The Smart Grid Dictionary defines energy efficiency as technologies, applications, and services that reduce the consumption of energy without impacting operations or behaviors.  It is that lack of change to behaviors or operations that sets energy efficiency (EE) apart from energy conservation.  EE produces negawatts – and treating it as that “penny earned” has been promoting welcome innovations in technologies and policies that financial and environmental benefits for consumers.

First, improved EE in products means lower total costs of ownership or TCOs for residential and business consumers.  The California Energy Commission recently adopted EE standards for battery chargers, which are vampire loads in just about every home and business.  Those chargers are often plugged in and drawing power even when they are not fulfilling their purpose of charging up a smart phone, mini-vac, or powered toothbrush.  In California alone, a cringe-worthy 5.3 gigawatthours of electricity is spent on chargers, mostly in the form of waste heat.  The standards, which take effect between 2013 – 2017, will require that manufacturers produce chargers that stop drawing power once the device battery is topped off.  That will lower consumers’ electricity bills and reduce the need to invest in additional generation capacity to support these vampire loads.  And that in turn helps keep electricity rates from rising.  California EE standards are reckoned to have saved its state residents over $36 billion since 1977.  That’s a lot of pennies earned.

Second, purposefully designing EE into products will reduce the amount of energy expended for any device’s operations – whether they are always tethered to the grid or reliant on battery power.  Researchers at the University of Michigan have a new technology called Energy-Minimizing Idle Listening that has reduced energy use in mobile devices by 44% in proof of concept testing.  By putting mobile devices into a “subconscious mode’, the device’s normal idle listening state consumes less energy, extending battery charges and reducing electricity consumption.   Another interesting technology trend first articulated by Jonathan Koomey of Stanford University and known as Koomey’s Law states that the amount of computing power per joule doubles every 1.6 years.  (A joule is a measure of energy, whereas a watt is a measure of the rate of energy consumption.)  Essentially, a fixed amount of computing power gets twice as energy efficient just under every two years, which has tremendous implications for our proliferation of electricity-guzzling data centers that support our growing use of cloud-based applications and digital storage.  IEEE’s local Silicon Valley Chapter of the Solid State Circuits Society is sponsoring a course about the fundamentals of low-power design, which portends opportunities for designers of computing devices, who have long understood the need to build in as much EE design as possible, to share their expertise with developers of consumer electronics.  These developments will ultimately reduce the costs of operation for many popular devices.

Third, thinking about energy efficiency as a penny earned enables policy-makers to support decoupling for electric utilities.  The Smart Grid Dictionary defines decoupling as a regulatory and market strategy that allows utilities to invest in and profit from efficiency-based capacity by assuring them a return that is equivalent to sales of electricity.  It means that utilities are not penalized for encouraging their customers to use less electricity.  Today, 30 states do not have pending or established decoupling policies in place for electricity and/or gas, and they should.  Consumers would like utilities to help them reduce their energy bills, but without decoupling, why would utilities negatively impact their revenues?  Understanding the full value of decoupling translates into political will to modify utility business models.  Why do regulators and legislators in these 30 states ignore the opportunities to save money for their citizens?     

Whether we’re looking at improving product designs or market mechanisms to encourage energy efficiency as that “penny earned”, the financial and environmental benefits for consumers are compelling.  Ben Franklin would approve.   

So what does this mean for the Smart Grid?  Electric utilities in California contribute 28% of CO₂ emissions, and began planning their emission reductions in 2006.  As previously blogged, California uses less electricity per capita than any other state in the US, largely due to enforced policies and regulations that increase energy efficiency of appliances and electronics as well as buildings.  However, the peak demand continued to grow as more people moved to the hot interior of the state where air conditioning is needed.  That prompted the California Energy Commission, which sets energy policy for the state, to create a loading order that governs how the investor owned utilities (IOUs) should plan to add to electricity production.  That loading order puts energy efficiency and demand response measures on top – so negawatts became part of the energy equation.  Integration of renewable energy and distributed generation comprise the second set of energy sources, and then integration of clean fossil fuels and improvement of infrastructure. 

Smart Grid-related solutions significantly factor into this loading order.  Energy efficiency and DR programs can use smart meters, Home Energy Management Systems (HEMS), and energy service providers to produce negawatts.  As California homes and businesses continue to ratchet down electricity use, we’ll continue to enjoy the savings that accrue to intelligent energy consumption.  Look for increased adoption of solutions and programs that drive down electricity usage within the state now that the voters have spoken.   

