Electronic Design
Expect More Consumer Buy-In Before The Smart Grid Takes Off

Expect More Consumer Buy-In Before The Smart Grid Takes Off

The government, industry, and academia alike are working to establish the Smart Grid, which would be a modernized, refurbished, and intelligent electrical power generation system for the United States (see “Smart Grid Design Opportunities Extend From The Meter To The Mercantile Exchange”). Its goals include more efficient energy usage, reduced pollution, expanded use of renewable energy sources, and improved security. That’s a tall order, but it’s essential for meeting our ever-increasing energy needs.

The current electrical grid is a huge network of interconnected power generation, transmission, and distribution stations throughout the country. More than 3100 different electrical utility companies share and distribute power. Yet in this one-way system, power is generated and transmitted to customers without any two-way communication between those customers and the energy supplier. The Smart Grid, though, will rely on two-way communications.

Communications networks will be implemented across the entire Smart Grid system, including customer homes and businesses. Utilities will be able to monitor and control energy usage better, providing huge savings and reducing carbon emissions. But before the system can work, consumers have to buy into it. This means the key stakeholders have to make consumers aware of the need to conserve energy and convince them to adopt energy management procedures.

Customer buy-in is so important, Parks Associates recently sponsored a whole conference on the subject. Held in January in Austin, Texas, the Smart Energy Summit: Engaging the Consumer offered a workshop devoted to an overview of where the movement is today as well as results from a recent Parks Associates survey. For example:

  • 80% of all consumers are interested in learning about ways to cut energy costs.
  • 54% of all households have a programmable thermostat. Since most of the power consumption in a home is related to heating, ventilation and air conditioning (HVAC), this is a major step in the right direction, but it is not enough.
  • More than 13 million smart meters were deployed in the U.S. at the end of 2009, and there are plans to install 50 million more in the next four to five years. Smart meters must meet the specifications of the Advanced Metering Infrastructure (AMI) initiative. AMI meters feature improved energy measuring techniques as well as a two-way communications capability—one link to the utility for measurement, data collection, and control, and another link into the consumer’s home-area network (HAN) where individual thermostats and appliances and other electrical devices can be controlled. Most of those AMI meters now in place are not yet connected to the consumer’s equipment.
  • The recent federal stimulus bill allocated $11 billion for Smart Grid initiatives.
  • 35% of consumers do not want the utilities to control HVAC or appliances in their home. While most utilities won’t demand such control, and those that do will permit customer override capability, consumers still reject what they believe to be an invasion of privacy.
  • 51% of consumers believe it is very important to purchase energy-efficient products. Yet such purchases are driven more by the goal of saving money on energy rather than the desire to be more environmentally friendly.
  • 80% to 85% of households are willing to pay $80 to $100 for cost-saving equipment if they are guaranteed to save 10% to 30% on their monthly electric bills.

The core of the home Smart Grid effort is the smart meter. AMI meters with two-way communications will allow the necessary monitoring and control needed to save energy. One communications link is from the meter to the utility. This backhaul link lets the utility read the meter as well as control loads in the home if a home network is implemented.

The backhaul methods are primarily wireless, with proprietary systems in the 900-MHz band being popular. Other possibilities include ZigBee, Wi-Fi, and WiMAX. The cellular operators can also provide this connection using machine-to-machine (M2M) radios. What will be popular or the most widespread remains to be seen. There’s no doubt, though, that a mix of techniques (see the figure) will be used across the country.

In the home, the Smart Grid can use powerline communications (PLC) or wireless technologies. ZigBee is very popular for HANs, but so are PLC systems like HomePlug’s. The National Institute of Standards and Technology (NIST) has blessed ZigBee and the new G.hn ITU standard, which can use powerline or internal home telephone or cable TV wiring for the HAN.

Insteon offers the PLC+wireless system for wireless networking. Z-Wave offers other potential networking devices as well. With the HAN in place, the meter can read and control the thermostat and other connected devices. The HAN’s load control modules are plug-in boxes that accept commands from the HAN and can turn appliances off and on, enabling utilities to control high-current devices like the HVAC, hot water heater, and refrigerator to optimize energy use.

It’s going to take a while to get the smart meters in place, inspire consumers to think about energy conservation, and get them to install a HAN with load control, giving the utility access. The energy savings will be astronomical, if the Smart Grid ever gets implemented. The implementation will happen a bit at a time, of course, as each utility goes through the process.


