Today, we announced our plans to automate how our smart, LED-based lighting system handles demand response events. Our Intelligent Lighting System will be able to receive demand response messages directly from a utility or DR provider and modify how each light performs – turn them off in an unused part of the facility, dim them 10% in another room, and do nothing in an area that should not be touched. Briefly, I will try to explain why we did this, how it works, and what will be next.
Why did we do this? Our customers are industrial customers; think million square foot warehouses or 7×24 manufacturing plants. These companies use a lot of power, and this industrial sector represents a substantial percentage of the load on the utility’s electric grid. Our first job is to work with this customer base to knock out 90% of the energy cost of lighting, and the next step is to go even further by integrating with their facility- or company-wide energy control systems. A significant portion of our customers already participates in demand response programs as a hedge against rising electric prices – often by switching on local generators to offset grid load at times of peak demand. Others, particularly manufacturers with sophisticated process control systems, can moderate drive speeds or carefully time heating and cooling operations to temporarily reduce their electricity demand.
So how does this work? Demand response is a system whereby energy use is curtailed by consumers based upon signals from a demand response aggregator or utility to reduce stress on the electrical grid at times of high demand. The first generation of demand response was largely manual – when a demand response condition happened, phone calls would go out to the participating customers and facility managers would flip on a local co-generation system and shut down non-essential loads. Under this first-generation approach, a facility manager with a Digital Lumens LightRules system would manually push “demand response” rules out to our lighting system. The second generation of demand response brings automation to the table. In this case, an electronic signal is sent to the facility and load shedding happens automatically based upon predetermined rules. Our announcement today signals our support for OpenADR, the emerging open standard for demand response automation.
And what is next? Automating the interface between the Smart Grid and Smart Buildings is a deep topic. After we make automated demand response available, logical next steps are to help our customers avoid peak demand charges (which can increase a monthly energy bill by 25%) or respond proactively to real-time electricity pricing signals. Beyond deeper grid integration, our LightRules software system has other open APIs that we will begin to tie into building management systems or corporate carbon accounting programs.
It is an exciting time for the outside-the-meter Smart Grid and inside-the-meter Smart Buildings, as well as the Intelligent Lighting Systems bridging the two in a smart and energy efficient manner.