Case Study

The Information Technology Revolution:

Coming to the Electricity Grid?

For more than a decade, Stefan Grosjean worked with big box retail stores in the U.S., trying to transform them from energy hogs to energy misers. The fundamental principle behind his efforts: you can’t control what you can’t measure.

So the first step for Grosjean’s team was adding instruments that measured energy consumption every minute from lights, heating and cooling, freezers and other equipment. The next step was using that data to spot wasted energy. “Once we had the load profile, we were really surprised by what remains on at night,” he says. In addition, data mining tools allowed Grosjean to compare stores to learn why some were so much more efficient than others.

With the information, “we were able to save 20-40 percent per store,” he says. The success got Grosjean to thinking. One main barrier to saving huge amounts of energy in the nation’s 115 million residential buildings is lack of information. Homeowners get only a monthly bill, with no clue how much electricity is being sucked up by TVs (both on and off), toasters, dryers, air conditioners, chargers for all those devices or the old fridge in the garage. Why not figure out exactly what all the power is being used for?

When Grosjean first had the idea about seven years ago, it simply wasn’t feasible. It required a meter on every appliance and software engineers to crunch the data. “I thought, okay, it’s too expensive, so it’s something for the future,” says Grosjean. “Then the future came.” Suddenly, we had the broadband Internet, smart phones, cloud storage, apps, and the ability to send and update sophisticated software remotely, among other information and telecommunications technologies. All that innovation has transformed finance, banking, manufacturing and retail businesses—even transportation with services like Uber and Lyft and Tesla’s regular software updates. “Why not energy too?” Grosjean asked.

He created a $249 device he calls Smappee (for “smart app for energy efficiency”), made by his Belgium-based company—also called Smappee. Using just one meter that measures power coming into a home’s electrical box more than 4000 times per second, Smappee ‘listens’ for the electrical `sound’ of stuff turning on and running. Each appliance or device has a characteristic pattern of energy consumption, like a melody. For instance, a refrigerator has a little spike of electricity use to get the coolant flowing when it turns on. So like Shazam, the software looks for a match to the pattern in the database in the Cloud, and thus is able to spot the coffeemaker, bathroom fan, refrigerator, chargers, and dozens of other devices. The detailed information is sent to your smartphone.

Smappee can’t always hear the 2-watt whisper of an LED being switched on over the cacophony of a 2000-watt dryer. And the database doesn’t yet include the unique patterns of all the thousands of possible appliances. But the mysteries hidden in the monthly electricity bill are now revealed. As Fast Company said: “Smappee lets you into the deep, dark secrets of your electric bill. Once you know what’s happening, your life—and energy use—will never be the same.1

Users are finding wasted energy from freezer doors not closing properly, pumps running unnecessarily, TVs and music systems gobbling power on standby, air conditioners not properly maintained, lights left on. In addition, Smappee acts like a remote home monitoring system, since the smartphone app tells you when the garage door opens or the bedroom light turns on. “It’s more than an electricity meter,” Grosjean says. “It also gives peace of mind.”

But perhaps the greatest value will come when devices like Smappee and its competitors go beyond measuring energy use to controlling it. If hooked up to data from the local utility, Smappee already has the smarts to turn down the air conditioner momentarily during periods of peak demand, or turn on the electric car charger when electricity is plentiful and cheap, or feed electrons from the battery in the basement or the solar panels on the roof back to the grid when there’s high demand and money to be made. “Control makes the smart grid of tomorrow really possible,” says Grosjean.

And it’s about time. Jim Davis, CEO of Smart Wires points out that Alexander Graham Bell would be blown away by how much phones have changed since his invention, but Thomas Edison would find today’s electricity grid very familiar. “This is the last industry that has gone through any type of modernization,” he says.

Thousands of companies see opportunity in that modernization. There’s already a whole industry, led by companies like EnerNOC, that works with businesses, building owners and utilities to measure and cut energy use, and to reduce bills by adjusting demand. There’s a growing business to install solar panels and wind turbines at or near Walmarts and other big box stores, data centers and corporate headquarters like Apple’s. And the hungry Silicon Valley companies who have already put a smartphone—and hundreds of new app-based services—in your pocket also want you to have a smart home and office that uses energy more efficiently. It’s no coincidence, for instance, that Google snapped up wireless smart thermostat maker Nest.

