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Smart Grid in America and Europe (Part II)

Past accomplishments and future plans.

Fortnightly Magazine - February 2011

its investor-owned utilities to adopt smart grid deployment plans by July 2011. The plans must include a security strategy that addresses consumer information protection. A separate privacy rule will be enacted before allowing third-party access to consumer data. 33

Based on the privacy principles of domestic and international organizations, three crucial characteristics of a successful privacy policy become apparent. They are: transparency, life cycle privacy, and the goal of a positive sum gained from the smart grid. First, the utility or the third party must be open and transparent in its gathering and use of the consumer information. There must be monitoring of the activity, including audits and an opportunity for consumers to challenge the activity or use of the information. Second, privacy should be prevalent in the life cycle of the information, from the collection, use, and retention to disposal. In addition, data integrity and security should be a priority during the life cycle. Lastly, smart grid development should occur in a positive-sum manner so that the benefits of the smart grid outweigh the regulatory and technical hurdles. 34 Policies should avoid tradeoffs between privacy and smart grid objectives. The policy must specify the purpose of the data gathering and then minimize the amount of data gathered if the data does not serve the previously identified purpose. The acceptability of new technology, especially by consumers, depends on a clear confidentiality policy. 35 The special status of privacy in a home should not be set aside simply to deploy economically and socially beneficial technology.

Distributed Generation and Microgrids

One key characteristic of the smart grid is its ability to move away from centralized generation and to accommodate a wide range of distributed generation. Distributed generation includes back-up generators powered by diesel, but the smart grid should incorporate more grid connected distributed generation from renewable sources like wind and solar. 36 Environmental benefits from renewables include reducing natural resource extraction and reducing carbon emissions. In addition, distributed generation based on renewables can further improve efficiency by reducing line losses due to its close proximity to consumers. 37 It can even improve power quality and reliability, important for society’s heavy reliance on communication and digital equipment. Microgrids coordinate distributed generation to create a cluster of generation capable of satisfying local demand. A microgrid can island itself from the regional grid if necessary to preserve its operations. By coordinating a group of microgrids to provide the same amount of generation as a central power plant, distributed generation obviates the need to build new power plants. Distributed generation would no longer be a passive part of the gird, but instead be integrated into the system. 38

Europe has had extensive distributed generation and microgrid R&D since the late 1990s. The E.U.’s Fifth Framework Program (FP5), beginning in 1998 and ending in 2002, involved 50 research projects focused on integration of renewables and distributed generation into Europe’s electricity networks. This research continued through the Sixth Framework Program, which began in 2002 and ended in 2006. 39 Now the Seventh Framework Program, which began in 2007 and will

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