• Evolved slowly, as needed, over the last 4-5 decades
• Built to provide power from central generation facilities, not solar panels in New Jersey and the Southwest, or wind farms in North Dakota.
• Not built to re-direct the flow of energy effectively over large areas.
• No electrical energy storage
• Nor was it built to support an efficient market of energy trading (not the infrastructure nor the organizations)
• Not taking advantage of information technology for grid management

Although you wouldn’t know immediately based on the hype, only a small fraction (much less than 20%, the entire AMI and DR budget) of the spending will go to home energy monitoring and control [ref]. This spending makes sense based on the ratio of available savings from home energy monitoring/cost to deploy monitoring and control.

Robert Cialdini is implementing an interesting alternative to automated demand response in the home: publish comparative data on energy use to motivate changes in behavior.

Now Cialdini is applying that concept to energy consumption, with promising results. Positive Energy, a company that has drawn on his work (he’s the chief scientist), has created software that assesses energy usage by neighborhood. Results are sent to consumers on behalf of their local utility, praising you with a row of smiley faces (you’ve used 58 percent less electricity than your neighbors this month!) or damning you with none (you used 39 percent more electricity than your neighbors in the past 12 months, and it cost you $741 extra).

- From Greening With Envy, The Atlantic

The article goes on to explain the ideas behind “social proof” and tout the successes of the project.  This approach makes a lot of sense because:

1. Passive monitoring is boring.  No one but the most devoted energy geek is going to sit and watch their energy use numbers roll by in order to respond to “energy events” after the first few weeks.
2. Significant levels of automated demand response are irritating.  ”My washing machine stopped mid cycle because the energy company ran out of capacity?”
3. Monitoring and control is difficult to justify when the payback period on installation and monitoring systems from electricity bill savings is 5-10 years.

The aggregation and simple publishing idea from Cialdini seems practical–compatible with human psychology and cost effective.

What is a “Smart Grid?” Or nationally speaking, what is THE “Smart Grid?”  What is smart about it?  I am not going to survey the smart grid, but rather hope to point to and contrast two fundamental ideas behind the smart grid.

To start, I propose drawing a distinction between two concepts behind the Smart Grid :

(1) information access and transparency
(2) centralized control structures

Behind idea (1), people know more about energy consumption, load, demand, pricing and they know it faster and cheaper.

The idea underlying (2) is a bit more abstract.  The concept here is that only a central player has knowledge of the effects of the collective behavior of separate energy consumers and that this central player can make decisions about individual behaviors to make the system more efficient. This is often the illusion of centralized planning and control of complex systems. It usually results in systems that are optimized until they become brittle.

Our experience is pretty consistent that sufficiently complex systems are rarely understood and managed successfully in terms of what engineers think of as (linear) feed back and control.  We like to think that free markets are the proven answer to centralized and planned economies and that the history of the last 100 years has proven our side.  I think of these systems as “top-down.”

I propose that what we want from our national power grid is a system that is efficient enough and resilient.  And that that resilience will come from a bottom-up smart grid. A key attribute of resilient systems is that at various scales of the system, decisions contribute to the survival of the local and global system at the same time.

Notice that we violated this idea with a mortgage system in which mortgage brokers provided mortgages to consumers and sold them to investors on the same day, assuming no risk of default. Not surprisingly, mortgage brokers stopped being concerned with default, putting the entire system in peril.

These two ideas regarding information access and central control should be seen as entire Worlds apart.  The repeated conflation of the two ideas in the current thinking on energy distribution and consumption is dangerous. It seems clear from a systems engineering perspective that central control ought to be based on adequate information.  Adequate information coming in the form of appropriate models of system behavior and relevant access to real-world data.  From repeated experience, it is also clear that people and companies will hide information to maintain control and power as defined by success outside the system the information is about (e.g. Enron).

Robust, emergent, adaptive systems, on the other hand, may rely on the similar looking “information access and transparency” structures to the top-down systems, but have none of the centralized, coordinated control structures of the top-down system. Instead, these bottom-up systems rely on essentially local (in both proximity and meaning) decisions, where the resilient structure of the system emerges from the behavior of individual agents.

The “smarts” in the Smart Grid will come from agents acting on readily accessible (cheap, timely, relevant) information (#1 above) and not centralized, top-down control (#2 above).  Mixing the two ideas is confusing us, distracting us and slowing us down. A smart grid will emerge as a robust system relying on alignment between local and global objectives of the energy consumers and produces.