Higher intellegence

Wind turbines above an apartment building.

Soon after President Obama took office and signed the American Recovery and Reinvestment Act into law, many were calling 2009 “the year of the smart grid.” After all, the bill set aside $4.3 billion to help deploy a smart grid that creates a versatile communications network on the nation’s electric grid and includes features such as two-way power flows, time-of-use pricing and self-healing grid components. Even with billions of dollars of federal money and private investment being channeled to smart grid implementation, the nation’s utilities and technology companies have a long way to go to make the smart grid a reality.

Increased demand for energy creates numerous challenges for the nation’s utilities to deliver reliable power via the grid, which is only 99.97 percent reliable. Yet the grid still allows power outages that cost Americans at least $150 billion each year, according to the U.S. Department of Energy (DOE). Bringing the nation’s aging grid up to speed with 21st century technologies would enable it to monitor everything from large-scale power plants to small-scale solar and home-based appliances, better preparing utilities and transmission providers to meet peak demands without having to build expensive “peaker plants” that rely on fossil-fuels to generate power on a moment’s notice.

Many such technologies already exist, and the grid is already changing.The number of smart meters installed in the United States increased by 5.8 million between 2006 and 2008, according to the Federal Energy Regulatory Commission. That number is expected to reach 50 million in two years, according to Edison Foundation’s Institute for Electric Efficiency. The smart meter is just one technology that would provide consumers with more knowledge and more choices in a smart grid.

Even as change is taking place, there are still many issues, including regulatory requirements, the built environment, workforce needs and data management, holding the smart grid back. In short, the United States is a long way from being ready for the smart grid even as it starts to come online.

“It’s like trying to build the plane as you fly it or change the wheels on a moving bus,” says Matt Spaur, senior product marketing analyst at Itron (NASDAQ: ITRI), one of the leading makers and installers of advanced metering infrastructure (AMI). “Utilities are required to provide 100 percent reliability and safety at the lowest cost. They’re being told to change out much of the infrastructure as fast they can. Those demands can be contrary.”

Regardless, it is what utilities and regulators are being forced to do thanks to a pair of energy bills that became law during the Bush administration, as well as the Obama administration’s focus on creating a “New Economy” rooted in renewable power sources and energy efficiency. Coupled with billions of dollars in stimulus funding pouring out of DOE, the time for getting the smart grid in place is now.