The Smart Grid Ecosystem

by Jeff Lund, Echelon Corp.

Utilities must address business and social issues associated with the environment. They must also manage their generation portfolios to keep pace with customers’ increasing peak-electricity demands. With limited options for adding more generation, many electric utilities invest in smart grids: intelligent electricity transmission-and-distribution (T&D) networks that use two-way communications to make power delivery more efficient, reliable and safe and to help customers better control energy use. The smart grid involves installing advanced metering infrastructure (AMI) solutions, including smart meters.

Historically, utilities focused on large commercial and industrial customers for using automated meter-reading solutions to exchange automated and detailed metering data with these customers. Understanding large customers’ electricity-usage patterns allowed utilities to offer customized rates and programs designed to influence energy use and more effectively manage load during peak-demand times.

With today’s heightened focus on energy conservation, however, utilities are targeting residential customers, as well. Thanks to technological advances, utilities can offer residential customers even more features and capabilities. Although an individual customer may be unable to shed a significant amount of load, in aggregate, residential customers represent a sizable amount of energy that can have an enormous positive impact on utilities and the environment.

AMI solutions should include advanced two-way network control systems with smart meters at every home. Using communication and control to and beyond the meter, utilities can create innovative tariffs and programs that provide rate incentives and cost savings to customers who reduce energy use during peak-demand periods. Cutting peak demand makes networks and generators more efficient, which reduces utilities’ costs and ultimately lowers customers’ energy bills.

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In addition, by expanding AMI and the smart grid to reach consumer products within homes, utilities can better ensure that enough electricity will be available in times of need, relieving system stress and preventing blackouts and brownouts. Customers can easily take part in proactive demand-response programs—without sacrificing comfort or security.

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Many AMI solutions support two-way communications, including messaging and control to home area network (HAN) devices. Most of these solutions, however, are locked into a single HAN technology. To ensure reliable communications, multiple HAN technologies must be supported. This would let utilities deploy various technologies and protocols to communicate with in-home devices without encountering compatibility issues and technology limitations and obsolescence.

The most logical approach for multiple HAN technologies is to move the HAN radio (such as ZigBee radio) outside of the meter. This solves a problem—radios don’t always communicate reliably from the meter to devices inside the home—and reduces the life cycle cost of the HAN solution.

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The market for smart in-home devices is in its infancy, and radio frequency (RF) control technologies—both the physical radio implementations and software protocols on top of them—are immature. As the cellular industry has moved from Global System for Mobile (GSM) to General Packet Radio Services (GPRS) to Enhanced Data Rates for GSM Evolution (EDGE) to Universal Mobile Telephone Service (UMTS), and the Wi-Fi market has moved from 802.11A to 802.11G to 802.11N, utilities can expect changes in RF control technologies. Putting HAN radio technologies inside a meter will shorten the technically useful life of the product.

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The most logical HAN approach is to use an AMI solution that provides a flexible, secure, bidirectional interface into and beyond the meter that can be used over time with whichever in-home technology is appropriate. By moving the radio outside of the meter, utilities will be able to upgrade home communications infrastructure without replacing the metering infrastructure.

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One way to facilitate multiple HAN technologies is to use meters with built-in power line networking communications to interact with in-home devices. Once inside a home, other devices could connect to the network and interact with the AMI system. For example, an in-home gateway could bridge the AMI solution’s communications from the power line to various RF technologies.

Organizations are working on standards and interoperability issues to facilitate HAN and intelligent in-home devices. Digital Home Alliance members are incorporating energy awareness into products and making them compatible with multiple HAN technologies. As products emerge, utilities will have customers willing and able to contribute to the smart grid and environment.

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The Digital Home Alliance approach enables new devices from multiple manufacturers to be added anywhere within the electricity network to provide competitive, value-added services at minimal cost.

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This extends the HAN to a variety of devices. Products such as intelligent networked thermostats, boilers, appliances, air handlers, lights and load-control modules based on Echelon’s LONWORKS technology are already available worldwide from thousands of manufacturers. More devices that will enable a variety of HAN technologies, including power line and RF (such as ZigBee, low-power Wi-Fi, or 6LoWPAN), will continue to be developed and added to HAN product portfolios.

HAN technologies provide utilities and their customers with effective tools to manage peak-electricity demand, which lets customers shift their energy use (and demand) from peak periods to off-peak periods. Customers with smart meters that use in-home displays to monitor electricity use and pricing can more intelligently manage their usage. Utilities can also implement new pricing schemes that adjust the price of electricity based on consumption patterns. Utilities can use these tools to curb consumption during peak periods when electricity is most expensive, shifting consumption to when it’s less costly. Consumers involved in these programs can either rely on in-home displays to track energy use and manually change their consumption behavior or use in-home devices that react automatically to the smart grid and time-of-use tariff to more effectively manage energy use.

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As utilities face increasing pressure to reduce costs and environmental impact (by reducing greenhouse emissions, for example), they must shift toward power generation and resource planning. The smart grid and AMI technologies will facilitate this shift. More important, the smart grid and AMI technologies will make power delivery more efficient, reliable and safe, and they will help customers better control energy use. AMI allows utilities to deploy a solution that lets them extend the smart grid and communications infrastructure to intelligent devices in homes. The ideal AMI solution will let utilities and customers implement and access an intelligent smart grid—one that benefits both parties—through various HAN technologies.


Jeff Lund is vice president of business relations at Echelon Corp. He has an MBA from the Wharton School of the University of Pennsylvania and a bachelor’s degree in electrical and computer engineering from the University of California at Davis. Reach him at

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