Science fiction often portrays a future world where devices that don't exist today play an integral part in every day life. A world where citizens would wonder how they ever lived without those devices. What differentiates the world of science fiction from the world of reality is that the world of science fiction has no impetus to change while the world of reality works on the premise that necessity is the mother of invention.

In today's global electricity sector, it is recognized that if we are going to be able to facilitate the generation, transmission and distribution of power of tomorrow in a way that fosters economic growth and environmental responsibility, our way of operating and interacting with the pieces of the power system must change dramatically. It is necessary change; change from a one-way "dumb" grid to an interactive, intelligent smart grid.

To foster this change, Ontario's Independent Electricity System Operator (IESO) created a 10 member Smart Grid Forum. Members of the Smart Grid Forum are:

  • Paul Murphy - President and CEO, Independent Electricity System Operator - Chair Ontario Smart Grid Forum;
  • Michael Angemeer - President and CEO, Veridian Corporation;
  • David Collie - President and CEO, Burlington Hydro;
  • Norm Fraser - Chief Operating Officer, Hydro Ottawa Limited;
  • Anthony Haines - President, Toronto Hydro Electric System;
  • David McFadden - Chair, Ontario Centres of Excellence;
  • Keith Major - Senior Vice President - Property Management, Bentall LP;
  • Jatin Nathwani - Professor and Ontario Research Chair in Public Policy for Sustainable Energy Management; Executive Director, Waterloo Institute for Sustainable Energy, University of Waterloo;
  • Paul Shervill - Vice President - Conservation and Sector Development, Ontario Power Authority; and
  • Wayne Smith - Vice President - Grid Operations, Hydro One.  

The Smart Grid Forum released its report entitled, Enabling Tomorrow's Electricity System on February 5, 2009. While the report focuses on Ontario, the contents, conclusions and recommendations have universal application across Canada.

Many area's of the economy will be affected by a smart grid but the research and development sector will need to take the lead in the early stages. A member of the Forum, David McFadden, who serves as Chair of the Ontario Centres of Excellence and Chair of Gowlings Energy and Infrastructure Industry Group said that, "We have a clear opportunity to leverage investments in smart grid technology to promote innovation and create green jobs." McFadden added, "Research and development in smart grid technologies coupled with a commitment to a highly skilled workforce can provide our province with a competitive edge."

What is a Smart Grid?

For many, a smart grid is still a nebulous concept so the first task of the Smart Grid Forum was to define what is meant by a smart grid. The following is their description of a smart grid:

A smart grid is a modern electric system. It uses communications, sensors, automation and computers to improve the flexibility, security, reliability, efficiency, and safety of the electricity system. It offers consumers increased choice by facilitating opportunities to control their electricity use and respond to electricity price changes by adjusting their consumption. A smart grid includes diverse and dispersed energy resources and accommodates electric vehicle charging. It facilitates connection and integrated operation. In short, it brings all elements of the electricity system - production, delivery and consumption closer together to improve overall system operation for the benefit of consumers and the environment.

A smart grid is not only information rich, but also has the analytic infrastructure, processes and trained individuals necessary to integrate and act on information in the very short time frames required by the electricity system. It is characterized by clear standards, security protection and open architecture that allow for continued innovation through the development and deployment of new technologies and applications by multiple suppliers.

 See diagram.

Why Do We Need a Smart Grid?

For Ontario, the impetus behind the advancement of the smart grid has been the provincial government's:

  • Requirement to shut-down Ontario's coal-fired generation;
  • Work to create a culture of conservation; and
  • Procurement of renewable generation sources to meet future electricity needs.  

Implementation of these initiatives requires, both transmission and distribution systems, to accommodate new types of generation, e.g. solar, wind and biomass, in new locations. Load patterns in the electricity system of tomorrow will be significantly different than the load patterns that were used as the basis for creating today's transmission and distribution system.

How Do We Get There?

Ontario has already taken the first step in creating, and realizing the benefits of, a smart grid by introducing smart meters. The report notes that research has shown that providing consumers with transparent commodity pricing together with time-of-use rates can lead to consumption reductions ranging from 5 to 15 percent.

The province's move to a conservation culture and its renewable generation initiatives continues the move toward the electricity grid system of tomorrow. However, without the advanced technologies that enable a smart grid, the full potential of these initiatives will not be realized. The province, and all jurisdictions, face challenges in simultaneously incorporating distributed generation, addressing growth and replacing aging infrastructure while also maintaining reliability and quality of service. The report notes that simply adding wires and equipment without intelligence to address growth and the replacement of aging assets is not a viable option.

What Will We Need?

While there is a clear definition of what a smart grid is and what a smart grid should accomplish, many of the technologies to support that vision are in the early stages of development. Some of the technologies will advance to commercialization and for some, the cost of large scale implementation may be prohibitive. The technologies of the smart grid must communicate with the technologies of the current grid system. The report notes that, "the challenge of interoperability, enabling new and existing technologies to exchange information and work together is substantial." These challenges can be overcome through innovation, investment and creativity. However, it will also take clearly defined roles for all potential market players. These roles can be defined through legislation, regulation or other available means that clarify authorities, establish requirements or create incentives.

Research will play a key role in the advance of the smart grid. The Ontario Centres of Excellence (OCE), an independent not-for-profit corporation established to encourage, fund and promote commercial innovation in Ontario and Canada, is well-positioned to develop smart grid technologies and systems. OCE currently has 14 projects underway or in the pipeline that relate to the development and commercialization of smart grid appliances.

