Navigant Research Blog

Smart Grid Common Sense

Bob Gohn — November 2, 2010

Perhaps the most common question when discussing our smart grid research with clients is “what do you include as part of the smart grid”? Answers are relatively straightforward where we have developed specific definitions of smart metering or grid communications. However, broader smart grid categories are often more difficult to define precisely.

I was reminded of this while leading a number of panel discussions at the recent Smart Grid Technology Europe Conference in London, which gathered vertically integrated utilities, DNOs (Distribution Network Operators), regulators, and vendors from across Europe. We discussed the usual smart grid topics, as well as several very impressive demonstration projects proposed under the UK’s Low Carbon Network Fund program (similar to the Smart Grid Demonstration Projects funded under the U.S. ARRA stimulus). Most interesting was exploration of the arguments between basic “network reinforcement” versus sophisticated smart grid technologies. Not surprisingly, the more passionate viewpoints were held by utility representatives, including speakers from Scottish and Southern Energy in the UK and ESB Networks in Ireland.

For example, as certain local substations approach peak capacity, are we better off with advanced control mechanisms (localized demand response, dynamic Volt/VAR control, scheduled EV charging, etc.) or installing “more copper in the ground”? Or if local distribution transformers risk overload, do we add more local intelligence or just swap in bigger transformers? The answers of course depend on the local circumstances, but the larger point is that there are choices, and often the common sense choice is not the most technologically sophisticated. To use (yet another) analogy from the telecom world, I recall how we wrestled with fine-grained quality-of-service queuing methods aimed at micro-managing “scarce bandwidth”. Turns out innovations in transceiver technologies made it easier and cheaper to just build “bigger pipes”, giving us cheap Gigabit Ethernet in our homes instead of super-managed ISDN lines.

We often define the smart grid as “power network + communications network”. But sometimes installing the latest low-loss transformers or pre-packaged substation solutions are “smarter” grid choices for improved efficiency and/or cost than advanced communications gear. Certainly greater intelligence in the grid remains the key attribute of the smart grid, but less sexy technologies play an important role as well. Within our forecasts for the overall “smart grid”, we have tried to recognize this phenomenon. Hence we already include nearly $9 billion of spending on “smart grid” technologies worldwide in 2008, recognizing there have been many “smart” technologies deployed even as the market is relatively nascent.

Of course, none of this reduces the need or importance of advanced computing and communications in the grid, but we need to remember that sometimes the common sense solution is just “more copper in the ground”.

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