Navigant Research Blog

As Summer Winds Down, a Look at Residential Demand Response Leaders

— September 19, 2017

Summer 2017 was relatively light from a demand response (DR) perspective in North America—aside from California, which saw extreme heat waves. There were not a lot of opportunities to test the capabilities of DR resources that utilities, regional transmission organizations, and retail electric providers had stockpiled to prepare for high load levels or energy prices. However, there was still plenty of merger and acquisition (M&A), technology development and new program design activity taking place.

Navigant Research took this opportunity to compile a Leaderboard that examines the current vendor landscape for residential DR (RDR). The report analyzes the strengths and weaknesses of the key players in this global industry and displays those rankings visually in the Navigant Research Leaderboard Grid. This Leaderboard utilized broad guidelines to determine which market participants should be included to allow for companies that offer hardware and/or software and focus on technology or include program implementation services.

The Navigant Research Leaderboard Grid

(Source: Navigant Research)

This Leaderboard evaluated 15 companies based on 10 criteria to determine which competitors are Leaders, Contenders, Challengers, or Followers in the market. As the global RDR market has heated up in recent years, leading companies have invested heavily to develop their capabilities and strategy. There are a number of companies focused on other aspects of the smart grid arena now beginning to tackle the DR space, as well as many startup companies with new hardware and software offerings that take advantage of the plethora of available energy data and communication options for devices and customer messaging. Some of the incumbent RDR vendors are finding that they need to partner with these new players to keep pace with the changing marketplace.

The RDR industry is still maturing relative to the energy industry in general, but great strides have been made in turning DR into an operational resource for grid operators. In addition, this report combines both software and hardware offerings, as well as technology providers and program implementation services, which are all different segments that require diverse skill sets. Few companies attempt to serve all sides, thereby offering a complete solution.

As Navigant Research has published a series of DR-related Leaderboards over the past few years, it has been interesting to see the high level of new players and new technologies that enter the market on a regular basis. By the time the next is published, I expect to see more companies come on to the radar screen and disrupt the market, along with more M&As as successful startups are swallowed up by large energy players looking to expand their reach in the space.

 

Harvey and Irma Highlight the Need for Advanced Outage Communications

— September 14, 2017

The impacts are devastating. Across Houston and larger parts of the Southeast, citizens are reeling from the extensive damage caused by Hurricane Harvey. Meanwhile, across the gulf, Florida was just hit by Irma—one of the strongest hurricanes on record.

For utilities, the wave of powerful storms not only means a rush to restore power as quickly as possible, and to as many customers as possible, but also highlights a measurable need for sophisticated outage communication and response capabilities—both before and after the storm.

Harvey Hit Hard While Irma Approached

As of Monday, September 4, roughly 280,000 customers across Texas were still without power, and utilities including CenterPoint Energy, AEP Texas, and Entergy were exhausting all possible resources to get the lights back on. And because service restoration could take weeks or months in some parts of Texas, outage communications are critical.

For example, in advance of Harvey, CenterPoint was marketing its Power Alert Service. With this free opt-in tool, customers automatically receive notifications via text message, email, or phone call whenever a power outage or other power problem is detected at or near their address. This advanced outage communications capability is enabled by the over 2.4 million smart meters installed in CenterPoint’s service territory.

Meanwhile, following Irma’s landfall in Florida, crews at Florida Power & Light (FPL) are coordinating with other state utilities to secure sufficient workforces and are commencing a military-like operation to restore power to at least 5 million affected residents. This is familiar territory for FPL, which has invested more than $3 billion toward grid modernization and storm preparedness since 2006, including the installation of 4.9 million smart meters and 83,000 intelligent devices that can help predict, reduce, and prevent power outages, and restore power faster when outages occur.

FPL customers should benefit from a multipronged outage communications system, allowing them to receive outage notifications via email, voice, or text, or view/report outages via an outage map tied to FPL’s website. The company also offers a mobile application where customers can access information about their account or local outages.

Outage Communications Best Practices

While there is no standard for outage communications across the industry, best practices include maintaining some form of basic outbound communications, including outage notification, restoration time estimates, and outage cause information. The use of web-based outage maps has grown in popularity in recent years, though the deployment process can often be resource-intensive. These tools can provide customers with a convenient and efficient means of disseminating and reporting outage information, while also preserving call center resources.

Spokane, Washington-based Avista Utilities chose to upgrade its outage communications capabilities in October 2015. Avista employed iFactor (now owned by KUBRA) to develop a new power outage map, an outage reporting and status tool, and proactive outage messaging by email and SMS text. Following the brutal windstorm that swept across the region in November 2015, the tool proved its worth.

The outage map was visited 837,500 times, registered more than 13,000 contacts to receive outage alerts, and sent and received a total of more than 228,500 messages.

More Can Be Done

Looking to Avista and others as an example, there is certainly more that can be done with regards to outage communications. For utilities in the Southeast and across the United States, the importance of this capability becomes clearer as customer expectations grow and the frequency and intensity of natural disasters continues to rise.

While basic outbound communications are now seen as commonplace, investing in advanced capabilities around proactive and personalized notifications and outage map development can further enhance outage communications and provide customers what they truly need—information and awareness in times of confusion and chaos.

