A “Peak” at an Example of a Smart Grid System

Blog, Energy, Les Routledge

Smart Grids for electrical utilities offer the potential to transform how electricity is produced, transmitted and consumed.  In some respects, it represents a comparable type of change to what the Internet introduced into traditional switched circuit voice networks and point-to-point host-terminal computing systems.  By linking users, producers and transmission operators into a dynamic and interactive network, Smart Grids offer the potential to increase the utilization of generating assets and create a platform that can introduce real-time competition into all parts of the energy markets.

The Globe and Mail has published an article that provides one illustrative example of how a  Smart Grid application can and does work to improve the operations of power networks.

These companies constantly walk a tightrope keeping the supply of power flowing into their grids in line with the amount customers take out. Today, the main way of doing this is to vary the amount of power going into the grid by buying extra electricity to meet peak loads. This power comes mainly from natural gas and hydroelectric generating stations, because coal and nuclear stations are too hard to throttle up and down as demand varies.  That means gas and hydro stations aren’t operating at full capacity.

…Enbala is connecting a smart grid to businesses and public sector organizations like water utilities that use a lot of electricity. When demand exceeds supply, the electricity grid operator will ask Enbala to trim demand. Enbala will send messages to machines at the utility, suggesting they take a break. At other times, when supply exceeds demand, Enbala will ask those same machines to fire up and use the power while it’s plentiful.


Some critic of renewable energy production highlight the intermittent nature of their capabilities to dismiss their value.  Others go as far to label Smart Grids as part of what they consider a bad idea.   What that criticism overlooks is that demand is constantly changing and subject to rapid increases or decreases in demand.  Demand is not constant over the cycle of a day, hour-to-hour, or even minute-to-minute.  In some respects, demand is as variable as something like say the speed of the wind or the intensity of sunlight.

To deal with this variability of demand, utilities need to keep some extra generating capacity in reserve.  Operating the network is a constant balancing act of attempting to supply the correct amount of power to the network to meet demand on a real-time basis.  Overloading a power plant or a high capacity transmission link can result in the system “tripping off line” in a manner comparable to how a breaker flips on a circuit in your home when it is overloaded.

Thermal plants, whether they are powered by coal, bio-mass, or nuclear fuel, need over 12 hours to ramp production up from a cold start.  Even combined cycle natural gas systems need a few hours to ramp up from a cold start.  Matching the generating capacity of slow response thermal plants with rapidly changing demand in real time is a challenging task.  Sufficient spare capacity must be kept “running” but in reserve to deal with sudden changes in demand or unexpected outages.  To some, that state of affairs may appear to be inefficient, but it is a necessity to maintain a reliable supply of electricity.

The exception to the above situation is hydroelectricity which can rapidly ramp its production up and down.  However, in most large utilities, the proportion of power produced by hydro assets is limited by both installed capacity and the capacity of transmission lines.  While it would be nice if all of North America enjoyed the hydro-electric resources of provinces like Quebec or Manitoba, the reality is that they do not.

For provinces and states that rely primarily on thermal electric power, Smart Grids can introduce an ability to vary demand in response to real-time supply-and-demand-inbalances.  When demand exceeds supply, a Smart Grid application can idle some discretionary components of consumption.  When supply exceeds demand, a Smart Grid application can ramp up some demand.  The end result is that power networks are not over stressed and power plants can operate at increased rates of efficiency.

The Smart Grid application profiled in the Globe article focuses on industrial users that have some flexibility over when they need to draw power.  Other target applications can include large data centres or heating-cooling systems.  In the longer term, commercial and residential appliances such as hot water heaters (household, swimming pool, hot tub) or freezers could be another type of load that could be altered in response to supply-demand balances.

A side benefit of implementing Smart Grid systems is that they can also deal with intermittent production of electricity from co-generation or bio-gas operations.  For example, the amount of energy that can be produced from bio-gas associated with livestock production or waste water treatment is dependent on the amount of organic material being processed as well as other factors such as the ambient temperature.  Smart Grids can handle that variability of supply in a manner compared to how they can deal with variability of demand.

And yes, a minor function of Smart Grids could be dealing with intermittent sources of power such as wind or solar energy.

In the long term, the potential impact of Smart Grids could be a transformation of the industry structure from a highly centralized, monopolist system into a dynamic market that features a many-to-many relationship between producers and customers.  Some commercial / industrial customers could even become suppliers as well as consumers of power through the use of combine heat-and-power systems.  It is even possible that some customers such as small farmers like me may want to connect solar panels or wind generators to a Smart Grid system.

When looked at in this manner, Smart Grids could, over time, evolve into a technology platform that resembles the technology infrastructure behind stock and commodity exchange trading platforms.  Instead of being an industry characterized by near-monopoly suppliers and captive customers, the electricity sector could become a market place where energy is produced by a multitude of suppliers and sold to empowered customers through open competition.  Like other markets, regulation and regulators would still exist, but their role in defining prices and tariffs would be much different.

Like the Internet, the deployment of Smart Grid technologies, infrastructure, systems and applications will be a gradual process.  After 20 years, we are still building out the Internet infrastructure (particularly the last-mile).  Smart Grid systems may require even longer to be universally deployed.  Hopefully over that time, public policy ideas emerge that take advantage of the capability of the technology to support open and competitive markets instead of entrenching old-economy monopoly interests.