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Can a 'smart grid' turn us on to energy efficiency?

  • Story Highlights
  • Smart grid uses digital technology to eliminate waste and improve energy efficiency
  • Households could have 'smart meters' to regulate energy use
  • Incorporating energy infrastructure into a 'smart grid' presents great challenges
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By Matt Ford
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(CNN) -- Think of the future of green energy and the mental picture you may conjure up is one of vast solar plants glinting like a beetle's eye in the sun, or ranks of wind turbines turning in the breeze.

Power up: A 'smart grid' could integrate traditional and new energy sources and lead to greater efficiency.

Power up: A 'smart grid' could integrate traditional and new energy sources and lead to greater efficiency.

While the years to come will feature more of these power sources, one of the most potent weapons in the green energy arsenal is actually remarkably prosaic: efficiency.

According to research sponsored by the U.S. Government, improving the efficiency of the national electricity grid by 5 percent would be the equivalent of eliminating the fuel use and carbon emissions of 53 million cars.

For years environmentalists have been talking up the idea of a "smart grid" -- an electricity distribution system that uses digital technology to eliminate waste and improve reliability -- as a way of achieving this.

Advocates of a "smart grid" also say that it would open up new markets for large and small scale alternative energy producers by decentralizing generation.

"It would give consumers the potential to have a much more complex relationship with their energy supplier," says John Loughhead, Executive Director of the United Kingdom Energy Research Center.

"Essentially, with a smart grid, traffic goes both ways. If you wanted to install some kind of micro-generation facility in your home, you could use it to sell to the grid and get money back."

Using smart grid technology, your future home would be as likely to be powered by electricity from a neighbor's roof-top solar panel, or a biomass generator on the edge of town, as from a traditional power plant 50 or 100 miles away.

Such a scheme would also use "smart meters" to help consumers reduce their consumption by providing efficiency advice, as well as real-time price information and even coordinating household devices to take advantage of cheaper, off-peak, power.

"You might want to think, 'Electricity is expensive right now, so I'll turn the freezer off, or turn the fridge down for half an hour,'" says Loughhead.

"[With a smart meter] of course you wouldn't have to worry about those decisions, it would all be automated. Most of the technology exists to do this now. The issue is doing everything at a large enough scale, at an affordable price. It's a deployment issue."

Already prototype city-wide schemes are being developed in Austin, Texas, and Boulder, Colorado. But the huge investment and political will needed to create such a system nationally has so far been lacking.

"Even with political support... this is not something that could be done overnight," says Loughland.

However, the $787 billion economic stimulus package in the U.S. has suddenly made available hitherto undreamed of amounts of cash for infrastructure work, and President Obama has repeatedly stated his desire to create a low-carbon, sustainable America; suddenly the smart grid is powering forward -- perhaps with real political support.

In response to the stimulus package senate majority leader Harry M Reid announced on February 25 that the Senate will move ahead with a "smart grid bill" to modernize the country's electricity infrastructure.

Obstacles and potential

There are still many obstacles. Few people currently understand the concept, or why they should support it, while energy companies will need to be persuaded that they will have to change their entire business model, not to mention the physical challenges of updating the labyrinthine power distribution infrastructure.

However, environmentalists believe the grid still represents one of our best hopes for a lower carbon future.

"The grid is absolutely critical," says Steven Biel, global warming campaigner for Greenpeace USA.

"Energy efficiency is very important. Our energy problems essentially boil down to the fact that we waste too much energy and get too much of that energy from polluting sources. The fastest, cheapest way to cut emissions is by simply using less energy.

"The smart grid is the link that will allow us to tap the world's enormous renewable energy resources and get it where it's needed -- to people who need heat, light and transportation. It will create jobs, save consumers money, and free America from our dependence on foreign energy sources."

Solving the environmental and economic crisis together may sound too good to be true -- but many experts agree on the grid's remarkable potential.

"If done properly, [the smart grid] should improve the efficiency of delivering existing electricity generation capacity, for example from conventional fossil fuel sources, and also enhance the incorporation of decentralized energy sources," says Ed Barbier, an economist at the University of Wyoming and author of a United Nations Environment Program report on a green recovery.

"Both achievements would help reduce fossil fuel energy use and carbon emissions. Such an investment would create jobs in engineering, construction and computer fields, and have indirect effects on manufacturing and component assembling employment."

Barbier cites a study by the Peterson Institute for International Economics and the World Resources Institute that estimates a package of initiatives similar to the green elements of the Obama plan could save the U.S. economy an average of $450 million per year for every $1 billion invested.

In addition, every $1 billion in government spending would lead to approximately 30,000 jobs per year and reduce annual U.S. greenhouse gas emissions by 592,600 tons between 2012 and 2020 -- a 20 percent increase in job creation over more traditional fiscal stimulus measures.

Around the world Governments are watching what is happening in the U.S., as Washington embarks on what seems to be a bold new direction. But the U.S. lead on what is repeatedly described as a "Green New Deal" will have its strength sapped without worldwide co-operation.

Environmental problems are global, and the world needs to act together. So far the signs are positive, with environment ministers at the G20 talks in Nairobi in February seeming to see the U.S. example as one to follow in the recession.

"Reviving the world economy is essential, but measures that focus solely on this objective will not achieve lasting success," says Barbier.

"Only through the national actions and global cooperation... will the world sustain its economic recovery by addressing the imminent challenges posed by climate change, energy insecurity, growing freshwater scarcity, deteriorating ecosystems, and above all, worsening global poverty."

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