60 Smart grids
in the way energy service companies (ESCOs) treat their customers. The UK electricity market is seeing a shift away from price-based competition towards integrated demand and price management. Others could follow its lead. “Considering many market changes are related to reducing emissions and ensuring suffi cient supply, the management of demand should begin to be an integral part of energy procurement strategies,” says Sid Cox, director of business sales at EDF Energy. The UK’s ESCOs are also off ering
But what businesses really want is dynamic electricity pricing, using intelligence to reduce consumption and to take advantage of off -peak tariff s. The idea is for electricity prices to rise when demand peaks then fall when demand is low. Energy users would be alerted through their smart meters when it is a peak time, encouraging them to use less energy in that period. Key to this will be the use of
complementary smart appliances. “Take deep freezers as an example,” says Gavin Jones, chair of SmartGrid GB. “You could over-freeze at night, incentivized by a low tariff . But setting your alarm for 2am to switch your freezer on to ‘fast freeze’ and then setting it again for 5am to switch it off again isn’t very practical. “You need to have
automation, both in the grid to send the signal to the freezer and in the freezer itself to take action. It’s the linkage between grids and equipment – that is the future of smart grids.” Promising
CREATING CLIMATE WEALTH
possibilities The UK’s Department of Energy and Climate Change claims this type of smart working could deliver savings of around £6.8bn ($10.9bn). And a US pilot scheme, known as the Olympic Peninsula Project, established in Washington State to encourage consumers to use smart meters and appliances, saw average annual electricity bills fall 10 percent. Peak demand dropped by 15 percent
– impressive, given the fi ndings of a recent study by the Brendle Group, which calculated if average peak demand were reduced by just 5 percent across the US, it would avoid the need to build 625 ‘peaking’ power plants. Creating a smart grid won’t come cheap. But all stakeholders involved should enjoy the fruits of a more effi cient system, not least power- hungry businesses witnessing a change
payments to companies that switch off electricity supplies to reduce demand at peak times. Keen to fi nd new ways of balancing supply and demand, grid operators want to reduce non-essential energy use from business users. As a result, numerous demand-
response technology companies have sprung up over the last couple of years, many off ering to install free- of-charge hardware that can handle the data needed to establish when companies can aff ord to switch off non- essential lighting, or air conditioning and heating systems, for example, without aff ecting performance. Supermarkets, banks, data centres and other large energy users can also reap rewards that typically range from between £5,000 to £100,000 depending on the size of premises and how much energy is saved. A fully integrated global smart grid might be a long way off , but these pockets of action provide an insight into what is possible. As Bartels says, “You better anticipate what is going to happen 20 years from now because some of the investments you put in today could be wasted in fi ve, ten or 15 years’ time.” ||||
A US pilot scheme to encourage consumers to use smart meters and appliances saw average annual electricity bills fall 10 percent
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