Energy Secretary Steven Chu sees a need for really, really easy-to-use home energy systems, coal-fired power plants that make biofuels and other high-value products in their spare time, and utilities sharing all kinds of grid data to avoid blackouts and drive efficiency.

He also sees massive new transmission lines carrying renewable power across the country, along with energy storage projects to keep that fickle solar and wind power from disrupting the grid – think lots of new pumped hydro storage in Canada, as well as millions of plug-in vehicles buying energy for cheap at night and selling it back for a profit during the day.

Those were a few of the highlights Chu gave Monday during his opening speech at the GridWeek conference in Washington, D.C. Representatives from dozens of utilities, companies, government agencies and organizations from 22 countries are in the nation's capital this week to keep abreast of the latest developments in bringing the latest in information technology to electricity grids.

The first stages of that process include deploying smart meters and distribution automation systems - the kinds of projects that are the focus of projects seeking billions of dollars of DOE stimulus grants (see Green Light posts here and here).

But Chu sees those projects as setting the groundwork for the challenges to come, which start with getting the percentage of the country's power that comes from renewable sources (not counting hydro power) beyond the single digits.  

One example of the challenges comes from the Bonneville Power Administration, the federal agency that transmits and distributes power in the Pacific Northwest. BPA gets about one-fifth of its power from wind energy when the wind is blowing, Chu said. But when it stops blowing, that share drops to zero, he said.

"How do you maintain and run a reliable transmission and distribution system when you have variable power?" he said. The answer, he said, is massive energy storage of the kind that is only contemplated today.

While some energy storage can be addressed by batteries, the large-scale storage Chu contemplates will likely have to come from the oldest technology for doing so – pumped hydro, which means pumping water uphill when electricity is plentiful, then letting it run downhill to spin a turbine when it's most needed (see Grid Energy Storage: Big Market, Tough to Tackle).

Federally run dams like Grand Coulee Dam in Washington state are looking at new pumped hydro projects, which offer about 80 percent efficiency but could cost billions of dollars, he said. And while the United States has tapped much of its potential for pumped hydro, "Canada has a lot of untapped hydro, and that hydro power can be ported into the United States," he said.

But getting beyond 20 percent intermittent renewables will create an additional problem for power generation, he said. It could require baseline generation sources like coal-fired and nuclear plants to actually turn down the amount of power they're generating when the wind is blowing hard or the sun is shining bright, he said.

Because coal and nuclear plants don't run nearly as efficiently when they're not running full-out, that will make their power more expensive at partial loads, he said.

"You're actually dipping into more inefficient ways to generate electricity. This is something that the smart grid can only partially take care of," he said.

To combat that, "We're beginning to look at using some of the fossil fuel generation as what is called poly-gen," he said. That is, use the power that's being taken off the power grid to do something useful, like make biofuel or other high-value products, he said.

Hybrid and all-electric vehicles that can be plugged in to charge up will also present both challenges and opportunities for the grid, he said. One way they can be used to balance the grid is by drawing power from millions of car batteries at once to meet peak demand loads, through so-called vehicle-to-grid (V2G) systems (see Ford Deploys Electric-Car-to-Grid Communications System and Electric Vehicles Could Surpass Grid or Support It).

"It has always been my goal to do energy arbitrage with plug in vehicles," he said. "If you get half the cars with 50 to 60 kilowatt-hours of energy storage, it's an incredible amount of energy storage... and if you're willing to sell half the energy storage back to the company, much of our energy storage problems will be taken care of."

Then there's using technology to turn down power use in factories, office buildings and homes to save on the expensive power needed only for a few hundred hours a year – typically, when hot summer days cause everyone to turn on their air conditioners at the same time.

Such peak power uses up one-quarter of the nation's distribution capacity and 10 percent of its generation capacity for less than 5 percent of the time, Chu said – and turning down power demand to lower that need could save "hundreds of billions of dollars a year," he said.

Dozens of startups and major companies like Google, Microsoft and Cisco are delving into the home energy management field, and many stimulus-seeking projects involve them (see Green Light post and stories here, here, here and here).

But to make homes – the largest untapped source of so-called demand response - reliable sources of load reduction, "This needs to be as easy and automatic as possible. I cannot emphasize that enough," he said. Just consider all the people who don't bother to program their programmable thermostats, he said. 

"My dream would be, you would have a very low cost RF mesh network that begins to interlink all your appliances, where you have that saver button or super saver button or energy peak button that talks to an energy interface where the consumer is blissfully unaware of what is happening," he said.

Chu also prepped the international audience for the upcoming release of the next stage of federal smart grid standards. The National Institute of Standards and Technology has been asked to develop standards to make sure today's systems will interoperate with future technologies, and released its first guidelines in May (see DOE Lifts Smart Grid Stimulus Cap to $200M).

NIST plans to release its next report on that process on Thursday in a speech by Commerce Secretary Gary Locke. With more than 100 standards to consider, there's much uncertainty over how the process will influence the policy and economics that will guide future smart grid deployments.

But security will definitely play a key role, Chu said.

"The grid is the most massive machine we operate... and the control systems for that will be very important," he said. "It has to be very high speed, it has to have automatic interoperability of high-speed communications, but it also has to be secured so the grid cannot go down." (see Defense Contractors Pursue the Smart Grid and DOE Issues Rules for $3.9B in Smart Grid Stimulus Grants).

Interact with smart grid industry visionaries from North American utilities, innovative hardware and software vendors and leading industry consortiums at The Networked Grid on November 4 in San Francisco.