Companies looking to make money by making the nation's electricity grid smarter just got a big stamp of approval from the Electric Power Research Institute.
Smart grid technologies – information and communications equipment and software that track and control electricity generation, transmission and usage – could help America reduce its future electricity needs by 200 billion kilowatt-hours, or 4.3 percent, by 2030, according to a report released Thursday by the Palo Alto-based research organization.
The report studied on-the-ground examples of smart grid technologies, then considered how they'd work if adopted in a widespread manner, said Omar Siddiqui, EPRI's energy efficiency program manager.
"It doesn't discuss how we get there, but rather, if we had these features, what could we expect to see?" he said.
Right now the "smart grid" is more idea than reality, though its building blocks are being laid.
Utilities have been pushing deployments of smart meters, which can monitor and transmit information on customers' energy usage, for some time now (see SCE Preps $1.63B Smart-Meter Program Silver Spring Smart Meters Get New Homes). They've also been installing demand and response systems, which seek to control the use of power to avoid blackouts and reduce peak-time consumption.
All that activity has been directing the attention of venture capitalists and other investors to companies in the smart grid arena. In the third quarter, VCs invested more money in smart grid and efficiency than biofuels, pushing smart grid to the number two spot in greentech investing (see Acquisitions in Smart Grid: Get Used to It).
Companies in the field include Comverge (NSDQ: COMV), Echelon (NSDQ: ELON), EnerNOC (NASD: ENOC), GainSpan, GridNet, GridPoint, Itron Inc. (NSDQ: ITRI), Landis+Gyr, Silver Spring Networks, SmartSynch and Trilliant, to name a few.
Interestingly, out of the seven categories the EPRI report considers, the one that showed the greatest potential for energy savings is one that relies on homeowners to take an active role in curbing their energy use.
That's direct energy feedback display devices, or systems that provide homeowners with information on how much electricity they are paying for at any given time. Companies like Tendril Networks and Greenbox are testing such products in homes through pilot projects with utilities (see Tendril Expands Its Reach in Smart Homes).
Initial findings, at least, showed that "The effect of direct feedback was the largest of the seven areas in terms of energy savings," Siddiqui said.
Another arena for big energy savings is large commercial buildings that can communicate with utilities to monitor how efficiently equipment is using electricity, he said.
So-called "continuous commissioning," which tracks large energy users like air-conditioning systems to make sure they're being powered at their most efficient level – and tells building managers or utilities when they aren't – can help achieve savings of nearly 9 percent on a building's electric bill, Siddiqui said. Extrapolate that to all the 100,000-square-foot and larger commercial buildings in the country, and that's a lot of electricity to be saved.
Enhanced levels of "demand and response" control – using two-way communication to power down equipment to avoid blackouts or reduce the amount of power consumed at peak load times – could also offer increases in energy savings, Siddiqui said.
Other savings can come from "enhanced measurement and verification" of energy efficiency programs put in place by utilities and their customers – checking to find out which ones are best at saving power and money – as well as from more precise regulation of voltage going to homes from a residential substation, he said.
And then there are two areas that don't reduce energy usage in a strict sense, but could reduce greenhouse gas emissions – using smart grid technologies to integrate plug-in hybrid cars and wind power and other intermittent renewable resources into the grid.
If smart grid technologies can bring down greenhouse gas emissions if they an increase the country's use of renewable energy and help consumers replace fossil fuel vehicles with plug-in electrics, Siddiqui said.
Adding to those effects the reductions in coal-fired power plant emissions and other reductions you'd get from overall energy savings, all seven areas the report covered could lead to a reduction of carbon dioxide emissions of more than 200 million metric tons by 2030 – equivalent to taking as many as 50 million cars off the road, Siddiqui said.
EPRI isn't the first group to tout the benefits of a smart grid. But its clout could lend weight to a push by groups like the Demand Response and Smart Grid Coalition (DRSC) to seek more smart grid-friendly policies from the federal government (see Smart Grid Coalition Seeks Tax Breaks for Negawatts).