Smart Grid -- Vision and Focus

Joao Batista Gomes | Dec 04, 2012

I think that it is common sense that the definition and understanding of the problem is always the first step to creating a solution. The main obstacle to the implementation and development of an "Intelligent Network" is that it is designed, engineered and thought to be used by the "Consumer of the Future", but who must support and pay the "Bill" are the "Current Consumer". Like most "Current Consumer" still does not understand what really is an "Intelligent Network", and they are reluctant to accept and pay for it, which is very natural.

Smart Grid represents a great investment for any Utility and they are understandably reluctant to implement a system that does not meet future specifications. The risks of taking procurement decisions on the wrong technologies or services increase with the pace of innovation launches. Results may vary from paralysis of analysis in which no decision is reached to selections from suppliers that are based solely on price rather than best fit to the current and future objectives. Anticipate and plan for the future requires that we focus on a moving target, but plan for the future will require boldness and talent to be made.

The complexity of Smart Grid Projects is constantly evolving and developing as well bringing the need for organization, that is, qualify for better understanding. As a consequence of change continues, the risk exposure is greater. Utilities are accustomed, for example, to own and control all parts of your infrastructure, and this needs to be changed, especially as regards the structure of communication. Deploy new technologies involves a level of risk and uncertainty daunting for an industry that has not changed much in a century.

On the other hand, some changes have altered the landscape operating Utilities, they are no longer responsible only for the delivery cheap reliable power, but now are seen as agents of economic growth and environmental policy.

The first Smart Grid projects around the world have been funded by Governments through funding, prizes and also the tax waiver. As these stimuli are short-lived, The Regulatory Agencies and Utilities have the difficult task of explaining and convincing "Current Consumer" of the outcome of these current projects. Measuring the value of Smart Grid Projects is challenging because it includes both the direct benefits that everyone recognizes immediately, and the longer term intangible benefits that are more difficult to assign a value.

This means that utilities have to deal with the difficulty of managing the stranded costs, if they want to pursue a strategy of smart metering. As we know, stranded costs are the costs associated with technology upgrades that can not be passed on to consumers. As the energy sector is highly regulated, the "Regulatory Issues" will determine the speed of your development, your success and failure. Much more efforts are needed in the definition of critical "Regulatory Issues" for which innovative solutions can be planned and designed.

Smart Grid is an evolutionary process similar to the notion of "Sustainable Development", and has to be implemented in layers. Smart grids require a systems thinking approach to current and future challenges posed by ever-increasing demand.

It can be a trap to think of Intelligent Networks targeting only the technological aspects and is not a single "Technology or Solution", but a series of changes cultural, business, regulatory new vision, new technologies and changing customer behavior, and management has to be less reactive and more proactive.

The smart grid must be defined by outcomes they produce, and these results need to be focused on the major issues facing the Electric Power Utilities. Finally, companies in the "Green Economy" that are connected to the Smart Grid area, need to gain muscle and develop "Knowledge and Pragmatism" to compete with businesses in the "Gray Economy".


When Henry Ford built the Model "Ford T" he also did not ask what consumers wanted. If he asks what consumers wanted, it is quite likely that the answer is this - We want a horse to run faster. He did not ask, and your car was a success, it can also happen with the Smart Grid!

Without efficiency gains, in 2030, we will need 40% more Energy and Water for our needs. China's population today is one hundred times greater than that of the United Kingdom during the Industrial Revolution, and China will reach levels of growth in 10 years that the UK soon 100 years to achieve. Therefore, we are assuming a clash of resource use that will be a thousand times greater - and that considering only the middle class in China.

Energy is an example of commodity that has a guaranteed demand and we can consider Information Technology as a commodity too.

But unlike other commodity classical prices in the area of Information Technology are falling and will continue to fall, the higher demand for information or more people are connected, the prices follow the reverse path.

The tools for IT Management and Automation will optimize virtually any field work activity or process to improve response time and effectiveness.

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If the price of the smart grid is falling, and the AMI landscape gets only clearer then the longer the utility waits, it will pay to wait and reap the lower cost more obvious benefits (and reduced risks) of implementing smart grid. This is like what deflation is to consumer spending...why spend now, when I can buy more later?

Energy efficiency should be a concern for all countries - such as the use of this energy in all productive activities and of entertainment - the standby is not a simple solution and can cost more in the future.

Joao The benefits of the so called smart grid are over rated. All smart grids do is to flatten the peak load of the grid - the ideal being that all electrical power is produced at base load and therefore at the highest efficiency and least cost.

The real Henry Ford out there is the guy developing the methane fuel cell. Right now there are two energy grids to most houses. The natural gas grid and the electricity grid.

The greatest efficiency gain is not to make the electricity grid "smart" but to make the gas grid smarter than the electricity grid. Methane fuel cells do exactly that.

