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Utilities are too top-down, command and control

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Top-Down

Photo Credit Mikey aka DaSkinnyBlackMan

Utilities are top-down.

Whenever I talk to utilities about Smart Grids and Smart Meters they always trot out the same speech. They want to use Demand Response for peak shaving and they want to implement it by having a mechanism whereby they can come in to their customer’s houses at times of maximum demand and turn down the settings on the aircon, immersion heater, etc.

Unfortunately this kind of traditional top-down, command and control attitude is more likely to turn people off Demand Response programs than to sell it to them.

I know that as a consumer I want to be able to program my appliances myself so that I decide when they turn on/off in response to price signals from the grid. The same is true for fridges/freezers and water immersions – I want them to change thermostat settings to take in electricity at times when energy is cheap and not when it is expensive by MY definitions of cheap and expensive.

I want control of my appliances. I do not want the utility deciding to come in and adjust or turn them on/off for me because it suits them.

Demand Response programs will be hugely beneficial to the utilities and consumers alike but they are complex to explain. If you couple that with the utility having control of your appliances they suddenly become a far harder sell.

Give customers more control of their electricity bill. Allow them reduce costs without reducing usage, by owner controlled, programmatic, time-shifting of consumption and suddenly Demand Response programs becomes an easy sell.

And when you couple that with how Demand Response will stabilise the grid facilitating greater penetration of variable supplies (i.e. weather-based renewables like wind and solar) and you have a win, win, win!

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GreenMonk interviews Stefan Engelhardt about SAP’s vision for Smart Grids

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One of the more interesting keynote talks at the recent SAP for Utilities conference in San Antonio TX was the one given by Stefan Engelhardt, SAP’s Head of Industry Business Unit Utilities.

In his keynote he discussed decarbonisation and SAP’s vision around Smart Grids and Smart Meters. I asked him if he’d be willing to come on camera to talk about some of these topics and he very graciously agreed.

With the vast majority of the world’s utilities using SAP’s software, they have their fingers firmly on the pulse of this sector. What was pleasantly surprising to me was the amount of interest SAP is seeing from their utility client companies in Smart Grids. As Stefan himself said in the interview:

For the next couple of years we see a clear trend towards the deployment of Smart Metering technology in the Utilities industry… and that means we have to adapt the existing business processes to this new technology

It was also fascinating to hear Stefan’s predictions around how Smart Grids will be rolled out gradually by utilities. Polling of smart meters by utilities will be ramped up bit-by-bit from maybe once a day to once every 10-15 minutes and this will have huge implications for the amount of data utilities will have to manage. Previously they may have collected 1 terabyte every 10 years. With smart meters reporting energy usage every 10-15 minutes they could be collecting 1 terabyte every month, or less!

With the roll-out of Smart Grids, utility companies will be able to publish energy prices in realtime based on supply and demand. This is important because electricity is more plentiful when renewables are contributing to the mix, so cheaper electricity should also track closely with Greener electricity!.

Utilities will now be able to offer new products like critical peak pricing for peak shaving in times of electricity shortage and even demand stimulation, to encourage people to consume electricity when supply is exceeding demand. This will encourage people to shift some of their loads to times when renewables are contributing more, thereby reducing the CO2 emissions associated with that load.

[Disclosure – SAP covered my expenses to attend this conference]

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Smart Grid management software

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One of the key challenges for any new technology, like Smart Grids, is finding intelligent ways to manage them.

Smart Grids contain new assets for utilities (Smart Meters) which collect data about energy usage and pass it back to the utility. They should also be capable of receiving data from the utility (price signals) and communicating that with the household.

Because this is an extremely immature technology as yet, there are many new entrants in the field with solutions around managing Smart Grids.

At the SAP for Utilities conference, I spoke to Krishna Kumar of Space-Time-Insight and he demonstrated their Smart Grid management software. I was impressed at the way the software used Google Maps and was able to zoom in or out to report at the city/block/individual residence level!

The fact that it also allows for the management of assets like wind turbines makes this an interesting piece of software for utilities, I suspect.

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Smart Grid demo at the SAP for Utilities Conference

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I attended the SAP for Utilities conference last week in San Antonio and was pleasantly surprised to find that many of the Utilities attending were thinking about rolling out Smart Grids or were already running pilot Smart Grids. There were even a couple who were well underway with their Smart Grid rollout project.

Demand Response was being discussed extensively and was cited by most as one of the principal advantages of Smart Grids.

Smart Grids and Demand Response are topics we have covered extensively here on GreenMonk.net and they are core to the Electricity 2.0 talk I gave in Berlin at the Web 2.0 Expo. The importance of Smart Grids and Demand Response cannot be overstated when it comes to energy efficiencies and energy demand management.

SAP are working closely with utilities through the Lighthouse Council, to ensure that whenever a utility wants to go from a traditional grid to a smart grid infrastructure, SAP will have the necessary software pieces in place for them (Enterprise Asset Management, Customer Relationship Management, and the newer Energy Capital Management).

In the video above, Russell Boyer demonstrates a Smart Grid in action. In this use case, Russell acts as the utility call center for a customer who is moving out and wants their power disconnected. The Smart Grid allows the agent to take a meter reading, and shut off power to the meter remotely. This isn’t the best demonstration of the potential of Smart Grids but it was the first time I saw Smart Grid technologies live in action and I have to admit to being wow’d by it.

[Disclosure – SAP covered my expenses for attending this conference]