post

The future of electric utilities – change and disruption ahead

by

The utilities industry has typically been change averse, and often for good reasons, but with the technological advances of the past few years, the low carbon imperative, and pressure from customers, utilities are going to have to figure out how to disrupt their business, or they will themselves be disrupted.

I gave the opening keynote at this year’s SAP for Utilities event in Huntington Beach on the topic of the Convergence of IoT and Energy (see the video above). Interestingly, with no coordination beforehand, all the main speakers referred to the turmoil coming to the utilities sector, and each independently referenced Tesla and Uber as examples of tumultuous changes happening in other industries.

What are the main challenges facing the utilities industry?

As noted here previously, due to the Swanson effect, the cost of solar is falling all the time, with no end in sight. The result of this will be more and more distributed generation being added to the grid, which utilities will have to manage, and added to that, the utilities will have reduced income from electricity sales, as more and more people generate their own.

On top of that, with the recent launch of their PowerWall product, Tesla ensured that in-home energy storage is set to become a thing.

Battery technology is advancing at a dizzying pace, and as a consequence:

1) the cost of lithium ion batteries is dropping constantly Battery Cost

and

2) the energy density of the batteries is increasing all the time Li-Ion battery energy Density

(Charts courtesy of Prof Maarten Steinbuch, Director Graduate Program Automotive Systems, Eindhoven University of Technology)

With battery prices falling, solar prices falling, and battery energy density increasing, there is a very real likelihood that many people will opt to go “off-grid” or drastically reduce their electricity needs.

How will utility companies deal with this?

There are many possibilities, but, as we have noted here previously, an increased focus on by utilities on energy services seems like an obvious one. This is especially true now, given the vast quantities of data that smart meters are providing utility companies, and the fact that the Internet of Things (IoT) is ensuring that a growing number of our devices are smart and connected.

Further, with the cost of (solar) generation falling, I can foresee a time when utility companies move to the landline model. You pay a set amount per month for the connection, and your electricity is free after that. Given that, it is all the more imperative that utility companies figure out how to disrupt their own business, if only to find alternative revenue streams to ensure their survival.

So, who’s going to be the Uber of electricity?

post

The coming together of the Internet of Things and Smart Grids

by

I was asked to speak at the recent SAP TechEd && d-code (yes, two ampersands, that’s the branding, not a typo) on the topic of the Internet of Things and Energy.

This is a curious space, because, while the Internet of Things is all the rage now in the consumer space, the New Black, as it were; this is relatively old hat in the utilities sector. Because utilities have expensive, critical infrastructure in the field (think large wind turbines, for example), they need to be able to monitor them remotely. These devices use Internet of Things technologies to report back to base. this is quite common on the high voltage part of the electrical grid.

On the medium voltage section, Internet of Things technologies aren’t as commonly deployed currently (no pun), but mv equipment suppliers are more and more adding sensors to their equipment so that they too can report back. In a recent meeting at Schneider Electric’s North American headquarters, CTO Pascal Brosset announced that Schneider were able to produce a System on a Chip (SoC) for $2, and as a consequence, Schneider were going to add one to all their equipment.

And then on the low voltage network, there are lots of innovations happening behind the smart meter. Nest thermostats, Smappee energy meters, and SmartThings energy apps are just a few of the many new IoT things being released recently.

Now if only we could connect them all up, then we could have a really smart grid.

In case you are in the area, and interested, I’ll be giving a more business-focussed version of this talk at our Business of IoT event in London on Dec 4th.

The slides for this talk are available on SlideShare.

post

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

by

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.

post

Colt Technology and Verne Global’s dual renewably sourced data centre in Iceland

by

Icelandic landscape

Iceland’s a funny place. Despite the name, it never actually gets very cold there. The average low temperature in Winter is around -5C (22F) and the summer highs average around 13C (55.5F). Iceland is also unusual in that 100% of its electricity production comes from renewable energy (about 70% from hydro and 30% from geothermal).

I have written here several times about the high carbon cost of cloud computing, so when I received an invitation from Colt Technology to view the new data centre they had built with Verne Global in Iceland, I nearly bit their hand off!

The data centre is built on an 18-hectare (approximately 45-acre) complex west of Reykjavik, just beside Keflav?k Airport. The site is geologically stable and according to Verne:

The facility is situated on the site of the former Naval Air Station Keflavik, a key strategic NATO base for over 50 years and chosen for its extremely low risk of natural disaster. Located well to the west of all of Iceland’s volcanic activity, arctic breezes and the Gulf Stream push volcanic effects away from the Verne Global site and toward Western Europe.

