Navigant Research Blog

Maine’s High Court Endorses Smart Meter Safety Concerns

— July 19, 2012

Maine’s highest court ruled recently that state utility regulators fell short in resolving health and safety concerns when they authorized Central Maine Power’s smart meter deployment – another sign that smart meters remain a focal point for public skepticism and a tough sell for utilities.  The court said the Maine Public Utilities Commission (MPUC) must return to the issue and investigate potential health and safety risks.  The ruling is seen as a victory for smart meter opponents.

The future, however, is less clear.  Central Maine Power (CMP) started installing smart meters in 2010, and has deployed some 600,000 of the devices in its service territory so far.  Customers who do not want a smart meter installed at their house can opt out, but must pay a monthly fee of $12.

The case that wound up before Maine’s highest court stemmed from a complaint by 19 CMP customers who said that the opt-out fee was discriminatory and the PUC failed to consider safety concerns in light of new evidence.  Smart meter opponents say the radio frequency (RF) emitted by the devices can cause sleep loss, dizziness, heart tremors, and other issues.  Maine’s PUC rejected the complaint, so the customers took their case to the state’s high court.

The PUC is still considering how it will respond to the court’s demand that it resolve the health concerns, but said it would develop a public process for complying with the ruling.  Meanwhile, CMP, the utility at the center of the controversy, says it will continue to install the remaining 2,000 smart meters it was planning to deploy, claiming the devices are safe.

Maine is not the only place where this issue has bloomed.  As noted in a previous blog post, Vermont’s legislature has approved a law allowing consumers to opt out of smart meters for free.  Other states, like California, Nevada, Michigan, and Texas, have opt-out programs for people opposed to smart meters.

In Pike Research’s own surveys, we have found a significant number of respondents with a negative view of smart meters.  In our most recent sampling of U.S. consumers, nearly one in four (23%) had an unfavorable view of the devices (either “not very” or “not at all” favorable).

(Source: Pike Research)

While it’s clear smart meters are an integral part of smart grid deployments, regulators and utilities must recognize that pushback from some customers, no matter how few, is not a trivial matter.  Concerns about safety need to be addressed, and consumer-friendly opt-out systems should be implemented.  And despite current evidence that smart meters pose less of a health threat than cellphones, the lesson from Maine (and other states) is: lawmakers and courts are willing to listen to smart meter opponents who raise concerns.

 

Nudging Users Toward Smart Energy Choices

— July 18, 2012

In writing the update to Pike Research’s smart grid data analytics report for 2012, I became simultaneously enthralled and spooked.  After all, big data and predictive analytics are not a new phenomenon.  The marketing department at Target can already figure out if I’m pregnant (I’m not) and send me money-saving coupons for diapers.  Surely, with the precision of the data being collected from smart meters, the utility should be able to help consumers understand their energy use to make better decisions.  The power of the human intellect combined with machine-driven pattern recognition has possibilities limited only by the imagination, and can provide significant value to the modernized utility and to society at large.

As technology advances and big data piles up, though, ethical questions frequently arise regarding the importance of data privacy.  What about the acceptable use of smart meter data to influence our actions?

All of a sudden, changing habits and behaviors seems like a complicated business.  Behavioral economists believe that emotions play a significant role in how we make decisions, that often those decisions aren’t in our best interests, and that perhaps it doesn’t help that we’re a little bit lazy.  These same economists explore “nudge theories” that employ suggestions and positive reinforcement that encourage us to alter our decision-making in beneficial ways, often below the level of our awareness.  It’s no surprise that politicians (the United Kingdom even has a “nudge unit”) and corporate culture managers love these theories.  With effective nudging, it should be possible to move individuals away from what many would see as inept decision-making (like overeating, not saving for retirement, wasting energy) toward those that support desirable policy goals (choosing healthy foods, saving money, and turning off the space heater).

Through advanced analytical techniques and predictive analysis, utilities and their service providers now have the potential to not only know who you are and when and how much energy you consume, but also to create a virtual fingerprint of consumption behaviors to discover how likely it is that you’ll be effectively nudged, how best to nudge you, and how hard.  Utilities can provide a consumer with information, tools, techniques, and customized money-saving pricing programs that will help save money and energy, without paying a big cost in comfort.  This is extremely encouraging from the perspective of realizing meaningful energy efficiency gains, but these techniques undeniably raise the specter of ethical acceptability and the overall smart meter creepy factor.  If the utility can tell I’m a restless sleeper because I toast a bagel at 2:00 a.m., is it going to nudge me to go to a doctor and get a sleep aid, armed with a coupon for Ambien?