Beyond negawatts, the second step in the loading order also has a strong dependency on Smart Grid technologies and initiatives.  The Smart Grid integrates renewable sources of energy into the electrical supply chain, and supplements or “firms” intermittent renewable energy sources with energy storage.  California recently enacted an energy storage bill (AB2514) to drive the market for IOU use of these technologies, and all the IOUs in the state are building out utility-scale renewable energy facilities – looking at wind, solar, geothermal and even hydro in the form of currents and waves. The recent Federal Energy Regulatory Commission (FERC) ruling about FiTs is encouraging news for distributed generation (DG), and while some of the state utilities have been reluctant to embrace this concept, achieving a 33% Renewables Portfolio Standard (RPS) may not be possible through utility scale efforts alone.  There are lots of rooftops that are suitable for distributed solar generation – and its time to put the programs in place to accelerate deployment on a mass scale. 

DG deployment has additional reliance on Smart Grid technologies, since the electrical distribution grid must be upgraded to support bi-directional flow of electrons, and aging transformers must be replaced with new models that can handle not only the daytime loads but the anticipated nighttime loads of charging electric vehicles (EVs).  Infrastructure improvements (number 3 in the loading order) must also take place at the transmission network to facilitate remote monitoring and management of transmission lines and substations for reliability of electricity supplies.   

All of these initiatives mean local jobs to conduct energy audits and building retrofits; deploy distributed generation facilities; and conduct upgrades to the transmission and distribution networks in the state.  Despite all the gloom and doom tactics that Proposition 23 advocates used, the reality is that Smart Grid solutions, as part of a clean tech economy, will deliver tangible economic benefits to California, as well as other states that embrace them.

This is the GOOD about California’s Smart Grid plans – it’s a public process that invites an open exchange of views about the roadmap for a successful and cost-effective Smart Grid in this state, which often serves as a template for other states. It included a great deal of discussion about what is in the average residential ratepayer’s best interests – and the aspects of the Smart Grid that benefit consumers.

The BAD is that decisions have to be made quickly, and in advance of cyber security and interoperability standards recommendations coming from the National Institute of Standards and Technology (NIST). It’s becoming a common theme – everyone is waiting for these standards recommendations, everyone wants state and Federal regulators to establish policies, but regulators are reluctant to pick winners and losers.

The UGLY is a sad, cynical and manipulative ploy by one of the three California IOUs to squash competition from municipal utilities. That utility is PG&E. It is sponsoring and investing more than $25 million dollars in a misleadingly-named “Taxpayers Right to Vote Act” also known as Proposition 16. This proposition requires that 2/3s of voters must approve any local government’s provisioning of electricity through a municipal utility. Why is this ugly? First, it contravenes the proposed California Smart Grid roadmap’s goals of accommodating all generation and storage options. Second, it directly counters another roadmap objective to enable electricity markets to flourish. PG&E definitely does not want alternative markets organized around Community Choice in California that could compete with them. Third, it is blatantly unenlightened behavior from a utility that had the courage to divorce the Chamber of Commerce for its “extreme position on climate change”. Does PG&E have an evil twin that is currently running the show?

Shout out to the EPA and DOE
The US Environmental Protection Agency and the Department of Energy are strengthening the ENERGY STAR program as noted in previous blogs. New testing is underway on six of the major electricity consumers in average American homes, and new ongoing verification testing will ensure continued compliance in addition to the third party testing already put into place. The appliances are freezers, refrigerator-freezers, clothes washers, dishwashers, water heaters and room air conditioners.

In addition, the DOE has been aggressively stepping up enforcement of Energy Star standards, requiring manufacturers to actually comply with these standards, and revoking the ENERGY STAR label from non-compliant products. This is all good news for American consumers, because the ENERGY STAR program is well-known and trusted to guide purchasing decisions. Beefed up enforcement will save consumers money – estimated to be $250 – $300 billion in savings over the next 30 years. Now that’s what I call a good use of taxpayer money. For more information, click here.

The Smart Grid Dictionary defines distributed generation as “Electric generation that feeds into the distribution grid, rather than the bulk transmission grid, whether on the utility side or customer side of the meter.   It includes customer-owned microturbines, wind-powered generators, hydro units, and PV arrays.  Customers who own generation resources usually want to reduce the amount of power purchased from the local utility or supply their own backup power needs, and this form of DG is sometimes known as on-site DG.   Excess power may be sold back to the utility through net metering.   Utilities may invest in DG to mitigate substation level peak loads and/or avoid building or upgrading local distribution lines.  The technologies used in distributed generation are sometimes referred to as Distributed Energy Resources.  DG is also known as decentralized energy.”    

Backup generation has been around for decades.  Telecommunications systems and other mission-critical operations like hospitals and data centers routinely install generators (often diesel or natural gas) along with battery backup to keep running even when an emergency event prevents electricity delivery from the utility grid.  However, the BUGS business model uses distributed generation assets to provide grid support and add generation capacity in situations where the utility’s usual generating capacity is not sufficient to meet customer demands for electricity.  The old business model would require that utilities either fire up an expensive “peaker” plant and/or ask customers to reduce their electricity use through demand response programs.     

