Fresh news on smart grid and green technologies
Utilities managing their demand response and energy efficiency programs separately could be hurting their customer engagement efforts, depending on how the programs are designed.
Research from a leading demand response provider shows consumers want to manage utility offerings from a single point. The findings add more evidence to a growing body of research on how managing demand response (DR) and energy efficiency (EE) together can boost engagement and results on the demand side, as well as make smooth long-term system planning as a supply resource.
“With everyone going after the same customer, and you have different silos within the utility, different vendors, even retail electric providers throwing in their own outreach … the end result for the customer is a very confusing experience,” said Steve Hambric, vice president of strategic sales and operations for Comverge.
A provider of energy management solutions for residential and commercial customers, Comverge’s position paper outlining where it sees the value of integrating efficiency and demand response offerings, and what outcomes better alignment could effect.
“When these programs are implemented separately and measured on a standalone basis, a natural tension may develop as the programs have the potential to cannibalize each other,” Comverge said in the paper. “However, when implemented in an integrated, coordinated approach, they have the potential to significantly increase the level of customer engagement and energy reduction to the utility.”
Mark my words: 2015 will be all about energy.
Of course, energy has always been here, keeping the lights on, keeping us warm, keeping us alive. But the industry has been largely stuck (not entirely of its own fault) for nearly 100 years. In 2015, it all will change.
Next year, energy will come to the foreground as the leader in innovation, showing the world how one-to-one marketing can revolutionize product delivery and customer service. Other industries will look to energy as the model for how to market.
The transformation we’ll see in 2015 is not without precedent. We’ve seen some progress in 2014: forward motion that set the energy industry on its path to change. But in 2015, it will blaze its trail to the front, writing a new chapter in utilities’ history, one of customer personalization that increases profits, expands energy efficiency and sets a new standard to which other industries will aspire.
Let’s look ahead to some things we’ll see in the next 12 months:
- Personalization that optimizes big data. Here’s where energy earns the spotlight. Increasingly more consumers desire meaningful, personal connections with one another and with their technology. Data analytics gives energy providers (and all other service providers) the means by which to cater to today’s customers. Energy will set the example by taking into account customer preferences for nearly everything: home temperature, appliance settings, access to their energy consumption data and bills.
Home data factors in, as well, including where customers live, the types of structures they inhabit, those structures’ insulation and the weather in the region at any given time. Using all of these markers, energy providers will be able to deliver customized products and services to their customers. This shift in marketing will all happen automatically through enhanced energy management technology.
The technology aggregates, analyzes and delivers useful data to energy providers so they can design programs that use customer preferences to improve energy efficiency and cut costs. These programs make energy management something that’s simultaneously effortless and fully within customers’ control.
2. A new way to market for utilities. This new era of personalization, in which customers expect enhanced services from their core providers and data analytics makes it possible to deliver these services, demands dramatic change from utilities.
Until recently, utilities have served as pure-play energy companies that offered electrons over a network of wires. It has worked, but times are changing. Customer expectations coupled with competition from companies such as Google with personalized, varied offerings are forcing utilities to provide the same.
To grow and succeed, utilities must start acting like energy service providers (ESPs). As ESPs, they will create a marketplace of energy-related goods and services that build new revenue streams and keep customers satisfied. Satisfied customers will stay utility customers instead of taking their energy needs to other independent providers.
In 2014, some utilities began to experiment with adopting the ESP model. NRG Energy unveiled a retail solar strategy and partnered with Green Charge Networks to deploy electric vehicle charging stations. Likewise, Arizona Public Service proposed a solar utility business model.
In 2015, we will see more utilities moving toward the personalized marketplace approach. It’s best for them and their customers.
Continued growth of distributed energy resources and energy efficiency measures could cause significant demand disruption and drive down utilities’ revenues by up to $48 billion a year in the United States and €61 billion a year in Europe by 2025, according to Accenture’s Digitally Enabled Grid research.
Accenture performed extensive modelling under three scenarios to assess how technologies, such as solar photovoltaics (PV), electricity storage, electrification of heating and transport, energy efficiency, energy conservation and demand response, would impact the grid network and utilities’ business models.
Additionally, as part of the research, Accenture conducted its second annual survey of global utilities executives and found that perceptions of the impact of these energy demand-disrupting technologies have shifted considerably in the last year. Utilities executives are notably more concerned about the impact of these technologies on future revenue streams, with 61 percent saying that they expect significant or moderate revenue reductions as a result of distributed generation, such as solar PV, compared to 43 percent last year.
