The $3.4Billion in grants for smart grid technology that were awarded yesterday are the single largest one-day award from the stimulus bill. There are 100 companies involved in the projects that are within 49 states, excluding Alaska. The funds will go into the accounts of awardees within 60 days, and the projects are projected to take between 12 and 36 months.

The largest technology  element of this award is for smart meters, paying for 18 million smart meters in homes to allow homeowners to better manager their energy use. There are 700 automated substations included, which will allow utilities to quickly restore power in the event of emergencies. And there will be 200,000 smart transformers.

Details on the 100 grants that were awarded can be found in this PDF Document, including coverage maps.

Energy Camp blog publishes a Google Map showing the positions of current Smart Grid projects internationally. Needless to say, there are quite a few markers on the map. The article goes on to describe the rising awareness of Smart Grids.

In practice, I wonder sometimes if the Smart Grid will turn out to be as distinct and separated from other energy efficiency related initiatives. It will be difficult to see electricity alone as separated, for example, from the building industry or the transport initiatives of the European Technology Platforms.  The production and management of energy will criss-cross applications and daily living, deepening into IT structures, yet, will continuously require a constellation of knowledge from various discplines to ensure it’s convergence remains practical, economical and useful.

Much of the hype around Smart Grid technology evolves around customer-oriented transparency. The use of smart meters enables detailed reporting and feedback that will drive consumers to conserve, which could add up to enormous energy savings and remove the need to build more power plants.

Making the rest of the grid smart is on the agenda, but it’s more of a daunting task. Beyond smart meters, there’s a need to automate transformers, substations and control centers for quick and efficient switching with demand. The technology to make switching automated aren’t quite there yet, but there are a number of things that can be done now on the broader grid.

Reacting to Energy Fluctuation

The additional of renewable energy plants and distributed energy generation at the home introduces power sources that fluctuate with weather and other variables. Without the reliability of centralized plants, there’s a need to manage weather related drop offs in power availability.

Demand response is one means to do this, and it’s accomplished by signing customers up to shed their power when demand hits a peak. These customers are compensated with lower rates in order to put up with outages that can become frequent during seasons of high demand. It’s an answer, but it’s by no means an elegant solution.

Another solution is to add storage capacity on the grid that can offload demand on the grid. Battery energy storage systems at large scale are one means to address the issue with tested technology. There are other ideas, such as running compressors to pressurize gas during off-peak times, and then using the pressure to power a turbine to generate additional power when needed.

Modeling Demand

To date, there’s really very little modeling of the  capacity and performance of the transmission and distribution grid. While the ultimate goal is the installation of sophisticated sensors to all nodes on the grid, a good first step would be to better model the infrastructure and performance of what currently exists.

The creation of a highly accurate, and geospatially-correct, grid infrastructure is mostly in place trhough large utilities. With this asset management step now mostly complete, it needs to be enhanced with to include rudimentary grid use and performance. Smart meters at the household level will eventually fill in the full performance perspective, but the initial mapping of performance at a macro scale is needed for optimal planning.

Multiple Approaches and Motives

At this early stage of Smart Grid development, there are a number of test deployments taking place nationally. There are a number of approaches that can be taken with Smart Grid development with different mixes of sensor equipment, feedback and customer-facing enablement. There’s certainly no best way yet, and best practices are only starting to be proven. Given the early days, there are a number of different strategies and motivations.

Some utilities are looking to the Smart Grid as a means to help them get their IT house in order, with all the various systems, such as outage management, customer service and workforce management, all coming together more concisely in an operations setting. Others see the creation of a Smart Grid as the ultimate means to make the grid more reliable, as grid outage is a very costly hit to economic productivity. And others see the grid as a motivation and means to incorporate more renewable energy, both at the plant and the household level.

The realization of Smart Grid technology will be huge boost to efficiency that promises to help drive down greenhouse gas, reduce our dependence on foreign oil, and empower consumers to conserve and save. The dollars are flowing from government sources and private equity. Let’s forge forward with measured and methodical approaches that create lasting and high-performance infrastructure that will stand the test of time.

With all the plans for large infrastructure spending projects as economic stimulus, why is there money for the energy grid? Some might feel that the money is best spent on roads and bridges as they see the deterioration of these elements as more directly aligned with commerce. What they’re missing is the inefficiency of our current distribution network and the significant economic gains from higher quality power generation and distribution.

According to calculations by the Department of Energy, the demand for power in the United States grows at more than one percent per year, and that’s not likely to change even in a down economy. Much of this flows on a network that was built more than 40 years ago. The American Society of Civil Engineers ranks the U.S. electric grid as a bright spot compared to other infrastructure, but there’s still a need for $1.5 trillion in investment over the next twenty years just in order to keep up with demand. Conversion to a national grid and local smart grid technology could shave considerable cost off that total by driving back growth of demand.

Savings Are Considerable

On the antiquated electric grid, ten percent of all the electricity we generate gets lost when it passes through old lines and inefficient transformers. The estimated financial hit of this loss amounts to $25 billion to $180 billion each year. By building more efficient network distribution, we cut loss, encourage conservation, eliminate previously hidden waste, and make power generation more efficient.

Energy conservation is the cheapest means to efficiency, but the grid is step one in this equation. The grid is the where the greatest energy efficiency gains can be found with the least amount of investment. And since our grid is near capacity now, we can’t expect to meet the added demands of renewable energy and electric cars without first upgrading our transmission system.

Weaving Though Regulations

In the United States a great many of the electric utilities are publicly traded companies that have invested money in power lines, but relatively little on the transmission grid. This public/private combination makes some bristle with some that feel the companies should pay for their own infrastructure. There’s also a great deal of legal and regulatory obstacles for siting and construction that have made it very difficult to build new power generation and transmission capacity.

In order to adequately and swiftly address the needs of new power transmission, and a national grid, the federal government can have great sway of cutting through local red tape. After all, a more efficient grid would bring a giant leap toward energy independence, which is tied closely to national security. What’s needed is a compromise and better regulations to streamline the creation of a national system with buy-in from states and municipalities. If we’re going to rebuild a more efficient grid, we first need to make sure that the construction and maintenance of these new structures is itself efficient.

High Cost of Failure

The cost of power failures can have a catastrophic economic effect on a city or region. A one-hour outage in Chicago in 2000 caused $20 trillion in trades delayed. A blackout in Silicon Valley totaled $75 million in losses. The Northeast blackout of 2003 cost $6 billion to the region.

Behind all of these outages is an overtaxed grid that is not adequately balanced or flexible. For instance, it can take days to get power back online after an outage due to a need to balance the system. The smart grid introduces a much more balanced grid where current flows in both directions and problem areas can be easily isolated. This smarter grid responds to demand quickly, and can handle issues of outages much more locally, without thousands of customers affected by very local events.

The move toward higher quality power and smarter transmission received a great boost when the stimulus bill allocated $11 billion for smart grid technology, including $4.5 billion for smart-technology matching grants. This is likely just a start for the amount that needs to be invested, but the payoffs can quickly offset the investment in so many ways.

References

The Urgent Need to Upgrade the Grid, Jim Jelter, MarketWatch

The Smart Grid: An Introduction, Litos Strategic Communications (under contract to D.O.E)

Smart Grid, U.S. Dept. of Energy

Smart Grid – A Powerful Tool for Conservation, Daily Breeze (2/26/09)

Future Renewable Electric energy Delivery and Management Systems Center (FREEDM)

The New Smart Grid: 21st Century Tech for the 21st Century, Bill Chameides, PopSci.com