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Recent blackouts in India and parts of the United States are fresh reminders that grid infrastructure revitalization and improvement are truly global challenges. Service disruptions are another stressor to the global economy, as they produce economic losses through lost business and added costs to energy. According to market analysts at research publisher SBI Energy, responses to grid instability the world over are anticipated to include Smart Grid technologies as less costly complements to additional power plants, and transmission and distribution (T&D) infrastructure expansions and rejuvenation.
The Smart Grid’s domain is necessarily broad, as its flexible deployment is envisioned to tackle regional, national and continental grid problems around the world. The causes of grid instability may differ – voracious leaps in energy demand from developing countries, insufficient transmission and distribution (T&D) investment in deregulated markets of developed countries – but they share a common solution in the concept of the Smart Grid. Voltage disruptions, blackouts and brownouts are perennial problems because contemporary grid systems remain inherently disjointed. In India, energy demand is outpacing available generation. Transmission line congestion and regional bottlenecks in the United States’ patchwork grid have been implicated in grid disruptions; some major blackouts have been sourced to the malfunction or loss of one substation or switchyard.
Smart Grid strategies do not address grid instability through system redundancies or improvements to the physical integrity of a grid; instead, they enable the dynamic deployment of system resources (load shaving, additional generation [power plants, storage, etc.], voltage regulation) and provide added system flexibility through real-time, two-way communications. For instance, the loss of a transmission line or the malfunction of a transmission-to-distribution substation could be addressed by a microgrid, one Smart Grid feature, used to effectively “island” a distribution network. The microgrid is able to manage its own generators and consumption loads independent of an unstable or downed centralized grid.
“This ability [of microgrids] to improve energy security and reliability respective to the centralized grid has caught the attention of the market,” notes SBI Energy analyst Bernie Galing, “with commercial districts, campuses, healthcare facilities, military bases and neighborhoods alike making notable forays in microgrid development.” Galing appraises the market for microgrid projects related to greater Smart Grid development at 5% of the total Smart Grid market.
More than any other technology, smart meters seem to capture the essence of the Smart Grid. Through smart meters, individual ratepayers can monitor their real-time electricity use and current rates. Smart meters also provide utilities with tremendous volumes of data for analytics that can later be used to model programs incentivizing lower electricity usage during peak loads, but also demand response (DR) programs using two-way communications to directly cut or reduce individual loads in a household, business or factory. Nascent deployment of smart meters in India has been motivated by a desire to reduce electricity theft, but these Smart Grid components also form the foundation for the long-term development of DR programs that could prevent blackouts during exceptional loads in the growing country.
In the end, Smart Grid technologies represent a value proposition. In the United States alone, the cost of service interruptions is estimated to reach $71 billion by 2020 (American Society of Civil Engineers, 2012). The U.S. Smart Grid market by that year will represent less than 10% of that cost and an excellent investment over more costly grid infrastructure replacements or expansions.