Exploring the imperative of revitalizing America’s electric infrastructure. the SMART GRID: an introduction. How a smarter grid works as an enabling engine for our economy, our environment and our future. prepared for the U.S. Department of Energy by Litos Strategic Communication under contract No. DE-AC26-04NT41817, Subtask 560.01.04 DISCLAIMER This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor Litos Strategic Communication, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer or otherwise does not necessarily constitute or imply its endorsement, recommendation or favoring by the United States Government or any agency thereof, or Litos Strategic Communication. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof. PRINTED IN THE UNITED STATES OF AMERICA. PREFACE IT IS A COLOSSAL TASK. BUT IT IS A TASK THAT MUST be DONE. The Department of Energy has been charged with orchestrating the wholesale modernization of our nation’s electrical grid. While it is running. Full-tilt. Heading this effort is the Office of Electricity Delivery and Energy Reliability. In concert with its cutting edge research and energy policy programs, the office’s newly formed, multi-agency Smart Grid Task Force is responsible for coordinating standards development, guiding research and development projects, and reconciling the agendas of a wide range of stakeholders. Equally critical to the success of this effort is the education of all interested members of the public as to the nature, challenges and opportunities surrounding the Smart Grid and its implementation. It is to this mission that The Smart Grid: An Introduction is dedicated. From the Department of Energy The Smart Grid Introduction is intended primarily to acquaint non-technical yet interested readers about: • the existence of, and benefits accruing from, a smarter electrical grid • what the application of such intelligence means for our country • how DOE is involved in helping to accelerate its implementation. SECTION FOUND ON ONE Introduction: We Don’t Have Much Time. Toward an orderly transition to a smarter grid… TWO Edison vs. Graham Bell: The Case for Revitalization. Presenting the argument in a timely fashion requires a trip “back to the future…” THREE The Grid as It Stands: What’s at Risk? The many hazards associated with operating the 20th century grid in the 21st century. The lights may be on, but consider what we’re missing… FOUR The Smart Grid: What It Is. What It Isn’t. Why it’s important to know the difference… TOC FIVE Compare and Contrast: A Grid Where Everything is Possible. KNOWLEDGE BROUGHT For an invigorating vision of our energy future, look forward… TO POWER TOPICS SIX First Things First: Teasing Out the Complexities. How various constituencies – i.e., utilities and regulators – are working toward fundamental realignment to make a smarter grid get here faster… SEVEN How Things Work: Creating the Platform for the Smart Grid. Making it possible for consumers to participate… EIGHT Progress Now!: A Look at Current Smart Grid Efforts and How They’re Succeeding. From West Virginia to California to Hawaii, a smarter grid is taking shape… NINE Edison Unbound: What’s Your Stake in All This? Benefits for everyone… Resources and Glossary Coming to terms with the Smart Grid... SECTION FOUND ON ONE Introduction: We Don’t Have Much Time. 2 Toward an orderly transition to a smarter grid… TWO Edison vs. Graham Bell: The Case for Revitalization. 4 Presenting the argument in a timely fashion requires a trip “back to the future…” THREE The Grid as It Stands: What’s at Risk? 6 The many hazards associated with operating the 20th century grid in the 21st century. The lights may be on, but consider what we’re missing… FOUR The Smart Grid: What It Is. What It Isn’t. 10 Why it’s important to know the difference… TOC FIVE Compare and Contrast: A Grid Where Everything is Possible. 16 KNOWLEDGE BROUGHT For an invigorating vision of our energy future, look forward… TO POWER TOPICS SIX First Things First: Teasing Out the Complexities. 24 How various constituencies – i.e., utilities and regulators – are working toward fundamental realignment to make a smarter grid get here faster… SEVEN How Things Work: Creating the Platform for the Smart Grid. 28 Making it possible for consumers to participate… EIGHT Progress Now!: A Look at Current Smart Grid Efforts and How They’re Succeeding. 