True or false? Smart grids will revolutionize the way we consume electricity and dramatically shift the decision-making power away from utilities and its centralized power grid.
Right now, that’s a big maybe, but there are hopeful signs. Fears that at least initially, the beneficiaries of the smart grid will be utilities while customers are overlooked are being recognized. Organizations dedicated to protecting the interests of consumers, businesses and communities are springing up. One is the Galvin Electricity Initiative (GEI) launched by former Motorola CEO Robert W. Galvin in part motivated by the costly East Coast blackout that in 2003 left 50 million in the dark.
“In most places, we find smart grid programs, [the utilities] put in smart meters out there and nothing changes,” observes GEI deputy director John Kelly. “The meters lack interval data, consumer access and dynamic pricing which limits consumer participation.”
So GEI is advocating the idea of Smart Microgrids which are like centralized grids only smaller with some owned by communities, neighborhoods, universities or other groups whose interests are closely aligned. Some would be owned by utilities as well.
Microgrids allow communities to reliably “generate, regulate and distribute the flow of power” instead of leaving it solely to utilities. Microgrids are “power to the people” in a literal sense.
Ideally, thousands of Microgrids would be networked together to make up what we loosely refer to today as the smart grid. They promise increased reliability, easier handling of rising demand, more renewable energy and greater innovation.
Today’s grid is highly centralized and controlled by utilities, leaving communities and consumers relatively helpless when it comes innovating, reliability and specifying power sources. Local distribution networks have not been upgraded in a half century in part because utilities are not focused on communities or continuous improvement methods as with other industries, according to Kelly.
“From our perspective, Microgrids are a change in philosophy. Utilities working with communities would design strategies to achieve specific goals on reliability, cost and carbon footprints. Cities today are completely left out of [decision making],” says Kelly. “They want to buy lower carbon generation sources including renewable energy and lock into 10-15 year contracts (factoring in the carbon tax, wind is currently the cheapest energy except for natural gas whose price is presently low but fluctuates).”
Today, decision-making resides with state utility commissions and the utilities themselves. So GEI is focusing its efforts on the regulatory front within state legislatures where often ex-mayors are the change agents. Education and research are also GEI priorities.
“What are the rules that empower communities and make utilities more accountable? We found the 90 per cent of the innovation comes from state legislatures,” he says. So GEI plans to work with U.S. Conference of Mayors and National Governors Association to help constituents establish Microgrid strategies.
GEI also has prescriptions for both businesses and residential users that start with simple things like understanding bills, conserving and realigning consumption to when the power is cheapest in off-peak hours.
Much of GEI’s mission is to create awareness given most of us take electricity for granted. But now we’re all in the game to the extent we want to educate ourselves and act. While the smart grid sounds sexy, invariably big power struggles (pun intended) between utilities and local entities, businesses and consumers lie ahead.
After all, utilities spend tens of millions every years in lobbying expense as Kelly likes to point out. But it’s becoming clear that technology, environmental concerns, reliability, efficiency and cost have the potential to empower consumers and communities.
My fear is that smart grid benefits will largely accrue to utilities or costs will be too high.
“There could be a consumer backlash that give smart grids a bad name. Without measurable goals, purpose and consumer engagement, benefits may not cover the costs,” says Kelley.
Microgrids are potentially way to stop that from happening. The video below shows other powerful backers of the Microgrid idea including Google.
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