Comverge (NSDQ:COMV) has landed another deal that calls for it to turn down homes' energy use during peak demand times with pagers at first, and with smart meters later on.
The deal is with Dominion Virginia Power, and calls for Comverge to manage about 117 megawatts of commercial and industrial power loads. Comverge will also provide its Apollo software platform to manage demand response devices for about 150,000 homes – representing roughly 150 megawatts of power use – which the utility wants to hook up with smart meters eventually.
The idea is to turn down home air conditioners, water heaters and pool pumps – the devices Comverge can now control – using its existing mainly pager-based communication system at first, said Mike Picchi, Comverge's interim president and CEO.
Then, as Dominion rolls out its smart meters, made by German manufacturer Elster, Comverge will switch over to using them as the gateway into the home instead, Picchi said. Comverge's Apollo software can manage both means of control, he said (see Green Light post).
The East Hanover, N.J.-based demand response provider has a similar contract with Pepco Holdings Inc., which plans to give its 1.9 million customers General Electric smart meters enabled with Silver Spring Networks communications gear over the next four years.
Comverge also is working with smart meter maker Itron to link its smart meters to Comverge's set of ZigBee-enabled thermostats and other systems. In Texas, it's working on integrating its systems with smart meters from Landis+Gyr, Picchi said.
After all, while every utility installing smart meters says they'll eventually be able to turn down home energy use, none have done so in a full-scale commercial deployment, he said (see The Elusive Smart Meter-Demand Response Combo).
That gives utilities like Pepco and Dominion a short-term choice, he said - wait for smart meters to be in place to start controlling home energy use, or turn to Comverge's existing set of programs, which range from turnkey systems that utilities can control to those managed by Comverge itself.
Comverge mainly controls power in commercial and industrial facilities, a market it shares with demand response competitors such as EnerNoc Inc. (NSDQ: ENOC), CPower, EnergyConnect and Constellation NewEnergy (see Green Light post). The idea is to turn down energy use when utilities are facing peak demand, saving the cost of building and buying power from "peaker" plants that may need to run only a few hundred hours every year.
But Comverge distinguishes itself from those competitors in that about a quarter of its more than 3,000 megawatts under management come from homes. Other residential demand response programs exist out there, but most are managed directly by utilities, though Cooper Power Systems does residential demand response work as well.
Big facilities and offices are easier to manage when it comes to demand response – they're bigger targets, and they tend to have staff, and some form of building control system, already in place to carry out the task.
Whether or not millions of homes can be as efficiently networked and controlled for peak demand reduction is a big question in the demand response field (see Demand Response: The Home vs. C&I Debate).
The Electric Power Research Institute predicted in January that the residential, commercial and industrial sectors would roughly share the market for demand response over the coming decades. But expanding the residential share of the pie will require a whole new host of technologies – and business models and regulatory structures – to get there.
One uncertainty is how to get the homeowner involved. Most of Comverge's existing residential demand response programs involve homeowners that sign up for cheaper power in exchange for giving the utility the power to adjust their thermostats for them.
But such direct load control could well give way to using the millions of smart meters being deployed across the United States to offer homeowners a wider variety of options (see 8.3M Smart Meters and Counting in U.S.)
In particular, direct utility control is being downplayed by many of the companies looking to the next generation of smart meters to enable their home energy management offerings (see The Smart Home, Part I).
The idea is that giving customers some kind of control – even if it's only control over choosing settings that automatically turn down stuff via utility commands anyway – is likely to be more popular with utility customers, as well as the regulatory bodies that tell utilities how they can spend their money.
Simply giving customers a view into their energy use can yield big savings, according to many pilot trials of in-home energy devices (see Smart Grid: Test Customers Give Thumbs Up).
And the host of companies looking to make such in-home energy display systems is expanding rapidly, with dozens of startups such as Tendril Networks, EnergyHub, Energate, Control4, Greenbox Technology, Onzo, AlertMe, eMeter and OpenPeak all competing with each other, as well as new home energy systems from Google, Microsoft and Cisco, for utilities' favor (see stories here, here and here).
Some of those systems extend beyond providing information to actual control over home energy suckers, using digital thermostats or "smart plugs" that turn power on and off at the wall socket. Those can be controlled with or without utility involvement, though analysts predict it will take subsidies from utilities – or perhaps a move by telecommunications companies to add them on to existing home entertainment and security systems – to make them more widely popular (see The Telco Home Energy Invasion).
Using smart meters to send pricing signals that encourage people to cut down on using power when its most expensive could be one way to do that. Many utilities are testing such pricing schemes in pilot projects. Some, such as Arizona utilities Salt River Project and Arizona Public Service and a host of utilities in Canada's Ontario province, such as Milton Hydro, are trying them out in a more widespread fashion.
In the meantime, General Electric and Whirlpool are planning to make smart appliances that can power down in response to utility or homeowner controls, though how fast those could come to market will depend on how quickly utilities settle on a standard set of technologies (see GE's Smart Appliances: Smarter With GE Home Energy Manager).
The question of standards and technologies, in turn, is likely to be guided by emerging guidelines for the $3.9 billion in federal stimulus grants directed at smart grid projects, including smart meter deployments (see DOE Hands Out $47M for Smart Grid Demos).