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Thursday, May 22, 2008

Smart (energy) Grid - Environmental and Social Sustainability Benefits

I attended the Corporate Climate and Energy Summit of the World Resources Institute earlier this week in Washington, DC. I participated in an informative, frank and very upbeat breakout session on the Smart (energy) Grid with speakers from Cisco, SunEdison and GridPoint.

If you have not come across Smart Grid before, the basic technologies enable energy consumption at a user level to be measured and displayed in real time. Users can see how much is being used at any one time and which devices are driving that usage and take action appropriately. It also enables discrete pricing to be established so sophisticated pricing programs can be established to incent energy consumption to move from peak to off-peak times. Large industrial customers can put in place lower tariff interruptible supplies where, by prior agreement, supplies can be ceased during peak times.

This has significant potential carbon emission benefits. Some of the greatest carbon emissions come about when the oldest, least efficient coal fired stations are fired up to meet a couple of hours of peak usage in the middle of a hot day. Cutting those peaks and keeping that old station from being fired up has a disproportionately large benefit on reducing emissions.

If we connect the dots there is a direct link between demand from devices, supply and price. So for example, you could envisage a more sophisticated consumer customer setting the maximum energy prices they are prepared to pay for using the toaster, running the HVAC, running the freezer, etc. When the power provider is approaching a peak, the price is gradually increased until enough devices switch off that the high emissions coal station doesn't have to be fired up. Or, perhaps, we all allow our aircon thermostat automatically run two degrees higher for two hours. It is certainly better than the grid overloading and shutting down completely.

This sophisticated level of management and control also has social impact. Something that is currently seen as a utility to which we pretty much all have basic rights at a common price, becomes auctioned off to the highest bidder. From the other perspective, we have a powerful tool for policy makers to ensure the basic rights of poorer communities to remain thermally comfortable in the summer and winter. Perhaps other usage needs (like powering my plasma TV) go in the luxury category and get 'auctioned' off during peak times.

More granular management and control enables finer tuning in times of limited supply. The creators of the technology are not responsible for how the technology is applied in this regard -- that is a matter for government policy. But it’s great to identify the social sustainability opportunities and promote them as much as we do the environmental sustainability benefits of the technologies that comprise Smart Grid.

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