By Steven Collier

The Smart Grid is going to be important to your local government whether or not you have an electric utility because a new electric utility model is emerging from within every city and county in the U.S. The century-old, centralized, cost-plus monopoly electric utility business model continues to erode as your citizens and companies will increasingly choose local alternatives to their incumbent utilities.

Looking into 2014 and beyond we see new developments that will make the Smart Grid more important for your local government. Specifically, your citizens and the businesses in your community will have alternatives to their incumbent electric utility.

Cooper and Carvallo argue in their insightful book, “The Advanced Smart Grid: Edge Power Driving Sustainability,” that a modern, sustainable grid will emerge at the distribution edge of the grid, where the customers are, rather than from the incumbent utilities at the center where the generation and transmission have traditionally anchored electric utility service. New technologies and business models will arise from within your communities to supplant the legacy grid.

What can we expect to see? Consider a couple of emerging developments for a modern, intelligent grid:

Distributed Energy Generation & Storage – A growing number of residential, commercial and industrial utility customers, will produce their own electric power and energy with conventional standby/backup generators, on-site and community solar cell arrays, wind generators, fuel cells and other renewable sources. Some will do this even if it does not reduce their energy costs in the short run in order to improve reliability, security or disaster preparedness. Others will do so to reduce their carbon footprint, avoid nuclear waste and safety concerns or increase sustainability via renewable or “green” energy.

Some simply seek some measure of independence from the monopoly grid and/or a hedge against increasing traditional utility energy costs in the future. Along with distributed generation, more customers will deploy thermal and electrical energy storage as well as sophisticated energy monitoring and control systems to maximize convenience and performance. They may own and operate their own energy facilities or contract with entities that provide them as a managed service (e.g. solar energy)

The Internet of Things – The Internet has been primarily about the connection of people to people and people to things. However, this is being eclipsed by the connection of things to things. Cisco predicts that 37 billion new connections will be made to this Internet of Things (IoT) by 2020. The smart grid is one of the first and currently the largest example of the IoT. It started with smart meters and demand response, but will be orders of magnitude more in the future.

The legacy grid has about 10,000 generating plants and 150 million electric meters. If only 1 percent of electric utility customers have distributed energy solutions, that explodes to 1.5 million endpoints. Also, utilities, non-utility providers and utility customers are monitoring and controlling not just a single meter, but a growing number of devices like smart thermostats, individual appliances, lighting, premises monitoring, PHEVs/EVs, on-site generation and storage ultimately resulting in hundreds of millions more IoT endpoints. The smart grid will be a convergence of the legacy grid and the new Grid Edge with the Internet of Things.

Bob Metcalfe, inventor of the modem and smart grid visionary, said “Over the past 63 years, we met world needs for cheap and clean information by building the Internet. Over the next 63 years, we will meet world needs for cheap and clean energy by building the ‘Enernet.’”

An important implication of the above is that it will become more possible for your local government to encourage, facilitate, even offer to your citizens and businesses more economical, reliable, secure, renewable and sustainable electric power and energy solutions without having to own and operate a traditional electric utility system. The provision of ubiquitous municipal broadband may be a particularly important contribution to this.

On the other hand, the emergence of Grid Edge will have new implications for local government including zoning, building codes, public safety considerations, existing electric utility franchise agreements, urban planning, economic development. The decentralized, Grid Edge model may prove to be the best source of electric power and energy for your local government offices and facilities could be preferable Grid Edge components.

Steven Collier is an IEEE Smart Grid expert, and director of smart grid strategies for Milsoft Utility Solutions.