Consumers increasingly believe that the so-called Smart Grid is a scam.
It appears to operate more in the interest of the power companies, at the expense of the consumer. And the Smart Grid has some nasty privacy implications.
As well as putting UP your power bill, the smart grid does not merely or mainly reduce energy use, so much as shift it to a different time. See the video (click “Keep reading” just below) for an example: Its from the You tube channel of West Coast Green Solutions.
But what is the Smart Grid? why is it important? and who stands to benefit from it the most – consumers or the energy companies?
Smart Grid explained
You come in from work and flip on the light, throw a pizza from the freezer to the microwave, and settle back in a comfortably big kitchen to watch the plasma screen. But do you ever stop to consider where the power for all this comes from? Probably only when you pay the bill, which currently averages over $1400 each year per household in the US and about a thousand pounds in the UK. Consumer groups in both countries forecast it will rise about 10% per year annually for the next decade.
By then the electricity Grid will have been renamed the “Smart Grid”, an “intelligent” version of the current system, say its proponents, where the householder will have minute by minute information on what energy the building is consuming, and the power generators will have real time information on every electrical item in their networks, and be able to power down non- essential usage at times of peak demand. Prices will fluctuate by the hour or minute, as opposed to the present system where prices stay the same for months on end.
The industry presents these developments as “empowering” the consumer, giving us control over what we use – but is it really that way?
How will the word picture at the beginning of this story have changed By 2020?
You might be returning home in your electric vehicle, and be about to plug into the home power supply, then check your meter and realise that prices for power are spiking as everyone else has also just got home –so you consider delaying that pizza, and listening to the radio instead of watching the energy-hungry plasma screen, which you may have cancelled because it used too much power and opted for LCD instead. You may even be renting the freezer rather than buying it, so as to avoid being locked into old technology in what is now a fast changing sector. The formerly predictable white goods in your kitchen are more like another member of the household now,compared to the appliances we used to know. The freezer “talks” to the power grid, using an AlertMe box in the UK– and probably to the microwave as well – as they discuss the best strategy to get your pizza cooked within budget.
At its heart, the new domestic smart power system will have a small controller in every home, as sold by British start-up AlertMe. The white box plugs into the mains, and measures everything electrical going on in the home. Then it dials up another part of the smart grid infrastructure – the Google Power Meter— to display its results which the householder views on their web browser.
It may come as a surprise to learn that the search engine giant is also aiming to be a behemoth in the energy industry. But its true – Google ‘s aim is to place itself at the centre of the smart grid.
The power meter will show a householder the exact amount of electricity being used by each device in the home, allowing greater control over how much is being spent, but perhaps not in quite the way you imagine. “Its like what happened fifteen years ago with the liberalisation of telecoms,” says Alert Me CEO Pilgrim Beart “the prices will vary a lot, by a factor of at least 10 –electricity is cheaper than free at night because there is such a great surplus.”
Supporters of the futuristic smart grid include power companies, industry regulators and governments, both here and in the US and Europe, as well as energy equipment manufacturers such as General Electric, and IT companies such as IBM and Oracle. Even the eco lobby groups including Friends of the Earth of have given it a cautious welcome. Many environmentalists see the Smart Grid as essential to managing the fluctuating flows of renewable energy from wind and sun.
Smart Grid has many opponents
Opponents of the smart grid include privacy campaigners who fear huge amounts of personal data will be unlocked by the new technology, and poverty campaigners who forecast the smart grid will discriminate against the energy-poor. A few private energy consultants argue that the whole concept is geared to make the rich utility companies even richer.
For CenterPoint, the so-called smartgrid revolution pertains primarily to local distribution networks, rather than the bulk-power transmission system, which, according to a spokeman, “has long operated as a smart grid.”
New York is breaking new ground among states in trying to stop “utility information monopolies” from emerging out of smart grid, according to the head of the National Energy Marketers Association,Kennedy Maize.
“I’ve been arguing that the smart grid is a bad, wrong-headed idea for months at POWER magazine’s blog (www.powermag.com). The smart grid simply shifts demand, with no benefit to society (but plenty to utilities).
“My case has been for a strong grid — more robust interconnections between and among the existing grids, without regard to how smart those interconnections are.
“There is no doubt in my mind that a smart grid would not have protected the nation in the most recent regional blackouts. Indeed, the cascading grid collapse might also have collapsed the information-based grid, and exacerbated the outage.
“As best I can tell, it’s a con. The utilities recover the costs of the smart grid in rates, benefit from load smoothing, and consumers have to pay for the infrastructure and buy intelligent toasters and the like on their own accounts.
