Deployment of the "Smart Grid:" Transforming the U.S. Electricity Delivery System

Last week the U.S. House Committee on Science and Technology heard testimony about the progress towards transforming the U.S. electricity delivery system. Discussion was focused on the planning, development, and deployment of the "smart grid."

The stakes for successfully implementing a smart grid could not be higher. The U.S. Department of Energy (DOE) has estimated that if the efficiency of the American grid was improved even by five percent, "the energy savings would equate to permanently eliminating the fuel and greenhouse gas emissions from 53 million cars."

Subcommittee chair Brian Baird, Washington Democrat, said, "Even today with tremendous advancements in technology, electrification is considered the greatest engineering achievement of the 20th century. However, parts of this infrastructure are nearly a century old, and our increased reliance on electrical power is straining this system's capacity."

According to the subcommittee:

"The smart grid is a two-way communication system for managing our electric infrastructure hat offers utilities and consumers more information regarding electricity supply, consumption, and price which would ultimately modify patterns of electricity usage. It would give consumers access to real-time pricing, which will enable them to use energy when the price is lowest. For example, if electric use in an area is high, customers will see that the price at that time is higher, and they may choose to limit or delay energy usage until the price goes down, like running the dishwasher later in the evening instead of right after dinner, when the air conditioning and the television are also running."

The National Institute of Standards and Technology smart grid coordinator, George Arnold, told the subcommittee that the institute will deliver the first set of standards to the Federal Energy Regulatory Commission this fall. FERC has the responsibility to adopt interoperability standards.

The complexity of the task at hand was underscored by Mr. Arnold who told the subcommittee that NIST's standards will involve software and hardware standards for nearly 5.4 million miles of transmission and distribution lines, more than 20,000 substations, and nearly 130 million electricity meters linked to more than 3,000 utilities, according to the BNA Daily Environment Report ("Smart Grid Will be Costly, Taking Years But Necessary for Economy, Experts Say," July 24, 2009).

Suedeen Kelly, a FERC Commissioner, testified that, "A critical issue as smart grid is deployed is the need to ensure grid reliability and cybersecurity. The significant benefits of smart grid technologies must be achieved without taking reliability and security risks that could be exploited to cause great harm to our nation's citizens and economy." She noted that in mid-July FERC adopted its smart grid policy statement. However, she cautioned that if Congress intends that all operators associated with the smart grid comply with FERC's standards "additional legislation would need to be considered."

Ms. Kelly explained that deploying the smart grid will be essential to the role renewable energy may play in the future. She said, "Smart grid technologies have considerable potential to facilitate demand response, and demand response can help address bulk-power system challenges, including reliably integrating unprecedented amounts of renewable resources into the grid."

The so-called stimulus bill included more than $10 billion that could be used for grid upgrades. This figure includes $4.5 billion for funding smart grid-related projects.

Smart grid work is also taking place in the European Union in the form of the SmartGrids project.

There seems little doubt now that the smart grid will be part of our electricity future. Consequently, it would be reasonable to conclude that there will be significant opportunities ahead in this nascent industry.

To learn more about the smart grid, read "The Smart Grid: An Introduction", which was published by the DOE.