Press

What Will Make Our Smart Grid Even Smarter?

(Originally Published in Utility Products, September 2010)

By Paul Hull

Ask 10 people what "smart" means, and there might be 10 different answers: clever, fashionable, intelligent, quick-witted, ingenious, in good repair, prominent, crafty? and also to hurt, to rankle, to sting, etc. Similar results will be found when asking people who work in utilities what they mean by the smart grid. The difference is that when talking about smart people, it can be a compliment or a bit of an insult; when talking about the grid, smart means better - better for utilities and better for customers. What will keep making the grid smarter? I asked a group of experts what they thought could smarten the smart grid even more.

The EcoView system from Advanced Telemetry enables users to view and reduce their resource consumption - and their utility bills and carbon footprint - with the touch of a button. In addition to electricity, the EcoView touch panel and Web portal let users view and adjust - in real time-gas and water, lighting, security and other electronic devices such as office or home entertainment equipment. The technology has been selected as a Microsoft partner and is licensed by General Electric Co. as part of its Ecomagination SmartCommand program. I asked Gus Ezcurra, president of Advanced Telemetry, whether a customer could be commercial, residential or both, and what sort of electricity bill would make it worthwhile.

"With EcoView Commercial, if you are a typical commercial customer, you will have less than a 12-month ROI if your small commercial building averages around $1,100 a month in your utility bill," Ezcurra said. "This is the size bill you would typically find in a quick-service restaurant, small office building, retail store or small multi-building campus. Studies have shown that when presented with real-time feedback on energy consumption, consumers will reduce their usage by up to 15 percent. EcoView Residential supplies the real-time information needed to reduce monthly energy bills and, even better, it's a place where all energy usage information, home management and home control systems can be fully integrated into one platform, controlled by a single gateway and accessed through consistent and easy-to-use interfaces. All this in a low-price, easy to install and future-proof system!"

"There are so many different types of focuses," said Bernie Nelson, director of Service Development - Utilities, Energy and Transportation at Hughes Network Systems, a company experienced in satellite networking technology. Individuals' awareness of being collaborative varies enormously. "We hope to see more collaborative competition," said Nelson, whose company is a recognized expert in satellite networking technology. "This technology can now deliver the combination of high performance, availability and security that can greatly aid smart grid efforts for the utility industry. If there are three areas where we can help most, they may be in substation connectivity, distribution automation and mobility." Nelson said the stumbling blocks for the smartest grid system are possibly ignorance and lack of perception on the part of some providers and customers. Customers must modify their behavior to benefit from all that is offered by a smart grid.

"One of the important drivers for the smart grid initiative is improving the reliability of the power grid," said Geoff Zeiss, director of technology for Autodesk's utilities business. "The Department of Energy estimates that power outages cost U.S. consumers $150 billion annually, or about $500 for every man, woman and child. The number of outages affecting more than 50,000 people more than doubled from 1991-1995 to 2001-2005. Smart grids include the capability of self-healing, the ability to automatically detect an outage, reconfigure the network to minimize the number of people affected and then to pinpoint failed equipment and dispatch crews to resolve the problems. Self-healing networks require a lot more data (some estimate a thousand times more data than utilities currently maintain) and much more reliable data. Achieving 100 percent accurate, real-time data reliability will require two things: a cleanup of existing network data and changes to existing business processes to optimize work flows and thus ensure and maintain the desired level of data quality. IT has developed tools to streamline information flows and improve data reliability by breaking down the barriers between traditional information silos, replacing paper flows with electronic information flows and eliminating duplicate or redundant information."

