The coming Smart Grid will let utilities reach into homes to control appliances: What will micro-managed demand response do for distributed energy?
Little-known and under-publicized
at the time, a provision of the Energy Policy Act of 2005 has since made rapid
strides towards advancing what would be a revolutionary goal: a complete
revamping of our nation’s electrical grid system and ratepayer electricity
markets. If this initiative, often called the “smart grid,” stays on the track
that industry groups are now busily charting, it will not only change the grid,
but fundamentally redefine how distributed energy (DE) generators do
business—and perhaps even determine whether there is a DE industry, at least as
it is now constructed.
Shepherding this far-reaching and
massive undertaking is the US Department of Energy (DOE), working along with a
public-private partnership called the GridWise Initiative. Members of the
GridWise Alliance consortium include such major utilities and corporations
(listed at www.gridwise.org) as: American Electric Power (AEP), AREVA
T&D, Battell, Bonneville Power Administration (BPA), GE Energy, Nxegen LLC,
IBM, PJM Interconnection, RockPort Capital Partners, SAIC, Schneider Electric,
UAI, EnergyWeb, North America Power Partners, EnerNOC Inc., Site-Controls LLC,
Powerit Solutions, RTP Controls Inc., and Ziphany LLC. The federal side of
development is being spearheaded at DOE’s Pacific Northwest National Laboratory
(PNNL) research facility in Richland, WA.
Positioned at the center of the
new grid concept is probably just what you’d expect-a digital device. Introduced
half a dozen years ago to the gas, electric, and water utilities, this one is
known as the advanced or automated meter reader (AMR). In essence, AMRs replace
the old mechanical electricity meters whose dials and gauges are read visually
by walk-by inspection. Instead, AMRs log digitized data that can be
transmitted—usually wirelessly—and, in new models, sent all the way to the
utility business office.
Likewise, next-generation AMRs not
only record and transmit, but also add two major enhancements. First, the
ability to register a site’s energy usage at temporal increments, down to
specific hours and even minutes of the day; and second, two-way communication,
i.e., first sending data to the utility, and then allowing the utility to reach
into the meter, and even into home appliances, remotely.
What this means is that, finally,
the potential has suddenly emerged for utilities and customers to engage in a
wholly different model of electricity usage and delivery—all thanks to these
high-end AMRs. What’s envisioned primarily is a massive-scale, time-sensitive
demand response (DR) energy market. If all goes as proponents envision, this
will someday be operating throughout the US grid.
Here Is How It Might Work
Rather than ratepayers being
charged basically flat, per-kilowatt-hour fees for power, day or night (as now),
the new time-sensitive AMRs would provide the possibility of an energy user
adjusting to the often-steep spikes in wholesale peaking power prices. Consumers
will thus be able to use their appliances—turn them on or off—more
intelligently, in response to power cost. For example, when doing the laundry, a
person might first look at the daily rate fluctuations and determine the
cheapest time for running that rather electricity-gobbling appliance. Or, a
person might turn a thermostat up for “pre-cooling” at cheap rates, in order not
to run a chiller later in mid-afternoon, during peaking times. Again, because
AMRs can match usage to time, the utility can reward price-minded frugality.
Better still, from the utility
benefit standpoint, comes a lowering of peak demand (achieved by all of these
frugal customer decisions) and, with it, the ability to avoid buying costly
peaking plant power. This electricity is, of course, often multiple-times higher
in price.
From here, it’s a short step to
what’s already emerging as the next phase. As just noted, digitally
remote-controlled appliances will enable utilities to decide when and how to run
air-conditioners, water heaters, space heaters, washer-driers, thermostats,
HVAC, and such—always factoring in predetermined comfort levels, together with
customer wishes and incentives. In fact, the compact circuit board for doing
this task already exists, so too does a prototype of the whole market
price–conscious smart grid itself, at least in a small-scale test version. In
the state of Washington for 2006–07, all of the above described elements that
were assembled and demonstrated using real utility customers—along with
integrated onsite power generators in the mix. (More on this trial, below.)
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Photo: Pacific Northwest National Library The Grid Friendly appliance controller is a sensor in an appliance that can detect when the electricity grid is under stress, and then turn it off. |
Networked on this two-way grid,
too, as just noted, will be present and future DE resources. They, like
remote-controlled home appliances, will be complemented with greatly expanded
DR. Using the new two-way technology, both will be made easily dispatchable in
fine increments as needed, for grid stability or more efficient power
management.
