This week’s guest author is Juliet Shavit, President and CEO of SmartMark Communications and SmartEnergy IP™. There’s an important link between Smart Grid technologies and customers, and more utilities are catching on to its value as a long-term, sustainable model.
What role does the customer play in a technology deployment? That is the question the utilities industry has been tackling over the last decade as the crusade to upgrade the country’s electrical infrastructure has developed into a reality.
Early AMI deployments had utilities focused largely on technology installations. If they could get the meters installed and create an optimized two-way communications network that included smart meters, sensors, etc., there was seemingly no room or need to think about the customer …
Until the first unexpectedly high bills began to hit customers after the initial smart meter deployment.
Until the first deployment caused such an uproar in the industry that the need arose to re-examine a utility’s strategy around AMI customer engagement.
Until regulators started requiring a customer education plan to be filed with the business case for Smart Grid investments before utilities could start installing a single meter.
Then the major shift in the industry occurred. I call it the “point of no return” when the customer became an integral part of the industry conversation.
But the role of the customer around education and communication is not just to get meters in homes and avoid backlash against the utility around AMI. The real need to invite the customer into the conversation is around behavior change. Unless customers do their part to reduce energy use, balancing the load on the grid will not be a sustainable reality. Knowledge is power, they say. An educated customer is more effective than any digital device. When customers understand the benefits of AMI and are exposed to customer-facing tools that help them manage their energy use, the control shifts to them and the message is then about customer empowerment.
The Smart Grid Customer Education Symposium on June 11 in Chicago invites utilities across the country to talk about their experiences in communicating and engaging with customers about the benefits of the Smart Grid. But, equally important, the event invites regulators and stakeholders to share their perspectives on the benefits of Smart Grid customer education.
The only way to achieve lasting success of the Smart Grid is to bridge the gap between technology and education, and talk about how advanced analytics and usage behavior will help change the way customers understand and manage their energy use.
This is the long-term sustainable model for utilities. The advanced technology is already in place to revolutionize the delivery of energy into every home and business in the country. For the continued successful transformation of the electrical grid of the past to the Smart Grid, educating customers must be as primary of an objective as the technology installation.
This is the real goal of Smart Grid customer education.
We’re featuring guest authors over the next few weeks. This article by Robert D. Cormia, a member of the Foothill College Engineering Faculty, talks about a new equation for energy intelligence – where ei = cm3 (for continuous monitoring, modeling, and management). Foothill College is located in Los Altos Hills, California, in the heart of Silicon Valley.
Foothill College has been engaged in a strategy that integrates building energy monitoring and management with enhanced distributed generation capabilities. It’s an important first step on a path that could lead to becoming a ‘managed energy grid’. Towards this end, Foothill College has developed a multi-tiered model that will integrate building energy sensors with building automation controls, measuring heat exchange of hydronics (heating and cooling from a central plant); a campus-wide energy management system; inverter output from 1.5 MW solar PV and 240 KW cogeneration (heat and power); an Energy Information System (EIS) that will monitor, model, and display the energy flows into buildings and from our onsite generation and utility feed; and finally the capability to synchronize energy generation and use, and or load shift (demand shift) in a utility business model called Integrated Demand Side Management (IDSM).
The logic and premise for this future energy system is based on a three-tiered stack. First, a smart energy campus begins with understanding when, where, and how energy is being used. This leads to a better understanding of basic building operation, i.e. are building systems operating correctly, and can we control buildings precisely enough to manage energy with occupancy and use?
The second tier of the smart energy stack is significant onsite energy production from 1.5 MW solar PV and 240 kW of cogeneration heat and power, which provides 45% of Foothill’s annual electrical demand and 50% – 100% of our peak power demand. At times this generation exceeds campus load, and Foothill exports electrical energy, which currently isn’t stored to offset energy at other demand peaks.
The third tier of the stack is the analytics and visualization platform for understanding power flows throughout the day, and displaying energy use at a building and campus level. This Energy Information System (EIS), transcends the energy management and building automation software (EMS/BAS); with such a system, we would begin to model an enhanced generation capability of additional solar PV and battery storage, mainly used to generate and store electrical energy during the day, and release it in the early evening, where we often experience our greatest power demand. In order to leverage additional onsite generation, without swamping the outer distribution grid (called “backfeed”), the generation and release of energy must be carefully managed.
