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Oracle’s Turning Information into Power report

Oracle Turning information into power report

Oracle released the results of a research report last week called “Turning Information into Power“.

The report had some interesting findings – from the press release:

Americans are concerned about energy costs and show interest in new energy options.

  1. 94% are concerned with the energy costs of their primary residence.
  2. 95% are interested in receiving detailed information on their energy use.
  3. 76% are interested in renewable energy technologies for their home – and 72% of those respondents state that “reducing personal energy costs” is the most important benefit of renewable energy.

Other interesting findings include:

  1. When asked to give their utility suppliers a grade on their “current ability to provide detailed, useful information on energy consumption,” only 14% of Americans gave their utility an “A.” When grading themselves on the same question, only 16% of utility managers gave their organizations an “A.”
  2. While more than half (58%) of electricity and multi-service utilities surveyed currently offer net metering programs – which allow homeowners to generate their own renewable energy or sell it back to their utilities – just 11% of these utilities say their customers are actively pursuing the programs.

This clearly demonstrates a communications issue between the utilities and their customer base.

While on Smart Grids –

  1. 91% of utility managers believe it is critical that the U.S. adopts smart grid technologies.
  2. 41% of utilities have assessed the opportunity for smart grid technologies and
  3. Utility managers believe “upfront consumer expenses” (42%) and a “lack of consistent industry technology standards” (30%) will be the biggest roadblocks to maximizing benefits of the smart grid

There is a lot of interesting information to digest in this report – mainly though it is good news. The American people want more information on their energy use, they are interested in renewables and microgeneration. The renewables, for their part, believe that rolling out smart grids is critical, provide net-metering programs but don’t, as yet, provide detailed useful information on energy consumption in their bills.

Both sides perceive the biggest obstacle to the rollout of smart grids is financial.

Let’s hope that the $11bn pledged to the implementation of smart grids by the Obama stimulus plan will break down some of these barriers.

I hope to be interviewing Guerry Waters, vice president, industry strategy, Oracle Utilities about this report in the coming weeks, if you have any questions you’d like me to put to Guerry, please feel free to leave them in the comments.

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Why Smart Grids are good!

I have made no secret of the fact that I am a big fan of Smart Grids and Demand Response programs (properly rolled out, of course!). I have also spoken at various international conferences propounding the benefits of Smart Grids and Demand Response for quite a while now.

You can imagine my disappointment then when I read an article entitled Outsmarting the Smart Grid which was strongly anti-Smart Grids, on The EnergyCollective site by William Tucker, a pro-nuclear writer.

William sets a facetious tone for the article in his opening paragraph:

The latest delusion about energy is the “smart grid.” This bright new technological miracle will once again help us overcome the realities of physics and allow us to live in a world run on wind and sunshine.

The genesis for Mr Tucker’s displeasure appears to be the above GE ad informing people of the benefits of Smart Grids.

He says

It’s fitting that the girl is standing in front of a clothes dryer because that and washing dishes are the only examples anyone has ever been able to come up with about how residential users are going to “redistribute” their energy consumption.

What else can they do? Are they going to wait until after midnight to watch prime-time television? Are they going to heat up dinner at 4 a.m.? Are they going to turn on lights at sunrise instead of sunset? And how about air conditioning, that most voracious consumer of electricity?

Again with the unhelpful sarcasm.

While it is true that not all loads in the home are movable – I use the example that I am highly unlikely to get up at 3am to cook my dinner just because energy is cheaper – there are more than just the dish washer and the dryer. Mr Tucker neglects to mention here air conditioning (though he does mention it elsewhere in his post so he is aware of it). Nor does he mention heating water in an immersion, refrigeration, PHEVs or storage heaters for example – all very movable residential loads. Of course, he neglects to mention industrial scale demand response altogether!

Mr Tucker then re-defines the Smart Grid to suit his argument

the underlying presumption of the smart grid is that it will somehow help us conserve significant amounts of energy

Uh, no it isn’t. The presumption of the Smart Grid is that it will more closely align demand with supply, thereby stabilising the grid and facilitating the further penetration of renewables onto it, thereby lowering our carbon footprint. The Smart 2020 report (7mb pdf) estimates that Smart Grids will reduce CO2 by 2.03 GtCO2e by 2020.