“Based on our research, Accenture believes that the most likely scenario in the next 10 years could lead to revenue losses at the lower end of our scale, $18 billion a year in the U.S. and €39 billion in Europe, caused by a moderate reduction in load on the grid network,” said Valentin de Miguel, global managing director of Accenture Smart Grid Services. “This is because adoption of energy efficiency and distributed generation will become possible without subsidies, which will lead to greater market penetration as a result of shifting consumer sentiment, falling technology costs and a moderate rise in electricity prices, especially across Europe.”
Despite popular reports of a looming utilities “death spiral”, in which consumers migrate off the grid or use it only as backup, Accenture research shows it to be unlikely and uneconomic for a large number of consumers due to natural limitations on viability and cost constraints.
The vast majority (79 percent) of utilities executives believe that it won’t be cost-effective for consumers to go off-grid without any subsidies until 2030 or beyond. In addition, by 2035, just 12 percent of customers in North America are expected to become energy self-sufficient, compared to 11 percent in Europe.
polar vortex that blasted the US with Arctic air in early January 2014 brought the coldest temperatures the country had seen in two decades. At the same time, peak demand for electricity to heat buildings soared by a massive 35,000MW – 25% higher than is typical in January and setting new winter peak demand records.
Several power stations failed and the US would have faced crippling power outages had the network operators been without an innovative grid balancing technology at their disposal: demand response. Rather than meeting energy demand the traditional way with more generation, customers who were pulling power off the grid, that didn’t actually need it, delayed their use of energy. Everyone who needed energy had access to it, but simply by managing capacity, the lights stayed on for thousands of people. This shows how powerful demand flexibility is and how much energy it can release at times of stress.
Think of the energy system like a car engine. An F1 car constantly adjusts performance to be able to arrive in the pit stop at the optimum time. Government and generators are proposing bolting on lots of extra bits to the motor, but that makes it expensive and slows it down. Fine tuning the energy system to operate in the consumption sweet spot solves the issue more efficiently.
In the US, 10-12% of power is now provided by demand response. While the technology is indispensable in emergency demand scenarios such as the polar vortex, it is also a critical component in bringing down the cost of energy; instead of just injecting more energy into the system via costly and polluting power stations, you can better manage existing capacity.
There is no reason the UK cannot emulate the US’ success in using demand-side response in order to ensure a fair deal for consumers, both in emergency and day-to-day scenarios. Managing risks to the electricity system has a major impact on bills that customers receive; energy costs are made up not just of the commodity cost of each kilowatt unit used, but include transmission charges, distribution charges, imbalance charges, and capacity charges. Real-time management of these risks through demand response drives down costs for customers.
Demand response has already proved its worth in the UK. Back in February 2012, seven UK power generators failed to start up due to the cold, yet again, customers kept the lights on.
Our electricity market will reach critically low levels of energy capacity by 2017/2018 and now we need demand response more than ever. But UK utilities and policy makers are actively side-lining innovative technologies in their proposed solution, the Capacity Market, to the detriment of UK bill payers.
The UK Capacity Market
The Capacity Market was originally set up to encourage capacity measures that keep the lights on at the lowest possible cost; a format which again we know has been used very successfully in the US.
To comply with European competition policy, the UK’s Capacity Market must embrace the principles of technology neutrality and competitive bidding to ensure generation adequacy at the lowest possible cost for consumers. Yet this is precisely what the proposed auction system fails to do.
An engrained, institutional bias in favour of building new assets to boost supply means that cost-effective ‘no build’ technologies for managing demand have been ignored. This will push up electricity bills needlessly and commit consumers to paying for capacity that we may not need if we invest properly in building demand-flexibility, for those who want to use it.
The UK has announced its intention to auction a total of 53.3 GW of capacity for the first delivery year in 2018/19, of which 50.8 GW is slated for auctions in December 2014. The balance will be auctioned one year ahead of delivery in 2017. New generators will be eligible for a 15-year capacity agreements. Demand response providers will only be eligible for one-year capacity agreements. The government has created a system that only works if you’re in the business of building power stations.
You probably didn’t notice it, but one of the most significant acquisitions in the history of the utility sector took place this week. Hawaiian Electric Industries agreed to sell its utility business to NextEra Energy for $4.3 billion.
The move is significant not because it creates an ever larger utility, but because one of the largest renewable energy asset owners in the world is acquiring a utility that is being overrun by renewable energy. Hawaiian Electric has been fighting an onslaught of rooftop solar energy that has transferred energy generating assets from its own control to customers. Regulators have even squashed an effort by the utility to slow the growth of solar.
