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April 24, 2014  |  Login
Smart Metering and Demand Response
By John Rubino
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Smart Grid

The meter reader-the person who walks from yard to yard checking each home's monthly electricity usage-is almost as much a part of American folklore as the mailman. It's a little disturbing, having a stranger wander through the back yard looking for the electric meter. But physically reading thousands of meters in a given territory is also an immense waste of time and effort. So, only a couple of decades after the invention of the cell phone, utilities have begun to install meters that can communicate wirelessly with the head office or with receivers in roving vans. In 2007, about 10% of U.S. homes were equipped with smart meters, but the total is growing fast. London-based market analyst Datamonitor predicts that smart metering will reach 89% penetration in North America and 41% penetration in Europe by 2012.

Once utilities and their customers establish real-time communication, lots of interesting things become possible. A utility can, for instance, install automatic controls on customers' water heaters, air conditioners, and other power-hungry devices and then remotely turn them off when demand spikes. Florida Power had half a million customers enrolled in such a program in 2007; customers agree to give the utility partial control over certain appliances at certain times in return for reduced bills. This is known as "demand response," because it's a voluntary reduction of electric demand in response to grid instability or high wholesale prices. Such a program might produce a net lowering of demand, as when an air conditioner is turned off for part of a day and isn't needed once the sun goes down. Or it can shift demand from peak to off-peak hours, as when a hot water heater is turned off at noon and then reheats the water later in the evening. Either way, the utility avoids having to build and maintain as much peak generating capacity, and, if it's done well, customers hardly notice a thing.

Even bigger savings are possible when customers do notice, and a communications system that lets utilities see what a customer's appliances are doing in real time also gives the customer, in theory, the same view. So on the horizon are smart meters that will show customers how much juice they're using per hour and what it costs. A Canadian company called Blue Line Innovations, for instance, now offers a $150 power cost monitor that looks like a digital electric clock, but instead of the time, shows the owner's monthly power bill. Switch on a given appliance, and you instantly know how much it's costing you. In a typical house, the air conditioner might bump power consumption from $0.03 an hour to $0.10. A toaster oven might cost $0.30 an hour and a microwave $0.40, while an electric clothes dryer might be a dollar or more. Now, combine this kind of appliance-by-appliance understanding of power consumption with new utility pricing schedules that vary with the time of day and overall power demand, and you have a powerful behavior modification program. People confronted with those big digital real-time meter readings will be a lot more likely to turn off the lights when leaving a room, snuggle under a blanket in winter, and limit the amount of time the kids play Halo on a brightly-lit TV. It's not exactly a return to our pioneer roots, but it is a few tentative steps away from the profligate, clueless stereotype.

Apply this kind of demand response and customer monitoring to the whole grid, and pretty soon you're taking real money. Energy consultancy Pacific Northwest National Laboratory (PNNL) calculates that moving to smart grid technology will eliminate the need for $46 billion to $117 billion in conventional utility infrastructure. more

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