Stakeholder Input

In developing the report, and the subsequent recommendations, members of the Forum heard presentations from a wide variety of industry stakeholders and experts on the following topics:

  • Smart Grid Vision - The vision of a smart grid and smart grid activities in the United States and European Union;
  • Consumers - Change in how consumers, utilities, retailers and other service providers interact by offering new ways for them to communicate and expanding the types of services available to consumers;
  • Ontario - Ontario distributors', transmitters' and the Independent Electricity System Operator's (IESO) current smart grid-related activities and future plans;
  • Distribution - How the use of advanced sensing, automation and communications equipment on the distribution system can improve reliability, equipment performance, restoration times and power quality;
  • Distributed Energy Resources - Energy resources on the distribution grid include generation, storage and demand response. Smart grid technologies can help maximize the amount of generation that can be connected to the system while maintaining safety and service quality. Energy storage offers potential benefits such as:
    • Delivering energy to meet peak load;
    • Providing ancillary services, including regulation and voltage support; and
    • Allowing for the deferral of distribution investments.
  • Micro-Grids - A micro-grid is seen as an integrated solution that meets the electricity needs of a group of consumers, such as a neighbourhood, a town or a single consumer such as a university;
  • Electric Vehicles - Plug-in electric vehicles offer the prospect of reduced emissions and lower costs. However, their widespread use will present challenges and opportunities for the electricity system. At a local level, the major challenge involves enabling vehicles to be charged safely and conveniently without adversely impacting local distribution equipment;
  • Standards and Security - Both are vital if the smart grid concept is to develop efficiently. Standards are required to allow devices developed by different companies for different purposes to interact. Security is crucial because grid modernization requires installing large numbers of devices that must communicate with essential computer systems. Many of these devices will be located in unsecured locations and can be potentially accessed by those seeking to penetrate critical utility systems; and
  • Transmission - The need to incorporate significant quantities of variable generation and the development of storage facilities will drive increased application of advanced technologies. Transmission systems can become more intelligent through the installation of additional monitoring which allows better assessment of conditions on interconnected systems.  

Key Recommendations

The Forum believes that the "rapid development of a smart grid to benefit electricity consumers and advance environmental initiatives should be the policy of the Province of Ontario." The following are the key recommendations of the report:

  • The Ministry of Energy and Infrastructure should facilitate the development of Ontario's smart grid through legislation, regulation or other available means that clarify authorities, establish requirements or create incentives for those entities investing in Ontario's electricity system to accelerate the deployment or enhance the functioning of smart grid technologies;
  • Consumers and their designated representatives should have access to timely information about their consumption and the price they are being charged from a smart meter with two-way communication capability;
  • Consumers should pay prices that reflect the cost of electricity at different times;
  • To plan and operate the grid reliably and efficiently, distributors, transmitters, the Ontario Energy Board (OEB), the Ontario Power Authority (OPA) and the IESO should work together to:
    • Develop requirements for and propose sufficient monitoring of distribution connected generation, storage and responsive load;
    • Determine the authority necessary to direct the operation of these facilities, the conditions under which their operation could be directed and any compensation that would be provided to a facility;
    • Propose contractual and pricing arrangements with distribution-connected generation, storage, and responsive load that support efficient grid operations and are consistent with the operation of the wholesale electricity market; and
    • Coordinate the development and implementation of grid control and information systems to facilitate the above actions.
  • A task force led by the Ministry of Economic Development, involving other relevant Ministries and consisting of representatives from the auto sector, electricity sector and universities should be created to develop a comprehensive plan for enabling plug-in vehicles. The plan would address policy, financial and system impacts of substantial electric vehicle penetration; and
  • Utilities, the IESO, the OPA, universities and the OCE should conduct research and development related to smart girds to advance Ontario's leadership position in this area, promote innovation and develop jobs in Ontario's green sector. The OCE should facilitate the development of a task force to produce a framework for smart grid research in Ontario that would include targeted amounts of funding and proposed funding mechanisms.  

For the development of smart grids to be successful, the Forum believes that stakeholders must recognize that not all smart grid technologies will deliver as promised, there will be some false starts and dead ends, and open standards and integrated approaches are essential to minimizing the risk of stranded technologies.

Based upon the reams of information available to the Forum, including presentations from the United States and the European Union, it is clear that no one jurisdiction is the clear leader in the development of a smart grid system. Coordination amongst stakeholders, both internal and external to each jurisdiction, as the idea and concept of a smart grid begin to crystallize are key to success.

How Much Will This Cost?

The preliminary cost estimate by the Forum is that incremental capital spending over the initial five years would be $1.6 billion. This cost estimate covers transmission, distribution and the IESO. The report notes that cost comparisons to other jurisdictions are not meaningful because each jurisdiction has a different starting point. For example, the $1.6 billion does not include smart meters costs since Ontario is already well down the road of installing smart meters.

Is the Government Supportive of This Initiative?

Within 24 hours of the report being issued, the Premier of Ontario stated that the province will be introducing new green energy legislation to modernize the electricity system. He further stated that a smart grid system is essential to maximizing Ontario's abundant renewable generation. The Premier estimates that the Green Energy Act will generate 50,000 direct and indirect jobs over the next three years and will expand Ontario's use of clean and renewable energy sources such as wind, solar, hydro, biomass and biogas.

The full text of the report may be viewed at the following site: