The Massachusetts Institute of Technology (MIT) co-chairs of the recent Smart Grid study titled “The Future of the Electric Grid”  just visited Silicon Valley to discuss their report with investors and entrepreneurs.   If you haven’t read the study, I recommend it because it’s an interesting read.  The study co-chairs, John Kassakian and Richard Schmalensee, cover the efficiency and reliability of the current grid and the implications of new technologies on transmission (high voltage) and distribution (low voltage) grids.  Their study includes recommendations in policy and technology areas that will be of interest to a wide audience – not just industry insiders or Silicon Valley technology types. 

What is missing from their study is information about grid resiliency, and that mirrors an absence of discussion in the electric utility industry.  Resiliency is defined in the Smart Grid Dictionary as the ability to resist failure and rapidly recover from breakdown.  It can apply to individual grid components or to systems.  Resiliency absolutely impacts grid reliability.  A more resilient grid is a more reliable grid. 

Building a resilient grid is accomplished by policy and technology.  On the policy side, the MIT study points out that there are no national standards in place for cybersecurity.  We lack benchmarks for regulators or utility executives to measure the effectiveness of cybersecurity strategies and tactics.  One important recommendation urges the establishment of national cybersecurity oversight, although whether that should reside within the Department of Energy or the Department of Homeland Security or another federal agency is left for lawmakers to decide.  The good news is that there are mature cybersecurity technologies and solutions that can be deployed in utilities to improve system-wide resistance and resiliency to malicious cyber attacks.  The bad news is that technology is, relatively speaking, easy to acquire and deploy.  Change – for people and processes – is hard.  Utilities must incorporate the appropriate skills, policies, and practices into their daily operations to maintain a cybersecure, and thus more resilient grid.

On the technology side, the study examines the challenges and opportunities associated with distributed generation (DG) and electric vehicles (EVs).  Poorly integrated DG and EVs could reduce grid reliability, and the study offers sensible suggestions to mitigate this concern.  But the opportunities for grid resiliency were shortchanged in the omission of Distributed Energy Resources (DER) assets like energy storage and microgrids.  The study notes that today’s energy storage technologies haven’t hit the price points that compete with traditional generation sources.  However, we’ve seen significant price drops in solar photo-voltaic technologies that are rapidly expanding market size and adoption rates.  The next press release could announce a game-changing technology in energy storage that completely revises existing cost assumptions. 

The absence of microgrids from this study is most troubling.  You can find a full definition of a microgrid in the Smart Grid Dictionary.  It is a microcosm of the electrical grid, minus transmission.  Microgrids contain generation assets – typically renewables, but can include co-generation and traditional energy sources too.   The electricity generated by these assets is consumed within the microgrid, or it can be sold back to the larger utility grid through interconnection agreements.  Distribution grids that have interconnected microgrids and other DER assets are more resilient to disruptions resulting from natural or human causes because they can reduce the numbers of homes and business affected by an outage.  Indeed, a DER strategy can be likened to a diversified investment portfolio.  You spread your assets across a range of investments to minimize the risks of failure. 

Grid resiliency through sensible cybersecurity and DER strategies will improve grid reliability.  Generation and energy storage assets must be distributed across the grid, along with the intelligent devices and software to securely manage these assets.  That means new policies and technologies are needed.  That was an important point of the MIT study.  The Smart Grid will require new software applications and services to manage the increasing numbers of devices that create, monitor, and control electricity across the supply chain.  That’s good news for Silicon Valley, which is very good at finding and funding innovative software applications.   This region should be a significant contributor of technologies and business models that help modernize our electrical grid.