Six summers ago on a particularly warm August afternoon, a tree that should have been trimmed triggered the largest power outage in American history.  The problem quickly spread from Ohio throughout the north-eastern United States – eventually leaving more than 40 million people without power.

The economic damages from the massive blackout have been estimated at $6 billion.  Smart grid technology could have prevented it from ever happening.  A digitised power infrastructure would allow consumers, utilities, and power generation sources to communicate for the first time.  In cases where the power grid is stressed, grid operators would be informed of the situation and could react accordingly.

It seems as if the dream of a smart grid may be finally coming true.  President Obama has made the technology central to his “rebuilding America” plan as a way to create new jobs and reduce America’s carbon footprint.  The stimulus package, enacted in February, included $38.7 billion for the Department of Energy (DOE), of which $4.5 billion is to go directly towards smart grid investments.

Some think it may not be enough.  “We are making a down payment,” said Matt Rogers, an adviser to Energy Secretary Steven Chu.  Rogers says the down payment will go towards a number of pilot projects that demonstrate the feasibility and benefits of smart grid technology.  Once completed, then long-term investments will be made to create a true, nationwide smart grid.

According to the Electric Power Research Institute (EPRI), long a promoter of smart grid technology, the costs of a national smart grid are staggering. The group estimates it would take $165 billion and 20 years to implement it fully.  An investment of that magnitude, however, would create a new industry and an untold number of new jobs.

The hardest part is to get the hundreds of different industries that play a role in the smart grid’s development to agree on a set of standards.  Of course certainly players would benefit depending on which set of standards are adopted but however this is worked out it is essential that it occurs before any national smart grid is attempted.

“If you look at how vast the grid is, all the way from generator to consumer, to bring together a communication fabric so that information can be exchanged, will take four to five years, easy,” said Arshad Mansoor, vice president of power delivery and utilisation at EPRI.

EPRI has been hired by the National Institute of Standards and Technology to develop standards for the smart grid industry.  Mansoor’s group will work closely with the DOE to get the process started next month.  

Mansoor knows it will be a huge challenge.  The famous format war between VHS and Betamax from the 1980s illustrates the issues that a lack of standardisation can cause.  The utility industry understands this and has been working closely with the automotive industry to develop a common standard for plug-in hybrid vehicles.

By 2020 demand for electricity is expected to rise by 30 percent – placing more stress on the grid than today’s power infrastructure can handle.  The estimate doesn’t include the additional power that will be needed for the million plug-in cars that Obama would like to see on the roads.

“Today an American consumer uses 13 times the electricity he or she did a half-century ago and there are twice as many of us,” said James Hoecker at a meeting of a House energy subcommittee.  Hoecker formerly chaired the Federal Energy Regulatory Commission (FERC) and is now an attorney with WIRES, an advocacy group for the electricity industry.  “We’re asking the transmission system to perform tasks for which it was not designed,” said Hoecker.

Bracken Hendricks of the Centre for American Progress, a liberal think-tank, calls America’s power infrastructure a “dumb and old energy distribution system” that hasn’t changed significantly since the days of Thomas Edison and Nikola Tesla more than a century ago.  “Electricity in the grid is like water in pipes,” explained Hendricks.  “You need to manage supply and demand.  You have to keep the levels in balance, or the whole system crashes down.”

Electric Power Research Institute
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Centre for American Progress
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http://www.americanprogress.org
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