What’s Really Driving the Growth of Smart Grid?

We have heard quite a bit lately about the smart grid and alternative energy, yet what does this really mean?  

At the present time, at least from a numbers perspective, the smart grid actually means smart metering at the point of use.  The number of smart meters being deployed keeps growing quite simply because they save utilities labor and money. Rather than having to manually read meters by sending out personnel to the physical locations, utilities can read smart meters as they’re tracked by the local network.

If a customer doesn’t pay the bill, the unity can turn off services without having to send someone out. Utilities are extremely conservative and are highly resistant to change.  The deployment of technology like smart meters, which makes and saves them money, while also reducing risk, is very attractive (despite what the marketing from your local utility says.) 

Beneficial ripple effect

Utilities are not the only beneficiaries of the modernization of the present day grid as it evolves to greater levels of automation and control since utility customers experience greater uptime with fewer interruptions.  For instance, when a source of power goes down, transfer switches can detect the problem and transfer to a new source in 100 milliseconds or less.   This of course keeps customers up and running – happy and paying their bills for un-interrupted energy flow. 

The key aspect to making the smart grid work reliably is secure networked connections.  Hackers and other nefarious entities can have a field day with these sophisticated systems if they can penetrate them.  As a result, the cyber security field is in such need of people to stop potential hackers that some are hiring and training employees with little education. From a jobs perspective, this is a boon to the local economy since this function can’t be outsourced to a faraway land where many of the hacking issues are coming from. 

The reality is that only a fraction of the smart grid is about hardware that either does not already exist and or has already been commoditized. In my view it’s about software and cyber security since much of the modern hardware is already well proven. Software reliability and security play just as large a part as hardware in making the smart grid work transparently.

But, again, what about the consumer side of things? Getting your facility off grid, or at least reducing your electric bill via solar, is certainly an option.  Asking who pays for the solar-powered system and installation is a good question, and of course the answer is that both the utility and the consumer need determine the expected ROI and payback period.  For solar, it’s key to consider that the technology is always improving. As a consumer I might ask: If I invest in solar today, what happens next year if the solar panels are 10% more efficient, or if a better inverter is available? At this point, this answer is most likely that I’m stuck with the old stuff.  It also seems that the rebates are continuously in flux depending on energy prices at the given time.  

What the future holds for the smart grid, in the growth of technology advances and the speed of implementation, is most likely tied to the price of energy at any given time.  Opportunities exist, but the adoption rate is tied to many, many variables.

With smart grid and alternative energy technologies it comes down to two basic questions:  1. Who is going to pay for it (and benefit from ROI)? And 2. Who is going to do the real work – including software and security implementation?

PSD