Why is there so much potential risk associated with the smart grid?

"The sheer volume of interactive devices on two-way networks is the biggest risk. By the end of 2015 we will have 440 million new hackable points on the grid. Nobody’s equipped to deal with that today" is part of the excerpts of a conversation between Kenneth Van Meter, Lockheed’s general manager of Energy and Cyber Services, and Melanie D. G. Kaplan of SmartPlanet.com that was published as Lockheed Martin on the smart grid: ‘440 million new hackable points’

In my third comment under Melanie's piece, I respond the question in a simpler and better way:

Because it involves all of it, everything up to the meter and everything behind the meter, the utility will be managing huge risks.

One key Second Generation Retailers (2GRs) job is to integrate demand to power system planning, operation and control. The result is that we have several competitive 2GRs managing their own risk after the meter and one transmission and distribution utility managing the risk before the meter, thus dividing the risk among them. Isn't that a much better proposition?

Continuing in reverse, under the heading Reliable Customer Service and Complexity Reduction, I wrote:

In the end-to-end smart grid being developed consumers will receive service from utility that is responsible for reliability, whether they like it or not. Even if you have a First Generation Retailer, they will not be participating in system operability performance.

The end-to-end value chain under the EWPC-AF is separate from transmission and distribution. Second Generation Retailers will be responsible for both prices and operability, as they will contibute to system operation performance for their customers. If you are not satisfied with a 2GR, you may go to a different one.

Finally, my first comment relative to piece was:

The smart grid has been made more complex than necessary, as a result of a system-of-systems architecting approach designed to protect most of utility system status quo profits, leaving practically intact their systems. That approach is summarized as: interoperability first and operability second. It can also be though as utility first and customers and society second.

To learn about how to simplify the architecture with the approach operability first and interoperability second, please take a look at the post "Why the IEEE Smart Grid World Forum Requires Learning About T&D Transportation Ultraquality.

José Antonio Vanderhorst-Silverio, PhD
Creator of the Electricity Without Price Controls Architecture Framework
Systemic Consultant: Electricity
Valued IEEE Member for 39 Years