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11.08
Coverage
of GridWeek 2008
By Patrick
E. Meyer
The most meaningful take-away
lesson from GridWeek 2008 was summarized by
Charlotte LeGates, director of Industry Strategy
at Oracle, in a single sentence when she
protested that “although the smart grid train
has pulled through the station, not everyone has
gotten onboard.” One of the parties that has
been left behind, argued LeGates, is the very
customers that many smart grid projects seek to
benefit.
I recently had the pleasure of
attending GridWeek 2008 in our nation’s Capitol.
IEEE-USA was a partner in the high-profile
event, which attracted prestigious
representatives from industry, government,
academia, non-profits, and elsewhere. Although I
only attended two of the four days of the event,
afterwards I was convinced that GridWeek is one
of the premier engineering conferences held in
Washington, D.C.
The dominant topic of GridWeek
2008 was smart grid. Smart grid is an
advanced system that includes increased use of
information control, optimization of grid
operations, use of distributed resources and
renewable energy; and involves the development
and integration of demand response, demand-side
technology and resources, energy-efficiency
resources, smart appliances, advanced
electricity storage, peak-shaving technologies,
and other advanced technologies.
Although industry specialists
are certainly able to recite a list of inherent
benefits in the aforementioned technological
improvements, customers may not yet see smart
grid services as better services. According
to LeGates, smart grid pilot programs have not
yielded the expected positive results. The
problem, according to LeGates, is that most
consumers are afraid of risk, and they perceive
risk in smart grid because they may not have a
full understanding of how the systems work or
affect their every day lives. For example,
customers have inquired as to what would happen
if they were not home during a peak billing
period — what kind of bill would they end up
with if they were not home to make the proper
adjustments to their smart appliances and energy
consumption? LeGates challenged industry to find
a way to address smart grid as a product that
the companies are responsible for selling — only
then will the companies be held accountable for
the product, and the consumer become more
comfortable with certain risks.
Tuesday: The Third
Industrial Revolution
Rewinding a bit to Tuesday, 23
September, my first day at GridWeek. The morning
began with acclaimed speaker and author Jeremy
Rifkin, president of the Foundation on Economic
Trends. Rifkin may have surprised GridWeek
attendees, when instead of speaking on the topic
of smart grid, transmission problems, or
advanced power production — as was the topic of
most speakers at GridWeek — Rifkin presented his
ideas on the necessity of a third industrial
revolution. Readers should be reminded that
GridWeek occurred amidst widespread financial
crisis and a time of overall economic unrest. At
the very moment that Rifkin was delivering his
speech, a nearly-trillion dollar Wall Street
“bailout” was being pushed through congress. In
light of this development, Rifkin argued that,
if applied correctly, the trillion dollars could
result in a long-lasting economic fix: “what we
need now is a trillion dollars to jump start a
third industrial revolution.” The smart grid,
Rifkin argued, is the way to do this.
Rifkin also believes that our
generation will be known as the fossil fuel
generation. But, he countered, now at the
dawn of the 21st century, we have the ability to
break free of this unfortunate label. We have
reached “peak globalization,” according to
Rifkin, and from here forward, the only options
are to adopt distributed, renewable energy
technologies.
Rifkin shifted his discussion to
the implementation of the smart grid, arguing
that the industry is on the verge of
mainstreaming the overall concept. Referring to
smart grid technology, Rifkin queried the
audience: “this can be done tomorrow — what are
we waiting for?” Fortunately for the smart grid
concept, but not so fortunate for prospects of
U.S. technological leadership, not everyone is
waiting. Rifkin maintained that the United
States is considerably behind the EU in smart
grid deployment, and that the United States must
act collectively to catch up. If we don’t act
quickly, he warned, we may not usher in the
third industrial revolution in time, missing our
limited window of opportunity to set the world
back on the right track.
Rifkin closed with the assertion
that the business community must lead the way to
smart grid implementation, and not the
government. He suggested the creation of a
trans-Atlantic partnership with the EU, through
which we can share and disseminate information
on smart grid. Subsequently, the partnership
could expand to China and India, as the nations’
companies become ready for next-generation
electricity grid technologies.
