1.  Support a national energy policy that encourages development of clean and domestically-produced renewable sources of energy.  The Smart Grid integrates renewable sources of energy and builds the foundation for wide adoption of electric vehicles (EVs).  The faster we upgrade and update our electrical infrastructure and revise our policies to support distributed generation from renewables and EVs, the sooner we end our reliance on oil.  And that means the sooner we can keep that $1 Billion daily transfer of wealth from going offshore into the bank accounts of petro nations like Iran that don’t like us. 
2. Revise the tax code to eliminate the permanent subsidies, royalty forgiveness, and other tax breaks that fossil energy companies enjoy.  If subsidies are bad for young solar and wind power developers, then they are insanely stupid for established oil companies that earn record-breaking profits.  We can’t afford corporate welfare to multinationals that pollute our atmosphere with CO2 emissions and foul our waterways with spills and pipeline leaks.  The Smart Grid helps make that transition from dirty energy sources to clean ones that are locally produced.
3. Invest in promising new Smart Grid technologies and businesses.  To make that happen, we need long-lasting tax and investment policies that create market certainty for private investors, not the piecemeal policy erraticism that seems so uniquely applied to anything that reduces our reliance on dirty fossil fuels.   There are opportunities for the USA to take technology leadership positions in energy storage, energy efficient materials, components, and technologies, advanced analytics, and cybersecurity applications.  All of these are vital to the establishment and ongoing operations of the Smart Grid.  While we’re generating lots of heat about Solyndra, there’s been little light shed on the fact that even very smart venture capitalists generally see a 10% success rate on their investments. Thomas Edison, an inventive genius, had more failures than successes too.
4. Stop doing stupid things like making the world safe for incandescent light bulbs.  Do we pay our elected officials exorbitant salaries with perks so they can cost us more money in our annual energy bills?  The incandescent bulb, so beloved of a vocal minority in Congress, hasn’t changed much since Edison invented it.  It is an extremely inefficient source of light, and an inconvenient source of heat (which is simply wasted energy).  The Smart Grid not only seeks to increase energy supplies from renewables, it aims to decrease demand for electricity through use of more efficient lighting.  The 100W bulb that has captured the adoration of some Congressional Republicans costs $25/year for 6 hours of operation a day.  It is a total operating cost that is higher than that of compact fluorescents or other new lighting technologies. Consumers have benefited from Energy Star appliances in the form of lowered electricity bills, and we deserve to enjoy the monetary benefits that elimination of wasteful incandescent bulbs will bring to our wallets too. 
5. Allocate more funding to microgrid R&D in the Departments of Defense (DOD) and Energy (DOE).  The US military is the largest consumer of petroleum fuels in the world, and has grim statistics on the human costs incurred in fuel transport.  In 2007 alone, 170 US soldiers or civilians were killed in Iraq and Afghanistan while moving fuel.  That’s an avoidable cost when locally-produced electricity can reduce fuel needs.  In fact, the DOD’s first issued Operational Energy Strategy defines its marching orders much as many US electric utilities document them:  reduce demand, find alternative sources of energy, and improve security.  Encourage microgrid research and give it more funding.  The knowledge the military builds will be disseminated into civilian microgrid applications that are part of the Smart Grid, and could end up lifting much of the world out of energy poverty.

Similarly, renewables-based generation, energy storage, and grid analytics/software are the three sisters of the Smart Grid – leveraging the synergies of their technologies to achieve greater reliable electricity yield than each technology could independently produce.   These three technologies can deliver their combined benefits for utility-scale generation as well as distributed generation and microgrids.  

Renewables, the first sister, are categorized as intermittent or steady-state sources of electrical energy.  Wind and solar are intermittent.  Geothermal and hydro (in most cases) are steady-state.  While steady-state is easier to manage, it’s not as well-distributed or readily accessible for most countries.  Solar and wind have distinct advantages in the fact that the sun shines everywhere and the wind is usually not too picky about where it blows.  Solar has great flexibility in where it can be placed –rooftops everywhere can be potential sites for distributed generation.  But intermittency is a vexing problem for planners and grid managers because it is vital to grid health to minimize fluctuations of energy.  Clouds passing over solar panels or temporary drops in wind create those fluctuations.  This is where the second sister comes into play. 

