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Logica’s Global Utilities Director, Nigel Spooner talks Smart Meters, Smart Grids and the DCC

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At the recent Logica Utility Analyst day, I talked to Logica’s Global Utilities Director, Nigel Spooner about Smart Meters, Smart Grids and the DCC – here’s a transcription of our conversation:

Tom Raftery: Hi everyone, welcome to GreenMonk TV, I’m in the Logica building in London with Nigel Spooner. Nigel is Global Utility Director for Logica. Nigel we’ve had a bit of a discussion here during the analyst event that I have just been attending, around smart meters and smart grids. Now we’re in the middle of one of the world’s worst economic crises in a long time, why would utilities want to be spending money on rolling out smart meters?

Nigel Spooner: Yeah it’s a good question isn’t it, it is difficult when money is tight, but there are benefits to smart metering, both in terms of the consumer being able to manage their energy consumption more closely, and also in terms of the distribution companies being able to run their networks more efficiently, but also and importantly being been able to cater for consumers doing their own generation for instance with photovoltaics and also for things like incorporating electric vehicles into the network.

Tom Raftery: So this is kind of life smart grid stuff and can you give us a quick idea, I mean you talked just a little bit about it sidewise, give me kind of an overall picture of what a smart grid is?

Nigel Spooner: A smart grid is difficult to define very succinctly, but it is a distribution grid where there is much more control over the way that power flows both on to and off the grid. At the moment grids are very much one way. The power goes in from the power station, it goes through the network and into the consumer.

Increasingly we’re having to cope for the fact that the consumers themselves are generating power, they are also using things like electric vehicles which have to be charged up at particular times, they need to be controlled if the networks are not to be overloaded, and therefore the distribution grids have to be much more responsive to those loads and those demands going on them. Smart metering gives the distribution companies the opportunity to know what’s going on on that grid to a much closer degree, and in real time than they having been doing so far.

Tom Raftery: And advantages to consumers…

Nigel Spooner: To consumers the advantage is that they can get first of all more flexible tariffs, so we may be able to get tariffs that are much more aligned with the way in which we actually consume energy, rather than being just a blanket tariff that’s the same for everyone. There will be much more information on the energy that one is using, so that for instance one can see when one is going for a rather large load and to turn things off if you need to, but also there is the ability increasingly to respond to variable pricing, so that if we know for instance electricity is going to be expensive in three days time because of demands on the system, then we can react to that and make sure that our large items like air-conditioning units that’s on, do not get turned on when the price is very high. So we should be able to save both energy and money through the information that smart metering gives.

Tom Raftery: And, I’ve heard a bit about this DCC thing that’s been rolled out here in the UK, can you tell me a little bit about that?

Nigel Spooner: Well DCC is simply the organization that is going to be setup or is been setup by the British government to basically take charge of all the data that is coming off smart meters as we roll them out. This will be collected centrally and then distributed to the market participants and the view is that, that will be the most efficient way to manage this huge increase in information that smart meters are providing. By doing that it should make it easier for participants to come into the market and it should make it easier for consumers to get the best deal on their energy.

Tom Raftery: Where is Logica in all this?

Nigel Spooner: Well I’m delighted to say that all the things we’ve been talking about require relatively sophisticated information technology services to enable them to happen. Logica has for many years been in the business of providing the systems and the services that are required to make those infrastructures operate effectively and we will of course continue to do so.

Tom Raftery: Okay, great. Nigel that’s been fantastic, thanks for talking to us today.

Nigel Spooner: Thank You Tom.

Full disclosure – Logica paid my travel and accommodation to attend this event.

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Logica and EdP’s smart grid trial in Évora

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Energy management devices

Logica brought me to the pretty Portuguese town of Évora recently to check out the InovGrid project which they have been participating in, along with EdP and other partner companies.

InovGrid is an ambitious project to roll out smart grid technologies to six million customers across Portugal. Évora’s InovCity is the first stage of the project. There are 35,000 people living in Évora, almost all of whom have been issued with smart meters by now.

The smart meters are connected in realtime to in-home displays (like the one pictured above) which takes energy consumption readings every two seconds and plots it on the screen. It can display the usage data as kWh, CO2 or more tangibly, the € cost. If the home or business has an internet connection, this information can be viewed remotely on a computer or mobile device (as seen on the laptop on the right in the image above). Interestingly, there is two-way communication going on here, so if smart plugs are installed in the house, they can be controlled (on/off) from the in-home display, or remotely.

