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Why We Are Halfway Home to a Crucial Smart Grid Demonstration By Steve Pullins May 29, 2008 - 5:30:00 AM
Our industry has piloted many technologies, but deployed few. Can we understand the value of a single technology piloted in a couple different utilities? Or, must we integrate it with other technologies in a real-world environment to discover additional benefits beyond its solo application? We are halfway home to a robust and valuable demonstration program. Congress has authorized the demonstration. Now it must appropriate the funds to make it possible. Pilots vs. Adoption
When we scan for technology adoption, we find a sad picture -- many solo pilots, but few projects that integrate multiple advanced technologies. The reasons are simple. Deploying new technologies is a risk utilities and regulators do not want to shoulder alone. Often the result is a stockholder – stakeholder impasse. That impasse prevents us from growing our ability to deploy technology. To overcome this impasse and its negative results, someone must take that risk. Fortunately, the government, consumers, and utilities industry have forged a solid plan to move forward. In the Energy Independence and Security Act of 2007, Title XIII, a large-scale demonstration program has been authorized for the country. This program enables risk to be shouldered by more than stockholders and stakeholders. Now, the government is sharing the risk of advanced technology integration. This demonstration program provides an incentive to create significant cost-shared projects around the nation where multiple advanced technologies can be operated in concert. From these co-funded projects, we will develop experience in the science integration. Risks will be better understood by stockholders and stakeholders alike, reducing the resistance to change. Real-world data from demonstrations will provide the most realistic and convincing results on the benefits of integrated technologies. These results will reduce the risk or all stakeholders including the utilities, regulators, and consumers. The demonstration results will determine the technologies that provide the most benefit for the investment. Demonstration results will be transferrable to other electrical regions with similar characteristics, thus building momentum to deploy advanced sets of technologies. The demonstration results will provide the credible data needed by utilities and other investors to make the business case. The data will also assist regulators in creating a regulatory environment that enables utility, consumer, and societal benefits to be fairly recognized while enabling utilities and others to fairly recover their investments. The data will also educate consumers on the value of the technologies and their increased choices for electrical service. With a robust budget for demonstrations, many partnering organizations across the country could be directly involved in planning, conducting, and evaluating the demonstrations. These organizations would learn first-hand the value of integrated sets of technologies and be able quickly deploy them within their regions. Other organizations that are not directly involved in the demonstrations will observe the results and deploy the technologies within their own regions. The Final Hurdle
One last hurdle remains. Congressional committees have a decision about appropriating funds for these projects, which were authorized in the Energy Independence and Security Act of 2007. With this help, the industry will move beyond the current impasse. This catalyst will result in an accelerated modernization of the grid ultimately enabling a stronger, more competitive economy deserving of the 21st Century. Not everyone agrees. Opponents to such government co-funded programs label them as “industry welfare.” With such a strong linkage between the health of the electric service and domestic prosperity, it is difficult to see this point of view. Sometimes it’s better to be dollar-wise, than penny-foolish. Next month, we will focus on pathways for modernizing the grid.
Authors are Steve Bossart, NETL Senior Management and Technical Advisor and Steve Pullins, Team Leader, DOE/NETL Modern Grid Strategy
2007 Energy Independence and Security Act
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