A look at the Smart Grid’s demand side

By now, nearly everyone has heard about the Smart Grid. But few think about it as having two sides-a supply side and a demand side. The supply side is operated by utilities, pushing energy to users. The demand side is populated by those users, and Arun Sinha, director of business development for Opto 22, a supplier of factory automation and control solutions, argues that users already have the power to start building intelligence into their energy management platforms, even as they wait for the utility companies to complete the Smart Grid’s supply side. In this conversation with Control Engineering, Sinha explains how users can start using Smart Grid principles to save money on energy costs today.

CE: Most Control Engineering readers have heard of the Smart Grid. However, they may not have given a lot of thought to the two different sides of the grid- the supply side and the demand side. Opto 22 has taken a special interest in educating automation professionals about the demand side. Can you briefly explain the difference between the supply and demand sides of the Smart Grid?

Sinha: The demand side can be thought of as everything on the customer side of the utility meter. This would be their building and anything that consumes electricity in it. The supply side would be everything upstream of the utility meter. This includes generation, transmission, and distribution. Opto 22 has focused on the demand side because for the most part up to this point, that is where customers can do something about their consumption and demand while we wait for the Smart Grid build out.

CE: Why should automation professionals be especially interested in knowing more about the demand side?

Sinha: Demand side management is essentially a data acquisition and control application. One or more process variables (say electrical consumption and demand) are measured at various points (at the building’s main meter, distribution panels, or at machines/equipment). Based on this data, the building, facility or plant is controlled to achieve a desired goal. The goal can include optimizing systems for energy efficiency, load balancing, aligning operations or production with electricity pricing schedules, etc. That sounds a lot like a process control or factory automation application, right?

So it seems like a good fit for the skill set that automation professionals have.

CE: What specific skills do automation professionals need to possess in order to shape the development of the Smart Grid?

Sinha: Frankly, I think they already possess the skills they need. The Smart Grid will provide the utilities with the information they need to determine when and where load balancing needs to occur, as well as the ability to automatically notify those customers. But for individual customers to react appropriately to Smart Grid notifications, other utility programs, renewable sources, etc., will require the skills of automation professionals. Curtailing or shifting load is often much more complex than just turning something on or off. Imagine a process plant that has product in some intermediate stage, factories with safety interlocks, or a piece of machinery that must go through a staged shutdown.

I don’t know that automation professionals need to shape the development of the Smart Grid per se. The Smart Grid will take the shape that it takes. Automation professionals will do what they do-which is use automation hardware, I/O and software to help customers actively participate in the Smart Grid by way of implementing energy efficiency, consumption reduction, demand control, load shifting, etc.

CE: How can automation professionals influence development of the Smart Grid in a way that will make it work better for commercial and industrial users?

Sinha: Automation professionals can start working with commercial and industrial users today. Most commercial and industrial users today do not have real-time visibility of their energy usage. Energy is treated as an overhead expense and the bill is paid at the end of the month, with no correlation to operations. Automation professionals can first teach customers about "energy awareness" and then help them implement hardware and software needed for real-time data visualization. In doing this, they will have prepared their customer for the Smart Grid. Utilities will approach a commercial or industrial customer about programs regarding efficiency, real-time pricing, demand response, and the like, which are all customer-facing aspects of the Smart Grid. If that facility or building has already been gathering consumption and demand data and as a result has a good understanding of their usage, it will be better prepared to decide what program is right for the building and act immediately.

CE: How can a company turn a demand-side energy management strategy into a revenue source?

Sinha: Reducing consumption and increasing efficiency definitely add profit straight to the bottom line. But to take that one step further and actually turn demand-side energy management into a source of revenue is possible through demand response. Utilities offer a wide variety of DR programs that often pay the customer (generously) just for a commitment to curtail energy use, irrespective of whether an event is called. The SuperValu Case Study on our website is an example of this and quotes actual dollar amounts from both efficiencies through DSM as well as payments for DR program participation.

CE: Are there specific types of technology that industrial companies need to adopt in order to implement a successful demand-side energy management strategy?

Sinha: On the demand side, the ability to move data into cloud-based energy software services is something we as a hardware manufacturer found was important early on.

In the past few years, many companies have emerged that have Web-hosted software packages that provide energy dashboards, data-logging, and often very sophisticated analytics. On the demand side, visualization of real-time data is the key piece.

So, besides the ability to support the automation protocols such as Modbus-TCP, OPC, and EtherNet/IP to move data into traditional HMIs, the energy visualization market has a host of new players from outside of our space. These even include some of the large IT companies. One of our partners developed an interface to IBM’s Maximo (part of the Tivoli platform), and CA Technologies brings data from our hardware into its Ecometer software.

CE: Can any of this be done with technology that companies already have in place?

Sinha: On the demand side, most of the technology is already there. As discussed previously, an automation platform reads inputs, solves a control strategy, and writes to outputs. That is essentially what is needed for demand side energy management.

But not all customers have the skill set or are able to hire a system integrator to select, install, and program an automation platform. In the industrial automation market space, we are typically dealing with people who understand automation, programming, controls, HMIs, etc. But when it comes to energy, which is more a financial issue than a technical one, we are often talking to people with titles like "Energy Manager, Sustainability Manager, or even CFO. This is why Opto 22 has taken an "appliance" approach to energy monitoring with its OptoEMU Sensor product family. It takes no specific skill set to implement.

Another issue that I run into often is when encouraging customers about energy awareness and energy visibility, they say, "but I already have a BMS (or BAS, EMS, HVAC) system." Most times, though, they are not getting data from these systems, or it is not presented in a way that is easy to understand. To get to that point may require the hiring of certified professionals from the equipment manufacturer or its agent. Further, these systems have often been put into place years ago, with set points and controls configured at the time of commissioning. Conditions change, equipment ages, and often problems are actually being masked. But I don’t want to be unfair to manufacturers of these systems. Back to the topic of skills, many automation professionals know PACs/PLCs, I/O, HMI, and their application fairly well, but might have to make an effort to better understand the similarity and differences between traditional building control systems. Even in industrial facilities, the majority of the electrical load can often be from the cooling of the building (i.e., HVAC systems).

CE: When looking for new automation equipment, what questions should automation professionals ask to determine if the equipment they’re purchasing- and the vendor they’re purchasing it from-will be able to support them in a smooth transition to successful demand-side management and ultimately to the Smart Grid?

Sinha: Many of the characteristics that can be differentiators for a product and company in traditional automation applications also apply in demand-side management and Smart Grid applications, such as a quality technology based on open standards and protocols, and low cost of ownership through things like free support and training. Products that are made in the U.S.A. also are becoming increasingly important to some users.

But probably most important is that whereas there are many companies offering energy monitoring products, not all of them also have products for control. To paraphrase something one of our leaders here at Opto 22 likes to say, "Every good data acquisition application leads to an automation application." The company that the automation professional chooses for energy monitoring should have products and solutions that allow him or her also to take that energy monitoring application through to a control application when that time comes.

CE: Are there any other points that you think automation professionals must take into account when looking to prepare their companies to transition to the Smart Grid?

Sinha: To get to the right person to start the dialog, they need to follow the money. Many automation professionals work with engineers and technicians tasked with running a plant, factory, or machine, but are not accountable for the cost of energy associated with that. It is not their fault; that is just the way things are and have been because energy has traditionally not been an issue. It was cheap and always available. To help a client get ready to transition to the Smart Grid, automation professionals often will need to get to the person or persons whose KPIs, bonus, or raise includes the cost of energy-or the person whose pocket the bill is actually being paid from. They will listen.

Read a PDF of the Opto 22 SuperValu case study.

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