Mr Tucker seems hell-bent though on criticising Smart Grids for not reducing consumption quoting from the Electric Power Research Institute (EPRI) “The Green Grid,” study published last June

its most optimistic prediction was that by 2030 we could reduce electrical consumption by 7 to 11 percent below what is now being projected. That’s not an absolute reduction in consumption but only a slowing of its anticipated rise. Second, as the study concludes, “shift[ing] load from on-peak to off-peak periods may not necessarily save energy.” It will only save money. And when you make electricity cheaper, people may consumer more of it.

What Mr Tucker is again conveniently forgetting is that electrical consumption is not the problem, per se. The problem occurs when that energy is generated using coal, oil or some other non-renewable form.

In fact, there are times when we have too much electricity and you are increasingly seeing wind farms curtailed as a result of this phenomenon. Instead of curtailing wind energy when we have an excess, what we should be doing is demand stimulation – stimulating people to increase their demand at this time of excess supply. This can be achieved by dropping the price of electricity to 0 or even making it negatively priced and making that information available via Demand Response programs rolled out over Smart Grids.

Mr Tucker concludes by once more poking fun at the GE ad

In that light, it’s worth going back to that last little GE vignette where the girl says, “It’s sunny in Arizona.” She is standing at a window looking at a waxing half moon about three hours above the horizon. If she’s in the Midwest, that means the sun has already set in Arizona. If she’s on the East Coast, then it’s about to go down. She’d better get to bed because in another twenty minutes the lights, refrigerator, television, computers and everything else are going to turn off.

Meeting pointless pedantry with more pointless pedantry, the girl is looking at a street light, not a waxing moon.

Mr Tucker’s main argument is that Smart Grids won’t necessarily reduce consumption so we shouldn’t bother with them.

Energy is very abstract, no-one really cares how much they use. What they do care about is the utility bill at the end of the month and increasingly, the carbon footprint of that consumption. If I consume 10 TeraWatt hours in my home daily (not possibly obviously!), as long as it has a negligible carbon footprint, so what?

What Smart Grids and intelligent Demand Response programs will do is, massage the demand for electricity so that it lines up with the supply. This stabilises the grid for the ISO (the grid operator) allowing them to add even more variable generation sources (i.e. renewables) to the system lowering costs and carbon footprints. Win, win.

The discussion continues in the comments where Mr Tucker rails against Demand Response

Now that I think about it, here’s what’s going to happen if the utility can cut off 1/6th of its air conditioning load on a rotating basis. If people know this – which they will – they’re just going to run their air conditioning a little higher while it’s on in order to compensate for the 1/6th of the time it’s off. It’s like the low-flush toilets that you have to flush twice to do the job.

However, for once he has a valid point!

This is why when you roll out Demand Response programs, you put the control directly in the hands of the consumer. The top-down, command and control utility attitude of “we’ll turn off your aircon when it suits us” will only turn people against Demand Response.

Instead, you roll out home area networks and home energy portals where people decide themselves how they want their devices to respond to pricing signals. You’d be able to program your dishwasher to wash the dishes when electricity at 6c/KWh or 6am, which ever came sooner, for example. If you put the washer on at 8pm, for the most part, as long as the dishes are washed by 7am the following morning, you don’t care when it happens.

Similarly with your immersion, if it selectively heats the water when electricity drops below either a set price or a set temperature, as long as you have enough hot water, you are happy.

Obviously any home energy portal like this would allow the home owner full control over all the devices in the house because they belong to the home owner, not the utility!

Long term, what I want to see happen is, I want utilities to publish their generation mix (% coal, % natural gas, % oil, % hydro, % chg, % wind, etc.), as well their prices, in realtime. That way I should be able not only to control my devices but also have the ability to select the Greenest utility supplier dynamically at any time – now that’s a Smart Grid well worth having.

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Grid 2.0 primer

I’m giving a talk at the O’Reilly ETech conference in San Jose next month (March 11th 2009). The title of my talk is “Electricity 2.0: Applying The Lessons Of The Web To Our Energy Networks“.

The talk will be about how to make the electrical distribution system more green and more resilient using demand response and smart grids in a consumer empowering way. I will also discuss my vision for an electricity system where you will be able to see the generation mix of all utilities and dynamically chose the Greenest supplier and other out there concepts!

In the video above, you can watch a primer to this talk I gave in a webinar for O’Reilly last night.

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REALLY Smart Meters!

Smart meter

Photo Credit yewenyi

Smart electricity meter projects are being rolled out all over the globe at this stage (here’s a map of the Smart Meter projects in the US), and with the Smart Meters, come Smart Grids and Demand Response programs whereby the utilities implement peak shaving programs (and in certain cases demand stimulation) to match demand and supply curves. This will lead to a more stable grid and therefore increase the amount of variable generators (i.e. weather based renewables) it is possible to add to the grid. Great.

