Massive rollouts of smart metering systems worldwide are underway, driven by government legislation and billions of dollars in funding for “smart grid” technologies. Energy delivery companies in the U.S., Canada, EU, and Australia are planning to install tens of millions of smart meters over the next five to seven years. While smart meters are the focus today, billions of dollars are pouring into new technologies to connect in-home electrical devices such as programmable thermostats, energy displays, smart plugs, PCs, and renewable energy sources to the electrical grid. These smart grid connected devices that make up the Home Area Network (HAN), empower consumers with real time control of their energy use as well as helping utilities build the smart grid.
As awareness increases about the benefits of a connected electrical grid, governments are starting to mandate that smart meters include a HAN interface and the energy industry is pushing for global standards. In fact, utilities, vendors, and research institutes are working together on an emerging standard to ensure robust, plug and play interoperability for the HAN.
In five year years, ON World projects that there will be 126 million smart meter households worldwide. This represents an enormous market for energy management, demand response, and wireless sensor network technologies.
Home Area Networks
HAN enabled households promise to magnify the benefits of smart meter infrastructures through dynamic pricing, advanced load control, and the potential to contribute to renewable power generation. Through the use of a HAN, consumers get real time information about their energy consumption and the current cost of energy in order to shift their usage off the peak usage times when energy is most expensive and the electrical grid is most strained. The benefits are even higher for households using energy smart thermostats and appliances that can automatically respond during critical peak pricing and grid reliability events.
Studies have found that dynamic pricing options can result in as much as 50 percent load reduction during critical peak periods. In addition, consumers can save up to twice as much on their energy bills using dynamic pricing compared with traditional “time of use” plans. Southern California Edison has calculated that consumers reducing their energy use during the peak energy alerts will reduce the overall peak power consumption by as much as 1,000 MW, which is the entire output of a major power plant.
While much of the impetus for developing smart grid and HAN technologies originated in the U.S. (especially California and Texas), this is quickly spreading worldwide. Recently, the Ministerial Council on Energy in Australia concluded that the home area network interface must be included as a minimum requirement in smart meter implementations. In the United Kingdom, the current smart meter supplier specification includes a requirement for "resilient communications to and from local devices." Also, Ontario’s Hydro One is participating in the most recently formed alliance for HAN standardization.
Smart Energy profile
While the ZigBee protocol is rapidly becoming the most popular networking protocol for the HAN, the reality is that the “smart energy” home will consist of several types of devices and networking technologies. To prevent ongoing market fragmentation, the ZigBee Alliance, HomePlug Powerline Alliance, EPRI, and leading utilities are collaborating on a universal standard and certification process in order to ensure plug and play interoperability among HAN devices, regardless of the underlying physical or transport layers. This effort is being led by the UtilityAMI’s ZigBee+HomePlug Steering Committee which consists of leading North American utilities such as American Electric Power, CenterPoint, Consumers Energy, Duke Energy, DTE Energy, Florida Power & Light, Hydro One, Oncor, Reliant, SCE, PG&E, SDG&E, and Xcel Energy.
The significance of the Smart Energy Profile is that consumers will be able to purchase thermostats, in-home displays, and smart appliances from any retail channel and register these with their energy delivery company in order to participate in advanced demand response and energy conservation programs. The future smart energy home will consist of heterogeneous devices that are capable of uniquely responding and interacting with the energy grid. Eventually, smart energy homes will be able to feed renewable power sources such as solar and wind back into the grid, which some experts believe is the only way we can meet the ever increasing energy demand.
Evolution of the smart energy home
As the smart metering infrastructures are rolled out, utilities and their customers are looking for energy management solutions that can be deployed today. The ubiquity of broadband and advances with wireless sensor networking has enabled innovative energy systems that leverage existing utility infrastructures and/or public broadband networks. Driven by smart grid legislation and increasing smart metering initiatives, energy focused wireless sensor network products and services have exploded over the past two years. Today, there are over 200 companies with energy management and demand response solutions with many of these available for less than a few hundred dollars.
Examples include TXU Energy’s ZigBee enabled demand response program over broadband using Comverge’s programmable thermostats that communicate through ZigBee/Ethernet gateways by Digi International. Other companies with affordable HAN systems that can be used without a smart meter include 4Home, Blue Line Innovations, Control4, Energate, Greenbox, Onzo, and Tendril Networks. By adopting Smart Energy certified devices – or those that are capable of being upgraded to the open standards – utilities and vendors are providing a seamless evolution for households to eventually become connected to the smart grid.
With billions of dollars in funding, open standards, and evolving business models, the smart energy home presents large market opportunities for suppliers, manufactures, software developers, and investors.