Dealing with the Smart Grid’s key drivers and challenges
The Internet we depend on every day for an amazing diversity of business, recreation, social and entertainment activities has changed unimaginably from the few static websites that appeared on our browsers in 1995 or even 2000. As we now try to look forward to the full realization of the Smart Grid in the years ahead, we can take at least one very important lesson from our Internet experience: build in flexibility, both commercial and technical, and ideas around the Smart Grid will flourish and blossom. The key to this is recognizing and addressing the key drivers that will shape the Smart Grid’s development.
From Consumers to Customers
“First and foremost, the largest driver for Smart Grid success is the transformation of today’s energy ‘consumer’ to tomorrow’s energy ‘customer.’ We have to see ourselves as customers in order to understand how that transformation will drive the industry, then build the right communications and service foundation to support it,” states Kamal Ballout, Vice President of Alcatel-Lucent’s Energy System Integration Division.
“Look at where we are today. As customers we now demand more choice, convenience and control over nearly everything, including the expectation of real-time information. The convergence of communications innovations – always-on connectivity through wi-fi and other technologies, ever more powerful mobile devices and multimedia platforms – have both increased our appetite for these benefits while raising our dependence on them,” he says. “They have become an integral part of our life.”
Ballout says that when it comes to energy, we’re going to witness a very similar transformation in the next decade. “If you look at how most of us use energy today as consumers, you recognize that we tend to buy it in bulk for the household and we get a flat bill at the end of the month – very much the same as the way the telephone service used to bill us,” he notes. “But now things are changing. We will want to understand how we are using that energy. We will want to be able to choose and control the cost, and we also will want to be able to choose the source – whether it’s renewable or standard.”
Electrical Vehicles Poised to Shake Up Current Energy Models
Electrical Vehicles (EVs) are poised to radically change models for both electricity production and consumption. On the generation side, millions of vehicles plugged into residential and business garage terminals will provide significant power reserves that can be tapped by utilities during peak demand periods—all while increasing the complexity of power management.
Control points in the network and consumer power agreements will become particularly important with the increasing popularity of EVs, when thousands of people may show up for work at 8am and plug in, causing a huge peak in demand. Using demand management incentives (DMIs), power suppliers will be able to mitigate those surges, allowing EV owners who need immediate recharges to get them, while power for others will be deferred until later in the day.
Ballout notes that power for EVs could account for more than 50 percent of a monthly bill, and that will be a huge motivator for consumers to embrace demand-based pricing models. “Overall, consumers will want to understand how they’re spending this energy and how to optimize it, whether for the EV, heat and air conditioning, appliances and other uses,” he says.
“Green” Energy Creating Both Risks and Rewards
In the next decade energy consumers will increasingly generate their own electricity, allowing them to be more “green” and socially responsible while creating additional highly distributed generating capacity. In this area as in all of the others, power providers will need to recognize trends and opportunities, developing the service applications to support them.
“Everyone is moving toward green energy, but sources like the wind and the sun are variable and unpredictable,” says Ballout. “The U.K. now has an objective of 50 percent renewables by 2020. Now that’s outstanding, but think about the impact. You are increasing the vulnerability of your network significantly, becoming 50 percent dependent on a variable source of electricity. Storage is part of the solution, but we also have to plan for renewable energy introduction with education and the smart, compelling consumer applications that will support responsible use. We need consumers to be socially responsible and engaged when it comes to green energy.”
Power Reliability Evolving From “Convenience” to “Critical”
Smart Grid development in the decade ahead will also demand an increasingly strong focus on the reliability of the network, with a major challenge in satisfying demand from an ever increasing, distributed, uncoordinated and diverse range of energy generation resources. The proliferation of smaller scale renewable generation will create conflict with the legal requirements on utilities to deliver quality energy, since it will increase instability and “noisy” loads within a grid. Exaggerated energy usage profiles and seasonal energy demand will compound this problem further.
Outages are becoming much more critical than ever before Ballout notes. “If you go back 10 or 15 years ago, if we lost our electricity we would lose the television and the refrigerator, along with the lights, but the phone was still on. Now if we lose electricity we can no longer work from your home, we cannot send email, we can’t get our scanners to work. We’ve become much more dependent on electricity in more aspects of our lives, so outages will be a much more costly situation for everybody.”
Again, it’s consumers who will be at the center of the success equation, since persuading them to cut down on consumption during peak periods will help the overall reliability and quality of the grid. “Using DMI’s enabled by Smart Grid technology, power suppliers will be able to better manage that load while keeping the costs down for everyone,” says Ballout. “Being able to shave some of that peak load also will reduce the frequency of outages, guaranteeing the ability to continue to deliver power to those with essential services.”
Dealing with Massive Amounts of Data
In the next few years a large number of utilities will be implementing thousands of sensitive controls throughout their energy networks, along with smart meters in millions of homes. By 2020 this trend will create nine times the Smart Grid data we have today, according to Lux Research, driving telecommunications and information technology investment in the grid from $12.8 billion today to $32.4 billion by 2020.
“We will face the very brutal reality that we will have to deal with exponentially more information than ever before,” says Ballout. “Therefore, research and innovations around data analytics based on statistical signal processing, pattern recognition and intelligent controls will be extremely important. The ability to sort through this data to allow us to be more proactive and productive – educating customers while planning better for the years ahead.”
This flood of new data also will make security more important than ever, because the more distributed and intelligent the system becomes, the more it will attract hackers. “What you and I see as convenience, hackers see as an opportunity to learn about us and our behavior and plan harm around that. This is why we have to pair that intelligence with the right innovation for security,” says Ballout. “Enhanced security and privacy protection will be essential to making customers comfortable with the behavioral information generated by smart metering.”
Creating Essential Flexibility for the Future
This multitude of complex drivers and challenges means that the Smart Grid’s future will depend upon building a highly capable service foundation based on open standards and interoperability –platforms that will help grow the inter-industry ecosystem essential for success. Networks based on open IP/MPLS technology will ensure both robustness and flexibility for all of the variable conditions and market players – enabling those essential, game-changing new applications that we haven’t even thought about.
And ultimately, energy awareness and engagement by those energy consumers-turned-customers will be the catalyst that drives new development and sparks the greatest success for the Smart Grid. “The Smart Grid concept is poised to become hugely successful,” Ballout states, “but we need their active participation to make it happen.”
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