Posts Tagged ‘broadband over powerline’

Smart Grid and Broadband Over Powerline

Thursday, November 12th, 2009

On November 9, 2009, the Brookings Institution held an event titled “Improving Broadband Innovation and Investment.”  A transcript as well as a video of the event may be found at http://www.brookings.edu/events/2009/1109_broadband_innovation.aspx.

The event is described on the Brookings website as follows:

Broadband and wireless technologies are key elements of our nation’s economic, social and civic development. With the Federal Communications Commission’s stated goals of bringing broadband access to all Americans, it is crucial to determine how to be innovative when investing in broadband infrastructure. How will infrastructure development be funded? What is the proper mix of financial resources? How can we identify emerging technologies that will serve citizens and businesses?

The Participants were:

Moderator

Darrell M. West, Vice President and Director, Governance Studies

Featured Panelists

John Horrigan, Consumer Research Director, Omnibus Broadband Initiative

Federal Communications Commission

Robert Shapiro, Senior Policy Fellow

Georgetown Center for Business and Public Policy

Thomas Z. Freedman, President, Freedman Consulting

Author of A Kindle in Every Backpack: A Proposal for eTextbooks in American Schools

During the Q & A session I asked why broadband over powerline (BPL) had dropped off the map even though it is a byproduct of the smart grid (that everybody including some of the panelists say we need and it would provide competition in the broadband market. Only Mr. Horrigan of the FCC attempted to answer and he emphasized that he could only repeat what he had heard, since it is not within his area of study or expertise.  His answer was that he had heard it was a technical problem due to the current architecture of the electrical grid.

Let me emphasize that this is not meant to be an attack on Mr. Horrigan or anybody else on that particular panel.  The Smart Grid concept covers a lot of territory and it is quite difficult to pin it down.  People cannot be experts on every subject about which someone might question them.  But I am rather puzzled about why BPL has failed to gain traction in the US.

The electric power industry was instrumental in wrestling control of the telecommunications industry from Ma Bell in the 1960s by providing their own internal communications system to their workers using microwave towers on electric rights-of-way.  As I recall, they successfully argued before the regulators that electric service was essential and power utilities should not be at the mercy of the phone company to handle outages and power emergencies.

As best as I can understand, the smart grid will operate by broadband communications, likely using both wired and wireless technologies, to monitor the grid and provide smart metering to the home.  So is the current grid architecture a huge barrier to the building of smart grid technology?  Will the smart grid as envisioned not reach into homes and the meters not transmit information in real time through hard wiring or wireless?

Answers… answers… who has answers?

HEK

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More Musings on the Smart Grid

Saturday, April 25th, 2009

DrakNet Web Hosting

As is well known amongst those who try to define this area, there is no simple definition of a smart grid, no national standards for operating the grid such as those established for the natural gas pipeline grid, and no consensus as to how the  grid should operate.  Over the years FERC has proceeded one step at a time to tie 48 state fiefdoms together, at least for buying and selling wholesale electricity in interstate commerce.  I do not know the particulars of each rulemaking, but there is extensive documentation on FERC’s website. Legislation has given FERC more power in interstate transmission siting and it seems to be taking a major role in implementing the smart grid, but intrastate matters will continue to stay within the realm of the state public utility commissions.

DOE (http://www.oe.energy.gov/smartgrid.htm) lists the following characteristics of a smart grid:

  • Self-healing from power disturbance events
  • Enabling active participation by consumers in demand response
  • Operating resiliently against physical and cyber attack
  • Providing power quality for 21st century needs
  • Accommodating all generation and storage options
  • Enabling new products, services, and markets
  • Optimizing assets and operating efficiently

This is a rather useful list of functions for examining smart grid policy.  Note that the list refers to end results or what the smart grid should accomplish, not which technology makes up the grid.  Since it is focused on provision of electric service, it does not mention potential sales of broadband over powerline to wholesale and retail customers as a means to offset some of the costs.   This is a byproduct of certain smart grid technologies.

I will return to this list from time to time when discussing smart grid policy.

HEK

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Smart Grid Financing

Sunday, February 22nd, 2009

I have been asking people why the utility industry is seeking government funds to implement a smart grid instead of using traditional utility financing.  Below are my thoughts and questions.  Anyone who reads this may feel free to jump right in with their opinion.

Everybody seems to be talking about smart grids this year. Much of the capability was there when I was in grad school, especially time-of-day/peak load pricing, although the technology to do such things is much more advanced these days. There is much talk about government funding and how the government absolutely MUST fund this upgrade to the power grid (not to mention that there is $11 billion or more in the stimulus package to fund the smart grid, but I have not really dug into this yet). Two things I do not really understand and I cannot seem to find any information on so far:

1) Why do the power companies not use traditional utility financing? After all, this is an addition to rate base if they do. I know capital markets are in terrible shape right now, but I believe using public money was the game plan even before the current difficulties.  Is there an argument that the smart grid is a public good, because benefits to ratepayers in other states cannot be captured by the investing electric company?  What are the
other arguments?

2) How will FERC/PUC’s treat public funding? I don’t think FERC has rate incentives for efficiency or DSM, but the PUC’s generally do. What if government money improves efficiency? Will any of this smart stuff impact supply competition?

There’s lots and lots of articles and even local presentations about the “oh wow!” aspects of the smart grid. But so far, nobody can tell me the regulatory and pricing implications other than the assumed advanced peakload pricing capability.  This has been rejected by most electric retail sellers for decades, even though the technology has been there in simpler form than the “smart grid.”

In response to a hypothesis that regulators and utilities
might be reluctant to invest in something with a fast moving technology that could be obsolete sooner than they might wish, I replied:

“These guys had microwave along the grid in 1967, when I had a summer job with Georgia Power. They loaded their rights-of-way with fiber optic prior to Enron.  I did a little research on this back around 2000-2001 (National Academy of Sciences white paper) and figured many utilities thought they were going to make unregulated profits and wound up with unregulated losses instead after Enron’s broadband market proved to be a fraud.

However,  “lighting up the grid” is rather simple, and there is a
potential broadband over powerline market. Everybody, including the power companies, buys laptops even if they might be obsolete next year. They keep obsolete meters forever now. Why would it bother them to get brand new soon-to-be obsolete meters if it is an addition to rate base?   Decades ago the telcos were able to put in new metering to separate the lines such that the customers were given control over inside wiring.

It’s not like they have to lease right-of-way, build new transmission lines or do any of that really expensive stuff to create a smart grid.  In fact, Dominion just won a court battle to do some heavy duty investment in new transmission and they will use traditional financing.  It makes no sense to me at all from an investment standpoint.  Is it that there is just no profit to be had in a smart grid investment, since it reduces the need
for new generation/transmission?”

I was kicking this around a bit further today and found an article titled,  “Electric Stimulus Crunch? Generating Utilities May See 10% Revenue Declines” by Nick Gogerty (http://seekingalpha.com/article/115196-electric-stimulus-crunch-generating-utilities-may-see-10-revenue-declines).”  Is this part of the reason why the industry does not wish to pay for the smart grid itself?

More to come as I find answers.

HEK

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