October 12, 2009

Smart Grid electric energy network begins taking shape

Manufacturers with long term energy concerns should get a charge out of this. In a September 24 announcement, Commerce Secretary, Gary Locke, unveiled a preliminary report from the National Institute of Standards and Technology (NIST) which outlines an accelerated plan to establish standards for an underlying framework for the Smart Grid electric energy network.

"What Smart Grid, and what does it have to do with my manufacturing business," you say?
As specified in the American Recovery and Reinvestment Act (ARRA), NIST will receive $10 million through the Department of Energy (DOE) to carry out responsibilities assigned under EISA. In addition, NIST is allocating $5 million in ARRA funding for this purpose. The funding supports collaborative efforts to develop a comprehensive framework for a nationwide, interoperable Smart Grid for the U.S. electric power system (as called for in EISA Title XIII, Section 1305).

The Smart Grid will be key to national efforts to further energy independence and curb greenhouse gas emissions, and NIST is carrying out its responsibilities with a sense of urgency. With industry, government, and consumer stakeholders, NIST is expediting identification and development of standards critical to achieving a reliable and robust Smart Grid. - Smart Grid Interoperability Standards Project, NIST

The United States has one of the world's most stable power supplies for industrial businesses. Drastic interruptions that hamper manufacturing production do not occur on the daily basis that some global manufacturers encounter. However, some unpredictable costs based on peak demand and foreign energy dependence remains a thorn in the side of US industry. The concept of a Smart Grid energy network seems appealing to most lean savvy manufacturers. Any form of continuous improvement is a step in the right direction.

However, like any lean initiative (and in this case green initiative too), it must lead to a more profitable process to be a success. This $10 million exercise is simply establishing standards. If a Smart Grid can be established without forcing businesses to shoulder the primary financial burdens, bravo!

Some manufacturers, like GE Energy, are already profiting from the Smart Grid.
About $4.5 billion of American Recovery and Reinvestment Act of 2009 (ARRA) funds to the Department of Energy also are slated for Smart Grid demonstration projects. - NIST press release

A GE announcement reports that they will be testing a small scale Smart Grid network in Maui, Hawaii. This system is a residential test in a resort community that monitors energy usage and has abilities to turn off appliances and other energy draws during expensive peak hours.
Half of the $14 million Maui project is paid for with a federal Department of Energy grant, with the rest of the resources and personnel contributed by General Electric and Hawaiian Electric. The pilot is being treated as part of the federal economic recovery package, which included $4.5 billion for smart grid development. - Associated Press story at msnbc.com

One dramatic change that could result from the adoption of a Smart Grid is the altering of manufacturing production schedules. Recognizing added expenses during peak hours may prompt industrial companies to change production scheduling in response to this. It would be like "Just In Time" energy consumption.

The Smart Grid incorporates more than simply energy consumption and sustainable manufacturing issues. NIST is establishing standards that address communications, security and other information transferring issues.

Collecting, analyzing, and managing all of the data available through the Smart Grid may produce a new corporate officer CUO - Chief Utilities Officer in manufacturing companies.

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