Navigant Research Blog

Japan, Disaster, and the Smart Grid

— March 31, 2011

I have been reluctant to join the fray on what the recent Japanese disasters might mean to this or that issue. With active clients in Tokyo, these tragedies have had a personal effect, and my first thoughts have been for the personal well-being of these clients, their families, and their colleagues. So while the most important observations are surely to be found in the resilience of the people of Japan, there are a few items worth considering within our comparatively small smart grid universe.

The highest profile issue is how the ongoing struggles at the Fukushima nuclear plant will impact the budding “nuclear renaissance” assumed for the United States and around the world. NRG Energy has already scaled back its efforts on a South Texas nuclear plant expansion (in which Japan’s TEPCO is an investor/participant). With the NRC declaring that it will review all existing and proposed plants in light of the Fukushima disaster, many believe it is 1979 all over again, when the Three Mile Island incident put the industry into a deep freeze.

The problem this time around is that while it may not be popular to admit it, nuclear expansion is the closest thing to a silver bullet to displace the 45% of U.S. electricity currently generated by carbon-spewing coal. The smart grid will need to get much smarter, much faster, if we want renewable energy resources to pick up even bigger slice of pie.

The other observation is the inherent vulnerability of large, centralized power generation. These natural disasters have created an instant and severe electricity shortage within perhaps the world’s most electricity dependent nation, with world-wide impact. This is a shock to what has been the world’s most reliable grid. (As an aside, it is worth noting how resilient the rest of Japan’s grid has been to the effects of the huge earthquake, which is quite remarkable). Would a grid with high penetrations of distributed renewable generation, organized as a collection of semi-autonomous microgrids, with large amounts of fine-grained demand response capability, fared better in the face of such a disaster? It is entirely possible, which is why the military is leading so much of the efforts around these technologies.

Of course, a countervailing observation can be made as well. The smart grid is all about leveraging communications and IT to derive greater efficiencies through real-time, fine-grained, control and management of distributed, ever-changing, generation sources and load sinks. This is really nothing short of a large scale, complex, resilient, semi-autonomous control system. Unfortunately, the best-in-class complex, resilient, semi-autonomous control systems in existence today are in nuclear plants. Ironically, it appears the key failure on the Fukushima disaster was a lack of electricity to run the control systems (i.e. cooling) to shut down the plant. Could we be setting ourselves up for a similar kind of “deadly embrace” in the smart grid, where we need electricity to run the controls, but we need the controls to run the electricity?

Much of this is magnified if we consider that it may not take a tremendous natural disaster on the scale of the recent earthquake and tsunami to cause such centralized (or distributed) disruptions. Most believe that cyber attacks could today accomplish the same or worse.

In any case, it is hard to imagine that any other region of the world could respond to such a challenge with any more grace and fortitude as the Japanese are doing today. May we never face that challenge again.


If We Shoot for the Stars We Might Make it to the Moon: Sustainable Mobility and the EU’s White Paper

— March 30, 2011

Last week the EU released its White Paper “Roadmap to a Single European Transport Area: Towards a Competitive and Resource Efficient Transport System” which outlines the vision of transport across Europe by 2050. Let’s not forget we are talking about a document which outlines the transport system in and across 30 countries with 500 million citizens.

Before we get to the exciting part – the vision and its reaction – it is worth just outlining some the document’s key points:

1. The transport system we have is not sustainable

2. Overall, the EU needs to reduce emissions by 80-95% below 1990 levels by 2050. By 2030, the goal for transport will be to reduce GHG emissions to around 20% below their 2008 level

3. In 2010, the oil import bill was around €210 billion (~$300 billion) for the EU. Unless we decouple oil and transport this is not going to decrease and the all the increases will be passed down to the consumer. That’s my folks, my sister, and myself, not some amorphous blob that we use the word “consumer” to cover, the unnamed them out there but us

4. If we stick to the business as usual approach, the oil dependence of transport might still be little below 90%, with renewable energy sources only marginally exceeding the 10% target set for 2020. CO2 emissions from transport would remain one third higher than their 1990 level by 2050.

So in a nutshell we have to change. Tomorrow cannot be like today.

