The Smart Grid
IEEE P2030 Working Group Chair
IEEE Steering Committee on Electric Vehicles
John D. McDonald
General Electric Digital Energy
S&C Electric Company
IEEE Technical Activities
IEEE Internet Computing recently held a roundtable discussion on the smart grid and invited industry leaders to participate. Harold Tepper, a senior technical project manager for the smart grid Initiative with the IEEE Technical Activities, moderated the discussion. The participants included
- Dick DeBlasio, IEEE P2030 Working Group chair, Chief Engineer, National Renewable Energy Laboratory, Member IEEE Standards Board of Governors and IEEE Standards Board liaison to the Department of Energy;
- Russ Lefevre, IEEE Fellow, IEEE Steering Committee on Electric Vehicles chair, and adjunct professor of physics and electrical engineering at the University of North Dakota;
- John D. McDonald, IEEE Fellow, IEEE Power and Energy Society past president, and director of technical strategy and policy development for GE digital energy; and
- Wanda Reder, vice president of Power Systems and Services Division of S&C Electric Company and IEEE Power and Energy Society past president.
Harold Tepper: The smart grid could be the largest-scale blending of disparate industries, utilities, telecommunications, and information technology, among others, than has ever occurred on a global scale. And certainly it's one of the largest opportunities of this new century, transforming the global energy grid from analog to digital, and it's really beyond multifaceted.
Today, we'll look at several aspects of this transition, asking questions of four IEEE Smart Grid experts.
Let's start with Wanda. Wanda, do you see the smart grid driving the restructure of the power industry, not only the role of the utilities but of the IT and Internet companies like Google, Microsoft, and Cisco?
Wanda Reder: Yes, I think we're entering a convergence of different industries right now, where the Internet and communication companies are becoming more intertwined with traditional power industry-type companies.
And, with that, we're used to seeing a high rate of change and turnover of technologies in the high tech side. The power industry has been relatively steady state for quite a while. That's not to say that we haven't integrated technology into the power system along the way because we have. However, as we modernize the grid with more customer involvement, renewables, automation, and self-diagnostics the rate of change is significantly greater than in the past. We're now faced with paradigm shifts in utility operations, data management, regulations, and rate structures. There's a lot under consideration at the moment. So, the short answer is yes.
Tepper: John, what's your perspective on the potential restructure of the different industries?
John McDonald: I think the biggest thing that's happened, like Wanda said, [is that] the industry has been fairly staid for many decades. But just as with the advent of what we call the smart grid and the opportunities that are out there, it's the opportunities for change and companies that are change agents, such as Google, Microsoft, and Cisco, can now see tremendous potential opportunities in our traditional electric utility space.
For example, Cisco had never been interested in hardening their networking equipment because the marketplace just wasn't as big as the office equipment market for Cisco. And, now, they're putting tremendous resources into complying with the IEEE standards that regulate networking equipment, and they're now committed to being able to provide that to utilities.
Google, with the power meter, sees opportunities with respect to metering information and being able to provide that information to others. There's definitely a restructuring taking place, and it's driven by, for the first time in a long time, the opportunities of change in our electric utility industry.
Tepper: Dick, with respect to the transition to the smart grid, where would you say we are in the US, and how would you compare other countries to the US in terms of how far along they are?
Dick DeBlasio: I think there are multiple answers, but as far as the US North American power grid goes, it's in need of modernization. I think we're going to go in that direction with the scenario that smart grid provides.
The smart grid also provides a new business model or opportunities for customer participation. It provides some impetus and motivation because with communication and Internet service providers, such as Microsoft, Google, Cisco, and others, they provide a service that's desired by many, which will encourage interplay with the modernization.
When it comes to other countries or other parts of the world, it seems that everybody is jumping on board the smart grid scenarios relative to upgrading or modernizing their grid. Some countries have gone more toward distributed generation and are actually engaging more in the sensor controls, protective systems, and communications and integrating the IT communications area, which is really the exciting part, as John and Wanda indicated.
My feeling is that pulling these three areas together—and I hope others (technical disciplines) in the future—really provides new opportunities for engineering innovation and IEEE participation. We need to start melding our expertise and disciplines and focus toward broader perspectives, and working on the smart grid is one way to do that.
