Navigant Research Blog

Allez Linky!: France Greenlights Smart Meter Program

— October 5, 2011

The French government has formally approved the deployment of 35 million electricity meters, starting in 2013 with completion by 2018.  Deploying the Linky meter to customers across France will cost an estimated €4.3 million ($6.2 million).  The government also confirmed that the cost of the rollout is expected to be borne by Électricité Réseau Distribution France and recouped through new network efficiencies.

The project follows the completion of a successful trial of 300,000 meters around Lyon and the Indre-et-Loire department, involving Atos Origin, Itron, Landis+Gyr, and Iskraemeco.  There had been concerns that the government might delay plans for deployment given the financial crisis in the Eurozone and a presidential election beckoning next year.  The announcement that the project will create around 10,000 new jobs will help sweeten the pill politically.

The major challenge in France will be to ensure consumer acceptance.  There is a perception amongst consumer groups that the meters are primarily for the benefit of the electricity industry (dominated in France by nationwide utility EDF and its subsidiaries) and that in the end consumers will be bear the price of the meters.  Only minimal support for consumer energy efficiency is required in the basic rollout and energy retailers can charge more for additional information services.  A lot more work will need to be done if the meter is to play a role in reducing household costs and improving energy efficiency. 

These challenges reinforce more general issues that are becoming evident in the European push to deploy smart meters.  The arguments in favor of smart meters are well rehearsed, but as European deployments accelerate, it’s clear that aligning the interests of all the potential stakeholders is no easy task.  In Europe, the European Commission has promoted smart meters as part of its overall energy policy – with the new technology seen as helping address energy efficiency and also market liberalization.  The basic concept is that if consumers are more aware of the price they are paying for electricity then they will both reduce energy consumption and also be able to find better rates from other suppliers in a deregulated market.  That’s the theory anyway.

But European policy has also promoted the disaggregation of energy suppliers, with distribution networks and energy retails provided by separate players or between regulated and non-regulated entities from single suppliers (as in France).

This separation highlights a disconnection between the goals of the distribution systems operators and the energy retailers.  Where this split is most developed – as in the United Kingdom – it raises issues as to how a holistic view of the requirement for smart grid investment can be achieved.  Smart meters in the United Kingdom are largely being cost-justified by the potential benefits to consumers and retailers.  Distribution system operators (DSOs) have been involved in the specification but it remains a secondary concern for them compared to the work that needs to be done on improving the network to support renewable integration, for example.

However in most of Europe, it is the distribution company that is responsible for smart meter deployment. As someone from a German DSO said last week, they can’t justify smart meters purely in terms of the benefits to network improvements, as they can achieve the same ends in a more cost-efficient manner (for example, by the strategic placement of many fewer network sensors).  That is not to say the smart meters have no benefits.  DSOs will happily use any data that can be provided, but they can’t make a standalone business case.  ERDF is reported as saying that it will take 20 years to achieve payback on the Linky deployments from improvements in network efficiency.

It is clear that if European countries are to meet the target of deploying smart meters to 80% of customers by 2020, then they need to focus equally and consistently on the two challenges of consumer engagement and providing incentives to network operators.  The need for a holistic view of the smart grid is a commonplace, but realising it within specific market structures is the real challenge.

Moving towards a European smart grid is a huge engineering challenge, but given the social, environmental and market issues also at stake it sometime looks more like an exercise in advanced plate spinning.


The Perils of SCADA Mobile Access

— September 21, 2011

During research for the Pike Research report, Industrial Control Systems Security, I stumbled upon some new mobile SCADA access applications in the iTunes App Store. I won’t name products here because my objective is not to single out any single vendor, but to provide a bit more big-picture thinking.

Lest we appear atavistic, Pike Research does indeed agree with new ways to access control network devices. There may be disaster-response scenarios (e.g., a control room destroyed) where a smartphone could be the only way to access critical devices until more conventional means of management are back on-line. However, smartphone access, like all other access to a SCADA network, must be carefully defined as part of a utility’s ICS Security Architecture.

