Washington, DC, U.S.A. --- (METERING.COM) --- July 21, 2009 - Many smart grid capabilities are just beginning to emerge in the United States, but the adoption of various technologies – such as smart metering, automated substation controls and distributed generation – is growing significantly, according to the U.S. Department of Energy’s first smart grid system report.

The report also notes that smart grid capabilities are socially transformational and that to achieve broader deployment and implementation, larger cultural change is likely to be needed. As with the internet or cell phone communications, smart grid technologies have the potential to dramatically change how electricity is experienced, but improvements in physical and cyber security and information privacy will require consumers, manufacturers and utilities to closely follow a range of grid best practices.

The report, the first biennial report on the current status and prospects of smart grid development in the U.S., identifies 20 metrics for measuring the status of smart grid deployment and impacts. These are in the areas of area, regional, and national coordination (dynamic pricing, real time system operations data sharing, distributed resource interconnection policy, policy/regulatory progress), distributed energy resource technology (load participation based on grid conditions, load served by microgrids, grid connected distributed generation, EVs and PHEVs, grid responsive non-generating demand side equipment), T&D delivery infrastructure (T&D system reliability, T&D automation, advanced meters, advanced system measurement, capacity factors, generation and T&D efficiencies, dynamic line ratings, power quality), and information networks and finance (cyber security, open architecture/standards, venture capital).

The report says that supporting the bi-directional flow of information and energy is a foundation for enabling participation by consumer resources. Advanced metering infrastructure (AMI) is receiving the most attention in terms of planning and investment. Currently AMI comprises about 4.7 percent of all electric meters being used for demand response. However, a large number of the meters installed are not being used for demand response activities. Nevertheless, the amount of load participating based on grid conditions is beginning to show a shift from traditional interruptible demand at industrial plants toward demand response programs that either allow an energy service provider to perform direct load control or provide financial incentives for customer responsive demand at homes and businesses

Distributed energy resources and interconnection standards to accommodate generation capacity appear to be moving in positive directions. Distributed generation (carbon-based and renewable) and storage, although a small fraction of total summer peak, appears to be increasing rapidly. In addition, 31 states have interconnection standards in place, with 11 states progressing toward a standard, one state with some elements in place, and only 8 states with none.

Companies with new smart grid concepts are receiving a significant injection of money. Venture capital funding of startups grew from $58.4 million in 2002 to $194.1 million in 2007. Electric utilities are finding some incentives from regulatory rulings that allow them rate recovery for smart grid investments. Some of these rulings have allowed AMI deployments to move forward. Great interest and investment in electric vehicles, including plug-in hybrids, is changing the future complexion of transportation and represents a significant demand for new products and services.

Not all customers have the same power quality requirements, though traditionally these requirements and the costs to provide them have been shared. While the state of power quality has been difficult to quantify, the number of customer complaints has been rising slightly. Smart grid solutions range from local control of power needs in a microgrid and supporting distributed generation, to more intelligent operation of the delivery system through technology such as is used in substation automation.

Gross annual measures of operating efficiency have been improving slightly as energy lost in generation dropped 0.6 percent to 67.7 percent in 2007 and transmission and distribution losses also improved slightly. The summer peak capacity factor declined slightly to 80.8 percent while overall annual average capacity factor is projected to increase slightly to 46.5 percent. Contributions to these measures include substation automation deployments. Presently about 31 percent of substations have some form of automation, with the number expected to rise to 40 percent by 2010.

The national averages for reliability indices appear to be trending upward. Smart grid directions, such as demand side resource and distributed generation participation in system operations are expected to more elegantly respond to disturbances and emergencies. At the regional system operations level, advanced measurement equipment is being deployed within the delivery infrastructure to support situational awareness and enhance reliability coordination. Cyber security challenges are beginning to be addressed with a more disciplined approach.

The report also identifies challenges to smart grid deployments, of which the most significant are the cost of deployment, ensuring interoperability of smart grid standards, and the development of economical storage systems. Another is the uncertainty of the path that smart grid development will take over time with changing technology, changing energy mixes, changing energy policy, and developing climate change policy. The challenge of development becomes an issue of providing flexible regulation that leverages desired and developing technology through goal directed and business case supported policy that promotes a positive economic outcome, says the report.