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By Jeff St. John

The case for smart grid technology that saves energy on the distribution grid is growing.

The latest comes from utility Xcel Energy (NYSE:XEL), which has linked up about 42,500 homes in its Boulder, Colo. SmartGridCity demonstration project with two-way communications and control systems that can do things like read home electricity usage, shut power on and off and detect outages.

But while much focus on that project has been on future energy-saving projects for those connected homes – most recently, on Xcel's request to install energy control devices in some of them – the devices the utility has installed on its own grid is saving it money and energy right away.

That's according to Xcel's July 9 report to the Colorado Public Utilities Commission. The report shows that SmartGridCity has sharply reduced – in some cases, eliminated – transformer failures, customer complaints and voltage problems on its distribution grid.

And that's what comprises the complicated web of substations, feeders, and end points that make up the "last mile" of electricity delivery for utilities. It's an often-overlooked piece of the smart grid, but offers some immediate gains for utilities that upgrade it, said Kevin Corcoran, director of product management at Current Group, one of many companies providing devices, software and services to SmartGridCity (see Green Light post).

The basic idea is simple, he said – put sensors on the grid that can tell you when equipment is about to fail, or sense frequency or voltage fluctuations that suggest a problem is about to occur.

It isn't cheap, necessarily. EnergyAustralia is spending $170 million to install and integrate about 12,000 devices from companies like Denmark's PowerSense on its distribution grids over the coming years.

But the results can be as dramatic as cutting the time it takes to find and fix outages by as much as half, and cutting the cost of maintenance by as much as 90 percent, largely by doing away with the need to drive around checking remote systems. That's according to a 2007 report by IBM on a similar project done by Danish utility Dong Energy (see A Feeling and Thinking Distribution Grid).

Another example is Virginia utility Dominion Power (NYSE:D), which has a smart grid pilot underway in Charlottetsville, Va., that has installed meters in 22,000 of an eventual 46,500 homes. While home energy management, different pricing rates and other such customer-facing programs will be a big part of the $20 million project, the utility will also see an "automatic energy usage reduction" of about 4 percent from managing the grid more efficiently, it says.

Mark Munday, CEO of Elster Electricity, which is part of German smart meter maker Elster, said much of those savings come from cutting down on voltage fluctuations that can overload or under-load lights, appliances, motors and the rest of the stuff at the ends of the power lines.

Essentially, running the voltage too high wastes power, and running it too low can cause devices to malfunction or break down. Keeping it steady is a tricky proposition, but made much easier when a utility can see what's happening out there in real time – or, perhaps, 15-minute increments.

Getting the information to better match utility output to the usage patterns of customers is the main source of energy and cost reductions for the 30 million-plus smart meter deployment at Italian utility Enel (EN), according to Bob Dolin, chief technology officer of Echelon (NASDAQ:ELON), which provided technology for the project (see Notes From a National Smart Grid Experiment).

The Electric Power Research Institute lists a series of devices that can help do this, such as synchronous generators, synchronous condensers, shunt capacitors, shunt reactors and static VAR compensators. All of them can be linked with smart grid communications to work more effectively. (For an interesting overview of different smart distribution grid systems, see this report from Pacific Northwest National Laboratory).

"It's something that many utilities around the country are excited about," said Brian Seal, a senior project manager with EPRI.

The institute plans to release a report this fall on its utility-backed research project into distribution automation, the Green Circuit Initiative, that will set some hard numbers on just what kind of cost and energy savings they can bring, Seal said.

In the meantime, these kinds of projects are open to apply for some of the $3.9 billion in smart grid stimulus grants the Department of Energy plans to give out (see DOE Issues Rules for $3.9B in Smart Grid Stimulus Grants).

So far, most of the publicly announced applications are seeking money for smart meter deployments, however (see DOE Hands Out $47M for Smart Grid Demos).

Voltage regulation can also be done at the customer end, as with devices made by Seattle-based startup MicroPlanet (see MicroPlanet: Fine-Tuning Voltage for Power Savings).

Source: Distribution Automation: Smart Grid’s Quiet Efficiency Offering