The smartphone SCADA applications that I encountered connect directly to SCADA devices, bypassing servers or personal computers, using direct TCP/IP links from the smartphone to the SCADA device. Unstated in that scenario is that such direct access also bypasses the perimeter security that has been so painstakingly and expensively integrated into the SCADA network.

The figure below shows NIST’s recommended paired-firewall DMZ deployment to isolate control networks from enterprise networks. I have added a smartphone and its connectivity (the red lines) to depict the network architecture that results from directly accessing the SCADA devices.

Despite the obvious problems here, the product documentation reads, “Security is guaranteed through extensive use of passwords and the encryption and tunneling options that the TCP/IP technology provides.” Let’s face it: The phrase “security is guaranteed” is roughly equivalent to, “Please hack me, I dare you, bring it on.” Hackers do not appreciate being taunted.

More fundamentally, it is clear from the figure that, used as advertised, these products completely sidestep the utility’s enterprise security architecture. A utility would be left hoping that the products’ built-in security was strong enough to ensure that only its employees’ phones can access the devices. Even if it is, trying to remove access from a terminated employee’s smartphone sounds like a recipe for a migraine.

For what it is worth, I have yet to find anyone among my cyber-security research inputs who believes that direct access from a smartphone to a PLC is a good thing. It’s incredibly difficult to create a security architecture that allows for random connection to weak endpoints by unknown future mobile devices. If the requirement for smartphone access is known and included in the security architecture, then a workable solution can be defined and then implemented using the careful change management processes for which control networks are famous. Without that type of preparation, smartphone access could introduce significant risk to even a well-protected control network.


In Greening the Grid, Knowledge Is Power

— September 20, 2011

When it comes to understanding the environmental impact of our personal choices, the EPA’s model of rating car fuel efficiency is a good lead to follow.  Greenhouse gas emissions are tied to how much fuel is burned, and we all know how much gas our car burns thanks to the omnipresent MPG ratings.  Many models of cars have embraced the digital age and now interactively let you know how your driving affects fuel economy by keeping track of your true MPG.  This level of information has enabled the current generation of drivers to understand their impact and, should they care to, adjust their driving accordingly.

But when it comes to tracking the emissions of the power plants that are a magnitude larger than our little 4-cylnder, we are still largely in the Mesozoic Era.

The United States is only surpassed by China in CO2 emissions, as highlighted in the recent Pike Research report Carbon Management Software and Services, which forecasts that managing CO2 will become a $2.4 billion industry in 2017.

It is easy for those of us who come from the IT industry to scoff at the power industry, which is replete with proprietary handcrafted networks and databases that even within a single location don’t talk to each other, let alone to the outside world.  The coming smart grid is largely focused on bringing the power industry up to the level of technology that the financial, information, and telecommunications networks achieved at least a decade ago.

It’s not that grid operators don’t have some elements of live data-sharing down.  The same “five 9s” focus on reliability has been used for generations to regionally balance power generation and demand with a precision that would give a network operations center manager goose bumps.  Every hair dryer or cell phone that gets plugged in has to be matched to generation, and remarkably, the grid works smoothly nearly all the time.  The perpetual need to locate and pay for additional power prompted grid operators to engineer a Wall Street-like trading market that includes a day-ahead market, as well as up to the second pricing and reconciliation technology that pulls in power from hundreds of miles away through the marginal power market.

But when it comes to tracking the emissions that are produced during the generation of power, the industry has a blind spot.  Most requirements for tracking CO2, NOx, particulates, and other emissions at generation facilities apply on an annual basis, without regard to the amount of power produced.  There’s very little data anywhere on emissions on an hourly or daily basis.  Regulatory folks I’ve spoken with were lacking information and surprised that I asked the question about correlating emissions to the power produced.

