The
$600 million that Dominion Virginia Power wants to invest in
creating the rudiments of a "smart grid"
is a fraction of the $1.8 billion the power company
plans to spend on a new coal-fired power plant in
Wise County -- and a drop in the bucket next to the
multi-billions it will pay one day to build a third nuclear generator at its Lake Anna facility. But in
the long run, that $600 million will do more to
change the way Virginians think about, and interact
with, electricity than any power plant ever could.
In its
early phases, Dominion's version of a "smart
grid" will be visible mainly as a
"smart meter" where the electric current
comes into your home. That meter will allow Dominion
to save a modest amount of electricity by fine-tuning
the voltage it delivers through its distribution
lines and will save a lot of labor spent reading the
meters every month. You probably won't notice much
difference in the way things work.
But the
smart meters will do one other very important thing:
They will make it practicable on a large scale to
implement rate programs that reward households
both for conserving energy and for deferring
electric consumption, like running the clothes drier
or recharging electric car batteries, to times of day when it's
cheaper for the power company to produce
electricity. In the longer run, the meter at your back
door could become a nerve center for converting your residence into a
"smart house" where your HVAC,
refrigerator and other appliances collaborate to conserve energy.
"Today,
the utility industry views the meter as an end point
of the [electric distribution] system," says
David Green, Dominion Virginia Power's senior vice
president-customer service. As manufacturers
increasingly embed consumer appliances with chips,
they'll be able to communicate. "With a smart
grid, the meter becomes a network node within the
distribution system that can talk to appliances,
pool pumps, water heaters and air conditioner
units."
Imagine
that: the smart grid as an electrical distribution
system that extends into your house and interacts
with your
appliances to utilize electricity more
efficiently.
And
that's just the beginning.
Saifur
Rahman, an engineer with Virginia Tech's Advanced
Research Institute in Arlington, says that it is a
misnomer to describe Dominion's plan as a
"smart grid." Smart meters, yes... But
smart grid, no.
Rahman visualizes sensors and intelligent controllers installed at
every point of the electric power system:
generators, transmission lines, sub-stations,
distribution lines and the home. Such a system would
be "self healing" -- capable of detecting
disruptions and bypassing the affected area -- and
it would integrate variable power sources such as
wind and solar power into a smoothly functioning
whole.
For
anyone who wants to see Virginia move toward clean,
renewable energy sources, that last point is
critical. Wind turbines spin electricity only when
the wind is blowing. Solar units generate power only
when the sun is shining. It is Dominion Virginia
Power's mandate to keep the lights on no matter
what. It will take a highly sophisticated grid to
ensure that conventional power sources kick in to supply
juice where it's needed, when it's needed, to back
up the renewables.
But
that's in future. For now, Dominion has presented a
plan to the State Corporation Commission to take the
first tentative step.
Green,
the DVP official, says the smart meter will reap
immediate efficiencies that will pay back $1 billion
over 15 years. He checks off the following benefits:
-
Meter
reading.
Currently, DVP dispatches meter readers to drive
down streets and read meters by means of a
short-range electronic signal. That's more
efficient than the older method of inspecting
meters visually, but moving to centrally
monitored smart meters is more efficient
still.
-
Voltage
conservation. By
delivering a more precise
voltage to the home, DVP can save energy. To maintain
uninterrupted service against the background of burps, hiccoughs and other fluctuations in
demand, DVP typically supplies marginally more electricity
than customers actually consume. By gauging changes in demand with more
precision, the smart meters will reduce the
voltage cushion needed to ensure
reliable service. That will translate directly
into less electricity generated and fuel
consumed.
Smart meters also will improve service when storms
knock out service. DVP already has sensors that
detect when large outages occur, but they can't tell
when individual houses are affected. The smart
meters will supply that information.
The
full impact of smart meters won't be felt, however,
until DVP implements "demand-response"
programs on a wide scale. Dominion has already
embarked upon a pilot program to equip homes with
monitors that show customers how much electricity
they're consuming at any point in time. But the holy
grail of demand-management programs is
variable pricing -- charging different rates
depending on what it costs DVP to supply power at
any given point in time. The goal is to incentivize
customers to conserve or to shift electric
consumption to off-peak periods when the cost of
power generation is only one third or one quarter of
the cost during peak periods.
Savings
from the smart meters and a clutch of other energy
conservation measures
-- incentives for EnergyStar appliances, carbon
fluorescent lights, energy audits and the like --
could reach 2.6 million megawatt-hours annually by
2013, the company says. That's enough to power
216,000 typical homes.
DVP's
energy conservation initiatives will eliminate the
need for two small power stations in the future and
delay the need to build two others, Green says.
Those plants haven't been announced, but they are
part of DVP's 15-year integrated resource plan.
Longer-range,
DVP is preparing for the advent of hybrid plug-in
vehicles, which will transform the economics of
electric power generation. Says Green: "Most
manufacturers are expecting plug-in hybrids to be
available on a widespread basis in the 2010-201 time
frame. ... We were in Detroit just a couple of weeks
ago. The mass production is coming from all of the
major manufacturers in two or three years. We have
to anticipate it. If we don't, it will exacerbate
our peak. ... We want to be at the table with
General Motors."
What
concerns DVP is the prospect of hundreds of thousands
of commuters returning home from work after 5 p.m.,
when summer air conditioning is already stressing
the system, and plugging in their cars to recharge
their batteries. On the positive side, variable
pricing will encourage customers to defer the
re-charge until later in the evening, or possibly to
let their hybrid cars feed the grid with electricity
from their batteries during peak periods and
recharge when demand slacks off. "The ability
to send pricing signals is instrumental to
this," says Green.
The
SCC has been following the dialog over smart grid
technology, says SCC spokesman Ken Schrad, and the staff sees
potential to use price signals to encourage
customers to shift electricity demand to off-peak
periods. However, a number of regulatory issues need
to be worked out. Summarizes Schrad:
-
What
is the best method for determining if a given
conservation program is fair, cost effective and
efficient?
-
How
should power companies be allowed to recover the
costs of such programs? Should demand
response/energy efficiency programs be put on an
equal footing with building new generation and
transmission facilities?
-
How
should rate schedules be structured to send the
right price signals to customers to take full
advantage of smart grid technologies and shift
demand to desired times of the day?
Given
the political imperatives of ensuring reliable electric supply
and protecting consumers from rate hikes, Virginia
is likely to proceed one step at a time, testing and
piloting each new initiative carefully. But over the
next 10 years, the "smart grid" should
make our current system look very much like a dim
bulb indeed.
--
August 4, 2008
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