"Many of the experts who are studying the Smart Grid are increasingly adopting the view that a truly Smart Grid should require as little consumer participation as possible. The Smart Grid does not require consumer participation to succeed," the EPRI study says.
EPRI's study updates a 2004 report that estimated total smart grid investments of $165 billion, one-third below the current study's top figure.
Gellings said this increase in the smart grid's cost is based on the expanded capabilities of the new technologies. "They reflect a newer, more advanced version of a smart grid," he said.
As the grid gets 'smarter,' electricity use slows
A major consumer benefit, according to the study, could be a reduction in electricity consumption. EPRI noted that the Energy Department's 2010 energy outlook forecasts a 1 percent annual growth rate in electricity consumption over the 2008-2035 period. Demand response and efficiency gains enabled by smart grid technologies would reduce annual electricity growth to less than 0.7 percent, EPRI predicted. The growth rate in peak energy demand would be even lower.
Lower power consumption lowers greenhouse gas emissions, EPRI said. Another EPRI study concluded that smart grid technologies would enable a transition to cleaner generation and reduced consumption that could reduce overall carbon emissions in 2030 by 58 percent compared to 2005 levels.
The barriers to smart grid deployment include agreement on technical standards for smart grid technologies and wariness among state utility commissions about passing on higher costs for smart grid systems until their value is clearly established, EPRI said.
Another issue is that utilities and their regulators are accustomed to buying power equipment that lasts 40 years or more. The new digital equipment being installed on the grid may last as little as a decade or two before being replaced by better devices, EPRI said.
The study notes a recent comment from the Illinois Commerce Commission that controversy and lawsuits accompany some smart grid deployments. "Disagreements exist about whether recovery of a utility's smart grid costs should be restricted to the 'traditional' rate-base method, or whether a 'non-traditional' method ... should be used. Some stakeholders are concerned that utility proposals for cost recovery of smart grid investments would lead to significantly higher monthly bills and a shift in the risk of investment from utilities to ratepayers. Others believe that non-traditional cost recovery would be essential to accelerate deployment of smart grid technologies."
A major uncertainty the study authors confronted was assessing the costs of protecting the U.S. grid against the threat of solar storms that send geomagnetic pulses slamming into vulnerable transformers and other critical grid equipment.
A once-in-a-century storm could cripple large parts of the power delivery system, with potentially catastrophic consequences, federal experts warn. EPRI is working on protective devices to safeguard power substations from pulse effects. "It is feasible, but it hasn't been developed yet," Gellings said. "The real question is, what is the potential impact of geomagnetic storms? They could be much more severe than we've estimated."
Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500