The information displayed on the in-home displays, and remotely, is not the same information which is sent to the utility for billing purposes. This may lead to some discrepancies in the € amount on the displays versus the amount on the bill at the end of the month. The smart meters send billing information to the utilities over Power Line Communications (with a GPRS backup). Even with the PLC connection, there is far too much data in 2 second reads, so a lower rate of reads is sent to the utility for billing purposes.

Interestingly, the in-home device shown above was installed in a coffee shop in Évora and it was possible to watch the fluctuations in the consumption graph in realtime as coffee was being made for customers. Also, the coffee shop realised €500 savings per annum in their energy bill when they examined the information from the device and realised they were not on the optimal tariff. It also demonstrated to them the savings to be had from turning off the coffee machine overnight, so the extra information from the device helped influence their behaviour.

EV Parking spot

EV Parking spot

Other than the smart meters, we were shown the information display in the town hall, which shows the realtime energy consumption of the building. This information is also supposed to be available on the town hall’s website for citizens to see remotely, though I failed to find it there (doubtless due to my lack of Portuguese!).

Other nice features on display were dedicated parking places for electric vehicles (EV’s), complete with charging stations as well as LED streetlights with motion sensors which dim the lights in the absence of people on the streets. The EV parking place was predictably empty due more to the general unavailability of EV’s than anything else. The LED streetlights though was interesting. Very few towns or cities have, as yet, embraced LED streetlights and yet 50% of a town’s energy spend can be on streetlights. LED lights can save 80-90% of the energy cost over traditional streetlights, they can report back their status (obviating the need to have staff checking for lighting failures) and they have a much longer lifetime, so they save on maintenance costs as well as energy.

It would be interesting to hear back from the InovCity people how much Évora is saving on lighting costs from the move to LED (even if only the energy savings) but even more interesting would be to try to see if the rollout of the smart meters and in-home displays has led to any sustained, per home, energy consumption reduction.

One last comment on this project – I can’t help but feel that the provision of in-home displays is an idea whose time has past. These days most people have access to a tablet, a smartphone or a computer where they can access this information. I suspect as the InovGrid project rolls out beyond the 35,000 inhabitants of Évora to rest of Portugal, the IHD’s will become at best, an added extra option, or quietly killed off.

Photo credits Tom Raftery

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Implications of the data explosion for utilities

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At the recent SAP for Utilities event in San Antonio, I caught up with Martin Mysyk, Senior Architect for TransAlta and we discussed the implications for utilities of the massive data explosion that is occurring in their industry right now.

Here is a transcription of our conversation:

Tom Raftery: Hi everyone! Welcome to GreenMonk TV. I?m at the SAP for Utilities event in San Antonio, Texas, and with me I have Martin Mysyk, who is the Enterprise Architect for TransAlta.

Martin, we?ve been talking about the amount of data utility companies you?re going to be dealing with and the mountain? I heard a talk earlier this year in Orlando, where one of the utility companies was talking about the change in meter reads from 75 million a year to 120 billion.

Now, there is also the other side away from smart meters and into just the devices on the grid itself and the amount of information they will be sending back to utility companies, what are they going to do with all this information and how are they going to handle it?

Martin Mysyk: Well, I think we do have to look at new ways of handling that amount of data, how we?re going to store it, how we?re going to back it up. And we?re monitoring so many more data points as we move from an analog world to a digital world. There?s an acceleration of the amount of data points where some of our assets may have had a couple of thousand data points we?re monitoring, taking in.

Some of our newer instrumentation generates 20,000 data points that we can monitor. So, that?s a large amount of — big influx of data that we have to — you want to keep it real time and that takes new techniques, new technology that we have to look at to be able to keep that on track and to be able to extract the information out that we need.

Tom Raftery: Okay, but 20,000 data points, is that too much? I mean, how can utility companies make any sense of that amount of data?

Martin Mysyk: That?s where you need another level of intelligence to layer on top of what you?re retrieving out of there, because you really — you can?t read that from a human perspective, you need software that looks for exceptions or things that are out of range to deal with those because whenever things are operating properly you don?t care about it. It?s just when there are exceptions or something?s going to impact your production capability that you want to know about that.

Tom Raftery: At the backend you?re going to need bigger servers, you?re going to need bigger failover facilities and all that?

Martin Mysyk: Yes, and the network ties it all together. So, wherever that is stored only high-speed networks have a lot of band with to carry the data, whether its onsite or everyone talks about being in the cloud. If you put it in the cloud, you are going to need lots of pipes to get it there.

Tom Raftery: This sounds like a lot of investment for utility companies, is it worth it?

Martin Mysyk: I think so, because we have to be aggressive on how we manage our data and our decision making capability needs to accelerate, because when we move into a more comparative global marketplace you have to have that decision making power and to do that you need the — to make information out of your data and that is only going to accelerate as time goes on.

