Wanda Reder
Vice President
S&C Electric Company

  EET&D   : As another year is starting, the Smart Grid continues to open up new opportunities for innovation in what has historically been a very traditional and relatively slow-moving industry. With that perspective in mind, I’d like to begin by asking you about the role of innovation in the long-term Smart Grid picture, and more specifically, where you expect to see innovations taking place in that future evolution.

  Reder   : Fundamentally, industry transformation is occurring largely where communications and computational systems are converging with traditional power systems. As we evolve toward a smarter grid – and I do mean smarter because the grid has a huge component of intelligence already – we’re learning how to apply technology to a power system that has become very complex over the past century.

For example, in 2000, the U.S. National Academy of Engineers rated the electric grid as the major engineering accomplishment of 20th century. We’ve been installing technology and routinely increasing the level of intelligent operation for decades, and that isn’t going to stop now. However, as computational and communication technology continues to evolve and expand, it is being applied to the grid so that we can run cleaner, more efficiently, and more reliably. In the most basic terms, that’s where a lot of the innovation is coming from; that is, the convergence of various technologies and disciplines required to deliver the kind of grid performance, safety and reliability necessary for the digital economy of the 21st century.

  EET&D   : What are some of the other elements that are fundamental to Smart Grid, and to what degree are consumers involved in the equation?

  Reder   : The power system we have known for the past fifty years or so was built with centralized generation that ebbs and flows to accommodate consumer’s electrical needs. In the future, in the modern grid – the Smart Grid, if you will – consumers will be empowered to make informed choices, depending on price signals and other behavioral factors. In addition, consumers and independent power producers are adding their own de-centralized – and sometimes highly intermittent – generation sources connected at various locations along the delivery system. Collectively, these are adding new dimensions of variability and uncertainty, which in turn, are leading to new operational paradigms. And, at the center of it, is the impact of consumer’s choice.

  EET&D   : How is the innovation taking place today different from say, a decade ago?

  Reder   : I think there are several facets of innovation that are quite different today. These fall into three main categories: Improved technology, where cost-effective energy storage is a power system game changer; a new element of interest in privacy and cyber security; and much broader stakeholder interest requiring engagement early and often to move innovations forward.

There is a lot of innovation in battery technology now that allows us to store power during periods of low demand and use it when the demand is the highest. In addition to managing these peak load conditions, batteries can help to defer equipment upgrades, improve service reliability, reduce losses and even help regulate frequency and voltage.

Historically, it has been very costly to store electricity in any practical way, but that is changing. New batteries and other storage technologies are adding new and innovative elements to the grid that was only being talked about a decade ago. This new wave of innovation is changing the very essence of how we think about power systems, which is now morphing into a completely new architecture – one with multi-directional power flow and substantially increased two-way communications, especially at the distribution level.

Another area that was barely on our radar a decade ago involves data privacy and cyber security issues. New rules around sharing information, securing communications and protecting systems critical to the nation’s security and economic interests have emerged and are now a mandatory consideration for innovation. Furthermore, as standards and requirements continue to evolve, new technology needs to be easily upgradeable to ensure compliance.

Finally, I think the process to ensure acceptance of new technologies is much more involved than it was a decade ago. A broader set of stakeholders needs to be consulted to generate support and approval. The stakeholders can include consumers, regulators, utilities and even contractors and support organizations. Engaging them with a transparent process early and often will help move innovation forward while also building on existing know-how and accepted practices.

  EET&D   : What do you feel is the most important message about Smart Grid that needs to be communicated to the marketplace?

  Reder   : Smart Grid can only succeed if it’s rooted in deep customer engagement, allowing consumers to better understand the benefits of their involvement and ultimately, help manage their energy use and resultant costs. This engagement can start by conveying the importance of Smart Grid for consumers to make proactive energy choices that help facilitate sustainability. Until now, electric bills have been largely an afterthought for most consumers, but Smart Grid initiatives dramatically change that dynamic with the onset of real-time usage data, alternative pricing schemes and the advent of more recent innovations like plug-in electric vehicles and distributed generation.

In addition to consumer engagement, we also need better messaging across the various technical disciplines that are involved in Smart Grid development. I feel that IEEE can really help make a difference by bringing interested, but divergent technical audiences together to vastly broaden their understanding of various technical disciplines. We can build awareness about each other’s challenges, bring best practices to the table, and as a result, be much more proactive and effective in educating the marketplace at large about the Smart Grid.

