Assessing the role of devices in empowering customers to control their energy costs

smartelectricnews.com Special

Recently, in an interview with smartelectricnews.com, Petri Trygg, Researcher, Institute of Power Engineering, Tampere University of Technology had spoken about consumers' interest level as far as electricity is concerned.

"In general, consumer´s attitude towards electricity must be quite uninterested one," Trygg, who is scheduled to speak during Intelligent Demand Response for Electricity Summit 2009, to be held in Amsterdam on 28-29 January 2009, had said.

In order to ensure optimal results from a demand response programme, experts advocate that timely information is critical to making demand response decisions.

It is said that consistent information develops habits for consumers that can greatly affect energy use and price responsiveness. Accurate, real-time data allows consumers and energy managers to control their energy consumption more precisely, producing increased energy efficiency and savings.

Plus, feedback helps customers understand the cause-effect link of behaviour and energy consumption, and time between action and consequence or resulting energy use and cost is very important to ensure maximum savings.

Precise communication, be it for informing consumers about their usage patterns or eliciting response from them, has several benefits.

It is believed that faster feedback results in savings upto 10 percent, conveying price information lets customers know when to conserve or shift use, and use and cost displays show alerts for events and results in customer decision result in real-time.


Advancements in communication devices

Over the years, the industry has seen Advanced Metering Infrastructure or AMI ready display devices that allow consumers to closely track their electricity consumption and receive messages or alerts from their utility provider.

There are LCD displays that show messages that are clear and intuitive, making it easy for consumers to manage their energy usage and costs in real-time and wireless communication allows for use anywhere in the home.

According to Comverge, Inc., research has shown consumer energy savings of up to 15 percent can be realised with the use of devices that allows the end user access to real-time energy usage data.

For its part, in October last year, Comverge expanded its AMI compatible product portfolio with the introduction of the PowerPortal Home, in-home display (IHD), that provides customers with current energy usage, energy price information and utility messaging. PowerPortal Home weighs less than 5 ounces, has a battery life of up to 2 months, and is one of the most portable IHD devices available.

As an AMI ready display, PowerPortal Home shows messages that making it easy for consumers to manage their energy usage and costs in real-time. Designed for ZigBee, the PowerPortal Home utilises the smart energy wireless profile, which allows for broad compatibility with many AMI systems and use anywhere in the home. PowerPortal Home has a magnetic backing, an integrated base and a rechargeable battery, so it can be placed on a table, countertop, or even on the front of a refrigerator.

The industry is also witnessing steady advancements in devices, which serve as a wireless communications portal between utility companies and their customers.

For instance, in the first week of January, LS Research shared that it has teamed with Ember to develop Rate$aver. The focus is on homeowners and utilities to collaborate on conserving energy and reducing costs. The emphasis is on offering reliable, wireless communication of consumption data from the utility meter into the home.

Rate$aver is being described as the first battery-powered, wireless graphical display employing the ZigBee Smart Energy public application profile, which supports pricing, security, simple metering and messaging clusters, and is interoperable with other ZigBee Smart Energy certified products including electric smart meters.

Rate$aver runs for up to two years on two AA batteries and uses a unique display technology that allows the display to remain visible even after the radio and the power are turned off. The Rate$aver provides an advanced radio architecture and a 100mW power amplifier that eliminates the need for repeater devices in most homes. Rate$aver also employs Ember's bootloader capability enabling easy implementation of software updates.


Intelligent Demand Response for Electricity Summit 2009

Intelligent Demand Response for Electricity Summit 2009 is scheduled to take place in Amsterdam on 28-29 January 2009.

For more information, click here: www.smartelectricnews.com/demand08

Or

Contact:
Abbie Badcock ,
Smart Electric News,
abbie@smartelectricnews.com
T: +44 (0)207 375 7581

ECS secures 30 MW target for a DR programme

Energy Curtailment Specialists (ECS) has shared that in only one summer season it successfully delivered a demand response portfolio, representing more than 30 MW of on-call load reduction, to KCP&L.

