Smart Grid Ushers In New Era Of Energy Conservation

When President Obama signed into law the American Recovery and Reinvestment Act (ARRA) in February, he set into motion an ambitious effort to modernize the nation's energy infrastructure. The legislation appropriated $43 billion for the U.S. energy sector, of which roughly $4.5 billion go toward a “smart” grid. The bill calls for a Smart Grid Task Force to run up to five demonstration projects focused on smart grids and energy reliability.

The deployment of a smart grid became policy with passage of Title 13, the Energy Independence and Security Act of 2007. The law funds the building of a smart grid and creates a Grid Modernization Committee to assess the benefits of energy demand response (DR) and to recommend needed protocol standards for the grid.

Rapid injection of capital by the ARRA legislation “will solidify and encourage more investment in smart metering and the smart grid,” according to Sam Lucero, ABI Research senior analyst. “There's widespread agreement on the advantage to be gained from smart metering, and the smart grid is a market opportunity for many hardware and software vendors,” he adds.

What Is The Smart Grid?

Figure 1

According to the DoE, the smart grid concept applies a systems approach to grid modernization. It uses a communication network linking the entire energy supply chain, from the point-of-generation to the end user. The smart grid uses information transmitted over the network to make timely decisions in response to supply and demand, as well as in response to anticipated natural and unnatural events. It will also be overlaid with a level of security. Advanced meter reading (AMR) of energy usage and sending usage data over an advanced meter infrastructure (AMI) are all key elements of the grid.

The smart grid is not just for electricity from conventional power plants. In fact, as of this writing, a Florida developer has announced plans to build a 195,000-home development in Fort Myers, the first powered by zero-emission solar energy. The photovoltaic plant will be the largest such entity to be operated by the electric utility Florida Power & Light. The utility is presently working with suppliers of AMR components for the smart grid.

To put things into perspective, a crude form of a smart grid has been around for years in the form of DR systems for large customers that provide uninterruptable service in the event of power outages. DR, in fact, is still in use today. It lets the grid operator cut power to users who have previously agreed to this arrangement in return for lower electricity rates or cash payments.

But in a truly smart grid, processors attached to key grid components will act in concert with sensors at energy point-of-use nodes. They will let the grid not only self manage itself, but also be self-healing. Such a grid will be able to localize and anticipate the consequences of natural disturbances such as hurricanes, lightning, earthquakes, rainstorms, and even intentional acts of sabotage.

This concept is favored by many energy experts including Massoud Amin, a distinguished professor of Electrical & Computer Engineering at the University of Minnesota and Director of its Center for Technological Leadership. He calls for a more predictive type of network, instead of just a reactive one, to meet growing energy demands. Despite the seemingly high capital investment needed to make the energy grid smarter, Massoud believes the cost is but a fraction of the current annual outlay caused by power interruptions.

Smart grid has a lot of possible benefits. As an example, Stephen J. Callahan, a partner with the Energy & Utilities industry of IBM Business Services, alludes to a smart grid project conducted by researchers at the Pacific Northwest National Laboratory (PNNL). The pilot project showed consumers cut their overall peak load on the grid by 15% when offered the opportunity to slice their electricity bills by 10%. That study highlights the importance of implementing a smart grid technology at the local level using micro-grids that reach the consumer premises.

Indeed, a recent study by the Consumer Electronics Association (CEA) found that home owners factor energy efficiency into purchasing decisions for consumer electronics and home appliances to reduce energy costs. Of those who underwent an energy audit, 61% have shown an interest in using smart energy meters.

The PNNL project ran for a year ending in March 2007. It updated residential, commercial and municipal customers every five minutes on energy consumption prices through their computers, and let them manage their energy consumption remotely through a grid-friendly appliance controller developed at PNLL. Residential users could set their thermostats, dryers and heaters to respond to certain price points. Municipalities with water-pumping plants had diesel backup generators that were programmed to kick in once grid power became too expensive.