The fundamental message we need to get across is that there are many ways to provide energy that’s cleaner, more efficient, safer and more reliable, but it all requires grid modernization. Fortunately, Smart Grid technologies are ready to deploy today that can allow us to do a much better job in the future.

  EET&D   : Clearly we’ve been in a tough economy the past few years and it would seem that full recovery will take more time. Is economic recovery an issue for the Smart Grid?

  Reder   : Yes, and inevitably, it will be a long evolution for many reasons, not the least of which is cost. The good news is that we already have most of what we need to get the job done, but the will to employ that technology has been lacking in many ways. Consumers want low rates, but they also want a sustainable model with the kind of reliability that we have enjoyed and to which we have become accustomed-- all of that comes at a price.

  EET&D   : Does that mean that the grid has to be entirely redesigned and/or replaced?

  Reder   : Let me answer this way: When we think about the infrastructure that has been built to have our lights come on when we flip the switch, we must also remember that our infrastructure has been a work in process for the past 100+ years. That is, when you really think about what it takes in terms of power generation, transmission and distribution to make it operate is really quite amazing, yet most of us just take that for granted, even though it wasn’t free and it certainly did not happen overnight. Likewise, the Smart Grid will not happen overnight either. Intelligence, increased control and system upgrades will be added to the original grid, resulting in modernization and benefits over a long period. Therefore, the investment will take time, and the grid will be partially replaced and re-designed using new technology.

  EET&D   : What are your thoughts on how we will get from where we are today to where we need to be a decade from now?

  Reder   : First, our aging infrastructure needs to be modernized, and I certainly hope that we go about it in a way that’s smarter than just replacing it in-kind. Moreover, every state is in a different place when it comes to the grid and its legacy infrastructure; every utility and its relationship with state regulators is at a different place, and there are varied objectives from country-to-country. That means that it will be very difficult to formulate uniform answers or be able to make broad, sweeping statements as to priorities and the rate of deployment in any given region, state or country. Some companies and regions are certainly moving ahead faster than others, but the applications resulting in the highest benefit for the least cost are going to be deployed first, while others will inevitably take longer – and in some cases, much longer.

  EET&D   : So many aspects of Smart Grid seem to be developing simultaneously: Electric vehicles, smart metering, renewable energy, and the list goes on. Is the order in which these things will take place based purely on economics, available technology or regulatory issues?

  Reder   : There are whole ranges of variables that go into that equation, and again, depending on the application and the situation, it’s really going to vary widely across the various regions and individual utilities. For example, some situations are constrained by transmission congestion that must be alleviated before a large penetration of renewable integration can take place. In other cases, utilities may be satisfied with their generation mix and instead, focus on updating metering infrastructure and the consumer interface.

Furthermore, initial electric vehicle sales will likely be focused in larger cities, and adoption is likely to occur in community pockets, making the challenges associated with charging stations somewhat isolated in the short term. Therefore, the electrical needs and the regulatory climate both vary, causing the natural order for deployment to fluctuate, depending upon the circumstances in each geographical region.

  EET&D   : Lately we’ve heard a lot about renewables and how important they are to our energy future. Do you feel that renewables are now with us to stay?

  Reder   : As we project future generation supply and demand it seems certain that renewables will be a big part of that mix – as they already are in some countries and regions – but we need to stay focused on doing it in a way that is both reliable and sustainable.

  EET&D   : What about the distribution side of the grid – what measures or steps are being taken there?

  Reder   : When it comes to distribution, we really have to focus attention on managing peak loads effectively, managing losses and providing reliable service that accommodates the needs of the new digital economy. The penetration of consumer electronics, computers and other electronic gadgets is increasing rapidly, and the demand for near-perfect power quality and uninterrupted power availability at the distribution level is increasing right along with those trends.

Secondly, the load factor in the U.S. has been in steady decline since the early 1960s. Today, peak conditions are actually occurring only about 1% of the time during a year, yet we have built the system to accommodate peak load during those periods. Thus, total capacity is being grossly underutilized most of the time. Furthermore, capacity investments have been lagging the growth in peak load, making the system vulnerable and difficult to operate during peak conditions.

