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IEEE: The expertise to make smart grid a reality

Interview with Erich Gunther

Erich Gunther, member of the IEEE Smart Grid Task Force, chairman of the IEEE PES (Power & Energy Society) Intelligent Grid Coordinating Committee, an IEEE PES Governing Board Member and chairman and Chief Technology Officer of EnerNex, offers insight on the challenges and benefits of Smart Grid implementation.

Erich Gunther, member of the IEEE Smart Grid Task Force, chairman of the IEEE PES (Power & Energy Society) Intelligent Grid Coordinating Committee, an IEEE PES Governing Board Member and chairman and Chief Technology Officer of EnerNex, offers insight on the challenges and benefits of Smart Grid implementation.

Question: Why are energy companies investing in a modernized grid and how?

To answer the “how”, it’s really dependent on where one is located on the grid. For example, California is an area of the country where energy prices are very high and where transmission and generation constraints are in play. In this scenario, empowering consumers to better manage usage and control costs could very well be the best course of action.

To answer the “how”, it’s really dependent on where one is located on the grid. For example, California is an area of the country where energy prices are very high and where transmission and generation constraints are in play. In this scenario, empowering consumers to better manage usage and control costs could very well be the best course of action.

While new applications are promising, such as EVs (electric vehicles), PHEVs (plug-in hybrid electric vehicles) and programs that help consumers become more savvy in regards to power consumption, there is still the issue of the grid’s aging infrastructure that must be addressed. We know that energy demand is going to continue to increase across the board and that older equipment is going to start to break down. Even if we don’t add any more applications, aging equipment needs to be replaced with larger-capacity upgrades. Or, alternatively, automation technologies need to be deployed to the degree we can defer capital investments as long as possible, while managing the increased demand.

The point of the matter is that spending no money really isn’t a viable option. A scenario where nothing is done to modernize the grid will result in more brownouts, more blackouts and, ultimately, rotating outages. The end result is rapidly rising energy costs to try and quickly compensate for failure rather than incrementally improve and extract more value from what we have.

Question: What are some of the challenges faced in bolstering Smart Grid’s momentum?

Primarily, there needs to be more incentive to change. Utility companies have been running their businesses the same way for a very long time. They achieve a return on investment in capital projects by selling energy used in that infrastructure. A regulated environment makes the idea of trying to get more out of what you’ve already built, yet sell less energy seem counterintuitive. This is compounded further by a fragmented, state-by-state regulatory system. Incentives need to be market or business driven, instead they are based on a fixed rate of return.

On the next level, utilities simply are unaware of the amount of information at their disposal that’s been gathered through pilot and demonstration projects. There are huge numbers of resources available to them, but, in many cases, utilities have yet to access this information to any significant degree.

Also, utilities are unaccustomed to having to solve these kinds of problems. Repeatedly, during the last 50 years, they have devised really effective ways to deploy a complex system with relative ease and by tailoring well-defined operating practices. In effect, what was once a complex engineering process has been codified to such a point that a utility can add new feeders and build new loads without doing a lot of analysis. Unfortunately, that is an operating culture that doesn’t allow for a lot of innovation.

Question: How can utility companies demonstrate the value of Smart Grid for consumers?

How can utility companies demonstrate the value of Smart Grid for consumers?

Frankly, the industry has grown used to telling consumers what they’re going to get as opposed to asking them what they’d like to have. Today, we need to switch gears and begin to ask questions along the lines of: “What are the consumers’ reliability and power requirements?” and “What kind of rate flexibility do they want that takes advantage of the time value of energy?” Because, historically, we haven’t done such a great job including input from customers, this is an area open to improvement on the part of utilities’.

Also, we need to work more inclusively to foster buy in at the consumer level. We need a way to get people thinking, “If I could do this, I would do this and this, too.” Improving communication with consumers about Smart Grid options is elemental to making them part of the process. We want to work towards providing truly viable options where a consumer immediately sees the value and says, “Yes, I want to get one of those.”

During the years when the rural electrification program was being executed, utilities provided community co-op model homes or model kitchens so that people could see for themselves the value of moving to electricity, rather than continuing to wring the wash by hand. Today, some utility companies are building Smart Grid innovation centers to demonstrate what’s possible and simplify high-tech initiatives for public consumption. Another historical equivalent that we can look to is central air conditioning. When we started bringing on air conditioning, the grid was not sized for that new load and lights would figure flicker in areas when the air conditioners were turned on.

Luckily, at that time, the grid was still being built out, and we were able to keep ahead of that huge, new load. Now, we have a fully built-out system, and so we’re going to have to manage the rising demand in other ways. There are probably additional lessons learned from looking back at how we as an industry dealt with similar challenges.

Question: How does the end consumer benefit from Smart Grid?

A major benefit of Smart Grid is that it empowers consumers to drastically improve the management of their individual energy usage. What’s more, because there have been many demand-response projects, both manual and automated, we can demonstrate the inherent value for consumers when they understand what they are doing in terms of their electricity consumption and what it costs. If you don’t measure it, you can’t manage it. But, when you do there is clear value for consumers in having an infrastructure that allows them to see and manage energy use on a granular basis.

On the next level, utilities are just not that aware of the amount of work that’s been done in terms of pilots and demonstration projects and the amount of information at their disposal. There are huge numbers of resources available to them, but they have not been exposed to it yet.

As an analogy, consider grocery shopping. We’re used to walking down the aisles and seeing what everything costs and making our purchasing decisions. Every once in a while, we come across a sale that we might choose to take advantage of. Imagine if we bought groceries the same way we currently buy energy. We don’t get to see the prices, and, while we know there are sales going on from time to time, we don’t get to know when. We simply grab a bunch of stuff that we think we’re going to need, and discover how much it all costs long after we’ve left the store. No other industry works this way. Building the Smart Grid to empower consumers to manage their energy usage and costs is an extremely valuable application.