We have a big service to provide to the world, and I think we have a lot of the expertise in this country and this industry to do that.
Tepper: Russ, Dick mentioned customer participation and the fact that this transition will lend itself to an increase in customer participation. Where and how do you see the customer participating? Is that something that you see coming soon or later in the transition?
Russ Lefevre: My perspective, of course, is associated with electric vehicle deployment. Most of you are probably aware that US President Barack Obama, in his State of the Union message on 25 January 2011, called for deploying a million electric vehicles by 2015. The message that comes out of that, of course, is that there's more to that than meets the eye. There's a well-known chart from the US Department of Energy that shows that you can produce 1,200,000-plus vehicles by 2015. But there's a question about whether you can sell 1,200,000 vehicles by 2015.
What that has led to is that there are many incentives—federal and state—to bring customers to the point of buying electric vehicles. If a customer is going to buy an electric vehicle, there's no question that there's going to be a significant impact on the smart grid.
Tepper: In terms of electric vehicles, how is the US positioned against other countries? Are we in step with everyone else?
Lefevre: It's a mixed bag. France, for example, is talking about 100,000 vehicles. The US is talking about a million. Spain is talking about numbers around a million. China might be where the biggest impact or the biggest incentives are. China has actually made the electric vehicle market one of its strategic objectives.
Tepper: I'd like to touch on the subject of renewable energy for a minute. Dick, how do you see renewable energies like solar and wind, as well as distributed generators for electric vehicles? How do you see that impacting the transition to the smart grid?
DeBlasio: Technologies in the renewable area—such as solar and wind—are available when the resource (solar radiation and wind) is available. So, some form of storage would be idea in utilizing the full potential provided by solar and wind. However, without storage, we can design and optimize their use through smart grid technologies and operations specific to their applications—this is the exciting part of using all distributed resources, including solar and wind configured as microgrids or as power clusters that can be interconnected into the grid or to the load as planned and required.
The objective of having 20 percent of our total energy needs met by renewable sources is viable, not by the nature of the renewable itself, but by the nature of how we use the renewable. I chaired the IEEE 1547 Standard for Interconnecting Distributed Resources with Electric Power Systems published in 2003, and two-way power flow is addressed for all distributed generators (including stationary and nonstationary), thus including electric vehicles both as a distributed generator storage source but providing to-way power to the grid if permitted by the utility and meets IEEE 1547 requirements for power flow, functionality, and protectiveness of that interconnect. The smart grid (interoperability and optimization of the electric power system) then adds another dynamic—data management and communications—that really complements this interconnection scenario with respect to using these technologies.
Again, I see in the near future utility grid interoperability using renewable energy (photovoltaics and so on) and other distributed generators (including electric vehicles) operating at the interconnection point (at the common point of coupling—that is, charging station, home distribution panel, and so on) to the utility distribution system. The electric vehicle, when designed and configured to both accept power to charge its batteries or discharge its battery power back to the grid (that is, loads), two-way power flow is established but with the agreement to allow this operation with the utility and independent power producer (distributed generators—the electric vehicle owner). The smart grid or interoperability capabilities will let this concept be realized and promote a new revolution in the future power grid as well as our transportation infrastructure.
I agree with Russ that there are all kinds of scenarios around the world, but it seems that one of the best possibilities in grid design and operation can be found in the emerging countries where they're developing their infrastructures and can allow variabilities in their power structures. So again, I see a bright future for renewables and electric vehicles.
Tepper: Wanda, both Russ and Dick either mentioned storage or battery storage relative to both renewables and electric vehicles. What kind of storage requirements will there be for the digital grid, and what work is under way to realize those requirements?
Reder: Yes, storage can really be a game changer for the smart grid, and, of course, there are a lot of technology advancements and a lot of research efforts going on in that space. But, to answer the question, you have to ask, "What are the benefits and what are the value streams?" And there really are many. So, the requirements, of course, must line up with the value streams.
