Navigant Research Blog

Why Even Have Meters?

— May 17, 2016

MeterFor as long as utilities have existed, they have created ways to have their customers pay for what they use.  The meter has traditionally been that tool, and many have looked to the newer iteration, the smart meter, as the nexus to enable the next evolution in the way utilities perform. Smart meters have been deployed for water utilities and gas utilities with recent fanfare. Most significantly, smart meters have been deployed by electric utilities, which are using advanced metering infrastructure as a pillar for new programs for a cleaner grid with more efficient use of power. The electric submeter is a part of that plan, enabling a finer grain look at who uses power with a tenant-by-tenant view. But is it time for us to rethink meters? Are they going to be a part of our digital future?  Certainly, we have to keep measuring use—having customers pay for the resources they use is critical, regardless of how low the cost. But with Internet of Things (IoT)-enabled devices, we need to rethink how resource use is reported, whether it be gas, water, or electricity.

A Clearer Picture through IoT

IoT-enabled devices—think cable boxes, commercial HVAC units, large factory machines, and data centers–are already deployed in the marketplace. To date, most of the IoT buzz has been associated with control or information flow, like a building automation system controlling an HVAC unit or a cable company sending over the latest prime time drama. With little modification, IoT-enabled devices can share how much power, gas, or water they are using at the place and time of their use. If all new devices were shipped with this technology, it would be possible to have a clearer picture of how those resources are being used than by using the aggregation tool that is the meter.

Utilities would not want meters to go away. They are a key cornerstone of how they work and, in some cases, are required by law. But as utilities strive to keep pace of the fourth industrial revolution, they may need to rethink how they want to provide better services for their customers. Approaches like circuit-level or plug-level energy reporting are not new, but if the entire electric, gas, or water system was reporting on how much it used in real time, it would provide a much clearer picture of the state of the system. This reporting could also shine a light into how much waste is present due to things like vampire loads or leaking pipes.

We’d need to have permissions and payment mechanisms resolved, and prototypes are already in development for microgrids. We’d need to have assurances that device reporting is reliable and secure, something that has already been proposed though the use of blockchain. The biggest obstacle is our existing infrastructure. At this point, it may not make economic sense to remove or even turn off meters and submeters, even as IoT devices are shipping. But there will be a time in the not-to-distant future where the meter will be viewed as redundant. It may be in a microgrid, or on a university campus.  There will be a tipping point where, for some new commercial, residential, or industrial facility, it will be cheaper to have no meters at all. On that day, we stop using the end of the buggy whip as the prototypical example of obsolesces, and we will instead recall the era of the meter.

 

Utility and Corporate Leaders Increasingly Embrace IoT Strategies

— May 5, 2016

CodeThere is new evidence that utility and corporate leaders are embracing the Internet of Things (IoT) trend with greater enthusiasm, meaning a more robust grid, energy savings, and lower costs in the coming years. That’s the hope, at least. The evidence comes from two recent surveys and a corporate report on the state of IoT.

A large global survey sponsored by Schneider Electric found that three out of four (75%) of business executive respondents are optimistic about IoT opportunities in this year alone. Additional results from the survey of 3,000 business leaders in 12 countries include:

  • 63% plan to use IoT to analyze customer behavior in 2016, with faster problem resolution, better customer service, and customer satisfaction among the top five potential benefits
  • Nearly half (42%) say they plan to implement IoT-enabled building automation systems within the next 2 years
  • Two out of three (67%) plan to employ IoT solutions via mobile applications in 2016
  • 81% say intelligence gathered from IoT data is being shared effectively throughout the organization
  • 41% expect cyber security threats related to the IoT to pose a critical challenge for their businesses

Asset Management

Similarly, a global survey of electricity, gas, and water utility executives from ABB reveals a strong belief in the benefits of an IoT strategy. Nearly 58% of respondents either have or plan to have a strategy that leverages IoT for asset management, and 55% say the importance of asset management has increased over the past 12 months. In a recent release, Massimo Danieli, ABB’s Managing Director of Grid Automation, notes: “Now more than ever, utilities see the need to bring together once disparate technologies and systems to better understand their increasingly complex asset base and share those insights with the people across the organization, in order to improve planning, productivity, and safety.”

Finally, Verizon’s latest report on the state of the IoT market says “companies across all industries now have IoT squarely on their radar.” Moreover, the report states that Verizon sees IoT applications ranging far and wide, and that the company focuses on key segments which include smart cities and energy. It also notes how past regulatory decisions have resulted in millions of installed smart meters, a leading IoT device.

These examples demonstrate a rising IoT tide among utilities and other corporations. As noted in the recently published Navigant Research report IoT Enabled Managed Services, now is the time for utilities to deploy a sensible IoT strategy. They must remain competitive and take advantage of the opportunities the latest technologies afford for smarter and more nimble grid applications and services while also recognizing the challenges these changes present.

 

It’s a Small World (for Dynamic Pricing) After All

— April 4, 2016

multimeterDisney recently unveiled surge pricing for its theme parks, meaning that tickets will cost more during holidays and on some weekends—up to 20% more—than during slower periods as the near-capacity parks seek to spread out demand. When Mickey Mouse announces this strategy, it’s hailed as a brilliant business move. So why is it that when utilities try to roll out dynamic pricing options, it is assumed it will lead the elderly and orphans to swelter in the heat and sit in the dark?

