Toward a Smart Electric Grid
On Thursday, August 14, 2003, at roughly 4:11 p.m., the largest blackout in American history struck the Northeast of the U.S. and parts of Canada. Affecting 50 million North Americans, the blackout highlighted how vulnerable our outmoded electricity system has become. Should we be establishing a "smart grid," one that operates more like the Internet, with embedded intelligence and real-time automation, to avoid even more crippling blackouts in the future? If you ask Vijay Vaitheeswaran—energy expert at The Economist and author of Power to the People: How the Coming Energy Revolution Will Transform an Industry, Change Our Lives, and Maybe Even Save the Planet (FSG, 2004)—the answer is a resounding yes.
NOVA: Why a smart grid?
Vijay Vaitheeswaran: A smart electricity grid not only delivers us power when we turn on the switch and we want to use electricity in our homes, but it can monitor how effectively and efficiently the system is delivering power to us, and it can also bring information back to the system operator in real time. So, in a sense, imagine if the Internet were to merge somehow with the dumb electricity grid we have. That's the kind of embedded intelligence a smart grid should have.
When you say "dumb electricity grid," what's dumb about it?
The current electricity system we have now would work fine if it was 1950. The power gets here most of the time, but the companies that generate and distribute the power often don't know what's happening on their own networks in real time. And that often leads to unnecessary blackouts, it leads to waste and inefficiency, and it means that we can't take on as many renewable energy forms as we could onto the network. So there are a lot of things about the "dumb" electricity grid we have now that are not good enough for the 21st century.
What are the most important reasons to upgrade, in your mind?
There are several reasons to upgrade to a smart grid, but the most pressing one is reliability. In the massive blackout in 2003, when I sat in the dark for 25 hours in Manhattan, what happened was the people whose job it was to watch the power supply in the Midwest didn't know what was happening on their own grid system. They had to get on the phone and talk to the system operator. Meanwhile, the power cut cascaded beyond one system to another, to another, and ultimately the entire Northeast, parts of Canada and the U.S., had to be shut down needlessly. If we had had a smart grid in place, that would have been a minor local blackout.
How would a smart grid have helped in that situation?
Well, when we look at an intelligent network like the Internet, what you find is it has a capacity to reroute information through switches in a very efficient way on the fly to get around problems. We don't yet have that on the electricity system. When there are problems, oftentimes the grid operators of the utilities have to get on the phone and call around and try to find out, hey, were there downed trees in some area? That is, they wait for people to call from their houses! A smart system would have sensors in place, embedded intelligence, so it would always know what's happening at any given time in real time and could even automatically reroute power to avoid the blackout in the first place.
Was the 2003 blackout a wake-up call?
The blackout of 2003 should have been a wake-up call, and it has only partially been so. It should have been because it exposed the extraordinary vulnerability we have as the world's richest economy with a Third World electricity grid. But we haven't acted soon enough, we haven't acted forcefully enough, and we haven't acted with sufficient inventive and innovative capacity to upgrade the electricity grid. We need to move faster.
"The smart grid is the vital enabling step to getting towards a much smoother profile for electricity."
If we don't fix it, do you think there are more blackouts in store like the one in 2003?
If we don't act decisively and soon to invest in smart grid, we're going to begin to see several kinds of problems. The most evident will be blackouts and brownouts and various other kinds of reliability problems, and these cost money. They cost businesses money, and even at home, because a lot of people need reliable power—home offices, electronic devices—so we're going to begin to see that problem eventually.
But there are also missed opportunities, the opportunities to tackle climate change by decarbonizing our grid, by embedding more renewables in an economic fashion, by seeing entirely new green industries take off. If we don't have the essential enabler that will allow them to compete on a market footing to get the just reward in the marketplace for being as efficient as they are or for being timely in coming on when their system needs them, we're going to lose out those industries to other countries as well. So there's opportunity cost as well as actual disruptive cost.
What's most wasteful about our current electricity system?
Most wasteful is the fact that at four o'clock in the afternoon in sunny California everybody turns on their air-conditioning, and the grid is pushed towards overload. You have to bring on a lot of peaker power plants. [Peaker, or peaking, power plants generally only run when there is peak demand.] These tend to be very dirty and inefficient but cheap to build. And you have to keep a lot of these plants on standby waiting around for the moment when people turn on their air-conditioners.
If we could somehow smooth the load, meaning shave the peak and get to a normalized load, we would have to build far fewer power plants in the future, especially the dirty kind. We'd have to pay a lot less in spot electricity rates at four o'clock in the afternoon. That's really the future. And the smart grid with real-time metering, dynamic pricing, and some of the other policies and technologies that go with it is the vital enabling step to getting towards a much smoother profile for electricity.
Will electric vehicles help that process?
