Japan group to build smart power grids that treat energy like network data

Using concepts from IT and networking, a Japanese consortium plans to develop large-scale energy grids that will handle power the way the Internet handles data, using "routers" and "service providers" to efficiently manage and direct the flow of electricity.

The Digital Grid Consortium, which was officially founded in September and includes NEC among its members, said Monday it will build experimental systems next year, and aims to launch large grid services to try out the concept after three years.

The group's fundamental aim is the development of technology to track units of energy across an entire grid, tagging them with their source and destination similar to the way data packets are handled on the Web. This will require grid addresses for everything from power plants to individual homes, along with routers that can convert and shuffle the energy units to where they are needed.

"This is a mechanism that will allow electricity to be sent out, or transferred back in any direction as required. This is something that doesn't exist in current smart grids, which are only really used to monitor electricity," said Rikiya Abe, a Tokyo University professor who serves as representative director of the consortium.

Creating power networks that are more intelligent is seen as a pressing need in Japan, which suffered sporadic blackouts after a powerful earthquake and resulting tsunami caused meltdowns at a key nuclear power plant. The central region of the country, which includes Tokyo, is still facing tight supply without the plant.

As with the traditional smart grids, the consortium plans for inputs to include existing power plants as well as solar facilities and other alternative sources. Local power storage such as large-capacity batteries in homes will be another key element, said Abe, as currently the entire grid must be built to handle peak loads.

Energy and financial exchanges on a grid would be managed by "service providers" which would be able to track and charge by distinct units of energy. Much of the day-to-day transactions could be virtual, similar to the way currency exchange markets work today, he said.

"This creates discussions about how an IT and networking company like NEC, which also has a battery business, can enter the energy industry," said Takemitsu Kunio, a senior vice president at the company.

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