Finally, there is a lot of loss in the power system. Excluding generation, we can lose as much as 15% of the power from the time it is generated to when it is consumed, so we’re taking pro-active steps to better manage the peak, build in automation to improve reliability and implement control schemes and technology to reduce losses.

  EET&D   : What are the chances for improvement in these areas?

  Reder   : Overall, we need to make much more efficient use of the entire generation, transmission and distribution infrastructure, and ask ourselves some probing questions: Can the grid be reconfigured to make use of new battery storage capabilities? Can incentives be provided to encourage consumers to make choices that improve energy usage patterns? What more can we do to deliver power more efficiently, more reliably and still get the most out of the infrastructure that’s already deployed?

Technology deployment is likely to be where the process begins, but it’s definitely going to take longer to appropriately and effectively engage the consumer. Behavioral change is usually slower than technological change and advancement, so it will take time and probably some retries – and of course, consumer engagement and education – to achieve those objectives.

  EET&D   : What kinds of storage are required for the digital grid, and what work is already under way to address those requirements?

  Reder   : There’s a lot of new investment in storage right now, but it’s not as if we haven’t had storage built into the grid before. Hydro plants have been used as a storage mechanism for a long time, and in some places, we use hydro plants to offset other types of generation. Now we’re starting to look at different types of storage technologies coming into play like compressed air, flywheels, ice storage, ultra-capacitors and numerous battery types such as lithium-ion, nickel cadmium, sodium sulfur and flow batteries. The characteristics of the storage technologies vary and the applications have a very wide range that continue to expand as technology moves forward.

  EET&D   : Are there any practical installations of these new types of technology?

  Reder   : There’s a 4-megawatt installation in Texas that provides up to six hours of power for an entire city. The city’s primary power source is a long transmission line, which is frequently struck by lightning causing repeated electrical problems. The original backup source required a lot of switching time and was fed from across the border in Mexico. To mitigate the potential of having repeated and extended outages at this border town, they’ve backed up the whole thing with battery storage.

Batteries are also being brought to the community level in the form of community energy storage where it is connected on the low-voltage side of the customer’s transformer to help accommodate plug-in vehicles and handle the variable effects of solar panels. Community energy storage can provide the ability to shave the peak, smooth the load profile, manage voltage fluctuations, and improve service availability. In addition, with numerous units deployed, a control scheme can aggregate the operation of all units to effectively create another distributed generation source.

  EET&D   : What, if anything, can be done to better integrate renewables into the grid?

  Reder   : The challenge of renewables, such as wind and solar generation, is that they are intermittent and occasionally require high-speed reactive compensation to successfully connect to the grid. With solar, when the sun goes behind a cloud, the flow of energy being generated by the panel is interrupted and then returns when the sun comes out again. When that happens, the solar source turns on and off very quickly. It doesn’t make a big difference in overall power generation, but the intermittent interruption of the generation source can be problematic for grid stability. This is also a typical scenario for wind generation, since the wind doesn’t just continue to turn wind turbines at a steady rate 24/7.

To aggregate and integrate these intermittent resources into the transmission system, a buffer to mitigate that intermittency is useful. Flywheels have proven to be useful for stabilizing the network, which allows renewables to be more readily and consistently integrated into the grid.

  EET&D   : Looking at the near-term, are you anticipating any milestones or achievements within the next couple of years relative to the issues and trends we’ve discussed today?

  Reder   : Over the next couple of years, I believe those that have started down the Smart Grid journey will continue to do so while incorporating lessons that they have learned internally and from others. As successes are reported, stakeholder confidence and acceptance will generally increase and business cases will strengthen, both of which will accelerate the rate of adoption. Regulator models will also evolve to better embrace grid modernization. This evolution is vital toward providing assurance that there is a long-term regulatory commitment to Smart Grid strategy and that a mechanism to get a return on the investment will be there.

We will also gain a better appreciation of the importance of a Smart Grid to satisfy the electricity demands of this century and its connection to sustainability and economic viability. Within the next two years, I believe we will have greatly improved our messaging and become much better at engaging the consumer in the overall process. Finally, there’s a lot of room for operational improvement as we move toward adoption of Smart Grid technologies and change our traditional operating paradigms accordingly. Smart Grid is a journey that is in the process of unfolding in 2012 and will continue well beyond.