Waiting For the Smart Grid

"It works well until it doesn’t." Few systems embody that aphorism as well as the electrical grid, born at a time when horse traffic and wooden sidewalks dominated street scenes. Yet the world’s energy profile has changed dramatically over the last century, putting increasing pressure on a system too big to replace and too important to fail.

Aside from growth in power consumption, new ways to create, store, and use energy pose their own challenges. Renewable energy sources such as wind and solar are fickle, intermittent producers, while electric vehicles shift generation from privately owned engines to centralized power plants.

The system as a whole cannot suddenly grow, but it can be managed more efficiently; that’s the promise of "smart grid" technologies, which use monitoring, communication, and control to make the existing electric network more stable and predictable.

Smart grid technologies are available for every point of the electrical generation, transmission, and distribution system, from the power plant to the end-user. They include, for example, device-monitoring sensors; equipment to communicate and synchronize data; components that can change energy flow, and security programs to prevent attacks on the grid as a whole.

These technologies typically are phased in to a power grid over time, replacing older, outdated equipment.

Smart meters are only the beginning

The smart grid’s most visible component to the end-user is the "smart meter," which enables two-way communication of usage data between a homeowner and energy provider.

Smart meters save utilities money because they don’t need to send someone to read each residential and business meter. Coupled with additional home devices, smart meters save consumers money by creating a profile of one’s electrical use, pinpointing energy "hogs" to either make recommendations or exert remote control. Some of its technologies were first developed in the 1970s, but smart meters were not widely deployed until the early 2000s, when utility Enel replaced every electrical meter in Italy over a six-year period.

"We started testing smart meters in the late ’80s, and made the decision in 1999" to roll them out, says Paola Petroni, head of Network Technologies at Enel Group’s Global Infrastructure and Networks Division. "It was a hugely logistic activity. But it went through very well, with installation of up to seven million meters per year. We now have more than 30 million smart meters connected."

While Italy has been unusually aggressive in this regard, smart meters have proven popular elsewhere. According to Colin McKerracher, senior analyst at Bloomberg New Energy Finance, the U.S. has more than 50 million smart meters installed; they’re commonplace in many Canadian provinces, with the switchout of mechanical meters for smart meters already completed in Ontario and British Columbia. Looking forward, the European Union aims for 80% of its meters to be "smart" by 2020; China expects all its electrical meters to be smart by 2017, and "almost all" of Japan’s utilities are targeting the transition to smart meters to be completed by 2023.

While smart meters can note usage anomalies, and communicate them wirelessly to the utility, a truly smart grid needs much more.

"Smart meters are mature technology," says McKerracher, "but there are a lot of technologies going in at both the low-medium- and high-voltage sections of the grid as well. For example, sometimes the grid delivers voltage a little higher than is necessary for the consumer; distribution automation technologies can get an efficiency savings by flattening out that voltage profile."

McKerracher says regulations, not technology, often stand in the way of smart-grid investments. "In a lot of parts of the world, grid operators don’t have strong incentive to invest in technologies that reduce their operating costs," he says. "That’s because they’re natural monopolies, and they make a regulated rate of return on the amount of capital they deploy. But smart grid solutions are often ways to reduce capital spending; they can shave peak loads so the operator doesn’t need to upgrade that line or substation."

Privacy, Security, and Big Data

Some of the smart grid’s biggest areas of promise are around data collection and interpretation. Says Tim Appleton, Energy and Industrial Business Development Manager at Intel, "If you’re able to collect data about such things as your transformers’ oil temperatures, you can determine whether they’re operating as expected. Then you can take proactive action to make sure they don’t become damaged. But that means you need to collect, consolidate, communicate, translate, and analyze all that data."

Wherever information is transmitted and stored, there are dangers that it could be intercepted … or altered. "Security is something that we as an industry need to solve," says Appleton. "The technologies are available. They’re well-known within the walls of technology companies, where we’ve been living with information security risks for the past 20 or 30 years. But the utility companies—outside of their IT groups—they’ve only been living with them for past five or 10 years."

At the other end of the wire, some consumers have expressed concern over potential privacy issues, particularly if the smart meter becomes a requirement to receive power. McKerracher notes that residential customers in some jurisdictions can opt out of smart metering programs—for a price. "The charge is basically intended to reflect the fact that that utility would then have to go out to read the meter, as well as maintain parallel billing systems and things like that," he says. However, "When regulators allow utilities to charge customers for those things, not very many people actually opt out."

Even if consumers resist, smart grid technologies are already integrated into many electrical systems, with all customers seeing the results. Petroni says, "When we started installing remote terminal units to monitor and manage medium-voltage substations in 2000, the average service interruption was two hours; now it’s about 40 minutes." McKerracher explains why: "You used to have to literally wait until someone called in to report a power outage, then drive around the neighborhood until they found a tree down on a power line. Now you have a meter saying, ‘I’m out, and the three around me are also out.’"

Tom Geller is an Oberlin, Ohio-based writer and documentary producer.