Hottest Issues in Smart Grid, Part 2: Interoperability Standards “Doing it Fast” Versus “Doing it Right”

Hottest Issues in Smart Grid, Part 2: Interoperability Standards “Doing it Fast” Versus “Doing it Right”

by Adam James

This is the second article in a series examining the debates around the Smart Grid raging inside what are often highly technical circles. The Smart Grid is going to influence almost every aspect of daily life. So it’s important to get a grip on the potentially controversial decisions that will be made over the next few years in creating this new web of energy consumers and suppliers.

Issue 2: The Fast standards vs. The Right standards

What are ‘interoperability standards’ and why do they matter?

In the last issue we discussed how the “smart” in Smart Grid are the revolutionary communications technologies that allow different parts of the grid to communicate with each other. Interoperability standards are the rules of the road that make this communication possible, and ensure that the technologies are able to work in synchronization.

As a consumer, you want the product you purchase to fit into the overall package of energy efficiency for your home. For example, if you purchase a smart thermometer, you would expect it to be able to signal temperature changes to your AC/heating system. You would also expect those changes to be reflected in your energy use as tracked by the meter. Unless the companies who make all those technologies conform to a standard, nothing can function effectively. Interoperability is like the universal remote for operating all these technologies.

Getting the technical details right, particularly for issues like Phasor Measurement Systems for time synchronized energy prices, are going to be essential in moving forward in every aspect of the grid. Without corresponding technologies, new pricing structures can’t take root. And while regulatory bodies are doing their best to establish a framework for demand response compensation (the mechanisms which help curtail consumer demand at peak hours), there have to be fundamental changes in our system to make the right things happen.

How does the standardization process work?

The National Institute for Standards and Technology, or NIST, was mandated under the Energy Independence and Security Act of 2007 to set the national standards for interoperability. There are two primary bodies within NIST designated with tackling this task: the Smart Grid Advisory Committee (composed of 15 voices from industry) and the Smart Grid Interoperability Panel (public forum composed of all stakeholders). There is a collaborative wiki page on each standard to engage the community on concerns and paths forward, and the participatory process isolates a consensus on standards (via working groups) before bringing them to FERC for approval.

So what’s the problem?

The democratic nature of the standardization process, engaging a wide variety of stakeholders to make sure interests are all represented, is certainly the only way to ensure that all the bases are covered and no one feels left behind. However, that process is (by virtue of how many parties are involved) very slow and cumbersome. Countries like China, however, do not have the same problem with engaging stakeholders because of their governance structure. What does that have to do with us? If China (or any other country) moves ahead on syncing their domestic technology with their grid build out, American companies may lose out on the ability to set standards and IP rights for budding technologies – instead having to settle for “innovating in a box,” and penetrating the market at a disadvantage. In this way, the dominant standard becomes the de facto standard because it is driving the market.

So domestically, Smart Grid proponents are grappling with a dilemma of “doing it fast” and rolling out standards that can guide developing technologies and enable us to compete, and “doing it right” by making standards which reflect industry needs and provide flexibility for new innovations while protecting stakeholder interests. This tension is not easily resolved, but some have proposed changes to the existing system. This includes adopting families of standards as opposed to individual standards, or gauging the necessity of standards in various parts of the grid and then adopting them at a moremacro level combined with policies to encourage people to meet them.

Whatever the solution may be, the standard setting process will need to be streamlined considerably to keep pace with our competitors. Failing to rise to this challenge means our producers might miss out on a chance to compete in the global marketplace, and our consumers will have to rely heavily on foreign products.

Adam James is a special assistant on the energy policy team at the Center for American Progress.

Previous Post: Hottest Issues in Smart Grid, Part 1: Data Access Versus Security

Next up: “Electric Vehicles: Market Penetration Versus Infrastructure Build out”


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