The EIS informs the campus energy manager about how energy generation assets, e.g. solar PV, cogen, and storage, can be combined with Automated Demand Response (ADR) to help the utility power grid better respond to large power demands, and/or shift the campus peak energy demand away from the utility¹s peak demand, which can also cause high time of use (ToU) charges. IDSM, or Integrated Demand Side Management, fits well with large distributed generation behind the meter, especially college campus distributed energy systems. In the utility model of the future, managed energy grids will participate in grid optimization, using a multilayered energy monitoring and management platform, and leveraging our new equation to deliver comprehensive and actionable Energy Intelligence.
Is it just me, or is the pace of technology innovation speeding up for you too? Acceleration is certainly evident in nanotechnology R&D. Back in December 2014 I wrote two blogs that updated my 2020 predictions first published in January 2014. Nanotechnology discoveries are now occurring on almost a weekly basis. Universities have been a hotbed of scientific discoveries in material sciences. Consider the recent news that graphene, a particularly interesting nanomaterial and photons. A photon is a unit of electromagnetic radiation that has energy but not an electrical charge. To the naked human eye, photons are sunshine. Research in Switzerland revealed that graphene can take one photon and make multiple electrons. This is what today’s solar panels do – convert photons into electrons. But graphene has a multiplier effect, with the potential to boost existing best case conversion rates from 32% to 60%.
While this announcement addresses research results, commercialization won’t be far behind, and we’ll soon be reading about new solar panels that leverage graphene materials to increase harvestability of solar potential. Other research advances focused on making solar harvesting materials more flexible. What do these research announcements mean? Here are three key points. Solar panels, like microprocessors, will shrink in size and increase in power. Second, areas that have marginal value for solar generation will get a second look as panels improve in their productivity and their flexibility to be adhered to non-traditional surfaces. Third, distributed energy resource (DER) momentum grows as a result as more rooftops, landscapes, and other building surfaces harvest solar energy and proliferate in distribution grids.Gr
Other nano research is concluding that a little stress can be a good thing for silicon crystals known as quantum dots. Around the time of the 1973 energy crisis, the popular saying was “small is beautiful”. In at least some research labs around the world, the new saying could be “small and stressed is beautiful”. One commercial application possibility focuses again on improving the energy harvestability of solar panels made from silicon. However, there’s also interest in how these nanocrystal reactions can increase the charge/discharge cycles of batteries, improve computer displays, and decrease power consumption.
Are investors paying attention? Graphene has been dubbed the “wonder material”, and big players like IBM and Samsung have been allocating money and resources into it. China has filed more patents involving graphene than any other country. One of the first commercial applications of graphene research is a light bulb that improves on the energy efficiency of LED bulb technologies. Once these new bulbs are available later this year, investors who have been hanging back will be looking for other commercialization opportunities.
From a Smart Grid perspective, graphene has exciting application potential in energy harvesting, energy storage, and even energy consumption, specifically reductions in waste heat. It’s a rapidly innovating area of materials science research that will be the foundation for disruptive technologies integrated into the electric grid. The dual impacts of these disruptors will be to increase the amount of electricity generated by DER assets and reduce electricity consumption as devices become more energy efficient. The speed at which R&D in graphene and other nanomaterials is advancing to commercialization may blast past my predictions of overall progress by 2020.
What does energy efficiency mean to you? Does it mean replacing old light bulbs with energy-stingy LEDs? Is it a remodeling project that installs double or triple pane windows? Does it include upgrading appliances like air conditioners and refrigerators to take advantage of Energy Star ratings and utility rebate programs? It means all of those things, and in states like California that employ aggressive energy efficiency (EE) policies and standards from widget to building envelope, it’s been a successful strategy to reduce per capita energy consumption.
Earlier this year the governor of California announced an energy policy, although he didn’t call it that at the time. One of the goals is to double EE savings in existing buildings by 2030. To get there, breakthrough innovations in EE policies, technologies, and financing are required. In other words, its time upgrade from EE 1.0 to EE 2.0, with a very heavy emphasis on building retrofits.
