POWER May 2012 - 80

SMART GRID
Ten Smart Grid Trends to Watch
in 2012 and Beyond
The year 2012 represents a turning point for the smart grid. Many foundational
elements have been tested; several have been successfully deployed.
Now the serious work of integration and value-generation begins, even
though the challenges remain substantial.
By Bob Gohn, Pike Research
S
mart grid technologies-particularly in
the U.S. and Europe-are at a pivotal
point. Sufficient initial steps have been
made on the part of both technology suppliers
and utility implementers that we are starting
to see some payoffs-small, to be sure, in
some cases, but significant in terms of proving
technical and economic value.
Given that most elements of the smart grid
sit " downstream " from power generators, one
might ask why those on the generation end of
the industry should care (other than because
we are all electricity consumers). One reason
is that smart grid technologies will both challenge
the operation of utility-scale generation
and become valued partners with traditional
generation. For example, sophisticated peakleveling
programs can reduce the need for
fast-responding peaker plants with low capacity
factors. Advanced forecasting, automated
load-shifting capabilities, and other
communication and information technology
tools all along the transmission and distribution
grid can make it easier for fossil-fueled
generators to integrate renewable generation
to maximize efficiency, lower overall emissions,
and balance portfolios.
In the medium to long term, smart grid
technologies-which include myriad devices
and tools to strengthen and secure
power delivery systems-will inevitably
affect the business models and operating
practices of both utilities and independent
power producers.
This article, based on the recent Pike Research
white paper " Smart Grid: Ten Trends
to Watch in 2012 and Beyond, " sums up the
current status of the smart grid industry and
identifies the top trends.
1. Smart Meters Will Shift from
Deployment to Applications
For the past few years, utilities have been laser-focused
on getting smart meters into the
field. Federal stimulus money has fueled this
effort to a great extent in the U.S. But that
money is drying up, and a shift to making use
of all that data is under way.
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Smart meters have reached (or are near)
critical mass. By Pike Research's estimates,
some 200 million smart meters have been
deployed worldwide, and 40 million of those
are now installed at premises in North America.
Utilities have begun to realize internal
cost savings from these new meters thanks to
features such as remote disconnect capabilities
and more efficient meter reading. However,
new challenges will surface in the near
term as utility managers build out consumerfacing
services, such as web portals and useful
apps that flow from smart meter data.
It is time for the new meters to start delivering
on some of the promises to help
consumers reduce consumption, lower their
spending on energy, and deepen their engagement
with utilities. Our expectation is
that this shift from deployment to applications
will take longer than anticipated because
utilities have never seen this volume of
data from meters, and no one has fully mined
the complexities. Eventually, some clever applications
will surface from forward-thinking
companies that can see beyond the obvious
use of the data. However, that is likely to occur
in the years beyond 2012.
2. Dynamic Pricing Debates
Will Escalate
Multiple studies show that dynamic pricing
does indeed reduce peak loads and that
its effects are enhanced with the application
of smart grid technology. However, variable
rates have some legitimate strikes against
them and, interestingly, opposition to dynamic
pricing can be found on both ends of a
politically polarized spectrum. Those toward
the right fear Big Brother taking control of
their thermostats and appliances (here, utilities
= government). Those bent leftward see
the social good of universal electricity being
corrupted, leaving the vulnerable unprotected
(here, utilities = big business).
What has been missing from the broader
debate is this question: Who wins/loses in the
status quo of average rates? Heavy peak users
are effectively being subsidized by everyone
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else. Efficient users are subsidizing inefficient
users. In this context, consumer advocates
should be clamoring for the energy hog
consumer " peakers " to " pay their fair share. "
More capitalistic types should welcome systems
that make energy a free market with
more consumer choice and effective pricing
mechanisms.
Programs are likely needed for disadvantaged
groups, but this is not a new challenge
for policy makers. Regardless, there is growing
evidence that even low-income consumers
are often able to respond to dynamic
pricing incentives and therefore share in the
economic benefits. Ultimately, regulators and
legislators armed with better data from pilot
programs and carefully considered consumer
protections integrated into service offerings
will need the courage to drive dynamic pricing
implementation forward.
3. " Architecture " Will Be the
New Buzzword
" Silo-busting " -integrating previously independent
functions, technologies, and people-has
been a widely recognized attribute
of smart grid deployment. The better integration
of substations, the distribution network,
and metering systems is key to the improved
grid management assumed to be required for
the future growth of electric vehicles and distributed
renewable energy generation. Silobusting
is easier defined than done.
Recent smart grid standards initiatives
around the world have accelerated the movement
toward a common architectural vision
(Figure 1). The fruit of these efforts will
emerge throughout 2012 with a tangible vendor
solution offering. Cisco's formal articulation
of its GridBlocks architecture this past
January provides perhaps the most comprehensive
framework for considering specific
system implementations. Although focused on
the communications network, it offers a considered
approach for broader systems interactions.
At a subsystem level, most of the major
smart meter manufacturers have just launched
more open and flexible metering platforms.
POWER | May 2012
http://www.powermag.com
POWER May 2012

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