Tom Raftery: Cool. Great. Martin, thanks a million.

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Logica and SAP in exclusive joint bid for UK Smart Meter data provisioning

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Smart meter

The UK has an interesting Smart Meter infrastructure model. Data from all the country’s Smart Meters will flow to a centralised data repository (called the DCC), from where, energy retailers will pull the data for billing purposes. The beauty of this system is that consumers dictate who has access to their data, and so switching energy providers, is not held up by data ownership issues.

The build-out of this system is still at very early stages with RFP’s expected towards the end of the year but SAP and Logica have come out of the blocks early with an announcement that they are going to put in a joint bid to become the data service provider for the DCC.

Logica and SAP are both heavily involved in the utilities sector in the UK, so it makes sense for them to bid for this – the interesting aspect is that they agreed to bid together and that their joint bid is exclusive.

The six main suppliers in the UK are all either involved in trials, or in the process of starting to trial smart meters. All six are using Logica’s head-end system for their trials, so if Logica and SAP win the bid, the transition to the DCC system should be relatively painless.

Talking to Tara McGeehan, Logica’s Head of Utilities UK on Monday, she said that the idea behind the bid was to move the debate away from technology and comms, onto the power of the data to affect things like micro-generation, energy efficiency and smart grids.

Having seen Centrica’s Smart Meter Analytics application, which runs on SAP’s HANA, earlier this year, the proposition that there is gold in them thar data, certainly rings true.

Photo credit Tom Raftery

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Deeply embedding social media and gamification into utility companies

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Energy 2.0 at Visualizar11

View more presentations from Tom Raftery

I was asked by the MediaLab Prado to give an updated version of my Energy 2.0 talk at their Visualizar11 – Understanding Infrastructures event in Madrid during the week.

I took the opportunity to update the deck with some of the thoughts I presented at the International SAP for Utilities event around deeply embedding social media into utility companies.

At the Visualizar11 event I talked about how utility companies will need to use gamification and competitions to pique customers’ interest in energy savings and to keep their engagement levels high. Even more importantly, done well, this will greatly extend the Mean Time to Kitchen Drawer (MTKD – the time it takes for people to get bored with an app and metaphorically stuff it in the kitchen drawer).

I was delighted then yesterday when IBM tipped me off that they are collaborating with three US utilities (CenterPoint, Oncor and San Diego Gas & Electric (SDG&E)) to launch the Biggest Energy Saver contest to help people better understand smart meter data.

In fact, there are two Biggest Energy Saver contests – one for customers to encourage them to reduce their energy consumption with a grand prize of an electric vehicle or a first-prize of a suite of GE smart home appliances in the Oncor and CenterPoint Energy service territories.

The second competition is for software developers to develop apps to help customers understand and use the information from their smart meters – this competition has potential prizes totalling up to $150,000. Serious money!

All of the details of the competitions have yet to be announced – but to really knock it out of the park, the customer competition should have social media and gamification throughout – using FourSquare-like principles of awarding badges for people who attain certain target reductions, having leaderboards, the ability to share your exploits on your social network(s) of choice, etc.

I’m giving the closing plenary keynote at the SAP for Utilities event in San Antonio this coming September where I’ll be going into these topics in a lot more detail so expect more on this here in the coming months.

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Centrica’s Smart Meter Analytics application could make energy management compelling

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As I have mentioned here previously, Smart Meters are going to bring a flood of data to utility companies which will need to be properly managed and which can be a source of intelligence for the utility, if they mine it well.

At the recent SAP Sapphire Now conference, UK Energy retailer Centrica showcased their Smart Meter Analytics application running on SAP’s HANA. HANA is SAP’s in-memory computing solution (In-memory computing moves data off traditional storage on servers and into RAM, providing a performance boost over having to read the data off disks).

Centrica are the largest single instance utility on an SAP system with 18 million residential accounts for and one million business accounts. Right now they are billing residential accounts every three months and they are managing 75 million meter reads per annum.

With the move to smart meters, Centrica will take electricity reads every 30 minutes and gas reads once per day. This means a shift from 75 million meter reads per annum to 120 billion meter reads a year. 120 billion – that’s billion with a b. That’s a phenomenal amount of data to have to deal with. Doing any kind of traditional analytics on a data set that large would very quickly get totally bogged down. One of the interesting things about HANA however is that the performance scales linearly with the hardware. If it’s starting to slow a bit with 120 billion meter reads, throw a couple of extra terabytes of ram and servers at it and hey presto you are back in business, or so the theory goes!

