Smart Grid Misconceptions Might Stall EVs in Their Tracks

By Clay Luthy, IBM

Electron-powered vehicles are electrifying public interest. In the car-crazy U.S., the promise of a clean, quick, reliable alternative to century-old fossil fuel technology seems ready to be fulfilled at last.

The Chevrolet Volt, a mostly electric sedan, is getting positive reviews for its efficiency, convenience and top safety ratings. Riding shotgun with the Volt’s introduction is possibly the future of General Motors Co. Nissan also unveiled its battery-powered Leaf, also for select urban markets where range issues won’t worry folks as much as they might their country cousins.

The launch of these next-generation vehicles is only part of the excitement. Energy Secretary Steven Chu in April announced $5 million in new federal funding for community-based efforts to deploy electric vehicle (EV) infrastructure and charging stations. Chu outlined a partnership with more than 80 EV stakeholders to help consumers better locate charging stations nationwide.

Local and national governments around the world are beginning to lay the groundwork for EV adoption. In the U.S., Ford Motor Co. recently announced the top 25 cities paving the way for EV deployment. In China last year the government launched an initiative in 25 Chinese cities to convert all public transportation vehicles to electric to support the EV movement. Meanwhile Israel is preparing the world’s first electric car network, complete with half a million recharging stations across the country. In Europe, EVs are expected to reach a market share between 9 and 13 percent by 2020.

Given the buzz greeting EVs and government support, why is the public so cautious about smart grid development? After all, an intelligent, secure network for power distribution is a vital complement to electric cars. Like Fred Astaire was to Ginger Rogers, the e-car and smart grid offer unrivaled abilities on their own; put together, they promise unprecedented leaps in performance and efficiency.

The EDISON Example

Much of the public doesn’t understand that for EVs to be successful, the grid must become smarter, allowing it to meet the new demand while maintaining reliable, high-quality electricity to fuel up. Further, while EVs and renewable energy are natural complements, if we are going to charge our vehicles with clean renewable energy we will need agile meters and better grid intelligence. This can help referee the flow and pricing of electricity to and from the grid and from local renewable energy sources such as rooftop solar panels.

A Denmark project is tackling this challenge. In 2009, the Danish government partnered with IBM, Dong Energy, the regional energy company of Oestkraft, the Technical University of Denmark, Siemens, Eurisco and the Danish Energy Association to establish the “Electric Vehicles in a Distributed and Integrated Market using Sustainable Energy and Open Networks” (EDISON) consortium. The project’s purpose is to develop an intelligent infrastructure that would manage the EV charge load effectively, smoothing the peaks and troughs in renewable power supply maximizing wind power to allow cars to recharge genuinely on zero carbon energy.

The consortium’s first step was to develop smart technologies to be implemented on the Danish island of Bornholm, designed to function as a test bed. With 40,000 inhabitants, the island has an energy infrastructure characterized by a large proportion of wind energy that allows researchers to study how the energy system functions as the number of EVs increases.

Researchers from IBM Zurich Research Laboratory are developing smart technologies that will synchronize EV charging with wind energy availability to maximize the use of renewable resources and to help meet the additional demand. This will allow the country to increase the share of renewable energy in the nation’s overall energy consumption and provide intelligent energy support for EV growth.

An allure of EVs is that they promise to free drivers from gas stations, or at least lessen their dependence on them.

Public Misperceptions

Despite these desired benefits, many concerns are surfacing. Some people suspect utilities’ agendas, wondering if a gridwide upgrade is a Trojan horse to sneak through onerous rate increases. Many worry that the smart grid suddenly opens the cyberthreat door to national security.

Pike Research recently released a report identifying market issues and opportunities associated with securing the smart grid. Pike expects smart grid cybersecurity spending will increase 62 percent between 2010 and 2011, and by 2015 the annual worldwide market spending in this critical sector will reach $1.3 billion.