You’re Free to Make Bad Choices

Malevolence is not necessarily inherent in a nudge.  In fact, critics point out that there is really nothing new with nudges.  Advertisers and public figures have long understood the power of emotional manipulation to alter our choices, without sacrificing our freedom of choice.  For example, social programs attempt to manipulate us by providing more information to improve decision making, such as with the extremely effective Meth Project designed to discourage drug use.  The choice to use drugs is still available, but the societal and individual value of such campaigns is undisputed.  Are you going to complain if your favorite grocery story puts oranges instead of chocolate bars in the checkout line of the grocery story to encourage more healthful food choices? And more to the point, what about information that helps consumers use less energy?  If consumers can freely choose to become more energy efficient and learn to conserve that can lead to lower energy prices and reduced carbon loading, that has clear value, to society, to the utility, and to the consumers themselves.  By contrast, New York City Mayor Michael Bloomberg’s proposal to ban the sales of large-size sugar-laden drinks was a shove, not a nudge.

One effective nudging technique is to provide people with clear details about their choices, and insight into what other people are doing with the same information (peer comparisons).  Many energy analytics companies provide techniques to deliver this nudge in different ways.  They can correlate utility information with various forms of third party data attributes (energy consumption patterns with Facebook posts, income and home characteristics) to help refine messaging that can help consumers make energy-savings choices.  For example, with a personalized home energy report, Opower reports seasonal savings as high as 3.5% achieved through providing information, neighborhood comparisons, and action steps to residential energy consumers.   This approach is a clear departure from traditional means of encouraging energy efficiency, and consumers respond positively to it.

At the same time, complete transparency into how we are being influenced is the key to maintaining freedom of choice.  As Spiderman’s Uncle Ben said, “With great power comes great responsibility.” Amazing things will doubtless come from the ethical use of big data to help promote new social norms, including reducing our carbon footprint and using energy wisely, but we bear the difficult task of balancing the forces between the preservation of personal freedoms and technological capability to influence behavior.  And that dichotomy must be respected.

 

On Alcatraz, Microgrids Escape Previous Limitations

— July 17, 2012

Recently I had the chance to tour the Island of Alcatraz, once the site of one of America’s most famous prisons.  The prison was closed in 1963 due to the high cost of maintenance in such a remote location, but it remains a top tourist destination.

My justification for this junket was an invitation from Princeton Power Systems, a smart inverter company based in Princeton, New Jersey, whose technology forms the backbone of a microgrid installed on Alcatraz with the help of federal government stimulus and which began operation earlier this year.

An inverter converts direct current (DC) from generation sources to alternating current (AC), at the voltage and frequency required by utility distribution companies (i.e., 60 hertz).  Recent advances in inverters for solar photovoltaics (PV) and small wind turbines are setting the stage for a viable microgrid market to evolve.  New inverters allow for safe islanding – i.e., the creation of small distribution systems cut off from the larger power grid.  When connected to the larger grid, inverters enable distributed renewable resources, such as solar PV, to continue to operate when the larger grid goes down, thus avoiding the feeder fault concerns associated with synchronous generators, which may take 2, 5, or even 10 seconds to respond to a grid outage.  (Pike Research’s new report, Inverters for Renewable Energy Applications, forecasts that the total inverter market will surpass $4 billion in global revenues by 2018.)

In the case of Alcatraz, access to Pacific Gas & Electric’s electric grid was severed several years ago when a ship’s anchor accidentally cut the transmission line from mainland San Francisco.  As a result, diesel generators were installed to provide on-site power.  However, as the price of diesel began to climb, and the cost of solar PV fell, developing a state-of-the-art microgrid appeared attractive.

On the day I visited, unfortunately, none of the nearly 1,000 highly efficient SunPower solar panels were working because a switch had failed.  So the entire island was still running on diesel generation, with back-up being provided by banks of lead acid batteries.  Of course, that’s the beauty of a microgrid: a diversity of resources can run together or serve as back-up to each other.

Topology of the 350 Kilowatt Alcatraz Remote Microgrid

(Source: Princeton Power Systems)

 

I learned a lot about the nitty-gritty issues of trying to build a microgrid on a windswept island.  For one, construction of the microgrid was delayed several times due to regulations protecting bird breeding activities, which limited the use of light and sound during a three-week period.  Along with these environmental factors come the quirks associated with preserving historical artifacts, which include rusting (and useless) water and fuel pipes as well as a hole in the roof.

