Energy is the life-blood of commerce. The smart grid -- an intelligent electricity-delivery system drawing significant interest from the U.S. government, venture capital investors, startup companies, and established tech giants, including IBM, Cisco, GE, and Google -- promises to make that energy flow more freely, more reliably, more efficiently, and at lower costs to both consumers and businesses.
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Just one of the benefits of the smart grid -- reducing power outages -- arguably helps justify the federal government's desired investment of $17 billion in federal funds into transmission and smart-grid investments. According to Electric Power Research Institute estimates, power outages cost U.S. business at least $50 billion a year.
But reducing power outages is but one of the potential benefits of connecting utilities and consumers through an intelligent network. With smart meters installed at homes and businesses to monitor energy consumption and transmit information between energy providers and consumers, the smart grid promises to be substantially more efficient than today's system. I'll dig more deeply into the capabilities and features of the smart grid as I share what I view as some of the top benefits it holds for business.
1. The smart grid can reduce the costly impact of blackouts. Our current energy grid is, well, dumb. It doesn't know when one of its components needs upkeep or has failed -- and the utility company doesn't know, either, until someone calls in to report it. Then we all just sit and wait for the lights to come back on.
A smart grid, by contrast, is self-aware, a point explained to Congress Wednesday by IBM vice president of strategy and development Allan Schurr. "Imagine a system that continuously monitors the state of the network, looking for approaching equipment failures by analyzing such things as transient voltage data and transformer oil temperature to predict when equipment may fail so it can be maintained or replaced just in time," he said.
Schurr continued, "Imagine a system that detects an outage and automatically isolates the problem by rerouting power to affected customers, while simultaneously diagnosing the cause and dispatching the nearest repair crew that has the replacement parts on the truck."
Equipment failure isn't the only cause of a blackout: During the hot summer months in parts of the country, the electric grid feels heavy strain when homes and business crank up the air conditioning. The strain can get so high, it can result in rolling blackouts.
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