Fresh news on smart grid, IoT and green technologies
So you just installed a Nest Learning Thermostat, one of the most popular smart thermostats on the market. You synced it with your smart phone and tablet, and now you’re ready to watch the savings roll in. Not only can you control the temperature of your home from just about anywhere, you may also have the ability to take advantage of a new program that can earn you a little extra dough.
Google has slowly been stepping out onto the energy scene with its acquisition of Nest Labs, its partial ownership of the Ivanpah solar array, and now, its Nest Rush Hour Rewards Program. Some may not realize why Google is branching out in this direction, but I’ll tell you why. Energy efficiency and home automation are taking off!
Nest owners now have the option to participate in an automated residential demand response (DR) program. I know what you’re thinking: What the whaaat?
Allow me to explain.
HERE ARE THE BASICS
Think back to the last time you were stuck in rush hour traffic. Aside from the thunderous obscenities you shouted, what do you remember? Congested roadways, sluggish movement, and no one getting anywhere fast enough. Now take that same concept and apply it to the electric grid.
During some of the hottest days of the year, everyone demands more energy to stay cool. Consequently, the grid becomes clogged, making it difficult for utilities to distribute enough electricity in order to meet the needs of their customers. That’s where demand response programs make their appearance.
When a situation like this occurs, the grid operator calls for an “event,” signaling DR providers to contact program participants and request a temporary reduction of their energy consumption. With enough reduction, the electric grid’s congested “traffic” disappears, and energy travels freely, avoiding damaging blackouts to the community.
HOW NEST FITS INTO THE EQUATION
Demand response programs were typically restricted to large businesses or organizations that consume a significant amount of electricity on a daily basis. These days, residents are getting in on the action as well.
Nest owners have an added convenience. When a DR event is triggered, their thermostats can automatically adjust for energy reduction. That means no more running home to turn down your A.C., no more forgetting when to turn it down, and no more having to look up how long it needs to be adjusted. Nest will take care of everything, leaving you more time to think about the details of your upcoming dinner party.
Monnit Corporation (www.monnit.com) announced today the release of new International M2M cellular gateways for wireless sensors. In order to meet the needs of International customers, Monnit is introducing new, low-cost International Cellular Gateways. The gateways feature 3G (GSM/UMTS) or 2G (GSM/GPRS) cellular technologies, allowing for operation on a majority of the world’s leading cellular networks.
Monnit cellular gateways are designed to communicate with the iMonnit™ Online Monitoring and Notification System via cellular transmission, making them the perfect solution for remote locations or where existing internet connections are not available. They are also available with battery backup, allowing for up to 24 hours of continuous operation in the event of a power outage.
Monnit International cellular gateway features:
- Available technologies; 3G (GSM/UMTS) or 2G (GSM/GPRS)
- Available wireless sensor frequencies; 900, 868 and 433 MHz
- Support for various cellular carriers
- LED status indicators
- Remote software upgrade capability
- 50,000 sensor message memory
- Optional 24 hour battery backup in event of power loss
- AC power supply
Monnit International Cellular Gateways are designed to support up to 100 Monnit Wireless Sensors, which are capable of detecting and monitoring functions that are critical to business operations, including: temperature, humidity, water, light, access, movement and much more. Monnit’s wireless gateways transmit data between local sensor networks and iMonnit, the online data monitoring system, which aggregates sensor information and sends notifications via text or email if user defined conditions are met or exceeded.
The Electric Power Research Institute (EPRI) unveiled demand response software today that would provide a common way for devices and appliances on the electric grid to respond automatically to changes in price, weather, and demand for power, a process called automated demand response (ADR).
ADR makes it possible to translate changes in wholesale markets to corresponding changes in retail rates. It helps system operators reduce the operating costs of demand response (DR) programs while increasing its resource reliability. For customers, ADR can reduce the cost of electricity by eliminating the resources and effort required to achieve successful results from DR programs.
The EPRI ADR software was certified by the OpenADR Alliance, an organization of stakeholders that fosters the development, adoption, and compliance of the Open Automated Demand Response (OpenADR) standard through collaboration, education, training, testing, and certification.
“Release of this software is a critical step in developing open, interoperable standards that will facilitate the emerging integrated grid,” said Mark McGranaghan, vice president of Power Delivery and Utilization at EPRI. “Making this software freely available to the industry will accelerate the adoption of standards-based demand response.” The EPRI integrated grid concept envisions a robust electricity grid that effectively integrates distributed energy resources – ranging from rooftop solar to demand response.
The software was developed by a collaborative that included American Electric Power, California Independent System Operator, Électricité de France S.A., ESB Networks Ltd. (Ireland), Kansas City Power and Light Company, New York Independent System Operator, The Southern Company, and Tokyo Electric Power Company, Inc.
