The heat wave in which much of the nation remains mired comes as a handful of communities across the country take their first steps toward implementing smart grid technology. The new meters, electricity distribution management systems, network management software and other technologies are designed to add intelligence to the way power is generated, distributed and used.

Already, smart grid pilot projects are up and running in places such as Harrisburg, Pa., Richland, Wash. (pdf), and Boulder, Colo.). As these regional smart grids expand, their eventual integration into a national smart grid should help make blackouts and brownouts (which of course can be devastating to a region's health and economy) easier to avoid and could possibly lead to discounts on consumer electric bills, provided consumers do not mind handing over some control of their home meters and appliances to their utility companies.

However, regional smart grids will not be in place until long after this summer's strings of consecutive above-90 degree Fahrenheit days are over—with adoption set to roll out over the next five years or so, provided consumers get on board. Still, the smart grid—which at its essence enables two-way communication of how electricity is generated, distributed and consumed—is expected to have a major impact on how we cope, energy-wise, with many long, hot summers to come, leveling peak demand for electricity with the help of smart appliances (including home chargers for the fleet of electric cars on the way) programmed to dial down energy usage when the grid is threatened with an overload.

Today, even without regional smart grids, utilities are able to cut energy consumption by businesses automatically through what are called demand response systems. These systems, usually arranged on a contractual basis, empower utilities to reduce the distribution of electricity to businesses that sign up for this service. This might include resetting a business's air conditioning thermostat to a higher temperature (typically only a few degrees) if the utility is seeing too much demand on its network. In return, the business saves money on its energy bill. Such arrangements are expected to expand significantly, especially into the residential sector, as smart grid technology proliferates, says Steve Minnihan, a research associate with Lux Research Inc. in Boston.

Tough social contract
"The challenge is that we've been operating with an implied contract with users that no matter how much energy they need, the utility will provide it for them," says Steve Hauser, vice president of grid integration at the U.S. Department of Energy's National Renewable Energy Laboratory (NREL) in Golden, Colo. It has even gotten to the point where, if the utility is not able to meet consumers' demand, the utility can be penalized. Expectations that utilities will keep their customers' air conditioners running even during prolonged heat waves will not change, so power companies are seeking better ways to meet this demand, in part via smart grids.

The ability to offer demand response systems is in a more nascent stage for homes than it is for businesses because it requires homeowners to install smart meters, a key component of the smart grid infrastructure. Once these meters, which communicate directly with the utility company via a network, are installed, consumers will be able to get detailed information about the variable cost of electricity at different times of the day. The goal is to enable consumers to better manage their electricity usage and thereby save money. The utilities benefit by experiencing fewer sharp spikes in demand when, for instance, commuters get home from work and simultaneously turn on air conditioners, clothes dryers and dishwashers. Eventually, consumers may likewise be able to make contractual arrangements, as some businesses already do, to hand that management over to utility companies during heat waves and other extreme weather conditions.

Storing electricity
Demand response systems that automatically scale back the consumer pull on the grid can conserve enough energy to allow utilities to cut their peak capacities by 10 percent, or several gigawatts, according to a Lux Research report released last week. Another way for utilities to avoid having to generate or buy large amounts of additional electricity to satisfy surges in demand during heat waves and other extreme events is to find better ways of storing energy on the grid when demand is low. Although the ability to store electricity is not essential to creating regional smart grid pilot projects, it will become more important for managing the distribution of electricity as these grids grow, Hauser says. In addition, the ability to store highly intermittent renewable energy from sources such as solar panels and wind turbines makes them a much more feasible component of the grid.

The U.S. Department of Energy (DOE) is sponsoring several efforts to develop batteries and other energy storage technology that utilities will be able to place on their grids and possibly even in customers' offices and homes. This includes a $9.6 million partnership with the California Energy Commission (CEC) for three projects that store electricity via supercapacitors, zinc-bromine batteries and flywheels, respectively. The DOE also has a $5.6-million partnership with the New York State Energy Research and Development Authority (NYSERDA) for six more projects showcasing storage technologies that include flywheels, sodium-sulfur batteries and lead-acid batteries.

"I'm a big fan of storage," Hauser says. "The bad news is that it's been the holy grail for 25 years." The push toward electric vehicles could accelerate the use of batteries as part of a smart grid. "We all carry cell phones and notebook computers around that have batteries in them," he adds. "So the technology is there to place batteries throughout the grid; we just haven't gotten it big enough or networked so that they can be used for local electricity storage."

Federal stimulation
Meanwhile, the Energy Department has awarded more than $3.4 billion to support efforts to update the nation's power grid. A significant smart grid pilot program is currently ramping up in south-central Pennsylvania, where PPL Electric Utilities is planning to connect 60,000 of its 1.4 million customers across a 150-square-mile area near Harrisburg, throughout Dauphin and Cumberland counties, to a smart grid infrastructure by mid-2012. Half of the $38 million PPL Smart Grid project is being funded by a DOE grant.

GE Energy's distribution management system will act as the PPL Smart Grid's brain. New sensors and automated switches throughout the grid will be in constant communication with the distribution management system, and the system will be able to automatically control those sensors and switches in response to changing demands. Lockheed Martin will provide cyber security for the Internet-connected grid, whereas Alcatel-Lucent is providing the wireless communications infrastructure as well as implementation and management of a high-speed fiber-optic communications infrastructure. Philadelphia's Drexel University is helping with the grid's design.

GE and a group of four venture capital firms recently announced plans to make $200 million available to entrepreneurs in an attempt to spur the development of technology required to make a national smart grid a reality. "We've seen in pilot programs: when consumers get the right pricing information, they will mitigate their usage during critical peak times," says Luke Clemente, General Manager of Metering and Sensing for GE's Digital Energy business. "We've always had supply follow demand. With smart grid, we can flip that around."