Wednesday: Energy Secretary
Bodman
Wednesday’s keynotes included
Samuel Bodman, Energy Secretary at the
Department of Energy, who began the day with a
discussion on smart grid’s complexities and
enormous potential. Bodman argued that we must
continue to develop and deploy new technologies,
and continue to improve the security of our
grid. Overall growth of energy demand, high
energy prices, and an urgent need to produce and
use energy that does not harm the environment or
national security, are three of the nation's
prominent sociopolitical and socioeconomic
problems, for which grid improvements could
serve as a fitting solution.
Bodman pointed out that the U.S.
Energy Information Administration estimates that
total U.S. electricity consumption will increase
25 percent between now and 2030. Meeting this
demand will require substantial growth of
generation and delivery capacity. This will
command the further development of a diverse and
secure supply of reliable, affordable, clean,
and sustainable energy. In other words, we are
in need of a transference to a truly smart grid.
The smart grid, according to
Bodman, will be composed of smart metering
devices, consumer appliances, systems, and
processes for management of the overall grid,
prices and marketing. Bodman expressed his
confidence that with the aforementioned
developments, “a smart grid will usher in a new
era of electric power for America.”
The Department of Energy,
according to Bodman, remains committed to
working with industry, academia, and consumers
to identify barriers to smart grid development,
and to eliminate them. But, it is necessary to
create effective pathways by which to develop
functional requirements of the smart grid. A
major requirement, stated Bodman, is to link
clean energy centers with large population
centers. Creating these linkages will require
further development of high-capacity
transmission lines which complement, rather than
supplant, the current system.
Bodman expressed confidence that
the nation will meet the challenges inherent in
the development of the smart grid, and that
through strong leadership and emerging
partnerships, the nation is already well on the
way.
Smart Grid and the
Environment
GridWeek also featured a number
of smaller presentations, organized in tracks
pertaining to overarching themes. The tracks
were more acutely focused on specific smart grid
topics. My personal interest in the
environmental implications of smart grid
technologies pointed me to the session on
Smart Grid in a Carbon Economy.
Presenter Steve Corneli, vice
president of Market and Climate Policy at NRG
Energy, Inc., began with the premise that in
order to move forward with smart grid in
general, we need to develop new low-carbon
technologies and deploy them around the world.
Carbon sequestration technologies, he argued,
along with next-generation nuclear energy and
renewable resources, are essential ingredients
of the future energy portfolio. To achieve the
necessary carbon reductions, low-carbon
technologies need significant work between now
and 2030, both technologically and economically.
To ensure that smart grid develops with
environmental interests in mind, key policy
features, such as cap and trade programs, are
necessary.
Dallas Winslow, representing the
Delaware Public Service Commission, provided a
discussion on the State of Delaware’s
participation in the Regional Greenhouse Gases
Initiative (RGGI). RGGI is a mandatory,
market-based effort to reduce greenhouse gas
emissions, and currently involves ten
Northeastern and Mid-Atlantic states in a
mission to reduce CO2 emissions from the power
sector 10 percent by 2018. Winslow explained
that Delaware has been allocated approximately 4
percent of the overall RGGI cap — set at 188.1
million tons of CO2 emissions.
According to Winslow, Delaware
is developing regulations to address basic
administrative functioning of the cap and trade
program, and as a precursor to future smart grid
initiatives, with an anticipated effective date
of 11 December 2008. Delmarva, which supplies
energy to more than a half-million customers, is
in the process of vendor selection, and will
begin the initial verification of systems and
functionality and conduct field testing in 2009.
The major focus, said Winslow, is placing
decision making in the hands of customers,
developing the ability to automatically
accommodate changing conditions, design and
operate with greater efficiency, promote green
energy initiatives, and enable distributed
renewable energy resources to participate in any
given scheme. The importance of the
aforementioned developments is that they are all
precursors to smart grid deployment, which,
according to Winslow, will begin in 2010.
