Box 41 Building a Smarter Grid

In today's "dumb" electricity grid, communication is only one-way, from consumers to utilities, which attempt to adjust to changes in demand by ramping production up and down. When utilities cannot respond as needed, system problems such as blackouts can occur. Kurt Yeager, former president of the U.S.-based Electric Power Research Institute, compares the current electromechani-cally controlled grid to "a railroad on which it takes 10 days to open or close a switch."

Yet the digital age, which has increased demand for electricity and highly reliable power systems, is now allowing the transition to a faster, smarter grid that can provide better-quality power with two-way communication, balancing supply and demand in real time, smoothing out demand peaks, and making customers active participants in the production as well as consumption of electricity.The smart grid allows more-efficient use of existing power capacity and ofT&D infrastructure by reducing line losses through the use of more local, distributed generation. As the share of generation from variable renewable resources increases, a smart grid can better handle fluctuations in power when the wind ebbs or clouds hide the sun. It will also allow electric vehicles to store power for transport use or to sell back to the grid when needed.

Smart technologies—including smart meters, automated controls systems, and digital sensors— will provide consumers with real-time pricing and enable them to save money and power by setting appliances, entire building heating and cooling sys tems, or industrial loads to shut off at specific times or when electricity prices exceed a certain level or there is a drop in generation from large wind plants.They can help shift loads to low-demand periods, when line losses are lowest and the dirtiest, least efficient plants are not operating. And they allow grid controllers to anticipate and instantly respond to troubles in the grid. Pilot programs have demonstrated significant consumer savings and demand reductions.

Full development of smart grids is 10-30 years away, depending on the policies enacted. But many countries and regions are well on their way. Pacific Gas and Electric in California, for example, is in the process of installing 9 million smart meters for its customers, while the Netherlands aims for a "base level" of smart metering and replacement of all 7 million household meters by autumn 2012. When starting from scratch, smart grids are cheaper than conventional systems, and they are helping to electrify regions of sub-Saharan Africa for the first time.The IEA has projected that more than $ 16 trillion will be spent in pursuit of smart grids worldwide between 2003 and 2030. If consumers are provided direct access to associated benefits, Kurt Yeager projects that a smart grid will open "the door to entrepreneurial innovation which will transform electricity efficiency, reliability and individual consumer service quality beyond even our imagination today."

Source: See endnote 16.

An Enduring Energy Future they feed back into it. Guaranteed access to both the electric grid and the market— through either feed-in tariffs (local generators are paid a set price for all the renewable electricity they produce) or net metering (they are paid, generally at the retail rate, for any excess power sent into the grid)—is critical to the expansion of distributed energy and renewables in general, enabling renewable energy not only to add energy supply but also to replace existing fossil fuel sources over time. While most locally generated power will not make use of transmission lines, it will use local distribution systems. An issue still to be resolved is the level of payment for use of the distribution system for the relatively small amount of electricity from local distributed sources.17

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