In the demo above, Centrica are using the analytics to examine their customer segmentation. They can look at the energy profile of similar businesses in a specific area and where there are anomalies, they can work with those businesses to help them cut their energy consumption until it is more in line with their peers. Increasing pressures to be energy-efficient and to reduce carbon footprints are being looked on by Centrica as an opportunity to open an energy services business, going to customers to help them to become more energy-efficient. The Smart Meter Analytics application is going to be crucial for this new practice within Centrica.

Centrica's Energy Efficiency Scorecard

Centrica's Energy Efficiency Scorecard

In the residential market the Smart Meter Analytics app presents householders with an Energy Efficiency Scorecard. This facilitates charting actual usage patterns against the various tariffs Centrica offers to find the optimal rate plan. The score card also allows home-owners to compare their energy efficiency with similar households in the same area.

This is an impressive use of Smart Meter analytics and it presents hugely useful information but to avoid a short MTKD (Mean Time To Kitchen Drawer – the time it takes for people to get bored with this app and metaphorically stuff it in the kitchen drawer), the scorecard has to keep homeowners engaged. There are several ways of doing this. One of main ones would be to bring in some gamification – make a game of it. The Scorecard could set energy reduction targets for people to meet in the next set period, allot points or awards for achieving reduction targets, build social media in for sharing achievements and put up a leaderboard to add some real competition to the game.

Energy management applications to-date have suffered from the fact that they were working with estimated data a lot of the time, from lack of a significant networked dataset and from a lack of a usable analytics engine. Large energy retailers, like Centrica, have the opportunity now to change that and to make energy management in the home compelling. Let’s hope they make it so.

Disclosure – SAP paid my travel and expenses to attend Sapphire Now.

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If Utilities don’t step up their customer communications, they risk their considerable smart grid investments

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Smart meter

Smart grids don’t come cheap.

They are typically projects costing in the order of hundreds of millions of dollars (or Euro’s, or pounds or whatever your currency of choice). Just think, the most fundamental piece of the smart grid, the smart meter, alone costs in the order of $100. When you factor in the costs of installation, etc., you are looking at over $200 per smart meter. Therefore if you have in the order of one million customers it’s going to cost you around $200m just for the smart meter rollout.

Given that they are so costly to implement, you’d think utility companies would do everything possible to protect these projects from failure – not so, according to the latest smart grid research from Oracle.

The report from Oracle surveyed 150 North American C-level utility executives about their vision and priorities for smart grids over the next ten years. The findings are both interesting and disturbing.

It is interesting but not too surprising for example, that when asked to select their top two smart grid priorities over the next 10 years, they chose improving service reliability (45%) and implementing smart metering (41%) at the top of the list.

What is worrying though is that while 71% of utilities say securing customer buy-in is key to successful smart grid roll-outs, only 43% say they are educating their customers on the value proposition of smart grids. This is hugely problematic because, as I have written about previously, customer push-back can go a long way to de-railing smart grid projects.

And those who are educating their customers, how are they doing it?

Well, from the report, to communicate with their customers 76% of utilities use postal communications, and 72% use their own website. Only 20% use social media (and who knows how well those 20% are using their social media channels).

Tellingly, the report also mentions that only 38% of utility customers take advantage of energy conservation programs when they are made available. There are a number of reasons for this:

  1. the savings from these programs often require work on the part of the customer for no immediately visible benefit
  2. the savings are typically small (or put another way, energy is still too cheap) and
  3. Because of the extremely poor job utility companies have done on communications to-date, their customers don’t trust them, or their motivations. There is no quick fix for this. It will take time and a significant improvement in how utility companies converse with their customers before they start to be trusted

I have written lots of times over the years about the need for utilities to improve their communications.

Utilities have a lot of work to do rolling out their smart grids – but if they don’t step up their customer communications, they risk their considerable smart grid investments.

Photo credit Tom Raftery

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Smart Grids for Europe white paper presented by SAP to EU Energy Commissioner

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12036 NM Smart Grids for Europe En

SAP recently presented a white paper entitled Smart Grids for Europe – Benefits, Challenges and Best Practices to EU commissioner G?nter Oettinger.

The paper makes the case that there are few (i.e. no) ICT transformations that are as promising as Smart Grids in meeting Europe’s urgent energy challenges. The paper also makes a compelling case for Europe to leverage its continental scale and develop a single market Smart Grid. In such a market, on cloudy days, excess electricity generated from wind and wave energy in Ireland and Spain, could be sold into the German market if solar farms, for example were under-producing! Wind is a notoriously variable supplier, but given a large enough grid, it becomes quite stable (the wind is always blowing somewhere!).