Innovations in battery technologies are transforming energy storage into cost-competitive solutions that partner well with intermittent renewables like wind and solar to deliver steady state power.   There are new technologies that overcome concerns of energy density, flammability, toxicity, and achieve grid-parity pricing.  Energy storage is the second sister of the Smart Grid.  Stationary and mobile (EV) forms of energy storage can play significant roles in utility scale and distributed generation utilizing solar and wind, because it can be deployed to smooth out temporal or weather-based fluctuations.  Renewables and energy storage deliver a potent synergy, but a third sister is needed to help manage these assets as they are integrated into transmission or distribution grids.

Grid analytics and grid management software are needed to manage increasing numbers of renewable generation and energy storage assets.  Utilities are building out IP-enabled networks to accommodate bi-directional communications, and this activity opens up opportunities for remote realtime monitoring and management of these new assets anywhere in the grid.   Realtime management of dispersed assets needs software to organize grid management activities.   It also requires analytics to provide proactive intelligence about conditions and predictive performance of grid networks and devices.  Grid analytics and management software enhance the reliability of electricity on the grid – a valuable synergy with renewables and energy storage. 

These technologies will accelerate the delivery of the benefits of the Smart Grid, but today exist as separate solutions.  Could a three sisters solution for the Smart Grid be the next brilliantly synergistic American innovation?  Like the Native Americans of the past, system integrators who specialize in distributed generation and microgrids can play a key role in creatively combining these technologies into solutions that fully leverage their synergies.  These solutions could also be exported globally to address developed and developing world energy needs.

2.  The recent Federal Energy Regulatory Commission (FERC) decision defines regional planning processes, outlines rules for fair cost allocation, and delivers market certainty for transmission companies and renewables developers that will speed renewables integration and concomitant energy storage deployment. It requires that transmission planning processes include regional policy considerations such as state renewable portfolio standards and Environmental Protection Agency (EPA) standards.  This decision also removed the “right of first refusal”, which discouraged cost-competitive transmission facilities development.  Utility-scale renewable projects such as wind farms and large solar deployments are often far from the points of consumption, and transmission lines will need to be built.  Energy storage should be a natural component of wind and solar projects to ensure firm power to the grid and the ability to participate in new markets.     

3.  The Electric Power Research Institute (EPRI) released a recent study to help utilities develop functional requirements for energy storage to aid in integration of renewable energy sources as well as energy storage at substations and within the electrical distribution networks.  Current work is now focused on similar recommendations for energy storage on the customer side of the meter – micro-scale energy storage that can be coupled with rooftop solar generation.  This means that utilities are taking serious looks at moving from current “always-on” forms of generation to time-shifted generation supported by energy storage, and considering that intermittent renewables like wind and solar can be coupled with energy storage technologies. 

The wild card that will soon be played is the mounting concern about fracking and the impacts to water and air quality and the true costs of these environmental externalities.  Texas, known for its casual attitude toward environmental protection, became the first state through passage of HB3328 to require that drilling companies that engage in hydraulic fracturing or fracking must disclose all “intentionally-used” chemicals that are introduced into the ground as part of their extraction processes.  Of course, the disclosure of incidental, accidental or unknown ingredients is not required, but it’s a significant step that will put a much needed spotlight on industry practices.  The cheap price point of natural gas may not look so attractive if it comes at the expense of potable water, which is in finite and stressed supply on this planet.  If natural gas loses some of its appeal, that will increase the demand for renewable sources of generation, and the need for energy storage.

 Energy storage is finally getting the attention it so richly deserves in the Smart Grid, and it will become a widely deployed technology in many form factors across the entire electricity supply chain consisting of generation, transmission, distribution, and consumption.

So let’s get creative in identifying and developing some of the benefits that a Smart Grid can bring to us into innovative programs.  For instance, the University of Delaware has been conducting a pilot in collaboration with PJM, the regional Independent System Operator (ISO); PEPCO Holdings, the local utility; and AC Propulsion, an electric vehicle (EV) manufacturer.  Their hypothesis was that EVs could help with load-frequency control, and thus encourage integration of intermittent renewables like wind and solar into the grid.  Increasing our use of renewables decreases dependence on foreign energy sources and dirty fossil fuels, and as an added bonus, builds local jobs.  The grid depends on a steady frequency of 60 KHz for grid stability, and intermittent renewables and today’s dearth of energy storage present challenges for grid operators.  When the wind dies down, for example, it can cause heartburn for grid operators if there are no alternative energy sources to take up the gap.   The team at Delaware experimented with EVs that remain plugged into the grid when not in use, responding to requests to discharge energy from the EV batteries back to the grid.  This is also known as Vehicle to Grid, or V2G, leveraging Smart Grid technologies to enable communications between utilities and EVs.  The pilot included incentives of $10/day/EV to provide frequency-load control services to the local utility.  That works out to $3650 each year to each EV owner. 

