A Monday Morning Smart Grid Roundup

Lynne Kiesling

The development and evolution of smart grid technologies, policies, and investments continues apace. Some interesting contributions to the discussion are:

  • A Popular Science article on “reinventing the grid”: Despite the over-the-top rhetoric that incorrectly focuses on “reinvention” instead of evolution, this article provides a reasonable overview of the current technology and policy issues. It starts with the by-now well-worn fact that distributed digital intelligence is crucial for managing the interconnection of variable sources, such as wind and solar. It also falls into the false trap of conflating “smart grid” with constructing more transmission capacity to reach places where wind and solar farms are likely to be most efficient and profitable. And while the article does not add anything meaningful on the potential use of price signals and transactive technology to achieve coordination, at least it does admit for “both utilities and consumers” having more informed, timely, and granular control over both electricity supply and demand.
  • A good Washington Monthly article by Mariah Blake: its hook is a really interesting discussion of the origins of Peter Corsell’s company GridPoint, but she then goes on to discuss the important institutional-regulatory-policy changes that would enable such entrepreneurs to unleash the potential value in consumer choice, digitally-enabled interconnected distributed generation, and a transactive electric power network. She also discusses the lessons we learned from the GridWise Olympic Peninsula Project. If you are looking for an in-depth profile that goes beyond the engineering, this is a good resource.
  • The IEEE’s periodical Spectrum has a special smart grid issue, with three lead articles on various aspects of smart grid technology and policy. As with the Popular Science article noted above, the focus here is more on engineering and supply than on consumer behavior, pricing, and coordination, but the articles are thorough and well-written. Their intro notes, with reference to smart grid stimulus funding, that “… all that money will be well spent only if regulators are as inventive and intelligent as transmission and distribution engineers have been.” I am concerned that the focus here is too much on a top-down paradigm of regulators manifesting their “inventiveness and intelligence” by actively putting in place regulations, rather than thinking bottom-up and focusing on changing existing regulations and removing those that pose entry barriers to many of the new transactions and new value propositions made possible by smart grid technology.

The next couple of weeks will also see more developments in the smart grid interoperability standards work. Will keep you posted if important economics understanding is part of the story.

4 thoughts on “A Monday Morning Smart Grid Roundup

  1. Hello Lynne,

    I agree with you that the technical contibutions are missing the customer orientation required to go forward. I plan to read the Mariah Blake’s article to see the insights on the important institutional-regulatory-policy changes.

    Last night I posted the Electricity Without Price Control article “Strong Evidence of Why Utilities as We Know Them Will Fail (please hit the link ),” which I believe qualifies for A Monday Morning Smart Grid Roundop.

    Best regards,

    José Antonio

  2. Mariah Blake’s article does a good job of showing the entrepreneurial energy being tapped at the intersection of the information technology and energy technology industries. The potential value here is immense.

    Blake also hones in on the main regulatory thickets that impede a more dynamic, customer-oriented electric power industry. However, her brief excursion into the history of regulation is a little slipshod. Most states had state-level rate regulation for protected monopolies well before PUHCA was passed in the mid-1930s. I’d add municipal corruption concerns to holding company abuses as part of the early history of electric regulation.

    I’m also not so keen on, say, paying Duke energy for not building power plants or imposing regulation targeted to reducing peak demand by some fixed percent. Consumers will be better off scraping away excess regulatory programs rather than adding to them.

  3. Thank you Michael,

    I read Mariah’s article, and I agree with all of your points.

    Modifying a bit one of Mariah statements, I suggest that “… without bold action on the federal level, we will never see the full potential of the [strong and] smart grid.”

    President Obama has the opportunity to open the power industry to innovation, by striking a transcendental agreement with key states legislatures, to get the genie out of the bottle, while giving those states a global power industry advantage.

    Do you think that is possible?

    Best regards,

    José Antonio

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