In the middle of last month, President Barack Obama signed a $787 billion stimulus plan for government spending that had a $38 billion emphasis on energy, with additional $20 billion set aside for tax incentives for the electrical industry. $4.5 billion of these $38 billion will be applied towards modernizing the electrical grid through the introduction of the "smart-grid". [1]
"What is a smart-grid?", you might ask, and "How will it help us save energy?".
A smart gird is a way of delivering electricity to consumers, using advanced technologies, that will save energy, reduce cost and increase the reliability of the system.[2] The smart grid will use smart meters and smart devices that will allow the consumer to see his/hers electricity use by the hour, instead of on a monthly basis, and having that knowledge, it is believed the consumer will alter his/her behavior in order to save money. Electricity pricing will be demand driven, which means that if the demand of electricity is high, then the price will be high and vice-versa. Currently, we are paying a flat rate for electricity, regardless of the demand on the grid. This means that at 5 o'clock in the afternoon, when the grid is loaded down and the losses are the greatest, the price of electricity is the same as at 3 o'clock in the morning, when the load is minimal. The smart grid will make customers pay a premium when they are
using electricity during peak demand and will sell electricity cheaper, when demand is not as high. The smart grid essentially allow the end consumer be a player in the energy market, by letting the consumer decide when and at what price he/she will buy electrical energy.
The smart grid will be impossible without a state-of-the-art communication system in place which will collect data from the millions of customers and will set energy prices almost instantaneously. This communication system is what will also enable electrical energy to be transferred from one part of the grid to another in a case of an outage, making the grid more resilient.
However, there are experts who disagree that the smart grid will be safer and more reliable, because the communication system will open this vital service to cyber attacks from hackers. The article "Report: Smart grid hackers can cause blackouts" states that a single hacker with about $500 worth of equipment and some knowledge of electronics and software engineering will be able to take over thousands, and maybe even millions of meters, therefore gaining control over state of a large part of the grid. If the hacker decides to shut down a part of the grid this can cause partial and maybe even a rolling blackout that will affect the whole system.[3]
William Sanders of the National Science Foundation Cyber Trust Center believes that the grid will not be deployed until these security concerns are addressed.
In my non-expert opinion, I believe that the smart grid will not do what it is predicted to do. I agree with the article on security, because there is always the chance of a hacker smart enough to find a loophole in even the most secure system. Look at online retailers, for example: Even after all these years of experience and all the money spent on security measures, at least once a year a hacker manages to break into their servers and steal thousands of credit card numbers. The smart grid creates an incredible amount of power, which if falls in the wrong hands, due to a computer or a human error, can have disastrous results.
I believe the concept of the consumer being a participant in the electricity market, discussed earlier, will not work out as well as everybody hopes. The simplest example of that is that if everyone were to turn on their appliances during off-peak hours, when the price of electricity is low, then the demand will increase and therefore the price will increase as well, which negates the effect of using off-peak power.
There are a lot of questions that are left unanswered about the smart grid: there are still a lot technological an policy issues that need to be addressed, before this idea is implemented in full scale.
Articles / References:
[1] http://news.cnet.com/8301-11128_3-10165605-54.html?tag=mncol;txt
[2] http://en.wikipedia.org/wiki/Smart_grid
[3] http://news.cnet.com/8301-1009_3-10201651-83.html
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Another area of concern is privacy. Depending on how integrated these systems are and how much they communicate they may produce data which the consumer would not want to get out. I would personally be concerned that someone may decide that they do not like it that I keep my home too warm, by their opinion, in the winter or that I leave the refrigerator door open too long each day. This may seem silly but when we have organizations filing lawsuits against fast food companies for selling products that are too fattening I think it is justifiable that I do not want any data about myself that might be considered 'bad behavior' to get out. I can already see some groups crying for punitative taxes on people who do things they dislike.
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