Far from firing magic bullets, politicians and electricity regulators should be applying themselves to the tedious detail of getting regulations right. Today's electricity markets do a poor job of integrating variable wind power at maximum efficiency and lowest cost. Some outright penalise wind, such as in the American Northwest, where the region's major grid operator is pushing for a threefold increase in charges on wind generators to cover the perceived extra cost of balancing supply and demand (page 47).
More intelligent regulation is what is required. Instead, we get linguistic gymnastics in the form of "smart grid." Subject "smart grid" to a dose of analysis and there is very little that is new on offer and none of it is revolutionary. In part, what "smart grid" refers to is the further application of IT to power system operation, with such basics as intelligent monitoring, control, and two-way communication included in the package, along with demand management. Some more far-fetched definitions of "smart grid" include "self-healing technologies" and widespread use of electric cars and electricity storage schemes.
Most of this is already in use and being further developed; the rest is of limited value. Power system engineers are not Neanderthals who for years have failed to evolve the skills of their trade. Eurelectric, the association of European utilities, states a part truth, in dire need of modification, when it tells us that "smart grids are indispensable for the effective integration of intermittent power sources as well as improving both energy efficiency and the functioning of the electricity market." A well run electricity market will by its nature absorb ever larger volumes of wind power, which is not intermittent, but a variable supply of energy that can be managed just as variable demand is managed. A "smart grid" should not be seen as a substitute for the critical investments needed in transmission capacity. Smart grid technologies can help make a power system efficient -- with more wind power resulting -- but first the wires must be built.