How close are we to a truly Smart Grid?

There are still hurdles to overcome, at least in the U.S., before the Smart Grid becomes reality.

By Sidney Hill, Jr. December 14, 2012

The Smart Grid has the potential to transform the way in which energy is delivered and used. The grid promises to make it easier for both residential and industrial users to manage their energy consumption to achieve the maximum in comfort and convenience at the lowest possible cost. The grid also could open some new career opportunities for industrial automation professionals.

Tim Wallaert has followed the Smart Grid’s evolution in his role as director of marketing for the energy segment with Belden, which supplies networking equipment for utility substations and other applications. Wallaert recently shared his unique perspective on the Smart Grid with Control Engineering.

CE: Where are we currently with the Smart Grid? How widespread is its implementation, and in what areas (geographically) is it the furthest along?

Wallaert: I think we should start by talking about what the Smart Grid is-and what it isn’t. There are so many perceptions-and misperceptions-about the Smart Grid that it’s always good to have a grounding conversation about it, if you will.

The first thing most people equate with the Smart Grid is smart meters. In reality, smart meters are only part of the Smart Grid.

I like to define the Smart Grid as adding two-way communication to the existing and emerging power distribution system.

The original power distribution system was built as a one-way channel. The Smart Grid is about adding twoway communication onto that channel for various reasons. So, you can assess the load on the channel, and you can monitor equipment performance downstream. And, especially important these days, is being able to control and adequately integrate sources of renewable energy that put power back on the grid.

Now, let’s talk about the status of the Smart Grid. From a global perspective, China probably is where it’s the furthest along. China has made massive investments in its overall electrical infrastructure, and much of that investment plays right into the Smart Grid. Europe probably is second, although they’ve had to slow down a bit recently because of the debt crisis.

What’s happening in the U.S. can best be described as an uneven rollout. That’s related, to a large degree, to the nature of the different countries.

For instance, China has one utility servicing most of its population. So, if that utility decides to build a nationwide grid, it can. In the U.S., we have a patchwork of utilities. Some are just involved in power generation, some are just involved in distribution, essentially operating the grid, and others are only involved in end-point customer servicing. You also have utilities of varying sizes-from large investor-owned utilities to municipal utilities and co-ops.

Each of these utilities has implemented something related to the Smart Grid. You might think that the larger utilities would be on the cutting edge of this movement. However, when you examine the landscape, you’ll find in a lot of cases, the smaller operations have stepped out to do some of the groundbreaking stuff.

CE: What are the remaining major obstacles to widespread implementation of the Smart Grid in the U.S.?

Wallaert: There are three major obstacles:

  • We’re talking about large capital investments made in existing infrastructure. Substations cost millions of dollars to build, and they are designed to last 40 years on average. You don’t want to throw all that out just to install new, smart equipment. Utilities have to figure out how to leverage those investments as they move to the Smart Grid.
  • Utilities have to answer to public regulation commissions and/or investors, and they have to demonstrate a financial payback for anything they do, including transitioning to a Smart Grid.
  • There is no true standard for Smart Grid equipment. Utilities need the certainty of being able to plug in equipment from different vendors and have it work properly. There is some movement in this area, but we’re not quite there yet.

CE: Control Engineering readers primarily are users of industrial automation technology. What are the primary things these users should know-from both a technology and an organizational perspective-in order to make a smooth transition to the Smart Grid?

Wallaert: If a company does nothing, the Smart Grid will come to it whether it likes it or not. Eventually, your utility company will connect smart meters to your plant; it will introduce new rate plans based on usage patterns. The utilities will reach out and touch the industrial automation guy. There will be considerations that will need to take place if your company has its own power generation that you want to integrate into the Smart Grid.

CE: Belden has published white papers stating that Smart Grid technology is blazing a trail for a new generation of industrial networks. What types of Smart Grid technology can industrial automation users adapt to their own networks?

Wallaert: A major concern for utilities is making sure that their networks run continuously without any corruption of data. They also need networks that are built for the long haul-that can withstand harsh environments. So, as utility companies devise these two-way communication networks that can perform safely and reliably under the harshest conditions, people running industrial plants can adopt that same technology for their own use.