The Next Generation of Energy Efficiency Project at Stanford University aims to define EE 2.0. Led by Dian Grueneich, former Commissioner of the California Public Utilities Commission and now a Senior Research Scholar at the Precourt Energy Efficiency Center and the Hoover Institution, the project will create a series of whitepapers to help mobilize actions that deliver Governor Brown’s “doubled down” objective.
The first White Paper, to be issued this spring, will discuss some of the steps Ms. Grueneich has identified to define an EE 2.0 framework:
- Articulate EE’s new role in terms of its increased value to economic, energy, and environmental security
- Structure transparency and build awareness through annual performance reporting on EE gains
- Revise state agency roles and processes to streamline policy and projects support
- Align EE regulatory rules and policies with state climate goals
- Improve customer-funded programs
- Investigate the state’s development and enforcement of codes and standards that can accelerate EE goals
- Identify and support innovations in technologies, policies, and financial products that contribute to EE savings
Technology innovations are abundant to retrofit existing buildings to higher EE savings. Much of that technology is relatively low tech too. Insulation and double pane windows aren’t rocket science. Of course, there’s exciting work in labs that will improve building envelope materials in the form of new paints as well as “smart” windows.
The pre-eminent challenges to creating the Next Generation of EE are in policy (including agency governance) and finance. Compare an EE investment in insulation upgrades to an investment in solar panels. Both have upfront acquisition costs with a promise of energy bill reductions enjoyed in the future. Homeowners have a range of options that include use of PACE programs to finance solar investments or partnering with firms that handle the upfront acquisition and installation costs and share in the production and tax benefits. Insulation upgrades lack the same diversity of financial programs and partnership options. As Ms. Grueneich described at a recent session, “in energy efficiency thousands of different decisions made every day by individuals, organizations, and governments. We have to use our policies and the private market to set up similar models to solar that make efficiency easy and attractive, for both consumers and providers alike.”
Ms. Grueneich noted that EE 1.0 consists of “mostly single ‘widgets’ and low uptake by consumers and businesses.“ But there’s pent-up demand and new technologies that EE 1.0 doesn’t address. How many more decisions about energy efficiency could be made if only policies and financial instruments better supported them? The Next Generation of Energy Efficiency Project just may provide that answer.
There’s been a significant amount of hype about the Smart Grid’s four Vs of data – volume, velocity, variety, and veracity. But there’s a missing element to these discussions, and that’s the fifth V – the value of data. In the Age of the Prosumer, the value of data has profound implications for the utility sector in general, and to defining consumer and prosumer value in particular. To excel in this new world of real and digital energy service choices, utilities will have to develop prosumer-centric operations and manage the data that is most valuable to them and their consumers and prosumers.
That’s not an easy task. Utilities are challenged to manage terabytes and petabytes of data with processes, tools, skillsets, and metrics designed for megabytes of data. As more devices become smart – capable of sensing and communicating status and accepting commands – the challenges to maintaining productive and cost effective operations will grow. Utilities can’t afford to engage in traditional siloed methods of learning – they will have to look to other sectors for knowledge, best practices, and tools.
As noted previously, other business sectors have knowledge that can be leveraged to good effect by utilities to avoid reinventing wheels of discovery and education. Some sectors are adept at tailoring promotions for both brick and mortar and online purchases (aka omni-channel strategies), to push discounts, loyalty program awards, and purchase suggestions. Their data expertise and best practice experiences can help utilities develop B2B2X marketing programs and definitions of consumer and prosumer value. The telecom sector has extensive expertise in segmentation and churn analytics. This sector also has standardized processes to ensure interoperable transactions with partners – knowledge that could be particularly useful to utilities to support the successful development and management of seamless digital energy services targeted to consumers and prosumers.
