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Coming to America

U.S. utilities are gaining valuable lessons from technology developments abroad.

Fortnightly Magazine - March 2008

for example, might not see the value of an investment in smart metering if the benefit is perceived to accrue within a load management center. “In the United States, utilities rely more on people’s experience for management, with an incumbent-based operation, than Asian utilities, where operational discipline is high,” Ipakchi says.

In the same sort of cross-jurisdictional conflict, a state located between a new wind farm and its ultimate consumer base might not see the value in building transmission lines across its territory. Thus federal regulatory initiatives or regional pacts may be necessary to foster grid enhancements that involve otherwise isolated utilities or states—both of which are more complicated than top-down planning that occurs in many other countries.

But perhaps the biggest reason U.S. utilities are slow to adopt new technology is a simple lack of accurate information. “There are a lot of myths surrounding new technology that utilities need to get their arms around, so that they can see if it’s real or not,” Lauby says. “That’s why we are forming a task force to bring experts from overseas to meet with U.S. utility people, to help characterize what they need to look at in terms of long-term planning and operations.”

Societal Value

Utilities frequently find difficulty measuring the monetary value of adopting new technologies. Still, some early programs have shown strong economic inducements. In Ontario, where the province mandated the use of smart meters for all customers by 2010, the estimated cost is in the neighborhood of Cdn$2 billion. “For that investment, projections are that over a 10-year period or so, the province will be able to defer some Cdn$25 billion in new generation costs,” Bridgen says. “That’s where the real return comes in.”

An even more rapid return is being tallied in Italy, where ENEL’s estimated E 2 billion investment is yielding a savings of some E 500 million per year, according to Lund at Echelon. The company provided AMI technology for ENEL, among the 1 million meters it deployed in Europe.

“Advanced metering does much more than just meter how much power is used or co-generated,” Lund says. “It also measures voltage, current, phase, and things that may not be a component of the customer bill, but that will provide a better understanding of how a utility’s grid is functioning so it can tell them more about where and how they need to plan investments for building out the grid.”

The societal value of high system reliability is more difficult to measure than economic value, but analysts say such considerations will become increasingly important in the United States, as they already have in Asia and parts of Europe.

Planning the Future

Although U.S. utilities might not be as quick to act as their international counterparts, experts agree the U.S. utility industry is moving into an accelerated part of the adoption curve—particularly in grid automation technologies, now that telecommunications costs have declined and services have improved. “Many U.S. utilities will be jumping into big programs,” Lund says. “But we are a little more conservative here than overseas, so they’ll