Navigant Research Blog

New Approaches Boost Energy Efficiency

— August 7, 2014

National Grid’s U.S. division has rolled out a home energy management (HEM) pilot in Massachusetts that combines free hardware and special applications in a bid to get customers to cut their electricity use and help the utility manage demand more efficiently.  The pilot is targeted at customers in Worcester, which, for the past few years, has been the focal point of National Grid’s testing of smart grid technologies, including new Itron smart meters and other infrastructure upgrades.

About 15,000 customers are eligible to take part in the pilot.  They can choose from several free bundles of technology.  One of the more novel devices is a digital picture frame made by Ceiva that receives electricity consumption data from a smart meter and makes suggestions for reducing use.  Smart thermostats from Carrier and smart electrical plugs from Safeplug are also available.  Ceiva’s software, called Homeview, enables customers to view consumption data online and on mobile devices.  For the utility, Ceiva’s Entryway software suite supports the management of smart meter-connected home area networks, residential demand response (DR) capabilities, and energy efficiency programs.  The pilot is scheduled to last about 2 years at a cost of $44 million.

Cheers All Around

A number of utilities are deploying similar technology to help customers reduce energy consumption.  Glendale Water & Power and San Diego Gas & Electric support Ceiva devices as part of their efforts to encourage customers to use electricity more efficiently.  In addition, utilities like NV Energy, using EcoFactor technology, and Oklahoma Gas & Electric, which has deployed thermostats from Energate and software from Silver Spring Networks, have taken the lead on HEM programs for several years (for a deeper dive into the HEM space, see Navigant Research’s report, Home Energy Management).

Utilities like National Grid and the others mentioned here are to be commended for providing a range of technologies that help customers reduce consumption while also helping utilities meet efficiency targets.  That’s what a smarter grid is intended to do, and more utilities should do the same.

 

Security Risks of Smart Meters Not New

— August 5, 2014

Recently, the Insurance Journal weighed in on the threats introduced by smart meters.  While I agree that smart metering presents risks both cyber and financial, I submit that many of those risks are merely new flavors of risks that have existed for decades.  And smart meters also introduce benefits that more than offset those threats.

The article seems to equate smart meters with the Internet, though we have yet to find any utility that is actually connecting its meters to the Internet.  (There are utility control systems connected to the Internet, most of which are known to hostile nation-states.)  And it also conflates a number of unrelated topics.  For example, the author cites the recent Havex Trojan, which attacks SCADA systems, not smart meters.  Likewise, the article mentions Stuxnet, which was directed at uranium enrichment centrifuges.  Stuxnet is a cautionary tale for anyone managing a control system, but smart metering networks are not control networks.  Still, the Insurance Journal explores situations worth considering.

Uneasy in the Islands

The successful meter attack described, citing Brian Krebs’ excellent analysis (written 2 years ago), occurred in Puerto Rico.  In that case, former employees of a local utility offered to reprogram residents’ smart meters via the meters’ optical diagnostics port.  For a fee ranging from $300 to $1,000, the technicians would reprogram the meters to under-report energy usage, resulting in a lower electricity bill every month.  This attack had nothing to do with the Internet.

The key to dealing with cyber risks is taking a big picture view of the situation.  In Puerto Rico, the fraud would have been easy to detect.  Utilities can put an additional smart meter at each transformer to measure total energy distributed to the customers on that transformer’s circuit.  When the total energy metered for all the individual customers is less than the total measured at the transformer, clearly something is wrong.  It may or may not be fraud, but it can be identified quickly by the technology described in Navigant Research’s report, Meter Data Management.  The $400 million lost in Puerto Rico indicates that the fraud may have persisted for months or years.  That sum is about 10% of Puerto Rico Electric Power Authority’s (PREPA’s) annual revenue – which seems awfully large to fly under the radar.

Finding Walter White

Smart meters provide other fraud detection capabilities that their electromechanical forebears do not.  One example is credit and collections.  Smart meters typically report energy consumption every 15 minutes.  So, for a customer who is already delinquent and is currently having a large spike in energy consumption (this is a common attribute of illegal activity, such as meth labs), smart meters enable utilities to detect these situations and initiate collection or disconnect activities immediately.  This approach is impossible with monthly-read electromechanical meters.  Plus, remotely disconnecting criminal activities is safer for the utility workforce.

For sure, smart meters introduce attack vectors that did not exist before.  This is a common byproduct of new technology.  Identity theft was much more challenging before we had the Internet – yet, there are few, if any, movements to shut down the Internet because of identity theft.