The Role of Consumers

Utilities are, by definition, service companies. Gregg Edeson, an energy expert at PA Consulting Group in New York with more than 30 years' experience in providing strategic insight to many global customers in the electric utility industry, advises that putting customers at the heart of the smart grid strategy should be the rule. "The transition to smart meters and smart grid is highly dependent on adoption by consumers," said Edeson. "Utilities, vendors and regulators striving to implement an integrated smart grid solution must engage, educate and shape the consumer's perspective to achieve early buy in to smart energy and its benefits. Utilities need to decide what maturity level or level of smart grid sophistication their customers desire-one they can implement in a cost-effective manner. Integrated road maps need to be developed that incorporate all critical stakeholders in building a common understanding of the vision and level of maturity envisioned. Build comprehensive business cases with baseline performance levels established so one can track progress and benefits achieved. Seek a solution and strategy that involves the complete business: operations, finance, risk, IT, HR, supply chain, engineering and planning."

An example from the PA Consulting Group comes from Italy. Italian power company Enel has developed the most extensive smart metering infrastructure in the world, having installed 30 million smart meters for its customers. While the initial costs were significant - about $3 billion - the company said the smart approach is saving about 25 percent of that per year.

"Ongoing customer contact is critical for the smart grid to work," said Steve Smith, director of sales and marketing at Honeywell Utility Solutions. "Utilities must adopt a consultative approach and provide ongoing service and education to make change compelling. Automation, such as that which Honeywell has provided, adds smarts to the smart grid by enabling customers to choose how and when they use electricity and act on those decisions with mechanical precision." In Smith's opinion, open standards are essential to success, too. He commented on the success of smart phones, where open standards have helped provide interoperability and encourage innovation. "Without automation, customer interaction and standards," Smith said, "the full potential of the smart grid will not be realized."

"Many consumers and business owners today do not know where their power is located, let alone how to interpret the data," said Mark Feasel, director of sales and marketing at Schneider Electric Energy Solutions. "Situational awareness is a challenge that energy consumers face and one that needs to be addressed to make the smart grid a reality. Schneider Electric is involved in projects that focus on metering and automation solutions, which we see as an opportunity to empower all consumers of energy with systems and software that provide actionable information about their energy usage and consumption. When energy consumers have the tools to become more situationally aware with an automated meter infrastructure and real-time delivery of energy price signals, they can return capacity to the grid when it is needed most. We're seeing that when smart grid technology is coupled with incentives that appropriately value demand-side capacity, energy consumers will participate in electrical wholesale markets in a volume and timeliness that was previously not possible. As automated demand management is still in its early stages of development and still not readily available to all consumers today, we are seeing that utilities are still not able to treat energy consumers the same way they treat those who generate power. Until more progressive utility programs are launched that provide energy consumers with compelling incentives to monitor and manage energy, consumer contribution to the grid is not likely to increase."

"Cisco and Duke Energy recently signed an agreement to pilot and further develop a smart grid-enabled home energy management solution," said Laura Ipsen, senior vice president and general manager, smart grid, for Cisco. "That will provide Duke Energy customers with secure and reliable energy information and a simple-to-use toll to help them reduce the amount of energy wasted in their homes," Ipsen said. Cisco's latest product, the Home Energy Controller (HEC), is a countertop touchscreen display and combines networking capabilities with applications for energy management. With it, users can view and control information on thermostats, intelligent sockets and power strips, and smart appliances such as refrigerators and water heaters. Although home energy management tools are not new, Cisco's Home Energy Management solution provides a level of control that is not available in many monitoring solutions.

Products to Perfection

There's not just one product or device that will provide a smarter grid. There are many products that can help. The City of Palo Alto Utilities in California consulted with Automated Energy to find a solution for effectively enhancing its existing advanced metering program using the city's fiber network. The city had two different meter-reading systems: one a dial-up modem system for reading electric meters, and the other a manual system for reading gas and water meters. To provide the desired network connectivity, Automated Energy went to the Lantronix UDS100 device server. It provides a fast, simple, cost-effective way to bring the advantages of data accessibility and remote management to equipment not currently connected to a network. Using serial tunneling, the UDS encapsulates serial data into packets and transports it over the Ethernet. "To meet the city's needs, we had to combine the merits of our iMETER solution with a robust networking solution," said George Bell of Automated Energy. "Lantronix offered the necessary connectivity with technology that wouldn't interfere with the way the city's connected devices already worked. The end result is a compatible pair of technologies that work together seamlessly."

