Converting the nation to a smart grid will make sense in the long run, but it’s the short run that’s the challenge.
My friend Lois has lived in California her entire life, most of which has been spent in Bakersfield. She’s lived in the same house for well over 30 years and couldn’t have been happier to have her local utility company install a digital smart meter to replace her old dial-gauge meter. The only person not happy about it was her meter reader.
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Oh, have pity for the meter reader. Like asbestos or the incandescent light bulb, they are sailing off into the building industry sunset. Thanks to a large line-item in last year’s stimulus package—roughly $3.4 billion—the nation is on track to start converting residential electricity meters to smart meters, which wirelessly transmit usage data to centralized computers at the utility company. Newly empowered consumers, like Lois, can log onto the web and conceivably monitor their energy consumption, follow monthly trending data, and make choices about how much and when they consume electricity.
Smart meters aren’t a new concept and many states have tested them. A 2008 pilot smart-meter program conducted by the Baltimore Gas and Electric Company showed an average savings of $115 per customer over four months. That is in line with other case studies demonstrating how smart meters effect behavioral change by encouraging conservation. Not everyone gets it. California-based Pacific Gas and Electric has experienced some backlash in its planned rollout—the largest in the country—of 10 million smart meters by 2012. Since the utility can monitor energy use during 30-minute intervals, some consumers have seen their electricity bills skyrocket owing to peak demand charges the utility previously had no way of levying. In other words, if you want air-conditioning at 3PM, be prepared to pay.
But smart meters aren’t so smart when they are acting alone. They need to sit within a greater web of information networks, or smart grids, that relay information at all scales of electricity generation and distribution, from the power plant to the thermostat on your wall. A smarter grid will be needed as the country develops more renewable energy sources, since electricity demand and supply become critical balancing acts with an unreliable source like wind turbines connected to the network. Of course, converting the entire country to a smart grid could require billions, if not trillions of dollars, since there hasn’t been much technological progress made since the days of Edison and there are few built case studies anywhere in the world. Minneapolis-based Xcel Energy is spending approximately $100 million developing the SmartGridCity project for Boulder, Colorado (smartgridcity.xcelenergy.com). It’s an ambitious demonstration project to fit all 100,000 homes in the city with smart meters and controls to automate energy use, retrofit monitors and controls to substations to minimize distribution losses, install communication systems to gauge outages, and implement cable and device failure detection capability. Xcel estimated it could be cheaper in the long run to redevelop the entire grid to operate more efficiently rather than spend the billions needed for new power plants. The industry is waiting to see the results.
Such a project relies on technological conver-gence, or, simply put, the ability for one thing to talk to another. It wasn’t that long ago that network incompatibility was a major issue in buildings, but that was before we came to expect a certain level of pervasive computing and wirelessness in our lives. We let the iPhone tell others where we are every day, so why not let the utility company know if the dishwasher is running? The Wireless Internet SmartGrid (WINSmartGrid) initiative at the Univers-ity of California, in Los Angeles, aims to do just that. Monitoring and controlling home appliances—demand management, in industrial parlance—would go a long way in smoothing out the peaks and valleys in the electrical grid demand. If we’re truly interested in living more sustainably, we have to give the utilities more control over this demand or run the risk of needing ever more power plants.
The energy industry faces several challenges in rolling out this transformation too quickly. For starters, there are no industry-consensus standards. The National Institute of Standards and Technology has been working on a smart-grid standard since 2007, but progress has been slow. A 2007 report by the Federal Energy Regulatory Commission found that of the 20 percent of existing meters nationwide that qualify as smart, only six percent have the capacity for two-way communication. This is an important point, especially if a utility wanted the ability in the future to turn off home appliances or communicate pricing information through the meter. Without standards, the industry is likely to spend billions on unforeseen transitionary steps and competing technology. Just look at the move toward hybrid vehicles, with each manufacturer embracing different battery types.
Even in the nascent stages of the government-funding rollout, these risks are already creeping up. Back in Bakersfield, Lois recently decided to install a solar photovoltaic system on the roof of her home in an effort to reduce her environmental footprint. She told me she was surprised she had to remove her newly installed smart meter and convert back to a conventional meter. Her smart meter wouldn’t have “rolled back” when her PVs were feeding excess electricity into the grid. When I asked her if there was another option that wouldn’t seem to contradict her good intentions, she just laughed, effectively shrugging her shoulders at the chaotic, perhaps apocalyptic nature of official California business. You can’t blame her. Until industry and the regula-tory machine sort themselves out, the smartest grid may turn out to be no grid.