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August 1, 2010
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Houses Get Smart

Utilities now modeling homes with smart-grid technology they expect to roll out within five years

By Feoshia Henderson

Duke Energy’s Envision Center in Erlanger demonstrates a variety of home energy-management ‘smart grid’ technologies expected to be in the marketplace by 2015.

The home of the very near future is pretty convenient and not too hard to imagine. Forget to turn off the lights while on vacation? No big deal. Want to turn up the home heat before a wintry workday ends? Easy. And wouldn’t it be nice to remotely switch off non-essentials if a peak-demand price surcharge kicks in?

In this house – your house – gas and electric gadgets are controlled with a laptop keystroke, at work from your Blackberry or via your TV remote.

This so-called “smart house” can help save money on energy costs with programmable appliances, like a dishwasher that can turn on automatically late at night when electric rates aren’t so high. With a push of a button, those same appliances – a water heater, for instance – can be shut off when no one is home during the day.

Kentuckians are among the first who can get a glimpse of this home of the near future, right in Erlanger. That’s where Duke Energy, a utility operating in five states including Kentucky, houses one of its two Envision Centers (the other is in Raleigh). The center is a mini high-tech exhibition of smart-grid utility technology, circa 2015 – not far off.

“There are a lot of factors driving (the need for smart grid technology): fuel prices are rising, electric vehicles are coming onto the grid and energy efficiency is progressing,” said Steve Hinkel, Duke’s director of advanced technology applications. “This technology is feasible right now, but it’s expensive. We think it will be more widely affordable by (2015). That’s why we’re shooting for that date to implement it.”

Smart-grid technology is mostly digital (or data) technology, the same technology that powers televisions, cell phones and computers. Like those devices, at the heart of smart-grid technology is two-way communication, in this case between appliances and a utility company. Just like this technology already allows you to order movies on demand, emerging smart-grid technology will allow consumers to control and manage their home energy use. It will also allow Duke to more quickly pinpoint and fix electricity outages (without a phone call from customers like today).

Among utilities, Duke is a leader in implementing smart-grid technology. Across Kentucky, utility companies are in various stages of testing out the technology.

Kentucky homes and businesses should see a rollout of smart-grid technology over the next two years, said Bob Amato, director of energy generation, transmission, and distribution for the Kentucky Department for Energy Development and Independence.

“Each utility is on its own schedule,” Amato said. “The rural co-ops are a little ahead in this because more of their customers are spread further apart. This reduces the time it takes to serve those customers, and saves (rural utilities) more money.”

In Erlanger, the Envision Center in vibrant detail showcases how smart appliances work as well as the technology that allows it. Located near the Cincinnati/Northern Kentucky airport, the center initially was open only to public officials and business leaders. It is now open for general public and media tours.

The Lane Report recently was given a private tour of the center. This $1 million center resembles a Hollywood movie set, with model kitchen, garage and apartment complex. Once inside, you also can experience a virtual thunderstorm complete with lightning and a power outage. The 15,000 s.f. setting also features a substation that provides two-way digital communication between the smart-grid home and Duke Energy.

The main features of this smart home of the near future are a digital energy management system that controls appliances, including dishwasher, washer and dryer, water heater and thermostat. This system allows homeowners to run major power-using appliances at off-peak energy times, driving down bills. The Duke system won’t be Big Brother, officials say, although the utility can make some adjustments to home appliances if customers grant permission.

“The customers ultimately have control,” Hinkel said, “and if they change their minds about something, settings can be overridden.”

The power management system, purchased separately through a third party, also allows consumers to set a budget for gas and electric use each month. If a customer gets near to exceeding their target for a billing period, Duke will alert them by phone, email or text message so they can decide how to proceed in electricity usage.

Meanwhile, just across the Ohio River in Cincinnati, the early stages of smart-grid technology are being put in place. With the help of $200 million in federal stimulus funds, “smart” gas and electric meters are being installed in customers’ homes and businesses.

