While expensive and often complex to implement, smart grids and smart energy
management will be the solution to conserving energy and money for households
and governments across the globe, experts agreed at a Tel Aviv conference on
“The evolving smart grid is going to be the biggest gift of
21st-century technology,” said Reji Kumar Pillai, president of the India Smart
Pillai was addressing the second Conference on Smart Energy,
organized by Israel NewTech, the Economy and Trade Ministry, the Israel Export
Institute and the Israeli Smart Energy Association.
As the world’s
natural resources continue to deplete and energy demand rises, the concept of
smart energy becomes increasingly attractive for both business and government –
despite the heavy price tags, according to Ofer Sachs, CEO of the Israel Export
There is vast array of definitions around the world for the
terms smart energy and smart grid. Yasha Hain, senior executive vice president
of the Israel Electric Corporation, said he “found about eight definitions of
smart grid” when preparing for his conference presentation.
grid brings together the idea of grid modernization and the closer integration
of all actors in our electricity system,” Hain said, adding that the concept
requires that players “synchronize and optimize the electrical system of your
own home and of the big grid.”
When implementing smart grids, it is
necessary to ensure a robust transmission system, as the integration of
renewable energy sources – particularly wind and photovoltaic – can be quite
challenging for the electrical operator, he explained.
system and distribution network must enable “the stable flow of electricity,”
and provide quality power, cyber security and energy efficiency, according to
Hain. In addition, three “main smart issues” are vital to the smart grid’s
existence – the smart customer, the smart utility and the smart
Comparing the smart grid to the human body, Hain said that the
nerves would be the smart meters, the brains would be the demand-response and
energy management systems, and the muscle would be distributed energy generation
from a variety of sources as well as energy storage. The bones would be new
transmission lines of high-voltage direct current (HVDC) and superconductor
form, as well as new transformers and substation equipment.
important to the smart grid is the idea of the “smart city,” Hain
While a “smart city” is also a loaded phase with many definitions,
it can generally be described as one that is economically and environmentally
sustainable, and thrives off of modern information and communication technology
and infrastructural networks.
Smart grid investments provide intelligent
energy infrastructure that can link various parts of the city, but smart city
programs can help build consumer awareness about energy efficiency, Hain
explained. Whether focusing on smart grid or smart city programs or both, the
biggest challenge, however, is to extend the pilot programs into citywide
developments, he said.
Thus far in Israel, the Israel Electric
Corporation has embarked upon a small smart grid pilot program that is ongoing
in Binyamina and Givat Ada, and will include 14,000 residents, 3,100 three-phase
meters and 1,000 one-phase meters.
The government decided in August 2010
to initiate a smart grid pilot, with the tender for the integrator issued only
in May 2012. After the Public Utility Authority decided not to recognize the
project costs, there were delays, and the IEC ultimately decided to do the
integration in-house, Hain said. This choice will shorten the project start from
three years to one year, with all pilot customers receiving their meters by the
end of February 2014, he said.
The main question, however, is figuring
out how to finance the enormous costs associated with launching a smart grid or
smart city, a task that can be quite challenging as the benefits are not always
Hain argued that the roll-out of smart grids will be
economically feasible for the national economy, with the break-even point
occurring at a 4-percent energy efficiency increase and at 10% of peak energy
use shaved. When conducting a cost-benefit analysis, he stressed that
environmental benefits must be included.
“It’s a daunting business case
because some of the benefits tend to be soft,” said Michael Avidan, senior
manager of the PG&E utility in California. “The power industry is a lot
about ‘we will build it and then they will come.’ Take [electrical vehicles],
for example; should we wait for EVs to come and then build the infrastructure,
or should we build the infrastructure and then they will come?” Ultimately,
producers must take such benefits into consideration, and the Energy and Water
Ministry is working to weigh these factors and estimate their economic
implications, said Shaul Zemach, ministry director- general. In doing so, the
industry will be able to show the regulator where it must open the door to new
technologies, rather than waiting for the regulator to make such decisions, he
In addition to taking the soft benefits into account, Zemach
emphasized the importance of the two-way communication between the provider and
supplier to these systems. For instance, just as a smartphone GPS application
may ask a driver if he wants to stop for coffee or other advertised products, a
smart meter could ask customers if they want to receive a discount for
conserving energy during specific hours.
In California, the smart grid
system has already begun to take off, with 10 million smart meter upgrades
completed by 2012 – the largest such deployment in the United States, Avidan
said. Calling his firm, PG&E, “the greenest utility,” Avidan said that the
company thrives on renewables, with a great amount of hydroelectric and nuclear
resources as well as the largest solar customer base in the country, accounting
for more than 40% of the US’s total installed solar capacity. The smart meter
deployment began 18 months ago, he said.
“We used to send meter readers
to get a meter read,” Avidan continued. “We didn’t really have a good
understanding of customer usage, and now we have a much better sense of what
that looks like.”
Gas meters can now be read on a daily, automated basis
and electricity meters can be read hourly or at 15- minute intervals, he said.
While saying that California is still “on a journey” despite the successful
deployment, Avidan stressed that energy officials must master an understanding
of three categories before implementing a smart grid: the necessary technology;
policy elements like legislation, market rules and regulation; and specific
market attributes such as demographics, weather and physical
In India, such constraints are particularly challenging, as
many portions of the grid are not strong enough to handle 24/7 stable
electricity supplies, said Pillai, the India Smart Grid Forum president. Part of
his organization’s role is therefore to determine “how to leverage new and
emerging technologies” to help manage India’s grid, where power demand has
doubled in the past decade.
Pillai believes Israeli innovators may be
able to find huge business opportunities in “the myriad of challenges of the
Indian power sector.”
“To manage this kind of a growing complex grid we need smarter technologies,” Pillai said.