During the conference, keynote speaker Andres Carvallo, CIO of Austin Energy (AE), discussed AE’s current system and plans, which heavily involve implementing all the features of the Smart Grid. He said that AE’s impetus was the Department of Energy’s projection that the U.S. would use more energy than it generates by 2012. That’s just around the corner, so action is needed on the conservation side since the time, restrictions, and hassle of building new generating plants are deterrents.

Carvallo also said that AE will be able to monitor, control, manage, create, and distribute energy in a two-way Smart Grid system. He also envisions using as much alternative (solar, wind) energy as available as well as tapping the massive resources in the batteries of plug-in hybrid electric vehicles (PHEVs). With 35% of the energy used coming from home HVAC, water heaters, and pool heaters, Carvallo hopes to get large voluntary participation in the AE energy monitoring and control program.

One interesting note: Carvallo mentioned that the AE backhaul was a proprietary wireless network using licensed spectrum. He also said that he felt that the basic requirements of the backhaul was six-nines reliability, high speed at low cost, and 100% coverage. That’s very tough to do with any backhaul, especially wireless.

The conference comprised multiple panels with a range of opinions. Overall, though, the different speakers came to some key conclusions. First, it’s clear that high energy bills and ease of use are two factors that really motivate consumers. It’s also estimated that only about 8% of consumers in the U.S. are on some form of load control program and using time of use (TOU) rates. And, the panels felt the consumer electronics market should help make the Smart Grid happen.

One interesting question was what the killer app for energy will be. There doesn’t seem to be one, as electrical energy is so taken for granted. Another interesting fact is that saving energy reduces utility income and profit. Yet the utilities are for it as it can help reduce overall energy costs and lessen the need for large capital expenditures for new power plants.

The HAN and the neighborhood area network (NAN) are key components of the coming Smart Grid. The NAN is the backhaul or a part of the backhaul for the HAN. Wi-Fi was suggested as a good NAN because of its speed, range, security, and reliability. It can achieve a range up to 1 km in point-to-point (P2P) operation.

Home networks and products should factor in the three screens that consumers regularly look to: the TV set, the PC, and the cell phone. And finally, the panels said, the HAN development stage is experimental and in transition. It appears that it will be a mix of wireless, powerline, and other solutions depending on the region and utility.

Keynote speaker George Arnold, the national coordinator for Smart Grid interoperability at NIST, outlined NIST’s recent efforts and announcements about the various interface standards the organization was approving, many involving communications and networking. Other panels discussed all aspects of the Smart Grid with emphasis on the home. For example:

• Appliance manufacturers are already beginning to build in control functions. Refrigerators, washing machines, hot water heaters, clothes dryers, and other appliances will have the interfaces to link to HANs.
An energy management “dashboard” appears to be an attractive first consumer energy product. It will link with the AMI meter and show energy usage and related data in a colorful and graphic way so consumers can better monitor and manually control their energy usage.

• While ZigBee appears to be the preferred choice of wireless HANs, Z-Wave is a viable alternative.

• The IEEE 802.15.4G is a new wireless standard being developed for Smart Grid use. It is essentially the NAN or backhaul and is generally referred to as the Smart Utility Network (SUN). The standard would establish a mesh network of home connections back to the utility using low-speed data at 40 kbits/s to 1 Mbit/s using frequency shift keying.

• Who will customers call if they experience difficulty with a HAN? The utility will no doubt be the target.

• Can the dumb grid approach meet the goals of the Smart Grid if consumers apply better home energy management?

• Many panelists speculated about how the Smart Grid will tie in with the government’s plans for a national broadband policy and rollout.

• The cell-phone carriers are not yet involved in the backhaul or other potential uses of their networks in the Smart Grid effort. With the growth of M2M, it seems like a workable relationship with the utilities. However, the utilities have always seemed to prefer to implement their own proprietary wireless networks. It’s a work in progress.

• Residential energy management (REM) appears to be a good first step in involving the consumer. Utilities or other companies can provide energy usage data to the consumer in a variety of ways using existing cable, DSL, or wireless systems. What is the value proposition to the consumer? There’s none right now, but it’s to come.

• The overall goal right now is getting consumer adoption of energy conservation and management. Standards are important but one panel warned the government not to go overboard. For instance, the panel warned, the government should not specify one HAN standard. It should use energy savings and other initiatives, not mandated control, to get buy-in.

It is too early to pick a clear HAN standard. Communications service providers are interested in REM, but utilities have not worked with them to provide backhaul or other related services yet.

Parks Associates

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