Counting the CO2 per megawatt hour would be a great place to start to understand grid efficiency.  If ongoing data about each generation facility were collected, we would have a baseline for understanding the true carbon footprint of our generation mix.  The next step would be to integrate the emissions data with the purchases of electricity on the marginal power market to create an hour-by-hour profile of how green the power grid really is.

To my knowledge, agencies such as FERC, the EPA, and the ISO operators don’t routinely ask for this level of fuel efficiency, so there is no financial or other reason for the data to be collected by power producers.  One motivation to start doing so would be to better understand the carbon impact of newly arriving electric vehicles.  The Pacific Northwest National Laboratory this week released a report that looked at how EVs could be used to balance expanding wind generation mix.  But how clean or dirty is the rest of the grid at night when vehicles are likely to be charged?  It’s about time we found out.


The View from Vancouver, British Columbia

— September 7, 2011

Standing on a dock in North Vancouver I was blown away by the views of the Port Metro Vancouver and the gorgeous skyline of the city. But I was distracted by the traffic jam going on in the harbor – an enormous Hyundai shipping vessel sat overwhelming the view. In Colorado, transport relies heavily on rail and trucks, but in the Pacific Northwest, the ocean is the transport medium. Idling ships, freight equipment, and amenities aboard cruise ships represent a significant power drain, one that is largely met through burning bunker oil. Marveling at the size and complexity of shipping vessels and port infrastructure inspired some curiosity about the logistics of maintaining such operations.

The Metro Port Vancouver trades roughly $75 million in goods with more than 160 economies annually. That’s an impressive amount of cargo and people in motion. From tugboats and cruise terminals, to freight trucks and railways, the Vancouver harbor was lively with vessels and equipment all requiring the combustion of the fuel bunker oil, one of the dirtier varieties of fuel oil. But as it turns out, a handful of ports around the world are pursuing cleaner options.

In 2009, Port Metro Vancouver was one of three ports across the globe that initiated the installation of shore power infrastructure. New shoreline transformers, cables, and switches allow ships to draw power from BC Hydro’s grid and take advantage of what is primarily hydropower-based electricity. In the case of passenger cruise ships, the hourly demand can be as high as 14 megawatts. As a result, these ships power down their diesel generators and stop emitting pollution over the city of Vancouver.

Moving cargo and passengers on the sea is one of the most cost-effective means of transport the world uses, and enables billions of dollars in global trade. It’s also an industry that hasn’t experienced much innovation; one of the most recent developments included streamlining containerization of cargo and many shipping companies were slow to adopt these practices. Ports, however, garner significant bargaining power for driving innovation and have plenty of incentive to do so. The city of Amsterdam is addressing shipping in their smart city project with ship-to-grid technology much like the shoreline power installed in Vancouver. Amsterdam is installing nearly 200 power stations that ships can use to provide power, displacing on-board diesel generators. The goal is to use high quantities of renewable energy to power them.

Shoreline power is an expensive technology option that requires new shoreline infrastructure and ship retrofits. Princess Cruises, a partner in the Port Metro Vancouver project, estimates that it costs roughly $14 million to outfit the vessels with equipment that enables them to draw power from the grid. Other shipping companies are trying less capital-intensive strategies for reducing fuel consumption and vessel emissions. Maerk – one of the largest shipping companies in the world with revenue of $28 billion annually – began implementing reduced-speed operations for its 500 vessel fleet. The company reduced speeds from the average 25 knots to 20 knots, and has even adopted super slow speeds of 12 knots, or about 14 miles per hour. Maerk has shown that a 20% reduction in speed yields roughly a 40% decrease in fuel consumption per nautical mile.

The United States military is also pursuing the clean-up of their port infrastructure, supporting clean energy goals and an energy security agenda. As we all continue to tap the power of the ocean, look for innovative new strategies like shoreline power to spark new moments of curiosity.


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