I was fortunate to attend a presentation by the Chief Marketing Officer for GE Energy who presented a fantastic slide deck on the Smart Grid. Although I have heard the term frequently I had little understanding beyond the term and certainly no understanding of the impact or importance. It started a broader energy conversation over lunch and the term Smart Energy began to float around the table. I continued to think about some of the concepts on the plane home and wanted to share a few observations.
Look back 20 years at the communication infrastructure, most of us had a phone connected to a wire that had pretty good reception and we could receive a handful of broadcast television channels. Over the last 20 years the communication infrastructure has been almost completely redeveloped – routers in your home, fiber optic infrastructure, data hotels, mobile towers and the list of infrastructure goes on. Think about how communication has changed and how many new companies now exist that create this infrastructure, manage this infrastructure and provide services enabled by this infrastructure (Internet).
What is starting in energy is something similar. We (the globe) is starting a process to rebuild our energy infrastructure and it opens the door on an incredible number of new opportunities.
Energy generation (power plants) and distribution (power lines) has pretty much operated the same way for a century. A fossil fuel is burned, steam is created that powers a turbine, the turbine generates electricity, the electricity travels down high voltage lines and through a series of transformers the power is stepped down to lower and lower voltage lines until it reaches your home or business. The introduction of alternative energy sources like wind and solar create a much more decentralized generation model and a distribution system that needs energy moving in many directions, not just the linear approach described above. How do you monitor and manage all of this – that is basically the Smart Grid concept. Smart Energy I would define as the whole energy ecosystem working together to create a reliable and sustainable energy system.
Now start adding the transportation fleet to the grid. About 47% of the energy used in the United States is for transportation and starting next year with the introduction of plug-in vehicles, that energy load will start moving onto the grid. As electric cars use about 80% of their energy for motion and gasoline cars use about 20% for motion (most is lost as heat) there is a huge environmental and economic benefit.
The environmental benefit – more efficient electric cars use less energy and dramatically reduce carbon output. This shift would also reduce the roughly $180 billion the United States spends on foreign oil that is converted to gasoline. In a few years the United States could be dramatically reducing carbon output and increasing dollars being reinvested in the United States by tens of billions.
Before I go let me give a plug to the GE Smart Grid site that has some great animations and information.