What’s an ideal demographic for this type of V2G program?  Senior citizens.  Think about your retired relatives and neighbors.  Living independently or in retirement communities, they often have cars that are infrequently used.  Why aren’t utilities, regulators, EV manufacturers, and the AARP putting together programs that, with financial assistance if necessary, encourage trade-ins of senior citizens’ gas-burning cars for EVs, with enrollment options to sell back EV battery power and earn money?  Many seniors have driving habits that fall well within the EV charge ranges, and they have perhaps more flexibility with their daily schedules than commuters and families with children, so they can be reliable frequency regulation sources.   When they need to use their cars, there’s no penalty for not being connected to the grid, just the loss of that incentive for the day.  Programs like these can make people understand one of the many benefits that the Smart Grid brings to consumers. 

The payoffs of an EV program targeted to seniors for grid frequency-load control extend beyond the participating consumers.  Utilities can add renewable energy sources with confidence and reduce reliance on dirty fossil fuels.  Regulators will see more stability in electric rates as utilities can avoid additional generation investments.  Air quality boards and health officials will like the reductions in car emissions.   All citizens benefit from these positive consequences of an enlightened V2G program.  Yes, Grandma would give up her Buick in a nanosecond if an EV actually earned money for her, and she’d love the Smart Grid for doing that.

The informal history goes well beyond that.  The SPP came into existence on December 14, 1941 when 11 regional utilities agreed to pool power to deliver 120,000 kW of reliable electricity to Jones Mill – an aluminum plant co-located next to the largest bauxite mine in the nation back then.  Aluminum was needed to build planes for the war effort.  War was declared on December 7, 1941.  It took just seven days, in an age before the Internet, computers, faxes and cell phones for eleven utilities to overcome all technical, regulatory, and organizational issues to make a handshake deal to guarantee the power to the mill.  It’s easy to recognize the motivators for this admirable accomplishment – necessity, national security, resource scarcity, and patriotism.  The origin of the Southwest Power Pool eloquently illustrates what Americans can do when we are motivated to action.

Smart Grid technologies can help integrate utility-scale and small-scale renewable sources of electricity generation and dramatically reduce our dependence on oil and other fossil fuels for power generation and transportation.  Face it, fossil fuels are not renewable and they are definitely not clean – or cheap.  The BP deep water oil spill is merely the latest, and most dramatic evidence that our economy and society go to ever greater risks to obtain a fluid that is ever more difficult (and environmentally costly) to extract. 

Tar sands are a great example of insanely complicated and expensive oil extraction.  The oil-imbued sands must be mined, and then the oil is separated and upgraded to produce oil fit to send to a refinery.  It takes several barrels of water just to produce one barrel of oil, and not all of that water can be recycled.  Where does the unrecyclable (ie thoroughly polluted) water reside?  In toxic containment ponds that kill birds that land in them. 

Even on land, oil obeys the “spill, baby, spill” rule, as the recent Red Butte Creek spill in Utah sadly illustrates.  Another ecosystem damaged – another inconvenient externality that is not factored into the price of petroleum. 

So what about natural gas?  Increasing evidence shows that hydraulic fracturing or “fracking” of the earth to obtain natural gas also has devastating environmental results.  Fracking uses vast amounts of water and chemicals similar to Drano in toxicity to extract natural gas.  In Pennsylvania and New York, reliable and long established household wells are now pouring out flammable water.  Yes, you read that right.  Water that you can light on fire. 

The Smart Grid enables the integration of domestically-produced clean and renewable sources of energy that will reduce our dependence on fossil fuels through electrification of our cars and public transportation systems.  Smart Grid technologies also help us consumers to intelligently manage and reduce our consumption of electricity and therefore retire aging generation plants that use dirty fuels.  Ramping up domestic renewables to integrate into the Smart Grid is a war effort, and the motivators are the same as cited in the example above – we need to confront the resource realities of fossil fuels and do it out of necessity.   We need to recognize that domestic renewable energy sources in the Smart Grid provide the right economic and national security foundations to ensure American prosperity.

I Want To Be A Prosumer

Alvin Toffler coined the term “prosumer” to describe a situation where a producer of electricity may also have a consumer relationship with a utility, aggregator, and other energy provider.

