How Smart Is The Smart Grid?

Business and residential users of electricity can sign up in different parts of the country for a program that will take the load off the electrical grid during emergencies. Some of these programs involve attaching devices on appliances that communicate with the utility, allowing the utility to reduce the cycle of that appliance, such as an air conditioner or a pool pump. Robert Siegel talks to Dan Delurey, president of the Demand Response and Smart Grid Coalition, a trade association that represents those companies.

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ROBERT SIEGEL, host:

With record high temperatures in parts of the country, homeowners who crank up the air-conditioning can expect to see increases in their electric bills. That spike could be alleviated if you signed up for one of the many programs that allow a utility to remotely curtail your air conditioning.

Well, joining us to talk about those programs and others is Dan Delurey, who is president of the Demand Response Smart Grid Coalition. It's a trade association of companies that make the technology for utilities and their customers. Welcome...

Mr. DAN DELUREY (President, Demand Response Smart Grid Coalition): Thank you, Robert.

SIEGEL: ...to the program. What exists now in the way of services whereby the utility can adjust your air conditioning?

Mr. DELUREY: Well, there are now technologies on the market that are now being integrated into the utilities as part of the smart grid movement that a lot of people are starting to hear about that allow a utility or some third party authorized by the customer to remotely modify the operations of an appliance in their home.

And when you do that on a day such as today when we're experiencing a peak event and when the reliability of the system is sometimes threatened, then there's quite a benefit from that. And when you combine that with incentives to that customer to do that it's really a win-win situation.

SIEGEL: How might it actually work? How would the utility get to your thermostat?

Mr. DELUREY: Well, there are various ways to communicate with devices. You can do it through the power lines - both the utility lines and then actually the lines within the home. You can use the Internet. You can use wireless devices. So, there are lots of different ways to communicate.

But the basic idea is the same, is you're looking at someone in a control room, say a utility control room, deciding that something has to be done to lower demand, either dispatch a new power plant or turn to the other side and reduce power. And they simply send a signal, say a radio signal, and that turns on or off some appliance somewhere.

SIEGEL: And the utilities' interest here is in avoiding a blackout, avoiding a breakdown of the system.

Mr. DELUREY: Correct. Certainly they're trying to avoid a blackout, but they're also trying to reduce costs on the system. Something that most people are surprised to hear is that 10 to 20 percent of the overall electricity costs in the U.S. come from the top 100 hours on the electricity system.

SIEGEL: I want you to repeat that number because it's astonishing. The top 100 hours of the year for demand of electricity account for 10 to 20 percent...

Mr. DELUREY: That's correct.

SIEGEL: ...of the cost of providing electricity.

Mr. DELUREY: That's correct. So, now there are new options. Technology has allowed new options. It's almost like a virtual power plant. Instead of turning on a 30-megawatt power plant, you can, by an automated means, reach out to all of these appliances and equipment and create a 30-megawatt virtual power plant.

SIEGEL: And the consequence would be a lot of people who were reasonably cool in their homes would be a little bit less cool, lights might dim...

Mr. DELUREY: Well...

SIEGEL: ...their appliances might not work. What are the consequences?

Mr. DELUREY: Well, the first thing is this is at the customer's option. This is not some program that would be put into place without any customer's permission. But if only a few customers, if only a small percentage of customers were to enroll in these programs, the overall effect would be enormous.

SIEGEL: So, one way in which the grid, the smart grid, would be smart is it would manage demand as well as supply in peak hours.

Mr. DELUREY: Yeah. I mean, demand response is really the smart grid in action. The smart grid on the one hand can be just putting these new technologies in. But if you don't put those technologies to work you really don't get the benefit of the smart grid.

SIEGEL: Mr. Delurey, thank you very much for talking with us.

Mr. DELUREY: Thank you, Robert.

SIEGEL: That's Dan Delurey who is president of the Demand Response and Smart Grid Coalition. It's a trade association of companies that make technology for utilities.

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