Sticking with the environmental
track, I attended Smart Grid in a Carbon
Economy in the afternoon. Don Von Dollen,
program director at EPRI’s IntelliGrid program,
moderated the session and presented some valid
introductory points. When discussing how the
electricity industry can substantially reduce
carbon emissions from electric power supply, he
argued that the United States is in need of a
portfolio of technology solutions, including
renewables, nuclear power, advanced coal, and
the incorporation of non-traditional,
grid-attached technologies, such as plug-in
hybrid electric vehicles. The bulk of the carbon
reduction, according to Von Dollen, will come
from renewable energy and efficiency
improvements.
Similarly, Becky Harrison,
director of distribution services at Progress
Energy, argued that the country is in need of a
balanced solution which recognizes that
customers are concerned about climate change,
rising costs, availability and power quality,
and high expectations for corporate
responsibility. A portfolio, such as the one
proposed by Von Dollen, would address most of
these issues simultaneously. Further, through
demand response (a key smart grid feature) on
the utility side, most consumer concerns can be
attended to in a way that is transparent, yet
still beneficial to consumers.
Empowering the Customer
The Wednesday morning breakout
session looked at Putting Information in the
Hands of the Customer Relations Front Line.
Mike Sullivan, senior vice president of
operations at Pepco Holdings, Inc., opened the
discussion by pointing out that double-digit
rate increases at Delmarva Power and Pepco have
angered and upset many customers. In response to
upset customers, Pepco has been making changes
to its customer services. Sullivan argued that
customers have to have a feeling that they are
in charge of the supply market, and in order to
do that, companies like Pepco have to shift
their customer services from a “complaint desk”
to a “help desk.” Through smart grid, maintained
Sullivan, there is great potential to make a
serious change in the way the consumers envision
the utility.
But it is impossible — and
impractical — to deliver the same solutions to
every customer. Indeed, a one-size-fits-all
answer is not the solution. Sullivan contended
that traditional consumer divisions —
residential, commercial and industrial— do not
apply anymore. Now and in the future, there must
be a greater focus on adjusting service to each
and every customer, instead of groups of
customers.
Wall Street's Take on Smart
Grid
Finally, in a stimulating
presentation, Michael Horwitz, managing director
of clean technology at the Stanford Group,
provided a Wall Street perspective on the
emergence of smart grid technology and
companies. He contended that most people simply
do not understand how big the clean technology
industry has become. Indeed, the clean tech
industry now accounts for more than 200
companies and $350 billion of annual revenue.
Venture capitalists, analysts, portfolio
managers and other financial types, are all
involved in the industry and are successfully
pushing it forward.
Horwitz decried the massive
underinvestment in the electric grid of the “old
economy.” But, he suggested, there is a new
economy supplanting the old one — a new economy
in which grid investment will likely become
considerably more widespread. The new economy is
being fueled by falling costs, which, according
to Horwitz, are often overlooked by the media
and the general public who may not understand
how costs come down when adoption occurs.
More recently, Wall Street has
become familiar with emerging smart grid
companies, according to Horwitz, especially
demand response and energy management companies.
It has been acknowledged that there are new,
evolving business models, and because of the
relative immaturity of these models, there are
going to be major bumps in the road to full
smart grid implementation. But Horwitz is
convinced that as companies and utilities get
through the early complications, and prove the
efficiencies and productivity gains inherent in
the smart grid, there will be an acceleration of
adoption and an increase in companies involved
in the industry simply because it will become a
money-making opportunity.
The lesson learned from GridWeek
2008 is that smart grid is here and now.
Industry appears to be poised on the very brink
of mainstream implementation on a grand scale.
The technologies are ready and most companies
are ready. However, consumers have yet to be
convinced that smart grid is worthwhile. The
general opinion amongst GridWeek presenters is
that there has not been enough effort to portray
smart grid benefits to consumers, or even to
inform them of the impending smart grid tidal
wave that is surely to come in the next five to
ten years. The bottom line is that smart grid,
deployed to its fullest, will bring about
tremendous energy, efficiency, environmental,
social, and technological benefits, but the
impact of these benefits will be dampened
significantly if the consumer is not onboard.
More information on GridWeek
2008, including downloads of participants’
presentations, can be found at
www.gridweek.com.
Patrick E. Meyer is
technology policy editor for IEEE-USA
Today's Engineer, and a doctoral student at
the University of Delaware.
Comments may
be submitted to todaysengineer@ieee.org.
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