When I was first asked to write about ‘green energy’ ahead of President Obama’s Global Entrepreneurship Summit (GES) 2016, I was debating whether I should focus on the usual, popular topics of green energy such as solar, electric vehicles, and Nest thermostats, or should I instead focus on a very important part of enabling ‘green’ that most people don’t talk about or understand. After thinking long and hard, I decided to pursue the ‘less popular’ path and share about the ‘Digital Grid’ and why we should care about it.

Total US electricity net generation from 1950 to 2015 (in billion kilowatt hours)
Image: Statista

Electricity is so vital to our lives, yet we seldom think about it. Electricity is one of those things that we only think about when we don’t have it. We take it for granted. Well, we should not take it for granted anymore, because as we face new challenges in the 21st century, modernizing and digitalizing our electric infrastructure will no longer be an option, but an imperative.

Compared to other things that have evolved or transformed in the last 100 years — such as how we get our information through smart phones, the Internet, and social media — the way we receive our electricity has not changed much.

Built in the 1890s, today’s current electric grid consists of more than 9,000 electric generating units with more than one million megawatts of generating capacity, connected to more than 300,000 miles of transmission lines. While the grid has improved over time with advances in technology, it is beginning to stretch its patchwork nature to its capacity. A coal, nuclear, or hydro power plant sends electricity through transmission lines to substations and on to transformers to finer wires and smaller voltages, until the electricity ultimately reaches your laptop or iPhone plugged into the wall. It is just-in-time manufacturing taken to the extreme!

Since electricity travels close to the speed of light, every kilowatt must be used the instant it is created. For our utilities, this means balancing a heavy load — trying the match the supply of electricity perfectly and nearly instantaneously with demand. When demand outpaces supply, everything goes dark — literally — a blackout occurs. Hence the need for spinning reserves — i.e., backup power plants that pump electricity into the system at a moment’s notice. Keeping these plants online is the most expensive part of your power bill! Not to mention that it wastes fuels such as natural gas.

Since the 1980s, however, the power grid, especially at the edges, has been getting smarter, as utilities began putting sensors in large industrial and commercial customers (such as factories and refineries) that use a lot of electricity. These sensors send back real-time data about energy use, giving utilities a heads-up on the demand side of the equation. As sensors become cheaper and technology like the Internet and wireless communication become more widespread, utilities are adding more sophisticated sensors to the grid, which means one thing — a ‘Digital Grid’ with a large amount of data.

The Digital Grid is essentially the application of smart-connected technology (e.g., smart sensors, two-way communication devices, and analytics) to our electric grid infrastructure to enable better energy efficiency, improved reliability (i.e., less blackouts and outages), the integration of more renewables and distributed energy resources (e.g., solar panels, electric vehicles, and battery storage), reduced emissions, and a more engaged and empowered consumer. Although you may not think much of the electricity you use, you should care about your electric grid turning into the Digital Grid, as it will deliver more and more benefits for consumers like you and me, our environment, and our society.

“What are some of those benefits?” you may ask. Let’s look at some of them.

Reliability

What people in the industry calls ‘reliability’ simply means less or no outages and blackouts to you and me. Analytical solutions are being deployed that offer efficient detection and restoration of outages by remotely rerouting power flow to quickly reconnect customers. In addition, in preparation for weather-based outages, some utilities are using predictive analytics to understand how distribution lines respond to environmental factors and where best to place crews. In fact, PPL Electric, a utility in the United States, has reported a 38 percent improvement in service reliability enabled in part by the deployment of sophisticated analytical capabilities.

More Engaged Consumers

Integration of customer consumption data with external data sources, such as demographic and psychographic data, can provide utilities with valuable insights to inform the creation of new targeted products and services. Oklahoma Gas & Electric, in a bid to substantially shed load by 2020, is using customer analytics to gain visibility on individual customers’ responses to price signals. This is enabling them to identify the best customers to target with specific marketing campaigns.

The flood of digital data must be quickly parsed to locate power failures, reroute electricity, or avoid overheating power lines. It also means that utilities must better deal with power line failures like the one that blacked-out the northeastern United States in 2003 and cost the U.S. economy billions of dollars in lost productivity. Not to mention the serious consequences of blackouts to our mission-critical facilities such as hospitals, military bases, and others.

Within the next decade, sensors are likely to be ubiquitous, to be everywhere and anywhere. One type of these smart devices in the electric industry, commonly referred to as a smart meter, will do to homeowners what the utilities have long done to factories — two-way communication — to give consumers like you and me better visibility and control about our energy usage, while also enable us to save costs and the environment — all in accordance to our choice, comfort and convenience (the 3C’s). If we choose to do so, smart technology could also enable our utilities (with our permissions) to do things like temporarily turn-off a smart appliance in our home to help avert a blackout. In doing so, the utilities can also cut down on backup power plants and use greener electricity sources such as wind or solar.

A greener future

Digitalizing our grid will also enable a greener future. The Digital Grid is promoting this greener future through enabling enhanced energy efficiency, improved energy reliability, and the ability to integrate more renewable and distributed energy resources into the grid. Through improved energy efficiency, we require less energy to be generated from often less efficient, and more polluting peaking plants. The Digital Grid will also enable the integration of more intermittent renewables such as wind and solar and distributed energy resources such as rooftop solar and electric vehicles into our grid, resulting in less need to depend on coal or other polluting sources of energy.

Solar Panels. Photo courtesy of Pixabay.The Electric Power Research Institute (EPRI) estimated that a Digital Grid in the United States alone will enable energy efficiency savings between 60–200 billion kWh and avoid between 100–200 million tons of CO2 emissions. That is roughly equivalent to taking 1–2 million cars off the road for a year.

The Digital Grid is especially exciting for the behavior changes they will bring about. Studies have found that when people are made aware of how much power they are using, they reduce usage by about 7 percent. With added incentives, people curtail their electricity use during peaks in demand by 15 percent or more. The Climate Group estimated that the application of digital technologies to our electric infrastructure has the potential to avert 3.71 gigatons of CO2 equivalent global emissions by 2020, delivering some $464 billion in global energy cost savings to businesses and end-consumers like you and me.

Thus, if you care about the world, our environment, and the next-generation, you should care about digitalizing our grid.