The smart grid is born of modern necessity; this article discusses a brief history and establishes practical relevance for a smarter grid.
The term smart grid has been in use since at least 2005, when the article “Toward a Smart Grid,” written by S. Massoud Amin and Bruce F. Wollenberg, appeared in the September-October issue of Power and Energy Magazine. For decades, engineers have envisioned an intelligent power grid system with many of the capabilities mentioned in formal definitions of today’s smart grids. Indeed, while the development of modern microprocessor technologies has only recently begun making it economical for utilities to deploy smart measurement devices at a large scale, its humble beginnings can be traced as far back as the late 1970s, when Theodore Paraskevakos patented the first remote meter reading and load management system .
For the next several decades, our global energy strategy will inevitably involve upgrading to a more intelligent grid system. Three fundamental motivators are driving this change: current bulk generation facilities are reaching their limit; utilities must maximize operational efficiency today in order to postpone the costly addition of new transmission and distribution infrastructure; and they must do all of this without compromising reliability of the power system. In fact, many governments, including the Essential Services Commission (ESC) of Victoria, Australia  are adopting legislation to make crucial components of a smarter grid system mandatory. In Canada, Hydro One’s distribution system has millions of smart meters already installed  in preparation for time-of-use rates slated to become mandatory by 2011 .
Over the next several decades, consumer advocacy groups and environmental concerns from the public will prevent the construction of centralized generation plants as a measure to meet quickly growing demand for electric power. Moreover, global electricity demand will require the addition of 1000 MW of generation capacity as well as all related infrastructure every week for the foreseeable future . Traditional bulk generation plants are now prohibitively expensive to construct due to cap-and-trade legislation, which places severe financial penalties on processes that continue to emit carbon dioxide and other harmful greenhouse gases. In conjunction with the higher economic cost, there are also social pressures and widespread concerns about long-term sustainability.
With the exception of hydroelectric and geothermal power, renewable energy sources such as wind and solar present unique challenges since they are unpredictable by nature and may vary significantly in their power output due to unpredictably- and rapidly-changing external factors. Subsequently, we must retrofit the existing power grid to ensure that it can maintain system stability despite these fluctuations in power output. Furthermore, utilities must have the ability to monitor key indicators of system reliability on a continual basis, particularly as we approach the grid’s maximum theoretical capacity.
A smarter grid can also improve operational efficiencies by intelligently routing different sources of energy. Because we currently send electricity from distant power generation facilities to serve customers across hundreds of kilometres of transmission lines, approximately eight percent of the total generated electric power is lost as waste heat . Moreover, we can make better use of the existing power generation infrastructure by reducing peak demand; in fact, the International Energy Agency found that a 5% demand response capability can reduce wholesale electricity prices by up to 50% .
|||Theodoros G. Paraskevakos and W. Thomas Bushman, “Apparatus and method for remote sensor monitoring, metering and control,” USPTO#4241237, December 30, 1980.|
|||Essential Services Commission, “Mandatory Rollout of Interval Meters for Electricity Customers,” Essential Services Commission, Melbourne, Victoria, Draft Decision.|
|||Hydro One. (2009, June) One Million Smart Meters Installed – Hydro One Networks and Hydro One Brampton Reach Important Milestone. [Online]. http://www.hydroone.com/OurCompany/MediaCentre/Documents/NewsReleases2009/06_22_2009_smart_meter.pdf|
|||Ontario Energy Board. (2010, February) Monitoring Report: Smart Meter Deployment and TOU Pricing – 2009 Fourth Quarter. [Online]. http://www.oeb.gov.on.ca/OEB/Industry/Regulatory+Proceedings/Policy+Initiatives+and+Consultations/Smart+Metering+Initiative+%28SMI%29/Smart+Meter+Deployment+Reporting|
|||The ABB Group. (2010, March) Performance of future [power] systems. [Online]. http://www.abb.com/cawp/db0003db002698/c663527625d66b1dc1257670004fb09f.aspx|
|||Hassan Farhangi, “The Path of the Smart Grid,” Power and Energy Magazine, vol. 8, no. 1, pp. 18-28, January-February 2010.|
|||International Energy Agency, “The Power to Choose: Demand Response in Liberalised Electricity Markets,” International Energy Agency, Paris, France, 2003.|
I originally wrote this article for a report submitted to ECE4439: Conventional, Renewable and Nuclear Energy, taught by Professor Amirnaser Yazdani
at the University of Western Ontario.