You read correctly: unexpected “boulders”
in “Boulder,” which hugs the abrupt uplift of
the Rocky Mountains.
The Daily Camera quotes Xcel spokes-
man Tom Henley as saying, “SmartGridCity
has always been a research and development
process, . . . It’s a living and breathing labo-
ratory, and we’ve always said all along that
there’s parts that will work and parts that
won’t work.”
To be fair, that’s true of any new technol-
ogy. What customers may be less willing to
accept is that they, rather than shareholders
and project technology partners, are now be-
ing asked to cover those experimental R&D
costs (Figure 1).
A New Approach to Estimating
Smart Grid Costs
Though there may never be a way to estimate
the full cost of unforeseen circumstances, a
new cost estimate framework may help the
entities funding projects large and small
compare costs and benefits using a common
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methodology. In January, EPRI released a re-
port, cofunded by EPRI and the DOE, whose
goal “is to present a comprehensive set of
methods for estimating the benefits and costs
of Smart Grid projects.”
It’s important to note that “Methodologi-
cal Approach for Estimating the Benefits and
Costs of Smart Grid Demonstration Projects”
does not itself offer a new estimate for total
U.S. smart grid costs. The closest it comes
to a grand total is its citation of a 2004 EPRI
report that estimated smart grid costs over 20
years at $165 billion.
But if $165 billion sounds like a lot,
consider that the 2008 report citing that
now-six-year-old figure (S. Pullins, “Smart
Grid: Enabling the 21st Century Economy”)
pegged the value of smart grid benefits over
20 years at $638 billion to $802 billion. Not a
bad return on investment (ROI).
Also note that this proposed framework is
for estimating the benefits and costs of “Smart
Grid Demonstration Projects.” It is tackling
cost and benefit projections for small parts of
that elephantine “smart grid” that no single
U.S. entity can create on its own.
The meat of the report focuses “on the
definition of benefits and a sequential, logi-
cal process for estimating them. Beginning
with the Smart Grid technologies and func-
tions of a project, it maps these functions to
the benefits they produce.” The goal is that
“The methods developed in this study will
help improve future estimates—both retro-
spective and prospective—of the benefits
of Smart Grid investments. These benefits,
including those to consumers, society in
general, and utilities, can then be weighed
against the investments. Such methods
would be useful in total resource cost tests
and in societal versions of such tests. As
such, the report will be of interest not only
to electric utilities, but also to a broad con-
stituency of stakeholders.”
Until this or some other cost/benefit cal-
culation method becomes standard, it will be
difficult to compare the ROI of any two pro-
posed or implemented projects for customers
(aka, the ultimate cost-bearers), utilities, gov-
ernment grants, or the environment.
The EPRI report identifies four categories of benefits: economic, reliability and
power quality, environmental, and security
and safety. Here are some of the benefits
that would accrue to power generators in
particular:
■ “Optimized Generator Operation: Better
forecasting and monitoring of load and
grid performance would enable grid operators to dispatch a more efficient mix
of generation that could be optimized to
reduce cost.
