by Enrique Santacana, ABB North America
On May 18, U.S. Secretary of Energy Steven Chu and Commerce Secretary Gary Locke convened a meeting of about 70 representatives from the utility industry, state regulators and academia to discuss the development and wide adoption of standards in smart grid technologies.
I attended the meeting and am encouraged by the Obama administration’s leadership and sense of urgency on this topic. My industry colleagues share these feelings. Standards will be instrumental in making the smart grid a reality by promoting interoperability, and everyone at the meeting understood this principle.
The administration is approaching its smart grid initiative practically, and part of that is recognizing that the standards process needs a strong central coordinator, in this case the National Institute of Standards and Technology (NIST). While Chu and Locke expressed desire for unanimity first and consensus second, they said that the administration, working through NIST, will not shy from making informed decisions to progress the process if a broad consensus cannot be reached. They described the standards effort in months, not years, with clear milestones.
The National Electrical Manufacturers Association (NEMA) recently identified financial incentives in a letter from its board of governors to Locke and Chu following the meeting. The NEMA letter outlines several areas that should be addressed to expedite smart grid development and implementation:
- Intellectual property—Adequate protections are needed to preserve patent and intellectual property rights of suppliers.
- Testing and certification—With NIST as the driver, we need a clear, open process for equipment and systems to be accredited as compliant with smart grid standards.
- Review and governance—We need an open process to manage the submission and acceptance of standards with input from stakeholders.
- International harmonization—NIST should make every effort to align the work done here with existing international standards. This will help avoid an overly diverse patchwork of standards, and it recognizes the international nature of the smart grid so we can leverage work already done elsewhere.
- Financial incentives—The administration should support the standards process with funding for activities from research and development through implementation by allowing accelerated depreciation schedules for investments in smart grid technologies and by supporting an aggressive schedule for asset retirement to avoid stranding previous utility investments.
- Project funding—NEMA supports the administration’s move to increase the ceiling on demonstration project funding and encourages involved agencies to continue to review smart grid grant proposals in a timely, thorough manner.
- Backward compatibility—NEMA encourages NIST to consider carefully the trade-offs between new functionality and compatibility with existing equipment and systems in the field.
This last issue is especially important. Ultimately, a fully realized smart grid will depend largely on interoperability among different types of devices and equipment supplied by different vendors. The real objective with standards is to achieve a level of interoperability that will sustain the accelerated implementation of smart grid technologies. Achieving that objective will involve leveraging investments that have already been made.
For example, in substation automation and protection, the IEC 61850 standard has been well-received in many parts of the world. In the U.S., however, DNP3 acts as a de facto standard. As a major supplier in the substation arena, ABB recognizes the need to support both standards. It’s encouraging, then, to see DNP3 and IEC 61850 included in the Department of Energy’s recently announced smart grid standards framework.
Our industry’s goal should be to chart a course with standards adoption that optimizes trade-offs among functionality, market penetration, speed and cost. There is already a great deal of standards activity across the industry, and we should endeavor to build on these efforts.
It also will be important for the standards that guide smart grid development to focus on performance objectives rather than the methodology or technologies used to reach them. Standards should not be prescriptive; they should focus on the “what” rather than the “how.” Again, there was broad agreement from all parties at the White House meeting.
Finally, the smart grid is not a panacea, but in some cases the goals we have set for it can be approached from other quarters. Energy efficiency, for example, stands to be improved with the implementation of smart grid technologies, but there are many ways to meet that objective.
In the industrial sector, electric motors account for a majority of all electricity used, and the application of controls such as variable speed drives can have an enormous impact. Energy savings of at least 20 percent are common with these devices (70 percent is not unheard of), and the payback is typically less than two years.
Even within the realm of smart grid, we need to remind those outside our industry that the grid we envision is more than just smart meters. There are numerous available technologies that can be applied at transmission and distribution levels to improve the reliability, efficiency and sustainability of our power systems. A fully realized smart grid will extend across the entire electricity value chain from generation to end use.
Chu ended the White House meeting with a stakeholder call to action to allocate the necessary resources and make the commitment to bring the smart grid into existence.
In my view, our industry is up to the task. From what I have seen, we have government partners who are equally motivated and prepared to tackle the work ahead.
Enrique Santacana is president and CEO of ABB Inc., and is responsible for the company’s North American operations. He is a member of the U.S. Department of Energy’s Electricity Advisory Committee and the Business Roundtable, and sits on NEMA’s board of governors.