market needs.
The smart grid will improve customer power reliability and power quality by employing network-connected sensors throughout the grid to anticipate and respond to outages in real time and nearly instantly. Smart grid technologies will substantially minimize the number and duration of outages so that services will be more robust and available.
Smart grid also holds potential to evolve the industry away from the centralized infrastructure model. It will augment existing capacity with distributed solutions based on resources such as solar or wind power, combined with battery storage, to meet local power needs and alleviate peak loads. Because distributed generation is located close to the customer, it reduces the electrical losses that are inherent with distributing power from centralized generation infrastructure. This not only reduces costs but also can be used to support utilities’ and customers’ environmental sustainability objectives. Smart grid technologies enable customers to interconnect their own distributed generation, such as rooftop solar panels, to the system and sell their excess capacity back to their local utilities.
With smart grid, customers may become active partners in grid utilization and management by employing smart meter and home automation technologies – or even smartphone applications. These tools are being developed to allow appliances to operate in conjunction with grid needs and enable customers to more actively participate in demand-response programs that help shift their demand off-peak or reduce their energy costs.
Customer Involvement Must Include Solutions that Intelligently Automate Demand Response
Integrating intelligence into end-use devices is key to unleashing demand response in a meaningful way. Researchers have found that there is often not enough difference between the cost for peak- and off-peak power to really capture the consumer’s attention and create significant behavior change. The industry needs to devise ways to incorporate automatic end-use-load participation into the business model so customers are not bothered by these programs and decisions and so their lifestyles are not inconvenienced.
Achieving customer engagement in the selection and configuration of electricity services represents a paradigm shift in the industry, which has traditionally delivered services without interacting deeply with the customer base. Greater customer participation is a fundamental part of reforming the system. It will help utilities achieve their energy efficiency objectives and lead to better decision-making and lower costs for both the utility and the customer. Embedded intelligence is needed, however, so consumers do not have to be in the middle of every demand-response decision.
Real Cost Savings are Possible for Typical Households
According to a 2012 Perfect Power Institute report, there is a real business case for empowering consumers, communities and utilities to invest in smart grid projects.
The Institute reported that consumers could realize financial benefits that exceed the investment costs by a factor of three or more if they, along with local governments and innovators, are engaged as partners in grid modernization. The Institute estimates the potential benefits of investments to be about $1,200 per year for a typical household while the costs are an estimated $400 per year per household. The Institute noted that the estimated benefits would be even higher if the impact on public health, safety and security could be precisely quantified and included. It spread the investment costs across three main grid categories: power supply, power delivery and end-use consumption. The greatest investments would be made at the consumption level. End-use investments would include local clean power supplies, smart meters and home automation.
To be continued…
To read part one of this article, click here.