Other innovative technologies are beginning to transform the electric grid itself. Smart Wires’s devices on transmission lines respond to wireless commands to increase or decrease impedance on the line, allowing grid operators to instantly reroute power from overloaded lines to ones with more capacity. The software and simulation models from Integral Analytics can analyze extreme weather, along with hourly price and load data, to provide precise valuations and accurate forecasts. Or they can pinpoint exactly where new substations or new distributed generation should be sited to bring the biggest improvements in grid capacity and reliability. With the new technologies and tools, “what’s possible are literally tens of billions, if not hundreds of billions, of dollars in savings across transmission and distribution,” says Jon Wellinghoff, former chairman of the Federal Energy Regulatory Commission.

But there are big barriers to this transformation—the current regulatory systems and business models for most utilities. “The utilities are conflicted about this,” says William Fulton, Director of the Kinder Institute at Rice University. “Their revenue model for decades has been to sell more electricity and make more money. It’s hard for them to get their minds around the idea of selling less electricity.”

In fact, there’s fear in the utility industry of a ‘death spiral,’ where revenue losses from customers using electricity more efficiently or from nimble entrepreneurs selling power to the grid from competing distributed generation sources make it harder and harder for them to maintain the distribution lines needed to deliver power to their customers. “Change is coming to our industry,” warns David Crane, long-time CEO of giant NRG Energy, the nation’s largest competitive power generator, and an energy retailer with three million retail customers. “We can either drive the bus or be run over by the bus.” And in fact, Crane himself became a casualty of the difficult transition. He was forced to resign as head of NRG in December 2015 after his efforts to boost rooftop solar and other renewables failed to impress shareholders and investors2.

The transition is challenging—and as public utilities, many companies are hamstrung by regulations that limit revenues to electricity sales and that only allow returns from new capital investments in generation and transmission. “The bigger utilities don’t understand what’s happening to them—or they do, but they can’t change,” says Grosjean. “They’ll see Google, Smappee and others pass them, like the taxi world saw with Uber.” In fact, says Wellinghoff, “the innovation is coming from third parties putting new technologies on the customer side of the meter.”

That’s why people in the industry are talking about two necessary changes. One is in the basic utility business model. Instead of selling electrons, utilities will be selling services. “We are moving towards utilities as platform providers,” says John Di Stasio, President of Large Public Power Council (LPPC), a group of 25 of the nation’s largest public utilities. In fact Chattanooga area utility EPB has built an entirely new platform—a fiber optic communications network.  With declining load growth, “we felt we needed to divest and get other revenue streams,” explains President and COO David Wade. The fiber optic system allow EPB to deliver both telecom and new energy services and makes the grid 60% more reliable, says Wade.

The other changes would be in the regulatory system. Following the model first pioneered in California, Public Utility Commissions could ‘decouple’ electricity sales from utility profits, and grant utilities a return from investing in energy efficiency, demand response and other steps to save electricity and make the grid more efficient. Overall, “the electricity section is very capital inefficient because we haven’t changed the rules of how utilities get paid,” says Richard Kauffman, Chairman of Energy & Finance for New York State. Meanwhile, opening up the grid to more competition in generation and transmission, as Texas as done, would unleash a powerful wave on innovation. “We need to make everything that can be competitive be competitive,” argues Wellinghoff. “We need to let the markets do it.”

Take those steps, and the results would be a grid that even Edison wouldn’t recognize. “Telecom has gone through a revolution,” says Grosjean. “Now it’s time for the electricity market go through a revolution.”

View footnotes

  1. Peters, A. 2014. “This Monitor Shows You Exactly How Much Power Each of Your Gadgets Is Sucking from The Grid,” December 10, 2014, available at
  2. Smith, R. 2015. “NRG Energy CEO David Crane Resigns,” The Wall Street Journal, December 3, available at

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