For example, storage can be useful for market benefits, such as energy arbitrage, frequency regulation, and generation capacity. If you look at delivery services—capacity upgrades or additions can be deferred, electric reliability increased, voltage better regulated, and losses minimized. These value streams require a wide range of functionality. The storage requirements must be matched with the objectives. For instance, if consumers have more plug-in vehicles and solar roof tops, we can use those to better manage the loads and distributed generation sources for increased system efficiency and utilization. Storage can also facilitate the interaction of intermittent renewable generation with the grid for increased stability and to absorb excess green generation to be used at a later time when electrical demand increases. Many benefits exist with varying requirements that are driven by the application. Over time, storage has the potential to significantly change how we design and operate the grid.
Tepper: John, relative to storage, do you see technical issues or even regulatory obstacles to moving quickly in the storage area?
John McDonald: Yes, because policy and regulatory are very important with respect to renewables and the incentives and drivers for renewables. As the penetration of renewables gets greater—and the volatility associated with that renewable generation—the system frequency can be very volatile, and some amount of energy storage is needed.
Tepper: Let's stay with you for a minute. You mentioned policy and regulatory issues. Policy and regulatory environments are drastically different between states and around the world. How do you see these differences impacting the adoption or the transition to the smart grid, not only in the US but outside it?
McDonald: Yes, this is a huge question because the success of the smart grid is really like a three-legged stool. Policy and regulatory are one of the legs; industry standards is a second leg, which is very critical; and the third is the technology itself. Associated with the technology is the value proposition: What is this solving for the customer, and what's the value?
One of the things that's important is to realize that policy and regulatory aren't standalone but are very strongly tied to standards—and very strongly tied to technology—and that's why we need to look at the relationships between all three.
But the hardest thing I deal with in my work at GE and with the IEEE is [that], state to state, we have very different policy and regulations, and we spend a lot of time with the US National Association of Regulatory Utility Commissioners, with the different state commissioners and influencing them to change policy in their states to be more supportive of the smart grid.
On the other hand, we have federal policy too; in the US, we have no national energy policy per se. So, what complicates things is a utility company like American Electric Power that operates in 11 states and basically has 11 different smart grid strategies because each state it operates in requires a different strategy. It's very complicated.
And outside the US, every country has its own policy and regulations. When we get into standards, we have local and regional standards, and then we have adoption of some international standards, such as from IEEE. Obviously, it would be easier if we minimized the amount of local and regional standards and maximized the adoption of international standards.
For companies like GE, we could develop and manufacture one product and have that product be acceptable to different countries. Now, in many cases, you have a product that has to be changed for each different country.
So, harmonization of policy and regulations first in the US and second across the EU would really benefit suppliers; it would benefit the customers because the customers would end up paying a lot less money for the products they purchase. A lot of us are trying to push for harmonization because it would make the chances for the smart grid to succeed much greater.
Tepper: Wanda, relative to policy and regulatory environments, do you think the utilities are doing a good job making their case to the regulatory bodies state by state, and, if not, is it an issue of education, or are there other issues that you think need to be addressed for the state regulatory bodies to become more comfortable with the transition to the smart grid?
Reder: It's hard to answer that with an overarching statement because every utility has a unique relationship with the state regulator. Generally, utilities have an aging asset base, much of which is fully depreciated. Utilities are often faced with a challenge of uncertainty on how they'll be able to recover expenses for upgrading and modernizing the delivery system.
Regulators and utilities are on a journey to build an understanding of costs, benefits, and consequences through a whole host of technical demonstrations to further discussions for successful regulatory models. One area of discussion involves traditional asset classification, which might be a barrier to deploy some emerging smart grid technologies. For example, who has decision-making authority for a large-scale battery installed at a substation or on the distribution system to generate power, defer capacity upgrades, relieve transmission constraints, integrate renewable, and possibly provide ancillary services?
State regulators will need to coordinate with Federal policy makers and be closely aligned with transmission markets to work through this jurisdictional challenge. This is a broad and complex topic spanning far beyond the relationship between any one particular utility and their state regulatory body.
Tepper: Russ, with respect to electric vehicles, obviously there are policy and regulatory issues that impact the transition to electric vehicles as well as technology issues. Do you think that the regulatory and policy issues are more of an obstacle to electric vehicles than the actual technology, is the technology more of an obstacle, or is it somewhat of both?
