Dialing down your home’s energy consumption during times of peak power grid use in exchange for compensation is an emerging service. Picture it’s a hot day and you agree not to jack up your air conditioner in exchange for a discount on your utility bill. Startups like new-comer Smart Grid Billing are developing applications to help manage this process, and later this month Smart Grid Billing plans to launch a field trial of its service at a golf course.
Founded in 2009, Smart Grid Billing is testing its combination of energy-monitoring wireless-connected plugs and software that collect and crunch energy consumption data. The service stores the data in a central server and can determine which appliance or equipment has the potential to reduce or cut its electricity use in real time.
This block of unused power can be sold to a local grid operator. Smart Grid Billing shares the revenue from that sale to its customers, and the plugs are programmed to restore the electricity flow back to the equipment at a later time.
The practice of dialing down or cutting energy use to reduce demand during peak hours of electricity use isn’t new. It’s called demand response, or energy time-shifting, and it’s more common place for commercial and industrial building owners.
But Smart Grid Billing is emerging to take advantage of a year-old ruling by the Federal Energy Regulatory Commission that requires grid operators to pay wholesale market prices for energy captured through demand-response programs. The idea of the ruling is to minimize the need for generating more power when grid operators and utilities could use demand-response programs to reduce consumption and maintain a balance of supply and demand in the process.
A utility’s demand-response program typically allows it to restrict electricity use to homes and businesses whenever it deems necessary, often during hot summer days, so that it can avoid blackouts or the need to buy expensive power to meet the high demand. Home and business owners get rebates or credits for participating in the programs, but they don’t usually know right away the amount of reduction that will be needed or have control over whether the restriction will cause them discomfort (for example, they can’t cool the house as much as they want).
Some large commercial or industrial operations have their own energy management programs to monitor and reduce energy use. In some cases, building managers or demand-response service providers have to decide a day ahead whether to shut down equipment in order to meet energy consumption goals because they don’t have two-way communication and good data crunching tools to make supply and demand decisions quickly.
But Smart Grid Billing’s service provides that live connection. “In real time, we know how many kilowatt hours will be used and electric prices, and we make a decision for all the devices we control and figure out how many megawatts we can move around and shift in real time,” said Henrik Westergaard, CEO of Smart Grid Billing.
To take full advantage of the demand-response market, automating data analysis, communication and decision-making processes will be critical. Making sure customers won’t experience discomfort or find their routines disrupted by time-shifting their energy use is important. Demand-response companies that also tout their real-time data analysis and speedy communication prowess include Comverge and EnerNOC.
Smart Grid Billing, which recently graduated from the San Francisco-based Greenstart incubator program, wants to sell its services to businesses first, and it’s starting a field trial at a golf course in Massachusetts this month.
The startup will be using its hardware and software to run a fleet of electric golf carts – it will delay charging them during the hours when wholesale electricity prices are high. Golf courses make for good customers because controlling their energy use is easier than controlling, say, a residential customer’s energy consumption. Controlling air conditioning and other appliances in a home is trickier because the curtailment could be noticeable and make the home uncomfortable for its inhabitants. One way to deal with that is to dial back energy use for a short period of time, say 10 minutes, and to do that every so often until a desirable, aggregated amount is achieved, Westergaard said.
Smart Grid Billing, which has been largely self-funded, is looking t raise $500,000 to prove its technology and service in field trials.