 

Smart Dust Has Yet to Settle, but the Hype Flourishes

— September 7, 2017

Smart dust … it sounds like a magical substance sprinkled on dumber things. Which is kind of true. The concept has been making the hype-cycle rounds late this summer and setting off some industry buzz among megatrend watchers during an otherwise lackluster news and information cycle.

But smart dust is not all that new a concept. Not long ago, it might have been known by the more mundane and geeky term micro-electromechanical systems, or MEMS, which is common in the computer chip world. Lump it together with the much hyped artificial intelligence (AI) notion and presto, smart dust gets new life.

Motes Not Dust Mites

So, what is smart dust? It is a swarm of tiny electronic sensors, some evidently smaller than a red blood cell, designed to float in the air and do various things. These tiny devices, known as motes, are self-powered. The idea is to unleash hundreds or thousands of them, have them interconnect wirelessly, and then perform a task or set of tasks. Think of releasing a batch over a farm for testing soil chemistry or pesticide levels.

Smart Dust for Energy Management

This smart dust could also be used in homes or commercial settings to reduce energy use. That was one of the use cases imagined by Kris Pister, a professor at the University of California Berkeley and smart dust pioneer. He has been tinkering with smart dust since at least 2001, when California was in the midst of an energy crisis. Back then, he worked on the technology with colleagues at Berkeley’s Center for Information Technology Research in the Interest of Society (CITRIS) in an effort to find new ways to conserve energy. The idea never quite took off as imagined.

The idea for dust networks goes back further to when the US Defense Advanced Research Projects Agency (DARPA) and RAND Corporation worked on the idea in the early 1990s. One can imagine the use of smart dust over a battlefield, feeding field commanders with relevant data in real-time to get the upper hand on an enemy. The idea can even be traced to novelist Philip Pullman’s His Dark Materials trilogy; dust in the books is a mysterious cosmic particle that is a central plot device.

A Cloud of Potential

Needless to say, smart dust motes have not made much of an impact outside the labs. Nonetheless, given the potential and the many swirling technologies of AI (e.g., deep learning, machine learning, smart robots, and the rest), smart dust’s future could be quite amazing, though that remains on the horizon. For now, one can keep the idea of smart dust on the radar while focusing on the more practical emerging technology trend affecting the grid and other industries, namely the Internet of Things, a topic extensively covered by Navigant Research.

 

The United Kingdom Takes Giant Steps toward Market Transformation

— August 29, 2017

Coauthored by Marc Bartlett

In July 2017, the United Kingdom’s Department for Business, Energy and Industrial Strategy (BEIS) and energy regulator Ofgem published their Smart Systems and Flexibility Plan. This document outlines the United Kingdom’s next phase in its transition to a low carbon future. It is the result of a long consultation period launched in November 2016 with many different stakeholders. The United Kingdom is making significant progress toward a more flexible energy system by removing barriers, encouraging innovation, and placing the customer at the center of the energy market. The plan is bolder than many other countries’ energy policies and sets a foundation for business model innovation. For example, the United Kingdom could well be the first to introduce a residential transactive energy market.

However, publishing a plan is far easier than implementing one. BEIS and Ofgem must work closely with the industry to ensure the UK energy market transition remains on track, they manage the different aspirations of stakeholders, and consumer protection remains at the top of the agenda. The Smart Systems and Flexibility Plan focuses on three areas: removing barriers to smart technologies—with a strong emphasis on storage—enabling smart homes and businesses, and making markets work for flexibility.

Regulations Adapt to Incorporate Storage

Storage is considered an increasingly important technology for the UK energy market. However, the country’s regulatory environment had not adapted quickly enough to address the specific requirements of storage. For example, since the United Kingdom had no clear definition of storage, its regulatory status was unclear. This uncertainty led to the charging of final consumption levies on storage, despite it not being a final consumer. The Smart Systems and Flexibility Plan also incorporates improved planning and licensing processes for storage, encouraging the colocation of storage with renewable generation and providing more streamlined processes to connect storage.

As regulated, unbundled monopolies, UK distribution network operators (DNOs) will not be permitted to directly own storage. BEIS and Ofgem believe that storage services should be tendered in a competitive market and that if a DNO were to own storage, it could hinder innovation and market developments. Yet, there is also an argument for DNOs to become suppliers of last resort. In this case, they would be permitted to provide and own storage where open markets fail to attract investment. BEIS and Ofgem have yet to finalize their plans for storage and will publish further guidance on unbundling storage services from DNO operations.

Smart Households to Play a More Active Role in the Future Energy Market

Demand-side response (DSR) will play a significant role in future UK system flexibility. At present, there is no technology to support residential DSR. However, the nationwide smart meter rollout will provide this foundation. Smart metering will allow half-hourly settlement, enabling the creation of time-of-use and other tariffs that shift peak demand. Household appliances and EV smart charging points will be the primary loads targeted in residential DSR programs. The government has stated its intention to work with industry, appliance manufacturers, and other countries to develop a common standard to ease the incorporation of these loads into DSR programs.

Barriers to New Business Models Will Be Removed

The plan acknowledges the need to evolve existing roles and responsibilities so networks are efficiently managed and barriers to new technologies or business models are removed. It specifies regulated monopolies’ need to plan, engage with new businesses, and explore the use of markets to solve issues. The days of the asset-focused DNO are numbered. These businesses will transform into system orchestrators that create platforms to interact more closely with service providers, system operators, and transmission network operators.

 

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