National Commentary

The Peak Oil Crisis: Smart Meters

It’s going to be an electric world. For those of you who have been following the peak oil story, it is becoming increasingly clear that liquid fuels for the average person’s transportation has a very short half-life. It won’t be long before we figure out that natural gas is too valuable for making stuff to waste on cooling our air, drying our laundry, heating our baths and keeping our homes warm.

Coal, too, has problems. Recent studies suggest there just may not be hundreds of years worth buried out there, and one of these days, a critical mass of us will figure out we had better start sequestering carbon or the great grandchildren are toast. Coal is not going to be cheap.

At this technological minute, the only realistic choices for the decades ahead seem to be more electrification of everything or a partial rerun of the 19th century. There is also little question that electricity is going to become much more expensive. Coal, nuclear plants, natural gas and the construction of nearly everything to do with producing more energy is becoming much more expensive. We simply are going to have to figure out how to keep going with much less. We will need much more energy-efficient homes, offices, vehicles and appliances – or do without.

An important step in transitioning to the new electric world took place last month for those of us here in Virginia, when Dominion Power announced next year they would begin installing 200,000 “smart” electric meters at trial locations around the Commonwealth. (Unfortunately, Falls Church is not part of the test – perhaps sometime in the next 3 – 5 years.) Smart meters, which have been around for the last 10 years or so, have the potential to bring major changes to the way we use – and more importantly – how we will conserve electricity in the future.

For those of you who are not familiar with the genre, smart electric meters contain computers and small radios that allow them to communicate back to your power companies’ computers and eventually down to the various electric devices in your home or other buildings. From the power companies’ point of view, smart meters will allow them to track your electricity consumption from the office, turn your power on and off remotely and know instantly that your power – and that of your neighbors – has gone out. Simply tracking demand in much more detail than ever before will provide great benefit, allowing power companies to produce and dispatch power with greater precision – thus reducing costs.

The real benefits, however, will come in the ability of the smart meters to track your consumption hour by hour and thereby permit differential pricing. Here is where the real savings will occur: for power that is used to run air conditioning during a summer heat wave, as it costs a lot more to produce than 3 a.m. in the spring or fall. Until the smart meter, most power was sold at a flat cost, regardless of the cost of production; in the future, power will be priced by the hour. Devices that consume large amounts of electric power, such as clothes dryers, air-conditioners and heat pumps, can be adjusted to do much of their power consumption during off-peak times.

The next step in the evolution of smart metering will be home area networks in which many of the electric appliances in your home will talk to the computer in your smart meter. During the test next year, some of the 200,000 smart meters in Virginia will be talking to smart thermostats that can be adjusted up and down by the smart meter in conjunction with the power company’s computer. During extremely hot or cold weather, when power consumption is going through the roof and requires much more expensive power to be generated, the power company, with the consent of the homeowner, would have the ability to change thermostat settings to reduce demand. The incentive, of course, would be much lower electricity bills for the consumer, who would not have to pay peak-load prices that could turn out to be several times the normal rate.

The most interesting feature of smart meters in combination with home area networks is their potential to grow and acquire advanced features. Very soon, many of us are likely to switch at least part of our gasoline consumption to electricity. Plug-in hybrids or electric cars, operated at a fraction of what our gasoline costs, will come a few years from now. It will be vital to insure that large car batteries are only charged at off-peak times, for if we all came home at 5 p.m. and plugged in our cars, we would soon have the mother of all brownouts.

With a smart grid, the recharging of electric cars could be staggered so that the existing power generation and distribution networks could be used to optimal efficiency. Tests are underway to see if the millions of large car batteries could be used as temporary storage for intermittent power sources, such as solar or wind generators. It is not difficult to imagine cheap renewable power being directed to recharge millions of cars sitting in parking lots during the day and to use some of the power from these cars to help meet peak loads.

Likewise, it is not hard to imagine that by pushing a single button, you could put your home in a low-power mode that would reduce power consumption to a tiny fraction of the norm until you come home.

Currently, very little is being done to prepare for the post-peak oil world, but the advent of smart meters appears to be one important exception.