Lefevre: The short answer is no. Across the country and even at the federal level, the policy issues are bipartisan, bicameral, and very positive. For example, last year, there was something called the Electric Vehicle Deployment Act of 2010 that passed out of the Senate committee at something like 19 to 4, which means that both parties were in favor of it. And a very similar thing happened in the House with the idea that it would foster deployment of electric vehicles. The bill ultimately didn't pass.
Nevertheless, there's a lot of federal support, and Wanda was talking about some of the issues associated with utilities. I'm familiar with some of that. Austin Energy is in the process of deploying charging stations throughout the city of Austin, public charging stations, [which] will mean that nobody is more than five miles from a charging station. I understand that that's also happening in other cities.
My point is that, certainly at a legislative level, there's an awful lot of support to deploy electric vehicles. There are several problems with that. The first is the public. [They have] range anxiety—"Can we get into a vehicle, and what happens when the charge runs out?" There are concerns about cost, although for a lot of that, there are incentives—cost incentives, tax incentives—both at the federal and state level to deal with that. And, then, [something] that's not terribly well articulated: "Gee, this is something that I've never done before. What does it mean to me?"
The only thing I can say that would alleviate all of that is the state and federal incentives that are trying to make the public more receptive.
Right now, it's the first adapters. Both Chevrolet Volt and Nissan Leaf are realizing a significant demand for their cars. Tesla just announced a 300-mile electric vehicle, although there might be questions about the cost.
Tepper: Just about everyone has mentioned standards. They impact equipment manufacturers, as John had said, being from GE; operational interoperability, all types of things. Dick, how do you see the need for new and revised standards, and how do you see that impacting the transition to the smart grid?
DeBlasio: It's very important. I've been involved in standards for many years, as well as others on this roundtable. The IEEE has more than 44 societies, and the IEEE Standards Association coordinates standards development and approves all standards within IEEE. Smart grid standards development will not only be evolutionary but in some cases will require forward thinking and flexibility in developing and adopting new standards. There are legacy standards (current and establish standards) that will need to be updated relative to what we would consider "smart."
But education and direction are also needed, and those are happening through government activities, such as US National Institute of Standards and Technology and also within our societies. I think there's been a lot of really good work coming out of Power and Energy Society (PES) and the Computer and the Communications Societies. I've had the pleasure of working with all three, and I do believe they've done a great job on the IEEE 2030 document.
When we reach consensus developing an IEEE standard, it's based on a ballot pool of experts who have a vote—one person, one vote. It's very open and consensus oriented. If we have standards that are technically oriented and in place as IEEE/American National Standards Institute standards, then we have a basis by which to engage the international standards arena, such as the International Electrotechnical Commission.
When we do have a vote for a standard that's internationally related, we discuss and develop a general consensus within our country through a US Technical Advisory Group established by the US National Committee of the American National Standards Institute. Voting at the international level is based on one country, one vote. Thus, it's critical that the industry has a basis to go by, and IEEE provides that through its standards process.
Tepper: Wanda, how do you see standards impacting equipment manufacturers [and] their ability to sell their equipment overseas in different international venues? How [do they] impact the cost curve?
Reder: There's been a lot of effort lately to try to get standards more global in nature. Certainly, IEEE has outreach efforts, and we work with other standards development organizations as well. But, to the extent that we can be more global from a standards perspective, it certainly aids in the manufacturing because you don't have to have as many iterations and permutations of equipment to offer, which will ultimately bring the cost down and make it easier to service the market.
Also, it would certainly help reduce cost and increase efficiency to market if the test requirements are consistent as well.
Tepper: I want to turn to the subject of security for a minute—maybe John could address this. What are some of the obstacles you see that must be overcome in the security area? I know there's cybersecurity and physical security; could you address those and what the obstacles are and how they can be overcome?
McDonald: I've been working in automation of the power system area for more than 35 years. Before open architectures, if anyone breached security, they couldn't do much because all communications were serial point-to-point, and communications protocols were proprietary. So, even if you broke into the communications system, you were limited to a small area (between points) and you had to know the particular protocol to do anything. Now, with Ethernet networks and industry standard protocols, once someone gets into the network, they can do a lot of damage because they have access to the entire network and the protocols are standard.
The trend today is toward standard communications protocols, which anyone has access to, and Ethernet networks. This means that, once you get in the network, you have access to a much bigger area than you did with the point-to-point communications of the past.