The EU has set out a vision document for what and where we should be by 2050. In short it is about building an intelligent low carbon system where we use trains, buses, boats, et cetera, for long journeys and not cars. But the bit that grabbed the headlines was the target for cars.

“Halve the use of ‘conventionally-fuelled’ cars in urban transport by 2030; phase them out in cities by 2050.”

In other words by 2050 all car in cities would be battery EVs or hydrogen fuel cell cars. Feasible? Possible. A stretch? Definitely.

So what is the problem? It’s a vision. Not a law. It’s a stretch target not legislation.

In the United Kingdom our Transport Minister pretty much showed that he hadn’t read it by saying, “We will not be banning cars from city centers any more than we will be having rectangular bananas.” They didn’t mention banning cars.

So over the next 40 years we will be moving in Europe to a system where low carbon and intelligent are the key focus.

Think about it.

Planes, trains, ships, cars – every mode of transport is going to be worked upon. Whether it is new fuel, new propulsion technologies, or new infrastructure transport in Europe, it’s going to get one hell of a wake up call.

If I was to have one gripe about the vision is that it doesn’t look at reducing the need for mobility. Mobility is a right, but by encouraging telecommuting and the better distribution of job opportunities reducing the need to travel would go a long way to reducing congestion and emissions from transport. Transport is one part of a larger societal ecosystem and by segregating it out a lot of the focus and potential for change is diluted, at best, or lost, at worst. But it is a start and in 2050 when I come to update this blog post it will be a brave new world. Can’t wait!

The full White Paper can be downloaded here.


The U.K. Smart Meter Project: Timelines Clear but Still an Open Race

— March 30, 2011

The U.K. government has published its response to the consultation it has been running on the proposed roll out of smart meters to 30 million U.K. homes and businesses. The headline documents lays out details of the next stage of the program, the so-called Foundation Phase, leading up to the beginning of the mass roll out program, which is now expected to start in Q2 2014. The headline figure is that the government is expecting deployment of over 50 million electricity and gas meters to be completed by 2019. It has therefore decided against more aggressive timescales, which were considered, but still expects to be well inside the 2020 smart meter deadline set by the EU.

There is also further clarification of the timescales for the establishment of the DCC (DataCommsCo). DCC is the new regulated body, responsible for tendering and managing the communications services that will support all smart meter deployments across Great Britain. Applications for the DCC license are expected to begin in middle of 2012, with the license awarded by the end of 2012. In parallel, with letting the DCC license, the government will also begin procurement of communications services. It is expected the procurement will be completed by the DCC once it is established with contracts awarded by the end of 2012. The central communications provision will therefore be in place to enable mass rollout to begin in 2014.

The specific nature of the enduring communications provision for the United Kingdom will therefore not become clear for some time. However, the government has said that the DCC will be expected to take on existing communications contracts as long as some basic criteria are met. This provides some greater certainty to energy suppliers deploying meters from the middle of 2012 (when compliant meters are expected to be available in volume). This approach does not preclude a new communications service being established and a limit may be set on the number of meters the DCC must adopt to ensure that most effective and efficient communications options are not excluded. So it is still too early to say what the final communications provision may look like as I explained in my previous blog, ”The UK Smart Meter Project: Will All Have Prizes?”

The response also lays out a timelines for the definition of a detailed technical specification to be complete by the end of this year. However, the basic functional requirements remain as in the prospectus, including the requirement for a separate WAN module and the provision of an IHD to all customers. The government has come down in favor of 13 months consumption data being held locally on the meter in order to allow customer comparison of usage and service. This was a victory for consumer groups over the manufacturers. Consumer groups will also be pleased with the government’s stance on privacy. Consumers will have a choice over how their consumption data is used and by whom, except where data is required to fulfill regulated duties. To quote the report: “The government is minded to define regulated duties narrowly.” The government is leaning towards requiring suppliers to obtain explicit informed consent from consumers for use of their data for other purposes.

As to the definition of metering interface standards, these are still to be defined. However, the report indicates that “a minimal number” of standard interface languages are likely to be allowed rather than a market driven approach.

