Industryweek 1176 0910smartgrid

Smart Grid Inches its Way Toward Reality

Aug. 13, 2010
Next-generation energy system promises industry improved power quality and reliability.

Like a jigsaw puzzle with half its pieces still missing, the picture of a smart grid -- a next-generation energy distribution network -- is only just starting to take shape.

The U.S. Department of Energy awarded $3.4 billion in stimulus grants toward upgrading the nation's energy grid, while an additional $4.7 billion in private funds has been invested through the program.

The process of implementation has been scattered, with some states swinging into action, while others have wrestled with challenges from state legislators and resistant utilities.

But one region that has taken an aggressive and largely innovative approach has been Chattanooga, Tenn., led by EPB, its municipal utility, which gets its power from the Tennessee Valley Authority.

Chattanooga began formulating plans for a smart grid network more than a decade ago and received a $111 million Department of Energy matching grant from stimulus funds last year. By December, it expects to roll out a 150-mbps fiber-optic grid, one of the fastest in the country.

Along the way, EPB will have tackled some of the most challenging questions associated with the technology: A smart grid requires new rivers of data flowing between utilities and customers, so what will carry the data, and how will it be channeled?

EPB has already installed 7,000 smart meters and estimates it will soon begin deploying an additional 1,500 per week.

According to Danna Bailey, an EPB vice president, the smart meters allow both the utility and the consumer to collect unprecedented amounts of data. EPB currently can take 2 million data points per year, but by fall 2012 that number will rise to 6 billion points annually. "People will be able to monitor the electricity use of their toasters if they want," says Bailey.

This holds tremendous opportunities for local industry and manufacturing, says David Wade, chief operating officer of EPB.

"Everyone talks about the potential savings of smart grid and its impact on the environment, but perhaps its most important factor is power quality and reliability," says Wade. "As manufacturing processes become more automated, a fraction of a second in power or the slightest change in voltage or frequency can have a pretty significant effect."

This impacts industry, whether large or small.

"We've seen many medium-sized manufacturing plants, that maybe employ 50 to 100 people, and if a storm rolls through on a Sunday when they're not in operation, they might not know a fuse blew on the transformer bank until Monday," says Wade. "Not only would they not know, we wouldn't know."

An EPB engineer technician installs one of thousands of smart meters that are creating an automated power system throughout the Chattanooga, Tenn., region. Over the long term, the real value of smart grid for industrial customers will come through transparency of costs, says Harry Forbes, senior analyst at ARC Advisory. Time-of-use rates -- meaning, the billing method based on charging power usage off the amount required and at what time of day -- is only offered to commercial and industrial customers. Forbes says that will inevitably be applied across the board, creating a ripple effect for industry.

"So far, about 99% of the discussion about smart grid has been about smart metering and on residential customers," says Forbes. "We've seen people picking off the low-hanging fruit from the industrial energy management efforts, but really, further down the road, the real impact will come in trying to get them to reschedule or resequence operations. And as far as I can tell, no one has touched that yet. This is very much in its infancy."

For now, Chattanooga will mark the largest metropolitan region in the U.S. with an advanced smart grid system. But that won't last for long, as cities throughout Texas and California are rapidly mobilizing.

Overhauling the nation's electricity delivery system won't take place overnight, warns Paul De Martini, Southern California Edison's vice president for advanced technology.

"We expect this to be 20-plus years in the making," says De Martini. "It is not a destination. It is a journey."

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