The BUGS model presumes that utilities would own, install, and manage the backup generation assets at substations.   It is an innovative option for utilities to avoid capital expenditures on new generation plants and transmission and distribution facilities.   It’s a great idea, and when it combines renewable energy sources and energy storage for grid support, it gets even better.  Rather than continue investments in remote generation and long distance transmission facilities, placing more generation closer to users reduces electricity losses incurred during transmission and therefore improves overall grid efficiency.   There’s a diagram of it at the California Energy Commission site.

Utility-owned distributed generation is not sufficient to address long-term generation capacity requirements, making it critically important for utilities and state regulatory agencies to encourage more distributed generation business models that convert residential, commercial, and industrial sites into energy producers rather than just energy consumers.   We need innovators who can take the mantra, “Think globally, act locally”, and transform it to “Think globally, generate locally”.

There was plenty of “whine” on November 4, or to be exact, at 4:55PM on November 3, when the CEA sent a 91 page document 5 minutes ahead of the 5:00PM deadline for comments on the California Energy Commission’s (CEC) proposed TV energy efficiency standards. In order to review this and other comments that arrived at this 11th hour, the CEC has postponed its hearing until November 18th.

The CEA comments oppose the proposed standards, citing that energy efficiency standards would increase the price of TVs. According to this industry association, the average digital TV uses the same electricity as two light bulbs – incandescent light bulbs. The average 42 inch LCD TV consumes 203 watts, and the average 42 inch plasma TV guzzles 271 watts. The average California home has three TVs. It appears that the CEA is strongly advocating for not only increased operating costs for consumers, but also construction of more expensive power plants and increased electricity rates to pay for increased power generation.

It’s a shame that the CEA can’t take the bold step of working cooperatively with the CEC to reduce consumers’ operating costs of TVs and reduce carbon footprints as well.

Smart Homes and HEMS in a Smart Grid

I attended a presentation by Vint Cerf, often called the “father of the Internet” last week, and part of his presentation covered sensors and actuators in homes, monitoring environmental conditions and sending alerts based on defined triggers. His example was his wine cellar. If the temperature goes above a threshold, sensors note the condition and send an alert to his mobile phone. An actuator could trigger a change in the air conditioning temperature to eliminate that threshold and alert.

This is the type of technology I want to see enabled on the one device I almost always forget to adjust before a trip – my hot water heater. Wouldn’t it be great if I could remotely set it to vacation mode and save energy and money – money that I could use for a future vacation? Wouldn’t it be even more wonderful if I had a powerful but easy-to-use Home Energy Management System (HEMS) that maintained a series of defined “Vacation mode” settings for my entire home? Instead of setting individual lamps on timers, having the ability to instruct my home to turn selected lights in selected rooms on and off on automated schedules would make my HEMS a handy preventive security system.

One way to achieve this is to make devices internet-enabled and addressable – maybe not all of them, but many of them. For utilities, one of the promises of the Smart Grid is the opportunity to expand and enrich their Demand Response (DR) programs. Through these DR programs, utilities can work with consumers to automatically power down pool pumps or refrigerator ice makers, remotely adjust HVAC temperatures up or down, and find other mutually agreeable actions that can pare down electricity demand at peak times. Some consumers are suspicious of any utility reach into their homes, so it will be very important for utilities to structure their DR programs so that consumers can override these automatic and/or remote controls – but at the price of higher peak electricity rates as a result of that ability to override.

There is another very important point about this future vision of a Smart Home in a Smart Grid – and it covers Internet security. Mr. Cerf pointed out that internet security is in definite need of research and development, and he’s right. If we are going to make a home truly Internet-enabled, as homeowners we’ll expect that our homes can’t be hacked with the unfortunate regularity that befalls our computers. HEMS solution providers need to consider appropriate security designs and processes into their software and hardware that consider worst-case scenarios. As we all know, one negative incident in the USA, one highly publicized negative incident, could set back the HEMS industry for years.

Check out the Global Smart Energy Bilateral Trade and Investment Opportunities event on November 13 in Monterey. The agenda is filled with Smart Grid sessions that cover national and global perspectives.

This forum, and others like it that encourage collaboration between universities, utilities, vendors, and governmental agencies, have the opportunity to get outside of traditional mindsets and to think differently about solutions that deliver on the vision of the Smart Grid – a fully bi-directional electric and communications network, as defined in the Smart Grid Dictionary.  The challenges are complex.  The existing grid in the USA was designed to meet the following expectations:

• deliver a one-way flow of electricity from centralized, utility-scale generation to a meter
• design processes and tools to manage electricity production from steady-state sources

The Smart Grid will include significant amounts of energy production from sources like wind and solar, which are clean and renewable, but stochastic sources.  (Stochastic means random variability, and that’s why the charts you see showing wind or solar production usually look like most stock market charts – which drives the agencies responsible for reliable electricity production crazy.)   It will also integrate distributed generation sources to the grid, which can range from neighborhood or campus-based sites to every residence with excess solar capacity.  Everything from modeling software and standards to the actual transmission and distribution equipment that handles bi-directional electricity flows has to be created and deployed.  In addition to these technology challenges, utilities also face questions from regulatory agencies with missions to protect rate-payers.  Even traditional processes will have to change to accommodate the changes coming with the Smart Grid. 