CE: We hear a lot about the Smart Grid triggering a "data explosion" on utility system networks. Should users also expect a data explosion as industrial facilities start connecting to the Smart Grid? And if so, how should users react?

Wallaert: It’s funny you should mention that. I remember similar concerns being raised when Ethernet networks were introduced to production environments. Suddenly, plant managers were being deluged with all sorts of new information. They went from only looking at simple control information to seeing information on machine diagnostics, uptime parameters, bottlenecks, and throughput counts. And at first, they didn’t know what to do with all this new information.

Ultimately, they figured out they could use that information to improve both their production processes and customer service. Now, we see end customers placing orders online and entering requests to track those orders through the production process to their front door, and we think nothing of it.

Both utility companies and energy users will have similar experiences as they move to the Smart Grid. The utilities will find new ways to monitor equipment performance, which will save them money. And users will have easier access to information on how they’re using energy in their plants, which will help in finding ways of using that energy more efficiently.

CE: Will industrial automation users have to develop any new skills as companies move to the Smart Grid? Will there be potential new career opportunities once the Smart Grid takes hold?

Wallaert: The skills related to setting up, designing, and maintaining industrial Ethernet networks will remain in demand as the Smart Grid emerges. Companies also will need to think about analyzing the new sets of information they will get from smart systems.

In the realm of data analysis, there are two areas that may present opportunities for career growth. One is mastering the nuances of load shifting. The other is becoming an expert in old-fashioned efficiency.

Load shifting is important because utilities use it to optimize power delivery by getting as many users as possible off the network during peak usage periods. Industrial users can get substantial rate discounts if they agree to shut down production equipment during peak usage hours. They also can get discounts if they agree to shut down equipment if the utility notifies them of an expected "event," such as an upcoming heat wave, that is likely to trigger heavy demand for air conditioning.

Going forward, companies are likely to value professionals who can devise strategies for taking advantage of load shifting discounts without interrupting critical production runs. Individuals with a good grasp of creating overall strategies for optimizing energy efficiency also will be highly valued.

Companies will either develop or hire people internally to fill these roles, or they will contract with consulting firms that have that expertise.

CE: We’ve heard that the Smart Grid will make utilities more vulnerable to potential cyber-attacks. Should industrial automation users have the same concerns about cyber security and the Smart Grid that utility company managers have?

Wallaert: Any organization with communications equipment in its operational areas-whether it’s a wastewater treatment plant or a steel mill-needs to be concerned about security. Historically, the security on industrial automation networks was an afterthought, if it existed at all.

The primary concern was making it easy to get access to equipment to make sure it was up and running. There was a false sense of security because plant-level systems weren’t connected to the outside world. Utilities had the same bias. Then something called the Stuxnet worm came along, and that false sense of security was shattered.

(Editor’s note: The Stuxnet worm was a computer virus discovered in 2010 that targeted industrial automation equipment produced by Siemens. It is believed to have been transmitted via thumb drives, sidestepping the need for infected systems to be connected to outside networks.)

CE: Given all the potential pitfalls and challenges we’ve discussed, would you still advise industrial automation users to pursue moving to the Smart Grid, and why?

Wallaert: If there’s something to be embraced in the Smart Grid, it’s the opportunity to improve operations through energy efficiency.

Another trend I’m seeing is the implementation of micro-grids, which basically are small generating facilities with solar panels on the roof or wind turbines in the back of plants. These allow companies to cut their energy costs, and in some cases get money back from their utility. Any dollar that doesn’t get spent with your local utility is another dollar of profit for the company. With the price of these technologies now, the payback is getting very attractive. To be able to implement a solar farm on your campus, you’ll need to participate in the Smart Grid.

You’re going to have to be able to tell the main grid, "I don’t need power right now because I’m generating it myself, or I have excess power right now, and I’m selling it back to you."

Those are things related to the Smart Grid that companies-and control engineers in particular-should be prepared to manage.