Special Report: 2.5.2009

Posted by TED Magazine on Thursday, February 05, 2009

Smart Grid or Bust!

By Joe Salimando

Life was (once) idyllic for electrical utility execs. They alone heard a wonderful, calming song: They generated power, people bought it. They maintained huge reserve-generating margins, much more than needed; but regulators made it pay!

Times changed. Utilities today are expected to know things that they don’t know and do things they can’t do.

See previous columns on the Smart Grid: the first one and #2 last week.

Two stories from 2008’s GridWeek:

a. A Texas utility exec talked about what happens when the wind ceases, and wind generation goes from X mW to ZERO in five minutes. You need a smart grid to (a) get a warning (from weather vanes?) ahead of time, and (b) cope with the disappearance of supply.

[Note: This was not a corporate type, he works for a municipal utility.]

b. The point that the current grid is “stupid” was made ad nauseum. “Customers think we know when their power is out,” one speaker said. That’s not the case! When the power in your house goes down, the utility does not know, unless you tell it!

The Electricity Story So Far

Let’s take a look at what’s happened in the past, oh, 20 years.

• Coal is now the bad guy. Recently, many coal-burning plants have died on the drawing board. We didn’t replace them (on paper, even) with natural-gas burners or nukes. Essentially, we’ve put a chokehold on our chances of having a satisfactory supply of electrons.
  
  
• Nuclear power looks good (especially from a significant distance!). There’s talk about reviving nuclear construction, and even a little action. But, considering nukes are the answer to greenhouse gas emissions, it’s shocking that we’re not planning to rapidly build 150 of them (or whatever the needed number is) over the next decade.
  
  
• Utility deregulation happened, but only in some places. It took forever. While it slowly developed, many utilities postponed needed spending on things like grid maintenance (and even tree-trimming!). Deregulation may have been a great idea, but when implemented, it didn’t work. The patchwork quilt now in place (some states are deregulated, some regulated, and a few on both sides of the fence) is an awful result for the nation.
  
  
• With no idea of what their futures might look like, most utilities stopped hiring; attrition did much damage. As a result, while the U.S. now faces a skilled workforce crisis, everyone in the utility business thinks they’ve got it the worst (with the exception, perhaps, of hospitals/nurses).
  
  
• As deregulation’s aftermath came into focus, utilities began to realize that: (a) they needed to move a lot of electrons around; and (b) the national grid (wires and equipment) had NOT been built to enable that. Remember the 2003 blackout that put 50 million people in the dark? Maybe you don’t, but utilities talk about it all the time.
  
  
• Alternative energy appeared, with a come-hither look. Everyone likes the idea of getting power from wind and sun. Problem is, the wind doesn’t blow (in most places) at energy-generating velocities on a 7 x 24 x 365 basis. Neither does the sun shine every minute (especially when that moon thing comes into the sky!). Biggest problem: Energy-storage systems have not yet come around to where they can store excess energy generated by wind/solar.
  
  
• It’s become apparent that the U.S. should be ashamed of itself. We waste more energy than most countries in the world use! The drive for efficiency may have achieved a life of its own. In many places, the public demands utilities help customers become more efficient. But no one has yet told electric utilities the answer to: How do you make increasing amounts of money selling fewer and fewer electrons?
  
  
• Utility executives have thought about these things, and spoken. If they’re going to make money helping customers reduce electricity use, they’ll need to do things “on the other side of the meter.” That satisfies the public demand for utilities to DO SOMETHING and gives these massive companies a way to make money while selling fewer electrons.

What has all this to do with The Smart Grid, you ask? Modernizing the grid (adding intelligence to it, and related efforts) changes the power system. All will work out in a wonderful, crowd-pleasing, utility-exec-enriching way; that’s the fairy-tale-like future envisioned for The Smart Grid.

Here’s How the Dream Goes

Here’s how The Smart Grid minimizes problems and creates happiness:

Not enough power plants: The Smart Grid will make moving power around easier, smarter, and more efficient. We’ll be able to take power wherever it is generated in excess and move it to wherever it is in short supply. That will make up for the unbuilt coal plants (although we’ll have to build some kind of new generation, no matter what!).