The need for standards

According to PNNL, the controller -- which could be built into home appliances for $5 or less -- can recognize when the electrical grid is straining to meet demand by noting tell-tale fluctuations in current flowing into the host appliance. It then responds by commanding the consumer to briefly scale back power demand. The next big step is to entice appliance manufacturers to build-in such intelligent controllers and to induce the public to demand them.

Some of the fundamental underlying technologies for a smart grid are sketchy. In the U.S. alone the electrical grid comprises more than 14,000 transmission substations and 4,500 switching centers, operated by as many as 3,000 independent companies regulated by state and regional public utility commissions. There is no standard among these entities for how to store and control the flow of energy.

On that score, the National Institute of Standards and Technology (NIST) is working with the Electric Power Research institute (EPRI) toward developing national smart grid standards for energy flow. The Institute of Electrical and Electronics Engineers (IEEE) and the American National Standards Institute (ANSI) are presently working on standards as well.

IEEE P2030 is a case in point. It will tackle interoperability issues, with a goal of producing a high-level electronics guide for the smart grid. Similarly, the ANSI C12.22 open standard defines how to transmit standardized tables of meter data across wired or wireless networks using various transport schemes. Major meter and meter system manufacturers like Itron, Elster, and Trilliant have already said they'll support this ANSI standard.

EPRI is also collaborating with the ZigBee Alliance and the HomePlug Initiative to create a unified AMI and home-area-network (HAN) solution for the smart grid. They're developing a common language for HAN devices to use AMI technology. ZigBee is a global wireless communications language.

In anticipation of these standards, energy meter manufacturers have been working feverishly with hardware and software developers as well as utility companies to prepare for a smarter grid using AMR. Houston's CenterPoint Energy is just one of many utilities using advanced smart grid metering. It plans to deploy 2.4 million meters made by Itron over the next five years. It is working closely with General Electric Digital Energy, IBM, and numerous other companies for smart metering.

Here are a few examples of what's going on in smart metering equipment:

GE is using WiMax-based (36.5-GHz) radios in CenterPoint's system. “Our radios can operate over large distances - — up to tens of miles,” says Larry Sollecito, president and CEO of GE's Digital Energy Enterprise Solution Sector. “This lets us effectively send meter data to the utility's control center,” he adds. Sollecito cautions that to maximize efficiency in an AMR system, the control point (the grid interconnect) must sit close to the user's location. He also cautions, “The electricity system is most efficient operating in a steady state. However, user demand is not steady, so methods must be employed in an AMI that properly factor in these seemingly conflicting issues.”

CenterPoint is using eMeter's EnergyIP meter data management system which captures 15-minute usage data from smart meters and routs it over HANs. eMeter provides software that allows the use of smart gas, electric and water meters used by 300 of the largest utilities worldwide.

Figure 3

Some firms such as Yitran provide transceiver ICs for wireless AMR communications. Its IT700 system-on-chip (SoC) IC PowerLine communication controller is available in two versions: the Protocol Controller Architecture and the Open Solution Architecture. The former has a universal asynchronous receiver/transmitter (UART) and simple command language for a connection to an external host computer. The latter allows use of the IT700's microcontroller peripheral functions such as timers, interrupts, communications interfaces, analog-to-digital converters (ADCs), spare memory resources, and general-purpose I/Os to implement the application, thus eliminating the need for an external host controller.

Landis+Gyr, a smart meter manufacturer, offers its Gridstream two-way smart grid communication network for AMR. It is in the process of completing the installation of 280,000 smart meters by August and has so far installed 165,000 of them in Austin Energy's utility facilities.

Silver Spring Networks is a manufacturer of networking boards for power meters that monitor and curb electricity, gas and water consumption. It has sold more than 2 million nodes for a wireless IP network that handles smart metering and other grid applications. The network uses a 912 to 928-MHz industrial, scientific and medical (ISM) card that delivers 100-kbit/sec point-to-point links on mesh networks that can span more than a mile or a single hop.

