Not so long ago, electric utilities generated and sold electricity and customers consumed it. The customers paid the same kilowatt-per-hour price for the electricity, regardless of the time of day or the time of year. The utilities had no idea what the homeowners used the power for or when they used it. Their meters measured only total consumption. For decades, the system worked well.
But as homeowners began to acquire more electronic equipment and the majority in most service areas installed central air conditioning, the utilities came to dread days when the temperature topped 100 degrees, the humidity was off the charts and everyone sought relief by cranking up the air conditioning to the max.
To meet their peak-load demand during a summer’s 100 unbearably hottest hours, the utilities bought electricity from their competitors at a premium price or ran their own peak-load generators, which are highly polluting and expensive to operate. Compared with conventional generating equipment, peak-load generators are about eight to 10 times as costly to run.
The peak-load problem could be solved if utilities had a way to encourage customers to use less electricity on the hottest days, and if the customers knew in real time what the power was costing them on the hottest days as well as during off-peak periods.
The solution has been the “smart grid,” a digital two-way communication system between utilities and customers. In 2003, installation of the first smart grid began in Austin, where the green building movement began in the early 1990s. It took Austin Energy five years to complete the project. Today, many electric utilities around the country are planning or installing a smart-grid system.
How does a smart grid work? In each utility’s smart grid, every household has a “smart meter” outside and a display of consumption information inside. Depending on the system, a household can follow its consumption online in real time or within a few hours, or on a digital-display dashboard. The consumption information conveyed to customers can be extensive. At a minimum, it includes the amount of electricity being consumed, its cost per kilowatt hour, and the household’s accumulating total in the billing period. The information can also include the household’s accumulating electricity expenditure for the year and the size of the household’s carbon footprint for the billing period, the year or both. Pilot studies have shown that when households can follow their electricity consumption and its cost in real time, rather than receiving a bill weeks after consumption, they tend to use 5 to 15 percent less power.
As a further inducement, some utilities offer dynamic pricing — different kilowatt-per-hour rates, depending on the time of day and time of year. When this information is provided, a household can see exactly how much it can save by altering its routines. For example, families might do laundry and other household chores at night when rates are lower, or turn up the thermostat a degree or two during hot summer afternoons, when rates are highest.
In addition to the smart meters and in-home displays, some households will have a programmable, communicating thermostat that allows the local utility to control the homeowner’s use of central air conditioning during peak-load periods. With the homeowner’s permission, the utility sends a signal to the thermostat to reduce the number of times the air-conditioning compressor cycles on during a peak-load period.
Westar, a Kansas utility serving 685,000 customers, installed the first of its planned 90,000 “watt-saver” thermostats last year. When Westar’s central generating plant sends its signal to the watt-saver, it “messages” the customer’s air-conditioning compressor to cycle on about half as many times during a peak-load period, which can be four hours. Instead of running continuously, the compressor will cycle on for 15 minutes and off for 15 minutes. When the compressor is off, the customer’s fan unit, which circulates cooled air in the house, will still be running.
During the first summer of its watts-saver program, Westar found that as long as its customers had air movement, “they didn’t notice any discomfort and only later learned that the cut-back was on,” said symposium presenter and Westar engineer Hal Jensen.
Westar’s watt-saver thermostat program does not operate on holidays and weekends.
Benefits for utilities
From the customers’ perspective, the peak-load control is the most obvious application of the smart grid, but it was not the prime motivation for developing it, said symposium presenter Andres Carvallo, who designed the nation’s first smart grid for Austin Energy.
The smart grid gives utilities control over other crucial aspects of their business. For a utility, the outside meter is like a cash register. The two-way communication allows it to collect billing information quickly, without having to deploy an army of meter readers and contend with biting dogs. The two-way communication allows utilities to pinpoint power outages quickly because the meter can send an “I am dying” signal before it stops. The method of detecting outages still used by most utilities is primitive by comparison. When the power goes out, the utility waits for unhappy customers to call in the news, and then their employees plot pins on a map of their service area. When enough pins are plotted, they know where to send their service trucks.
The smart grid also provides a much easier way for utilities to buy electricity from small producers at the “grid edge,” including homeowners with solar photovoltaic equipment on their roofs or wind turbines, Carvallo said.
A utility could also buy the electricity stored in the batteries of hybrid and electric vehicles, he said. It’s not being done, because of regulatory and business-model issues. No price has been established for “vehicle battery sourced” electricity, he said, and it’s impractical to buy small amounts of electricity from individual car owners. But in the future, as electric vehicles become more common and car-generated kilowatts are assigned a price, utilities could buy power from organizations with fleets of electric-powered vehicles, such as the U.S. Postal Service, Carvallo said.
Katherine Salant has an architecture degree from Harvard. A native Washingtonian, she grew up in Fairfax County and lives in Michigan. If you have questions or would like to suggest topics for coverage, contact her by e-mail or go to katherinesalant.com.