The most persistent issue facing the microgrid, though, revolves around the birds.  Though naturalists initially worried that the solar PV panels that cover the roof would scare away birds, gulls have actually found them quite appealing.  In fact, they sometimes nest under the panels.  Unfortunately, they tend to leave behind their waste, which degrades performance and requires an ongoing, and messy, maintenance task.  Kept clean, the solar PV panels can meet the entire island’s power supply, even during San Francisco’s famous fog, which reduces potential output by more than half.

Beyond the Alcatraz project, Princeton Power Systems has three other microgrids up and running in San Diego, Texas and Missouri. The company offers 10 kilowatt and 100 kilowatt versions of its “DR Inverter,” which accepts four connections to and from power loads (two AC and two DC).  The inverter is designed to sell stored solar energy into the burgeoning U.S. market for demand response revenue streams being authorized by grid operators in response to the Federal Energy Regulatory Commission’s Order 745.  Funded in part by the Department of Energy, PPS’s technology aims to make solar PV more competitive by capturing new revenue streams.  The firm was in San Francisco at the Intersolar North America conference to showcase this new commercial product.

 

In Europe, Coal Regains Its Crown

— July 13, 2012

Like a smoker desperately trying to kick his nicotine habit, the United States is steadily reducing its dependence on coal for power generation.  Europe, meanwhile, is headed for four packs a day.

According to BP’s “Statistical Review of World Energy,” released last month, coal consumption in Europe went up 3.3% last year over 2010.  Germany, the biggest consumer of coal in Europe, consumed 77.6 million tonnes (85.5 U.S. tons) of coal in 2011, 1.2% more than 2010.  Coal consumption in debt-plagued Spain jumped by more than half last year.

That expansion led to a 49 percent jump in imports from the United States in the first quarter of 2012, according to the U.S. Energy Information Administration.  The reasons for Europe’s backsliding on coal dependency are purely financial: cheap coal imports from the U.S. have boosted profit margins at coal-fired power plants to a two-and-a-half year high, according to Bloomberg, while carbon permits – the centerpiece of the EU Emissions Trading System – have dropped to prices that make it more reasonable to burn coal and pay for the permits, rather than shifting to renewables or other relatively high-cost fuels.  Permit prices have fallen about 17% this year, to around €8 ($10) per ton, even as the EU hands out free “transition” allowances to utilities in Poland and elsewhere.

Natural gas, meanwhile, which has dropped to record low prices in the United States thanks to the shale-gas boom, remains pricey in Europe, making coal the more competitive fuel for power generation.  European utilities are actually shuttering gas-fired power plants: Deutsche Bank AG has forecast that 6.4 gigawatts (GW) of power from natural gas plants in Germany, or one-quarter of the country’s capacity, could shut down between now and 2015.

Nuclear Twilight

Indirectly, the rush to coal is being driven by Germany’s decision to phase out nuclear power in the wake of the 2011 nuclear accident at Fukushima, Japan.  Exactly how Germany – which has been a major coal power since the mid-18th century – will replace generation from nuclear plants remains uncertain, but clearly, for now, coal is the answer.  Stating that “fossil fuel-fired power plants are essential for a secure energy supply,” a 2011 study from the Economics Ministry in Berlin called for the construction of around 17 major new power plants by 2022.  If some of those turn out to be coal-fired plants it will signal a major setback for Europe’s plans for a carbon-free electrical sector and the failure of the EU carbon trading scheme.

“The continent-wide cap-and-trade regime in operation in Europe continues to disappoint, as nations switch back to dirty coal-fired electricity generation,” wrote Alex Trembath in a July 9 analysis for The Breakthrough Institute.  Meanwhile the EIA reported that for the first time since the government began compiling monthly statistics, the share of power generation from natural gas in the United States matched that of coal, each accounting for 32% of total generation.  The shift to natural gas is powering significant reductions in the emission of greenhouse gases in the U.S.

“CO2 emissions in the United States in 2011 fell by 92 Mt (million tonnes), or 1.7%, primarily due to ongoing switching from coal to natural gas in power generation and an exceptionally mild winter, which reduced the demand for space heating,” stated the International Energy Agency.

Despite the most progressive anti-carbon regulations in the world, Europe, unfortunately, is headed in the opposite direction.

 

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