Ted Bayne of the fledgling electricity co-op Vineyard Power on Martha’s Vineyard, the island off of Massachusetts’ Cape Cod, is excited about establishing a renewable energy electricity service on the island and implementing smart grid-like programs such demand response to help save energy. In a demand response event, willing participants have their appliances turn down or delay energy-intensive cycles during “peak load” periods. Only the Vineyard’s version of a smart grid may not use the two-way communicating smart meters widely considered to be necessary for smart grid services.

Instead, Vineyard Power will likely send demand response and pricing signals to homes and businesses via the Internet.

Vineyard Power is involved in a pilot program with GE, utilizing GE’s Nucleus energy management system and the company’s Brillion smart appliances. So far, the pricing signals are simulated and based on regional wholesale electric rates. The Nucleus energy management system passes this information along to the GE smart appliances, and they can delay a cycle, depending on the cost of energy at the time. Homeowners maintain the option of overriding a delay.

“The Internet may supercede AMI (Advanced Meter Infrastructure) meters,” that are being deployed for smart grid services, Bayne says. “If you have a home area network and are connected to Internet, the sky’s the limit.”

The Vineyard isn’t the only community looking at Internet connections instead of smart meters. “We see it as distinctly an option,” says Bill Ablondi, director of home systems with research firm Parks Associates. “There isn’t a need for smart meters if the utility can provide the pricing signals via the Internet.”

Ablondi says Internet-based smart grid services could be a viable option for small electricity co-ops and municipal power companies, especially those that already provide broadband services to their customers.

Need for Housewide Energy Management Systems?

Providing such IP-based services over the net would require some level of energy management within the home, such as what’s being done with GE’s Nucleus systems on Martha’s Vineyard. That means more of an emphasis on whole-house energy management systems with possible tie-ins to other systems such as security, lighting control, HVAC, motorized shading and home control and automation—whereas smart meters could communicate pricing and other signals directly to smart appliances.

Home energy management systems could also offer homeowners more options—such as more sophisticated levels of preprogrammed preferences than are likely to possible via basic smart meter-to-smart appliance connections. For example, whether to turn on an appliance might be dependent upon not only on a signal received from the utility but on the amount of energy that has already been consumed in a home that day, week or month.

What’s Stopping This?

“The hurdle is that utilities don’t want to give that information up. They want to be assured they can count on the proper responses for demand response,” says Ablondi.

Electric utilities also don’t move very quickly, and many are committed to smart meter rollouts. Under U.S. economic stimulus funding, $4.3 billion has been provided for smart grid development, including smart meter deployments.

“There’s definitely an option for IP-based energy management services,” says Ablondi.  He says it may come down to which option—Internet or smart meters—is better suited to provide those services. Though he also sees the two options as possibly being complementary.

Steven Castle - Contributing Writer

Steven Castle is Electronic House's managing editor. he has been writing about consumer electronics, homes and energy efficiency topics for two decades. He is also the co-founder of GreenTech Advocates.