Fostering the Development of a ‘Smart Grid’

New England states have laid out an ambitious agenda to slow the growth in electricity use, reduce greenhouse gas emissions, develop renewable resources, maintain power-system reliability, and lower costs. The sometimes-conflicting nature of these goals makes it difficult to align them.

Indeed, this is a critical juncture for New England. For decades, the region has faced formidable energy challenges, from a lack of indigenous fuel sources to historically high costs, a weak transmission system, and growing consumer demand. The introduction of competitive electricity markets a decade ago has provided a solid foundation for progress: almost $10 billion in private investment in new power plants has boosted supply by more than 30%, and $3 billion of long-overdue transmission investment with about $5 billion more being planned will result in a more-efficient flow of power throughout the region.

The next steps can be achieved by developing solutions that accommodate and harness recent technological innovations to improve the efficiency of the power grid — in other words, to foster the development of a ‘smart grid.’

This ‘smart grid’ means far more than the use of technology. It means establishing ‘smart’ policies that will bring new technology to all corners of the power system to optimize supply, transmission, and conservation. It also means being smart about resource choices in the long term, so that the region can diversify its fuel sources and lessen its reliance on natural gas and oil to produce electricity.

On the regional level, smart-grid technology has been incorporated into New England’s power system operations so that grid conditions both inside and outside the region can be monitored. Moreover, ISO New England is committing funds for the development of an ‘Advanced Grid Simulator’ that will help determine how the grid will operate with the addition of intermittent alternative energy resources such as wind.

New electricity markets were recently implemented to expand the types of resources used to meet consumer demand. New England’s markets now procure in advance not just traditional supply such as power plants, but also conservation resources that reduce electricity use and have never been included in the marketplace before.

This fall, the ISO began a pilot program designed to test alternative energy resources, including energy storage, as a way to instantaneously balance electricity supply and demand. At the state level, policies are being implemented that will maximize the potential of these innovations and encourage their continued development. The state recently enacted the Green Communities Act that promotes the development of renewable resources and energy-efficiency programs.

Meanwhile, the state of Connecticut passed energy legislation that promotes conservation and reduced demand to limit the growth in electricity use. Connecticut has become a leader in demand response, which provides financial incentives for customers to lower their electricity use during tight supply periods. And energy efficiency programs are giving consumers tools to better manage their energy use.

Some New England states are either considering the adoption of smart meters or have already introduced pilot programs. Such technologies would provide consumers with real-time price information to enable them to better manage their use and lower their bills.

The goals that have been set for renewable resources, conservation, and reductions in greenhouse gas emissions are ambitious, but feasible if industry and government continue to build on progress. Technology transformed the region’s economy in the 1980s and ’90s, and fostered improvements in productivity and efficiency in industries around the world. New England can be at the center of another technological revolution in power delivery and use — automating the system to make it more efficient and bringing the economic, environmental, and energy needs of the region into closer alignment.-

Gordon van Welie is president and CEO of Holyoke-based ISO New England Inc.

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