If it chooses to, NextEra could build the next generation utility, one that embraces solar and wind energy while addressing the challenges that come from these energy sources.
Can NextEra Energy create the utility of the future?
Hawaii’s first challenge is that it gets about 75% of its electricity from imported oil. This is incredibly expensive and is the reason Hawaiians paid an average of $0.34/kW-hr of electricity in September versus $0.10 nationwide (this includes all sectors).
Source: U.S. Energy Information Administration.
This high cost electricity has made solar energy extremely attractive for consumers, who can save money by putting solar panels on their roof for a lease of around $0.15/kW-hr and $0 down. But distributed solar systems rely on net metering to send extra electricity during the day back to the grid and the high penetration of distributed solar has been a challenge for the utility. As a result, Hawaiian Electric has tried to slow solar growth by adding fees and limiting net metering for solar systems.
The UK’s new electricity capacity market suffered a potential setback on Thursday when it emerged that a demand response company is to launch a legal challenge against the mechanism in the European General Court.
Tempus energy, which is a member of the UK’s Demand Response Association, said the mechanism acts as an “unlawful subsidy” that unfairly favours new generation assets above consumers capable of moving demand away from peak hours.
The market is set to open to auction later this month for delivery of power capacity from Winter 2018. However the government said it remained “fully confident” in its timetable.
Some operators of new-build plant are eligible to enter this month’s auction for contract lengths of up to fifteen years, while customers offering demand response capabilities are only allowed to enter a separate subsidy scheme that will entitle them to maximum one-year contracts.
EnerNOC, Inc. (Nasdaq:ENOC), a leading provider of energy intelligence software (EIS), and Pulse Energy, a leader in customer engagement software for the utility industry, today announced that EnerNOC has acquired Pulse Energy to help utilities better engage all of their commercial and industrial customers, from small businesses to the largest enterprises.
“Forward-thinking utilities are striving to be trusted energy advisors to their customers by delivering tools that provide greater visibility and control over energy use. The combination of EnerNOC and Pulse Energy will offer utilities the only integrated platform purpose-built to engage utilities’ entire commercial and industrial customer base,” said Tim Healy, Chairman and CEO of EnerNOC. “This acquisition strengthens EnerNOC’s software product offerings for utilities and significantly increases our addressable market.”
Pulse Energy’s software enables utilities to deliver targeted energy saving recommendations in a branded environment, catered to each customer’s unique profile, including business type, location, and energy use. It has detailed analytics models for over 100 commercial customer market segments and is currently deployed by utilities in North America, Europe, and Australia, including BC Hydro, British Gas, Ergon Energy, FortisBC, and Pacific Gas & Electric. Together, EnerNOC and Pulse Energy serve 54 utilities worldwide.
The Bluetooth Special Interest Group (SIG) officially adopted version 4.2 of the Bluetooth core specification this week. Key updates in 4.2 improve privacy and increase speed, and a soon-to-be ratified profile will enable IP connectivity. Bluetooth 4.2 opens up new opportunities for developers, OEMs and the industry to build a better user experience for consumers while creating use cases never before imagined.
“Bluetooth 4.2 is all about continuing to make Bluetooth Smart the best solution to connect all the technology in your life – from personal sensors to your connected home. In addition to the improvements to the specification itself, a new profile known as IPSP enables IPv6 for Bluetooth, opening entirely new doors for device connectivity,” said Mark Powell, executive director of the Bluetooth SIG. “Bluetooth Smart is the only technology that can scale with the market, provide developers the flexibility to innovate, and be the foundation for the IoT.”
Privacy and Security
Bluetooth 4.2 introduces industry-leading privacy settings that lowers power consumption and builds upon the government-grade security features of the Bluetooth specification. The new privacy features put control back into the hands of the consumer by making it difficult for eavesdroppers to track a device through its Bluetooth connection without permission. For example, when shopping in a retail store with beacons, unless you’ve enabled permission for the beacon to engage with your device, you can’t be tracked.
Bluetooth 4.2 increases the speed and reliability of data transfers between Bluetooth Smart devices. By increasing the capacity of Bluetooth Smart packets, devices transfer data up to 2.5 times faster than with previous versions. Increased data transfer speeds and packet capacity reduces the opportunity for transmission errors to occur and reduces battery consumption, resulting in a more efficient connection.
Building on the capabilities released earlier with Bluetooth 4.1 and the new features released in 4.2, the Internet Protocol Support Profile (IPSP) will allow Bluetooth Smart sensors to access the Internet directly via IPv6/6LoWPAN. IP connectivity makes it possible to use existing IP infrastructure to manage Bluetooth Smart “edge” devices. This is ideal for connected home scenarios that need both personal and wide area control. This profile will be ratified by the end of the year.
