In This Issue
Spring Issue of the Bridge on the Electricity Grid
March 29, 2010 Volume 40 Issue 1

New products and Services for the Electric Power Industry

Monday, March 29, 2010

Author: Clark W. Gellings

Meeting the nation’s future needs for low-carbon electricity in a secure, reliable, and environmentally friendly way will require integrating large, low-carbon, central-station generation with local energy networks, electric transportation, and smart grids. To realize this integration, new products and services will be needed to govern interactions among buildings, local energy networks, distribution systems, and the bulk power system, all components of the overall energy system that must function harmoniously to minimize environmental impacts, ensure system reliability and security, and optimize energy use and economic impact. Research is underway on ElectriNetSM, a high-level enabling architecture for monitoring, analyzing, controlling, and otherwise accommodating and taking advantage of the synergy of these components.


ElectriNetSM, the electricity network of the future, will be a highly interconnected, complex, interactive network of power systems, telecommunications, the Internet, and electronic commerce. ElectriNet will facilitate competitive electricity markets by supporting a myriad of informational, financial, and physical transactions among traditional utilities, independent power producers, third-party providers of electric energy services, consumers, and new participants in the electricity value chain.

The ElectriNet architecture will encourage and accelerate the development of new products and services—especially “hyper-efficient” end uses, electric transportation, and dynamic energy management (see Figure 1). ElectriNet will have four components (Gellings and Zhang, forthcoming):

  • smart grid
  • local energy networks
  • low-carbon, central-station power generation
  • electric transportation 

Figure 1

Smart Grid

The existing North American power grid was designed and built primarily in the 1950s. This aging system, although largely reliable in the past, is inefficient today and incapable of fully accommodating advances in technology that will save energy, reduce greenhouse gas emissions, and contain energy costs. To meet growing demands more efficiently and pave the way for hyper-efficient and smart energy devices, many elements of the transmission and distribution system will have to be substantially changed.

The new grid will intelligently connect all elements in the power-delivery network through a smart grid, a key component of which will be advanced electricity meters that can communicate with the distribution network. As a first step toward a nationwide smart grid, some local utilities have already installed tens of thousands of advanced meters in the United States, thus initiating two-way communications with all parts of local and regional power grids.

These initial advanced-metering infrastructure projects have demonstrated the benefit, to both energy providers and energy users, of a power-delivery system that includes the two-way communications capabilities of a smart grid. For example, meters with two-way communications provide consumers with feedback about the cost of power, which changes with the time of day, thus encouraging them to reduce consumption during peak hours. With load-control technology in place, the consumer or the utility can remotely adjust thermostats to maximize savings.

The critical technological building blocks for improving the energy efficiency of the power-delivery system are (1) advanced communications and metering systems and (2) smart end-use devices, both of which require a smart-grid architecture.

Local Energy Networks

Another key component of ElectriNet will be local energy networks that include a combination of wholesale and retail power systems integrated with distributed-generation power sources (e.g., solar panels), local energy storage, and integrated demand-response functions at the building, neighborhood, campus, or community level. The local energy network will facilitate the functionality of ElectriNet.

The overall goal of ElectriNet is to enable the operation of a power system with the following characteristics:

  • smart, self-sensing, secure, self-correcting, self-healing capabilities
  • uninterrupted service, even in the event of failure of an individual component
  • a focus on regional, area-specific needs
  • reasonable cost, using minimal resources and with minimal environmental impact, to fully satisfy consumer needs
  • improvement in quality of life and economic productivity
  • reduction in carbon dioxide (CO2) emissions

Local energy networks will enable dynamic energy management, a far-reaching strategy for remotely controlling all equipment on the distribution system, including the use of electricity on consumers’ premises. New products and new product development to support an intelligent power-delivery system—the smart grid and local energy networks—are either here or are evolving rapidly.

Low-Carbon, Central-Station Power Generation

Another component of ElectriNet is low-carbon, central-station power generation of solar, wind, and nuclear power. We will need a wide variety of generation options to accommodate the economic and environmental uncertainties of the future. 

