A Smarter Electrical Grid

Researchers and utility companies are pushing the idea of systems that adjust household electricity use to ease periods of peak demand and cut consumers' bills

by John Carey

For a year, Jerry Brous lived a little piece of the future. The 67-year-old resident of Sequim, Wash., was part of a test of a home energy system smart enough to respond to changing prices of electricity. When the price rose because of greater demand on the grid, the house automatically dialed back the thermostat, or shut down the water heater and clothes dryer. That shaved an estimated 15% from Brous' energy bills, giving him average monthly payments of $85 with a monthly high of $148. More important, with more than 100 houses equipped like Brous' in the experiment, the smart system was good for the grid as well. It smoothed power peaks, reduced the need for expensive new power plants, and cut the chances of a blackout. "It was a wonderful thing," says Brous. "I frankly miss it."

Right now, electricity use in U.S. homes is pretty darn dumb. Electrons come in, get eaten by TVs, heaters, lightbulbs, iPod chargers, and myriad other devices. A meter records how much is consumed, but that's about it. So when people come home from work and turn on lights and appliances, or when Arctic cold or summer heat waves hit, the demand for power soars. Utilities must crank up additional generators or tap power coming across the grid from other locations. It's often a delicate balance. If something goes wrong, the result can be brownouts or blackouts, like the one that crippled the Northeast in 2003.

That's why researchers and utility executives have been pushing the idea of a smarter grid. Many homes already have computers hooked up to the Internet or other networks. So why not add appliances and other electricity-users as well? Throw in meters with enough brains to know the changing overall demand and the corresponding change in price for electricity, plus software and devices to control the appliances, and the whole grid can go from dumb to downright intelligent.

Boon to Sensor and Device Makers

Such a smart grid—connected to only those energy users who agree to it—brings a host of advantages. Household electricity use can be adjusted to ease, if not prevent, peak power loads. As renewable energy alternatives like wind and solar grow, the grid can be better adjusted to handle the fluctuations in power when the wind ebbs or clouds thicken. "Widespread adoption of these technologies can help provide reliable clean energy," says Robert G. Pratt, program manager at Pacific Northwest National Laboratory (PNNL).

Plus, it offers a huge business opportunity for the companies making sensors, control devices, and software. IBM (IBM), for one, figures that the market for its software and other technology would be in the many millions of dollars, if the nation were to adopt the smart grid.

But does it really work? Will ordinary homeowners cede control over water heaters and dryers to some Big Brother-like network? In 2005, researchers such as Pratt decided it was time to do an actual experiment to find out. "We said that we need to stop talking and start showing," he says. "We needed a concrete example."

Giving Up Thermostat Control

So with $2 million in funding from the U.S. Energy Dept., an additional $500,000 from Bonneville Power and Portland General Electric (POR), and technology from IBM and Whirlpool (WHR), Pratt devised a test. At a cost of about $1,000 per home, his team outfitted 112 homes on Washington State's Olympic Peninsula with smart electric meters, thermostats, water heaters, and dryers. The dryers, for instance, were commercially available Sears/Kenmore units modified to include a circuit board that automatically senses stress on the grid by detecting the telltale tiny decrease in the AC frequency at a regular wall outlet. When a controller sensed stress on the grid, it then automatically turned off the heating element in the dryer.