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Remarks at GridWeek Conference

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Thursday, September 24, 2009

CONTACT OFFICE OF PUBLIC AFFAIRS

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Secretary of Commerce Gary Locke
Remarks at GridWeek Conference
Washington, D.C.

I’m pleased to be here this morning to help mark an important milestone. Today the Commerce Department’s National Institute of Standards and Technology (NIST) is releasing its first framework for the adoption of Smart Grid standards.

This document is the result of months of collaborative work with industry, states, regulators, and others—and it represents a major step in the development of a national Smart Grid.

I want to thank those of you here today who worked with NIST to develop this new document—and I encourage you to remain engaged, as we still have lots of work to do.

As you know, the Smart Grid is critical to the nation’s economic, energy and environmental future.

If a smart grid is built nationwide, it can help reduce power demand by more than 20 percent—which is significant enough to eliminate the need to run hundreds of power plants during times of peak demand.

And as distributed power sources like plug-in electric cars, rooftop solar panels and wind farms become a bigger part of America’s energy mix, we’ll need a Smart Grid to deal with energy coming from many sources in which some customers are consuming energy and others are feeding it back into the grid.

Modernizing our electric grid is a project that is long overdue. If Thomas Edison were alive today, he might be surprised at how similar our electric grid is to when the first lines were laid a century ago.

The barriers to getting the Smart Grid up to scale are largely not technical. A smart grid uses much the same networking technology that links computers together in an office or factory.

The primary challenge is coordinating the regulations, standards and incentives that govern our patchwork system of power generation.

That is why President Obama has made the Smart Grid such a high priority with a total of $11 billion allocated to federal agencies to jumpstart the transformation to a bigger, better, smarter grid.

Already, we are seeing incentives and regulations changed that will help accelerate the adoption of the Smart Grid.

Currently, 24 states—plus the District of Columbia—have set Renewable Portfolio Standards that require electricity providers to obtain a minimum percentage of their power from renewable energy resources by a certain date.

The energy bill passed by the House this summer would take that trend national by requiring states to obtain about 15 percent of their electricity from renewable sources by 2020—about four times the amount we use today.

And at the local level, we are seeing a promising move towards utilities decoupling their pricing from power generation. Increasingly, investments in efficiency measures and things like the Smart Grid are turning into a profit center for utilities—which means we are bound to see more of it.

But these efforts will fail to achieve their promise if we don't knit together the various technologies that will make our current dumb electric grid smart. And that is what this NIST project is all about.

Congress assigned NIST the responsibility of coordinating and accelerating the development of interoperability standards for the Smart Grid.

Building on a long history of successful collaboration with industry, government, and non-profits, NIST announced its plans to accomplish this goal in three phases:

  • First, develop a road map and consensus for an initial set of standards;
  • Second, establish a panel of stakeholders to address gaps and assign development of specific standards to the various standards development organizations (SDOs);
  • And third, create a plan for testing and certification to ensure that Smart Grid equipment and systems are secure and interoperable.

In May, Secretary of Energy Steven Chu and I took the first step at the White House when we met with about 70 industry and non-profit leaders involved with the Smart Grid.

At that time, NIST announced an initial set of 16 standards where there was consensus to move ahead.

We knew we would need everyone’s support in this effort. In the end, an advanced Smart Grid infrastructure that accommodates end-to-end interoperability will require hundreds of standards.

These standards are needed immediately to ensure we don’t prematurely render otherwise viable products obsolete.

For example, we don’t want smart grid meters—the key communication device that links utilities with consumers—to suffer from “beta versus VHS” rivalries.

Working with NIST, the National Electrical Manufacturers Association—a key SDO has develop a standard in record time, just 90 days, to ensure these devices can be upgraded as new capabilities and technologies become available.

That's just one of many challenges. The scale and complexity of this Smart Grid standards effort may be unprecedented. The 5.4 million miles of transmission cables that make up today’s grid could circle the Earth at the equator more than 200 times—and the grid includes some 22,000 substations and 130 million watt-hour meters.

Today we have the first dividends from all of our work.

The report was posted this morning on the NIST Smart Grid Web site. We will be soliciting comments on the report for a thirty-day period.

NIST will be hosting a free briefing at 1:00 p.m. this afternoon here at the Reagan Amphitheatre following the GridWeek conference to describe the report in detail.

