Throughout history there have been moments in time when the simple transmission of a signal has changed the course of events. The earliest spoken sentence, transmitted electronically by Alexander Graham Bell, is a perfect example. Nearly a hundred years later, the first message sent over the ARPANET, the predecessor to the Internet, is another. Today our lives continue to be transformed by the ability to relay information rapidly in electronic format.
A few months ago, a unique, transactive incentive signal was first transmitted between test nodes of a system being developed in the Pacific Northwest. This signal is the cornerstone of an innovative new approach to managing resources throughout the electric power system. Pioneered as part of the Pacific Northwest Smart Grid Demonstration Project, this signal contains information about what power is available and at what cost, as well as what power is needed by end users. More importantly, it captures the monetary value of power in terms of dollars-per-megawatt-hour, at a given point in time changing as it flows from supply towards consumption to reflect the situation at each specific location along the path of electricity delivery. As it moves through the system, it incentivizes the use and movement of power, allowing both intelligent devices and consumers to make smart decisions about energy use.
The successful transmission of this signal may sound deceptively simple. But, like the telephone and the Internet, its implications are profound. As an element in the nation’s future smart grid, this signal and the overall Pacific Northwest Smart Grid Demonstration Project have the potential to significantly reduce our energy usage, costs, reliance on fossil fuels and greenhouse gas emissions. The signal also could help the nation increase its use of alternative energy sources. For example, if the wind is suddenly producing a lot of power in a particular region, the transactive energy management system would make using that power locally a priority through pricing incentives. On the opposite end of the spectrum, if a region was experiencing congestion on its transmission system, transactive incentive signals could help reduce the load in that region thereby reducing the risk of a blackout.
The Pacific Northwest Smart Grid Demonstration Project is a collaborative five-year program; the largest and most complex of the 16 Regional Smart Grid Demonstration Grant projects awarded by the U.S. Department of Energy. A year and a half into the project, there are 11 utility sub-project partners and over a dozen sub-project test sights covering more than 60,000 metered residential, commercial and industrial customers in Idaho, Montana, Oregon, Washington and Wyoming. The project represents the potential for a safe, scalable and interoperable smart grid, regionally and nationally, that works for regulated and non-regulated utility environments.
The actual information communicated in some of history’s greatest innovations is not always profound. Bell’s message was, “Mr. Watson, come here, I want to see you.” The ARPANET message was simply “lo” – the first two letters of the word login, and then the system crashed. It was the ability to send those messages that ushered in important economic and societal changes. I believe smart grids signal a similarly important innovation. Information is power – let’s use it wisely.
Written by Michael Valocchi, the Global Energy and Utilities Industry Leader for IBM Global Business Services, who is responsible for the development and execution of the industry strategy to delivery consulting services as well as the development and direction of the Industry thought leadership and solutions strategy. IBM is celebrating its Centennial this year.