We're at the dawn of a new age in energy management. For the first time, Internet-enabled technology can facilitate interaction between electricity suppliers and users, creating a true supply- and demand-driven market with full participation from all energy players. This new technology is known collectively as enterprise energy management (EEM) systems. EEM systems use intelligent meters (dispersed throughout power distribution networks) to communicate with remote command-and-control software. The hardware/software combination helps energy providers adjust their supply of electricity in reaction to prices or demand, and it helps consumers adjust their demands in reaction to prices or supply. In short, EEM systems help control the quantity, quality, and cost of power.

On the following pages, you'll read about two different applications using EEM technology. One is a short-term strategy that revolves around demand-response programs. The other is a long-term solution involving small, distributed power plants.

Demand-Response Programs

EEM systems help alleviate electricity shortages by enabling the real-time exchange of information in demand-response programs. These programs give users monetary incentives to reduce consumption during peak-usage periods. Users can shed loads or switch to onsite generators in response to immediate market prices or whenever utilities notify them of impending load-curtailment sessions. Such actions lower spot-market prices during peak-usage periods. This would prevent situations like the summers of 1998 and 1999, where electricity costs in some regions of the United States were 200 times higher than normal.

An example of a demand-response program in action can be found at RETX, an Atlanta-based company that offers the load management dispatcher (LMD), a full-featured Website that permits fast interaction between retail energy players. The company's “negawatt hub” (negawatt means a megawatt saved from the grid) empowers the New England independent system operator (ISO) to offer emergency-response and price-response programs to electricity suppliers and users within the six-state power grid. Any one of New England's 192 energy suppliers can subscribe to the negawatt hub and participate in load-response opportunities. This allows the New England ISO to count load-response assets as available resources and dispatch them as needed.

In the emergency-response mandatory-curtailment program, RETX's system notifies participants of opportunities to engage in the energy markets via e-mail, pager, or cell phone. End users respond by reducing consumption (i.e., shedding loads or starting generators). The RETX server then collects metered data from end-user sites to confirm load reduction and timing.

The voluntary price-response program allows end users to sell negawatts back to the grid when electricity prices are high. For example, when forecasted prices exceed $100 per megawatt-hour, the ISO opens the “negawatt store,” and users can decide how much energy to sell to the ISO at spot-market prices for that 24-hour period.

You may be wondering how participating end users access the necessary data to make these decisions. They do so through meters installed at their facilities. These meters can, among other things, communicate such information as price signals, electricity generation and consumption, and historical load profiles and usage.

For the price-response program, end users e-mail energy-usage data directly to the negawatt hub's LMD software, which processes the business transactions the following day. If desired, end users can use the meters to automate load shedding and generator startup.

Working with DG Systems

In the long-term, EEM systems can work in tandem with DG systems to provide higher-quality power. To understand the benefits of this integration, it helps to look at the evolution of electricity requirements.

The escalating demand for high-quality power is defining a totally new set of supply requirements. Internet data centers, digital processes, and computer-controlled mission-critical businesses require near 100% uptime. This equates to six nines (99.9999%) of power reliability, or less than 30 sec of downtime per year.

The current grid delivers only three nines of power reliability (99.9% or about 8 hrs of downtime per year), which is adequate for lighting systems, air conditioners, and motor loads. It can't supply the quality or quantity of power today's businesses need. And even if companies construct more centralized power plants, the electricity produced will be trapped within inadequate transmission networks.

This is where DG comes into play. DG technology permits quick configuration and higher power quality because DG systems are directly connected at end users' sites or through shorter transmission lines.

Studies show that, depending on transmission distance, up to two-thirds of the energy used to produce power in a centralized facility is dissipated by the time it reaches the consumer. Currently, DG — in the form of standby generators — accounts for 10% of the U.S. generation capacity. This figure is expected to climb to more than 30% within 10 years.

When combined with EEM systems that automatically monitor and control generator operation, DG reduces the cost of the electricity supply. Today, you can install a combined-cycle DG unit for about $35,000 and an EEM system for around $30,000.

NiSource, an electric and natural gas company based in Merrilville, Ind., is currently testing the first continuously running microturbine. This unit, which supplies the necessary power to meet a Walgreen's drugstore's base-load requirements, works in tandem with an EEM system.

Gary L. Neale, chairman, president and CEO of NiSource, agrees that generation should be built near demand. “Nobody will allow you to build a 250MW combined-cycle, gas-fired power plant in downtown Chicago, New York, or any other place. Distributed generation is the answer with generation on rooftops and in basements.”

An EEM system added to a DG system should accomplish several tasks. The EEM system at the Walgreen's drugstore, for example, receives remote control signals for rapid generator startup or shutdown and archives data during power disturbances or communication interruptions. It also automatically transmits data directly to the public Internet or wireless, satellite, and paging networks so that ISOs, load-serving entities, and end users have identical information.

Ideally, EEM-system meters are industrial-grade. They should continuously report conditions to end users and, if the generator interconnects with the grid, the utility and ISO as well.

EEM software should be installed at command-and-tracking workstations for system-wide or local situation analysis and to support automatic start/stop operations.

Independent power producers are among those companies that rely on DG and could benefit from employing EEM systems. In California, Real-Energy owns and manages generators that supply large commercial facilities with power (40% to 50% during peak loads). This power is sold at a discount — below the local utility's prices.

RealEnergy's projects include fourteen 200kW generator sites, one 60kW microturbine site, and a 200kW solar facility in Fountain Valley, Calif., the largest in the western hemisphere. The company's engineers also installed a solar panel for a 320,000-sq-ft industrial building near San Diego. The building's owners have sold the solar panels' excess electricity to San Diego Gas & Electric.

All this input from a growing number of independent sources raises the question of grid stability. Obviously, if DG systems interconnect with regional electricity grids, voltages must be maintained within a reasonable range, usually within ±5% of nominal. Historically, utilities and ISOs have been responsible for grid stability, but with hundreds of independent producers now pumping power into the grid, they too need to bear part of the burden. According to Brad Forth, president and CEO of Power Measurement, EEM systems can help with that, too.

“An EEM system can stabilize the grid all the way down the power delivery chain by controlling voltage and frequency, managing congestion, coordinating protection and fault clearing, and automatically activating reserve capacity,” he says. “The bottom line is that EEM helps create a new, more interactive energy marketplace.”

Ralf H. Edler, based in Tucson, Ariz., is a writer and communications consultant for Power Measurement in Victoria, British Columbia, Canada. You can reach him at ralfhedler@cs.com.