Real Energy Conservation Requires a Smarter Grid

Val Peterson offers enthusiastic support for her home-energy-management system as husband Bud Peterson, chancellor of the University of Colorado at Boulder, looks on.© Dana Romanoff

Ask anyone to name the most important technological change coming to the U.S. energy picture and you"ll get a raft of replies: solar, wind, geothermal, tidal, hydrogen, nuclear or the highly dubious "clean coal." But a less obvious answer might be the most important: the "smart grid," which will not only provide better, faster delivery for these solutions, but also may do more for energy conservation than any other measure.

The present grid has hardly changed in a century: massive amounts of power generated at behemoth plants are sent downstream via transmission wires. The system is stout and brawny, like a field hand capable of carrying any load demanded. But it was never very brainy, and don’t even talk about its communications skills. (Have you ever considered that the only way the electric company knows your power is out is if you call and tell them?)

In the modern age, the flow of information—in both directions—is as important as the flow of electrons. As it stands now, 42 states and the District of Columbia require utilities to buy any excess energy generated by customers, but so far, it’s only an added utility expense. Because they can’t know in real time that power is coming in, utilities generate as much as they would have anyway. When information flows both ways, customers will be able to specify only renewable energy for their houses—which will increase the demand, increase the supply and lower its price. And they"ll be able to set the price they’re willing to pay to run certain appliances. That might mean your dishwasher runs in the middle of the night, when electricity is cheaper.

Until now, the only way for utilities to ensure that they have enough power has been to build more plants. Some of those plants operate on idle to be ready for periods of peak demand, which is like keeping an extra car running in the driveway. The smart grid will increase options for those peak periods. Utilities could, for example, temporarily turn off, or rev down, an appliance or two in homes across their service areas, and then restore them almost before anyone noticed. It wouldn’t have to be Big Brother-ish; each home could designate the devices it was willing to include, or designate none and pay a higher cost.

This vision may sound futuristic, but it isn"t. Companies such as EnerNOC, Inc. of Boston and North America Power Partners of Woodbury, New Jersey, are doing it already, making deals with large utility customers to reduce their consumption at peak times, and then selling the demand savings to utilities. In his book Hot, Flat, and Crowded (Farrar, Straus and Giroux), New York Times columnist Thomas L. Friedman writes that many of the technologies for blanket application of these ideas "already exist or are being perfected right now in garages or laboratories."

Some of the most prominent labs in the effort are under the umbrella of FREEDM, the Future Renewable Electric Energy Delivery and Management Systems Center, an initiative announced by the National Science Foundation in September 2008. It is headquartered at North Carolina State University but has affiliates in 28 states and nine countries. The center’s industry liaison, Mark Johnson, likens the smart grid effort to the development of the Internet. Desktop computers are great, he says, but they become far more useful when connected to the web. In energy terms, he says, the benefit comes "not from getting away from the power company, but by connecting with it."

This runs counter to the idea of off-grid living, but such interdependence will do as much or more than, say, swapping incandescent lightbulbs for CFLs. "It allows you to not only be a consumer but also a resource," Johnson says. If plug-in autos become mainstream, for example, drivers could reserve what they need and sell the rest back to the grid during a peak period. Cars can recharge overnight, when demand—and prices—drop. Imagine: millions of mobile storage devices, collectively reducing the need for more power plants.

This protean energy future is already being tested in Boulder, Colorado, where "SmartGridCity" has been launched by the utility Xcel Energy. By December 2008, about 35,000 homes and businesses—and small portions of the grid—were outfitted with automation and communications capabilities. By the end of 2009, more than 50,000 homes and businesses will be connected.

So far, about 8,000 smart meters have been installed, but Bud and Val Peterson are among the first to have home-energy-management systems put in. Bud is also known as G.P. Peterson, chancellor of the University of Colorado at Boulder; Val calls herself CU-Boulder’s "first lady," and it’s hard to imagine that the school, or the town, or Xcel Energy could have a more enthusiastic supporter.

"Xcel [and its partners will have] spent $100 million on this. They’ve gone out on a limb. You don’t expect an energy company to be partnering and doing all this research," she says.

Peterson says she has been energized—thrilled, even—to take part. Though the installations of solar panels, multiple automated thermostats, connections for a plug-in hybrid vehicle, and a GridPoint connector and load manager were overwhelming, Peterson says that operating the system is easy.

"A lot of it is programmed on a computer. I set my preferences and then I don’t have to think about it. That’s why I’m the poster child for this. It’s not hard."

Peterson says her husband, a Ph.D. in mechanical engineering, loves all the data the system feeds back, as does she. "On my dashboard [her desktop interface], they have what I call my cheerleader—different measures of carbon savings because of our behaviors. For example, I have it set to express our energy savings in pizzas. Last month, we could have microwaved 3,295 pizzas" with the energy they saved.

Tom Henley, an Xcel Energy spokesperson in Denver, says it will be early 2010 before the company knows how much is being saved—in money and in energy. Only then can it consider expanding beyond Boulder.