Other industries have had a lot more experience with security than the utility industry. And it's more difficult to go back in legacy products—products that are already developed—and bolt on security than it is to build it in from the beginning.
In the US, we have cybersecurity standards through the critical infrastructure protection standards from US North American Electric Reliability Corportation (NERC). And, as you mentioned Harold, there are two other aspects. One is physical security. I've been involved with PES's Substation Committee for about 30 years, and we have separate standards for physical security and cybersecurity with respect to substation communications. Physical security is also part of NERC's substandards.
A third aspect that wasn't mentioned is information privacy. We're spending much more emphasis now on the smart grid, not just on the grid side, which we've done for many decades, but now on the consumer side. And, when you get in on the consumer side, information privacy is very critical. And it's not as black and white as, say, cybersecurity might be with NERC's substandards.
We've spent a lot of time with privacy by design as a privacy model developed by Ann Cavoukian, who's the information and privacy commissioner in Ontario, Canada. In a project that we're doing with Hydro One together with IBM and Telvent, all three of us are taking the technology that we're implementing on our project and building in privacy, the tenants of the privacy-by-design model, and operationalizing it in the actual hardware and software that's being supplied for the project.
The obstacles are the existing equipment, adding the functionality that's needed. The second obstacle is how much cybersecurity really needs to be incorporated because, as a supplier, there are two things that are very important, and the same is true with standardizing products. The two [most] important aspects are product performance and price. If I add a lot of cybersecurity functionality and my price has a 30 percent premium, [the added security might render my product unaffordable]. [Likewise,] if the performance degrades so much because of the additional overhead that I've added to the product, it might be very safe, but I have no commercial marketplace for my product.
So, one of the biggest obstacles is what degree of functionality do we need to add, where in the integrated system do we add it—at the device level? In the substation? The data concentrator level? At the station level?—and what's the impact going to be with respect to performance and price?
Tepper: Privacy of customer information is a good segue into consumer education. Wanda, where do you see the consumer fitting into the smart grid picture? Do you think they really want to manage their own energy use? What incentives can we offer so that they take advantage of the benefits that the smart grid provides?
Reder: Enabling consumer participation and anticipating their needs is key to the smart grid's success because a fundamental assumption involves the choices consumers make about their daily energy use based on price signals. We have a long way to go before the consumer understands how they currently use electricity and meaningful, automated technologies are in place to incorporate use preferences and dynamic electricity pricing. Consumer education, technical interfaces, and pricing schemes are all critical. The consumer facet requires a lot of focus to learn more about the cause and effect of prices on behavior, the impact on electrical use patterns, and the implications to the overall system.
Tepper: Dick, do you have anything else to add relative to consumer education?
DeBlasio: The need also has to be looked at regarding the mutual benefits. The utilities and customers need to be brought together on needs as well as understanding the opportunities and the possibilities. What are the competitive forces that one needs to understand, not only in the business world but also at the social [level], and the regulatory side?
The opportunities are there, but the need to bring together customers and the utilities and the infrastructure to work together on the smart grid is a daunting proposition. We're all trying to make that happen or at least trying to influence and make it easier. But, again, there needs to be motivation. What might that motivation be? It might be pricing, maybe marketing, and maybe a lot of things. But it's absolutely something we need to do, that we're going to have to do one way or another regarding costs. Ultimately, somebody is going to pay, and it's going to be us.
Tepper: Let's finish with a couple of broad closing questions, and I''ll address the first one to John. What do you think are the "killer apps" for the smart grid? Are they behind the meter, in the network, or are they in both places?
McDonald: Some market research firms, including Greentech Media and Pike, have recently said that, up until now, the predominate spending on the smart grid has been on metering—very much driven by policy. But, within three years, there's going to be a very big shift and much more focus on the distribution system and improving its efficiencies and reliability. A lot of the technology that we need to do that exists.
That will have tremendous impact on the smart grid. It's on the consumer side, and it's truly integrating the information from the utility with respect to the price of electricity during the day and how it changes, where the peak price can be 20 to 50 times the off-peak price.