In Kentucky, Duke is pursuing Public Service Commission approval to begin installing those meters in Northern Kentucky also. If all goes as planned, that will begin happening sometime in 2011. Because federal funds alone won’t pay for new meters and power-line upgrades, however, Duke also must get approval to add a fee to utility bills. In Cincinnati, it added 49 cents to monthly electric bills and 12 cents to gas bills.

Smart-grid technology still developing
Duke is among leaders in the country in implementing smart-grid technology, which is a federal government initiative to modernize the U.S. energy system. Smart-grid technology is in the very early stages of its promise to better power the nation through a variety of renewable and fossil-fuel sources. Ultimately the grid will allow storage, transmission and distribution of a wide variety of power sources, from coal to wind to solar.

But for now, individual utility companies’ main goal is to flatten out peak energy-use times, like on super hot summer days or even at dinner time when customer use can exceed capacity. That’s when a local utility has to buy extra power from another utility or on the wholesale market, which jacks up your monthly bill. If those peaks occur too frequently, it leads to building more power plants. That’s even more expensive and something companies and the public generally want to avoid.

“The smart grid will put the infrastructure in place to monitor energy flow intelligently. It will give consumers the ability to control and manage the way they use energy in a way that is pretty much absent now,” said Mahendra K. Sunkara, Ph.D., interim director at Conn Center for Renewable Energy Research at the University of Louisville.

While elements of smart grid technology are already in place, it’s still in its infancy. There are many high-tech business solutions waiting to be discovered or perfected in this market. Among them are newer and improved smart appliances, and home and business energy-management systems. On the energy-generation side, there are still kinks to be worked on the best way, or ways, to store various types of energy, to transmit it and to link new types of energy generators (like a rooftop windmill) to the smart grid. Eventually, Kentucky homeowners and businesses could even sell excess energy back to a utility.

“There are lots of technologies that are going to be needed in distributing, generating and storing energy. If everyone started to have their own generator or windmill, you’d have to have storage for a home or a subdivision. All of this presents a shifting from (the model of) one big utility and a coal-fired power plant to a different set of economics,” Sunkara said.

Among products currently being developed are devices that monitor home energy use, charging stations for electric cars, and new appliances that communicate with your utility and can be controlled by computer or cell phone.

The smart-grid initiative was created in 2007, but spurred by the Obama administration through the 2009 American Recovery and Reinvestment Act, better known as the stimulus bill. Currently nationwide, 100 smart-grid projects are being at least partially funded with stimulus dollars, including power-line and meter upgrades.

In addition to the Duke program, South Kentucky Rural Electric Cooperative Corp. in Somerset has been awarded $9.5 million for its smart-grid project.
Those funds will go toward upgrading from conventional gauges to a smart-meter network for more than 66,000 families and businesses in rural Kentucky, a project whose overall cost is estimated at $19.1 million. PJM Interconnection, which serves a small portion of Southeast Kentucky, has also been awarded smart-grid funds as well.

Business opportunities in emerging field
There are business opportunities already opening in the smart-grid sector for traditional and startup companies. In Louisville, GE has started manufacturing a suite of smart, or Energy Management Enabled, appliances that can receive signals from utilities. GE is working with E.ON U.S. LLC, the parent company of LG&E and KU, on a pilot program that began in 2007. The pilot tests smart refrigerators, ranges, laundry sets, dishwashers and microwaves that can communicate directly with the utility.

Two thousand households and business in the Louisville metro area have volunteered for the three-year pilot. Appliances notify users of rate changes such as peak-demand electricity pricing via digital displays. Appliances are not programmed to use less energy during those times, but the customer can override the program. The program might be expanded after the trial.

“It’s still an emerging technology, and standards are still being set in implementing it,” said E.ON spokesman Brian Phillips. “We wanted to introduce it to our customers in a conservative way so we don’t put out an unacceptable level of risk for them. This is a great way to begin to move into this area.”

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