That’s exactly what is happening today.  Consumers can play the role of renewable electricity producers at individual or community levels.  For instance, in California, Community Choice Aggregation offers neighborhoods and municipalities opportunities to join forces to source renewable energy for their electricity needs.  This sensible policy encourages growth of local businesses to build and manage renewable energy production and stimulate local economies.  Unfortunately, Pacific Gas and Electric, the monopoly in Northern California, wants to undermine these policy goals and economic benefits to consumers through its Proposition 16 campaign (See my April 19 blog).

Future electricity production must also consider the “negation” of electricity use.  A negawatt is defined in the Smart Grid Dictionary as “A term that identifies watts of energy saved through a reduction in energy use or increase in energy efficiency.  It is the greenest form of energy.”  It is also called the “first fuel”, and it should be bought and sold like any other energy source.

There are growing numbers of solutions that enable homeowners to monitor and manage their electricity use, and create negawatts.  In other words, a consumer can actively participate in reduction of electricity consumption through new Smart Grid technologies.   Traditionally, utilities or third party aggregators enrolled customers into programs that usually delivered day-ahead notification of requests to reduce electricity consumption.  In the future, maintaining a stable grid with renewable resources will require real-time requests for electricity consumption adjustments (and energy storage too).  That implies low cost, high performance reliability in solutions that homeowners use to manage electricity consumption.  One of the most interesting technology platforms uses open source hardware and software – called OSHAN (Open Source for Home Area Networks).  Why is that important? 

Open source solutions (like Linux, MySQL, Apache –foundations of the Internet) have a solid reputation for top quality, reliability, security, and flexibility.  Open source solutions are created at fractions of the cost of traditional development cycles and eliminate risks of buying products that won’t work together. The OSHAN platform could play an important role in unleashing the creativity of software and hardware developers to create innovative products that manage and reduce energy use, creating negawatt value for consumers.   Just as the Smart Grid enables a broad base of participation in electricity production and consumption, technologies like OSHAN can propel the most cost-effective and easy-to-use energy management products into mainstream use.   I look forward to being a prosumer. 

What is the Smart Grid?  The short definition of the Smart Grid from the Smart Grid Dictionary states that that it is a bi-directional electric and communication network that improves the reliability, security, and efficiency of the electric system for small to large-scale generation, transmission, distribution, and storage. 

When will we have a Smart Grid?  That was a great question asked at this Unconference.  With so many technologies, regulations, market incentives and processes to deploy that are specific to generation, transmission, distribution, or storage, the answer depends on what part of the grid you are looking at.   

Let’s deconstruct the Smart Grid into the components of generation, transmission, distribution, and storage to give you as a consumer some simple rules of thumb that allow you to assess when you do have a Smart Grid delivering electricity and information to your home.

Generation

We need more energy, and we need more clean energy – meaning it does not contribute Greenhouse Gas emissions or GHGs.  Dirty coal is not the answer, and when clean coal technology includes clean coal removal techniques, it could be a possible source of electricity production in a Smart Grid.        

Let’s take nuclear out of the discussion right away.  It’s a clean fuel, so why?  Because of NIMBY and BANANA.

NIMBY, as you probably know, means Not In My Back Yard.  BANANA means Build Absolutely Nothing Anywhere Near Anyone.  These are common reactions of people to just about anything, including something as basic as placement of a cellular phone tower or a transmission line.  Realistically, do you expect to see nuclear plants built in the USA?  I don’t, and neither do many state regulatory agencies, which is why they are promoting clean renewables. 

Natural gas is cleaner than coal, but still emits GHGs.  So, as much as possible we want to steer clear of any fuels that get in the way of that overall goal of reducing our carbon footprint.  That leaves us with hydro, solar, wind, geothermal, and biomass.  These do have drawbacks too, ranging from concerns that geothermal production may induce earthquakes to bird kills from wind turbines to land allocation for solar or biomass production.  However, these are issues to be overcome with technology and risk mitigation research because they don’t spew carbon dioxide. 

Therefore, a key Smart Grid objective is to use more and cleaner sources of electricity generation in existing and new power plants across the national and regional interconnected grids. 

Smart Grid Rule #1.  As a consumer, you know you have a Smart Grid when you have choices about the type of energy you want to purchase at a price that is acceptable to you – you can buy pure solar or wind-produced electricity, a mixture of any clean energies, or just the cheapest electricity regardless of production type at the time you wish to use it.