A second killer app would be a smart meter with two-way communications—not only upstream [from the meter/gateway to the utility company] but also downstream into the home [from the meter/gateway to smart devices in the home]—[using] programmable communicating thermostats, smart appliances, and the other intelligent loads and devices in the home. This would enable consumers to manage their home energy use by programming their home energy management system to control based on the price of electricity. In addition, they would be able to monitor and control home energy use when not at home—for example, with their smart phone. We'll give the customer, as Wanda said, the education first. We also need to have a good understanding of the customer's price points and their behavior, so we can tailor programs by empowering consumers to manage their own energy use without compromising their lifestyle. That's something we haven't done before in industry. We don't know our customers very well.
Tepper: Russ, you're a big proponent of electric vehicles. Do you see electric vehicles as a killer app for the smart grid?
Lefevre: Electric vehicles absolutely need aspects of the smart grid. People have asked, "What's the impact of the electric vehicles on the smart grid?" We've got plenty of capacity for generation. Transmission? Apparently no problems in the near term. But, when you get to the distribution, you start running into significant difficulties.
Many researchers have been doing a lot of research in this area. I point out that an IEEE Fellow, Saifur Rahman, has been doing some of the most important work. For example, [he stated that] for a relatively small number of homes, if you had a couple of electric vehicles doing some level-two charging, which isn't all that demanding, at exactly the wrong time, and you turn on a hair dryer, you could blow the transformer.
That's a serious problem, and there are many ways that people think about alleviating that problem, but almost none of them get by without smart grid communication, demand response, something that senses that the transformer is being stressed and can do something to relieve the charging. That's really important—a killer app is figuring out how to deal with that.
Tepper: One final closing question. How important do you think partnerships are among the various industry sectors and realizing the potential of the smart grid, and what do we have to do to foster those partnerships?
Reder: The smart grid and its possibilities are are so large, and it requires so much knowledge from different perspectives, resources, and infrastructure. There's no one company or even one discipline that can do it all. Partnerships are critical. It can't be done without working together. We need involvement of different technical disciplines, different industries, different knowledge bases to move forward.
To foster partnerships, we must look beyond the traditional silos, especially where technical disciplines overlap to find opportunity, build relationships and leverage expertise. It's critical for the success of the smart grid to work together across nontraditional boundaries and to forge partnerships.
Tepper: Dick, do you see standards as a way of fostering partnerships with the smart grid?
DeBlasio: Of course. We do a lot of that; that's the whole idea of the open consensus process in which we include users, application vendors, academia, industry, and government, to engage in the standards development process.
From the IEEE Standards Association's point of view and some of the work we're doing, there are two areas, equipment standards and systems-level standards. From an equipment level, this can be very easily done with international standards development and testing. On a systems level, it becomes more relative to the region as to how you do the application. So, you can package this into subsystems or systems.
But, again, we need to bring together the utilities and the customers, and customer participation isn't too involved with standards. Customers are basically looking for products, and they trust the industry and the people who make the products and utilities and the government relative to systems standards.
Standards can be the bridge. But the big issue I see coming down the road is the cyber issue that John mentioned—that is, information security and privacy and equipment operation vulnerability are a concern and, if compromised, could be destructive and pose a major challenge to smart grid design and cyber attack mitigation. For example Privacy is going to be a very important issue, and I think that's where the relationships must be developed between the customer and the utility.
Tepper: I thank Dick DeBlasio, John McDonald, Wanda Reder, and Russ Lefevre for sharing their perspectives and their expertise in the smart grid area.
About the Speakers
Dick DeBlasio is an IEEE P2030 Working Group chair. He has a BS in electrical engineering from Santa Clara University. Contact him at email@example.com.
Russ Lefevre is an IEEE Steering Committee on Electric Vehicles chair. He has a PhD from the University of California, Santa Barbara. Contact him at firstname.lastname@example.org.
John D. McDonald is director of technical strategy and policy development at General Electric Digital Energy. He has an MS in electrical engineering and power engineering from Purdue University and an MBA in finance from University of California, Berkeley. Contact him at email@example.com.
Wanda Reder is vice president of S&C Electric Company's Power Systems and Services Division at the US Department of Energy. Contact her at firstname.lastname@example.org.
Harold Tepper is a senior technical project manager for the Smart Grid Initiative with IEEE Technical Acitivities. He has an MBA in marketing and finance from Pace University's Lubin School of Business. Contact him at email@example.com.