Approximately 350 commercial customers were recruited by ECS to take part in the MPower programme which is designed to provide grid stability and manageable energy prices while offering an incentive to businesses for conservation. This portfolio was called upon and delivered essential load reduction four times during the 2008 season, which runs from June through September.

According to Paul Tyno, executive vice president program development for ECS, the most successful demand response programmes are the ones that effectively bridge the needs of the utility with the realities of the customer.

"While it's important to enroll megawatts in a DR portfolio, it's far more important that those megawatts are reliable and acquired in a fashion that preserves and enhances the utility's long standing customer relationships," said Tyno.

ECS will get down in the trenches with customers to understand their business and in turn help them understand and better manage their energy use.

KCP&L utilises a demand response curriculum to assist in managing summer peak electric demand. These DR programmes are a vital component of their Comprehensive Energy Plan, the company's long-term action plan for providing sustainable, environmentally responsible energy to the region.

"Demand response is clearly the 'killer application' for the smart grid"

Demand response and advanced metering programmes have made significant progress in serving more consumers across the country, according to a new report released by Federal Energy Regulatory Commission (FERC).

The report, 2008 Assessment of Demand Response and Advanced Metering, while notes progress on overcoming regulatory and financial hurdles over the past three years, also points to continuing obstacles – the limited number of retail customers on time-based rates, restrictions on customer access to meter data and the scale of financial investment necessary to deploy enabling technologies during an economic downturn – that could limit opportunities for continued growth in these programmes.

According to FERC Commissioner Jon Wellinghoff, who leads the Commission's efforts in the Collaborative Dialogue on DR with the National Association of Regulatory Utility Commissioners, DR is clearly the 'killer application' for the smart grid.

"With our FERC report gauging progress and identifying continuing barriers to demand response, we can effectively assess our progress in deploying essential smart grid technologies," said Wellinghoff.

The report's conclusions are based on a survey that shows the ratio of advanced meters to all installed meters has reached 4.7 percent for the US, a significant jump from the less than one percent in 2006. The report is FERC's third annual report on DR issues.

On the demand response side, eight percent of energy consumers in the US are in some kind of DR programme and the potential DR resource contribution from all such US programmes is close to 41,000 megawatts, or 5.8 percent, of US peak demand. This represents an increase of about 3,400 MW from the 2006 estimate. The largest DR resource contributions are from the Mid-Atlantic, Midwestern and Southeastern regions of the US. The report also notes that in the past year, Colorado, Maryland, Ohio and other states promoted DR through utility regulation legislation. Alabama and California led states in approving time-based rates for consumers. And multi-state groups from the Mid-Atlantic to the Pacific Northwest are coordinating across jurisdictions to enhance DR through research, education and planning.

"It is worth investing in DR resources if its cheaper than the alternative resources"

Interview with Ulrik Stridbaek, Chief Economist, Regulatory affairs at DONG Energy

smartelectricnews.com Special

During the hottest days or any other period of maximum demand, demand can rise to a level where even if generating capacity is available, the delivery infrastructure or the grid may be pushed to the point of failure. According to experts, demand response (DR) can be used at such times to reduce spikes and increase grid reliability.

This type of DR usually involves end users on `standby' able to be dispatched - often times automatically - by grid operators or utilities when demand is spiking and grid equipment failures are possible.

Apart from increasing grid reliability, another option would be to reduce short-term price volatility.

Depending on the configuration of generation capacity, DR may be used to increase demand (load) at times of high production and low demand. Some systems may thereby encourage energy storage to arbitrage between periods of low and high demand (or low and high prices).

As the proportion of intermittent power sources such as wind power in a system grows, demand response may become increasingly important to effective management of the electric grid.