To knock down these worries one by one, let’s start first with the misperception that the smart grid rollout is likely to unleash a surge in power prices. Most consumers get their energy from utilities that are regulated by independent boards, charged in part with representing customers’ interests. To invest in costly new equipment such as smart meters, utilities must make a case before this group about the necessity and costs of such steps. These boards oversee investment by utilities and ensure that any cost passed to end consumers will have a far greater expected value.

What’s more, utilities are pushing for smart meters in part because they promise to lower operating costs, which can help keep rates low. By replacing human meter readers—still the norm in many areas—with digital signals and automating the process of turning a meter on or off when homeowners relocate, utilities are trimming millions from process and labor costs. Likewise, blackouts and equipment failures are expensive financially and in customer satisfaction and are events utilities routinely face. By improving views on the grid’s condition and letting utilities respond faster, the smart grid gives network managers a tool to avoid these costly failures.

Often, unfounded fears stem from lack of knowledge. The industry has made great progress in raising consumer awareness about smart grids and smart meters, but we have not been articulate enough about consumer cost savings and incentives. People are more likely to remember one negative story than a hundred positive ones. Or as Winston Churchill said, “A lie gets halfway around the world before the truth has a chance to get its pants on.” It is human nature to believe that any new technology must come with a price tag; so it is our responsibility as an industry to communicate clearly to consumers the overall cost savings made possible by modernizing our grids.

Securing the Grid

It is understandable that smart grid security is a natural concern for utilities and consumers, but the smart grid promises greater security and resiliency, not less. The phrase “smart grid” might be new to the public’s ears, but for utilities the process of computerizing grid management is decades old. Efforts to spin a web of digital connections across the power grid have followed an orderly path. Starting with the most critical gear, smart sensors and software have moved progressively to less costly, more numerous devices such as transformers and are proceeding to meters on buildings and appliances and machines within them.

This push has been driven by the desire to lower the frequency of costly outages caused not by cyberterrorists but by more mundane events: from sagging power lines touching tree branches to hungry rodents and powerful storms. The smart grid can’t stop squirrels from nibbling through wires or birds’ nests from causing transformer fires, but better information about how equipment is functioning lets network managers respond faster when accidents happen.

When it comes to public concern about security, perspective helps. The utility industry is a latecomer to the digital revolution, with many critical segments of the U.S. economy preceding it. The finance industry has been aggressively replacing its analog processes with digital substitutes for more than half a century, the latest phase of which has been extending banking services to the Web—a process that was met with panicked opposition but is now the norm.

Likewise, the aviation sector was quick to digitize its complex ticketing, routing and scheduling operations. The same is true for telephone companies, which invented many of the information-processing technologies underlying the Internet to meet exploding demand for voice, data and now digital video services.

Big industries have been building secure digital operations for many decades and have helped develop a huge reserve of best practices, lessons learned and reliable skills from which utilities can draw.

With new technologies, standards and education, utilities can add a layer of intelligence to the grid that will protect against vulnerabilities.

So far, apprehension about smart grid security hasn’t stymied progress in testing, developing and deploying this technology. This is a mixed blessing given the need to go faster than the typical methodical pace of the cautious utility industry.

But industry insiders note opposition that complicates an already complex process—one that involves hundreds of local, state and federal utilities, regulators and technology vendors and millions of customers. To keep that headwind from pushing progress backward, industry players and the public should remember we’ve done this before, and it’s worth doing again.

EVs are here for the long haul. If we are to reach IDC’s estimate of 60,000 plug-in vehicles sold in North America by 2011, the industry must be prepared for the increase in adoption and years of maintenance to follow. The growth and success is dependent upon a dynamic, responsive and efficient foundation: a smart grid that will support the next generation of automobiles.

Clay Luthy is the global distributed energy resource manager for IBM’s Energy & Utilities Industry and is focused on building a relevant ecosystem, defining corporate initiatives and determining IBM’s strategy across the EV management, demand management, distributed generation and distributed storage technology areas.