Smart Grid Presents CE Makers With Tough Challenges, Opportunities

SAN FRANCISCO -- With broad implementation of the smart grid some 10 years out, CE and appliance companies are grappling with issues of infrastructure, customer interface and distribution that will impact how products and standards evolve during ramp-up, experts said last week on a CEA Industry Forum panel.

For appliance makers, the piecemeal rollout of smart meters by 4,000 U.S. utility companies makes it difficult to manufacture products for a national customer base, said Chris Johnson, senior manager of products, standards and environmental compliance for LG. How those products will be sold is another issue. “What channel do I bring them out in?” he asked. No single retailer will sell smart grid-compatible products, and appliances are handled by separate buyers at stores like Home Depot and Lowe’s, Johnson said. “There’s going to be a serious problem with the channel if it has to be reorganized” to offer a broad selection of these types of products, he said. Issues will arise in trying to get buyers to coordinate among themselves “so their products will talk to each other” and then how those products will be shown to consumers, “because there’s no one aisle for that category,” he said.

The biggest challenge for appliance makers will be the lack of standards, said Bill Rose, president of WJR Consulting. Whether standards arise from consensus, competition or the government, “there needs to be a limited set of communications protocols so products can be mass-produced” and purchased anywhere, he said. Jay McLellan, president of Home Automation Inc., which is involved in smart grid trials, said “standards are going to have to be clear and nationwide, and that’s an issue right now."

Smart grid benefits are obvious to utility companies, but translating benefits to consumers will be challenging. Although there will be “dollars on the table for consumers,” saving 10 percent translates to about $10-$12 a month, “not terribly compelling,” he said. The real benefit consumers will realize is in “new uses for these products,” he said, “and I'm not sure anybody knows what those are.” He compared future smart grid benefits to apps arising from the iPhone-iPad market, in which new intelligence inside devices, along with communications, enabled a new world of capability. “You have a new user interface and all of a sudden a thousand new apps come out and that product can now do things you wouldn’t have dreamed it could do before,” he said. The benefits will come “not from the $10 savings per month,” but new brand applications “we never thought about before."

Johnson of LG sees tremendous opportunities for consumer electronics companies in the smart grid age. “The more things that connect to it, the more valuable it becomes,” he said. As the smart grid becomes a marketplace, he said, software will enable additional savings for consumers and opportunities for service providers. “The amazing number of things we'll be doing through the smart grid in 10 years will astound us,” he said, “and the Internet is going to play a huge role.” He envisioned a tie-in with home healthcare products. Children of old parents could be notified when the parents’ refrigerator hadn’t been opened for 48 hours, to alert them that something might be wrong, he said. “They'll be getting connected for a different purpose, but now they'll be able to do different things with that connection,” he said.

Consumers will be able to manage energy and costs in accordance with peak usage cycles if they're charged more during high-usage times. Intelligence to allow appliances to automatically make usage choices can be built into products, McLellan said. A refrigerator could delay a defrost cycle during times when energy costs are high, and a dryer could “lay off a heating coil” during peak hours, he said. The advent of electric cars will tax the grid as they start to get popular, he said. “That will encourage utilities to offer more time-of-use rates,” he said. Consumers will want to delay the water heat cycle when the car is charging “so you don’t overtax the power available to the home or the neighborhood,” he said.

Megan Hayes, senior manager for technology and standards at CEA, said the biggest role the CE industry can play in smart grid development is in defining the interface, or gateway, between the meter and the home so it allows “the best use of home energy management.” How the gateway -- the brain that allows all the devices to interact and to talk to the meter -- will look and where it exists in the infrastructure have to be determined, panelists said.

Johnson of LG said as the smart grid goes forward, the gateway will provide pricing and usage information, but when it’s merged with information consumers can get off the Internet and intelligence that can go into the products, “that’s where the real benefit to consumers comes in.” He envisioned the gateway as an interface to the smart meter and then to other networks in the house. That model, he said, would “solve the problem of standards.” Noting a long rollout ahead, he said, “the network today is not going to be the network in 10 years when the smart grid is broadly adopted,” so any gateway has to enable flexibility for technology changes down the road “to allow this to grow into something more."

Where the gateway will be in homes “is a tough question,” said Rose. It’s not likely to be in the meter, he said, because “utility companies aren’t keen on that” for several reasons, including control and security. And utilities will install smart meters in homes with the idea that they'll be in place for 20-30 years, but technology changes much faster than that. “It could be in a display; it could be in a CE product or a set-top box,” he said. McLellan said HAI envisions the gateway as a router “with an appropriate RF or powerline interface to the meter.” Some people consider a home automation system a gateway to the smart grid, McLellan said. Consumers can monitor usage of lights or thermostats through a home automation system, which can also manage lights and appliances for them. “If it’s connected to the Internet or a phone line, it can be a gateway,” he said. He doesn’t see the gateway being incorporated into appliances or integrated into CE products with other functions. “The nice thing about keeping the gateway separate is as technology changes and standards evolve, you don’t have to change the entire system, just the gateway,” he said.