Is "Smart Grid" in the Eye of the Beholder?

Kennedy Maize

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Folks in the electric business are talking—a lot—about the “smart grid.” In February 2009, the U.S. House of Representatives Select Committee on Energy Independence and Global Warming held a hearing titled, “Get Smart on the Smart Grid: How Technology Can Revolutionize Efficiency and Renewable Solutions,” that demonstrated considerable uncertainty about what the phrase means in practical terms.

The hearing didn’t resolve any of the confusion about the smart grid, but it did serve to bring some of the major questions to the surface. For some, the smart grid appears to be a universal solvent that can dissolve all of the problems facing the electric industry and its customers in the years ahead; others are more cautious. Everybody admits that whatever it is, the smart grid is expensive.

For Rep. Edward Markey (D-Mass.), the committee chairman, the smart grid is a broad concept. He said, “The backbone infrastructure needed for renewables requires more than tall towers and wide rights-of-way: to do it right, it also requires smart grid internet protocol communications networks, open protocol smart meters, backbone sensors connected by radio spectrum, and sophisticated interactive control technologies.” Markey didn’t mention smart houses and smart appliances as part of that definition; some witnesses did.

Difference Without Distinction

Smart grid sounds like a lot of expensive hardware and software to bite off, according to Jim Hoecker, counsel to a broad-based electric industry coalition and former Federal Energy Regulatory Commission chairman. Testifying for the Working Group on Investment in Reliable and Economic Electric Systems (WIRES), Hoecker warned, “When we speak of the ‘smart grid,’ let’s not overlook the ‘grid’ itself.” He noted that the distinction between the old-fashioned grid and the smart grid is “difficult to draw” and that the two terms are “often used interchangeably. There is no standard definition of smart grid.”

The intent of Hoecker’s testimony was to guide the discussion away from pie-in-the-sky musings about Internet protocols, smart meters, and distribution network technologies, and toward the big iron and copper. Referring to spending on conventional extra high voltage and direct current transmission between now and 2030, he said, “Educated estimates of the size of the investment that must be made . . . range in the neighborhood of $300 billion. After a period of declining investment, U.S. companies will have spent about $30 billion on transmission in the period 2006–2009, at a rate roughly double the annual expenditures at the beginning of the century. However, as of mid-2008, only 668 miles of high voltage transmission has been built across state lines since 2000. Remarkably, the staggering expenditure on transmission will remain the smallest component of the investment we must make in the electricity system.”

Robert Gilligan, vice president of transmission and distribution for General Electric (GE), embraced both the high-voltage transmission grid and the lower-voltage distribution network as elements of his definition of the smart grid. Of course, GE stands to benefit from both transmission and distribution system investments. The smart grid, said Gilligan, “is a framework for solutions. It is both revolutionary and evolutionary in nature, because it can significantly change and improve the way we operate the electrical system today, while providing for ongoing enhancements in the future. The smart grid is defined differently by and provides different benefits to the various audiences it serves.”

Gilligan extended the smart grid metaphor to include the smart house—something electric utilities have been promoting, without success, for 25 years. The smart house of the future as Gilligan outlines it includes Internet-enabled monitoring of energy consumption, “smart appliances with two-way utility connections” (what one wag dubbed “talking toasters”), rooftop and backyard generation with net metering, and a “smart charging interface for plug-in hybrid electric vehicles.”

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