Exactly what this might mean for
DE resource owners could include, among other things, a much easier way to use
their backup diesel generators. As PNNL’s senior research engineer for the smart
grid, Donald Hammerstrom, points out, these diesel generators—often located at
hospitals and police stations—“Usually sit around having nothing to do.” But if
an easy means existed, which could enable occasional peaking operation, these
idle assets would find a whole new role for themselves. That is indeed a
theoretical capability that has also recently proven out.
Industry Commitment
Growing
In any event, during the few years
since the Energy Policy Act empowered smart grid research, a number of related
private initiatives have come to the fore. A few highlights:
- Major AMR implementations are
now underway at Southern California Edison (5 million two-way meters—in 1999,
Itron and Southern California Edison signed a contract creating the largest AMR
Installation in California), Horizon Utilities (800,000 meters in Western
Canada), CenterPoint Energy Houston Electric LLC (1.9 million—IBM was selected
as the technology and implementation partner for the project), and Pacific Gas
and Electric (9.3 million over the next six years under an agreement with
Itron). Besides these, Duke Energy Corp., AEP, and BC Hydro have all announced
huge smart meter projects, each to cost in the range of $1–5 billion, according
to http://smartgridnews.com.
- In 2007 in metropolitan
Washington DC, 1,200 customers began participating in a “PowerCentsDC” pilot
with DR-capable, radio-controlled AMRs, under an agreement with Sensus Metering
Systems. Price responsiveness is being tested at hourly, peak, and critical peak
level rates. The Energy Independence and Security Act of 2007 added a provision
for creating a Federal Smart Grid Task Force to coordinate smart grid activities
for the federal government.
- A GridWise Architecture Board
task group has been established to define generation and distribution
protocols.
- IBM has launched the Intelligent
Utility Network Coalition, which seems to be charting de facto standards.
- In December 2007, Xcel Energy
established a private sector Smart Grid Consortium (consisting of Accenture,
CURRENT Group, Schweitzer Engineering Laboratories Inc., and Ventyx) to develop
data automation systems management.
- In January 2008, CURRENT Group
announced the commissioning of the nation’s first high-speed utility Smart Grid
home area network, for Oncor Electric Delivery Co. in Dallas, TX. Using
programmable thermostats and load-control switches, the system communicates and
verifies DR requests. Electricity retailers Direct Energy, Reliant Energy, and
TXU Energy, as well as the Center for the Commercialization of Electric
Technologies, are collaborating.
- After construction began in
mid-2008, a $100-million (largely federally funded) Smart Grid City development
at Boulder, CO, by Xcel Energy, was scheduled to be near completion by December
2008. Integrated at that time were four utility substations; 25 feeders; 50,000
residential smart meters; in-home Web portals with automation; and provision for
plug-in hybrid electric vehicles (PHEVs) recharging solar, wind, and CHP. Xcel
serves 3.3 million electricity customers and anticipates expanding the Smart
Grid City to many.
Why Put in a “Smart DR Grid” Instead of
More DER?
Massively expanded DR
capability—going down to each home—goes far beyond anything done historically.
Why launch such an enormous undertaking?
Supporters in the DOE and at the
utilities argue this approach is simply the best solution for correcting a
widely recognized, chronic market hardship that is increasingly exacerbated by
grid congestion. Preston Michie, Executive Director of Northwest Hydrogen
Alliance Inc. and a consultant to the Bonneville Power Administration (prominent
in smart grid research for the DOE at PNNL), explains that, from an electrical
standpoint, DR is “one of the better strategies for managing resource imbalance”
caused by peak demand or a downed power line. “If you can trip the load off, you
relieve stress on both the transmission [and distribution] systems,” he
says.
What about just adding more
distributed energy resource (DER) to a feeder instead? Dispatching of this sort
already occurs, Michie notes. “A fast-acting device at the load itself is a very
good solution,” he says, “because it can detect [and solve] the problem at the
load very quickly [by simply curtailing the load] at large numbers of residences
or small businesses.”
DR load shedding is thus
relatively instantaneous. This contrasts to the time lag that is encountered in
waiting for DE resources to respond to dispatches. So from the utility
standpoint, DR, rather than DE, “makes the [grid stability] problem much easier
to solve, because the response occurs at the load itself,” says Michie. “What’s
key, is that loads [unlike DE] are everywhere. You may need [to curtail] a
couple of hundred megawatts of demand response—which is a very large number of
homes. But if you had those sites already in place and automatically responding
… the operator could send a signal that trips all of them simultaneously.”
