Newswise — Two South Dakota State University researchers are developing an energy management system that will help utility companies decrease peak-time power usage and pass those savings on to their participating customers.

Zhen Ni and Tim Hansen, assistant professors in the Department of Electrical Engineering and Computer Science, received a one-year, $80,000 grant from the South Dakota Board of Regents to develop a next-generation residential energy management system. They will be partnering with Sioux Valley Energy of Colman, which serves more than 23,000 homes, farms and business in east central South Dakota and southwest Minnesota, and the National Renewable Energy Laboratory in Golden, Colorado.

Utility companies purchase energy from power suppliers, Hansen explained. “They pay the wholesale market rate—whatever electricity costs at the moment.”

Power suppliers charge less for nonpeak energy because more efficient generators, including renewables, such as wind and solar, are in use. “Peak power generators are the most expensive to run and are, hypothetically, the most emission-intensive units,” Hansen said.

With the residential electricity use in the United States expected to increase 24 percent by 2040, utility companies are looking for ways to become more efficient by using smart-home technologies. That, in turn, will result in savings for their customers.

Tim McCarthy, Sioux Valley Energy CEO and general manager, said, “Nearly half of Sioux Valley Energy’s total power costs each year come from demand charges.  Our members would benefit from technology and systems that help them control their electrical demand during peak-use times. We are looking forward to working with South Dakota State University to develop solutions to help both consumers and the utility save on their power bills without sacrificing home comfort.” 

Ni will develop new optimization algorithms to minimize energy costs for utility companies and a multilevel reward system for customers who shift energy usage to nonpeak times. Activities, such as doing laundry or charging electric vehicles, would be done during nonpeak times.

“Different reward tiers will be offered depending on how much appliance usage you are willing to move,” said Hansen, who will develop software to simulate what’s occurring and test how effective the new method will be.

The researchers will use utility and power data from Sioux Valley Energy to validate the proposed system. Finally, the researchers will confirm the validity of the theoretical results using the smart-home laboratory at the National Renewable Energy Laboratory.