Solar and wind power generation, which do not have constant output, present added challenges to the power system. Because wind doesn’t blow steadily and the sun doesn’t shine with the same intensity at each hour of the day, we will need energy storage devices, such as pumped storage (hydroelectric systems that can be pumped up at night and discharged during the day) and compressed air stored in underground caverns for future use, to power generators and banks of batteries. These storage devices can “smooth” the energy output of variable renewable energy sources, such as wind and solar power.

The most viable option for large-scale storage is compressed-air energy storage (CAES), which uses low-cost, off-peak electricity to drive compressors that charge a (typically underground) storage reservoir at night. Then, during the day, when electricity prices are much higher, air is discharged from the reservoir into a fuel-fired expansion turbine connected to an electric generator. CAES can be significantly more cost effective and emit less CO2 than their conventional, fossil-fueled counterparts, especially if off-peak renewable or nuclear energy is used to charge the reservoir.

Electric Transportation

Most industry analysts agree that there will be a large number of electric vehicles on U.S. roadways—the only question is when. Because transportation plays such a significant part in energy consumption, electric transportation—electric vehicles and plug-in hybrid electric vehicles (PHEVs)—will be a major supporting technology in the ElectriNet infrastructure. As PHEVs begin to proliferate, the availability of both distributed, controllable electricity loads and electricity storage can have a profound impact on electrical systems.

An infrastructure of plug-in stations, intelligently managed via two-way communications, can provide off-peak power for recharging vehicles at the most cost-effective time of day. The vehicle meter will “shake hands” with a network-connected “socket” to identify, locate, and provide vehicle and billing information. When PHEVs and electric vehicles are not being used, the power stored in their batteries could be sold to the local energy network.

Consumer Portal

The consumer portal, the interface between consumers and elements of the ElectriNet infrastructure, is a technology that will enable the full development and implementation of a wide variety of new, advanced-energy services for consumers. Depending on the need and application, a consumer portal can help manage peak loads, optimize energy efficiency or performance, and increase cost effectiveness (Gellings et al., 2004).

Consumer portals will enable two-way communication between intelligent equipment and networks in consumer facilities and remote systems throughout the smart grid. These portals will integrate and interface elements of an integrated energy and communication system and provide suppliers with better information on how consumers use electricity at any point in time. The portal will enable communications between energy-management systems and end-use subsystems and equipment.

The electric meter is a logical choice for the location of the consumer portal, but it is not the only option. A portal could be located in a home or business PC, a cable set-top box, a gas or water meter, a dedicated device, a telephone, or another device. In fact, a portal does not even have to be in one location; it could be a logical construct assembled of numerous software and hardware entities distributed throughout a home or factory.

Portals have many potential benefits. Most important, the implementation of supply- and demand-responsive pricing for electricity, for instance, could save consumers billions of dollars. At present, real-time pricing is not feasible because there are no real-time communications among energy users and electric utilities. With consumer portal technology, however, real-time communication would become commonplace.

In addition, power quality could be improved to minimize equipment failures and power disturbances. Greater energy efficiency could be achieved by coordinating individual consumer programs with grid-wide operations. Daily load peaks could be leveled, thereby minimizing the need for constructing new power plants and power lines. Additional services are also expected to be developed, such as automatic equipment monitoring and management (upgrading, diagnosing, or controlling equipment via the portal), tamper/theft detection, multi-utility services (water, gas, electricity, cable, etc.), and intrusion or damage alerts.

Overall, the communications integration provided by the consumer portal will enable the power of existing intelligent controls and computer technology to be used for the benefit of the entire grid.

Dynamic Energy Management

Once the ElectriNet architecture is in place and the consumer portal begins to evolve, consumers will begin to enjoy the benefits of dynamic energy management (DEM), an innovative approach by consumers and electricity suppliers to managing electricity demand and usage. DEM will incorporate conventional energy-use management principles, such as demand-side management, demand response, and distributed-energy resource programs, and merge them into an integrated framework that simultaneously addresses permanent energy savings, permanent reductions in demand, and temporary reductions in peak loads.