Jack Oliphint, a retiree who lives 20 miles north of Houston in Spring, Texas, thinks the $444 he will pay CenterPoint in coming years for a smart meter is too much, considering what he sees as rather elusive benefits. “There’s no mystery about how you save energy,” says the 71-year-old retired furniture salesman. “You turn down the air conditioner and shut off some lights. I don’t need an expensive meter to do that.”
In other states, such concerns have led to the scaling back of smart-meter deployments.
Smart Grid early examples are not promising
Two years ago, Connecticut Light & Power Co. proposed to provide smart meters for all of its 1.2 million customers. “But then we heard from the Connecticut attorney general asking us, why don’t you walk before you run?” says Mitch Gross, a spokesman for the utility. “He was concerned about the cost.”
As a result, the utility will do a pilot program this summer to test customer acceptance of smart meters and variable pricing. Some 3,000 customers have volunteered, and the utility intends to see whether people cut energy use during times that prices rise. Some consumers will have “energy orbs” in their homes that change color, a visible indication of how prices are changing, as a way to stimulate behavior changes.
Instead of the estimated $255 million cost of a full meter deployment, the test will run $13 million.
Concerns have arisen in California, too, where the state’s three big investor-owned utilities are expected to spend at least $4.3 billion for millions of new meters by 2012. Utilities already are looking at variable-pricing programs designed to discourage heavy use of electricity during peak periods like hot summer days. The meters, they hope, will make variable pricing more effective by giving people clear incentives to decrease energy use when wholesale energy prices are highest.
But consumer advocates in California also complain about the cost. “There are cheaper ways to meet the goal of reducing energy use,” says Marcel Hawiger, an attorney for The Utility Reform Network, or TURN, in San Francisco, a consumer advocacy organization.
For instance, Mr. Hawiger favors expanding existing air conditioner-cycling programs, where utilities have the ability to control air conditioners so they take turns coming on and off, reducing the drag on the electric system. He says the air-conditioner controllers can provide much of the benefit at a fraction the cost of installing millions of smart meters. These programs control temperature settings and compressors to reduce overall energy use.
PG&E Corp., a San Francisco utility, estimated the cost of its meter program at $1.74 billion in July 2006, but recently got permission to spend an additional $467 million, pushing the cost to $2.2 billion for 5.4 million electric meters. It has installed 557,000 meters so far with the capability of letting consumers go online and read energy data. So far, however, only 12,000 consumers have taken advantage of it. PG&E says it hasn’t yet marketed the program and it hasn’t activated the home-area-network capability, which will allow people to take information and put it to work by setting up networks to control appliances, furnaces, air conditioners and other devices.
PG&E has 124,000 customers enrolled in an air-conditioning-cycling program and hopes to raise that number to 400,000 customers by the summer of 2011, but that will add $178 million in program expense. Each thermostat costs about $300.
The smart grid will be filled with improved sensing so we know up to the minute how bad it is. These sensors are the most important part of the initial smart grid investments, even more important than most of the AMI investments. These sensors will enable grid operators to track operations closely. One of the early power companies to install smart grid sensors distributes power on either side of FirstEnergy. FirstEnergy is the utility whose slow response led to the great Northeastern Blackout of 2003. FirstEnergy was pushing too much power over transmission lines causing them to overheat. Overheated wires stretch, in this case stretching all the way to hit untrimmed trees. The adjacent power company could see this coming, and even called the FirstEnergy control room to urge action before a crisis came. We want smart grids so the grid will be less like the one in Cleveland in 2003, and more like its neighbor.
Most general public reports gloss over what response FirstEnergy could have made. In essence, FirstEnergy could have prevented the great blackout by voluntarily unplugging half of Cleveland. That is what smart grids will do; they will turn off half of Cleveland to keep problems from spreading. With the quality of the grid getting worse by design, smart grids will turn off their customers regularly. Turning off customers to protect their own infrastructure will become a regular activity of power companies that operate smart grids.
In smart grids, the only question is will we manage energy use in our own end nodes, or will we let our electricity suppliers do it for us. Will we marshal energy storage and energy generation internally, or will we turn over all operations to utilities and suppliers? Will we build environments with dynamic, diverse technology and innovation, or will we be limited only to the solutions that can be managed centrally, chosen by organizations that play not to fail, rather than playing to win?
