Let's talk how smart grid is applied to utilities and consumers. A smarter grid offers valuable technologies that can be deployed within the very near future, or are already deployed today. In the short term, a smarter grid will function more efficiently, enabling it to deliver the level of service we've come to expect more affordably in the era of rising costs, while also offering considerable societal benefits, such as less impact on our environment. The smart grid represents the longer term promise of a grid remarkable in its intelligence and impressive in its scope, although it is universally considered to be a decade or more from realization. Longer term, expect the smart grid to spur the kind of transformation that the Internet has already brought to the way we live, work, play, and learn. So what is the smart grid? Transformation from a centralized producer-controlled network to one that is less centralized and more consumer interactive, change of the industry's entire business model and its relationship with all stakeholders, involving and affecting utilities, regulators, energy service providers, technology and automation vendors, and all consumers of electric power. A smarter grid makes this transformation possible by bringing innovative philosophies, concepts, and technologies that enables the Internet to the utility and the electric grid. Technologies already in place are, advanced metering infrastructure, visualization technology, phasor measurement units, distributed generation, peak demand, smart grid versus smart meter, an array of technological approaches that will make it work. Devices such as wind turbines, plug-in hybrid electric vehicles, and solar arrays are not part of the smart grid. The smart grid encompasses the technology that enables us to integrate, interface with, and intelligently control these innovations and others. Once again, in short, smart grid is intelligent, efficient, accommodating, motivating, opportunistic, quality-focused, resilient, green. Let's examine how smart grid applies to utilities. Utilities are dedicated to providing for the public good by operating, maintaining, and building additional electrical infrastructure. The cost associated with such tasks, billions of dollars annually, and the challenges associated with them are enormous. Additional infrastructure must be built, smart or not. Investment totaling approximately $1.5 trillion will be required between 2010 and 2030 to pay for this infrastructure. The smart grid holds the potential to be the most affordable alternative to building out, by building less and saving more energy. Energy efficiency on the load side, consumers capable of exercising usage control are suddenly and simultaneously also able to exercise their environmental stewardship, resulting in tremendous consumer side energy efficiencies. Let's talk about avoidance of new construction. Increased asset optimization means more reliance upon the most efficient power plants, and less reliance upon the least efficient peaker plants. It allow utilities to defer new generation investment. The ability to effectively manage load with existing transmission and distribution infrastructure means that, ultimately, utilities would no longer have to build, or could at least defer infrastructure to account for rapidly increasing peak demand. Let's discuss integration of renewable energy sources. Given the significant concerns regarding climate change, the need for distributed solar and wind power is critical. According to the European Wind Energy Association, integrating wind or solar power into the grid at scale, at levels higher than 20%, will require advanced energy management techniques and approaches at the grid operator level. The smart grid ability to dynamically manage all sources of power on the grid means that more distributed generation can be integrated within it. Talking of preparation for the future, a smarter grid is a necessity for plugging in the next generation of automotive vehicles, including plug-in hybrid electric vehicles, to provide services supporting grid operation. Let's talk about smart grid and how it applies to consumers. For most consumers, energy has long been considered as passive purchase. A typical electric bill is largely unintelligible to consumers and delivered days after the consumption actually occurs, giving consumers no visibility into decisions they could be making regarding their energy consumption. Electric bill includes a hefty mortgage payment to pay for the infrastructure needed to generate and deliver power. As much as 33% to 50% of electric bill is non-negotiable. With demand estimated to double by 2050, and more power plants, transmission lines, transformers, and substations to be built, the cost of this big iron will also show up on your bill in one way or another. Global demand for construction material will rise substantially, driving prices up. Connecting to consumers by means of the right price signals and smart appliances, for example, a smarter grid can reduce the need for some of that infrastructure, while keeping electricity reliable and affordable. Enabling consumers to automatically reduce demand for brief periods through new technologies and motivating mechanisms like real time pricing, the grid remains reliable, and consumers are compensated for their help. Ultimately, tapping the collaborative power of millions of consumers to shed load will put significant breaks on the need for new infrastructure at any cost. Instead, utilities will have time to build more cost efficiencies into their sighting and building plans. Given new awareness, understanding, tools and education made possible by smarter grid, consumers will be able to make choices that save money, enhance personal convenience, improve the environment, or all three. Research indicates that consumers are ready to engage with the smart grid, as long as their interface with the smart grid is simple, accessible, and in no way interferes with how they live their lives. At the residential level, smart grid must be simple, set it and forget it technology, enabling consumers to easily adjust their own energy use. Equipped with reach useful information, consumers can help manage load on peak to save money and energy for themselves, and ultimately for all of us.