Nuclear power plants: Build them in Alberta, Canada, and use extra-high voltage powerlines to bring the electrons to New York and New Jersey. Or build them in northern Nevada, use EHV lines to power Albuquerque and West Covina.

Deregulation’s many problems: The Smart Grid concept entails upgrading the many pieces of the grid that have been neglected, at the cost of hundreds of billions of dollars. It’s a great concept, with the exception of the funding. Who’s going to come up with the cash? My presumption: The Federal Reserve Board will print it!

Dumber, less-numerous workforce: The Smart Grid and outsourcing will make up for a shortage of skilled workers. On the latter: Quanta Services stock (PWR) has gone from the $3 range in February 2003 to $19 today (and was as high as $35 in the past year). Over the same time period, the S&P 500 has fallen like a stone.

Old, dumb grid: The Smart Grid is going to involve a massive effort to retrofit “brains” into what is a stupid, decrepit national power machine. On paper, this sounds wonderful. The details of who pays how much for this get kind of muddled (at least in my search for specifics). But the bottom line is: In painting the Smart Grid future, the ancient, creaky grid we have in place is “assumed” away.

Alternative energy: I heard (in GridWeek sessions) that The Smart Grid has the brains to cope with the intermittent nature of alternative power generation. I almost believe it.

Making more selling less: The Smart Grid has so many brains, it’s even figured this out. Seriously!

Other side of the meter: Key here is the notion that houses and commercial buildings will get “smart” appliances and control systems. They will “talk” to The Smart Grid, which will be able to converse with these things. I am not certain whether (or how) the utilities will establish and maintain a monopoly on the supply and installation of these things.

Joe’s Dumb Solutions

Obviously, like utility deregulation, The Smart Grid is a great idea. However, it seems certain that it won’t happen anytime soon. What might we do while we wait?

1. Raise the price of electricity. We saw what happened when gasoline got to $4/gal. last summer; consumption declined. What would happen at $.23/kWh?
   
   
2. To me, the idea of “one million solar roofs” (times 100) makes more sense than building massive concentrating solar power plants. But what happens when the sun goes down (or hides behind clouds)? We need a Manhattan Project for energy storage! Even with a Brain, our power system will do much better if excess electricity generated during sunny/windy days is stored and (eventually) used locally.
   
   
3. Combined heat and power has always made sense to me. We have a system with massive electric power stations located far from where power is consumed (and as noted in Part I, the U.S. government is thinking of even more of this). Power plants are about 35% efficient; most of the energy input goes skyward or is lost to I-square-R transmission. CHP, on the other hand, is 60% to 70% efficient.

Yes, this plan works out well for electrical distributors and their contractor customers. But that’s not the reason it makes sense!

While The Smart Grid might work, it’s far from a sure thing. Energy storage isn’t either, but it’s a more interesting place for R&D dollars. Higher electricity prices won’t work for everyone (the poor need to be protected, something that could be royally screwed up by the government). Local power plants (CHP) are a solution that won’t be accepted everywhere.

But the times, in power supply and much else, seem to be turning desperate. While The Smart Grid is appealing, we as citizens and electron-users know that the neatest ideas (i.e., The Smart House or electricity deregulation itself!) don’t seem to pay off.

Something as simple as allowing electricity prices to soar, on the other hand, would reduce power consumption immediately.

And Yes: Distributors sure would, as a result, sell (and contractors install) one heck of a lot more of them there T5HO thingies.

	Joe Salimando of EFJ Enterprises is a consultant, web content provider, and wordsmith based in Oakton, Va. To contact him, call 703-255-1428. See also The EleBlog.
Personal Disclaimer: The appearance of the ambling pachyderm is indicative of the writer’s obsession with elephants, not his political leanings.
IMPORTANT NOTE: THIS COLUMN REFLECTS ONLY THE OPINIONS OF ITS AUTHOR AND DOES NOT REFLECT THE OPINIONS OR POLICIES OF NAED, TED MAGAZINE, OR THE ADVERTISERS ON THE TEDMAG WEB SITE.