July/Aug 2011

We’ve been hearing that the smart grid is coming for a while now: from politicians, in TV commercials, on the news, and in this magazine. But when is it coming, and how will it affect us? Sure, we’ve heard about smart-grid pilot projects, and some of us have smart meters installed at our homes or offices. Where (and what) is the rest of it?

Also, since the whole point of the smart grid is to eliminate power outages, prevent future rate increases, and avoid building new power plants—things only noticeable by their absence—how will we know when it’s here?

First, a brief primer: “Smartening up” the world’s electrical grid starts with making it a two-way street—power out, information in. Electric utilities need to overlay an information channel on top of their current electric-distribution networks that collects information on how the networks are functioning. That data is used for more than just health checks; smart grids can automatically adjust for changing conditions, such as offsetting big electrical loads when heavy industrial equipment starts up. A smart grid is also friendly to renewable energy sources and uses smart meters to collect data and control demand.

This past February, I went to the DistribuTECH trade show in San Diego to learn about the current status of the smart grid and what it looks like from a consumer’s perspective. DistribuTECH is a gathering for the companies that take energy transmitted from power plants over high-voltage, long-distance electrical lines, step it down to lower voltages, and distribute it to our homes and offices. The distribution segment is where most of the “smart grid action” is taking place.

I gleaned these seven lessons about the smart grid from dozens of conversations with people actively engaged in implementing it. Some will make you happy, others grumpy. I was not bashful in my quest for answers, and the people I spoke with were not dopey (nor sneezy, thank goodness). Shake off the cobwebs, sleepy, and pay attention. These are important, doc. Hi ho!

Lesson 1: The smart grid will be mostly invisible to consumers.

Sprint’s Brian Huey said it best: “If we do it right, the consumer will never know.” Most of the “smart” things the grid will do are unseen, such as active network management (proactively identify and fix problems), automatic voltage control (maintain voltage within targets), dynamic line rating (compute power-line capacity based on weather conditions), and reactive power compensation (offsetting heavy loads). These all keep our lights on without flickering—which is good, but boooring! I dig phasor measurement units (phasors on stun!), which are space-age information weapons that capture synchronized performance data across the grid, providing to-the-second monitoring of voltage, current, and other network metrics. Also unseen to consumers but felt by the industry, the business relationships and regulatory regimes that underlie the electrical industry are due for a major shake-up as the smart grid becomes a reality.

Lesson 2: Nobody wants to be PG&E.

Engaging the customers on the other side of a smart meter is a critical step toward a successful smart grid deployment—just ask anyone who’s heard about the “Bakersfield fiasco.” In 2006, PG&E (Pacific Gas & Electric) started rolling out smart meters to all customers following a successful pilot. Everything was fine for two-plus years, than customers started complaining of skyrocketing bills in the summer of 2009. Stoked by local activists, hundreds of angry customers insisted smart meters were to blame—and piled on other complaints ranging from privacy to whether smart meters killed plants, started fires, or caused cancer.

Making matters worse, PG&E’s customer service reps gave complaining customers the run-around, according to a study commissioned by the CPUC (California Public Utilities Commission). Lawsuits ensued, but were dropped or dismissed when the CPUC study exonerated the meters: An unusual hot spell, poorly understood tiered rate plans, and a handful of post-outage meter failures caused the high bills. The real problem was that customers didn’t know how much energy they were using, or how they were charged for it. According to Control4’s Paul Nagel, vice president of business development, the U.S. electric industry pressed pause on smart-meter deployments after Bakersfield to “assess and correct” its customer-engagement strategies.

Lesson 3: Conservation is the happy face of the smart grid.

Everyone agrees we must reduce electricity consumption through conservation, which Erika Diamond, business development vice president of ThinkEco, calls the “happy face of the smart grid.” Without sufficient conservation, we could face usage restrictions, time-of-day billing, and other measures imposed by our electric utilities to thwart burgeoning demand.

