To the extent that the popular media understands the Smart Grid at all, it’s seen in terms of “smart meters” that are going to, say, let the utilities turn off consumers’ clothes dryers. Yet it really is about three things: the currently fragile grid, which desperately needs fixing; the fact that no matter where somebody wants to site a new power plant or run power lines, a whole lot of people are going to resist it fiercely; and the business reality that electricity is a commodity and wants to be traded like one.
A further factor is that the governments of the European Union, China, and the United States are pouring billions of Euros, Yuan, and dollars into their smart grids for technology that does not yet exist or exists today in a hundred different forms that defy interoperability and must be reconciled. Technologists have a wonderful opportunity to do it right and get paid for it.
It helps to understand what everyone is talking about. The National Institute of Standards and Technology, (NIST), the IEEE Power Engineering Society (PES), and hundreds of companies have been working on defining the Smart Grid in terms of standards for guiding engineers in designing actual Smart Grid products that go far beyond electric meters. In fact, the needs of the Smart Grid are largely in the realm of information-technology—wired and wireless networking, monitoring, control, and information processing.
Most of the information here comes from the 145-page “NIST Framework and Roadmap for Smart Grid Interoperability Standards, Release 1.0,” which was released at the January 19 joint IEEE/NIST Innovative Smart Grid Technologies conference in Gaithersburg, Md. The conference drew roughly 700 attendees to its three days of panels and technical sessions, despite the fact that its planning had only kicked off in October (see “IEEE And NIST Smart Grid Conference Hits The Ground Running”).
Communications penetrates all of the aspects of the Smart Grid, as indicated by the roadmap’s list of the 25 most important standards (see the table) that NIST and the other stakeholders are developing. The list is heavily weighted toward information technology and information security.
CONCEPTUAL MODEL
To facilitate discussions about the Smart Grid, a “conceptual model” detailed in the report and elsewhere describes the Smart Grid in terms of domains (customers, markets, service providers, operations, bulk generation, transmission, and distribution), which are functional designations of user classes. The model also refers to actors, applications, associations (logical connections), and interconnections (physical connections). Watch for that “actors” term in what follows, because it usually signals a piece of hardware that needs to be designed.
The usual way of presenting the Smart Grid conceptual model is hierarchically by domains, starting with the customer and working backward to bulk generation, transmission, and generation. There is a fairly simple diagram of the overall set of domains (Fig. 1) (and other diagrams that represent each domain), but it doesn’t show the interdependence of domains. An alternative diagram illustrates just how complex Smart Grid interactions (Fig. 2) will be, although it tends to induce headaches from eyestrain.
To highlight what is revolutionary about the Smart Grid, I’m going to explain the domains out of their usual order, emphasizing financial transactions over operational considerations. That means starting with the markets.
THE MARKETS DOMAIN
Not everyone would agree, but the markets domain is what makes the Smart Grid smart. It’s a commodities exchange where electricity and electricity futures are bought and sold. (Companies like the unlamented Enron do that now, but not in near real-time.)
Actors in the markets domain exchange prices and balance supply and demand within the power system. The boundaries of the market domain include the edge of the operations domain and of the domains that supply assets that make electricity and get it to the consumer (generation, transmission, etc.) and the customer domains.
The function of the market domain in setting electricity prices takes the Smart Grid beyond the “simple” role of a continent-spanning industrial-control system. Its financial aspect gives its communications aspects the imperative for traceability and auditability. Communications must support e-commerce standards for integrity and non-repudiation.
That’s going to be an evolving technical area. As the percentage of energy supplied by small distributed energy resources (DERs) increases, the allowed latency in communications with these resources must shrink.
The NIST report notes that “The high-priority challenges in the markets domain are: extension of price and DER signals to each of the customer sub-domains; simplification of market rules; expanding the capabilities of aggregators; interoperability across all providers and consumers of market information; managing the growth (and regulation) of retailing and wholesaling of energy; and evolving communication mechanisms for prices and energy characteristics between and throughout the markets and customer domains.”
As defined in the NIST report, the markets domain actors comprise market managers, retailers, aggregators, and traders. Market managers include independent systems operators (ISOs) for wholesale markets or the New York and Chicago Mercantile Exchange (NYMEX/CME) for forward markets. There also are transmission and services and demand response markets as well as basic electricity markets.
“Retailers sell power to end customers and may in the future aggregate or broker DER between customers or into the market. Most are connected to a trading organization to allow participation in the wholesale market,” the report says.