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Building a Better Utility

Many of the obstacles and strategic issues that utilities face today are all too familiar. This time they must be solved with a different business model.

Fortnightly Magazine - June 2005

throughout the utility world. Utilities need to focus on technology that lowers prices, but why should they take risks when there's no reward?

Transmission and the Power to Transform

Today, any technological transformation in the industry is likely to start with transmission. Why? Computers control electricity flows 24/7, but the electricity grid can't direct the electrons flowing across its network. The difference is silicon. Computers use electronic switches; the transmission grid uses mechanical switches. And silicon makes all the difference.

An electronic switch operates at the speed of electricity. Add silicon to the grid and throughput can be increased.

We don't need to site and build new lines. We can use the lines we already have more efficiently-and with higher reliability and stability. When electricity flows are controllable, the system can operate closer to design limits, and that transforms the economics not just of transmission, but of generation as well.

Imagine the impact of increasing power flows on existing lines by 50 to 300 percent. What would it do to capacity utilization of generating plant? To fuel prices? To gas demand?

A Smart Grid Is … Well, Smart

That's the start. And from there, it only gets better. Creating an intelligent network enables a system that is self-healing. That means the most efficient use of plant, equipment, and resources. That improves energy reliability and stability. That enables new products and services.

A smart grid enables appliances like air conditioners and refrigerators to cycle themselves on and off, depending on the owners' preferences for comfort and price. Think what that could do to peak-demand requirements and the value of expensive and inefficient generation. Think about air-conditioners and refrigerators beginning to network, creating complex systems that adapt to changing weather and price conditions.

Think about what that means for pricing. Some estimates show that a 2.5 percent reduction in peak demand could reduce the costs of serving that peak by 25 percent.

And eliminating frivolous or time-insensitive peak load not only frees up generation but has a huge effect on transmission system capacity.

Then there's broadband over powerline (BPL) technology, which can start with load control and peak demand and then morph into a whole new line of products and services-ones with higher profit margins and happier customers.

All of this makes me wonder about the future of central station power generation.

Distributed Generation for the Digital Economy

Distributed generation (DG) is the future. It has to be. DG can provide support to the transmission system, so the costs of DG shouldn't be compared with central-station plant but evaluated based on how they change reactive power needs, voltage, and stability on the transmission lines.

DG also is the future in a digital economy. Central station power plants cannot supply the reliability and power quality needed for a digital society. Most customer interruptions are not due to failures in central-station plant. They're in the transmission and distribution (T&D), and mostly the D side of the house. So siting plant closer to (or actually at) the load source will increase power quality and reliability.

Imagine what