Conservation as a goal is ineffective without tools to measure and encourage it, such as ThinkEco’s “modlet.” The modlet is a smart surge protector that monitors the usage patterns and energy consumption of devices plugged into it, and suggests on/off schedules to stop “phantom” power consumed when a device is not in use. Home-energy monitoring tools also help. These display current and historic energy-usage patterns, and some also support remote control over home functions such as setting the thermostat or turning off lights. Home-energy monitoring tools come in many forms: countertop gadgets, handheld or wall-mounted displays, iPad and smartphone apps, and Web portals.

Lesson 4: Behavioral manipulation is the unhappy face of the smart grid.

Most people believe conservation alone will not generate sufficient energy savings, so utilities will be forced to “incent” us to consume less. Utilities can “motivate” us to consume less peak energy using TOU (time-of-use, or billing higher rates during peak hours), demand response (selectively turning off or throttling back big energy consumers during peak periods), and rebates for increasing off-peak energy usage.

Of the three, only off-peak rebates are non-controversial. TOU rates are in consumer advocacy group crosshairs because they can disproportionately harm those least able to shift their demand or pay higher bills, including the poor, elderly, disabled, and self-employed. Baltimore’s application for a stimulus-funded smart-grid project was rejected by its regulator partly because it included mandatory TOU rates. Demand response is also tricky. Turning off an elderly person’s air conditioner during a heat wave could prove fatal. Verizon’s Ernest Lewis, industry partner for the carrier’s Global Energy & Utility practice, has the right idea. He believes “energy is about lifestyle,” and looks ahead to a grid that can “enable a sensitive response” that caters to lifestyle groups such as “extra savers, pay-for-green, or vacation home.”

Lesson 5: Electric cars will lead the way toward change.

One lifestyle group of consumers that will see time-of-use rates from the start is EV (electric vehicle) owners. Since an EV charge is estimated to consume 50-100% of an average home’s daily electrical usage, the grid simply cannot support the load if everyone comes home from work and plugs their EV in at the same time. EVs must be charged off-peak, when sufficient capacity is available.
Because of this need, Nigel Spooner, group director-utilities for Logica, believes electric cars will be the tipping point at which utilities and consumers break down the communication barrier and commence a meaningful dialogue about energy consumption and rates. He believes these interactions should be as straightforward as possible, a concept Logica has embodied in its CiMS charging station management platform. CiMS allows an EV owner to plug in a car at home and specify when/how to charge the vehicle—immediately at a premium price, or later for an off-peak price. It also integrates with public charging-station networks, providing authentication and payment authorization for away-from-home vehicle charges.

Lesson 6: “If it’s not the same technology my wife uses, it won’t work.”

Wireless technologies are one area where the smart-grid market is highly fragmented. That communication layer that’s being overlaid onto electric distribution networks can take many forms: data over powerline, cellular networks, satellite communications, POTs (plain old telephone) lines, Ethernet connections, private networks in various places across the spectrum map, and more. There’s a similar battle for wireless preeminence inside the home.

Numerous technologies are vying for the “home-automation network” that connects a smart meter to equipment inside a home including appliances, modlets, lamp controllers, smart thermostats, and home-energy monitors. Home energy management products on display used ZigBee, Z-Wave, cellular, and Wi-Fi technologies. Wi-Fi may turn out to be the eventual winner, according to David Steidtmann, product manager for Aclara, who reasoned: “… if it’s not the same technology my wife uses to load photos onto our digital picture frame, it won’t work.”

Lesson 7: The smart grid guys have some of the coolest toys.

Walking the floor at DistribuTECH can be a jaw-dropping experience. From giant power transformers to bucket trucks that look about 100 stories high, there’s always lots of cool stuff to see. For example: Grid Sentry’s GS-200 “smartgrid sensor” that looks like a giant gray Tic Tac, and can be clamped onto a power line to monitor line condition, throughput, and other things.

Not all of the stuff is just for grid geeks. Best of all was a stainless steel pull-out bed that covered the entire floor of a van. Designed to make it easy to find and unload heavy equipment, that thing would be perfect for unpacking the family at a campsite!

Laurie Lamberth loves watching her smart meter spin backwards on sunny summer days from the output of her home solar array. Keep up with Laurie’s evolving “green home” and learn more about her strategic business development and marketing consultancy at www.laurielamberth.com

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