Is that all there is to our new advancing convergence of utility and service markets for the homemaker and small business owner — Lights, thermostats and locks? First of all, why “lights?” Doesn’t anyone understand that lighting is one of the lesser users of energy in the home or small business? Yet whenever we see a discussion on the topic, lighting seems to be an important part of any program.
Likewise Energy Management Systems, even those touted to be advanced, don’t seem to ever venture beyond traditional direct load control (utility shuts off a device, such as A/C compressor, pool pump, water heater, etc., in peaking period for a specified time), or via Programmable Controllable Thermostats (PCTs), where a price signal is sent to a thermostat to set-back the cooling setting for a specified period, or a display showing current pricing, total usage and (sometimes) a projected usage. We even have alarm companies that are offering monitoring systems that also control lighting, thermostats and lock/unlock doors. Wow! These new functions and features are really great! You might think so, if all you could see was current advertising and hype around the new services offerings from your local electric utility, cable provider or alarm monitoring company.
It seems that every mind-numbing energy management system has been designed and built upon the premise that the consumer must be (somehow) made aware of their consumption (and current pricing) so that they will make the “right” choices in their energy purchases and then they will use a few simplistic functions surrounding lights, thermostats and locks. But can’t we do much, much better? It seems to me that our message here should be that people can (and will) make better decisions with better information. Isn’t that what utilities are trying to provide?
While there is truth to that, smart meters by themselves only tell you when you are using a lot of energy. What they lack is an accompanying toolset to do something about it. So, why can’t we create a choreographed household that manages energy usage (possibly by device and groups of devices), that balances price to need, learns consumption and lifestyle patterns, and, importantly can analyze the interplay of multiple energy sources/options, and current and future usage against current and projected needs to produce the most efficient solution? This sounds real interesting, but is it really possible? I believe it is, and that it is achievable by building upon current mainstream AMI technologies.
Here is where, as an industry, I think we lose sight of the target audience: if it’s the general public, they will think this is mumbo-jumbo (no offense) because they have no idea what their benefit is to doing all of this. So clearly we need to do a much better job of educating them on what value is in this for them (back to my point above about providing people with better information to make better decisions). I also agree with the assessment that the real answer is favoring automated-intelligence over pieces of hardware (which is what dominantly is being marketed right now).
For this to work correctly we need significant change–and the new AMI technology is just the beginning. The first of these are the rates that utilities charge consumers of their electricity; and for these new technologies to work all customers need to be charged time of use rates. To me, this will produce a more equitable system. For those willing to collaborate with the utility, they should be rewarded and those that do not collaborate should have to pay extra. Everyone is suggesting that you are the starting point, but to me if you want to be radical, then we need a more equitable system. For example, if I keep my thermostat set at Energy Star settings all year long, but all my neighbors keep their AC at 60 degrees, I am actually paying for that (in the form of shared common utility costs). So their overall capacity cost share should probably be more than mine since they exert more overall demand on the system than I do, especially at peak load times. But all of this will not happen without a revamp of our regulatory environment as well as an overall energy policy. Here is another core issue: utilities/consumers have been benefiting from prior-decade decisions to build power plants and we have been riding that benefit. Many of those plants across the country are about to reach their end of life. Utilities need to invest in new generation, but without a comprehensive energy policy I could inadvertently create a new plant that is “taxed”/penalized because of the latest whim of politicians. A comprehensive energy policy (not regulations) could provide the appropriate roadmap. Maybe we even suggest a “grandfathering clause” for a plant that’s built and/or upgraded specifically to adhere to that energy policy.