The Insurance Journal article does quote Navigant Research’s market forecast for global smart meter deployment.  The 1.1 billion smart meters expected to be deployed by 2022 should indicate that it’s time to stop worrying about smart meter security and just get on with it.

 

In Japan, Smart Meters Accelerate

— May 1, 2014

The deployment of smart meters in Japan is moving into a higher gear.  The country’s leading 10 utilities have announced plans to finish installing residential smart meters sooner than originally scheduled.  The speedup was prompted by a perceived need on the part of the incumbent utility monopolies to better prepare for expected competition once the retail sale of electricity is deregulated in 2016.

Tokyo Electric Power Company (TEPCO) is expected to complete its deployment first under the revised schedule.  The company is aiming to have the deployment of about 27 million smart meters finished in its fiscal year 2020.  TEPCO is expected to soon announce which five manufacturers have been chosen to the supply the utility with new meters for its first surge of installations set to begin this fall.

All In by ‘24

Meanwhile, Kansai Electric Power Company (KEPCO) and Chubu Electric Power will aim to have their smart meter projects finished in fiscal year 2022.  KEPCO, which has a service area that includes Kobe, Kyoto, and Osaka, has already deployed about 2 million smart meters.  Six of the remaining utilities intend to complete their smart metering projects in fiscal 2023, with the seventh, Okinawa Electric Power Company, moving up its expected completion date to 2024 from the original year of 2032.  By 2024, virtually all of Japan’s roughly 80 million residential customers are expected to have a smart meter installed in their homes.

The growing smart metering activity in Japan will have a positive impact on at least one U.S. company, Itron.  Itron’s smart grid software package, called OpenWay Collection Engine, was recently chosen by Mitsubishi Electric Corporation for deployment at Chubu Electric Power, Japan’s third-largest electric utility.  The OpenWay platform will be used to help collect and relay the high volume of data expected from field routers and the estimated 10 million smart meters Chubu Electric Power intends to install through 2022.  This Japanese win for Itron, which has struggled in recent quarters, as smart metering projects have wound down in North America, is its second major victory this year.  In March, FirstEnergy announced it had chosen Itron to provide 2 million smart meters and the OpenWay platform for deployment among FirstEnergy’s four Pennsylvania-based utilities.

As was seen during the boom in smart meter deployments in North America (and noted in Navigant Research’s recent report, Smart Meters), a similar situation is about to begin in Japan – with multiple projects commencing at about the same time.  Many winners and losers are about to be chosen among vendors of smart meters and grid hardware and software in Japan.  The stakes are high, and many in the utility world will be watching closely for new lessons that are likely to emerge from the Japanese effort.

 

Driblet Wants to Become the Nest of Water Meters

— December 6, 2013

An early stage startup in Texas wants to change how people monitor their water use – and become the Nest of water meter sensors.  The startup, called Driblet, offers a seemingly simple device, also called Driblet, that attaches to a shower faucet or an outside hose bib and measures consumption.  What makes it unique is its ability to send usage data via Wi-Fi to a cloud service, where the user can monitor water consumption from a computer or Internet-connected mobile device.

The basic concept – to isolate water usage at a faucet level – is not new.  Several vendors (e.g., GPI, DLJ Meter, Hydrologic) offer water flow measuring devices for consumers, but the Driblet’s Internet-connected functionality sets it apart.  The device is the brainchild of Rodolfo Ruiz, an electrical engineer who first created a smart water meter 15 years ago in Monterey, Mexico.  His original device was designed for one of Mexico’s largest water meter distributors, but it never came to market because of federal regulations and a lengthy legal process.

Turn Off the Shower

But Ruiz did not give up.  The father of two children, he noticed his daughter taking long showers that would lead to arguments.  He wanted some way to let her know her water consumption was out of line compared with the rest of the household.  Today, with the help of his improved device, the fights over water use in his home have subsided.  Later, Ruiz entered Driblet in a hackathon event in Mexico and won a prize that got his company off the ground.  Now Driblet is part of Dragon Innovation, a crowd-funding incubator for hardware startups.

The target market is residential homeowners, but Ruiz thinks landlords, non-government organizations working in remote locations, and governments will also be interested.  The device costs $49 for early adopters.  Ruiz says the potential savings on water consumption can be as high as 30%, though the company needs to push Driblet into more homes to obtain a true gauge on how much people can save on average.

There’s no telling if Driblet will make it to widespread production and distribution like the Nest device.  It faces a big marketing challenge, but Ruiz has come up with a solution that others might find worthwhile.  The company is not aiming to displace utility-grade water meters, of course, but this device could provide the water-use granularity that many people would like and could afford.  Stakeholders in the water industry should take note, at least, given that simple ideas sometimes have a way of making an impact.

 

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