How your customers will plug in to the “smart grid”

By Betsy Loeff, contributing writer

It isn’t only the electric grid that policymakers hope to make “smarter” in the near future. They also want consumers to wise up to how and when they use electricity. That’s why there are changes ahead for electric utility customers.

Saving on demand
“Demand response” initiatives are a key component of intelligent grid visions. These programs offer end-use customers incentives, load-control technologies, dynamic time-based prices — or a combination of all these — to inspire changes in consumption.

Dynamic electricity prices will require that customers have some form of advanced metering. Without it, utilities won’t know when customers used energy and whether they used less during high-priced time periods.

In a 2007 survey of nearly 100 utilities, researchers from ON World, a market-intelligence firm, found that three-quarters of respondents had automatic meter reading or planned to add it within 18 months. Nearly half of those deployments involved two-way, fixed-network systems capable of supporting demand response and smart grid applications.

Bringing it home
Load control is another possible smart grid component, although many utilities already have it. Typically, today’s load control programs use a signal sent via radio frequency or power-line communications. The signal cycles off air conditioners and other non-essential loads.

Once the smart grid is in place, utilities may communicate with the customers’ appliances via a “home area network” (HAN). Using a communicating, programmable thermostat, the consumer would decide how high to set the household temperature if the utility sends a summertime peak-event notice. For instance, the thermostat might reset itself from 72 to 76 degrees upon receiving a peak alert.

Such load shedding automation was part of a two-year study conducted in California during 2003 and 2004. Results showed that when customers were on a critical-peak rate — one that applies only during times of potential grid overloading — those consumers reduced their consumptions around 12 percent. Adding automated load shedding to that critical-peak tariff prompted peak-load reductions of up to 34 percent.

Watching it
Another device that could communicate with the utility over a home area network is a “real-time information-feedback” (RTIF) display.

Ted Geilen, senior utilities engineer with the California Public Utilities Commission, covered this technology in a session during the DistribuTECH 2008 conference held in January. He told his audience that standards, such as those used in ZigBee technology, could dramatically drop the cost of HAN devices. While many RTIF systems function independently of advanced metering, they typically cost as much as $150 and require professional installation by an electrician, he said. However, a standards-based unit that could be a homeowner’s do-it-yourself project could cost less than $25.

What’s more, RTIF systems tend to promote conservation, because they raise awareness and give customers a way to see how much energy they’re using at the time, Geilen explained. He cited five different studies in which participants cut energy use between 6 percent and 15 percent. He also talked about a study under way at Hydro One in Ontario, Canada. Many of its participants keep their energy monitors by the front door to remind family members to shut off lights.

Deployment of technologies like RTIFs isn’t far off. ON World estimates that the worldwide market for HAN devices could reach 276 million units by 2012.

Staying connected
Grid-sensing chips are under development, too. With them, appliances could shut off non-essential energy drains in response to grid instability.

For example, researchers at the U.S. Department of Energy’s Pacific Northwest National Lab created the “Grid Friendly Appliance Controller,” and they proved that it works by testing it in Kenmore dryers that actually were working in consumer households. The chips shut off dryer heating elements — the appliances’ largest energy user — when the unit senses a grid problem.

Net metering programs may be part of smart grid changes, also. These meters record regular consumption, as well as the energy that customers feed back into the grid when they generate more than they need.

The DOE sees net metering as an “important incentive for consumer investment in renewable energy generation.” Why? Net “means that customers receive retail prices for the excess electricity they generate.”

Without net metering, utilities use a second meter to record power coming onto the grid, and they pay consumers less than retail rates for it. That leaves consumers less likely to buy renewables. The investment just isn’t as smart as it could be.


Betsy Loeff has been freelancing for the past 15 years from her home in Golden, Colo. She has been covering utilities for almost four years as a contributor to AMRA News, the monthly publication of the Automatic Meter Reading Association.

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