When you look at it at the household level, smart grid technologies don't fuel dramatic savings.
In Italy, for instance, a smart grid system owned by utility Enel cuts power bills by about 1.5 Euros per customer per month, says Bob Dolin, CTO of Echelon, which put in the power-line networking equipment that underlies the system. That comes to 18 Euros a year per home.
But the utility has installed smart meters in 30 million homes since 2001. Added all up that comes to approximately half a billion Euros a year. The utility raised 2.2 billion Euros to install it, giving it a four-year payback.
"They had a smart grid before there was a name for it," he said during an interview this week.
Echelon is one of the many companies trying to cash in on the rush to modernize the grid for efficiency. So far, the company arguably has been one of the more successful ones. Besides the Italian deployment, it has also conducted trials and/or commercial deployments with several European utilities. It is also working with Philips and others to network lighting systems. Street light trials in Anchorage, San Francisco and other places have relied on its technology.
On the other hand, power-line networking has its skeptics (see In Smart Grid, a Push for Power-Line Networking). The company's products are largely based around LonWorks, a communications technology created by the company that gets integrated into power line and other networking standards. LonWorks can be found in building management systems all over the world. It works great, but various protocols and standards are now vying for this lucrative market. Many U.S. utilities are experimenting with mesh radios and wireless in smart grid deployments.
Power line also has an uneven history in the U.S. Some American consumers also soured on the concept because of earlier experiments (with equipment from other vendors) didn't work as advertised. It also never took off as a way to deliver movies to homes.
A big advantage over wireless competitors like ZigBee, though, is the existence of physical connection, Dolin said. McDonald's, for instance, tested power line in a "kitchen of the future" trial to see if it could cut power in its restaurants. The trial worked, so the chain has encouraged kitchen equipment suppliers to make products that will be compatible with LonWorks. McDonalds is also working with heating/air conditioning contractors to connect their systems via power line, Dolin said.
A power line system at the Venetian Hotel in Las Vegas for controlling two chillers for the air conditioning system has resulted in about $32,000 in savings a year (see Eleven Cool Names and Concepts to Watch in Air Conditioning.)
The savings that come from smart grid technologies, however, aren't always easily predicted. In Italy, for instance, the money in homes saved doesn't come through demand response programs. Instead, it comes because the utility can deliver electricity at lower voltages to homes because of the meters and because of phase balancing, a process that better matches the output from the utility with the usage patterns of homes.
The Italian project also deployed pre-paid power systems in some locations. It's like a Laundromat: you put money in, and power runs until the cash runs out. England had this after World War II.
Commercial demand response programs tend to work because factories and large commercial buildings use a lot of electricity and can curb power consumption at peak times, he said. Consumers are largely at work during peak periods: Thus, there is far less than can be harvested.
In the McDonald's trials, the company found that it found the most gains by better controlling the air conditioners rather than kitchen equipment. Throttling or turning on the deep fat fryer remotely also presents practical problems.