It’s time to rethink our nation’s energy infrastructure: Bridging the gap between our current energy infrastructure and an efficient, more intelligent “Smart Grid” of the future

Our nation is facing significant energy challenges because the power system in use today is old, inefficient and unable to balance supply and demand. This problem is growing more complex with the emergence of the smart grid, which is designed to increase communications between utilities and consumers, allow for more control of energy usage and support sustainable technologies such as electric vehicles and renewable energy.

“Intelligent energy management can deliver clearer data and analysis that delivers bottom-line and operational benefits for utilities, commercial and industrial (C+I) users and residential consumers.”
-John Rossi, SVP of Business Development

Yet existing technologies are ill equipped to ease the pressure put on energy sources and infrastructure during the transition to the smart grid and in the interim, outages and problems with power quality are costing U.S. businesses $100 billion-plus each year. In fact, there have been three major blackouts over the past decade. Brownouts (when the lights dim and power goes down, but not out completely) across the grid have also become a wider problem due to what electric utilities refer to as a "lack of situational awareness." And the stress levels keep growing.

Meanwhile, electricity prices are projected to keep rising, with an increase of 50 percent expected over the coming seven years. Part of the reason for rising costs is simple economics: fossil fuels are a limited resource and as more people around the world increase their consumption of such fuels, costs will go up.

Climate change-focused strategies that put a price on carbon - either directly or through cap-and-trade programs - will also make fuels like coal, natural gas and petroleum increasingly expensive over time. As prices go up in an effort to reduce carbon dioxide emissions, the cost of carbon-producing fossil fuels will also rise.

If prices are rising, then demand is skyrocketing. Since 1982, increased demand for electricity in the U.S. has far outpaced transmission growth - by a rate of 25 percent annually. Over the next 20 years, overall electricity demand is expected to rise by another 30 percent.

For all their merits, sustainable technologies, such as renewable energy and electric vehicles, add further complications to the mix. Bringing renewable energy sources onto the grid raises a host of new issues for energy management thanks to something called "intermittency" - i.e., the wind doesn't always blow and the sun doesn't always shine. That's a growing issue in a world that in 2010 added 47 percent of new solar energy capacity and 31 percent of new wind power capacity.

In the U.S., stimulus spending is expected to continue driving expanded use of renewable energy sources, but integrating renewables in real-time operation poses some tricky challenges, with larger needs for fast response reserves. Those challenges are certain to grow as we look at adding 100,000 megawatts of new renewables by 2025 while also retiring many older gas- or oil-powered energy plants.

Reserves might be fragile, but they are set for another big test in the form of plug-in vehicles. While this new generation of vehicles promises to cut pollution and oil consumption, it will raise demands on the electricity grid. With several new models of all-electric - and increasingly affordable - vehicles now entering the market (including the Nissan LEAF and Chevy Volt), their impact could start being felt in the near future.

Recognizing the severity of these challenges, state and federal governments are looking at legislation that can help keep the balance. While we have stopped short of enacting carbon regulations or pricing, other regulations are starting to impact future energy strategies. In Pennsylvania, for example, a new law requires a 4.5 percent reduction in peak energy demand by 2013. And elsewhere, the nation continues to invest billions of dollars in stimulus funding into smart-grid technologies, low-carbon transport and home energy efficiency improvements.

For these investments to pay off, we need to rethink our approach and bridge the gap between our current infrastructure and an efficient, more intelligent "smart grid" of the future.

Intelligent energy management bridges this gap by giving the providers and consumers of energy with the insight and control they need to make informed decisions about usage. By doing so, intelligent energy management can deliver clearer data and analysis that delivers bottom-line and operational benefits for utilities, commercial and industrial (C+I) users and residential consumers.

For utilities, implementing intelligent energy management technologies and services promises to reduce problems with load management and peak demand. By enabling greater visibility into consumption data and trends, intelligent energy management can help utility companies better predict demand, control supplies and cut the expense, inefficiency and carbon pollution associated with bringing peak power plants online.

Conversely, C+I users can tap into intelligent energy management to reduce electricity waste, lower bills and identify "low-hanging fruit" for improved energy efficiency in their facilities and operations. As a result, they can also cut their overall energy footprint, more easily comply with new energy- and environment-focused regulations, and enhance their brand reputations and marketability to increasingly green-minded customers.

Finally, intelligent energy management technologies offer a way for homeowners to view their own energy habits in an easy-to-read, intuitive way. By gaining both real-time and historic insights into their consumption patterns, consumers can better understand how to save energy, reduce their power expenses and control their usage to take advantage of lower-cost, off-peak billing. It also paves the way for support of electric vehicles and renewable energy sources that are increasingly coming onto the electricity grid.