DEM will be a system comprised of smart end-use devices and distributed energy resources integrated with highly advanced controls and communications capabilities that enable dynamic management of the system as a whole. The simultaneous implementation of these measures will distinguish DEM from conventional energy-use management and will eliminate the inherent inefficiencies of a piecemeal strategy. DEM offers a so-called “no-regrets” alternative to program implementers by ensuring that future system modifications will be immediately compatible with legacy systems in a kind of “plug-and-play” scheme (EPRI, 2008).

The DEM concept is based on four building blocks (see Figure 2):

  • smart, energy-efficient, end-use devices
  • distributed resources
  • advanced whole-building control systems
  • integrated communications architecture

Figure 2

These components will build upon each other and interact with each other to enable  a dynamic, fully integrated, highly energy efficient, automated, and learning-capable infrastructure. The four building blocks will work in unison to optimize the operation of the integrated system based on consumer requirements, utility constraints, available incentives, and other variables such as weather and building occupancy.

Figure 3 shows DEM infrastructure applied to a generic building. In this example, there are two-way communications via the Internet as well as via the power line. The building is equipped with smart, energy-efficient end-use devices, an energy-management system, automated controls with data-management capabil-ities, and distributed energy resources such as solar photovoltaics, wind turbines, and other on-site generation and storage systems. PHEVs at the building provide a clean transportation option for consumers and a distributed storage device for use by utilities and system operators. 

Figure 3

Energy-efficient devices, controls, and demand-response strategies coupled with on-site energy sources serve as an additional energy resource for the local utility. All of these elements not only contribute to the utility’s supply side by reducing building demand, but the distributed energy resources also feed excess power back to the grid.

To achieve effective DEM, a variety of R&D is underway to provide smarter devices and appliances and distributed resources. The following are the main enabling technologies for a DEM infrastructure.

Smart End-Use Devices

Smart devices will have embedded intelligence that can adjust operation of the device within parameters set by the end user. Many smart devices are already in operation, and more are on the horizon. Digitally addressable ballasts (e.g., digital addressable lighting interface), can dim lighting fixtures in response to peak demand signals and provide two-way communication. In both nonresidential and residential buildings, a host of intelligent controls and communication protocols provide automated operation of lighting and information and entertainment systems, as well as mechanical, security, and ventilation systems. Smart home automation systems that control lighting, comfort, and entertainment systems are based on wireless radio frequency and Zigbee protocols.

Hyper-Efficient Appliances

The easiest and most cost-effective way to meet future consumer demand for electricity is to invest in reducing demand. Investments in improving end-use energy efficiency, either by codes and standards, regulatory policy, or encouragement of consumers to use the best available energy-efficient technologies, can provide substantial returns to consumers, society, and utilities.

For a number of reasons, manufacturers of electrical appliances and devices in Japan, Korea, and Europe have outpaced U.S. manufacturers in developing high-efficiency electric end-use technologies. Current R&D in the United States demonstrating these “hyper-efficient” technologies may lay the groundwork for their commercialization in the United States, which could lead to a reduction of more than 10 percent in consumer demand and consumption (EPRI, 2009a).

Collectively, these technologies have the potential to reduce electricity consumption in residential and commercial applications by as much as 40 percent for each application. Thus hyper-efficient appliances represent the single biggest opportunity for meeting consumer demand for electricity (EPRI, 2009a).

Energy-saving technologies include variable refrigerant flow air conditioning, heat-pump water heating, ductless residential heat pumps and air conditioning, hyper-efficient residential appliances, energy efficiency for data centers, and light-emitting diode (LED) street and area lighting.

