Lady Gaga, BP Oil and Smart Grid

Phil Carson | Jun 04, 2010

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Two weeks have passed since we delved into the mailbag, but every time we do there are insights from smart grid proponents and naysayers alike.

In some cases, the proponents and naysayers are having their conversations in the comments section of this column, with or without us. (Columnist stifles a sob.)

(Oh, and there's nothing in this column about Lady Gaga or BP Oil - I'm just selfishly testing a search engine optimization theory.)  

Last week, John Anderson, president and CEO of ELCON, the Electricity Consumers Resource Council, which represents large industrial manufacturers, had questions about smart grid-related demand response programs on a webcast held by the GridWise Alliance. Click here for the column.

"What is a smart grid?" Anderson asked rhetorically. "Will it bring mandatory requirements to consumers? Or will participation be voluntary? Can participants opt out? What are the cyber security implications? What will the smart grid cost? Will it produce long-lived assets or will consumers be faced with stranded costs? Why have no qualified consumer groups supported the idea? Is real-time pricing what customers want? Will customers be prohibited from hedging against price volatility by seeking fixed-price contracts in the smart grid era?"

"You can 'do' energy efficiency, including demand response, WITHOUT smart meters," one reader wrote. "I've designed and installed numerous cost-effective, industrial-scale systems (including DR). What you can NOT do absent smart metering is TOU (time-of-use) or real-time pricing. Without real-time pricing, passing on high renewable source costs is significantly more difficult. Beyond that,  in the wider smart grid initiative, you also find the need for more sophisticated dispatching, again to accommodate high-cost, low-reliability renewable sources PLUS a variety of storage schemes that are on the horizon.

"Frankly, I long for a cogent plan that forthrightly addresses the BIG picture including the elements mentioned above. So far, all I'm seeing is a convergence of special interests. I see a monstrous, ugly, insanely expensive patchwork dog on the horizon."

"The theory that smart meters only serve TOU pricing and that TOU pricing is just a ruse to pay for higher renewable energy rates is a bit narrow," I gamely responded. "The most expensive power is generated at peak hours, mostly by natural gas-fired generation. Metering use according to costs makes a lot of sense and is prevalent in other utility settings beyond electricity."

Another reader bemoaned the inclusion of microcontrollers in appliances, because they can be controlled by the seller to fail right after the warranty expires. This writer used that well-worn analogy of the manipulation of Iranian and Libyan ciphering machines, broadcast by Swiss Radio International. (I suggest doubling down on your medications, sir.)

Yet one reader appeared to have achieved some semblance of balance on the issue:

"TOU pricing need not be punitive for the consumer," our correspondent wrote. "Incenting consumers to move a portion of their usage off- peak can be accomplished with a combination of savings opportunities and higher price risks. I agree that utilities need to dialogue with consumers before deciding how best to roll out TOU rates. Some customers may prefer a predictable, static rate structure, but others may want to have more dynamic rates, if there is a mechanism that can adequately inform them in advance of changing energy supply and demand constraints on the utility and more aggressive savings incentives for modifying their energy usage accordingly. Here is where automated HAN technologies may really benefit the consumer."

The week before we talked with Microsoft's Jon Arnold, who heads the company's power and utilities practice, and who later blogged about the conversation, which had a second part.  

"It was an interesting conversation as it started very differently than any interview I have ever done about what Microsoft is doing in Power & Utilities," Arnold wrote. "We started by discussing a question that Bill Gates posed to me several years ago concerning our strategy for Power & Utilities at Microsoft and how my response to him then was very different from what it would be today. Phil did a good job capturing the essence of our conversation and he writes about it in a very entertaining style."

Of course, now that the Evil Empire, I mean, Microsoft, has blessed my work, I'm unemployable as a journalist. Fortunately, it's summer and the living is easy.

Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
303-228-4757

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Comments

GOOD JOB

We rarely agree in the main but I appreciate your management of this forum and the effort it must take to keep it fresh daily.

Make my day...

Well, thanks. We'll soon be taking a look at some smart grid technologies such as FACTS, HVDC and the like.

Stay tuned. Keep me honest. Let our forum readers know your thoughts.

Regards, Phil Carson