The UCLA WINSmartGrid Connection promises to be an interesting day –long session that explores promising technologies, the DOE and National Lab Smart Grid visions, and stimulus funding.   Their focus on wireless communications technologies, including RFID and RF sensors, is particularly intriguing, as well as their discussion on cap and trade impacts on the future Smart Grid.  The telemetry information that RFID can deliver has real possibilities in solutions that help manage the overall reliability of transmission and distribution in the Smart Grid.   It’s a good step in the direction of developing game-changing technologies. 

Game-changing Thinking

If you want some cheese with that “whine”, plan to attend the November 4 California Energy Commission public hearing to consider adoption of TV energy efficiency standards.   Will we hear more from the Consumer Electronics Association (CEA) about how these standards will hurt the California economy?  Probably.  Will we also get a reprise of the opinion that the government should really bail out electricity guzzling TV manufacturers with a cash for TV clunkers program?   No kidding – that was proposed by Panasonic.   

As previously blogged, there are currently 21 categories of appliances covered by California’s energy efficiency standards.  TVs are a worthy inclusion to that list – the average household has 4 of them!  Click here for more information about the hearing. 

It would be so refreshing and yes, game-changing, to see an industry association like the CEA thinking long term about the future of the planet instead of short-term about certain members’ bottom lines.  However, that doesn’t appear to be in their game plan.  My game plan is to put Panasonic and the other manufacturers that oppose the CEC proposal on my “Do not buy” list.  If sufficient numbers of consumers make energy efficiency part of their game plan, that will be game-changing thinking too. 

The TV industry opposition seems so drearily familiar to other industries that have complained about other regulations.  Some readers will recall the vehemence that met seat belt regulations and requirements for catalytic converters.  The auto industry made a number of wild claims about them that turned out to not be true.

Here’s a little history lesson:  In 1976 the CEC first set standards for appliances sold and used in California.  The results of those standards are that per person, annual electricity consumption in California has remained steady at 7,000 kWh.  For the rest of America, electricity consumption has risen by 40% to 12,000 kWh.  Reduced consumption of electricity means reduced energy bills.  Reduced consumption of electricity means avoidance of building power plants.

In California, TVs, DVRs, DVDs, and cable/satellite boxes consume 10% of a home’s electricity.  The standards that the CEC proposes would apply to new TVs sold after January 1, 2011, and would reduce energy consumption by 33%.  A second tier of standards proposed for 2013 would bump up the reductions in energy consumption to 49%.  That ka-ching sound you hear is money you can save in operating costs.

The Environmental Protection Agency (EPA) also announced changes for TVs seeking Energy Star compliance in September 2009 – they must be 40% more energy efficient than conventional models starting May 1, 2010.  In May 2012, the rules require that an Energy Star-labeled TV must be 65% more efficient than current models.  The Consumer Electronics Association (CEA) expressed concern about the EPA focus on energy consumption rather than energy efficiency.  Why are they concerned?  Given the propensity for consumers to purchase ever larger TV sets, it is important for us to understand the true impacts of our purchase decisions with regards to electricity use.  Did you know that a 42 inch LCD TV uses less electricity than a 42 inch plasma TV?  Did you know that an old technology like a cathode ray tube (CRT) only uses .23 watts per square inch versus the LCD’s .27 watts per square inch?  Did you know that a new flat panel TV typically consumes more electricity than your refrigerator?  Considering that TVs are operated for an average of 5 hours every day, the use of TVs that are electricity guzzlers will add up – and impact not only your wallet but the overall electricity requirements of your local utility.

Given the success of the current CEC energy efficiency standards, we really need similar standards for TVs.  However, one really important piece of information is missing for consumers mulling over purchase decisions for TVs.  There are no EnergyGuide labels on TVs.  Yes, the ubiquitous label on many other appliances does not exist for TVs.  The EnergyGuide label tells you the yearly electricity requirements for the product in question and also ranks that product’s overall energy efficiency on a scale of best to worst (most energy efficient to least energy efficient).  EnergyGuide labels help consumers calculate annual operating costs and provide invaluable information for consumers who want to buy energy efficient products for their green benefits and to save money.  Why isn’t there an EnergyGuide label for TVs?

That’s a separate battle to be fought, but in the meantime, the CEC is taking a good first step with its hearing on Tuesday, October 13 about electricity use in TVs.