The potential benefits are obvious: Install all kinds of monitoring equipment in personal residences, at small-business establishments, and out on the poles in the streets so that both providers and consumers know just how much electricity is being used at any given time to do what, and everybody stands to gain. Customers who have a better idea of how they’re using electricity and what they’re paying for it will consume it much more judiciously. The electricity provider, with much the same information plus still more coming from the distribution network, will be able to see problems coming and fix them more quickly and economically, before they start compounding and cascading. The provider, what's more, will have tools to influence consumer behavior so that all users of the grid become cooperative partners in making the electric power system more reliable and robust.
If it all comes out right, the overall efficiency of the power distribution system will be significantly improved, so that long-term investment in new generation can be reduced. Instead of having to add big new base-load plants that typically run on coal or natural gas, energy companies will have the option of building smaller wind farms or gas peaking plants instead.
The only thing is, nobody really knows just how big such benefits will be, how soon they will materialize, and how much it will cost to produce them. Seeking to get a handle on those issues, Xcel Energy, a Minneapolis-based distributor and producer of electricity, is in the midst of organizing an experimental project in Boulder, Colo., that it and its partner companies have dubbed SmartGridCity. Xcel, which claims to be the largest wind generator among U.S. utilities, hopes to figure out how to best design interactive systems that it can install in its own electricity distribution systems and then sell to others. Xcel’s partners, which make various kinds of smart-grid-relevant equipment and software, want to show potential customers around the world just how cost saving and useful their goods can be.
SmartGridCity is by no means the only project in the world flying the smart-grid flag, though it may be the most comprehensive. Billions of dollars are being spent in the United States and around the world on installation of smart meters, which represent just one facet of what smart-gridsters have in mind. (Smart meters tell customers and utilities when electricity is being used, communicating wirelessly or over power lines, thus opening up opportunities for conservation and improved load management.) In principle, many billions of dollars could be spent on all manner of gadgets from sensors mounted on wires and transformers to programmable refrigerators, washers, and dryers. And that doesn’t count the US $4.5 billion that the Obama administration plans to spend, as part of the stimulus package, on smart-grid demonstrations, innovative electricity storage systems, and transmission-system monitoring.