Shifting and managing load with the smart grid


By Jeff Lund

And now, with the ink barely dry on all of the new papers describing AMI systems, much of the talk is turning to the smart grid. But what does a smart grid really mean? The grid is usually thought of as the electricity distribution infrastructure owned and operated by utilities: generation plants and equipment, transmission and distribution infrastructure, and meters. Adding intelligence and communications to these assets can make utilities more efficient, reduce their cost of operations, increase the quality of service they deliver, and improve system reliability. Customers benefit as well.

However, the smart grid is not just those things owned and operated by the utility – it is everything connected to the electricity network. Every device that consumes electricity is part of the grid: appliances in homes; HVAC equipment in commercial buildings; streetlights in cities and towns. The smart grid is not just the infrastructure that generates, transmits, distributes, and measures energy; it is also all of the loads that consume that energy. Working together intelligently as part of a smart grid, the loads themselves play a critical role in helping to balance supply and demand, reduce peaks, and shift consumption.

When smart systems in homes, buildings, and cities are linked with pricing and other information available through a modern AMI system, the power of the smart grid becomes apparent. Consumers and businesses can intelligently and automatically reduce and manage their load in ways that work best for them. Utilities can promote automatic demand response programmes that empower their customers to become active participants in energy management.

Clearly, a first step in any smart grid is AMI. Before consumers and businesses can decide to shift or reduce load based on time-of-use prices or critical peak pricing events, they must understand how much load they are currently using, the costs of that consumption at that moment in time, and what the rates will be at later points in time. Further, advanced metering systems that let utilities perform load studies based on their entire customer base allow utilities to segment their customer base and design rate structures that fit various demographics. The ability to download these new plans over the network reduces the high costs traditionally associated with time-of-use programmes. Together, these capabilities provide a foundation for utilities to become responsive marketers to their customers, for regulators to enforce energy policy, and for consumers and businesses to choose from an array of offerings to find one that best matches their needs. A smart meter network, however, is only the first step in what will one day be a much richer interaction between the utility and its customers, and a much more energy-efficient world.

Meter family

Many utilities are looking to provide their customers with inhome displays that offer easy access to current consumption and rate information, hoping they will use this data to manage and reduce their load. But these devices can show only whole-home consumption: not where in the home that energy is being used. Similarly, while information can influence consumer behaviour, it is not enough to significantly affect supply and demand imbalances and to reduce load during peak demand. While it is nice to think that consumers will constantly monitor their displays, once the novelty has worn off, they will glance at them only occasionally. It is human nature. In response, many utilities are considering directly controlling devices – usually a thermostat – in the home. While well intentioned, consumers respond very negatively to the thought of giving up control over their home and their comfort, as seen by the negative public and press reaction to the California Energy Commission’s (CEC) recent draft plan to require remote control of in-home thermostats.

It will take more than just information and messages sent to a display, or direct utility control of in-home devices, for consumers to willingly, and significantly, participate in demand response programmes. Consumers must also maintain control over their homes and be able to shed load in ways that best fit their lifestyle. In order for broad-based and sustained consumer response, devices in our homes must act autonomously on our behalf.

Groups like the Digital Home Alliance ( and the European Committee of Domestic Equipment Manufacturers (Conseil Européen de la Construction d’appareils Domestiques, CECED) have developed standards and technologies to enable smart appliances and other products to communicate with each other in networks that set themselves up automatically. By incorporating information from a smart meter, smart appliances can react automatically to changing energy rate information. Devices can co-ordinate their usage to shift peaks and flatten load within the home. Electric dryers can extend their dry time during high rate periods. Refrigerators can delay their defrost cycle to low cost times. Other appliances can reduce their load while the oven preheats. This behaviour can take place not only at times of peak demand, but at all times in an energy aware, intelligent home.

Since lighting and HVAC subsystems account for 70 percent of the average commercial building’s energy use, many companies and utilities have initiated demand response and virtual power plant programmes to remove some of this load during peak demand times. However, most of this load shedding is simply on/off control of large loads – and if the choice is all on or all off, most businesses must choose the former. They cannot, for example, turn off all lights for an extended period without negatively affecting their business. The solution: smart buildings that can make small, intelligent reductions in a large number of loads that collectively add up to the large reduction needed, and can do so in a way that has minimal, if any, impact on occupant comfort and productivity.

Widely adopted international standards, such as ANSI 709, promoted by a large consortium of companies through LonMark® International (, provide a mechanism for deeply embedding intelligence throughout a facility. The impact on managing energy use can be dramatic. For example, Echelon Corporation’s headquarters in San José, California show how an entire network’s capabilities can be used to manage energy for automatic demand response programmes. This facility integrates all key building subsystems – including security, lighting, elevator, and HVAC – into a single, smart building automation system based on LonWorks technology; 1,100 smart devices in all.

In 2006, Echelon took part in a demand response pilot programme conducted by the CEC’s Demand Response Research Council, a joint research centre of the CEC, Pacific Gas & Electric, and Lawrence Berkeley National Laboratory. In response to a signal received over the Internet, Echelon’s building quickly and automatically reduced its energy use by over 30 percent – more than any other participant in the programme – without negatively affecting building occupants. It accomplished this through many small changes, such as using LonWorksenabled sensors that automatically lowered lights and room temperature accordingly. Employees used a web-based interface to control their individual workspace lighting and heating settings, thus becoming active programme participants.

Streetlights are among a city’s most important assets, providing safe roads, inviting public areas, and enhanced security in homes, businesses, and city centres. They are usually very costly to operate, however, and they use a lot of energy – almost 40 percent of a typical city’s electricity spending. The same networking technology applied to the smart grid, the smart home, and the smart building is being applied to create smart street lighting systems.

The city of Oslo, Norway, has begun installing an Internetconnected, LonWorks-based, smart street lighting system as part of a programme to reduce energy use and carbon dioxide emissions, reduce operating costs, ensure driver and pedestrian safety, and allow remote monitoring and control. So far, Oslo has reduced energy use by 62 percent. About two-thirds of that is due to installation changes; the rest is attributed to reduced lamp burning hours. As the public acclimatises to the changing light levels, Oslo expects to save an additional 10 to 15 percent in energy use, which the city expects will pay for the system within five years. Likewise, in the UK city of Milton Keynes, a LonWorks-based smart street lighting system has helped cut the city’s energy use by 40 percent. These intelligent street lighting systems can become a valuable component of the smart grid.

As the metering systems of the past are replaced with the AMI systems of the future, we have a great opportunity to build and enable a truly smart grid, in which utilities and their customers can work together, intelligently, automatically, and continuously to balance supply and demand. By reducing costs, increasing quality and reliability, and reducing greenhouse gas emissions, a true smart grid will benefit not only utilities and their customers, but all stakeholders, including regulators and shareholders.