It was in Sequim in early 2005 that researchers from the Pacific Northwest National Laboratory (PNNL) convinced the

tiny Clallam Public Utility Districta utility too small to own a single power plantto try something that had never been tried before. The researchers wanted to equip volunteer households with free, custom-designed computers that received electric prices set every five minutes. With the help of appliance giant Whirlpool, they would also be given thermostats, water heaters, and clothes dryers that could be programmed so that households would receive continuous feedback on the current price and quantity of power they were using and adjust their load accordingly. The head of the PNNL research team, scientist Rob Pratt,was amazed at the experiments results. The 112-household marketplace successfully kept demand below the feeders capacity at all times, though not without some fairly severe price spikes. Participating households saved an average of 10% of their power bills by managing their use and reduced their use of peak power even more. It was not an experiment that could be immediately replicated or scaled up.The specialized equipment cost about $1,000 per household.

The One-Way Grid

Meters cumulate the total electricity that you use over the course of a month (or normal billing period). The power company reads your meter each month and determines how much to bill you for. As part of their balancing duties, operators have to choose which power plant to turn on next as aggregate power use climbs over the course of a day. Some power plants are cheap to run, but they must be kept running around the clock. Other power plants are technically good at turning on quickly, which is good when more power is needed during the middle of the day. However, the plants that are most controllable are also the most expensive per kilowatt-hour made. This means that the cost of making a single kilowatt-hour changes by a striking amount during the day, especially on very hot or cold days when electricity use is high. In the dead of night, the cheapest plants are making power for about 3 to 5 cents/kWh. As power use rises in the morning hours the next type of plant turned on costs about 6 or 7 cents. During the 100200 hours each year when demand is the highest, making power often costs 8 to 20 cents/kWh or more, because the oldest, least efficient plants are turned on, and the cost of making them available to run these few hours during the year must be recovered. A dumb electric meter adds up all of the kWh used over the course of a month regardless of when that power was made and how much it cost to make.Some homes use a lot of power during the expensive mid-day period, While others use most of their power at night. If those two homes used the same monthly total number of kWh, and they had a dumb meter, the power company has to charge them the same amount for monthly service because it doesnt know when each house was using power. Smart meters and time-based pricing open up a panorama of new possibilities. First, setting timebased prices and billing them becomes much easier, and more pricing options can be offered. Second, smart meters can also work with smart appliances that can be programmed to automatically respond to price changes and other user commands to shift their use around within a day or even a week. This is what the residents of Sequim could do in their experiment. Finally, these meters make it easier to integrate small-scale generators and storage on customers premises. Any meter smart enough to keep track of use by time period can also keep track of self-produced power, shift production patterns around, and even figure out when to store electricity for later use in the rare cases where storage is available. smart gridis combining time-based prices with the technologies that can be set by users to automatically control their use and self-production, lowering their power costs and offering other benefits such as increased reliability to the system as a whole.

The New Paradigm Downstream, for end users, the impacts of the Smart Grid are potentially profound. Customers will face electric prices that vary within each day, and they will have far more information and control over their power use and costs. With software simple enough to run on a cell phone, theyll monitor the energy used by several appliances linked to their home network, controlling them immediately or programming them to react to prices. With the touch of a button you will be able to program your air conditioner to turn off fifteen minutes out of every hour when hourly electric prices exceed a certain set-point. Yes, youll be a little warmer, but youll also save good money. And for the majority who dont want more complex power, appliances will all come preprogrammed so users can connect them seamlessly at factory default settings.

Electricity Storage
Another change brought on by the Smart Grid will be the greater use of electricity storage. The technologies that allow customers and utilities to communicate and share grid control will easily accommodate storage devices. Cheap, large scale storage is correctly called a disruptive technology because if power can be stored cheaply the entire paradigm of immediate balance is obliterated. First off, balancing the grid gets infinitely easierrather than worrying about turning power plants on and off constantly, you just let the batteries do the balancing. There is no need to turn power plants on in perfect synchronization with demand. Instead, just let the batteries charge when theres less demand and discharge when there is more. And if everyone can store enough power onsite for days or weeks, maintaining the grid in its current state isnt really necessary: it just needs to operate enough to recharge everyones storage units, much as we refill our gas tanks once or twice a week. If electricity could be stored as cheaply as gasoline, the utility industry would have the same structure as the oil industry, with electric filling stations at every major crossroads. A system that previously flowed power only from large central sources to downstream customers will flow in both directions from locally based generation and storage. New power management systems will respond automatically to hourly prices and utility signals