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Photo: ECS Inc. High-efficiency fixtures replaced existing 300-watt incandescents in this school gym, to improve lighting and lower electricity and maintenance costs. |
Thus, according to Michie, the
“…ability to pinpoint the location and to control the magnitude with [DR] makes
this the better solution.”
In purely commercial terms, having
the ability to do pinpoint load management also means that utilities will avoid
the often stiff, per-kilowatt-hour cost of buying from remote peaking plants.
These charges in particular cut into profits, because they are not automatically
or quickly passed on to ratepayers since regulators laboriously set rates.
Similarly, exorbitant costs are
encountered by utilities in building transmission and distribution lines. Here
again, the burden is borne by the utilities and ratepayers. As a Bonneville
executive Mike Hoffman reports in another context, “It’s not unusual for
construction of a transmission line to cost upwards of $100 million.”
However—despite the foregoing
credible assertions—a curiously contrary finding, based on interviews with 22
utility managers for a recent Chartwell report, suggests that utilities may see
the impending automated grid more as something to make their jobs easier, than
as a solution to power-delivery problems. The report, titled, “Smart Grid: How
Utilities View the Grid of the Future,” finds that utilities actually “see more
value in operational benefits as opposed to load curtailment benefits.” One of
the report’s contributors, Chartwell’s metering research analyst Mark Hall,
calls this “surprising.”
A final reason for pushing smart
grid development is that the services of electric utilities are rapidly
expanding. Several have already announced plans to provide high-speed broadband
over powerline. The smart grid will enable delivery and control of voice, video,
and data transfer, over the same wire that brings in 120-V house current. A
future grid with this added utility-end control and activity measurement
built-in would become a tremendous enabling asset.
DR: Already a Big Competitor to
DER
The utility-controlled home DR
that the GridWise Alliance envisions would also come as an addition to the DR
that is routinely taking place at larger-load sites now. In a way, these DR
businesses—called “curtailment service providers” (CSP), a.k.a. energy brokers,
DR aggregators, enterprise energy manager, etc.—are occasionally a thorn in the
side for some onsite generation developers. Both offer customers similar peak
load shaving benefits; but CSPs, et al. do it just by curtailing load, without
installing power.
As an example: CSP firm Comverge
reported helping the University of Maryland (UMB) at Baltimore cut back on more
than 20 million kWh in power purchases from PJM Interconnection (the
Pennsylvania-New Jersey-Maryland transmission organization) over the last two
years. Comverge installed a market-pricing monitoring system and graphical
tools, did load profiles, and established baselines—all of which, as UMB utility
manager Michael Krone states in a news release, “have been invaluable to our
success in the regional DR program.”
Among the strategies that Comverge
implemented were: using an existing 20,000 ton-hour per 2,000-ton output thermal
storage system to shift air-conditioning load from daytime peak to off-peak
operation, remotely controlling campus lighting, and curtailing chilled water
production.
As another example, DR firm Site
Controls packages “intelligent load management technology” in a program called
“Site-Command,” for doing long-distance, centralized load shedding at bank
branches. An operator can monitor and control branch lighting, air-conditioning,
signage, and equipment at hundreds or even thousands of sites. Peak load
shedding is optimized, enabling energy reductions of least 15%, yet, “without
interfering with customers’ experience,” says company sales materials.
DR and DER are not always
competitors; occasionally they are complementary. As executive vice president of
program development Paul Tyno, of Energy Curtailment Specialists Inc., points
out: “Every DR provider has participants who have onsite generation to displace
loads during an event call.” Thus, if the tariff incentives are large enough,
sites will run their backup generators to displace peak loads, he says. However,
there’s a strong public preference these days “to utilize reduction
methodologies that are nonpolluting.”
Smart Grid: What’s It Going to Mean for
DE?
If this futuristic grid becomes
reality, it would effectively integrate many more energy competitors in the form
of customers whose loads would participate in micro-scale DR. From a utility
standpoint, as Michie noted, DR is sort of the flip side of DE: Both yield the
result of enabling a grid to adjust to demand.
