Advanced Metering Infrastructure and the Smart Grid

The Promises and the Perils of a Smart Infrastructure

Available UN forecasts suggest that global demand for electricity will grow by about 84% between today and 2035. Part of that growth will come as electrification reaches the roughly 20% of the global population that still doesn’t have access to electricity. Most of the rest of the increase will come from rapid increases in industrial production in developing regions outside of the United States. Consumption in the US and other countries with mature economies is expected to grow at a much slower rate. That doesn’t mean that we won’t be affected by the overall global consumption increase.

In the US, a large portion of our generation, transmission, and distribution infrastructure is old in years, and even older in terms of the technologies that keep the system up and running. Americans want electrical power that is cheap, reliable, and as clean as possible.

The Promises

Technologies and devices are available today that will allow the US to develop a national “Smart Grid” system. The Smart Grid system will eventually allow a many-to-many communication relationship between control centers and hundreds of millions of devices and data sources from power stations to home meters. The system will be more efficient, more reliable, and potentially more resistant to attack by storms or malicious attackers, provided security is built into the system from the beginning. It will also be better able to integrate the growing number of small-scale renewable energy initiatives, and perhaps local energy storage devices like fuel cells or batteries for a new generation of automobiles.

With the introduction of Advanced Metering Infrastructure (AMI) individual consumers will be able to track energy consumption in 15 minute intervals around the clock, giving them a valuable tool to manage their energy costs. Thoughtful consumers will find ways to shift electrical usage to lower cost off-peak periods – or take advantage of lower cost interruptible services plans for non-critical applications like heating swimming pools or charging their new electric vehicles.

To better understand how such a system would work, it may be useful to divide the total national electrical system into two big pieces. A variety of organizational structures, some very large, and many quite small, buy electricity on the wholesale market, and sell it through distribution networks to individual consumers. The control centers of these distribution organizations can be thought of as the point of contact between the two parts of the systems.

Distribution control systems need to have some means of receiving system status information. The sophistication of these status-gathering mechanisms varies widely. Some distribution operators have already passed the cost of System Control and Data Acquisition (SCADA) technologies to their rate payers with the promise of improved reliability and operations cost savings down the line. Others have so far committed little or no ratepayer money to SCADA. For the full promises of the Smart Grid to become a reality, the technologies collectively referred to as Advanced Metering Infrastructure need to be put into place. As the name implies, AMI implementation involves new intelligent meters, along with a communication link to the distribution control center. At the control center a data recep­tion and management system is required to handle meter data, and integrate it with existing or yet to be installed SCADA data from substations and other key points in the distribution system. When completed, the AMI system will provide distribution system control centers with much improved data with which to manage their local systems, and will provide an enriched source of demand information for the second major part of the total electrical system.

This part of the system includes the major investor owned and independent power producers, the privately owned interstate transmission system, and a system of Regional Transmission Organizations (RTOs) under the supervision of the Federal Energy Regulatory Commission (FERC). The RTOs play several very important roles in the national system. They attempt to monitor demand throughout their service areas, and increase or decrease the number of power suppliers on-line to keep the system in balance. Their ability to control the number of power suppliers on-line stems from the fact that RTOs establish the price paid to generators through a number of market mechanisms, including a spot market that can be used to quickly raise or lower the amount of power fed into the system. The enhanced sensitivity to real time electricity demand provided by AMIs will improve the effectiveness of RTOs, and perhaps lower the country’s total energy bill.

The Perils

There is widespread agreement in the electric utility industry at the national energy policy level that the AMI/Smart Grid model is the right model for America’s future. Aside from a small contingent of opponents who believe that creating a record of household electricity consumption by time of day is an unwanted and perhaps dangerous invasion of privacy, there are two big issues that are influencing implementation progress. Perhaps the easiest to understand is the enormous cost of the system. The lion’s share of that cost will be borne by consumers though increases in their monthly electric bills, though some will also be borne by the shareholders of investor owned utilities. Sorting out who gets to pay for what has been a slow and difficult process, particularly when many consumers are quite satisfied with the electric service they now receive, and are reluctant to absorb additional cost for a benefit they may not personally experience.

The second challenge facing the AMI/Smart Grid implementation is the need to make the system resistant to terrorist cyber attacks. AMI systems work by capturing digital information from literally millions of separate points, and integrating that data into control systems throughout the grid. How do we ensure that only valid data enters the system? How do we stop a sophisticated cyber terrorist from using one of those portals to enter dangerous misinformation or malicious code into the system? A security breach affecting an RTO’s performance could shut down power to major portions of the country with devastating consequences not only to electricity users, but also to our transportation, communication, and information management systems.

The security challenges will be solved, but defining the best solution strategies, and allocating responsibility for implementing those strategies, has proven to be a very tough nut to crack. At the center of the controversy is a steadily growing list of compliance standards that the utility industry must meet. These Critical Infrastructure Protection (CIP) standards often carry heavy compliance costs, a factor made more onerous by seemingly plausible arguments that any given standard may be gross overkill, too weak to be effective, or both.

Our country needs AMI and the Smart Grid. It will take time, but these issues will be resolved.

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