To use an analogy from the construction world, this report is like a designer’s first detailed drawing of a complex structure. It presents a high-level conceptual model to ensure that everyone is on the same page before moving forward to develop more detailed, formal Smart Grid architectures.

Since the Smart Grid is an evolving networked system of systems, this high-level model is critical to help plan where to go next.

I’d like to spend the next few minutes giving you a few highlights from the document.

This new document incorporates input from more than 1,500 stakeholders who have participated in the NIST framework development process.

It identifies about 80 specific standards where NIST believes there is sufficient consensus for implementation in the near term.

Standards are just one aspect of building a Smart Grid infrastructure, but they are a fundamentally important one.

The complexity of the Smart Grid makes it critical that components from many different manufacturers be able to work together seamlessly. Getting to that point requires a very systematic effort with clearly identified priorities.

In addition to specific standards, the report identifies a set of 14 “priority action plans” that identifies important gaps where additional or revised standards are needed. The plans outline everything from how to handle plug-in electric vehicles, to home energy management systems, to preventive maintenance aimed at keeping the grid from developing problems before they arise. Each plan includes a recommended approach and timeline to develop solutions to these high-priority needs.

These action plans respond to four priority areas recommended by the Federal Energy Regulatory Commission (FERC) in its proposed policy statement and action plan:

  • 1. Wide-area situational awareness: We need to be able to monitor and display power-system components and performance across wide geographic areas in real-time, or close to it – so we can improve performance and anticipate, prevent, or respond to problems before disruptions can arise.
  • 2. Demand response: We need means and incentives for business and residential customers to cut energy use during times of peak demand or when power reliability is at risk.
  • 3. Electric storage: We need a means of storing electric power, directly or indirectly beyond the limited hydroelectric technology currently available.
  • 4. Electric transportation: We need to enable plug-in electric vehicles on a large scale—which could significantly reduce U.S. dependence on foreign oil, increase use of renewable sources of energy, and dramatically reduce the nation’s carbon footprint.

Besides the FERC priorities additional priorities were added in responses to stakeholder

feedback. Two specific examples are:

  • 5. Advanced metering infrastructure: We need meters that don't just allow customers and utilities to see energy usage in real-time, but actually allows them to do something about it—like charge different prices for energy used at different times of day or remotely control appliances and heating and air-conditioning systems.
  • 6. Distribution Grid Management: We must maximize the performance of transformers and other components of distribution systems, and integrate with transmission systems and customer operations.

Also central to this report is the issue of cyber security.

This is an area in which we need to take the time to do it right because security must be designed deliberately into the foundation of the Smart Grid. It cannot be added on later, and it must be uniform. Having 48 of 50 states implement security specifications will not suffice.

The Smart Grid gets its “smarts” from sophisticated computer systems—but that also provides vulnerability.

In recent years, cyber attacks have increased in both number and severity. Without the right protections, an attacker might penetrate a network, gain access to control software, and destabilize the grid in unpredictable ways.

That’s why NIST organized a group with more than 200 participants from the private and public sectors to identify cyber security considerations including risk assessments, assessing vulnerabilities, architectures, and other requirements for protecting the Smart Grid. A chapter in the report describes these efforts.

These are the highlights of the report. But where do we go from here?

Following the 30-day public review and comment on this draft, NIST will provide its initial framework document, or what we’re calling Release 1.0 to the Federal Energy Regulatory Commission (FERC), which they can use to start a rulemaking proceeding based on the report’s standards and protocols. This will help ensure the Smart Grid will be functional and interoperable in interstate transmission of electric power, and in regional and wholesale electricity markets.

The final version of Release 1.0, which will be issued later in 2009, also will serve to guide the work of the Smart Grid Interoperability Panel, which will identify, prioritize and address new requirements for Smart Grid interoperability and security.

This is indeed a daunting and important project you are a part of.

In 2000, the U.S. National Academy of Engineering ranked the creation of a national electric grid as the greatest engineering achievement of the 20th century.

And now you're trying to reengineer it.

At stake is America's energy future and the economic competitiveness of our nation.

I thank you for all the hard work you have already done—and know I speak for everyone at NIST when I say that I am looking forward to making history with all of you in the months and years ahead.