Is it time we switched on to smart grids? Perhaps the most crucial component of any smart city, bringing the digital age to electricity distribution seems an instant no brainer, but most grids are ageing infrastructures. Check your clumsily estimated bill for proof of that.
In the future low carbon economy where demand for electricity is growing, the grid needs to get smart – and that starts with a meter in every home. Smart metering promises efficiency as well as control over energy on both a domestic and a city-wide, even national scale, but the smart grid as a long-term goal is incredibly ambitious; the use of dynamic renewable energy projects that respond to demand, dynamic pricing, and even the total integration of a national network of electric vehicle recharging stations.
That will require a fully interconnected system producing the very epitome of big data; welcome to the smart grid. “The term ‘smart grid’ is a concept that uses different technologies to gather information about the behaviour of suppliers and consumers, and uses this to manage energy more efficiently and sustainably via the existing utility grids,” explains Nandini Basuthakur, Senior Vice President & Managing Director of EMEA at Opower, a customer engagement platform for the utility industry that uses big data and behavioral analytics.
Such automated, digital processing and communications are key to the smart grid, though to consumers it means nothing more than a digital meter that records each home’s energy consumption – then shares it with the utility company. That’s the end of estimated bills, then, but this kind of metering is also about gaining detailed insight into energy use.
It’s useful for the utility companies, of course, which can precisely measure when energy is being consumed; cue a future where utility companies can adjust their rates per kilowatt hour depending on the time of day. That will deliver more profit and a less drastic difference between peak and off-peak demand, but it will also allow energy suppliers to both offer contracts based on actual use, and employ more creative, tech-savvy customer services such as tailored energy saving tips via a smartphone app. We could even see the end of the kilowatt hour altogether as energy suppliers become more innovative.
Using the explosion of data that smart meters will bring, the Opower platform – used in 15 million homes around the world – produces personal reports that show how one home’s energy use compares with similar households in the area, as well as personalised feedback on how to reduce energy usage – and by an average of 2-3 per cent.
“Looking forward, it is possible that smart meters will be connected to household appliances, too,” says Basuthaku, “allowing consumers to time them so they run on off-peak tariffs, saving money and energy.”
Most of the world’s smart grid thinking is at the early stages, though the number of smart meter initiatives is increasing; Miami has a ‘one million meters’ initiative and Singapore is trialling meters island-wide, though it’s Italy’s NEL – at 30 million smart meters already installed – that is at the forefront in Europe.
GE Canada has just opened a huge Grid IQ Innovation Centre in Markham, Ontario, complete with a 60-foot-wide video screen, to demonstrate smart grid solutions. Predicated on the desire to control power usage in homes and offices using an Internet connection, it comes on the back of 4.7 million smart meters.
Ontario has spent over $1 billion on smart meters, which is the main brake on smart grids globally, though that isn’t stopping the UK from joining the revolution, too. Under plans unveiled three years ago by Ed Miliband when he was energy and climate change secretary, every home and business in the UK will have a smart meter installed by 2020. The programme, which starts in 2014, will provide 30 million meters, and it will cost £11 billion.
Rahoul Bhansali, Head of government and utilities at international ICT management consultancy firm Hudson & Yorke, has been working with Ofgem and the Department for Energy and Climate Change on the UK’s smart grid plans. “The smart grid offers a way to put intelligence into the network in order to predict and manage supply and demand for electricity,” says Bhansali. “Through the Low Carbon Initiative, Ofgem is providing funding to allow businesses to test some of the ideas and applications required within the smart grid.”
Bhansali thinks that the common denominator in all smart grid projects – and the driver for change – is consumer demand and behaviour. “Here in the UK, there will come a tipping point in the future when 90 per cent of the population will want an electric, rather than a petrol-driven car,” he says. “They will then expect to be able to charge their cars every few hours, and expect charging stations all over the country. Once that tipping point is reached, it will change the way we require electricity.”
Will smart meters give households in the UK the information they need to constantly switch supplier? “Churn levels are at around 17 per cent each year – and that is down mainly to customer apathy rather than commitment or loyalty to any specific provider,” says Emma Goodwin, Utilities and Power Divisional Director at IPL, an IT services company specialising in IT solutions and consultancy. “The enhanced In Home Display (IHD) will provide a chance to change that model, to use the in-built messaging functionality and data analysis capability to build on the customer relationship whilst also improving consumers’ own understanding of their energy usage and associated cost.”
With demand for electricity expected to increase as much as ten-fold if both electric heating and electric vehicles become the norm, the smart meter is key.
For those creating the so-called ‘Internet of Everything’, the smart grid is just another component. “The electricity grid relies on a family of technologies to form a communications network … that allows utilities to deploy applications that result in a more efficient, reliable, secure, and therefore smarter grid,” says Kanwalinder Singh, Senior Vice President for Business Development in New Markets at Qualcomm CDMA Technologies. He argues that smart grids and networks of smart meters can be constructed most quickly by using existing cellular networks. “This allows energy companies to strategically and rapidly deploy meters, grid devices and sensors on existing cellular IP networks, ensuring secure and scalable end-to-end solutions with minimal upfront capital expenditures, nominal operational expenses and lower total cost of ownership than alternative solutions.”
However, the smart grid is about far more than just technology. “No shareholder in utility would accept a business case that is predicated purely on technology,” says Bhansali, who insists that the central policy issue is the desire to reduce carbon emissions through energy efficiency. “At a base level, the business case is that it is cheaper to roll out better use of ICT in the power network than build new power stations.”
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