The good news is that there’s an entity called the TM Forum that collects and manages this repository of knowledge, and it is available to utilities as part of their Smart Energy program. TM Forum provides a neutral, open, and structured forum for collaboration between service providers and their vendors. Their goals are to reduce costs and risks, ease system and process integrations, and improve business and information agility. Members utilize consensus-built tools, metrics, and best practices to accelerate their initiatives in network operations modeling, customer experience management (CEM), and data architecture strategies.
For example, a tool called the Business Process Framework is a proven blueprint for enabling successful business transformations – something that can be extremely helpful for utilities as they revamp and restructure their operations to accommodate all the new data generated by Smart Grid solutions. What’s more, TM Forum supports projects called Catalysts to explore how their tools can be applied to different business sectors and their unique challenges.
There’s an ongoing Smart Energy Catalyst that has already demonstrated large-scale integration points and digital handshakes necessary to connect utility grid and back-office operations and concomitant applications to support digital energy services for consumers. Participants in this low-risk proof of concept project include utilities (BC Hydro, Hydro-Quebec, and Salzburg AG) and solution providers (Esri, Infonova, and BaseN, among others).
Learning by doing in the collaborative environment enabled by a Smart Energy Catalyst is a great first step for utilities to build expertise in data that supports strategic objectives. Getting the 5Vs of data right will be critical success factors for utilities to build prosumer-centric operations and properly define prosumer value.
Disclaimer: TM Forum is an SGL Partners client.
The Age of the Prosumer presents challenges for utilities accustomed to thinking of their customers in terms of kilowatthours consumed. The Smart Grid is responsible for these challenges, borne out of technology, policy, and capital innovations. These innovations are triggering many disruptions to the utility business model, and will eventually transform the historic dependency of electricity consumers on utilities into new prosumer relationships of interdependency.
Interdependency is the key distinction between a consumer and a prosumer and will be a significant factor in developing formulas to assess the total value of these relationships to utilities. A consumer is dependent on the utility and generates revenues. A prosumer has different value for utilities through an interdependent relationship in which the utility may rely on commitments to reduce electricity use (negawatt production) or supply electricity to the grid (kilowatt production) at specified times. At other times, the prosumer may be reliant on the utility to supply kilowatts.
The calculations of prosumer value are explicitly impacted by regulatory policy. Consider two different state regulatory commission decisions in 2014. In March the Minnesota Public Utility Commission approved a process to create the first “value of solar” tariff. This tariff includes non-traditional calculations such as the offset costs of other forms of electric generation and environmental considerations. In late December the Arizona Commerce Commission allowed two regulated utilities, Arizona Public Service and Tucson Electric Power, to offer programs that essentially let them seek authorized use of customer rooftops to deploy rooftop solar generation assets.
These two decisions herald the first steps that utilities will make to develop definitions of prosumer value that are unique to their business environments. Where another business sector may be satisfied with analyses of demographic and behavioral data, utilities must include geographic data, weather data, and solar irradiance data correlated with grid operational attributes and performance data to build a value of solar tariff. Similar data can help create prosumer value assessments.
In the Arizona scenarios, data analysis of this type will help determine if a certain number of rooftops outfitted with solar along a distribution line can postpone an expensive grid upgrade. The owners of rooftops with excellent solar potential on congested lines will have very different prosumer values to a utility than owners of rooftops with similar solar potential that are connected to areas of the grid that are problem-free.
Prosumer value will be different for each utility. It is also dynamic, with variable rates of change for key factors in formulas. While an address is fixed on the grid, the occupants at that address change, and their load patterns change too. Rooftops and vegetation change. Grid assets have always changed over time, along with the loads on them. The challenge for utilities is that the numbers of assets and variables that impact grid operations will vastly increase. Simulation applications can assist in creating different scenarios that become the frameworks for consumer or prosumer valuations. Today utilities benefit from condition-based maintenance – a predictive analytics approach to asset performance. Similar methodologies can contribute to prosumer value definitions by modeling historical consumption trends and correlating that data with projections for production to create predictive reports about multiple asset generation capabilities.
The Age of the Prosumer has profound implications for utilities as they venture into defining and managing new interdependent relationships with dynamic prosumer valuations. Smart Grid technologies, particularly sensing, communications, and analytics will play critical roles in defining and managing prosumer values as well as the assets that create these new values.