If Thomas Edison could take a look at our nation's electrical grid today, there's very little that he wouldn't already be familiar with. But the out-dated grid is running up against considerable limitations and is often over-taxed. It is for these and other reasons that researchers are working to develop a "smart grid," which adds information and communication technology to electricity generation, delivery and consumption in order to make energy systems cleaner, safer, and more efficient and reliable.
Given that perhaps some 2% of consumers actually read their electric bill each month, getting them involved in decisions about how to more efficiently use energy is a significantly daunting task. But engaging the customer is a key consideration as New York State sets out to assess the broad economic, customer and social impacts of aggressive development of smart grid technologies, according to Angus Shaw, a smart grid consultant for KEMA (www.kema.com) in Burlington, Mass.
Looking to make meaningful progress on developing a smart grid, New York State gathered together a wide spectrum of stakeholders in 2008 to define and work toward a common vision. The New York State Smart Grid Consortium (www.nyssmartgrid.com) is a comprehensive organization, representing utilities, markets, operators, industry, academia, government and end users. It includes such major players as General Electric, IBM, Consolidated Edison and Brookhaven National Labs—about 20 member organizations in all.
At ABB Automation and Power World 2011 this week in Orlando, Shaw presented a glimpse of the work the consortium has been doing, including consumer considerations, the impact of a wide range of variables on the program, and the need for policy investments. One variable that will directly impact consumers is whether to mandate dynamic pricing or make it voluntary. "The decision to go for dynamic pricing is a brave one," Shaw said. "The benefits will appear over time, but the cost of marketing them will be significant. Engaging customers is the challenge that we all face." Although the consortium looked into voluntary dynamic pricing, Shaw noted, voluntary advanced metering infrastructure (AMI) meters would potentially double the cost of implementation.
The group also looked at the impact on the system of smart charging, which would be deployed as electric vehicles are more widely adopted. Based on a model of about 6% of New York State's residents having electric vehicles by 2020, the expectation is that a smart grid implementation would yield a net benefit of $724 million over the next 14 years. If electric vehicle penetration were to be 12% instead (there is a large potential swing, depending on gas prices), the net benefit is predicted to be $2.3 billion, Shaw said.
Looking at a period of development from 2011 to 2025, the consortium estimates smart grid implementation costs at about $7 billion. But the benefits across the board are tagged at $21 billion, coming in the form of reduced losses, price savings from lower energy usage, deferred distribution and more.
Jobs are a critical component of the development. "If you're a utility, jobs are a cost. If you're a state, jobs are a benefit," Shaw said. "It's difficult to get to a point where benefits exceed cost. Jobs are a significant factor for that."
Ultimately, however, it will be important for smart grid evaluations to look beyond the usual bottom-up price considerations (how much does the wire cost, how much does the equipment cost), and look instead from a top-down viewpoint, realizing the long-term economic future of, in this case, New York State, Shaw said. "This will help companies continue to want to do business in New York State," he said, noting the need for control over energy prices, particularly in manufacturing environments. "It will enable New York State to be an effective place to do business."
