We've all probably read articles on how much energy costs we can save by utilizing power when it's not at peak demand. Unfortunately, most people don't really know the cost of how much energy it takes to heat, say a hot tub, or to power a dishwasher. Most people just utilize energy as needed, without being cognizant of the fact that they could pay less, if they accessed that power at different times of the day.
Smart Grid Billing hopes to aggregate demand and spread it across the day when power is more available. The Folsom, Calif.-based company is one of the Greenstart class of companies that pitched itself at the accelerator's Demo Day in San Francisco on Wednesday, at which some 200 investors were registered.
Essentially, Smart Grid Billing is providing load balancing to the energy grid. The company is taking advantage of the Federal Regulatory Energy Commission (FERC) Rule 745, which allows small companies to be demand aggregators and help utilities evenly distribute and disperse energy.
"The biggest problem is the peak energy demand. If you look at a day and how the demand of energy looks like, it peaks around 5 to 6 pm," said Henrik Westergaard, CEO and co-founder of Smart Grid, in an interview with me. In order to meet that peak energy, utilities they have to tap into additional plants, which costs money.
"The utilities have power plants that are idle around midnight," said Westergaard. "There’s a lot of wasted energy. If we can utilize the energy by shifting the energy around, we save a lot of energy."
Smart Grid Billing currently works with 15 golf courses to help them save energy expense they pay to charge up their golf carts. Basically, Smart Grid pays a golf course to charge their electric golf carts. “We’ll say to a golf course owner, 'We'd like to pay you money for delaying the charge of your golf carts,'" said Westergaard.
Typicaly, golf courses have 80 to 120 golf carts they have to charge, probably every night when the carts come back in from usage all day. They may need to be charged for several hours. Smart Grid tells the golf course that it will buy those hours that the carts need to be charged up. And, rather than charge the carts at night, Smart Grid will find the optimal time to charge them. "We move that demand to off-peak hours," said Westergaard.
Smart Grid sells the golf course a device (costs about $100) to put on each cart. That device allows Smart Grid to power up the cart whenever the company sees demand for power at low levels.
"On a good summer, those devices will return in a year," said Henrik Westergaard, CEO and co-founder of Smart Grid, in an interview with me.
On the supply side, Smart Grid will work with an ISO (independent system operator). These ISOs work with utilities, selling them power as needed. An utility generates about 80% of its power and buys the remaining power from an ISO, said Westergaard.
In the golf cart case, Smart Grid will let the ISO know that it can turn off the energy that the golf carts were expected to produce. So, if the golf cart typically charges for several hours, starting at 9 pm at night, Smart Grid will tell the ISO that it can turn off a certain number of megawatts in those hours. The ISO will in turn pay Smart Grid for reducing the energy load.
The ISO has incentive to reduce its load because it would cost more for it to provide that energy than to pay Smart Grid to take it away. In an example of how much it can cost to service power at peak hours, the Texas ISO paid $20 per megawatt of power. But on a really warm day, it paid $3000.
An ISO is similar to a stock market, in that it captures energy prices and their fluctuations and makes that visible to companies like Smart Grid. Because Smart Grid has access to the pricing, it can match up demand for energy at times when prices fall, which typically means there's energy available.
Smart Grid plans to launch officially with New England ISO on June 1. Its first market will be golf courses, of which there are 18,000 across the U.S. Westergaard estimates the market is about $300 million.
(Image source: Csub.edu)