Cold aisle contained racks in Verne Global's Iceland facility

Cold aisle contained racks in Verne Global's Iceland facility

The data centre was built using Colt Telecom’s modular data center design. This is essentially a data centre in a box! The modular data centre is built by Colt, shipped to site, (in this case, it was literally put on a ship and shipped to site – but the modules fit on a standard wide-load 18-wheeler), where it is commissioned. In the case of the Verne Global data centre, the build of the data centre took just 4 months because of the modular nature of the Colt solution, instead of the more typical 18 months. Also, modularity means it will be relatively straightforward to add extra capacity to the site, while keeping up-front data centre development costs down.

The data center has an impressive number of configurable efficiency features built-in. In the Verne Global facility, cold aisle containment is used and it is a wise choice in this environment. The facility uses only outside air for cooling (no chillers) so it makes sense to vent the hot air from the servers into a room being cooled by outside air. In winter, if the outside air is too cold, it can be mixed with hot air from the servers before entering the underfloor space to cool the servers.

The underfloor space is kept free of plenums and obstructions to allow an unimpeded flow of air from the variable speed fans – this minimises the work needed to be done by the fans, increasing their efficiency.

From an energy perspective, though, what makes the site very unique is that it sources its electricity from dual renewable sources (hydro and geothermal). Iceland is in quite a unique situation with its excess of abundant, cheap renewable power. Energy is so cheap in Iceland that aluminium smelting plants locate themselves there to take advantage of the power. These plants require roughly 400-500MW of constant power, so adding even 10 large data centres to the grid there would hardly be noticed on the system!

Another unique aspect of the Icelandic electricity is that because it is renewably sourced, its pricing is predictable (unlike fossil fuels). In fact, the Icelandic electricity provider, Landsvirkjun, offers contracts with guaranteed pricing up to 12 years. Also, the Icelandic grid ranks 2nd in the world for reliability and has the most competitive pricing in Europe (currently offering $43/MWh for 12 years as public offering – with better private offerings potentially available).

Speaking to Verne Global’s Lisa Rhodes, while in Iceland, she told me that because Verne had guaranteed energy pricing from Landsvirkjun for the next 20 years, they would be able to pass this on to Verne’s hosting customers and, in fact, she claimed that hosting in the Verne facility would cost 50-60% of the cost of hosting in the East coast of the US.

On the connectivity front, Colt announced that they were putting a Colt POP in the Verne facility, so it is connected directly into the Colt backbone.

Also, the Emerald Express fibre-optic cable which is due to be commissioned late this year has been designed to support 100x100Gbs on each of its six fibre pairs, which should easily meet any connectivity requirements Iceland should have well into the future.

Interestingly, one of Verne’s Global’s first customers is greenqloud – a company offering green public compute cloud services (an AWS EC2 and S3 drop-in replacement). With this, can we finally say that cloud computing can be green? Unfortunately, with cloud’s propensity to promote consumption of services, no, but at least with Greenqloud, your cloud can have a vastly reduced carbon footprint.

Full disclosure – I had my travel and accommodation paid for to visit this facility. And Colt has a POP in CIX, the data centre I co-founded in Cork before joining GreenMonk.

post

Engaging people in the energy conversation

by

Green Numbers

I went along to the MashupEvent Energy 2.0 – Energy goes Digital get together in London last Thursday.

It was a good event with some interesting speakers, including Usman Haque of pachube, Ajit Jaokar from FutureText and Paul Tanner (self-confessed energy nut!).

The talks were good – for me, one of the more interesting learnings was how pachube is being used to crowd-source rediation readings from hacked Geiger counters in Japan! Seriously awesome stuff, and a real case of people using the pachube platform for purposes never dreamed of when it was first created, I suspect.

When the floor was opened for questions and discussion, some interesting topics were raised. When the question was asked from the podium, one brave member of the audience confessed to being from a utility (British Gas) and she went on to raise an interesting point – she said it was hard to motivate people to to make any changes. British Gas, she said, have offered people free insulation, which would potentially save them hundreds of pounds, and they don’t take up the offer.

This is not the first time I have heard these kinds of stories. Why is that?

