Satellite image shows the Northeast Blackout of 2003, which affected more than 55 million people in the USA and Canada. Will smart grid tech make blackouts a thing of the past?

by Dennis Powell, e-Management

By most accounts, the smart grid will be the best thing since Seinfeld ruled Thursday nights back in the 1990s. Okay, maybe not that good. But really, what’s so “smart” about that grid anyway? Well, it’s a modernized electricity delivery system, which uses two-way digital technology that can monitor, track, and control energy used by appliances and devices. The smart grid promises to save businesses, governments, and consumers money; reduce energy consumption; and be less susceptible to brownouts and blackouts. Sounds smart.

Even the sometimes hard-to-please environmentalists are on board with the smart grid. They say the smart grid will help reduce global carbon emissions, and integrate other forms of sustainable energy production. Unsurprisingly, President Obama also says the modernized electricity system is smart for America. His administration has led the way to at least $4.5 billion to help smart grid technology become a reality in the U.S.

But is the smart grid an intelligent solution for all of us? Are there any hidden threats that would leave us feeling like: “Is this really better than what we had?”

What about Those Smart Hackers?
Since the smart grid is a computerized system, this opens you, business, and government organizations to cyber attacks. A smart grid is supposed to make blackouts less likely, but some experts are saying not so fast. According to them, smart grid technology has vulnerabilities that must be addressed in order to protect us from terrorist plots. For instance, a savvy hacker or terrorist organization could hack into the grid and shut it down causing massive blackouts. The results of such an attack could be devastating, especially if they were accompanied by coordinated physical security threats. The cyber experts are recommending that before a smart grid is built, cyber security safeguards need to be put in place.

What about Smart Costs?
The smart grid price tag to consumers is another real concern under the modernized system. Case in point, a pilot payment program led by a Massachusetts utilities company recently came under fire when the energy provider proposed a pay-in-advance plan for nearly 800 low-income households. Another proposed plan would charge a premium beyond basic energy usage such as laundry, heating, and cooking needs. According to the utilities company, the rationale is to promote and introduce energy efficiencies to consumers. The fear from opponents, however, is that such plans could leave low-income households without energy if they were to run out of credits, and the proposed payment plans could even circumvent state laws designed to protect consumers from being left in the dark because of slow payment or lack of payment. Nevertheless promoters across the U.S. of pay-in-advance programs cite that consumers actually use less energy than others who have traditional plans. Still, there is evidence that is only the case for more affluent users.

What about Smart Benefits?
Is it possible the sheer benefits of the smart grid outweigh the concerns of some its detractors? In addition to cool things to come from the smart grid discussed earlier, proponents say consumers will use less energy because the technology promotes consumer choice and greater efficiencies. Arguably, consumers currently use more energy than they need. In contrast, the smart grid may give the consumer more awareness of their total consumption in real-time, which may lead to “smarter” energy usage. Since power outages are theoretically less likely under a smart grid system, low-income consumers and others who are especially vulnerable if there is a loss of power can sleep easier at night during extreme weather conditions.

According to a 2006 study by the Ernest Orlando Lawrence Berkley National Laboratory, power outrages costs the U.S. $80 billion every year. So there is also an obvious financial benefit for business and government organizations that must deploy resources under duress to deal with power failure, and its immediate fallout (e.g., public health issues, national security issues, downtime of financial systems, additional pay for overtime).

Another “cool” benefit, which may resonate with consumers, is that the smart grid really is “smart.” During times when there is less demand for energy, the grid could automatically activate a home heating system. Likewise, at peak hours, the smart grid could turn off less essential appliances or devices such as an mp3 charging deck or lamps.

Is There a Smart Future?
Clearly, there are a few people who have some reservations regarding smart grid technology, and others who are all for it. If the modernized grid is to be successful, industry and government must plan ahead to address issues of cyber security safety as well as to ensure scalable systems. Additionally, legislative bodies may have to reconsider pricing and payment enforcement practices that safeguard consumers from big utilities, and if necessary enact laws to protect the mutual interests of users and providers.

Looking Forward to Your Smart Comments…
We want to hear from you. Smart grid: cool idea or just plain dumb? Is implementing smart grid technology worthwhile? Are we rushing into it? Once in place, how do you think pricing will play out for consumers? Will cost savings realized by electricity companies trickle down to you? Will our government organizations be ready for cyber terrorists’ plots to take advantage of the network vulnerabilities of the modernized grid?