Dynamic pricing exists in many aspects of society, such as with airline tickets, theater and sporting event tickets, subway fares, and road tolls. The basic concept is that the value of a product varies based on time, demand, and other factors, so being able to charge prices that better reflect that value is more economically efficient than simply charging an average flat price across all hours and variables. Makes sense, right?

In the electricity industry, the concept of dynamic pricing for mass-market customers is fairly recent (aside from time-of-use rates). With the proliferation of advanced meters that can record usage at small intervals, more types of dynamic pricing can be applied down to the residential level.

The key drivers for advancing dynamic pricing include technical, policy, and economic factors such as:

  • Advanced metering infrastructure (AMI): Without the 15-minute interval data provided by smart meters, or AMI, dynamic pricing programs cannot accurately be implemented. Smart meters are now seeing more widespread deployment, which further enables the market for dynamic pricing.
  • Utility and customer costs: Offering a dynamic pricing program to reduce peak demand may be cheaper for a utility than building a peaker plant to meet increased demand. On the customer side, electric bills can be reduced by modifying consumption behavior. In the long run, all ratepayers should see lower rates than they otherwise would due to the increased capacity factor and avoided infrastructure costs.
  • Enabling technologies: Devices such as smart thermostats, smart appliances, and associated home energy management applications are becoming more commonplace, allowing consumers to more easily manage their energy demand.
  • Distributed energy resources (DER): As DER capacity from resources like energy storage and electric vehicles grows, so does the ability to shift load and enjoy the cost savings from dynamic pricing programs.

However, the slow rate of dynamic pricing program development points to the depths of the barriers to such growth:

  • Reliable service concerns: Utilities understand how important reliability is—especially for at-risk residential customers, including low-income customers, the elderly, families with young children, and the disabled—and seek to provide a resilient grid that operates disruption-free. Without proper education about the program, dynamic pricing rates could potentially send a harmful signal to these at-risk groups.
  • AMI integration: Systems integration plays a huge role in the success of AMI techniques and poses a significant cost to utilities. Ensuring AMI provides flexible and extensible solutions is paramount.
  • Lack of customer education and demand: Customer understanding of dynamic pricing is low. Unlike other energy management strategies that focus on different aspects of energy consumption, dynamic pricing depends on modulating customer habits, which may be hard to change.

There are several examples of utilities implementing successful dynamic pricing programs, such as Baltimore Gas and Electric, Oklahoma Gas and Electric, and Sacramento Municipal Utility District. These topics and more are covered in Navigant Research’s new report, Dynamic Pricing. Perhaps learning about dynamic pricing from Disney will lead more people to embrace it in other parts of their lives.

 

Big New York Smart Meter Rollout Plans Take Shape, but Issues Remain

— March 30, 2016

??????????????????Consolidated Edison (Con Ed), the largest utility in New York, recently received approval of its ambitious plans for a smart meter rollout, but the latest details point to some concerns about paying for the requirements and more details about customer engagement.

The plan, approved by the New York Public Service Commission (PSC), calls for the installation of approximately 3.5 million smart electric meters and for some 1.2 million gas meters to be deployed in Con Ed’s service territory starting next year, with an expected completion by 2022.

But in the announcement, the commission said its approval was contingent on the utility providing a detailed plan for providing continued engagement with customers and third parties. In addition, the commission expects 15-minute meter reads for residential customers, whereas the original proposal called for hourly data from meters. With the more frequent reads, the issue of charging fees, if any, for providing the more granular data has yet to be resolved. For non-residential meters, the meter data is to be at 5-minute intervals.

Program Questions

In addition, there are concerns about how Con Ed will implement the Green Button Connect program, which is a federally sanctioned initiative aimed at giving residential customers easy online access to their detailed energy consumption data. Originally, Con Ed indicated hourly data would be available at no charge. But now a group called Mission:data, which represents third-party companies like SolarCity, Stem, Bidgely, PlotWatt, and EnerNOC, has raised the issue of whether Con Ed will be charging a fee for data access. Con Ed has until the end of July to submit new details about data access and who will have to pay.

Undoubtedly, the smart meter rollout envisioned by Con Ed will eventually be deployed and customers should benefit by having a more modern and flexible system. But the devil, as always, is in the details, and when it shakes out, some of the hoped-for capabilities might be less than expected. And third-party energy service providers might be less than satisfied. As we’ve seen with other smart meter implementations—the United Kingdom’s complicated deployment comes to mind—the complexity of an advanced metering infrastructure rollout can sometimes be overwhelming, and the real costs not readily apparent. Bumps in the road have become commonplace, especially with large projects, but a smarter grid is still attainable.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Electric Vehicles, Finance & Investing, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Smart Transportation Program, Transportation Efficiencies, Utility Innovations

By Author


{"userID":"","pageName":"Smart Meters","path":"\/tag\/smart-meters","date":"6\/26\/2016"}