They are quiet (actually silent) have no moving parts to wear out and can take methane gas and convert it to electricity at an efficiency of around 60-70% the rest being hot water and waste hot gases both of which can be used as heating in colder climates.

So to make a single REALLY smart grid you install a methane fuel cell in every household and disconnect it from the electrical grid. Then there is only one service or standing charge to pay (not two) and all those ugly overhead wires are gone with the energy being transmitted below ground.

THAT is now to make energy consumption really smart. It is coming and the electrical utilities know it - that is one of the reasons for not spending billions on telemetry - in 10 years none of it will be required.


Malcolm -- " that is one of the reasons for not spending billions on telemetry - in 10 years none of it will be required." Agreed most of your post except the idea that distributed CHP will eliminate the need for an electricity grid.


a) The natural gas distribution grid is subject to the very same peaking limitations as the electric grid. Few know it now, but I've seen the billing system of a large gas transmission / distribution / storage utility the provisions for peaking mitigation by writing contracts for peak shaving with large interruptible customers, basically demand control. They do what they can to avoid it, but are up against limitations on transmission capacity from the producing fields, max rate of extraction from storage, and limitations on the capacity of the distribution piping.

b) No single CHP generator system is likely to ever be reliable enough to satisfy customers expectations due to mainteneace requirements, occasional failures.

c) A single customer will be better off sharing a smaller CHP unit with several neighbours and arranging jointly to handle large peaky loads at one site with CHP units excess capacity from other sites, rather than installing their own capacity sufficient to handle their maximum peak.

d) The ideal size of the CHP unit for a site is determined by the site's thermal load (space heating, domestic hot water, pool heating, perhaps driveway de-icing etc.), and is normally much smaller than the unit required to handle site electrical peaks.

Note that in my design of IMEUC I anticipated this issue, and designed the single meter system to handle both electrical and natural gas markets (and perhaps in some locations even water) with the same market design.


Anyway my friends you need information collected remotely to better manage their power distribution system, no matter what type of Power Generation you use.

I have long said that the smart grid is SCADA on steroids. The utility industry installed various parts of the smart grid decades ago and paid for it with reduced operating costs. Distribution utilities paid for load control devices and saw a reduction in their wholesale demand charges. The largest utility in New Zealand still does this. Commercial and industrial customers similarly reduced their demand charges. Other utilities paid for load control devices by the cost differential between on-peak and off-peak marginal costs, turning off oil fired generators when load control knocked off on-peak loads and keeping based load generators from ramping down when the load control allowed the loads to return a few hours later. Utilities in Australia operate this way. This is especially effective when on-peak prices are allowed to soar during a shortage, effectively changing the fixed costs of generation into a variable price.

But soaring prices are often viewed as bad. I see them as a result of the operational mismatch between supply and demand, allocating the supply to those who are willing to pay for it. The opposite is true for plummeting prices, again with a mismatch between supply and demand, but this time allocating the demand among the suppliers who are willing to bid for it. The ABT pricing of UI in India is one way that such a market is working, but the prices are not allowed to soar enough or plummet enough.

The conversion of the fixed cost of generation into a variable price through the interaction of supply and demand is also appropriate for the cost of wires. We do it for transmission in the US and many parts of the world. We can also do it for distribution, as I discuss in “Dynamic Pricing: Using Smart Meters to Solve Electric Vehicles Related Distribution Overloads,” Metering International, Issue 3, 2010. This would allow the CHP projects mentioned by others to operate against a market price for both the generation value and the wires value.

In Sweden they say that too many Cooks spoil the soup. That is what we seem to have here. I have never seen or Heard a discussion of the smart grid here in Sweden, although given the lies and misunderstandings about energy put into circulation in this country and elsewhere, I am sure that in the discussions and seminars sponsored by self proclaimed energy experts, the business about smart grids must make an ad-hoc appearance.

When the nuclear capacity in Sweden was approximately 45% or perhaps somewhat larger, and something over 50% of the energy generated was from nuclear reactors, Sweden had some of the lowest cost Power in the World. There was no need to discuss, speculate or pontificate about the advantages of smartening the grid. The wonderful arrangement they had in this country was partially destroyed by the kind of people who consider CNN a fount of intellectuality, as well as dumb economcis teachers who thought that it was a good idea to string wires between Sweden and Germany. The Word 'fools' is useful for describing them, and the same is true of those persons in the US who want limitations on the export of oil and natural gas removed.

Meaning what? Meaning that dealing with the smartness or stupidity of the grid can wait until we deal with these other matters. For instance, producing reactors at what I call the optimal price, which is approximately the lowest price in the World (whatever that is), and not exporting energy Resources like oil, gas and electricity because that is what is prescribed in the chapters on free trade in some off-the-wall Econ 101 textbook.

By the way, I dont know anything about the smart grid, and dont have the slightest intention of trying to learn! As far as I am concerned, it would just be an elegant way of wasting time.