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Smart Grids

by david.nunes

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eLetter August I 2011 – SMART GRIDS
17th August 2011

“Current trends in energy supply and use are patently unsustainable – economically, environmentally and socially. Without decisive action, increased fossil fuel demand will heighten concerns over the security of supplies and energy related emissions of carbon dioxide (CO2) will more than double by 2050… [Our] roadmap focuses on smart grids – the infrastructure that enables the delivery of power from generation sources to end-uses to be monitored and managed in real time… Smart grids are required to enable the use of a range of low carbon technologies, such as variable renewable resources and electric vehicles, and to address current concerns with the electricity system infrastructure, such as meeting peak demand with an ageing infrastructure”.

Nobuo Tanaka, Executive Director, International Energy Agency (IEA)

I’ve never had a smart grid, hardly anyone yet has, but if I were a power company I would like to wake up on my birthday and find one waiting for me. Of course, I wouldn’t quite know what to do with it, any more than I knew just what to do with my first PC – the original IBM PC with laughable amounts of processing power and memory and few, very few, apps. I just knew I had to have it although it took some imagination to find much really useful to do with it – besides satisfying my inner nerd. I think most power companies feel very much the same way – smart grids are great things to have, if you can get them, one day, to do what they are supposed to do. It won’t be easy; the idea is great, but smart grids are not a plug‘n’play proposition – it will be a really big challenge to fully and effectively implement them.

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Smart grids integrate, embed, telecommunications and computing power into the warp and woof of the power grid so that ‘intelligent’ (pardon the expression) control can be exercised on a real time basis to shift energy from low demand sectors to those experiencing peaks. Smart grids will let power companies use dynamic pricing and communications with users – or their computers – asking them to cut back on their usage because the rates will shoot up while the peak lasts and letting them know when bargain rates will be in effect so users can rationalize at least part of their consumption or charge their electric cars cheaply. By doing a good job of balancing usage throughout their grids, power companies will be able to reduce their spending for additional generating and distribution capacity and bolster the bottom line on their profit and loss statements.

Over and above the operational efficiencies and the hoped for profits, many throughout the world are anxiously awaiting the arrival of smart grids as an important weapon in the fight against global warming. In addition to the smart grid’s rationalization of energy usage and the reduced carbon footprint they bring, smart grids are needed to efficiently integrate the use of renewable, greener, energy sources – wind, solar and consumer generated power, among others – into a nation’s power supply.

It is easy to understand why these grids will generate substantial returns, but security concerns, the management and use of massive amounts of data, smart meters and associated management software, and getting into gear with evolving standards will keep power companies busy for quite a while. Big complex projects often take years to generate the expected returns, and smart grid investments are not likely to de different; it will take time to develop ‘best practices’ and climb the learning curve.

I am not an industry expert; I have never worked with an electrical utility, but basic principles – and experience from other sectors apply. Smart grids are more than a simple technology update, say, a change in an automobile’s components. Smart grids bring a series of major changes in how utilities operate and do business; they call for a major paradigm shift. Early reports indicate that some companies are having problems with the shift – the costs are greater, the integration problems more complex, the initial technology choices need to be re-evaluated and, generally speaking, managing the shift to a seemingly comprehensible technology is proving much more difficult than imagined.

Getting the most out of smart grids requires a profound re-evaluation of current business cases and models. Few companies – and this is true in any sector – manage to think far enough outside the box to fully re-define their business cases to encompass profound technological change and plot the steps to accomplish it. Planning subverted by ‘irrational exuberance’ and visions of cash (as yet unearned) dropping into the corporate piggybank is more common than many think.

Utilities will take time to re-learn how to manage their operations at a fundamental level. Few utilities companies have the internal expertise to deal with the security issues or the data deluge that smart grids will bring. The lack of industry-wide standards, the lack of a body of time-tested best practices and models to emulate and, importantly, the difficulty to see how smart grids will affect everything from network planning and operations to internal operations, procedures and job descriptions will weigh upon the sector in the coming years.

In addition to these birth pains, utilities will have to face a series of specific problems.

Security is a major concern. Intimately linking a nation’s energy supply via telecommunications to computerised management systems makes it vulnerable to hackers, crackers, terrorists and enemy nations. The vulnerability can be reduced with careful planning and costly, massive, full-time, heavy-duty, vigilance schemes and highly sophisticated security software that go well beyond ordinary anti-virus and firewall protection.

There have already been attacks upon the utilities’ SCADA (supervisory control and data acquisition) systems and the software that controls the smart meters (meters that measure electricity usage at short intervals and use telecommunications report it back to a centralised computer system) at the heart of their systems. Attacks have already been registered – the Stuxnet worm is best known – against the Windows-based systems that supervise the logic controllers in the field.

Data is another problem. For many companies, getting data from separate and incompatible systems and then beating it into manageable and useful form will be difficult. Combining this data with massive amounts of smart grid data and extracting operationally, financially and administratively useful information will strain the resources of most utilities.

Then too, the human side of the transition to smart grids will be taxing. Internal systems will have to be re-done and everything from billing, to the management of field assets, network management and planning, network failure response, the logistics of maintenance calls and much more will have to be re-thought.

The ride will be bumpy, painful at times, and exhilarating at others, but there is a pot of gold waiting at the end – profits for utilities, lower costs for consumers and reduced CO2 and global warming for us all.

Fredric Morris

Fredric Morris

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