It’s Easy Being Green: The Next Generation of Electricity?

Two recent developments signal that electrical grids in the United States may soon receive a much-needed upgrade: Xcel Energy’s announcement earlier this year that it would make Boulder, CO, the nation’s first fully integrated smart grid city, and Title XIII of the Energy Independence and Security Act of 2007, which authorizes a large-scale demonstration program for smart grids.

The smart grid, though still in its infancy stages, offers enormous potential in improving energy distribution and delivering greater efficiency in energy use. The idea is to integrate digital, high-speed communications technologies with the electric grid that would allow for real-time, two-way communication between the utility and the consumer throughout the distribution grid.

The result is a system where consumers can have programmable devices installed in their homes, allowing them to control home energy use, monitor electricity costs, communicate directly with the utility company, and even choose the source of their electricity. The grids themselves would have such capabilities as the ability to “self-heal,” diverting power automatically if a transformer or line goes down. This would ensure that all areas of the grid are always provided with uninterrupted service, preventing blackouts. Real-time information from the system would also allow grid operators to isolate affected areas and redirect power around damaged facilities.

Benefits of the smart grid system would include greater consumer choice over energy source, more reliable grids when problems arise, potential reduction in power consumption, and greater use of renewable, clean energy sources, with the potential for consumer compensation for conserving or generating power.

Xcel Energy disclosed plans in March to implement such a system in Boulder, with the first phase set to be in place as early as August of this year, continuing through 2009. Xcel chose Boulder because of its size and that fact that the University of Colorado and several federal institutions are located there, including the National Institute of Standards and Technology, which is already involved in smart grid efforts for the federal government. After the initial implementation and assessment, Xcel Energy plans to talk with state, federal, and regulatory officials about a larger deployment throughout the company’s eight-state service territory. The proposed system includes many of the features listed above, including real-time, high-speed, two-way communication throughout the grid and support for distributed generation technologies such as plug-in hybrid vehicles, wind turbines, and solar panels that allow consumers to generate their own power.

The federal government indicated a willingness to get behind smart grids with the Energy Independence and Security Act of 2007. The Act authorizes funds—yet to be appropriated—for a large-scale smart grid demonstration program that could develop experience in building smart grids and reveal their benefits to utilities, consumers, and regulators. Currently, utilities remain resistant to perceived risks and costs in integrating smart grid technologies, and with federal support, demonstration projects may help convince them smart grids are not only feasible, but a reasonable next step to deal with today’s increased electrical load and demand.

Smart grids are not a “pie-in-the-sky” concept or a pipe dream. The technology exists to build them today, and consumers are ready for the change. A survey by IBM last year of 1,900 households in six countries, including the United States, indicated that 83 percent of respondents who could not choose their own utility provider would welcome that option, and two-thirds that did not have renewable power would like to have the option, even if it cost more. Finally, two-thirds also were interested in generating their own power, provided they could sell the power back to the utility. All of these options would be available to consumers through smart grids.

The consumer will to adopt this technology is already present, and companies like Xcel are responding. If the project succeeds, it could help usher in a new electrical grid befitting the 21st century.

To learn more about the Center for American Progress’ policies on energy and the environment, please see: