Smartgrids - Initial Observations

Smartgrids is a broad phrase that refers to an intelligent electricity distribution infrastructure. Its objective is to increase the efficiency of the electricity consumption - to a first level of approximation. It is not completely clear but there is a chance that this change will create new systems design problems and problem spaces.

There are two reasons for increasing efficiency:

1. Carbon costs
2. Demand growth

There is a growing consensus that carbon costs will be imposed as a way to account for externalities associated with energy consumption. This is becoming more of a reality with every passing day whether or not there is an agreement in Copenhagen.

The normal demand growth due to appliances and population growth is creating pressures in parts of the distribution network. A new source of demand growth is the new electric vehicles which shift the energy/carbon burden from transportation to electricity utilities.

Smart grid will combine four things:

1. Greater renewable energy generation such as solar and wind
2. More efficient distribution of electricity
3. More intelligent use of energy at homes and businesses
4. Massive energy storage

There is a significant amount of information generation and consumption and coordination that will be supported by an IT infrastructure. Depending on which part of the system you look at, you will find a different subsystem that can constructed, optimized, secured and managed.

For example, the AMIs (Advanced Metering Infrastructure) will be able to communicate to the utility IT system and possibly with some control function within the homes and enterprises. Southern California Edison (SCE) will deploy upto 5M such devices in the field by 2011. The
communication and maintenance costs of these AMIs is significant. An interesting problem is how to reduce the communication without loss of information to reduce costs? How to upgrade these systems on the fly? How to secure these system at the minimum possible cost?

There will definitely be more. But the reality is as follows:

0. Unlike IT, the utility system has 'closed' architecture, for good reasons of reliability and predictability.

1. Utilities have little upside for changing other than meeting regulatory requirements. They are paid based on assets such as poles and wires and not for innovation.

2. Utilities have little capacity to cope with the change. Their internal IT systems are antiquated and they allocate few resources for IT.

3. There are emerging standards but the need is today.

4. The people network that is needed to support a large industry such as electricity is limited. Unlike the internet space, there are few interest groups outside industry consortia and conferences.

Your thoughts?