What Do You Know About the Smart Grid?

Here are the terms you need to know to save energy and money via the smart grid.

A recent survey by Pike Research has found that consumer interest in home energy management and smart appliances is quite strong, with smart meters and demand response enjoying lower levels of interest.

So what do all these terms really mean?

Home energy management systems may include energy monitors that display electricity usage and technology that allows devices to be automatically shut off to save you energy and money. We’ve written a lot about energy monitors on this blog, so feel free to peruse some of the articles. (Hint: Type in “energy monitor” with quotes in our search bar.)

Smart appliances will include washers, dryers, dishwashers and the like that can communicate directly to a two-way smart meter so that they can be shut off or powered down during peak load periods. Some smart appliances may also be programmed to operate only when electricity rates are lower (see time of use pricing, below). We’ll start seeing smart appliances from companies like Whirlpool and GE in 2011. In a separate report, Pike Research says that by the end of the decade, smart appliances will have about 8 percent of the appliance market, with about 118 million units sold.

OK, now for the terms people seem to be having trouble with.

Smart meters are just two-way communicating electric meters that are required for smart grid services. The vast majority of the electric meters today are one-way, communicating only your home’s electricity usage in kilowatt hours to the utility, probably to a guy driving by in a utility truck with an RF (radio frequency) receiver. Two-way smart meters allow the utility to send the home signals, such as rate information and data about demand response programs (see next).

Demand response, also known as demand-side management, is when the electric utility is allowed to shut off or power down your appliances, through a two-way communicating smart meter and smart appliance or control system—likely in exchange for a discount on your electric rates. This helps the utility avoid peak load periods in which it has to buy more expensive power or institute brownouts. Demand response programs will be voluntary, so a utility won’t just be allowed to shut off or turn down your air conditioner or electric clothes dryer.

Here are some other terms you should also be familiar with:

Time of Use pricing is when an electric utility prices the electricity higher during peak usage periods, such as 3 pm to 8 pm, when we all tend to come home and start turning things on. Time of Use pricing, when combined with smart grid services and smart appliances, could make it possible for you to run energy-intensive appliances late at night, for instance, when the usage and rates are lower.

Tiered rates are when utilities institute higher electricity pricing once you cross a ceiling on electricity usage. You might go from 14 cents per kilowatt hour to more than 30 cents per kWh near the end of your billing cycle, if you use a lot of electricity. Look at your electricity bill carefully, as some utilities implement this pricing structure, and a bill could take you by very unpleasant surprise. One company, called Eragy, is planning an energy management solution that helps homeowners decide what rate structure is best for them—and which could potentially save some people a bunch of money.

PHEVs are plug-in hybrid electric vehicles. Why are they here? Plug-in vehicles could be a huge part of the smart grid, especially if we all run out and buy them in the next few years, come home at the same time and plug them in. The drain on the electric grid could be immense, and electric utilities will want us smart changing our electric vehicles, so we’re not all charging them at the same time. That will require a smart meter and some brains in the car or the charging apparatus. A programmable home control system that allows you to set your preferences will help immensely as well. There is even talk of V2G—or Vehicle to Grid, in which electric vehicles’ batteries could help power the grid or other things in your home. Though that is probably farther off.


Comments are closed.