It is clear to us that energy policy and regulations are the key drivers of the business case for SG applications, and not technologies. These policies/regulations promote, for example, RPS mandates, dynamic pricing, demand response, competitive market structures, self-optimizing customers (e.g., distributed generation and storage, smart appliances, micro-grids), electric vehicles, cyber-security, and data privacy. It is a kind-of “policy-push” market, with SG applications in a “catch-up” mode.
In order to implement the new policies and regulations in all of their complexities and not-designed-for impacts on the traditional electricity grid, while still maintaining the current levels of service reliability, stability and security, the grid needs to be smarter, and react faster. We will be operating “closer to the edge”.
The SG is at its core about automation, control, and optimization across the power system operations – both physical and market operations. For example, it comprises smart sensors, intelligent electronic devices, communications systems, M2M interfaces, data analytics, situation awareness and alerts, and control systems.
In its ideal form, the SG is a system of systems that in essence have the potential to optimize power system operations and capacity requirements. To realize this potential, i.e., for the grid to be “smart”, these systems ultimately need to be interoperable since the SG is an interconnected system from generation all the way to end-use of electricity.
The above new policies/regulations are out ahead of the SG in terms of technology, interoperability, and grid operations – the SG is playing “catch-up”. But more importantly, we also need the SG in order to realize the full benefits of these new policies and regulations.
The “catch-up” situation can lead to unintended/undesirable consequences related to the operation and reliability of the power system.
Fortunately, SG applications have the capability, if not yet the readiness, to mitigate these risks, provided they are interoperable.
The Transition to an “Ideal” SG Architecture Will Be Messy -- We Are Going To Feel Uncomfortable
As engineers, we like tidiness. In a perfect world, the transition to a fully-functional SG would be orderly and paced to accommodate new applications while protecting grid integrity: perhaps a three-stage transition -- from today’s operations’ data silos in utilities to a single common information bus, then to many common, integrated buses, and finally to a converged system.
But in a non-perfect world, i.e., reality, the SG will evolve as a hybrid of legacy and new systems -- it will not be an optimized process – there will not be a “grand plan” – clusters of interoperability will appear here and there across the SG.
The transition will take perhaps 30 years -- not for technology-based reasons, but because the “refresh cycle” for utility assets is lengthy – so, there’s time for a whole career for all of us in deploying SG applications! Continue reading