EPRI guided the development of the software to accelerate the adoption of OpenADR, to validate its specifications, and to provide another way to enable the creation of new products and services that use demand response to increase the reliability and reduce the cost of operating the electric grid.
More information about the software is available at:
Wattics, the leading Energy Management software company based in Dublin, Ireland, are launching their new Measurement and Verification tool and Partnership Program on the 20th January, at ESCO-Europe, Europe’s largest ESCO-focused annual platform. Wattics is sponsoring ESCO Europe 2015 and Antonio Ruzzelli, Wattics CEO, will also be speaking at the event about energy analytics and the benefit for ESCos of any size.
The M&V tool is designed for energy professionals in charge of delivering White Certificates and energy/carbon credits using IPMVP certification. The advancement of this tool provides a service, which accelerates the conversion of energy savings projects into monetary benefits.
The concept behind the new M&V tool is to revolutionise the way ESCO companies conduct their projects, streamlining their energy conservation projects, achieving more energy savings, identifying which projects are the most viable from a financial point of view, so to ensure seamless and profitable energy performance contracting. The immense benefits of the Wattics M&V tool for ESCO companies include abandoning complex excel files, locating all data and documents in one central place online, simplifying projects management with a step-by-step adjustable IPMVP compliant process, and importing data from existing energy management solutions directly from the user’s interface.
A unique advantage of the Wattics automated M&V tool combined with the Wattics Sentinel Self-learning energy analytics engine is on one hand the versatility to automatically import any meter data and other relevant non-energy data used develop the regression model, and on the other hand the valuable automatic learning process that goes on continuously, which alert the operator if there are unexpected factors or issues that may compromise the saving project. This is a major step forward towards the management of saving projects as many ESCO partners using the system have stated.
Antonio Ruzzelli, Wattics CEO, states: “We are absolutely thrilled to empower our Energy Professional Partners and we are continuously looking for new ones that are willing to stand out from the mass, to deliver exceptional energy efficiency services, to make a difference in this market.
We are extremely excited about the launch of our unique automated M&V Tool and we have developed a simple and straightforward way of integrating partner’s data into our analytics engine and dashboard. Today, we offer one the best cloud-based energy platforms at the most competitive subscription tariff in the market.
However, it is important to contact Wattics before starting your energy saving projects to be sure the right parameters are taken before and after the conservation measures. Once the client sees the monetary benefits achieved and the potential to achieve more, the client requests the system to be installed permanently, as we always see.”
Hoping to address the uncertainty that resulted when a federal appeals court decision called into question whether demand response resources can continue participating in organized capacity markets as supply, the PJM Interconnection LLC on Jan. 14 filed with FERC a proposal that would account for those resources on the demand side of the supply/demand equation.
While the U.S. Solicitor General has said he intends to seek, on FERC’s behalf, Supreme Court review of the decision (Electric Power Supply Association v. FERC, 11-1486) at issue — which found that the agency overstepped its authority when it essentially ordered that demand response providers be paid the market price for energy under certain circumstances — PJM explained that its “stop-gap” proposal (ER15-852) was developed in case the high court refuses to grant certiorari in the matter.
The U.S. Court of Appeals for the District of Columbia Circuit has stayed a mandate for FERC to vacate Order 745 pending the Supreme Court’s final disposition of the case, but PJM said the filing would put into place a “fully adjudicated method” for allowing demand response to participate in the May base residual auction, or BRA, for capacity for the 2018/2019 delivery year should the high court deny review of the EPSA opinion. Although the D.C. Circuit’s opinion specifically addressed a challenge to demand response participation in energy markets, many have argued that the findings also extend to organized capacity markets.
“PJM proposes these changes in order to establish a jurisdictionally sound basis to realize the operational and market efficiencies of demand response in the PJM region in lieu of the risks and uncertainties that would arise if PJM cleared demand response in its capacity market auctions under the existing rules after the EPSA mandate had issued,” the filing explained.
Specifically, the grid operator proposed to adjust the amount of capacity it procures through its reliability pricing model, or RPM, auctions to take into account commitments by wholesale entities to reduce their loads in the capacity market. PJM said it sought to “ensure that, in the event the EPSA mandate issues, RPM will operate with accurate representations of demand, and thus will continue to provide just and reasonable prices for the capacity needed to maintain resource adequacy.”
PJM said it could not predict how much demand response would participate in the capacity market under the proposed rules, but acknowledged that the amount “could be substantially lower under this proposal than it has been historically.” That is because curtailment service providers — aggregators that bundle end-users’ load reductions into supply commitments to PJM that in the past have accounted for the majority of demand response registered in the region — would no longer be allowed to participate directly in the grid operator’s capacity market.
Nevertheless, assuming that the existing rules under which demand response participates in the PJM market must be revised, PJM said it believes a plan that would “preserve the reliability and economic benefits of some demand response would be superior to rules that do not recognize any demand response.”
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.
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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.
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