Overall, the main response to the report is likely to be relief that there is now some clarity as to the timelines for the project. The uncertainty as to the nature of the DCC and the communications service model will continue to cast something of a shadow, but there seem to be reasonable safeguards to suppliers who push ahead before 2014. There are also nods in the document to concerns that the smart meter roll out is divorced from consideration of the wider smart grid program the U.K. needs to meet its network upgrade and environmental targets. The document explicitly states the desire to enable the smart meter program to support smart grid requirements, for example, through an upgradeable WAN interface and some other elements of the technical specification. However, the smart meter program in the U.K. continues to be driven with a focus largely on the consumer requirements and energy efficiency in the home.


PlanIT Valley: A Blueprint for the Smart City

— March 30, 2011

New build smart cities are a phenomenon usually associated with Asia or the Middle East. Whether it is a showcase project like Songdo in South Korea or the massive new city development program being driven by the Chinese government, greenfield sites offer a chance to think afresh about how cities are designed, built, and operated. However, one of the most ambitious new city developments is about to begin in northern Portugal. PlanIT Valley is being built on a 1,700 hectare (4,000 acre) plot in the municipality of Paredes near Porto. The project is being driven by Living PlanIT, which is working closely with the Portuguese authorities and partners such as Cisco and Microsoft to develop an ambitious plan for a new type of urban development.

At the heart of the plans for PlanIT Valley is an innovative design approach that will embed smart technology into the fabric of the city, but PlanIT Valley is not just about technical innovation. The smart infrastructure will provide an open platform for the development and deployment of a wide range of new services (and existing services delivered in new ways). Indeed, the core business model for PlanIT Valley provides the partner companies the chance to cooperate on the development of such services in a uniquely collaborative environment.

A major focus for the project is to improve the inefficiencies of the traditional construction industry. Existing building design and development techniques and processes are inadequate for today’s technology rich and environmentally aware requirements. The Living PlanIT founders saw the opportunity to change the fundamental economics of the building process. Taking lessons from other manufacturing industries – including aerospace, automotive, and shipbuilding – they identified a number of core elements that defined the modern manufacturing capability. They are now applying those principles to the construction of PlanIT Valley. By doing so they expect to save 30-40% on traditional building costs, construct buildings 30-50% faster and to a much higher quality, and embed technology into the buildings through modular construction principles. This will also lead to significant savings in operation costs for the buildings based on the use of new materials and designs.

Given the importance of network and sensor technologies to the project, there was also a need for a simple and cost-effective infrastructure that enables easy integration of systems for monitoring and actuating building features and allowing communication between multiple devices and sensors. Living PlanIT acquired its innovative sensor technology from McLaren Electronic Systems, part of the McLaren Group. Based on the electronic control units used in Formula One racing cars, this sensor technology is designed to handle large volumes of critical data in real-time in extreme conditions. The sensor and control technology will be embedded in the Cisco router and IOS software infrastructure to create a high-density network of low-energy and environmentally-hardened sensors, some of which will be embedded in material structures. In total, Living PlanIT expects to have around 100 million sensors (or roughly one per SQ) deployed throughout the city.

The Living PlanIT team includes engineers who were responsible for the development of SOAP, the Microsoft developed standard for web service integration and Microsoft’s .NET architecture. They have utilized the same principles for easy integration to the PlanIT Valley infrastructure, which allow the development of new services and capabilities by partners. For example, PlaceApps allow location based M2M applications to be built using services that interact with building systems such as lighting or heating controls. Steve Lewis, CEO of Living PlanIT refers to this as the iPhone model – a common platform that enables new applications to be built and deployed quickly.

There is a huge amount of work to be done before the first residents are housed around the middle of 2012. The speed of development envisaged for the project will itself present an immense challenge in terms of project management, coordination, and integration. However, it is hard not to admire a project that will put a number of smart city promises to a rigorous test. First, it is challenging accepted assumptions on how cities should be designed and constructed. Secondly, it will show what can be done if connectivity and intelligence are built in to the design from the beginning. Thirdly, it will be a pilot zone for a whole range of new services and, equally important, new types of collaboration.

The attraction of PlanIT Valley as a model for new cities in Asia, the Middle East, and other regions is obvious. But the innovations it is fostering in construction, urban technology platforms, and service design are also of relevance to developers in Europe and North America involved in urban regeneration. It could well be that some of the most exciting insights from PlanIT Valley will not be about how we build new cities, but how we make old ones fit for the 21st century.


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