According to Ulrik Stridbaek, Chief Economist, Regulatory affairs at DONG Energy, greater volatility in supply from variable resources such as wind power will create greater value in shifting demand from hours with a high price to hours with a low price.

"So if power is priced correctly the incentives for customers to respond will increase with the expansion of e.g. wind power. If incentives are sufficient to trigger DR, this can contribute balancing the system. Otherwise other sources of flexibility will have to be found. New intelligent generation and demand such as micro generation and electric cars can help creating the framework where demand becomes more responsive, by triggering the necessary investments for intelligent demand," says Stridbaek, who is scheduled to speak during Intelligent Demand Response for Electricity Summit 2009, to be held in Amsterdam on 28-29 January 2009.

Stridbaek also spoke about few other issues in an interview with smartelectricnews.com. Excerpts:

smartelectricnews.com: What according to you is the appropriate way to merge pre-existing energy infrastructure to intelligent ICT, Smart grids and Virtual Power plants?

Ulrik Stridbaek: Investments in the grid, including smart grids, will probably require regulatory incentives. When necessary regulated infrastructure is in place, there must be proper incentives to make use of the infrastructure (e.g. for VPPs) and integrate traditional and new types of resources.

The best way to create these incentives is through well designed markets, competition and market forces.

smartelectricnews.com: How should companies go about planning and executing DR and DSM programmes and also partnering with specialists for the same?

Ulrik Stridbaek: It is worth investing in DR resources if this is cheaper than the alternative resources. So first step must be to have a good feel for the cost and value of marginal resources in any given system. Next step is to have knowledge about the cost of DR.

This also requires close relationships with customers. Partnerships with consultants, aggregators and vendors comes after that, and must depend on the specific circumstances.

smartelectricnews.com: How can DSM play an important role in helping balance supply and demand in any energy market as well as help reduce price volatility and increase system reliability and security?

Ulrik Stridbaek: DR is a resource to be compared with other alternative resources to balance power supply and maintain reliability. DR can help reduce prices and volatility but volatility is also what gives incentives for DR in the first place.

smartelectricnews.com: When it comes to installation, maintenance and data management of such programmes, what factors do you think need to be taken into consideration for enablement cost where one-time cost includes equipment installation and administration and annual maintenance cost?

Ulrik Stridbaek: This is complex. One point for consideration is that a lot of potential DR resources requires up front investment, but once these have been incurred and demand has been automated, the cost of responding may be low. So once the investment has been incurred it is highly competitive with other alternative resources, such as generation from peakers.

smartelectricnews.com: It is said that Automated Demand Response (Auto-DR) programme costs are less than half the cost of peak generation resources. How do you assess developments related to Auto-DR platform designed to automated, electronic price and reliability signals as well as site-specific demand response strategies?

Ulrik Stridbaek: This is under development but probably focused on specific sectors and applications, rather than in a broad roll-out. Initial target sectors could be electric cars and specific appliances.

Intelligent Demand Response for Electricity Summit 2009

Ulrik Stridbaek is scheduled to speak during Intelligent Demand Response for Electricity Summit 2009, to be held in Amsterdam on 28-29 January 2009.

For more information, click here: www.smartelectricnews.com/demand08

Or

Contact:
Abbie Badcock ,
Smart Electric News,
abbie@smartelectricnews.com
T: +44 (0)207 375 7581

Handling communication strategy for DR programmes

Article: Interview with Jessica Stromback, director, VaasaETT Global Energy Think Tank

smartelectricnews.com Special

In this time of rising energy prices, initiatives are being taken to provide customers with additional information that could help them reduce electricity usage and potentially lower their bills.

Recently, a group of selected residential electricity consumers in the District of Columbia were chosen for a pilot programme, PowerCentsDC, described as the first in the electric utility industry to test the response of residential customers to three different innovative pricing options under one programme. Via this initiative, an advanced metering technology is being tested. Plus, the consumer are also checking out pricing options that could assist them in curbing their monthly bills by better controlling their power consumption.

