In search of the smart grid

By Fiona Harvey, Environment Correspondent
Published: November 3 2008 02:00

Few electricity users even think about the power grid until their lights go out. When that happens, the stresses of the energy transmission system become all too apparent.
Developed countries take the constant availability of electricity for granted but, around the world, the networks of power stations, transmission lines, substations and other equipment that carries power from generator to user are under strain.
"These assets are getting old," says Bob Gilligan, vice president at GE Energy. Some of the equipment has already been in use longer than envisaged when it was installed, and at times of high demand when several power stations are unexpectedly out of service at once, brownouts or blackouts can result.
But the investment needed to restore the ageing grid infrastructure has been lacking. In the US, for instance, an estimated $50bn to $75bn would be needed to update the existing infrastructure and give the US what it has never had - a truly national transmission network that would balance the load across the entire country.
The ageing of existing electricity networks is not the only reason to opt for upgrading. Today's grids are centralised, built to take power from a small number of large power stations and carry it to the millions of homes and businesses where it is used. Electricity grids also balance the supply and demand, so that at any given time the amount being generated matches that being used.
But modern energy requires more than that. Renewable sources of energy require very different grid management techniques than those in use for the past 50 years. Wind turbines and solar power plants produce energy intermittently and unpredictably - not like the nuclear or fossil fuel plants of old.
The rise in popularity of micro-generation, such as solar panels and mini-wind turbines, means homes and offices can now be producers of energy as well as consumers, requiring two-way traffic on a network that was once all one-way.
There are also moves towards building smaller power stations, such as those burning waste or biomass, which are closer to where the energy is used, cutting some of the 5 per cent or more of electricity that is lost down power lines and enabling the waste heat produced to be used to warm local buildings.
Moreover, today's grids incur large costs because of their inefficient use. In order to balance peak demand with the necessary supply, many power stations must be kept on standby, ticking over and ready to supply energy at short notice, which results in massive waste.
For all these reasons, many energy experts now believe the answer lies in upgrading existing energy networks to a new form of grid - the smart grid. Making the electricity grid smart means improving data and communications across it.
Communication hardware and software would be installed to allow operators to monitor in real time where power was coming from and where it was needed. These control systems would allow grid operators to ensure that, while there was enough power when needed, there was no need to keep vast reservoirs of power on standby.
Paul Karr, vice president of market management at Trilliant, a metering and smart grid company, explains: "The grid we have today is dumb. We have very limited visibility [on supply and demand and grid performance]. But by improving the communications intelligence, you can make the grid smarter, which enables you to cut the waste and operate much more efficiently."
The smart grid would be able to cope with taking in power from micro-generation units, and its improved load balancing would mean that intermittent sources of power, such as wind turbines, could be used without needing so much back-up constantly available from fossil-fuel generation.
The peaks and troughs of demand could also be smoothed by making the appliances that use electricity smarter, explains Andrew Howe, chief executive of RLtec, which makes "dynamic demand" technology. He gives fridges, which do not need to have their motor running constantly to maintain an even temperature, as an example. Instead, the motor cuts in and out to cool the fridge when the top of the preferred temperature range is reached. If fridges incorporated "dynamic demand" technology, they could be made to cut in and out at the optimal times for electricity demand.
Other household equipment, such as hot water tanks and electric cars, could similarly be programmed to draw electricity from the grid at quieter times.
Smart electricity meters installed in homes could also help people manage their own electricity use more efficiently. For instance, they could be charged lower prices to use their appliances during off-peak periods, encouraging people to wait or leave devices such as washing machines on timers to start at quiet times of day.
This would also help electricity providers even out usage patterns, lowering peak demand and resulting in greater efficiency.
Copyright The Financial Times Limited 2008