In an amusing but practical note about smart meters and consumers, Daryl Miller, vice president of engineering at Lantronix, explained how he came to understand the wonders of today's technologies. "I thought it would be simple to figure out the optimum time to do the laundry based on the cost of energy," said Miller. "The first stop was to the electric utility's website to download the rate and tariff schedule. Opening up the document, beads of sweat broke out as I reviewed the incredibly complex, multi layered rate level that spans eight pages. Would I need a calculus refresher course? Acronyms abound: Trans, Distribin, NSGC, NDC, PPPC, CIA, DWRBC, PUCRF, URG, DWR, and don't forget on-peak and off-peak rates for summer versus winter, level I and level II, and, of course, single-family and multiple-family residence rate schedules. Somehow it matters whether I share a wall with a neighbor! Wow! Now I understand at least one reason for having a smart meter. Go a step further. What if a washer and dryer - or any energy-hungry appliance - were part of this network? Appliances can indicate when the optimum time is, even going as far as starting the wash automatically. Meet the smart grid utopia. In all seriousness, this is wonderful technology."

The leaders in this country's move to a smart grid should be, have been and still are the utilities. "Most of our customers are suppliers of equipment to utilities," said Paul Pishal, vice president of marketing at Lantronix. "The connecting devices are collecting data and telling how energy is consumed. Both utilities and customers need to be prepared for this data and know what to do with it when they receive it because that knowledge can benefit everybody involved." Again, the importance of the customer-utility rapport is emphasized.

Meters are not the only aspects of the smart grid, though they are important. Intellistreets, from Michigan-based Illuminating Concepts, as the name suggests, addresses the needs and smartening of street lighting. Utility executives, municipal planners, county officials and local governments have all shown great interest in Intellistreets. It offers benefits in energy conservation, homeland security, revenue generation, traffic monitoring, public safety and aesthetic appeal. It's an intelligent, wireless network concealed in the construction of what seems to be an ordinary, standard light pole. The pole would offer reduced power usage through smart sensors and real-time reporting, lighting control, emergency alerts, lighted evacuation routes during emergencies, Amber Alert warnings, hazardous environment alerts via sensors for gas and radiation that might menace public safety, audio concealed in the pole for ambience and public address, footfall sensors to monitor and report pedestrian and vehicular traffic, and LED signage on the pole to replace vinyl banners and to provide revenue for property owners and municipalities. There's more, too. A smart way to use energy in the city?

The Connectivity of Smartness

Telvent is an international company that has many thousands of successes in improving the information technology for a variety of industries, including utilities. "Smart grid is one of the most vexing terms on this planet," said Andy Zetlan, a Telvent smart grid executive. "This multifaceted term has many definitions, which ultimately suggest that electricity distribution companies and consumers of electricity must learn to work together to avoid the reliability, economic and environmental problems that face our world today. To achieve these goals requires a diverse set of programs and technologies that work together to enable both consumers and utilities to balance the conflicting objectives that define a smart grid."

Zetlan believes that utilities in particular need to focus on several issues, including the build out of telemetry from meters and other telemetric devices to collect critical data on loading, consumption, weather, the environment and energy costs. After collecting this data, utilities must have the analytical capability to process that data to help make better operational and economic decisions. "The grid is smarter when it is safe, reliable and sustainable at reasonable cost," Zetlan said. "Utilities, energy markets and customers must connect in an intelligent manner and work together to achieve this ultimate goal."

At energy management company EnerNOC, customers can access a four-pronged application platform for the smart grid. With its DemandSMART, the company pays businesses and organizations to reduce electricity usage during times of peak demand. SiteSMART is a technology-driven solution with the proven expertise to help businesses identify low- or no-cost opportunities for savings equal to between 8 percent and 12 percent of addressable energy spent by monitoring their energy use in real time, every hour of every day. "Carbon accounting is no longer an academic exercise," said Tim Healy, CEO and chairman of the board at EnerNOC. "Whether it is done voluntarily, by customer mandate or propelled by pending legislation, an increasing number of businesses are considering scalable, transparent and auditable ways to quantify their carbon foot print. Our CarbonSMART application offers a secure, enterprise class solution."