Typically each consumer is charged for three general categories of services: (1) a general customer charge, (2) a usage charge for how much you use over the billing period, and (3) a capacity charge (for how much maximum demand you actually place upon the system at some specified time; think of this as how fast you turn on the water), but right now the capacity charges are typically only called-out and detailed for very large commercial and industrial customers, while it’s embedded within the small commercial and residential rates. In today’s world your local utility has to build and operate their system to meet all three of these demands that you actually may place upon their system. But they bill you individually based upon the aggregate of the group you’re within. So when you behave responsibly and raise your thermostat on really hot days you’re paying the same rate per kWh as your neighbor that runs their house at 66 degrees all summer. So while they are actually consuming far more expensive energy they are actually paying the much cheaper average rate and you are helping to make up the difference.
Residential and small commercial customers generally make up the largest blocks, by numbers, of customers for a utility, but may be eclipsed in overall load caused by the utility’s very large industrial customers (which may constitute a fairly small number of accounts). Further, the residential and small commercial customers may often also have the greatest variability between low average usage, average usage and peak usage; and even more so during extreme peak periods. Thus these individual points of seemingly low consumption become significant matters for utilities when they are aggregated into tens of thousands and even millions of customers. So systems and programs that can positively influence the actions of these individual customers can have significant impacts at the utility level. Therefore the message from the utility to the customer is simply, “You can make a real difference in your impact on the environment and your monthly energy costs.” A good analogy is recycling: every little bit helps but you really get a social benefit when everyone participates.
However, we also need to remain aware that individual consumers are not ever going to become energy wardens and spend a significant part of each day monitoring and controlling their energy consumption. The key, to me, is that we need to try and begin to address the entire premise by providing technologies and customer rate programs that you can set-up/configure and then (essentially) forget. We need these programs to provide a way to make decisions based upon the housing/premise characteristics, energy-consuming devices and life-style (or business type) of the utility customer; and the system needs to know enough about the various energy consuming, storage and generating devices to learn and optimize their use to match current and forecast conditions and lifestyle events.
But all is not lost as I’m starting to see evidence that utilities and technology vendors, and PHEV/PEV manufacturers, are starting to address these issues. For example, in Spain, Endesa (one of Europe’s largest electric utilities) is moving toward integrating the charging and battery storage capabilities of PHEV/PEV’s.
In Texas, TXU Energy has announced a rate plan for “Free Nights.” Through this rate plan consumers will get free energy from 10 PM to 6AM of every day. I’m hoping to see next “Free Nights and Weekends.” I’m also anticipating that perhaps TXU might bundle this with upgraded air conditioning, like an ice-based chilled water system, perhaps? Then perhaps we could see room-based zone heating/cooling? Pneumatic zoning is very economical; maybe in the new TXU world this type of A/C should be designed in with any new/retrofit install?
Then again on the PHEV/PEV front we have Toyota offering a charging system that is starting to look like a precursor to a whole-premise energy management toolset:
“Toyota Motor Corporation (TMC), in collaboration with its customer service IT company, Toyota Media Service Corporation, has developed a tool to support easy home-based charging of the Prius PHV plug-in hybrid vehicle, due for launch next year, and electric vehicles (EVs). Toyota Housing Corporation, TMC’s house construction and design subsidiary, will start sales of the tool, the H2V (home-to-vehicle) Manager, in Japan in January 2012. PHEV users can connect (wired or wireless) to the H2V Manager from a home PC, television or smartphone to set or adjust their PHV or EV charging start time, as well as check household electric power consumption. The same operations can be performed remotely with a smartphone, through the Toyota Smart Center. When necessary, the H2V Manager automatically interrupts PHV or EV charging when household power demand spikes, and then resumes charging when there is spare power capacity. This function prevents circuit breakers from cutting off power supply when a large number of home appliances are used simultaneously, pushing electricity consumption beyond the home’s maximum voltage.” The logical next step seems obvious.
So perhaps I was too harsh in my complaint about lights, thermostats and locks. Maybe we’re really moving in the right direction with the real-world application of Smart Grid. I’d just like to see it happen a bit more quickly with less emphasis on the single small steps and more on the whole house (or premise) approach.
William Peak is senior principal consultant with Infosys.