In Colorado, Xcel Energy’s pilot SmartGridCity in Boulder comes with a $100 million price tag. As the costs mount, there are questions from consumer advocates in Colorado and across the country about how smart grid should be financed and who should pay the bill.
‘This is all uncharted territory,’ said Bill Levis, director of the Colorado Office of Consumer Counsel. ‘The costs have to be properly accounted for.’
Consumer advocates in Pennsylvania and California are questioning the usefulness of expensive smart-grid technologies – especially smart meters that track real-time energy use and can control appliances.
‘The cornerstone of smart grid is this house where your meter talks to your appliances,’ said Mindy Spatt, spokeswoman for TURN, a California utility advocacy group. ‘My toaster is never going to talk to anyone.’
Homes can be made more energy-efficient and energy use can be managed without expensive meters, Spatt said.
Cambridge-based AlertME is carrying out trials at the moment to see exactly how users really take to the new technology, and they are reporting a 10% drop in power consumption, as householders respond to messages from Alert ME to warn them when power consumption goes above a set level.
Says Pilgrim Beart “The consumer doesn’t care about the smart grid anymore than they care how the mobile phone system works.
“They care about their own experience in the home – money, convenience simplicity and control. So that is what we are focused on — delivering something that saves them money – same as they expect from telecoms – where they can see an itemised bill, where they can choose a package
All the same there is a limit to the amount of night time use we can make of electricity. The examples most commonly given are running our washing machines and dishwashers in the small hours, but in many households that would simply lead to sleepless nights as the machines whirred and clanked
And what about the idea that we will switch off when the price is high. Imagine an asthmatic pensioner deciding whether to turn off the air conditioning in the middle of a heatwave because the price had risen to 50 cents a kw hour from a typical off-peak price of 5-10 cents.
GE says that in a British trial of smart grid technology that used its equipment, electricity demand was cut by 9 per cent: a very impressive result. But that was in a village that was pre-selected as having a population interested in energy and the environment, which embraced the trial enthusiastically. A record of the community’s energy use was posted in the village hall, and people would go from house to house encouraging each other to save energy and passing on tips, and so on. Not everyone wants to live that way, as other, less successful, trials have shown.
Ofgem has made GBP500m available for smart grid trials in the UK, but a recent report by the Parliamentary Energy and Climate change committee criticised it for rushing into trials too soon, before standards had been agreed.
The committee raised concern that Ofgem has granted funding for new grid investment projects before the completion of a fundamental review of how the existing network can be better used. This could drive investment in transmission at the expense of other more cost-effective options such as greater management of energy demand or energy reduction measures such as insulation..
The report also urged the government to quickly implement a regime that will encourage the sharing of grid capacity and prioritize renewables, while also facilitating a greater role for demand-side management. About 60 gigawatts of generation capacity is waiting to be connected to the grid.
“The sector has for far too long forestalled reform in areas such as transmission access,” the report said.
The committee raised concern at the absence of a “culture of innovation” within the networks sector and called on the industry to grasp to opportunities that the global smart grid market offers.
Gurpreet Gujral, research analyst at the City broking house Ambrian Partners, told the Evening Standard:
‘The rate of evolution of an industry is known as the industry clockspeed.The utility industry is regarded as having one of the slowest clockspeeds in the world because of the scale of capital expenditure, the importance of energy security and the lack of incentive to change.
‘We see a move away from large-scale centralised power sources towards smaller, low-carbon power sources located closer to points of consumption. The emergence of this is akin to the computer industry moving from mainframe computing to laptop and desktop access. This modernised grid will accommodate intermittent energy generation using energy storage technologies and digital sensors [to regulate supply].
Opposition now would discourage investment
‘As the make-up of the grid is reformed, a new ecosystem is created with customers having greater choice of energy consumption patterns and pricing, the capacity to integrate renewable energy and other energy generation sources cost efficiently, and [to] deliver energy with increasing reliability and less carbon emissions.’
For some, being able to see how the money is ticking away every minute might be a real cause for worry, making them uneasy about being able to afford their energy. Others do not like the sense that they are being pushed into inconvenient lifestyle changes, such as doing their washing at night when electricity demand is lower and prices cheaper. GE likes to say that its technology enables changes in behaviour, not lifestyles, but until there is a new generation of intelligent appliances that can communicate with the smart grid and make automatic and painless adjustments that consumers will not notice, then it will be hard to avoid some impact on lifestyles.
Although the issue has not yet broken cover, there is certainly potential there for the impact of the smart grid to be a source of public and political controversy, and that could prevent the legislative and regulatory changes that will be needed to persuade companies to invest.
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