Big Decisions for the Smart Grid

In recent months, many states such as Florida and Colorado have brought up the start date of smart grid projects in order to qualify for federal stimulus money. While the grid potentially offers extraordinary possibilities (see previous blog), they’re finding that difficult decisions need to be made now to ensure that these possibilities are realized. Everyone wants the smart grid to happen as soon as possible but many worry that too much haste will severely limit the long-term benefits. Here are just a few of the biggest issues that these states are grappling with:

Data Security

Smart Grids generate huge amounts of personal data and that is what makes them so useful and powerful in planning and moving energy supply. It is also what helps users, for example, control their home electricity use from work and lets appliances synch with power cost changes. But even before this data is generated, companies are squabbling over ownership of the data and consumers are worried about their privacy. Less than perfect security, many worry, could create a public relations crisis that turns people off the smart grid altogether.


Because both the hardware and software are relatively new and no one design leads the pack, each project is working with a different group of providers to create completely unique smart grid packages. This is a very useful way to learn and separate winners from losers. But the problem comes when one smart grid meets another. Compatibility is a necessity here, especially because the real efficiency benefits come only when the grid grows.

Another compatibility problem will come when companies begin rolling out “smart appliances” that link directly to the smart grid and are programmed to respond to changes in demand, supply, and price. At some point, people argue that the grid will even use household electric car batteries to store energy as demand fluctuates. To get all these benefits, compatibility between all the hardware and software is a necessity.


Many are also worried that these first generation smart grids being built now will quickly become obsolete. There are many different and often competing visions of the smart grid out there and it is perhaps unlikely that the grids being rolled out today will be consistent with the grid that ultimately becomes dominant.

All this isn’t to say that we shouldn’t press ahead. After all, the best way to learn is to do. But, as we saw with ethanol, long-term and reasoned thinking is necessary to ensure that we don’t create more problems than we solve. Lots of difficult choices need to be made today and it will be exciting to watch this far-sighted technology unfold.