The Inevitability of Smart Grid

Expansion of Driving Forces Point to Smart Grid

Much of the current industry discussion around Smart Grid tends to focus on its benefits related to improved environmental stewardship through energy conservation and the introduction of renewable energy resources. Although these benefits will have a permanent role in the overall business case for Smart Grid investments, there are other industry forces and trends that are gaining increasing importance in overall Smart Grid strategy and planning initiatives.

These forces and trends include:

• As the overall global economy recovers the demand for energy and specifically electricity will increase. Based on relatively conservative assumptions, without a major change in customer consumption patterns and behavior some industry observers have estimated that this increased demand equates to an additional 300 nuclear and fossil generating plants.
• Independent of economic growth, the time for electric vehicles is upon us. This will only serve to accentuate the need for new power generation.
• Alternative energy solutions (hydro, wind and solar), though part of the solution, cannot be physically or economically leveraged to address the magnitude of the power gap described above, and
• The realities of not-in-my-backyard (NIMBY) sentiments against new nuclear power and the cost impacts of the Clean Air Act on any new fossil generation  will limit any potential measures to close this gap by merely adding more primary generation.

Smart Grid Meets Numerous Challenges

Add to these driving forces the realities of an aging electric transmission and distribution infrastructure and its impact on providing reliable service, there is no avoiding the need to invest in solutions that acknowledge the need to:

• Accommodate growth
• Improve reliability
• Diversify and optimize the portfolio of energy technologies
• Modify customer behaviors towards energy usage

Smart Grid provides the framework for accomplishing this as both an:

• Initiator of a holistic power production and grid modernization strategy, and
• Catalyst for introducing new technologies and pricing models to drive the required socio-economic changes.

Challenges Remain

Customers are likely to experience a significant increase in the cost of electricity and in the short-term brownouts (perhaps even rolling blackouts) will be a normal event, particularly in the coastal areas with larger populations. Given the political and societal interest in the topic, Smart Grid creates a platform to communicate expectations and position the discussion for acceptance by a broad range of stakeholders.