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Smart Grid in America and Europe (Part I)

Similar desires, different approaches.

Fortnightly Magazine - January 2011

clean, efficient, and low-emissions energy technologies through coordinated research. 33 The SET Plan creates the larger research landscape which directs the E.U. smart grid projects to implement technology deployment in a coherent manner. 34 In 2009, when the commission adopted the 20/20/20 goal, it also published a funding map for the SET Plan. 35 Because the SET Plan is broad, the SmartGrids ETP, the EGGI, and the Framework Programs all contribute to SET Plan goals in one way or another. 36 The EEGI specifically points out that it enables the SET Plan. 37

E.U. smart grid deployment utilizes comprehensive goals and plans to set the course for industry groups and interested parties. The SmartGrids ETP is the main guiding document for smart grid development, and the EEGI Plan and the SET Plan help incorporate the smart grid developments in the E.U.’s overall clean energy development goals. In contrast, U.S. lawmakers have developed more laws and regulations, although they are far from complete or mature. Only recently has the U.S. expended great resources into R&D implementation.

U.S. Smart Grid Policy

The U.S. long-term goal for smart grid technology is to reduce energy demand by 20 percent, improve system efficiency by 40 percent, and incorporate 20 percent of renewables for electricity capacity by 2030. 38 It also hopes to be able to serve all critical loads at all times by 2030. The U.S. has addressed smart grid issues through meetings with industry, the Energy Independence and Security Act of 2007 (EISA), the Federal Energy Regulatory Commission (FERC) Smart Grid Policy, and the American Recovery and Reinvestment Act of 2009 (ARRA).

Initially, in 2003, the DOE met with electric industry leaders and stakeholders to discuss the future energy challenges of the U.S. and how the smart grid could address them. As a result, the meeting produced the Grid 2030 report, which defined the smart grid, its benefits, and the policy to facilitate its implementation. 39

Energy Independence and Security Act of 2007 : The EISA laid out the formal U.S. policy for modernizing the electric grid. 40 The EISA included new energy efficiency standards for appliances and required the adoption of interoperability and functionality standards for the smart grid. The EISA directs the National Institute of Standards and Technology (NIST) to develop interoperability and functionality standards. Once FERC is satisfied with NIST’s interoperability standards, then FERC must institute rulemaking proceedings to adopt standards and protocols necessary to “insure smart-grid functionality and interoperability in interstate transmission of electric power, and regional and wholesale electricity markets. 41 The standards must address physical security, cyber security, and a common information framework.

FERC Smart Grid Policy : In 2009, FERC issued its Smart Grid Policy. 42 The policy discussed system security and interoperability standards and it listed four priority standard setting areas: wide-area situational awareness, demand response, electric storage, and electric transportation. One main feature of the policy is the interim rate policy, with the goal of encouraging investm ent in smart grid systems until the standards are adopted by FERC. The policy also discussed FERC’s