The paper identifies the challenges facing the European energy sector currently –

  • Growing demand and rising prices
  • Ageing infrastructure – the electric utility infrastructure in most of Europe is between 60 and 80 years old
  • Climate change and sustainability – 20% reduction in GHG by 2020
  • Energy efficiency – the EU has a 20% energy efficiency target
  • Energy market liberalisation – both generators and consumers now have the right to transact business across internal EU borders
  • Security of supply – reduction of imports and esp fossil fuels

The paper went on to outline the advantages to Europe of smart grids – benefits for both the consumer (residential as well as industrial) and for the retailers and generators. Further benefits come from helping Europe meet its GHG reduction targets by facilitating greater penetration of renewables onto the grid and from making Europe more competitive in world Smart Grid markets.

The current state of Smart Grid deployments in Europe is, however, at best, early stage. The existing efforts are largely national with little coordination among them.

The white paper recommends developing an EU legislative Framework for Smart Grids – complete with proposed milestones. It further recommends incentives for investments in Smart Grids, common European standards for Smart Grids, ensuring privacy, security and trust in Smart Grids and consumer awareness campaigns, amongst other suggestions.

This paper is well worth a read, whether you are EU-based or not, if you have any interest in our future energy roadmap.

You should follow me on Twitter here

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IBM AsiaPac Smart Grid announcements

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Smart Meter install

Photo credit pgegreenenergy

IBM seems to be making big moves in AsiaPac!

IBM made two significant announcements last week about projects it is involved in in South Korea and Shanghai. In the South Korean project, IBM is partnering with POSCO ICT “to develop South Korea’s first renewable energy management system for a smart grid.” When you combine this with the announcement last week that South Korea is investing $8.2bn to build out massive offshore wind farms, you can see why they might need a renewable energy management system!

The Shanghai project is a collaboration with Shanghai Electric Power to pilot new technology, developed by IBM Research and designated the Integrated Distribution Outage Planner (IDOP). IDOP upgrades a grid to reduce outage frequency and the duration of black-out time. According to the release:

Since the project was completed earlier this year, the rate of equipment availability at Shanghai Power has increased significantly, and the company’s sale of electricity has increased by 50 million kWh per month, which is equal to an incremental revenue of 35 million Yuan (US$5.1 million) a month.

So $5.1m in increased sales alone per month? That’s not to be sneezed at – kudos to the folks at IBM Research. Job well done.

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No, energy is not too cheap!

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Dumb Thermostat UI

Is energy too cheap to motivate consumers to change their habits and use less?

In the Smart Grid Technology conference I attended in London last week a number of discussion points came up over and over again. I wrote already about how utility companies are wondering how to engage their customers around smart grid projects. Another topic which raised its head frequently was the question of how to motivate customers to change when energy is so cheap!

The obvious answer is to raise the price of energy, and this will happen over time, but it is the wrong answer – in the short-term at any rate.

The issue is not that energy is too cheap, rather it is that people have lots of demands on their attention. To make it worth people’s time to become involved in energy saving activities, if the return is not very high (because energy is cheap) then the process of reducing energy consumption needs to be made simple!

Look at the thermostat above. This is the thermostat to control the central heating/air conditioning in my home. I like to think I am reasonably technical. I have been a Windows sysadmin for a multi-national company, managing Windows, Exchange, Active Directory, ISA and SQL Servers. I edit php files regularly, I remotely manage my own CentOS server via SSH and I’ve even done quite a bit of regex scripting of .htaccess files!

But this thermostat is beyond me!

I know it has a timer, so it should be possible to set it to come on and off at pre-arranged times. Should. Getting it to do so seems to require a Stephen Hawking-like intellect. And, even if I did manage to figure it out, it is so unintuitive that the next time the clock goes forward (or back), I’d have forgotten again and would need to start over! Which begs the question, if my phone knows when to change its clock forward or back, why doesn’t the thermostat – but I digress!

This is far too much hassle entirely. So I don’t use the timer in my thermostat. Or any of its functionality (apart from on/off). And I’m far from being alone in this.

Home energy management systems have, to-date, suffered from having appalling user interfaces. Consequently, no-one uses them. Why would they? They are hard to use and energy is cheap. The room is too hot? Rather than trying to figure out how to turn it down, just open the window!

However, if energy management were made simple and no effort were required to make changes, then it wouldn’t matter nearly as much that the savings were not substantial.

Making energy device interfaces easier to use is no silver bullet mind. This kind of approach needs to be combined with a culture of increased client communications, as I outlined in my earlier post. However, combining these two strategies would go a long way towards making people energy responsive.