Navigant Research Blog

European Grids Look to RF Mesh Networks

— July 23, 2014

Communications networks for smart grids have evolved very differently in Europe than they have in North America, with power line communications (PLC) and cellular technology, thus far, as the leading forms of communications for smart meter connectivity across the pond.  Here in the states, the availability of unlicensed (free) spectrum in the 900 MHz band has led to the leadership of proprietary radio frequency (RF) mesh solutions, such as those provided by Itron, Silver Spring Networks, Elster, Tantalus, Landis+Gyr, and others.

The European Commission, however, has taken steps in recent months to bring 48 European nations into alignment on spectrum policy across the continent.  Specifically, for smart meters and smart grid applications (and other machine-to-machine [M2M] applications), the European Conference of Postal and Telecommunications Administrations (CEPT) announced in February a framework whereby 5.6 MHz of spectrum, from 870 MHz to 875.6 MHz, will be set aside for unlicensed M2M uses, including smart meters and grids.  Details can be found in CEPT’s Electronic Communications Committee (ECC) Report 189.

Indoor Reading

CEPT cited several reasons for supporting interoperability, including the creation of economies of scale and cost reduction, reduction in the risk of cross-border interference, and greater flexibility.  The choice of sub-1 GHz spectrum, where propagation characteristics are stronger than at higher bands, makes the spectrum suitable for reading meters that may be placed indoors, even in basements — a common practice in European nations.

Ofcom, the United Kingdom’s telecommunications regulatory body, this year made amendments to its Wireless Telegraphy Act that allow for commercial operations on a license-exempt basis at 870 MHz to 876 MHz as of June 27, 2014; similar action is likely across the 48 nations that participate in CEPT.

This is good news for vendors, like those named above, but also for utilities across Europe seeking more flexibility in their smart meter and grid deployments.  RF mesh solutions are often less expensive than PLC for near area networks, although that varies widely depending upon the structure of the grid in the region as well as the topography.  Nonetheless, some smart meter/communications solutions providers have struggled financially over the past couple of years after ramp-up for American Recovery and Reinvestment Act (ARRA) funding created a spike in demand that has since fallen rather sharply.

Room to Grow

Europe is poised to be the next big growth area for smart metering, thanks to the EU’s 20-20-20 initiative, which a majority of European nations support.  Navigant Research estimates that current penetration of smart meters across Europe is just 15%, compared with more than 40% in North America.  While several nations have made significant progress in deployment (Italy, Scandinavia), Germany isn’t yet on board with the 20-20-20 initiative, and the United Kingdom and France are just getting rolling.  In Eastern Europe, there has been minimal activity to date, particularly in Russia, home to nearly 100 million meters.  For details on Navigant Research’s global smart meter forecast, look for our report Advanced Metering Infrastructure, slated for publication later this year.

The Market for Smart Meters, Europe: 2013-2023

(Source: Navigant Research)

Smart meter shipments in North America are expected to total 121 million between 2014 and 2023; that total is forecast to be 221 million in Europe.  That’s more than $18 billion in anticipated revenue for smart meters — a market of which surely every smart meter vendor will take note.

 

In the Islands, Renewable Energy Scales up Rapidly

— July 22, 2014

Renewable energy project developers are touring islands these days, salivating at the opportunity to displace diesel-powered electricity systems that can cost as much as $1/kWh with significantly lower-cost clean power.  Prominent examples include Iceland, where, according to the country’s National Energy Authority, roughly 84% of primary energy use comes from indigenous renewable energy sources (the majority from geothermal); Hawaii, where energy costs are 10% of the state’s GDP, and where the state government has set a goal of reaching 70% clean energy by 2030; and Scotland (part of a larger island), with a goal of 100% renewable energy by 2020.  Several smaller, equally interesting island electrification initiatives present great opportunities for companies looking for renewable energy deployment opportunities that are truly cost-effective for customers and developers.

These opportunities include:

  • In Equatorial Guinea, a 5 MW solar microgrid planned for Annobon, an island with 5,000 inhabitants off the west coast of Africa, is intended to supply 100% of the power for residential needs.  The project is funded by the national government with power produced at a rate 30% cheaper than diesel, the current primary fuel source.  The project is scheduled for completion in 2015 and is being installed through a partnership between Princeton Power Systems, GE Power & Water, and MAECI Solar.
  • The Danish island of Samsø is the first net zero carbon island, where 34 MW of wind power generate more electricity than is consumed on the island.  Fossil fuels are still utilized, so  Samsø is not truly a 100% renewable energy island as often reported.  The project was conceived and designed as part of a 10-year process begun in 1997, following the Kyoto climate meeting in Japan.
  • The island of Tokelau, an atoll in the South Pacific, is home to 1,500 inhabitants and produces up to 150% of its electrical needs with solar PV, coconut biofuel-powered generators, and battery storage – displacing 2,000 barrels of diesel per year and $1 million in fuel costs.
  • El Hierro, the westernmost of Spain’s Canary Islands, is home to 10,000 residents.  With an innovative combination of wind power and pumped hydro acting in tandem, the island is projected to generate up to 3 times its basic energy needs.  Excess power will be used to desalinate water at the island’s three desalination plants, delivering 3 million gallons of fresh water per day.
  • The Clinton Global Initiative has a specific Diesel Replacement Program for islands, focused on deploying renewable energy projects and strategies tailored to the unique needs of its 20 island government partners.  The objective is not only to create cost-effective solutions to reduce carbon, but also to help many of these island nations reduce the often enormous debt that results from relying on imported diesel fuel for electricity.

