Upgrading Electric Grids: The Cost of Mitigating Power Grids for Smarter, Utility Scale Consumption

For years engineers and utilities have been waxing on and on about the future of the utility grid and the economic importance of having a smarter, more flexible infrastructure for distributing electricity. But the conversation goes silent when it comes to the price tag: $1.5 trillion.

There’s no doubt that a radical improvement needs to be made to the aged infrastructure that carries electricity from generation plants to homes and businesses. Some places on the grid, like stretches between L.A. and San Diego, are as congested as the freeways at rush hour.


This is where energy intelligence comes in. Energy intelligence is often defined as a subsector of traditional energy efficiency, focused on utility-scale distribution, grid connectivity and two-way communication with end users and devices. It becomes part of the nervous system that helps connect and make the grid more sentient.

By using energy intelligence technologies, grid-connected utilities and providers will be able to manage their generation and supply in accordance with end-user usage patterns. And that means power is distributed more intelligently to minimize load and enable active power-distribution management to optimize resources.

It may cost the U.S. $1.5 trillion to upgrade to a smart grid.
(Source: Federal Energy Regulatory Commission)

With the new infrastructure in place, customers can make informed decisions about their energy use, so they can purchase it at times when it’s cheapest. The way to make much of that happen is with smart meters and power management dispatched to homes and businesses where they will deliver savings and improved efficiency.

Trouble is, the next phase of bringing solar and wind energy sources online will require more engineers trained in power electronics. Unfortunately, power electronics was taught widely at universities 20-30 years ago but now few teach it.

“Power electronics is really going to be the critical area, along with interface technologies for converting AC current to DC and vice versa,”

says Dick DeBlasio, laboratory program manager for electricity programs at the National Renewable Energy Labs in Boulder, Colorado.

It is part of an evolutionary process that aims to bring a grid built on 50-year-old analog technology up to speed with the 21st century shift to digital. “Interoperability is really the big part of the focus for researchers and engineers,” says DeBlasio. Part of the problem is where to place sensors in buildings and on the distribution system.

The control and monitoring of the smart grid it is not easily done, as an estimated 10-15 percent of energy is lost in delivery. Another critical item for the future of the grid is storage and government R&D in this area has been abysmal for a long time.

The targeted areas for smart-grid R&D activities are in four basic categories: architecture and communication standards; monitoring and load-management technologies; monitoring and control for demand-side management; advanced components and operating concepts. . “We have a chance to be an early adopter of this technology,” said John Kunhart, managing director and co-founder of American River Ventures in Roseville, CA., at a recent panel discussion on Energy Intelligence: Investment, Risk and Regulation for Advanced Connectivity and Infrastructure sponsored by the VC Task Force.

Standardized architectural designs and interfaces are important to stimulate developments toward a smart grid. As part of that effort, universal standards have been proposed, like the IEEE 1547 series of standards on interconnecting distributed resources with electric power systems by the National Renewable Energy Laboratory.

So what will it take for energy intelligence to reach its potential and simultaneously reward investors? Successful growth in this area will require a detailed understanding and navigation of the complex interplay of risk mitigation, regulation and regulatory influence, and infrastructure development.


2 Responses to “Upgrading Electric Grids: The Cost of Mitigating Power Grids for Smarter, Utility Scale Consumption”
  1. Cyril R. says:

    That 1.5 trillion dollar figure is not very useful unless it is compared to the economic benefit. That is, compared to doing nothing. Scaring people with big numbers is not going to solve real problems.

    I’d imagine the 1.5 trillion would be spent over many years, say 15 years that’s 100 billion/year. That’s only a dollar per person per day. I spend more than that on coffee!

    What is the economic cost to me of collapsing electric grids? Much more than what I spend on coffee, I’d reckon.

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