32 From West Virginia to California to Hawaii, a smarter grid is taking shape… NINE Edison Unbound: What’s Your Stake in All This? 36 Benefits for everyone… Resources and Glossary 40 Coming to terms with the Smart Grid... 1 SECTION ONE : INTRODUCTION WE DON’T HAVE MUCH TIME. Our nation’s electric power infrastructure that has served us so well for so long – also known as “the grid” – is rapidly running up against its limitations. Our lights may be on, but systemically, the risks associated with relying on an often overtaxed grid grow in size, scale and complexity every day. From national challenges like power system security to those global in nature such as climate change, our near-term agenda is formidable. Some might even say history-making. Fortunately, we have a way forward. There is growing agreement among federal and state policymakers, business leaders, and other key stakeholders, around the idea that a Smart Grid is not only needed but well within reach. Think of the Smart Grid as the internet brought to our electric system. A tale of two timelines There are in fact two grids to keep in mind as our future rapidly becomes the present. The first – we’ll call it “a smarter grid” – offers valuable technologies that can be deployed within the very near future or are already deployed today. The second – the Smart Grid of our title – represents the longer-term promise of a grid remarkable in its intelligence and impressive in its scope, although it is universally considered to be a decade or more from realization. Yet given how a single “killer application” – e-mail – incited broad, deep and immediate acceptance of the internet, who is to say that a similar killer app in this space won’t substantially accelerate that timetable? In the short term, a smarter grid will function more efficiently, enabling it to deliver the level of service we’ve come to expect more affordably in an era of rising costs, while also offering considerable societal benefits – such as less impact on our environment. Longer term, expect the Smart Grid to spur the kind of transformation that the internet has already brought to the way we live, work, play and learn. 2 A smarter grid applies technologies, tools and techniques available now to bring knowledge to power – knowledge capable of making the grid work far more efficiently... • Ensuring its reliability to degrees never before possible. • Maintaining its affordability. • Reinforcing our global competitiveness. • Fully accommodating renewable and traditional energy sources. • Potentially reducing our carbon footprint. • Introducing advancements and efficiencies yet to be envisioned. Transforming our nation’s grid has been compared in significance with building the interstate highway system or the development of the internet. These efforts, rightly regarded as revolutionary, were preceded by countless evolutionary steps. Envisioned in the 1950s, the Eisenhower Highway System was not completed until the early 1980s. Similarly, the internet’s lineage can be directly traced to the Advanced Research Projects Agency Network (ARPANET) of the U.S. Department of Defense in the 60s and 70s, long before its appearance as a society-changing technology in the 80s and 90s. In much the same way, full implementation of the Smart Grid will evolve over time. However, countless positive steps are being taken today, organizations energized and achievements realized toward reaching that goal. You will learn about some of them here. The purpose of this book is to give readers – in plain language – a fix on the current position of the Smart Grid and its adoption. You will learn what the Smart Grid is – and what it is not. You will get a feel for the issues surrounding it, the challenges ahead, the countless opportunities it presents and the benefits we all stand to gain. Remember life before e-mail? With every passing day, fewer and fewer people do. With the appropriate application of ingenious ideas, advanced technology, entrepreneurial energy and political will, there will also come a time when you won’t remember life before the Smart Grid. 3 Menlo Park Workshop Pearl Street Station First Street Lamps Metering Compact Fluorescent Light advancements in electricity There is a popular comparison that underscores the pace of change – or lack thereof – regarding our nation’s grid. SECTION TWO: EDISON VS. GRAHAM BELL: THE caSE FOR REVITALIZATION. The story goes like this: If Alexander Graham Bell were somehow transported to the 21st century, he would not begin to recognize the components of modern telephony – cell phones, texting, cell towers, PDAs, etc. – while Thomas Edison, one of the grid’s key early architects, would be totally familiar with the grid. advancements in telecommunications First Telephone Operator Switching Stations Rotary Dialing North American Rotary Dial with Ringer 4 Numbering System and Handset While this thought experiment speaks volumes about Given that the growth of the nation’s global economic leadership appearances, it is far from the whole story.