SOME DAY, THE SMART GRID INFRASTRUCture being assembled by utilities across the country will become a huge enabling tool for power producers and consumers alike.

Although it is likely still two to four years away, a fully operating smart grid will allow for huge benefits like real-time asset management, new data management knowledge and news ways to manage bidirectional power flow on the grid resulting from expected increases in distributed generation.

Smart meters the first step
Currently, smart meters are being deployed by the millions, helping utilities to isolate power outages more quickly and, in some cases, avoiding outages altogether. While smart meters are deemed the first step toward achieving a fully integrated smart grid, a host of infrastructure issues must be worked out in order to accomplish that goal. So while a few utilities claim to be well on the road to smart grid enablement, those that are actually collecting data already are doing very little with it. So the real promise of smart grid technology lies several years down the road.

"The current status of the smart grid is very intriguing, and a lot of the clients we're working with are beginning to see that smart grid is not really an option, but more of a survival platform that they will need for the future," said Kevin Sullivan, regional director for management operation consulting for consulting firm KEMA. "Realizing the benefits is still the biggest challenge for most of the utilities that are applying this technology."

Smart grid technology takes on many meanings and almost every utility describes its role and importance differently. In fact, smart grid projects vary greatly from one utility to another.

Reducing distribution losses
Seattle City Light, for example, recently applied for funding for an energy optimization project, the goal of which is to reduce distribution losses and energy consumption for its customers by reducing customer voltage levels, optimizing reactive power flow and balancing the distribution phase load. Seattle City Light is part of the nine-member Pacific Northwest Smart Grid Demonstration Project, which is testing various technologies in different use cases.

Michael Pesin, chief technology advisor and smart grid architect for Seattle City Light, notes that by reducing customers' voltage by 1 or 2 percent, customers could save millions of dollars in energy costs.

Conservation voltage reduction stands to be one of the big benefits of a fully implemented smart grid. Typically, voltage reduction reduces energy consumption by an overall factor of 0.8. That means that if a utility is able to reduce voltage by 1 percent, it will see a 0.8 percent reduction in energy consumption.

Pesin said that many devices in homes consume less energy at lower voltages. So when you lower the voltage at the customer's home, you reduce the energy consumption.

"For customer electrical equipment to function properly, the utility company has to maintain customer voltage between 126 and 114 volts," he said. "In general, the lower the voltage is, the less is the energy consumption. However, if your voltage is too low you can damage some customer equipment such as electric motors."

In the past, utilities had no real-time visibility into a customer's voltage. As a result, they had no choice but to maintain customer voltage at a higher level to prevent equipment damage. By deploying smart meters and distributed sensors, the utility can have near-real-time information about voltage, power quality and much more.

"If you use this information in conjunction with intelligent computer applications and communications-enabled control equipment in the field, you can reduce customer voltage to the optimal level," said Pesin.

Another direct benefit to the utility is optimizing reactive power flowing on the distribution lines to reduce energy lost by the utility during the process of sending electricity from the distribution substation to the customers.

Real-time asset management
Another thing that utilities have to look forward to in a world that is interconnected by smart grid technology is the ability to better manage assets such as substations and other equipment. By having real-time visibility into the data streaming from substations, utilities will be able to better monitor the security and health of equipment, and therefore predict failures and required downtimes to repair equipment.

"Most utilities rely on a scheduled maintenance system, requiring that a transformer be maintained on a certain date," said Pesin. "When we are able to monitor the system and see real-time data come from the transformer, the data will tell us that the transformer may have failed and needs to be taken out of service and repaired immediately. Or we can look at the data graph and see that it may need to be taken out of service for maintenance in six months instead of 12 months, so that prevents a failure. Again, it's a conceptual idea, and before we get there we need to have the infrastructure in place and have devices like sensors and other equipment that monitor these things."

Yet, it is hardly pie-in-the-sky stuff, and there are many potential use cases for an enabled smart grid. Connectivity for field crews is gaining a lot of attention. By including those workers in the same digital stream that AMI data is gathering, dispatchers can be much smarter about where workers are deployed in the field.

A distribution automation focus
Experts say that the more interesting projects are the ones in which distribution automation has been the focal point for the smart grid rollout, such as the digitization of protective relays at substations and installing intelligent RTUs and networks to prepare for the use cases that might deploy that digital technology in advanced automation scenarios.

"But again, we're not at the point where those scenarios have been played out or even demonstrated," said Sullivan. "I really think that in the next two to three years we should see the integrated role of taking data and turning it from data to information and, more importantly, taking that information and turning it into knowledge," he said. "Three years from now I feel there will be a big renaissance, if you will, saying this was not a bad idea after all, especially when utilities start to realize that to control bidirectional power flows, you need to have a smart grid infrastructure behind your power delivery system."

Of course, the smart grid jackpot revolves around distributed energy and the increase in power generated from the wind, sun and other renewable sources, and the utility's ability to integrate various solutions to allow a distributed-generation environment to exist. While renewables present the biggest opportunity for the smart grid, it is clearly also the biggest challenge.

For years, power generators have worked in a right-to-left fashion to deliver energy to the customer. But as more consumers begin to produce energy from renewable sources and put energy back onto the grid, the traditional utility power generation equation will change dramatically.

"The distributed renewals issue is probably what will cause the most heartache for utility operators when it comes to managing the stability on the network," said Steve Pullins, president of Horizon Energy Group. "We have the tools at the transmission level to help to do that, but we are short on tools to manage the variability that renewables introduce to the distribution network."