Towards Efficient Energy Management: Defining HEMS, AMI and Smart Grid Objectives Ana Rossell´ o-Busquet, Georgios Kardaras, Jos´ e Soler and Lars Dittmann, IEEE members Networks Technology & Service Platforms group, Department of Photonics Engineering, Technical University of Denmark, 2800 Kgs. Lyngby, Denmark {aros, geka, joss, ladit}@fotonik.dtu.dk Abstract—Energy consumption has increased considerably in the recent years. The way to reduce and make energy consumption more efficient has become of great interest for researchers. One of the research areas is the reduction of energy consumption in users’ residences. Efficiently managing and distributing electricity in the grid will also help to reduce the increase of energy consumption in the future. In order to reduce energy consumption in home environments, researches have been designing Home Energy Management Systems (HEMS). In addition, Advanced Metering Infrastructure (AMI) and smart grids are also being developed to distribute and produce electricity efficiently. This paper presents the high level goals and requirements of HEMS. Additionally, it gives an overview of Advanced Metering Infrastructure benefits and smart grids objectives. I. I NTRODUCTION Despite the fact that home appliances have become more energy efficient, electricity consumption in households has increased 30% over the last 30 years [1]. This is due to the fact that the number of appliances that can be found in households is also increasing. According to the International Energy Agency (IEA), European electricity consumption is going to increase 1.4% per year up to 2030 unless countermeasures are taken [2]. Residential buildings can reduce their energy consumption by becoming more energy efficient. This paper will try to identify the objectives that need to be fulfilled in order to deploy an energy efficient infrastructure. This infrastructure will help reduce the electricity consumption in users’ resi- dencies and make the electric grid more efficient. The research areas of efficient energy management have divided into three more specific research areas: energy management in-home environments, consumers and utilities cooperation and energy management in the electrical grid. In this paper we treat ‘utilities’ as the parties involved in the production and distribution of electricity through the electrical grid. In addition, we use the term distribution to refer to the process of electricity transport from the generation plants to the users’ residences. As shown in table I, energy consumption in home envi- ronments can be reduced by installing Home Energy Man- agement System (HEMS) [3] in users’ residences. HEMS will give the users the necessary tools to manage and reduce their consumption. Advanced Metering Information (AMI) will enable two way communication between the households and the utilities. AMI will benefit the users as it will enable the provision of real time rates and billing status through the smart meter. If users take into consideration the price of electricity while consuming and reduce their consumption when the price is high, consumption will be optimized as demand peaks will be reduced. In addition, providing this exchange of information is one of the first steps towards optimization of energy distribution and production as it will provide the utilities with statistics that will help predict energy consumption. In order to reduce losses and optimize energy distribution and production the electrical grid needs to be upgraded. Upgrading the electrical grid will lead to the so called smart grid. The smart grid will include new elements to efficiently manage the electricity distribution and production. In this paper, the different goals that should be achieved in these areas in order to reduce energy consumption in home environment and make more efficient distribution and production of electricity are presented. When designing such systems, researchers usually focus on one of the goals. However, it is important that when designing these systems, researchers design them in the framework they are going to be deployed and keep in mind all the goals they should achieve to maximize the benefits. This paper summarizes the different objectives of these research areas which can be used as a guideline. The remainder of this paper is organized as follows: Section II introduces the concept of Home Energy Man- agement System (HEMS) and describes the high level goals and requirements to deploy it successfully. Section III will present the concept of smart meters and AMI. In addition, the possible information exchange between households and utilities will be explained. Finally, section IV will present the concept of smart grid and the objectives that need to be achieved to optimize energy production and distribution. II. ENERGY MANAGEMENT IN HOME ENVIRONMENTS Energy consumption in households should be reduced in order to decrease greenhouse gas emissions. Introducing Information and Communication Technologies (ICT) into home environments can help reduce users’ energy consump- tion. A HEMS is a system that includes all the necessary elements to achieve reduction of electricity consumption in home environments. One of its main elements is the so 335 ICN 2011 : The Tenth International Conference on Networks Copyright (c) IARIA, 2011 ISBN:978-1-61208-113-7