Toyota Prius dashboard driving info

Toyota Prius dashboard driving info

There are a few reasons for this, as far as I can see:

  1. When you are getting electricity bills like the one above, you have no idea what your actual consumption is like day-to day, minute-to-minute. I bought a Toyota Prius a number of years ago and it totally changed the way I drive because of how well the consumption information is fed back to me on the dashboard – the same is not true for the Honda Insight, as I discovered when Honda lent me one to trial, so not alone is it important to give people information on their consumption, it is also vital to present it in an easily digestible way.
  2. People don’t trust their utility companies – traditionally utility companies only communicate with their customers (who they often refer to as ratepayers!) when they are sending a bill or when a bill is overdue. This form of communication is not particularly conducive to establishing a good relationship. The basis for any good relationship and thereby trust is communication. Utility companies need to radically step up their customer communications, but not in a way that is spammy. They need to engage with their customers on all channels (if my preferred method of communication is Twitter, I want them to engage with me there, if my Dad’s preference is phone – talking to a person, not an IVR, then that’s where they need to talk to him). This is going to be a hard lesson for many utilities to learn but they fail to learn it at their own peril and
  3. Energy is too cheap! Possibly fixing 1 and 2 will persuade people to become more energy efficient, but I suspect, the real driver for energy efficiency will only come along when energy becomes more expensive. Only when the cost of energy really starts too impact on people’s lives, will they start to pay attention. Luckily, that’s the direction energy prices have been going for some time now!

You should follow me on Twitter here

Photo credit Tom Raftery

post

It is surprisingly easy to leave yourself open to claims of Greenwashing!

by

Spinning wind power

Photo credit Doxi

Companies need to take a lot of care when making Green claims. The whole Green energy space is massively complex and it is surprisingly easy to leave yourself open to claims of Greenwashing.

What do I mean?

Well, take the Irish energy sector, for example. Anyone who generates electricity in Ireland, which is to be distributed on the grid, is required to sell that power into the wholesale pool – the Single Energy Market (SEM).

Then any retailer who wishes to sell that power to businesses or residential customers, buys the electricity from the pool and sells to their customer base.

Now if you are grid connected in Ireland for your electricity supply (as most organisations are) you get your power from this pool.

Can you see where I am going with this?

Most electricity companies in Ireland do generation as well as retail. Some of them have a significant portfolio of renewable resources (chiefly wind). However, because of the structure of the market, they can’t sell this power directly to consumers, it has to go to the SEM pool first.

When the electricity retailers sell electricity, they have to purchase it from the SEM pool to sell to their customers. Because all electricity sold in Ireland comes from the same SEM pool, everyone has the same percentage of renewables in their supply (unless they have a private supply).

What this means in effect is that you can’t selectively buy renewable electricity in Ireland.

If you see companies saying that their Irish operations are “running on almost 90 percent wind power”, for example, they are either ill-informed, or they are Greenwashing.

If you can’t selectively purchase renewable electricity, what can you do to reduce the carbon footprint of your energy consumption?

Well, the best thing to do then would be to move your loads to times when the percentage of renewable sources in the pool is highest! Any company committing to doing that would be making a bona fide Green statement.

post

When will we have full Smart Grid deployments?

by

electric cables

Photo credit mckaysavage

Despite a lot of talk and some high profile trials the day we have ubiquitous full Smart Grids is still a long way off.

I attended the Smart Grids Europe conference in Amsterdam this week.

It was a great conference, I met a ton of interesting people and had some fascinating conversations.

I can’t help feeling a little deflated though.

I’m a huge advocate of Smart Grids. I gave my first international talk about Smart Grids and demand side management (Demand Response) at the Reboot conference in Copenhagen back in early 2007. We are now a full three years later and many utility companies have yet to roll out smart meter pilot programs.

Others are rolling out smart meters more because of pending of legislative requirements than because of any desire help reduce people’s energy footprints.

In fact, after talking to more utility companies, I suspect that smart grids may not proceed beyond smart meter deployments in some regions. The recent Oracle survey of Utility CxO’s confirms this view

utilities executives put improving service reliability (45 percent) and implementing smart metering (41 percent) at the top of the list [of Smart Grid priorities]

So why the apparent passive aggressive response from the utility companies?

Well, they have to keep the lights on. To paraphrase the old saw, they do not want to ‘fix’ their grid, if it ain’t broke! And, let’s be fair, the idea of investing large sums of money to help their customers use less of their product isn’t one which sits comfortably with them. That’s understandable.

And no utility wants to have the kind of customer blowback that PG&E saw with their botched smart meter rollout in Bakersfield.

But there is a huge global imperative for Smart Grids – the Smart 2020 report said:

Smart grid technologies were the largest opportunity found in the study and could globally reduce 2.03 GtCO2e , worth ?79 billion ($124.6 billion).

How then do we square that circle?

We could legislate for them but a better approach would be to change the landscape in which the utility companies operate such that there is a business case for full smart grid deployments.