Distributed Resources

An intelligent, nationwide ElectriNet can seamlessly link disparate and distant sources of power generation and power consumption, including renewable generation sources, distributed storage systems, and electric transportation. As a part of this DEM, the system can incorporate widely distributed and local sources of both stored and generated power for use throughout the nationwide grid. In fact, R&D is under way to lower the cost of local power generation by incorporating solar and wind power-generation products for individual businesses and residences into the overall system (Key, 2009).

Distributed Renewable Power Generation. Renewable energy resources, such as solar and wind energy, have a number of favorable characteristics: they are clean; their supply is not depleted over time; and they are—at least from a fuel standpoint—free. In response to high global demand resulting from government mandates for renewable energy, wind and solar PV power generation are growing by 20 to 30 percent a year worldwide.

Nevertheless, integrating large-scale renewable power, particularly wind and solar energy, into the electric power infrastructure presents significant challenges. The major issue is the inherent variability (often referred to as intermittency) of wind and solar power, which differentiates these two energy sources from other renewable resources. Through the ElectriNet, DEM will make the integration of variable energy sources into the power grid more feasible.

Distributed Storage Systems. Distributed storage devices can also help mitigate the variability of some renewable resources. Distributed storage includes personal electric transportation and a variety of electric-energy storage systems (e.g., battery systems and uninterruptible power-supply systems primarily designed to improve power quality and reliability), thermal-energy storage, and ice storage systems in buildings.

Building Control Systems

Highly advanced controls and communications capabilities will enable DEM not only at the building level, but also at the neighborhood, business park, city, area, and regional level. For example, at the building level, a hierarchical control system can manage distributed generation and storage devices, as well as smart appliances and other systems in the building.

Inputs to the control system may include user settings or preferences, utility time-based prices, weather data and forecasts, the status of smart appliances, the status of generation and storage devices, and others. Based on these inputs, control algorithms will initiate control functions for building systems, appliances, generation devices, and storage devices to reduce energy costs and CO2 emissions.

Integrated Communications Architecture

A critical element in the functionality of tomorrow’s power system will be the development of a communications architecture overlaid on today’s transmission and distribution system. This integrated architecture must be an open-standards-based systems architecture for data communications and distributed computing. Elements in the architecture must include: data storage and networking, communications over a wide variety of physical media, and computing technologies embedded in devices (Gellings, 2004).

Demand-Response Capability

A key feature of DEM is demand response—rationalization of the pattern and amount of electricity use based on the wholesale electricity market—for the purpose of reducing electricity prices and increasing available capacity. Demand response, which shifts the pattern of loading, is critically underused in the United States.

Demand response has only a small impact on cumulative energy reduction, but it can have a large impact on improving system economics and reliability. In addition, demand response capability will become strategically more important as carbon constraints and the cost of energy create more serious economic challenges to energy companies and consumers.

Demand response programs have the capability of reducing peak demand by 5 percent thereby reducing the need for generation capacity. In addition, studies have shown that these systems also reduce overall energy consumption (e.g., King and Delurey, 2005.)

Demand response will be enabled by “dynamic systems,” that is, networked, smart, end-use devices that interact with the marketplace for electricity and other consumer-based services. Market interactions include either sending direct “prices to devices”SM or making price signals available to information-technology and consumer-electronic devices.

Demand response programs and systems may have a substantial impact on system reliability, customer value, energy savings, and CO2 emissions (Chuang and Gellings, 2007; EPRI, 2006). However, there is very little in the way of demand response in the field today. To support it, we will need one or more of the following: a communications infrastructure, innovative markets, innovative regulation and rates, or smart “demand-response-ready” end-use devices. Current R&D is focused on creating an environment in which consumers can purchase end-use devices that are demand-response-ready, either directly or through embedded information technology in those devices.

Beneficial Uses of Electricity

Electricity use is generally considered a contributing factor to net CO2 emissions. In response to growing concerns about greenhouse gas emissions, R&D and other resources are being directed toward low-carbon power-generation technologies.