Although at first glance it seems
DE resources would likely be at an increasing disadvantage, because of the
possibility that the multi-kilowatt scale advantage—which onsite generators now
enjoy—would be negated by the network of thousands of tiny 1-kW loads which
could be automatically controlled, either individually or in aggregated
multi-kilowatt blocks. PNNL’s Hammerstrom notes that an expanded role is
conceivable, especially for backup generators. Also, operationally, whenever DE
resources are dispatched, this will likely become more automated. Currently, if
a utility needs DE, the phone rings. But in the future, the dispatch will
probably come by an electrical signal. As Michie says, “We’ll be able to detect,
say, a decline, and then automatically turn off demand or turn on generation; it
can be done very quickly … in this instance, through a drop in frequency.”
Test Deployment: When the Price
Was Right
Would electricity ratepayers
really trade away control of appliances in exchange for lower bills? And in a
bidding contest between DR and DE, how would DE come out? Possible answers—and
an early real-world glimpse of this future—were supplied by a small pilot
version in 2006–2007, on the Olympic Peninsula of Washington (the market area
near PNNL and BPA).
Major coparticipants included:
Invensys Controls; IBM; Whirlpool Corp.; three utilities—BPA, Portland GE, and
Clallam County planned unit development; power generator PacifiCorp; the City of
Port Angeles, WA; and the US Department of Energy. In the experiment, the AMR
meters, thermostats, and water heaters in 112 homes were outfitted with the
above-described control boards. These were then set to turn appliances on or off
in response to grid power demand—but also most importantly, doing so in response
to pricing signals and customer choices. The whole array was then linked to the
Internet, to enable owners to monitor things like fluctuations of kilowatt-hour
prices and their own appliance’s costs and behavior, moment by moment—watching
it in real time, via Web browsers, and setting parameters with the on-screen
dashboard. Participants got actual market pricing information, and they were
free to adjust devices, either for comfort or economizing.
Also in the competitive mix was a
30-kW microturbine running in grid parallel and two diesels generators (175 kW
and 600 kW). Although the latter two were not grid-connected, they already had
transfer switches to enable automated starts. Besides these three generators, a
fourth “virtual” one was computer simulated, to see how it would respond to
markets.
Lastly, besides the DER and
home-sized loads, several municipal and commercial loads were equipped: HVAC air
handlers, water pumps, and such, could join in the competitive bidding. With
these large DR loads, notes Hammerstrom, balance must also be maintained between
building occupant comfort and load curtailment.
In this first-of-its-kind energy
market, all participants were free to bid for the opportunity to curtail peaking
loads (or, in the microturbine’s case, to make power directly) whenever grid
conditions warranted. Winners, of course, received compensation.
“The real novelty was an extremely
sophisticated price-point bidding system that every load and/or power-generating
customer was able to participate in—not unlike market systems operating in the
energy sector,” observes Hammerstrom.
The winning purchase decision was
entirely automated and likewise market-driven, being determined by comparing
energy prices measured at five-minute intervals. Thus, for example, whenever the
wholesale power kilowatt-hour rates rose to a predetermined point, a DR resource
(i.e., ratepayer) might decide to put off using the clothes drier or water
heater a few hours, in order to win a nice, albeit brief, rate reduction.
Likewise with the microturbine or
diesel generators: Finding that the rival peaking-plant power was priced much
higher than their own costs (i.e., for fuel, labor, maintenance, and wear and
tear) by a big enough margin to make it worth their while, the operators would
fire-up turbines and sell power for some convenient time block (perhaps in
minimal half-hour units, say, twice a day). For doing so, cash accrued to an
account. Bids (i.e., wholesale market rates) and offers (DE/DR responses)
occurred one or two days ahead, at specific price-points. Then—depending on
which bids won—the resources (DR and/or DER) would be scheduled for the
following day, allowing also some flexibility.
In its own “league” was the 30-kW
microturbine: being grid-interconnected, it was able to set a constant output.
It thus bid continually at about $377 per megawatt-hour.
Bids by the two diesel generators
ranged greatly, Hammerstrom recalls, depending on the power quantity being
produced—from as little as 30 kW, up to several hundred kilowatts—and bids to
produce were accepted for as low as $180 per megawatt-hour, up to $680 per
megawatt-hour. “The smaller generator usually bid lower than the 600 kilowatts,”
he notes.
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Photo: Pacific Northwest National Laboratory A 30-kW microturbine was interconnected to the local Washington state electrical grid and dispatched to provide peaking power from 2006-07. |
So, at the end of the yearlong
trial, what did the study reveal? All in all: a qualified success for DE.
