To tackle the dilemma, the world’s largest electricity companies are collaborating with other industries. Germany-based energy supplier RWE, for example, worked with software provider Microsoft and hardware provider ELV to develop a device that plugs into an Internet connection and creates a smart home at the touch of a few buttons. “What we are really doing is a first step towards a smart grid,” says Holger Wellner, RWE’s project manager for SmartHome.

The RWE-Microsoft SmartHome system, available in Germany by the end of the year, gives individuals the ability to programme electric appliances – both for convenience and to cut energy consumption. The environmentally friendly system  can be set up so when the alarm clock rings in the morning, the shutters automatically rise, the heat turns on and the coffee machine starts brewing. It can also be programmed to turn the heat off when sensors detect an open window, and to switch on electrical goods only when rates are cheaper. 

“It’s a plug-and-play solution,” says Microsoft’s Bruno Schmidt, industry market development manager for the utility industry. “All you need is an Internet connection. It’s simple and it’s mobile. You can install it on your own and you can take it with you when you move to a new home,” Schmidt says. It can also be operated remotely from a mobile phone.

SmartHome, which was developed by the companies at a cost of about €20 million, will cost consumers a few hundred euros depending on the size of their apartment. The approximate price is €10 per square metre, or about €1,000 for a 100 square-metre apartment. The solution can save a household between 10 and 30 per cent of its total energy requirements. Depending on consumption patterns, the investment can be recouped in about three to four years. Consumers will be able to purchase and use the device with all energy providers.

RWE, Microsoft and ELV aren’t the only companies that are joining forces as a new era of IT-driven energy management dawns. Itron and Cisco are also working in the respective fields of smart metering and networking communications and announced a partnership in September 2010. And last July, energy giant GE and four venture capital companies launched a $200 million global campaign to speed the development of smart grids. 

These moves reflect a growing recognition that cutting energy use is one of the most effective solutions to global warming. The European Commission is funding energy-saving initiatives, including a €2 billion smart grid initiative aims to upgrade Europe’s electricity network by building intelligence into the existing passive delivery system.

Smart meters are a bridge technology. From the beginning of 2011, SmartHome system will be linked to a smart meter, enabling energy-saving measures. In the future such home-based monitoring systems will be linked directly to the smart grid, which could for example enable washing machines to function when a lot of wind power is being generated. 

RWE also has plans to sell the SmartHome system outside of Germany, including the Netherlands and the UK by mid-2012. Other countries will follow if the product proves popular. 

Saving energy is a top priority for governments everywhere. Now the question for policy makers is how to encourage consumers to spend a few hundred euros to go green.

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