The fourth platform is SupplySMART, which emphasizes that energy is a resource that needs to be managed actively. EnerNOC will help businesses navigate the complexities of deregulated energy markets and advise how to obtain the most favorable energy contracts.

While praising the Obama administration's intentions for the deployment of $3.4 billion for federal smart grid investment, Gary Fromer, CEO of Cpower, a leading demand response company in North America, wonders if we have hit the target accurately enough. "With the majority of these federal stimulus dollars being doled out to local and regional utilities to install smart meters, which cost $1,000 per home on average, we need to ask ourselves two questions about this investment," said Fromer. "How do we measure the value returned from this new infrastructure and technology? And will it enable us to reduce our dependence on harmful fossil fuel based energy sources while increasing our use of renewable energy sources?" Fromer's point is that high-tech meters might help monitor and regulate energy consumption, but they most likely will not inspire the change in behavior that is necessary to accomplish these goals. "The smart grid initiatives should focus rather on energy efficiency programs that will offer incentives for energy users to actually transform their habits and be rewarded in the process," Fromer said.

In all business there is a legal association. Roland Hall, a partner in Autry, Horton & Cole with an extensive practice headquartered in Georgia, has experience with utilities and electric cooperatives. He has interesting points to make about smartening our smart grid. "Parts of the grid are already smart, in that utilities around the country have been installing various elements of smart grid technology in the generation, transmission and distribution systems," Hall said. "Key elements of any smart grid are a strong communications backbone and integration of the various systems that make up the grid. Although these elements are not as exciting as smart meters and home-area networks, success with these elements can yield great benefits in making the grid smarter for outage response, system maintenance, increased reliability and support for demand-side management. That being said, introducing smart elements at the customer level could yield tremendous benefits over time in decreasing peak demand and improving energy efficiency. Achieving such benefits will require more than simply making the technology available. Many of the customer-level smart grid innovations depend on customers accepting substantial changes to their traditional relationship with their utility."

Making Progress Together

IBM is involved in nearly 100 smart grid projects in emerging and mature markets in locations as different as the little island of Malta, Denmark or Dallas. "Climate change, rising energy prices and technology advances are all forces reshaping the power industry," said Mozhi Habibi, strategy manager for emerging solutions for global energy and utilities at IBM. Now, with the emergence of the technologies that make smart grids possible, the convergence of these factors is generating heightened interest from both consumers and businesses and changing the way they interact with utility companies. On the technology front, the increasing interconnectedness of devices and software means that smart grids automate, monitor and control the multi way flow of energy across operations - from power plant to plug. The intelligence built into the system also means improved customer service; a utility company can optimize grid performance, prevent outages, restore outages faster and allow consumers to manage energy usage right down to the individual networked appliance. Smart grids also can incorporate new sustainable energy resources such as wind and solar, and interact locally with distributed power sources or plug-in electric vehicles. Having the capabilities to transform the grid is one thing, but driving the transformation within the market requires the commitment and collaboration of multiple players. This is why a group like the Global Intelligent Utility Network Coalition is an important accelerant in the increasing use of smart grid technologies for the energy and utilities industry. The coalition's first collaborative effort was the creation of the Smart Grid Maturity Model, which has been used by more than 60 utilities around the world to assess where they are and how they plan their own smart grid program. It was recently donated to Carnegie Mellon's Software Engineering Institute for use by the industry.

There are, then, many ideas about how we can continue improving today's smart grid. Most of them, naturally, are reflective of the products or services in which the speaker is involved, but there does seem to be one firm belief from them all: The improvements will come from a true, strong, honest rapport between utilities and customers and from the wisdom with which they harness all the technologies available.