Recent R&D has revealed that expanding end-use applications of electricity could save energy and reduce CO2 emissions. The focus of this research is on converting residential, commercial, and industrial equipment and processes—existing or anticipated—from traditional fossil-fueled technologies to more efficient electric technologies. A key objective is to inform estimates of the impacts of fuel-conversion programs being developed by utilities, electric system operators and planners, policy makers, and other electricity industry stakeholders (EPRI, 2009b).

Research has shown that many end-use applications of electricity can provide energy services much more effectively than other technologies, such as those powered by natural gas. In fact, they are so effective that they can offset CO2 emissions from electricity production.

According to the Energy Information Administration (EIA) Annual Energy Outlook 2008, total annual energy consumption in the United States for the residential, commercial, industrial, and transportation sectors is estimated at 102.3 quadrillion Btus (“Quads”). EIA’s reference case forecasts that this consumption will increase by 15.3 to 118 Quads by 2030 (EIA, 2008).

Recent research has identified 1.71 to 5.32 Quads per year of energy savings by 2030 as the result of expanded end-use applications of electricity. In addition, CO2 emissions could potentially be reduced by 114 to 320 million metric tons per year by 2030—of total projected emissions of 6,850 million metric tons (EPRI, 2009b).


The Electric Power Research Institute is heavily involved in supporting the research described in this paper, including research on hyper-efficient appliances and the development of the consumer portal. Local and regional utilities have already made great progress in deploying the first elements of the smart grid that will be essential for next-generation smart devices. In addition, innovative companies are delivering a host of products that will be integrated into the smart grid.

Low-carbon, central-station power generation, local energy networks, the smart grid, and the widespread adoption of electric transportation will be the main elements of ElectriNet, an intelligent, end-to-end energy platform that will enable DEM. When fully deployed, this infrastructure will support more intelligent devices, deliver more efficient energy use, and enable a significant reduction in greenhouse gas emissions. Forthcoming products and services will not only improve the economy and raise living standards. They will also protect the environment.


Chuang, A., and C. Gellings. 2007. Demand-side Integration for Customer Choice through Variable Service Subscription. Pp. 1–7 in Proceedings of Power & Energy Society General Meeting 2009. New York: IEEE.

EIA (Energy Information Administration). 2008. U.S. Department of Energy, Energy Information Administration Annual Energy Outlook 2008. Available online at

EPRI (Electric Power Research Institute). 2006. Advancing the Efficiency of Electricity Utilization: “Prices to DevicesSM.” Background Paper, 2006 EPRI Summer Seminar. Palo Alto, Calif.: EPRI.

EPRI. 2008. Dynamic Energy Management. Kelly E. Parmenter, Patricia Hurtado, Greg Wikler, Clark W. Gellings. TR-1016986. Palo Alto, Calif.: EPRI.

EPRI. 2009a. Hyper Efficient Appliances. Clark W. Gellings and Marek Samotyj. TR-1018759. Palo Alto, Calif.: EPRI.

EPRI. 2009b. The Potential to Reduce CO2 Emissions by Expanding End-Use Applications of Electricity. Executive Summary. TR-1018906. March. Palo Alto, Calif.: EPRI.

Gellings, C. 2004. A consumer portal at the junction of electricity, communications, and consumer energy services. The Electricity Journal 17(9): 78–84.

Gellings, C., M. Samotyj, and B. Howe. 2004. The future’s smart delivery system—meeting the demands for high security, quality, reliability, and availability. IEEE Power & Energy Magazine 2(5): 40–48.

Gellings, C., and P. Zhang. Forthcoming. The ElectriNetSM concept. Electra. Paris: CIGRE.

Key, T. 2009. Finding a bright spot: utility experience, challenges, and opportunities in photovoltaic power. IEEE Power and Energy Magazine 7(3): 34–44.

King, C., and D. Delurey. 2005. Twins, Siblings, or Cousins—Analyzing the Conservation Effects of Demand Response Programs. Public Utilities Fortnightly. March. Available online at htm.

About the Author:Clark W. Gellings is a fellow at the Electric Power Research Institute (EPRI) in Palo Alto, California.