September 1, 2010

What Utility Executives Think About the Smart Grid

By Gail Reitenbach, PhD

How Executives See the Industry's Future

As with any collection of individuals, these executives don't all agree on every issue. One likely reason is that they don't all currently rely on the same generation portfolio and are not all bound by the same state- or provincial-level requirements for renewables, for example. That makes their choices for "most important" issues over the next 5 to 10 years all the more interesting. When they were asked to use a 10-point scale to identify the most important issues from a list of 29 issues, respondents put these at the top:

• "An increase in electricity prices for end users
• Increasing environmental regulation
• Increased implementation of AMI/AMR [automated meter reading] technology
• Increased utility industry of technology (e.g. demand side management and smart grid technology)"

Note that two of those items directly involve smart grid technology and the other two do so indirectly.

Though the issues identified as "least important" don't relate directly to smart grid issues, three of them do so obliquely:

• "More LNG (Liquefied Natural Gas) terminals built
• Greater collaboration among industry leaders
• Increasing number of financial players in the market
• More coal generation built"

We'd expect less anticipated demand for LNG and coal because imperatives to build lower-carbon generation seem all but certain, and to the extent that those sources are renewables and/or distributed generation, a smarter grid is required to ensure that we have a reliable grid.

Other visions of the future included energy storage, though most noted that it is still too expensive for common use. In one respondent's view, "That's the one [technology] that I'd love to see but I think storage is 30-40 years away." (See the Sept. 2010 issue of POWER for a story on energy storage.)

One type of smart grid–integrated energy storage option is plug-in electric hybrid vehicles, and some comments indicated that the individuals grasped the business potential of a new nighttime load.