Similarly, real-time pricing signals should reduce consumption during peak hours, when the price of wholesale power spikes and power lines can overheat. In January, Pratt’s group at Pacific Northwest National Lab completed a demonstration project that showed that real-time pricing can cut peak power usage by 10 percent, reducing congestion and power losses on the lines. It also means that the least efficient and most polluting fossil-fueled plants, which utilities would rather not fire up, can be left on the sidelines.
Continuous feedback from smart meters and substation sensors should further increase power reliability in Boulder by enabling rapid and precise response to grid problems. The system will pinpoint lines or substations at risk of overloading and activate remotely operated substation switches to reroute power. If problems persist, the system can send a signal to the smart meters of customers on the troubled lines, who have been offered some type of financial incentive to reduce demand when necessary.
Sharing the costs of the Boulder project are a consortium of equipment and networking providers, including Current Group, a Germantown, MD, company developing systems for sending broadband communications signals over power lines, and substation switch and sensors firm Schweitzer Engineering Laboratories, in Pullman, WA. Their combined investment resolved a chicken-and-egg dilemma that has been delaying the large-scale implementation of smart grids. State public utility commissions have been reluctant to let utilities pass on the cost of smart-grid investments to consumers until they can prove that consumers will share the benefits, too; but the utilities can’t prove that consumers will benefit until they introduce smart-grid technologies on a large enough scale. “With our partners and the shared risk, we can go after those hypotheses and not put the burden on the rate payer to suffer through our R&D process,” says Carlson.
The project has also helped smooth the relationship between Xcel and Boulder’s municipal government, which had grown rocky in recent years. Boulder has committed to reducing the city’s overall greenhouse-gas emissions to 1990 levels by 2012–a 22 percent reduction from 2006 levels. Electricity accounts for more than half of Boulder’s greenhouse-gas emissions, and when 2006 saw a rise in both power consumption and emissions, the city began to consider establishing its own utility to take over the electricity supply. Xcel’s smart-grid plan, along with financial risks identified in a preliminary study of the municipal-utility proposal, helped convince Boulder’s city council to officially shelve the idea on Tuesday.
Boulder assistant city manager Kara Mertz estimates that shaving peak demand and delivering power more efficiently could provide up to a quarter of the emissions reduction that Boulder has set for itself, while the greater reliance on renewable energy enabled by the smart grid could deliver another quarter. “It’s a big promise,” says Mertz.