monitored and controlled end to end—all the way down to billions of individual devices.
A newly engineered smart electricity grid will give us much‐needed choices. Among them: interdependence not isolation; efficiency not waste; customization not one size fits all; sustainability not vulnerability; and a power system focused on the future not mired in the past.
This is a vision, but it can become a near‐term reality. Right now, our electric infrastructure in the U.S. revolves around about 130 control centers that are blind to each other. We want to establish an interoperable network where there is sharing of information, power and resources across long distances. There’s no reason that wind power in Texas and hydropower in Washington State can’t be balanced and mixed.
A cornerstone of the new smart electricity grid will be efficiency that is optimized by computers. We need to digitize the current analog system. Or, to put it another way, we need to Google the grid and create massive interconnections that permit intelligent self‐healing and utilization adjustments when supply and demand conditions warrant. Another new foundation as we build out the electric infrastructure is customer choice. Utilities today sell power one way—their way; this will change so that, like the phone companies, there are a number of tailored purchase plans for energy consumption.
The ultimate result stemming from a new digitized electricity grid will be a move away from petroleum‐based fuels. Once the new electric infrastructure is up and running, we will be able to deploy a host of fuel sources—renewable and non‐renewable—for the first time on a large-scale basis. That’s why I believe the petroleum economy will gradually be transformed into the electricity economy.
4. What will it take to achieve these kinds of results?
There are three essential technology components that are critical for the new smart electric grid’s success. First, two‐way communication. Communication between utilities has to happen in order to develop and deploy a seamless and interactive network. Second, smart devices that talk and listen on an end‐to‐end basis. And third, advanced control systems that engage in real‐time throughout the sprawling network.
There are also three essential “rules” that will enhance the new electric infrastructure long after it is engineered. First, as with the Internet, open and interoperable standards. Second, correct pricing models. We have to get this right because peak electricity can be 100 times more costly to produce. And third, the correct policies from the public sector that will make it easier for a century of regulation to be relaxed and reshaped in the name of progress and public interest.
5. What role will the Obama Administration and Congress have in this much needed transformation?
We must change the mindset—first and foremost. For too long, infrastructure has been associated with drudgery; now it must be seen as an opportunity to create jobs and prosperity. And new electric infrastructure must be viewed as an economic priority by Washington DC.
If a new smart grid doesn’t get the attention and funding it deserves, the downside consequences will be significant. We will see more dirty coal plants. We will have to cope with obsolete and over‐taxed electric infrastructure that has no role in the 21st century. We will witness the continuation of a regulated 19th century monopoly that desperately needs to change. Our electric infrastructure will remain vulnerable to natural disaster and terrorist attacks. And our global rivals—countries like China, which recently allocated $170 billion to upgrade its electric grid—will surge past us.
The upside opportunities are, without question, in the national interest. If Washington invests in smart grid infrastructure, we can seriously lessen our dependence on foreign oil because a new electric network will make it easier to use renewable energy sources. The efficiencies are promising as well; some analysts believe we will be able to reduce our energy consumption by up to 30 percent when all is said and done. For consumers, a smart grid promises lower energy costs and more good jobs. For the private sector, new electric infrastructure offers commercial opportunities on the same scale as the Internet Revolution. And for the environment, the proliferation of smart grid technology means the chance to completely transform our transportation sector from petroleum to electricity.
6. What other institutions and companies will have a transformative impact on the U.S. electric infrastructure?
Several states are already having a major impact on the growth and development of the smart grid. California, for example, has had a larger budget for this technology innovation than the United States government; and Texas recently installed major smart grid components. It’s hard to pinpoint the utilities of the future today, but several are aggressively pushing toward new and intelligent electric infrastructure. Some examples: Southern California Edison, Xcel Energy, Austin Energy and Sempra.
Top‐tier financial investors like Goldman Sachs, Kleiner Perkins and the Global Environment Fund have joined platinum companies such as GE, IBM and Google in committing capital to smart grid technology research, development and deployment.
And a number of emerging and fast‐growth companies are already staking claim to this potentially lucrative market space. In the demand response sector, Comverge and EnerNOC are setting the pace; in distributed resources, Grid Point is showing the way; in smart meters, Itron is breaking new ground; and in advanced controls, Areva T&D is moving forward.
7. What effect will the smart grid of the 21st century have on the economy and our lives?
There are six sweeping trends that smart grid implementation will help usher in: a brand new interstate and inter‐country highway system for electricity; a transformed transportation sector based on electric power; community‐scale micro‐electricity grids versus the centralized command‐and‐control electricity distribution we’ve known for a century; customized choice for consumers when it comes to electric consumption; smart infrastructure based on the digital revolution; the dawn of the electronomics era, which will generate jobs, opportunity and sustainable prosperity on an unprecedented scale that hasn’t been seen in decades.