Although DE bids were often too
high, there were a few times when grids were so congested they could not bring
more power in; Prices for DE soared, and bids were easily won. Successful DE
bids peaked during a couple of weeks in early December when heating loads
spiked; power rates leaped higher. The microturbine won many bids and ran a
respectable 59 hours during this two-or-three-week period, while the other two
generators worked 65 and 48 hours respectively. As days passed, though, feeder
capacity revived, and DE resources were consistently outbid. On the shoulder
months, activity fell by two-thirds in November and January, and then shrank
down to a tiny fraction most of the year.
As for the home-based DR
ratepayers, they too reportedly found that their participation paid off
modestly, as they shaved an average of about 10% off monthly bills. Surveyed
afterwards, most said they liked having a choice and would probably buy the
necessary appliance modification to enable participating again. Few ever felt
inconvenienced.
Michie—who worked on the
experiment with Hammerstrom—recalls: “One of the things we looked for was, do
people notice these things [i.e., the automated curtailing of home appliance
loads]? And, the answer was, no.”
The utilities received the
greatest benefit: peak loads were cut as much as 50% for days at a time, notes
Hammerstrom. If this could be duplicated nationwide for a couple of decades, it
would likely translate into avoided costs of tens of billions of dollars, he
adds.
Cost? Benefit?
On this latter score, however,
actual long- or even short-term savings have proven extremely difficult to
calculate, and the published estimates (of which there are many) vary
considerably. For example, a 2006 DOE report to Congress (mentioned earlier)
titled, “Benefits of Demand Response in Electricity Markets and Recommendations
for Achieving Them,” found that in 10 DR industry studies to date, estimates
were “wildly disparate,” and ranged from life cycle savings totaling as little
as just $1 million, up to $52 billion. On only an annual basis, figures in two
studies that DOE favored, came up with numbers varying by a factor of eight—$362
million versus $2.6 billion. Two estimates derived from PNNL pegged potential
life cycle savings at either $70 billion or even $120 billion. And, a study in
2007 from the Brattle Group, covering real-time power savings during a one-week
heat wave in PJM, found that curtailment of peaking plants resulted in an
estimated $650 million in savings. So, take your pick.
Whatever the cost-avoidance
benefit actually is, what will the smart grid set us back, and who will pay for
it? AMR units—the enabling technology—are now priced over $100 each; and, beyond
having one or more at each site, there will be thermostats and appliance circuit
boards. Elsewhere on the system will be peak load and energy management
controls, and a networking superstructure. Obviously, the total—perhaps coming
to several hundred dollars per ratepayer site—won’t be cheap.
And as the GridWise Web site
suggests, the tab will likely have to be recouped with increases in electricity
tariffs and with taxpayer subsidies. The authoritative 2006 DOE report does not
attempt to come up with a cost figure, but does note that expenses will be
recurring, owing to periodic maintenance and upgrading. Also, the high first
costs will likely pose an obstacle to gaining acceptance, especially for small-
and medium-size customers.
Smart Grid Thus Faces Hurdles
Michie agrees that massive
up-front cost will be needed, noting that implementation at just a single
utility will necessitate retrofitting “tens of thousands of homes,” at a cost of
many millions of dollars, just to yield DR “in the neighborhood of one kilowatt
per locale, during peak loads.”
High initial cost is just one of a
number of challenges to be surmounted. Michie—though he strongly supports the
future grid—lists some of the other key considerations that will need to be
addressed:
- “All-or-nothing” critical mass:
There’s relatively little to gain from partial or incremental
implementation. From a utility cost-benefit standpoint, “several hundred”
megawatts are needed, he says; otherwise the impact “would be too small to be of
much use.”
- Automation should be flexible.
Although fully automated DR is probably desirable in many scenarios, it’s not in
others, and manual operator oversight will be necessary.
- Superb reliability will be critical.
“A failure rate of just 5%, for whatever reason,” might translate into millions
of dollars in added expense or lost benefits, over the life of the system, says
Michie. Similarly, the “rate of degradation is unknown”—a fact which would
necessitate adding redundant systems initially, until system life is well
understood. And any wide scale DR system would also be subject to failure
whenever the Internet goes down, he adds.
- Human resources, administrative demands
would be considerable. Operationally, servicing a future grid will
require comprehensive staff re-training on technical, business, and marketing
aspects. Likewise would come the need for acquisition of new materials, devising
new distribution systems, and establishing new standard contracts approved by
utility commissions.
- No
mechanism to finance or insure the system exists. And there is likewise
none yet for billing, handling complaints, or doing repairs.
