Does It Matter How We Define "Smart Grid"?
Some folks like to think they can dismiss or minimize the value of smart grid developments by pointing out that no single, clear definition of the term exists. In that respect, the moniker is akin to "clean coal"; "cleaner coal" and "smarter grid" would be more appropriate, but neither is as powerful for marketing and rallying purposes. That said, those who understand smart grid issues are the first to note that what's in progress is the building of a smarter grid and that it is more a process than an end point.
As with any new technology introduction, there's an inevitable degree of chaos during the early years as a plethora of new companies and tools compete for preeminence and as standards are developed. Given that—prior to the recent, slow introduction of digital technologies to the electricity sector—the electrical grid has been almost unchanged for a century, we should expect some initial open-endedness to the reshaping and redefining of the grid. A certain level of trial and error learning up front is beneficial, lest an industry settle too quickly on choices that may later prove inferior.
Another reason for variations in smart grid definitions is addressed by this survey participant: "It is the time for people to start to get their minds around what [smart grid] means to them, and what the implications are to better optimize their houses going forward. I think we need to define what smart grid means for [us] because it means many different things to [many] different people. We all have different challenges within our service territory, and to define the requirements for smart grid against where the customer benefits associated within your specific service territory are key."
Another respondent noted that smart grid technology would, in the long run, likely not be deployed to the same extent in all service territories in all parts of the U.S. Perhaps digital home energy management, for example, doesn't make sense in some areas, but tools to enable faster response to outages (or the ability to avoid some outages altogether) and that enhance grid security would benefit everyone.
How to Fund the Smart Grid
Several individuals commented on the difficulty of funding smart grid projects. At least one seemed to indicate that, given the tight economy, transmission and distribution equipment was allowed to fail before it was replaced. With that sort of approach, the odds of replacing 100-year-old technology with the smartest alternative that can be integrated into the larger, smarter grid are very low, ultimately making the cost of a smarter grid even higher.
Some survey participants said they were relying on what regulators would permit in terms of cost recovery. Others, like this respondent, are looking to the federal government to solve the dilemma: "The government will have to mandate it. . . . It's very hard to make an economic case for right now up front. The payback is long term and you really have to force some level of standardization, common protocols across the systems to make it happen and get people comfortable with it."
However, one individual had a much different perspective: "The whole transmission and distribution infrastructure which is aging and coming up for renewal is a safe place to put your money. Whether it’s transmission or distribution, it’s the area of business that isn’t changing, does demand capital, does produce attractive risk-adjusted returns. So that’s the place to put your money while the other part[s] of your business are in turmoil."
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