There are many more opportunities, including Crete, Madeira, Bonaire, La Reunion, the U.S Virgin Islands, and the Philippines (7,127 islands) – which last summer set a 100% renewable energy target within 10 years.

Not all of these projects, particularly the more sophisticated ones, have gone smoothly.  The logistical challenges of island construction add to the overall cost of the projects.  The risk of extreme tropical weather events is always present, including the risk of actually being underwater if sea levels rise as anticipated.  Thus far, financing for many of these projects has come from public-private partnerships, and as I’ve written previously, the coming avalanche of adaptation funding means those avenues are expected to be around for the foreseeable future.  But given the strong economic arguments for residential systems, resorts, agriculture, and other energy-intensive applications that often rely on diesel power for electricity, onsite distributed projects often pencil out without public assistance.

 

California Calculates the Value of Time in Energy Efficiency

— July 22, 2014

The 2013 update to California’s Title 24 building energy efficiency standards went into effect on July 1, 2014.  In addition to increasing overall building efficiency requirements over the 2008 standards, this update set out more stringent lighting requirements for both residential and non-residential buildings.

The 2013 update also includes changes to California’s time dependent valuation (TDV) calculation.   Used only in California, TDV is a tool to gauge the value of energy efficiency measures.  Unlike other metrics, such as site or source energy (measured in kBtu), TDV includes the cost to provide energy based on time of use, as well as other variations in cost due to climate, geography, and fuel type.

TDV was developed in 2005, and was updated in both 2008 and 2013, to help California meet the energy efficiency goals established in Title 24.  In the 2013 update, the California Energy Commission (CEC) changed the TDV calculation to account for climate sensitivity by separating California into 16 different climate zones.  This alteration helps reflect differences in energy costs driven by climate conditions, which vary considerably throughout California.

Finer Grained

One of the key barriers to wider TDV adoption is developing values for each climate zone.  As stated above, California alone has 16 climate zone values.  Another limitation is that many state officials are unaware of it: California is the only state that uses TDV, whereas metrics such as site and source energy are much more commonly employed both nationally and internationally.  Further, TDV does not account for the potential grid modernization costs necessary to export excess electricity back to the grid.

But since TDV accounts for differing energy costs based on a range of factors, it more accurately captures the societal cost of energy consumption that’s missed in assessments based only on source or site energy parameters.

In the coming years, as California tries to build more zero energy buildings (ZEBs), TDV will play an important role in determining whether a building meets the required energy use intensity to qualify as zero net energy.  The forthcoming Navigant Research report, Zero Energy Buildings, will provide an update to the 2012 iteration, and look further into the benefits and challenges associated with TDV as a metric.

 

In New York, Greening Older Buildings

— July 21, 2014

Building energy efficiency has reached the mainstream.  Clean energy technologies have become so common that technical training in renewable energy and energy efficiency retrofits is becoming more and more accessible.

Green City Force (GCF), a Brooklyn, New York-based non-profit, has trained nearly 300 young adults living under the poverty line in NYC for careers in the green economy with the group’s Clean Energy Corps.

The Clean Energy Corps supports a variety of projects related to energy and efficiency, including energy audits in low-income homes, urban agriculture, and energy efficiency retrofits.  The corps provides its members with an academic and technical training program to prepare them for college; the program leads to certification for entry-level work in energy efficiency and includes GPro, a nationally recognized certification in building science.

Retrofitting

One of the major partners for Green City Force, and for the Clean Energy Corps specifically, is the New York City Housing Authority (NYCHA).  More than 8.4 million people reside in New York City, and 615,199 of them are served by the authority’s Public Housing and Section 8 programs.  This represents 7.4% of the population of New York City.  Together, both programs cover 12.4% of the rental apartment stock in one of the most expensive cities in the world.

The Housing Authority’s property portfolio is equally impressive and rivals commercial housing developers.  The NYCHA oversees 334 developments, including 2,563 buildings and nearly 178,000 apartments.  In contrast, the Chicago Housing Authority has 21,000 apartments in 128 properties.  Los Angeles has 2,491 apartments across a portfolio of 93 properties.   Only 20% of the developments in NYCHA’s portfolio are less than 30 years old, and one-third of the authority’s developments are more than 50 years old.  Modern buildings are built with energy efficiency in mind, but older buildings have more room for improvement.

The More the Better

GCF develops service projects in partnership with the Housing Authority, city agencies, and other non-profits.  One example is the Love Where You Live Challenge, which bring corps members together with fellow NYCHA residents to reduce energy use in homes.  Corps members gain experience and skills, while the Authority reduces its energy costs.  NYCHA spends $535 million annually on utilities.

The NYCHA is not the only public agency using innovative approaches to promote energy efficiency.  The Washington Metropolitan Area Transit Authority (WMATA) recently awarded Philips Lighting a 10-year lighting performance contract to upgrade lighting across 25 parking garages to LED lighting.  Instead of paying out of pocket for the 13,000 fixtures, WMATA will share the savings in energy costs with Phillips over the 10-year period.

For disruptive technologies such as energy efficiency, the more business models in the market, the more accessible the clean energy economy becomes.

 

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