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Pumping power onto the grid from your basement

GridPoint has developed Net-connected energy storage appliances, which it says will save money by using electricity off-peak.

In a 21st century twist on Microsoft's original "PC in every home" vision, a young company has created a home energy-storage appliance that connects to the power grid--and the Internet.

Called GridPoint, the 3-year-old company has developed "intelligent energy management" systems, which it claims can help people lower their electricity bills.

It makes two products: a storage appliance that works in conjunction with a renewable power source, such as , and a back-up power supply unit. Both refrigerator-size boxes are equipped with Net-connected PCs that collect and analyze data on power usage.

Using the company's software, people can lower their energy consumption by having the system shut off appliances at certain times. Or people can power their homes from their batteries on a schedule that makes best use of changing electricity tariffs, according to GridPoint.

The Washington, D.C.-based company is part of a wave of start-ups entering the clean technology sector and seeking to create business opportunities from higher energy prices. A handful of these clean tech companies, including GridPoint, are focusing on technologies that lower power costs, in part by shifting electricity usage to different times of the day.

"Energy shifters change the timing of when energy is drawn off the system--they don't necessarily reduce the use of energy overall," said Rob Day, an investor at Expansion Capital Partners. "They are betting on time-of-use (pricing) working its way more and more into the regulatory environment. That's probably a valid assumption."

GridPoint appliance

In September, GridPoint plans to announce a partnership with a utility industry company to tap into the kilowatt-hours of storage sitting in people's basements, Chief Operating Officer Karl Lewis said.

The idea is that the utility will purchase and install the storage units in customers' homes in a certain region. To avoid potentially expensive spikes in demand, such as hot summer days that could cause blackouts, utilities will draw on the stored electricity in the GridPoint systems, Lewis said.

Having the storage units connected directly to the electricity grid allows the utility to pull the electricity from the disparate appliances, much like servers and PCs exchange data over the Internet.

"This supply-side technology can put elasticity into the electrical grid," said Lewis, adding that the deal involves a product designed specifically for utilities. "We can do that because we have a network operations center, so we can control a set of boxes in the field."

Peak shaving
Peak energy periods can be very costly to utilities, which may have to ramp up production by putting reserved power plants online or to expand capacity by building new power plants. With record heat in the U.S. this summer, for example, utilities in Northeastern states and California urged consumers to scale back use of air conditioning and other power-intensive activities.

Programs to lower energy consumption during the day have been around for some time by utilities interested in balancing energy demand, Lewis said. For example, people could agree to have their radio-equipped water heaters turned off or their air conditioner thermostats turned up during the day.

Lewis said these "negawatt" programs are aimed at smoothing out demand over the course of a day to avoid overtaxing the electrical grid. By contrast, GridPoint is trying to add more supply to the grid network. "It's discharging during periods of grid stress," he said.

The partnership calls for utilities to actually own the storage units and have a "service relationship" with the customer that includes the storage device, he added. But GridPoint also sells directly to consumers and is trying to develop partnerships with building companies that would pre-install storage devices.

The company sells its $10,500 back-up power unit, GridPoint Protect, as a cleaner alternative to diesel generators--which have become more common in places like Florida, as it has been hit with devastating hurricanes in the last few years. The devices, equipped with an Intel PC running Windows CE, can be monitored and serviced over the Internet.

The $11,000 GridPoint Connect, a separate unit, is sold more on the basis of the economic benefit, Lewis said. It acts as a turnkey system, with an inverter and either 7 kilowatt-hours or 10 kilowatt-hours of storage, to accompany a solar electric system. And its data-collecting tools help consumers shave money off their bills.

"The computers in these boxes are making decisions with regards to energy based on the value of energy at that point in time and the historical consumption of that residence," Lewis said, adding that part of the company's management team has a background in software and communications.

Electricity tariffs that change over the course of the day to reflect fluctuations in demand are still not commonplace for U.S. consumers. However, the Energy Policy Act of 2005 (click for PDF) calls on state utility regulatory bodies to explore "time-based metering and communications" next year, which would allow customers to participate in "time-based pricing rate schedules and other demand response programs."

Another company that is trying to capitalize on "peak shaving" or "peak shifting" is Ice Energy, which makes an air-conditioner add-on that freezes water in the evening to cool the refrigerant, rather than run the AC during heat of the day.

Ice Energy sells its units directly to businesses but is also investigating ties with utilities including those in California that are struggling with the costs associated with meeting peak demand.

Extremely high summer temperatures that tax the grid, such as those happening this summer in the U.S., are happening more frequently, according to Ice Energy CEO Frank Ramirez.

"Utilities used to plan for what they call one in 10 (extremely high temperature) events. Now they are finding they are becoming one in three or one in four events," he said.

"The occurrence of sustained high temperatures is wreaking havoc on the ability to maintain the integrity of the grid," Ramirez said.