In smart cities, water, energy, transport, public health, safety and other services are managed seamlessly in concert, providing a clean, efficient and safe environment.

All of this is made possible by a smart grid that does three things. It automates power systems, providing remote monitoring and control through micro-grids. Second, it informs and educates consumers about how much energy they use. This enables them to make decisions about how and when to use electricity and gas. And third, the grid will create the safe, secure and reliable integration of distributed and renewable energy resources. The result: energy infrastructure that’s more reliable, more sustainable and more resilient. The grid turns the city into an organism where the different parts are working together.

Amsterdam’s New West district, for example, contains computers and sensors that reduce the number and duration of power outages, provide the opportunity to feed consumer-produced electricity back to the grid, support the integration of electric-powered vehicles, prevent large price increases for electricity transmission and enable active participation in a sustainable energy supply. This network is cheaper because targeted maintenance can be committed, the number of power failures decreases and the grid power will not have to be increased for a long time.

Other examples include Low Power London, a £30 million (AU$55 million) project, largely funded by industry regulator Ofgem, to explore how best to tackle the challenges London’s electricity network will face in meeting its tough carbon reduction target: a 60 per cent reduction on 1990 levels by 2025. London currently has the highest carbon emissions in the UK. It is trialling grid technologies to provide electricity network operators with cost-effective and sustainable ways to manage electricity networks in a low carbon future.

Or SmartCity Malaga in Spain, a smartgrid pilot initiative that forms part of the European Union’s 20-20-20 Plan, which is seeing 11 companies rolling out state-of-the-art technologies in smart metering, communications and systems, network automation, generation and storage, and smart recharging infrastructure for e-vehicles. Over 17,000 smart meters have been installed, and a sample of 50 of these users have energy efficiency solutions for the home. Over 10 SMEs and emblematic buildings in the area have energy efficiency solutions installed, enabling them to monitor consumption and control some of their charging. Advanced automation systems have been installed in over 20 transformer centres, and 72 centres are linked via a broadband powerline communications (PLC) network, which connects all points of the electricity grid to the network control centre, where these assets are monitored. The zone has around 11 megawatts of renewable generation capacity, which includes numerous roof-mounted photovoltaic installations spread throughout the city, a cogeneration facility, vertical-axis wind turbines and generation systems integrated in street lighting.

And then there’s Smart City San Diego, which has a 100kW energy storage system charged by solar canopies and used to balance sunlight intermittency on overcast days. The storage system offsets power demands on the grid, especially during peak hours, to charge electric vehicles. When the battery is full, the excess solar energy that is generated is put into the grid to improve reliability and benefit the surrounding community. Significantly, it’s driving electric vehicle sales. With nearly 10,000 EV drivers and counting in the area, EV sales are up 130 per cent this year over last.

The electric car revolution

Plug in electric cars have the potential to revolutionise not only how we drive but how we generate and use electricity in our homes and workplaces. In the not-too-distant future householders will charge up their cars from solar panels on their roof and then pump surplus power from their car back into the grid on days of high peak power demand.

As Scientific American points out, private electric vehicles could be programmed to discharge power to the grid for certain times of the day when they are most needed and provide extra storage space by recharging from the grid when they are not. Such programs could easily be overridden in the event of a schedule change, and the battery would always be kept partially charged in case of emergencies.

“The potential upshot for owners would be income that helps pay the cost of the vehicle, a discount that grows every year the vehicle is in use. The owner of the car would essentially be leasing storage capacity to the grid operator, which in turn could use it to smooth the ups and downs of a more renewable-dependent energy supply.”

In October 2010, IBM announced it would play what it described as “a pivotal role” in the development of “Australia’s first smart grid network”. This three-year project, according to IBM, was to begin immediately across five sites in Sydney and the Hunter (Newcastle, Scone, Sydney CBD, Ku-ring-gai and Newington) and represent “Australia’s first commercial-scale smart grid”. Benefits would include sophisticated analysis of consumption patterns enabling a real-time view of energy use to identify opportunities for reduction.

“The technology will allow residents to see real-time analysis of electricity usage for their households and even for individual appliances, to help them make better decisions about energy efficiency in their homes and minimise their environmental impact,” the company said. “The smart grid demonstration will also test real-time, complex information about grid performance in order to improve control over the network for Australian energy transmission and distribution companies.”

According to an extensive audit report produced by the office of the Federal Auditor-General and published in January this year about the administration of the program, the project was largely successful, albeit with a few caveats.

“As a demonstration program, a key outcome from the Smart Grid, Smart City Program is data and information that contributes to greater knowledge and understanding regarding the rollout of smart grids. To date, reports from the grant recipient, Ausgrid, and the department indicate that many of the program’s trials have been successfully implemented, with a range of data collected.

Projects that were completed largely in accordance with the funding agreement included:

  • grid-side applications that tested new technologies to assist distribution network service providers to better manage electricity supply
  • energy resource management projects to test the potential impact of wide-scale renewable energy generation (such as rooftop solar panels or wind turbines) on the existing electricity grid, and trial storage batteries and other technologies that can assist to manage peak electricity demand and integrate with energy generated from renewable sources
  • an electric vehicle trial that involved the operation of 20 vehicles over short and longer-range journeys for an 18-month period
  • a ‘network’ trial that rolled out smart meters to customers’ homes and tested their interaction with feedback technologies providing information on real-time electricity use

It’s early days, and there are a few issues to sort out. First, smart grids will be collecting information about the amount of energy people will be using and possibly, the types of devices connected to the grid. All of this raises potential privacy issues.

“It’s not hard to imagine a divorce lawyer subpoenaing this information, an insurance company interpreting the data in a way that allows it to penalise customers, or criminals intercepting the information to plan a burglary. Marketing companies will also desperately want to access this data to get intimate insights into your family’s day-to-day routine – not to mention the government, which wants to mine the data for law enforcement and other purposes,’’ said the Electronic Frontier Foundation in a blog post. Clearly, smart grids and smart cities will have to be closely regulated.

And as with most other modern computer technologies, the smart grids could be vulnerable to hacking. The risk would be heightened by the geographical scale and the sheer number of devices connected into them. The FBI has warned that these hacking activities are likely to spread. This means legislators will have to regulate behaviour in regard to smart grids and bring in criminal penalties for those gaining unauthorised access or interfering with the smart grid.

Another point is there will be many entities operating a smart grid infrastructure and that’s likely to mean government will bring in laws to promote competition, like has been done with Australia’s telecommunications sector.

There is no doubt that smart grids and smart cities will bring benefits for consumers, change urban life and help reduce greenhouse gas emissions. But issues are still to be resolved, particularly around management and regulation. Watch this space.

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