For the latest Bluetooth 4.2 and IPSP technical details, tools and other information including an FAQ and more, visit: www.bluetooth.com/bluetooth4-2
About Bluetooth® Wireless Technology
Bluetooth wireless technology is the global wireless standard enabling simple, secure connectivity for an expanding range of devices and serves as the backbone of the connected world. Bluetooth Smart technology, through an updatable platform and low power consumption, creates new application opportunities for the mobile phone, consumer electronics, PC, automotive, health & fitness and smart home industries. With nearly three billion devices shipping annually, Bluetooth is the wireless technology of choice for developers, product manufacturers, and consumers worldwide. Backed by industry leading companies, the Bluetooth SIG empowers over 24,000 member companies to collaborate, innovate and guide Bluetooth wireless technology. For more information, please visit www.bluetooth.com.
FirstEnergy Corp. has a traditional view of wholesale electricity markets: They’re a competition between iron-in-the-ground facilities that can put megawatts on the grid when those megawatts are needed. Think coal plants, nuclear reactors and hydroelectric dams.
Missing from the definition is a consumer’s promise to turn off the lights when the grid is stressed — so-called demand response.
Instead of creating energy during peak times, demand response resources conserve it, freeing up megawatts that don’t need to come from generators.
The idea is not new and has been expanding in the territory of PJM Interconnection, a Valley Forge-based grid operator that manages the flow of electricity to 13 states, including Pennsylvania.
FirstEnergy, which owns power plants and utility companies across several states, wants PJM to abandon the demand response concept.
The Ohio-based energy company says demand response, which doesn’t require any kind of capital commitment, is “starving” traditional generation out of its rightful revenue in wholesale markets.
“We feel that it’s going to lead to even more premature closures of power plants,” said Doug Colafella, a spokesman for the firm.
Specifically, FirstEnergy is fighting to get demand response kicked out of PJM’s annual capacity auction, which ensures there’s enough electricity resources to meet projected power demand three years in advance. The auction establishes a single clearing price that will be paid to all successful bidders, like a retainer fee, in exchange for their promise to be available to be called upon three years from now.
During the May auction, which set capacity prices for the 2017-2018 year, the clearing price was $120 a day for each megawatt of electricity bidders committed. About 6 percent, or about 11,000 megawatts, of the capacity secured came from demand response.
FirstEnergy’s Bruce Mansfield coal-fired power plant in Beaver County failed to clear the auction. The company has since postponed upgrades to the facility, which could jeopardize its functioning beyond 2016.
Capacity payments are a stable source of revenue for baseload generation plants, Mr. Colafella said, and a price signal to the market about which way demand is headed, giving generators some indication about whether new facilities will be necessary and profitable.
Demand response distorts that dynamic, he said.
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As we wrap up 2014, it’s time we took a look at some of the biggest cloud technologies that made an impact over the course of the year and thought about cloud predictions for 2015. I’m most likely not going to list all of the technologies that were big this year, so if you feel I missed something, feel free to add it in the comments section!
That said, the concentration around the user and the information delivery model has allowed the modern data center and the cloud infrastructure in general to really evolve. We’re seeing new methods of optimization, cloud control and entirely new ways of controlling the user experience. And so, what were some of the big technologies that impacted the cloud?
- APIs (cloud apps). This has been a big one. Platforms from VMware, OpenStack, CloudStack, Eucalyptus, and Amazon are all creating easier ways to connect via the cloud. APIs are creating intelligent infrastructure cross-connects to reduce the amount of resources required. APIs at the software and hardware layer will continue to make cloud communication easier on an application and infrastructure level.
- Software-Defined Everything (SDx). We’re really taking off with this whole virtualization concept. Software-defined platforms really do revolve around specific components virtualization. This can be storage, networking, security, or even a data center platform. With technologies like SDN, we’re able to create intricately connected data centers capable of greater resiliency and business continuity.
- The Hybrid Cloud. There is going to be a lot of blurring when it comes to cloud model definitions. The future of the cloud will pretty much see everyone adopt some type of hybrid cloud platform. Why? Firstly, most organizations are already in the cloud. Secondly, there are a lot of new options in terms of connecting a private cloud with some cloud resources. More companies are moving just a part of their environment into various cloud options. The reason it’ll all start to blur together is the management framework is evolving. New cloud management solutions aim to control your cloud regardless of the platform. Hybrid, public, private and even community clouds can all be controlled from a single console.