Fiber Fete: Smart Grid – The Killer App

Speaker: Ron Holcomb

“Smart Grid” implies today’s electric grid is dumb, which is pretty much the case. Energy leaves generation plant, goes into the “ether,” knowledge comes back only in the form of a meter reading. Wasteful but reliable system.

Smart Grid is really simpler than it sounds. We have command and control systems. Command and Control Systems | Communications Infrastructure | Two Way Communications Devices. Applicatioins: Automated demand response, distributed generation, distribution automation (load balancing, including better handling of catastrophic events that previously caused outages), price response (give users more control over management of their consumption), electric vehicles, outage management, voltage control.

What’s driving smart grid?

Regulatory: Energy Independence and Security Act has clear vision of SG applications and challenges. Paradigm shift has begun.

Social/environmental. Renewable portfolio standards in 33 states, some aggressive.

Economic: cabon based fuel cost volatility and looming carbon taxes.

Energy interest second to none in impact on American life, and prices and pressures are going in one direction. We have a lot of work to do here, we haven’t really attempted effective management for conservation, cost control. High speed, low latency pipe is key to business success in this context.

Significant economic benefits from wind enrgy, smart grid enabled distribution reduction of carbon emissions, reduced energy consumption, reduced cost of power-related disturbances, society benefits that exceed costs by four to one. (EPRI)

Why isn’t this happening faster, now. Question is how we pay for it?

Review of various benefits to enterprise (utility), ratepayer, and to society. Cost of service interruptions to ratepayer: $80 billion/year.

Not happening faster because so much of the ROI is indirect, hard to qualify, hard for the enterprise, the utility company, to monetize.

What is the utlility’s philosophical view re cost resposnibility? RE. social and environmental responsibility? What level of financial responsibility should utility take for outage costs born my customers? Should utility play a role in economic development and local job creation?

Strategic considerations: Stick to tried and true public power business pratices. Invest in future-proof infrastructure. Electric crews can build and maintain it. Own it, don’t lease it. Avoid risk of cores service failures by handing over command and control communications to a carrier. Avoid risk of price gouging (considering size and value of energy industry).