I suspect the best approach would be the introduction of a carbon tax. This is something we need to do anyway (and the mechanisms for doing so are a topic for a separate post) but if there were a tax on CO2 production, it would be in utility companies (and their customers) interests to cut back on energy consumption.

Even if there were a strong business case for smart grids, given the glacial speeds at which utility companies move, I suspect it is going to be many years before we see full smart grid implementations.

post

Klaus Heimann espouses SAP’s smart utility of 2020 at International SAP for Utilities conference

by

I attended the 7th International SAP for Utilities event in Munich last week.

Having attended the SAP for Utilities event in San Antonio last year, I had reasonably high expectations from this conference and I wasn’t disappointed. At the San Antonio event SAP talked very much about the ‘State of the Now’ talking up their, then recently launched, Energy Capital Management software. At this event however, Head of SAP Service Industries, Klaus Heimann keynoted introducing SAP’s vision for the utility company of 2020!

In what was a very forward-looking address, Klaus confidently predicted that:

In two years time this will no longer be a Utilities conference, it will be en Energy conference

This must have had a lot of the people in the room squirming in their seats because, as Klaus himself said, “Utilities are not known as being good at change!”

But change they must.

Just a few of the upcoming major changes utility companies are going to have to cope with include the growing imperative to move to a greater penetration of renewables in the generation mix, the impending explosion in the numbers of electric vehicles to be charged, and the need to roll-out smart grids and take in distributed generation.

Klaus’ vision for the utility company of 2020 is summarised in the video interview I conducted with him above, but briefly he talked of an energy market vastly more complex than today’s. An energy market:

  • where customers can be consumers and producers (via micro-generation)
  • where customers may have shares in a wind-farm which sells electricity to the local utility
  • where customers receive rebates on kWh’s saved during times of peak demand (compared to avg previous day’s use at same time, for example)
  • where utilities will have special renewable-only power offerings (I wish they had that now)
  • where utilities will need to be able to bill customers for energy used to charge electric vehicles, away from home (at the office) or even in different countries and
  • where utilities will need to be able to offer real-time consumption information, generation data and a control interface to the customer’s appliances

Nothing too earth-shattering in that list to be honest. But, when put against the types of changes utilities have gone through in the last 100 years, this is an enormous upheaval. This is probably a good time to be a change management consultant in the utilities sector 😉

For this vision to become real (and any utilities who don’t start to move in this direction can start writing their own obituaries now), there needs to be massive changes in utilities communications infrastructures and their data handling capabilities.

With big change, comes big opportunities so it is not surprising to see SAP are all over this and helping the utilities visualise where they need to go.

post

Make people responsible for their energy use to drive down consumption!

by

Joe Baguley wrote a fantastic post recently on the HomeCamp blog on monitoring energy use in the home. It is a really good read as Joe outlines how he first became interested in home energy monitoring and over time evolved into the “home energy enforcer” (!). He goes through the tools he employed to monitor his home energy use and how, as he evolved to more granular and network accessible information, he was able to make even greater savings on his electricity bills.

What is even better though is how the first comment on the post came from his father, who said:

Pity he did not do this for the 20 plus years he lived at our house, the only way he saved energy then was to lie on the settee and wach me mow the lawns! He neven opened his bedroom curtains as it was easier to reach out of bed and turn on the light.

So there are two very important lessons to be taken from this post:
1. The more information you have about your energy consumption, the easier it is to reduce it and
2. One of the greatest incentives to reducing your energy consumption is having to pay the bills.

Joe didn’t worry about saving electricity while living with his parents, but now that he is paying for his electricity himself, reducing his energy footprint (and by extension his carbon footprint) has taken on a whole new level of importance. As he said himself:

What drove me to do all this was not only a fascination with tech, but more importantly a fascination with not wasting money. Not saving the planet – saving cash. In my experience cash beats morality every time…

I wonder, within businesses, would the best way to reduce energy usage be to expose energy usage information to all the employees (broken down facility, by department and even by individual)? Then make energy reduction part of people’s KPI‘s.

By extension, when electricity information in the home is granular enough, would a good way to reduce it be to assign energy budgets to all the members of the house (especially the kids!)?

post

IBM’s Drew Clark on electricity, water and trends in sustainability

by

I had the good fortune to have a chat with IBM Director of Strategy Drew Clark recently. We had a great talk covering how to get noticed by the IBM Venture Capital group, water and energy projects and trends in sustainability globally.

We even speculated on the likelihood of demand response systems being rolled out for water management.