However, this is not nearly ambitious enough as far as I am concerned. First off, as I have said previously, cheaper electricity typically has a higher % of renewables in the generation mix. Therefore, if I am getting a smart meter, I want it to be a very smart meter. I want my meter to be going out across the grid, checking the realtime price from all utilities and dynamically sourcing the energy from the cheapest supplier at any given time. Nothing too new there, I have written about that concept previously.

Taking that idea to the next level. Imagine if utilities were mandated to publish, not only the price of electricity in realtime, but also the generation mix. I could then have a Smart Meter which would actively chose the greenest electricity for me at any time. Or the one with the best price/renewables mix.

And if we had a SuperGrid in place, then that Green electricity might be coming from Danish windfarms, Icelandic geothermal generation or North African solar farms.

Now that would be a Really Smart Meter!

UPDATE – I have been asked the relevance of the photo above – it is subtle, anyone care to guess?

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Smart Grids and unlocked Smart Meters

Smart Meter

Photo Credit Tom Raftery

I have been talking to a lot of Smart Meter and utility companies in the last few weeks and it has been fascinating. I have learned a huge amount about some of the challenges and opportunities involved in rolling our Smart Grids.

The first thing to say is that Smart Grids are coming. None of the utilities I have spoken to have given me feedback to indicate that they are rolling back on their Smart Grid projects – and they all have Smart Grid projects at some level, whether it is in planning, in trial or in roll out.

One of the questions I have asked and not received a satisfactory answer to yet is “What happens if I decide to change utility co.? Does my existing utility come along, take the Smart Meter off my wall and my new utility then needs to send an engineer to install their Smart Meter?” Unfortunately, so far the answer to this appears to be “Yes”!

In reality, this will probably be solved with some kind of cost or asset transfer solution.

As an electricity consumer (be that industrial or residential), ideally what I want is either an ‘unlocked’ Smart Meter, or one which is owned by the grid management company, as opposed to one which is locked into a particular utilitity.

In fact, for me the ultimate solution would be a neutral Smart Meter which can go out at all times, find the cheapest electricity at that time and pull from that utility!

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

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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IBM’s coming on board will speed up the rollout of Smart Grids

Light House

The observant amongst you may have noticed that we have talked quite a bit about smart grids here on GreenMonk. That is because we believe fundamentally in what it is they are trying to achieve and how they are going about it.

And we are not alone in that!

SAP’s AMI Lighthouse Council is all about Smart Grids and hence SAP are holding their SAP for Utilities conference in San Antonio Texas in October where there will be a major focus on Smart Grids.

As well as SAP, not surprisingly the utilities are all over this space because Smart Grids will give them the ability to far better manage their energy supply and the demand, thereby reducing the number of outages. It seems that every day brings news of a new Smart Grid trial by some utility.

ComEd are looking at Smart Grids in Chicago, Manitoba Hydro is testing about 4,500 smart meters in Winnipeg, Xcel Energy has announced plans to make Boulder the first SmartGridCityTM, PEPCO has rolled out a Smart Grid trial in 1,000 homes in Washington DC, Austin Energy plans to have all its meters converted to Smart Meters by December 2008, etc. In fact, here is a Google Map of all the Smart Grid projects currently underway globally!

As well as the utilities, because this is a whole new area, there are literally hundreds of startups in this space from the likes of SynergyModule in Ireland to more established names like Echelon and Itron in the US.

Because of the involvement of these myriad players, IBM has also come on board to try to bring some standards to the table. According to this recent article in CNet,

The idea is to create a common set of communication protocols and data formats that utilities and smart-grid start-ups can adhere to.

With these technical blueprints, based on standards like TCP/IP, new technologies can be plugged into the grid on a large scale…. What’s happening now is a patchwork of smart-grid trials using differing products, an approach that prevents fast technology change.

This is great news for the rollout of Smart Grids globally. If we have a universally agreed set of standards that everyone adheres to then the creation and integration of smart grids and smart grid devices suddenly becomes far less complex.

It will still take some time before there are the devices in place, and the regulators and utilities sign-up to convert completely to Smart Grids but a heavy weight like IBM’s coming on board can only help move things along.

[Full disclosure: SAP have invited me to attend the SAP for Utilities conference, I am a sometime unpaid advisor to SynergyModule and IBM are a RedMonk client, though not a GreenMonk client!]

Photo Credit MumbleyJoe