Assessing such initiative, Jessica Stromback of VaasaETT Global Energy Think Tank told smartelectricnews.com, "I look at these developments as very positive. Most pilot studies only test one or at most two, options at a time rather than several. This creates a situation where, if you want to learn for example, which type of feedback system or pricing scheme works best, you are forced to compare studies carried out at different times, within different population groups and usually using different selection criteria and methodology. To say the least, this can make accurate, reliable conclusions difficult to come by."

Stromback, who is scheduled to speak during Intelligent Demand Response for Electricity Summit 2009, to be held in Amsterdam on 28-29 January this year, recommends three things when it comes to involving consumers for DR programmes right from the pilot/ test phase for any project.

1. Know what consumers care about or what their "need drives" are - is it the environment? Financial savings? Social responsibility? etc.
2. Use those need drives to grab their imaginations.
3. Make your campaign part of a larger media package. Use everything you have, your own marketing department but also the general media to give your efforts more weight through publicity.

With reference to PowerCentsDC pilot, organisations involved in the project hope to get an insight into how consumers react to pricing information. They also want to learn whether consumers alter their usage habits, potentially resulting in lower energy costs, achieving energy efficiency gains and a reduction in the amount of kilowatts needed to supply the District of Columbia's demand, thereby benefiting all consumers.

It is quite critical for any government/ state authority and other organisations to get an insight into how consumers react to pricing information or any initiative.

Commenting on the same, Stromback said: "The very best way of course is to try them - and like the Canadians try a variety of possibilities so that you can build on previous knowledge and create real comparisons. You not only learn about how your customers’ would react but also what such measures would really require in reality from your utilities, regulators, grid operators…"

"If you don't have the budget for a pilot study - ask them. However, remember that most consumers know almost nothing about the industry and they may not understand the ramifications of their answers. For example, most customers that are asked if they would like to have "accurate billing" rather than the widely used estimated bills, say yes – until they are informed that their winter electricity bills may double. Therefore, the questionnaires must be carefully designed."

A third method, which should not be forgotten and is always an important first step is to review the excellent pilot studies that have already been done.

When it comes to gaining full media and political support for DR programmes, Stromback, "Not to be too cynical here, but in my experience, gaining full media support helps to gain political support. If a utility already has the public and media behind it and their initiative is seen to save consumers money, save energy and help the environment, they will have an easier time with the politicians."

As to gaining media support, Stromback said it is imperative to have a genuinely well-designed DR programme and marketing package, explaining how this programme will help meet consumer concerns about the environment, rising energy prices etc.

The utility needs to be ready for tough questions about what they themselves are getting out of all of this. She recommends that a communicative executive should be present to answer any query.

"If they want to generate media attention – they should get visual and get dramatic. For example, a utility may want to cut peak load for grid and security of supply reasons but they may have a customer base which is concerned about the environment. They can work out how much unnecessary CO2 is released generating peak for their customers and then they can have a campaign…like I believe they did in Australia, where they released so many black balloons for every ton of CO2. Or they could visually show how much water the CO2 will poison, how many fish that would kill on average, how many birds… These are genuine reasons for cutting peak, they are visual, they are concrete, and they are easy for the public to understand. So utilities should use them," said Stromback.

Finally, Stromback says it is important to remember that any campaign must empower people to change – not leave them feeling overwhelmed.

"There is a lot we can do and it really does help when we do it. In order to motivate behavioural change, a happy ending must always be possible," was the parting message from Stromback.


Intelligent Demand Response for Electricity Summit 2009

Jessica Stromback of VaasaETT Global Energy Think Tank is scheduled to speak during Intelligent Demand Response for Electricity Summit 2009, to be held in Amsterdam on 28-29 January.

For more information, click here: www.smartelectricnews.com/demand08

Or

Contact:
Abbie Badcock ,
Smart Electric News,
abbie@smartelectricnews.com