Yes, one of the greatest advantages of moving to smart grid is the potential in time that electric vehicles will be able to connect to the grid. This could mean either battery-electric or fuel-cell-electric, or a variety of other combinations of vehicles. There are two positive aspects to this. First, they would charge in the middle of the night. It's at a time when a lot of power plants are lying fallow, that is, they're not really being used to their capacity. You could have that electricity for cheap.
Secondly, at peak, when the whole system is about to go into overload, smart software can connect a number of vehicles to the grid and sell power back to the grid. So at the end of the month, Con Edison or PG&E would send you a check saying, "Thank you, customer. You've prevented us from hitting a brick wall and forcing us into a blackout." That's the value of thinking about vehicle-to-grid in the future.
"You and I would be willing to pay more if we understood the benefits."
And what about renewables like wind and solar? Would a smart system help incorporate them more into the grid?
One of the great assets of a smart grid is that it will give renewable energy as well as other forms of distributed generation—micro turbines, fuel cells, and so on that use fossil fuels in a clean way—it will give them the best opportunity to integrate with the grid in a safe, environmentally friendly way. And it's one that helps them get monetary benefits, because they will be acknowledged for providing power during peak. If you can provide power through renewable energy in your house or a micro power plant, you're not putting a congestion charge on the grid, forcing the coal plant to send power to your house. A smart grid can acknowledge that. It can store power for later. It can meter you correctly and give you the financial benefit you deserve. So it transforms the economics of renewable energy.
STORING AND PROTECTING
You mention storage. Is improved electricity storage the holy grail in all this?
Yes. Electricity is a commodity unlike any other. Bananas or copper you can store in a warehouse, but electricity is really hard to store. We can't do it efficiently. We can't do it in a cost-effective manner. And so this creates enormous problems with the electricity system. If we can find a way, whether it's batteries or superconductors or other kinds of technologies that can store electricity when we generate it—for example, from solar energy—and then are able to use it when we need it at another time of day, this would transform not just renewable energy, but it would transform electric vehicles. It would transform the economics of the power grid. This is the most important technological area of opportunity, I would say, in the first few decades of this century.
How about security issues? If the grid's going to work like the Internet, how do we know it will be secure?
There's no question that any smart grid technology and software combination must put security first as one of the paramount concerns. We know, and we have evidence, that hackers in the former Soviet Union and China have explicitly made targeting the grid as one of their objectives, along with other kinds of targets—environmental systems, for example, and water systems. We are living in an age where this is an ongoing threat. It's a riskier world, but what that means is we need to build more resilience into our systems. And if we do smart grid right, it will actually make us safer because we will have a more resilient system.
To develop a smart grid, some people say we need a national commitment, almost like an Apollo mission.
Some people make the analogy to the Apollo mission or a moon shot as the only way to get a smart grid done. I am innately skeptical when people talk about moon shots. Sending a spaceship to the moon once, cost be damned, is not the same as transforming an energy infrastructure that has to work for 250 million people. I think government has the right role to set the policy framework and common standards and provide some seed funding for research. But beyond that, it will be the private sector that will invest in this. Government could never afford to build a smart grid for us from scratch. It needs to be economically viable in the private sector.
What we need to do is persuade utilities to invest in smarter grid technologies. You and I would be willing to pay more if we understood the benefits—reliability, environmental efficiency, and maybe even the enabling of distributed-power vehicles connecting to the grid. Smart grid technologies will enable a tremendous revolution to come, but only if we change regulations and change attitudes so that the people that invest get to see some of the financial returns on that investment.
"Some people think it can't get done. But let's remember, energy is the biggest industry on Earth by far."
Do we as American consumers also need to change our attitudes—become more involved in the energy we're using, how we're using it, when we're using it? Would that make a big difference in making the smart grid work?
The smart grid won't happen unless we begin to be a little bit more mindful about the true source of energy and how we use electricity in our homes. It's not just something that comes out of a hole in the wall; it's connected to a relatively dirty and inefficient power system. And the key piece to changing that is if we begin to take our own responsibility seriously and agitate for some change.
Maybe utilities will begin to be responsive. Our regulators might reward the utilities for investing in smarter technologies, and ultimately you'll find the private sector—investors, venture capitalists—putting more money into this area because they see a market demand. That's where the solution will come from, from the bottom up. I really don't think that government can do more than enable a common set of frameworks, policies, and directives, and then step out of the way to let the innovators invest and come up with the solutions.
How would you respond to people who say smart grid is just too big to pull off?
Some people think because it's such a huge project, which may cost in the tens of billions, maybe even over $100 billion, that it can't get done. But let's remember, energy is the biggest industry on Earth by far. It's a multi-trillion-dollar industry. So when you look at the assets that this industry has, if you look at how much we Americans pay for electricity every year and how we can't live without it, you suddenly begin to see that renewing and regenerating our very decrepit asset base of power lines and power plants is the natural cost of doing business anyway. All I'm arguing for is with a little nudge from government in the right direction towards a smart grid, that that investment will come towards a smarter, more efficient, cleaner enabling platform, rather than just doing business as usual.