- Public awareness of future grid benefits is
negligible. Consumers will thus need to educated and “sold” on the
concept, or their apathy/resistance will undermine it.
Despite these hurdles to be
overcome, though, once the future electrical system is up and running, Michie
says, “You’ve got a terrific resource—something very valuable to help manage
emergency outages or peak demand.” Disruptive events like heat waves, ice
storms, downed power lines, and peaking power shortages, will become far easier
to cope with.
What Alternatives? DER, Energy Efficiency…
An expensive DR-based grid is not
the only solution for peaking power, and, in fact, a number of options have been
available for policy makers to weigh.
From the DER industry standpoint,
the overwhelmingly obvious one is to continue making fairer grid interconnection
rules. This would enable more customer-owned generation to be added and, thus,
relieve congestion. This would also seem the preferable alternative for the
public, as it would not only help solve peaking power issues, but do so without
necessitating higher tariffs or public funding. Customers would invest in, own,
and maintain their resource—whether it is rooftop solar photovoltaic (PV) or a
cogeneration plant—which would provide broader public benefits gratis.
DER has long faced dubious
interconnection barriers, and any would-be solar PV adopter also faces a number
of obstacles—any of which could rather easily be removed if public policy were
reformed. Regarding both, in fact, it is ironic that the same Energy Policy Act
of 2005 that mandated doing studies of smart grids, also required that every
public electric utility must offer net metering. In reality, however, it appears
that this is not really happening very quickly. According to a report titled
“Freeing the Grid” which was prepared by four consumer advocacy groups (the
Network for New Energy Choices, the Interstate Renewable Energy Council, The
Vote Solar Initiative, and The Solar Alliance), as of late 2007, 16 states still
have no grid interconnection policy. Of those that do, eight are still deemed
inadequate to facilitating connection. In other words, in total, about half of
the US states still are not complying. Almost identical figures are reflected
for net metering policies. At present, only five—California, Colorado, Maryland,
New Jersey, and Pennsylvania—earned an “A” for interconnection and net-metering
policies.
Simply correcting these two
regulatory failings would arguably go a long way to solving peaking power
problems. As has already been demonstrated in Germany, a public policy pushing
solar-friendly, net-metering tariffs alone will likely spur enough investment
and tech development that the result would solve grid congestion issues.
Germany—which is now regarded as the world leader in solar PV—achieved this
distinction primarily with PV-favorable net metering.
On the subject of adding DER to
grids, Michie articulates the frequently cited utility response that, “There are
infrastructure issues that need to be addressed first, so that utilities will
have confidence that both distributed generation and demand response resources
will respond as expected.”
A second alternative to the smart
grid taking control of home appliances would be simply to promote investment in
more energy-efficient ones, and let people use the “on” or “off” button as they
wish. Another report (“Reducing US Greenhouse Gas Emissions: How Much at What
Cost?”), issued in December 2007 by McKinsey & Company for The American
Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE),
reveals that “A huge potential for energy and dollar savings in the lighting,
heating, and cooling of buildings” exists “...yet, substantial barriers to
adoption of efficient technologies remain,” in the form of non-incentives for
landlords and builders to invest in energy-efficient appliances.
The report also notes that
consumers—although price conscious when asking about an appliance’s first
cost—rarely pay attention to comparative life cycle energy cost. One easy
solution might be to require appliance manufacturers to indicate their products’
relative energy efficiency in kilowatt-hours, right on the price tag, just as
the MPG of new cars is on the showroom sticker. Another solution, suggested in
the same report, is to rewrite utility regulations, so as to reward promotion of
electricity conservation, rather than providing revenues solely for selling
it.
Still another alternative to the
smart grid (which, if it comes, will be almost wholly dependent on government
mandates to make it happen, rather than on markets) might be, simply, to wait a
year or two, as emerging competing technologies become better known. For
example, newer inverter-based interconnections for DER and microgrids make DER
relatively easier and safer to deploy. Another example is high-capacity battery
storage (already widely used in Japan): Cells charge overnight and discharge at
peak times. Another technology—announced in 2008 by PowerMand—is an entirely
Web-based DR system, which lets any home engage in DR without other grid
hardware or utility control. PowerMand’s DR would be managed by third-party
energy aggregators and CSPs.
Based on its sales material, at
least, PowerMand seems to have leapfrogged the national AMR grid. Given the
high-powered push behind the smart grid undertaking—and the continuing rapid
tech changes that surely lie ahead—it will be interesting to see what answers
the GridWise folks can offer.