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Issue: June 2009 APPLIANCE Magazine

Prices for Devices

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Tim Somheil, editor

Smart grids have the potential to create significant appliance energy use reductions, but standards have to come first.

The idea is simple enough. Home appliances that consume a lot of electricity will be equipped to communicate with utility companies. Utilities will transmit energy pricing data, which the appliances then use to adjust their energy consumption based on homeowner settings. Under some circumstances, utilities may have the ability to control the home appliances themselves to reduce the overall utility drain.

It’s one aspect of the Smart Grid concept, now getting much attention in the United States. President Obama regularly addresses the economic and security risks posed by the nation’s antiquated electricity infrastructure and made an updating the grid part of his plans for stimulating the economy. Vice President Joe Biden’s April 16 speech in Jefferson City, MO, focused on the Department of Energy’s smart grid plans and outlined how $3.9 billion in American Recovery and Reinvestment Act funds will be used, mostly in the form of grants, to stimulate smart grid development.

Smart grid goals go well beyond smarter home energy use, but the home is naturally where consumers, and appliance OEMs, are focused.

The systems that come into being will need to provide good reasons for consumers to participate. In fact, the DOE’s Advanced Metering Infrastructure (AMI) concept seems to put little control in the hands of the utility companies. Instead, it will incentivize consumers to participate through “Prices to Devices” techniques.

These systems assume that energy will be priced based on its near-real-time cost (a tactic DOE calls imperative to the smart grid approach). Price information is communicated to consumers’ home controller or directly to the biggest energy users in the home—HVAC equipment and major appliances. Homeowners will already have input their preferred settings, so each appliance will know how to adjust its power use. These adjustments happen automatically and consistently, providing substantial energy savings. It essentially gives the homeowner a much higher level of control of utility bills.

The Industry Is On Board

Many entities in the appliance industry are eager to be a part of the U.S. smart grid solution. GE Consumer & Industrial is poised to launch smart appliances with energy-management capabilities and the ability to get a signal from the local utility.

On May 21, GE Consumer & Industrial presented a progress report on its pilot program with Louisville Gas & Electric Co. (LG&E). The program let consumers test out the use of smart meters, smart or demand response appliances, and a tiered pricing program to help offset energy costs when higher prices are implemented during peak usage times.

“We believe with our Demand Response appliances, GE will help consumers significantly decrease power usage during peak demand periods. That will help the utilities reduce the need for more power generation and help consumers save on their energy bills,” said Kevin Nolan, vice president of technology for GE Consumer & Industrial. GE doesn’t appear to be waiting for federal standards to be put in place. It is already looking for more utilities to partner with.

Whirlpool Corp. plans to make all of its electronically controlled appliances capable of receiving and responding to signals from smart grids—if an open, global standard is developed. Whirlpool made this announcement at the EE Global Forum and Exhibition in Paris in April. Bracken Darrell, president of Whirlpool Europe, said its ability to successfully deliver on the commitment was dependent on the development of an open, global standard for transmitting signals to and receiving signals from a home appliance, as well as on appropriate policies that reward consumers, manufacturers, and utilities for using new peak demand reduction capabilities.

The challenge of implementing a single standard is a big one. It makes no sense for industry players to gamble their resources on a system with competing standards, where one of those standards has the potential for being obsoleted.

A standard may be in sight in the United States, however, through the National Institute of Standards and Technology’s (NIST) Smart Grid Interoperability Project. NIST is charged by Congress to develop a Smart Grid Interoperability Standards Roadmap. An interim roadmap is scheduled for release this month, June 2009.

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