Florida Power & Light is using 100,000 Silver Spring Networks IP-based meters, the largest advanced AMI system in the U.S. Silver Spring Networks' solution include UtiIOS, a special network operating system; and UtilityIQ, a network management platform handling AMR, advanced network management, and data management.

One company that prides itself on offering a total AMI solution is Trilliant Inc. Bill Vogel, Trilliant's founder and senior vice president of strategic development says “Trilliant's aim is to bring all grid networking solutions together.” Unlike vendors that focus on wireless communications networks only, the company offers a wireless, RF mesh network operating system, communications chips, a gateway for collecting data from groups of meters, network management tools, and remote control tools for DR, load control and distribution monitoring.

A Rosy Future For The Smart Grid

Even Google Ventures has gotten into the smart grid act by investing in Silver Springs Networks. Google has a prototype PowerMeter. It receives information from a utility's small meter and management devices and lets subscribers access their home electricity consumption on their iGoogle homepage.

Figure 4

Finally, customers of German energy company Energie Baden-Wuttenberg (EnBW) can also watch their energy use in real time on the Internet to get a handle on their energy consumption. As part of a campaign to install intelligent electricity meters in private homes, the company is integrating each meter into a networked communication and billing system.

Inside a smart grid power meter

Market forecasters foresee a rosy future for smart grid. One firm in this camp is BCC Research. It divides up the smart grid market into four segments: communications; sensing measurement and control; distributed energy generation and storage; and transmission lines. Distributed energy generation and storage accounts for the largest share, $12.2 billion last year and $!3.3 this year, growing to $22.1 billion by 2014. It considers sensing measurement and control the next largest segment, followed by communications technologies.

The ARC Advisory Group is equally bullish. It forecasts a North American market for a smart grid and an advanced metering infrastructure (AMI) to grow at a CAGR of 20.6% over the next five years.

As for smart grid metering, the core of the smart grid, Gartner chip analyst Stephen Ohr calls it a sizeable growth opportunity. He recently estimated that more than 150 million smart meters will be installed worldwide in the next five years, with half of those in North America. Gartner expects those five years to bring as much as $2 billion in business opportunities for semiconductor and chip makers.


Old-style electromechanical induction meters count the revolutions of an aluminium disc as a measure of consumed power. The more power used, the faster the disc rotates. Rotation comes from magnetic flux generated by two coils, one producing flux proportional to voltage, the other generating flux proportional to current. The resulting eddy current (plus damping from a permanent magnet) makes the disc rotate at a speed proportional to the power consumed. A worm gear coupled to the disc spindle drives either an odometer-like display or dial pointers reading out watt-hours of usage.

In contrast, solid-state power meters typically use inductive coupling to the power line as a means of measuring electrical current. This combined with a voltage measurement lets them compute power consumption. In a smart grid system, solid-state power meters may also incorporate radio transceivers for communication with other smart grid components.

One such scheme is that used in the GoodWatts system developed by Watt Shifters, Richmond, Va., and used in a pilot project by the Pacific Northwest National Laboratory. It uses a gateway installed in the home that connects to the home's internet connection. The gateway communicates with WattShifter servers through a secure link over the public internet to send and receive connection, control, command, and monitoring data. In the home, the gateway serves as the host of a wireless mesh network and also serves as the brains of the home control network. The thermostat, a load control meter, and electric meter then communicate with the gateway to receive control commands, report historical data and exceptions, and indicate when control actions take place or when humans override them. Electric utilities can connect to the server and take broader control actions to maintain grid integrity and manage peak demand. Back at the server, all the control and trend information is stored in a database that includes 15-minute data for every device in every home. This lets homeowners and utilities review the historical performance of the various components and make better energy management decisions.

U.S. Department of Energy, “Preparing for Tomorrow's Challenges,” National Smart Grid Conference, Spokane, WA, April 6, 2009

Upgrading the Grid, Nature, vol. 454, July 30, 2008, pg. 570-573

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