Why isn’t our Smart Grid Smarter?
The term Smart Grid appears frequently now in public press and government strategic documents [1]. A key function in a Smart Grid is the two-way communication between the utility and its customers [2, 3]. In other words, 21st century information technology (IT) that enabled eBay, on-line banking, etc., is now integrated into the nation’s electric grid. This is a big deal. IT can now create an environment where utility producers and consumers can interact. Consumers can now interact with the grid, track their electricity usage, and change their behavior so electricity can be used more intelligently. Utility producers can automatically monitor electricity flows and adjust to changes in electricity supply and demand accordingly via demand response programs. This is today’s smart grid.
People are calling tomorrow’s smart grid a transactive grid, where peer-to-peer transactions can occur different utility produces and consumers. Think “Amazon.com” but for the grid. This would be enabled by IT being pervasively implemented in the grid. For example, instead of using electricity from BGE tomorrow, I buy it from my neighborhood’s microgrid. I have seen others call this transactive energy.
How does IT make the grid more transactive?
As an example, let’s look at how IT transformed personal banking. The Internet has enabled us to do our banking online instead of going to a brick and mortar branch. Each transaction with the bank is now easier, quicker, and cheaper for us. We can also use this technology to automate our bill payments or receive alerts. We can now bank whenever we need to, wherever we are. The banking industry has also benefited from this. They now have improved its customer service; they can keep their interactions with their clients at a maximum level and engage with them continually. By analyzing their customers’ online banking behavior, banks can now provide their customers with a more holistic personalized experience [4]. As a customer, I can now transact with multiple banks on line. Banking is just one example; think about online shopping, FTD, Edible Arrangements, etc.
The utility industry is starting to use IT and digital communication technology to automate individual transactions, as programs such as the SGIG have helped accelerate smart grid technology deployment in the US [5]. Engineering related automatic transactions are now possible, so that power flows can be optimized and faults detected and repaired. BGE, who is my utility provider, operates residential Demand Response Program where they automatically manage, via digital communication, customers’ central air conditioning or electric heat pumps during peak times.
This is the tip of the iceberg. Now that the grid is transactive, it is now possible to [6-10]
– Give consumers freedom to choose dynamic pricing, utility producer, and empowering them to use the technology and the price signals to choose their utility producer and control / manage their own electricity use.
– Provide utility real-time monitoring and controlling all aspects of the power network to minimize service disruptions (blackouts and brownouts), and therefore help utilities avoid penalty fees and other regulatory repercussions.
– Reduce cost in future system improvements and upgrades in the long run, as IT based solutions are often scalable and can evolve over time or can be applied over a fairly short time-horizon.
– Enable new rate plans and business models, the revenue from which can used to upgrade the grid [11].
Why isn’t this smart, transactive grid here?
