Navigant Research Blog

On Blackout Anniversary, Demand Response Gains Ground

— August 14, 2013

August 14 is the 10-year anniversary of the blackout that dimmed cities across the Northeastern United States and Ontario.   It was hard, in that summer of 2003, to imagine the immediate and sustained costs, in addition to impact on peoples’ lives, that the incident would produce.

The summer of 2003 was unusually hot, and air conditioning use was high. Because energy costs were (and, for many, still seem to be) low enough for people to not think twice about a slightly higher bill in exchange for temporary comfort, aggregated high demand for energy strained the Northeastern electric grid.  Combined with a series of monitoring and grid management mishaps, this resulted in approximately 45 million Americans losing power for up to 2 days.  Six people died in New York City.  But most people, after they realized it wasn’t a terrorist attack, assumed the blackout was the fault of a tree falling outside Cleveland.

Since 2003, energy regulation has evolved to impose substantial fines for mismanagement of the grid.  Furthermore, the Smart Grid Investment Grant doled out billions of dollars to utilities to upgrade their grids to provide more reliable, efficient service to customers.  These behind-the-scenes policy changes and upgrades are not always effective enough to adequately reduce the strain (i.e., cost) of peak loads or to result in desired efficiency improvements, and are potentially out of reach for many utilities due to high capital expenditures.

Be Cool

The solution?  Demand response.  This grid balancing technique directly involves customers by initiating an agreement that they will curtail use upon receiving signals from the utility that the grid will be overloaded at a specified time.  There are a number of different demand response schemes that involve varying degrees of participation on behalf of the customer.  In New York City, Con Edison and ThinkEco have introduced the coolNYC program to combat one of the 2003 blackout’s indirect culprits: air conditioning.  Participants receive smart plugs and smart thermostats that the utility can directly control to cycle on and off during peak loads. Customers don’t need to directly participate, other than opting in or out, and they stay comfortable during heat waves. In addition, they achieve savings on their electric bills.

The problem? Well, the problem is that it’s doing really well, and Con Edison can’t keep up.  Having equipped roughly 10,000 window AC units with smart thermostats and plugs, the company still has millions of units to equip, and there’s currently a waiting list to participate.  That fact in itself highlights another important fact: New Yorkers are starting to care.  Navigant Research has noted that of one of the major barriers for demand response, and a reason that utilities have been slow to adopt, is that it can be hard to convince consumers of the benefits.   A decade after the 2003 blackout, it’s important to note the progress that has been made in customer engagement—arguably the greatest inhibitor for any form of energy efficiency or load management.

 

Sensus Lands Great Britain Smart Grid Communications Deal

— August 14, 2013

Raleigh, North Carolina-based Sensus was the only American company to win a piece of the long-awaited Great Britain smart meter deployment contracts, which were announced on August 14.  The U.K. Department of Energy and Climate Change (DECC) selected  Arqiva Limited as the preferred bidder to provide the smart metering communications service for Northern England and Scotland.  In conjunction with Arqiva, Sensus will provide the long-range radio technology for the communications network.  DECC estimates the value of the communications service contract to be £625 million ($828.5 million) over 15 years.

Sensus’ FlexNet technology will deliver data from both gas and electric meters at 10.2 million locations across the region, or between 16 million and 17 million meters.  Sensus will be providing base stations and long-range radios that will communicate with a hub at each meter location.  Base stations will be mounted on Arqiva-owned communications towers; Arqiva owns 8,000 cellular towers and several thousand radio and television broadcast towers across the U.K.

Sensus says the complexity of the region to be served was a big reason for its selection.  Covering both rural and urban areas, the district reaches from the Highlands of Scotland to the City of Manchester.  Sensus reports a range of up to 40 miles in rural locations for its Flexnet wireless network, and 2 to 3 miles in urban and suburban locations.  Cellular provider Telefónica UK was chosen for the more urban central and southern region communications contracts.

FlexNet is a point-to-multipoint private radio frequency (RF) solution.  In the United States, FlexNet operates on licensed 900 MHz spectrum; in the U.K. the solution will operate over licensed 400 MHz spectrum owned by Arqiva.  The use of licensed spectrum allows for higher power transmission than unlicensed communications networks, and is generally not subject to the interference that may occur in unlicensed systems.  The system uses a star topology, with nodes communicating with a centrally located tower.  Each node typically sees more than one tower, allowing for network redundancy.

Big Win

The solution was designed to meet DECC’s service level requirements and has the ability to prioritize data through channelization.  The FlexNet system can support data throughput of 1 megabit per second.

The solution will support pre-pay and load-shedding applications, and will also facilitate British consumers’ ability to change retail energy providers in the deregulated market.

The deal is a very big win for Sensus and positions the company well for future business in Europe.  Sensus says that it already serves 475 electric, gas, and water utilities worldwide.  Previously, however, the bulk of Sensus’ business was in North America.  PECO in Philadelphia, for example, is deploying the FlexNet communications network in its 1.8 million meter smart grid program and plans a wide range of distribution automation applications over the network, in addition to traditional AMI applications.

Navigant Research estimates that point-to-multipoint communications nodes accounted for just 2% of total smart grid communications nodes worldwide at the end of 2012.  With Sensus’ significant entrée into Europe, however, it’s possible that share may grow in coming years.

 

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