Siemens Investing in Technology to Promote Smart Grid Development

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Researched by Industrial Info Resources (Sugar Land, Texas)--Siemens Energy (Erlangen, Germany), part of German power giant Siemen AG (NYSE:SI) (Munich), and Viridity Energy Incorporated (Conshohocken, Pennsylvania) are cooperating on the development of technology to allow power supply companies and network operators to implement virtual power plants.

A virtual power plant is a collection of distributed power-generating sources such as wind generators, biomass plants, photovoltaic systems, engine-powered generators and others, which are combined into a network and treated as a single entity. These virtual power plants can then be operated in a network more efficiently.

Siemens Energy has developed its decentralized energy management system (DEMS) to facilitate the control of virtual power plants and hopes to increase its presence in the U.S. by cooperating with Viridity. Viridity has combined the Siemens DEMS system with its own network application solutions to offer operators the ability to control the availability of energy within a network more effectively.

The idea of controlling all elements in a power network is often referred to as a "smart grid." In a smart grid, the power generation and distribution network can communicate with all the entities in the network, from generating units to consumers. By monitoring variable elements within a network such as weather forecasts, instantaneous electricity demand, and current electricity prices, the Siemens DEMS system is able to organize the deployment of the virtual power plants to gain the most effectiveness.

Viridity has combined the Siemens DEMS system within its proprietary VPower System to control demand response and energy management by integrating individual customer requirements and distributed generating and storage resources into a single, simply managed resource. This allows operators to anticipate and plan load and generating levels by forecasting demand levels and optimizing the generating capabilities accordingly.

Smart grids benefit utility operators by reducing power outages, sensing repair needs, and detecting leaks from power lines. Utility companies can more easily integrate environmentally friendly power generating sources such as solar and wind into the power grid, and take advantage of new technologies such as electricity-storage facilities when they are established for commercial use ready to come online.

Smart grids also enable consumers to control electricity usage in much the same way as they can control mobile phone plans, by running appliances that consume the most electricity when rates are lowest.

The benefits of developing smart grids are such that the U.S. government has allocated $4.5 billion to help advance the technology. It is estimated that more than 15 million smart meters will be installed by utility companies in the U.S. by 2015. With 9,200 power plants and 480,000 kilometers of transmission lines, the U.S. grid is the world's largest connected system.

However, some experts have expressed concern over the security aspects of a smart grid. They are concerned that, just as with the Internet, hackers could obtain illegal access to a smart grid and take control of the network, redirecting power, obtaining free electricity or perhaps causing worse consequences.

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